



COURT OF APPEAL FOR ONTARIO

CITATION: Lucas v. 1858793 Ontario Inc.
    (Howard Park), 2021 ONCA 52

DATE: 20210128

DOCKET: C67896 & C67904

Hoy, Brown and Thorburn JJ.A.

BETWEEN

Alexandre Alberto Da Silva Lucas
    and Kelly Ramos Avelar Lucas

Applicants
    (Respondents)

and

1858793
    Ontario Inc. o/a Howard Park,

Sofia
    Ribeiro and Andre Ribeiro

Respondents (Appellants)

William Ribeiro, for the appellant, 1858793
    Ontario Inc. o/a Howard Park

Andreas G. Seibert, for the appellants,
    Sofia Ribeiro and Andre Ribeiro

Leon J. Melconian, for the respondents,
    Alexandre Lucas and Kelly Lucas

Heard: November 12, 2020 by video conference

On appeal from the order of Justice Paul
    Schabas of the Superior Court of Justice, dated January 2, 2020 with reasons
    reported at 2020 ONSC 964, 17 R.P.R. (6th) 138.

BROWN J.A.:

I.        OVERVIEW

[1]

This appeal concerns an agreement of purchase
    and sale for a small, one-bedroom residential condominium unit in the west end
    of Toronto. The two main issues are: (1) whether the application judge erred in
    concluding that the vendor wrongfully terminated the agreement; and (2) whether
    the application judge erred in granting the purchasers the remedy of specific
    performance.

[2]

By way of overview, in January 2015, the appellant
    vendor, 1858793 Ontario Inc. o/a Howard Park (185), and the respondent
    buyers, Alexandre and Kelly Lucas (Alex and Kelly or, together, the
    Lucases), entered into an agreement, pre-construction, for the purchase and
    sale of a condominium unit in Toronto (the Agreement) for a price of $369,900.

[3]

185, a condominium development company, is owned
    and operated by Mario and Francisco Ribeiro (Mario and Francisco or,
    together, the Ribeiro Brothers). Alex worked for a roofing company owned by
    the Ribeiro Brothers from 2009 until 2017, when he left to join a competitor.

[4]

In February 2019, just prior to the sales
    scheduled closing, 185 purported to terminate the Agreement and forfeit the
    Lucases deposit of $73,980. 185 claimed that the Lucases had breached the
    Agreement by leasing the unit to a tenant, Renato Duarte, during the interim
    occupancy period without 185s permission.

[5]

On March 12, 2019, 185 entered into an agreement
    to re-sell the unit to the appellants Sofia and Andre Ribeiro (Sofia and
    Andre), who are Franciscos children and Marios niece and nephew. In May
    2019, during the interim occupancy period under that agreement, Sofia and Andre
    leased the unit to two tenants with 185s consent. The Lucases registered a
    caution on title which prevented the sale to Sofia and Andre from closing.

[6]

The Lucases commenced this application seeking relief
    from forfeiture and, in effect, specific performance of the Agreement. The
    application judge granted both. He concluded that 185 had wrongfully terminated
    the Agreement, declared the sale to Sofia and Andre null and void, and ordered
    185 to close the sale of the property to the Lucases.

[7]

The appellants appealed. 185 sought a stay of
    the judgment pending appeal. MacPherson J.A. dismissed the motion by order
    dated February 14, 2020, following which title to the unit was transferred to
    the Lucases. They took possession of the unit on April 1, 2020 and, with the
    consent of the appellants, placed a $200,000 mortgage on title in June 2020.

[8]

The appellants advance three main grounds of
    appeal.
[1]
First, they argue the application judge erred by finding that 185 wrongfully
    terminated the Agreement. Second, they submit the application judge misapplied remedial
    principles in awarding specific performance. Finally, they say the application
    judge had no basis to interfere with 185s subsequent sale of the unit to Sofia
    and Andre and disrupt the rights of their tenants, who were not parties to the
    application and had no opportunity to respond.

[9]

I would dismiss the appeal. The record supports
    the application judges finding that 185 lost its right to terminate by
    declining to treat the Agreement at an end within a reasonable time following
    the Lucases alleged breach. Further, the application judge correctly
    identified the principles governing the remedy of specific performance. I see
    no reversible error in his application of those principles to the facts of this
    case or his order that 185 perform the Agreement and transfer the unit to the
    Lucases rather than to Sofia and Andre.

II.       ISSUE 1: 185s TERMINATION OF THE AGREEMENT

A.      The evidence

[10]

Alex and Kelly are married. At the time they
    entered into the Agreement, they had one child; at the time of judgment, they
    had two.

[11]

In 2009, Alex began working for Triumph Roofing
    and Sheet Metal Inc. (Triumph), a company owned and operated by the Ribeiro
    Brothers. Over the next few years, Alex and Kelly became friends with Mario and
    Francisco. By 2015, Alex had been promoted to manager of Triumphs roofing
    division.

The Agreement for Unit 421

[12]

On January 11, 2015, the Lucases and 185 entered
    into the Agreement for Unit 421 at 38 Howard Park Avenue in Toronto, which was
    to be a 595 square-foot, one-bedroom unit located on the fourth floor of an
    eight-storey building (the Unit). The Agreement set the purchase price at
    $369,900 and would have required the Lucases to make five deposit payments totalling
    $73,980 by the occupancy date, which was yet to be determined.

[13]

However, Mario deposed that 185 offered the Unit
    to the Lucases on advantageous terms based on their friendship, Alexs
    long-standing employment with Triumph, and the expectation that Alex would
    remain a key Triumph employee for years to come. These terms, added by
    separate amendments to the Agreement, included the following:

(i)     a $15,000 credit toward the purchase price, $5,652.26 of
    which the Lucases used to pay for upgrades to the Unit; and

(ii)    the ability to stretch out payment of part of the deposit in
    twenty interest-free monthly increments of $1,000 payable from March 2015 to
    October 2016, with the balance due on occupancy.

[14]

Section 18 of the Agreement prohibits the buyers
    from leasing the Unit prior to the closing date without the vendors written
    consent, stating, in part:

18. The Purchaser covenants and agrees with
    the Vendor not to  offer for lease  the Unit, at any time prior to the unit
    Transfer Date without first  obtaining the written consent of the Vendor  The
    Purchaser acknowledges and
agrees that once a breach of
    the preceding covenant occurs such breach is or shall be incapable of
    rectification
, and accordingly the Purchaser acknowledges and agrees
    that
in the event of such breach the Vendor shall have
    the unilateral right and option of terminating this Agreement and Occupancy
    License
, effective upon delivery of notice of termination to the
    Purchaser or Purchaser's solicitor, whereupon the provisions of this Agreement
    dealing with the consequence of termination by reason of the Purchaser's default,
    shall apply. [Emphasis added.]

[15]

Section C.12 of the Terms of Occupancy License,
    attached as Schedule C to the Agreement, contains a similar prohibition,
    stating in part that the Purchaser shall not have the right to assign, sublet
    or in any other manner dispose of the Occupancy License during Interim
    Occupancy without the prior written consent of the Vendor.

[16]

Section 17 of the Agreement provides that the
    buyers agree not to register a caution or certificate of pending litigation
    against title to the Unit.

Alex leaves Triumph

[17]

In January 2017, Alex resigned from Triumph to become
    part owner of a competitor company called Maxim Roofing Limited (Maxim). As a
    result, Alexs relationship with the Ribeiro Brothers soured. Mario believed Alex
    was trying to poach Triumph employees to work for Maxim.

The Lucases take possession of Unit 421

[18]

185 advised the Lucases that the Unit would be
    ready for occupancy on April 20, 2018. The Lucases signed an interim occupancy agreement
    requiring them to provide 185 with 12 post-dated monthly occupancy cheques for
    $1,548.03 each.

[19]

During the interim occupancy period and before
    the Agreement could close, 185 needed to address outstanding building deficiencies
    and register the condominium declaration on title. Registration would not occur
    until February 21, 2019.

[20]

On April 20, 2018, the Lucases took possession
    of the Unit. By that time, they had paid all required deposits, totalling $73,980.

Renato Duarte moves into Unit 421

[21]

The Lucases did not move into Unit 421 upon
    taking possession; they allowed Mr. Duarte to move in.

[22]

Mr. Duarte and Alex met in 2016, when Mr. Duarte
    worked for Triumph as a roofing foreman. In 2017, after Triumph let Mr. Duarte
    go, Alex hired him to work for Maxim.

[23]

In April 2018, Mr. Duarte told Alex he was
    having financial problems and needed a place to stay. The Lucases agreed to let
    Mr. Duarte live in the Unit rent-free until he got back on his feet. Mr.
    Duarte moved into the Unit on May 1, 2018.

185 alleges a breach of the Agreement

[24]

In late July 2018, Mario became aware that Mr.
    Duarte was living in the Unit, when he was advised of such by 185 employees who
    worked in the building.

[25]

On September 21, 2018, Ms. Vanessa Spagnuolo, on
    behalf of 185, emailed Kelly to advise that 185 had been unable to address
    certain deficiencies in the Unit because Mr. Duarte, whom Ms. Spagnuolo referred
    to as a tenant, had denied access to 185 contractors. Ms. Spagnuolo told Kelly
    that Mr. Duartes occupancy was a breach of s. 18 of the Agreement:

I would like to take this opportunity to bring
    to your attention the terms of [the Agreement] with respect to leasing. As per
    item 18  you are currently in breach of [the Agreement]. As per [the
    Agreement], written consent of [185] is required to offer for lease or lease
    the unit  All requests for leases are at the sole discretion of our management
    and are only reviewed once all deficiencies are signed off  please expedite
    permission to allow deficiencies to be completed, once they are completed /
    signed by You with site staff you may request permission to lease / rent the
    unit  until then we will consider you to be in breach of [s. 18 of the
    Agreement].

[26]

Kelly replied by email on the same day and
    denied that Mr. Duarte had refused access to the Unit. She also asserted that
    Mr. Duarte was not leasing the Unit, writing:

Im familiar with the terms of [the Agreement]
    but in regards to Mr. Duarte, he does not lease the unit. We do not have any
    type of rental agreement with him nor have we ever received any type of
    compensation from him.

[27]

On October 1, 2018, Mr. Duarte was arrested
    following a police search of the Unit. He vacated the Unit and did not return.

[28]

After Mr. Duartes departure, the Unit remained
    unoccupied. 185 continued to cash the Lucases monthly occupancy cheques. In
    November 2018, the Lucases permitted 185 to enter the Unit on several occasions
    to rectify various deficiencies.

[29]

185 did not raise the Lucases alleged breach of
    s. 18 again until December 2018, in the context of a dispute over a bathtub
    repair (the Bathtub Dispute).

The Bathtub Dispute

[30]

A gouge in the Units bathtub was identified in
    the late spring or summer of 2018. In an email to Kelly dated August 9, 2018, a
    185 employee acknowledged it was the companys responsibility to fix the deficiency
    with the bathtub.

[31]

On November 23, 2018, the Lucases attended the
    Unit for a Tarion inspection, which revealed that the bathtub gouge had not
    been rectified.

[32]

On December 6, Mr. Ross Eskandari, another 185
    employee, informed the Lucases that 185 had opted to repair  not replace  the
    bathtub. Mr. Eskandari also suggested that Mr. Duarte had caused the damage to
    the bathtub and again alleged that the Lucases had breached the Agreement. He
    gave the Lucases two options:

Option 1  We have completed a second tub
    repair as a courtesy to you  We ask that you review the work in person and
    trust that you will find it acceptable. If accepted, we ask that you remove it
    from your deficiency list to close this item.

Option 2  If on the other hand you do not
    accept the repair & we are directed to replace the tub by Tarion, we will
    proceed with a full tub replacement in protest.
All costs
    involved with your unit and breach of the occupancy agreement with regards to
    leasing will be tabulated at closing. We reserve the right to have all costs be
    included as part of your settlement fees owed to the developer prior to closing
.
    [Emphasis added.]

[33]

In an email dated December 19, 2018, Ms.
    Spagnuolo suggested that 185 would pursue the Lucases for the alleged breach stemming
    from Mr. Duartes occupancy if they did not release 185 from its obligation to
    replace the bathtub:

Without prejudice, we are willing to come to
    an agreement for a limited time. If the bathtub repair that we completed in
    good faith, which was caused by your tenant, along with all other Tarion issues
    are cleared, [185] will not pursue your breach of the occupancy agreement any
    further. If you are not in agreement please advise and we will consult with
    Tarion for next steps.

[34]

The Lucases were not satisfied with the repair
    and refused to sign off.

[35]

On January 2, 2019, Tarion determined that the
    damage to the bathtub was not consistent with homeowner use, confirming it
    was 185s responsibility to replace the tub. Nevertheless, 185 continued to
    urge the Lucases to sign off on the repair in exchange for relief from their breach
    of the occupancy agreement. The Lucases once again refused.

[36]

By email dated January 22, 2019, 185 advised the
    Lucases it would replace the bathtub in protest and that all costs related
    to [the Unit] associated with damage caused by your tenant will be tracked and
    kept in claim of your breach of occupancy agreement.

[37]

185 replaced the bathtub on January 28, 2019.

185 purports to terminate the Agreement

[38]

A week later, on February 5, 2019  which was
    about two weeks prior to the scheduled closing date for the Unit  185 sent a
    letter to the Lucases purporting to terminate the Agreement on the basis of Mr.
    Duartes occupancy. (Mr. Duarte had vacated the Unit a little over four months
    earlier.) The letter stated, in part:

We refer you to Section 18 in the Agreement in
    which the section sets out that the unit cannot be leased to a tenant without
    the prior written consent of the vendor. We have learned that you leased the
    unit to a third party tenant which is a fundamental breach  entitling us to
    terminate your Agreement. Section 18 goes on further to state that once a breach
    of this covenant occurs, the breach is incapable of rectification and that we
    have the unilateral right to terminate your [Agreement] effective upon delivery
    of this letter  We hereby terminate your [Agreement] and have had your
    deposits and occupancy fees forfeited to us as liquidated damages.

[39]

By the time they received the termination letter,
    the Lucases had paid 185 a total of $93,534.70, covering the deposits, $15,482 in
    monthly interim occupancy fees for the period May 2018 through February 2019,
    and other expenses. 185 claimed it was entitled to retain the entire sum based
    on the Lucases alleged breach of s. 18.

185 agrees to sell the Unit to Sofia and
    Andre

[40]

Just over a month later, on March 12, 2019, 185
    agreed to sell the Unit to Franciscos children, Sofia and Andre, for a
    purchase price of $418,000. Edgar Shamilyan, a realtor retained by 185 to
    provide an expert report, placed a significantly higher value on the Unit. In
    his report dated May 1, 2019, Mr. Shamilyan opined that the base price for the
    Unit at the time of his report was approximately $489,000. Another realtor
    retained by 185, Alexandre Alves, in his April 26, 2019 expert report, valued
    the Unit at $500,000 to $520,000.

[41]

The agreement required Sofia and Andre to put down
    $5,000 at signing and another $13,000 on the closing date, which had not been
    set. Mario also advised Sofia that, because she was family, 185 would agree to
    act as the lender to finance the balance of the purchase price. The loan was
    secured by a promissory note and a vendor take-back mortgage, with a yearly
    interest rate of 3%.

[42]

In May 2019, Sofia and Andre obtained 185s
    permission to lease the Unit during the interim occupancy period. A one-year lease
    of the Unit to two non-party tenants was signed on May 23, 2019.

[43]

On March 19, 2019, a week after 185 agreed to
    sell the Unit to Sofia and Andre, the Lucases commenced this application
    against 185 seeking relief from forfeiture and specific performance of the Agreement.
    The application did not seek damages as an alternative to, or in lieu of,
    specific performance. On April 1, they also registered a caution on title,
    which prevented the sale to Sofia and Andre from closing pending the outcome of
    this litigation. On May 15, 2019, the Lucases amended their application to add
    Sofia and Andre as parties.

B.      Reasons of the application judge

[44]

On the application, the Lucases argued they had
    not breached s. 18 of the Agreement because they never had a lease agreement
    with Mr. Duarte and he never paid rent. In the alternative, if they had
    breached s. 18, the Lucases submitted that 185 had not treated Mr. Duartes
    occupancy as a fundamental breach within a reasonable time and had thereby waived
    its termination and forfeiture rights.

[45]

The application judge agreed with the Lucases in
    both respects. First, he found that the Lucases had simply loaned the Unit to
    Mr. Duarte for a short time, without a lease agreement, and had received no
    rent or other benefits from him. As such, he held there was no lease and
    therefore no breach of s. 18: at para. 31.

[46]

Even if there had been a breach, the application
    judge concluded that 185 affirmed the Agreement by its conduct after learning of
    Mr. Duartes occupancy: at para. 45. He found 185 became aware of the alleged
    breach by September 21, 2018 at latest, the day Ms. Spagnuolo told Kelly that
    Mr. Duarte had denied access to the Unit. Nevertheless, 185 did not exercise
    its right to treat the contract at an end within a reasonable time. Instead, it
    continued to accept occupancy payments until February 2019, only vaguely purporting
    to rely on s. 18 as a bargaining chip in the Bathtub Dispute. 185 thus lost
    the right to terminate and, as of February 2019, nothing stood in the way of
    closing the sale: at paras. 39-42.

C.      The issue stated

[47]

For the purposes of my analysis, I shall assume,
    without deciding, that the Lucases breached s. 18 by allowing Mr. Duarte to live
    in the Unit during the occupancy period without 185s written consent. My
    analysis will focus on 185s submission that the application judge erred in
    finding that 185 lost its right to terminate by failing to treat the Agreement
    at an end within a reasonable time after the alleged breach.

[48]

185 submits that it did not lose or waive its
    contractual termination rights as the Agreement was clear that any breach of s.
    18 was incapable of rectification. The emails exchanged with Kelly on
    September 21, 2018 show that, contrary to the application judges findings at
    paras. 42-45, 185 insisted on strict compliance with s. 18 of the Agreement as
    soon as it learned Mr. Duarte was living in the Unit. From this point on, 185
    says it was entitled to terminate unilaterally. As such, and since the
    Agreement did not expressly require timely termination, 185 argues the
    application judge erred by concluding 185 waived its right to terminate by
    failing to do so within a reasonable time.

[49]

In any event, 185 contends that it did terminate
    within a reasonable time. From December 6, 2018 to January 11, 2019, the
    parties exchanged emails regarding the Bathtub Dispute which 185 says were
    privileged settlement communications relating to the Lucases alleged breach
    of s. 18. 185 argues that, when the period during which these emails were
    exchanged is removed from the calculation, its decision to terminate in
    February 2019 was made only three months after it gave the Lucases notice of
    the breach on September 21, 2018. According to 185, three months was a
    reasonable period between the notification of breach and the notice of
    termination.

D.      Analysis

[50]

Section 18 of the Agreement provides that if a
    purchaser leases a unit during the occupancy period without first securing the
    vendors written consent, a breach occurs and such breach is or shall be
    incapable of rectification. However, while the breach may be incapable of
    rectification, such a breach does not cause an immediate termination of the
    Agreement. As s. 18 goes on to state, in the event of such breach the Vendor
    shall have the unilateral right and option of terminating this Agreement and
    Occupancy License.

[51]

Upon learning of Mr. Duartes occupancy of the
    Unit, 185 did not exercise its termination rights under s. 18 of the Agreement.
    It waited many months before so doing. During that period, 185 accepted the
    Lucases monthly interim occupancy payments and worked to remedy the bathtub
    deficiency. This conduct by 185 led the application judge to state, at paras.
    37 to 39, that:

The problem  is that 185 did not treat [the
    Agreement] at an end; to the contrary, it did not treat the breach as
    fundamental or incapable of rectification at all  [185] took no steps to
    investigate or require compliance with section 18 of the Agreement until it
    raised the issue in September 2018, in the context of an emerging dispute
    between the Lucases and 185 about deficiencies. Spagnuolos September 21 email
    did not terminate the Agreement, but suggested the breach could be cured by
    signing off on deficiencies.

185 did not respond to Kellys denial of a
    breach on September 21, 2018, and did not raise the issue again until December,
    long after the breach, if any, had been cured. Throughout this time, 185
    continued to cash the applicants cheques paying the monthly occupancy fee.

Only on December 19, 2018, was the alleged
    breach raised again, as a bargaining chip over the bathtub repair  a repair
    185 was obliged to make. The applicants objected to 185s demands, and 185
    continued to treat the contract as extant and continued to take the applicants
    monthly occupancy fees. 185s demand was repeated on January 11, 2019, though
    it never said the contract would be terminated if the Lucases did not agree to
    185 not repairing the bathtub. 185s email of January 22 was even more
    tactical, saying that the tub would be repaired in protest .

[52]

That course of events led the application judge
    to conclude, at para. 42, that:

In my view, by not treating the Agreement at
    an end and incapable of rectification when it knew of the breach, at latest,
    by September 21, 2018, 185 lost the right to terminate and claim the deposits
    and fees as liquidated damages. It sat on its rights, to the detriment of the
    applicants, who continued to pay occupancy fees and expected to close the sale
    in early 2019. Assuming there had been a breach between May 1 and October 1,
    2018, that breach was rectified and both parties acted on that basis from
    October 1 forward. There was no breach in February 2019 and nothing stood in
    the way of closing the sale. 185 acted wrongly in terminating the Agreement.

[53]

In reaching that conclusion, the application judge
    did not commit any error of law. He correctly identified the applicable legal
    principle. Even if the Lucases breach could be characterized as repudiatory, on
    the basis that s. 18 of the Agreement describes that particular kind of breach
    as one incapable of rectification, an innocent party must elect to treat the
    contract at an end and communicate that election to the repudiating party
    within a reasonable time:
Place Concorde East Ltd. Partnership v. Shelter
    Corp. of Canada Ltd.
(2006), 270 D.L.R. (4th) 181, at para. 50.

[54]

Nor do I see any palpable and overriding error
    of fact in the application judges finding that 185 failed to elect to treat
    the Agreement as at an end within a reasonable time. The record amply supports
    that finding of fact by the application judge.

[55]

I am also not persuaded by 185s submission that
    the application judge should have treated the Bathtub Dispute emails as
    privileged settlement communications. The application judge held, at para. 46
    of his reasons, that the emails are not properly characterized as settlement
    communications:

This submission has no merit. First, only one
    email, dated December 19, states it is without prejudice. Second, these are
    not settlement discussions between lawyers; they are communications between the
    parties regarding their positions on the performance of a continuing contract,
    including the fulfillment of 185s obligation to repair and resolve
    deficiencies in the Unit. There is no basis to treat them as being inadmissible
    on the basis of settlement privilege.

[56]

I see no error in that characterization. The
    emails focused on how the vendor would remedy a construction deficiency with
    the bathtub: the vendor wanted to patch the bathtub; the Lucases wanted the
    bathtub replaced. The emails did not purport to compromise the dispute that is
    the subject-matter of this litigation  namely, whether 185 was entitled to
    terminate the Agreement because the Lucases had permitted Mr. Duarte to occupy
    the Unit for a period of time. That litigious dispute was not yet in existence
    or within contemplation:
Losenno v. Ontario Human Rights Commission
(2005), 78 O.R. (3d) 161 (C.A.), at para. 21; Sidney N. Lederman, Alan W.
    Bryant & Michelle K. Fuerst,
Sopinka, Lederman & Bryant: The Law of
    Evidence in Canada,
5th ed. (Toronto: LexisNexis Canada, 2018), at §14.348;
Bercovitch v. Resnick
, 2011 ONSC 5082, at para. 26, leave to appeal
    refused, 2011 ONSC 6410 (Div. Crt.). To the contrary, the two options set out
    in the vendors email of December 6, 2018  reproduced at para. 32 above  specifically
    contemplated that the Agreement would close even if the Lucases insisted on the
    replacement of the bathtub.

[57]

As well, from the language of the Bathtub
    Dispute emails, the Lucases could not have contemplated that a disagreement
    over how to repair the bathtub would lead 185 to terminate the Agreement and
    trigger this litigation. The application judge was therefore entitled to rely
    on the Bathtub Dispute emails to support his finding that 185 did not treat the
    Lucases alleged breach of s. 18 as fundamental or incapable of
    rectification.

E.      Conclusion on Issue 1

[58]

Accordingly, I am not persuaded by this ground
    of appeal. I see no reversible error in the application judges finding that
    185, by its conduct, lost the right to rely on the alleged breach by the
    Lucases as a basis to terminate the Agreement.

III.      ISSUE 2: THE AVAILABILITY OF
    SPECIFIC PERFORMANCE

A.      The application judges reasons and
    order

[59]

As remedies for 185s wrongful termination, in
    their application the Lucases sought relief from forfeiture of the deposit and
    specific performance. The Lucases did not seek damages in lieu of specific
    performance.

[60]

The application judge first exercised his
    discretion under s. 98 of the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43 to grant the Lucases relief from forfeiture, concluding the applicable
    test was clearly met:
Saskatchewan River Bungalows Ltd. v. Maritime Life
    Assurance Co.
, [1994] 2 S.C.R. 490. 185 does not contest that part of his
    judgment.

[61]

He then considered whether the Lucases were
    entitled to specific performance based on three factors: (1) the nature of the
    property, particularly its uniqueness within the meaning of
Semelhago v. Paramadevan
,
    [1996] 2 S.C.R. 415, at para. 22; (2) the related question of the inadequacy of
    damages as a remedy; and (3) the behaviour of the parties:
Matthew Brady
    Self Storage Corp. v. InStorage Limited Partnership
, 2014 ONCA 858, 125
    O.R. (3d) 121, at para. 32, leave to appeal refused, [2015] S.C.C.A. No. 50.

[62]

With respect to the nature of the property, the
    application judge held, at paras. 59 and 64, that uniqueness arose not from the
    Lucases subjective needs or the Units physical characteristics, but because the
    Agreement contained advantageous terms and could not have been readily
    duplicated in Torontos competitive, volatile real estate market:
1954294
    Ontario Ltd. v. Gracegreen Real Estate Development Ltd.
, 2017 ONSC 6369, 80
    C.L.R. (4th) 297, at para. 151.

[63]

Relatedly, the application judge concluded that
    the circumstances surrounding the Agreement rendered damages inadequate. The
    Lucases paid over $90,000 toward the Unit from January 2015 to February 2019. During
    this time, as the Unit increased in value significantly along with much of
    Torontos housing market, this money was not available to the Lucases for
    acquiring another property. The application judge commented that the litigation
    would likely drag for years if the Lucases were limited to suing for damages,
    during which time the Lucases would be denied the advantage of the rise in
    value of the Unit that exists today as well as the use of their deposit. In
    other words, the Lucases losses were difficult to mitigate, making specific
    performance a more complete and just remedy than damages in the circumstances:
    at paras. 63-65.

[64]

Finally, the application judge held that 185s
    conduct favoured granting specific performance. 185 had continued to accept
    payments from the Lucases while improperly trying to use the allegation of a
    breach to avoid its responsibility to replace the bathtub. It then terminated
    the Agreement and took the Lucases deposit without justification, long after Mr.
    Duarte had vacated the Unit: at para. 75. Moreover, 185s subsequent sale to
    Sofia and Andre, which was not at arms length and did not contain commercially
    reasonable terms, was a sham designed to put the Unit out of the Lucases reach:
    at paras. 66 and 77. As he amplified in his cost reasons, the application judge
    concluded the transaction was a sham in part because it involved a sale below
    market price, with little by way of an up-front payment: 2020 ONSC 1329, at
    para. 4.

[65]

Based on the foregoing, the application judge
    concluded that specific performance was the best remedy to serve justice
    between the parties. He ordered 185 to complete the sale of the Unit to the
    Lucases in accordance with the Agreement no later than February 14, 2020, with
    all payments to date credited toward the purchase price. In addition, the
    application judge declared the sale to Sofia and Andre null and void and
    ordered the lease with their tenants assigned to the Lucases.

B.      The issue stated

[66]

The appellants contend that the application
    judge made three main errors in granting the Lucases specific performance of
    the Unit rather than directing an assessment of damages:

(1)   awarding specific relief for a generic condominium unit that
    the Lucases now intend to sell, contrary to the principles governing specific
    performance of real estate contracts;

(2)   finding that damages were inadequate as a remedy without
    evidence that (a) the Lucases would have had trouble finding a replacement property,
    or (b) damages would be difficult to assess; and

(3)   holding that 185s behaviour favoured granting specific
    performance but failing to properly consider the Lucases misconduct.

[67]

Before explaining why I am not persuaded by these
    submissions, I first set out the principles applicable to a purchasers claim
    for specific performance of a contract for the sale of residential property.

C.      The governing principles

[68]

The most appropriate place to start the analysis
    is by recalling first principles. In general, contractual remedies are intended
    to provide the non-breaching party with what the contract was to provide: Angela
    Swan, Jakub Adamski & Annie Na,
Canadian Contract Law,
4th ed.
    (Toronto: LexisNexis Canada, 2018), at
§
6.14. That usually is done by requiring the party in breach to pay,
    as damages, an amount of money that will provide the victim of the breach with
    the financial equivalent of performance: John D. McCamus,
The Law of
    Contracts,
3rd ed. (Toronto: Irwin Law, 2020), at p. 971. However, as
    observed by The Honourable Robert J. Sharpe in
Injunctions and Specific
    Performance
, loose-leaf (2020-Rel. 29), 4th ed. (Toronto: Thomson Reuters,
    2012), at
§
7.50:

The existing regime of remedial law strongly
    favours the first option of damages and awards specific performance only in
    exceptional cases.
Yet in many cases, specific relief may
    seem to be the only sure way to put the plaintiff in the position he or she
    would have been in had the contract been performed
The assessment of
    damages the innocent party has suffered can be a difficult, expensive and
    time-consuming task. Specific performance has the advantage of avoiding the
    problems and costs the parties and the judicial system must incur if damages
    are to be assessed.
Perhaps more significant is the very
    real element of risk that the translation into money terms of the effect of the
    breach on the plaintiff may be inaccurate. Some cases will present more risk
    than others but it cannot be denied that the element of risk of error is
    virtually swept away if the court is able to make an order of specific
    performance. The innocent party receives the very thing bargained for rather
    than a monetary estimate of its worth
. [Emphasis added.]

The overarching test for granting specific
    performance

[69]

The basic rationale for an order of specific
    performance of contracts is that damages may not, in the particular case,
    afford a complete remedy:
Adderley v. Dixon
(1824), 57 E.R. 239 (Ch.),
    at p. 240;
Semelhago
, at para. 21;
Matthew Brady
, at para.
    29. In
Semelhago
, the Supreme Court noted that at one time the common
    law regarded every piece of real property as unique. However, in the
    contemporary real estate market, which is characterized by the mass production
    of urban residential housing, it cannot be assumed that damages for breach of
    contract for the purchase and sale of real estate would be an inadequate remedy
    in all cases: at para. 21. Accordingly, specific performance should not be
    granted as a matter of course absent evidence that the property is unique to
    the extent that its substitute would not be readily available: at para. 22.
    Therefore, a party seeking specific performance must establish a fair, real,
    and substantial justification by showing that damages would be inadequate to compensate
    for its loss of the subject property:
Asamera Oil Corp. v. Seal Oil &
    General Corp.,
[1979] 1 S.C.R. 633, at p. 668.

[70]

In his article Death to
Semelhago
! (2016)
    39:1 Dalhousie L.J. 1, Professor Bruce Ziff commented, at p. 9, that the
    change ushered in by
Semelhago
can be seen as one of degree, not
    principle. The point was made, in a slightly different way, by Lax J., in
John
    E. Dodge Holdings Ltd. v. 805062 Ontario Ltd.
(2001), 56 O.R. (3d) 341
    (S.C.), affd (2003) 63 O.R. (3d) 304 (C.A.), leave to appeal refused, [2003]
    S.C.C.A. No. 145. She ventured the view, at para. 55, that
Semelhago
did not replace the presumption of uniqueness with a presumption of
    replaceability.
[2]
Certainly the plaintiff bears the onus of demonstrating entitlement to the
    remedy of specific performance. But what does that require the plaintiff to
    demonstrate? Lax J. stated, at para. 55:

Semelhago
asks us to examine in each case, the plaintiff and the property. The danger in
    framing the issue as one of uniqueness (a term that carries with it a pre-
Semelhago
antediluvian aroma) is that the real point of
Semelhago
will be lost.
    It is obviously important to identify the factors or characteristics that make
    a particular property unique to a particular plaintiff.
The
    more fundamental question is whether the plaintiff has shown that the land
    rather than its monetary equivalent better serves justice between the parties.
This will depend on whether money is an adequate substitute for the plaintiff's
    loss and this in turn will depend on whether the subject matter of the contract
    is generic or unique. [Emphasis added.]

[71]

Whether specific performance is to be awarded or
    not is therefore a question that is rooted firmly in the facts of an individual
    case:
Matthew Brady
, at para. 32. In determining whether a plaintiff
    has shown that the land rather than its monetary equivalent better serves
    justice between the parties, courts typically examine and weigh together three
    factors: (i) the nature of the property involved; (ii) the related question of
    the inadequacy of damages as a remedy; and (iii) the behaviour of the parties,
    having regard to the equitable nature of the remedy:
Landmark of Thornhill
    Ltd. v. Jacobson
(1995), 25 O.R. (3d) 628 (C.A.), at p. 636. Whether a property
    is unique, either by virtue of its nature or the features of the contract for
    its purchase and sale
[3]
,
    operates as only one of several factors a court must consider when determining
    entitlement to specific performance.

[72]

Against that backdrop of general principles, I
    shall examine the case law regarding each factor.

(i)

The nature of the property

[73]

In assessing whether a property is unique, courts
    may have regard to: (a) a propertys physical attributes; (b) the purchasers
    subjective interests, or (c) the circumstances of the underlying transaction.
    While physical and subjective uniqueness of property will usually be
    significant in cases where a purchaser  as opposed to a vendor  seeks
    specific performance, the types of uniqueness are not exclusive and no
    difference in evidential weight should be given to one form over another: Jeffrey
    Berryman,
The Law of Equitable Remedies
, 2nd ed. (Toronto: Irwin Law,
    2013), at pp. 355-57.

[74]

Uniqueness does not mean singularity or
    incomparability. Instead, it means that the property has a quality (or
    qualities) making it especially suitable for the proposed use that cannot be
    readily duplicated elsewhere:
Dodge
(S.C.), at para. 60. For example,
    a rising real estate market, particularly where the purchasers deposit remains
    tied up by the vendor, may indicate that the transaction could not have been
    readily duplicated or that other properties were not readily available at the
    time of breach within the plaintiffs price range:
Walker v. Jones
(2008), 298 D.L.R. (4th) 344
,
at para. 165;
Sivasubramaniam v.
    Mohammad
, 2018 ONSC 3073, 98 R.P.R. (5th) 130,

at paras. 84 and
    92, affd 2019 ONCA 242, 100 R.P.R. (5th) 1.

[75]

The court should examine the subjective
    uniqueness of the property from the point of view of the plaintiff at the time
    of contracting:
Dodge
(S.C.), at para. 59. The court must also determine
    objectively whether the plaintiff has demonstrated that the property or the
    transaction has characteristics that make an award of damages inadequate for
    that particular plaintiff:
Dodge
(S.C.), at para. 59;
Di Millo v.
    2099232 Ontario Inc.
, 2018 ONCA 1051, 430 D.L.R. (4th) 296,
at paras. 70-73, leave to appeal refused, [2019] S.C.C.A. No. 55.

[76]

While units in cookie-cutter townhouses or condominium
    units may be considered less unique than other forms of property, some condominiums
    are truly unique:
Gillespie v. 1766998 Ontario Inc.
, 2014 ONSC 6952,
    49 R.P.R. (5th) 65, at para. 26;
Landmark of Thornhill
, at p. 636. Even
    in the case of mass-produced condominiums, the issue remains whether the
    plaintiff has shown, upon the consideration of all the factors, that the land
    rather than its monetary equivalent better serves justice between the parties.


[77]

Put another way, the specific performance
    analysis is not merely a search for uniqueness. As the case law discloses, other
    factors such as the inadequacy of damages as a remedy and the behaviour of the
    parties also play a role:
Landmark of Thornhill
, at p. 636;
Dodge
(S.C.), at para 55;
UBS Securities Inc. v. Sands Brothers Canada Ltd.
,
    2009 ONCA 328, 95 O.R. (3d) 93, at para. 100.

(ii)

Adequacy of damages

[78]

As indicated above, one other factor is whether
    damages would be adequate to remedy the purchasers loss. For instance, courts
    should be reluctant to award specific performance of contracts for property
    purchased solely as an investment, since money damages are well-suited to satisfy
    purely financial interests:
Southcott Estates Inc. v. Toronto Catholic
    District School Board
, 2012 SCC 51, [2012] 2 S.C.R. 675, at paras. 40-41.

[79]

By contrast, if damages would be particularly
    time-consuming, difficult, or complex to compute, this may point in favour of
    specific performance: Sharpe J.,
Injunctions and Specific Performance
,
    at
§
7.220;
Neighbourhoods
    of Cornell Inc. v. 1440106 Ontario Inc.
(2003), 11 R.P.R. (4th) 294, at
    paras. 112-14, affd (2004), 22 R.P.R. (4th) 176 (C.A.), leave to appeal
    refused, [2004] S.C.C.A. No. 390.

(iii)

The behaviour of the parties

[80]

A final factor involves considering the
    behaviour of the parties and weighing the equities at play in the transaction:
Paterson
    Veterinary Professional Corporation v. Stilton Corp. Ltd.
, 2019 ONCA 746,
    438 D.L.R. (4th) 374, at para. 31, leave to appeal to S.C.C. refused, 38927
    (April 2, 2020);
Matthew Brady
, at para. 32. A vendors bad faith attempt
    to terminate a valid agreement of purchase and sale may support an order of
    specific performance against that party:
Gracegreen
, at para. 170.

D.      Analysis

[81]

In assessing the appellants submission that the
    application judge misapplied the foregoing principles in granting specific
    performance, I shall address the three main errors alleged by the appellants.

First error: The Unit was not unique to the
    Lucases

[82]

The appellants contend that Unit 421 was not
    unique to the Lucases in any way; it was merely a generic investment opportunity.
    They submit the application judge misapplied the applicable principles by
    awarding specific performance after finding, at paras. 59 and 61, that the Unit
    cannot be described as physically unique and that uniqueness of the property
    in the sense that it has some special characteristic sought by the party, does
    not apply. According to the appellants, the fact the Lucases now intend to
    sell the Unit and buy a larger home  due to their expanding family  proves
    that Unit 421 is only valuable to them financially and therefore is not unique:
Southcott
, at paras. 38-40.

[83]

I see no reversible error in the application
    judges analysis. Although he acknowledged that the Unit is one of many similar
    properties available in Toronto at any given time, there is no rigid rule
    requiring a court to decline specific performance to a prospective purchaser in
    the absence of physical or subjective uniqueness. In determining whether a
    substitute for the Unit was readily available within the meaning of
Semelhago
,
    a court may look beyond the physical attributes or location of a property to
    examine the features of the purchase transaction.

[84]

That is what the application judge did. At para.
    64, he found that the Unit was unique based on advantageous terms in the
    Agreement. These terms included: (a) a $15,000 credit, part of which the
    Lucases used to customize the Unit with upgrades, and (b) the ability to
    stretch out payment of the deposit into small monthly increments. The
    appellants now argue that these terms were available to the public at large.
    However, 185s evidence on the application was that (a) the overall deal outlined
    in the Agreement was unique to Alex Lucas and (b) the deposit payment
    structure was only available to the Lucases, not to others, because of Alexs
    long-standing employment with Triumph. The Agreement
locked in a home for
    the Lucases at a favourable price, along with the ability to slowly build their
    deposit. As long as they made their payments, they were insulated from market fluctuation
    while their home was being constructed and fitted with custom upgrades. On this
    basis, the application judge found that the Agreement could not have been
    readily duplicated at the time of 185s wrongful termination in February 2019.
    I see no palpable and overriding error in that finding.

[85]

This case is distinguishable from
Southcott
,
    where a developer sought specific relief with respect to property it had agreed
    to purchase solely as an investment. At the hearing, 185 acknowledged there was
    no evidence that the Lucases purchased Unit 421 as an investment property.
    Rather, the Lucases evidence was that they intended to live in the Unit when
    they entered into the Agreement in 2015. Later, when their second child was
    born, they decided they needed more space. While the arrival of a second child
    before the Units closing date changed their plans to live in the Unit, Kelly
    deposed that their interest in completing the purchase of the Unit remained one
    tied to residential use, not investment  they could use the sale proceeds as
    the means to buy a 2-bedroom unit in the condominium in which to live. Accordingly,
    the evidence does not support the appellants efforts to paint the Lucases interest
    in the Unit as solely an investment opportunity.

Second error: The Lucases failed to establish
    the inadequacy of damages

[86]

The
    second alleged error concerns the application judges finding, at para. 65, that
    pursuing damages would deny the Lucases the advantage of the rise in value of
    the Unit, hindering their ability to buy a home of the size and quality they
    could otherwise afford now. The appellants say the application judge failed to
    acknowledge that damages would be assessed at the date of judgment based on a
    straightforward analysis of the Units fair market value. As such, damages
    would not be complex to assess and the Lucases would not lose out on any
    increase in value.

[87]

The
    appellants further argue that the Lucases did not specifically plead that
    damages were inadequate or adduce evidence that it would have been difficult
    for them to obtain a similar property in Toronto. Therefore, the appellants
    submit that there was no basis on which to find damages inadequate and the application
    judge should have recognized the Lucases duty to mitigate.

[88]

I
    am not persuaded by the appellants submissions for four reasons.

[89]

First,
    the application judge found damages inadequate because of delay, not quantum.
    He did not ignore the practice that damages generally are assessed as of the
    date of judgment (or trial); he held that it would be unfair to make the
    Lucases wait any longer to be compensated for 185s misconduct.

[90]

As
    I read his reasons, especially at para. 65, the application judge made three
    points:

(i)    To
    accept 185s position that specific performance should not be available for a
    breach of a contract to sell a standard condominium unit where a vendor retains
    control of the purchasers deposit would make it difficult for purchasers to
    mitigate their damages. They would not be able to use their deposit to acquire a
    replacement property;

(ii)    Even
    with a damages award in their pockets, purchasers such as the Lucases would
    still have to spend time and money pursuing their vendor, such as 185, if it
    did not immediately honour the judgment; and

(iii)   Finally,
    a suit for damages could drag on for years. I take the application judge to
    be pointing to the Lucases choice to bring an application, rather than an
    action, to obtain their remedy for 185s breach. Bringing an application for
    specific performance would better achieve justice than requiring the [Lucases]
    to sue for damages, as the application judge put the matter.
[4]

I see no error in any of these points made by the
    application judge. Indeed, I agree with them.

[91]

In
    regard to the application judges comment that a suit for damages could drag on
    for years, I would note that an application is designed as a more stream-lined
    device than an action to obtain a remedy, avoiding the delays and costs too
    often associated with productions, discoveries, and the scheduling of trials.
    And the potential advantage of an application over an action was demonstrated
    in this case: the Lucases issued their notice of application in March 2019 and
    obtained their judgment less than 10 months later, in January 2020. An example
    of the courts process satisfying the service guarantee promised by r.
    1.04(1) of the
Rules of Civil Procedure

to secure the just, most expeditious and least expensive
    determination of every civil proceedings on its merits:
Louis
    v. Poitras
, 2020 ONCA 815, at para. 33; 2021 ONCA 49, at para. 22.

[92]

Second,
    the Lucases were not required to specifically plead the inadequacy of damages,
    as the appellants contend. A claim for specific performance, by its nature,
    requires a court to inquire into whether damages would be an adequate remedy in
    the circumstances. While choosing not to plead damages as an alternative to
    specific performance may, in some circumstances, be a risky litigation strategy,
    it does not preclude a court from assessing the circumstances surrounding the
    transaction and subsequent litigation in exercising its remedial discretion. Accordingly,
    185s contention that it was taken by surprise when the application judge
    considered inadequacy of damages is not tenable given the Lucases claim for
    specific performance.

[93]

Third,
    there was sufficient evidence to support the application judges finding that damages
    were inadequate to compensate the Lucases. It is common ground that prices in
    the Toronto real estate market rose significantly over the past several years. The
    evidence before the application judge was that the Unit had increased in value
    by about 40% between the signing of the Agreement in 2015 and 185s purported
    termination in 2019. Given that four years had elapsed between the execution of
    the Agreement and 185s wrongful termination, it was reasonable for the
    application judge to infer that it would have been difficult for the Lucases to
    find a property at a comparable price, particularly when 185 had seized their
    deposit.

[94]

Finally,
    I do not accept the appellants suggestion that in order to obtain specific
    performance the Lucases were required to prove they lacked the financial means
    to mitigate their loss. In their application, the Lucases claimed specific
    performance, not damages. In
Southcott
, the
    Supreme Court explained the interplay between a claim for specific performance
    and the obligation of the innocent party to mitigate when faced with a breach
    of contract. At para. 37, the court stated:

Asamera
set out the general
    principles governing mitigation: was the plaintiffs inaction reasonable in the
    circumstances, and could the plaintiff have mitigated if it chose to do so.
    Those principles apply to a plaintiff seeking specific performance. If the
    plaintiff has a substantial justification or a substantial and legitimate
    interest in specific performance, its refusal to purchase other property may
    be reasonable, depending upon the circumstances of the case.

[95]

In
    assessing whether the plaintiffs refusal to purchase another property was
    reasonable, the defendant vendor bears the burden of proof. As the court went
    on to state in
Southcott
, at para. 45: [W]here
    it is alleged that a plaintiff has failed to mitigate damages, the onus of
    proof on a balance of probabilities lies with the defendant, who must establish
    not only that the plaintiff failed to take reasonable efforts to find a
    substitute, but also that a reasonable profitable substitute could be found.

[96]

The
    application judge obviously found that 185 had not discharged that onus. 185s
    retention of the deposit evidently played a large role in the application
    judges analysis for he noted, at para. 64, that the [Lucases] deposits have
    been provided to 185, and that money has been, and remains, tied up in the
    property, unavailable for acquiring another property, as the market continues
    to rise. The evidence also disclosed two other impediments to reasonable
    mitigation: (i) the expert evidence indicated that any potential substitute
    property in February 2019 would have been significantly more expensive than the
    contract price for the Unit; and (ii) the Agreement had provided the Lucases
    with special advantageous terms because of their relationship with the vendors
    principals.

[97]

Given
    those circumstances, I see no error in the application judges determination
    that the
Lucases had shown that specific performance of
    conveying the Unit, rather than awarding its monetary equivalent, better served
    justice between the parties
.

Third error: the Lucases behaved
    inappropriately, not 185

[98]

The
    appellants also contend the application judge failed to consider that the
    Lucases did not bring their claim for equitable relief with clean hands.
    Conversely, they argue that the subsequent sale to Sofia and Andre, while a favourable
    deal, was legitimate. As such, the appellants say the application judge erred
    in finding that the behaviour of the parties weighed in favour of awarding specific
    performance against 185.

[99]

I
    see no merit in this submission. The application judge considered and rejected essentially
    the same argument: at paras. 72-75. On appeal, 185 seeks to re-litigate the
    issue. Although 185 may disagree with the application judges reasoning, I see
    nothing to suggest he made any palpable and overriding error in his application
    of the doctrine of clean hands.

[100]

Further, as the
    application judge noted, at para. 75, the equities in this case strongly favour
    the Lucases. The Lucases upheld their end of the Agreement and expected 185 to
    do the same. Over the course of four years they made all required payments to
    secure ownership of the Unit. In September 2018, 185 took issue with Mr.
    Duartes occupancy. However, 185 did not promptly invoke any right to terminate
    under the Agreement. Instead, it did nothing for months, only raising the
    matter again in December as leverage in the Bathtub Dispute, long after Mr.
    Duarte had already vacated the Unit. When that tactic failed, 185 terminated
    the Agreement on the eve of closing, seized the Lucases deposit, and re-sold
    the Unit to close relatives of the companys principals on favourable terms.

[101]

The appellants submit
    that the application judge erred in finding, at para. 77, that the re-sale of
    the Unit to Sofia and Andre was a sham, intended by the [appellants] to
    prevent the [Lucases] from acquiring title to Unit 421. While the word sham
    might overstate the commercially favourable aspects of the re-sale transaction,
    the evidence certainly supported the application judges inference that 185
    entered into that transaction to prevent the Lucases from acquiring title to
    the Unit. Specifically, the evidence revealed that:

(i)    Sofia
    and Andre were the children of one of 185s principals;

(ii)    The
    re-sale price of $418,000 was far below the then market price for the Unit,
    which 185s own experts valued at between $489,000 and $520,000;

(iii)   The
    required deposit of $5,000 was only 1% of the purchase price, far lower in
    proportion than the deposit required of the Lucases on their purchase.
[5]
Another $13,000, or 3%, was to be paid on closing, with the balance financed by
    a vendor take-back mortgage from 185, the company owned by the purchasers
    father and uncle;
[6]


(iv)   Mario
    deposed that 185 offered the mortgage because he was aware that Sofia and Andre
    did not have the money to close the transaction;

(v)   The
    re-sale was not the result of listing the Unit on the open market. Instead,
    Sofia deposed that her uncle approached her to advise that the sale of the Unit
    to a former Triumph employee was not proceeding; and

(vi)   Sofia
    deposed that her uncles overture occurred in early March 2019, just three
    weeks after 185 purported to terminate the Agreement.

[102]

Given the evidence set
    out above in paras. 100 and 101, it certainly was open to the application judge
    to find that 185 acted in bad faith in terminating the Agreement and to take
    that conduct into account in granting equitable relief to the Lucases.

E.      Conclusion on Issue 2

[103]

Accordingly, I would dismiss the appeal with respect to remedy. I
    see no reversible error in the application judges decision to grant specific
    performance in favour of the Lucases. He properly applied the controlling
    principles to the evidence before him. Rather than focus solely on the uniqueness
    of the Unit itself, he conducted a broad critical inquiry as to the adequacy of
    damages having regard to the circumstances of the transaction as a whole. Based
    on this inquiry, the application judge was entitled to conclude, as he did, that
    specific performance would best serve justice between the parties.

IV.     ISSUE 3: THE SUBSEQUENT SALE TO SOFIA
    AND ANDRE

[104]

The final issue on appeal concerns 185s subsequent sale of the Unit
    to Sofia and Andre. The appellants submit the application judge erred by
    ordering the lease with Sofia and Andres tenants assigned to the Lucases. As non-parties
    to the litigation, the appellants submit that the tenants had no recourse to
    challenge the application judges interference with their contractual rights. They
    say the lease should be re-assigned and all rent payments returned to Sofia and
    Andre.

[105]

As a practical matter, this is no longer a live issue. At the
    hearing, respondents counsel confirmed that Sofia and Andres tenants
    voluntarily vacated the Unit on March 31, 2020, after paying only one month of
    rent to the Lucases. The Lucases re-took vacant possession of the Unit in April
    2020.

[106]

As well, given my conclusion that the application judge did not err
    in granting the Lucases specific performance of the Agreement, I see no error
    in that part of his judgment which, in effect, directed the Lucases to honour
    the lease with the then existing tenants of the Unit.

V.      DISPOSITION

[107]

For the reasons set out above, I would dismiss the appeal.

[108]

I would order the appellants to pay the respondents their partial
    indemnity costs of the appeal fixed in the amount of $18,500, inclusive of
    disbursements and applicable taxes.

Released: AH JAN 28 2021

David
    Brown J.A.

I
    agree. Alexandra Hoy J.A.

I
    agree. Thorburn J.A.





[1]
185
    abandoned its appeal of the application judges order with respect to relief
    from forfeiture and released $73,980 in deposit monies to the Lucases.



[2]

Low J. first made this point
in
904060
    Ontario Ltd. v. 529566 Ontario Ltd.
, [1999] O.J. No. 355 (S.C.), at para.
    14.



[3]

Domowicz v. Orsa Investments Ltd.
(1993), 15 O.R.
    (3d) 661, at pp. 687-88, affd (1998), 40 O.R. (3d) 256 (C.A.);
Matthew
    Brady
, at para. 39;
Di Millo v. 2099232 Ontario Inc.
, 2018 ONCA
    1051, 430 D.L.R. (4th) 296, at paras. 70-74,
leave to appeal
    refused, [2019] S.C.C.A. No. 55.



[4]

In
Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd.
, 2014
    BCCA 388, 377 D.L.R. (4th) 701, the British Columbia Court of Appeal noted the
    advantages of the remedy of specific performance in providing greater access to
    justice in the courts, stating, at para. 49:

In terms of the modern
    concept of access to justice, the remedy has much to be said for it, at least
    in the context of contracts for the sale and purchase of land. Certainly it is
    likely to be less expensive and time-consuming than the assessment of damages,
    which requires the parties to marshal expert evidence concerning the value of
    the land as at a particular date (which may be in issue) in what may be an
    unstable market.



[5]

Sofia
    and Andre recovered their deposit through the rent paid by their tenants prior
    to the judgment and transfer of the Unit to the Lucases.



[6]

Although
    the application judge, at paras. 22 and 77, stated that the agreement to secure
    payment of the balance of the purchase price was by way of a promissory note, not
    a mortgage, in my view this mischaracterization is of no consequence. At the
    end of the day, the purchasers were offered financing for 96% of the purchase
    price by the company owned by their father and uncle.


