



COURT OF APPEAL FOR ONTARIO

CITATION: Ingarra v. 301099 Ontario Limited
    (Previn Court Homes), 2020 ONCA 103

DATE: 20200211

DOCKET: C67092

Simmons, Lauwers and Nordheimer
    JJ.A.

BETWEEN

Anthony John Ingarra

Applicant (Respondent)

and

301099 Ontario Limited o/a
    Previn Court Homes

Respondent (Appellant)

Ian P. Katchin, for the appellant

Nicholas J. Cartel and Glenn Brandys,
    for the respondent

Heard: January 24, 2020

On appeal from the judgment of Justice Jessica
    Kimmel of the Superior Court of Justice, dated May 30, 2019, with reasons
    reported at 2019 ONSC 3347.

Lauwers
    J.A.:

[1]

Anthony John Ingarra bought a home from Previn
    Homes in a new residential subdivision. The transaction did not close. On March
    20, 2018 Mr. Ingarra brought an application seeking the interpretation of
    the agreement of purchase and sale between the parties and an order for
    specific performance. The house was later sold by Previn Homes to another buyer.

[2]

The application judge dealt with the
    interpretation issue but not the remedy. She found that Previn Homes breached
    the agreement, not Mr. Ingarra and granted declarations to that effect. She
    also found that Mr. Ingarra was entitled to a remedy to be determined in later proceedings.

[3]

For the reasons set out below, I would allow the
    appeal and dismiss Mr. Ingarras application.

Factual Context

[4]

The agreement of purchase and sale was
    dated March 26, 2016. Because it was for a new home, it included a Tarion
    Addendum, which governs the relations between the parties, in part. The Tarion
    Addendum derives from the
Ontario New Home Warranties Plan Act
, R.S.O. 1990, c. O.31, as amended.

[5]

Under the
    terms of the agreement and the Tarion Addendum, the parties fixed what the
Tarion Addendum
called a Firm Closing
    Date for January 11, 2017.

[6]

Previn Homes
    was required to provide an occupancy permit to Mr. Ingarra on or before the
    closing. The occupancy permit was not provided until January 12, 2018. Previn
    Homes was therefore not in a position to close on the Firm Closing Date.

[7]

For his part, Mr.
    Ingarra was also not in a position to close on the Firm Closing Date because he
    was not yet in funds. His lender needed five days from its appraisal to
    complete the process and approve the loan. However, when the appraiser attended
    on January 8, 2018, the home  was not complete because the exterior bricks and
    soffits/fascia had not been installed. Mr. Ingarras counsel sent a letter to
Previn Homes counsel, dated January 11, 2018. It stated:

Our clients lender B2B Bank completed their
    appraisal of the subject property and advised that the exterior of the property
    is not complete as required by them in order to advance. Accordingly an
    extension is required until their advance criteria can be met.

[8]

Although the Tarion Addendum prescribes a
    framework for changing dates the parties did not follow that framework. Instead
    by agreement between the lawyers, the closing date was extended to January 15,
    2018. By letter dated January 15, 2018, Mr. Ingarras counsel wrote to counsel
    for Previn Homes requesting an additional extension:

Our client requires an extension to tomorrow
    (January 16, 2018) as his lender has not completed the Appraisal. Kindly
    contact your client and advise.

[9]

Counsel for Previn Homes agreed in
    correspondence on January 15, 2018:

Further to your request, my client agrees to
    extend the closing of the above-noted transaction to no later than Wednesday
    January 17, 2018 with adjustments remaining as at January 11, 2017 [sic]. All
    other terms of the Agreement of Purchase and Sale are to remain the same and time
    is to remain of the essence.

[10]

Mr. Ingarra was not in funds on January 17, 2018
    and was unable to close. By letter that day, his counsel requested an additional
    extension to January 18, 2018, but counsel for Previn Homes refused, stating in
    his responding letter:

Unfortunately, my client which has been more
    than reasonable in granting extensions without requiring the payment of an
    extension fee, has lost its confidence in your clients ability to close this
    transaction, and is simply not prepared to grant any further extensions.

Under the circumstances, my client hereby
    declares your client in breach of the Agreement of Purchase and Sale, considers
    the Agreement of Purchase and Sale to be at an end and deems the deposit paid
    as forfeited. It is the intention of my client to now relist the property for
    sale.

The Issue

[11]

The application judge correctly identified the
    issue at para. 46 of her reasons:

The decision in this case comes down to
    whether the agreement between the lawyers (made orally and through the exchange
    of faxes and emails) to extend the agreed upon Firm Closing Date to the Interim
    Closing Dates (with adjustments remaining as at January 11, 2018) superseded
    the operation and effect of the provisions of the Tarion Addendum.

The Decision Under Appeal

[12]

The application judge found that the parties did
    not have the contractual freedom to set a closing date outside of the confines
    of the Tarion Addendum. She stated, at para. 46:

Their agreement did not comply with the
    requirements prescribed by section 4 of the Tarion Addendum, which the parties
    were clearly familiar with having adhered to them when the Amending Agreement
    was entered into on August 3, 2017. Their failed efforts to retroactively
    preserve the January 11, 2018 Firm Closing Date through the agreement to
    Interim Closing Dates have no legal effect.

[13]

Previn Homes
    had options regarding the setting of a new closing date under the Tarion
    Addendum. However, it took no steps on January 11, 2018 to set a new closing
    date under the Tarion Addendum framework. As a result, the application judge
    found that, s. 3(c) of the Tarion Addendum operated to set a new Delayed
    Closing Date 90 days after the Firm Closing Date, on April 11, 2018: at para.
    56. The provision states:

If notice of a new Delayed Closing Date is not
    given by the Vendor before the Firm Closing Date, the new Delayed Closing Date
    shall be deemed to be the date which is 90 days after the Firm Closing Date.

[14]

The application judge held that s. 4 of the
    Tarion Addendum limited the contractual freedom of the parties to set a new
    closing date and that s. 13 gave the Addendum precedence: at paras. 47-48.
    The application judge, at para. 41, rooted this effect in the consumer
    protection objectives of the legislation, citing the trial decision in
Sirisena v. Oakdale Village Homes Inc.
,
2010 ONSC 2996
,
100
    R.P.R. (4th) 94
, at paras. 11 and 45-53, affd
2013 ONSC 1051
,
30 R.P.R. (5th) 31
(Div. Ct.).

[15]

The application judge considered the
    requirements prescribed by s. 4 and concluded, at para. 51:

The purported amendments to the Firm Closing
    Date that were reflected in the agreement between the lawyers were voidable by
    the Purchaser by virtue of section 4(a) of the Tarion Addendum and were voided
    by the Purchaser's continued efforts to complete the APS notwithstanding the
    Vendor's purported (and invalid) termination of it on January 17, 2018.

[16]

In consequence, the application judge found, at
    para. 54: 
The Vendor's purported termination of the
    APS on January 17, 2018 was invalid. She did this on the basis that: None of
    the permitted grounds for termination under section 10 of the Tarion Addendum
    were available to the Vendor.

Analysis

[17]

I agree with
    the application judge that s. 3(c) of the Tarion Addendum operated to set a new
    Delayed Closing Date 90 days after the Firm Closing Date, on April 11, 2018:
    at para. 56. However, she erred in finding that the parties were not free to
    set a new advanced closing date before the Delayed Closing Date, outside of the
    confines of the Tarion Addendum.

[18]

It is not surprising that the lawyers did not
    use the cumbersome, paper-intensive and therefore expensive process set out in
    s. 4 of the Tarion Addendum, part of which is reproduced in the appendix to
    these reasons, to set new closing dates. Were they free to set new closing
    dates in the manner they did? In my view they were, for two reasons.

[19]

First, s. 4 of the Tarion Addendum does not
    render unenforceable non-compliant amendments. Despite stating that the Addendum
    sets out a framework for altering the Critical dates which cannot be altered
    contractually except as set out in this section 4, the last sentence in s.
    4(a) provides: Any amendment not in accordance with this section is
voidable
at the option of the Purchaser (emphasis added). A non-compliant amendment altering
    the closing date is not invalid as the application judge found. It is only
    voidable.

[20]

The failure to close on the Firm Closing Date of
    January 11, 2018 had the effect of leaving either party free to specify a new
    closing date on reasonable notice and restore the force of the time of the
    essence provision: see
Domicile Developments Inc. v. MacTavish
(1999),
    45 O.R. (3d) 302 (C.A.) and
King v. Urban & Country Transport Ltd.
(1973), 1 O.R. (2d) 449 (C.A.). This was the effect of the letter from counsel
    for Previn Homes, who gave an extension one day longer than Mr. Ingarras
    counsel requested. It was not argued before the application judge nor before this
    court that notice of the new closing date was unreasonable, nor was it
    unreasonable under the circumstances.

[21]

Second, s. 10 of the Tarion Addendum addresses
    Termination of the Purchase Agreement. Section 10(e) provides: Nothing in
    this Addendum derogates from any right of termination that either the Purchaser
    or the Vendor may have at law or in equity on the basis of, for example,
    frustration of contract or fundamental breach of contract.
Since Mr. Ingarra was not in funds to close on the new agreed closing
    date, it was open to Previn Homes to terminate the agreement of purchase and
    sale. Doing so was not prohibited by the Tarion Addendum.

[22]

In my view the application judge was correct in
    her conclusion, at para. 51, that: 
The purported
    amendments to the Firm Closing Date that were reflected in the agreement
    between the lawyers were voidable by the Purchaser by virtue of section 4(a) of
    the Tarion Addendum. But she erred in finding that the amended closing date
    was voided by the Purchaser's continued efforts to complete the APS
    notwithstanding the Vendor's purported (and invalid) termination of it on
    January 17, 2018. To the contrary, as the Purchaser had not by then exercised
    his right to void the lawyers agreement, Previn Homes termination was valid
    under s. 10(e) of the Tarion Addendum.

[23]

I reach this conclusion without satisfaction. The
    Tarion Addendum is not consumer protective by any stretch of the imagination.
    The current document is only marginally better drafted than its predecessor,
    which I described in the trial decision in
Sirasena,
at para. 11, as containing
    consumer-unfriendly language. It is consistent with Lord Devlins sardonic
    remark:
This sort of document is
    not meant to be read, still less to be understood:
McCutcheon v. David
    MacBrayne Ltd.
, [1964] 1 W.L.R.
    125
(U.K. H.L.).


[24]

The Tarion Addendum

is a small-font, single spaced, convoluted and confusingly long and
    obscure document, as s. 4 in the appendix to these reasons amply shows. It is a
    trap for the unwary, particularly the unwary lay person. Before Previn Homes terminated
    the agreement of purchase and sale on January 17, 2018, Mr. Ingarra had the option
    to void the newly set closing date, because the alteration was not compliant
    with s. 4 of the Addendum. The deemed Delayed Closing Date on April 11, 2018
    would then have been effective. However, he did not expressly do so. The
    Addendum is the territory of real estate lawyers, and any lawyer practising
    residential real estate involving new homes must be familiar with its terms, as
    we assume the lawyers were in this case.

Disposition

[25]

I would allow the appeal with costs to the
    appellant in the amount of $15,000 all-inclusive and reverse the costs payable
    in the court below.

Released: P.L. February 11, 2020

P.
    Lauwers J.A.

I
    agree. Janet Simmons J.A.

I
    agree.
I.V.B. Nordheimer J.A.

Appendix

Section 4 provides, in part:

4. Changing Critical Dates  By
    Mutual Agreement

(a) This Addendum sets out a
    framework for setting, extending and/or accelerating Critical dates, which
    cannot be altered contractually except as set out in this section 4. Any
    amendment not in accordance with this section is voidable at the option of the
    Purchaser.

(b) The Vendor and Purchaser may at
    any time, after signing the Purchase Agreement, mutually agree in writing to
    accelerate or extend any of the Critical Dates. Any amendment which accelerates
    or extends any of the Critical Dates must include the following provisions:

(i) the
    Purchaser and Vendor agree that the amendment is entirely voluntary  the
    Purchaser has no obligation to sign the amendment and each understands that
    this purchase transaction will still be valid if the Purchaser does not sign
    this amendment;

(ii) the
    amendment includes a revised Statement of Critical Dates which replaces the
    previous Statement of Critical Dates;

(iii) the
    Purchaser acknowledges that the amendment may affect delayed closing
    compensation payable; and

(iv) if
    the change involves extending either the Firm Closing Date or the Delayed
    Closing Date, then the amending agreement shall:

i. disclose
    to the Purchaser that the signing of the amendment may result in the loss of
    delaying closing compensation as described in section 7;

ii. unless
    there is an express waiver of compensation, describe in reasonable detail the
    cash amount, goods, services, or other consideration which the Purchaser
    accepts as compensation; and

iii. contain
    a statement by the Purchaser that the Purchaser waives compensation or accepts
    the compensation referred to in clause ii above, in either case, in full
    satisfaction of any delayed closing compensation payable by the Vendor for the
    period up to the new Firm Closing Date or Delayed Closing Date.

If the Purchaser for his or her own
    purposes requests a change of the Firm Closing Date or the Delayed Closing
    Date, then subparagraphs (b)(i), (iii) and (iv) above shall not apply.


