



COURT OF APPEAL FOR ONTARIO

CITATION: Bovaird West Holdings Inc. v.
    Mattamy (Credit River) Limited, 2020 ONCA 445

DATE: 20200707

DOCKET: C67903

Juriansz, Rouleau and Hourigan
    JJ.A.

BETWEEN

Bovaird West Holdings Inc.

Applicant

(Appellant)

and

Mattamy (Credit River) Limited

Respondent

(Respondent)

Eliot N. Kolers, Patrick G. Duffy and
    Alexander DeParde, for the appellant

James Renihan and Sapna Thakker, for
    the respondent

Heard: in writing

On
    appeal from the order of Justice Shaun OBrien of the Superior Court of Justice,
    dated December 16, 2019.

REASONS FOR DECISION

[1]

In 2010, the respondent, Mattamy (Credit River)
    Limited (Mattamy), owned several parcels of undeveloped land in Brampton. It
    entered into an Agreement of Purchase and Sale (APS) to sell a portion of its
    lands to NA Realty Acquisition Corp., which later assigned its interest to the
    appellant, Bovaird West Holdings Inc. (Bovaird). As part of the APS, Mattamy
    agreed to indemnify & save the Purchaser harmless in respect of the Community
    Cost Sharing Agreement(s).

[2]

The sale of the land to Bovaird closed on June
    26, 2013. Mattamy and Bovaird entered into several related agreements as part
    of the closing. One such agreement was the June 25, 2013 Agreement re
    Post-Closing Obligations, in which Bovaird agreed that the property was to be developed
    for district retail use pursuant to the Official Plan.

[3]

In 2016, Bovaird obtained a zoning amendment to
    allow residential development on a portion of the land it purchased  a change
    from Bovairds original plan to use the land for retail. This change in use
    triggered an additional fee of $2,825,407 for contribution toward the cost of
    land for schools. Bovaird paid the fee but sought indemnity from Mattamy under
    the APS. Mattamy took the position that it was not required to indemnify,
    because Bovaird breached its obligation in the Agreement re Post-Closing
    Obligations to develop the property for retail use.

[4]

Bovaird commenced an application seeking an
    order that Mattamy reimburse it for the additional fees. In support of its
    application, Bovaird submitted that its obligation to develop the property for
    district retail did not require it to develop retail uses. It argued that
    because the Secondary Plan allows for the possibility of residential
    development in district retail areas, it could satisfy its contractual
    obligation by pursuing a residential development.

[5]

The application judge rejected this argument.
    Based on the language of the agreements and the factual matrix, she concluded
    that Bovairds development was specifically focused on district retail use in
    its usual meaning in the Secondary Plan and not on the exception for
    residential use in some circumstances.

[6]

Having found that Bovaird breached its
    obligation to develop the property for district retail use, the application
    judge concluded that Mattamy was not required to indemnify Bovaird. She
    reasoned that the indemnity provision must be read in the context of Bovairds
    agreement to develop the land for retail use and found that the broad
    indemnity obligations should not allow Bovaird to profit from its own breach of
    contract when it decided to develop the lands for residential use. She
    dismissed the application.

[7]

Bovaird submits that the application judge erred
    in: (i) holding that it breached the Agreement re Post-Closing Obligations; and
    (ii) reading down Mattamys indemnity obligation so it was limited to
    cost-sharing obligations associated with developing the land for retail use.

[8]

To succeed on this appeal of the application
    judges interpretation of a one-off contract, Bovaird must establish a palpable
    and overriding error or an extricable error of law:
Ledcor Construction
    Ltd. v. Northbridge Indemnity Insurance Co
, 2016 SCC 37, [2016] 2 S.C.R.
    23, at paras. 19-26.

[9]

We are not satisfied that Bovaird has met its
    onus on the appeal. Indeed, we agree with the application judges thorough and
    careful analysis of the terms of the parties agreements and the surrounding
    factual matrix. She reached the correct result, one that is fully supported by
    the record and which accords with commercial sense.

[10]

The appeal is dismissed. If the parties cannot
    agree on the costs of the appeal, they may file written submissions of no more
    than three pages within ten days of the release of these reasons.

R.G. Juriansz J.A.

Paul Rouleau J.A.

C.W. Hourigan J.A.


