



COURT OF APPEAL FOR ONTARIO

CITATION: Himidan v. Farquharson, 2019 ONCA 575

DATE: 20190708

DOCKET: C66320

Huscroft, Trotter and Zarnett JJ.A.

BETWEEN

Dr. Sharifa Himidan

Plaintiff/Defendant by Counterclaim  
    (Appellant)

and

Emma Louise Farquharson and Sheehan Patrick Burns

Defendants/Plaintiffs by Counterclaim  
    (Respondents)

Tanya Pagliaroli and Bethany McKoy, for the appellant

Courtney Raphael and Brian Chung, for the respondents

Heard: June 27, 2019

On appeal from the judgment of Justice Heather McArthur
    of the Superior Court of Justice, dated November 16, 2018.

Zarnett J.A.:

[1]

At the conclusion of argument the court
    dismissed the appeal with reasons to follow. These are those reasons.

[2]

The appellant agreed to sell her home at 45
    Moore Avenue, Toronto to the respondents. Between the signing of the Agreement
    of Purchase and Sale (APS) and the date the sale was to close, the neighbouring
    property owners asserted that the appellant did not own all of what appeared
    visually to be the driveway of 45 Moore Avenue. The neighbours pursued that
    assertion, including by fencing off a two-foot-wide strip of the 26-foot-long
    driveway they claimed encroached on their property. The appellant disputed the
    neighbours assertion, but could not resolve the dispute before the closing
    date. It is the subject of outstanding litigation between the appellant and the
    neighbours.

[3]

The respondents refused to close the purchase
    under the APS, on the basis that the appellant could not convey clear title to
    the entire driveway. The appellant commenced an action for damages for the
    failure to close. The respondents counterclaimed for return of their deposit.
    The parties each moved for summary judgment to dismiss the claims against them
    and for judgment on their own claims.

[4]

The motion judge found in favour of the
    respondents. In her view the APS represented that the appellant owned all of what
    was visually apparent as the functioning private driveway of 45 Moore Avenue at
    the time the APS was executed. She found that there was a defect in the
    appellants title due to the dispute over whether a two-foot-wide strip of the
    driveway was owned by the appellant and could be conveyed to the respondents.
    And she found that the defect was significant enough to entitle the respondents
    to refuse to close.

[5]

The appellant raises the following grounds of
    appeal:

a)

The motion judge misinterpreted the APS. Properly interpreted, the
    appellant only agreed to sell her home with a seven-foot-wide driveway. That
    the driveway was nine feet wide when the APS was signed, and that the neighbour
    claimed two feet of that width, were irrelevant to the appellants obligations
    and the respondents rights under the APS. There was no title defect in what
    the appellant had actually agreed to sell.

b)

In
    any event, the title defect of a two-foot discrepancy in the width of the
    driveway was not significant enough to permit the respondents to refuse to
    close.

[6]

In considering these issues, the appellant
    argues that the motion judges determinations are reviewable on a correctness
    standard. In any event, she says the motion judge made palpable and overriding
    errors in arriving at her interpretation of the APS.

The Standard of Review

[7]

I reject the appellants submission that a
    correctness standard of review should apply. The interpretation of a contract
    is generally subject to a deferential standard of review because it typically
    involves issues of mixed fact and law; only where an extricable error of law is
    involved is a correctness standard applied:
Sattva Capital Corp. v.
    Creston Moly Corp
., 2014 SCC 53, [2014] 2 S.C.R. 633, at
    paras. 50, 52-55. In my view no such error has been identified.

[8]

Nor is this a case attracting a correctness
    standard of review because the APS in part uses a standard form. This is not a
    case of a standard form contract entered into under circumstances where there
    is no relevant factual matrix, such as a contract of adhesion. Some of the disputed
    clauses of the APS are not part of the pre-printed standard form contract, but
    were added as Schedules. And there is a factual matrix concerning the matter
    that is specific to these parties and assists in interpreting the APS. A
    deferential standard of review is thus applicable:
Ledcor
    Construction Ltd. v. Northbridge Indemnity Insurance Co
.,
    2016 SCC 37, [2016] 2 S.C.R. 23, at para. 48.

The Interpretation of the APS

[9]

Prior to executing the APS with the respondents,
    the appellant had listed her home for sale. The property was advertised as
    having a recently upgraded heated private driveway and a garage. The
    respondents viewed the property before submitting an offer. At that time, the
    property visually appeared to include a driveway leading, unobstructed, to the
    garage, and a fence at the edge of the driveway separating it from the neighbours
    property.

[10]

The APS which resulted from the respondents offer
    provided for the sale of 45 Moore Avenue for $1,905,000. It described the
    subject property as having a frontage of 24 feet and a depth of 95 (irregular) feet.
    The driveway is mentioned in two schedules to the APS.

[11]

Schedule D is a 1987 survey of the property
    which shows, among other things, a private driveway of 26 feet by seven feet.

[12]

Schedule B contains a clause which states that
    the respondents accept that there is a mutual right of way registered on title
    to the subject property as per the attached survey (between the houses). It
    also provides that the respondents accept that the survey may not show the
    current location of all structures, fences landscaping, decks etc., and that
    they will not object with respect to that.

[13]

Schedule B contains a further driveway clause
    by which the appellant represents, and the respondents accept, that: the
    subject property driveway is owned by 45 Moore Avenue, but is subject to a
    right of way. The driveway functions as a private driveway.

[14]

The width of the driveway as it visually appeared
    at the time of the APS was nine feet. The appellant argues that the motion
    judge erred in relying on the respondents understanding that they were
    getting the driveway they visually saw. She argues that in approaching the matter
    that way she allowed the surrounding circumstances to overwhelm the text of the
    APS, contrary to
Sattva
, at para. 57. She
    argues that the text of the Schedules means the appellant was selling a property
    with a seven-foot-wide driveway.

[15]

I disagree. The motion judge was entitled to
    interpret the words used in light of the factual matrix, in order to deepen
    her understanding of the mutual and objective intentions of the parties as
    expressed in the words of the contract:
Sattva
, at paras. 57-58. On a fair reading of her decision, that is what
    she did.

[16]

The physical and visual appearance of the
    property at the time of the contract were objective facts known to the parties,
    which are particularly useful in interpreting the meaning of the description of
    the property in an agreement to purchase a home. As this court noted in
LeMesurier

v.

Andrus
(1986)
, 54 O.R. (2d) 1 (C.A.), leave to appeal refd, [1986] 2 S.C.R. v, at
    p. 4:

A reasonable person entering into the contract
    would assume that the purchase of 9 Dinnick Crescentwith private drive to the
    West would include everything which to the eye appeared part of the driveway[.]

[17]

The motion judge was entitled to find as she
    did, that any reasonable person would assume that the driveway referred to in
    the APS as owned by 45 Moore would include what appeared to the eye to be the
    driveway, which was not seven feet wide but nine.

[18]

Interpreting the APS as including the driveway
    as it visually appeared at the time of contracting leads to no inconsistency
    with the wording of either Schedule. Schedule D containing the survey and the
    1987 driveway dimensions does not assist the appellant because Schedule B
    primarily refers to it for the purpose of identifying a mutual right of way (which
    is not in issue) and expressly states that it may not show current locations of
    structures, fences, etc. Moreover, the dimensions provided on a 1987 survey,
    specifically not represented to be current, could not reasonably be taken to
    mean that what was being sold was only 7/9 of what appeared to the eye to be
    part of the driveway, or that the APS placed the risk of that occurring on the
    respondents.

[19]

Schedule Bs driveway clause does not assist the
    appellant because it confirms that the driveway is owned by the sale property and
    functions as a private driveway; those representations are inconsistent with
    the neighbours assertion of ownership and what the appellant was able to
    convey. The statement about a right of way also does not help the appellant because
    the neighbours asserted ownership, not a right of way, over part of the
    driveway.

[20]

A contract must be interpreted in accordance
    with sound commercial principles and good business sense:
Ventas,
    Inc. v. Sunrise Senior Living Real Estate Investment Trust
, 2007 ONCA 205, 85 O.R. (3d) 254, at paras. 24, 50. On the
    appellants argument, she was agreeing to sell only a seven-foot strip of the
    driveway. If the appellants contentions against the neighbours are correct, namely
    that the appellant owned the other two-foot strip by adverse possession, then
    the APS was reserving that two-foot strip to her (because she was not including
    it in the sale). If the neighbours assertion is right, then the appellant was
    selling a seven-foot strip of a nine-foot-wide driveway under circumstances in
    which the neighbours could block the other two feet,
interfering with
    the functioning of the driveway as it appeared at the time of the APS
. In either event, the appellants proposed interpretation does not
    make commercial sense.

[21]

Accordingly I see no error in the motion judges
    finding that the there was a title defect in what the appellant had agreed to
    convey.

The Significance
    of the Defect

[22]

The appellant argues that the motion judge
    relied on the respondents subjective view of the driveways importance in
    deciding that the title defect was significant enough to justify the
    respondents refusal to close. But the respondents view was relevant:
Kelly
    v. Semple
, 2010 ONSC 1020, at paras. 13-14. Further, there
    was abundant objective evidence of the title defects significance. The neighbours
    wanted $200,000 in exchange for giving up their assertion of ownership over the
    two-foot strip. The appellant herself gave evidence that blocking the two-foot
    strip off with a fence interfered with the use of the driveway, both
    restricting the ability to open a car door and blocking access to the garage.
    When the appellant resold the property, the agreement of purchase and sale specifically
    disclosed the ongoing litigation with the neighbours over the driveway, and the
    sale price was negatively affected: the appellant realized an amount $145,000
    less than that the respondents had agreed to pay.

[23]

There is no error in the motion judges
    conclusion that the title defect was significant enough to permit the
    respondents to refuse to close. The respondents reliance on it in refusing to
    close was neither arbitrary nor capricious:
LeMesurier
,
at p. 7.

Conclusion

[24]

The appeal is dismissed. In accordance with the agreement of the
    parties, the respondents are to have their costs of the appeal in the amount of
    $12,621.02, inclusive of disbursements and applicable taxes.

Released: GTT July 8, 2019


B. Zarnett J.A.

I agree. Grant Huscroft J.A.
I agree.
G.T. Trotter J.A.


