Court of Appeal Summaries (October 21-25)

October 30, 2024
John Polyzogopoulos

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Civil Decisions

Sapusak v. 9706151 Canada Ltd., 2024 ONCA 774

Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Summary Judgment, Appeals, Stay Pending Appeal, Mortgages Act, R.S.O. 1990, c. M.40, Land Titles Act, R.S.O. 1990, c. L.5, ss. 69, 78, 78(4), Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, Rules of Civil Procedure, r. 63.02, Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Dhatt v. Beer, 2020 ONCA 545, Martin v. 11037315 Canada Inc., 2022 ONCA 322, Ramdial v. Davis, 2015 ONCA 726, Hryniak v. Mauldin, 2014 SCC 7, Regal Constellation Hotel Ltd. (Re) (2004), 71 O.R. (3d) 355 (C.A.)

Del Grande v. Toronto Catholic District School Board, 2024 ONCA 769

Keywords: Administrative Law, Education, Discipline, Judicial Review, Constitutional Law, Civil Procedure, Res Judicata, Issue Estoppel, Abuse of Process, Functus Officio, Canadian Charter of Rights and Freedoms, ss. 2(a) (freedom of religion), 2(b) (freedom of expression) and 3 (democratic rights), Education Act, R.S.O. 1990, c. E.2, O. Reg. 246/18, s. 1(1), Toronto Catholic District School Board Code of Conduct Policy No. T.04, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Victoria University (Board of Regents) v. GE Canada Real, 2016 ONCA 646, Beach Place Ventures Ltd. v. Employment Standards Tribunal, 2022 BCCA 147, In the Matter of s. 10 of the Education Act, 2016 ONSC 2361, Chandler v. Alberta Association of Architects, [1989] 2 S.C.R. 848, Chandler v. Alberta Association of Architects, [1989] 2 S.C.R. 848, Jacobs Catalytic Ltd. v. International Brotherhood of Electrical Workers, Local 353, 2009 ONCA 749, Stanley v. Office of the Independent Police Review Director, 2020 ONCA 252, Fresco v. Canadian Imperial Bank of Commerce, 2022 ONCA, Bryton Capital Corp. GP Ltd. V. CIM Bayview Creek Inc., 2023 ONCA 363, Doré v. Barreau du Québec, 2012 SCC 12, Loyola High School v. Quebec (Attorney General), 2015 SCC 12, Commission scolaire francophone des Territoires du Nord-Ouest v. Northwest Territories (Education, Culture and Employment), 2023 SCC 31, Volpe v. Wong-Tam, 2023 ONCA 680, York Region District School Board v. Elementary Teachers’ Federation of Ontario, 2024 SCC 22, 492, Kempling v. British Columbia College of Teachers, 2005 BCCA 327, Law Society of British Columbia v. Trinity Western University, 2018 SCC 32

Corridor Transport Inc. v. Vittorio Junior Lentini, 2024 ONCA 773

Keywords: Breach of Contract, Torts, Conversion, Ontario Business Corporations Act, R.S.O. 1990, c. B16, Limited Partnership Act, R.S.O. 1990, c.L.16, Bunton v. FTA Logistics Inc. and Ikenouye, 2020 ONSC 5463, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 52, 563689 Ontario Ltd. v. Two Saint Clair Holdings Ltd., 2004 CanLII 34920 (Ont. C.A.), J.A. Willoughby & Sons Ltd. v. Selkirk, [1958] O.R. 235 (C.A.), Boma Manufacturing Ltd.v.Canadian Imperial Bank of Commerce, [1996] 3 S.C.R. 727, Canadian Contract Law, 4th ed. (Toronto: LexisNexis Canada, 2018)

1785192 Ontario Inc. v. Ontario H Limited Partnership, 2024 ONCA 775

Keywords: Contracts, Real Property, Options to Purchase, Remedies, Specific Performance, Relief from Forfeiture, Mitsui & Co. (Canada) Ltd. v. Royal Bank of Canada, [1995] 2 S.C.R. 187, Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, Kingsberg Developments Ltd. v. K Mart Canada Ltd., (1983), 40 O.R. (2d) 348 (H.C.), Self Unit Acquisitions Inc. v. Cherokee-Oakville Property G.P. Inc., 2007 CarswellOnt 5115 (S.C.), Vulcan Packaging Inc. v. Capital Ventures Group Inc. (1990), 71 O.R. (2d) 554 (C.A.)

Short Civil Decisions

Miguna v. Sitel Operation Corporation, 2024 ONCA 779

Keywords: Torts, Defamation, Civil Procedure, Summary Judgment, Costs, Libel and Slander Act, R.S.O. 1990, c. L. 12

CIVIL DECISIONS

Sapusak v. 9706151 Canada Ltd., 2024 ONCA 774

[Zarnett J.A. (Motions Judge)]

Counsel:

G. Cadogan, for the moving party (M55320) and the responding party by way of cross-motion (M55407) Canguard Group Limited

K. S. Randhawa, for the moving party (M55319) 11039342 Canada Inc.

N. Colville-Reeves, for the responding party (M55319 & M55320) and the moving party by way of cross-motion (M55407) C. J. S.

Facts:

Canguard Group Limited (“Canguard”) and 11039342 Canada Inc. (“11039”) each moved, under r. 63.02 of the Rules of Civil Procedure, for a stay of orders granted by the summary judgment judge pending their appeals of those orders. The challenged orders expunged a mortgage in favour of Canguard from title to the Caledon property and a mortgage in favour of 11039 from title to the Bradford property. The moving parties’ central contention was that their appeals will be moot if the challenged orders are registered on title, as the orders declared that the Canguard mortgage was void and directed it be expunged title.

Issues:

Should the Court stay the orders pending appeal?

Holding:

Motion dismissed.

Reasoning:

No.

The test for staying an order pending appeal requires the court to consider the following three factors: (i) the merits of the appeal to ensure, on a preliminary assessment, that there is a serious question to be tried; (ii) whether the moving party would suffer irreparable harm if the stay were refused; and (iii) the balance of convenience, that is, which of the parties would suffer greater harm from the granting or refusal of the stay pending a decision on the appeal.

(i) Merits of the Appeal

The Court did not accept the submissions by Canguard that it raised serious issues on appeal and rejected each of its following arguments: (i) the summary judgment judge proceeded in the absence of evidence from Mr. S; (ii) he misinterpreted the effect of the power of sale provisions of the Mortgages Act and s. 78 of the Land Titles Act; (iii) he used, as evidence against Canguard, deemed admissions of Bangia arising from its default in defending Mr. S’s claim; and (iv) he failed to draw the inference that money must have been advanced in the transactions Mr. S complained about, since when Mr. S owned the Caledon property it was subject to mortgage debt that was subsequently discharged.

The Court also did not accept the merits of the four grounds of appeal raised by 11039: (i) the judge failed to consider trust ledgers which showed the provision of funds by 11039 to its mortgagor; (ii) that Mr. S’s title was extinguished by the exercise of a power of sale by a different mortgagee; (iii) that the judge should not have relied on the Fraudulent Conveyances Act; and (iv) the summary judgment judge relied on evidence not properly before the court.

(ii) Irreparable Harm

The Court did not accept the submissions by Canguard and 11039 that they would have suffered irreparable harm if a stay was not ordered because the orders expunging their mortgages from title were in the nature of vesting orders which, when registered, precluded their appeals from proceeding and rendered them moot. They relied on Regal Constellation Hotel Ltd. (Re) as an authority.

First, although the Court found that both Regal and the case at hand addressed vesting orders, this case was distinguishable as it did not involve an appeal from vesting orders. In this case, the challenged orders of the summary judgment judge did not state that any interest vested or was to be vested. They provided that the mortgages of Canguard and 11039 were expunged from title. Counsel for Mr. Sapusak expressly took the position they were not vesting orders and that he did not and would not take the position that the appeals will be moot upon registration of the orders. If the appeals were allowed, he would not oppose the re-registration of the mortgages.

Second, the Court found that Canguard and 11039 failed to meet the onus of showing irreparable harm. Any argument that they would have suffered irreparable harm assumed the converse of what the summary judgment judge found, namely, that neither Canguard nor 11039 advanced any money under its mortgage.

(iii) Balance of Convenience

The Court found that the balance of convenience favoured denying the stay. The potential harm to the responding party, Mr. S, through limiting his ability to raise funds to pay taxes or remediate the properties outweighed any harm to the moving parties. The moving parties’ only assertions were that their appeals would become moot, however, they failed to provide any evidence of harm resulting from a refusal to stay the orders under appeal. If the appeals succeeded and Mr. S puts new financing on the properties, the re-registered mortgages may have lost some of their priority, but neither of the moving parties led any evidence of the values of the property or the likelihood that new financing would materially affect their security.

Accordingly, the Court found it was not in the interest of justice to impose a stay pending appeal, however, it imposed a no-transfer term as a condition of dismissing the motion, meaning the respondents cannot transfer title of the properties pending the outcome of the appeals.

Del Grande v. Toronto Catholic District School Board, 2024 ONCA 769

[Hourigan, Trotter, and Gomery JJ.A.]

Counsel:

C. Lugosi, C. Giordano and T. Slade, for the appellant

J. Lisus and P. Underwood, for the respondent

Facts:

This appeal arose from a decision of the Divisional Court upholding decisions of the Toronto Catholic District School Board (“TCDSB”) which led to the sanction of the Appellant under its Code of Conduct for remarks he made during a public meeting discussing the addition of four grounds on which discriminatory practices are specifically barred.

The Appellant, D.G. is a trustee of the Respondent, TCDSB. In a November 2019 public meeting of trustees, the appellant questioned how the TCDSB would deal with teachers involved in polyamorous marriages. He proposed that if the four proposed grounds: gender identity, gender expression, family status, and marital status were added, so should a long list of sexual fetishes and paraphilias. When a fellow trustee pointed out that many of the practices mentioned by D.G. were criminal, he responded that “God made them all”. His suggested amendment was ruled out of order and the four new grounds were put to a vote and passed. Following the meeting the TCDSB received dozens of complaints about the Appellant’s statements. In response, an investigator was retained to determine whether the Appellant had breached the Code of Conduct.

In May 2020, the investigator issued a report finding that the Appellant had violated the Code of Conduct because through his statements he had effectively equated members of the LGBTQ+ community to criminals such as rapists and cannibals. On August 20, 2020, the Board voted on a resolution that the Appellant had violated the Code of Conduct, which did not pass (the “First Decision”). Following further negative response from the local community, a special meeting was held on November 11, 2020, a motion to reconsider the First Decision was passed (the “Reconsideration Decision” and a resolution was passed finding that the Appellant had violated the Code of Conduct (the “Merits Decision”). Further, the Board voted to sanction the appellant requesting that he apologize publicly, requiring him to complete equity training, and barring him from sitting on subcommittees or acting in a representative role for the Board of Trustees for three months (the “Sanction Decision”). The Appellant appealed these decisions in December 2020 and the Board confirmed the decisions (the “Confirmation Decision”). The Appellant then brought an application for judicial review before the Divisional Court for an order quashing all but the First Decision. That application was dismissed. The Appellant appealed, submitting that the Divisional Court made four errors.

Issues:

Did the court err in:

1. Applying the standard of reasonableness in reviewing the Decisions?
2. Finding that the Board had legal authority under the Education Act to reconsider the First Decision?
3. Finding that the reconsideration did not offend the doctrines of res judicata, issue estoppel, abuse of process, and functus officio?
4. Finding that the Board’s decisions did not violate the Appellant’s section 2(a) and section 3 Charter rights?

Holding:

Appeal dismissed.

Reasoning:

1. Did the Court err in applying the standard of reasonableness in reviewing the Decisions?

No. The Court held that the Divisional Court correctly found that the appropriate standard of review of the Decisions was reasonableness.

The Court reiterated that in keeping with Vavilov, reasonableness is the presumptive standard of review, and it specifically applies where, as in this case, an applicant for judicial review challenges an administrative decision maker’s authority to act based on regulations it has adopted pursuant to broad authority delegated to it by an enabling statute. The Court outlined that the correctness standard applies exceptionally, where the rule of law requires it such as when an issue gives rise to “general questions of law of central importance to the legal system as a whole” or questions relating to jurisdictional boundaries between administrative bodies per Vavilov. Referring to its previous decision in Victoria University (Board of Regents) v GE Canada Real and Vavilov, the Court repeated that for the correctness standard to apply, the “narrowly construed issue, not the application of a broadly stated legal doctrine, has to be of general importance to the legal system.”

The Court found that although the Appellant relied on re-litigation doctrines, the issues that must be determined on the appeal are not of general importance to the legal system and thus the correctness standard does not apply.

2. Did the Court err in finding that the Board had legal authority under the Education Act to reconsider the First Decision?

No. The Court agreed with the Divisional Court’s finding that applying the reasonableness standard, the Board’s interpretation of the Education Act and its By-law supports its power to reconsider the First Decision.

The Appellant argued that the Decisions should be quashed because the Education Act does not specifically authorize school boards to reconsider matters already put to a vote and the power to reconsider in the Board’s By-law was not intended to be used as it was in this case. The Court held that pursuant to the section 58.5 of the Education Act, the TCDSB is a corporation and “has all the powers and shall perform all the duties that are conferred or imposed on it under this or any other Act.” Specifically, under subsection 17(1)(18), the Board is empowered to “do anything that a board is required to do under any other provision of this Act.” The Appellant acknowledged that the TCDSB had the authority to adopt Operating By-Law Number 175, which governs how the Board of Trustees will make decisions and conduct meetings. However, he contended that the Board did not have the legal authority to use it to revisit the question of whether he had breached the Code of Conduct, despite section 218.3(6)(c) of the Act empowering a board to confirm or revoke a determination after it has found that a trustee had breached the Code of Conduct. The Appellant argued that the Act does not contemplate the possibility of a reconsideration after a determination that the trustee did not breach the code of conduct. The Court found that this argument had no merit.

The Appellant also argued that a limit on the Board’s power to reconsider should be read into the Education Act and the By-Law because to find otherwise exposes trustees to double jeopardy. The Court held that concepts of double jeopardy do not apply because the Board is a democratically elected assembly answerable to its constituents, not a court or a professional disciplinary body. Thus, in the context of the Code of Conduct complaint against him, the Appellant was not entitled to the procedural guarantees afforded to an individual facing criminal prosecution or even all those that would apply were his right to practice a profession at stake.

3. Did the Court err in finding that the reconsideration did not offend the doctrines of res judicata, issue estoppel, abuse of process, and functus officio?

No. The Court held that these doctrines have limited application where an administrative tribunal has authority to reconsider past decisions based on its enabling statute or regulation, or on a procedural by-law it has adopted to exercise its functions pursuant to them.

The Appellant argued that the Board’s first decision was final and could not be revisited simply because the Board was dissatisfied with the outcome. The Court outlined that in Chandler v. Alberta Association of Architects, the case relied on by the Appellant, recognized that an administrative tribunal can reconsider a past decision if authorized by statute and in this case the Board was broadly empowered by the Education Act to adopt appropriate procedures to exercise its functions and carry out its duties. Referring to its previous decisions, the Court outlined that “a reconsideration power is “a complete answer to the jurisdictional objection” of functus officio. A decision maker’s determination as to whether res judicata and issue estoppel preclude reconsideration constitutes an exercise of discretion, which is entitled to deference by the reviewing courts. The Court found no error in the Divisional Court’s reasoning on these issues.

4. Did the Court err in finding that the Board’s decisions did not violate the Appellant’s section 2(a) and section 3 Charter rights?

No. The Court found no error in the Divisional Court’s analysis finding that the Appellant was not sanctioned based on his religious beliefs or for debating the merits of adding prohibited grounds of discrimination under the Code of Conduct. He was sanctioned for using “extreme and derogatory rhetoric that fell below the standard of conduct required of a Trustee”, and for making remarks that “did not reflect any sincerely held religious beliefs” but rather used a “slippery slope” argument to mock individuals who seek protection from discrimination based on their gender identity and gender expression.

D.G. argued that he merely engaged in rhetorical hyperbole at the November 2019 meeting that did not violate the Code of Conduct and that the Divisional Court erred in finding that his statements were not protected under ss. 2(a) (freedom of religion), 2(b) (freedom of expression) and 3 (democratic rights) of the Charter. The Court outlined that, according to the recent Supreme Court decision in Commission scolaire francophone des Territoires du Nord-Ouest v. Northwest Territories, under the Doré approach a reviewing court must: 1) Determine whether a decision-maker’s decision limits relevant Charter protections; and 2) If so, examine the decision maker’s reasoning process to assess whether, given the relevant factual and legal constraints, the decision reflects a proportionate balancing of Charter rights or the values underlying them. The Court found that the Divisional Court balanced his right to free speech and freedom of religion with the Board’s statutory mandate under the framework set out in Doré v. Barreau du Québec and Loyola High School v. Quebec (Attorney General).

The Court also noted that section 3 of the Charter protects the right to vote for or serve in the House of Commons or a legislative assembly. It provides no guarantee that a person can participate as a school board trustee. Thus, the Appellant’s section 3 rights were not engaged.

Corridor Transport Inc. v. Vittorio Junior Lentini, 2024 ONCA 773

[Lauwers, Miller and Harvison Young JJ.A.]

Counsel:

J. S.G. MacDonald and M. Rupoli, for the appellants

R. Winterstein and M. Lauricella, for the respondents

Facts:

This appeal flowed from a failed business venture between J. H. and members of the L family (“the L’s”). The appellants were Corridor Transport Inc. (“CTI”) and Corridor Transport Limited Partnership, and the respondents are V.J.L. and LTI Logistics Inc. (“LTI”). The venture was J. H.’s idea, and he recruited the L’s, who ran a trucking business and were experienced in hauling steel. J. H. and the L’s were engaged in a business together for about a year before the relationship breakdown.

In 2009, J. H. embarked on a business venture to transport specialized steel products by rail. This would involve fabricating railway-approved railcars and acquiring a steel trucking business that could transport steel from road to rail.

In August 2009, J. H. incorporated Corridor Canada Inc. (“CCI”) for this purpose. At the time of these events, J. H. worked out of a premises in Brampton (“Parkhurst Square”).

J. H. needed the services of a trucking company with experience hauling steel. V. S. L. with his wife E. L. became the intended partners. The L’s had transported steel for decades.

From 1989 through 2009, V. S. L. and E. L. ran their trucking business through a corporation called Lentini Trucking Inc., with V. S. L. as its sole director. In 2009, V. S. L. wound the company up because he was unable to pay various fines and charges. He reincorporated as LTI Logistics Inc. to continue their trucking operations, this time with their son V. J. L. named as the sole director. V. J. L’s evidence, accepted by the trial judge, was that he never played a role in the family business except to deliver customer cheques to his mother E. L., who deposited them in the company’s BMO bank account (“BMO Account”). The cheques were payable to “LTI Logistics” and mailed to V. J. L.’s Caledon residential address.

Sometime in April 2010, the L’s agreed to work with CCI. Although the exact terms of the business venture are disputed, V. S. L. and E. L. moved all their equipment into Parkhurst Square and E. L. worked from there until the spring of 2011. J. H. drafted a detailed Memorandum of Understanding (“MOU”) which, he asserted, memorialized their discussions. However, while J. H. signed it on April 13, 2010, the L’s never did. The MOU was long and complicated. It explained that the parties’ business would entail freight brokerage and steel shipping. It detailed the proposed corporate and partnership structure under which the parties would conduct their business. The business was to operate under the name “Newco”, but the name was later changed to CTI. Importantly the MOU provided that the L’s could compete with the partnership provided that their independent revenue never exceeded a specified threshold.

J.H. organized the corporate structure and the partnership in May 2010. The plans never came to fruition in the sense that no steel was ever transported by rail. While the L’s operated out of Parkhurst Square, V. S. L. and E. L. continued to operate their former trucking business and serviced their clients as before. A central difference was that E. L. deposited all the customer cheques into a newly opened RBC account, rather than their BMO account.

In the action, the appellants claimed that the respondents breached a contract and/or committed the tort of conversion. In addition, they claimed that V. J. L., as a director of CTI, breached his fiduciary duty by depositing funds in the amount of $148,968.62 into their bank account after the breakdown. The trial judge dismissed the action.

Issues:

Did the trial judge commit a reversible error in finding that there was no enforceable contract?
Did the trial judge commit a reversible error in finding that there was no conversion?

Holding:

Appeal dismissed.

Reasoning:

The Court held that the appellants did not identify any reviewable error in the trial judge’s factual finding that there was no agreement on the essential terms of the contract. The trial judge’s findings were reasoned and well-grounded in the evidence heard over the 9-day trial.

The Court noted that with respect to the parties, the trial judge found “that a reasonable person in J. H.’s shoes” would have been confused as to the identity of the contracting party on the L’s side, noting that this was the central issue. At trial, J. H. admitted that he initially thought that V. J. L.’s father would be entering the partnership on behalf of the L’s because he was the “patriarch” of the trucking business with extensive knowledge of the industry. J.H. stated, however, that this changed when setting up the RBC Account, because the L’s allegedly told him that V. J. L. would be signing on behalf of the L. Group. He testified that, from then on, he understood the partnership to be between CTI and V. J. L., although J. H. never amended the incorporation documents to clarify the directorship.

Because the identity of the contracting parties was an essential term of a contract, these findings alone were sufficient to support the trial judge’s conclusion that there was no enforceable contract: 563689 Ontario Ltd. v. Two Saint Clair Holdings Ltd.

The Court agreed with the trial judge’s conclusion that the parties never understood that all of the proceeds of the L’s trucking business belonged to the partnership. The parties’ conduct and the Memorandum of Understanding, which J. H. relied on in his evidence, confirmed this.

The Court held that the misunderstanding about the RBC Account served to underline the fundamental misunderstandings about the parties, and whether V. J. L’s father or V. J. L. was the L’s contracting party.

The Court held that there was no conversion of the appellant’s property. The Court noted that in the circumstances of this case, the conversion claim could not succeed because there was no enforceable contract between the parties that would have given the appellants a right to the funds in issue. The cheques deposited in the BMO Account were payable to LTI for services the L’s rendered in their trucking business, and, as the trial judge reasonably held, there was no clear agreement between the parties as to how the LTI receivables were to be treated.

The Court held that the appellants did not establish any error or unreasonableness in the trial judge’s finding that the L’s practices was not sufficient to establish on a balance of probabilities that the funds belonged to the partnership because of the fundamental misunderstanding about the RBC Account and how the LTI receivables would be treated. The appellants had not established a possessory interest in the funds, and the conversion claim therefore failed.

1785192 Ontario Inc. v. Ontario H Limited Partnership, 2024 ONCA 775

[Miller, Copeland and Dawe JJ.A.]

Counsel:

P. H. Griffin and S. Hale, for the appellants/respondents by way of cross-appeal

A. Kreaden, for the respondent/appellant by way of cross-appeal

Facts:

The appellant corporations (“the Landlord”) owned two commercial properties in Whitby, Ontario. The Landlord leases the properties to the respondent (“the Tenant”), which operates two car dealerships on them. The Tenant purchased the car dealerships from the Landlord in 2015 for approximately $30 million in an asset purchase agreement. The Landlord had operated the two dealerships on the properties for the previous 18 years.

Two leases were included in a schedule to the asset purchase agreement, which enabled the Tenant to continue operating the car dealerships on the properties. The leases were for a term of 5 years, with options to renew until 2035. The leases also provided an option for the Tenant to purchase the properties from the Landlord.

The option to purchase clause contained in both leases included a mechanism for setting the price at which the Landlord would be required to sell the properties:

[A] purchase price equal to the average of the appraised fair market value of the Leased Premises as determined by two appraisers, one chosen by the Landlord and one chosen by the Tenant.

The Tenant failed to give timely notice of its intention to renew the leases, as required by the leases. When it later elected to do so, it was out of time and the Landlord refused to renew. For the Tenant to remain on the properties, its only remaining alternative was to exercise the options to purchase.

In 2020, the Tenant provided notice that it was exercising the options. Counsel for the Landlord acknowledged receipt of the notice and advised that the appraisals conducted must be based on the highest and best use of the properties.

The Landlord obtained an appraisal of the properties valuing them at $31,200,000 collectively. The Tenant’s appraisals valued the properties at $11,746,000, collectively. The midpoint of these two appraisals is $21,473,000.

The purchaser brought an application seeking specific performance of the contract, while the vendor brought an application for an order declaring the options null and void. The application judge found that the purchaser had made sufficient tender and consequently ordered specific performance.

The parties disputed the validity of each other’s appraisals. The difference between the appraisals was caused predominantly by a difference in assumptions.

To provide the Tenant with reassurance of the bona fides of its appraisal, the Landlord had two further appraisals undertaken, one which valued the properties at $27,480,000 and another which valued the properties at $24,500,000.

On September 17, 2020, the Landlord circulated draft documents for closing requiring a purchase price of $21,473,000 but reserved the right to claim a full purchase price of $31,200,00 if the Tenant failed to close.

The Tenant purported to close by forwarding the requisite closing documents and wiring $11,746,000 to the Landlord’s solicitor. The Landlord refused to convey title on this basis and returned the $11,746,000 to the Tenant’s solicitor.

The Tenant brought an application seeking specific performance of the contract, while the Landlord brought an application for an order declaring the options null and void. The application judge found that the Tenant had made sufficient tender and consequently ordered specific performance.

Issues:

On Appeal:

Did the application judge err in concluding the Tenant made a valid tender?
Should the tenant be relieved from forfeiture of its right to purchase the property?

On Cross-Appeal:

Did the application err in finding that the Landlord had obtained a valid appraisal?

Holding:

Appeal allowed. Cross-appeal dismissed.

Reasoning:

Yes.

The Court agreed with the Landlord that the application judge made a reversible error in concluding that the Tenant made a valid tender. The purchase price was fixed by the mechanism set out in the option clause. The Landlord was not required to accept any less than that amount, and the Tenant was in breach of contract when it purported to tender part in cash and part by way of funds unilaterally and non-irrevocably forwarded to the Tenant’s solicitor in trust. Having exercised the option to purchase without completing the sale transaction, the option was now spent, and the Landlord was entitled to the relief it sought.

The Court held that Tenant had not raised an adequate argument as to why it should be granted relief from forfeiture. Its argument, essentially, was that it was taken by surprise when the Landlord refused to close, and expected that the title would be conveyed and the parties would subsequently litigate how much more – if any – the Tenant would be required to pay. The Court noted that the obligation is on the Tenant to establish that relief from forfeiture is available on a failure to tender the full purchase price, and that it ought to be ordered in the circumstances of the case. It had done neither. There was no reason that it should be relieved of the consequences.

The Court did not agree that that the application judge made a reviewable error. She was entitled to accept all, some, or none of the evidence before her. She was entitled to reject the answer of the Landlord’s expert on cross-examination that a difference in valuation of this magnitude was probably the result of methodological error in one of the appraisals. That answer, moreover, was far from a conclusive statement that there was a methodological error, or that if there was a methodological error, that it was on the part of the Landlord’s appraisal.

SHORT CIVIL DECISIONS

Miguna v. Sitel Operating Company, 2024 ONCA 779

[Hourigan, Madsen and Pomerance JJ.A.]

Counsel:

M.M., acting in person

M. Paterson, M. Dick and S. Farr for the respondent, Refinitiv Limited

C. Li for the respondent, Sitel Operating Company

Keywords: Torts, Defamation, Civil Procedure, Summary Judgment, Costs, Libel and Slander Act, R.S.O. 1990, c. L. 12

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