Jun 22, 2020

COURT OF APPEAL SUMMARIES (June 15 – 19, 2020)

Ju v. Tahmasebi, 2020 ONCA 383 (CanLII)

[Doherty, Hourigan and Fairburn JJ.A.]

Counsel:

Julian Binavince, for the appellants

Pathik Baxi, for the respondent

Keywords: Contracts, Interpretation, Real Property, Agreements of Purchase of Sale of Land, Duty of Good Faith, Bhasin v. Hrynew 2014 SCC 71

Facts:

The appellants and individual respondent (“respondent”) entered into two agreements of purchase and sale (“agreements”) for a property that the appellants were responsible for having severed into two lots. The respondent provided a $100,000 deposit at the time that the agreements were entered into. The respondent agreed to pay a second total deposit of another $100,000 ($50,000 per lot) “after the seller provides City or OMB severance approval to the buyer’s lawyer.” Over two years after the agreements had been entered into, the appellants informed the respondent that the lots had been severed. Shortly after having told the respondent about the severance, the appellants insisted on payment of the second deposit “ASAP”. When the respondent did not comply with the appellants’ unilaterally imposed deadline for payment, the appellants terminated the agreements and relisted the properties for sale. When the specified closing date finally arrived, neither party tendered to close.

The appellants brought an application a declaration that the respondent had repudiated the agreements by failing to pay the second deposit and that the $100,000 deposit that had been paid be forfeited to the appellants. They also asked for a trial with respect to the damages caused by the respondent’s purported repudiation of the agreements. The application was dismissed.

Issues:

Did the application judge err in any of the following respects?

1. Misapprehending the date on which the approval for severance had been obtained.

2. Misapprehending the date on which the second deposit should have been paid.

3. Misapplying the doctrine of good faith performance.

Holding:

Appeal dismissed.

Reasoning:

1. No. The application judge determined that the City had approved the severance on the date of the TLAB decision granting the severance. In any event, even if the date of the City’s approval was later (when a Certificate of Offical was obtained), the decision did not turn on this point. Once the respondent was finally informed of the severance, she asked for an indulgence because she was out of the country. When faced with a request for an indulgence, the appellants behaved unreasonably. That finding is not fixed in the date of the city approval, but in the appellants’ behaviour in the over six months preceding their sudden insistence upon payment of the second deposit.

2. No. Where there is no express reference in an agreement to the time of performance, the law requires performance within a reasonable time. What is reasonable will be determined upon the facts of the individual case. The application judge was under no obligation to set out what date would have been reasonable. The key is that, in light of all of the operative facts, she concluded that August 7, 2018 was not reasonable.

3. No. It was a violation of the principle of good faith and unreasonable to proceed as the appellants did: ignore the respondent’s repeated requests for an update for many months, withhold critical information about the city approval, and then demand immediate payment by an arbitrarily set date when the respondent said she was not in a position to pay because she was out of the country and needed an indulgence.