11 Suntract Holdings Ltd. et al. v. Chassis Service & Hydraulics Ltd. et al., (1997) 49 O.T.C. 112 (GD)

• Judge: Lax, J.
• Court: Ontario Court of Justice General Division (Canada)
• Case Date: December 12, 1997
• Jurisdiction: Ontario
• Citations: (1997), 49 O.T.C. 112 (GD)

11 Suntract Holdings v. Chassis Service (1997), 49 O.T.C. 112 (GD)

MLB headnote and full text

Temp. Cite: [1997] O.T.C. TBEd. DE.138

11 Suntract Holdings Ltd. and Leon Holdings (1967) Limited (plaintiff) v. Chassis Service & Hydraulics Ltd. (defendant) and Colliers Macaulay Nicolls (Ontario) Inc. (third party)

(Court File Nos. 96-CU-97650CM and 96-CU-97650CMA)

Indexed As: 11 Suntract Holdings Ltd. et al. v. Chassis Service & Hydraulics Ltd. et al.

Ontario Court of Justice

General Division

Lax, J.

December 12, 1997.

Summary:

Chassis owned an industrial property located in North York. A small portion of the property was leased for a long term to Cantel Inc. for a cellular telephone transmission tower and an equipment shed. Chassis also granted Cantel an access easement over its land so that Cantel could service its equipment. Thereafter, Chassis retained the services of Colliers, a real estate broker to sell the property. The broker was informed of the lease, however, never disclosed it to Leon, the purchaser, who was going to demolish the building and redevelop the land for retail use. Shortly after signing the Agreement to purchase, which stated that the tile would be "free of encumbrances, vacant possession on closing, and ownership of all fixtures", Leon discovered the lease. Negotiations to try and resolve the problem were unsuccessful and Chassis terminated the Agreement, taking the position that Leon objected to its title and that it could not satisfy the objection. Accordingly, under the Agreement it was entitled to rescind the contract. Leon tendered, but Chassis refused to close. Leon commenced an action for specific performance with an abatement, or damages. Chassis counterclaimed for damages for breach of contract and slander of title. Chassis also third partied against Colliers, alleging that its agents did not meet the requisite standard of care in advising the vendor on the transaction.

The Ontario Court (General Division) held that Leon was entitled to specific performance with an abatement. The court further determined that Colliers did not meet the requisite standard of care in advising the vendor in the transaction and therefore liable to Chassis for any losses it suffered as a result of the aborted transaction.

Agency - Topic 3603

Relations between principal and agent - Particular agencies - Real estate agents - See paragraphs 1 to 24.

Brokers - Topic 3144

Duties of brokers to principal - Real estate brokers - Negligence - Duty of care - See paragraphs 1 to 24 and 53.

Sale of Land - Topic 3603

Contract - Discharge, rescission or annulment - General - Rescission - What constitutes - See paragraphs 29 to 37.

Sale of Land - Topic 3681

Contract - Discharge, rescission or annulment - Bars - General - See paragraphs 29 to 37.

Sale of Land - Topic 6178

Completion - Abatement of purchase price - When available - See paragraphs 44 to 47.

Sale of Land - Topic 7406

Remedies - General - Escape clauses - Effect of - See paragraphs 29 to 37.

Sale of Land - Topic 7408

Remedies - General - Specific performance - When available - See paragraphs 38 to 43.

Sale of Land - Topic 7685

Remedies of vendor - Damages - Bars - See paragraphs 50 to 52.

Sale of Land - Topic 7701

Remedies of vendor - Rescission or cancellation - General - See paragraphs 29 to 37.

Sale of Land - Topic 8551

Remedies of purchaser - Specific performance - When available - See paragraphs 38 to 43.

Sale of Land - Topic 8553

Remedies of purchaser - Specific performance - Effect of encumbrances and changes in subject matter - See paragraphs 38 to 43.

Sale of Land - Topic 8559

Remedies of purchaser - Specific performance - Upon repudiation by seller - See paragraphs 38 to 43.

Sale of Land - Topic 8566

Remedies of purchaser - Specific performance - With abatement - See paragraphs 38 to 47.

Cases Noticed:

Landmark of Thornhill Ltd. v. Jacobson et al. (1995), 85 O.A.C. 179; 25 O.R.(3d) 628 (C.A.), refd to. [para. 3].

Freedman v. Mason, [1958] S.C.R. 483, refd to. [para. 3].

Grossman Holdings Ltd. v. Visplar Holdings Ltd. (1976), 1 R.P.R. 40 (Ont. H.C.), refd to. [para. 6].

Joydon Developments Ltd. v. Hilite Holdings Ltd. (1972), 31 D.L.R.(3d) 430 (Ont. H.C.), refd to. [para. 12].

Bullen v. Wilkinson (1912), 2 D.L.R. 190 (Ont. C.A.), refd to. [para. 12].

Starr (Paul S.) & Co. v. Watson, [1973] 1 O.R. 148 (C.A.), refd to. [para. 21].

Posthumas v. Garner (1995), 48 R.P.R.(2d) 286 (Ont. Gen. Div.), refd to. [para. 21].

Price v. Malais (1982), 24 R.P.R. 160 (B.C.S.C.), refd to. [para. 21].

Charter-York Ltd. v. Hurst (1978), 2 R.P.R. 272 (Ont. H.C.), refd to. [para. 24].

Dai v. Kaness Investments Ltd. et al. (1979), 24 O.R.(2d) 51 (H.C.), refd to. [para. 27].

O'Neil et al. v. Arnew (1976), 16 O.R.(2d) 549 (H.C.), refd to. [para. 27].

Hurley v. Roy (1921), 50 O.L.R. 281 (C.A.), refd to. [para. 29].

Louch v. Pape Avenue Land Co., [1928] S.C.R. 518, refd to. [para. 30].

Lavine v. Independent Builders Ltd., [1932] O.R. 669 (C.A.), refd to. [para. 30].

Ashburner v. Sewell, [1891] 3 Ch. 405, refd to. [para. 30].

Jackson and Haden's Contract, Re, [1906] 1 Ch. 412 (C.A.), refd to. [para. 30].

Selkirk v. Romar Investments Ltd., [1963] 3 All E.R. 994 (P.C.), refd to. [para. 33].

Baines v. Tweddle, [1959] Ch. 679 (C.A.), refd to. [para. 34].

Skariah v. Praxl (1990), 73 O.R.(2d) 1 (H.C.), refd to. [para. 34].

Bakker (J.C.) & Sons Ltd. v. House (1979), 8 R.P.R. 24 (Ont. H.C.), refd to. [para. 35].

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415; 197 N.R. 379; 91 O.A.C. 379; 136 D.L.R.(4th) 1; 3 R.P.R.(3d) 1, refd to. [para. 38].

Mortlock v. Butler (1804), 32 E.R. 857 (L.C.), refd to. [para. 44].

Barnes v. Wood (1869), L.R. 8 Eq. 424, refd to. [para. 44].

Topfell Ltd. v. Gallery Properties Ltd., [1979] 1 W.L.R. 446 (Ch.), refd to. [para. 44].

Semelhago v. Paramedevan (1994), 73 O.A.C. 295; 19 O.R.(3d) 479 (C.A.), refd to. [para. 48].

306793 Ontario Ltd. v. Rimes (1979), 25 O.R.(2d) 79 (C.A.), refd to. [para. 48].

Morgan et al. v. Lucky Dog et al. (1987), 45 R.P.R. 263 (Ont. H.C.), refd to. [para. 48].

Captain Developments Ltd. v. Nu-West Group Ltd. (1982), 37 O.R.(2d) 697 (H.C.), revd. (1984), 1 O.A.C. 132; 45 O.R.(2d) 213 (C.A.), leave to appeal refused (1984), 55 N.R. 273; 4 O.A.C. 78 (S.C.C.), refd to. [para. 51].

Weinstein Estate v. LePage (A.E.)(Ontario) Ltd. and Musa (1984), 4 O.A.C. 234; 47 O.R.(2d) 126 (C.A.), refd to. [para. 53].

Authors and Works Noticed:

Chapman, J.J., A Stacked Deck: Specific Performance and the Real Estate Transaction (1994), 16 Adv. Q. 240, p. 273 [para. 48].

Laskin, Bora, Defects of Title and Quality in Contracts for the Sale of Land, Law Society of Upper Canada Special Lectures (1960), p. 391 [para. 6].

Leon, Jeffrey W., Annotation to Semelhago v. Paramadevan (1996), 3 R.P.R.(3d) 1, pp. 3, 4, 5 [para. 38].

Perell, Paul, The Fate of Specific Performance; Gavel to Gavel: Recent Developments in Real Estate Litigation, Law Society of Upper Canada (January 12, 1996), pp. F-16 to F-19 [para. 39].

Sharpe, Robert J., Injunctions and Specific Performance (Looseleaf Supp.), paras. 11.40, fn.3 [para. 44]; 11:340 to 11:360 [para. 48].

Swan, John, Damages, Specific Performance, Inflation and Interest (1979), 10 R.P.R. 267, generally [para. 48].

Counsel:

G. Hall, for the plaintiff;

B. Grossman, for the defendant;

T. Kent, for the third party.

This application was heard at Toronto, Ontario, on September 24 to 26, 29 and 30, and October 1, 7, 8, 14 to 16 and 28, 1997, before Lax, J., of the Ontario Court (General Division), who released the following judgment on December 12, 1997.