VP Auto Sales & Service Ltd. v Ahmed2 Inc., 2024 ONCA 507, saw the Ontario Court of Appeal (the “Court”) address a motion judge’s grant of partial summary judgment, with damages being reserved for trial. The Court, in one of its rare decisions on partial summary judgment, agreed with Motion judge’s ruling.
The respondent entered an Agreement of Purchase and Sale (the “Agreement”) with the appellant. Before the closing, the appellant raised concerns about the price being too high and requested a discount, which was refused by the respondent.
On the scheduled closing date, the appellant did not proceed with the transaction, citing a breach of the Agreement by the respondent. This resulted in the property remaining unsold, prompting the respondent to seek summary judgment against the appellant for the purchase price of $4,750,000. The motion judge granted summary judgment on liability, finding the appellant accountable for the failure to close, but indicated that damages would be determined through a trial.
The disputes that arose during the proceeding centered around disagreements regarding the terms of a vendor-take-back mortgage (“VTB”). The appellant argued that the terms were modified from the initial agreement to mandate obtaining prior consent for registering a second mortgage and assigning material contracts as security. The motion judge determined that these alterations were not significant and fell within the contractual rights to safeguard the priority of the VTB.
At the appeal, the appellants sought to introduce new evidence. The appellants contended that the additional evidence they wished to present for the first time during the appeal would reveal the respondent’s lack of effort in obtaining the necessary zoning for the property, as stipulated in the Agreement. Despite the respondent’s lack of response to this request, they argued during oral proceedings that the new evidence would not change the motion judge’s decision. The Court concurred, stating that once the zoning condition was waived by the appellant, any alleged breach of that condition was no longer applicable. Therefore, the new evidence was deemed irrelevant and could not impact the motion judge’s decision.
The principle behind summary judgment is to streamline litigation, either by eliminating the need for a trial or by significantly reducing the scope of the trial. In this case, the only unresolved issue pertained to the level of damages, which justified a partial summary judgment for efficiency and cost-effectiveness. The motion judge followed the principles of trial efficiency and proportionality, leading the Court to find no fault in the decision to grant summary judgment on liability, while leaving damages to be determined at trial.
Partial summary judgment may be difficult to obtain, and it may be challenging to convince a Court to schedule such a motion. Nevertheless, partial summary judgment remains an option for claimants or defendants in the right circumstances. This may be particularly so when considering clear and apparent breaches of Purchase and Sale Agreements or other commercial contracts. Parties should consider seeking legal counsel to assist in determining whether a claim (or counterclaims) is intertwined with other parts of the litigation. If not, partial summary judgment is an option that may warrant further discussion.
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