In Reid v. Abass, 2024 ONSC 7083, the Ontario Superior Court of Justice highlights the efficiency and clarity that summary judgment can bring to disputes arising from complex real estate transactions.
This case in Reid v Abass arose from the defendants’ failure to close a real estate transaction under a February 24, 2022, Agreement of Purchase and Sale (“APS”) for $999,000. Following an alleged anticipatory breach by the defendants, the parties renegotiated the terms under a July 7, 2022, Extension Agreement, which set a reduced purchase price of $850,000 and a new closing date of July 28, 2022.
The plaintiffs sought summary judgment for damages representing the difference between the original and renegotiated prices, claiming the defendants remained liable under the original APS despite closing under the revised agreement. The defendants argued the extension agreement released them from liability if they closed on the new date. Both parties agreed that the matter could be decided without a trial and via summary judgment.
Summary judgment under Rule 20 of Ontario’s Rules of Civil Procedure is intended to streamline cases by resolving legal issues when there is no genuine dispute of material fact.
Both sides agreed there were no material facts in dispute, and the Court’s role was limited to interpreting the language of the July 7, 2022, Extension Agreement. The Court applied well-established principles of contractual interpretation, including considering the agreement as a whole and resolving ambiguities against the drafting party.
The key issue in the motion was the interpretation of clause 10 of the Extension Agreement, which preserved the plaintiffs’ right to sue for damages if the defendants failed to close on the “scheduled closing date.” The plaintiffs argued this referred to the original June 27, 2022, closing date, while the defendants maintained it referred to the revised July 28, 2022, date.
The Court sided with the defendants, concluding that “scheduled closing date” referred to the revised closing date of July 28, 2022. The Court emphasized that interpreting the clause as referring to the original date would create inconsistencies with other terms in the agreement and render portions of the “Irrevocable Direction” illogical.
For litigators, Reid v. Abass is a reminder of the potential for summary judgment to deliver swift justice in disputes centered on contract interpretation. It also illustrates the need for careful drafting of agreements to avoid ambiguities that may later be construed against the drafter. Parties involved in real estate disputes may wish to seek legal counsel to determine whether they are able to resolve issues without the need for a trial and the associate complexities.
The lawyers at Gilbertson Davis LLP have experience with contract litigation, summary judgment and commercial disputes. Please contact us for an initial consultation.
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