January 27, 2023
Leaving a judge in a quandary is never a good thing.
Lawsuits over aborted real estate transactions seemed to be popping up almost as often as estate litigation these days. This is particularly true in the Greater Toronto Area and the Golden Horseshoe, but it’s bound to be on it’s way to Thunder Bay.
Just a couple of weeks after writing about the Ontario Court of Appeal emphasizing that expert evidence is not always necessary in establishing damages over an aborted real estate transaction, what caught our eye was in Ontario Court of Appeal decision about expert evidence in an aborted real estate transactions.
Rosehaven Homes Limited v. Aluko was decided initially on a summary judgment motion rather than a trial. Expert evidence by way of an unsigned report attached to an affidavit from one of the authors of the report was admitted into evidence in favor of the plaintiffs. This panel of the court did not discuss at all the issue of expert evidence versus simply proving the loss on the resale.
The key issue in Rosehaven was the admissibility of the expert evidence in the form presented. The Court of Appeal showed a very flexible approach to the question, rather than being fully formal and requiring strict compliance with the rules on expert evidence. In particular the court reminded us that:
 The fact that rule 53.03 sets out rules for the exchange of expert reports for the purposes of a trial does not undermine the ability of a party to introduce expert evidence on a motion, provided that the rules relating to the admissibility of evidence, in general, and expert evidence, in particular, are respected. This case is distinguishable from Karami, because, in that case, the expert’s report was not verified by an affidavit from the expert. Moreover, the motion judge in Karami was not satisfied that the expert had been properly qualified: Karami, at paras. 27 and 29.
 We acknowledge that Rosehaven’s expert report may not have been in perfect compliance with all the requirements specified in rule 53.03(2) to support its admissibility. However, we are not persuaded that any failure to comply was material.
 Concerning the Form 53 issue, we note that Rosehaven’s expert swore that, on October 8, 2021, she executed the Acknowledgment of Expert Duty Form attached as an exhibit to her affidavit sworn October 12, 2021. However, the Form 53 appended to her affidavit is not signed. Although there is no explanation for this discrepancy on the record, there was at least an available inference that Rosehaven’s expert was familiar with Form 53 and intended to sign a Form 53 in relation to this matter if in fact she did not do so. As we will explain, the appellants had the opportunity to clarify the discrepancy or object to the admissibility of Rosehaven’s expert report if they were concerned about it. They did not do so.
The court also excused the experts report for not having a separate section setting out in detail the instructions received from plaintiffs lawyers. Substance governs over form.
Another procedural point of importance in this decision was the fact that although the defendants had cross examined the expert prior to the motion, they had not filed a transcript of that cross examination so could not rely on anything said on the cross examination to discredit the expert or the weight to be given to his report. They also did not object to the report going into evidence in front of the motions judge. The court concludes:
 As the motion judge said in his reasons, he was left in a “quandary” because of the absence of admissible evidence from the appellants. He was required to do the best he could to assess damages and mitigation efforts based on the evidence led. The appellants were required “to put their best foot forward” on the motion. In the absence of admissible evidence challenging or undermining Rosehaven’s expert report, we are not persuaded the motion judge made any error in his treatment of Rosehaven’s expert report.
Once the judge was in that quandary, the Court of Appeal agreed that his decision to give the plaintiffs’ expert weight but ignore the weak evidence put forth by the defendant was proper.
The Court of Appeal agreed with the motions judge that:
Given this lack of evidence on the part of the [appellants] and the evidence provided by [Rosehaven], the Court can only conclude that the price obtained by [Rosehaven] on an arms length sale was reasonable.
- Cases are 90% about the facts and 10% about the law.
- Facts are proven through evidence. If you do not have evidence, you will not have the facts to win.
- On a motion for summary judgment where it is important to put your best foot forward, you should use a combination of both your own affidavits and vigorous cross examinations to attack the opponent’s evidence.
- Those cross examinations are worthless if you do not file the transcripts.
- The courts will take a substance over form approach to the use of expert evidence on a summary judgment motion.
- They will not strictly apply the provisions of rule 53.03 which exist to allow smooth trial management. The summary judgment motion is not the same as a trial.
- Where a judge is left in a quandary, they will have to do the best that they can. That may not be in your favour.
- It is never a good thing to leave a judge in a quandary unless the quandary is created by your opponent.
WHAT WEILERS LLP CAN DO FOR YOU
The real estate section at Weilers LLP carries on our proud tradition of advising clients about the risks and obligations that they are accepting before they sign a contract.
If difficulties arise, we work with our clients and their other advisors to attempt to resolve the problems.
If the problems cannot be resolved on a friendly basis, then our litigation lawyers may be able to assist with damage control. If there is a question about how to calculate or prove damages, we have the benefit of having Brian Babcock as counsel. Brian has taught the course on Remedies, including damages, numerous times at the Bora Laskin School of Law.
We know the law of damages, the rules of evidence, the art of advocacy on summary judgment motions, and how to blend them together to get your best possible results.
Our litigation team works well with outside real estate lawyers who do not do litigation as well as with our own clients.
If you find yourself needing advice about your risks or obligations under a real estate contract, it is best to seek the advice early. Feel free to give Weilers LLP a call and see if we are the right lawyers for you.