Executive Summary: Key Legal and Evidentiary Issues

• M.G. Group Inc. breached four Agreements of Purchase and Sale for commercial condominium units after failing to close on any of them.
   
• Credibility of 212's sole witness, Rup Lal, proved central, with the court finding him believable but frequently unreliable due to inconsistencies with the documentary record.
   
• Whether 212's counterclaim was statute-barred turned on correspondence establishing an extended closing date of 21 December 2012, keeping the claim within the two-year limitation period.
   
• Several of 212's damages exhibits, including a summary of interest and expenses and tenant ledgers, were excluded as inadmissible hearsay.
   
• Property tax lookups and parcel registers were admitted under the principled hearsay exception as public record documents relied on by both sides.
   
• Damages were assessed unit by unit, resulting in a net award to 212 of $50,321.49 after offsetting resale surpluses against proven losses.
   

Facts of the case

M.G. Group Inc. ("M.G.") sued 2127023 Ontario Inc. ("212") for breach of contract, alleging that 212 terminated four Agreements of Purchase and Sale under which 212 had agreed to sell M.G. commercial condominium units at 109-19 and 216-19 Woodbine Downs Ave. [source alternates between "Woodbine Down Ave." and "Woodbine Downs Ave." across the judgment], and 8 and 9-6640 Finch Ave. West. 212 counterclaimed for damages, initially seeking $100,000 for misrepresentation, $248,400 for maintenance fees, interest, costs and TMIs, and $20,000 for repairs to one unit, plus costs and interest. At trial, 212 recast the second head of damages as $317,229.35 in interest, $67,000 in maintenance and insurance, $67,722.98 in property taxes, and $16,460 in loss on resale. Shortly before the pretrial conference in September 2025, M.G. announced its intention to abandon its own action; at the outset of trial, the court granted M.G. leave to abandon under Rule 23.01(1)(b), leaving only 212's counterclaim to proceed, with 212 as Plaintiff by Counterclaim and M.G. as Defendant by Counterclaim. The trial was heard over four days in January 2026 before Justice Trimble, with Rup Lal, 212's principal, as the only witness. For each unit, M.G. had agreed to purchase at a stated price under an APS dated in early-to-mid 2012, failed to close, and 212 subsequently resold the properties: 109-19 Woodbine Downs for a surplus of $14,626; 9-6640 Finch Ave. West for a surplus of $138,540; 8-6640 Finch Ave. West for a shortfall of $16,460; and 216-19 Woodbine Downs for a surplus of $3,515.

Policy and legislative provisions at issue

The limitation defence engaged section 4 of the Limitations Act, 2002, which bars a claim commenced after the second anniversary of its discovery. Contractual interpretation was governed by the framework in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, as summarized in Prism Resources Inc. v. Detour Gold Corporation, 2022 ONCA 326, directing courts to read agreements as a whole, in light of the factual matrix, in a commercially sensible manner. The court also considered the duty of good faith performance recognized in Bhasin v. Hrynew, 2014 SCC 71. On the evidentiary side, the admissibility of several exhibits turned on the hearsay framework from R. v. Khelawon, 2006 SCC 57, requiring necessity and reliability where no traditional exception applies, and Rule 23.01(1)(b) governed M.G.'s leave to abandon its action.

Reasoning and analysis

The court found Mr. Lal generally believable in demeanour but often unreliable in substance, citing vague testimony, an inability to explain discrepancies between his evidence and the parcel registers, and inconsistent positions on when extensions were granted. As a result, his evidence was accepted only where corroborated, admitted, or unchallenged. On liability, the court held there was no real dispute that M.G. breached all four APS's by failing to close. On limitations, correspondence between the parties' lawyers showed 212 extending the closing date multiple times, most recently to 21 December 2012, and the court found 212 never definitively terminated the contracts before that date; since the counterclaim was filed 10 December 2014, it fell within the two-year period [the judgment's own recital of the expiry date at para. 46 states "2012," which appears inconsistent with the surrounding analysis]. On the hearsay exhibits, the Summary of Interest, Taxes, Maintenance and Insurance and the Tenant Ledgers were excluded because their underlying source documents and authors were never put into evidence, leaving their reliability untested. By contrast, the Toronto Property Tax Lookup records and parcel registers were admitted as public record documents obtained in the ordinary course of business and relied upon by both parties. Applying the agreed principle that a resale surplus on one property cannot offset losses on another, the court then assessed each unit separately, dismissing the $100,000 misrepresentation claim as duplicative of the breach of contract claim and the $20,000 repair claim for lack of supporting evidence, while allowing recovery for unpaid property taxes where properly proven.

Ruling and overall outcome

Justice Trimble found in favour of 212 on its counterclaim. For 109-19 Woodbine Downs, 9-6640 Finch Ave. West, and 216-19 Woodbine Downs, the court awarded $0, as resale surpluses on those units exceeded or offset any proven losses. For 8-6640 Finch Ave. West, the court awarded 212 $50,321.49, comprising a $16,460 shortfall on resale plus $33,861.49 in unpaid property taxes that M.G. had undertaken but failed to pay. In total, 212 was granted judgment against M.G. for $50,321.49, together with prejudgment interest under the Courts of Justice Act, with the parties invited to return to court if they could not agree on the applicable rate and start date. 212, as the successful party, was found presumptively entitled to costs of the counterclaim and of M.G.'s abandoned action, with the amount and allocation of costs to be determined through written submissions due from 212 by 9 October 2026 and from M.G. by 30 October 2026.