The dispute involved a failed development project in Innisfil, Ontario
In a recent ruling, the Ontario Court of Appeal has ruled against a real estate developer for breach of a joint venture agreement (JVA).
In Colonna v. Fellin, 2024 ONCA 224, the court dismissed the appeal of Renato Fellin and his corporation, Rossi Consulting Group, in a legal battle against David Colonna, an individual who conducts business by financing, developing, and selling real estate in Ontario. The dispute involved a failed JVA regarding the development of a property located at 2355 Taylorwoods Blvd. in Innisfil, Ontario.
The appellants, Fellin and Rossi Consulting Group entered into a JVA with Colonna and had plans to develop the property. The JVA stipulated that the appellant, Rossi, would purchase the property through contributions from the respondent, the title to the property would be held by Rossi, the contribution of the respondent would be secured with a no-interest mortgage against the property, and the profit would be divided equally after repaying the parties’ contributions and addressing any tax liabilities.
The court noted that while Fellin had full authority to run the development project on the property, the JVA required that he inform the respondent in writing of any decisions or plans on how it would proceed and seek written acknowledgement and consent for those decisions.
Ultimately, the development did not proceed as anticipated, leading Colonna to seek summary judgment and claim a breach of the JVA. The motion judge found in favour of Colonna, establishing that the appellants had indeed breached the JVA, resulting in Colonna being owed $609,928.15 in expectation damages.
The appellants contested the motion judge's findings, particularly regarding the liability and calculation of damages. They also sought to introduce fresh evidence just days before the appeal hearing. The Court of Appeal, however, found no merit in their arguments, affirming the original decision on all counts.
The court noted that the JVA outlined that Rossi would acquire the property with funds contributed by Colonna, who was to be secured with a no-interest mortgage against the property. Despite the agreement, the appellants failed to undertake essential development steps, including not registering a required mortgage for Colonna, not preparing for development, and leveraging the property for personal gain, among other breaches.
The court also rejected the appellants' motion to admit fresh evidence, finding it could have been presented initially with reasonable diligence. Furthermore, the court dismissed the appeal against the liability and damages findings, finding no reversible errors in the motion judge's decision. Ultimately, the appeal court upheld the motion judge's decision, emphasizing the importance of adhering to contractual agreements and the consequences of failing to do so.
