1247249 B.C. Ltd. v 1098212 B.C. Ltd.

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

1247249 B.C. Ltd. v. 1098212 B.C. Ltd.,

2022 BCSC 1230

Date: 20220720

Docket: S92866

Registry: Nanaimo

Between:

And

1247249 B.C. LTD.

1098212 B.C. LTD.

Plaintiff

Defendant

Before: The Honourable Mr. Justice Veenstra

Reasons for Judgment

Counsel for the Plaintiff:

Counsel for the Defendant:

Place and Dates of Trial:

A. Soliman

T.J. Huntsman

Nanaimo, B.C.

November 16-19, 24-26, 2021

and January 6, 2022

Place and Date of Judgment:

Nanaimo, B.C.

July 20, 2022

1247249 B.C. Ltd. v. 1098212 B.C. Ltd.

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Table of Contents

INTRODUCTION ....................................................................................................... 4

FACTS....................................................................................................................... 5

Background ............................................................................................................ 5

Listing the Property and Negotiating the Contract of Purchase and Sale............... 5

Contract of Purchase and Sale............................................................................... 7

Due Diligence......................................................................................................... 9

October 20, 2020 Meeting.................................................................................... 12

After the Meeting to November 24, 2020.............................................................. 14

Correspondence of November 26 to 28, 2020...................................................... 23

Events leading up to and including December 7 .................................................. 28

ISSUES.................................................................................................................... 33

ISSUE 1: DID THE PARTIES AGREE TO AMEND THE CONTRACT ON

OCTOBER 20 2020?............................................................................................... 34

Positions of the Parties......................................................................................... 34

Governing Principles ............................................................................................ 36

Reliability and Credibility................................................................................... 36

Was there an agreement or an agreement to agree?....................................... 37

Was any amendment sufficiently recorded in writing? ...................................... 42

Was there sufficient certainty with respect to the amendment?........................ 44

Did the plaintiff repudiate any agreement to amend by sending inconsistent

documents? ...................................................................................................... 45

Decision ............................................................................................................... 47

Reliability and Credibility................................................................................... 47

Was there an agreement to amend the CPS or an agreement to agree?......... 52

Was any amendment sufficiently recorded in writing? ...................................... 54

Was there sufficient certainty with respect to the amendment?........................ 55

Was there sufficient consideration for the amendment?................................... 57

Did the plaintiff repudiate any agreement to amend by sending inconsistent

documents? ...................................................................................................... 57

ISSUE 2: IS THE DEFENDANT ESTOPPED FROM DENYING A DECEMBER 7,

2020 DEADLINE? ................................................................................................... 59

Governing Principles ............................................................................................ 59

Positions of the Parties......................................................................................... 61

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Decision ............................................................................................................... 62

ISSUE 3: DID THE DEFENDANT COMMIT AN ANTICIPATORY BREACH OF THE

CONTRACT?........................................................................................................... 63

Governing Principles ............................................................................................ 63

Positions of the Parties......................................................................................... 64

Decision ............................................................................................................... 65

ISSUE 4: WAS THE PLAINTIFF REQUIRED TO PAY THE DEPOSIT TO THE

AGENT? .................................................................................................................. 65

Governing Principles ............................................................................................ 65

Positions of the Parties......................................................................................... 67

Decision ............................................................................................................... 67

ISSUE 5: IS SPECIFIC PERFORMANCE AN APPROPRIATE REMEDY?............ 68

Governing Principles ............................................................................................ 68

Positions of the Parties......................................................................................... 70

Decision ............................................................................................................... 71

CONCLUSION......................................................................................................... 72

SCHEDULE A.......................................................................................................... 73

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Introduction

[1]

The plaintiff seeks an order for specific performance of a contract of purchase

and sale (the “CPS”) for a development property in Nanaimo, British Columbia.

[2]

The defendant says that the CPS lapsed on its terms and the plaintiff has lost

all rights to the property. The plaintiff says that the parties agreed to amend the

contract, that the amendment included an extension of the condition precedent

removal date (the “CPRD”) to December 7, 2020, that it gave notice on that date that

it was removing conditions precedent but that the defendant repudiated the CPS that

day. The plaintiff also argues that the defendant is estopped from denying the

extension.

[3]

For the reasons set out below:

a) I conclude that there was a valid and binding agreement to extend the

CPRD to December 7, 2020;

b) In the alternative, I conclude that the defendant was estopped from

denying that the CPRD was extended to December 7, 2020;

c) The defendant anticipatorily breached the CPS by evincing an intention to

not perform any further obligations under it;

d) The plaintiff was ready, willing and able to post the required deposit on

December 7, 2020 but, as a result of the defendant’s anticipatory breach,

was not required to do so; and

e) In the circumstances and given the nature of the property, specific

performance is an appropriate remedy.

[4]

As a result, I find that the plaintiff is entitled to an order of specific

performance.

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Facts

Background

[5]

The action relates to a 90-acre property on Lotus Pinnatus Way (the

“Property”), which is at the southwest end of the City of Nanaimo, adjacent to the

Nanaimo Parkway (Highway 19).

[6]

Mohammed Doar is a director of the plaintiff numbered company. Mr. Doar

has been involved in real estate development for several years, with projects in the

Lower Mainland as well as two prior projects in the City of Nanaimo.

[7]

Irene Wenngatz is a director of the defendant company, which has owned the

Property for 10-14 years. Ms. Wenngatz described her occupation as buying and

selling real estate, private lending, and some real estate development work

(although she says that being a developer was something she did not enjoy).

[8]

Each of them was represented by an experienced real estate agent: the

plaintiff, by a Mr. Deleskie, and the defendant, by a Mr. Robinson.

[9]

The plaintiff also had the advice and drafting assistance throughout of a

lawyer, Mr. Rainey, although Mr. Rainey was not directly involved in negotiations.

[10] The defendant chose to act without legal advice until after the events alleged

to constitute repudiation on her part.

Listing the Property and Negotiating the Contract of Purchase and Sale

[11] The defendant listed the Property for sale with Mr. Robinson’s real estate firm

on September 25, 2019. Mr. Robinson prepared an MLS listing information sheet

that described the property as follows:

Vendor financing available at attractive rates. It is the largest subdivision

property available in Nanaimo and is in close proximity to Vancouver Island

University, the Aquatic and Ice Rink Centres all the land is within the

boundaries of the City of Nanaimo. This parcel of land could easily satisfy the

demands for affordable multi-family dwellings. (R10) Zoning provides for up

to 592 units of detached, single family residential dwelling subdivisions and

clustered multiple family developments, Buyers to verify indedently (sic) with

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the City of Nanaimo. Attaining sewer and water to the property is possible

from the Harewood Mines Road side making this an extremely desirable

piece for future development. This is a rare opportunity to own one of the best

development pieces on Vancouver Island.” – parcel size 90.69 acres – list

price $5,750,000.

[12] Ms. Wenngatz said that it is the real estate agent’s job to prepare the

description, and that she paid no attention to it. She told Mr. Robinson the price, and

that she was willing to provide vendor financing at attractive rates. All of the other

information was Mr. Robinson’s for which she accepted no responsibility.

[13] Mr. Robinson said that the information about the potential number of units

came from an older engineering study that was in a file he had access to at the time

he prepared the listing, but is no longer available. The information about this being

the largest available development site came from his own review of MLS listings for

Nanaimo.

[14] Mr. Doar had been looking for another development project in Nanaimo and

saw the MLS listing. In early 2020, he contacted Mr. Deleskie and began to make

inquiries.

[15] Mr. Doar said his interest in the property was in part because developing it

was a long-term project given its size. His intent was to subdivide the property into

smaller lots with infrastructure provided over time, and to carry on the project of

building condominiums and townhouses in stages. Alternatively, he would consider

selling off some of the smaller subdivided areas to other developers. He was

contemplating moving to Nanaimo and saw this as a way to employ himself and

family members in that community over the course of years.

[16] On February 22, 2020, Mr. Robinson sent an email to Mr. Deleskie confirming

some of the key business terms for a proposed transaction, following which

Mr. Rainey was retained to draft a contract of purchase and sale. The draft contract

was emailed by Mr. Deleskie to Mr. Robinson on March 2, 2020. There followed

negotiations with respect to the terms, following which the final version of the

contract (the “CPS”) was signed by both parties on or about April 26, 2020.

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Contract of Purchase and Sale

[17] The CPS is six pages long and has a one-page schedule. It is not on a

standard real estate board form. It was drafted by the plaintiff’s lawyer, Mr. Rainey.

[18] Section 1 provides that the purchase price is to be $5,750,000. It states that

the purchase price does not include GST, and that the buyer is to make its own

investigation as to GST applicability. Section 1(b) states that:

Upon the Buyer removing the Conditions precedent as set out in Section 3 of

this Offer, the Buyer will increase the Deposit to Four Hundred Thousand

($400,000) Dollars to be deposited with and held in Trust by the Buyer’s

Realtor and applied to the purchase price upon completion of this transaction.

[19] Pursuant to Section 8, the Buyer was to have the right to require the Seller to

take a mortgage, the Seller Take Back Mortgage (the “STB Mortgage”), the terms of

which were set out in Schedule A to the CPS. Schedule A is reproduced as a

Schedule to these reasons for judgment. It provides for a first mortgage registered

against the Property with a principal amount of $4,750,000, with terms including:

a) A 25-year amortization, with a term of 5 years and 6 months, open;

b) Interest of 3.9% for the first three years and 4.9% thereafter;

c) No payments for the first 20 months, following by amortized payments

after that time;

d) The Buyer may obtain a partial release of the STB Mortgage in respect of

any lots subdivided from the main parcel (which are referred to as “release

lots”) by paying an amount equal to $85,000 per acre.

[20] Section 3 sets out several conditions precedent, which include:

a) Completion of a satisfactory (to the Buyer) environmental study – which is

to be provided to the Seller;

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b) Confirmation with the City of Nanaimo that “the current zoning will permit

the Buyer’s intended use for the Lands, which intended use includes

subdivision of the Lands”; and

c) The Buyer “being satisfied, in its sole discretion, with the economic

viability and feasibility of redevelopment of the Lands”.

[21] In connection with the environmental study, Section 3 provides that the

“Buyer understands that the Seller is not obligated to provide access to the Lands

until such time as the Buyer provides the Seller with confirmation of $4,000,000

liability insurance”.

[22] Section 3 provides that these conditions are for the sole benefit of the Buyer,

and that:

The Conditions Precedent are to be removed or waived by the Buyer on or

before the date that is seven (7) months following the Seller’s acceptance of

this Offer (the “Condition Precedent Removal Date”). If the Buyer fails to

notify the Seller, in writing, that the Conditions Precedent have been satisfied

or waived within the time specified, then this Offer will become null and void

and the Deposit with accrued interest will be returned in its entirety to the

Buyer.

[23] In addition, Section 3 states that the Buyer agrees to “provide Seller with

copies of any and all studies and reports commissioned by the Buyer pursuant to

this Section 3, as same become available to the Buyer”.

[24] Section 6, Additional Terms, includes the following:

a) Agreement by the seller to sign documents that may be required for the

Buyer to obtain rezoning, subdivision approval, development permits,

community plan amendments or building permits to further the Buyer’s

intended use; and

b) A covenant that, provided the City agrees:

… the Buyer will assign the name “Wenngatz” to one street in the

development, the physical location of which shall be mutually agreed

upon between the Buyer and the Seller, both acting reasonably.

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[25] Section 7 provides that the completion date shall be “that date which is five

(5) months following the date upon which the Buyer accepts or waives the

Conditions Precedent”.

[26] There is a time of the essence clause in Section 10, which also provides that:

It is understood that there are no representations, warranties, guarantees,

promises or agreements other than those contemplated in this Offer.

Due Diligence

[27] Once the CPS was signed, the plaintiff began a process of due diligence. It

hired an architect to perform master planning; an environmental consultant to look at

environmental issues overall, as well as to specifically conduct a landmark tree

survey and develop a tree management plan; a geotechnical engineer to look at

issues such as slope and soil stability; a surveyor to prepare detailed plans for the

site based on the evolving design; a civil engineering firm to begin planning sewer,

water, lighting and other infrastructure; a traffic consultant to prepare a traffic

analysis; and a construction estimator to prepare projections for the cost of servicing

the development.

[28] At trial, the defendant challenged whether the plaintiff had in fact done any

development work. The defendant pointed to one document in the materials

provided that was a proposal containing hourly billing rates for the architectural firm,

and asserted that all the plaintiff had done was collect information on possible

consultants. Having reviewed the extensive documentation in the record with respect

to this due diligence work, it seems clear that significant work was done. The

documentation includes numerous invoices issued to the plaintiffs – many of which

acknowledge retainers or payment of past accounts, as well as some credit card

receipts. There are detailed reports and drawings.

[29] It also seems clear that these various reports were communicated to the

defendant. Initially, Ms. Wenngatz testified that nothing was provided to the

defendant other than proposals that hadn’t been acted upon. Ultimately, as

documents were presented and Mr. Robinson confirmed receipt of them, it became

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clear that the plaintiff had provided substantial information to the defendant through

Mr. Robinson – including a significant number of documents on August 25 and 26,

2020.

[30] Various approximate amounts were stated as to the cost of all of this work. At

one point, it was suggested that the plaintiff had spent $200,000 by mid-October,

2020, and another $200,000 between then and early December 2020. I note that

several invoices were issued to the plaintiff by Hayat Contracting, which apparently

represent charges for Mr. Doar’s time and effort in advancing the development.

While there is no suggestion those were not proper charges for accounting

purposes, in the context of balancing the equities between the parties in an action

like the present, I see those as a representation of the time and effort of the principal

of the plaintiff, but substantively different than actual out-of-pocket amounts paid to

third parties.

[31] The invoices in the record indicate that by October 20, 2020, the plaintiff had

been billed $121,000 by external consultants and just over $90,000 by Hayat

Contracting. By the end of December, the total billed had increased to $207,330

from external consultants and $127,550 from Hayat Contracting. These invoices do

not include any charges for legal or accounting fees, and Mr. Doar was never asked

whether the invoices in the record were complete.

[32] One of the documents in the record at trial is an appraisal which is dated

June 4, 2020. This appraisal was not provided to the defendant until it was disclosed

in this litigation. The defendant argued that it was a study or report “commissioned

by the Buyer pursuant to” Section 3 of the CPS, in that it was part of the plaintiff’s

consideration of “the economic viability and feasibility of redevelopment of the

Lands”, and should have been disclosed in the summer of 2020. Mr. Doar’s

evidence was that all he received in the summer of 2020 was a draft, which was

based on what the seller had represented to be the available number of lots, and

that the final report was not actually issued until early 2021. While the defendant

cast doubt on that evidence, I do note on reviewing the appraisal that among the

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documents the appraiser is said to have relied on is a “project summary and

massing provided by Boldwing Continuum Architects, dated October 21, 2020”. It is

clear that the appraisal in evidence was completed no earlier than October 22, 2020

– and most likely some time thereafter.

[33] The evidence includes an email from the architect to Mr. Doar on

September 9, 2020, indicating that based on the results of the studies done to that

point in time and preliminary discussions with city staff, it appeared that the

maximum achievable number of units was 507, and that the plans he was then

working on reflected 467 to 496 units. This was significantly less than the 596 units

referenced in the MLS listing, which led Mr. Doar to consult with Mr. Deleskie about

the possibility of seeking a reduction in the purchase price, or alternatively looking at

different ways to structure the transaction. Mr. Deleskie expressed the view that

Ms. Wenngatz was unlikely to agree to drop the price.

[34] Mr. Doar also gave evidence that by mid-September, his consultants had

determined that the city would require sewer and water services to come by way of a

tunnel from an existing subdivision north of Highway 19, rather than from Harewood

Mines Road which was the road giving access to Lotus Pinnatus Way. This again

was different from what had been stated in the MLS listing. Mr. Doar’s evidence was

that the city’s requirements led the estimates for the cost of servicing the

development to increase from $9 million to approximately $13 million.

[35] On September 22, 2020, Mr. Doar emailed Mr. Deleskie and asked him to set

up a meeting with Ms. Wenngatz, with proposed meeting dates in mid-October. He

explained to Mr. Deleskie that “We will be completing our analysis and present it to

the seller.” Mr. Deleskie emailed Mr. Robinson requesting the meeting, using the

same words as in the email he had received from Mr. Doar.

[36] Mr. Robinson forwarded this email to Ms. Wenngatz the next day, who

responded by text saying:

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Send Jay Deleskie an email. And ask him to make sure that we have copies

of all reports one week prior to our meeting on October 20, 2020 so we can

review everything.

And I want to make sure that you record everything for me please on voice

recorder.

October 20, 2020 Meeting

[37] Although at one point Ms. Wenngatz indicated she would not attend the

meeting on October 20, ultimately it went ahead with Ms. Wenngatz, Mr. Doar, and

the two real estate agents all present. Mr. Robinson did not record the meeting, nor

were any formal minutes kept. Rather, there was extensive and conflicting evidence

at trial from each of the four participants as to what occurred at this meeting.

[38] The meeting took place at Mr. Deleskie’s office. Mr. Deleskie had

photocopied a number of the reports that the plaintiff had obtained from its various

consultants, of which there were copies on the table. Most if not all of these reports

had been previously emailed by Mr. Deleskie to Mr. Robinson. Mr. Deleskie gave a

few introductory remarks, then Mr. Doar began his presentation.

[39] Mr. Doar’s presentation involved a high-level review of the engineering that

had been done, the overall vision for the project, and the plans for servicing the

proposed new development. Mr. Doar identified the two key issues that were

concerning him: the number of units that could be developed being significantly

lower than as represented in the MLS listing, and the fact that the city’s requirements

for site servicing were going to lead to a significantly higher cost of servicing than

what Mr. Doar had previously anticipated.

[40] These issues were cited by Mr. Doar as the basis to request a reduction in

the purchase price of the Property. Ms. Wenngatz quickly rejected that request.

Mr. Doar’s recollection was that Ms. Wenngatz told him that she could help with

other matters but the price was firm.

[41] Mr. Doar then proceeded to identify three other items that he believed would

make the deal work for him. First, he requested delaying the deadline for removal of

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the conditions precedent to December 7, 2020. Second, he asked that the amount of

the down payment be reduced from $1 million to $700,000. Third, he asked that the

provisions for payment to obtain partial release of subdivided lots from the overall

STB Mortgage be varied, such that rather than paying $85,000 per acre in order to

obtain a full release of each lot, the plaintiff would pay $30,000 per acre and grant a

mortgage in respect of the released lot for $55,000 per acre (being the balance of

the $85,000 amount) – with that mortgage to be postponed to construction financing.

[42] While Ms. Wenngatz sought to characterize Mr. Doar’s requests as being

vague and rambling, having reviewed all of the evidence I conclude that the requests

were specific and there was a common understanding between those at the meeting

as to what the requests were.

[43] In addition to these items, Mr. Doar indicated that he was willing to commit to

use the name Wenngatz Way for the main road in the development.

[44] Mr. Doar also raised the prospect that he might be able to complete the CPS

earlier than as provided in the CPS. His evidence was that this was something he

was proposing to do on a best efforts basis and not a specific commitment.

[45] The parties do not agree on whether there was acceptance of these proposed

amendments to the CPS, whether there was sufficient certainty to the amendments,

or whether there was consideration for the amendments. I will deal with all of those

issues below.

[46] There was a discussion at the meeting of the need to reflect any agreement in

writing. The plaintiff asserts that this related to documenting an agreement that had

been made; the defendant asserts that this reflected negotiation of an actual

agreement in light of what was at best an agreement to agree.

[47] The parties disagreed as to how long the meeting was. No one actually kept

track of the meeting length. Mr. Doar estimated an hour, Mr. Deleskie estimated 30-

40 minutes, while Ms. Wenngatz and Mr. Robinson estimated 30-45 minutes. Given

the nature of the discussions, a time estimate of 45 minutes sounds realistic.

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[48] During the meeting, Mr. Doar jotted down a few words on a page from one of

the reports. In my view, those words are vague and of no assistance in determining

the result of the meeting.

[49] Ms. Wenngatz and Mr. Robinson left Mr. Deleskie’s office together after the

meeting. They both said that, while they chatted in the parking lot, Ms. Wenngatz

expressed the view that the plaintiff might not have the money to go ahead with the

transaction.

After the Meeting to November 24, 2020

[50] At 3:17 pm on the afternoon of October 20, 2020, Mr. Doar emailed

Mr. Rainey’s paralegal, Ms. Coleman, stating:

We are amending the followings:

1. Subject removal and payment of by Dec 7, 2020, and payment of

400,000 in trust

2. Second payment is 300,000 to complete the sales transaction Not

600,000

3. Partial Release of STB: The amount is 30,000 Per Acre, and she

wants 50,000 upon the sales of the released LOTS. She wants us to

secure the 50,000 Per Acre as second mortgage after we get our

financing, but we advised the seller that most bank would refuse

second mortgage.

We kindly ask Richard to advise us of other solution to 100% secure her

interest. She implied that I can sell the lots and I could be in Mexico and she

would be at risk by not getting the 50,000 per acre.

[51] The evidence indicated that the meeting that day had started at noon. Thus,

this email was sent about two and a half hours after the conclusion of the meeting.

[52] Mr. Doar followed up with Ms. Coleman on October 21, 2020, stating:

Can we please try to finish by Friday. The seller is unpredictable and may

change her mind.

[53] He followed up with Mr. Rainey directly on October 26, 2020, stating:

The seller is unpredictable and may change her mind. We need to amend the

contract as per my below email.

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[54] Ms. Coleman emailed a draft amendment to Mr. Doar on October 28, 2020.

Mr. Doar provided comments on it. A revised version was provided to Mr. Deleskie

on October 29, 2020 (the “October 29 Addendum”), which he emailed to

Mr. Robinson at the end of that day. Mr. Deleskie’s email stated:

Please see attached addendum as per our meeting that the lawyers

prepared.

[55] He concluded by noting that he was “looking forward to closing this one

together”.

[56] The October 29 Addendum dealt with the amendment to the CPRD by

deleting the words in Section 3 that referenced “the date that is seven (7) months

following the Seller’s acceptance of this offer” and replacing them with “December 7,

2020”.

[57] With respect to the reduction in the down payment, the October 29

Addendum replaced the reference to $4,750,000 in Schedule A of the CPS with

$5,050,000. This makes sense given that the CPS made no explicit reference to a

down payment. Rather, the CPS specifically set out the total purchase price, the

amounts of the deposits, and the amount of the STB Mortgage in Schedule A. The

parties’ use of the phrase “down payment” in their discussions at the October 20

meeting was clearly intended to mean the total payment to be made on or before

closing, which in my view reflects the common use of that phrase. However, the

CPS did not use those words. Rather, the amount to be paid on closing had to be

inferred by reference to other amounts set out in the CPS. A $300,000 increase in

the STB Mortgage amount had the effect of decreasing the down payment by

$300,000.

[58] With respect to the partial release of the STB Mortgage on subdivided lots,

the October 29 Addendum proposed to replace the provisions in Schedule A of the

CPS for partial release of the STB Mortgage (quoted at para. 19(d) above) with the

following:

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In the event the Buyer subdivides the Lands, the Buyer shall have the right to

release, at any time or times, the STB registered on title to any one of or

number of individual lots (the “Release Lot”) on the following terms and

conditions:

A. The Buyer will deliver to the Seller:

(i) an amount equal to $30,000.00 per acre as a partial payment of the

STB, which amount will be apportioned for any lot or lots the area of

which is less than one acre, plus all accrued interest under the STB

attributable to the Release Lot (the “Partial Payout Amount”);

(ii) a Land Title Office Form C, Release of Mortgage (the “Release”)

completed to include all Release Lots, and

(ii) a Land Title Office Form B, Mortgage (the “Replacement Mortgage”)

over the Release Lot, completed to include the following terms:

Principal Amount:

An amount equal to $50,000.00 per acre of the

Release Lot

Interest Rate:

0.0%

Interest Adjust Date: N/A

Interest Cal Period: N/A

Payment Dates:

First Payment Date: N/A

Periodic Payment: N/A

N/A

Interest Act Statm’t: N/A

Last Payment Date: N/A

Assignm’t Rents:

N/A

Place of Payment:

Postal Address in Item 4

Balance Due Date: The Principal Amount shall be repaid on the

date that is the earlier of (a) the due date of the

original STB; or (b) the date that the Release

Lot is sold or transferred.

[59] The document also included a priority provision, as follows:

B. If requested by the Buyer, the Seller agrees to sign a priority agreement in

connection with any Release Lot being mortgaged by the Buyer, the

proceeds of which are to be used to benefit all or any part of the Lands.

[60] Mr. Doar said that he hadn’t noticed the 0% interest rate, and agreed that was

not something he thought had been agreed to. As well, the two numbers ($30,000

and $50,000 per acre) due in respect of any release lot did not add up to the

$85,000 per acre release price set out in the STB Mortgage. Mr. Doar confirmed that

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this was an error as well, as there had been no discussion of a change to the

$85,000 amount.

[61] There were various texts between Ms. Wenngatz and Mr. Robinson over the

next few days, scheduling a time to get together to review the October 29

Addendum. Ms. Wenngatz noted in a text at 11:39 am on November 2, 2020, that:

There are changes which need to be made and I just want to make sure I

have time.

[62] On November 3, 2020, Mr. Deleskie sent an email following up on the

October 29 Addendum, and providing some explanation of the priority agreement

provision:

You will note that any release on any of the lands of the VTB is solely to be

able to get construction financing to service the whole site to carry forward

developing the site, as such every time a construction loan is put on a

specific property that has the VTB released by way of paying the 30K per

acre it is solely able to be used to better the whole site as it will be only

dispersed to pay for offsite servicing which will be increasing the value of the

whole site which Irene will have covenants against for the VTB and the 50K

per acre balance from the released lot.

Just wanting to clarify that there is no risk to Irene by releasing the VTB on

specific sites as it’s only being done to improve the whole site which is where

she has all her security etc.

I’m sure you understand this but I wanted to make sure so we are clear and

able to process accordingly.

[63] Shortly thereafter, Ms. Wenngatz texted Mr. Robinson, commenting:

Because we have a firm dec 7/2020 condition removal date. We now need to

put a firm possession date in the amendment.

[64] This presumably reflects Ms. Wenngatz having realized that the completion

date was defined in Section 7 of the CPS as being five months after the date of

condition waiver or removal, and thus an extension of the CPRD would indirectly

result in an equivalent extension of the completion date unless specified otherwise.

[65] At 5:18 pm on November 3, 2020, Mr. Robinson emailed Mr. Deleskie stating:

Please see below for what Irene wants to see in the contract in addition to

amending the Completion Date to January 28, 2021.

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Financing available only up to the amount taken out of the parcel which is

a maximum of $30,000 per acre that is removed. The balance of the per

acre price ($55,000 per acre) is to be registered as a mortgage; by the

Seller, on to the parcel that has been removed. Interest is to be calculated

at 4.9% and is to be paid at the point of sale of each parcel. All legal

consultations, all legal fees, all registration fees of the mortgage, and

Land Title fees to be paid by the Buyer to the Seller and added to the

mortgage amount of the parcel removed. The maximum length of this

mortgage will be 1 year after removal of the land parcel, after which the

Buyer will have to find their own financing. As the down payment is being

reduced by $300,000.00 it will repaid by either:

1. Lump sum payment at the end of the 6 month period or;

2. Payment of $50,000 per month for the 6 months following.

[66] As can be seen, the defendant proposed through this document that the

completion date be moved forward by approximately three months – from the end of

April 2021 to the end of January 2021. Nothing is said in this document about the

CPRD.

[67] Mr. Deleskie forwarded this email to Mr. Doar on Friday, November 6.

[68] Mr. Doar expressed concern in his evidence about these provisions. He was

not confident he could commit to an earlier completion date, and did not want to

include that in any agreement. While he had no problem with the 4.9% interest rate,

he was concerned about the maximum one-year term of the mortgage on the

release lots – given that he anticipated construction on those lots would take more

than a year to complete, and did not expect to sell any released lot until he had

completed a development on it. Finally, he had understood that the $300,000

reduction in the down payment would simply become part of the overall STB

Mortgage and had not anticipated having to repay it in the first six months after

completion at a time when there was no anticipated revenue.

[69] These concerns appear in an email Mr. Doar sent to Mr. Deleskie on the

morning of November 6, 2020. Mr. Doar begins his email by stating:

This is not what we agreed on.

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[70] Mr. Doar obtained a further draft addendum from his lawyer (the

“November 16 Addendum”), which Mr. Deleskie provided to Mr. Robinson on the

evening of Monday, November 16. The email (which appears to have been drafted

by Mr. Doar and just pasted into Mr. Deleskie’s email) commented:

We accepted the seller conditions. However the amendment to change the

closing, is difficult to meet. We don’t want to change the date.

I know that I did communicate during our meeting that I want to have the

option to close earlier, but I have to be on the safe side as part of my funds

are coming from other projects and overseas. Therefore, I have to allow

myself enough time just in case, but it is in my best interest to close earlier.

As for the reduced down payment for the amount of 300,000, it shall be

repaid on the date of the Release Lot is sold to an arms-length third party.

Please review the attached and above with the seller so we can finalize by

early next week

[71] The November 16 Addendum, was similar to the October 29 Addendum,

except that:

a) The principal amount of the Replacement Mortgage was corrected to

$55,000 per acre of the Release Lot;

b) The interest rate was set at 4.9%;

c) The Balance Due Date was changed to provide for repayment:

… on the date which is the earlier of: (i) the Release Lot is sold to an

arm’s length third party; or (ii) one (1) year following the day upon which

the Release Mortgage is executed, in registrable form, by the Seller.

d) The addendum included provision for payment of the seller’s reasonable

legal fees associated with the Replacement Mortgage; and

e) The Buyer was to make a partial payment of $300,000 on the STB

Mortgage upon the sale of a Release Lot to an arm’s-length third party.

[72] On the afternoon of November 17, 2020, Mr. Robinson provided

Ms. Wenngatz with a draft response to the addendum. Ms. Wenngatz responded,

instructing by email at 7:05 pm that evening to “forget about the possession date”.

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The next morning there were a series of texts from Ms. Wenngatz to Mr. Robinson,

one of which stated:

I also want written in there that buyer agrees to name the Main Street

WENNGATZ WAY as per the drawings presented to seller on. (What was the

date of our meeting?)

[73] Mr. Robinson and Ms. Wenngatz exchanged further emails on November 19,

2020. At 10:36 am, in response to a draft reply email from Mr. Robinson, she

commented:

You gotta put the 85,000$ first then the next is the cash 30,000$ then

balancing financing is available only up to 55,000$

[74] At 10:54 am, in response to an email from Ms. Wenngatz stating that

“Everything is good now”, Mr. Robinson stated “I will send it over”. Ms. Wenngatz

replied at 10:55 am “Take it or leave it”.

[75] At 1:02 pm on November 19, Mr. Robinson emailed Mr. Deleski stating:

As per Irene, she would like the following (see below) into the amendments to

replace section 3.B b. and the assignment paragraph. She also wants to add

4, 5, 6 into the agreement. Should be fairly minor changes to what is there

and it would be great if we did not get any further changes back.

3.B.b. The total amount payable to the Seller to remove an acre of land is

$85,000.00. Financing is available only up to the amount taken out of the

parcel which is a maximum of $30,000 cash per acre that is removed. The

balance of the per acre price ($55,000 per acre) is to be registered as a

Seller Take back mortgage; by the Seller at the Buyer’s expense, on the

parcel that has been removed. Interest is to be calculated at 4.9% and is to

be paid at the point of sale of each parcel. The maximum length of this

mortgage will be 1 year after removal of the land parcel, after which the Buyer

will have to obtain their own financing. The Seller will pay for the initial

conveyance of the parent parcel only; 103 Lotus Pinnatus Way. Buyer will

pay for drafting and registration of the mortgage. All other legal consultations,

all legal fees, all registration fees of the mortgage, and Land Title fees to be

paid by the Buyer to the Seller and added to the mortgage amount of the

parcel removed.

As the down payment is being reduced by $300,000.00 it will be repaid in the

following installments:

$100,000 September 1, 2021

$100,000 March 1, 2022

$100,000 September 1, 2022

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4.

5.

Completion, possession and adjustment dates will be March 1, 2021.

As discussed in the meeting on October 20, 2020, the Buyer will

name the main street of the subdivision “Wenngatz Way” as per the drawing

presented at the meeting.

6.

Buyer must pay their own GST if applicable including, but not limited

to, land subdivision. …

[76] While the November 19, 2020 email from Mr. Robinson was framed as setting

out additional terms to be incorporated into the addendum, on a close reading of this

email the words “replace 3.B.b” can be read as intending to have Ms. Wenngatz’s

drafting of the bulk of the addendum replace the drafting that had been done by the

plaintiff’s lawyer. Ms. Wenngatz gave evidence that she intended this wording to

communicate her disagreement with the provisions stipulating for the defendant to,

on request, grant priority for construction financing with respect to the $55,000

mortgages on the release lots. Nothing in any of the previous correspondence

indicated any disagreement with respect to that provision, and no request to delete

the priority provision was ever made expressly. Neither Mr. Doar nor Mr. Deleskie

understood Ms. Wenngatz to be objecting to the priority agreement. Mr. Doar and

his lawyer treated the points expressly made in the November 19, 2020 email as

comments on the November 16 Addendum, changing the document to reflect the

substance of those points that were accepted, but maintaining the format of the

addendum.

[77] Having reviewed the correspondence, it is clear that none of Mr. Doar,

Mr. Deleskie or Mr. Robinson understood at any time in November 2020 that there

was any objection to the priority provision.

[78] At 12:03 pm on November 21, 2020, Mr. Deleskie emailed Mr. Robinson

commenting:

Reviewing, are we able to keep the original closing date?

I know Mohammad would like to close earlier if he can but he is not 100% yet

that he can move closing up to March 1^stso can you go over that with Irene

and at least have that be the same as original dates as we know 100% we

can close on those dates, and if anything changes so that we can close early

we would just send notice to you to request an earlier closing once we are

100% that we can close earlier.

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[79] At 10:00 pm on November 22, 2020, Mr. Doar emailed Mr. Deleskie stating:

[Ms. Coleman] will make the amendments, but the closing date won’t change.

also, the payment of the 300k will be paid as follows:

1. 100,000 On or before January 30, 2022

2. 100,000 on or before April 30, 2022

3. 100,000 on or before September 30, 2022

All other terms are acceptable. Please get the verbal approval so [Ms.

Coleman] can finalize

[80] Mr. Robinson responded to Mr. Deleskie’s November 21 email at 11:01 am

on November 23, 2020, stating:

Irene agreed to keep the closing date at April 26, 2021 which is what the

original contract points to. She would like to see that concrete date referred to

in any amended paperwork going forward.

[81] The plaintiff’s law firm prepared a revised draft amendment on November 23,

2020. It added some of the terms proposed by Ms. Wenngatz, but no longer had the

amendment to Section 3 of the CPS that would change the subject removal date to

December 7, 2020. Mr. Doar emailed Ms. Coleman stating:

I reviewed it but I can’t find where the subject removal date has been

extended to December 7^th, 2021. Please advise.

[82] The reference to December 7, 2021, rather than December 7, 2020, was

inadvertent. However, it did not get picked up by anyone for several days.

[83] Ms. Coleman quickly sent Mr. Doar a revised addendum (the “November 24

Addendum”) with a provision to extend the CPRD to December 7, 2021. Mr. Doar

signed it electronically and provided it to Mr. Deleskie.

[84] The November 24 Addendum included various other additions reflecting

matters the parties had been negotiating:

a) It included various amendments to Section 6 (Additional Terms) of the

CPS, providing for the naming of the Main Street as Wenngatz Way, for

the Buyer to pay any applicable GST, and for legal and registration costs;

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b) A specified completion date of April 26, 2021; and

c) With respect to the payment of the $300,000, provision for payments of

$100,000 on each of October 30, 2021, March 1, 2022 and September 1,

2022.

[85] At 1:16 pm on November 24, 2020, Mr. Deleskie sent the signed

November 24 Addendum to Mr. Robinson, stating in the email:

Attached the amendment signed per the seller request, and I attached the

previous contract for reference.

Correspondence of November 26 to 28, 2020

[86] There was no further correspondence between the parties until November 26,

2020. Mr. Robinson and Ms. Wenngatz exchanged texts that afternoon, in which

Mr. Robinson asked Ms. Wenngatz to give him a call “as the contract expires today”.

Mr. Robinson explained that it was his understanding that November 26, 2020, was

the CPRD. [The defendant, in closing submissions, accepted that on a proper

interpretation of the CPS provisions for condition removal, the actual CPRD apart

from any extension was November 27, 2020.]

[87] At 4:52 pm that day, Mr. Deleskie emailed Mr. Robinson to follow up on

getting the signed November 24 Addendum from Ms. Wenngatz. He stated:

From the last email from Irene the buyers agreed to and added in everything

requested. They feel they have agreed to everything requested of them and

are ready to move forward and after spending all the time and money on the

project certainly are wanting to work with Irene.

We can remove the word reasonable if you like, but it does state below that

the buyers are responsible for all legal fees relating to the mortgage being

registered, etc.

Let me know as they are wanting to get this finalized.

[88] It appears this relates to an objection by Ms. Wenngatz, communicated

verbally, to a contractual provision for the Buyer to pay the Seller’s “reasonable”

legal fees in respect of the mortgages on release lots. She wanted to have the word

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Page 24

reasonable removed with a view to avoiding disputes as to whether her solicitor’s

fees were reasonable.

[89] Mr. Robinson replied by text at 4:53 pm as follows:

Hi Jay Irene does not want to provide the financing she has cited that the

changes are always a fight and she is reluctant to spend the next 5 years

arguing about things. I really tried to have her see it another way but to no

avail.

[90] Mr. Deleski texted back that:

She agreed to it originally?

Then my clients spent a couple hundred thousand dollars.

to which Mr. Robinson replied “I’m trying”. Mr. Deleskie followed up with:

The clients had to pay another couple hundred thousand after we met her

that day after she agreed to these terms

[91] As this was going on, Mr. Robinson forwarded the 4:52 pm email from

Mr. Deleskie to Ms. Wenngatz, stating:

Just came in. I did just text Jay and reiterate your feelings on the financing.

[92] Ms. Wenngatz replied to this at 5:10 pm, stating:

I am not doing the financing any longer too much headache

[93] At 5:38 pm, Mr. Doar sent an email to Mr. Deleskie which was intended to be

forwarded on to Ms. Wenngatz. It stated:

I want to confirm to you that I have instructed the lawyer and you were copied

to accept all Irene’s conditions without any modifications. If there is a minor

changes, it was due to mistyping and we have no objection changing it back.

If the first 100k payment is on September 1 2021, we have no objection to

this request.

Further, we have no intention to making any further changes on the STB or

any terms in future. We have spent substantial amount to complete our study

by October, and we proceeded in detailed surveying and geotechnical

analysis and hired more consultants since our last meeting. Our cost is

almost 350k not including our dedicated time to proceed into this project.

Please note we can pass the 400k Dec 7^th, 2021 and are okay for Irene to

take the $400k from trust providing that we sign option to purchase. We are

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Page 25

fine on this. This will be here decision and we are still committed to all the

terms in the agreement without further changes.

I confirm no further changes in the future

[94] The evidence indicates that what Mr. Doar and Mr. Deleski understood at this

time to be the “minor change” due to “mistyping” was leaving the word “reasonable”

in with respect to payment of the defendant’s legal fees.

[95] Mr. Deleskie forwarded this email to Mr. Robinson at 6:13 pm, stating “please

forward to Irene”, and sent Mr. Robinson a text shortly thereafter stating:

Email Sent to you. Please send to Irene and you should have lots to work

with there to help her see moving forward is a great decision.

[96] At 6:18 pm on November 26, 2020, Mr. Doar sent Mr. Deleski a revised

addendum (the “November 26 Addendum”), which he had also signed, stating:

Hi Jay,

I have fixed the mistakes and the terms are according to Irene request.

[97] Mr. Deleskie forwarded this document to Mr. Robinson at 6:23 pm. He

followed up with a text saying “Also sent you the corrected contract as per Irene’s

exact requests.” Mr. Robinson forwarded the document to Ms. Wenngatz at 6:48 pm.

[98] I have reviewed the November 26 Addendum. It was mostly identical to the

November 24 Addendum, except that:

a) The completion date was changed from April 26, 2021 to April 27, 2021;

and

b) The date for the first $100,000 payment was changed from October 30,

2021 to September 1, 2021.

In particular, the November 26 Addendum still included the word “reasonable” with

respect to the plaintiff paying the defendant’s legal fees.

[99] Ms. Wenngatz wrote to Mr. Robinson at 7:04 pm stating:

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Still Wrong.

B. I won’t postpone any more than 30,000$ per acre.

[100] It is clear from the above review of the parties’ correspondence that this was

the first time Ms. Wenngatz had said that she would not postpone the full $55,000

that had appeared in all prior versions of the addendum and in the emails sent on

her behalf.

[101] She followed up with a second email to Mr. Robinson two minutes later

stating:

No there are still too many problems. Just not interested in giving this

mortgage. I can see nothing but problems. They have words in there like

reasonable legal fees. Everything could turn into an argument.

[102] Mr. Robinson replied to Ms. Wenngatz at 7:11 pm stating:

Jay said he was going to change that and he messed it up, I told him that was

a huge sticking point! I will tell him the error, I am not sure how the

postponement clause should be written either actually. Let me know and they

will change everything, these guys are desperate now and I do believe they

will bend to whatever you say at this juncture. If there is any demand that you

have just tell me and I will tell them and work with them to make sure you are

delivered a document that is completely satisfactory. (There are always a few

things I need help with – like the postponement part.) Thanks, Lee

[103] One minute later, Ms. Wenngatz replied to Mr. Robinson saying “Lee don’t

waste your time any more.” Mr. Robinson responded that he had told Mr. Deleskie

that “he isn’t helping himself sending me another document with incorrect changes”,

to which Ms. Wenngatz replied at 7:18 pm stating:

I have cold feet don’t want to do this mortgage.

[104] Mr. Robinson emailed Mr. Deleskie at 7:19 pm stating:

I think that the seller is done tonight, I am going to hold off sending anything

further as she has indicated that she is not willing to look at anything more. I

will keep trying.

[105] Mr. Deleskie emailed Mr. Doar at 8:02 pm stating:

She says it is still wrong, she won’t postpone more than $30,000 per acre, but

at least I got a response. I am not sure how to write that up, do you have any

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ideas? You kept the legal fees as reasonable legal fees not all legal fees, that

isn’t helping me convince Irene. Can you word it that the seller will pay all

legal fees not all reasonable legal fees.

Please revise and send back, I sent an email that I would work directly with

you guys to ensure that she received a document that works without revision.

She doesn’t want the hassle of having to review and change all the time.

[106] At 8:14 pm, Mr. Deleskie texted Mr. Robinson stating:

I’ve got him to make both the changes.

1; adjusting the postponement to be no more than $30k as per her request as

well removed the wording reasonable and replaced with all legal fees and

adjusted the date to October for the payment as previously mentioned,

As far as we see that would be everything that was missed?

Let me know as you know they are trying to get this to be exactly what was

requested,

I apologize for the clerical errors as that’s all they were,

Looking forward to finalizing., Thx

[107] Mr. Robinson replied “Thanks Jay, I will keep at it.”

[108] At 8:32 pm, Mr. Doar emailed a revised signed addendum (the “Revised

November 26 Addendum”) to Mr. Deleskie. It is the same as the one forwarded at

6:23 pm, except that:

a) In the postponement provisions, the references to $55,000 and $30,000

were reversed, such that the amount to be paid in return for a release lot

was now $55,000, with only $30,000 to be mortgaged,

b) With respect to the provisions for legal costs of any mortgage, the word

“reasonable” was replaced with the word “ALL”.

[109] Mr. Deleskie forwarded this document to Mr. Robinson at 1:11 am on

November 27, 2020.

[110] At 10:35 am on November 27, 2020, Mr. Deleski texted Mr. Robinson saying:

How you making out today?

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You received everything updated as per her request, it wasn’t done on

purpose it was clerical errors that have been rectified and you see from his

email that he wants no changes etc

I hope she will see she has everything she asked for and is ready to move

forward so we can move forward to deposit the funds.

[111] Mr. Robinson replied that he had not been able to get through to

Ms. Wenngatz that day.

[112] On Saturday, November 28, 2020, Mr. Deleskie texted Mr. Robinson advising

that he had just noticed that the subject removal date in the Revised November 26

Addendum was December 7, 2021. He continued that he had “the buyer adjusting to

dec 7, 2020 as per our meeting so that the $400k deposit will be deposited same

day”. He continued:

My clients carrying on as if we are still in motion and will make the deposit on

dec 7^th. Let’s do our best to get the latest amendment signed so we can

remove subjects and firm this deal up

[113] A few minutes later, he emailed Mr. Robinson a signed addendum corrected

in accordance with his text (the “Final Addendum”). It is identical to the Revised

November 26 Addendum, except that the CPRD is December 7, 2020 (rather than

2021).

Events leading up to and including December 7

[114] On Monday, November 30, 2020, Ms. Wenngatz emailed Mr. Robinson at

3:00 pm saying:

I have read through this again. There is just way too many problems. With

these guys. I am simply not interested in carrying a mortgage for this group.

They should go seek their own financing.

[115] That message does not appear to have been communicated any further at

that point in time. On the Wednesday, December 2, 2020, at noon, Mr. Robinson

texted Ms. Wenngatz stating:

Give me a call when u can on lots, Deleskie seems to think he has until the

7^thto remove subjects, im not so sure about that.

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[116] On the afternoon of Thursday, December 3, 2020, Mr. Doar emailed his

lawyers with instructions to wire the $400,000 deposit to Mr. Deleskie’s brokerage

firm on December 7, 2020. That email was forwarded by Mr. Deleskie to

Mr. Robinson. They also exchanged texts that day. Mr. Robinson texted

Mr. Deleskie at 5:35 pm stating:

… do you have the paperwork regarding the dates for deposit and subject

removal handy? I am between computers right now and it would save me

some searching.

[117] Mr. Deleski responded by re-sending his email of November 28, 2020, with

the latest revision of the addendum (the Final Addendum) signed by Mr. Doar. Later

that evening, Mr. Robinson texted Mr. Deleskie to thank him, to which Mr. Deleskie

replied confirming that he would be sending the subject removals on December 7,

2020.

[118] On the morning of Friday, December 4, 2022, at 10:22 am, Ms. Wenngatz

texted Mr. Robinson as follows:

I am putting you on notice. That With reference to 103 LOTUS THERE IS NO

VALID SIGNED AND ACCEPTED OFFER ON THIS PROPERTY. SO I WILL

NOT BE ACCEPTING A DEPOSIT. Please re lay this to Jay Deleskie on

Monday. Dec 7, 2020 for me

[119] At 6:13 pm that evening, Mr. Robinson emailed Ms. Wenngatz stating:

Jay called today and advised that the $400,000 can and will be made non-

refundable straight to you if the deal goes. Please see below for deposit email

he sent me yesterday and there is one other communication I will forward as

well.

[120] Ms. Wenngatz replied to the email stating:

There is no deal and I am not accepting the deposit but let him know on

Monday.

[121] Ms. Wenngatz, when asked why she gave the instruction not to let the

purchaser know of her position until December 7, said it was because it was after

business hours on a Friday. Of course, her instruction to that effect was the same as

the instruction she had given that morning.

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[122] Mr. Robinson replied to the email saying “Gotcha, as discussed”.

[123] On the morning of Monday, December 7, 2020, Mr. Doar emailed Mr. Rainey

at 9:59 am advising that “we are removing subjects on the above property now”, and

confirmed his instructions to deposit the $400,000 payment to the trust account of

Mr. Deleskie’s real estate firm. He then electronically signed the condition removal

addendum, which Mr. Deleskie received by email at 10:14 am.

[124] At some point on the morning of December 7, 2020, Mr. Deleskie sent

Mr. Robinson a series of texts, stating:

I wanted to share with you my notes from our meeting on October 20, 2020 at

my office boardroom with the buyer Mohammad Doar & seller Irene

Wenngatz, yourself (Lee Robinson) sellers representative and myself Jay

Deleski the buyers representative met to go over the contract of purchase

and sale dated March 2, 2020.

We all met at noon and I grabbed coffee and water for the group. We

discussed the findings of the reports shared them with each other and

discussed our challenges. My clients was asking to see if we could get an

adjustment on the price of property which the seller refused to adjust it. We

then discussed some alternative options that would assist the buyers in their

closing of the property.

As I was at the meeting with you and my clients and the seller the following

was mutually agreed at the meeting by the buyer and seller as adjustments to

the contract that were mutually agreed,

1) subject removal date was moved to December 7^th, 2020 so that we would

make the $400000 deposit the same day was approved by all.

2) we asked to reduce the amount of the down payment from $1000000 to

$700000 by way of $400000 at subject removal and $300000 on completion.

This was also approved by all.

3) we discussed removing parcels from the VTB mortgage by paying out

$55000 of the currently agreed $85000 to the seller and the seller would

postpone the remaining $30000 by the buyer paying to register the remaining

$30000/acre left on the property by way of a registered mortgage. This was

mutually agreed by all parties.

The above were the only mutually & verbally agreed changes to the contract

at this meeting.

Can you please confirm to me that this is accurate to what you also

witnessed happen at the meeting?

I very much so hope everything works out as agreed to as my clients moving

forward as if it is.

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When free give me a should no rush just wanted to go over what I’ve sent

you.

I’ll send you subject removals shortly.

Also before we deposit into my trust account do you know if Irene wants the

$400k herself by signing the offer to purchase?

[125] Mr. Robinson responded that “I will get back to you shortly before you do any

of this Jay”. He then left Mr. Deleskie a voicemail to let him know that an email would

be coming that Ms. Wenngatz had asked him to relay.

[126] At 10:38 am on December 7, 2020, Mr. Robinson sent an email to

Mr. Deleskie stating:

Hi Jay

The Seller asked me to send this to you with reference to 103 Lotus Pinnatus

Way:

There is no valid signed and accepted offer on this property so I will not be

accepting a deposit.

I sincerely hoped that this deal was going to proceed. Cheers Lee

[127] At 12:02 pm, Mr. Deleskie sent an email to Mr. Robinson that stated:

Please see attached subject removals for this deal as per the agreed new

subject removal date extension in our meeting on October 20 at my office in

Nanaimo.

The buyers placing the deposit in our trust account today and such is firming

up our accepted offer from March 2 2020 with no changes to that contract

although we had agreed to some changes at the meeting the buyers

prepared to move forward with the deal under the terms and conditions

agreed to on March 2 2020

[128] The attachment to this email was a standard real estate addendum form

confirming removal of the buyer’s conditions precedent in Section 3(a) through (e). It

was signed by Mr. Doar.

[129] Mr. Robinson forwarded this email to Ms. Wenngatz at 1:21 pm. He sent a

follow-up email to her stating:

Jay Deleskie contacted me this morning regarding subject removal and I sent

along the message you asked me to him. Jay contacted me saying that they

would be pushing subject removal based on the agreed upon terms at our

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Page 32

meeting of the 20^thof October to change the … sent over.) They are also

putting in the deposit today.

Basically they are intending to move forward on this at the initial agreed upon

terms (no changes from the meeting will be incorporated in). I realize that you

don’t want this but it is starting to get to legalities, and I would suggest that

you consult with your lawyer on how …

The version of this email that was put in evidence unfortunately was cut off. Attached

to the email was the lengthy text Mr. Deleskie had sent to Mr. Robinson earlier that

morning.

[130] Ms. Wenngatz responded to Mr. Robinson at 2:13 and 2:17 pm, saying in the

two emails that:

There were no signed written agreements which were accepted!

There is no legalities. Subjects should have ben removed on the date of the

March 2, 2020 accepted offer that was NOT DONE!!

[131] A few minutes later, Mr. Robinson texted Ms. Wenngatz advising that the

buyer’s lawyer wanted to be in touch with her lawyer, and asking for that person’s

name. Ms. Wenngatz replied:

Nope. Unless he is gong to put up a legal retainer.

[132] Ms. Wenngatz appears to have operated throughout the time from March 2 to

December 7, 2020, without legal advice.

[133] At about 2:30 pm, Ms. Wenngatz placed a call directly to Mr. Deleskie and

denied that anything had been agreed to at the October 20 meeting. Mr. Deleskie’s

recollection was that Ms. Wenngatz also told him that everything at the meeting had

been recorded. Mr. Deleskie sent a text to Mr. Robinson to let him know that

Ms. Wenngatz had called him.

[134] The plaintiff retained litigation counsel, Mr. Soliman, who wrote to

Ms. Wenngatz at 3:31 pm, asserting that the parties had agreed to extend the CPRD

to December 7, 2020, demanding that the defendant confirm it would abide by the

terms of the contract, and urging Ms. Wenngatz to obtain legal advice. He stated in

the letter that:

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The Buyer is willing, ready and able to proceed with the terms of the

Amendments and the CPS.

The Buyer will now increase the Deposit (as defined in the CPS) to $400,000

CAD (the “Funds”). My client advises that the Funds are available in trust at

Drysdale Bacon McStravick LLP and are ready to be transferred to the

Buyer’s agent in trust upon receipt of your confirmation. I copy Richard

Rainey … to this letter.

[135] Ms. Wenngatz responded to this letter by emails at 3:37 pm and 3:39 pm,

stating:

I the buyer did not enter into any further signed agreements with the buyer.

There is only one contract of March 2, 2020 and the buyer has missed that

condition removal date. As it stands there is NO EXISTING CONTRACT IN

PLACE.

I will not be closing on any offer that does no longer exist and this one does

not exist.

[136] At the time these emails were sent, a courier was en route to deposit the

$400,000 from the trust account of Mr. Rainey’s firm to the trust account of

Mr. Deleskie’s agency. However, upon receipt of Ms. Wenngatz’s response, the

courier was recalled and instead Mr. Rainey’s firm provided written confirmation that

it was holding the $400,000 in trust.

[137] This action was commenced, and a certificate of pending litigation filed, on

December 10, 2020.

Issues

[138] The plaintiff seeks an order for specific performance of the CPS, arguing that

it removed the conditions precedent on December 7, 2020, creating a binding

contract of purchase and sale which the defendant has repudiated by way of an

anticipatory breach.

[139] The defendant argues that the CPRD remained at November 27, 2020, that

the plaintiff failed to remove conditions that day, and that the contract is thus at an

end. The defendant also raises further objections to the plaintiff’s claim.

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[140] The positions advanced by the parties give rise to a number of issues which I

will consider in the following order:

a) Issue 1: Did the parties agree to amend the CPS on October 20, 2020?

This requires consideration of several sub-issues:

i. Was there an agreement to amend the CPS or an agreement to

agree?

ii. Was any amendment sufficiently recorded in writing?

iii. Was there sufficient certainty with respect to the amendment?

iv. Was there sufficient consideration for the amendment?

v. Did the plaintiff repudiate any agreement to amend by sending

inconsistent documents?

b) Issue 2: Is the defendant estopped from denying a CPRD of December 7,

2020?

c) Issue 3: Did the defendant commit an anticipatory breach of the CPS?

d) Issue 4: Was the plaintiff required to pay the deposit to the agent?

e) Issue 5: Is specific performance an appropriate remedy?

Issue 1: Did the parties agree to amend the contract on October 20 2020?

Positions of the Parties

[141] The plaintiff says that the parties agreed to amend the CPS on October 20,

2020, to:

a) Change the CPRD date to December 7, 2020;

b) Reduce the amount of the down payment from $1 million to $700,000;

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Page 35

c) Release any lot upon payment of $30,000 and a seller take back

mortgage of $55,000, to be subordinated to construction financing; and

d) Name the main street in the development Wenngatz Way.

[142] The plaintiff argues that what really happened here is that, after the above-

noted terms were agreed to, the defendant began asking for additional terms which

were negotiated over the balance of November until November 26, 2020, when

Mr. Doar sent an email accepting all of the defendant’s proposed terms. Then,

because the defendant refused to execute the amendment, the plaintiff removed

conditions based on the original CPS and relied only on the oral agreement of

October 20, 2020, to extend the CPRD to December 7, 2020.

[143] The plaintiff argues that its removal of subject conditions on December 7,

2020, was in accordance with the CPS as amended, and that as a result the CPS

was in force and wrongfully repudiated by the defendant.

[144] The defendant argues that there was no agreement to extend the deadline for

condition waiver or removal, and as a result the CPS ceased to be in effect as of the

end of the day on November 27, 2020.

[145] The defendant further argues that, even if there appeared to be agreement as

to certain amendments:

a) Any such amendment would not be valid unless in writing,

b) Any such amendment was void for lack of certainty,

c) In any event, there was no consideration for any of the proposed

amendments, and

d) The plaintiff repudiated any agreement to amend the original contract by

subsequently sending documents to the defendant that were inconsistent

with the alleged agreement.

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Governing Principles

Reliability and Credibility

[146] Reliability and credibility are related but distinct concepts. A concise

explanation of the distinction can be found in R. v. Morrissey (1995), 22 O.R. (3d)

514 (C.A.) at 526:

Testimonial evidence can raise veracity and accuracy concerns. The former

relates to the witness's sincerity, that is, his or her willingness to speak the

truth as the witness believes it to be. The latter concerns relate to the actual

accuracy of the witness's testimony. The accuracy of a witness's testimony

involves considerations of the witness's ability to accurately observe, recall

and recount the events in issue. When one is concerned with a witness's

veracity, one speaks of the witness's credibility. When one is concerned with

the accuracy of a witness's testimony, one speaks of the reliability of that

testimony. …

[147] A frequently cited list of factors to be applied when assessing both the

veracity of a witness and the accuracy of that witness’ evidence is found

in Bradshaw v. Stenner, 2010 BCSC 1398 at para. 186, aff’d 2012 BCCA 296. It

includes:

a) The ability and opportunity of the witness to observe events;

b) The firmness of their memory;

c) Their ability to resist the influence of interest to modify their recollection;

d) Whether their evidence harmonizes with independent evidence that has

been accepted;

e) Whether the witness changes their evidence during cross-examination (or

between examination for discovery and trial) or is otherwise inconsistent in

their recollection;

f) Whether their evidence seems generally unreasonable, impossible or

unlikely;

g) Whether the witness has a motive to lie; and

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h) The demeanour of the witness generally.

[148] In considering credibility, the evidence of a witness must be assessed for “its

harmony with the preponderance of the probabilities which a practical and informed

person would readily recognize as reasonable in that place and in those

conditions”: Faryna v. Chorny, [1952] 2 D.L.R. 354 at 357 (B.C.C.A.).

[149] Further, “a trier of fact may accept none, part or all of a witness’s evidence,

and may attach different weight to different parts of a witness’s evidence”: Gill Tech

Framing Ltd. v. Gill, 2012 BCSC 1913 at para. 28.

Was there an agreement or an agreement to agree?

[150] In Le Soleil Hotel & Suites Ltd. v. Le Soleil Management Inc., 2009 BCSC

1303 at paras. 321-323, Justice Dickson (as she then was) discussed the underlying

policy tensions and the role the court plays in a case such as this:

[321] Courts strive to uphold contractual obligations solemnly and freely

undertaken. They do not, however, impose them upon parties who have not

reached agreement on all essential terms: Catalyst Paper Corp. v.

Companhia de Navegacao Norsul, 2008 BCCA 336.

[322] For parties to be bound in a contractual relationship there must be a

manifest meeting of the minds. They must express themselves outwardly in a

manner that indicates both an intention to be bound and reasonably certain

mutually agreed terms: Klemke Mining Corporation v. Shell Canada Limited,

2007 ABQB 176, affirmed 2008 ABCA 257 ().

[323] These fundamental principles of contract law enable commercial life

to operate in a fair, predictable and efficient manner. They apply whether the

purported contract in question is concluded in writing, orally, by conduct, or

by a combination thereof. The key question in all cases is whether an

agreement has been reached on all essential terms, regardless of its

form: Catalyst Paper Corp. supra; Periscan Financial Services Inc. v. 519090

B.C. Ltd., 2007 BCSC 707; Leong & Associates Actuaries & Consultants Inc.

v. Watt, 2003 BCSC 1885.

[151] The specific legal principles that determine whether a contract exists were

carefully summarized by Justice Williams in Salminen v. Garvie, 2011 BCSC 339 at

paras. 24-33:

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B.

Basic Requirements

A contract is usually the product of negotiation, during which the terms

[24]

of a proposed agreement are accepted, without qualification, by one party

(the offeree) as presented by the other party (the offeror).

[25]

For parties to be bound in a contractual relationship, there must be a

manifest meeting of the minds or consensus ad idem on all the essential

elements of what that relationship will be: G.H.L. Fridman, The Law of

Contract in Canada, 5^thed. (Toronto: Thomson Canada Ltd., 2006) [Fridman]

at p. 14. The absence of a formal signed and properly witnessed agreement

does not change the binding nature of a contact. What is required is that the

contracting parties express themselves outwardly in a manner indicating an

intention to be bound to mutually-agreed and reasonably-certain terms.

[26]

The burden of proving consensus is on the party seeking to prove the

existence of the agreement; the standard to be met is proof on a balance of

probabilities: Reid v. Reid, 2011 BCSC 231 at para. 27, [2011] B.C.J. No. 298

(QL), citing Bell v. Bell (1998), 24 E.T.R. (2d) 169, [1998] B.C.J. No. 1457

(QL) at para. 14 (S.C.).

[27]

The test for determining consensus ad idem at the time of contract

formation is objective: it is “whether the parties have indicated to the outside

world, in the form of the objective reasonable bystander, their intention to

contract and the terms of such contract”; it is “whether a reasonable...

[person] in the situation of that party would have believed and understood

that the other party was consenting to the identical term”: Fridman, supra,

p. 15; see also Smith v. Hughes (1871), L.R. 6 Q.B. 597 at 607 adopted in St.

John Tugboat Co. Ltd. v. Irving Refining Ltd., [1964] S.C.R. 614, 1964

CarswellNB 4 at para. 19, and Remington Energy Ltd. v. B.C. Hydro & Power

Authority, 2005 BCCA 191 at para. 31, 42 B.C.L.R. (4th) 31. The actual state

of mind and personal knowledge or understanding of the promisor are not

relevant in this inquiry: Hammerton v. MGM Ford-Lincoln Sales Ltd., 2007

BCCA 188 at para. 23, 30 B.L.R. (4th) 183, citing S.M. Waddams, The Law of

Contracts, 5^thed. (Toronto: Canada Law Book Inc., 2005) at 103. In short, if a

reasonable person would find that the parties were in agreement as to a

contract and its terms, then a contract would exist at common law: Witzke

(Guardian ad litem of) v. Dalgliesh, [1995] B.C.J. No. 403 (QL), 1995

CarswellBC 1822 at para. 59 (S.C. Chambers). The test’s focus on objectivity

animates the principal purpose of the law of contracts, which is to protect

reasonable expectations engendered by promises.

C.

Subsequent Conduct – Further Negotiations

[28]

To determine whether a binding agreement was created vis-à-vis the

parties’ manifest intentions, the court may consider their conduct leading up

to and following the conclusion of the alleged agreement: Cassidy v. Canada

Publishing Corp. (1989), 41 B.L.R. 223, 1989 CarswellBC 302 at para. 27

(S.C.), citing Lawrence Management Services Ltd. et al. v. Hartford

Investments Ltd. (1964), 49 W.W.R. 129, 1964 CarswellMan 30 at para. 3

(Man. Q.B.). Subsequent conduct is a factor in addition to evidence of the

discussions and documentation leading to the contract’s formation: Leong &

Associates Actuaries & Consultants Inc. v. Watt, 2003 BCSC 1885 at

para. 117, 42 B.L.R. (3d) 128. The parties’ actions, such as the altering of

1247249 B.C. Ltd. v. 1098212 B.C. Ltd.

Page 39

terms after what appeared to be the conclusion of their agreement, may be

evidence, in some circumstances, that no such agreement was ever reached.

[29] However, generally, the mere proposal of additional or better terms

does not negate the existence of a binding contract. Put alternatively, further

negotiations are not necessarily inconsistent with a fully-formed agreement.

As noted by Masuhara J. in Norske Skog Canada Ltd. v. Companhia de

Navegaçāo Norsul, 2007 BCSC 610, [2007] B.C.J. No. 919 (QL) at para. 73

quoting from Sir Guenter Treitel in The Law of Contract, 11^thed. (London:

Sweet & Maxwell, 2003) at 17-18, rev’d 2008 BCCA 336, 83 B.C.L.R. (4th)

226:

...The court will then look at the entire course of the negotiations to decide

whether an apparently unqualified acceptance did in fact conclude the

agreement. If it did, the fact that the parties continued negotiations after

this point will not normally affect the existence of the contract; it will do so

only if the continuation of the negotiations can be construed as an

agreement to rescind the contract. A fortiori, the binding force of an oral

contract is not affected or altered merely by the fact that, after its

conclusion, one party sends to the other a document containing terms

significantly different from those which had been orally agreed.

[30]

To similar effect, in Ridgeway-Pacific Construction Ltd. v. United

Contractors Ltd., [1978] B.C.J. No. 478 (QL) at para. 42, 1978 CarswellBC

668 (S.C.), Gould J. stated as follows:

The principle is that once a definite offer has been made and accepted

without qualification and it appears that all essential terms have been

agreed between the parties, there exists a contract which cannot be

affected by subsequent negotiations. Once there is a complete contract

further negotiations between the parties cannot, without the consent of

both, get rid of the contract already arrived at. [case references omitted]

[31]

Masuhara J. went on to quote from Professor S.W. Waddams in The

Law of Contracts, 5^thed. (Toronto: Canada Law Book, 2005) at para. 28:

Where there appears to be a firm agreement at one stage, but

subsequently negotiations resume, the facts are susceptible of at least

two analyses. There may be an agreement that remains intact, with

subsequent negotiations on a supplementary agreement, the failure of

which is irrelevant to the enforceability of the prior agreement, or the

subsequent negotiations may show that there is no agreement, either

because, looked at as a whole, events show agreement never was

reached, or because the subsequent conduct amounts to a rescission of

the earlier agreement, or sets up an estoppel. The latter analysis seems

appropriate where one party, in negotiating for better terms, leads the

other to believe that there is not yet any firm agreement at all. In those

circumstances she is attempting to improve her position by threatening to

back out altogether, and she should not then be allowed to fall back on an

agreement the existence of which she has by her own conduct denied.

On the other hand, if both parties know, or should know, that the

negotiations look to supplement an existing firm agreement, there is a

strong case for permitting enforcement of that agreement when the

supplementary negotiations fall through.

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[32]

Where the alleged agreement contemplates the execution of a further

formal contract or where, as here, further negotiations take place after the

conclusion of the alleged agreement, the court must determine whether the

parties intended to create a binding contract or simply reached a basis for

future agreement: Le Soleil Hotel & Suites Ltd. v. Le Soleil Management Inc.,

2009 BCSC 1303 at para. 329, [2009] B.C.J. No. 1900 (QL) [Le Soleil]. It is

trite law that “an agreement between two parties to enter into an agreement

by which some critical part of the contract matter is left to be determined is no

contract at all”: May & Butcher Ltd. v. The King, [1929] All E.R. Rep. 679,

[1934] 2 K.B. 17 (H.L.), at 20.

[33]

The question for the court is whether the parties reached an

agreement on all matters that are vital to that agreement or merely intended

to defer legal obligation until a final agreement has been reached: see, for

example, Boult Enterprises Ltd. v. Bissett (1985), 67 B.C.L.R. 273, [1985]

B.C.J. No. 1872 (QL) at para. 13. In Le Soleil at para. 333, Dickson J. said

this:

In some cases where execution of a formal contract is contemplated, a

draft contract containing additional or different contractual terms may be

produced and delivered. In such circumstances, if the court is satisfied, on

an objective analysis, that all essential terms were agreed and the new

terms do not amount to a repudiation or admission that no agreement was

reached earlier, the agreement will be binding: Perry v. Suffields Ltd.,

[1916] 2 Ch. 187 (C.A.); Horsnail v. Shute (1919), 27 B.C.R. 474

(C.A.); Klemke Mining Corporation... [v. Shell Canada Ltd., 2007 ABQB

176, aff’d 2008 ABCA 257 ()]; Lake Ontario Cement Co. v. Golden

Eagle Oil Co. Ltd., (1974), 46 D.L.R. (3d) 659. On the other hand, if the

Court concludes that key terms remained open for negotiation an

intention to be create legal relations will not be found: "Bay Ridge" (The),

[1999] 2 Ll.L. Rep 277; Pitt Air Ltd. v. Pitt Meadows Airport Society, [2006]

B.C.J. No. 1870, 2006 CarwellBC 2031 (S.C.), affirmed [2007] B.C.J.

No. 36, 2007 CarswellBC 34 (C.A.); Bawitko Investments Ltd. v. Kernels

Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.).

[152] Dealing specifically with oral contracts, Dickson J. in Le Soleil noted at

para. 328 that oral contracts are interpreted using the same principles as written

contracts, by considering the parties’ words and actions in context and assessing

whether they establish an intention to be bound. At paras. 328-331, she further

stated that:

[328] … The genesis and aim of the transaction is an aspect of the relevant

context for consideration: Canada Square Corporation, supra. The credibility

of witnesses will be particularly important and differing versions of events will

increase the difficulty of establishing that an enforceable bargain was

made: Anchorage Management Services Ltd. v. 465404 B.C. Inc., 1999

CarswellBC 2947 (C.A.).

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[329] When the Court considers the parties’ manifest intentions, it may be

required to determine whether they intended to create a binding contract or

simply reached a basis for future agreement. This question often arises

where, as in the Specific Performance Action, the alleged agreement

contemplates the execution of a further formal contract.

[330] It is not necessary for every conceivable matter to be resolved

between the parties before an enforceable contract is created. The law does

not, however, recognize an “agreement to agree”. The question for

determination is whether the parties have reached agreement on all matters

that are vital or fundamental to the arrangement or whether they intended to

defer legal obligation until a final agreement has been reached: Boult

Enterprises Ltd. v. Bissett (1985), 21 D.L.R. (4th) 730.

[331] The classic statement of the law is found in Van Hatzefeldt-

Wildenburg v. Alexander, [1912] 1 Ch 284 at pp. 288-289:

It appears to be well settled by the authorities that if the documents or

letters relied on as constituting a contract contemplate the execution of a

further contract between the parties, it is a question of construction

whether the execution of the further contract is a condition or term of the

bargain or whether it is a mere expression of the desire of the parties as

to the manner in which the transaction already agreed to will in fact go

through. In the former case there is no enforceable contract either

because the condition is unfulfilled or because the law does not recognize

a contract to enter into a contract. In the latter case there is a binding

contract and the reference to the more formal document may be ignored.

[153] In Hoban Construction Ltd. v. Alexander, 2012 BCCA 75 at para. 38,

Justice Bennett cited the following excerpt from Bawitko Investments Ltd. v. Kernels

Popcorn Ltd. (1991), 79 D.L.R. (4th) 97, 1991 2734 (Ont. C.A.) at 103-104:

As a matter of normal business practice, parties planning to make a formal

written document [of] the expression of their agreement, necessarily discuss

and negotiate the proposed terms of the agreement before they enter into it.

They frequently agree upon all of the terms to be incorporated into the

intended written document before it is prepared. Their agreement may be

expressed orally or by way of memorandum, by exchange or

correspondence, or other informal writings. The parties may “contract to

make a contract”, that is to say, they may bind themselves to execute at a

future date a formal written agreement containing specific terms and

conditions. When they agree on all of the essential provisions to be

incorporated in a formal document with the intention that their agreement

shall thereupon become binding, they will have fulfilled all the requisites for

the formation of a contract. The fact that a formal written document to the

same effect is to be thereafter prepared and signed does not alter the binding

validity of the original contract.

However, when the original contract is incomplete because essential

provisions intended to govern the contractual relationship have not been

settled or agreed upon; or the contract is too general or uncertain to be valid

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in itself and is dependent on the making of a formal contract; or the

understanding or intention of the parties, even if there is no uncertainty as to

the terms of their agreement, is that their legal obligations are to be deferred

until a formal contract has been approved and executed, the original or

preliminary agreement cannot constitute an enforceable contract. In other

words, in such circumstances the “contract to make a contract” is not a

contract at all. The execution of the contemplated formal document is not

intended only as a solemn record or memorial of an already complete and

binding contract but is essential to the formation of the contract itself...

[154] At paras. 58-59, Bennett J.A. confirmed the importance of focusing on the key

legal principles pertinent to determining whether a contract is legally enforceable,

such as:

[58]

… whether the parties effectively agreed to enter into binding legal

relations, and, if so, whether the essential terms of their contracts are so

vague and uncertain as to be incapable of reasonable interpretation and,

consequently, meaningless.

And,

[59]

… whether a reasonable third-party observer would conclude from all

of the circumstances, including the documents themselves, the

circumstances under which they were executed, and the parties’ subsequent

conduct, that the parties intended to enter into binding legal relations.

Was any amendment sufficiently recorded in writing?

[155] The parties framed their submissions in terms of s. 59(3), (4) and (7) of the

Law and Equity Act, R.S.B.C. 1996, c. 253, which states:

(3) A contract respecting land or a disposition of land is not enforceable

unless

(a) there is, in a writing signed by the party to be charged or by that

party's agent, both an indication that it has been made and a

reasonable indication of the subject matter,

(b) the party to be charged has done an act, or acquiesced in an act of

the party alleging the contract or disposition, that indicates that a

contract or disposition not inconsistent with that alleged has been

made, or

(c) the person alleging the contract or disposition has, in reasonable

reliance on it, so changed the person's position that an inequitable

result, having regard to both parties' interests, can be avoided only by

enforcing the contract or disposition.

(4) For the purposes of subsection (3) (b), an act of a party alleging a

contract or disposition includes a payment or acceptance by that party or

on that party's behalf of a deposit or part payment of a purchase price.

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…

(7) A writing can be sufficient for the purpose of this section even though a

term is left out or is wrongly stated.

[156] The legal principles required to interpret and apply these provisions of the

Law and Equity Act were summarized in Le Soleil at paras. 343-345. After setting

out the provisions of s. 59(3) and (4), Dickson J. commented:

[343] Section 59(3) is rooted in the Statute of Frauds enacted in England in

1677. It provides an evidentiary threshold that proven contracts must reach

before they will be enforced: 387903 B.C. Ltd. v. Canada Post Corp. (1995),

6 B.C.L.R. (3d) 370.

[344] Like the original English statute, the Statute of Frauds, R.S.B.C. 1960,

c. 369 provided that no agreement concerning an interest in land was

enforceable unless evidenced in writing. Its purpose was to protect parties

from fraudulent allegations of oral agreements affecting land, trusts or

guarantees. Following its enactment, however, courts became concerned

that, restrictively interpreted, it could be used as an instrument of fraud to

avoid enforcement of an agreement when the plaintiff had already embarked

upon performance. This concern led to adoption of the “part performance”

equitable exception to the statute’s writing requirement: The Law Reform

Commission of British Columbia’s 1977 Report on the Statute of

Frauds (“LRC Report”), pp. 57-58 and 80-82

[345] In Schild v. British Columbia (Official Administrator), 1993 CarswellBC

2678 Cashman J. conducted an extensive review of the jurisprudence

relating to s. 59(3)(b) of the Act. In so doing, he noted that the statute adopts

a more liberal approach to what may constitute acts of part performance than

the common law, which required acts unequivocally consistent with the

alleged contract. This view was later confirmed by the British Columbia Court

of Appeal in Olsen v. Gamache, [1995] B.C.J. No. 1614 and Johnson v.

Breitkreuz, 2006 BCCA 30. The statutory requirement is “to prove acts

indicating a contract has been made that is not inconsistent with the alleged

contract and that the party to be charged has done or acquiesced in such

acts”: Olsen, supra, ¶ 13 & 16.

[157] The defendant asserts that the parol evidence rule is also applicable to

prevent the introduction of evidence of an oral agreement to amend a written

contract. The parol evidence rule was summarized in Gutierrez v. Tropic

International Ltd. (2002), 63 O.R. (3d) 63, 2002 45017 (C.A.) at paras. 19-20:

[19]

Under the parol evidence rule, when the language of a written

contract is clear and unambiguous, extrinsic evidence is not admissible to

vary, qualify, add to, or subtract from, the words of the written contract. ….

However, the rule is not absolute. It admits of numerous exceptions, including

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Page 44

where it is alleged that evidence of a distinct collateral agreement exists,

which does not contradict, and is not inconsistent with, the written contract …

[20] Some recent authorities suggest a more relaxed approach to the

admission of parol evidence. In Power Consolidated (China) Pulp Inc. v.

British Columbia Resources Investment Corp., [1989] B.C.J. No. 114 (S.C.),

McLachlin C.J.S.C. (as she then was) stated:

The starting point in any discussion of when a collateral contract is

excluded by the words of the main contract must be the rule -- sometimes

called the parol evidence rule -- that evidence of a collateral contract is

not admissible unless consistent with the main contract: Hawrish v. Bank

of Montreal . . . The application of this rule, however, is narrow. Recent

authorities suggest that it applies only where it is clear that the contract

sued upon is wholly in writing. If a party can establish that there was a

pre-contractual stipulation which was not intended to be excluded, then it

may be relied on even though it is arguably inconsistent with certain terms

of the written contract: …

[Citations omitted.]

[158] The parol evidence rule generally focuses on alleged discussions in

connection with the formation of the written contract. It appears that the rule does

not operate to exclude evidence of subsequent oral agreements which may alter or

nullify a written contract: Barber v. Glen, [1987] 59 Sask. R. 49, 1987 4627

(C.A.) at para. 9.

[159] Thus, the proper focus of the Court with respect to this issue is on the

requirements of s. 59 of the Law and Equity Act.

Was there sufficient certainty with respect to the amendment?

[160] In Le Soleil at paras. 339-341, Dickson J. explained that a court cannot

enforce an agreement that has unclear terms that are “vague, ambiguous or

incomplete”, as the parties to such an agreement cannot be said to have come to a

meeting of the minds. Instead, parties’ expressed intentions must be capable of

being determined with a “reasonable degree of certainty”.

[161] At para. 340, she also noted that enforceable contracts may leave some

matters to determined in the future, as long as an agreed upon mechanism is in

place to do so:

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[340] As noted, however, there are enforceable contracts in which some

matters are left to be determined in the future. The contract will not fail for

uncertainty so long as an effective mechanism for their determination is

agreed. In Hillas & Co., Ltd. v. Arcos, Ltd., [1932] All E.R. 494 the House of

Lords stated:

Business men often record the most important agreements in crude and

summary fashion; modes of expression sufficient and clear to them in the

course of their business may appear to those unfamiliar with the business

far from complete or precise. It is, accordingly, the duty of the court to

construe such documents fairly and broadly, without being too astute or

subtle in finding defects ... that ..., however, does not mean that the court

is to make a contract for the parties, or to go outside the words they have

used, except in so far as there are appropriate implications of law, as for

instance, the implication of what is just and reasonable to be ascertained

by the court as a matter of machinery where contractual intention is clear

but the contract is silent on some detail. Thus in contracts for future

performance over a period, the parties may not be able nor may they

desire to specify many matters of detail, but leave them to be adjusted in

the working out of the contract. Save for the legal implication I have

mentioned, such contracts might well be incomplete or uncertain; with that

implication in reserve they are neither incomplete nor uncertain.

[162] In addition, commercial documents do not need to be drafted with “strict

precision”, and courts should uphold agreements “if, on close analysis, definite

meaning can be discerned from their terms”: Le Soleil at para. 341. At para. 341,

Dickson J. noted that this approach is reflected by Justice Morden in Canada Square

Corp. Ltd. v. Versafood Services Ltd. (1981), 130 D.L.R. (3d) 205 at 218 (Ont. C.A.):

In this case there is no doubt that the document of October 14, 1969, as an

agreement to lease, is crudely expressed and contains some very loose

language. Further, a more sophisticated document would probably have

covered several other matters in addition to those dealt with in it.

Nonetheless, accepting that the parties intended to create a binding

relationship and were represented by experienced businessmen who had full

authority to represent their respective companies, a Court should not be too

astute to hold that there is not that degree of certainty in any of its essential

terms which is the requirement of a binding contract.

Did the plaintiff repudiate any agreement to amend by sending

inconsistent documents?

[163] The impact of ongoing negotiations on an alleged agreement was reviewed in

Salminen, including at paras. 28-33 cited above. At the conclusion of that

discussion, Williams J. went on to comment at paras. 34-39:

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[34]

The issue of subsequent conduct, specifically in the form of further

negotiations, leads me to consider the issue of repudiation.

D.

Repudiation

[35]

Repudiation occurs where, without justification, a party, by words or

conduct, evinces an intention to refuse the performance of the contract and

not to be bound by it: Fridman, supra, at p. 606; Guarantee Co. of North

America v. Gordon Capital Corp., [1999] 3 S.C.R. 423, [1999] S.C.J. No. 60

(QL) at para. 40. The totality of the circumstances must be considered in

determining whether a party repudiated a contract through conduct that

amounts to a rejection of his or her obligations under that contract: Terrien

Bros. Construction Ltd. v. Delaurier, 2006 BCSC 1645 at para. 51, [2006]

B.C.J. No. 2896 (QL) (Chambers), aff’d 2007 BCCA 623, 75 B.C.L.R. (4th)

63. The test, as with consensus ad idem, is that of an objective reasonable

person: Business Depot Ltd. v. Lehndorff Management Ltd. (1996),

24 B.C.L.R. (3d) 322, [1996] B.C.J. No. 1061 (QL) (C.A.) at paras. 66-67.

[36]

The effect of repudiation depends on the response of the non-

repudiating party. As the Court of Appeal stated in Ginter v. Chapman, [1967]

B.C.J. No. 27 (QL), 1967 CarswellBC 63 at para. 11 (C.A.), aff’d [1968]

S.C.R. 560, 1968 CarswellBC 77, “Repudiation of a contract by one party is

of no consequence in law unless the other party accepts it as such and

communicates the acceptance to the repudiator within a reasonable time.”

The party faced with the other’s repudiation has two options: Norfolk v.

Aikens (1989), 41 B.C.L.R. (2d) 145, 64 D.L.R. (4th) 1 (C.A.). They are, as

expressed in ASEAN Technology Partners Inc. v. Canada (National

Research Council), 2007 BCSC 1539, [2007] B.C.J. No. 2273 (QL) at

para. 109, aff’d 2009 BCCA 126, [2009] B.C.J. No. 561 (QL):

If the non-repudiating party treats the contract as still being in full force

and effect then it remains in effect for both sides. However, if the non-

repudiating party accepts the repudiation, the contract is terminated

(Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3

S.C.R. 423, 178 D.L.R. (4th) 1). Acceptance of repudiation can be

inferred through conduct that indicates that the non-repudiating party

does not intend to continue with the contract (American National Red

Cross v. Geddes Brothers, [1921] 61 S.C.R. 143, 55 D.L.R. 194).

[37]

These cases provide that the making of a counter-offer, which

demonstrates objectively a rejection of contractual obligations, effectively

repudiates an agreement, and that that agreement is extinguished if there is

sufficient evidence that the non-repudiating party accepted the repudiation.

[38]

In Fieguth v. Acklands (1989), 37 B.C.L.R. (2d) 62, 1989 CarswellBC

88 (C.A.), a case concerning the validity of a settlement agreed upon

between lawyers, the defendant sent settlement funds to the plaintiff having

deducted income tax and the plaintiff refused to accept the funds and

proceeded to litigation on the basis that, by deducting the taxes, the

defendant varied the terms of the settlement, such that no final agreement

was reached. The Court of Appeal held:

39 ...If there was an agreement of settlement, as both courts found, then

the consequences of subsequent conduct relating to the exchange of

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funds and documents would not discharge either party unless it could be

said that the party alleged to have repudiated the contract exhibited an

unwillingness to carry out its terms. ...

[para. 40 omitted]

41 ...One can tender whatever documents he thinks appropriate without

rescinding the settlement agreement. If such documents are accepted

and executed and returned then the contract, which has been executory,

becomes executed. If the documents are not accepted then there must be

further discussion but neither party is released or discharged unless the

other party has demonstrated an unwillingness to be bound by the

agreement by insisting upon terms or conditions which have not been

agreed upon or are not reasonably implied in these circumstances.

E.

Summary Overview

[39]

With these principles in mind, it seems to me that the appropriate

analytical framework to be applied in the present case requires that the first

question to be asked is whether there was a contract reached at all. If there

was an agreement, the second question is whether the agreement was

repudiated by one party insisting on terms that were not agreed to: Lacroix v.

Loewen, 2010 BCCA 224 at para. 28, 4 B.C.L.R. (5th) 282; applied in Brown

v. 0821969 B.C. Ltd., 2010 BCSC 989 at paras. 42-43, [2010] B.C.J.

No. 1410 (QL) and, if so, to determine what results follow.

Decision

Reliability and Credibility

[164] There were four main witnesses at the trial: Mr. Doar, Mr. Deleskie,

Ms. Wenngatz and Mr. Robinson. Although much of the key evidence can be found

in the documentary record, their viva voce evidence is important with respect to

whether any agreements were reached at the meeting that occurred on October 20,

2020.

[165] I found Mr. Doar’s evidence to be, for the most part, reliable and credible. His

recollection was generally good, even as to the complicated sequence of

negotiations reflected in the documents that took place over the course of November

2020. His evidence harmonized with that of Mr. Deleskie and with the documents.

More generally, his actions appear consistent with those of an experienced

developer who was keen to move forward with the project represented by the CPS.

He retained experienced consultants, took legal advice with respect to drafting

agreements, and involved his real estate agent throughout the process. His

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evidence reflected a good degree of objectivity. While he expressed some frustration

with Ms. Wenngatz – and a feeling that she kept making more and more demands

as they tried to resolve the wording of the addendum – that frustration was reflected

in an appropriate manner. There were few discrepancies with his discovery

evidence. While I wondered at trial whether Mr. Doar had exaggerated the amount

invested in the project, having reviewed the documentary record I am satisfied that

his investment in the due diligence process was significant. While I accept that

Mr. Doar has a financial interest in proceeding with this transaction, even taking that

potential motive into account, I find his evidence both reliable and credible.

[166] The defendant sought to describe Mr. Doar as defensive, confrontational and

evasive. I found Mr. Doar to be very careful in cross-examination to ensure that he

understood the question. I did not find him overall to be evasive or confrontational.

[167] I found Mr. Deleskie to be a reliable and credible witness. Mr. Deleskie was

thoughtful and careful in his evidence, and he had a good command of the sequence

of discussions. He frankly acknowledged that he would have earned a commission

of approximately $100,000 had the deal gone ahead, but I had no sense that this

impacted on his ability to recount what happened.

[168] Mr. Deleskie made concessions in cross-examination. One of those

concessions contradicted evidence of Mr. Doar. Mr. Deleskie, in his lengthy text to

Mr. Robinson on December 7, 2020, stated the following:

3) we discussed removing parcels from the VTB mortgage by paying out

$55000 of the currently agreed $85000 to the seller and the seller would

postpone the remaining $30000 by the buyer paying to register the remaining

$30000/acre left on the property by way of a registered mortgage. This was

mutually agreed by all parties.

[169] In his direct examination, Mr. Deleskie stated that he inadvertently reversed

the $55,000 and $30,000 amounts in this text, and that the actual agreement on

October 20, 2020, had been that the amount paid on release was to be $30,000 and

the amount to be mortgaged was $55,000. After lengthy cross-examination,

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Mr. Deleskie accepted that he might have been correct in his text, and that his

evidence that he was in error may have been incorrect.

[170] Having reviewed the sequence of correspondence subsequent to the

meeting, it is clear that all of the correspondence prior to 7:04 pm on November 26,

2020, was predicated on the payment on release being $30,000. I conclude that the

evidence given by Mr. Deleskie in his direct examination was correct, and that he did

in fact reverse the two numbers in his text. His text, of course, was written on

December 7 – some 10 days after Ms. Wenngatz had demanded that the amounts

be reversed, at a time when the most recent draft of the addenda showed the

payment on release being $55,000.

[171] While this was the one area where Mr. Deleskie’s evidence was less reliable,

his willingness to carefully think through what had occurred and consider the

propositions put to him by counsel reflected well on his credibility.

[172] I had more difficulty with Ms. Wenngatz’s evidence. She took every

opportunity to attempt to disparage Mr. Doar. She asserted repeatedly that the

plaintiff had done no substantive due diligence work, even in the face of documents

clearly sent to her agent making clear that the work done had been substantial. She

said that all that was given to her at the meeting was one or two site plans – which is

different from the evidence of the other witnesses, and contrary to common sense

given Mr. Doar’s goals for the meeting. She claimed that it was of no importance to

her that the main road be named as Wenngatz Way – yet the emails show her

insisting that this matter be reflected in the addendum. She insisted that she had

made it a condition that she obtain legal advice before agreeing to any changes to

the contract – yet it is clear from her conduct that she had no intention to get legal

advice.

[173] With respect to her points about naming the main road Wenngatz Way and

obtaining legal advice, each connected to legal arguments her counsel intended to

make (lack of consideration, and any agreement being conditional on legal advice). I

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was left wondering whether the evidence she gave was influenced by what she

knew about the legal arguments that were to be advanced.

[174] In her evidence with respect to the October 20 meeting, she at times stated

that Mr. Doar wanted to tear the entire contract from beginning to end apart in half

an hour, at times stated the meeting was really, really short and nothing concrete

was even proposed, and at times stated that numerous different numbers were

tossed around in a vague and rambling manner. None of these were consistent with

the evidence of the others at the meeting, and indicated Ms. Wenngatz’s tendency to

exaggerate when she thought something was to her benefit.

[175] At her examination for discovery, Ms. Wenngatz had said that no specific

condition removal date was discussed at the meeting. Her evidence on that changed

at trial – perhaps not surprisingly given what appeared in her text to Mr. Robinson on

November 3, in regard to “a firm dec 7/2020 condition removal date”.

[176] Ms. Wenngatz claimed in her evidence that she had realized at the

October 20 meeting that, due to the way the CPS was worded, any change to the

CPRD would also impact on the closing date. She also claimed that she had

identified the erroneous reference to a CPRD of December 7, 2021, as soon as that

date first appeared in the November 24 Addendum. In my view, had either of those

statements been correct, the issues she claims to have identified would have

appeared in the documents much earlier than they did. She also denied having ever

called Mr. Deleskie – when Mr. Deleskie’s contemporaneous text seems to clearly

indicate that she did call him on December 7.

[177] All of these issues raise concerns about both the credibility and reliability of

Ms. Wenngatz as a witness. I did not find her to have a reliable memory as to what

issues arose and were dealt with in what sequence, and was very concerned that

her evidence was coloured by what she felt she needed to say to advance her

interests in this litigation.

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[178] Mr. Robinson’s recollection of the details of the October 20 meeting was not

strong. He expressed difficulty recalling details of the discussion with respect to

reducing the down payment or changing the provisions for the release lot. He also

gave evidence very cautiously at points – when asked on direct examination whether

there was anything agreed to at the meeting, Mr. Robinson insisted on using the

words “specifically”, in terms of saying that “[Ms. Wenngatz] didn’t agree to anything

at that meeting specifically”, and that he didn’t recall her “specifically agreeing” to

any of the points allegedly agreed to.

[179] During a break in Mr. Robinson’s cross-examination, it came to light that

Mr. Deleskie had recorded a conversation he had with Mr. Robinson in April 2021. I

was assured that Mr. Deleskie had not shared the recording with anyone prior to

trial, and that neither the plaintiff nor the plaintiff’s counsel were aware that it existed.

After hearing submissions from the parties, I agreed to allow Mr. Robinson to be

cross-examined on the recording, provided that he be given an opportunity to review

it and to discuss it with the defendant’s counsel before that happened, and provided

that Mr. Deleskie would be recalled as a witness as well.

[180] It became clear from listening to the recorded conversation, and from

Mr. Robinson’s responses to questions asked about the recording in cross-

examination, that Mr. Robinson understood at the conclusion of the October 20

meeting that there was agreement in that room at that time as to the items at issue

in this case, and that Ms. Wenngatz did not say that she needed to go away and

think about it. While Mr. Robinson accepted in the course of his ongoing cross-

examination that the terms as alleged were agreed to, he suggested that the

agreement was just “partial”, then acknowledged that “I guess it depends on your

definition of an agreement”. Although Mr. Robinson continued to state that there had

been “an agreement to agree”, he was unable to explain what he understood to be

the difference between an agreement to move forward and an agreement to agree.

[181] Mr. Robinson was clearly torn between his loyalty to his client and his desire

to advance her position, and his recollection as to what happened at the meeting. I

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read his evidence overall as confirming Mr. Deleskie’s view that an objective

observer at the meeting would have seen outward manifestations of actual

agreement on the terms alleged by the plaintiff.

Was there an agreement to amend the CPS or an agreement to agree?

[182] The plaintiff argues that the parties reached agreement at the meeting on

October 20, 2020, that after the meeting the defendant asked for additional terms

which were negotiated until November 26, 2020, at which time Mr. Doar advised that

he accepted all of the defendant’s terms, and that the CPS as amended was then

repudiated by the defendant on December 7, 2020.

[183] The plaintiff says that the objective, outward manifestation of the parties’

conduct at the meeting – as confirmed by Messrs. Doar, Deleskie and Robinson (on

cross-examination) – was that an agreement had been reached. The plaintiff points

to Mr. Doar’s October 20 email instructing his law firm and the October 29

Addendum as confirming the agreement that was reached.

[184] The defendant, on the other hand, says that at most the parties had an

agreement to agree, that there were some terms discussed, but that all of their

discussions were subject to a detailed addendum being produced and signed off by

the parties. The defendant argues that there was not sufficient certainty as to the

terms of the addendum for it to be enforceable, which it says reinforces its assertion

that the parties did not intend to create contractual obligations at the meeting. The

defendant also argues that any agreement by the defendant was subject to

Ms. Wenngatz obtaining legal advice.

[185] Having heard from all four participants at the meeting, I conclude that those

present understood at the meeting that four key items had been agreed to at the

time. To use the language of the cases, a meeting of the minds took place that was

manifested outwardly to those at the meeting.

[186] There was undoubtedly an understanding that the agreement would be

reflected in an addendum. Mr. Deleskie agreed on cross-examination that as a

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licensed real estate agent he was bound by the Canadian Real Estate Association’s

Realtor Code of Ethics to ensure that any agreement was reflected in writing. His

evidence was that the parties intended to have an addendum drafted and signed,

and that Mr. Doar agreed to instruct his lawyer to prepare the written document. In

my view, it is not unusual in a case where all of the contract drafting has been done

by a lawyer, for the lawyer to be asked to draft an amending document.

[187] The fact that real estate agents are ethically bound to ensure that agreements

are in writing does not, in my view, prevent parties to a real estate transaction from

entering into an oral agreement to amend a contract. It does not answer the question

whether the parties reached an agreement, or merely intended to defer legal

obligations until a written agreement had been prepared: see Salminen at para. 33.

[188] I see Mr. Doar’s October 20, 2020 email to Ms. Coleman as confirmatory of

an agreement being reached. The defendant argues that the absence of the word

“agreement” in that email is inconsistent with there having been an agreement.

However, in my view, the words “we are amending the followings” is more consistent

with there having been an agreement than with a request to draft a proposal as a

basis for negotiation.

[189] Other emails and texts (including Mr. Doar’s email of November 6 and various

later texts between Mr. Deleskie and Mr. Robinson) confirm that both Mr. Doar and

Mr. Deleskie understood that the parties had reached an agreement. When read in

context, the November 3 text from Ms. Wenngatz referring to a “firm” December 7,

2020 condition removal date, also confirms an agreement rather than a launch of

negotiations.

[190] I deal with the certainty issue in a separate section below. As set out in that

analysis, I conclude that the existing framework of the CPS provides the necessary

certainty with respect to the terms relating to the reduction of the down payment and

the payment and mortgage in respect of the release lots.

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[191] The defendant argues that the plaintiff putting an interest rate of 0% in the

October 29 Addendum suggests that the plaintiff saw this document as merely a

launching point for negotiations. This argument finds some support in the manner in

which the October 29 Addendum sets out a separate set of terms for the release lot

mortgage, rather than just simply adopting the existing terms for the STB Mortgage

in Schedule A to the CPS.

[192] In my view, the question of whether the parties had reached agreement is

determined as of the conclusion of the October 20, 2020 meeting, and not by what

the lawyer may have advised as to an appropriate drafting approach when

attempting to document that arrangement several days later. When the parties met

on October 20, 2020, they were aware of the existing framework with respect to their

agreement and would have understood that framework to inform their discussions –

such that they could focus only on what items were actually changing.

[193] I conclude that there was an agreement at the meeting on October 20, 2020,

to amend the CPS.

Was any amendment sufficiently recorded in writing?

[194] The defendant argues that none of the requirements of s. 59(3) of the Law

and Equity Act are met in this case, and that as a result any oral agreement to

amend the CPS is unenforceable.

[195] The plaintiff argues that:

a) The correspondence between the parties – including emails from

Mr. Robinson – contain written confirmation of the parties’ agreement

sufficient to meet s. 59(3)(a);

b) The ongoing work of the plaintiff, acquiesced in by the defendant,

constitutes part performance sufficient to meet s. 59(3)(b); and

c) The plaintiff’s reliance on the agreement is sufficient to meet s. 59(3)(c).

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[196] In this case, I am of the view that the plaintiff has acted in reasonable reliance

on the oral agreement made during the October 20 meeting such that s. 59(3)(c) of

the Law and Equity Act applies. Here, the plaintiff arranged its affairs based on the

December 7, 2020 CPRD. It arranged to ensure that funds were available by

December 7, and allowed the original CPRD to pass without signing a condition

removal document. In the interim period, the plaintiff continued to spend significant

sums upon due diligence and the finalization of development plans.

[197] Having come to that conclusion, I do not need to consider s. 59(3)(a) or (b).

Was there sufficient certainty with respect to the amendment?

[198] The defendant argues that:

a) With respect to the delay in the CPRD, there was no discussion at the

meeting as to what would happen to the completion date which, in the

defendant’s submission, was an essential matter for decision;

b) With respect to the postponement of the down payment, there was no

discussion at the meeting as to when the amount postponed would be

paid, which the defendant says is an essential term; and

c) With respect to the changed arrangements for release lots, there was no

discussion at the meeting about key terms related to the proposed

mortgages, including interest rate, term, and who would pay the

defendant’s legal fees – all of which the defendant says are essential

terms.

[199] The defendant also argues that there was significant uncertainty as to

whether the mortgage amount was to be $55,000 per acre or $30,000 per acre, and

that there had been no discussion about the proposed priority agreement.

[200] Dealing with this last argument first, I have already concluded that at the

meeting the parties agreed to a mortgage amount of $55,000 per acre, and that

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there was to be a provision for the defendant to grant priority for construction

financing.

[201] In considering the question of certainty, it is important to focus on whether

there was certainty at the time the agreement was made. While evidence as to the

parties’ subsequent conduct may shed some light on what they agreed to at the

October 20, 2020 meeting, uncertainty arising from or reflecting the various

subsequent efforts (primarily initiated by the defendant) to renegotiate or add to the

terms of the agreement is not evidence of uncertainty as of October 20, 2020.

[202] With respect to the delay in the CPRD, I conclude based on the evidence that

at the time of the October 20 meeting the parties were not aware that a change to

the CPRD would indirectly impact the completion date. There was no discussion of

any delay to the completion date. The fact that the parties were unaware of this

unintended consequence of their agreement did not, in my view, make that proposed

change to the contract uncertain.

[203] With respect to postponing the down payment, the plaintiff said that the

contract clearly sets out how any amounts not paid on or before closing (which is

what I interpret the reference to “down payment” to reflect) will be paid. They are to

be paid over time in accordance with the terms provided for the STB Mortgage in

Schedule A to the CPS.

[204] I agree with this assertion. While the defendant clearly decided in November

2020 to seek to negotiate different terms, which would have seen the $300,000

amount by which the down payment was reduced paid at an earlier date, that does

not impact my conclusion as to what the parties agreed at the meeting on

October 20, 2020.

[205] I turn now to the proposed changes to the provisions governing release lots.

In my view, the parties’ negotiations must be considered in light of the existing

contractual framework. In particular, the existing framework in the CPS provided for

amounts not paid up front to be financed for a term of five years and six months, with

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interest only payments at 3.9% (increasing part-way through the term to 4.9%).

Other terms were set out in Schedule A.

[206] I acknowledge that the plaintiff’s lawyer, in drafting the addendum, provided a

framework for these provisions to be separately set out and for a different interest

rate to apply. It is clear that these different terms were not discussed at the

October 20 meeting.

[207] In my view, the time at which certainty is required is at the October 20

meeting. At that time, the parties agreed that an amount of $55,000 per acre from

the release payment was to be unpaid at the time of release and it was to be

secured by a mortgage. That agreement, viewed in the context of the existing

contractual framework, provides sufficient certainty for the agreement to be

enforceable.

Was there sufficient consideration for the amendment?

[208] The defendant submits, without reference to authority, that there needed to

be consideration for the amendments. While the plaintiff did not dispute the

proposition that consideration is required, the plaintiff said that this requirement was

undoubtedly met by the agreement with respect to the naming of the main street of

the development.

[209] While the defendant argues that the naming of a street as Wenngatz Way

was already provided for in the CPS, there is a material difference in the naming of

the major street (versus any street) as Wenngatz Way. Ms. Wenngatz clearly viewed

this as significant as she asked that it be expressly referenced in the draft

addendum.

[210] In my view, there is no issue as to consideration.

Did the plaintiff repudiate any agreement to amend by sending

inconsistent documents?

[211] The defendant argues that the plaintiff repudiated any agreement that may

have been made at the October 20 meeting by doing the following:

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a) Changing the amount to be paid to obtain the release of a lot from the

agreed $55,000 to $30,000, in the draft addenda;

b) Inserting a priority agreement in the draft addendum “even after the

defendant’s unambiguous removal of that in her drafted wording to change

the addendum”;

c) Inserting a 0% interest rate in the October 29 Addendum;

d) Rolling the reduced down payment into the main mortgage;

e) Changing the CPRD to December 7, 2021 (rather than 2020) in the

November 24 Addendum (and retaining it in the two addenda sent on

November 26); and

f) Stating that the plaintiff had fixed the changes when it had not.

[212] The legal test, as set out above, requires consideration of whether any of

these matters “evinces an intention to refuse the performance of the contract and not

to be bound by it”, or “demonstrates objectively a rejection of contractual

obligations”: Salminen at paras. 35, 37.

[213] Dealing with the arguments made by the defendant:

a) I have found that the amount agreed to for the initial payment on release

of a lot was $30,000, so the October 29 Addendum was accurate as to

that point.

b) The defendant’s second point dealt with the plaintiff’s response to an

unstated request to amend one of the terms agreed to on October 20.

That was part of a subsequent negotiation as to possible changes to the

agreement, initiated by the defendant, and is not a change to the

agreement itself.

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c) I have concluded that the inclusion of 0% in the October 29 Addendum

was an error. It was neither intended nor considered as a demand for a

change to the agreement. It does not demonstrate an intention not to be

bound, and does not constitute a repudiation on the part of the plaintiff.

d) I have concluded that the agreement made on October 20, 2020, was to

include the reduced down payment in the STB Mortgage.

e) The reference to December 7, 2021, was clearly an error. In any event, I

note that by the time that date was placed in an addendum, the parties

had agreed to a specific completion date in April 2021. It would have

made no sense to have a condition removal date subsequent to the

completion date.

f) With respect to the final point, the plaintiff did understand that all of the

issues raised by the defendant had been corrected.

[214] In my view, nothing the plaintiff did in the weeks following the October 20,

2020 meeting constituted a repudiation of either the amending agreement or the

CPS.

Issue 2: Is the defendant estopped from denying a December 7, 2020 deadline?

[215] The plaintiff says that even if its claim that there was an amendment to the

CPS is not made out, it is entitled to enforce the CPS because the defendant is

estopped from denying that the CPRD had not yet passed when conditions were

removed on December 7, 2020. The plaintiff relies on both proprietary estoppel and

promissory estoppel.

Governing Principles

[216] The legal principles governing proprietary estoppel were summarized in

Cowper-Smith v. Morgan, 2017 SCC 61 at paras. 15-16:

[15]

An equity arises when (1) a representation or assurance is made to

the claimant, on the basis of which the claimant expects that he will enjoy

some right or benefit over property; (2) the claimant relies on that expectation

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by doing or refraining from doing something, and his reliance is reasonable in

all the circumstances; and (3) the claimant suffers a detriment as a result of

his reasonable reliance, such that it would be unfair or unjust for the party

responsible for the representation or assurance to go back on her word …

The representation or assurance may be express or implied … An inchoate

equity arises at the time of detrimental reliance on a representation or

assurance… When the party responsible for the representation or assurance

possesses an interest in the property sufficient to fulfill the claimant’s

expectation, proprietary estoppel may give effect to the equity by making the

representation or assurance binding.

[16]

Proprietary estoppel protects the equity, which in turn protects the

claimant’s reasonable reliance … Like other estoppels, proprietary estoppel

avoids the unfairness or injustice that would result to one party if the other

were permitted to break her word and insist on her strict legal rights … As

Lord Denning M.R. put it … :

When the parties to a transaction proceed on the basis of an underlying

assumption — either of fact or of law — whether due to misrepresentation

or mistake makes no difference — on which they have conducted the

dealings between them — neither of them will be allowed to go back on

that assumption when it would be unfair or unjust to allow him to do so. If

one of them does seek to go back on it, the courts will give the other such

remedy as the equity of the case demands.

[Citations removed.]

[217] The principles governing promissory estoppel were recently summarized in

Trial Lawyers Association of British Columbia v. Royal & Sun Alliance Insurance

Company of Canada, 2021 SCC 47 at paras. 15-16:

[15]

Promissory estoppel is an equitable defence whose elements were

stated by Sopinka J. for this Court in Maracle, at p. 57:

The principles of promissory estoppel are well settled. The party relying

on the doctrine must establish that the other party has, by words or

conduct, made a promise or assurance which was intended to affect

their legal relationship and to be acted on. Furthermore, the [promisee]

must establish that, in reliance on the [promise], he acted on it or in some

way changed his position. [Emphasis added.]

The equitable defence therefore requires that (1) the parties be in a legal

relationship at the time of the promise or assurance; (2) the promise or

assurance be intended to affect that relationship and to be acted on; and (3)

the other party in fact relied on the promise or assurance. It is, as we will

explain, implicit that such reliance be to the promisee’s detriment.

[16]

Promissory estoppel seeks to protect against the “inequity of allowing

the other party to resile from his statement where it has been relied upon to

the detriment of the person to whom it was directed” …

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[218] In Vision West Development Ltd. v. McIvor Properties Ltd., 2012 BCSC 302

at para. 79, the court stated that the defence of estoppel can still be applied in

respect of a contract which can only be amended in writing:

[79]

… [A] contract which may only be amended in writing is not an

absolute bar to a defence of estoppel. In each case, the court must consider

the provisions of the particular agreement in the entire context of the facts in

order to determine whether it would be unjust or unconscionable to permit a

party to enforce its strict legal rights.

Positions of the Parties

[219] The plaintiff advances estoppel as an alternative to its position that there was

a binding agreement to amend the CPS. The plaintiff asserts that the defendant

gave assurances that the CPRD would be changed to December 7, 2020, on which

the plaintiff relied by, among other things, failing to arrange to have funds on hand

by November 27 to pay the deposit, allowing the November 27 date to pass without

taking steps to remove the conditions precedent, and continuing to spend substantial

funds advancing the development on the understanding that the CPS was still afoot.

[220] The defendant argues that at no time did it make a promise, representation or

assurance that was intended to affect their legal relationship and be acted upon. If

any such promise, representation or assurance was made, it was repudiated by the

plaintiff (for the reasons argued above with respect to the amendment issue). The

defendant argues that:

a) It was unreasonable for the Plaintiff to refrain from removing the conditions

on November 27, 2020 based on an incomplete negotiation and an

unexecuted contract amendment document;

b) There was no basis for a reasonable reliance in the context of “the chaos

that the plaintiff was causing”; and

c) The plaintiff has not established that it did anything in reliance on any such

promise, representation or assurance.

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Decision

[221] In my view, the requirements of both proprietary estoppel and promissory

estoppel are made out in this case.

[222] Dealing with proprietary estoppel:

a) The plaintiff was given an assurance at the October 20, 2020 meeting that

it would have until December 7, 2020 to remove conditions precedent and

pay the $400,000 deposit;

b) As a result of that assurance, the plaintiff had a reasonable expectation

that it would have until December 7, 2020 to take those steps;

c) The plaintiff relied on that assurance by arranging its affairs in a manner

such that it would have the $400,000 available by December 7, by

allowing November 27 to pass by without taking any steps, and by

continuing to spend substantial amounts on the due diligence and pre-

development work it was undertaking;

d) The plaintiff suffered a detriment in that the defendant has purported to

use the plaintiff’s acts in reliance on the assurance to repudiate the

contract; and

e) It would be unfair and unjust to allow the defendant to go back on its word.

[223] Dealing with promissory estoppel:

a) The parties were in a legal relationship arising from the CPS at the time of

the promise or assurance made on October 20, 2020;

b) The promise or assurance was intended to be acted upon, in that it was

understood from and after the meeting that the plaintiff would have until

December 7, 2020, to determine whether to remove conditions and post

the $400,000 deposit; and

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c) The plaintiff relied on that promise or assurance in the manner set out

above.

[224] In my view, the defendant was estopped on December 7, 2020, from taking

the position that the contract had lapsed on November 26 or 27, 2020.

Issue 3: Did the defendant commit an anticipatory breach of the contract?

[225] The above conclusions establish that the CPS remained afoot on

December 7, 2020 – either through an agreed amendment, or as a result of the

estoppel.

[226] The analysis then turns to the actions taken on December 7, 2020. The

plaintiff’s claim is premised on the communications sent by or at the direction of the

defendant on December 7, 2020, giving rise to a repudiation by way of anticipatory

breach.

[227] The specific communications in issue are:

a) The email sent by Mr. Robinson at 10:38 am stating:

There is no valid signed and accepted offer on this property so I will

not be accepting a deposit.

b) The two emails sent by Ms. Wenngatz to Mr. Soliman at 3:37 and 3:39

pm, stating:

I the buyer did not enter into any further signed agreements with the

buyer. There is only one contract of March 2, 2020 and the buyer has

missed that condition removal date. As it stands there is NO

EXISTING CONTRACT IN PLACE.

I will not be closing on any offer that does no longer exist and this one

does not exist.

Governing Principles

[228] The applicable law as to what constitutes an anticipatory breach was

summarized in Kaur v. Bajwa, 2020 BCCA 310. At para. 13, Justice Voith quoted

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from Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 at

para. 149:

[149] The final point of terminology is concerned with “anticipatory” breach.

An anticipatory breach “occurs when one party manifests, through words or

conduct, an intention not to perform or not to be bound by provisions of the

agreement that require performance in the future”: [John D. McCamus, The

Law of Contracts, 2nd ed. (Toronto: Irwin Law, 2012)] at p. 689; see also A.

Swan, with the assistance of J. Adamski, Canadian Contract Law (2nd ed.

2009), at §7.89. When the anticipated future non-observance relates to

important terms of the contract or shows an intention not to be bound in the

future, the anticipatory breach gives rise to anticipatory repudiation. The

focus in such cases is on what the party’s words and/or conduct say about

future performance of the contract. For example, there will be an anticipatory

repudiation if the words and conduct evince an intention to breach a term of

the contract which, if actually breached, would constitute repudiation of the

contract.

[229] In Kaur, Voith J.A. continued at paras. 14-16:

[14]

In Remedy Drug Store Co. Inc. v. Farnham, 2015 ONCA 576, the

Ontario Court of Appeal similarly described the various legal requirements

that underlie an anticipatory repudiation at paras. 41–52. In particular, the

Court confirmed that a “repudiation occurs by the words or conduct of one

party to a contract that show an intention not to be bound by the contract”,

that “the test for anticipatory repudiation is an objective one”, that “in

objectively construing the purported breaching party’s intention, the

surrounding circumstances must be considered”, that “a finding of

anticipatory repudiation is reserved for cases in which the conduct at issue

can be said to be serious”, and that “before an anticipated breach of contract

can be characterized as an anticipatory repudiation, the breach must deprive

the innocent party of substantially the whole benefit of the contract”: at

paras. 42, 45, 46, and 50.

[15]

In Kuo at para. 40, this Court noted that “regardless of how it

manifests, the refusal to perform must be clear and unequivocal to amount to

a repudiation”. See also Marcotte v. Marcotte, 2018 BCCA 362 at paras. 45–

49.

[16]

These various considerations and requirements are all engaged at the

point in time that the breaching party communicates its inability or intention

not to perform. …

Positions of the Parties

[230] The plaintiff asserts that the three emails set out above clearly show an

intention not to be bound by the CPS.

[231] The defendant did not specifically respond to this issue.

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Decision

[232] In my view, the three emails in issue all clearly evince an intention to no

longer be bound by the CPS. All three repeat Ms. Wenngatz’s assertion that the

CPS is no longer in force and that she no longer considers the defendant to be

bound by it.

Issue 4: Was the plaintiff required to pay the deposit to the agent?

[233] As noted above, although the plaintiff had given instructions for the deposit

funds to be paid, after receipt of the final two above-noted emails from

Ms. Wenngatz to Mr. Soliman, the plaintiff chose to leave the funds in trust with its

lawyer.

Governing Principles

[234] The general legal principles governing a party’s response to a repudiation are

summarized in Dosanjh v. Liang, 2015 BCCA 18 at paras. 33-34:

[33]

The trial judge summarized the general law with respect to a party’s

right to accept a repudiation of a contract at para. 50 of her judgment, citing

Sethna v. 350 Kingsway Development Ltd., 2011 BCCA 434 at para. 24,

and Homestar Industrial Properties Ltd. v. Philps (1992), 72 B.C.L.R. (2d) 69

(C.A.) at para. 13:

 A party to a contract has two alternatives if the other party

repudiates the contract: the innocent party may accept the

repudiation or affirm the contract.

 If the innocent party accepts the repudiation, the contract is at an

end, both parties are relieved of their obligations under it, and the

innocent party may sue for damages immediately without waiting

for the time that the contract should have been performed.

 If the innocent party affirms the contract, the contract remains

alive in all respects for both parties, and the risk exists that the

party beginning as the innocent party will subsequently commit a

breach of its own.

 If the innocent party wishes to accept the repudiation, he or she

must make his or her election known.

 Once made, the election is irrevocable.

[34]

Neither party quarrels with these general propositions, which are well-

supported in the case law. …

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[235] While the contract remains alive if affirmed by the innocent party, there are

limitations on what an innocent party is required to do by way of ongoing

performance. As noted in Le Soleil at para. 354:

[354] When a contract is repudiated, it is unnecessary for the innocent party

formally to tender documents or consideration so long as, on the date fixed

for completion, that party is ready, willing and able to complete. As Southin

J.A. explained in Norfolk, supra at p. 157:

Tender is a formal step. There are many authorities to the effect that if

one side has made it clear that it will not complete it is not necessary for

the other to go through the formal step of offering the necessary

documents or consideration...

[236] The ongoing application of these principles was recently confirmed in Toor v.

Dhillon, 2020 BCCA 137 at paras. 49-53:

[49]

More recently, the Court commented in Di Millo v. 2099232 Ontario

Inc., 2018 ONCA 1051 at para. 34 that “only a party who is ready to perform

can rely upon a ‘time is of the essence’ clause to terminate the contract for

the other party’s non-compliance with the provision”; …

[50]

In my view, this principle applies in British Columbia. As a result, a

party who is not prepared to perform an agreement cannot rely on a “time of

the essence” clause to terminate the contract for the other party’s failure to

comply strictly with the time provisions in the contract.

[51]

The vendors submit that while this principle may apply at the time of

completion, it has no application to an anticipatory breach. They rely on the

proposition that an unaccepted repudiation has no legal effect. I agree that…

a party cannot rely on an unaccepted repudiation to justify its failure to

perform its contractual obligations, but the question of reliance on a time of

the essence clause is narrower. The principle that a party cannot rely on a

time of the essence clause when it is not prepared to perform its own

obligations does not relieve the innocent party of its contractual obligations; it

simply relieves the innocent party of the requirement to comply strictly with

time requirements in the contract when performing these obligations, if it

wishes to affirm the contract. In the case at bar, the position of the vendor

constituted a continuing repudiation in the sense explained in Dosanjh v.

Liang, 2015 BCCA 18, at paras. 41–46. Accordingly, it is not necessary to

consider whether the time of the essence principle would be affected by a

single act of repudiation.

[52]

An analogy may be drawn to the well-settled law that when one party

has made it clear that it will not complete a transaction, the other party is not

required to tender closing documents or the purchase price on the agreed

upon completion date: Norfolk at p. 19. Similarly, when one party has made it

clear that it will not complete a transaction, and the other party wishes to

affirm the contract, the innocent party is not relieved of its obligation to pay

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the deposit, but is relieved of its obligation of strict compliance with the time

requirements for payment.

[53]

In this case, the continuing position of the Vendors reflected by their

repudiation of the Contract on June 12 and June 15 demonstrates that the

Vendors were not “ready, desirous, prompt and eager” to carry out the

agreement on July 15 when they purported to rely on the “time of the

essence” clause to terminate the Contract; their position continued through

the repudiation by their solicitor on July 29. Accordingly, they were not

entitled to rely on strict compliance with the time provisions in the Contract. …

Positions of the Parties

[237] The plaintiff says that Mr. Soliman’s letter makes clear its affirmation of the

CPS. It argues that it was not required to pay the deposit to the real estate agent in

strict accordance with the requirements of the CPS because the defendant had

made clear that it would not complete. It says that the evidence establishes that it

was ready, willing and able to pay the deposit but changed its approach only when

the defendant’s position had been made very clear.

[238] The defendant argues that condition removal was only effective upon

payment of the deposit. It says that because the contract remained alive for both

parties, the plaintiff’s failure to pay the deposit to the real estate agent is a breach

that disentitles it from pursuing this action.

Decision

[239] I agree that Mr. Soliman’s letter to Ms. Wenngatz sent on December 7, 2020

is a clear affirmation of the CPS.

[240] Mr. Soliman’s assertion that the plaintiff was ready, willing and able to

proceed with the CPS is confirmed by the delivery of the condition removal

document earlier that day and by the evidence indicating that the $400,000 deposit

was in the lawyer’s trust account and was, in fact, on its way to be deposited in the

real estate agent’s account before being redirected.

[241] I conclude that in the circumstances, and given the clear anticipatory breach

and the clear communication from the defendant that she considered the CPS to be

at an end, this a case in which the principle in Norfolk applies and the plaintiff was

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not required to, in effect, “tender” performance of the $400,000 deposit payment on

that date in order to maintain this action.

Issue 5: Is specific performance an appropriate remedy?

Governing Principles

[242] The law governing when specific performance is an appropriate remedy has

evolved over the past 25 years. That evolution was summarized by Justice Francis

in Deol v. Sinnathamby, 2021 BCSC 722 at paras. 28-34:

[28]

Historically, it was commonplace for specific performance to be

granted as a remedy in the context of contract disputes involving real

property. However, the modern approach favours damages, rather than

specific performance, as a remedy for breach of contracts involving real

property. In Semelhago v. Paramadevan, [1996] 2 S.C.R. 415 at 429,

Sopinka J. noted the exceptional nature of specific performance as a remedy

when land is in issue:

Specific performance should, therefore, not be granted as a matter of

course absent evidence that the property is unique to the extent that its

substitute would not be readily available.

[29]

In Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada

Ltd., 2014 BCCA 388 at para. 52 [Youyi], Justice Newbury considered the

effect of Semelhago and Southcott Estates Inc. v. Toronto Catholic District

School Board, 2012 SCC 51, on the remedy of specific performance and the

circumstances in which it will be granted:

In my respectful view, the Supreme Court merely recognized in those

cases that in light of the advent of condominiums and other forms of

interest in land, the uniqueness of real estate should no longer be

presumed. As I read the two cases, the Supreme Court has not signalled

that specific performance is ‘on the way out’ or that contracting parties

should no longer expect to be held to their bargains.

[30]

In Youyi at para. 56, the Court of Appeal held that, post-Semelhago,

the Court should not apply a “presumption of replaceability” when determining

whether damages will provide an appropriate remedy, or whether specific

performance is warranted. In that paragraph, Newbury J. quoted with

approval from Raymond v. Anderson, 2011 SKCA 58 at paras. 13-14,

wherein the court held:

Semelhago does not, however, stand for the proposition that the

presumption of uniqueness has been supplanted by a presumption of

replaceability. . . . The only change wrought by Semelhago is in the

approach of the courts to determining the appropriate remedy; judges

must no longer presume the inadequacy of damages as a remedy

whenever real property is involved. But, this assessment is not a search

for uniqueness. Rather, it is appropriate to characterize a judge’s

assessment in cases of this nature as an inquiry into whether, in the

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circumstances, damages would be an inadequate remedy. [Emphasis

added.]

[31] In fashioning an appropriate remedy, the court should examine the

specific plaintiff and property in each case: Youyi, at para. 57. This is a fact-

dependent inquiry.

…

[33]

Uniqueness is a matter of proof and the onus lies on the party seeking

the remedy. However, a plaintiff is not required to prove a negative and

demonstrate the complete absence of comparable properties: John E. Dodge

Holdings Ltd. v. 805062 Ontario Ltd. (2001), 56 O.R. (3d) 341 (S.C.), aff’d

(2003) 63 O.R. (3d) 304 (C.A.), leave to appeal dismissed [2003] S.C.C.A.

No. 145 (cited with approval in Youyi at para. 45).

[34]

While the factors or characteristics that make a property unique are

important, the more fundamental question is whether the plaintiff has shown

that the land rather than its monetary equivalent better serves justice

between the parties: Youyi at para. 45.

[243] In John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2001), 56 O.R. (3d)

341 (S.C.J.) at para. 50, affirmed (2003), 63. O.R. (3d) 304 (C.A.), Justice Lax noted

that in granting specific performance in respect of a development property:

… even in commercial transactions, courts will necessarily have to consider

subjectivity and will be confronted with assessing the sincerity and force of

the plaintiff's reasons for asserting an interest in the vendor's property rather

than its monetary equivalent.

[244] At paras. 59-60, Lax J. went on to describe the appropriate approach to

considering uniqueness:

[59]

There is both a subjective and objective aspect to uniqueness ... In

terms of the subjective aspect the court should examine this from the point of

view of the plaintiff at the time of contracting. In some cases, there may be a

single feature of the property that is significant, but where there are a number

of factors, the property should be viewed as a whole. The court will determine

objectively whether the plaintiff has demonstrated that the property has

characteristics that make an award of damages inadequate for that particular

plaintiff. Obviously, investment properties are candidates for damages and

not specific performance.

[60]

It is important to keep in mind that uniqueness does not mean

singularity. It means that the property has a quality (or qualities) that makes it

especially suitable for the proposed use that cannot be reasonably duplicated

elsewhere. To put this another way, the plaintiff must show that the property

has distinctive features that make an award of damages inadequate. The

plaintiff need not show that the property is incomparable.

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[245] The principles set out in John E. Dodge have been applied in British

Columbia cases involving commercial properties: Trinden Enterprises Ltd. v.

Ramsay, 2008 BCSC 177 at para. 12; Hundley v. Garnier, 2011 BCSC 414 at

para. 185.

Positions of the Parties

[246] The plaintiff argued that it is entitled to an order for specific performance

given the unique nature of the property. It argues that this is a property that was

marketed based on its unique characteristics, as set out in the MLS listing document

quoted at the start of this judgment. Those characteristics include:

a) The availability of vendor financing at an attractive rate;

b) The Property being the largest subdivision property available in Nanaimo;

c) Its close proximity to Vancouver Island University, the aquatic and ice Rink

centres;

d) All of the land is within the boundaries of the City of Nanaimo;

e) The R10 zoning which would facilitate the development of multi-family

dwellings; and

f) The availability of sewer and water from the Harewood Mines Road side.

[247] The plaintiff also relied on Mr. Doar’s evidence that he planned to develop the

Property over several years and saw this as a long-term development opportunity

that would provide employment in a desirable location for himself and family

members.

[248] The defendant argued the property is not unique. The defendant asserted that

there are “serious questions as to the ability of the plaintiff to have actually done the

development”. The defendant argued that the plaintiff “has not demonstrated the

absence of the existence of other properties of a similar nature”.

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[249] The defendant also argued that the plaintiff does not come to court with clean

hands given that it did not adequately identify the purpose of the October 20

meeting, and that it had failed to disclose the appraisal in advance of that meeting.

Decision

[250] In my view, the evidence does establish that the Property is unique, and that

there is a substantial justification for the plaintiff seeking specific performance in the

circumstances. The fact that this is the largest subdivision site in Nanaimo, that it is

an attractive area close to amenities, and that its zoning promotes development of

multi-family housing, in connection with the plaintiff’s desire to make this a multi-year

project engaging the owner in a community it already had projects in, all provide

distinctive features of the property that combine both subjective and objective

elements.

[251] The cases indicate that the plaintiff is not required to disprove the negative

proposition advanced by the defendant that there is an absence of other, similar

properties.

[252] On the evidence, I do not agree that there are serious concerns about the

ability of the plaintiff to develop the Property. The evidence indicates that the plaintiff

made a substantial investment in due diligence and pre-development work and was

ready to move on to next stages upon condition removal. It also indicates that the

plaintiff had the money to pay the deposit at hand in the form of a lawyer’s trust

cheque payable to the real estate agent.

[253] Finally, I do not accept that there are any “clean hands” issues that would

disentitle the plaintiff to an order of specific performance. In my view, the October 20

meeting did include a serious discussion of the results of the plaintiff’s due diligence

to date, and it would be anticipated by any experienced owner of commercial real

estate that such a discussion would include the ramifications of what had been

learned. I also accept, having reviewed the appraisal report and its reference to

information gleaned after October 20, 2020, that it was not in fact finalized until after

the October 20 meeting.

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[254] I therefore conclude that specific performance is an appropriate remedy in the

circumstances of this case.

Conclusion

[255] For the reasons set out above:

a) I conclude that there was a valid and binding agreement to extend the

CPRD to December 7, 2020;

b) In the alternative, I conclude that the defendant was estopped from

denying that the CPRD was extended to December 7, 2020;

c) The defendant anticipatorily breached the CPS by evincing an intention to

not perform any further obligations under it;

d) The plaintiff was ready, willing and able to post the required deposit that

day but, as a result of the defendant’s anticipatory breach, was not

required to do so;

e) The plaintiff is entitled to an order of specific performance.

[256] The parties are at liberty to address issues of costs and the details of how the

order I have granted is to be implemented. I would ask that they do so by way of

written submission. The plaintiff’s submission should be received by August 24,

2022, with the defendant’s response to be received by September 16, 2022. If the

parties believe a further hearing is appropriate, they may so indicate in their

submissions; however, I reserve the right to decide whether a hearing is necessary.

“Veenstra J.”

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Schedule A

Schedule A to Contract of Purchase and Sale

The Buyer has the right, at its sole option, to require the Seller to take a mortgage (the “STB”) in the

amount of FOUR MILLION, SEVEN HUDRED AND FIFTY-THOUSAND (4,750,000) dollars (the

“Principal Amount”), to be secured by a First mortgage registered against the Lands on the following

terms and conditions:

Term:

25 year amortization, 5 years and 6 months, open

Interest Rate:

Years 1 through 3, inclusive:

Balance of the Term:

3.9% per annum

4.9% per annum

Calculation Period:

Payable:

Semi Annually, not in advance

Quarterly, not in advance, interest only

First Payment Date:

20 months no payments; for clarity one year and 8 months no

payments. Interest to compound from the completion date on to

principal. Subsequent payments; for clarity, 1st payment to be

made on the 21st month after completion subsequently quarterly

interest only payments.

Default:

The Buyer will have thirty (30) days to rectify any default by the

Buyer under the mortgage, upon receipt of written notice from

the Seller of any such default.

Assignment:

The Buyer may, with the prior written consent of the seller,

assign the STB, or any portion of the STB, without changing any

of the financial terms of the STB. Buyer shall be required to

provide any and all information the Seller deems necessary to

provide its consent to any such assignment. In the event that the

Seller provides its consent to an assignment of the STB, the

Seller may, at the Seller’s option, require the Buyer to continue

his personal guarantee of the STB in respect of that portion of

the STB being assigned.

Partial Release of STB:

In the event the Buyer subdivides the Lands, the Buyer shall be

permitted to release, at any time or times, the STB registered on

title to any one of or number of individual lots (the “Release

Lots”) by paying to the Seller an amount equal to $85,000.00 per

acre, which amount will be apportioned for any lot or lots the

area of which is less than one acre, plus all accrued interest (the

“Partial Payout Amount”). Upon receipt of the Partial Payout

Amount, the Seller agrees to immediately execute a partial

release of the STB, in registrable form, releasing the STB from

title to the Release Lots.

Covenantor:

Mohammad Doar agrees to execute the STB as covenantor.