1198952 Alberta Ltd. v. 1356472 Alberta Ltd. et al., (2010) 474 A.R. 274 (CA)

• Judge: Watson, Slatter and Rowbotham, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: February 03, 2010
• Citations: (2010), 474 A.R. 274 (CA);2010 ABCA 42

1198952 Alta. v. 1356472 Alta. (2010), 474 A.R. 274 (CA);

      479 W.A.C. 274

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. FE.068

1198952 Alberta Ltd., operating as Raleigh Foods (respondent/applicant) v. 1356472 Alberta Ltd. and Sid M. Tarrabain Professional Corporation (appellants/respondents) and Alm Holdings Ltd. (not a party to the appeal/respondent)

(0803-0228-AC)

651730 Alberta Ltd., operating as Fantasia Noodle House Restaurant (respondent/applicant) v. 1356472 Alberta Ltd. and Sid M. Tarrabain Professional Corporation (appellants/respondents) and Alm Holdings Ltd. (not a party to the appeal/respondent)

(0803-0229-AC)

(2010 ABCA 42)

Indexed As: 1198952 Alberta Ltd. v. 1356472 Alberta Ltd. et al.

Alberta Court of Appeal

Watson, Slatter and Rowbotham, JJ.A.

February 8, 2010.

Summary:

A landlord sold land that was subject to unregistered commercial leases. The tenants applied for a declaration that the purchaser's title to the property and the mortgage registered against the title were subject to the tenants' leases and that the purchaser was bound by the terms of the leases. The purchaser requested an order compelling the tenants to vacate the premises.

The Alberta Court of Queen's Bench, in a decision reported at 459 A.R. 51, granted the tenants' application, declared that the purchaser's title and the mortgage interest were subject to the leases, the purchaser was bound by the terms of the leases and the notices to vacate provided by the purchaser to the tenants were invalid. The purchaser appealed.

The Alberta Court of Appeal dismissed the appeal.

Real Property - Topic 8006

Title - Registration of instruments, etc. - Land titles system - Effect of notice of unregistered encumbrances - A landlord sold land that was subject to unregistered commercial leases - The tenants applied for a declaration that the purchaser's title to the property and the mortgage registered against the title were subject to the tenants' leases and that the purchaser was bound by the leases - The purchaser requested vacant possession - A chambers judge allowed the tenant's applications - The Alberta Court of Appeal dismissed an appeal - On a proper interpretation of the offer, the purchaser had agreed to assume the leases - Prior to the closing, the purchaser took the position that the leases were not binding and advised that it would "waive the assignments of leases" on closing - By that time all the "subject to" conditions had been removed and there was a binding agreement - The purchaser had no ability to unilaterally amend the contract and thereby expose the vendor to additional liabilities - The chambers judge was entitled to find that the vendor never agreed to the amendment and that the purchaser remained bound to honour the leases - That conclusion was not inconsistent with the tendering of a statutory declaration in lieu of a tenant estoppel certificate - The fact that leases were not included in the "Permitted Encumbrances" was not inconsistent with the covenant to assume the leases - With respect to priority, it was acknowledged that the leases should have been registered - The purchaser, except in the case of fraud, was not affected by any notice of the unregistered leases (Land Titles Act, s. 203) - To succeed, the tenants had to show fraud - The purchaser's covenant to take assignments of the leases was "an additional element" sufficient to overcome s. 203.

Real Property - Topic 8010

Title - Registration of instruments, etc. - Land titles system - Fraud - What constitutes - [See Real Property - Topic 8006 ].

Real Property - Topic 8065

Title - Registration of instruments, etc. - Notice of a prior instrument - General - Effect of knowledge of prior unregistered instrument - [See Real Property - Topic 8006 ].

Sale of Land - Topic 1677

The contract - Offer and acceptance - Acceptance - What constitutes acceptance - [See Real Property - Topic 8006 ].

Sale of Land - Topic 2041

The contract -Variation - General - [See Real Property - Topic 8006 ].

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 6].

Andrews v. Coxe (2003), 320 A.R. 258; 288 W.A.C. 258; 2003 ABCA 52, refd to. [para. 7].

Diegel v. Diegel, [2008] A.R. Uned. 304; 100 Alta. L.R.(4th) 1; 2008 ABCA 389, refd to. [para. 8].

Alberta Importers and Distributors (1993) Inc. et al. v. Phoenix Marble Ltd. et al. (2008), 432 A.R. 173; 424 W.A.C. 173; 2008 ABCA 177, refd to. [para. 8].

Fenrich v. Wawanesa Mutual Insurance Co. (2005), 371 A.R. 53; 354 W.A.C. 53; 46 Alta. L.R.(4th) 207; 2005 ABCA 199, refd to. [para. 8].

McDonald Crawford v. Morrow (2004), 348 A.R. 118; 321 W.A.C. 118; 2004 ABCA 150, refd to. [para. 8].

Double N Earthmovers Ltd. v. Edmonton (City) et al. (2005), 363 A.R. 201; 343 W.A.C. 201; 2005 ABCA 104, affd. [2007] 1 S.C.R. 116; 356 N.R. 211; 401 A.R. 329; 391 W.A.C. 329; 2007 SCC 3, refd to. [para. 8].

Jiro Enterprises Ltd. v. Spencer, [2008] A.R. Uned. 42; 2008 ABCA 87, refd to. [para. 8].

Dynamic Transport Ltd. v. O.K. Detailing Ltd., [1978] 2 S.C.R. 1072; 20 N.R. 500; 9 A.R. 308, refd to. [para. 10].

Holt, Renfrew & Co. v. Singer (Henry) Ltd., Pekarsky and Thompson & Dynes Ltd. (1982), 37 A.R. 90; 20 Alta. L.R.(2d) 97 (C.A.), refd to. [para. 13].

Suncor Inc. Resouces Group, Oil Sands Division v. Allarco Group Ltd. (1987), 77 A.R. 378; 53 Alta. L.R.(2d) 107 (C.A.), refd to. [para. 15].

Loke Yew v. Port Swettenham Rubber Co., [1913] A.C. 491, refd to. [para. 15].

Independent Lumber Co. v. Gardiner (1910), 13 W.L.R. 548 (Sask. C.A.), refd to. [para. 15].

Scandia Meat Market Ltd. v. KDS Investment Co., [1977] 1 W.W.R. 542; 3 A.R. 290 (T.D.), refd to. [para. 15].

Darnley v. Tennant (2006), 408 A.R. 261; 63 Alta. L.R.(4th) 100; 2006 ABQB 575, refd to. [para. 15].

Statutes Noticed:

Land Titles Act, R.S.A. 2000, c. L-4, sect. 203(2), sect. 203(3) [para. 12].

Counsel:

S. English, Q.C., for the appellants;

F.C.R. Price, Q.C., and D.A. Young, for the respondents.

This appeal was heard on February 3, 2010, by Watson, Slatter and Rowbotham, JJ.A., of the Alberta Court of Appeal. The following memorandum of judgment was filed by the court at Edmonton, Alberta, on February 8, 2010.