Dal-Sask Farms Ltd. v. Li, (2012) 407 Sask.R. 260 (QB)

• Judge: Scherman, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: November 20, 2012
• Jurisdiction: Saskatchewan
• Citations: (2012), 407 Sask.R. 260 (QB);2012 SKQB 483

Dal-Sask Farms Ltd. v. Li (2012), 407 Sask.R. 260 (QB)

MLB headnote and full text

Temp. Cite: [2012] Sask.R. TBEd. DE.030

Dal-Sask Farms Ltd. (plaintiff) v. Song Song Li (defendant)

(2010 Q.B. No. 1342; 2012 SKQB 483)

Indexed As: Dal-Sask Farms Ltd. v. Li

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Scherman, J.

November 20, 2012.

Summary:

The plaintiff listed land for sale. In April 2008, the defendant contacted the listing agent to make an offer to purchase. The defendant outlined the terms of his offer over the telephone, and the listing agent prepared the offer using a standard form Contract of Purchase and Sale. The listing agent sent the documents to the defendant, who signed and returned them. The listing agent then presented the offer to the plaintiff, who counter offered by increasing the purchase price to $900,000. The defendant accepted the counter offer and paid a $100,000 deposit. Clause 1(a) of the agreement stated "The offer is Subject to the Seller Carrying an Agreement or Mortgage for a term of three years explained on schedule A." Schedule "A" contained a clause that stated "The offer is subject to the seller carrying a mortgage ... for a term three years ..." There was also a clause that stated "No title will transfer until such time that all monies are paid in full." In July 2008, the defendant registered a miscellaneous interest claim against the property. The defendant then asked the plaintiff to transfer title to him, so that he could grant a mortgage back in favour of the plaintiff for the balance due on the purchase price. The plaintiff refused, and took the position that the agreement was an agreement for sale, and the full balance due had to be paid before title would transfer. The defendant did not make any of the payments. The plaintiff brought an action seeking cancellation of the agreement and forfeiture of the deposit. The defendant counterclaimed seeking specific performance of the contract.

The Saskatchewan Court of Queen's Bench found in favour of the plaintiff and dismissed the defendant's counterclaim. The agreement was an agreement for sale, which the defendant breached by failing to make the payments called for under the agreement. The court issued an order cancelling the agreement and forfeiting the deposit paid by the defendant to the plaintiff.

Contracts - Topic 7401

Interpretation - General principles - Intention of parties - The defendant contacted a listing agent and made an offer to purchase the plaintiff's lands - The defendant outlined the terms of his offer over the telephone, and the listing agent prepared the offer using a standard form Contract of Purchase and Sale - The defendant signed the offer - The plaintiff counter offered by increasing the purchase price to $900,000 - The defendant accepted the counter offer and paid a $100,000 deposit - Clause 1(a) of the agreement stated "The offer is Subject to the Seller Carrying an Agreement or Mortgage for a term of three years explained on schedule A." - Schedule "A" contained a clause that stated "The offer is subject to the seller carrying a mortgage ... for a term three years ..." - There was also a clause that stated "No title will transfer until such time that all monies are paid in full." - At issue was whether the agreement was a mortgage or an agreement for sale - The Saskatchewan Court of Queen's Bench held that it was an agreement for sale - While the language in the agreement created some difficulties in interpretation, the agreement as a whole was not ambiguous and there was no need to consider extrinsic evidence - The intention of the parties, as found in the words of the agreement, was that there would be vendor financing with specified payment terms, and title would remain with the vendor until all monies were paid - See paragraphs 17 to 26.

Contracts - Topic 7407

Interpretation - General principles - Whole contract to be considered - [See Contracts - Topic 7401 ].

Contracts - Topic 7412

Interpretation - General Principles - Inconsistent clauses - Specific v. general - The defendant contacted a listing agent and made an offer to purchase the plaintiff's lands - The defendant outlined the terms of his offer over the telephone, and the listing agent prepared the offer using a standard form Contract of Purchase and Sale - The defendant signed the offer - The plaintiff counter offered by increasing the purchase price to $900,000 - The defendant accepted the counter offer and paid a $100,000 deposit - Clause 1(a) of the agreement stated "The offer is Subject to the Seller Carrying an Agreement or Mortgage for a term of three years explained on schedule A." - Schedule "A" contained a clause that stated "The offer is subject to the seller carrying a mortgage ... for a term three years ..." - There was also a clause that stated "No title will transfer until such time that all monies are paid in full." - At issue was whether the agreement was a mortgage or an agreement for sale - The Saskatchewan Court of Queen's Bench held that it was an agreement for sale - When there were apparent inconsistencies between different terms of a contract, the court was required to attempt to find an interpretation that could reasonably give meaning to each of the terms in question - The general clause of the agreement (clause 1(a)) called for the plaintiff to choose vendor financing by either mortgage or agreement for sale - Specific clauses in Schedule "A" qualified the general clause with the provision that no title was to transfer until all monies were paid - The use of the word "mortgage" in Schedule "A" was not a specific term that qualified a general term - See paragraphs 20 to 23.

Contracts - Topic 7426

Interpretation - Ambiguity - What constitutes ambiguity - [See Contracts - Topic 7401 ].

Contracts - Topic 7433

Interpretation - Ambiguity - Contra proferentem rule - The defendant contacted a listing agent and made an offer to purchase the plaintiff's lands - The defendant outlined the terms of his offer over the telephone, and the listing agent prepared the offer using a standard form Contract of Purchase and Sale - The defendant signed the offer - The plaintiff counter offered by increasing the purchase price - The defendant accepted the counter offer - The defendant claimed that the agreement required the plaintiff to transfer title and take a mortgage back for the balance due - The plaintiff claimed the agreement was an agreement for sale - The defendant argued contra proferentum - The Saskatchewan Court of Queen's Bench held that if contra proferentum applied, it operated in favour of the plaintiff - Language that the defendant considered ambiguous originated with him and could not be attributed to the plaintiff - The fact that the plaintiff's listing agent wrote the provisions in question did not alter the fact that the words were written based on the defendant's instructions and that it was his offer - See paragraph 25.

Sale of Land - Topic 805

The contract - General - Agreement for sale - What constitutes - [See Contracts - Topic 7401 and Contracts - Topic 7412 ].

Sale of Land - Topic 806

The contract - General - Agreement for sale v. mortgage - [See Contracts - Topic 7401 and Contracts - Topic 7412 ].

Sale of Land - Topic 7604

Remedies of vendor - General - Upon default by purchaser - [See Sale of Land - Topic 7744 ].

Sale of Land - Topic 7701

Remedies of vendor - Rescission or cancellation - General - [See Sale of Land - Topic 7744 ].

Sale of Land - Topic 7744

Remedies of vendor - Forfeiture of deposit - Circumstances resulting in forfeiture - The plaintiff and defendant signed an agreement for the sale of land - The defendant paid a $100,000 deposit - The defendant claimed that the agreement required the plaintiff to transfer title and take a mortgage back for the balance due - The plaintiff claimed the agreement was an agreement for sale and refused to transfer title until the full balance due had been paid - The defendant did not make any of the payments - The plaintiff brought an action seeking cancellation of the agreement and forfeiture of the deposit - The Saskatchewan Court of Queen's Bench held that the agreement was an agreement for sale, which the defendant breached by failing to make the payments called for under the agreement - The defendant had taken an unreasonable position - He had been in breach and in arrears, and tied up the land for nearly four years - The agreement expressly stated that the deposit was non-refundable - It would be unjust and inequitable to give the defendant an opportunity to redeem in those circumstances - The court issued an order cancelling the agreement and forfeiting the deposit paid by the defendant - See paragraphs 28 to 31.

Cases Noticed:

BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241; 99 D.L.R.(4th) 577, appld. [para. 13].

United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; 153 N.R. 81; 106 Nfld. & P.E.I.R. 140; 334 A.P.R. 140; 102 D.L.R.(4th) 402, folld. [para. 14].

Eli Lilly & Co. et al. v. Novopharm Ltd. et al., [1998] 2 S.C.R. 129; 227 N.R. 201; 161 D.L.R.(4th) 1, appld. [para. 15].

Minister of National Revenue v. General Motors of Canada Ltd. (2008), 379 N.R. 60; 292 D.L.R.(4th) 331; 2008 FCA 142, folld. [para. 16].

Counsel:

Robert J. Gibbings, Q.C., for the plaintiff;

Jon W. Danyliw, for the defendant.

This matter was heard before Scherman, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on November 20, 2012.