Erie Sand and Gravel Limited v. Tri-B Acres Inc,

• Jurisdiction: Ontario
• Judge: Cronk, Gillese and Armstrong, JJ.A.
• Neutral Citation: 2009 ONCA 709
• Citation: 2009 ONCA 709,(2009), 254 O.A.C. 377 (CA),97 OR (3d) 241,312 DLR (4th) 111,63 BLR (4th) 161,[2009] CarswellOnt 6035,[2009] OJ No 4179 (QL),254 OAC 377,84 RPR (4th) 157,312 D.L.R. (4th) 111,[2009] O.J. No 4179 (QL),254 O.A.C. 377,(2009), 254 OAC 377 (CA),97 O.R. (3d) 241
• Date: 13 October 2009
• Court: Court of Appeal (Ontario)

Erie Sand & Gravel v. Seres Farms (2009), 254 O.A.C. 377 (CA)

MLB headnote and full text

Temp. Cite: [2009] O.A.C. TBEd. OC.030

Erie Sand and Gravel Limited (plaintiff/respondent) v. Seres' Farms Limited and Tri-B Acres Inc . (defendants/appellant)

(C49349; 2009 ONCA 709)

Indexed As: Erie Sand and Gravel Ltd. v. Seres' Farms Ltd. et al.

Ontario Court of Appeal

Cronk, Gillese and Armstrong, JJ.A.

October 13, 2009.

Summary:

The plaintiff brought an action for specific performance of an alleged agreement to purchase farmland from Seres' Farms. The defendants, Seres' Farms and Tri-B (who had a right of first refusal entitling it to purchase by matching the offer) argued that although the parties agreed on certain terms, there was only an "agreement to agree". Alternatively, the defendants argued that if there was an agreement, there were insufficient acts of part performance to take the agreement outside the writing requirements of s. 4 of the Statute of Frauds. Finally, the defendants argued that if there was an agreement, damages, not specific performance, was the appropriate remedy.

The Ontario Superior Court, in a judgment reported [2008] O.T.C. Uned. I15, allowed the action. There was agreement on all essential terms of the sale. Section 4 did not apply, because there were unequivocal acts of part performance and, in any event, the written offer was a "sufficient note or memorandum" under s. 4. The uniqueness of the property entitled the plaintiff to specific performance. One of the defendants appealed.

The Ontario Court of Appeal dismissed the appeal.

Sale of Land - Topic 805

The contract - General - Agreement for sale - What constitutes - The plaintiff agreed to purchase a 54 acre parcel of land from Seres' Farms at $22,000 per acre - Because Tri-B had a right of first refusal, the plaintiff would not tender a written offer until all terms of the agreement were agreed to, including Seres' Farms agreeing to sell to the plaintiff unless Tri-B matched its offer - The plaintiff tendered the written offer - Tri-B did not match the offer, but Seres' Farms accepted Tri-B's offer for the same sale price, but with a lower deposit and later closing date - The plaintiff sued Seres' Farms and Tri-B (defendants) for specific performance - The trial judge, in allowing the action, held that there was an oral agreement containing all of the essential terms of the sale and that Tri-B induced Seres' Farms to breach the agreement - There were acts of part performance unequivocally referable to dealings with land under the provisions of the pre-existing oral agreement, thereby excluding the application of s. 4 of the Statute of Frauds and, in any event, the written offer was a "sufficient note or memorandum" to satisfy the writing requirements of s. 4 - The uniqueness of the property entitled the plaintiff to specific performance - The Ontario Court of Appeal dismissed Tri-B's appeal - There was a binding oral agreement - The fact that a formal written document was to be prepared and executed did not alter the binding validity of the original contract - The trial judge did not err in finding that the acts of both the plaintiff and Seres' Farms constituted sufficient part performance to exclude the application of s. 4 - Finally, given the non-availability of substitute property, which was essential to the plaintiff remaining in business, there was no error in ordering specific performance on the basis of the uniqueness of the property and the inadequacy of damages.

Sale of Land - Topic 1351

The contract - Necessity for writing - Part performance in lieu of writing - What constitutes part performance - The Ontario Court of Appeal held that "the acts of both [the purchaser and vendor] to an alleged oral agreement may be considered when a court is called on to determine if sufficient acts of part performance take an alleged agreement outside the operation of the Statute of Frauds" - See paragraph 75.

Sale of Land - Topic 1351

The contract - Necessity for writing - Part performance in lieu of writing - What constitutes part performance - [See Sale of Land - Topic 805 ].

Sale of Land - Topic 1352

The contract - Necessity for writing - Part performance in lieu of writing - The doctrine - Nature of - The Ontario Court of Appeal stated that there were "two distinct, albeit related, aspects of the doctrine of part performance. The first aspect is detrimental reliance which ... requires a party to prove its acts of performance. Without detrimental reliance there can be no inequity in relying on the Statute of Frauds, thus, it is the first hurdle to be met. The second aspect of the doctrine, however, relates to Equity's requirement that the acts of part performance sufficiently indicate the existence of the alleged contract such that the party alleging the agreement is permitted to adduce evidence of the oral agreement. ... these two aspects of the doctrine are not synonymous. The former is a matter of substantive law based on the rationale for the doctrine of part performance, whereas the latter is primarily evidentiary in nature." - See paragraph 79.

Sale of Land - Topic 8551

Remedies of purchaser - Specific performance - When available - [See Sale of Land - Topic 805 ].

Cases Noticed:

Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 53 O.A.C. 314; 79 D.L.R.(4th) 97 (C.A.), refd to. [para. 42].

McKenzie v. Walsh (1920), 61 S.C.R. 312, refd to. [para. 42, footnote 2].

UBS Securities Canada Inc. v. Sands Brothers Canada Ltd. (2009), 248 O.A.C. 146; 95 O.R.(3d) 93 (C.A.), refd to. [para. 43].

Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69; 206 N.R. 299; 157 N.S.R.(2d) 81; 462 A.P.R. 81, refd to. [para. 49].

Steadman v. Steadman, [1976] A.C. 536 (H.L.), refd to. [para. 58].

Mount Sinai Hospital Center et al. v. Quebec (Minister of Health and Social Services), [2001] 2 S.C.R. 281; 271 N.R. 104; 2001 SCC 41, refd to. [para. 74].

Levine v. Davies et al., [1998] O.A.C. Uned. 24; 37 O.R.(3d) 252 (C.A.), refd to. [para. 76].

Cotterhill and Cotterhill v. Parkway Development Corp. Ltd. (1981), 29 A.R. 222 (Q.B.), affd. (1982), 39 A.R. 398 (C.A.), refd to. [para. 80].

Greenspoon et al. v. Tsambalieros (1998), 68 O.T.C. 268 (Gen. Div.), affd. (1999), 126 O.A.C. 352 (C.A.), refd to. [para. 81, footnote 19].

Kang Corp. v. KRTT Group Ltd. et al., [2007] O.T.C. Uned. 643; 56 R.P.R.(4th) 278 (Sup. Ct.), refd to. [para. 81, footnote 19].

Wade v. Trpin, [2004] O.T.C. Uned. 305; 18 R.P.R.(4th) 50 (Sup. Ct.), leave to appeal refused [2004] O.J. No. 4760 (C.A.), refd to. [para. 81, footnote 20].

Fitzgerald v. 545880 Ontario Ltd. et al., [2004] O.T.C. Uned. 648; 22 R.P.R.(4th) 263 (Sup. Ct.), refd to. [para. 81, footnote 20].

Deglman v. Brunet Estate, [1954] S.C.R. 725, refd to. [para. 82].

McNeil v. Corbett (1907), 39 S.C.R. 608, refd to. [para. 87].

Brownscombe v. Public Trustee of Alberta, [1969] S.C.R. 658, refd to. [para. 91, footnote 24].

Thompson v. Copithorne Estate, [1974] S.C.R. 1023, refd to. [para. 91, footnote 24].

Kramaruk v. Kushnir, [1956] O.R. 392 (C.A.), refd to. [para. 91, footnote 24].

Tavares v. Tavares, [2001] O.T.C. Uned. 661; 43 R.P.R.(3d) 246 (Sup. Ct.), refd to. [para. 91, footnote 24].

Peters v. Euloth (1976), 11 Nfld. & P.E.I.R. 109; 22 A.P.R. 109 (P.E.I.C.A.), refd to. [para. 91, footnote 24].

Colberg v. Braunberger Estate; Colberg v. Schumacher (1978), 12 A.R. 183 (C.A.), refd to. [para. 91, footnote 24].

Booth v. Knibb Developments Ltd. et al. (2002), 312 A.R. 173; 281 W.A.C. 173 (C.A.), refd to. [para. 91, footnote 24].

Haskett v. O'Neil, [1939] 4 D.L.R. 598 (Ont. C.A.), refd to. [para. 91].

1110049 Ontario Ltd. v. Exclusive Diamonds Inc. et al. (1995), 83 O.A.C. 391; 25 O.R.(3d) 417 (C.A.), refd to. [para. 111].

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415; 197 N.R. 379; 91 O.A.C. 379, refd to. [para. 112].

Dodge (John E.) Holdings v. 805062 Ontario Ltd., [2001] O.T.C. 803; 56 O.R.(3d) 341 (Sup. Ct.), affd. (2003), 168 O.A.C. 252; 63 O.R.(3d) 304 (C.A.), leave to appeal dismissed (2003), 326 N.R. 195; 194 O.A.C. 197 (S.C.C.), refd to. [para. 114].

1252668 Ontario Inc. v. Wyndham Street Investments Inc. et al., [1999] O.T.C. Uned. 692 (Sup. Ct.), refd to. [para. 116].

Authors and Works Noticed:

Di Castri, J. Victor, The Law of Vendor and Purchaser (1998 Looseleaf Update), vol. 1, para. 141 [para. 79, footnote 17].

Fridman, Gerald Henry Louis, The Law of Contract in Canada (5th Ed. 2006), pp. 231, 232 [para. 79, footnote 17].

Waddams, Stephen M., The Law of Contracts (5th Ed. 2005), paras. 236 to 239 [para. 79, footnote 17].

Counsel:

Myron W. Shulgan, Q.C., for the appellant, Tri-B Acres Inc.;

Claudio Martini, for the respondent;

No one appearing for Seres' Farms.

This appeal was heard on June 17, 2009, before Cronk, Gillese and Armstrong, JJ.A., of the Ontario Court of Appeal.

The judgment of the Court was delivered by Gillese, J.A., and released on October 13, 2009.