Hasanova v. Wulastook Industries Ltd., (2015) 443 N.B.R.(2d) 294 (TD)

• Judge: Morrison, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: Monday November 30, 2015
• Jurisdiction: New Brunswick
• Citations: (2015), 443 N.B.R.(2d) 294 (TD);2015 NBQB 233

Hasanova v. Wulastook Ind. Ltd. (2015), 443 N.B.R.(2d) 294 (TD);

    443 R.N.-B.(2e) 294; 1159 A.P.R. 294

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Sommaire et texte intégral

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2016] N.B.R.(2d) TBEd. JA.009

Renvoi temp.: [2016] N.B.R.(2d) TBEd. JA.009

Shoira Hasanova (plaintiff) v. Wulastook Industries Limited, a body corporate (defendant)

(F/C/66/2014; 2015 NBQB 233; 2015 NBBR 233)

Indexed As: Hasanova v. Wulastook Industries Ltd.

Répertorié: Hasanova v. Wulastook Industries Ltd.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Fredericton

Morrison, J.

November 30, 2015.

Summary:

Résumé:

The plaintiff entered into an Agreement of Purchase and Sale (the "Agreement") with the defendant for the purchase and sale of a commercial property. The purchase price was $525,000. The Agreement provided that the plaintiff would pay a deposit of $100,000 at the time of the execution of the Agreement. The plaintiff failed to close the transaction on the agreed closing date thereby breaching the Agreement. The plaintiff requested the return of the $100,000 deposit. The defendant refused. The plaintiff brought an action seeking the return of the $100,000 deposit.

The New Brunswick Court of Queen's Bench, Trial Division, dismissed the action.

Contracts - Topic 4046

Remedies for breach - Liquidated damages and penalties - Whether deposit or amount specified is a penalty or liquidated damages - The New Brunswick Court of Queen's Bench, Trial Division, stated that "Whether a deposit is unconscionable or penal is determined by considering a number of factors. ... The parties referred to several cases ... From a review of those cases one can glean the following non-exhaustive list of factors which are considered in determining whether a deposit is penal/unconscionable: (1) Whether the contract provided that the deposit constituted liquidated damages or a pre-estimate of damages (more likely to be considered reasonable); (2) The customary deposit for similar transactions; (3) The conduct of the parties, the gravity of the breach and the disparity between the amount of the deposit and the actual damages suffered; (4) The length of the interval between the date of the deposit and the date for completion; (5) Inequality of bargaining power" - See paragraphs 9 to 10.

Contracts - Topic 4046

Remedies for breach - Liquidated damages and penalties - Whether deposit or amount specified is a penalty or liquidated damages - The plaintiff entered into an Agreement of Purchase and Sale (the "Agreement") with the defendant for the purchase and sale of a commercial property - The purchase price was $525,000 - The Agreement provided that the plaintiff would pay a deposit of $100,000 at the time of the execution of the Agreement - The plaintiff failed to close the transaction on the agreed closing date thereby breaching the Agreement - The plaintiff brought an action seeking the return of the $100,000 deposit - The New Brunswick Court of Queen's Bench, Trial Division, dismissed the action - On balance, and having regard to all the circumstances, it could not be said that the deposit was either penal or unconscionable - Even if the court had concluded that the deposit constituted a penalty clause it could be enforced if it was reasonable in the circumstances to do so (Law Reform Act, s. 5) - It was reasonable in all of the circumstances of this case that the defendant should retain the deposit.

Contracts - Topic 4051

Remedies for breach - Liquidated damages and penalties - Forfeiture of deposit - General - [See second Contracts - Topic 4046 ].

Sale of Land - Topic 7744

Remedies of vendor - Forfeiture of deposit - Circumstances resulting in forfeiture - [See second Contracts - Topic 4046 ].

Cases Noticed:

Tang et al. v. Zhang et al. (2013), 332 B.C.A.C. 304; 569 W.A.C. 304; 2013 BCCA 52, consd. [para. 4].

Coal Harbour Properties Partnership v. Liu et al. (2006), 230 B.C.A.C. 78; 380 W.A.C. 78; 2006 BCCA 385, refd to. [para. 10].

Hinkson Holdings Ltd. v. Silver Sea Developments Limited Partnership (2007), 246 B.C.A.C. 37; 406 W.A.C. 37; 2007 BCCA 408, refd to. [para. 10].

Amiri v. One West Holdings Ltd. et al. (2013), 335 B.C.A.C. 284; 573 W.A.C. 284 (C.A.), refd to. [para. 10].

MTK Auto West Ltd. v. Allen, 2000 BCSC 1613, refd to. [para. 10].

Syncrude Canada Ltd. et al. v. Hunter Engineering Co. and Allis-Chalmers Canada Ltd. et al., [1989] 1 S.C.R. 426; 92 N.R. 1, refd to. [para. 10].

Statutes Noticed:

Judicature Act, R.S.N.B. 1973, c. J-2, sect. 26(3) [para. 3].

Law Reform Act, R.S.N.B. 2011, c. 184, sect. 5 [para. 22].

Counsel:

Avocats:

J. William Cabel, for the plaintiff;

Donald J. Stevenson, Q.C., for the defendant.

This action was heard on July 13 and 14, 2015, before Morrison, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Fredericton, who delivered the following decision on November 30, 2015.