Kopec v. Pyret and Borys, (1983) 25 Sask.R. 280 (QB)

• Judge: Scheibel, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: March 29, 1983
• Jurisdiction: Saskatchewan
• Citations: (1983), 25 Sask.R. 280 (QB)

Kopec v. Pyret (1983), 25 Sask.R. 280 (QB)

MLB headnote and full text

Kopec v. Pyret and Borys

(No. 25 A.D. 1981)

Indexed As: Kopec v. Pyret and Borys

Saskatchewan Court of Queen's Bench

Judicial Centre of Weyburn

Scheibel, J.

March 29, 1983.

Summary:

The vendor of land under an agreement of purchase and sale refused to complete the agreement and subsequently sold the land to a third party. The prospective buyer sued the vendor and the third party for specific performance and for damages. The vendor counterclaimed for a declaration that the contract of sale was not properly completed or alternatively, that it was completed by mistake. The third party counterclaimed for damages and for an order vacating the caveat of the plaintiff.

The Saskatchewan Court of Queen's Bench allowed the plaintiff's action, awarding damages against the vendor. The court dismissed the vendor's counterclaim and ordered that the plaintiff's caveat be removed from the title.

Contracts - Topic 1441

Formation of contract - Agreements which are not contracts - Agreements to agree - The Saskatchewan Court of Queen's Bench discussed an agreement to agree and especially contrasted it with a right of first refusal - See paragraphs 36 to 38.

Damages - Topic 505

Limits of compensatory damages - Speculative losses - A buyer sued a vendor for damages for breach of contract, after the vendor sold the subject farmland to another - The land was adjoining the buyer's property - The Saskatchewan Court of Queen's Bench refused to award damages for loss in not having land close to the plaintiff's land and for loss of the opportunity to spread depreciation and financing costs of machinery over a larger land base, because these losses were speculative - See paragraphs 76 to 77.

Damages - Topic 1063

Mitigation - In contract - General - The Saskatchewan Court of Queen's Bench referred to the duty to mitigate loss when claiming damages for breach of contract - See paragraphs 56 to 60.

Damages - Topic 1042

Mitigation - In contract - Reasonable remedial measures - What constitutes - The Saskatchewan Court of Queen's Bench referred to the duty to mitigate loss by purchasing a substitute property, when claiming damages against a seller for breach of contract - The court held that there was no duty to buy alternate property where the property was so dissimilar that it could not be considered a substitute, plus where the buyer sought specific performance of the agreement of purchase and sale - See paragraphs 61 to 72.

Damages - Topic 5701

Contracts - Breach of contract - Primary rules for breach of contract - The Saskatchewan Court of Queen's Bench referred to the general principles used to assess damages for breach of contract - See paragraphs 54 to 55.

Real Property - Topic 7925

Title - Registration of instruments - Caveats - Interests which may be protected - The Saskatchewan Court of Queen's Bench held that once the vendor received an offer to purchase from a third party, a right of first refusal became an interest in land which could be protected by a caveat - See paragraphs 44 to 51.

Sale of Land - Topic 1728

Contract - Offer and acceptance - Options - Option distinguished from right of first refusal - The Saskatchewan Court of Queen's Bench contrasted an option and a right of first refusal - See paragraphs 28 to 29; 31 to 32.

Sale of Land - Topic 1763

Contract - Offer and acceptance - Right of first refusal - Defined - The Saskatchewan Court of Queen's Bench discussed a right of first refusal - See paragraphs 23 to 43.

Sale of Land - Topic 1765

Contract - Offer and acceptance - Right of first refusal - What constitutes - A lease contained the clause "In the event of a sale of the said land, the lessor agrees . . . to give the lessee notice of such sale, and the option to purchase said land upon terms and conditions to be agreed upon between the parties . . ." - The Saskatchewan Court of Queen's Bench held that the lessee received an enforceable right of first refusal - See paragraphs 23; 30 to 33.

Sale of Land - Topic 8761

Remedies of purchaser - Damages - Limits of compensatory damages for breach - The plaintiff sued a vendor for damages suffered by the sale of farmland adjoining the plaintiff's to another - The Saskatchewan Court of Queen's Bench awarded damages for loss in being deprived of the land at the contract price and loss of profits for two crop years - The court refused damages for loss in not having land close to the plaintiff's land and for loss of the opportunity to spread depreciation and financing costs of machinery over a larger land base, because they were speculative and covered by the loss of profits award - The court also awarded the interest penalty on the plaintiff's mortgage and loss of his deposit - See paragraphs 73 to 85.

Sale of Land - Topic 8761

Remedies of purchaser - Damages - Limits of compensatory damages for breach - The plaintiff applied for a mortgage to finance the purchase of farmland - The principal sum was advanced to the plaintiff, but the vendor failed to complete the sale - The plaintiff invested the mortgage funds and earned interest income - The plaintiff was required to pay interest on the mortgage debt plus an interest penalty for pre-payment of the mortgage before maturity - The Saskatchewan Court of Queen's Bench allowed the plaintiff to recover the interest penalty from the vendor; the other interest was included in the loss of profits damage award - See paragraphs 79 to 83.

Cases Noticed:

Powers v. Walter and Walter, [1981] 5 W.W.R. 169; 9 Sask.R. 89 (C.A.), refd to. [para. 22].

Irving Industries (Irving Wire Products Division) Ltd. et al. v. Canadian Long Island Petroleums Ltd. et al., [1974] 6 W.W.R. 385; [1975] 2 S.C.R. 715; 3 N.R. 430, consd. [para. 24].

Re Hawksmoor Investments Ltd. and Marr Construction Ltd., [1973] 1 O.R. 313, aff'd., [1973] 1 O.R. 820, refd to. [para. 27].

Sudbrook Trading Estate Ltd. v. Eggleton and Others, [1982] 3 W.L.R. 315, refd to. [para. 29].

Smith v. Morgan, [1971] 2 All E.R. 1500, consd. [para. 39].

Asamera Oil Corporation Ltd. v. Sea Oil & General Corporation et al.; Baud Corporation, N. V. v. Brooke, [1979] 1 S.C.R. 633; 23 N.R. 181, refd to. [para. 54].

Koufos v. C. Czarnikow Ltd. (The "Heron II"), [1969] 1 A.C. 350 (H.L.), refd to. [para. 55].

Red Deer College v. Michaels et al., [1967] 2 S.C.R. 324, refd to. [para. 57].

British Westinghouse Electric and Manufacturing Company Limited v. Underground Electric Railway Company of London Limited, [1912] A.C. 673, refd to. [para. 59].

Radford v. De Froberville, [1978] 1 All E.R. 33, refd to. [para. 62].

Westward Farms Ltd. and Deniau v. Cadieux et al; Barnabe v. Cadieux McKague Sigmar Realty Ltd., Fillion and Durand, [1981] 3 W.W.R. 673; 9 Man.R.(2d) 96 (Man. Q.B.), refd to. [para. 62].

Authors and Works Noticed:

Thom's Canadian Torrens System (2d Ed.), pp. 586-588 [para. 34].

Counsel:

W.R. Stinson, for the plaintiff;

R.E. MacDonald, for the defendants.

This action was heard before Scheibel, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Weyburn. The decision of Scheibel, J., was delivered at Regina, Saskatchewan, on March 29, 1983.