Martel v. Mohr, (2011) 370 Sask.R. 104 (QB)

JudgeDawson, J.
CourtCourt of Queen's Bench of Saskatchewan (Canada)
Case DateApril 21, 2011
JurisdictionSaskatchewan
Citations(2011), 370 Sask.R. 104 (QB);2011 SKQB 161

Martel v. Mohr (2011), 370 Sask.R. 104 (QB)

MLB headnote and full text

Temp. Cite: [2011] Sask.R. TBEd. MY.010

Jeremie Michael Anthony Martel, Shylee Martel (plaintiffs) v. Denise Marie Mohr, Terry Douglas Mohr (defendants)

(2007 Q.B. No. 121; 2011 SKQB 161)

Indexed As: Martel v. Mohr

Saskatchewan Court of Queen's Bench

Judicial Centre of Estevan

Dawson, J.

April 21, 2011.

Summary:

The plaintiffs claimed against the defendants for breach of contract for the purchase and sale of a house and sought specific performance of the contract.

The Saskatchewan Court of Queen's Bench allowed the action.

Contracts - Topic 1444

Formation of contract - Agreements that are not contracts - Agreements to agree - The Saskatchewan Court of Queen's Bench confirmed that "there are three separate principles contained within the basic notion that an 'agreement to agree' is unenforceable. The first proposition is that there is no enforceable contract where essential terms of the agreement have not been agreed to, but have been left to the parties for future agreement. The second proposition is that there is no enforceable contract where the provisions of what has been agreed to are insufficiently certain. The third proposition is there is no enforceable contract where the parties intend that a preliminary agreement is not to create binding contractual relations until a subsequent formal document is executed. In examining all of the situations, the parties' subsequent conduct is an important factor. Conduct takes on great importance in assessing whether an arrangement goes beyond an unenforceable agreement to become a binding contract. It is clear that the courts have a strong inclination to find a binding contract if the parties acted as if they thought they had one." - See paragraph 40.

Contracts - Topic 1444

Formation of contract - Agreements that are not contracts - Agreements to agree - The plaintiffs (Jeremie and Shylee Martel) answered an ad advertising the defendants' house for sale - The plaintiffs viewed the house and decided to purchase it - The parties completed and signed an "Agreement to Purchase/Sell Residential Property" and settled on an August 1, 2007, closing date - The plaintiffs provided a $1,000 deposit - The plaintiffs sold their home - The plaintiffs separated - Jeremie indicated that he would proceed with the purchase on his own - Communication between the parties was difficult - Due to the uncertainty of whether Jeremie had the financing and was going to purchase the house, the defendants decided to nullify the agreement and returned the deposit - The plaintiffs claimed against the defendants for breach of contract - The defendants asserted that the agreement was not enforceable as it was only an agreement to agree because essential terms were incomplete, including, inter alia, the condition of financing - The Saskatchewan Court of Queen's Bench rejected the defendants' assertion - Jeremie had obtained a commitment for financing from his bank, prior to looking at the house - While Jeremie was obtaining financing, the offer to purchase was not conditional on financing - Jeremie had already obtained his financing commitment and he did not have to obtain any further confirmation - Further agreement between the parties in relation to financing was not necessary - The contract was not missing an essential term of being conditional on financing - See paragraph 44.

Contracts - Topic 1444

Formation of contract - Agreements that are not contracts - Agreements to agree - The plaintiffs (Jeremie and Shylee Martel) answered an ad advertising the defendants' house for sale - The plaintiffs viewed the house and decided to purchase it - The parties completed and signed an "Agreement to Purchase/Sell Residential Property" and settled on an August 1, 2007, closing date - The plaintiffs provided a $1,000 deposit - The plaintiffs sold their home - The plaintiffs separated - Jeremie indicated that he would proceed with the purchase on his own - Communication between the parties was difficult - Due to the uncertainty of whether Jeremie had the financing and was going to purchase the house, the defendants decided to nullify the agreement and returned the deposit - The plaintiffs claimed against the defendants for breach of contract - The defendants asserted that the agreement was not enforceable as it was only an agreement to agree because essential terms were incomplete, including, inter alia, who would pay legal and/or transfer fees - The Saskatchewan Court of Queen's Bench rejected the defendants' assertion - There was no legal requirement that a contract between two parties for the purchase or sale of residential property provide for who would pay for legal fees or transfer fees - Both parties had their own independent lawyers and it would not be essential to the purchase contract to set out that each party would pay for the legal work that their own lawyer undertook on their instruction - That left the question of whether the lack of a term setting out who would pay the land titles transfer fees was a missing essential term so as to negate contractual intention - The payment of the transfer fees was a relatively minor term which could not meet the standard necessary to set aside the contract for want of an essential term - See paragraphs 45 and 46.

Contracts - Topic 1444

Formation of contract - Agreements that are not contracts - Agreements to agree - The plaintiffs (Jeremie and Shylee Martel) answered an ad advertising the defendants' house for sale - The plaintiffs viewed the house and decided to purchase it - The parties completed and signed an "Agreement to Purchase/Sell Residential Property" and settled on an August 1, 2007, closing date - The plaintiffs provided a $1,000 deposit - The plaintiffs sold their home - The plaintiffs separated - Jeremie indicated that he would proceed with the purchase on his own - Communication between the parties was difficult - Due to the uncertainty of whether Jeremie had the financing and was going to purchase the house, the defendants decided to nullify the agreement and returned the deposit - The plaintiffs claimed against the defendants for breach of contract - The defendants asserted that the agreement was not enforceable as it was only an agreement to agree because essential terms were incomplete - The defendants asserted that the agreement did not contain a provision for Jeremie to place chattels on the property prior to possession which the parties had discussed - The Saskatchewan Court of Queen's Bench rejected the defendants' assertion - The lack of a term allowing Jeremie to leave some personal property at the residence prior to possession could not be said to be an essential term which would negate contractual intention - The evidence from all the parties was that this discussion was almost collateral to the agreement, but even if not collateral, it was not essential - See paragraph 47.

Contracts - Topic 1444

Formation of contract - Agreements that are not contracts - Agreements to agree - The plaintiffs (Jeremie and Shylee Martel) answered an ad advertising the defendants' house for sale - The plaintiffs viewed the house and decided to purchase it - The parties completed and signed an "Agreement to Purchase/Sell Residential Property" and settled on an August 1, 2007, closing date - The plaintiffs provided a $1,000 deposit - The plaintiffs sold their home - The plaintiffs separated - Jeremie indicated that he would proceed with the purchase on his own - Communication between the parties was difficult - Due to the uncertainty of whether Jeremie had the financing and was going to purchase the house, the defendants decided to nullify the agreement and returned the deposit - The plaintiffs claimed against the defendants for breach of contract - The defendants asserted that the agreement was not enforceable as it was only an agreement to agree because essential terms were incomplete - The defendants asserted that clause 8 was ambiguous because it did not indicate that the purchasers would get clear title to the land and premises - The Saskatchewan Court of Queen's Bench rejected the defendants' assertions - The defendants' suggested interpretation of clause 8 ignored the portion of that clause that stated the defendants were required to discharge the existing mortgage on the land - The clause went on to state that the seller warranted "all items" sold under this agreement "shall be free" - The contract referred, in clause 1, to the sale of the property and at clause 3, to the sale of a "house, garage, all outbuildings and property ... windows ... fridge, stove ... etc." - All of these, the land, house and chattels, were referenced by the term "all items" in clause 8 - On a plain reading of clause 8 of the contract, the defendants' submission that the contract was uncertain had to fail - The clause was not ambiguous - It was clear that the plaintiffs were to get clear title to the property, the land, buildings and chattels and that the parties agreed to that - See paragraphs 48 to 50.

Contracts - Topic 1444

Formation of contract - Agreements that are not contracts - Agreements to agree - The plaintiffs (Jeremie and Shylee Martel) answered an ad advertising the defendants' house for sale - The plaintiffs viewed the house and decided to purchase it - The parties completed and signed an "Agreement to Purchase/Sell Residential Property" and settled on an August 1, 2007, closing date - The plaintiffs provided a $1,000 deposit - The plaintiffs sold their home - The plaintiffs separated - Jeremie indicated that he would proceed with the purchase on his own - Communication between the parties was difficult - Due to the uncertainty of whether Jeremie had the financing and was going to purchase the house, the defendants decided to nullify the agreement and returned the deposit - The plaintiffs claimed against the defendants for breach of contract - The defendants asserted that the agreement was not enforceable as it was only an agreement to agree because the parties intended to execute a subsequent formal legal contract - The Saskatchewan Court of Queen's Bench rejected the defendants' assertion - It was clear from the conduct between the parties, including the correspondence between counsel, that the parties' conduct indicated a belief that they were bound by the terms of the agreement signed - The parties acted as if the deal were done and an analysis of their subsequent conduct pointed to no other conclusion than that a final agreement had been reached - See paragraphs 52 to 56.

Contracts - Topic 3730

Performance or breach - Fundamental breach - What constitutes a fundamental breach - [See Contracts - Topic 3735 ].

Contracts - Topic 3735

Performance or breach - Fundamental breach - Effect of exclusionary clause - The plaintiffs (Jeremie and Shylee Martel) answered an ad advertising the defendants' house for sale - The plaintiffs viewed the house and decided to purchase it - The parties completed and signed an "Agreement to Purchase/Sell Residential Property" and settled on an August 1, 2007, closing date - The plaintiffs provided a $1,000 deposit - The plaintiffs sold their home - The plaintiffs separated - Jeremie indicated that he would proceed with the purchase on his own - Communication between the parties was difficult - Due to the uncertainty of whether Jeremie had the financing and was going to purchase the house, the defendants decided to nullify the agreement and returned the deposit - The plaintiffs claimed against the defendants for breach of contract - The defendants relied on clause 6 of the agreement, which provided that " ... Should the Seller forfeit any terms of this Agreement, the Buyer shall be entitled to the return of their deposit plus interest calculated at a rate of 5% per annum and the remainder of this Agreement shall become null and void." - The Saskatchewan Court of Queen's Bench held that the defendants' breach was a fundamental breach of the contract - Clause 6 was a limitation of liability or an exemption clause - The last sentence of clause 6 carried with it considerable ambiguity - The interpretation of "forfeit" in the last sentence suggested by the defendants would cause the court to ascribe two different meanings to the word within the same clause - The clause had to be strictly construed against the defendants and, as the clause was not clear, the ambiguity weighed against the defendants - Because of the ambiguity, the defendants were not entitled to rely on the limitation of liability - Further, the second part of clause 6 purported to set out the amount of damages which the breaching vendors had to pay to the innocent purchasers if the vendors breached the contract - But the damages sum was set out as being the return of the purchasers' deposit plus interest - This amount was not a genuine pre-estimate of damages - The clause provided the purchaser with no damages at all, since it merely gave them back their own money plus interest at five per cent, which was not a pre-estimate of the damages - The amount of damage given to the purchasers was unconscionable in comparison to their loss - It was also unconscionable for the vendors to retain the property with no consequence - If the portion of the clause in issue was a stipulated remedy clause, it was a penalty and it would be unconscionable to enforce it - See paragraphs 59 to 105.

Contracts - Topic 4106

Remedies for breach - Specific performance - When available - General - The plaintiffs (Jeremie and Shylee Martel) answered an ad advertising the defendants' house for sale - The plaintiffs viewed the house and decided to purchase it - The parties completed and signed an "Agreement to Purchase/Sell Residential Property" and settled on an August 1, 2007, closing date - The plaintiffs provided a $1,000 deposit - The plaintiffs sold their home - The plaintiffs separated - Jeremie indicated that he would proceed with the purchase on his own - Communication between the parties was difficult - Due to the uncertainty of whether Jeremie had the financing and was going to purchase the house, the defendants decided to nullify the agreement and returned the deposit - The plaintiffs claimed against the defendants for breach of contract and sought specific performance - The Saskatchewan Court of Queen's Bench allowed the action - In determining whether the plaintiffs were entitled to specific performance, there were two issues which needed to be addressed: "(a) is the property unique such that damages are an inadequate remedy? and (b) were the plaintiffs ready, willing and able to proceed with the purchase?" - The plaintiffs had more than met their burden of showing that the property was unique and that they were ready, willing and able to proceed with the purchase - See paragraphs 106 to 114.

Contracts - Topic 4110

Remedies for breach - Specific performance - Sale or lease of land - [See Contracts - Topic 4106 ].

Sale of Land - Topic 873

The contract - Uncertainty - Uncertainties resulting in void contract - [See second, third, fourth and fifth Contracts - Topic 1444 ].

Sale of Land - Topic 876

The contract - Uncertainty - Financing to be arranged - [See second Contracts - Topic 1444 ].

Sale of Land - Topic 1965

The contract - Breach of contract - What constitutes - [See Contracts - Topic 3735 ].

Sale of Land - Topic 7408

Remedies - General - Specific performance - When available - [See Contracts - Topic 4106 ].

Sale of Land - Topic 8551

Remedies of purchaser - Specific performance - When available - [See Contracts - Topic 4106 ].

Specific Performance - Topic 506

When available - General principles - Contractual obligations - [See Contracts - Topic 4106 ].

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. 39].

Calvan Consolidated Oil & Gas Co. v. Manning, [1959] S.C.R. 253, refd to. [para. 40].

Canada Square Corp. et al. v. VS Services Ltd. et al. (1981), 34 O.R.(2d) 250 (C.A.), refd to. [para. 40].

Imperial Oil Ltd. v. Young et al. (1998), 167 Nfld. & P.E.I.R. 280; 513 A.P.R. 280; 21 R.P.R.(3d) 65 (Nfld. C.A.), refd to. [para. 40].

Foley v. Classique Coaches Ltd., [1938] All E.R. Rep. 88; [1934] 2 K.B. 1 (C.A.), refd to. [para. 45].

Mitsui & Co. (Point Aconi) Ltd. v. Jones Power Co. et al. (2000), 189 N.S.R.(2d) 1; 590 A.P.R. 1; 2000 NSCA 95, leave to appeal refused (2001), 270 N.R. 196; 193 N.S.R.(2d) 400; 602 A.P.R. 400 (S.C.C.), refd to. [para. 49].

Buildevco Ltd. v. Monarch Construction Ltd. (1990), 73 O.R.(2d) 627 (H.C.), refd to. [para. 63].

Ardekany v. Dominion of Canada General Insurance Co. (1985), 67 B.C.L.R. 162; 20 C.C.L.I. 37, refd to. [para. 64].

Popyk v. Western Savings & Loan Association (1969), 67 W.W.R.(N.S.) 684 (Alta. C.A.), refd to. [para. 65].

R. v. Premier Cutlery Ltd. (1980), 55 C.P.R.(2d) 134 (Ont. Prov. Ct.), refd to. [para. 66].

869163 Ontario Ltd. v. Torrey Springs II Associates Limited Partnership - see Peachtree II Associates - Dallas L.P. et al. v. 857486 Ontario Ltd. et al.

Peachtree II Associates - Dallas L.P. et al. v. 857486 Ontario Ltd. et al. (2005), 200 O.A.C. 159; 76 O.R.(3d) 362; 256 D.L.R.(4th) 490 (C.A.), refd to. [para. 67].

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. 74].

Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423; 247 N.R. 97; 126 O.A.C. 1, refd to. [para. 75].

CIT Financial Ltd. v. Weber Construction Ltd. (2003), 232 Sask.R. 72; 294 W.A.C. 72; 2003 SKCA 13, refd to. [para. 76].

Plas-Tex Canada Ltd. et al. v. Dow Chemical of Canada Ltd. et al. (2004), 357 A.R. 139; 334 W.A.C. 139; 245 D.L.R.(4th) 650; 2004 ABCA 309, refd to. [para. 77].

Romfo et al. v. 1216393 Ontario Inc. et al., [2007] B.C.T.C. Uned. F10; 35 B.L.R.(4th) 105; 285 D.L.R.(4th) 512; 2007 BCSC 1375, refd to. [para. 79].

Rogers v. Lane Realty Corp. (2005), 265 Sask.R. 261; 2005 SKQB 330, refd to. [para. 80].

Solway et al. v. Davis Moving and Storage Inc. et al. (2002), 166 O.A.C. 370; 62 O.R.(3d) 522 (C.A.), leave to appeal refused (2003), 320 N.R. 194; 189 O.A.C. 200 (S.C.C.), refd to. [para. 83].

Atlas Supply Co. of Canada v. Yarmouth Equipment Ltd. and Murphy (1991), 103 N.S.R.(2d) 1; 282 A.P.R. 1 (C.A.), leave to appeal refused (1991), 137 N.R. 78; 108 N.S.R.(2d) 270; 294 A.P.R. 270 (S.C.C.), refd to. [para. 84].

Burkhardt v. Gawdun et al. (2004), 254 Sask.R. 271; 336 W.A.C. 271; 2004 SKCA 128, refd to. [para. 85].

Bow Valley Husky (Bermuda) Ltd. et al. v. Saint John Shipbuilding Ltd. et al., [1997] 3 S.C.R. 1210; 221 N.R. 1; 158 Nfld. & P.E.I.R. 269; 490 A.P.R. 269, refd to. [para. 93].

Shelanu Inc. v. Print Three Franchising Corp. (2003), 172 O.A.C. 78; 64 O.R.(3d) 533 (C.A.), refd to. [para. 93].

SaskPower International Inc. et al. v. UMA/B&V Ltd. et al. (2007), 293 Sask.R. 66; 397 W.A.C. 66; 2007 SKCA 40, refd to. [para. 93].

Meeker Log and Timber Ltd. v. Ship Sea Imp VIII (1996), 21 B.C.L.R.(3d) 101 (C.A.), leave to appeal refused (1997), 208 N.R. 325; 89 B.C.A.C. 92; 145 W.A.C. 92 (S.C.C.), refd to. [para. 95].

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415; 197 N.R. 379; 91 O.A.C. 379, refd to. [para. 108].

Authors and Works Noticed:

Chitty on Contracts (25th Ed. 1983), vol. 1, paras. 103 [para. 42]; 104 [para. 52].

Hall, Geoff R., Canadian Contractual Interpretation Law (2007), pp. 243 [para. 78]; 263 [para. 96].

Swan, Angela, Canadian Contract Law (2nd Ed. 2009), para. 9.78 [para. 73].

Waddams, Stephen M., The Law of Contracts (4th Ed. 1999), paras. 48 [para. 41]; 674 [para. 106].

Williston on Contracts (3rd Ed.), vol. 5, p. 640 [para. 65].

Counsel:

Jonathan Goby, for the plaintiffs;

John Billesberger, for the defendants.

This action was heard by Dawson, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Estevan, who delivered the following judgment on April 21, 2011.

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12 practice notes
  • Table of Cases
    • Canada
    • Irwin Books Archive The Law of Equitable Remedies. Second Edition
    • June 18, 2013
    ...11 M.P.L.R. (2d) 134 (Ont. Ct. Gen. Div.) ........................................................................ 98 Martel v. Mohr, 2011 SKQB 161 .......................................................................... 357 Marvost v. Stokes, 2011 ONSC 4827 ....................................
  • Specific Performance: Sale of Land
    • Canada
    • Irwin Books The Law of Equitable Remedies - Third edition
    • November 18, 2023
    ...870 [ Phelps ]. 42 Le Soleil Hospitality Inc v Louie , 2010 BCSC 1183 [ Le Soleil ]. 43 Sihota v Soo , 2010 BCSC 886; Martel v Mohr , 2011 SKQB 161; Jassal v Garcha , 2017 BCSC 600; Grewal v Dhillon , 2019 BCSC 1933. 44 Siddiqui v Mir (2005), 47 RPR (4th) 137 (Ont SCJ); Deol v Sinnathamby ,......
  • Table of cases
    • Canada
    • Irwin Books The Law of Equitable Remedies - Third edition
    • November 18, 2023
    ...149 Marley v Rawlings, [2014] UKSC 2 .................................................................... 699 Martel v Mohr, 2011 SKQB 161 ..........................................................................494 Martin v ConCreate USL Limited Partnership, 2013 ONCA 72 .......................
  • Specific Performance: Sale of Land
    • Canada
    • Irwin Books Archive The Law of Equitable Remedies. Second Edition
    • June 18, 2013
    ...VIS 3430 , 2010 BCSC 870. 34 Le Soleil Hospitality Inc. v. Louie , 2010 BCSC 1183. 35 Sihota v. Soo , 2010 BCSC 886; and Martel v. Mohr , 2011 SKQB 161. 36 Siddiqui v. Mir (2005), 47 R.P.R. (4th) 137 (Ont. S.C.J.). 37 Raymond v. Raymond Estate , above note 17. 38 Silverberg v. 1054384 Ontar......
  • Request a trial to view additional results
8 cases
  • Input Capital Corp. v Gustafson, 2019 SKCA 78
    • Canada
    • Court of Appeal (Saskatchewan)
    • August 16, 2019
    ...2004 SKCA 128 at para 9, 254 Sask R 271 [Gawdun CA]; Rogers v Lane Realty Corp., 2005 SKQB 330 at para 20, 265 Sask R 261; Martel v Mohr, 2011 SKQB 161 at para 85, 370 Sask R 104; Cardinal v Bomok, 2013 SKQB 160 at para 22, 419 Sask R 275; including the subsequent case of Primewest Mortgage......
  • Perrault v. Ruchotzke, (2012) 407 Sask.R. 185 (QB)
    • Canada
    • Saskatchewan Court of Queen's Bench of Saskatchewan (Canada)
    • November 9, 2012
    ...to. [para. 32]. 101090442 Saskatchewan Ltd. v. Harle (2012), 392 Sask.R. 178; 2012 SKQB 112, refd to. [para. 32]. Martel v. Mohr (2011), 370 Sask.R. 104; 2011 SKQB 161, refd to. [para. Stefan v. Lichter (2005), 270 Sask.R. 124; 2005 SKQB 383, refd to. [para. 32]. Authors and Works Noticed: ......
  • 101090442 Saskatchewan Ltd. v. Harle, 2014 SKCA 6
    • Canada
    • Saskatchewan Court of Appeal (Saskatchewan)
    • February 20, 2013
    ...that the parties here expressed their intention so unclearly that a court cannot discern what their intentions were. [ Martel v. Mohr , 2011 SKQB 161, 370 Sask. R. 104 at para. 51] [76] In another case, Justice Dawson quoted with approval: Victor Di Castri, The Law of Vendor and Purchaser ,......
  • Demir v. Kilic, 2018 ONSC 949
    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • February 8, 2018
    ...Co. (Point Aconi) Ltd. v. Jones Power Co., 2000 NSCA 95, leave to appeal to the S.C.C. refused, [2000] S.C.C.A. No. 526; Martel v. Mohr, 2011 SKQB 161.[7] 2007 ONCAara. 65.[6] Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.); Mitsui & Co. (Point Ac......
  • Request a trial to view additional results
2 books & journal articles
  • Table of Cases
    • Canada
    • Irwin Books The Law of Equitable Remedies. Second Edition
    • June 18, 2013
    ...11 M.P.L.R. (2d) 134 (Ont. Ct. Gen. Div.) ........................................................................ 98 Martel v. Mohr, 2011 SKQB 161 .......................................................................... 357 Marvost v. Stokes, 2011 ONSC 4827 ....................................
  • Specific Performance: Sale of Land
    • Canada
    • Irwin Books The Law of Equitable Remedies. Second Edition
    • June 18, 2013
    ...VIS 3430 , 2010 BCSC 870. 34 Le Soleil Hospitality Inc. v. Louie , 2010 BCSC 1183. 35 Sihota v. Soo , 2010 BCSC 886; and Martel v. Mohr , 2011 SKQB 161. 36 Siddiqui v. Mir (2005), 47 R.P.R. (4th) 137 (Ont. S.C.J.). 37 Raymond v. Raymond Estate , above note 17. 38 Silverberg v. 1054384 Ontar......

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