North Calgary Community Church v. 510207 Alberta Ltd. et al., 2004 ABCA 357

• Judge: Fraser, C.J.A., Conrad and Fruman, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: January 16, 2003
• Citations: 2004 ABCA 357;(2004), 357 A.R. 304 (CA)

North Calgary Church v. 510207 Alta. (2004), 357 A.R. 304 (CA);

    334 W.A.C. 304

MLB headnote and full text

Temp. Cite: [2004] A.R. TBEd. NO.075

Caleron Properties Ltd. and Ronald W. Slater (appellants/defendants) v. North Calgary Community Church (respondent/plaintiff) and 510207 Alberta Ltd.  (not party to the appeal)

(0201-0189-AC; 2004 ABCA 357)

Indexed As: North Calgary Community Church v. 510207 Alberta Ltd. et al.

Alberta Court of Appeal

Fraser, C.J.A., Conrad and Fruman, JJ.A.

November 15, 2004.

Summary:

Oman and Slater established 510207 Alberta Ltd. to acquire a 29.29 acre parcel of land in Calgary. The land was to be developed by Caleron Properties Ltd. into residential lots with a 6.1 acre family enrichment centre site, which was to include a new church. 510207 issued a private placement offering memorandum to potential investors. The private placement closed. 510207 acquired the 29.29 acre parcel. The church site was reduced from 6.1 acres to 4.51 acres. The church subsequently filed a caveat, claiming it had an option to purchase the 4.51 acre site for $125,000. The church sued 510207, Caleron Properties and Slater to enforce the caveat.

The Alberta Court of Queen's Bench, in a decision reported at 310 A.R. 176; 2002 ABQB 262, held that the offering memorandum issued by 510207 was a memorandum in writing evidencing an option for the church to purchase the 4.51 acre site such that it satisfied the Statute of Frauds. The court found that the option had been validly exercised and ordered specific performance. Slater and Caleron Properties appealed, arguing that the court failed to consider whether a valid option to purchase was ever granted to the church.

The Alberta Court of Appeal allowed the appeal. The references to the option in the offering memorandum were insufficient to establish a valid option agreement.

Sale of Land - Topic 1722

The contract - Offer and acceptance - Options - What constitutes an option - 510207 Alberta Ltd. was established to acquire a 29.29 acre parcel of land - The land was to be developed into residential lots with a 6.1 acre family enrichment centre site, which was to include a new church - 510207 issued a private placement offering memorandum to potential investors - The private placement closed - 510207 acquired the land - The church site was reduced from 6.1 acres to 4.51 acres - The church subsequently filed a caveat, claiming it had an option to purchase the 4.51 acre site for $125,000 - The Alberta Court of Appeal held that references to the option to purchase in the offering memorandum issued by 510207 were insufficient to establish a valid option agreement - The offering memorandum did not stipulate any time period for exercise of the option - Nor did it provide that the option was exclusive to the church and irrevocable by 510207 - The offering memorandum also lacked specifics with respect to how the option was to be exercised - Further, 510207 would not be in a position to enter into a binding agreement of sale where the offering memorandum indicated that the project was conditional on a number of approvals, etc. - Events that occurred after the private placement was completed also confirmed that no valid option existed.

Cases Noticed:

Walker v. Cusack (1982), 16 Man.R.(2d) 114 (Q.B.), refd to. [para. 9].

Irving Industries (Irving Wire Products Division) Ltd. et al. v. Canadian Long Island Petroleums Ltd. et al., [1975] 2 S.C.R. 715; 3 N.R. 430, refd to. [para. 12].

Mitsui & Co. (Canada) Ltd. v. Royal Bank of Canada et al., [1995] 2 S.C.R. 187; 180 N.R. 161; 142 N.S.R.(2d) 1; 407 A.P.R. 1, appld. [para. 12].

Sudbrook Trading Estate Ltd. v. Eggleton, [1983] 1 A.C. 444 (H.L.), refd to. [para. 12].

Ladco Co. v. Winnipeg (City) (1992), 80 Man.R.(2d) 309 (Q.B.), refd to. [para. 23].

Authors and Works Noticed:

Perell, Paul M., Options, Rights of Repurchase and Rights of First Refusal as Contracts and as Interests in Land (1991), 70 Can. Bar Rev. 1, p. 3 [para. 12].

Counsel:

N.D. Anderson, for the appellant;

D.F. Younggren, for the respondent.

This appeal was heard on January 16, 2003, before Fraser, C.J.A., Conrad and Fruman, JJ.A., of the Alberta Court of Appeal. The following memorandum of judgment of the Court of Appeal was filed on November 15, 2004.