Roberge v. 1102940 Alberta Ltd., 2012 ABQB 717

• Judge: Ross, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: August 09, 2012
• Citations: 2012 ABQB 717;(2012), 552 A.R. 263 (QB)

Roberge v. 1102940 Alta. (2012), 552 A.R. 263 (QB)

MLB headnote and full text

Temp. Cite: [2012] A.R. TBEd. DE.071

Greg Roberge and Kandi Roberge (plaintiffs) v. 1102940 Alberta Ltd. (defendant)

(0703 12142; 2012 ABQB 717)

Indexed As: Roberge v. 1102940 Alberta Ltd.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Ross, J.

November 20, 2012.

Summary:

The plaintiffs brought an action, seeking specific performance of an agreement to purchase a condominium. The defendant counterclaimed, seeking removal of a caveat.

The Alberta Court of Queen's Bench dismissed the action and allowed the counterclaim.

Contracts - Topic 2115

Terms - Express terms - Force majeure clauses - General - [See third Real Property - Topic 8818.1 ].

Contracts - Topic 5310

Impossibility or frustration of performance - Frustration - Force majeure - [See third Real Property - Topic 8818.1 ].

Real Property - Topic 8818.1

Condominiums - Purchase and sale agreements - Termination clauses - The plaintiffs brought an action, seeking specific performance of an agreement to purchase a condominium - The defendant developer claimed that the agreement was validly terminated in accordance with clause 18 - Construction delays and increases in trade subcontractor prices caused financing for the project to be withdrawn - The result was that an unreasonable delay in completion was foreseeable - This justified its decision to terminate under clause 18, as it was "unable to substantially complete the Unit for occupancy within a reasonable time after the designated Closing Date" - The plaintiffs asserted that there was no "designated Closing Date" under clause 18 as the defendant had not given 10 days' notice in writing of the "Closing Date" under clause 19 - The Alberta Court of Queen's Bench dismissed the action - The reference at the conclusion of clause 18 to the "designated Closing Date" was arguably ambiguous - However, when interpreted in context it had to refer to the scheduled date for possession which was "designated" in clause 18 to be August 31, 2006 - The "designated Closing Date" could not be the actual date of possession, as the termination of the agreement meant that there would be no actual possession - There was no reason for the defendant to give 10 days notice of a meaningless date - The interpretation argued by the plaintiffs was, if not absurd, at least not in accordance with good business sense - See paragraphs 41 to 46.

Real Property - Topic 8818.1

Condominiums - Purchase and sale agreements - Termination clauses - The plaintiffs brought an action, seeking specific performance of an agreement to purchase a condominium - The defendant developer claimed that the agreement was validly terminated in accordance with clause 18 - Construction delays and increases in trade subcontractor prices caused financing for the project to be withdrawn - The result was that an unreasonable delay in completion was foreseeable - This justified its decision to terminate under clause 18, as it was "unable to substantially complete the Unit for occupancy within a reasonable time after the designated Closing Date" - The plaintiffs asserted that the defendant failed to established that it was "unable to substantially complete the Unit for occupancy within a reasonable time" after the closing date so that it was entitled "at its sole option" to return the plaintiffs' deposits and terminate the agreement - The Alberta Court of Queen's Bench dismissed the action - Based on the circumstances of this case (a delay of approximately 12 months) and the case law, both the actual and anticipated delays were such that the defendant reasonably concluded that it would be unable to substantially complete the unit within a reasonable time after the closing date - See paragraphs 47 to 51.

Real Property - Topic 8818.1

Condominiums - Purchase and sale agreements - Termination clauses - The plaintiffs brought an action, seeking specific performance of an agreement to purchase a condominium - The defendant developer claimed that the agreement was validly terminated in accordance with clause 18 - Construction delays and increases in trade subcontractor prices caused financing for the project to be withdrawn - The result was that an unreasonable delay in completion was foreseeable - This justified its decision to terminate under clause 18, as it was "unable to substantially complete the Unit for occupancy within a reasonable time after the designated Closing Date" - The plaintiffs asserted that the inability due to financing considerations did not justify termination under clause 18 - The plaintiffs characterized clause 18 as a force majeure clause - The Alberta Court of Queen's Bench dismissed the action - The wording of clause 18 was markedly different from the force majeure clauses - The only similarity was that it was dealing with an inability to complete construction by a designated date that was not caused by a lack of diligence on the part of the defendant - The major difference between clause 18 and a force majeure clause was that clause 18 did not concern unanticipated or unforeseen events, but rather the risk of construction delays - Clause 18 also lacked the typical list of circumstances excusing performance, such as acts of God, weather, accidents and unrest - There was nothing in the language of clause 18 that suggested it would not extend to construction delays due to financial difficulties, if those difficulties were significant enough that the defendant was unable to complete construction within a reasonable time after the designated closing date - See paragraphs 52 to 79.

Real Property - Topic 8820

Condominiums - Purchase and sale agreements - Specific performance - The plaintiffs brought an action, seeking specific performance of an agreement to purchase a condominium - The defendant developer claimed that the agreement was terminated according to its terms when the condominium could not be completed by the contract date or within a reasonable time afterwards in light of the withdrawal of financing - The Alberta Court of Queen's Bench dismissed the action - The defendant validly terminated the agreement - Alternatively, the court would have denied specific performance and ordered damages - The agreement was a commercial contract, lacking the personal aspects of a contract of personal service - There was nothing in the evidence suggesting that any action of the defendant would have made it difficult for the plaintiffs to purchase another unit or even to purchase the unit itself and maintain their right to seek damages for the difference in price - The plaintiffs should have dealt with the defendant - The fact that there were substitute properties available undermined the legitimacy of the claim to specific performance - In order to justify inaction, a plaintiff had to have a "substantial justification" or a "substantial and legitimate interest" in specific performance - The modern reality was that "[r]esidential, business and industrial properties are all mass produced much in the same way as other consumer products" - This was certainly the case when it came to multiple units within the same condominium development - The plaintiffs had opportunities to obtain a substitute property and to mitigate their damages which they did not pursue - Their inaction was not reasonable behaviour in the circumstances - See paragraphs 82 to 101.

Real Property - Topic 8820

Condominiums - Purchase and sale agreements - Specific performance - The plaintiffs brought an action, seeking specific performance of an agreement to purchase a condominium - The defendant developer claimed that the agreement was terminated according to its terms when the condominium could not be completed by the contract date or within a reasonable time afterwards in light of the withdrawal of financing - The Alberta Court of Queen's Bench dismissed the action - The defendant validly terminated the agreement - Alternatively, the court would have denied specific performance on the equitable ground of hardship to third parties - The unit had been sold to the Wrights who dedicated a considerable amount of money, time and effort to making improvements to the unit - If the plaintiffs were to obtain specific performance as relief, they would receive a unit fundamentally different than what they contracted for and a significant windfall at the expense of the innocent Wrights - See paragraphs 102 to 104.

Cases Noticed:

Shaw GMC Pontiac Hummer Ltd. v. Polaris Explorer Ltd. - see Galichowski v. Shaw GMC Pontiac Buick Hummer Ltd. et al.

Galichowski v. Shaw GMC Pontiac Buick Hummer Ltd. et al. (2009), 469 A.R. 156; 470 W.A.C. 156; 2009 ABCA 390, refd to. [para. 42].

Scanlon v. Castlepoint Development Corp. et al. (1992), 59 O.A.C. 191; 11 O.R.(3d) 744; 99 D.L.R.(4th) 153 (C.A.), refd to. [para. 43].

Meyer v. Partec Lavalin Inc. et al. (2001), 281 A.R. 339; 248 W.A.C. 339; 2001 ABCA 145, refd to. [para. 49].

Cull et al. v. Heritage Mills Development Ltd. et al. (1974), 5 O.R.(2d) 102; 49 D.L.R.(3d) 521 (Ont. H.C.J.), refd to. [para. 56].

Laflamme v. Prudential-Bache Commodities Canada Ltd. - see Placements Armand Laflamme Inc. v. Roy et al.

Placements Armand Laflamme Inc. v. Roy et al., [2000] 1 S.C.R. 638; 253 N.R. 155; 2000 SCC 26, refd to. [para. 56].

Kokesch v. Kokesch, 2005 ABQB 611, refd to. [para. 56].

Justein v. 3900 Young Street Limited (1983), 29 R.P.R. 80, refd to. [para. 58].

Haqq v. Steininger (c.o.b. Quality Homes Construction), [1975] B.C.J. No. 703 (S.C.), refd to. [para. 58].

Faulkner v. Challenge Homes Ltd, [1976] A.J. No. 128 (Dist. Ct.), refd to. [para. 58].

Carter v. Leahey (1994), 134 N.S.R.(2d) 93; 383 A.P.R. 93 (S.C.), refd to. [para. 58].

Afonso Construction Ltd. v. Wang, [1996] A.J. No 1361 (Q.B.), refd to. [para. 58].

Atlantic Paper Stock Ltd. et al. v. St. Anne-Nackawic Pulp and Paper Co. et al., [1976] 1 S.C.R. 580; 4 N.R. 539; 10 N.B.R.(2d) 513; 4 A.P.R. 513, refd to. [para. 66].

Wal-Mart Canada Corp. et al. v. Gerard Developments Ltd., [2010] A.R. Uned. 224; 2010 ABCA 149, refd to. [para. 66].

Domtar Inc. v. Univar Canada Ltd., [2011] B.C.T.C. Uned. 1776; 2011 BCSC 1776, refd to. [para. 69].

Jones (Tom) & Sons Ltd. v. Ontario (1981), 31 O.R.(2d) 649; 119 D.L.R.(3d) 684 (H.C.), refd to. [para. 71].

Tandrin Aviation Holdings Ltd. v Aero Toy Store LLC, [2010] EWHC 40 (Comm.), refd to. [para. 73].

Schneeberg v. Talon International Development Inc. (2011), 285 O.A.C. 287; 2011 ONCA 687, refd to. [para. 75].

Marathon Canada Ltd. v. Enron Canada Corp. (2009), 448 A.R. 245; 447 W.A.C. 245; 2009 ABCA 31, refd to. [para. 78].

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415; 197 N.R. 379; 91 O.A.C. 379; 136 D.L.R.(4th) 1, refd to. [para. 82].

1244034 Alberta Ltd. v. Walton International Group Inc. et al. (2007), 422 A.R. 189; 415 W.A.C. 189; 2007 CarswellAlta 1562; 2007 ABCA 372, leave to appeal denied (2008), 387 N.R. 383 (S.C.C.), refd to. [para. 83].

Neher v. Marathon Homes Inc. (2011), 509 A.R. 295; 2011 ABQB 92, refd to. [para. 83].

1534818 Alberta Ltd. v. Tissot Management Ltd. (2011), 514 A.R. 210; 2011 ABQB 75, refd to. [para. 84].

Southcott Estates Inc. v. Toronto Catholic District School Board, [2012] 2 S.C.R. 675; 435 N.R. 41; 296 O.A.C. 41; 2012 SCC 51, refd to. [para. 91].

Asamera Oil Corp. v. Sea Oil and General Corp. - see Baud Corp., N.V. v. Brook.

Baud Corp., N.V. v. Brook, [1979] 1 S.C.R. 633; 23 N.R. 181; 12 A.R. 271, refd to. [para. 93].

Pathak v. Jannock Steel Fabricating Co. et al., [1996] 8 W.W.R. 355; 186 A.R. 277 (Q.B.), refd to. [para. 98].

2438667 Manitoba Ltd. et al. v. Husky Oil Ltd. et al., [2007] 9 W.W.R. 642; 214 Man.R.(2d) 257; 395 W.A.C. 257; 2007 MBCA 77, refd to. [para. 98].

Globex Foreign Exchange Corp. v. Kelcher et al. (2011), 513 A.R. 101; 530 W.A.C. 101; 337 D.L.R.(4th) 207; 2011 ABCA 240, refd to. [para. 98].

Mitz v. Wisemen, [1972] 1 O.R. 189; 22 D.L.R.(3d) 513 (H.C.), refd to. [para. 103].

Babcock v. Carr et al.; Babcock v. Archibald et al. (1981), 34 O.R.(2d) 65; 127 D.L.R.(3d) 77 (H.C.), refd to. [para. 103].

Authors and Works Noticed:

Beale, H.G., Ed., Chitty on Contracts (29th Ed. 2004), vol. 1, General Principles, § 14.137 [para. 65]; § 14.138, §14.146 [para. 67]; § 22.047 [para. 78].

Di Castri, Law of Vendor and Purchaser (3rd Ed. 2010), vol. 2, looseleaf, § 789 [para. 102].

McGregor on Damages (18th Ed. 2009), § 7-053 [para. 97].

Waddams, S.M., The Law of Damages (2011), looseleaf, p. 15-11-12, § 15.210 [para. 98].

Counsel:

Roger C. Stephens (Simons & Stephens), for the plaintiffs;

Todd A. Shipley (Reynolds, Mirth, Richards & Farmer LLP), for the defendant.

This action and counterclaim were heard between June 18 and August 9, 2012, by Ross, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on November 20, 2012.