Vallieres et al. v. Vozniak, 2014 ABCA 290

• Judge: Slatter, O'Ferrall and Veldhuis, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: September 12, 2014
• Citations: 2014 ABCA 290;(2014), 580 A.R. 326

Vallieres v. Vozniak (2014), 580 A.R. 326; 620 W.A.C. 326 (CA)

MLB headnote and full text

Temp. Cite: [2014] A.R. TBEd. SE.058

Real Vallieres and Suzanne Weller (appellants/plaintiffs) v. Charlie R. Vozniak also known as Chuck Vozniak (respondent/defendant)

(1301-0255-AC; 2014 ABCA 290)

Indexed As: Vallieres et al. v. Vozniak

Alberta Court of Appeal

Slatter, O'Ferrall and Veldhuis, JJ.A.

September 12, 2014.

Summary:

The defendant agreed to purchase the plaintiffs' residential property. The purchase contract covenanted title free and clear of all encumbrances except for non-financial obligations on title, such as easements, utility right-of-ways, covenants and conditions that were normally registered against title and did not affect the property's saleability (i.e., permitted encumbrance). The property was subject to a restrictive covenant requiring a 20 foot set back for all buildings. The plaintiffs' garage encroached on the 20 foot set back. The defendant refused to close on the ground that the restrictive covenant was not a "permitted encumbrance". The plaintiffs sued for damages for the failed sale. The defendant counterclaimed for a return of his deposit.

The Alberta Court of Queen's Bench, in a judgment reported [2013] A.R. Uned. 341, dismissed the action and allowed the counterclaim. The plaintiffs appealed.

The Alberta Court of Appeal allowed the appeal, set aside the trial judgment, and awarded damages to the plaintiffs.

Contracts - Topic 1130

Formation of contract - Form - Standard form contracts - General - [See Practice - Topic 8808 ].

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge (incl. contractual interpretation) - At issue was whether a trial judge erred in law in interpreting a standard form real estate purchase and sale contract used by the Alberta Real Estate Association - The Alberta Court of Appeal stated that "The findings of fact in the decision presently under appeal are entitled to deference. In this case, the appropriate standard of review on the interpretation of the contract is correctness. It is a 'standard form' contract developed by the Alberta Real Estate Association. It is used continuously by vendors, purchasers, and realtors in Alberta. Its interpretation is of general importance beyond this dispute, any decision on its proper interpretation has great precedential value, and the primary objective should be certainty. It is untenable for this contract to be given one interpretation by one trial judge, and another by a different one. The standard of review analysis in Housen does not anticipate or require that kind of uncertainty or variability. Attempting to inject the circumstances surrounding the formation of the contract into the analysis, or any attempt to identify the intention of the parties, is nothing but a legal fiction. These parties were content to adopt the standard form agreement prepared by the Association, and essentially it is the intention of the committee that drafted it that prevails." - See paragraph 13.

Sale of Land - Topic 946

The contract - Conditions and warranties - What constitutes a warranty - [See Sale of Land - Topic 1467.1 ].

Sale of Land - Topic 1467.1

The contract - Form and contents of agreement or memorandum - Encumbrances - Encumbrances affecting saleability - Clause 1.5(b) of a standard form contract for the purchase of a residential property provided for title free and clear of all encumbrances except for non-financial obligations on title, such as easements, utility right-of-ways, covenants and conditions that were normally registered against title and did not affect the property's saleability (i.e., permitted encumbrance) - The property was subject to a restrictive covenant requiring a 20 foot set back for all buildings - The vendors' garage was only 10 feet from the property line - The purchaser refused to close - The trial judge held that the restrictive covenant was not a "permitted encumbrance", as it affected the "saleability" of the property, which entitled the purchaser to repudiate the contract - The Alberta Court of Appeal allowed the appeal - Clause 1.5(b) only applied to the registration of the encumbrance, not whether it was in good standing - The court stated that the purchase contract permitted the registration of the set back restrictive covenant - There was no representation or warranty that the covenant had been complied with - The purchaser was not permitted to repudiate - The court also held that noncompliance with the 20 foot set back did not affect "saleability", because it would not affect the marketability of the property to a reasonable and informed purchaser - All 186 homes in the subdivision were subject to the covenant - The garage had been there for 12 years without complaint - Given the ultimate 10 year limitation period, the prospect of anyone now challenging the location of the garage was remote and success would be speculative - The court held that "even if clause 1.5(b) does cover breaches of permitted encumbrances, the conclusion of the trial judge that the encroachment on the setback affected saleability of the property was unreasonable, and reflects reviewable error" - See paragraphs 25 to 43.

Sale of Land - Topic 3444

Contract - Discharge - Repudiation - By buyer - When available (incl. fundamental breach) - [See Sale of Land - Topic 1467.1 ].

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 11].

Creston Moly Corp. v. Sattva Capital Corp. (2014), 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 12].

White Resource Management Ltd. v. Durish, [1995] 1 S.C.R. 633; 178 N.R. 321; 165 A.R. 20; 89 W.A.C. 20, refd to. [para. 21].

Potts et al. v. McCann (2002), 325 A.R. 137; 2002 ABQB 734, refd to. [para. 23].

Furano v. Montgomery et al. (2006), 398 A.R. 391; 2006 ABQB 230, refd to. [para. 23].

Champion v. Smith et al., [2014] A.R. Uned. 101; 2014 ABQB 48 (Master), refd to. [para. 23].

Jukes v. 1735560 Alberta Ltd., [2014] A.R. TBEd. MR.071; 96 Alta. L.R.(5th) 30; 2014 ABQB 131, refd to. [para. 23].

Friio v. Simmons, [2009] A.R. Uned. 699; 2009 ABPC 250, refd to. [para. 29].

McAleer v. Desjardine, [1948] 4 D.L.R. 40; [1948] O.R. 557 (C.A.), refd to. [para. 33].

Hamilton v. Julien, 1983 CarswellBC 886, refd to. [para. 34].

Allard v. Shaw Communications Inc. et al. (2010), 493 A.R. 182; 502 W.A.C. 182; 2010 ABCA 316, refd to. [para. 40].

Lim v. Titov (1997), 208 A.R. 338; 56 Alta. L.R.(3d) 174 (Q.B.), refd to. [para. 40].

Durell v. Pritchard, [1866] 1 Ch. 244, refd to. [para. 40].

Haggerty v. Latreille (1913), 29 O.L.R. 300; 14 D.L.R. 352 (C.A.), refd to. [para. 40].

Ruxley Electronics and Construction Ltd. v. Forsyth, [1996] A.C. 344, refd to. [para. 40].

Counsel:

J.G. Oppenheim and B. Randhawa (student-at-law), for the appellant;

N.D. Anderson and C. Jones, for the respondent.

This appeal was heard on May 7, 2014, before Slatter, O'Ferrall and Veldhuis, JJ.A., of the Alberta Court of Appeal.

On September 12, 2014, the following memorandum of judgment was filed by the Court.