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SALE OF LAND - Agreement of purchase and sale - Validity - Deficiency in formality

Wednesday, December 11, 2019 @ 8:40 AM  


Lexis Advance® Quicklaw®
Appeal by the plaintiffs from refusal of a claim for specific performance of a contract to purchase a residential property. In April 2017, one plaintiff offered to purchase the defendants' residential property for $1.1 million with a $50,000 deposit and completion date of June 2017. The defendants accepted the offer on the same day it was made. The parties' contract included a term that permitted the buyer to assign the contract to any third party without further notice to the vendor. The plaintiff subsequently verbally assigned the purchase agreement in part to his wife and father, also plaintiffs in the proceeding. The paperwork was forwarded to the defendants' solicitor one week prior to closing. On the closing date, the plaintiffs were ready to proceed. The defendants refused to execute the transaction documents. The plaintiffs sued for specific performance of the purchase agreement. The defendants took the position that the partial assignment of the purchase interest in the agreement was not in writing and was therefore ineffective under the Law and Equity Act. The trial judge accepted the defendants' position and dismissed the claim. The plaintiffs appealed.

HELD: Appeal allowed. The trial judge erred in concluding that the purchase agreement could not be enforced against the defendants. The partial assignment of the right to purchase as between the plaintiffs was an equitable assignment, valid as between assignor and assignees, despite being oral rather than written. It was not necessary that the equitable assignment be formally identified as such to the defendants to be effective. The trial judge erred in conflating the validity and enforceability of the assignments with the enforceability of the contract of purchase and sale. In light of the terms of the purchase agreement, the defendants were obligated to transfer title to the original plaintiff purchaser and his assignees when the purchase price was tendered. The provisions of the Law and Equity Act did not override the expectations of the parties expressed in their agreement. No technical deficiency arose from the assignor and assignees proceeding as co-plaintiff. The evidence supported the remedy sought by the plaintiffs. Specific performance was granted accordingly.

Guraya v. Kaila, [2019] B.C.J. No. 2014, British Columbia Court of Appeal, S.D. Frankel, G.J. Fitch and J.J.L. Hunter JJ.A., October 25, 2019. Digest No. TLD-December92019008