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SALE OF LAND - Agreement of purchase and sale - Breach of - Express term

Wednesday, January 22, 2020 @ 6:17 AM  

Lexis Advance® Quicklaw®
Application by the defendant vendor for summary judgment for the forfeiture of the deposit paid by the purchaser. The vendor agreed to purchase a hotel from the plaintiff purchaser. The deal fell through when the purchaser did not advance the remainder of the necessary funds to complete on the date of closing and took the position that the vendor was in breach of the contract for failure to provide a stage 2 environmental assessment report. Although the purchaser originally sought to extend the closing date until a stage 2 environmental report could be provided, the vendor terminated the contract and sought forfeiture of the deposit. The vendor argued the purchaser repudiated and fundamentally breached the contract, and it was lawfully entitled to exercise its option to terminate the contract and retain the non-refundable deposit. The purchaser argued that its inability to tender the purchase price was caused by the vendor’s failure to deliver environmental reports and that the vendor thereby breached the contract.

HELD: Application dismissed. The purchaser was entitled to a return of the deposit. The vendor was not ready, willing and able to close because he failed to provide the stage 2 environmental report and this obligation was not waived by subsequent events or the Addendum. The clear words in the contract indicated that the vendor was under an obligation to provide a copy of a stage 2 environmental report for the subject property. The fact that the vendor did not have one did not relieve the vendor from providing one, absent the consent of the parties. The fact that the vendor communicated that it did not have environmental reports and the purchaser said it would get its own, did not amount to a waiver but, at most, was a mere act of indulgence. The effect of the vendor’s breach was to render time no longer of the essence as neither the vendor nor the purchaser could complete on the closing date.

1050438 B.C. Ltd. v. Penguin Enterprises Ltd., [2019] B.C.J. No. 2388, British Columbia Supreme Court, M.J. Brundrett J., December 10, 2019. Digest No. TLD-January202020007