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SALE OF LAND - Express repudiation - By vendor - Specific performance

Wednesday, June 17, 2020 @ 6:20 AM  

Lexis Advance® Quicklaw®
Appeal by the vendors from trial judgment granting the purchasers specific performance of an agreement of purchase and sale. The parties signed a Limited Dual Agency Agreement, appointing H as agent for each of them in respect of the purchase and sale of the property and signed an agreement of purchase and sale. Subsequently, the vendors advised that they no longer wanted to sell the property. They refused to provide access to the property for a mortgage appraisal. The purchasers wanted to proceed with the purchase. They provided the deposit on the date stipulated in the agreement but named the real estate brokerage incorrectly. H agreed to let them correct the mistake the next day. The vendors purported to terminate the sales agreement for failure by the purchasers to pay the deposit on the correct date. The closing documents were never executed by the vendors. The purchasers’ solicitor did not have the full amount of the purchase funds in his trust account on the intended closing date. The trial judge held that as a dual agent, H had the actual or ostensible authority of the vendors to waive or alter the date by which the deposit had to be paid. The trial judge thus held that the purchasers did not deliver the deposit late and were not in breach of the contract. The trial judge concluded that since the reason the purchasers could not complete was the refusal of the vendors to allow access to the appraiser, it was not open to the vendors to defeat the claim for specific performance on that account. The judge concluded that the purchasers were not ready, willing, and able to complete on the completion date but their inability to complete was due solely to the conduct of the vendors who could not rely upon their own breach and repudiation of the contract to defeat the purchasers’ right to specific performance.

HELD: Appeal dismissed. The vendors could not rely on the time of the essence clause to argue that the deposit was not paid on time. Before the date for payment of the deposit, the vendors had already repudiated the contract and were not ready, desirous, prompt and eager to carry out the agreement. They were thus not entitled to rely on strict compliance with the time provisions in the contract. The clerical error in the name of the payee on the first bank draft did not constitute a failure to pay the deposit as required by the contract in circumstances where the time of the essence clause could not be relied upon by the party asserting non-compliance. The presentation of the bank draft combined with the presentation of the corrected draft the next day amounted to reasonable compliance with the contractual requirements. Payment of the deposit had the effect of rejecting the repudiation and affirming the contract, putting the purchasers in the position to seek specific performance of the agreement. The trial judge was correct to conclude that the purchasers were not disentitled from obtaining specific performance by the fact that they were not ready to close on closing date, because the vendors were in default of their obligations on that date. The contract subsisted, and the purchasers were entitled to set down a date for completion of the agreement.

Toor v. Dhillon, [2020] B.C.J. No. 792, British Columbia Court of Appeal, P.M. Willcock, L.A. Fenlon and J.J.L. Hunter JJ.A., May 13, 2020. Digest No. TLD-June152020005