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SALE OF LAND - Agreement of purchase and sale - Repudiation

Wednesday, December 09, 2020 @ 6:19 AM  

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Appeal by the defendant from a judgment finding the plaintiff did not repudiate the parties’ assignment and purchase agreement. In 2013, the defendant contracted to purchase a condominium unit that had yet to be built. He paid deposits totalling $47,485. The purchase contract was assignable with the builder’s consent. In 2016, the plaintiff contracted with the defendant to obtain an assignment of his rights to acquire and own the condominium in exchange for payment of the deposit amount plus an additional fee of $45,000. If the builder consented to the assignment, the defendant would complete the purchase. If the builder did not consent, the plaintiff would supply the funds required to close the purchase and the defendant would convey the condominium within seven days of obtaining title. Communications between the parties broke down. The plaintiff subsequently learned that the defendant had acquired title. She commenced an action seeking return of monies paid at the time of the first assignment and an order for determination of damages. The defendant took the position the plaintiff’s brother advised she was unable to obtain financing. The defendant counterclaimed, seeking an order that the plaintiff’s deposit was forfeited plus damages for breach of contract. The trial judge found the defendant was not entitled to conclude the plaintiff was repudiating her obligation to make payments under the assignment agreement and declined to order forfeiture. The defendant appealed.

HELD: Appeal allowed. The trial judge erred in concluding the plaintiff had not repudiated the agreement. It was not open to the judge to consider post-breach facts, such as the subsequent extension of the closing date by the vendor. There was a clear and unequivocal communication that the plaintiff lacked the ability to obtain financing and the funds to complete the purchase. This would deprive the defendant of substantially the whole benefit of the agreement. The communication occurred when the parties expected the transaction to close reasonably imminently. No other financing options were voiced. The trial judge did not assess whether the defendant communicated acceptance of the repudiation to the plaintiff, and the record was insufficient to make that determination. The matter was remitted for a new trial.

Kaur v. Bajwa, [2020] B.C.J. No. 1779, British Columbia Court of Appeal, R. Goepel, J.J.L. Hunter and P.G. Voith JJ.A., November 9, 2020. Digest No. TLD-December72020006