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CIVIL PROCEDURE - Settlements - Offers - Acceptance - Enforceability

Tuesday, January 19, 2021 @ 6:11 AM  

Appeal by the defendants from the trial judgment in an action for breach of contract. The parties were partners in a joint venture. They purchased a business condominium and developed it. Part of the property was leased, and the rental payments went into the joint bank account used by the partnership. The appellants began to deposit rent payments from the condominium property tenants into their personal bank accounts rather than the partnership joint account after a dispute regarding signing authority for the joint account. The respondents commenced an action against the appellants for damages alleging they wrongfully paid themselves monies that neither were entitled to. During the action, counsel for the appellants made an offer that the corporate respondent purchase the corporate appellant’s interest in the property for $315,225. When the respondents accepted, the appellants claimed their counsel’s e-mail was not a settlement offer but was for discussion purposes only. When the appellants refused to sign the transfer, the respondents commenced an action for breach of contract. The condominium property was then sold by court order. The trial judge rejected the appellants’ argument that the e-mail was only a starting point for discussion and that the price of $315,225 was for raw, undeveloped land. She found the e-mail was structured in a buy and sell, shotgun manner and awarded the respondents damages for the ultimate sale price of $1,003,280 less the e-mail offer of $315,225. She also awarded damages for lost rental revenue. The appellants argued there was no binding agreement because there was no agreement on the price adjustment date for rents, closing date and possession date.

HELD: Appeal dismissed. The trial judge did not err in law in finding that there was a binding contract to transfer the appellant Roswell’s interest in the condominium property. The e-mail was prepared and sent in the context of the first action by the counsel for one co-owner to the counsel of the other co-owner.  It was described to be an offer both in its subject line and in the body of the e-mail itself. There was certainty of parties and the subject matter. The trial judge’s holding that neither the closing date nor possession date were essential terms given the rather particular nature of this contract represented no error. This was not an arm’s length transaction between third parties, but an offer extended by the appellants in the context of the existing litigation in the first action. The trial judge’s finding that there was a valid offer and acceptance and that all essential terms were present disclosed no basis warranting appellate intervention. There was no error made by the trial judge in not recognizing the closing costs to sell the condominium property in assessing damages. The respondents intended to keep the property for the long term and had no plans to sell it. The closing costs were largely incurred because the property had to be sold pursuant to a judicial sale due to the appellants’ refusal to sign the transfer. The judge made no palpable and overriding error in her assessment of damages.

1353141 Alberta Ltd. v. Roswell Group Inc., [2020] A.J. No. 1323, Alberta Court of Appeal, J.D.B. McDonald, F.L. Schutz and J. Strekaf JJ.A., December 4, 2020. Digest No. TLD-January182021004