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Real Property Law - Sale of land - Agreement of purchase and sale - Conditions and warranties - Completion - Time for - Remedies - Forfeiture of deposit

Thursday, February 16, 2017 @ 7:00 PM  

Appeal by Invecom Associates from a ruling that it forfeited a deposit under an agreement of purchase and sale with the respondent numbered companies. The appellant paid $400,000 to the respondents pursuant to an agreement to purchase three properties. The parties’ agreement contained several conditions of closing in favour of the appellant, one of which was a deadline for waiver of conditions by written notice to the respondents, following which the conditions would be deemed satisfied and waived. An agreement extended the waiver date. On the extended date, the appellant sent the respondents a draft amendment and extension agreement proposing a further 15-day extension. The respondents indicated through their real estate agent that they would not agree to a straight extension. The appellant took the position that the deal was at an end and the transaction failed to complete. The respondents took the position they were entitled to retain the appellant’s deposit and litigation ensued. An application judge found the appellant in default of the parties’ agreement and declared the deposit and accrued interest forfeited to the respondents. Invecom appealed.

HELD: Appeal dismissed. The application judge did not err in interpreting the appellant’s draft amendment and extension agreement as an offer to extend that failed to fulfill the notice requirements within the waiver condition. Nothing in the agreement or related correspondence exhibited intent the draft agreement would serve as written notice. As the draft agreement’s recitals stated, it constituted a request to extend the condition and closing dates. The application judge did not err declining to find the respondents’ refusal to respond to the offer as a breach of its good faith obligations. These were sophisticated parties. The respondents were entitled to rely on their rights under the purchase and sale agreement. There was no error in the conclusion the appellant’s deposit was forfeited to the respondents.