Do, All Building Maintenance Ltd. Plaintiff - v. -, 2011 ABQB 451

Court of Queen ’ s Bench of Alberta Citation: Do, All Building Maintenance Ltd. v. 393660 Alberta Ltd., 2011 ABQB 451 Date: 20110708 Docket: 0903 20329 Registry: Edmonton Between: Do, All Building Maintenance Ltd. Plaintiff - and - 393660 Alberta Ltd. Operating as Trailway Motel Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R.

Paul Belzil _______________________________________________________ The Application [ 1 ] The Defendant has filed a Notice of Motion seeking an order discharging a Caveat and Certificate of Lis Pendens filed by the Plaintiff on land which it owns. Facts [ 2 ] At all times material, the Defendant owned land in the City of Edmonton on which is located the Trailway Motel. [ 3 ] On September 4, 2009 the parties entered into an agreement whereby the Plaintiff offered to purchase the land. The closing date was stipulated to be December 15, 2009 with all conditions to be removed by November 30, 2009.

Paragraph 7.1 contains a time clause which reads as follows:

7.1 All time periods, deadlines and dates in this Contract shall be strictly followed and enforced. All times will be Alberta time unless otherwise stated. [ 4 ] On November 20, 2009 the then solicitor for the Plaintiff wrote to the then solicitor retained by the Defendant requesting an extension of the closing date. No response was received to this letter. [ 5 ] On November 26, 2009 the solicitor for the Plaintiff again wrote to the solicitor for the Defendant advising that the Plaintiff had made arrangements for financing but that funds would not be available until mid-February 2010.

No response was received from the Defendant’s solicitor to this correspondence. [ 6 ] On November 30, 2009 the Plaintiff’s lawyer faxed a letter to the lawyer for the Defendant, the body of which reads as follows: My client has instructed that we remove the financing condition provided the following condition precedents to closing are agreed upon: 1. Provision of a Business Licence from the City of Edmonton; 2.

Entering into a new form of purchase agreement with appropriate representations and warranties for a purchase of an ongoing business of this nature and a closing date no sooner than March 15, 2010 with a complete chattel list; and 3. Completion of due diligence regarding the property and business.

I look forward to receipt of your acceptance of the foregoing by return. [ 7 ] No response was received to this correspondence. [ 8 ] On December 4, 2009 the then solicitor for the Defendant forwarded a letter to the solicitor for the Plaintiff, the body of which reads as follows: Further to your request and our discussions with Mr. Jessa, our client does not agree to the extension and conditions requested by your client. Accordingly this transaction is hereby cancelled.

We trust the foregoing to be satisfactory and remain. [ 9 ] There is no evidence that at any time the Defendant agreed to change the closing date for the transaction. [ 10 ] On December 15, 2009 the Plaintiff did not tender the purchase price and no evidence has been adduced that it ever communicated that it was ready, willing and able to do so. [ 11 ] Moreover, there is no evidence that the Plaintiff, prior to December 15, 2009, ever received a commitment for funding of the purchase from any lender.

The Plaintiff did seek funding through Stirling Bridge Group of New York but no commitment for funding was ever provided.

[12] On December 3, 2009 Stirling Bridge Group forwarded a letter to Parmjit Safri and Ranjit Safri, who are officers of thePlaintiff, wherein an initial offer to fund the purchase was made but the letter contains the following statement: Please find below Stirling Bridge Group’s (henceforth “SBG”) initial offer to fund the project as outlined under

Section 2. Thisagreement should not be misinterpreted as a commitment to fund this transaction; the Commitment will follow upon the return ofthis agreement with all provisions executed. (emphasis added) [13] On December 22, 2009 the Plaintiff filed a Statement of Claim seeking an order for specific performance or in the alternative,damages. Discussion [14] In Main v. Jeerh 2006 ABCA 138 the Alberta Court of Appeal at paras. 16 to 18 confirmed that a caveat may only bemaintained if the caveator can show a prima facie claim to an interest in land. [15] In 1244034 Alberta Ltd. v.

Walton International Group Inc. 2007 ABCA 372 the Alberta Court of Appeal held at para. 17that a caveat will be discharged in circumstances wherein damages would be an adequate remedy: 17 Alberta law is well settled that on an application to discharge a caveat based on an agreement for the purchase and sale of land, afinding that damages would be an adequate remedy is sufficient to discharge the caveat. The determination of the chambers judge wasthus correct in law and is supported by sound policy considerations.

Once it has been determined that damages are an adequate remedy,there is no "interest in land" capable of protection by caveat. With no interest in the land required to be protected, there is no basis to tieup development of the land pending resolution of the litigation. See 410675 Alberta Ltd. v. Trail South Developments Inc., supra, atparas. 54-57; Acquest/Alberta Mining Inc. v. Barry Developments Inc., [1999] A.J. No. 784, 1999 ABQB 511 at para. 74; MarloEquities Ltd. v. Cline, [1998] A.J. No. 721, 1998 ABQB 582 at paras. 24-25; Corse v. Ravenwood Homes Ltd., [1998] A.J.

No. 509,1998 ABQB 380 at para. 30 and McMurray Imperial Enterprises Ltd. v. Brimstone Acquisitions & Asset Management Inc., [1997]A.J. No. 985 at paras. 33-40. [16] The issue then becomes whether the Plaintiff can show prima facie that it will succeed in its claim for specific performance? [17] In Digger Excavating

(1983) Ltd. v. Bowlen 2001 ABCA 214 the Alberta Court of Appeal at para. 13 made the followingobservation respecting the availability of specific performance: Specific Performance 13 Generally speaking, the party seeking specific performance must be in a position to show that it was ready, willing and able toperform the agreement. (See 364021 Alberta Ltd. v. 361738 Alberta Ltd., 1994 ABCA 89 , [1994] 6 W.W.R. 72 (Alta.

C.A.)).Here, the purchasers neither tendered the payment due on the closing date nor demonstrated that they were willing and able to do so.Instead, they ask the Court to grant relief against this failure to perform. [18] At paras. 15 to 17 the court observed that generally speaking a court of equity will not intervene if the parties have agreed thattime is of the essence. [19] There is no evidence that the Defendant ever waived the time clause in the Conditional Purchase Agreement and indeed theletter of December 4, 2009 referred to above makes it clear that waiver was not being contemplated by the Defendant.

[ 20 ] Counsel for the Plaintiff submits that the Defendant failed to agree to waive any claims against the City of Edmonton which had revoked the Defendant’s business licence to operate the motel. [ 21 ] Even if this is true, this could not overcome the failure by the Plaintiff to either tender the purchase on closing or at a minimum communicate that it was ready, willing and able to close the transaction in accordance with the signed agreement. [ 22 ] The Defendant was under no obligation to amend the previously agreed upon closing date and, in fact, never did so. [ 23 ] Accordingly, in order to maintain an action for specific performance the Plaintiff had to tender the purchase funds on the previously agreed upon closing date of December 15, 2009 or demonstrate that it was ready, willing and able to do so. [ 24 ] The fact that the Plaintiff’s then solicitor was requesting an amendment to the closing date is compelling evidence that the Plaintiff was not ready, willing and able to complete the transaction on December 15, 2009. [ 25 ] The Plaintiff cannot succeed in an action for specific performance but, is at liberty to pursue its claim for damages.

The Defendant agrees that the Plaintiff is entitled to a return of its deposit. [ 26 ] In the result, the Plaintiff cannot demonstrate prima facie that it has an interest in the subject land and accordingly, the Defendant is entitled to an order discharging the Caveat and Certificate of Lis Pendens from the title. The Defendant is entitled to costs of this application. Heard on the 5 th day of July, 2011. Dated at the City of Edmonton, Alberta this 8 th day of July, 2011. R. Paul Belzil J.C.Q.B.A. Appearances: Michael A. Kirk Witten LLP for the Plaintiff Murray L. Engelking

Engelking Wood for the Defendant