1042063 Alberta Ltd. v. Donald Da Paoli, 2016 ABQB 436

Court of Queen’s Bench of Alberta Citation: 1042063 Alberta Ltd. v McLean, 2016 ABQB 436 Date: 20160808 Docket: 1312000170 Registry: Wetaskiwin Between: 1042063 Alberta Ltd. and Donald Da Paoli Applicants/Defendants - and - Robert S. McLean, and Robert S. McLean and Dan McLean operating under the name and style of Bar A Storage Respondents/Plaintiffs _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice J.W. Hopkins _______________________________________________________ [ 1 ] This is an application for

summary judgment by the Defendants seeking to dismiss the Plaintiffs’ claim. At the outset, the action insofar as the individual Defendant, Donald Da Paoli [1] , is concerned is hereby dismissed as the Plaintiffs concede that there is no cause of action against the individual Defendant.

For ease of reference, I will use the term Defendant generically to also refer to Donald Da Paoli acting in his capacity as agent for the corporate Defendant. [ 2 ] The Plaintiffs have commenced an action in contract against Defendant, 1042063 Alberta Ltd., alleging that they have entered into an enforceable option to purchase agreement for the purchase of a parcel of land for commercial purposes. [ 3 ] The Defendant moves for

summary judgment under Rule 7.3 of the Alberta Rules of Court , AR 124/2010, as amended, on the basis that there is “no merit” to the claim. Relying on

section 4 of the Statute of Frauds , 1677 (29 Cha. 2), c. 3 (the Statute ), the Defendant argues there is no enforceable option agreement and that this is a complete defence. Facts [ 4 ] The Defendant, 1042063 Alberta Ltd., was the registered owner of the subject property, namely Plan 0712752 Block 2 Lot 1

(hereinafter referred to as “the property”). [ 5 ] The Plaintiff was interested in purchasing the property giving rise to an email dated June 24, 2012 sent by the Plaintiff Robert McLean to the Defendant discussing the terms of purchasing of the property. Initially, the proposal was to pay $1 million for the property with a $10,000 non-refundable deposit and $4,000 per month referred to as interest over a two year term and indicated the Defendant was to carry all the paper.

This was a two page proposal termed an Agreement for Sale; Option Proposal. [ 6 ] The Defendant responded by email June 26, 2012 saying the proposal is an option. [ 7 ] The Defendant responded by email again June 29, 2012 requesting more information. [ 8 ] On August 1, 2012, the Plaintiff Robert McLean forwarded to the Defendant by email a document titled Offer to Purchase setting out terms including: • The purchase of Block 1 Plan 112173 SW Quarter of

Section 17 Township 20, Range 2, W 5th for a price of $1 million dollars; • A $10,000 non-refundable deposit at the closing; • Two years to pay the $1 million purchase price; $4,000 per month payment until purchase was completed; • The Plaintiff was to be responsible for all utilities, taxes and on-going operational costs until the purchase was completed; • The Plaintiff was entitled to all storage income; • The Plaintiff was entitled to pro-rated pre-payments from existing tenants; • Subject to, among other things, the receipt of permission from the MD of Foothills to construct a modular storage facility; and, • Offer was open for review and acceptance until August 8, 2012 and possession was to be completed by August 15, 2012. [ 9 ] The Offer to Purchase was not signed by the Plaintiff. [ 10 ] The email including the aforementioned offer dated August 1, 2012 specifically stated that the Plaintiff Robert McLean realized that this was not what the Defendant wanted and that he could not raise the $1 million from the bank, and further set August 9 as a deadline for acceptance of the offer. [ 11 ] The offer was not accepted or responded to by the August 8 or 9, 2012 deadlines. [ 12 ] In response to the August 1, 2012 offer from the Plaintiff Robert McLean, the Defendant by email dated August 10, 2012 set out the main points of an agreement being drawn up by his lawyer, namely: • Lease of $4,000 per month as of September 1 or sooner; • Tenant to pay all expenses in relation to the property e.g. taxes, insurance, power, phone, lawyer, improvements and MD charges, etc.; • Tenant entitled to all income from the property; • Lessee has option to purchase the property for $1 million; • Consideration for the option is $50,000 for one year and can be extended for an additional year for another $50,000; and, • Tenant is responsible to get an amendment to the storage to include modular storage. [ 13 ] The email ends saying that the land owner will cooperate in every way possible. [ 14 ] The Defendant instructed his counsel to draft a Lease Agreement with an Option Agreement

Schedule attached, the draft of which was emailed to the Plaintiff Robert McLean on or about September 14, 2012.

The evidence of the Defendant is that comments in respect to the proposed Lease and Option Agreement were requested but no comments whatsoever were provided by the Plaintiff Robert McLean in regard to the draft Lease Agreement and Option Agreement Schedule, nor was any Agreement signed between the parties. [ 15 ] I note that the Lease Agreement properly described the property in question, whereas it was incorrectly described by the August 1, 2012 offer from the Plaintiff. [ 16 ] The pertinent terms of the draft Option Agreement forwarded on or about September 14, 2012 included: • $15,000 consideration paid by the purchaser to the vendor; • The purchaser would have exclusive option to purchase the subject property for $1 million; • The option may be exercised by the purchaser prior to the earlier of the termination of the lease of the subject property between the vendor and the purchaser prior to 11:59 on August 31, 2013 by notice in writing from the purchaser to the vendor advising the vendor that the purchaser intends to purchase the subject property; • Upon exercising the option, a further $100,000 would be deposited and credited to the account of the purchase price on the closing date; and,

• The option may be extended for a 1-year period upon payment of an additional $50,000. [ 17 ] It is the evidence of the Plaintiffs that the draft

Schedule Option Agreement was executed by the Plaintiff Robert McLean and dated October 1, 2012 with interlineations and deletions in paragraphs 2, 3, and 4(

b) with some of those changes initialled.

Those changes are as follows: • With regard to paragraph 2, titled Term and Exercise, the date that the option was to be exercised, namely August 31, 2013, was crossed out and replaced with “one year from zoning approval from the Foothills MD.” The changes to paragraph 2 were initialled by the Plaintiff Robert McLean; • With regard to paragraph 3, which provided for the extension of the option to August 31, 2014 and required a further payment of $50,000 consideration if extended for a full year, and indicated that if it was not paid the option became null and void, the entire paragraph was crossed out.

This was not initialled by the Plaintiff Robert McLean; and, • With regard to paragraph 4(b), the Plaintiffs hand wrote in their address on the paragraph. This was not initialled by the Plaintiff Robert McLean. [ 18 ] The Option Agreement was purported to be signed and dated October 1, 2012 by the Plaintiff Robert McLean.

The Plaintiffs’ assert that Robert McLean returned the document to the Defendant in October 2012 by facsimile but there is no supporting evidence before this Court of it being sent or received by the Defendant at that time. [ 19 ] There is no evidence that the $15,000 consideration as contemplated by the Option Agreement was tendered or paid by the Plaintiff at the time that the Plaintiff says the agreement was returned. [ 20 ] It is the evidence of the Defendant that the aforesaid agreement with interlineations and deletions was never provided to nor received by the Defendants and the first knowledge that they had of the document when it was provided to the Defendant in response to a Request for Particulars after litigation had commenced. [ 21 ] It is the Defendant’s evidence that in mid-October 2012, a further discussion took place at the home of the Plaintiff Dan McLean wherein the parties discussed approval for the subject property of plans for a container storage facility. [ 22 ] Following the aforementioned discussion, the Plaintiff submitted, on October 24, 2012, on behalf the Defendant an application to the Municipal District of Foothills (the “MD”) for a site specific amendment to allow placement of containers on the property.

The Plaintiffs agreed to act as the Defendant’s agents and paid an $800 application fee. [ 23 ] An MD council meeting was scheduled for March 27, 2013, which the parties attended together.

It is the Defendant’s evidence that throughout the process from August 2012 to April 2013, the Defendant proceeded on the basis that the Plaintiffs were going to buy the property notwithstanding that no agreement of any kind had been entered into. [ 24 ] On April 5, 2013, approval from the MD was obtained regarding the use of storage containers after which time it is the Defendant’s evidence that discussions commenced regarding the purchase of that property.

Furthermore, it is the Defendant’s evidence that the Plaintiff Robert McLean advised the Defendant that they now only wanted to lease the Property and if the Property was to be sold a reduction in price would be necessary. [ 25 ] The Plaintiff Robert McLean asserts that the parties met on May 8, 2013, at which time he states that the Defendant refused to accept payment of the $15,000 deposit and that the Defendant was not willing to proceed with the option to purchase the property. [ 26 ] The Plaintiff Robert McLean’s evidence was that he had a blank cheque with him in his brief case not filled out and that there was money in a bank account sufficient to cover the required amount.

Based on the evidence before the Court, it is clear that a cheque for $15,000 was never tendered at that time. [ 27 ] The evidence before the Court is that on May 7, 2013 the Defendant sent the MD a note written and signed by Donald De Paoli for the Defendant as follows: I, Donald De Paoli, (1042063 Alberta Ltd.), in the event that the McLean’s walk away from the Offer to Purchase, I wish to obtain the approval of first reading bylaw 16-2013 until its expiry (two years from March 27/13). [ 28 ] The Plaintiffs argue this confirms the Defendant had in his mind that the Plaintiffs had made an offer to purchase which the Defendant had accepted.

I disagree with this

interpretation and I read this as an attempt by the Defendant to maintain its ability to proceed with the land use application that had already been commenced. Furthermore, it refers to an offer to purchase, not a lease agreement with an option to purchase or simply to an option to purchase which is the subject of this litigation. These are different contracts. [ 29 ] The Defendant also received a further offer on May 2, 2013 from the Plaintiffs in the name Ā (Bar) Storage to purchase the Property for the sum of $1,300,000 with a May 30, 2013 closing date without deposit. This offer was not signed.

Furthermore, the Defendant was advised by the Plaintiff that the aforementioned offer was conditional on a second offer being entered into and the actual purchase price would be $900,000.00. [ 30 ] The Defendant rejected the May 2, 2013 offer after being advised by counsel that it was likely an attempt to defraud the lender.

I note that on questioning the Plaintiff Robert McLean admitted it was a possibility that he suggested the $900,000 side agreement to the Defendant. [ 31 ] The Plaintiff Robert McLean’s evidence is that in an effort to salvage the deal, on May 6, 2013, a further unsigned offer was provided to the Defendant from the Plaintiffs. Dated May 7, 2013, the document was titled “Offer to Purchase Interim Agreement” and

referenced the following terms: • Total purchase price $1,000,000; • $10,000 deposit with the Plaintiffs’ lawyer; • $40,000 upon removal of conditions; • $650,000 more or less after execution by vendor payable on or before closing; • $300,000 vendor-take back mortgage at 8%; • Financing condition by May 31, 2013; • If no vendor take-back mortgage, the purchase price is reduced to $900,000; • If the vendor take-back mortgage is paid by December 15, 2013 the purchase price is to be reduced to $950,000; and, • Closing date of June 15, 2013. [ 32 ] The evidence of the Defendant is that he took the aforementioned document dated May 7, 2013 to his counsel who hand wrote notes on it and this document was provided to the Plaintiff for review by the Plaintiffs’ counsel. [ 33 ] It is the evidence of the Defendant on May 16, 2013 that he received a phone call from the Plaintiff Dan McLean, and was advised that the Plaintiffs were walking away from the deal.

Furthermore, on May 23, 2013, the Defendant received a phone call from the Plaintiff Dan McLean requesting that they go back to the original discussions of leasing the property. The Defendant’s evidence is that he reiterated to the Plaintiff Dan MacLean that the Defendant was only interested in selling the property. [ 34 ] It is the Defendant’s evidence that since that date there have been no further discussions with either of the Plaintiffs and no correspondence exchanged in respect of any prospective purchase or lease of the property.

The Defendant maintained that at no time did the Defendant ever receive a signed offer from the Plaintiffs nor did the Defendant ever receive any deposit or any consideration of any kind and there is no valid agreement in place. [ 35 ] It is the Plaintiffs’ position that parties have negotiated an Option to Purchase Agreement whereby the Plaintiff would have an option to purchase the property for $1 million within a one-year time frame. Effectively, the Plaintiffs argue this was a “gentlemen's handshake deal” in August 2012.

The Plaintiffs continue that the draft Agreement emailed to the Plaintiff by the Defendant was returned 10 days later with revisions indicated above, namely paragraphs 2, 3, 4(

b) and signed by the Plaintiff Robert McLean.

When he did not hear back from the Defendant or his counsel, the Plaintiff Robert McLean considered the agreement complete. [ 36 ] Thereafter, the Plaintiffs argue that the parties conducted themselves in a manner consistent with the existence of an option to purchase as follows: • A condition precedent to the purchase of the property was the approval of the use of large storage containers on the property by the MD and in an email sent August 1, 2012 the Plaintiff stated “if you accept I will forward material, i.e. site drawings and a draft drawing of the perimeter wall and entrance that I have contracted out.

I will come out and help you with your presentation to the MD”; • In October 2012 an application to amend the land use by-law pertaining to the property in order that it may allow for storage containers was prepared.

The application named the Plaintiffs as agent for the Defendant (land owner) and the Plaintiff paid $800 to the MD in relation to the application; • The storage containers were approved by the MD in March 2013 and correspondence dated April 8, 2013 was sent to the parties confirming same; • On May 7, 2013, the Defendant wrote to the MD indicating “in the event that the McLeans walk away from the Offer to Purchase” he stated that he wished to obtain the approval of first reading of the by-law; and, • The next day the Plaintiffs’ evidence is that they attempted to deliver the $15,000 deposit payable to the Defendant however the Defendant refused stating that he was no longer interested in honouring the parties Option to Purchase Agreement. [ 37 ] There is no evidence before me that the Plaintiffs have executed the Lease Agreement which was provided to them in draft form September 14, 2012, nor is there evidence before me that the Plaintiffs have satisfied the terms of the Lease Agreement provided to them on that date.

In particular, the Plaintiffs did not take possession of the premises as contemplated, did not provide payment of $4000 per month rent commencing September 1, 2012 or sooner, nor was there evidence before the Court regarding the placement of tenant insurance, and no evidence of payment of utilities, taxes or other expenses as was contemplated by the draft Lease Agreement. [ 38 ] In addition to the foregoing, the Option Agreement which was provided to the Plaintiff Robert McLean as a draft

Schedule “A” to the Lease Agreement was not executed by the Defendant, nor did the Defendant initial the changes. Issue [ 39 ] The Plaintiffs correctly identify the sole issue is whether the Plaintiffs’ claim should be dismissed for lack of merit pursuant to Rule 7.3 which reads as follows:

Application and decision 7.3(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the following grounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded.

(2) The application must be supported by an affidavit swearing positively that one or more of the grounds described in subrule (1) havebeen met or by other evidence to the effect that the grounds have been met.

(3) If the application is successful the Court may, with respect to all or part of a claim, and whether or not the claim is for a single andundivided debt, do one or more of the following: (

a) dismiss one or more claims in the action or give judgment for or in respect of all or part of the claim or for a lesser amount; (

b) if the only real issue to be tried is the amount of the award, determine the amount or refer the amount for determination by areferee; (

c) if judgment is given for part of a claim, refer the balance of the claim to trial or for determination by a referee, as thecircumstances require. [40] The Plaintiffs further identify a number of subsidiary issues, including whether there was an enforceable option agreement.The Plaintiffs rely on the subsequent conduct of the Defendant to argue that there was an enforceable oral agreement. [41] Under the Statute, the reliance on parole evidence to prove the existence of a contract based on subsequent conduct is limitedto the doctrine of part performance.

This was recently described by the Court of Appeal in Haan v Haan, 2015 ABCA 395, 609 A.R. 371(Haan), discussed further below. I therefore prefer to rely on the evidentiary framework provided by the Statute to determine whethersuch an alleged oral agreement existed. [42] The Plaintiffs also argued that the question of damages and compliance with Rule 7.2 were at issue. For reasons that willbecome apparent, it is unnecessary to deal with these issues.

Summary Judgment [43] Jones J. in Muhammad v Canlanka Ventures Ltd., 2015 ABQB 145 (para 35) cited Windsor v Canadian PacificRailway, 2014 ABCA 108, 572 A.R. 317, where the Court of Appeal provided the following guidance for deciding applications forsummary judgment: 1.

Summary judgment is now an appropriate procedure where there is no genuine issue requiring a trial: para 13 [emphasis added]. 2. There will be no genuine issue requiring a trial when a judge is able to reach a fair and just determination on the merits on a motionfor

summary judgment: para 13, quoting from Hryniak v Mauldin, 2014 SCC 7 (S.C.C.) at para 49, (sub nom Hryniak v Mauldin)(Hryniak). 3. A judge is able to reach a fair and just determination on the merits when that judge is able to: a. make the necessary findings of fact; and b. apply the law to the facts, and the process is a proportionate, more expeditious and less expensive means to achieve a just result: para 13, quoting from Hryniak atpara 49. [44] The Plaintiff cites 1214777 Alberta Ltd. v 480955 Alberta Ltd., 2014 ABQB 301, [2014] A.J.

No. 538 (QL) (Master), toargue that it “remains to be seen whether a judge sitting in chambers in Alberta can now find facts or determine credibility based onAffidavit evidence” and “a rule change, or a legislative change might be necessary” (at para 15). [45] The Plaintiff submits that the evidence in this case differs significantly and only viva voce evidence will permit the Court tomore accurately assess the credibility of the evidence.

While I agree that in some circumstances it may be necessary to hear viva voceevidence, the Court may also make factual findings based on a paper record where it is fair and just to do so. [46] In P. (W.) v Alberta, 2014 ABCA 404, 588 A.R. 110 (P.(W.)), the Court of Appeal stated at para 26:

Summary judgment is therefore no longer to be denied solely on the basis that the evidence discloses a triable issue. The question iswhether there is in fact any issue of “merit” that genuinely requires a trial, or conversely whether the claim or defence is so compellingthat the likelihood it will succeed is very high such that it should be determined summarily: Windsor at para 16; Beier [v Proper CatConstruction Ltd., 2013 ABQB 351, 564 AR 357], at paras 56, 59-68 and 70 (Beier). [47] In 776826 Alberta Ltd. v Ostrowercha, 2015 ABCA 49, at paras 10-11, 593 A.R. 391 (Ostrowercha), the Court of Appeal

determined: From the substantive perspective,

summary judgment can be granted if, in light of what that fair and just process reveals, there is nomerit to the claim. No “merit” means that, even assuming the accuracy of the position of the non-moving party as to any material andpotentially decisive matters — matters which would usually require ordinary forensic testing through a trial procedure with viva voceevidence and which could not be resolved through the fair and just alternative — the non-moving party’s position viewed in the roundhas no merit in law or in fact.

Stated another way, in order for the non-moving party's case to have merit, there must be a genuine issue of a potentially decisivematerial fact in the case which cannot be summarily found against the non-moving party on the record revealed by the “fair and justprocess”. The mere assertion of a position by the non-moving party in a pleading or otherwise, or the mere hope of the non-moving partythat something will turn up at a trial, does not suffice.

The key is whether the circumstances require a viva voce evidence in order toproperly resolve the case: see Papaschase Indian Band No. 136 v Canada (Attorney General), 2008 SCC 14 (S.C.C.) at paras 10 to 11,[2008] 1 S.C.R. 372 (S.C.C.). [48] In Attila Dogan Construction and Installation Co. v AMEC Americas Ltd., 2015 ABQB 120, at para 52, 605 A.R. 303,Wittmann CJQB added this at para 52: To this set of principles I would add some further points of direct application to the

Summary Applications sought here. It is important tounderstand that the principle of proportionality and what has been described as the less stringent test for

summary judgment in Albertadoes not affect the evidentiary requirements for such applications. As discussed in further detail below, affidavit evidence sworn insupport of

summary judgment must comply with the provisions of the ARC and these are unaffected by Hryniak and Windsor.Furthermore, a self-serving affidavit in and of itself is not sufficient to create a triable issue in the absence of detailed facts andsupporting evidence: Guarantee Co. of North America v Gordon Capital Corp., (SCC), [1999] 3 SCR 423, at para 31.Finally, the principle of proportionality will require that the procedure used to adjudicate the dispute should fit the nature of the claim,but proportionality has more than one aspect.

The magnitude of the claim in terms of monetary value may have some place in thisanalysis, but the nature of the claim will as well. It has been recognized, for example, that disputes over the

interpretation of aninstrument, such as a contract, may lend themselves particularly well to

summary judgment: Tottrup v Clearwater (Municipal District99), 2006 ABCA 380 , [401 A.R. 88]. (aff’d, 2015 ABCA 406, 609 A.R. 313). [49] Unless there is a genuine issue of a potentially decisive material fact which cannot be summarily found against the non-moving party revealed by a “fair and just process,” there will be no need for a trial based on viva voce evidence (Ostrowercha, at para11). Positions of the Parties [50] There was some dispute between the parties’ as to what instrument constitutes the alleged memorandum relied upon to satisfythe requirements of

section 4 of the Statute. [51] The Defendant alleges that the document relied upon is the alleged Option Agreement dated October 1, 2012 and signed bythe Plaintiff, Robert McLean, which is a version of the document provided by the Defendant to the Plaintiffs appended to the LeaseAgreement at some time on or around September 14, 2012. The document contains three interlineations and insertions and deletions. [52] The Defendant’s evidence is that the document was never received by the Defendant, and only became known to theDefendant during the course of this litigation.

According to the Defendant, the October 1, 2012 document lacks a signature by the partyagainst whom the contract is being enforced and lacks a description of the property, and as such does not meet the requirement forformalities under the Statute. [53] It is alleged that there was never any meeting of the minds with respect to the terms of the Option Agreement.

The documentdated October 1, 2012 differed from the exchange of email correspondence between the parties’ August 1, 2012 and August 10, 2012 inseveral respects: • The legal descriptions in the August 1, 2012 and the lease documentation forwarded on or about September 14, 2012 are different; • The Defendant argues that whereas the discussions and the original document of September 14, 2012 refer to the existence of alease agreement, none is provided as part of the terms of the October 1, 2012 document; • The Defendant argues that there was no performance of any of the essential terms of any agreement, particularly in relation topayment of option monies, lease payments, utilities, expenses or possession of the premises; and, • The Defendant argues that in order for there to be acceptance of the alleged option agreement, there must be strict compliancewith its terms, including time and the tender of deposit (citing Gordon v Connors, (SCC), [1953] 2 SCR 127, see also,Roots v Carey, (1914) (SCC), 49 SCR 211, cited in Urban Communications Inc. v BCNET Networking Society, 2014BCSC 485 at para 74, r’vd on other grounds, 2015 BCCA 297 (Urban Communications)).

The Defendant arguesthat, in any event, the alleged tender of a cheque by the Plaintiffs at a later date does not meet the requirement for formalities (citingNywening v Melton Holdings Ltd., 2000 ABCA 141, at para 9-11, 225 AR 354, Costigan JA). [54] The Plaintiffs, instead of relying solely on the October 1, 2012 document, relies on the e-mail communication from theDefendant to the Plaintiff dated August 10, 2012, which, together with the documents later provided in or around September 14, 2012,are alleged to contain all of the material terms of the agreement.

These documents are said to have “sufficiently embodied the terms of

the oral agreement . . . to warrant its being taken as a memorandum of the latter . . .” (citing McDougall v MacKay, (1922) (SCC), 64 SCR 1 at 9, Anglin J). [55] The Plaintiffs argue the email dated August 10, 2012 from the Defendant to the Plaintiff Robert McLean is analogous to thecover letter sent with the offer to purchase, and signed by the Defendant, which in Spicer v Gambell, 2005 ABQB 646, 388 A.R. 51, was found to satisfy the Statute. The Plaintiffs further rely on Leoppky v Meston, 2008 ABQB 45 , 87 Alta.

L.R. (4th) 238, toargue that email communication may satisfy the requirement for signature under the Statute. [56] The Plaintiffs argue that the alterations contained in the October 1, 2012 document, with respect to the timing of the optionand the renewal of the option, are not material to the terms of the agreement described in the August 10, 2012 email. [57] The Plaintiffs rely on the subsequent conduct of the parties to prove the existence of an oral agreement.

In particular, thePlaintiffs rely upon the Defendant’s instructions to prepare the documentation, the preparations undertaken by the Plaintiffs to start theirbusiness, and the application for a by-law variance with respect to the property. Law and Analysis [58] The Defendant relies on

section 4 of the Statute to argue that the option to purchase is not a binding contract.

The sectionreads as follows: No action shall be brought whereby ... to charge any person ... upon any contract or sale of lands ... unless the agreement upon whichsuch action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith,or some other person thereunto by him lawfully authorized. (cited in Austie v Aksnowicz, 1999 ABCA 56, at para 23, 232 A.R. 118 (Austie)) [59] The purpose of the Statute was described in Haan, at para 9: The Statute of Frauds recites that it was enacted for the “... prevention of many fraudulent practices which are commonly endeavored tobe upheld by perjury ...”.

The mischief arising from claimants asserting oral agreements was to be avoided by requiring that certaincontracts be evidenced by “some memorandum or note thereof ... in writing and signed by the party to be charged therewith ...”.Contracts respecting land “created by livery and seisen only or by parole” would not be enforced absent such a writing [note omitted] [60] In Harvie v Gibbons, 1980 ABCA 38 , [1980] AJ No. 951 (QL) at paras 16-20, 109 DLR (3d) 559, Laycraft JA, setout the requirements of the Statute developed in the case-law as follows: 1) No rigid or precise form of memorandum is prescribed by the Statute, nor need the entire contract be contained in writing. 2) What is required is a statement of the essential terms of the contract.

Moreover, the statute does not deal with the validity of thecontract but with the evidence of its existence. 3) The memorandum must, however, set forth the material terms of the agreement.

Though what is material will vary with thecircumstances of each case, in land transactions the usual essentials are said to be “parties, property and price.” 4) Several documents may be connected to each other by reasonable inference, by parole evidence if necessary, to constitute asufficient memorandum. [cites omitted]. [61] A memorandum under the Statute must be of a past or present contract, not a future one (Zukiwski v Yakmac InvestmentsLtd., 1999 ABCA 193, at para 13, 244 AR 136 (Zukiwski) citing Austie). [62] A party may obtain relief in equity from

section 4 of the Statute based on the doctrine of part performance. The Court ofAppeal in Haan described the test as follows at para 11-12: It quickly became apparent to the common law judges that the Statute might itself become an instrument of fraud (or at least injustice) ifit was strictly enforced with respect to contracts that were wholly or partly performed: Hill v Nova Scotia (Attorney General), (SCC), [1997] 1 S.C.R. 69 (S.C.C.) at para. 10. The courts developed the concept of “part performance” as an exception.

If acontract concerning land was partly performed, that could displace the need for a note or memorandum in writing signed by the party tobe charged. It was one thing to create an exception that displaced the need for a memorandum in writing, but something else to completely nullify theStatute’s operation. The thrust of the Statute was that contracts concerning land could not be proved by parol evidence alone. Thus, partperformance might be an exception, but it could not, in effect, mean that the underlying contract could be proven by parol evidence.

Indeveloping the “part performance” exception, a balancing of the competing considerations was required. An important factor in the caselaw became that the part performance must be “unequivocally” related to the alleged contract. [63] The part performance relied upon “must be unequivocally referable to the contract asserted.

The acts performed must speakfor themselves, and must point unmistakably to a contract affecting the ownership or the tenure of the land, and to nothing else”(Deglman v Guaranty Trust Co. of Canada, (SCC), [1954] SCR 725, Cartwright J at 734, quoting Meston v Gray, (SK CA), [1925] 4 DLR 887 at 888 (SKCA) in Haan at para 13). [64] Unless the evidence of part performance points “unequivocally” to the type of contract alleged, the Statute of Frauds will

preclude its enforcement ( Haan at para 14 ). [ 65 ] The purported Option Agreement dated October 1, 2012 that was admitted pursuant to a Request for Particulars under Rule 3.61 does not satisfy the Statute of Frauds as it does not contain a description of property nor does it contain a signature by the Defendant, against whom the agreement is sought be enforced.

The Plaintiffs have instead sought to rely in its written brief and during their oral argument on the August 10, 2012 email and subsequent documentation as incorporating the terms of the oral agreement. [ 66 ] While I will consider the email and documentation relied upon by the Plaintiffs during argument in these reasons, the non- compliance of the purported Option Agreement dated October 1, 2012 with the Statute of Frauds I consider to be in its own right sufficient for me to grant this application for

summary dismissal under Rule 7.3 in its entirety. [ 67 ] There are several problems with the reliance by the Plaintiffs on the August 10, 2012 email and subsequent documentation forwarded on or about September 14, 2012. [ 68 ] This documentation, to which the purported Option Agreement was appended, refers to the existence of the lease, the terms of which include the possession of the premises, the payment of rent and expenses in relation to the property. No possession of the premises took place, there was no payment of rent or any other expenses by the Plaintiffs.

No lease was ever entered into. [ 69 ] The purported Option Agreement dated October 1, 2012 signed by the Plaintiff Robert McLean includes changes to the following clauses: the term and exercise of the option, the extension of the option, and the terms for the payment of the option. [ 70 ] I disagree with the Plaintiffs’ assertion that the interlineations and deletions to the clauses in the purported Option Agreement dated October 1, 2012 are immaterial. In my opinion, they were material as they go directly to price and time to satisfy the terms of the contract.

The alleged memorandum contained in the earlier email and documentation does not reflect the same terms as the purported Option Agreement dated October 1, 2012. [ 71 ] The evidence that such essential terms as purchase price, the deposit, and the terms of financing remained subject to negotiation in May 2013 long after the alleged handshake agreement was said to have taken place, further reinforces my view that the alleged memorandum did not contain the essential terms of an agreement to satisfy the Statute . [ 72 ] Any memorandum must contain the terms of a past or existing agreement, not a future one, and I am not satisfied that any binding agreement was in place at the time that the documentation relied on was provided.

While the Plaintiffs place great emphasis on the instructions by the Defendant to prepare legal documentation, it is clear from the subsequent conduct of the parties that discussions with respect to essential terms were not concluded by the time alleged “gentlemen’s handshake agreement” was to have taken place in August of 2012. [ 73 ] I cannot accept, therefore, that the email dated August 10, 2012 and the documentation later forwarded on September 14, 2012 contained the essential terms of an earlier oral agreement.

The requirement that the memorandum of the Defendant contain the essential terms of an oral agreement under

section 4 of the Statute in my opinion has not been satisfied in this case. [ 74 ] I accept the contention by the Defendant that the purported option agreement contained in the documentation forwarded on or about September 14, 2012 granted to the Plaintiff Robert McLean a standing offer, but that the offer was never accepted according to its terms. An absolute and unqualified acceptance of an offer is required to form a contract, and that a purported acceptance that attempts to vary the terms of the contract will be a counter-offer.

A counter-offer extinguishes a previous offer ( Urban Communications , at para 74 ). I find the changes by the Plaintiff Robert McLean contained in the purported Option Agreement dated October 1, 2012 modified the material terms of the original offer, and as such constituted a counter-offer that was never accepted by the Defendant. [ 75 ] Furthermore, where there is an option for the sale of land, there must be strict compliance with the terms of the offer for such an option to be exercisable, including time and the tender of payment.

As discussed in my findings of fact, there was no tender of payment at any time. I am therefore not satisfied that there was a binding option to purchase the lands. [ 76 ] The Plaintiffs rely on several acts of part performance. The activities must unequivocally and unmistakably point to the contract alleged to prove the existence of an oral agreement for the sale of land under the Statute (see, Haan ). [ 77 ] The preparations by the Plaintiffs to start a business are not referable to the existence of an agreement for a sale of land.

It is equally plausible that such preparations took place in anticipation of the conclusion of an agreement. The evidence there does not satisfy the requirements of part performance. [ 78 ] The instructions by the Defendant to prepare legal documentation may also relate to ongoing discussions and therefore does not satisfy the requirements of part performance. [ 79 ] The Plaintiffs obtaining permission to act as agents for the Defendant to apply for planning approval for the use of containers does not meet the requirements for proof.

In New Hart Builders v Brindley , (1974) [1975] Ch. 342 at 353 (WL), [1975] 1 All E.R. 1007 , Goulding J for the English Court of Chancery described analogous circumstances: On any view the plaintiff company’s planning proceedings cannot in my judgment rank as part performance unless by their own character they are referable to the existence of an agreement between the plaintiff company and the late Mr. Brindley. Mr. Sparrow, for the plaintiff company, laid much stress on the fact that the Brindleys gave assistance to the plaintiff company in pursuing the applications for planning permissions.

However, I see nothing improbable or unusual in the co-operation of a would-be developer and a landowner to obtain planning permission in the hope that both will eventually profit, without necessarily having bound themselves by contractual terms. Thus the planning activities do not prove the existence of a contract, and the plaintiff company has in my view failed to make out the allegation of part performance. The defence under

section 40 of the Law of Property Act 1925 is accordingly a good answer to the plaintiff company's claim.

(emphasis added, see also, Anger and Honsberger Law of Real Property, 3 rd ed . (Toronto: Canada Law Book, 2006)(loose-leaf 2014 supplement), ch. 21 at 5-6). [ 80 ] The reference in the letter sent by the Defendant to the MD on May 7, 2013 to the “offer to purchase” in my view, also does not unequivocally refer to the existence of a concluded option to purchase agreement and may also have been consistent with efforts by the Defendant to maintain its ability to proceed with the land use application that had already been commenced by the Plaintiffs. [ 81 ] I am unable to place any reliance on the evidence of part performance advanced by the Plaintiffs as demonstrating the existence of an option to purchase agreement.

Conclusion [ 82 ] A fair and just determination of these matters may be reached based on the record before the Court and without the need for a viva voce hearing. I find this is so for the following reasons: 1) The purported Option Agreement dated October 1, 2012 does not include an adequate description of the property nor is it properly executed by the Defendant, against whom the agreement is sought to be enforced.

It does not comply with the Statute . 2) Even if I accept that the alleged memorandum was contained in the email dated August 10, 2012 and subsequent documentation forwarded by email on or about September 14, 2012, I am still not satisfied that the requirements of the Statute have been met. There are material differences between the documentation comprising the alleged memorandum and the purported Option Agreement dated October 1, 2012, including the existence of a lease and the terms for exercising the purported option.

The documentation exchanged reflected ongoing discussions with respect to essential terms, which continued until at least May 2013. 3) The changes by the Plaintiff Robert McLean to the purported Option Agreement dated October 1, 2012 constituted a counter-offer that was never accepted by the Defendant, extinguishing the previous offer contained in the purported memorandum. 4) There was no performance of the terms of the lease or the tender of payment, both of which were required for the exercise of the option. 5) The efforts to start a business by the Plaintiffs, the instructions by the Defendant to the solicitor to prepare of documentation, the permission to apply for change of use before the MD, and the letter by the Defendant to the MD referring to an offer is in each case not evidence of part performance as the evidence does not unmistakably refer to the existence of a contract for the sale of land. [ 83 ] In the Zukiwski decision referred to me by the Defendant, the Court of Appeal found that the alleged memorandum was not sufficient to meet the formal requirements of the Statute and

summary judgment was granted. I consider this case to be analogous. [ 84 ] There is no genuine issue of a potentially decisive material fact that cannot be summarily found be me in this proceeding ( Ostrowercha , at para 11 ). I am satisfied that my findings of fact can be made based on an examination of detailed facts and supporting evidence in the affidavits. [ 85 ] As described by the Court of Appeal in P.(W.) , there is not in fact any issue of “merit” that genuinely requires trial.

Furthermore, I consider the Defence’s position to be so compelling that the likelihood that it would succeed at trial is very high. [ 86 ] I am not satisfied based on a review of the evidence before me that the terms of the oral agreement allegedly entered into in August 2012 were ever reduced into writing and signed by the Defendant and the acts of part performance relied upon are not referable to the agreement. Therefore, the requirements of

section 4 the Statute of Frauds have not been met. [ 87 ] Accordingly, I find there is no merit to the Plaintiffs’ claim within the meaning of Rule 7.3 . The other issues in relation to Rule 7.2 and the existence of damages that were raised by the Plaintiffs I do not have to deal with this in this application, as Rule 7.3 is dispositive. [ 88 ] I therefore grant

summary dismissal in favour of the Defendant. [ 89 ] Costs have not been argued but may be spoken to by making an application before me if counsel cannot agree. Heard on the 25 th day of February, 2016. Dated at the City of Wetaskiwin, Alberta this 8 th day of August, 2016.

J.W. Hopkins J.C.Q.B.A. Appearances: Len W. Zalapski, Q.C. MacLean West LLP for the Defendants Ken Sockett Sockett Law Office for the Plaintiffs