Salvation Army v Angus Partnership Inc, 2017 ABQB 568

Court of Queen’s Bench of Alberta Citation: Salvation Army v Angus Partnership Inc, 2017 ABQB 568 Date: 20170922 Docket: 9901 15873 Registry: Calgary Between: The Governing Council of the Salvation Army in Canada and the Governing Council of the Salvation Army Canada West Appellants - and - Angus Partnership Inc. and Western Conservatory Realty Group Inc. Respondents _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice A.G.

Park _______________________________________________________ [ 1 ] The Governing Council of the Salvation Army in Canada and the Governing Council of the Salvation Army Canada West (SA) appeals a Master’s decision which refused SA’s application to dismiss the claim of Angus Partnership Inc (Angus) pursuant to Rule 7.3 of the Alberta Rules of Court : 7.3 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. 7.3(2) The application must be supported by an affidavit swearing positively that one or more of the grounds described in subrule (1) have been met or by other evidence to the effect that the grounds have been met. 7.3(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 and undivided 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 a referee; (

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 the circumstances require. [ 2 ] The litigation centers on a 1999 failed sale of the Grace Hospital and the surrounding lands in the City of Calgary in the Province of Alberta. In that sale, SA was the vendor and Angus was the purchaser.

Angus sued for the return of its deposit and damages arising from that failed sale. [ 3 ] In its application before me, the SA stated there was no disagreement on the facts as between the parties. [ 4 ] However Angus took issue with some of the SA’s facts and submitted the facts as detailed in its brief before me more accurately reflected the dealings between the parties. [ 5 ] Having read both parties’ sets of briefs and referenced the affidavits filed by both parties, I set out the facts as I found them.

I note where there is no substantial disagreement between the parties on the facts, I adopt and quote verbatim in certain instances the facts as set out in the Statement of Facts filed by each party. [ 6 ] The SA used the Grace Hospital lands for the operation of a public hospital for many years until 1995 when, Angus agrees, the hospital use was terminated. [ 7 ] While operating the Grace Hospital, the Salvation Army had entered into an “Equity Agreement” with the Province of Alberta (the “Province”) on September 26, 1969, which contained the following provision: 9.

The parties agree that so long as the hospital is being used by the Owner for hospital purposes, the Owner will have the right, subject to the provisions of this agreement, to sell and the Minster shall, once notified of the Owner’s intention to sell, have the right to purchase the hospital from the Owner after giving the Owner reasonable notice to that effect. In the event of such purchase the value of the Owner’s equity will be arrived at by taking the value of the Owner’s equity on the 1 st day of January immediately preceding the year of the purchase.

Such value will then be adjusted to the date of purchase in accordance with the provisions of this agreement. [ 8 ] The SA, on October 15, 1997, along with other health facilities in the Province ratified a non-binding Memorandum of Understanding (MOU) with the Province, effective December 23, 1997. It modified the Equity Agreement whereby, upon termination of the Equity Agreement the SA was obliged under the MOU to sell to the Province and the Province was obliged to purchase (Article 9(b) (

i) and (ii)) the SA’s interest in the Grace Hospital, with the Province paying the SA a Buy-Out Equity. The MOU was never registered on the title of the Grace Hospital lands. The Equity Agreement was never terminated. [ 9 ] The Offer was entered on or about June 1, 1998, and was to initially close on April 30, 1999. It specified a deposit of $250,000 and a purchase price of $8 million. Among other terms, it included an “Entire Agreement” clause as follows: 6.

The Purchaser agrees to purchase the Property in its current condition and it is agreed that there is no representation, warranty, collateral agreement or condition affecting the said Property or this agreement, other than as is expressed herein.

The parties hereto acknowledge that this agreement constitutes the entire agreement between them concerning the Property. [ 10 ] The Offer has no conditions or terms relating to requirements for financing, permitted uses or zoning, or dealings with third parties such as tenants, or contractors or parties to whom Angus might “flip” some or all of the property immediately after closing. [ 11 ] Angus was at all material times acting on behalf of two entities, Rayrow Realties Ltd. (“Rayrow”) and Linver International Inc. (“Linver”) (collectively the “Joint Venture Partners”) with respect to the purchase of the Grace Hospital lands as well as potential development.

Those entities together were to finance the acquisition and redevelopment of the Grace Hospital lands by Angus. [ 12 ] Angus, pursuant to the Offer, paid an aggregate deposit of $250,000 to CB Commercial Real Estate Group Alberta Inc. (“CB Commercial”) which CB Commercial retains to date.

CB Commercial was the realtor for the SA. [ 13 ] On August 15, 1998, Angus waived all its conditions to the offer [ 14 ] On or about September 11, 1998, the Plaintiff, Western Conservatory, a company set up by Angus and acting on behalf of Angus, registered caveats on the Grace Hospital lands with respect to Angus’ rights under the Offer. [ 15 ] The Province never registered any caveat or other encumbrance against lands subject to the Offer to secure any interests under the Equity Agreement, the MOU, or otherwise. [ 16 ] On or about December 3, 1998, Angus agreed to “flip” a portion of the Grace Hospital lands it was to acquire from the SA (that portion containing the Grace Hospital buildings) to Healthchoice Corp. (“Healthchoice”) for $7,000,000 immediately after the Offer

closed. The “Buyers Conditions Precedent” of Healthchoice under that agreement (the “Healthchoice/Angus Offer”) is of critical importance. It deals with permitted uses of those lands: 2. On or before the 1 st day of April, 1999, the Seller shall have obtained final non-appealable direct control rezoning of the Property, upon terms and conditions satisfactory to the Buyer, which will include as permitted use, the Buyer’s intended uses of the Property, namely, the following uses, as more particularly specified in the Buyer’s preliminary plans to be delivered to and approved by the Seller in accordance with paragraph 5 of this

Schedule “B”: * HRG tenant – Medical Clinic * Muscle and Joint Rehabilitation * Walk-in Clinic * Family Medical Practice * Medical Clinic * Administration Offices & General Offices * Professional Offices * Pharmacy * Coffee Shop/Cafeteria * Laboratory * Medical Services * Health Services [ 17 ] At the request of the SA on December 4, 1998, Angus agreed to an extension request for the SA to obtain sub-division approval, which under the Offer was to have been secured by December 1, 1998.

Approval was obtained on February 24, 1999. [ 18 ] On or about December 23, 1998, the parties agreed to amend the Offer to provide for a new closing date of July 30, 1999. On March 18, 1999, Angus waived any conditions to the sale pursuant to the Offer.

All that was required at that point was for title to be exchanged for the remainder of the price. [ 19 ] According to Ben Wygodny, the principal of Angus, the Healthchoice/Angus Offer was still in force as of July 30, 1999 (to close immediately after the Offer) and the Buyers Condition Precedent #2 relating to zoning had also been extended to July 30, 1999. [ 20 ] Angus, at the time of entering into the Offer, was unaware that the SA on or about September 26, 1969, entered into an Equity Agreement with the Province, containing a Right of First Refusal (ROFR) in favour of the Province.

The SA prior to entering into the Offer with Angus, failed to disclose to Angus the Province’s ROFR under the Equity Agreement, or obligation to purchase under the MOU. [ 21 ] The SA did not advise Angus of the Province’s Equity Agreement ROFR (Article 9) or obligation under the MOU (Article 9(b) (

i) and (ii)), either prior to the Offer or after Angus had waived all its conditions on August 25, 1998.

On March 8, 1999, SA’s conveyancing counsel wrote Angus’ conveyancing counsel confirming the sale of the Grace Hospital site, was unconditional, with the sale to close on July 30, 1999. [ 22 ] The SA never provided the Province with notice of its intention to sell the Grace Hospital site while it was being used as a hospital. [ 23 ] The SA, between January 1996 and October 1997 undertook an investigation to determine the feasibility of converting the Grace Hospital site to Social Services use in the context of selling or leasing the Grace Hospital site, recognizing their obligations to the Province.

During this time, the SA undertook a revamping of its Deed Vault and related legal documents and requested in-house counsel to review the Equity Agreement and MOU. [ 24 ] The SA, following acceptance of the Angus Offer, on June 1, 1998 further addressed its mind to its obligations in the Equity Agreement and MOU as early as October 5, 1998, and on October 16, 1998, acknowledged that the MOU stated that the Province is obliged to purchase the Grace Hospital. [ 25 ] On November 10, 1998, Divisional Finance Secretary (Karen Coley) (“Coley”) emailed the Territorial Finance Secretary, Susan McMillan (“McMillan”) of the SA regarding the Equity Agreement between the SA and the Province, questioning the Province’s liability to the SA in light of the SA having sold the Grace Hospital site.

On November 19, 1998, Divisional Finance Secretary, Coley, forwarded to Territorial Finance Secretary, McMillan, correspondence enclosing the Equity Agreement and MOU.

On November 26, 1998, Territorial Finance Secretary, McMillan, forwarded an email to Divisional Finance Secretary, Coley, querying in the face of the Grace Hospital site being sold to Angus for $8.0M, whether the difference in the equity calculation of $6.5M was owed to the Province. [ 26 ] On March 5, 1999, Divisional Finance Secretary, Coley, wrote the Territorial Finance Secretary, MacMillan, referencing the SA’s in-house legal counsel’s letter of December 15, 1998, wherein the SA, under the Equity Agreement, would not be seeking a cash settlement from the Province for the Buy-Out Equity.

[ 27 ] On March 22, 1999, the SA’s Property Secretary, Donald Copple (“Copple”) sent Peter Wood (“Wood”), Secretary for Business Administration at the SA (position akin to CFO/COO), a memo to the Province’s planned “claw-back” of funds on the sale of the Grace Hospital. [ 28 ] On March 29, 2009, the Financial Secretary, McMillan, sent a memo to Wood, acknowledging that the SA should have triggered the buyout provisions of the Equity Agreement when the hospital was transferred to the Foothills Medical Centre, outlining the SA’s strategy in dealing with the Province so as to retain the full proceeds of the Angus sale. [ 29 ] As at March 29, 1999, the SA had prepared a draft letter to the Province dated February 22, 1999, wherein the SA acknowledged that they ought to have triggered the Equity Agreement Buy-Out Equity provisions in 1995 and that the Grace Hospital had been sold to a third party. [ 30 ] The SA, on March 30, 1999 wrote the Province’ Minister of Health, referencing the Equity Agreement and MOU, confirming they ought to have triggered the Buy-Out Equity Agreement provisions in the spring of 1995, but did not do so, wherein the SA proposed releasing the Province from its obligation to pay the Buy-Out Equity in exchange for the SA retaining the full proceeds of the property sale.

The letter did not disclose the sale price, purchase or closing date of the sale to Angus to the Province. [ 31 ] In anticipation of closing, Angus took a variety of steps in 1998 and 1999 to facilitate redevelopment of the Grace Hospital lands. These steps included seeking land use re-designation (including that required under the Healthchoice/Angus Offer) and a development permit from the City of Calgary.

Stephen Carruthers of Carruthers and Associates, an architectural firm (collectively “Carruthers”), was retained by Angus to assist in these endeavours and, apart from one meeting attended by Wygodny, was entirely responsible for dealing with the City as far as land use re-designation was concerned. [ 32 ] On April 26, 1999, the Province, having been advised by the SA of the imminent sale of the Grace Hospital lands in a March 30, 1999 letter concerning settlement of outstanding financial obligations, wrote to the SA claiming that the ROFR in s. 9 of the Equity Agreement was triggered by the sale to Angus.

The Province requested the SA postpone the finalization of the sale to Angus because it “may” wish to exercise the claimed ROFR. [ 33 ] On May 17, 1999, Divisional Financial Secretary, Coley wrote the Territorial Finance Secretary, McMillan, voicing a “bad news” and “good news” scenario regarding the sale of the Grace Hospital site to Angus in the face of the Province’s ROFR claim. [ 34 ] On May 21, 1999, Property Secretary, Copple, wrote his assistant as a result of an email to Territorial Financial Secretary, MacMillan, regarding complications with the Province’s ROFR to the Grace Hospital site, in light of the sale. [ 35 ] On May 21, 1999, Property Secretary, Copple communicated with Secretary for Business Administration, Wood, as to the Province’s ROFR, noting that the SA had signed an unconditional offer to sell the property, and had he known the document in question existed or that the Finance Department was involved in negotiations, he would have taken both conditions into account in dealing with potential purchasers. [ 36 ] On May 26, 1999, Angus’ consulting architects, while at the Grace Hospital site, were advised by representatives of the Province of the Province’s ROFR.

On May 27, 1999, SA’s conveyancing counsel, following discussions with Angus’ conveyancing counsel as to the Province’s ROFR claim, forwarded a facsimile to Angus’ conveyancing counsel, enclosing a copy of the September 26, 1969 Equity Agreement and the December 23, 1997 MOU with the Province. [ 37 ] Angus, prior to May 27, 1999, had never been advised by the SA of the Equity Agreement and the Province’s ROFR claim under

Article 9 of the Equity Agreement, nor the obligations under

Article 9(b) (

i) and (ii) in the MOU. [ 38 ] On May 28, 1999, Angus’ conveyancing counsel wrote SA’s conveyancing counsel, requesting an extension to the closing, equal to the delay being experienced, pending resolution of the Province’s ROFR, indicating Angus remained enthusiastic and wished to be cooperative in resolving the issue. SA’s conveyancing counsel, on June 4, 1999, wrote expressing the opinion that the Province had no enforceable interest in the property and the SA was not prepared to extend the closing and that time was of the essence.

On June 4, 1999, Angus’ conveyancing counsel replied to SA’s conveyancing counsel indicating that Angus did not want an extension of the closing if the problems with the Province’s ROFR could be resolved immediately, suggesting that SA’s conveyancing counsel’s position as set forth in their letter of June 4, 1999 was unreasonable and unsupportable. On June 4, 1999 conveyancing counsel for Angus wrote a further letter to conveyancing counsel for the SA.

He expressed concerns regarding how the Province’s claim to the ROFR might impact Angus’ dealings with the City of Calgary and Angus’ ability to deal with existing and future tenants, contractors, and anyone else in respect of the property, if and when the Province lets its position to be made public. [ 39 ] On June 10, 1999, SA wrote the Province, in response to its April 26, 1999 letter, taking the position that even if the Province was entitled to exercise the ROFR, it would be very difficult if not impossible to terminate the transaction with the purchaser at this time while ignoring the Province’s request for a postponement and failing to disclose to the Province that Angus had likewise requested an extension to the closing, pending resolution of the Province’s claim.

At no time did Angus seek to terminate its Offer with the SA. [ 40 ] On June 30, 1999, Angus’ conveyancing counsel again wrote to conveyancing counsel for the SA stating as follows: As you are aware, we remain without resolve of the issue of the claim of the Province of Alberta. As well, you are aware that closing with our client has been based upon our client’s need to have adequate time to obtain acceptable designation of the site for our client’s use and allowing our client to obtain its financing.

As indicated in our prior letters and telephone conversations, the issue with the province is now interfering with our client’s ability to obtain those approvals on a timely basis, and due to summer scheduling at The City of Calgary. In addition, to the foregoing, my client has now been faced with two additional and significant problems: 1. Despite earlier advice that the building on the property was legally available to continue it its present use, my client as (sic) now been

advised by the City of Calgary that redesignation is necessary to even continue in the existing use. ... In light of these circumstances, [...] we must now insist on a postponement in closing until a reasonable time when we can expect these approvals to have been obtained. [ 41 ] On July 6, 1999, Angus’ conveyancing counsel wrote SA’s conveyancing counsel with respect to a turnabout from the City as to their position in January 1999, which denied use of the Grace Hospital site as a “medical clinic”, which was its current use.

He again was pressing for some consideration as to the black cloud over the Grace Hospital site. [ 42 ] On July 16, 1999, the SA received an Offer to Purchase the Grace Hospital site form Leasex realty Group Inc. (“Leasex”) on behalf of an undisclosed purchaser (Healthchoice) for $8.5M which was provided to the SA’s conveyancing counsel the same day.

On July 19, 1999, the Property Secretary Copple’s assistant, received a call from SA’s conveyancing counsel, indicating that as there is nothing on title, he is simply going to close the deal; i.e. the Angus/SA offer. [ 43 ] On July 23, 1999, conveyancing counsel for the SA delivered to conveyancing counsel for Angus all documents necessary to deliver title to the Grace Hospital lands as set out in the Offer and otherwise as required to close the sale as of July 30, 1999. [ 44 ] On July 23, 1999, conveyancing counsel for Angus wrote to conveyancing counsel for the SA advising that Angus would complete the transaction but only if two issues “which cloud title” were resolved.

One issue was the Province’s claim to a ROFR which was said (without evidence or particulars) to be adversely affecting the City of Calgary development approvals sought by Angus. The other was described as follows: 2. The City of Calgary has reversed its position on the lawful use of the building. This reversal has been so significant that it calls into question the legality of the current use of the building, and clearly makes physical changes, necessary in developing the site, open to disqualifying current usage. This problem, and its impact on the site, may be verified with Mr. Chapeur of your offices. Mr.

Chapeur, I have recently discovered, has represented my client in this issue with the City of Calgary. It is clearly his advice that the City has drastically changed its position over the past six months and I believe he can verify that the effect may render the site unusable if any changes occurs...

The ramifications of this are enormous and could render this property virtually valueless in its currently envisioned use. [ 45 ] That same letter went on to state: Based on the foregoing, we again must insist that a delay in closing is warranted...my client will take whatever steps are necessary to preserve its investment and interest in this property. [ 46 ] On July 23 and 24, 1999, Healthchoice (July 16, 1999 Offer - $8.5M) wrote the SA’s Property Secretary, Copple as to it purchasing the Grace Hospital stating that it was ready, willing and able to close the transaction. [ 47 ] On July 26, 1999, Angus forwarded directly to SA’s Property Secretary, Copple, correspondence requesting a meeting in Toronto at the SA’s convenience to resolve the issues concerning Angus’ purchase of the Grace Hospital site.

Accompanying such correspondence were letters from the Angus Joint Venture Partners, or letters on their behalf, confirming that they had the financial wherewithal to conclude the purchase, provided the Province had no further interest in the Grace Hospital site.

The SA did not meet with Angus as requested. [ 48 ] On July 28, 1999, just two days before the closing date, Angus’ conveyancing counsel again wrote SA’s conveyancing counsel proposing an extension to closing and advising that Angus would only complete purchase of all of the Grace Hospital lands if “the Province of Alberta officially drops its claim” and the “use issue as prior outlined is resolved with certainty as to the continued available use of the building. [ 49 ] On July 29, 1999, SA’s conveyancing counsel wrote Angus’ conveyancing counsel, taking the position that unless the Province registered a Caveat against title prior to Angus’ Caveat, or before the July 30, 1999 closing, their purported interest in the lands is extinguished.

Angus’ conveyancing counsel on July 30, 1999 in a response, pointed out that the Province’s claim need not be registered to be effective and continuing.

Angus’ conveyancing counsel reminded SA’s conveyancing counsel that on numerous occasions they had requested the SA obtain from the Province some kind of release or written assurance that their “interest” had been abandoned, which the SA did not provide. [ 50 ] On July 30, 1999, SA received a second Offer to Purchase the Grace Hospital site from OPUS Building Corporation (“OPUS”) for $9.0M. [ 51 ] SA’s conveyancing counsel, on July 30, 1999, following the Angus sale not closing due to the Province’s ROFR claim, wrote its realtor, CB Ellis, requesting that the $250,000 deposit provided by Angus in accordance with the Offer be forwarded to their offices as a result of Angus failing to close.

On the same day, Angus’ conveyancing counsel wrote CB Ellis directing them not to release the $250,000 deposit to the SA. CB Ellis continues to hold the $250,000 deposit. [ 52 ] Angus has since confirmed that it had the financial ability, through the Joint Venture Partners, to close on July 30, 1999. [ 53 ] Despite this, Angus refused to close with the SA on July 30, 1999.

The Buyers Condition Precedent in the Healthchoice/Angus Offer could not be satisfied and that deal also “fell apart” on July 30, 1999. [ 54 ] On August 5, 1999, Healthchoice wrote SA’s Property Secretary, Copple again, referencing its July 23 and 24, 1999 letters as to the purchase of the Grace Hospital.

[ 55 ] On August 6, 1999, SA’s conveyancing counsel wrote the SA’s realtor, CB Ellis, instructing them to take no action in dealing directly with the Province/Minister of Health, in relation to the Province’s ROFR claim and the Angus sale, as it might be harmful to other offers, either on the table or forthcoming, being received by the SA for the Grace Hospital site. [ 56 ] On August 17, 1999, the SA’s Secretary for Business Administration, Wood, received a letter from the Province, dated August 5, 1999, referencing the Equity Agreement and MOU, confirming the Province was forgoing its ROFR, and that the SA could retain the sale proceeds of the Grace Hospital. [ 57 ] On August 20, 1999, the SA’s Property Secretary, Copple’s assistant communicated with SA’s conveyancing counsel, indicating they were receiving pressure to respond to the Healthchoice Offer, suggesting a counteroffer of $9.0M. [ 58 ] On August 24, 1999, Angus’ conveyancing counsel wrote SA’s conveyancing counsel confirming their advice that the SA had received two Offers to Purchase the Grace Hospital for $8.5M and $9.0M.

SA’s conveyancing counsel would not advise who made these Offers or when they were made. [ 59 ] On August 27, 1999, Healthchoice again wrote SA’s Property Secretary, Copple providing a further Offer to Purchase the Grace Hospital for $9.0M (as described on Certificates of Title accompanying the July 14, 1999 Offer to Purchase from Leasex). [ 60 ] On August 27, 1999, SA’s conveyancing counsel wrote its realtor, CB Ellis Commercial Real Estate Group (“CB Ellis”), confirming the Province was foregoing its ROFR, allowing the sale to proceed.

Angus only learned of the Province’s decision from CB Ellis on August 28, 1999. [ 61 ] On September 22, 1999 Angus made a new Offer to Purchase the Grace Hospital lands from the SA for $8,000,000.

Among the terms of that offer were conditions precedent concerning zoning redesignation and delivery by the SA of evidence that the Province had waived any ROFR. [ 62 ] The SA did not accept this offer and instead sold the Grace Hospital lands to another party. [ 63 ] On September 23, 1999 the SA accepted the Healthchoice offer of $9M with a closing date of September 23, 1999. [ 64 ] In addition to advancing the $250,000 deposit paid under the Offer, Angus spent $288,921.39 on architectural services and other items in anticipation of closing the purchase of the Grace Hospital lands and redeveloping those lands.

Most of this was financed by Rayrow and Linver (via its principal, Danny Taran). This sum does not include fees of Carruthers that Angus did not pay (and has no arrangement in place to pay) in an amount of roughly $212,000. [ 65 ] On November 29, 1999 the Province wrote the SA in relation to the agreement reached, in exchange for the Province foregoing its ROFR, permitting the sale to a third party, with the SA retaining the proceeds of such sale. [ 66 ] The sale did not close until February 17, 2000.

The Master’s Decision [ 67 ] It noted both parties provided a substantial evidentiary basis and extensive case authorities to support their respective arguments. The Master correctly instructed himself on the principles to be applied in an application for

summary judgment. He stated a court is to consider whether there is a genuine issue requiring a trial or whether a court can reach a fair and just determination on the merits of the motion for

summary dismissal. [ 68 ] The Master summarized Angus’ argument that there is a triable issue to be decided by a trial court. That argument highlighted the question which needed to be determined by a trial judge on the facts and law placed before him or her. The question related to whether or not there was a cloud on the title which would have exposed Angus to a reasonable threat of litigation from the Province of Alberta, should Angus complete the purchase and acquire title.

The Master noted a finding by a trial judge of a cloud on the title could provide the foundation for an Angus argument that it could not be forced to accept a doubtful title. He referenced the Angus’ authorities cited in support of its position. [ 69 ] The Master found the Statement of Claim extensively laid out facts and arguments in support of the Angus claim for damages for breach of good faith and the further position of Angus that the cloud on the title justified its failure to complete the purchase.

Based on the facts pled in the Statement of Claim he determined it is possible a trial judge would provide Angus a remedy based on a cloud being present on the title. [ 70 ] In response to the argument advanced by the SA that there was no threat of litigation directed against Angus because the letter of the Alberta Minister of Health dated April 26, 1999 was only sent to the SA, the Master noted the letter clearly indicated the Province of Alberta believed the SA was in breach of the Equity Agreement and it further indicated the Province of Alberta may wish to exercise its ROFR under s. 9 of the Equity Agreement. [ 71 ] In

summary the Master stated it would not be difficult to imagine the Province of Alberta in attempting to enforce its right to acquire the land, would sue the SA and as well, Angus, if Angus had become the registered owner of the land. He found the Minister’s position in the April 26, 1999 letter could amount to a reasonable threat of litigation. [ 72 ] The Master further determined the Province of Alberta did not retract or resile from its position before the purported closing of July 30, 1999 between the parties.

In addition, the Master referenced the letter of July 29, 1999 from SA’s conveyancing counsel to the Angus conveyancing counsel. In particular he looked at its discussion respecting the course of action to be employed should the Province of Alberta caveat the title to the land before or after the closing of July 30, 1999. He determined the reasonable expectation of the parties would require the SA to rectify the issues with the Province of Alberta before accepting the offer to purchase or in the absence

of such rectification, the SA would disclose the issue respecting the ROFR to Angus. He noted the angst expressed by all of the interested parties as possible evidence that the SA did not handle the sale properly after its decision to sell the property. [ 73 ] As a result the Master ruled a trial court possibly could find there was a cloud on title and Angus may be successful at trial. In essence, he found it was a genuine issue requiring a trial in that it cannot be decided upon a

summary dismissal application. [ 74 ] The Master went a step further and assessed Angus’ claim for damages based upon its allegation the SA breached its duty of good faith. That breach is based upon Angus’ assertion the SA failed to disclose to it the Equity Agreement and MOU. He noted the SA argued the Angus claim did not fit within the existing doctrines touching on the particular type of situations and relationships in which good faith obligations are imposed.

He further noted the SA argument that good faith does not impose a duty of disclosure nor does it impose a duty to forego the advantages flowing from a contract. [ 75 ] The Master considered the seminal case of Bhasin v Hrynew , 2014 SCC 71 which attempted to provide a coherent and consistent set of principles for the concept of good faith. He recognized the Supreme Court of Canada set out the general organizing principle of good faith. That principle is based upon the reasonable expectations of the contracting parties.

Such expectations require honesty, candidness and forthright and reasonable contractual performance in certain specific situations and relationships. Included in that is the belief that parties must cooperate in order to achieve the objects of the contract. [ 76 ] The Master expressed the principle object of a real estate contract is to ensure the purchaser obtains all for which it bargained.

He noted the SA may be correct in its argument that the Province of Alberta would have failed in any action against Angus based upon the principle of indefeasibility of title as set out in the Land Titles Act of Alberta , RSA 2000, c L-4 at s 60. [ 77 ] Despite the SA argument that Angus should not have been apprehensive over the Province of Alberta’s position, the Master found the SA itself was concerned about its conduct in failing to give notice to the Province of Alberta respecting the proposed sale to Angus.

He noted the considerable correspondence between various officers and employees of the SA discussing the anticipated proceeds from the sale bearing in mind the provisions of the Equity Agreement and MOU. Based on the documentation the Master stated the Province of Alberta conceivably was entitled to claim a sizeable portion of the sale proceeds. [ 78 ] He noted the state of anxiety within the ranks of the SA upon his review of its inter-office memos and correspondence.

In addition, the Master referenced the state of arousal generated in the offices of the eventual purchaser, Healthchoice, and the architectural firm engaged in the proposed modification of the hospital building when representatives of the Province of Alberta inspected the building site in May of 1999.

He found the failure of the SA to notify the Province of Alberta in advance of acceptance of the Angus offer and the failure of the SA to notify Angus of the existence of the documentation, possibly providing the Province of Alberta a ROFR, caused disruption from May to July of 1999 amongst all of the interested parties.

Next he noted despite conveyancing counsel for SA advising conveyancing counsel for Angus that the Province of Alberta had no enforceable interest in the property, conveyancing counsel for the SA advised the Province of Alberta on June 10, 1999 that the SA might be forced to terminate the Agreement for Purchase and Sale of the hospital property to Angus. [ 79 ] He found the position that the Province of Alberta might not have an enforceable ROFR or its claim might have been defeated by the indefeasibility of title principle is an after-the-fact analysis. [ 80 ] Returning to the reasonable expectation of the parties based on the general organizing principle of good faith, the Master noted it is at least arguable the SA was required to disclose to Angus the Province of Alberta’s ROFR. [ 81 ] The Master further considered the SA’s argument that the real reason Angus failed to complete the purchase was the inability of Angus to obtain zoning and planning approval to satisfy conditions in Angus’ resale of the property.

He further considered the countervailing Angus argument that it was reasonable for it to stop the continued expenditure of time and money in the face of the discovery of the Province of Alberta’s ROFR claim. In his determination of those 2 competing arguments, the Master noted conveyancing counsel for Angus initially raised the problem of the existence of the Province of Alberta’s ROFR claim in its letter of May 28, 1999 to conveyancing counsel for the SA. He found the planning and subdivision issue and the issue of the Province of Alberta’s possible ROFR claim was inextricably linked.

As a result he ruled he could not grant the SA’s

summary dismissal application. [ 82 ] As an aside, the Master noted substantial practical concerns arising out of the Supreme Court of Canada’s Bhasin decision, supra , respecting the scope and implications of the general organizing principle of good faith and noted further concerns respecting the uncertainty of the specific duty of honest contractual performance for contracting parties.

He adopted the view further judicial consideration might be necessary to define further certainty for contracting parties regarding the general organizing principle of good faith in contractual performance. [ 83 ] As a result of his decision to dismiss the application, the Master found no need to address the inordinate delay argument of Angus or the Angus argument to strike some or all of the SA’s evidence in the application. The Appeal [ 84 ] In this appeal the SA argued the Master erred on the following grounds: The Master: (

a) assumed that good faith obligations may apply among parties to simple arm’s length real estate transactions; (

b) effectively held that good faith may impose a legal duty on vendors of real estate to disclose all potential claims to unregistered interests in land, even inoperable ones, and even where the offer has expressly disclaimed all implied representations and warranties regarding such;

(

c) effectively ruled that good faith may require forbearance of contractual rights without any consideration; (

d) determined that the land use issue raised by Angus as a basis for refusing to close was “arguably inextricablylinked” with the Province’s ROFR claim in the absence of any evidence or even argument in support of such a finding; (

e) determined that the Province’s letter to the SA stating that it “may wish” to exercise the ROFR couldsomehow “arguably” constitute a threat to sue Angus for fraud if Angus closed under the Offer; and (

f) held that an alleged “threat” by the Province to bring a wholly frivolous fraud claim against Angus, and/orthe altered City land use position, could justify Angus’ refusal to close. The Standard of Review [85] This is an appeal de novo with correctness being the standard of review. I recognize that I can exercise my discretion andreplace the Master’s opinion with mine.

The Application of the Decision in Hryniak v Mauldin, 2014 SCC7 [86] In applying the decision I refer and set out para 26 and 27 in Ursa v The City of Edmonton (City), 2015 ABQB 438: It must be recognized there has been a sea change relating to delay in civil litigation. Today the length and cost of trials present anongoing problem. Unwieldly and expensive litigation processes tend to make access to justice inaccessible to the public. Timely accessto the courts is a must for litigants.

Moving the civil case forward with a series of time and procedural related steps will increase theefficiency of civil justice and will result in a just determination of the merits of each individual legal action. The new Rules of Court were brought into existence in order to promote the pace of litigation and to simplify proceedings. SpecificallyRule 1.2 sets out the purpose and intend of the Rules.

It states: 1.2(1) The purpose of these Rules is to provide a means by which claims can be fairly and justly resolved in or by a court process in atimely and cost effective way. [87] The decision of Hryniak, supra, in the Supreme Court of Canada somewhat relaxed the threshold for

summary judgment froma “genuine issue for trial” to a “genuine issue requiring trial.” If a judge can make the necessary findings of fact on the evidence placedin support of the application, and if the judge can apply the law to those facts, then the judge can deliver a decision on an application forsummary judgment. However, if the foundational evidence on the application is insufficient or reveals a material dispute between theparties, a judge cannot make a factual determination in those circumstances and a trial would be necessary in order to resolve the caseproperly. Yet it should be recognized that a

summary judgment application might allow a judge to make some fact findings on certainissues or further define issues left in dispute. In such instances the eventual trial could be shortened and a more efficient trial could result.As a result, even a non-successful

summary judgment application can assist the parties and the court to better prepare for the eventualtrial with the evidence and issues more fully delineated. [88] I recognize and adopt the following principles which are set out in para 18 of the Brief of Law and Argument of the SA filedin this application: Application of these principles here reveals that determination via

summary process is both fair and efficient: a. There is a very substantial evidentiary basis on which to proceed and no basis to expect further material evidence to emerge throughviva voce testimony or otherwise; b. There is no conflicting evidence on any material fact; c. There is no barrier to applying the law to the undisputed material facts; and d. A

summary determination would save significant time, cost and judicial resources. [89] Counsel for the SA submitted the mere assertion of an unregistered interest or right in land does not create a “reasonable threatof litigation” in fraud against a purchaser who had no notice of such asserted interest or right prior to contract formation, and does notallow that purchaser to avoid his contract, refuse to close, recover back his deposit, or claim damages against the vendor. [90] Counsel for the SA submitted the argument about a reasonable threat of litigation is without foundation in law, and offendsthe core principles behind Alberta’s land registration system.

Counsel noted the core purpose of the Land Titles Act of Alberta is toensure certainty of title for all bona fide purchasers for value. This core purpose is accomplished through the principle of indefeasibilityof registered title.

See Turta v Canadian Pacific Railway, (SCC), [1954] 3 DLR 1 (SCC) at para 84. [91] It was noted by counsel for the SA that the cases cited by Angus in support of Angus’ assertion that there exists evidence tosupport a “reasonable threat of litigation” over the validity of the title are a line of dated equity cases concerning marketability of title atcommon law and under deed registration systems. It was stressed in argument that these equity cases are from non-Torrens registrationsystem jurisdictions. In such jurisdictions these cases referenced marketability of title at common law.

A “marketable title” was a titlesufficiently certain that it could be forced on an unwilling purchaser. If the title lacked sufficient certainly, it was considered doubtful

and a purchaser was not bound to accept it. Counsel commented these equity cases dealt with the uncertainty of a marketable title, where the validity of the title was subject to a “reasonable threat of litigation.” [ 92 ] The argument of the SA stressed in such cases there must be objective evidence and not a mere subjective fear of litigation by the purchaser.

Further it was argued that such a reasonable threat of litigation would have to demonstrate a level of some substance as opposed to being one of triviality or shallowness. [ 93 ] Counsel for the SA submitted the principle of indefeasibility of registered title in Alberta dislodges the equitable concepts of “marketable” and “doubtful” title as they relate to unregistered interests.

Counsel submitted only registered interests can “cloud” a title in Alberta and not threats of litigation on unregistered interests, which are necessarily considered frivolous. [ 94 ] If Angus had registered the transfer of land, it would have received good and sufficient title in that the Province of Alberta did not have a registered encumbrance setting out its ROFR. Hindsight is most relevant as the Province of Alberta notified the SA it was not exercising its ROFR.

However that notification by the Province of Alberta occurred after the closing date of July 30, 1999 between the SA and Angus. [ 95 ] Yet that is not the situation present in the case at bar.

If the Province of Alberta had registered by encumbrance its ROFR, Angus would not be required to close until the issue of the ROFR was resolved. [ 96 ] Here Angus eventually received notice by the letter of the Province of Alberta Minister of Health of April 26, 1999 to the SA that the Province of Alberta was relying on s. 9 of the Equity Agreement irrespective of any other agreements entered into between the SA and other parties. This reference to other agreements could encompass the Offer to Purchase between the SA and Angus.

The letter pointed out the requirements and responsibilities of the various parties in the event the owner (the SA) wishes to sell. The letter reminded the SA of its responsibility to notify the Minister of Health of the intention to sell.

It went on to state the Province of Alberta wished the SA to postpone finalization of the sale until the Crown was able to discuss the situation with the Calgary Regional Health Authority and depending on these discussions the Province of Alberta may wish to exercise its ROFR under s. 9. [ 97 ] In its argument before me the SA asserted there was no conflicting evidence and/or there was no need for viva voce evidence. It further submitted the Master improperly held the April 26, 1999 letter “arguably” constituted a threat to sue Angus for fraud.

The SA argued the letter spoke for itself and I can make the determination based on the letter whether it did or did not constitute a threat to sue Angus for fraud. [ 98 ] My determination is the letter did not constitute a threat to sue Angus for fraud. [ 99 ] However, I agree with the Master when he stated the Province of Alberta believed the SA was in breach of its agreement and the letter stated the Province of Alberta may want to insist on its rights.

I further agree with the Master’s statements: [...]It is not difficult to imagine that the Province in attempting to enforce its right to acquire the land would sue the Defendant and, if the Plaintiff was then the registered owner, sue the Plaintiff as well. The test is not whether the action would be successful, but whether the Province’s position in its April letter amounted to a reasonable threat of litigation. Arguably, it does. The Province did not retract or resile from its position stated in the April letter before closing July 30 th , 1999.

In clause 6 of the Defendant’s lawyer’s letter of July 29 th , 1999, Mr. Lyle discusses steps to be taken should the Province register a caveat against the lands before closing. Therefore, it is arguable that there was a reasonable threat of litigation right up until closing. If the Court determines that there was indeed a cloud on title, the Plaintiffs may be successful in obtaining judgment directing the return of its deposit and damages. [ 100 ] I find the letter constituted an objective and substantial reasonable threat of litigation in the circumstances.

The SA and Angus were certainly put on notice regarding the Province of Alberta’s position. Any litigation emanating from the Province of Alberta may be founded on the capacity of the SA to sell the property in the face of the Equity Agreement and the MOU. [ 101 ] The officers and employees of the SA and the other interested parties, including Healthchoice and the architectural firm, in their documentation certainly expressed their concern over the Province of Alberta’s position. They consulted their legal counsel. [ 102 ] The letter constituted only one piece of evidence.

As noted by the Master and as set out in the Facts of these Reasons, there were other pieces of evidence suggesting there was a reasonable threat of litigation. While the letter did not expressly reference a threat to litigate an inference can be easily drawn that its wording constituted a reasonable threat to proceed to litigate to enforce its rights, if necessary, under s 9 of the Equity Agreement. [ 103 ] It is easily understood that Angus might not wish to close the purchase in the face of the Province of Alberta’s position.

If Angus did close and received registered title, a law suit commenced by the Province of Alberta to enforce its ROFR could possibly name and encompass Angus as the registered owner of the property as well as the SA as the former registered owner which sold the property in possible contravention of the requirements and responsibilities set out in the Equity Agreement. Such a lawsuit might not be successful but it could hardly be described as frivolous.

Further, the principle of indefeasibility of title might not be applicable as a defence in the unusual circumstances of this litigation. [ 104 ] Finally the Province of Alberta and Angus merely asked the SA for forbearance in postponing the closing of the purchase until the Province of Alberta could ascertain its position. The SA did not accede to this request and insisted it close on the scheduled date.

A few days after the scheduled closing the Province of Alberta advised it would not exercise its ROFR. [ 105 ] In my opinion, there is possible evidence in the present litigation between Angus and the SA which could be adduced as to whether there was a cloud on the title. The actions of the Province of Alberta as to its position and request certainly caused a “cloud” which raised concern on the part of all the interested parties. There is a basis in my view of further material evidence to emerge through viva voce testimony at such a trial.

Such testimony might emanate from the employees and officials from the Province of Alberta

respecting its position. Such evidence might detail the basis on which the Province of Alberta believed it had a ROFR. [ 106 ] Such evidence might detail why the Province of Alberta failed to encumber the lands with an instrument protecting its ROFR and notifying interested parties dealing with the title. It might detail why the Province of Alberta failed to encumber the lands with such an instrument between the dates commencing after it received notice of the SA’s proposed sale to Angus but before the sale closed on July 30, 1999.

The evidence might further disclose the reason the Province of Alberta asked the SA to postpone the closing of the Angus purchase pending its position on the ROFR. As well such evidence might provide why the Province of Alberta elected to not exercise the ROFR. Was it because the hospital building did not prove to be feasible in the Province of Alberta’s discussions with the Calgary Health Authority or was it because the Province of Alberta upon closer examination of the ROFR reached a conclusion it might not be successful in its litigation?

Those are just some of the presently unanswered questions. [ 107 ] Further possible evidence might be provided by one of the parties in the present litigation as to the reason the City of Calgary possibly changed its planning and zoning designations regarding the hospital property. However in my opinion, the position of the City of Calgary on the land use did not present as a further “cloud” on the title due to a reasonable threat of litigation.

Rather, the City of Calgary’s position on the land use applicable to the hospital site was a subsequent consequence to Angus as a result of independent factors which did not flow from the Province of Alberta’s ROFR. [ 108 ] In my opinion based upon objective evidence, there is a viable argument there was a reasonable threat of litigation right up to the potential closing of the sale between the SA and Angus. The SA has not presented uncontroverted facts and law which makes it highly unlikely Angus will succeed at trial.

This issue in its present evidentiary state dictates this litigation must be resolved at a trial. There are many factual issues which have to be resolved by the trial judge and which factual issues cannot be resolved in this application for

summary dismissal. There is a need for additional viva voce evidence. [ 109 ] I note if the Province of Alberta had registered an encumbrance or caveat on the lands on the basis of the Equity Agreement, the MOU or the ROFR, each independently or taken one with the other or others, the SA could not on the indefeasibility principle provide Angus with a free and clear title until the Province of Alberta’s position was resolved.

Such an encumbrance would serve to protect the Province of Alberta’s legal position and it would serve to provide notice to interested parties or to possible bona fide purchasers for value. [ 110 ] In the case at bar, Angus as the bona fide purchaser for value, was placed on notice not through an encumbrance but was placed on eventual notice by the letter of April 29, 1999 from the Province of Alberta. If the Province of Alberta had filed an encumbrance on the title before or after the closing date of July 30, 1999, the principle of indefeasibility perhaps would not be applicable.

Indeed conveyancing counsel for the SA in a letter of August 6, 1999 to Mr. Garry Beres of CB Richard Ellis stated: If the Province was to file a caveat prior to a caveat from a new purchaser, this would effectively sterilize the property until its determination by the courts. [ 111 ] With respect to the reasonable threat of litigation, I note if the Province of Alberta determined it was going to attempt to enforce its ROFR and placed an encumbrance, if registerable, on the Angus title after the sale closing, either Angus or the SA would be required to resolve the issue of the ROFR with the Province of Alberta.

Alternatively the SA and/or Angus might have to take steps to remove the encumbrance. Such steps might include possible litigation to remove the encumbrance or litigation requiring the Province of Alberta to enforce it.

Scenarios involving the possibility of a Statement of Claim issuing would only be resolved if the Province of Alberta provided a release to either the SA or Angus respecting its possible interest or any limitation period respecting the ROFR expired. [ 112 ] I am not prepared to find as argued by counsel for the SA on the evidence presented on this application that the Province of Alberta’s claim respecting its asserted ROFR is frivolous. Any issue as to whether the ROFR was valid and enforceable could depend on a court’s

interpretation of the documentation between the SA and the Province of Alberta involving the Equity Agreement, the MOU and the ROFR. [ 113 ] As an aside, I can think of another example where the reasonable threat of litigation caused by the Province of Alberta asserting its ROFR could represent a cloud on the title. I consider the scenario where Angus might be seeking financing for the possible development of the property. Despite the absence of any encumbrance on the title registered by the Province of Alberta, Angus would have a duty of disclosure to any possible lender to advise of the existence of the ROFR.

This disclosure could certainly impact the decision by the lender to advance funds using an encumbrance such as a mortgage or caveat registered against the title as security for the loan. A prudent lender might not be prepared to engage in any financing due to the possibility of the Province of Alberta litigating to enforce its ROFR.

Angus might have a duty of good faith to warn the lender regarding the ROFR (registered or unregistered) which could impact the lender’s security. [ 114 ] Those are some of the scenarios where litigation could result as a result of the Province of Alberta advising it believes the SA is in breach of its agreement and advising that it may want to insist on its right. [ 115 ] This issue surrounding the existence of the ROFR cannot be decided on a

summary dismissal application. A trial is required. Angus’ Claim of Bad Faith and Dishonesty [ 116 ] Counsel for the SA referenced the Supreme Court of Canada decision in Bhasia v Hrynew , 2014 SCC 71 setting out the nature and boundaries of good faith in contract law. He noted the decision emphasized the limits of good faith as an organizing principle which required a cautious and incremental approach by the court. From this organizing principle specific doctrines emerge.

In addition, the foundation for the application of the good faith principle consists of the reasonable expectations of all parties to the contract. These reasonable expectations include a basic duty of honesty, precluding lies or known misrepresentations respecting the contractual performance.

[ 117 ] The decision set out certain contractual relationships which call for higher duties of good faith in the concepts of fairness, candidness, forthrightness and reasonableness. Some of such specific contractual relationships include contracts of employment, leases, insurance and tender.

Such contracts are underscored by the parties’ need for higher duties of good faith in order to protect them against vulnerability or power imbalances; or to maintain a trust and cooperation. [ 118 ] Other examples of situations requiring higher good faith duties include: 1. the parties’ need for cooperation in order to achieve contractual objectives; 2. where discretionary contractual powers come into play; 3. where a party seeks to evade its contractual duties. [ 119 ] Counsel for the SA stressed the cautious and incremental approach, urged by the Supreme Court of Canada in the application of the good faith principle, should require the courts to employ the principle objectively and not employ it in a search for judicial moralism or employ it as pretext for scrutinizing the motives of the parties to the contract.

Further the principle does not invoke duties of fiduciary loyalty, disclosure or the need to forgo advantages emanating from the contract. [ 120 ] Finally, claims of bad faith outside certain existing contractual relationships should only succeed in instances where the existing law is not able to provide a judicial remedy and the good faith principle will provide a judicial remedy in that new situation. [ 121 ] In the case at bar, counsel for the SA submitted the contractual relationship between the SA and Angus did not encompass good faith obligations. [ 122 ] In considering that submission, it is my view on the evidence adduced in this application, that a trial judge should look to see if a basic duty of honesty, which all parties have, required the SA to disclose to Angus its contractual relationship with the Province of Alberta, including all documentation such as the MOU, the Equity Agreement, and the ROFR which might potentially affect the ability of Angus to receive a free and clear title, absent any claim the Province of Alberta might have on the property.

The SA’s position is that the ROFR is inoperable and unenforceable. It further takes the position that the Province of Alberta’s assertion of a ROFR is a spurious assertion. The SA might be correct in that position. However a trial judge, after hearing evidence, documentary or possible viva voce , from the SA, Angus and the Province of Alberta might not find in favour of the SA’s position at trial. The Province of Alberta in its letter of April 26, 1999 to the SA did not suggest the ROFR was inoperable, unenforceable or spurious.

Again there is no evidence as to why the Province of Alberta elected not to proceed on its ROFR. It might have reached the same conclusion as advanced by the SA in this application. Then again it might not have reached such a conclusion. Its decision not to proceed on the ROFR might have been founded on an economic basis or a basis that it had no future interest or plans for the hospital or its site. There could have been other reasons. I will not surmise as to what such reasons might be.

However, there is a source of evidence available from at least the Province of Alberta which will assist a trial court to determine if the SA’s position on the operability, enforceability or spuriousness of the Province of Alberta’s ROFR is correct. The position advanced by the SA on this application as to the inoperability, unenforceability or spuriousness of the ROFR cannot be determined on the evidence adduced to date. [ 123 ] There is insufficient evidence on this application to consider whether a basic duty of honesty was owned by the SA to Angus in these circumstances.

Further if it did exist, did it require the SA to disclose to Angus prior to the execution of the Offer to Purchase, the contractual relationship it enjoyed with the Province of Alberta respecting the Equity Agreement, the MOU and most importantly, the ROFR.

While there was no evidence of lies or misrepresentation by the SA, the lack of disclosure might have breached any good faith obligations a trial judge might find was owing in the contractual relationship between the SA and Angus. [ 124 ] A trial judge must determine whether on all of the evidence that the Bhasin decision applied to the facts in the case at bar.

In doing so the trial judge would approach the issue of good faith objectively, and not approach it as a search for judicial moralism, or approach it as a pretext for scrutinizing the motives of the parties to the Offer to Purchase. [ 125 ] In my opinion, the pleadings of Angus respecting bad faith are wide enough to require this further issue can be resolved on evidence to be adduced at trial. There is insufficient evidence on this issue of bad faith for me to dismiss Angus’ claim on a

summary basis. [ 126 ] Further, the prior contractual relationship between the SA and the Province of Alberta might give rise to a class of relationships involving higher level good faith duties, some of which have been classified as employment contracts, lessor-lessee contracts, insurance contracts or contracts of tender. Again, there is insufficient evidence adduced on this application for me to determine whether higher level good faith duties exist in the present litigation.

As indicated earlier, possible sources of evidence flowing from the Province of Alberta or elsewhere might allow a trial court to determine whether the SA bore a higher level of good faith to Angus in the contractual circumstances.

In the further alternative, a trial might allow a trial judge to determine that Angus demonstrated the law in this situation is “wanting” and good faith principles should be extended to apply to this relationship or situation. [ 127 ] Finally, a trial judge can decide, as opposed to a determination by me on the evidence provided in this application, whether good faith required the SA to postpone the July 30 th , 1999 closing in the face of the delay requests put forth by both Angus and the Province of Alberta.

I am not, on the evidence provided on this application, prepared to determine the ROFR was inapplicable, inoperable or unenforceable as submitted by the SA in this application. [ 128 ] I further agree with the Master’s point that there remains a substantial disquiet respecting the existing width of the general organizing principle of good faith as set out in the Bhasin decision, supra , in the Supreme Court of Canada. I note the Master referenced a recent

article on the decision as authored by Maureen Killoran Q.C. and Anne Kirker Q.C. The authors stated the general organizing principle of good faith, as well as the specific duty of honest contractual performance remains somewhat uncertain for contracting parties. They concluded both concepts will require further judicial consideration and development as the decision does not set out specific expectations for satisfying either concept. Flowing from the

article and the Master’s comments, I believe the case at bar with its specific factual background is exactly the type of case which calls for further judicial consideration of these concepts. Only a trial,

bringing to light all of the evidence, can attempt to implement these concepts in this case. An application for

summary judgment cannot. [ 129 ] In the end result, I uphold the Master’s decision and accordingly I dismiss the appeal. [ 130 ] With respect to costs, Angus is entitled to costs for this application in Column 3 for the first half day and for 2 additional half days, payable forthwith. Heard on the 2 nd and 5 th days of June, 2017. Dated at the City of Calgary, Alberta this 22 nd day of September, 2017. A.G. Park J.C.Q.B.A. Appearances: Thomas P. O’Leary for the Appellants William R. Pieschel, Q.C. for the Respondents