Kathryn Farms Ltd v, 2021 ABQB 245

Court of Queen’s Bench of Alberta Citation: Kathryn Farms Ltd v 1572548 Alberta Ltd, 2021 ABQB 245 Date: 20210330 Docket: 2101 01967 Registry: Calgary Between: Kathryn Farms Ltd, Marion Randall, Nancy Kissinger, Patricia Harding and Lori Randall also known as Lori Chang Applicants - and - 1572548 Alberta Ltd Respondent Corrected judgment: A corrigendum was issued on April 20, 2021; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice P.R.

Jeffrey _______________________________________________________ [ 1 ] The Applicants (collectively “ Kathryn Farms ”) seek an order requiring the Respondent 1572548 Alberta Ltd. (“ 157 ”) to remove its caveat from the titles to their 4409.515 acres (the “ Lands ”). They also seek injunctive relief to regain possession of the Lands back from 157 or, failing that, that 157 post security for damages. [ 2 ] The caveat was placed on the titles by 157 as notice that it claimed a purchaser’s interest in those Lands pursuant to an agreement it reached with Kathryn Farms (the “ Agreement ”).

The core issue in this application is the present status of that Agreement – whether 157 continues to have a purchaser’s interest (or any proprietary interest) in the Lands. [ 3 ] Kathryn Farms and 157 entered into the Agreement on November 29, 2018. By it 157 promised to pay a deposit of $100,000 to Kathryn Farms within 3 days of signing the Agreement and the remainder of the purchase price (the “ Balance ”) on April 1, 2019, their agreed “ Closing Date ”, subject to standard adjustments. The Balance would be over $27,500,000.

[ 4 ] If 157 was unable to pay the Balance by the Closing Date, because of an inability to obtain the funds from the completion of a sale of land in Germany (the “ Triggering Event ”), then the deal would close on the “ Extended Closing Date ” of November 30, 2019, plus some additional terms would govern their relationship between those dates (the “ Extension Terms ”). Those Extension Terms are significant to the issue now before the Court and include: a. 157 shall still receive vacant possession of the Lands on the Closing Date (Article 6.2); b.

As of the Closing Date, 157 would not be restricted from any use of the Lands that it wished, such as harvesting timber, marketing aggregates from off the Lands, subletting some or all of the Lands or assigning agreements associated with the Lands; c. All of the purchase price adjustments in

Article 2.6 would still be made as of the Closing Date not the Extended Closing Date (Article 2.6 (b)) so, for example, 157 became responsible for the property taxes and all other expenses as of the Closing Date even though it had not paid the Balance, and after the Closing Date not the Extended Closing Date 157 became entitled to all revenues from the Lands such as surface lease payments; d. 157 would lease the Lands from Kathryn Farms between the Closing Date and one month after the Extended Closing Date, at a rent specified in the Agreement (Article 2.4 (d)); e.

Kathryn Farms would apply the amount 157 pays as rent against the outstanding Balance (Article 2.4 (d)); and f. 157 would pay interest to Kathryn Farms at the rate of 2% per annum on the unpaid Balance after the Closing Date until the earlier of the Extended Closing Date and payment of the Balance (Article 2.4 (c)); [ 5 ] In the Agreement Kathryn Farms promised to transfer to 157 the titles to the Lands on whichever of the two dates they received the Balance. [ 6 ] 157 paid the $100,000 deposit but was delayed in delivering the Balance by reason of the Triggering Event. [ 7 ] Pursuant to the Extension Terms, the parties entered into a lease of the Lands from April 1 to December 31, 2019 (“ Lease 1 ”).

Lease 1 refers to the Agreement in its recitals. It incorporates some of the Extension Terms but reverses others. It contains an “entire agreement” clause. [ 8 ] Lease 1 terminated December 31, 2019. [ 9 ] 157 was still unable to pay the Balance by the Extended Closing Date.

Kathryn Farms says therefore the Agreement terminated on November 30, 2019, by its terms. 157 says it has not terminated – because of the Extension Terms and the parties’ dealings since November 30, 2019, resulting in it being an “agreement for sale” preventing Kathryn Farms from defeating its equitable interest summarily. [ 10 ] The parties attempted to agree on terms that would amend the Agreement, by which Kathryn Farms would permit 157 to pay the Balance on an even later date.

Those negotiations continued long after the Extended Closing Date, but the parties never did reach an agreement to extend the Extended Closing Date, despite a willingness on both sides. [ 11 ] The parties did agree to a second renting of the Lands (“ Lease 2 ”). Lease 2 ran from April 1, 2020, to February 28, 2021. Lease 2 does not address the fact three months transpired between the end of Lease 1 and the start of Lease 2.

Lease 2 does not contain any of the Extension Terms; it does not mention either the Balance or the Agreement. [ 12 ] Lease 2 requires 157 to “at the termination thereof, yield up the [Lands]” (Article 16). It also contains an “entire agreement” clause. [ 13 ] The ongoing discussions between the parties about the sale shifted from both parties speaking of amending the Agreement.

In September 2020 Kathryn Farms spoke of the need for “a new contract”. [ 14 ] On December 21, 2020, Kathryn Farms reminded 157 that “there is nothing in writing with [157] at the moment which would commit [it] to purchasing” the Lands. 157 did not dispute that characterization of the Agreement. [ 15 ] On December 21, 2020, Kathryn Farms also notified 157 that they had received more than one other offer for the Lands, not actively solicited, and that they would need a “binding Amending Agreement” or a “binding written commitment” from 157 to justify not accepting one of the new offers. 157 did not respond saying the Agreement was just such a commitment that was already binding on Kathryn Farms and on it, or that in any way the Agreement still limited Kathryn Farms’ options. [ 16 ] Kathryn Farms heard nothing from 157 until they received, on January 7, 2021, a proposal from 157 in the form of a “Draft 2021 Revised Amending Agreement”. [ 17 ] On January 9, 2021, Kathryn Farms entered into an agreement to sell the Lands to a third party, for $28,500,000.

That

agreement requires, I am told, Kathryn Farms to transfer the titles clear of the caveat on or before its closing date of March 5, 2021. That date passed before this application came before me for emergency hearing. [ 18 ] On January 10, 2021, Kathryn Farms responded to the January 7 proposal from 157. They notified 157 of their decision not to proceed with any further agreement with 157 and of having accepted a conditional offer from a third party.

They asked 157 to discharge the purchaser’s caveat. [ 19 ] 157 has not done so. 157 says the Agreement is an “agreement for sale” and that it is entitled in equity to an opportunity to redeem the titles to the Lands. [ 20 ] Kathryn Farms never requested earlier that 157 discharge its caveat. In fairness, it appears the constructive and professional dialogue between the parties up to then may have given Kathryn Farms no reason to suspect 157 would not readily withdraw the caveat. Nothing turns on this point. [ 21 ] At the time of hearing this application, 157 said it was still unable to pay the Balance.

Nothing turns on this point either. Application Process [ 22 ] Kathryn Farms apply for a declaration that the Agreement is not an “agreement for sale”, for an order discharging the caveat and, because 157 has been in occupation of the Lands, for injunctions that 157 vacate the Lands and remove all their property therefrom. In the alternative they seek an order requiring 157 to provide security for damages in the amount of $28,500,000, the amount of the consideration for the Lands expected from the third-party purchaser. [ 23 ] Kathryn Farms did not follow the process established by

section 138 of the Land Titles Act to require 157 as caveator to take proceedings in court by application to substantiate its interest claimed in the lands. Had it done so, 157 would have 60 days to substantiate its interest, failing which the caveat would lapse. [ 24 ] Kathryn Farms did not follow the process established by

section 141 of the Land Titles Act for asking the Court to discharge a caveat. That process would require notice to 157 to show cause why the caveats should not be discharged and typically would be followed by a hearing or application on that issue. That process may be commenced, says s 141, “at any time”. [ 25 ] For Kathryn Farms, it appears, getting the caveat off the titles had become urgent. If it commenced either statutory process it would be subject to how quickly or slowly 157 might choose to proceed.

Even if Kathryn Farms commenced either statutory process immediately after signing the new sale agreement with the third-party purchaser, it could not be certain of a court order by the March 5, 2021, deadline that it voluntarily agreed to with that third-party purchaser. The 60 days under the s 138 process, for example, permitted 157 until after March 5. [ 26 ] Kathryn Farms filed this application on February 10, 2021. [ 27 ] 157 says any urgency to this Application is entirely of Kathryn Farms own making.

Kathryn Farms knew of 157’s interest, it says, and the third-party purchaser had notice of its interest from the caveat. [ 28 ] I infer that Kathryn Farms opted for this application process so it could drive an abbreviated court timing to the timing contemplated in the statutorily prescribed processes. Upon filing its application, Kathryn Farms wrote to the Court and petitioned for an immediate hearing. One of my colleagues granted the request without, it appears, having the prescribed statutory processes brought to her attention by Kathryn Farms.

She added the application as an emergency onto my Commercial Chambers sittings for hearing March 16.

I moved it back another day to give 157 a bit more time to submit an abbreviated written response to the late filings of Kathryn Farms. [ 29 ] 157 does not ask me to deny the discharge application for not following either prescribed statutory process, but does say it ought to affect the test I am to apply. 157 says the process commenced by Kathryn Farms is tantamount to a request that its claim be dismissed summarily. 157 says to succeed, Kathryn Farms “must prove that there is no triable issue with respect to the validity of the caveat,” that it has no argument of merit to sustain the caveat. [ 30 ] I agree that the approach taken by Kathryn Farms has compromised 157’s opportunity to frame the basis for its position and its time in which to marshal its evidence and formulate its arguments. 157’s counsel has done so impressively in the abbreviated time available.

This constraint has not adversely affected the merits of those arguments and under the process chosen by Kathryn Farms they bear the burden not 157. But I agree that in the circumstances I should apply to the issues regarding the nature of the Agreement, its present status, and the caveat discharge request, the

summary dismissal test. That test is summarized by our Court of Appeal in Weir- Jones Technical Services Incorporated v Purolator Courier Ltd , 2019 ABCA 49 at paras 47 – 49 . [ 31 ] I am satisfied, having regard to the state of the record and the issues, that it is possible to fairly resolve the dispute now. There are no disputes about the facts, the record or the law, just about the law’s application to the record. The core issue is one of contractual

interpretation and the effect at law of the events and the parties’ communications since, based on an undisputed record. There is no genuine issue here requiring a trial. [ 32 ] Further, Kathryn Farms must persuade me to a much higher standard of confidence than merely on balance. Caveat: The Nature and Current Status of the Agreement [ 33 ] The terms of the Agreement state that it terminates if 157 fails to pay the Balance when due. Kathryn Farms says that

according to law the Agreement has terminated and 157 has no remaining purchaser’s interest.

Therefore, it says, the caveat must beremoved from the titles to the Lands. [34] 157 says the Agreement has not yet terminated and in these circumstances Kathryn Farms are not entitled to terminate it. 157says the caveat protects its property interest as purchaser of the Lands. [35] 157 says the Agreement did not terminate and it still holds a purchaser’s interest in the Lands because of the Extension Termsand because the parties continued to discuss amending the Agreement after the Extended Closing Date. [36] 157 says that the Extension Terms are hallmarks of an agreement for sale, that by the Agreement Kathryn Farms conveyed to157 the fruits of the Lands, without a means to get the property back. 157 says the Agreement is akin to a rent to own and to a vendortaking back the mortgage.

Kathryn Farms is financing 157’s purchase until the Extended Closing Date. It does not matter, says 157,whether the future payments due a vendor are amortized over 25 years or (as here) 8 months, the essential nature of the arrangement isthe same. The payment is over time with the purchaser possessing the Lands in every sense of the word in the interim.

While inpossession 157 bears responsibility as the full owner subject only to the right of Kathryn Farms to receive the Balance in the future. [37] 157 says, further, the ongoing communications between the parties plus their conduct post Extended Closing Date renderKathryn Farms unable to rely on the “time is of the essence” clause in the Agreement. It says Kathryn Farms cannot satisfy all threeparts of the test in Shaw v Holmes, (ON CA), [1952] 2 DLR 330 (Ont CA) (citations omitted): Time may be insisted upon as of the essence of the agreement by a litigant, (

a) who has shown himself to be ready, desirous, prompt andeager to carry out his agreement: …; (

b) who has not himself been the cause of the delay or in default: …; and (

c) who has notsubsequently recognized the agreement as still subsisting; he must not play fast and loose at his pleasure. [38] In my view, Kathryn Farms is entitled to rely on the “time is of the essence” clause in the Agreement. I find that KathrynFarms has been ready and willing to complete the sale transaction. Kathryn Farms has not been the cause of the delay. Kathryn Farmshad not “played fast and loose”. And they did not scour about for a better price from another acquisitor while preserving the 157 deal intheir back pockets just in case.

Kathryn Farms did not conceal from 157 that others had expressed interest in acquiring the Lands.Kathryn Farms did not actively solicit those offers. Kathryn Farms patiently accommodated 157’s delays, though with understandabledisappointment, until they tired of 157’s unrealized assurances, forecasts and representations. Kathryn Farms was extremely forbearingas 157, over time, demonstrated that its predictions were not reliable. Kathryn Farms did nothing by which they can be taken to havewaived their right to rely on the “time is of the essence” clause in the Agreement.

Therefore, they are able to hold 157 to the Agreementterminating on the Extended Closing Date. [39] Kathryn Farms and 157 agreed on the terms of 157’s two separate leases of the Lands. Each contained an “entire agreement”clause. That is also most significant in this case as I will now attempt to explain. [40] Lease 1 encompassed the time between the Closing Date and the Extended Closing Date. It reversed some of the ExtensionTerms in the Agreement.

The parties did not, therefore, ‘convey to 157 the fruits of the Lands without a means of getting them back.’ [41] After this reversion by Lease 1, the result is more consistent with an agreement of purchase and sale than an agreement forsale. Under the Agreement the closing adjustments were to be made as at the Closing Date, not the Extended Closing Date and 157would enjoy the rights of ownership between the Closing Date and the Extended Closing Date.

These approaches to the Extension Termsreflect more 157 taking on full ownership despite not yet paying the entire Balance. [42] But the parties changed that in Lease 1. By Lease 1 the parties reverted to Kathryn Farms continuing as full owner betweenthe Closing Date and the Extended Closing Date, and beyond if the Balance was still not paid. The parties agreed to the closingadjustments being made as of the Extended Closing Date not the Closing Date.

Under Lease 1 Kathryn Farms retained all responsibilitiesand rights of ownership, for example, paying all property taxes and other expenses and receiving third party surface revenues. Lease 1involved Kathryn Farms as landlords and 157 as having only tenancy rights of possession.

Lease 1 prohibited 157 from harvestingtimber, marketing sand, gravel or clay from the Lands, subletting any of the Lands, or any of the broad range of rights for propertyownership that the Agreement said transferred to 157 on the Closing Date. [43] I infer from these changes in Lease 1, supplanting the approach taken in the Agreement, that the parties had realized theiraddition of the Extended Closing Date and the Extension Terms in the Agreement had not reflected their true intentions. By Lease 1 theystated their true intention when agreeing to the possibility of the Extended Closing Date.

Their true intentions, captured in Lease 1, were‘in force’ before the commencement of the extended term. [44]

Article 7.2 of the Agreement contemplated amendments to the Agreement provided they were in writing. At

Article 7.2 theAgreement says: This Agreement shall not be deemed to be or construed to be, modified or amended except by instrument in writing signed by [KathrynFarms] and [157] specifically. [45] An amendment to the Agreement need not say something like “By these terms that follow the parties are amending theAgreement” or other comparable declaration. The requirement is only that there be an “instrument in writing signed by” both parties. Thetwo Leases satisfy this requirement. [46] To the extent either of the Leases contain terms that differ from the Agreement, they prevail over the terms in the Agreement,both by the effect of

Article 7.2 of the Agreement and by common sense that the more recent in time, by the same parties and about thesame Lands, can be understood to be made with knowledge of the prior and therefore prevail over the prior. Where two agreementsamong the same parties address the same matters in conflicting ways, the more recent in time prevails, all other things being equal. [47] The Agreement contemplates Lease 1, in

Article 2.4(d), but to the extent the terms of Lease 1 deviate from or vary the

Agreement, Lease 1 constitutes an amendment to the Agreement and prevails over it. [ 48 ] The “entire agreement” clause in Lease 1 prohibits consideration of anything that occurred before Lease 1 was signed in interpreting Lease 1 and determining its effect. The “entire agreement” clause in the Agreement does not prevent amendments to it after its execution. See, in this regard: Soboczynski v Beauchamp , 2015 ONCA 282 at paras 43 – 53 .

Therefore, Lease 1 amended the Agreement on an important consideration to whether or not the Agreement was an agreement for sale. [ 49 ] Therefore, further, if 157 is correct that it still had a continuing interest in the Lands after the Extended Closing Date, entitling it to not relinquish possession, then Lease 2 amended that aspect of the Agreement by requiring yielding up the Lands on February 28, 2021 (Article 16).

Lease 2 contains an “entire agreement” clause. [ 50 ] An entire agreement clause also does not preclude from consideration in interpreting the contract the conduct of the parties after its execution: Soboczynski , at paras 60 – 63 . The post-contractual conduct of the parties here, in particular (

i) their reversing significant Extension Terms in the Agreement by Lease 1 and (ii) their requirement that 157 yield up possession of the Lands in Lease 2, demonstrate they meant the Agreement to terminate on the Extended Closing Date absent payment of the Balance by 157; they meant it remain an agreement of purchase and sale, not an agreement for sale that bestowed any residual proprietary interest to 157. [ 51 ] The post-contractual conduct of the parties, particularly their apparent common understanding between December 21, 2020, and January 7, 2021, that it had terminated, also militates strongly in favour of the

interpretation that it had terminated, not continued in any way by the parties’ negotiations after the Extended Closing Date. [ 52 ] I conclude the Agreement is not an “agreement for sale” but remained a “purchase and sale agreement”. It is not one from which 157 still retains any caveatable interest. While the Extension Terms that remained after Lease 1 was signed are consistent with an agreement for sale, alone they are not sufficient to transform what started out as a purchase and sale agreement into an agreement for sale following the Triggering Event.

They are merely the parties’ agreement to keep each other relatively whole for the brief period between the Closing Date and the Extended Closing Date, in the event of the Triggering Event only. [ 53 ] The most recent property interest 157 has enjoyed in the Lands is that of tenant, under Lease 2. That expired February 28, 2021. 157 is overholding. [ 54 ] 157 says it was necessary for Kathryn Farms to exercise a right to terminate the Agreement and it does not have that right in these circumstances. I disagree; it did not need a right to terminate in the agreement and then to exercise it.

The Agreement is expressly clear that the Agreement terminates automatically if the Balance is not paid by one of the closing dates.

Article 2.4 states: … in the event [the Balance]is not paid and releasable to [Kathryn Farms] on or before the Extended Closing Date, this agreement shall be deemed to have terminated … and neither the Vendor nor the Purchaser shall be obligated to complete the purchase and sale transaction contemplated herein. And

Article 2.8 states [I]f the Purchaser fails to perform any provision of this Agreement then … this Agreement shall terminate. [ 55 ] The term of the Agreement was not indefinitely extended as a consequence of the parties continuing to discuss a further extension. By the terms of the Agreement, any such amendment had to be in writing (Article 7.2). Therefore, even though both sides expressed a willingness to amend the Agreement to further extend the closing date, they never did.

Absent such an amendment in writing to further extend the closing date, the Agreement terminated in accordance with its terms. [ 56 ] In any event, I find the December 21, 2020, communication from Kathryn Farms to 157 sufficient notice that Kathryn Farms treated the Agreement as terminated. [ 57 ] 157 says Kathryn Farms cannot now repudiate the Agreement. Repudiation arises when a breach complained of would have the effect of depriving the innocent party of substantially the whole or a major benefit under the agreement: Booster Juice Inc v West Edmonton Mall Property Inc , 2019 ABCA 58 , at para 13 .

At such time the innocent party is considered as relieved from further performance but only if it elects that outcome right away. In Dresser Industries, Inc v Raven Muds Ltd , 1976 AltaSCAD 229, the Alberta Supreme Court, Appellate Division, said at para 24: It seems clear that if the repudiation is not acted upon or accepted as such immediately, or certainly within a reasonable time, the contract remains alive to the end for the benefit of both parties: Cromwell v. Morris , (1917) 2 W.A.R. 377; and Guy-Pell v. Foster (1930) 2 Ch. 169 . [ 58 ] With respect, that is not what Kathryn Farms are doing.

For the reasons herein, I am satisfied they are enforcing their rights as fee simple owners following the termination of the Agreement and the expiry of the latest tenancy. [ 59 ] 157 says Kathryn Farms failed to perform their obligations under the Agreement, preventing 157 from lawfully tendering the Balance. Specifically, 157 says Kathryn Farms failed to deliver to 157 in advance of the Closing Date various documents, such as registerable transfers, water permits and licences, and a certificate for Income Tax Act purposes that Kathryn Farms are not non-residents, among others.

Their delivery was required “reasonably far in advance of the Closing Date to allow … registration of the title … prior to or on the Closing Date”: (Article 6 of the Agreement). [ 60 ] This “failure” is of no consequence because, first, in the circumstances of the ongoing communications between the conveyancing solicitors for both sides, it was known there was no point in the document preparation and delivery because 157 had made it clear that it would not be able to pay the Balance on the Closing Date. The parties’ attentions were properly focused on developing Lease 1.

Kathryn Farms non-delivery of closing documents was, I find, solely and entirely because 157 admitted at the time it would not tender the funds Balance.

[61] Second, 157 never objected to Kathryn Farms failing to prepare and deliver superfluous documents – ones that would onlyhave to be revised or recreated later. [62] Third, 157 had the option of the Lands being registered in the name of a nominee, or some nominees, so Kathryn Farms couldnot prepare registerable transfer documents affecting the Lands without hearing first from 157 on that. It never did.

I find, rather, thatKathryn Farms remained at all times poised and ready to close; 157 was not. [63] Fourth, if 157 construed that document delivery omission by Kathryn Farms as relieving it from performing its obligationunder the Agreement to tender the Balance, then it was necessary for it to communicate its chosen treatment of that failure “immediately,or certainly within a reasonable time” thereafter: Dresser Industries, Inc v Raven Muds Ltd, 1976 AltaSCAD 229 at para 24.

An innocentparty may be taken by reason of silence to have elected not to treat its obligations under the contract as at an end: Denmark ProductionsLtd. v Boscobel Productions Ltd., (1969) 1 Q.B. 699 at 732. 157 cannot say it was relieved of its obligation to pay the Balance after itfailed to tell 157 at the time of Kathryn Farms’ non-delivery of closing documents, of its choice to treat that non-delivery as relieving itfrom the obligation to pay them the Balance. 157 continued to act as though the Agreement remained in force and binding on both parties– indeed, it insists in response to this application that the Agreement remains in force. [64] I note, further, that the Agreement’s treatment of the possible forfeiture or refund of the $100,000 deposit implies that forKathryn Farms to actually be in breach (for deposit forfeiture purposes) it must fail to perform the entire Agreement, unlike 157, whichforfeits the deposit if it fails to perform any provision (Article 2.8). [65] 157 relies on Co-op Centre Credit Union Ltd v Greba (1984), 1984 ABCA 183 , 55 AR 176 (Alta CA), in support ofits position that it is entitled to redeem the titles to the Lands.

I disagree that Co-op applies here. If Co-op applied at all, it would be toprevent Kathryn Farms from enforcing a right to payment under the Agreement and, failing that, to have 157 removed from title andpossession. But, first, Kathryn Farms does not have any right to enforce payment of the Balance against 157. Kathryn Farms’ remediesfor 157 not paying the Balance are retention of the $100,000 deposit and 2% interest on the Balance until the Extended Closing Date,nothing more. There is no surviving covenant by 157 to pay any deficiency.

Second, 157 does not have possession under the Agreement,only under leases that have expired. And third, 157 does not have title to the Lands. [66] I find the facts here to be closer to those in the recent decision of Ingarra v 301099 Ontario Limited (Previn Court Homes),2020 ONCA 103, a case referred to in one of the authorities submitted by 157. In Ingarra neither vendor nor purchaser could close thetransaction on the first “Firm Closing Date” of January 11, 2018. The vendor could not provide an occupancy permit and the purchaserwas not yet in funds.

The parties did not follow their agreement in changing their closing date; instead by agreement of their lawyers theyextended it to January 15, 2018. The vendor could close on the new date but the purchaser still could not. He continued to be without the funds and, on the 15th, he requested one additional day. The vendor agreed to the further extension and set it to January 17. On the 17th again the purchaser was without funds to close; he asked for a further extension.

The vendor declined, declared the purchaser to be inbreach, deemed the deposit forfeit, and proceeded to relist the property. [67] After addressing the effect of the “time is of the essence” clause in their contract, the Court said, at para 21: Since [the purchaser] was not in funds to close on the new agreed closing date, it was open to [the vendor] to terminate the agreement ofpurchase and sale. [68] Similarly, here, the Agreement by its terms was deemed terminated when 157 was still not in funds by the Extended ClosingDate.

Kathryn Farms’ gracious forbearance thereafter did not serve to revive or to continue the Agreement. Any amendment to theAgreement extending even later the closing date had to be in writing. That did not occur. [69] Even if Kathryn Farms’ forbearance did serve to revive or continue the Agreement, the communications between the partiessince the Extended Closing Date made sufficiently clear Kathryn Farms’ position that the Agreement had terminated. The wording ofLease 2 is far more consistent with the Agreement having terminated than the alternative.

The December 21, 2020, communication fromKathryn Farms to 157 gave sufficiently clear notice that the Agreement had terminated and that there was no reason preventing KathrynFarms from accepting one of the other offers they had received. [70] The only relevant difference between this case and Ingarra is 157 taking possession of the subject property while trying tosource the funds to complete the purchase, whereas in Ingarra the purchaser had not taken possession while trying to source the funds toclose.

But here that possession arose under the leases, not the Agreement, so this case is in fact on all fours with Ingarra. Even if onewere to interpret the Agreement, containing the agreement to agree on a lease, as providing for possession of the Lands by 157 pendingcompletion of the purchase on or before the Extended Closing Date, that was superseded by Lease 1, itself an “entire agreement” inrespect of the basis of the possession as tenant. Further, by Lease 2, the possession as tenant was on a basis entirely distinct from theAgreement.

Lease 2, again, also has an “entire agreement” clause. [71] I am convinced (that is, I am not just persuaded on balance), therefore, that 157 had no purchaser’s interest after November30, 2019, presently no longer has any caveatable interest in the Lands, and that the caveat must be removed. Injunctions and Security for Damages [72] Kathryn Farms also seeks two injunctions, one prohibitory and the other mandatory. The former asks that 157 be enjoinedfrom attending the Lands; the latter asks that 157 be required to remove all its property from the Lands.

The prohibitory requires theyshow a serious issue to be tried for the first part of the tripartite test, whereas the mandatory injunction requires they show a strong primafacie case. [73] By my conclusions on the nature of the Agreement and on the application to discharge the caveat, Kathryn Farms haveprevailed, not just shown a strong prima facie case. Therefore, they have satisfied both formulations of the first part of the test.

[ 74 ] I am satisfied Kathryn Farms will suffer irreparable harm if the injunctions are not granted. One of the applicants is over 82 years of age and her remaining opportunity to enjoy redeploying her proceeds of the sale are more limited. This is not compensable monetarily. Also, as a land parcel of substantial size in aggregate, the Lands are unique and of potential interest to a more limited market.

The possibility of future events in these uncertain times during a further delay in the absence of the injunctions could scare off other potential buyers. [ 75 ] I am satisfied the balance of convenience favours Kathryn Farms. The harm to Kathryn Farms will be greater if I do not grant the injunctions, in light of my findings above, than will be the harm to 157 if I do. [ 76 ] Customarily the Court’s role is to enforce contracts.

The Court is doing nothing more than aiding the performance of the terms of the parties’ three agreements, each freely negotiated with the benefit of counsel, and voluntarily signed. [ 77 ] I therefore grant both injunctions. Under the mandatory injunction, however, the requirement that 157 remove all its property from the Lands shall not be construed as a breach of the prohibitory injunction and shall exclude any crops already harvested by 157 from the Lands and that are currently stored on the Lands. This is to reflect the parties’ agreement at

Article 32 of Lease 2. Any such previously harvested crops must be clearly identified by both parties and must be removed by 157 no later than June 30, 2021. 157 shall be responsible for their safe keeping, preservation, and for the preservation of their quality, until removal. [ 78 ] In light of my conclusions on the primary grounds of relief sought by Kathryn Farms, it is not necessary for me to consider the relief they sought in the alternative, for security for damages. Conclusions [ 79 ] I conclude the Agreement is not an “agreement for sale”. I conclude 157 no longer has a purchaser’s interest in the Lands.

I order removal of the caveat. [ 80 ] I find 157’s tenancy on the Lands to have ended and that 157 is overholding. [ 81 ] I grant the injunctions requested, modified as I have indicated. [ 82 ] The parties may speak to me about costs if they cannot agree, provided they do so within 30 days. Heard on the 17 th day of March, 2021. Dated at the City of Calgary, Alberta this 29 th day of March, 2021. P.R. Jeffrey J.C.Q.B.A.

Appearances: Terry Czechowskyj and Halley Auger for the Applicants C Michael Smith for the Respondent _______________________________________________________ Corrigendum of the Reasons for Decision

of The Honourable Mr. Justice P.R. Jeffrey _______________________________________________________ The following changes were made to the Reasons for Decision: 1. Paragraph 50 was amended as follows: “...absent payment of the Balance by 157 ; they meant...” 2. Paragraph 80 was amended as follows: “I find 157 ’s tenancy on the Lands to have ended and that 157 is overholding.”