RICHARD SMITH Plaintiff - v. -, 2003 SKPC 57

2003 SKPC 57 IN THE PROVINCIAL COURT OF SASKATCHEWAN SMALL CLAIMS DIVISION SITTING AT LOON LAKE BETWEEN: RICHARD SMITH Plaintiff - and - PHYLLIS VON GRAD AND ALFRED VON GRAD Defendants Appearances:Richard Smith, for himself Phyllis Von Grad and Alfred Von Grad Collin, for themselves ************************************************************************ JUDGMENT March 21, 2003 E. Kalenith, PCJ ************************************************************************

[ 1 ] Richard Smith brings an action for the return of a deposit paid, and legal costs paid, as a result of cancellation of an agreement to purchase pasture land from the Von Grads. He alleges that he agreed to buy land from the Von Grads subject to the condition that there was a reliable and adequate water supply for cattle. He alleges that the water supply was neither reliable nor adequate, entitling him to return of his deposit. The Von Grads dispute that the water supply was a condition of the agreement to sell, but allege that this is something Mr.

Smith has made up as a reason to try to cancel the sale, something which was not contained in the receipt which confirmed the terms of the sale. [ 2 ] This case raises the following issues: (

a) was there a reliable and adequate supply of water to the land being sold ?; (

b) if not, was the adequacy of the water supply a condition of the sale ?; (

c) if so, does that entitle Mr. Smith to have his deposit returned and to reimbursement of legal costs he incurred in relation to the aborted purchase? I deny Mr. Smith’s claim for the reasons which follow. [ 3 ] Richard Smith contacted Alfred Von Grad on February 20, 2002, in response to an ad in a newspaper for the sale of pasture land for $35,000.00. Mr. Smith met with Mr. Von Grad on February 23, 2002 and viewed the property. Mr. Von Grad indicated that the land had a phone connection, a septic system, a power connection, and a water well.

He also indicated that an Indian Band pipeline skirted the property and that there was a low-lying area on the property which always had water in it and which could be used for a dugout. Mr. Von Grad agreed that he would arrange for removal of the “junk” (old vehicles and pieces of metal) from the property. Mr. Smith then agreed to purchase the land. He testified that the sale was subject to the water supply being reliable and adequate. Mr.

Von Grad did not recall this but disputes that the sale would be subject to this condition because it was not something he could guarantee, not having personal knowledge of the water supply in the well. [ 4 ] Mr. Smith then paid a deposit of $3,600.00 and received a document prepared by Phyllis Von Grad which acknowledged receipt of that amount from Mr. Smith, for BC Rich Farms (a company owned by Mr. Smith, his wife and his son), on the quarter

section of land NW 25-58-22-W3, total price of $36,000.00, free of debts and liens. Mr. Von Grad asked if the receipt was satisfactory. Mr. Smith agreed that it was and they shook hands. Mr. Von Grad then suggested having the deal confirmed in writing by his real estate agent. Mr. Smith said he would prefer to have paper work completed by his lawyer, something that was never done. [ 5 ] Mr. Smith then agreed to purchase a load of hay from Mr. Von Grad and they attended at Mr. Von Grad’s farm. There was some discussion about the fact that Mr.

Smith was answering an ad which showed a purchase price of $35,000.00, instead of the $36,000.00 price shown in other ads, and so it was agreed that the purchase price would be $35,000.00. [ 6 ] Mr. Smith was concerned about the water supply and so he attended the property again on April 21, 2002 and checked the well by dropping a rock down it, which struck dirt and not water. The well was operated using a sand point system, the water being located below the sand. Beverly Smith made inquiries of the Band land man and was told they would not be able to attach to the Band pipeline.

Having been advised that Joe Farn previously conducted a slaughterhouse business on the property, and used the well, Mr. Smith attempted to contact Mr. Farn without success. On May 8, 2002, Mr. Smith attended to view the property again. He had discussions with Mr. Von Grad about various solutions to Mr. Smith’s concerns about the reliability and adequacy of the water supply. Mr. Von Grad suggested that Mr. Smith contact Peter Hakes, a water well driller from Meadow Lake, and Mr. Smith attempted to make such contact without success. Mr.

Smith also said that his shareholders were opposed to the purchase of the land because it was so far from home. Mr. Smith acknowledged that he said this but explained that this concern was based on the fact that the distance from his home near Lloydminster would make it very difficult for him to keep cattle on the pasture land if the water supply was not reliable. No other testing was ever done of the well.

[ 7 ] Joe Farn testified that he occupied the land and used the property for a slaughterhouse business until November, 2000. The well was dug in 1976 and it was a thirty-six-inch hole and had thirty-two feet of water. In 1998 the bottom rotted out of the well and a sand point system was put in so the well could continue to be used. He never had a problem with water supply but did acknowledge that he did not use it for keeping cattle, which would involve greater use. He also acknowledged that if the well ran dry and was not supervised, this would cause damage to the pressure pump system in place.

The power hookup and pipes remained on the property to allow for checking the adequacy of the water supply in the well. [ 8 ] On May 9, 2002, Mr. Smith contacted Alfred Von Grad and advised that he was cancelling the purchase because he was of the view that the water supply was inadequate and he requested return of his deposit, which Mr. Von Grad refused. Mr. Smith also had his lawyer send a letter confirming that he was cancelling the purchase because he was of the view that the water supply was not reliable and adequate, and the letter requested return of the deposit. This deposit was not returned. [ 9 ] Mr.

Von Grad indicated that he was contacted by others and provided a list of numerous other people who left names and numbers with requests for information about possible sale of the pasture land, all of which he declined because he thought that he was bound to sell the land to Mr. Smith. He later had a lawyer send a letter to Mr. Smith demanding that the sale should be completed or he would sell the land to someone else, but he took no further steps to do this.

He also testified that recent contact with the Band suggested that they would permit establishing a hookup to the band pipeline, although it is uncertain as to whether that would require putting a residence on the property, something Mr. Smith never intended to do. A. ANALYSIS [ 10 ] I find that Mr. Smith has failed proven that there was not a reliable and adequate water supply to the property. The evidence presented clearly shows that this was a concern of his, but it also shows that the only testing done was when he dropped a rock down the well.

I am satisfied on the evidence that the well system had recently provided a water supply adequate for operating a slaughterhouse business, and while grazing cattle may require more water, no testing was ever done of the well to determine whether it provided a reliable and adequate supply. I cannot draw any conclusion on this issue from the evidence presented. For this reason alone Mr. Smith’s claim must fail. [ 11 ] I also find that even if it had been proven that the water supply was not reliable and adequate, the claim must fail because I find that this was not made a condition of the sale. While I accept Mr.

Smith’s evidence that the adequacy and reliability of the water supply was a concern of his, I do not accept that he made it clear to Mr. Von Grad that the agreement to buy the land was conditional on him being satisfied about the water supply. Not only is the receipt silent about any such condition, which Mr. Smith confirmed at the time as acceptable, he refused the offer to have the agreement put down in writing to remove the possibility of any misunderstanding. I accept Mr.

Von Grad’s evidence that he would not make the sale subject to a guarantee about the water because this was not something he could guarantee. I find that in the circumstances Mr. Smith was not entitled to cancel the purchase as a result of his concerns and that he is not entitled to return of his deposit or of repayment of any legal costs he incurred in connection with the purchase. [ 12 ] I therefore dismiss Mr. Smith’s claim. DATED this 21st day of March, 2003. ________________________________ Earl Kalenith, a Judge of the Provincial Court of Saskatchewan.