1061403 B.C. Ltd. Plaintiff v. Canada Willingdon Holdings Ltd., 2018 BCSC 1067

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: 1061403 B.C. Ltd. v. Canada Willingdon Holdings Ltd., 2018 BCSC 1067 Date: 20180628 Docket: S164470 Registry: Vancouver Between: 1061403 B.C. Ltd. Plaintiff And Canada Willingdon Holdings Ltd. Defendant Before: The Honourable Madam Justice Donegan Reasons for Judgment on Plaintiff’s

Summary Trial Application Counsel for the Plaintiff: S.H. Stephens Counsel for the Defendant: O.J. James Place and Date of Trial: Vancouver, B.C. February 22, 2018 Place and Date of Judgment: Vancouver, B.C. June 28, 2018 INTRODUCTION [ 1 ] This action centres on a desirable piece of residential development property on West 15 th Avenue in Vancouver, British Columbia (the “Property”).

In early January 2016, at a time when the owner was in the latter stages of obtaining a development permit, the defendant, Canada Willingdon Holdings Ltd. (“Canada Willingdon”), entered into a contract with the owner to buy the Property. One of its terms allowed for Canada Willingdon to assign the contract to another party without the vendor’s consent. [ 2 ] Shortly thereafter, Canada Willingdon and the plaintiff, 1061403 B.C.

Ltd. (“403”), entered into an Assignment of Contract of Purchase and Sale (the “Assignment Agreement”), which included a provision that stated, in part, “…the purchase price will include the Development Permit.” 403 paid Canada Willingdon the $250,000.00 deposit required by the Assignment Agreement, but the development permit was not issued by the completion date, 403’s financing arrangements fell through and it did not complete.

Canada Willingdon was then unable to complete its contract with the vendor and ultimately lost the Property. [ 3 ] In this action, 403 sues Canada Willingdon for breach of the Assignment Agreement, seeking return of its deposit and other relief. Canada Willingdon denies breaching it as alleged, or at all, and asserts that it was 403 that breached the Assignment Agreement and counterclaims for damages arising from that breach. [ 4 ] This is a

summary trial application brought by the plaintiff. The plaintiff seeks judgment in the amount of $250,000.00, plus interest and costs. It says the defendant breached the Assignment Agreement, entitling it to return of its deposit, primarily on three basis: 1. The development permit provision in the Assignment Agreement was a condition precedent that the defendant failed to satisfy; 2. The defendant’s breach was a fundamental breach; and/or 3. The deposit is returnable pursuant to the terms of the Assignment Agreement itself. [ 5 ] The plaintiff submits this matter is suitable for

summary trial determination because it involves, at its core, a straightforward

interpretation of the provisions of a contract. 403 recognizes certain factual controversies in the evidence, but says that if the court finds it necessary to resolve them, they can be. [ 6 ] The defendant takes a contrary position on all points.

[ 7 ] It first submits that if the court finds it necessary to venture into the factual matrix in order to construe the terms of the Assignment Agreement, the evidence on key points is so conflicting and incomplete (and relies partly on inadmissible hearsay), the court should conclude the matter is unsuitable for

summary trial determination. [ 8 ] In the event there is to be a

summary trial on the plaintiff’s claim (the counterclaim is not before the court), the defendant has tendered evidence and argues the plaintiff’s claim ought to be dismissed. It says the issuance of a development permit was not a condition precedent, was not a fundamental term of the Assignment Agreement and that the deposit is not returnable pursuant to the terms of the Assignment Agreement. [ 9 ] I think it would be helpful to first introduce the parties and other key players and then outline the basic uncontroversial facts in this application.

I will touch upon the factual areas of controversy in a general way, but will leave to later the final details that arise in respect of particular arguments. UNCONTROVERSIAL BACKGROUND FACTS The Parties and Key Players [ 10 ] The plaintiff is a British Columbia corporation. Balpreet Bal is a director of 403 and its principal. He is also a realtor, the managing broker for a real estate brokerage firm bearing his name and the owner of a mortgage brokerage firm. [ 11 ] Inderjeet Dhillon is a realtor who acted as the realtor for 403 for the transaction at issue. Mr. Dhillon has known Mr. Bal for years. He knows Mr.

Bal to be a client who is regularly interested in hearing about real estate investment and development opportunities. [ 12 ] The defendant, Canada Willingdon, is a British Columbia corporation that characterizes itself as a small development company specializing in boutique multi-home residential and mixed use developments. Ray Chen is the president and operating mind of Canada Willingdon. [ 13 ] Shinna Hsu is a realtor who acted as a realtor for Canada Willingdon for the transaction at issue. [ 14 ] Lily Gan is a realtor whose precise role in this litigation is at issue. Canada Willingdon says that Ms.

Gan acted as its “referral agent”, while the plaintiff says that Ms. Gan was co-agent with Ms. Hsu for Canada Willingdon in the transaction at issue. [ 15 ] Vinny Maan (sometimes referred to as Vinny Mann in the materials) is another realtor who was involved somehow in the transaction at issue. His role is very much in dispute. The plaintiff says that Mr. Maan acted as agent for Canada Willingdon, for its realtor (Ms. Gan) or for both. Canada Willingdon vigorously denies Mr. Maan acted as its agent or in any capacity for it at all. The Contract of Purchase and Sale for the Property [ 16 ] In December 2015, Mr.

Chen learned the owner of the Property was interested in selling. He was also aware the owner had already taken steps to develop the Property, including applying for a development permit from the City of Vancouver (the “Development Permit”). [ 17 ] At this stage, the Development Permit was fairly far along in the approval process, in the sense that a “prior to” letter had been issued by the City on November 2, 2015.

The “prior to” letter indicated that the application for the Development Permit had been approved and that a permit would issue upon completion of certain conditions that were set out in the body of the letter. The “prior to” letter further advised that if the conditions set out in the letter were not met by January 16, 2016, the application for the Development Permit “may stand refused.” The Development Permit had value at this point. According to Mr.

Bal, it is likely that up to $100,000.00 would have been spent on the Development Permit approval process as of January 2016. [ 18 ] On or about January 3, 2016, Canada Willingdon entered into an Agreement of Purchase and Sale with the vendor to purchase the Property (the “Contract”). The Contract included the following material terms: 1. The purchase price was $4.25 million; 2. Canada Willingdon was to pay deposits totalling $250,000.00; 3. Completion date was March 15, 2016 (or earlier upon 15 days notice by Canada Willingdon); and 4.

Canada Willingdon was permitted to assign the Contract to another party without the consent of the vendor. [ 19 ] Later that same month, Canada Willingdon and 403 negotiated for the assignment of the Contract. The details of those negotiations, including what the parties intended and instructed their agents, and the status, involvement and potential representations by Mr. Maan are all very much in issue. [ 20 ] The parties executed the Assignment Agreement (dated January 26, 2016) on January 28, 2016, prepared on the Real Estate Board of Greater Vancouver’s standard assignment of purchase and sale agreement. Ms.

Hsu and Ms. Gan are identified on the Assignment Agreement as the defendant’s realtors and Mr. Dhillon is identified as the plaintiff’s. [ 21 ] Material terms of the Assignment Agreement included the following: 4. TERMS

The Assignor hereby assigns to the Assignee as of the Effective Date (as defined in Clause 4.4), all the Assignor’s right and title in and to the Contract on the following terms and subject to the following conditions: 4.1 ASSIGNMENT AMOUNT: In consideration of the Assignor assigning the Contract to the Assignee, the Assignee agrees to pay the Assignor the sum of Four Hundred Fifty Thousand DOLLARS $450,000.00 (Assignment Amount) determined as follows:

a) Reimbursement of Deposits Paid Under the Contract to Date by Assignor $25,000.00

b) Balance of Assignment Amount $450,000.00+GST

c) Assignment Amount (a+b) $700,000.00

d) Assignee’s Total Purchase Prince (original purchase price +b) $4,700000.00 4.2 DEPOSIT: a deposit of $250,000.00 which will form part of the Assignment Amount, will be paid on the following terms: $50,000.00 non-refundable deposit paid direct to assignor within 48 hours of acceptance via bank draft or certified cheque and $200,000.00 to be paid on March 1, 2016 .

All monies paid pursuant to this clause (Deposit) will be delivered in trust to First and Second deposit Direct to Assignor [as] the reimbursement of Deposit Paid Under the Contract to Date by Assignor and are non-refundable. (the “Stakeholder”) and hold in trust in accordance with the provisions of the Real Estate Services Act .

In the event the Assignee fails to pay the Deposit as required by the Assignment Agreement, the Assignor may, at the Assignor’s option, terminate this Assignment Agreement. 4.3 TERMS AND CONDITIONS : The assignment of the Contract includes the following terms and is subject to the following conditions: See Addendum __________________________________________ ______________________________________________________ ______________________________________________________ Each condition, if so indicated, is for the sole benefit of the party indicated.

Unless each condition is waived or declared fulfilled by written notice given by the benefitting party to the other party on or before the date specified for each condition, this Assignment Agreement will be terminated thereupon and the Deposit returnable in accordance with the Real Estate Services Act . 4.4 ASSIGNMENT AMOUNT : The Assignment Amount (other than the Deposit payable under Clause 4.2) shall be paid to the Stakeholder or the Assignee’s conveyance, as follows: On completion. ___________________________________________ _______________________________________________________ _______________________________________________________ 4.5 EFFECTIVE DATE : This Assignment Agreement shall be effective upon the later of: (

a) the date that the last of any conditions set forth in Clause 4.3 hereof are satisfied or waived; or (

b) such other date as specifically provided in Clause 4.3 hereof. … 4.7 DEPOSIT : The Assignor assigns as of the Effective Date, all of the Assignor’s interest in the Deposit set out in Clause 2 (including the interest, if any, that accrued to the Assignor thereon) to the Assignee. … 4.10 ASSIGNOR’S INDEMNITY : The Assignor hereby agrees to indemnify and save harmless the Assignee against and from all actions, suits, costs, losses, damages, charges, and expenses incurred by the Assignee arising out of any breach or non-observance of any of the representations and warranties of the Assignor contained in this Assignment Agreement. [ 22 ] The Addendum referred to in clause 4.3 appears at the last page of the Assignment Agreement and it provides: 1) Seller warrants that there will be no outstanding [fees] owing to the City of Vancouver for the Development Permit and the purchase price will include the Development Permit [the “Development Permit Clause”]. 2) Seller will provide a letter of authorization and consent to the Buyer for the appropriate Government authorities authorizing disclosure, and grant the buyer to act on behalf of the seller in any matter relating to the Property. 3) Buyer will be responsible to complete all of the requirements from the City of Vancouver before receiving the Building Permit and such requirements will be at Buyer’s own expenses.

Buyer been [advised] to take independent legal advice on this assignment of contract of purchase and sale and for direct deposit paid as [mentioned] in the contract. [ 23 ] Two other documents were executed on January 28, 2016 pertaining to realtor’s fees. The plaintiff and Mr. Dhillon executed a

“[Commission] Agreement Form” identifying Mr. Dhillon’s gross commission, plus the applicable GST for the Assignment Agreement. The defendant and Ms. Gan and Ms. Hsu (and possibly Mr. Dhillon and/or Mr. Maan) executed a “Fee for Service Retainer Agreement”, identifying the net commission to be paid for the Assignment Agreement. [ 24 ] The Commission Agreement Form identifies Mr. Dhillon as the selling salesperson and Ms. Hsu and Ms. Gan as the listing salespersons. The Fee for Service Retainer Agreement identifies Ms. Gan, Ms. Hsu and Mr. Dhillon as designated agents, but at some point Mr.

Dhillon’s name is crossed out and Mr. Maan’s name is inserted. There is no evidence about how and when Mr. Maan’s handwritten name came to appear on this document. Ms. Hsu, Mr. Chen and Ms. Gan all deny that Mr. Maan acted as an agent, or in any capacity, for Canada Willingdon in this transaction. [ 25 ] 403 paid the deposit required under clause 4.2 by March 1, 2016. [ 26 ] The status of the Development Permit following the execution of the Assignment Agreement and other post-agreement activities by the various players are also very much in dispute, particularly what Mr. Maan may or may not have said and done.

I will address these post-contract conversations and activities at a later point in these reasons. [ 27 ] On March 1, 2016, 403 made financing arrangements for the purchase and development of the Property through Canada Western Bank.

This financing was conditional upon the issuance of the Development Permit and an appraisal confirming a market value of the Property “as if complete” of $11 million. [ 28 ] 403 was unable to complete on the closing date because its financing collapsed. 403 says this occurred because once it learned that the Development Permit had not been issued (contrary to representations said to have been made by Mr. Maan on behalf of the defendant), it unsuccessfully tried to negotiate an extension of the completion date in order to seek alternative financing. The defendant disagrees and says that Mr. Bal and Mr.

Dhillon told Ms. Hsu that the plaintiff could not close because a partner which was advancing a good portion of the purchase price was no longer interested in the project. In any event, 403 did not complete. [ 29 ] Canada Willingdon tried to extend the closing date under the Contract to allow 403 additional time to raise funds, but to no avail. Canada Willingdon could not therefore complete the Contract and the Property was later sold to another purchaser. [ 30 ] What occurred in the weeks that followed is also controversial.

POSITIONS OF THE PARTIES [ 31 ] The plaintiff submits that it only wanted to take on the assignment on the condition that the Development Permit would be issued and its associated fees paid before completion date. It asserts that Mr. Maan, on behalf of the defendant, told Mr. Dhillon that these terms would not present a problem, that Canada Willingdon was working with the vendor on the application, and that the Development Permit would certainly be issued prior to the completion date. [ 32 ] The plaintiff alleges that Mr.

Maan, on behalf of the defendant, provided regular updates and assurances to 403 that the Development Permit was nearly approved and that on or about March 10, 2016, Mr. Maan incorrectly advised Mr. Dhillon that the Development Permit had been issued and was ready for pick-up at City Hall.

The Development Permit had not in fact been issued and there was about $7,000.00 in fees outstanding. [ 33 ] The plaintiff submits that, as a matter of law, the Development Permit Clause contained within the Addendum of the Assignment Agreement should be interpreted as a condition precedent, with the onus on the defendant to satisfy the condition.

Because the defendant failed to satisfy the condition, it breached the Assignment Agreement, entitling the plaintiff to the return of its deposit, plus other potential contractual damages. [ 34 ] The plaintiff says first that the Development Permit Clause is, on its face, a condition precedent, but if necessary to consider the surrounding circumstances leading to the Assignment Agreement in order to construe it, those circumstances provide further support for this conclusion.

If still ambiguous, the plaintiff urges resort to the parties’ post-agreement conduct, which it says only reinforces its position. [ 35 ] The plaintiff also submits that the defendant’s failure to obtain the Development Permit constitutes a fundamental breach of the Assignment Agreement. It says that 403 made its election to accept the defendant’s repudiation when it did not proceed with the Assignment Agreement and perform the obligations under the Contract. [ 36 ] The plaintiff also argues that the terms of the Assignment Agreement provide for the return of its deposit as well.

The Development Permit Clause, it says, was for the plaintiff’s sole benefit. When it went unsatisfied, the Assignment Agreement terminated and the deposit should have been returned. It also argues that the deposit should be returnable as damages under clause 4.10. Even if classified as a mere warranty, the plaintiff says the defendant’s breach entitles it to damages caused by the breach, which includes the return of its deposit. [ 37 ] The plaintiff advances an alternative argument that relies upon a finding that Mr.

Maan acted as an agent of the defendant and that Canada Willingdon, through its agents, confirmed a shared assumption that the Development Permit Clause required the defendant to provide the Development Permit prior to completion. 403 relied on this shared assumption to its detriment to the extent that it would be unjust to now allow a different construction on the parties’ agreement.

In other words, the plaintiff alternatively relies upon the doctrine of estoppel by convention. [ 38 ] The defendant takes the position that the plaintiff’s claim “stands and falls” on whether it was a condition precedent under the Assignment Agreement that the Development Permit would be issued prior to the closing date. It offers a sharply different

interpretation of the Development Permit Clause than the plaintiff.

[39] On its face, the defendant says the Development Permit Clause is unambiguous and is not a condition precedent and should beinterpreted in context to mean only that the purchase price would include the cost of the Development Permit. The defendant says that itwas always its understanding that the burden of obtaining the Development Permit rested on 403. [40] The defendant emphasizes that the plaintiff’s

interpretation overlooks that the Development Permit Clause was not drafted as acondition precedent, used no conditional language, did not state the Development Permit would be issued, and even if it could be impliedthe Development Permit was to be issued, there is no time frame specified. The plaintiff’s

interpretation, it argues, requires the court toimply terms that are simply not there. The defendant relies upon Gulston v. Aldred, 2011 BCCA 147 as a complete answer to theplaintiff’s position. [41] However, if the court is required to look at the factual matrix in construing the terms of the Assignment Agreement, then thedefendant submits this matter is wholly inappropriate for determination by way of

summary trial because it is impossible for the court toresolve the conflicting evidence in order to make the critical findings that would need to be made. THE LAW

Summary Trials [42] Rule 1-3 of the Supreme Court Civil Rules, B.C. Reg. 168/2009 [Civil Rules] provides: Object (1)The object of these Supreme Court Civil Rules is to secure the just, speedy and inexpensive determination of every proceeding on itsmerits. Proportionality (2)Securing the just, speedy and inexpensive determination of a proceeding on its merits includes, so far as is practicable, conducting theproceeding in ways that are proportionate to (

a) the amount involved in the proceeding, (

b) the importance of the issues in dispute, and (

c) the complexity of the proceeding. [43]

Summary trials are governed by Rule 9-7 of the Civil Rules, which allows a party to apply for judgment on an issue orgenerally. In support of, or in response to, the application for a hearing by

summary trial, a party may tender evidence in a variety offorms, including affidavits, answers to interrogatories, examination for discovery transcripts, admissions and expert reports: Rule 9-7(5)of the Civil Rules. [44] In this case, the evidence has been tendered in the form of affidavits and portions of examination for discovery transcripts. [45] Rule 9-7(15) sets out the scope of a

summary trial application: Judgment

(15) On the hearing of a

summary trial application, the court may (

a) grant judgment in favour of any party, either on an issue or generally, unless (

i) the court is unable, on the whole of the evidence before the court on the application, to find the facts necessary to decide the issues offact or law, or (ii) the court is of the opinion that it would be unjust to decide the issues on the application, (

b) impose terms respecting enforcement of the judgment, including a stay of execution, and (

c) award costs. [46] In Gichuru v. Pallai, 2013 BCCA 60, the British Columbia Court of Appeal discussed the appropriateness of determining anaction or issue by way of

summary trial and the factors to be considered on such an application: [30] In Inspiration Management Ltd. v. McDermid St. Lawrence Ltd. (1989), (BC CA), 36 B.C.L.R. (2d) 202(C.A.), the court confirmed that the court under this rule "tries the issues raised by the pleadings on affidavits", that "a triable issue orarguable defence will not always defeat a

summary trial application", and that "cases will be decided summarily if the court is able tofind the facts necessary for that purpose, even though there may be disputed issues of fact and law" provided that the judge does not find"it is unjust to do so" (p. 211).

In determining the latter issue (whether it would be unjust to proceed summarily), the Chief Justiceidentified a number of relevant factors to consider (at p. 215): In deciding whether it will be unjust to give judgment the chambers judge is entitled to consider, inter alia, the amount involved, thecomplexity of the matter, its urgency, any prejudice likely to arise by reason of delay, the cost of taking the case forward to aconventional trial in relation to the amount involved, the course of the proceedings and any other matters which arise for consideration

on this important question. [31] To this list has been added other factors including the cost of the litigation and the time of the

summary trial, whether credibilityis a critical factor in the determination of the dispute, whether the

summary trial may create an unnecessary complexity in the resolutionof the dispute, and whether the application would result in litigating in slices: Dahl v. Royal Bank of Canada et al., 2005 BCSC 1263 atpara. 12, upheld on appeal at 2006 BCCA 369. [32] All parties to an action must come to a

summary trial hearing prepared to prove their claim, or defence, as judgment may begranted in favour of any party, regardless of which party has brought the application, unless the judge concludes that he or she is unableto find the facts necessary to decide the issues or is of the view that it would be unjust to decide the issues in this manner. Thisrequirement was underscored by Madam Justice Newbury in Everest Canadian Properties Ltd. v. Mallmann, 2008 BCCA 275: [34] It is trite law that where an application for

summary determination under Rule 18A is set down, the parties are obliged to take everyreasonable step to put themselves in the best position possible. As this court noted in Anglo Canadian Shipping Co. v. Pulp, Paper &Woodworkers of Canada, Local 8 (1988) (BC CA), 27 B.C.L.R. (2d) 378 (B.C.C.A.) at 382, a party cannot, by failingto take such steps, frustrate the benefits of the

summary trial process. Where the application is brought by a plaintiff, the defendant maynot simply insist on a full trial in hopes that with the benefit of viva voce evidence, 'something might turn up': see Hamilton v. Sutherland(1992), (BC CA), 68 B.C.L.R. (2d) 115, [1992] 5 W.W.R. 151 (B.C.C.A.) at paras. 66-7. The same is true of aplaintiff where the defence has brought the R. 18A motion. [Emphasis added.] [33] Newbury J.A. discussed this issue in greater depth in Brown v.

Douglas, 2011 BCCA 521 at paras. 29 and 30, which passageswere relied upon by the trial judge (at para. 24): [29] I should also advert briefly to an argument made by the plaintiffs at the oral hearing of this appeal - that the

summary trial judgeshould not have proceeded at all under Rule 18A in the face of their lack of evidence as to what counsel referred to as "proof ofdamages". ... It was said that in the circumstances, the

summary trial judge should have dismissed the defendants' motion for judgmentand permitted the plaintiffs to address this matter on a later occasion. In this regard, the plaintiffs cited the comments of this court inPlacer Development Ltd. v. Skyline Explorations Ltd. (1985), (BC CA), 67 B.C.L.R. 366, where Taggart J.A. describedthree options available to counsel faced with an application brought against his or her client under R. 18A. These options were: 1. He may agree that the case is an appropriate case for a

summary trial and he may decide to seek judgment on the merits in favourof his client. 2. He may decide that it is a wholly inappropriate case for

summary trial and he may decide to oppose the application for

summarytrial on the basis of material already filed and on the basis of additional material including affidavits that tend to show that the case isinappropriate for disposition under the rule. 3. He may decide that the case is an inappropriate case for

summary trial but he may decide to file affidavits and other materialtending to show that while it is not an appropriate case for

summary trial, if there is to be a

summary trial the judgment should be infavour of his client [At 384-5.] The Court went on to observe that the language of what was then R. 18A(3) - more latterly, R. 18A(11) and now R. 9-7(11) - clothes thejudge with a "broad discretion" to refuse to proceed where the judge is unable to find the facts necessary to decide the issues of fact orlaw or if it would be unjust to decide the issues. [30] The authorities are clear, however, that (as counsel for the plaintiffs acknowledged at the hearing of this appeal) counsel acting onbehalf of the respondent to an application for

summary judgment who takes the second course described in Placer "runs a risk". This isthe risk that the court will not agree that the case is not appropriate for

summary trial and may give judgment against his or her client.This point was made in Inspiration Management, supra, where the Chief Justice observed at 214 that "There is no room in the properconstruction of R. 18A for a respondent's veto." The point was also made at greater length in Anglo Canadian Shipping Co. v. Pulp,Paper and Woodworkers of Canada, Local 8 (1988), (BC CA), 27 B.C.L.R. (2d) 378. There a plaintiff had sued forjudgment under R. 18A, giving the defendant two months' notice of its application.

The defendant did not examine the plaintiff fordiscovery within that period and on the day scheduled for trial, argued that it had been prevented from exploring arguments it might wishto make with respect to mitigation. The trial judge nevertheless granted judgment to the plaintiff under R. 18A and awarded damages ofsome $42,000. On appeal, this court rejected the defendant's argument that judgment should not have been granted. Lambert J.A. stated: In my opinion, the

summary trial procedure contemplated by R. 18A cannot be open to being frustrated by one of the parties delayingthe pre-trial procedures until it is too late for the

summary procedure to use them effectively. I am not suggesting that there was any intentional delay in this case. But it must be the case that if adequate notice is given to anopposing party that a

summary trial application is going to be brought on, there then falls on that party an obligation to take everyreasonable step to complete as much of the pre-trial procedures as is necessary to put him in the best mastery of the facts that isreasonably possible before the

summary trial proceedings are heard. He cannot, by failing to take those pre-trial procedures, frustrate thebenefits of the

summary trial rule. ... In my opinion, it is not in this case appropriate that the judgment be set aside, on the ground that sufficient facts were not available toone of the parties to lay before the court on the

summary trial application. [At 381-2.; emphasis added.] Anglo Canadian Shipping has been cited and applied by this court on many occasions: see, e.g. Everest Canadian Properties Ltd. v.Mallmann 2008 BCCA 275 at paras. 34; Gilmour Estate v. Parchomchuk, 2011 BCCA 207 at paras. 19; Dixon v. British ColumbiaSnowmobile Federation, 2003 BCCA 174 at para. 5; Strathloch Holdings Ltd. v. Christensen Bros. Foods Ltd. (1997), (BC CA), 29 B.C.L.R. (3d) 341 (C.A.) at para. 12. [34] In

summary, the jurisprudence is clear that, subject to certain guidelines, the decision as to the suitability of proceeding by way

of

summary trial to determine an action (or issue), is a discretionary one. Appellate deference is given to the exercise of discretionarypowers in the absence of a clear conclusion that the discretion has been wrongly exercised, in that no weight or insufficient weight hasbeen given to relevant considerations (see Creasey v. Sweny (1942), (BC CA), 57 B.C.R. 457 at 459 (C.A.); Friends ofthe Oldman River Society v. Canada (Minister of Transport), (SCC), [1992] 1 S.C.R. 3 at para. 104; Stone v. Ellerman,2009 BCCA 294, 92 B.C.L.R. (4th) 203 at para. 94, leave to appeal ref'd [2009] S.C.C.A. No. 364; and Bell v.

Levy, 2011 BCCA 417 atpara. 75), or it appears that the decision is clearly wrong and may result in an injustice (see Taylor v. Vancouver General Hospital(1945), (BC CA), 62 B.C.R. 42 at 50, [1945] 3 W.W.R. 510 (C.A.)). [35] The authorities are also clear that a

summary trial, although heard on affidavits in chambers, remains a trial of the action forwhich the plaintiff (even if not the applicant) retains the onus of proof of establishing his or her claim(

s) and the defendant (even if notthe applicant) retains the burden of establishing any defence that is raised. Mr. Justice Wood, writing for the Court in Miura v. Miura(1992), (BC CA), 66 B.C.L.R. (2d) 345 (C.A.), clarified this issue (at page 352): There is no reason why the onus should be reversed simply because the defendant moves for judgment under Rule 18A, thus requiringthe plaintiff to prove her case in a

summary trial proceeding. ... ... the onus of proof does not shift simply because a trial is conducted summarily under rule 18A [now R. 9-7]. As in an ordinary trial, theparty asserting the affirmative of an issue must prove it on a balance of probabilities. I believe that such a result is also consistent withwhat was said by McEachern, C.J.B.C. in Inspiration Management et al. v. McDermid et al. [citation omitted] at page 215 of the report: The test for R. 18A, in my view, is the same as on a trial. Upon the facts being found the chambers judge must apply the law and allappropriate legal principles.

If then satisfied that the claim or defence has been established according to the appropriate onus of proof hemust give judgment according to the law unless he has the opinion that it will be unjust to give such judgment. Indeed, the respondents gave express notice to Mr. Gichuru of his burden in the application by referring to the first paragraph of thispassage in their

summary of the legal basis for their application to strike Mr. Gichuru's action. [47] In Hryniak v. Mauldin, 2014 SCC 7, the Supreme Court of Canada directed that

summary trial rules be interpreted broadly,favouring proportionality and fair access to the affordable, timely and just adjudication of claims: para. 5. Recognizing that the

summarytrial suitability analysis in British Columbia is not changed by Hryniak, our Court of Appeal endorsed these objectives in Morin v.0865580 B.C. Ltd., 2015 BCCA 502 at para. 48. [48] Since this application primarily involves construction of the terms of a contract, I will now outline the general applicable legalframework for those issues such that their interplay with the

summary trial suitability analysis, principles and factors can be considered. Principles of Contractual

Interpretation [49] The Supreme Court of Canada set out the proper approach to interpreting the terms of a contract in Sattva Capital Corp. v.Creston Moly Corp., 2014 SCC 53: [47] Regarding the first development, the

interpretation of contracts has evolved towards a practical, common-sense approach notdominated by technical rules of construction. The overriding concern is to determine "the intent of the parties and the scope of theirunderstanding" (Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, [2006] 1 S.C.R. 744, at para. 27per LeBel J.; see also Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69, atparas. 64-65 per Cromwell J.).

To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary andgrammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract.Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at wordson their own, because words alone do not have an immutable or absolute meaning: No contracts are made in a vacuum: there is always a setting in which they have to be placed... .

In a commercial contract it is certainlyright that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of thetransaction, the background, the context, the market in which the parties are operating. (Reardon Smith Line, at p. 574, per Lord Wilberforce) [48] The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and thenature of the relationship created by the agreement (see Moore Realty Inc. v. Manitoba Motor League, 2003 MBCA 71, 173 Man.

R.(2d) 300, at para. 15, per Hamilton J.A.; see also Hall, at p. 22; and McCamus, at pp. 749-50). As stated by Lord Hoffmann in InvestorsCompensation Scheme Ltd. v. West Bromwich Building Society, [1998] 1 All E.R. 98 (H.L.): The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of itswords. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using thosewords against the relevant background would reasonably have been understood to mean. [p. 115] [50] In contractual

interpretation, the law draws a distinction between the consideration of the circumstances surrounding contractualformation and the parties’ post-contractual conduct: Wade v. Duck, 2018 BCCA 176 at para. 25. [51] There is no question that courts are entitled to consider surrounding circumstances in interpreting the written terms of a contract,regardless of whether those terms disclose any ambiguity: Wade at para. 26. However, in Wade, Madam Justice Kirkpatrick reminds usthat the Sattva Court cautioned about the limitations of evidence of surrounding circumstances: [27] However, as the Court held in Sattva, evidence of surrounding circumstances has limits:

[57] While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed tooverwhelm the words of that agreement (Hayes Forest Services, at para. 14; and Hall, at p. 30). The goal of examining such evidence isto deepen a decision-maker's understanding of the mutual and objective intentions of the parties as expressed in the words of the contract.The

interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract (Hall, atpp. 15 and 30-32). While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviatefrom the text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc. v. B.C.

Tel Mobility Cellular Inc.(1997), (BC CA), 101 B.C.A.C. 62). [52] In contrast, evidence of post-contractual (or subsequent) conduct should only be considered if the contract is found to beambiguous after one has considered its text and the factual matrix surrounding the creation of the contract. Sattva has not changed thisrule: Wade at paras. 28, 29 and 31. Conditions Precedent [53] A condition precedent is a term in a contract requiring a certain event or occurrence to take place. If the event or occurrencedoes not take place, the contract can be treated as repudiated: G.H.L.

Fridman, The Law of Contracts in Canada, 6th ed. (Toronto:Carswell, 2011) at 421, 478. [54] There are two types of condition precedent – “true” conditions precedent and what are sometimes called “internal” conditionsprecedent. An internal condition precedent is a condition that can be satisfied by the actions of the parties. These are sometimescharacterized as promissory conditions because they hinge on promises to action undertaken by the parties: Fridman at p. 423. Forexample, in McCauley v.

McVey, (SCC), [1980] 1 S.C.R. 165, Laskin C.J.C. concluded that a provision in a contractrequiring a vendor to “arrange for and bear cost of any necessary survey or surveys to allow transfer of title” was not a true conditionprecedent, because the fulfillment of the condition rested on action being taken by the defendant and not on an action being taken by athird party: pp. 168-170. [55] Where a term of a contract is characterized as an internal condition precedent, and the term is not satisfied, then the other partyhas the choice of either repudiating the contract or affirming it, as is normal in breach of contract cases.

This choice determines theremedies available to the innocent party. [56] By contrast, a “true” condition precedent is a term of a contract that hinges on “a future uncertain event, the happening of whichdepends entirely on the will of a third party”: Turney v. Zhilka, (SCC), [1959] S.C.R. 578 at 583-584. An example of atrue condition precedent was described by Lambert J.A. in dissent in Wiebe v. Bobsien (1985), (BC CA), 64 B.C.L.R.295 (C.A.), where a contract term stated “subject to John Smith being elected as Mayor in the municipal election on 15 October of thisyear” at p. 298.

The election of a mayor is typically outside the control of the parties to a contract. [57] The plaintiff in the case at bar also cites the dissent by Lambert J.A. in Wiebe for the proposition that there is a third class ofcondition precedent, those which are partly subjective and partly objective, at 298-299: Each "condition precedent" case must be considered on its own facts. As Mr. Justice Bouck indicated, some conditions precedent are soimprecise, or depend so entirely on the subjective state of mind of the purchaser, that the contract process must still be regarded as at theoffer stage.

An example would be "subject to the approval of the president of the corporate purchaser." In other cases, the conditionprecedent is clear, precise and objective. In those cases, a contract is completed; neither party can withdraw; but performance is held insuspense until the parties know whether the objective condition precedent is fulfilled. An example would be "subject to John Smithbeing elected as Mayor in the municipal election on 15 October of this year." But there is a third class of condition precedent. Into that class fall the types of conditions which are partly subjective and partlyobjective.

An example would be "subject to planning department approval of the attached plan of sub-division". This looks objective, butit differs from a truly objective condition in that someone has to solicit the approval of the planning department. Perhaps somepersuasion of the planning department will be required. Can the purchaser prevent the condition from being fulfilled by refusing topresent the plan of sub-division to the planning department?

This type of case has been dealt with by implying a term that the purchaserwill take all reasonable steps to cause the plan to be presented to the planning department, and will, at the proper time and in the properway, take all reasonable steps to have the plan approved by the planning department. [58] Mr. Justice Lambert’s reasoning on this point was affirmed by the Court of Appeal in Peier v.

Cressey Whistler TownhomesLimited Partnership, 2012 BCCA 28 at paras. 21-22. [59] The determination of whether a term is a condition precedent and/or what type of condition precedent it is a matter ofinterpretation based on the language used by the parties. If a term is characterized as a true condition precedent, and satisfaction of theterm depends on the action of a third party, then the court may infer certain obligations. [60] In Dynamic Transport Ltd. v. O.K. Detailing Ltd., (SCC), [1978] 2 S.C.R. 1072, Dickson J., as he then was,discussed obligations that arise as a result of true conditions precedent.

In that case, the plaintiff and defendant entered into a contract forthe purchase of real property. The Court found that a term in the contract constituted a true condition precedent, namely, that approval beobtained from the municipality for the subdivision of the lands. Dickson J. concluded that, in appropriate circumstances, a court will findan implied promise by one party to take steps to bring about the event constituting the condition precedent.

In the circumstances, theCourt found that the defendant, as the seller of the land, had an implied obligation to act in good faith and take all reasonable steps tocomplete the sale, including efforts to obtain the planning approval: p. 1084. [61] In Gulston, the appellant, Gulston, agreed to purchase a property from the respondent, Aldred. The closing was postponed twicein order to allow Ms. Aldred to remove a decommissioned oil tank and to have soil remediation work done. By virtue of the remediationclause in an agreed upon addendum to their contract, Ms. Aldred agreed to provide Mr.

Gulston with a municipal certificate by aspecified date. The certificate was not provided by that specified date, but was provided well before the closing date. In that case,

Madam Justice Ryan concluded that the remediation clause was not a condition precedent as contemplated in the contract because it didnot make use of the “for the sole benefit of” language. However, the Court nevertheless went on to consider whether the common lawprinciples of contract

interpretation required the remediation clause to be interpreted as a “true condition precedent”. [62] Ms. Aldred took the position that the trial judge was correct in concluding that the remediation clause was not a conditionprecedent. She submitted that if the parties had intended to create a condition which had the effect of suspending performance of thecontract until it was fulfilled, one would have expected them to use language which signified that it was conditional.

The Court of Appealagreed. [63] In determining that the remediation clause was not a condition precedent, the Court compared its language to the language usedby the parties in another clause – the one requiring a favourable inspection report. That clause was expressed in clear language: [45] …subject to the Buyer receiving, reading and being satisfied with an inspection report from the inspection conducted on Feb. 24,2008, on or before March 4, 2008.

This condition is for the sole benefit of the Buyer. [64] Noting that the remediation clause was expressed quite differently, the Court held: [45] …In the context of this case it is clear that what the parties desired was a clean-up of the soil at Ms. Aldred's expense. This wasnot something that depended on the unknown will of a third party. There were legislative standards which, once met, would give rise tothe issuance of a municipal certificate. Nothing in the clause itself suggests that Mr. Gulston's obligation to fulfil his end of the bargainturned on the remediation being completed.

In my view then, the trial judge was not wrong in finding that the remediation clause was nota condition precedent of any sort. Fundamental Breach of Contract [65] As summarized by Tysoe J.A. in Mantar Holdings Ltd. v. 0858370 B.C.

Ltd., 2014 BCCA 361 at para. 11: [a] fundamental breach of a contract occurs where the failure of one of the contracting parties to perform a primary obligation under thecontract has the effect of depriving the other party of substantially the whole benefit which the parties intended that party to receive … [66] In Gulston, the Court also considered whether the remediation clause was a fundamental term of the contract, the breach ofwhich entitled the appellant to treat the contract as at an end.

In confirming that to qualify as a fundamental term, one must ask whetherits breach would be “tantamount to frustration of the contract”, the Court cited with approval the following passage from Poole v.Tomenson Saunders Whitehead Ltd. (1987), (BC CA), 43 D.L.R. (4th) 56, 16 B.C.L.R. (2d) 349 (C.A.), where Mr.Justice Wallace observed at pp. 63-64: [46] … To qualify as a fundamental term one must ask whether breach of the term would be "tantamount to the frustration of thecontract". In Poole v. Tomenson Saunders Whitehead Ltd. (1987), (BC CA), 43 D.L.R. (4th) 56, 16 B.C.L.R. (2d) 349(C.A.). Mr.

Justice Wallace observed at pages 63-4: The Supreme Court of Canada has set out the requirements for termination of a contract by fundamental breach in Thompson & Alix Ltd.v. B.F. Smith, (SCC), [1933] S.C.R. 172, at 181, where Cannon J. cited with approval the House of Lords' statement inMersey Steel & Iron Co. v. Naylor, Benzon & Co., [1884] 9 A.C. 434: All their Lordships as well as the Lords Justices accepted the principle stated by Lord Coleridge in Freeth v.

Burr (2) as the true test; or,as it was expressed in the words of Lord Selborne: 'You must look at the actual circumstances of the case in order to see whether the oneparty to the contract is relieved from its future performance by the conduct of the other. You must examine what that conduct is, so as tosee whether it amounts to a renunciation, to an "absolute refusal to perform the contract, such as would amount to a rescission if he hadthe power to rescind" and whether the other party may accept it as a reason for not performing his part. And in Bettini v.

Gye (1876), 1 Q.B.D. 183 at p. 188 it was said: One must 'see whether the particular stipulation goes to the root of the matter so that a failure to perform it would render theperformance of the rest of the contract by the plaintiff a thing different in substance from what the defendant has stipulated for'. The same principle was expressed by Upton L.J. in Hongkong Fir Shipping Co. Ltd. v.

Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26, 64in these words: ... the question to be answered is, does the breach of the stipulation go so much to the root of the contract that it makes furthercommercial performance of the contract impossible, or in other words is the whole contract frustrated? If yes, the innocent party maytreat the contract as at an end. If nay, his claim sounds in damages only. Other authorities have described the indicia of a fundamental breach in a variety of ways including: "An intimation of an intention to abandon and altogether to refuse performance of the contract." Freeth v. Burr

(1874) L.R. 9 C.P. 208,213. "Do the acts and conduct of the party evince an intention no longer to be bound by the contract?" General Billposting Co. v. Atkinson,[1909] A.C. 118, 120. "If the conduct of the employer amounts to a 'basic refusal to continue the servant on the agreed terms of the employment' then there isat once a wrongful dismissal and a repudiation of the contract;" Re Rubel Bronze & Metal Company and Vos, [1918] 1 K.B. 315 (supra)p. 323.

The common theme, emphasized by every court, when determining whether a breach of contract justifies the innocent party terminatingthe contract rather than confining his remedy to the damages caused by the breach, is that the breach must be tantamount to thefrustration of the contract either as a result of the unequivocal refusal of one party to perform his contractual obligation or as a result ofconduct which has destroyed the commercial purpose of the contract - thereby entitling the innocent party to be relieved from futureperformance. [Emphasis added.] [67] In Gulston, the Court then went on to endorse the test set out in Ramrod Investments Ltd. v.

Matsumoto Shipyards Ltd. (1990), (BC CA), 47 B.C.L.R. (2d) 86 (C.A.) for determining such a breach: [47] In Ramrod Investments Ltd. v. Matsumoto Shipyards Ltd. (1990), (BC CA), 47 B.C.L.R. (2d) 86 (C.A.) Mr.Justice Cumming approved the test for determining such a breach as follows: The traditional test that has consistently been cited with approval and applied by the courts is that stated by Bowen, L.J.

Bentsen v.Taylor, Sons & Co. [1893] 2 Q.B. 274 at 281 (C.A.): There is no way of deciding that question except by looking at the contract in the light of the surrounding circumstances, and thenintention of the parties, as gathered from the instrument itself, will best be carried out by treating the promise as a warranty soundingonly in damages, or as a condition precedent by the failure to perform which the other party is relieved of his liability. This test was endorsed by the English Court of Appeal in Bunge, [1981] 3 All E.R. 513 (Megaw L.J.'s judgment at p. 538).

Thatjudgment was expressly approved by Lord Wilberforce at p. 542 of his judgment in Bunge. It will be noted that the test to determine intent as enunciated by Bowen L.J. requires one to look not only at the words of the contract butat surrounding circumstances. ...

The traditional test, in my view, can be readily reconciled with the so-called "third category" approach put forward in Hong Kong Fir.The approach which I believe to have been accepted by the authorities can be briefly summarized as follows: (1) the test enunciated byBowen L.J. remains the starting point, (2) the surrounding circumstances referred to in that test must include the commercial setting, and(3) if it cannot be determined by these considerations whether the parties intended the obligation in question to be a warranty soundingonly in damages or a condition, the breach of which would relieve the innocent party, then the basis for seeking out that intent should be,as put forward by Hong Fir, namely an assessment of the gravity of the event to which the breach gave rise. [68] If there is a breach of a fundamental term to a contract, the innocent party has two options: [50] Where there is a breach of a fundamental term, the innocent party has two options.

As this Court stated in Morrison-Knudsen Co.Inc. v. British Columbia Hydro and Power Authority, (1978) (BC CA), 85 D.L.R. (3d) 186 at para. 130: ... However, it is not every breach which determines a contract and puts an end to contractual obligations. There are breachescompensable in damages only and breaches called fundamental breaches which can bring the contractual relationship to an end and freethe parties from further performance. When faced with a fundamental breach the innocent party is put to an election.

He may elect toaffirm the contract and to hold the other party to the performance of his obligations and sue for damages as compensation for the breach.He may, on the other hand, elect to treat the breach as a fundamental breach and accept it as such. Thus he would terminate the contractand thereafter be relieved of any further duty to perform and he could sue at once for damages or quantum meruit for performance to thatpoint.

It is essential that such election, an election between inconsistent rights, be made promptly and communicated to the guilty party.Once made, the election is binding and cannot be changed. [Emphasis added.] [69] To summarize then, the breach of a contract can be considered a fundamental breach if the breach is of a primary obligation andhas the effect of frustrating the performance of the contract. A fundamental breach can be contrasted with a less serious breach, whichdoes not entitle the innocent party to the same remedies.

With a less serious breach (sometimes called a breach of warranty), the innocentparty can sue for damages relating to that breach, but is still otherwise bound by the contract. [70] If the breach can be considered a fundamental breach, then the innocent party can choose to either affirm the contract and holdthe other party to its performance, or can choose to treat the contract as being at an end and sue for damages. [71] The Court in Gulston concluded that it was “self-evident” that the breach was not tantamount to frustration of the contract.

Thesoil had been remediated in time – it was the certificate proving this that was five days late. The words of the contract and the failure byMr. Gulston to allege that any damage was caused by the breach all led to the Court’s conclusion that the breach was not of afundamental term. Estoppel [72] An estoppel by convention is established by post-contractual conduct. Madam Justice Dickson, as she then was, summarizedthis form of estoppel in Le Soleil Hotel & Suites Ltd. v.

Le Soleil Management Inc., 2009 BCSC 1303: [358] In a breach of contract claim another, quite different, possible form of estoppel is estoppel by convention. An estoppel byconvention is established by post-contractual conduct. Where the parties have based their dealings on a shared assumption as to thecontract's proper

interpretation and one has relied on that

interpretation to its detriment, the other will not be permitted to resile and asserta different

interpretation: Ryan v. Moore, 2005 SCC 38; Litwin Construction

(1973) Ltd. v. Pan, [1986] B.C.J. No. 3120 (S.C.); affirmed (BC CA), [1988] B.C.J. No. 1145 (C.A.). [359] In Ryan, supra, Bastarache J. summarised the test for establishing an estoppel by convention as follows:

[59] ... I am of the view that the following criteria form the basis of the doctrine of estoppel by convention:

(1) The parties' dealings must have been based on a shared assumption of fact or law: estoppel requires manifest representation by statement or conduct creating a mutual assumption. Nevertheless, estoppel can arise out of silence (impliedly).

(2) A party must have conducted itself, ie., acted, in reliance on such shared assumption, its actions resulting in a change of its legal position.

(3) It must also be unjust or unfair to allow one of the parties to resile or depart from the common assumption. The party seeking to establish estoppels therefore has to prove that detriment will be suffered if the other party is allowed to resile from the assumption since there has been a change from the presumed position. ANALYSIS [ 73 ] I have concluded that this issue is not suitable for determination by way of

summary trial. I find that I am unable, on the whole of the evidence, to find the facts necessary to decide the issue. [ 74 ] In order to construe the meaning of the Development Permit Clause, I must read the Contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of the formation of the Assignment Agreement. This is so I can determine the overall intent of the parties and the scope of their understanding.

To repeat, the Development Permit Clause provides: 1) Seller warrants that there will be no outstanding [fees] owing to the City of Vancouver for the Development Permit and the purchase price will include the Development Permit. [ 75 ] Each party asks me to look only at the plain language of the Development Permit Clause in the context of the contract as a whole and interpret the provision in their favour, largely without resort to the underlying factual matrix known to the parties at the time of contract formation and, if still found to be ambiguous, without resort to the factual matrix subsequent to the contract formation. [ 76 ] The difficulty with this position is that the words of the Development Permit Clause, considered in the context of the Assignment Agreement as a whole, do not have an immutable or absolute meaning.

Resort must be had to the underlying factual matrix known to the parties at the time of the Assignment Agreement formation. The parties have put forward evidence from witnesses that flatly contradicts one another. [ 77 ] The plaintiff says the Development Permit Clause, in the context of the Assignment Agreement as a whole, means that the defendant agreed to provide the completed Development Permit to the plaintiff prior to completion and all of its associated fees paid.

The defendant, on the other hand, says it means that the purchase price to be paid by the plaintiff included the cost of the Development Permit and it was the plaintiff’s obligation to obtain the Development Permit. [ 78 ] In support of the plaintiff’s

interpretation, Mr. Bal deposes that he was only interested in the assignment if the Development Permit was issued and the required fees paid on or before completion. He says that he based this decision on several factors, including:

a) In order to obtain a mortgage loan in an amount sufficient to purchase and develop the Property, the Development Permit would need to be in place. Mr. Bal is the owner of a mortgage brokerage firm and was aware, at the time of Contract formation, that in the absence of the Development Permit, the Property would be valued “as is”, not “as if completed” thereby significantly reducing the amount that a lender would be willing to loan the plaintiff;

b) The January 16, 2016 deadline set out in the prior to letter had already passed and, accordingly, there was a risk that the Development Permit application would stand refused;

c) He had been advised that the application process was nearing completion and, having just been introduced to the opportunity and lacking familiarity with the specific process undertaken to date, he was not in a position to see the Development Permit application through to formal approval in a timely or efficient manner. [ 79 ] Mr. Bal further deposes that he instructed 403’s realtor, Mr. Dhillon, to inform Mr. Maan that 403 was interested in taking an assignment of the Contract, but only on the condition that the Development Permit would be issued and its associated fees paid before March 15, 2016. [ 80 ] Mr.

Dhillon deposes that he received those instructions from Mr. Bal and communicated them explicitly to Mr. Maan. Mr. Dhillon says that Mr. Maan assured him that those terms specifically would not pose a problem as Canada Willingdon was working with the vendor of the Property on the Development Permit application and it would certainly be issued prior to completion. [ 81 ] There is no evidence from Mr. Maan. The defendant, through the evidence of Mr. Chen, Ms. Gan and Ms. Hsu, all vigorously deny that Mr.

Maan acted as Canada Willingdon’s agent, or as agent for any of them, and certainly did not communicate the terms the plaintiff alleges to them. [ 82 ] Furthermore, the defendant objects to the admissibility of any evidence from the plaintiff alleging what Mr. Maan may have said, on the basis of hearsay. The plaintiff replies that issues of hearsay do not arise because, as the defendant’s agent, the “party admission” exception to the rule against hearsay is invoked. In other words, the plaintiff submits that Mr. Maan’s representations to it through its agent is admissible on the basis that Mr.

Maan is a person that Canada Willingdon authorized to make those statements or, at the very least, those statements were made by Mr. Maan as Canada Willingdon’s agent concerning a matter within the scope of their agency relationship. Of course, the evidence from all of the defendant’s witnesses denies this.

[ 83 ] The difficulty here is obvious. As I have highlighted, the defendant vigorously denies the existence of any agency relationship between it and Mr. Maan. That Mr. Maan’s name was inserted by hand in place of Mr. Dhillon’s name on Canada Willingdon’s Fee for Service Agreement does not assist in resolving the controversy because it was done after the Assignment Agreement was executed and was done for reasons that are unknown and unexplained on the evidence. On the evidence presented, it is impossible for me to determine Mr.

Maan’s status and his role in this transaction. [ 84 ] Over and above this difficulty, Mr. Chen’s evidence is diametrically opposed to that of the plaintiff’s witnesses. He denies being advised at any time during the negotiations that the plaintiff indicated a desire for the term at issue. In fact, Mr. Chen says that he would have never agreed to such a term if he had been asked because the issuance of the Development Permit was not something within his control. As well, by assigning the Contract to 403, Mr.

Chen deposes that it would have made no sense for Canada Willingdon to carry on with the Development Permit approval process. Mr. Chen understood that, as a signee, 403 would complete that work. [ 85 ] The evidence of Ms. Hsu and Ms. Gan supports that of Mr. Chen. Ms. Gan deposes that Mr. Maan put her in contact with Mr. Dhillon and that she negotiated the assignment terms with Mr. Dhillon. Only the terms negotiated over text message and through email were discussed by her with either Mr. Dhillon or Mr. Maan, and no other terms were discussed, including the term alleged by the plaintiff.

She specifically denies ever discussing that term. [ 86 ] Ms. Hsu deposes that Ms. Gan dealt with 403’s realtor in the negotiations and that Ms. Gan would obtain instructions from Canada Willingdon through her. She further deposes that she reviewed deal terms and offers with Mr. Chen and then relayed information back to Ms. Gan. With respect to the Development Permit, Ms. Hsu deposes that it was never her understanding that the Development Permit would be issued by the closing date of March 15, 2016, and that she never represented that to be the case to Ms. Gan or anyone else.

She had no way of knowing when the Development Permit would be issued. With respect to the particulars, she further deposes: 11. I discussed with Ms. Gan the terms Canada Willingdon was prepared to include in any assignment agreement concerning the Development Permit. As the application for the permit was in place, we were prepared to include terms relating to it that provided that nothing was owing in respect of the Development Permit application. But we were not prepared to make any representation as to when the Development Permit would be actually issued.

I recall calling the City of Vancouver around this time to confirm that nothing was owing under the Development Permit application. I emailed terms to Ms. Gan and understand she sent them to Mr. Dhillon by test message, after which I understand he incorporated them into an offer for the assignment of the Property that he provided on behalf of 1064103 B.C. Ltd. [ 87 ] Ms.

Hsu specifically denies the plaintiff’s evidence about the Development Permit discussions and goes further to say that she never would have allowed Canada Willingdon to agree to such a term that it would be responsible for providing the Development Permit prior to the closing date. [ 88 ] As I have indicated, the Development Permit Clause contained within the Assignment Agreement is open to

interpretation. It is necessary to look at the factual matrix leading to its creation in interpreting it. I am unable to resolve these key factual issues on a

summary trial basis. [ 89 ] I should go on to observe that were it necessary to consider the post-contractual conduct of the parties, either to construe the meaning of the Development Permit Clause (in the event it was still found to be ambiguous) and/or in the context of considering the plaintiff’s estoppel by convention argument, I would encounter the same difficulties. [ 90 ] For example, Mr. Dhillon deposes that after the Assignment Agreement was executed, Mr. Bal asked about the status of the Development Permit from time-to-time. Mr. Dhillon deposes that he asked Mr. Maan or Ms.

Gan and: [t]he response was consistently to the effect that the Development Permit was progressing and that the Development Permit would certainly be issued prior to the completion date. [ 91 ] Ms. Gan’s evidence is diametrically opposed. She flatly denies this assertion by Mr.

Dhillon, calling his evidence on this point plainly “not true”. [ 92 ] As another example, the parties’ positions on what was said about the plaintiff’s inability to obtain financing leading to its inability to close is irreconcilable. [ 93 ] The plaintiff says its financing fell through because the Development Permit was not issued prior to completion and it learned of this state of affairs too late to secure alternative financing. However, Ms. Hsu says that Mr. Dhillon and Mr.

Bal told her they did not close because 403’s partner, which was advancing a good portion of the purchase price, was no longer interested in the project. She says that at no time in the weeks following the closing date did either of them tell her they considered Canada Willingdon to be in breach of the Assignment Agreement, or that they believed Canada Willingdon was required to provide them with the Development Permit prior to completion. In fact, Ms. Hsu deposes that Mr.

Bal made it clear to her that he still wanted to close on the Property even without the Development Permit, possibly through a joint venture with Canada Willingdon. [ 94 ] These are only some central examples of the profound differences in the evidence before me on this application. I am unable to critically evaluate and resolve these controversies on a

summary trial. This is a matter that can only be resolved at a conventional trial where the credibility of the players and the reliability of their evidence can be evaluated and factual determinations made in order for the court to be in a position to properly construe the term at issue. [ 95 ] The plaintiff’s application for

summary trial determination is, therefore, dismissed, with costs to the defendant. If the parties cannot agree on costs, the matter may be brought before me, as arranged through Supreme Court Scheduling. “S.A. Donegan J.”

DONEGAN J.