2021 MBCA 61, 2021 MBCA 61

Citation: 6486976 Manitoba Ltd v 7344989 Manitoba Ltd, Date: 20210611 2021 MBCA 61 Docket: AI21-30-09568 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Diana M. Cameron Madam Justice Jennifer A. Pfuetzner Madam Justice Lori T. Spivak BETWEEN : 6486976 MANITOBA LTD. ) S. J. Thliveris and ) S. W. Cannon (Plaintiff) Appellant ) for the Appellant ) (via videoconference) - and - ) ) C. R.

Williamson 7344989 MANITOBA LTD. ) for the Respondent ) (via videoconference) (Defendant) Respondent ) ) Appeal heard and - and - ) Decision pronounced: ) June 4, 2021 MARCELO ARIEL and ) ROBERTO FRIDSON ) Written reasons: ) June 11, 2021 (Defendants) ) COVID-19 NOTICE: As a result of the COVID-19 pandemic and pursuant to r 37.2 of the MB, Court of Appeal Rules , MR 555/88R , this appeal was heard remotely by videoconference. On appeal from 2020 MBQB 192 Spivak JA (for the Court): [ 1 ] The plaintiff appeals a

summary judgment order dismissing its action for damages in respect of a real estate transaction that was terminated by the defendant. At the conclusion of the appeal hearing, we dismissed the appeal with brief reasons to follow. These are those reasons. [ 2 ] The plaintiff and the defendant entered into an offer to purchase agreement in 2016 (the Agreement) for the purchase of ten commercial condominium units in a larger complex that was being developed by the defendant (the Property). The Agreement was amended to reduce the number of units from ten to nine, and increase the ceiling height to 11 feet.

There were delays in the completion of the construction and the defendant says that the closing of the transaction was extended to September 30, 2019, in accordance with the terms of the Agreement (the closing date). [ 3 ] The plaintiff failed to tender the balance due on the closing date and the defendant terminated the Agreement and retained the plaintiff’s deposits totalling $726,825. The plaintiff’s action sought the return of its deposits and damages for breaches of the Agreement.

The plaintiff alleged that the closing date was unilaterally extended by the defendant and that the defendant breached the Agreement due to construction deficiencies, primarily relating to the units’ ceiling height. According to the plaintiff, this breach disentitled the defendant to terminate the Agreement and retain the deposits. [ 4 ] The defendant moved for

summary judgment dismissing the action on the basis that the plaintiff’s failure to tender the balance due on the closing date was a full answer to the action. The motion judge concluded that this was an appropriate case for

summary judgment. While the plaintiff argued that the closing date was not agreed to in writing as required by para 35 of the

Agreement, the motion judge found that the parties agreed to the closing date in accordance with the terms of the Agreement, and that the plaintiff’s failure to tender the balance on the closing date was a default that allowed the defendant to cancel the Agreement and retain the deposits. He also concluded that the alleged construction deficiencies were without merit and, regardless, the Agreement provided a mechanism to resolve such disputes after all monies had been paid on the closing date. The motion judge granted

summary judgment to the defendant, finding that the failure to tender the balance on the closing date was fatal to the plaintiff’s claim. [ 5 ] The plaintiff appeals on the grounds that the motion judge erred in: finding that the parties agreed on the closing date; misinterpreting the objective intentions of the parties and disregarding the words of the Agreement; and summarily disposing of the plaintiff’s action for its failure to tender the balance on the closing date. [ 6 ] Decisions regarding

summary judgment are discretionary. Appellate review of a discretionary decision calls for deference absent error in principle or palpable and overriding error of fact, or unless the decision is so clearly wrong as to yield an unjust result ( see CIBC v Ahmed , 2021 MBCA 25 at para 4 , citing Perth Services Ltd v Quinton et al , 2009 MBCA 81 ; and Nazarewycz v Dool , 2009 ABCA 70 ). As well, disputes as to contractual

interpretation are questions of mixed fact and law which cannot be interfered with absent palpable and overriding error unless there is an error in respect of an extricable question of law (see Sattva Capital Corp v Creston Moly Corp , 2014 SCC 53 at paras 50-55 ). [ 7 ] We have not been convinced that the motion judge made any reviewable error. [ 8 ] The motion judge examined the email exchanges between the lawyers regarding the closing date and the terms of the Agreement, in accordance with the principles of contractual

interpretation set out in Sattva .

He found that (at para 72): The objective intentions of the parties set out in the Agreement and a review of all the evidence supports the position that the parties agreed to a closing date of September 30, 2019, which is consistent with the date the Property was certified as substantially complying with the applicable codes, the units were ready for occupancy and [the defendant] provided a transfer of land to convey title to [the plaintiff]. . . . [ 9 ] The above-noted findings of the motion judge were supported by the evidence and were made without palpable and overriding error.

As he was entitled to do, the motion judge considered that, when the defendant’s counsel advised that the closing date would be September 30, 2019, this date was not disputed by the plaintiff and was confirmed through its lawyer by email. Further, it was open to the motion judge to find that this was consistent with the objective intentions of the parties to close the transaction as soon as possible once construction was completed and the units were certified for occupancy.

Understandably, a factor for the motion judge, as well, was that the plaintiff did not raise a breach of para 35 of the Agreement as a basis for failing to close, and was in financial difficulty as it had presold the units and was awaiting those funds. [ 10 ] We are also not persuaded that the motion judge erred in his

interpretation of para 35 of the Agreement. In rejecting the plaintiff’s position, that this required a written extension agreement, the motion judge properly interpreted that paragraph in the context of the Agreement as a whole and the surrounding circumstances. He reasonably concluded that the email exchanges of the lawyers agreeing to the closing date satisfied the requirements of para 35, as it specifically contemplated an extension agreement being made by the parties’ lawyers. [ 11 ] Finally, the motion judge did not err in granting

summary judgment. The motion judge appropriately recognized that the primary issue that he had to decide required an

interpretation of the Agreement and that the affidavits filed would allow the Court to make the necessary findings of fact, interpret the Agreement and apply the law to the facts. Based on the evidence, he found that the parties agreed to the closing date and that the defendant at no time indicated that it would not rely on its strict rights, including the “[t]ime [is] of the essence” provision in the Agreement.

The motion judge considered the case law, which provides that a purchaser is required to tender the funds to close, and a failure to do so, in the absence of waiver of the default, entitles the vendor to cancel the contract and results in the loss of the purchaser’s rights under the agreement (see Peg-Man Ltd v Pallen , 2009 MBQB 120 at para 33 ; and Victor Di Castri, The Law of Vendor and Purchaser , 3rd ed (Toronto: Carswell, 1988) vol 2 (loose-leaf updated 2013, release 11) ch 12, pt VIII at 12-81 to 12-85).

Applying these principles to the facts, he rightly determined that the failure to tender the balance on the closing date was fatal to the plaintiff’s action. [ 12 ] We have not been persuaded that the motion judge misdirected himself, made an error in principle or that his decision is so clearly wrong as to amount to an injustice. [ 13 ] For the above reasons, the appeal was dismissed with costs. JA JA JA