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Appeal – Procedural Fairness & Condition of Agreement of Purchase and Sale

Posted on August 19, 2018 | Posted in Five Liners, Real Estate

Union Building Corporation of Canada v. Markham Woodmills Development Inc. 2018 Ont CA

An agreement of purchase and sale was conditional upon the city consenting to a severance. The vendor was to seek the severance and satisfy any conditions that the city imposed, except conditions that were onerous or unreasonable. If the vendor refused to accept unreasonable conditions, it had to allow the purchaser to do so and, if the purchaser did not wish to do so, then the deal would die. The city did impose significant conditions relating to the development of the property, which the vendor would not accept. The purchaser accepted the conditions, and then sued the vendor for the $407,000 cost of them. The application judge decided the case not on the specific condition or on a basis that the parties advanced; rather, he decided the case on another condition in the contract dealing with the responsibility for zoning. The court allowed the appeal on 2 grounds: first, the application judge had no right to dispose of the application on the basis that was neither advance nor argued; that amounted to a denial of procedural fairness. 2nd, under the condition itself, it was not reasonable to expect a vendor of undeveloped land to pay the costs associated with future development of the land.


Jonathan Speigel


Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.


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