Legal Blog

Specific Performance, Conveyance & Good Faith

1954294 Ontario Ltd v. Gracegreen Real Estate Development Ltd 2017 Ont SCJ

Vendor trying to get out of deal because it was offered more money subsequently by another purchaser. The vendor’s lawyer complained of 12 technical deficiencies relating to agreement of purchase and sale, all of which the judge threw out. The judge relied on (i) the indoor management rule, (ii) the proposition that, before a vendor can rely on the standard agreement of purchase and sale regarding title deficiencies, the vendor must first attempt to satisfy title deficiencies that are matters of conveyance, (iii) the proposition that a vendor must make a genuine effort to obtain what is necessary to carry out the contract and not carry on in a capricious or arbitrary manner. The judge also held that specific performance was available even though it was a commercial property. The property was unique in that (i) the land was site ready for development; and (ii) other properties were no longer available at anywhere near the same price. The judge held that damages would not suffice because the vendor was a single asset corporation and any damages would not easily be collected and would result in more litigation. Further, the judge held that the vendor had acted in bad faith and therefore the equitable remedy of specific performance was appropriate.

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