Purchasing property can be an enormous decision, and it makes sense that people should do everything they can to ensure they understand precisely what they are purchasing and how the purchase or sale must be carried out. A failure to follow what has been contracted can lead to litigation over the purchase and sale of the property. As we see in a recent Ontario Superior Court of Justice decision, poor attention to detail or an innocent mistake can have significant consequences.
Plaintiff backed out of agreement of purchase and sale for subdivision lot
In Sadiq v. Simcoe Ridge, the plaintiff sought a certificate of pending litigation on a lot (“lot 140”) in a subdivision outside of Toronto. This would mean that an interest in the land would be assigned to the plaintiff to stop the planned sale of the land to a third party. The developers and real estate agents involved in the property sale were the defendants in the matter.
The situation came before the court after the plaintiff signed an agreement of purchase and sale for the property on July 15, 2020. It was signed by the developer the next day. On Monday, July 20, at 11:55 pm, the plaintiff sent an email to the developer’s real estate agent stating that after talking to a lawyer and accountant, he wanted to cancel the deal “because it does not work for me.” It was the plaintiff’s understanding that he had a 3-business day “cooling period” that was set to expire on July 21, 2020 (five minutes after the email was sent). The developer’s real estate agent contacted the plaintiff’s real estate agent the following day (July 21) to state that she was going to get him out of the deal and that a new purchaser had already been lined up for the lot.
Plaintiff alleged he cancelled the wrong property deal
Things became complicated after the plaintiff took the position that he cancelled the wrong deal. He said he was also involved in purchasing another piece of property on Park Avenue and that the cooling period he referenced was in the contract for the Park Avenue property, which he wished to take advantage of. He said he mistakenly cancelled the purchase of the wrong property. In his application, he told the court he believed the defendants preferred the new purchaser and were wrong in enforcing his request to cancel the deal.
Does the plaintiff have an interest in the property?
To succeed, the plaintiff had to establish a reasonable, underlying claim to an interest in lot 140. The factors used to determine this include,
“whether damages are claimed and are an adequate alternative to the claimed interest in land and whether the moving party has prosecuted the motion ‘with reasonable diligence.’”
Agreement included “cooling period” that expired after plaintiff sent email
The court looked at the agreement of purchase and sale and found that it also included a cooling period and believed the defendant developer, who said that the cooling period they follow is typically 3-5 days and that a three-day period would have expired on July 21. Furthermore, while the purchase and sale agreement for the Park Avenue property also included a cooling period, it was not set to expire until July 28, a week after the email was sent.
Court found plaintiff didn’t behave as if he believed agreement still in place
The court also found that the plaintiff failed to send any written correspondence to the defendants, which it said was contrary to the behaviour of someone who believes that the agreement is still in place. While the plaintiff did show the court screenshots of two “carefully written” texts to the defendants, stating his position that he made a mistake, the defendants say they did not receive the texts. Meanwhile, the plaintiff refused to allow any metadata to be collected that could confirm that the messages were actually sent to the defendants, something that can’t be done through screenshots.
Plaintiff delayed in bringing motion and failed to prove other property sale had been cancelled
The court looked at other factors despite having “deep misgivings” about the plaintiff’s credibility. The first was the delay in bringing the motion forward. The court found the plaintiff waited months, doing nothing in that time to advance his claim. He told the court he was depressed and that COVID-19 limited his ability to pursue a legal remedy, but he produced no evidence to support this. Ultimately, the plaintiff waited over a year and a half to bring the motion.
The court also considered the uniqueness of the land. The court found that the plaintiff failed to prove that the purchase of the Park Avenue property had also been cancelled. He said it was but offered no evidence, leaving the court unable to determine if the 140 lot was for his own home or if it was an investment. The court found that while Lot 140 is a corner lot, it is in a subdivision with largely pre-designed homes, and the property was not unique outside of it being a corner lot. The test to prove uniqueness was described as needing more than that, though, with the plaintiff having the responsibility to demonstrate there is no substitute readily available. In this case, the plaintiff did not present the court with evidence that the 140 lot had no substitutes.
The court ultimately ruled that the plaintiff failed to establish an interest in the land and that the planned sale to a third party could continue.
Contact Campbell Litigation in Kitchener-Waterloo for Trusted Real Estate Litigation Advice
The decision to purchase or sell property can be one of the most significant ones a person makes. Problems that prevent or delay closure or other unanticipated issues can cause unwanted stress and financial loss. By working with an experienced lawyer, you can help minimize these risks. The skilled team at Campbell Litigation has over forty years of experience assisting clients in a broad range of real estate-related disputes. Please contact us online or by phone at 519-886-1204 to see how we can help you.
