Kirsten T. Crain

The purchasers (respondents) entered into an agreement to buy a residential property from the vendor (appellant), conditional upon a satisfactory home inspection in the purchasers' sole and absolute discretion.

After receiving an inspection report identifying several deficiencies, the purchasers decided not to waive the condition and requested the return of their deposit.

The vendor refused, arguing the purchasers did not act reasonably or in good faith.

The Court of Appeal upheld the trial judge's decision ordering the return of the deposit, finding that the inspection condition imported both objective and subjective elements, and that the purchasers exercised their discretion honestly, in good faith, and reasonably based on the inspection report.