COURT OF APPEAL FOR ONTARIO
RE:
FRASER BALL and LORRAINE SHANAHAN (Plaintiffs (Appellants)) – and – LYNN HELEN HARDY (Defendant (Respondent in Appeal))
BEFORE:
O’CONNOR, A.C.J.O., LABROSSE and FELDMAN JJ.A.
COUNSEL:
Brian P. Bellmore and Diana M. Soos
for the appellant
Cheryl G. McLuckie
for the respondent
HEARD AND RELEASED ORALLY:
July 5, 2006
On appeal from the judgment of Justice J.A. Roy of the Superior Court of Justice dated April 13, 2005.
E N D O R S E M E N T
1The appellants are the purchasers and the respondent is the vendor under a written agreement of purchase and sale of the vendor’s property. The vendor refused to complete the transaction and the purchasers commenced an action for a declaration that the agreement was binding and for specific performance. After a trial, Mr. Justice Roy dismissed the action on the basis that the parties were not ad idem, with costs in favour of the vendor. For the reasons that follow, we would allow the appeal.
2The purchasers had indicated to the vendor that they were interested in buying the property. Later they were invited by the vendor to come and visit the property. Discussions and negotiations for the transaction took place between the parties over a period of two days. The purchaser Ball prepared two copies of a hand written agreement of purchase and sale and the vendor Hardy participated in the preparation of the agreement by providing the necessary documents for the drafting of the agreement. The parties signed the agreement and each retained a copy of the executed document. A deposit was accepted by the vendor which was to be held in trust by a lawyer pending completion of the transaction. The parties agreed to attend on the lawyer the next day to proceed with the transaction.
3However, the next day, the vendor advised the purchasers that she was not going to the lawyer and needed more time to think about the sale. Later, she advised that she was not prepared to proceed to the transaction.
4The trial judge found that the agreement contained all the essential terms for a valid agreement of purchase and sale and that the unique nature and quality of the property warranted the remedy of specific performance. He found that all the parties were credible. He also found that there was no undue influence or duress by the appellants on the vendor and that the agreement was not unconscionable. He found that the sale price was reasonable.
5Nevertheless, the trial judge arrived at the conclusion not to enforce the agreement. In so doing, he appears to have relied upon a lack of consensus ad idem and the defences of mistake, non est factum and unconscionable conduct due to inequality of bargaining power.
6The vendor is a literate and educated woman with no physical or mental condition that would interfere with her ability to enter into a valid agreement. While the circumstance of negotiating and entering into a handwritten agreement of the sale of land without the involvement of a real estate agent or a lawyer is certainly unusual, there was no evidence that the vendor did not understand the nature of the document she was signing. While there was some evidence given in her cross examination that the vendor may have thought that the agreement would not be binding until the parties had seen a lawyer, the evidence is clear that she knew that the purchasers thought that they had bought the property. She did nothing at the time to suggest the contrary.
7In Walton v. Landstock Investments Ltd., 1976 669 (ON CA), [1976] 72 D.L.R. (3d) 195 (Ont. C.A.), Houlden J.A., speaking for this Court, in dealing with a contract of the sale of land, stated:
The trial judge found that the plaintiff did not accept the defendant’s counter-offer, and hence there was no binding contract between the parties. With respect, I cannot agree with this finding. On October 17th, when the plaintiff initialed the changes in the counter-offer, I think that a binding contract was entered into between the parties. Mutual assent is not required for the formation of a valid contract, only a manifestation of mutual assent: Restatement of the Law of Contract (1932), vol. 1, 20, p.25. Whether or not there is a manifestation of mutual assent is to be determined from the overt acts of the parties: Williston, Treatise on the Law of Contracts, 3rd ed. (1957), 22, p. 46 et seq., and Lindsey v. Heron & Co. 1921 538 (ON CA), 50 O.L.R. 1 at p. 8, 64 D.L.R. 92 at pp. 98-9, per Middleton J. When the overt acts of the parties are examined, I think it is relevant that there was a manifestation of mutual assent in this case. [Emphasis added.]
8These words are applicable to the present case. Unquestionably, the written agreement was a manifestation of mutual assent for the sale of the property. The trial judge’s conclusion not to enforce the agreement is contrary to his findings of fact and is not supported by the evidence. None of the defences referred to above were available in the circumstances of this case. Specifically, the facts of this case do not support a defence of mistake. The vendor did not communicate any reservation or misunderstanding that she may have had to the purchasers and it appears that she simply changed her mind after the execution of a valid and enforceable agreement of purchase and sale. Although this is most unfortunate for the vendor, the purchasers are entitled to enforce the agreement.
9The appeal is allowed. The judgment is set aside and an order for specific performance of the Agreement of Purchase and Sale will issue. We leave it to the parties to work out the mechanics of the sale. Should there be a problem, we may be spoken to Costs of the trial and of this appeal to the appellants in the amount of $10,000 all inclusive.```
