Court File and Parties
Docket: C47193 Date: 2008-02-26 Court of Appeal for Ontario
Between:
Grundel Investments Inc. Respondent (Applicant)
and
Modern Pet Food Processing Inc. Appellant (Respondent)
Before: Lang, MacFarland and LaForme JJ.A.
Counsel: Stephen B.W. Chisholm for the appellant (respondent) George Karayannides and Matthew Diskin for respondent (applicant)
Heard: February 25, 2008
On appeal from the order of Justice Harvison Young of the Superior Court of Justice dated April 26, 2007.
Appeal Book Endorsement
[1] The application judge concluded that the respondent was entitled to rely on the environmental condition to terminate the agreement of purchase and sale. We see no error in this determination. On a plain reading, the environmental condition allowed the respondent to terminate the agreement in its “sole and unfettered discretion” based on its satisfaction with the property’s “physical condition (including suitability for future construction.)” This wording did not limit the condition to the “pristine” condition of the land as argued by the appellant. The environmental assessment disclosed problems with the land’s soil permeability that would have affected the respondent’s intention to develop the property as a scrap metal facility. As the application judge determined, on the plain wording of the environmental condition, these problems allowed the respondent to terminate the agreement.
[2] We agree with the application judge that this interpretation was available irrespective of the respondent’s earlier waiver of the feasibility condition and that there was permissible overlap between the two conditions.
[3] Whether the standard of reasonableness is objective or subjective, we agree with the application judge that, on either standard, the respondent acted reasonably. Importantly, the application judge found that the respondent exercised the termination clause in good faith.
[4] Accordingly, the appeal is dismissed. Costs to the respondent fixed at $3,500 inclusive of disbursements plus GST.