High Tower Homes Corporation v. Stevens et al.

[Indexed as: High Tower Homes Corp. v. Stevens]

Ontario Reports

Court of Appeal for Ontario,

Hoy A.C.J.O., Epstein and Hourigan JJ.A.

December 18, 2014

123 O.R. (3d) 81 | 2014 ONCA 911

Case Summary

Contracts — Interpretation and construction — Vendor mistaken as to particular term in agreement of purchase and sale when it accepted purchaser's counter-offer — Purchaser acquiring property at unintended price below market value if transaction was completed — Agreement providing that purchaser could waive conditions for its benefit by notice in writing to vendor and that agreement became null and void if conditions were not so waived — Motion judge not erring in finding that vendor could avoid completing sale transaction by relying on purchaser's failure to give notice of its waiver of conditions to vendor personally — Motion judge not erring in finding that "entire agreement" clause in agreement precluded implication of term that notice could be given by fax to vendor's solicitor — Vendor not waiving strict compliance with notice provision — Doctrine of promissory estoppel not precluding vendor from requiring notice in writing to him of waiver of conditions.

The vendor decided to sell two adjacent properties, Property A and Property B. For tax planning purposes, he decided to allocate as much of the aggregate purchase price as possible to Property B. Schedule A to the purchaser's first offers included a clause to the effect that the sale of each property was conditional on the sale of the other. A series of further offers and counter-offers ensued. In a subsequent offer for Property A, the purchaser revised the offer to provide that the sale was not conditional on the sale of Property B. The change was not brought to the vendor's attention. The vendor accepted the offer in the form prepared by the purchaser. The agreement of purchase and sale provided that the purchaser could waive conditions for its benefit by notice in writing to the vendor. If the conditions were not waived, the agreement would become void. When the vendor learned of his mistake and the purchaser's attempt to take advantage of it to buy only Property A at a bargain price, he advised the purchaser that the agreement was at an end because the purchaser had not given notice waiving conditions for its benefit to the vendor personally. The purchaser sued for specific performance or damages for breach of contract and brought a motion for partial summary judgment declaring the vendor liable for breach of the agreement. The motion judge declared the agreement unenforceable and dismissed the motion. The purchaser appealed.

Held, the appeal should be dismissed.

The motion judge did not err in finding that the vendor could avoid completing the sale transaction by relying on the purchaser's failure to give notice of its waiver of conditions personally to the vendor. Nor did he err in finding that an "entire agreement" clause in the agreement precluded the implication of terms to the contrary. Even if the motion judge erred in his interpretation of the "entire agreement" clause, the purchaser's argument based on implied terms failed. To imply other terms in relation to notice would run contrary to the express notice provisions in the agreement. The device of implying contractual terms is to be used sparingly and with caution. Implying a term that notice could be given by fax to the vendor's solicitor was not necessary to give business efficacy to the [page82 ]agreement. The vendor did not waive the right to insist on strict compliance with the notice provisions. The doctrine of promissory estoppel did not preclude the vendor from requiring notice in writing to him that the purchaser waived the conditions. No unambiguous promise or assurance which was intended to affect the vendor's right to require notice in compliance with the express terms of the agreement could be inferred from the circumstances. Even if one could be inferred, the purchaser was not entitled to relief on the basis of promissory estoppel as its conduct was properly characterized by the motion judge as "hard and pointed".

1376273 Ontario Inc. v. Knob Hill Farms Ltd., [2003] O.J. No. 2364, [2003] O.T.C. 526, 34 B.L.R. (3d) 95, 10 R.P.R. (4th) 172, 123 A.C.W.S. (3d) 688 (S.C.J.), distd

Bhasin v. Hrynew, [2014] S.C.J. No. 71, 2014 SCC 71, [2014] 11 W.W.R. 641, 27 B.L.R. (5th) 1, 4 Alta. L.R. (6th) 219, 2014EXP-3530, J.E. 2014-1992, EYB 2014-244256, 245 A.C.W.S. (3d) 832; CivicLife.com Inc. v. Canada (Attorney General), 2006 20837 (ON CA), [2006] O.J. No. 2474, 215 O.A.C. 43, 149 A.C.W.S. (3d) 417 (C.A.); Colautti Construction Ltd. v. Ottawa (City) (1984), 1984 1969 (ON CA), 46 O.R. (2d) 236, [1984] O.J. No. 3194, 9 D.L.R. (4th) 265, 5 O.A.C. 74, 7 C.L.R. 264, 25 A.C.W.S. (2d) 379 (C.A.), consd

Other cases referred to

Canadian Pacific Hotels Ltd. v. Bank of Montreal, 1987 55 (SCC), [1987] 1 S.C.R. 711, [1987] S.C.J. No. 29, 40 D.L.R. (4th) 385, 77 N.R. 161, 21 O.A.C. 321, 41 C.C.L.T. 1, 4 A.C.W.S. (3d) 299; DW Squared Limited Partnership v. Oxford Properties Canada Ltd., [2001] O.J. No. 3919, [2001] O.T.C. 739, 43 R.P.R. (4th) 155, 108 A.C.W.S. (3d) 710 (S.C.J.); Engineered Homes Ltd. v. Mason, 1983 142 (SCC), [1983] 1 S.C.R. 641, [1983] S.C.J. No. 42, 146 D.L.R. (3d) 577, 47 N.R. 379, 51 B.C.L.R. 273, 49 C.B.R. (N.S.) 257, 20 A.C.W.S. (2d) 3; G. Ford Homes Ltd. v. Draft Masonry (York) Co. (1983), 1983 1719 (ON CA), 43 O.R. (2d) 401, [1983] O.J. No. 3181, 1 D.L.R. (4th) 262, 2 O.A.C. 231, 2 C.L.R. 210, 22 A.C.W.S. (2d) 232 (C.A.); High Tower Homes v. Stevens, 2014 ONSC 2309 (S.C.J.); Maracle v. Travellers Indemnity Co. of Canada, 1991 58 (SCC), [1991] 2 S.C.R. 50, [1991] S.C.J. No. 43, 80 D.L.R. (4th) 652, 125 N.R. 294, J.E. 91-959, 47 O.A.C. 333, 3 C.C.L.I. (2d) 186, 50 C.P.C. (2d) 213, [1991] I.L.R. Â1-2728 at 1284, 27 A.C.W.S. (3d) 70; Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 100 (SCC), [1994] 2 S.C.R. 490, [1994] S.C.J. No. 59, 115 D.L.R. (4th) 478, 168 N.R. 381, [1994] 7 W.W.R. 37, J.E. 94-1053, 20 Alta. L.R. (3d) 296, 155 A.R. 321, 23 C.C.L.I. (2d) 161, [1994] I.L.R. Â1-3077 at 2913, 48 A.C.W.S. (3d) 1240; Sattva Capital Corp. v. Creston Moly Corp., [2014] S.C.J. No. 53, 2014 SCC 53, 2014EXP-2369, J.E. 2014-1345, 373 D.L.R. (4th) 393, [2014] 9 W.W.R. 427, 59 B.C.L.R. (5th) 1, 461 N.R. 335, 25 B.L.R. (5th) 1, 358 B.C.A.C. 1, 614 W.A.C. 1, 242 A.C.W.S. (3d) 266; Servello v. Servello, [2014] O.J. No. 4075, 2014 ONSC 5035, 245 A.C.W.S. (3d) 330 (S.C.J.); Technicore Underground Inc. v. Toronto (City), [2012] O.J. No. 4235, 2012 ONCA 597, 296 O.A.C. 218, 14 C.L.R. (4th) 169, 2 M.P.L.R. (5th) 1, 354 D.L.R. (4th) 516, 220 A.C.W.S. (3d) 333; Toronto (City) v. Polai, 1969 339 (ON CA), [1970] 1 O.R. 483, [1969] O.J. No. 1624, 8 D.L.R. (3d) 689 (C.A.)

Authorities referred to

McCamus, John D., The Law of Contracts, 2nd ed. (Toronto: Irwin Law, 2012)

APPEAL from the judgment of Trimble J. of the Superior Court of Justice dated April 16, 2014 dismissing a motion for partial summary judgment. [page83 ]

Ronald Allan, for appellant.

Christopher E. Reed, for respondents.

The judgment of the court was delivered by

HOY A.C.J.O.: —

Introduction

[1] A vendor was mistaken as to the terms of an agreement of purchase and sale. Completion of the sale transaction would result in the purchaser's acquisition of the property at an unintended price below market value. Did the motion judge err in concluding that the vendor could avoid completing the sale transaction by relying on the purchaser's failure to give notice of its waiver of conditions personally to the vendor?

[2] The purchaser's arguments do not persuade me that there is a basis for this court to intervene with the motion judge's conclusion. I would accordingly dismiss this appeal.

Background

[3] Brett Stevens, in his capacity as trustee (and in his personal capacity, the "vendor") owned a property ("Blue Water") in Burlington. He and his then spouse owned the adjacent property ("Avondale"). It was their principal residence. Stevens and his spouse concluded that selling the two properties together would maximize their value. For tax planning purposes, they wished to allocate as much of the aggregate purchase price for the properties as possible to Avondale.

[4] High Tower Homes Corporation (the "purchaser") expressed interest in the properties and submitted offers for both. The offers were not simply standard form documents. The purchaser added Schedule A -- consisting of two typed pages of additional provisions -- to the Ontario Real Estate Association standard form of agreement of purchase and sale. The added provisions superseded the standard terms to the extent of any conflict or discrepancy.

[5] The purchaser's first offers for the two properties were presented together.

[6] Schedule A to each of the purchaser's first offers included a clause entitled "CONDITION FOR SALE OF ADJACENT PROPERTY" to the effect that the sale of each property was conditional on the sale of the other. A series of further offers and counter-offers ensued. In a subsequent, fully retyped offer for Blue Water, the purchaser revised the text of the clause under the heading "CONDITION FOR SALE OF ADJACENT PROPERTY" to provide that the [page84 ]sale of Blue Water was not conditional on the sale of Avondale. The change was not "black-lined" and the purchaser did not otherwise draw the change to the vendor's attention. No change was made to the corresponding clause in the Avondale offer.

[7] On January 25, 2013, the vendor accepted the purchaser's counter-offers to sell the properties. The agreement of purchase and sale for Blue Water (the "agreement") was in the form prepared by the purchaser -- that is, without the clause making the closing of the sale of Blue Water conditional on the purchase of Avondale.

[8] All price increases in the course of the negotiations were made with respect to Avondale. Throughout, the price offered by the purchaser for Blue Water remained at $1 million -- an amount less than what Stevens had paid for Blue Water in 2008. Over the course of the negotiations, the price offered for Avondale increased from $3.5 million to $4.5 million.

[9] Clause 7[^1] to Schedule A of the agreement contained a clause -- entitled "CONDITION FOR BUYER'S BENEFIT" -- outlining conditions for the purchaser's benefit that could be waived "by notice in writing to the Seller, within the time period stated herein" (on or before February 22, 2013) (emphasis added). If the conditions were not so waived, the agreement would become null and void.

[10] Clause 3 of the standard terms of the agreement, entitled "Notices", provided, in relevant part:

In addition to any provision contained herein and in any Schedule hereto, this offer, any counter-offer, notice of acceptance thereof or any notice to be given or received pursuant to this Agreement or any Schedule hereto (any of them, "Document") shall be deemed given and received when delivered personally or hand delivered to the Address for Service provided in the Acknowledgment below, or where a facsimile number or email address is provided herein, when transmitted electronically to that facsimile number or email address, respectively, in which case, the signature(s) of the party (parties) shall be deemed to be original.

[11] No address for service was specified in the part of the agreement entitled "Acknowledgment" and no facsimile number or e-mail address was specified in the spaces in the agreement immediately following the notice clause labelled "FAX No. (For delivery of Documents to Seller)" and "Email Address (For delivery of Documents to Seller)".

[12] On Friday, February 22, 2013, the purchaser's solicitor gave notice to the vendor's solicitor, by fax, purporting to waive [page85 ]the conditions for the purchaser's benefit in clause 7 of Schedule A to the agreement and seeking an extension of time for the waiver of conditions with respect to its purchase of Avondale.

[13] According to Ivan Curic -- an officer, director and principal of the purchaser -- the purchaser's solicitor also told him that he had to deliver the waiver to Blue Water and he allegedly did so (he thinks in the evening of February 22, 2013). Mr. Curic admits that he did not deliver the notice to the vendor personally and the vendor's evidence was that nothing was left at Blue Water. The notice waiving the conditions was never delivered to the vendor personally.

[14] The vendor was stunned when he learned of his mistake, and the purchaser's attempt to take advantage of it to buy only Blue Water, at a bargain price.

[15] On February 25, 2013, the vendor's lawyer responded by fax to the purchaser's solicitor. The vendor's lawyer advised that the agreement was at an end because the purchaser had not given notice waiving the conditions for its benefit within the required time period in the manner required by the agreement.

[16] The purchaser sued for specific performance and, in the alternative, damages in the amount of $5 million for breach of contract. The vendor counter-claimed for a judgment rectifying the agreement and a declaration that the agreement and the agreement of purchase and sale for Avondale were both null and void. The purchaser brought a motion for partial summary judgment declaring the vendor liable for breach of the agreement.

[17] The motion judge declared the agreement unenforceable and dismissed the purchaser's motion. He found that the agreement was clear: notice should have been delivered personally to the vendor and the purchaser did not deliver its notice personally. Further, the "entire agreement" clause in the agreement precluded the implication of terms to the contrary[^2] and was a complete answer to the purchaser's argument that the vendor had waived the requirement that notice be given by personal delivery. [page86 ]

[18] The motion judge also concluded that the vendor was not entitled to rectification of the agreement.

[19] The purchaser appeals the dismissal of its motion. The vendor cross-appeals, asking that if the purchaser's appeal be allowed, all issues, including his claim to rectification, be sent to trial.

Arguments on Appeal

[20] The purchaser makes five arguments on appeal:

(1) The purchaser's solicitor's fax number was provided in the agreement. The signed agreement was faxed by the vendor's solicitor to the purchaser's solicitor and the vendor's solicitor's fax number therefore appears on the top of each page. In this way, the vendor's solicitor's fax number was "provided herein", within the meaning of the notice provision. Therefore, fax delivery to the vendor's solicitor complied with the express notice provision in the agreement.

(2) The motion judge should have found that by leaving the notice at Blue Water, Mr. Curic satisfied the requirement for personal delivery, as was found in 1376273 Ontario Inc. v. Knob Hill Farms Ltd., 2003 28382 (ON SC), [2003] O.J. No. 2364, 34 B.L.R. (3d) 95 (S.C.J.).

(3) A term that notice waiving the conditions in favour of the purchaser could be given by fax to the vendor's solicitor and by hand delivery to Blue Water is necessary to give business efficacy to the agreement and should be implied as a matter of presumed intention: Canadian Pacific Hotels Ltd. v. Bank of Montreal, 1987 55 (SCC), [1987] 1 S.C.R. 711, [1987] S.C.J. No. 29. And, as in CivicLife.com Inc. v. Canada (Attorney General), 2006 20837 (ON CA), [2006] O.J. No. 2474, 215 O.A.C. 43 (C.A.), the wording of the entire agreement clause does not preclude the implication of a term. The motion judge erred in concluding otherwise.

(4) The vendor waived the personal delivery notice requirement, through his conduct or that of his solicitor. Alternatively expressed, the vendor and the purchaser amended the provisions of the agreement by their actions during the course of the agreement, as in Colautti Construction Ltd. v. Ottawa (City) (1984), 1984 1969 (ON CA), 46 O.R. (2d) 236, [1984] O.J. No. 3194 (C.A.). An entire agreement clause does not necessarily preclude a party from asserting waiver, or that the agreement was subsequently amended. The motion [page87 ]judge erred in concluding that the "entire agreement" clause in the agreement did so.

(5) The motion judge failed to consider and apply the doctrine of promissory estoppel. The vendor through his conduct waived strict compliance with the provisions in the agreement regarding how notice was to be given, leading the purchaser to suppose that he would not insist on strict compliance with the notice provision. This is an appropriate circumstance for equity to intervene and estop the vendor from strict reliance on his rights.

[21] Below, I address each of these arguments in turn. However, I first outline the standard of review that the Supreme Court held in Sattva Capital Corp. v. Creston Moly Corp., [2014] S.C.J. No. 53, 2014 SCC 53, 373 D.L.R. (4th) 393 is to be applied to questions of contractual interpretation.

Contractual Interpretation: Standard of Review

[22] In Sattva, Rothstein J., for the Supreme Court, wrote, at para. 50:

Contractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix.

[23] He explained, at para. 51:

One central purpose of drawing a distinction between questions of law and those of mixed fact and law is to limit the intervention of appellate courts to cases where the results can be expected to have an impact beyond the parties to the particular dispute. It reflects the role of the courts of appeal in ensuring the consistency of the law, rather than in providing a new forum for parties to continue their private litigation.

[24] "[D]eference [is owed] to first instance decision-makers on points of contractual interpretation": Sattva, at para. 52.

[25] There may be instances where a question of law -- which attracts a correctness standard -- can be extricated from the interpretation process. However, as Sattva cautions, at para. 55, such instances will be rare.

[26] Therefore, the motion judge's conclusions that the purchaser was required to deliver its written notice of waiver to the vendor personally and that the manner by which the purchaser gave notice in this case did not amount to personal delivery to the vendor are entitled to deference, absent an extricable question of law. [page88 ]

Arguments 1 and 2

[27] I am not persuaded that either of the purchaser's first two arguments provides a basis for this court to interfere with the motion judge's conclusions.

[28] As for its first argument, there is no indication from the purchaser's factum below on the motion for partial summary judgment that the purchaser argued at first instance that fax delivery to the vendor's solicitor constituted fax delivery in accordance with the agreement. In any event, the agreement included a specific spot where a fax number -- if any -- at which the vendor could be given notice was to be specified. No fax number was specified in the spot in the agreement designated for that purpose. Faxing the notice to the vendor's solicitor did not constitute notice via facsimile transmission in accordance with the agreement.

[29] As to its second argument, the purchaser's evidence that it had delivered the notice to Blue Water was contradicted by the vendor and his former spouse. The motion judge did not make a finding that the purchaser had delivered the notice to Blue Water, and I would be reluctant to make such a finding on this record.

[30] In any event, the facts in this case are very different from those in Knob Hill. In that case, the notice clause required that notice to the corporate seller be delivered in person at a specified address. The court found that a notice -- delivered by the hand of an individual -- and addressed to and placed between the locked doors of the specified address, where it would surely be found when the doors were unlocked by a responsible person, was delivered in accordance with the notice provision: see Knob Hill, at para. 143. Here, clause 7 of Schedule A to the agreement specifies that the conditions can only be waived by "notice in writing to the Seller" (emphasis added). And clause 3 of the standard terms refers to a notice "delivered personally or hand delivered to the Address for Service provided in the Acknowledgement below . . .". As noted above, no address for service was specified in the "Acknowledgement". Further, the vendor in this case is an individual, not a corporation as in Knob Hill, and Blue Water was not a place of business, as in the case of Knob Hill, where the notice "would be surely found" by a responsible person. The vendor did not live at Blue Water and the vendor's evidence was that no notice was found at Blue Water. [page89 ]

Argument 3: Implied Terms

[31] In my view, there is no basis for interfering with the motion judge's conclusion that other provisions as to notice should not be implied. His interpretation of the "entire agreement" clause is entitled to deference. Moreover, I would not imply the term regarding notice that the purchaser seeks to have implied. Therefore, even if the motion judge erred in his interpretation of the entire agreement clause, the purchaser's argument based on implied terms fails.

[32] The entire agreement clause in the agreement provided as follows:

This Agreement including any Schedule attached hereto, shall constitute the entire Agreement between Buyer and Seller. There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein.

(Emphasis added)

[33] While the word "condition" was not modified by a phrase such as "express or implied", in my view it was nonetheless open to the motion judge to find that the entire agreement precluded the implication of an implied term as to notice.

[34] CivicLife did not preclude the motion judge from coming to that conclusion.

[35] The issue in CivicLife was whether the contract included a duty of good faith performance. Weiler J.A., writing for the court, concluded that it did, using the device of an implied term. At para. 52, she held that the wording of the entire agreement clause did not preclude the implication of such a term because it was already part of the contract. She further held that even if the entire agreement clause precluded such an implication on face, the court had the discretion not to enforce the clause when to do so would be unconscionable, unfair, unreasonable or otherwise contrary to public policy.

[36] In Bhasin v. Hrynew, [2014] S.C.J. No. 71, 2014 SCC 71, 27 B.L.R. (5th) 1 -- a decision released after this appeal was argued and on which the parties subsequently made written submissions -- Cromwell J., writing for a unanimous court, clarified that the duty of good faith should not be thought of as an implied term. He recognized a new duty of honest contractual performance as a general doctrine of contract law that operates irrespective of the intentions of the parties. As such, the parties cannot exclude it by an entire agreement clause: Bhasin, at para. 74.

[37] Seen in the light of Bhasin, CivicLife is about the importance of acting in good faith in contractual dealings, and [page90 ]not about the general ability to imply terms -- whatever their nature -- notwithstanding an entire agreement clause.

[38] Because he was of the view that the entire agreement clause precluded the purchaser from asserting that there were implied terms as to the manner of giving of notice, the motion judge did not expressly address whether a term should be implied that notice waiving the conditions in favour of the purchaser could be given by fax to the vendor's solicitor and by hand delivery to Blue Water.

[39] I would decline to imply such a term. As Cory J.A. (as he then was) held in G. Ford Homes Ltd. v. Draft Masonry (York) Co. (1983), 1983 1719 (ON CA), 43 O.R. (2d) 401, [1983] O.J. No. 3181 (C.A.), at p. 403 O.R.: "no term will be implied that is inconsistent with the contract". As mentioned above, the agreement expressly provided a way in which the vendor could be served: personally. There was no indication that the vendor was evading personal service of the notice, and the purchaser made no effort to serve the vendor personally. To imply other terms in relation to notice would run contrary to the express notice provisions in the agreement. The device of implying contractual terms is to be used sparingly and with caution: John D. McCamus, The Law of Contracts, 2nd ed. (Toronto: Irwin Law, 2012), at p. 774. Finally, I agree with the vendor that implying the terms sought by the purchaser is not necessary to give business efficacy[^3] to the agreement. Therefore, these terms should not be implied as a matter of presumed intention.

Argument 4: Waiver

[40] While the motion judge noted the purchaser's argument that the vendor, through his lawyer's course of conduct, had waived the requirement that any notice given pursuant to the agreement be given in accordance with its express terms, the motion judge did not make a finding as to whether or not the vendor had waived compliance with the notice provision. Rather, he concluded that the purchaser's waiver argument was defeated by the entire agreement clause in the agreement.

[41] At para. 58, the motion judge wrote, "[w]aiver is nothing more than a representation by conduct or a collateral agreement [page91 ]affecting the [agreement], both of which the [entire agreement clause] prohibits".

[42] I would be inclined to agree with the purchaser that this clause does not necessarily bar a claim that the vendor waived a provision of the agreement after the agreement was concluded. However, as I explain below, I am not persuaded that the evidence in the record establishes waiver or amendment of the agreement by post-agreement conduct. Therefore, if the motion judge erred in concluding that the entire agreement clause bars a claim asserting waiver, such error is of no moment.

[43] In Technicore Underground Inc. v. Toronto (City), [2012] O.J. No. 4235, 2012 ONCA 597, 354 D.L.R. (4th) 516, at para. 63, Gillese J.A., writing for the court, summarized the essentials of waiver as set out by the Supreme Court of Canada in Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 100 (SCC), [1994] 2 S.C.R. 490, [1994] S.C.J. No. 59:

Waiver occurs when one party to a contract (or proceeding) takes steps that amount to foregoing reliance on some known right or defect in the performance of the other party. It will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of the deficiency that might be relied on and (2) an unequivocal and conscious intention to abandon the right to rely on it. The intention to relinquish the right must be communicated. Communication can be formal or informal and it may be inferred from conduct. The overriding consideration in each case is whether one party communicated a clear intention to waive a right to the other party.

[44] The purchaser argues that negotiations had always or almost always been conducted through counsel and that through this course of conduct the vendor waived his right to insist upon the prescribed method of notice.

[45] The purchaser points to the fact that the parties made offers and counter-offers by fax to their respective lawyers in the course of their negotiation of the agreement and that the vendor accepted the offer resulting in the agreement by fax to the purchaser's solicitor.

[46] The purchaser also points to correspondence exchanged between its counsel and the vendor's counsel on February 20 and 21, 2013. The purchaser's lawyer faxed a letter to the vendor's lawyer on February 20, 2013 requesting confirmation that the $50,000 deposit had been received and that the conditional period expired on February 23, 2013. On or about February 21, 2013, the vendor's lawyer responded by fax, acknowledging receipt of the deposit and confirming that the conditional date was February 22, 2013 (February 23 landed on a Saturday).

[47] In my view, the evidence does not demonstrate that the vendor had an "unequivocal and conscious intention" to abandon [page92 ]his right to insist on strict compliance with the requirement that the purchaser give notice in writing of its waiver of notice of conditions personally to the vendor. I conclude this for several reasons.

[48] First, it is important to recall that the agreement contained two provisions governing the giving of notice of waiver of conditions for the benefit of the purchaser: clause 7 of Schedule A and clause 3 of the standard terms. Clause 7 is a separate and specific obligation to give "notice in writing to the [vendor]" in the case of a waiver of conditions for the benefit of the purchaser. There is no equivalent stand-alone provision in respect of the delivery of offers or counter-offers, or communications regarding the deposit, or the condition waiver date. Any waiver resulting from the conduct that the purchaser relies on could only be with respect to clause 3 of the standard terms -- as that was the only clause applicable to such conduct -- and not the independent requirement in clause 7 of Schedule A. It therefore cannot be said that the conduct relied on by the purchaser demonstrates that the vendor had an unequivocal and conscious intention to abandon his right to rely on the specific notice of waiver of conditions provision in clause 7.

[49] Second, not only did the agreement not contain a separate provision requiring "notice in writing to the [vendor]" in the instances that the purchaser seeks to rely on (i.e., the making of offers and counter-offers, the delivery of the deposit, and the discussion of the condition waiver date), in two of those instances the agreement actually contemplated communication with a person other than the vendor. The agreement required the purchaser to deliver the deposit to the vendor's solicitor within two business days of the acceptance of the agreement. It did not require notice to the purchaser confirming receipt of the deposit. Given that the deposit was to be paid to the vendor's solicitor, it is logical that the purchaser's lawyer would seek confirmation from the vendor's solicitor that it had been received. Similarly, in the case of the communication between counsel regarding the date when the conditional period expired, clause 20 of the agreement permitted the vendor's and the purchaser's respective counsel to extend or abridge time on their behalf.

[50] Third, the notice at issue is specifically required by clause 7 of Schedule A and is of critical importance. If the conditions in clause 7 were not waived "by notice in writing to the [vendor]" within the applicable time period, the agreement would become null and void. [page93 ]

[51] Fourth, this is not a case where a particular kind of notice (such as a notice of renewal of a lease)[^4] had always been given in a particular manner, and accepted by the other party as having been validly given, despite not conforming to the notice provisions of the governing agreement.

[52] Finally, the purchaser's lawyer did not seem to be of the view that sending a fax to the vendor's lawyer satisfied the requirement that notice in writing be given to the vendor. According to Mr. Curic, the purchaser's lawyer instructed him to deliver the notice to Blue Water as well.

[53] As to the purchaser's argument based on Colautti, whether the purchaser waived the right to insist on strict compliance with the notice provisions and whether the vendor and the purchaser varied the notice provisions in the agreement by post-agreement conduct essentially involve the same analysis, at least in this case.

[54] In Colautti, after difficulties in the construction of a sewer line arose, the parties agreed that the proposed sewer line should be relocated. The contractor later sued for the additional costs it incurred in doing so. The contract -- which the court described as one drawn by a municipality to protect taxpayers and as being "so rigid and restricting" -- required that extra costs be authorized in writing. The court noted that over the course of the contract the city ordered several significant changes and additions. While none were authorized in writing, the city paid for all of them. At pp. 242-43 O.R., Cory J.A. (as he then was), writing for this court, wrote that "the parties, by their conduct, have varied the terms of the contract which require extra costs to be authorized in writing. As a result, the City cannot rely on its strict provisions to escape liability to pay for the additional costs authorized by it" in the event the contractor incurred those costs as a result of the city's error. The court did not make a determination as to whether the changes stemmed from an error by the city. Instead, it ordered a new trial.

[55] For the same reasons that I am not satisfied that the vendor waived the right to insist on strict compliance with the notice provisions, I am not satisfied that the parties by their [page94 ]conduct waived the terms of the agreement that required that notice of waiver of conditions pursuant to clause 7 of Schedule A be to the vendor.

Argument 5: Promissory Estoppel

[56] Nor am I persuaded that the doctrine of promissory estoppel precludes the vendor from requiring notice in writing to him that the purchaser waived the conditions.

[57] The Supreme Court set out the principles of promissory estoppel in Maracle v. Travellers Indemnity Co. of Canada, 1991 58 (SCC), [1991] 2 S.C.R. 50, [1991] S.C.J. No. 43, at p. 57 S.C.R.:

The principles of promissory estoppel are well settled. The party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position.

[58] The promise can be inferred from the circumstances, but must be unambiguous: see Engineered Homes Ltd. v. Mason, 1983 142 (SCC), [1983] 1 S.C.R. 641, [1983] S.C.J. No. 42.

[59] Promissory estoppel is equitable relief. Therefore, the party seeking to invoke it must show that its "past record in the transaction is clean": see Toronto (City) v. Polai, 1969 339 (ON CA), [1970] 1 O.R. 483, [1969] O.J. No. 1624 (C.A.), at pp. 493-94 O.R.; see, also, Servello v. Servello, [2014] O.J. No. 4075, 2014 ONSC 5035, 245 A.C.W.S. (3d) 330 (S.C.J.), at paras. 107-108, 117.

[60] For the same reasons that I am not convinced that the evidence makes out a basis for the purchaser to assert waiver or variance of the agreement by post-agreement conduct, I am not satisfied that an unambiguous promise or assurance which was intended to affect the vendor's right to require notice in compliance with the express terms of the agreement can be inferred from the circumstances.

[61] And even if one could be inferred, I would decline to grant relief to the purchaser on the basis of promissory estoppel. While -- in the course of addressing the vendor's plea for rectification -- the motion judge concluded that the purchaser's conduct was not equivalent to fraud, he also found that the purchaser must have known that it was important to the vendor that the properties be sold together. The motion judge characterized the purchaser's conduct as "hard and pointed". In my view, the purchaser's "past record in the transaction" would be sufficient to deny relief on this equitable basis. [page95 ]

Disposition

[62] I would accordingly dismiss the appeal, and order costs in favour of the vendor in the amount of $18,000, inclusive of HST and disbursements. Since I would dismiss the purchaser's appeal, I see no reason to address the vendor's cross-appeal.

Appeal dismissed.

[^1]: This clause appears as clause 4 of the agreement of purchase and sale for Avondale.

[^2]: At para. 52 of High Tower Homes v. Stevens, 2014 ONSC 2309 (S.C.J.), the motion judge in this case wrote: "In this case, the contract was clear. Notice should have been delivered personally, and, given [the entire agreement clause], there can be no waiver or agreement contrary to the terms of the [agreement]." Given the issues before the motion judge, I interpret the words "or agreement" as responding to the purchaser's argument that the agreement includes implied terms regarding the giving of notice.

[^3]: In Canadian Pacific Hotels, Le Dain J. characterized the test for implied terms in fact, at p. 775 S.C.R., as being the implication of a term "as necessary to give business efficacy to a contract or as otherwise meeting the 'officious bystander' test as the term which the parties would say, if questioned, that they had obviously assumed".

[^4]: See DW Squared Limited Partnership v. Oxford Properties Canada Ltd., 2011 ONSC 5169, [2011] O.J. No. 3919, 43 R.P.R. (4th) 155 (S.C.J.), where the two prior notices of renewal of lease had been given by the same tenant and accepted by the same landlord in the same manner as the notice of renewal at issue.