COURT OF APPEAL FOR ONTARIO

CITATION: J.M.B. Cattle Corp. v. 2144032 Ontario Inc., 2016 ONCA 417

DATE: 20160531

DOCKET: C61487

Juriansz, Brown and Roberts JJ.A.

BETWEEN

J.M.B. Cattle Corp.

Applicant/Appellant

and

2144032 Ontario Inc. and Thomas Kaufman, Estate Trustee of the Estate of William H. Kaufman

Respondents/Respondents

Counsel:

Peter T. Fallis, for the appellant

Judy Fowler Byrne and Stephen Cameron, for the respondents

Heard: May 25, 2016

On appeal from the order of Justice David Price of the Superior Court of Justice, dated November 25, 2015.

ENDORSEMENT

[1] This appeal arises out of a failed real estate transaction. The negotiations were protracted. Some five offers were exchanged. In the first offer the appellant offered to purchase certain lands from the respondents, subject to obtaining a severance. The appellant included a clause undertaking to apply for the severance and reserving the right to terminate the agreement if approval of the severance had not been obtained on or before a specified date.

[2] The first offer expired. The respondent sellers then delivered a fresh offer in which the severance clause was amended to give either party the right to terminate the transaction if final severance approval was not obtained by the stated deadline. The appellant did not accept that offer, and it, too, expired on its irrevocable date.

[3] The appellant’s third offer and the sellers’ fourth offer also expired on their irrevocable dates without being accepted. The appellant then delivered a fifth offer that, as did its third offer, contained the mutual termination clause as proposed by the seller in the second offer but for a different termination date. The sellers accepted the fifth offer, and subsequently terminated the agreement when the appellant did not succeed in obtaining a severance by the termination date.

[4] The appellant applied for a declaration that it had the exclusive right to terminate the agreement. The application judge found that the agreement, as finally executed, provided a mutual right of termination and entitled the sellers to terminate the agreement when severance had not been obtained by the stated deadline. He refused the declaration.

[5] On appeal, the appellant submits that handwritten portions of its fresh offers should be disregarded because it did not initial them. We do not agree. As the application judge correctly observed, there is a fundamental distinction between offers and a contract both parties have signed. The appellant’s fifth offer was not a “sign back” of the sellers expired fourth offer, but a fresh offer that contained the mutual termination clause. The sellers accepted the offer, so who initially proposed the mutual termination clause does not matter. We agree with the application judge that if the appellant did not want to include the mutual termination clause, it was required to cross out the words providing for the clause on the face of the fresh offer it delivered. The fact that the real estate agents of both parties used language describing all the fresh offers as “sign backs” does not affect the legal analysis.

[6] Further, the application judge’s conclusion is supported by his analysis of the factual matrix of the agreement’s negotiation and with commercial reasonableness.

[7] We also agree with the motion judge’s conclusion that the appellant’s attempt to invoke promissory estoppel is untenable. The parties’ relationship was governed by a contract. The sellers signed an agency agreement authorizing the appellant to apply for severance of the property. That agreement ceased to have effect when the appellant’s application was refused by the Planning Board. The appellant received what it contracted for: the opportunity to seek to obtain a severance of the property before the stated deadline after which the sellers could exercise the termination clause.

[8] The appeal is dismissed. The respondents’ costs are fixed in the amount of $9,000.00 all inclusive.

“R.G. Juriansz J.A.”

“David Brown J.A.”

“L.B. Roberts J.A.”