Ontario Superior Court of Justice
Court File No.: CV-22-1240
Date: 2025-04-30
Between
Babak Shiralian, Samuel Anshilevich and Alex Ilchenko
Applicants
– and –
Wyldewood Creek Inc.
Respondent
Appearances:
Neil G. Wilson and Haya Sardar, for the Applicants
Andrew Parley and Zachary Rosen, for the Respondent
Heard: September 12 and October 20, 2024 and January 6, 2025
Reasons for Decision
M. McKelvey
Introduction
[1] The Applicants are suing the Respondent for damages arising out of an alleged breach of contract. The Applicants entered into an Agreement of Purchase and Sale for the purchase of a condominium unit to be built in Collingwood. According to the Respondent, it was impossible to build the condominium building because of various issues with the City of Collingwood. The Applicants seek damages of $280,000 as a result of the alleged breach of contract.
Factual Background to the Claim
[2] The Applicants purchased a preconstruction condominium property from the Respondent Wyldewood Creek Inc. pursuant to an Agreement of Purchase and Sale dated January 9, 2020. The purchase price was $439,990. The initial purchasers were the Applicants Babak Shiralian and Samuel Anshilevich. On January 25, 2020, an amendment to the Agreement was made whereby Alex Ilchenko was added as a purchaser of the property.
[3] The Purchase and Sale Agreement contained a Tarion addendum (the “Addendum”). This is a statutory addendum to any agreement of purchase and sale in Ontario governed by the Ontario New Home Warranties Plan Act, RSO 1990, c O.31.
[4] The Addendum included a condition permitting the Respondent to terminate the Agreement if they were not able to obtain mortgage financing for the construction of the project. The original termination date for the financing condition was November 30, 2020.
[5] In the Addendum, the date for satisfaction of any early termination condition could be changed by mutual agreement provided that it was set at least 90 days before the first tentative occupancy date. The Agreement further provides that the early termination condition, “will be deemed to be 90 days before the first tentative occupancy date if no date is specified or if the date specified is later than 90 days before the first tentative occupancy date”. Thus, the Addendum provides that the early termination condition could not be extended without a change to the first tentative occupancy date beyond August 1, 2021 which is 90 days before the first tentative occupancy date of November 1, 2021.
[6] On October 29, 2020, the Respondent delivered a letter to the Applicants advising them of delays in the progress of the project as a result of the COVID-19 pandemic. In that letter, the Respondent advised that construction on the project would start in the spring of 2021 with occupancy dates to start at the end of 2022.
[7] On November 23, 2020, the Respondent wrote to Mr. Shiralian and Mr. Anshilevich advising that they would be unable to meet the first tentative occupancy date. They set December 30, 2022 as a subsequent tentative occupancy date.
[8] On May 25, 2021, the Respondent again wrote to Mr. Shiralian and Mr. Anshilevich. The Respondent advised that the Town of Collingwood had implemented an Interim Control By-law freezing the issuance of building permits town-wide for a period of one to two years. The action was taken by Collingwood because the town felt it was running out of potable water. By this point, it was apparent that the timeframe for implementing the early termination clause had expired. The Respondent advised in its letter as follows:
We understand many of you have concerns about the project moving forward. I cannot allay these concerns right now. Lives change, economies change, even the Town may change. Basically, you have two options right now. You can wait and watch what transpires in these next few months. Alternatively, I have no issue if you choose not to move forward and receive your full deposits back. In either case, Wendi Keen, the Broker of Record on the project, will be sending out documents for your signature(s). Feel free to expedite matters by contacting Wendi directly.
[9] On June 22, 2021, Mr. Shiralian and Mr. Anshilevich signed an amendment to the Purchase and Sale Agreement. The amendment deleted the date by which condition #2 (the early termination condition) was to be satisfied (being November 30, 2020). It was replaced by a term which provided that,
The date by which Condition #2 is to be satisfied is the 30th day of November, 2021.
[10] It is significant to note that the amendment also contained a provision which states,
All other terms and provisions of the Purchase Agreement shall remain the same and be in full force and effect and time shall continue to be of the essence of the Purchase Agreement and of this Amending Agreement.
[11] It is also significant to note that the Amending Agreement was signed by Mr. Shiralian and Mr. Anshilevich following consultation with legal counsel.
[12] On November 29, 2021, the Respondent wrote to Mr. Shiralian and Mr. Anshilevich cancelling the Agreement of Purchase and Sale. In the letter, David Hirsh, the President of Wyldewood Creek wrote,
Unfortunately, I am writing to you with regrettable news. Due to the delays and increased costs caused by the Interim Control By-law (“ICBL”) passed by the Town of Collingwood, combined with the impacts of the COVID-19 pandemic, we are now put in a position where we cannot obtain financing for the Wyldewood Creek development and must therefore cancel our Agreement of Purchase and Sale. This is done in accordance with section 6 of the Statement of Critical Dates, which we have enclosed for convenience.
The Parties’ Positions
[13] The Applicants maintain that under the terms of the Addendum, the early termination provision expired on August 1, 2021. This is based on the condition of the Addendum which provides that the early termination provision will expire 90 days before the first tentative occupancy date. They therefore maintain that the Respondent has breached the Purchase and Sale Agreement. They further rely on the fact that Mr. Ilchenko never signed the agreement to extend the early termination provision, so for that reason as well, the amendment was never binding on him.
[14] The Respondent’s position is that Mr. Ilchenko was a partner in a partnership with the other two purchasers of the property. It argues that the other two partners had the authority to bind the partnership when they signed the Amending Agreement. The Respondent further maintains that with respect to the provisions contained in the Addendum, the Applicants have waived any reliance on the provisions which limited the ability of the parties to set an early termination condition to 90 days before the first tentative occupancy date.
[15] Finally, the Respondent relies on a provision in the Agreement of Purchase and Sale which provides that the purchasers shall have no remedy or claim whatsoever against the vendor for “economic loss, expectation damages or any other damages whatsoever whether arising, based or founded in contract, tort, equity or otherwise”.
Were Mr. Shiralian and Mr. Anshilevich authorized to bind Mr. Ilchenko to the amendment dated June 22, 2021 extending the date for the early termination clause to November 30, 2021?
[16] The Respondent argues that the Applicants are partners in a real estate investment business and can bind one another in respect of matters that are the subject of that business. I agree with the Respondent’s position in that regard.
[17] The Partnerships Act, RSO 1990, c P.5, defines a partnership as “the relation that subsists between persons carrying on a business in common with a view to profit”.
[18] Under s. 6 of the Partnerships Act,
Every partner is an agent of the firm and of the other partners for the purpose of the business of the partnership, and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he or she is a member, bind the firm and the other partners unless the partner so acting has in fact no authority to act for the firm in the particular matter and the person with whom the partner is dealing either knows that the partner has no authority, or does not know or believe him or her to be a partner.
[19] In Canadian Imperial Bank of Commerce v. Charbonnages de France International S.A., the British Columbia Court of Appeal adopted the following principles from Lindley on the Law of Partnership:
The consequences of the general rule contained in section 5 of the Partnership Act 1890 are:
(1) That if an act is done by one partner on behalf of the firm, and it was done for carrying on the partnership business in the ordinary way, the firm will prima facie be liable although in point of fact the act was not authorised by the other partners.
(2) That if an act is done by one partner on behalf of the firm, and it was not done for carrying on the partnership in the ordinary way, the firm will prima facie not be liable.
In the first case the firm will be liable unless the one partner had in fact no authority to bind the firm, and the person dealing with him either was aware of that want of authority or did not know or believe him to be a partner, whilst in the second case the firm will not be liable unless an authority to do the act in question, or some ratification of it, can be shown to have been conferred or made by the other partners.
[20] In the Supreme Court of Canada decision in Backman v. Her Majesty the Queen, 2001 SCC 10, [2001] 1 RCS 367, the Supreme Court considers the issue of partnership and comments as follows:
In determining whether a business is carried on “in common”, it should be kept in mind that partnerships arise out of contract. The common purpose required for establishing a partnership will usually exist where the parties entered into a valid partnership agreement setting out their respective rights and obligations as partners. As was noted in Continental Bank, supra, at paras. 34-35, a recognition of the authority of any partner to bind the partnership is relevant, but the fact that the management of a partnership rests with a single partner does not mandate the conclusion that the business was not carried on in common. This is confirmed in Lindley & Banks on Partnership (17th ed. 1995), at p. 9, where it is pointed out that one or more parties may in fact run the business on behalf of themselves and the others without jeopardizing the legal status of the arrangement. It may be relevant if the parties held themselves out to third parties as partners, but it is also relevant if the parties did not hold themselves out to third parties as being partners.
[21] Mr. Ilchenko was cross-examined in advance of the hearing in this matter. He testified that the three individuals purchased the Collingwood property collectively as an investment property. The purpose for the purchase was to generate income and the plan was to rent it out to others.
[22] When asked whether he had an agreement with Mr. Shiralian and Mr. Anshilevich regarding the revenues that would be received from the investment property or the costs that would be incurred in managing the investment property, Mr. Ilchenko stated that there was a verbal agreement. When asked what the terms of that verbal agreement were he answered,
It was an equal partnership.
[23] Mr. Shiralian was also cross-examined and was asked how the revenues from the investment property would be managed and distributed. He stated in response,
We were all equal partners, so it would have been one third each.
[24] Mr. Ilchenko in his evidence stated that he had been investing in real estate with Mr. Anshilevich and Mr. Shiralian since 2019. The three had an agreement to equally divide the expenses from their investments and they were equally entitled to a share in any revenues or profits earned from those investments.
[25] When questioned as to how responsibility for handling the investments is dealt with, Mr. Ilchenko testified as follows,
Answer: I handle some stuff, like, for example, we can say renovations, that I have autonomy and I kind of don’t bother the other two with decisions, you know, how…
Question: So there’s a bit of division of responsibility among the three of you?
Answer: Yeah, there could be, yeah.
[26] Based on the above evidence, I have concluded that the three Applicants were in a partnership together for the purposes of earning profits in real estate. They even made reference to themselves being partners in their evidence in this case. Mr. Ilchenko described the Applicants as “equal partners” in relation to the purchase of the property in question. I have concluded that each of the three Applicants was an equal partner in the purchase of the Collingwood property.
[27] The evidence also shows that Mr. Shiralian and Mr. Anshilevich were the two partners responsible for dealing with the Respondent in this case. While Mr. Ilchenko did not receive a copy of the amendment itself, both Mr. Shiralian and Mr. Anshilevich received and executed copies of the amendment. Both Mr. Shiralian and Mr. Anshilevich referred the proposed amendment to legal counsel and received advice from legal counsel. Mr. Ilchenko was copied on an email from Mr. Anshilevich to the lawyer regarding the proposed amendment, although he does not believe he saw or read this email at any point prior to the termination of the Agreement. Given my conclusion that the three Applicants were in a partnership with respect to the purchase of the Collingwood property, I conclude that Mr. Shiralian and Mr. Anshilevich had the authority to act for the firm and bind the partnership in relation to the Amending Agreement dated June 22, 2021. Mr. Hirsh had no reason to doubt the authority of Mr. Shiralian and Mr. Anshilevich to bind Mr. Ilchenko to the Amending Agreement. In his evidence, Mr. Hirsh testified as follows,
You know, it’s a very interesting question. We only dealt in the main with Sam and Babak. We believed Sam and Babak had full authority to commit for Alex. We had no reason and they led us to believe that they had no reason to get Alex involved in various aspects of the deal, as they have the authority.
[28] During the course of legal argument on this application, counsel for the Applicants and the Respondent agreed that Mr. Hirsh can be believed on the issue that he thought he was dealing with Mr. Shiralian and Mr. Anshilevich as agents for their partner Mr. Ilchenko.
[29] In light of that admission, I have concluded that the Amending Agreement is binding on Mr. Ilchenko as well as the other two Applicants who signed the Amending Agreement.
Could the Applicants waive the right to require compliance with the dates set out in the Addendum for the early termination condition?
[30] Under paragraph 6(d) of the Addendum, the date by which condition #2 was to be satisfied was set initially at November 30, 2020. This is the provision which permits the vendor to terminate the purchase agreement. The effect of the amendment of June 22, 2021 was to delete the date of November 30, 2020 and to replace it with the date of November 30, 2021. However, while the date for satisfaction of any early termination condition, “may be changed by mutual agreement” the Addendum goes on to state, provided in all cases it is set at least 90 days before the first tentative occupancy date and will be deemed to be 90 days before the first tentative occupancy date if no date is specified or if the date specified is later than 90 days before the first tentative occupancy date”. As previously noted, the first tentative occupancy date is stated to be November 1, 2021. Ninety days before that date would be August 1, 2021. The Respondent did not attempt to exercise the early termination provision until November 29, 2021 at which point the early termination condition would have expired.
[31] The Respondent argues that the Applicants waived any requirement that they be notified of an intention by the Respondent to terminate the Purchase and Sale Agreement before November 30, 2021. In the Respondent’s factum, it states,
[T]he Respondent made it clear that they required the assurance from the Applicants that – if the Respondent continued right up to the end of November of 2021 making further significant efforts to advance the Project – the Applicants would permit the Respondent to cancel the Project by November 30, 2021. The Respondent also made clear that the Applicants had a choice of whether or not to provide such an assurance, and that they also had the alternative right to a refund of their deposit.
[32] The Respondent further argues that the Applicants had the benefit of legal counsel to understand their legal position and that,
The Applicants knew or ought to have known that the original Condition Date had already passed and that they had no obligation to give the Respondent more time. The Applicants understood the options available to them and what each entailed.
[33] The basic requirements for waiver are set out in the Supreme Court of Canada decision in Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 SCR 490. At p. 500, the Court states,
Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. The creation of such a stringent test is justified since no consideration moves from the party in whose favour a waiver operates. An overly broad interpretation of waiver would undermine the requirement of contractual consideration.
[34] I am not satisfied that the Applicants waived their right to rely on waiver to extend the date for early termination to go beyond August 1, 2021.
[35] I start from the wording of the Addendum which clearly provides that if the date specified for the early termination provision is later than 90 days before the first tentative occupancy date, the condition, “will be deemed to be 90 days before the first tentative occupancy date”.
[36] While the Amending Agreement dated June 22, 2021 sets a new date for the early termination provision to be November 30, 2021, it does not change the date of the first tentative occupancy date, nor does it make any reference to the provision noted above. In fact, the Amending Agreement states that all other terms and provisions of the Purchase Agreement shall remain the same and be in full force and effect.
[37] I accept that the Tarion Addendum has been the subject of previous concern and criticism by the courts. In Ingarra v. 301099 Ontario Limited (Previn Court Homes), 2020 ONCA 103, Justice Lauwers of the Ontario Court of Appeal noted that the Tarion Agreement is not “consumer protective” by any stretch of the imagination. He states that the current document is only marginally better drafted than its predecessor which he described as containing “consumer-unfriendly language”. He goes on to state that the writing was consistent with Lord Devlin’s sardonic remark: “This sort of document is not meant to be read, still less to be understood”.
[38] Justice Lauwers goes on to state that the Tarion Addendum is “a trap for the unwary, particularly the unwary lay person”.
[39] I fully agree with the comments of Justice Lauwers with respect to the convoluted nature of the Tarion Addendum, but it remains part of the contract in question here and it cannot be ignored.
[40] In the text Geoff R. Hall, Canadian Contractual Interpretation Law, 4th ed (Toronto: LexisNexis, 2019), the author notes that a fundamental precept of contractual interpretation requires an examination of the contract as a whole. He notes, “individual words and phrases must be read in the context of the entire document”. This is described as a well-known principle of contractual interpretation. It seems likely to me that the Respondent prepared the amendment to the contract without regard to the other provisions relating to how long the contract permitted an extension of the early termination clause. There is, however, nothing in the factual circumstances which suggest that this provision was being waived. On the contrary, the intention as stated in the Amending Agreement was that all other provisions continued to be applicable. There is no reason to believe that it was the intention of the parties to waive those provisions. Instead it appears it was the intention of the parties that these provisions would continue to be applicable.
[41] I am mindful of the comments of the Supreme Court in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, where the Court states,
While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement (Hayes Forest Services, at para. 14; and Hall, at p. 30). The goal of examining such evidence is to deepen a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract (Hall, at pp. 15 and 30-32). While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement.
[42] In my view, that is what the Respondent is asking this Court to do. The Respondent wants this Court to ignore the stated limitations of the extension of the early termination condition which would in effect re-write the Agreement. Their suggestion that those provisions could be “waived” flies in the face of the terms of the Amending Agreement which states that all other terms of the Agreement remain in place. Clearly the intention of the parties was not to waive by the Amending Agreement any other provision of the Purchase and Sale Agreement.
[43] It may well be that the Respondent made a drafting error in preparing the Amending Agreement of June 22, 2021. It failed to consider the effect of the Addendum which deemed that the early termination condition could not be extended beyond August 1, 2021 which was 90 days before the first tentative occupancy date of November 1, 2021. But whether it was a drafting error or not, I have concluded that the doctrine of waiver does not apply in this case. There is simply no evidence that the Applicants made an “unequivocal and conscious intention to abandon” the requirement that the early termination provision be exercised 90 days before the first tentative occupancy date. For these reasons, I find that the Amending Agreement did not constitute a waiver of the provisions of the early termination clause of the Addendum which required any extension of the early termination provision to be exercised on or before August 1, 2021.
Is the Respondent’s liability limited by the terms of the Purchase and Sale Agreement?
[44] The Purchase and Sale Agreement contains the following provision:
Notwithstanding anything contained to the contrary in this Agreement, but subject always to the Tarion Addendum, all rights, remedies and recourses of the Purchaser in connection with this Agreement and the transaction resulting therefrom (and whether arising, based or founded in contract, tort, equity or otherwise) for any default of the Vendor hereunder are limited solely to the return of the deposits paid by the Purchaser pursuant to this Agreement and the Purchaser shall have no remedy or claim whatsoever against the Vendor or its agents, nominees, trustees, directors, officers, shareholders or any other person, firm, corporation, partnership, limited partnership or other entity related to or associated with the Vendor for economic loss, expectation damages or any other damages whatsoever whether arising, based or founded in contract, tort, equity or otherwise. This provision may be pleaded by the Vendor and by its agents, nominees, trustees, directors, officers, shareholders or any other person, firm, corporation, partnership, limited partnership or other entity related to or associated with the Vendor as a complete defence to any such claim.
[45] The Applicants’ claim falls clearly within the terms of the limitation of liability. The issue which arises is the enforceability of this provision. The enforceability of a similar provision was considered by the Court in Ritchie v. Castlepoint Greybrook Sterling Inc., 2020 ONSC 3840. In that case, the Court was dealing with early termination provisions for a residential condominium building in the City of Toronto. The plaintiffs in that action were suing for damages arising out of an alleged breach of contract situation involving the purchasers of condominium units in the City of Toronto. In his decision, Justice Perell notes that the Supreme Court of Canada in Hunter Engineering Company v. Syncrude Canada Ltd., [1989] 1 SCR 426, comments that exclusion clauses, like all contractual provisions, should be given their natural and true construction. Great uncertainty and needless complications in the drafting of contacts will obviously result if courts give exclusion clauses strained and artificial interpretations in orders, indirectly or not, to avoid the impact of what seems to them to have been an unfair and unreasonable clause.
[46] Justice Perell further goes on and comments that in their decision in Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways), 2010 SCC 4, the Supreme Court of Canada established a three step approach to the application of exclusion clauses. The first step is to determine whether as a matter of interpretation, the exclusion cause applies. I have no hesitation in concluding that the clause as drafted does apply to the circumstances of this case. Second, if the exclusion clause applies, the second step is to determine whether it was unconscionable at the time the agreement was made. Third, if the exclusion clause applies and it was not unconscionable, then the third step is to determine whether the court should refuse to enforce the clause because of the presence of an overriding public policy.
[47] In the Ritchie case, the plaintiffs argued that the clause ought not to be enforced because it would be contrary to the public policy expressed by the legislature in the statutory regime that includes the Tarion Amendment.
[48] In the Ritchie case, the court concluded that the policy of the Tarion Addendum did not preclude the vendor from limiting its liability to exclude damages incidental on the termination of the contract. Justice Perell therefore concluded as a matter of contractual interpretation that the clause applied to the circumstances of the case and that there was no public policy reason that would override the exculpatory provision that the parties contracted for. Therefore it followed that the defendant had a complete defence to the claim for damages.
[49] In his decision, Justice Perell commented as follows:
The Tarion Addendum allocates the risk of there being a termination of the Agreements of Purchase and Sale. Just focusing on the Tarion Addendum terms, those terms permit an early termination condition. The parties allocated the risk that Castlepoint might rely on this condition by limiting its exposure to a return of the deposit plus interest. This allocation of risk was envisioned or achieved by paragraph 11 (Refund of Monies Paid on Termination), which is part of the Tarion Addendum terms. Paragraph 11 provides that if the Purchase Agreement is terminated without breach by the Purchaser, the Vendor shall refund all monies paid with interest. Paragraph 11 states that nothing in this Addendum prevents the Vendor and Purchaser from entering into such other termination agreement as may be agreed to by the parties.
[50] Later on, at para. 91 of his decision, Justice Perell states,
The policy of the Tarion Addendum is to allow the parties to agree that the parties may agree to terminations in which, in any event, the vendor shall refund all monies paid by the Purchaser including deposit(s) and monies for upgrades and extras with interest from the date each amount was paid to the Vendor to the date of refund to the Purchaser. The policy of the Tarion Addendum states that nothing in the Addendum prevents the parties from entering into other termination agreements. The policy of the Tarion Addendum does not preclude the parties agreeing that the right to terminate may be available when the Vendor has breached the agreement or when the Vendor is not acting in good faith. The policy of the Tarion Addendum does not preclude the Vendor limiting its liability to exclude damages incidental on the termination of the contract.
[51] This decision was appealed to the Ontario Court of Appeal. The appeal was dismissed. The Court of Appeal noted that the clause in question concerned the allocation of risk as between the parties to the agreement should the agreement be terminated. The Court concluded,
As the motion judge held, the limitation on the respondent’s potential liability, agreed upon by the parties in clause 28, is not inconsistent with the letter of the Tarion provisions or the policy underlying those provisions.
[52] The decision in Ritchie was appealed to the Supreme Court. However, leave to appeal that decision was denied by the Supreme Court at. It follows that the Ritchie decision is binding on me.
[53] In the present case, the Applicants have raised a further argument which was not raised or considered in the Ritchie decision. The Applicants argue that the exculpatory clause here subverts the Condominium Act, 1998, SO 1998, c 19, and the Tarion Addendum by limiting the recovery of the Applicants to only the return of their deposits and entitling the Respondent to keep the statutory interest. They therefore argue,
[U]nlike the clause at issue in Ritchie, the Exculpatory Clause here violates both the Condominium Act provisions requiring the developer to pay statutory interest to the purchaser.
[54] The Applicants argue that the consequences of applying the clause here would be extreme and unconscionable. The first day on which the purchaser would have the opportunity to terminate the Agreement would be on March 1, 2027 which is designated as the outside occupancy date. This would mean that according to the Respondent, it would have been entitled to hold on to the purchasers’ deposits for seven years and the Applicants would be deprived of any interest on their deposits.
[55] I do not agree that the purchasers in this case would be deprived of the interest owing on their deposits. While the provisions in paragraph 8.07 of the Purchase and Sale Agreement are limited to the return of their deposits, there are other provisions of the Agreement which clearly provide for the payment of interest.
[56] For example, paragraph 1.03 of the Agreement of Purchase and Sale sets out that interest is payable on the deposits. It reads as follows,
The amounts set forth in subparagraphs 1.02(a), (b), (c), (d), (e) and (f) shall, upon payment, constitute the deposits referred to in this Agreement and shall be payable as herein set out in paragraph 1.06, by postdated cheques delivered to the Escrow Agent or declarant’s solicitor, in trust upon submission of this Agreement. All such deposits shall be held in accordance with the Act, pending completion or other termination of this Agreement and shall be credited on account of the Purchase Price on Closing. The Vendor shall pay interest to the Purchaser on the deposits paid in accordance with Section 82 of the Act. The Purchaser acknowledges and agrees that for the purposes of subsection 81(6) of the Act, compliance with the requirement to provide written evidence, in the form prescribed by the Act, of payment of monies by or on behalf of the Purchaser on account of the Purchase Price shall be deemed to have been sufficiently made by regular mail delivery of such written evidence to the address of the Purchaser noted below. [Emphasis added.]
[57] Under Section 11 of the Addendum it also makes clear that the vendor is required to pay interest. This provision states,
If the Purchase Agreement is terminated (other than as a result of breach of contract by the Purchaser), then unless there is agreement to the contrary under paragraph 10(a), the Vendor shall refund all monies paid by the Purchaser including deposit(s) and monies for upgrades and extras, within 10 days of such termination, with interest from the date each amount was paid to the Vendor to the date of refund to the Purchaser. The Purchaser cannot be compelled by the Vendor to execute a release of the Vendor as a prerequisite to obtaining the refund of monies payable as a result of termination of the Purchase Agreement under this paragraph, although the Purchaser may be required to sign a written acknowledgement confirming the amount of monies refunded and termination of the purchase transaction. Nothing in this Addendum prevents the Vendor and Purchaser from entering into such other termination agreement and/or release as may be agreed to by the parties. [Emphasis added.]
[58] In the text Canadian Contractual Interpretation Law referred to earlier, it is noted that a key principle of contractual interpretation is that the words of one provision must not be read in isolation but should be considered in harmony with the rest of the contract and in light of its purposes and commercial context. A corollary of this principle is that meaning must be given to all of the words in a contract.
[59] The author goes on that another purpose of the principle reading contracts as a whole is to eliminate inconsistencies and ambiguities on contracts. When a contract is read as a whole, different parts of it should, if possible, be reconciled with one another so as to eliminate inconsistencies. A court must therefore, strive to harmonize apparently conflicting terms in a contract and “should endeavor to read the clauses of the contract in such a way that they can be reconciled with one another provided that doing so does not result in an absurdity”.
[60] When reading this contract as a whole, it is apparent that interest is payable on the deposits made by the Applicants. This is inherent when the contract is read as a whole and any inconsistencies are avoided. Thus, while the limitation of liability provision only makes reference to the Applicants’ right to a return of the deposits, I am satisfied that in interpreting the contract there is clearly a right by the Applicants to receive interest in accordance with the applicable legislation.
[61] Based on the Court of Appeal decision in Ritchie and reading the termination provisions in the context of the Agreement as a whole, I have therefore concluded that the limitation of liability of the Respondent is limited to a return of the deposits of the Applicants, together with interest in accordance with the applicable legislation.
[62] I therefore conclude that the Applicants are entitled to a return of their deposits together with interest. They are not entitled to the other damages claimed.
[63] If counsel are not able to agree on costs, then an appointment may be taken out through the Trial Coordinator’s office within 30 days of the release of these Reasons to set a date for an attendance before me to deal with the issue of costs. In the event that an attendance before me is necessary to deal with costs, then the parties at least two days prior to that hearing are to submit brief written submissions on the issue of costs.
Justice M. McKelvey
Released: April 30, 2025