Brian Madigan LL.B., Broker
BRMadigan@Rogers.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

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Specific Performance in Commercial Transactions

September 27, 2018 - Updated: September 27, 2018

Specific Performance in Commercial Transactions
 

In most situations, specific performance, that is, an actual conveyance of the property is not an available remedy. That is due to the fact that most of the time in a commercial purchase, damages will be sufficient.
 

Justice Edwards in a motion to discharge a Certificate of Pending Litigation (CPL) considered such a case in Northfield v. North American on 25 November 2015.
 

Northfield was the owner of a parcel of property in the City of Waterloo. It had held onto it for 18 years. On 12 June 2007 it sold the 7.31 acre parcel to North American, subject to a condition on rezoning the property to be suitable for development of a shopping plaza. It took 6 years but the property was indeed rezoned and the condition contained in the Agreement was then waived on 22 February 2013.
 

The closing scheduled for 11 March 2013 did not take place. The Purchaser, North American brought an ex parte application (without notice to the other side) and was successful in obtaining a CPL. This current motion is to discharge that same CPL.
 

When it came to the issue of “uniqueness”, this is what Justice Edwards said:
 

         " Intention of Parties and Uniqueness
 

[34]       I will review whether the land is unique in conjunction with the intention of the parties in acquiring the land.
 

[35]       The parties disagree as to the legal meaning of uniqueness.
 

[36]       Here, the purchaser
 

had a specific use in mind, namely the rezoning of the property in order to build and lease a commercial shopping plaza.
 

There is evidence that the property is located in a pivotal and desirable location.
 

The purchaser expended considerable effort to rezone the property to allow for its desired use.
 

In addition, a substitute property was not readily available given the unique location within the City of Waterloo and its zoning.
 

[37]       These factors have been held to give rise to a finding of uniqueness:  2039903 Ontario Inc. v. Parktrail Estates, 2008 CarswellOnt 7036 (On.S.C.J.) at para 38, 2329131 Ontario Inc. v. Carlyle Development Corp. 2014 CarswellOnt 1803 (ONCA).
 

[38]       Counsel for Northfield submits that the intent of North American was to purchase the land for investment/profit and therefore the property is not unique.  Multani Custom Homes Ltd. V. 1426435 Ontario Ltd2013 ONSC 4712 (CanLII) at para 26
 

[39]       However,
 

the evidence of North American was that its purpose was to rezone the lands for a shopping centre, develop the lands of the shopping centre and ultimately manage it.
 

There was no intention to resell the land or even to develop and then sell the land. 
 

It was not purchasing as a passive investment or as inventory in the sense of building lots or existing apartment buildings, but rather as part of its business of taking land from a raw state and developing into a shopping centre that it continued to manage for years to come.
 

[40]       I am satisfied that the property is unique in the sense that word has been interpreted for the purpose of a CPL."
 

Note: underlining above is mine, for the purposes of emphasis.
 

COMMENT
 

The Purchaser spent 6 years and over $500,000.00 rezoning the property. You will also appreciate that the matter came before the Court for vacation of the CPL in late 2015, basically 8 years after the sale. Obviously, there was a significant increase in value over the time, and just about any Vendor would want out of the deal.
 

As you undoubtedly appreciate, there were likely some other factors which complicated the transaction.
 

Nevertheless, in this situation, we have the Court siding with the purchaser for the specific performance remedy in a commercial transaction.
 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com


Tagged with: specific performance certificate of pending litigation cpl remedy damages not suitable commercial property ontario law
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

BRMadigan@Rogers.com

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