Case information

Contracts — Commercial contracts — Standard of review — Procedural fairness — Purchaser bringing application for determination to order seller to repay money paid to satisfy severance conditions stemming from agreement of purchase and sale of land — Court of Appel setting aside lower court decision and dismissing application — Whether appellate court in a civil proceeding that has found a denial of procedural fairness in the lower court should substitute its decision for that of a lower court or should it remit matter back to original trier of fact — Whether appellate court deviated from standard of review established by Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633 to substitute its own interpretation of a negotiated commercial contract — Whether appellate court applied well-established rules of contractual interpretation.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The parties entered into an agreement of purchase and sale whereby the respondent, Markham Woodmills Development Inc. agreed to sell an undeveloped parcel of land to the applicant, Union Building Corporation of Canada. The sale was conditional upon the City of Markham consenting to a severance of the land. Clause 17 of the agreement provided that Markham Woodmills would seek the severance and satisfy any conditions the City imposed, except for conditions that were “onerous or unreasonable.” Clause 17 provided that Union Building could have the opportunity to satisfy any such condition; if not, the agreement was null and void.

The City granted the severance order but required Markham Woodmills to sign onto a development plan at the cost of $407,562. It took the position this was an onerous or unreasonable condition and invoked Clause 17. Union Building paid the amount to obtain the severance. Union Building then brought an application to claim that amount back from Markham Woods.

The Ontario Superior Court granted the application for determination and ordered Markham Woodmills was required to pay Union Building $407,582 it had paid to satisfy the severance condition.

The Court of Appeal allowed the appeal, set aside the decision of the application judge and found that the application for determination should be dismissed.