Case information

Contracts — Damages — The scope of the obligation to fulfill a condition precedent, in land sale transactions and as a general matter of contractual interpretation — The appropriate date for the assessment of damages in land sale transactions, applying the principles of mitigation

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.

In 2008, the parties entered into an agreement of purchase and sale of 5 acres of land for the price of $1,175,000 per acre. Prior to the finalization of the agreement, Abstak sought to obtain a development permit for the land from the City of Calgary. The City refused Abstak’s development permit application. Abstak filed a notice of appeal of this decision. The day before the appeal was to be heard, Abstak withdrew its appeal. It terminated the agreement between the parties.

The Court of Queen’s Bench of Alberta found that Abstak had an obligation to pursue the appeal for the permit and that Telsec was entitled to damages in the amount of $2,000,000. The majority of the Court of Appeal found no error in the trial judge’s reasons warranting its intervention. It disagreed however with the damages award, and found that Abstak’s initial deposit on the transaction should be deducted from the damages. O’Ferrall J.A., dissenting, would have allowed the appeal, set aside Telsec’s $2,000,000 judgment and directed the return of Abstak’s deposit.