Real estate in Vancouver: the court rules that the agreement is not binding

A Vancouver man who sued the potential buyer of his home for $600,000, claiming he owed a deposit for that amount despite the failed deal, has had his claims dismissed by Colombia’s Supreme Court -British.

In a decision released Tuesday and posted online Wednesday, Judge Andrew PA Mayer found that an agreement signed by owner Mark Angus and potential buyer John Williams is not an enforceable contract.

Mayer’s decision details several months of negotiations in 2019 and 2020 between Angus, Williams and CDRW Holdings Ltd. — a holding company owned by Williams’ wife — for the sale of a home on East 5th Avenue in Vancouver.

The court’s ruling does not share the exact address of the property, which was first listed for sale in early 2019 for $7.7 million. In June of that year, Williams’ wife Donna made an offer for the property, which was rejected.

Angus and Williams continued to discuss the property after that date, eventually meeting on July 22, 2020, to discuss pursuing the sale in two transactions totaling $6.8 million, according to Mayer.

At that meeting, the ruling says, Williams drafted the agreement and the two men signed it. The deal called for the sale of the property for $6.4 million, along with a subsequent purchase of $400,000 for various other items, including furniture and artwork.

In his decision, Mayer refers to the agreement as a “term sheet” and notes that it is an untitled one-page document that does not refer to the property or its address. It does, however, include a bullet point indicating that Williams or CDRW would deposit $600,000 into an “attorney’s trust account by July 24, 2020.”

Despite the alleged delay, no security deposit was ever paid, according to the court ruling.

Instead, Mayer writes, after an inspection of the property revealed issues with the building envelope, the Williams family decided they no longer wanted to buy the property.

Angus had his attorney create a formal purchase and sale agreement, which was sent to Williams on July 29 with a July 30 deadline. When Williams did not respond, Angus’ attorney sent follow-up emails which were also ignored.

According to Mayer, none of these correspondences referred to the term sheet. The first reference to the alleged deal came in an email to Williams from Angus’ attorney on August 12, 2020, which “set out Mr. Angus’ position that he considers the alleged deal to purchase and sale of the property had been repudiated.

Angus eventually sued Williams and CDRW for $600,000, arguing that the signed term sheet constituted a legal obligation for the man or company to pay the deposit.

Mayer rejected this argument, concluding that a “reasonable objective viewer” would not view the agreement as legally binding, given the circumstances surrounding it and the lack of detail it contains.

“The term sheet does not refer to ownership,” wrote the judge in his decision.

“Although it is virtually certain that the property was the subject of the “first transaction” in the term sheet, the absence of even a superficial reference to the property suggests a flippancy that is not compatible with an intention to formally enter into a contract to purchase expensive real estate.”

This flippancy, coupled with multiple written references – including in the term sheet itself – to a solicitor or real estate agent filing paperwork, would lead a reasonable objective viewer to conclude that “the understanding or intent of the parties was that their legal obligations were to be deferred until a formal contract had been approved and executed,” Mayer writes.

For these reasons, the judge dismissed Angus’ lawsuit, noting that the usual order would be that the defendants are entitled to payment of their legal costs, and inviting the parties to make submissions on this matter if they wish.

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