Indexed
as:
Laredo Development Ltd. v. I.R. Capital Corp. (B.C.C.A.)
[1993] B.C.J. No. 2311
Vancouver Registry No. CA013918
BRITISH COLUMBIA COURT OF
APPEAL
Between
Laredo Development
Ltd.
Respondent,
Appellant by
Cross-Appeal, (Plaintiff)
And
I.R. Capital
Corporation
Appellant, Respondent by
Cross-Appeal, (Defendant)
Vancouver, British Columbia
Toy, Taylor and Rowles JJ.A.
Heard: October 20 and 21, 1993.
Judgment: filed November 17, 1993.
(39 pp.)
Counsel:
Counsel for the Appellant: George E.H. Cadman and Brenda
Brown.
Counsel for the Respondent: Richard H. Hamilton and James A.
Hall.
¶ 1
TOY J.A. (for the Court, dismissing the appeal):—
On December 12, 1988, the plaintiff, Laredo Development Ltd.
(Laredo), and the defendant, I.R. Capital Corporation (I.R.
Capital) entered into an agreement with respect to the
purchase and sale of a 49-unit condominium development in
Richmond, British Columbia, which was then in its earliest
stage of construction. The agreement provided, firstly, for
an option to purchase the whole project; secondly, that upon
the exercising of the option the parties would be deemed to
have entered into a binding contract of purchase and sale;
and, thirdly, on completion of construction and issuance by
the Municipality of Richmond of a final building inspection
certificate, seven days thereafter the transaction would be
completed by payment of the balance of the purchase price and
transfer of title to the property. The option was exercised
by Laredo. On June 30, 1989, the two responsible officers of
the parties, namely Mr. Rogowski, on behalf of I.R. Capital,
and Mr. Richert, on behalf of Laredo, orally agreed to vary a
term of the agreement extending a completion date to August
31, 1989. The trial judge concluded that prior to the date
for the completion of the sale and purchase, I.R. Capital had
repudiated the agreement. He ordered I.R. Capital to return
to Laredo the $700,000 it had paid when it exercised the
option and to pay Laredo $429,000 in damages. I.R. Capital
has appealed the judgment and Laredo has cross-appealed on the
quantum of damages awarded.
¶ 2
The judgment of the trial judge, Mr. Justice
Braidwood, is now reported: 17 R.P.R. (2d) 11. However,
before addressing the issues raised on these appeals, I
propose to summarize some of the pertinent facts in
chronological order and set out most of the terms of the
written agreement between the parties.
¶ 3
The first three clauses of the agreement between
the parties dated December 12, 1988, deal with the initial
phase of the agreement, namely the exercising of the option.
This entailed two payments of $100,000 and $600,000 which, if
paid, were to be credited to the full purchase price for the
project of 7.1 million dollars. Although there was an issue
raised at trial whether those funds had been fully paid, no
such issue has been raised on this appeal.
¶ 4
Clauses 3 to 11 inclusive and Clause 16 have
bearing on the issues raised on these appeals and I now
produce those clauses in their entireties:
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3.1 This Option may be exercised at any time up to
but not after the hour of 11:59 p.m. on February 28,
1989 (the "Term") by the Optionee, its solicitors,
agents or assigns, delivering a notice in writing to
the Optionor in the manner provided for in section
12 together with a non-refundable payment to the
Optionor of SIX HUNDRED THOUSAND DOLLARS
($600,000.00) (the "Second Option Payment"). |
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3.2 If this Option is exercised by the Optionor,
the Optionor and the Optionee shall be deemed to
have entered into a binding contract for the sale
and purchase of the Lands on the terms and
conditions contained in this Agreement. |
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4. |
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PAYMENT OF PURCHASE PRICE |
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4.1 If, as and when this Option is exercised by the
Optionee the Purchase Price shall be paid as
follows: |
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4.1.1 by crediting in full to the optionee the
amount of the First Option Payment and the Second
Option Payment; |
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4.1.2 the balance of $6,400,000 SIX MILLION
FOUR HUNDRED THOUSAND to be paid by the Optionee by
certified cheque to the solicitors for the Optionor
on the Completion Date as hereinafter defined. |
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5.1 If, as and when the Option is exercised by the Optionee, the sale of the Lands shall be completed
by the parties hereto on a date occurring 7 business
days after the date on which the Municipality of
Richmond has issued a Final Building Inspection
certificate for the Development (hereinafter
"Completion Date"). |
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5.2 On the Completion Date the Optionor shall
deliver to the Optionee: |
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5.2.1 a Transfer of an Estate in Fee Simple,
transferring the Lands to the Optionee free and
clear of all liens, charges and financial
encumbrances of any kind except for: |
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(a) |
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the legal notation under the Aeronautics
Act (Canada) described in recital A; |
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(b) |
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subsisting encumbrances in the nature of
utility easements, rights-of-way,
restrictive covenants and similar
encumbrances; |
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(c) |
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subsisting conditions, provisos,
restrictions, exceptions and reservations,
including royalties, contained in the
original grant and contained in any other
grant or disposition from the Crown; |
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(d) |
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such further encumbrances in the nature of
utility easements, rights-of-way,
restrictive covenants and similar
encumbrances, required by public
authorities to be placed against title to
the Lands from the date of this Option
Agreement to the Completion Date and which
do not materially effect the marketability
of the Lands; and |
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(e) |
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the encumbrances shown on Schedule A
hereto (the "Permitted Encumbrances"; |
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all in a form satisfactory to the solicitors for the Optionee, and in a form acceptable for registration
in the appropriate Land Title Office. |
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5.2.2 registrable discharges of the Permitted
Encumbrances or undertakings from the Option's
solicitors to discharge the Permitted Encumbrances
with the net sale proceeds; |
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5.3 The Optionee shall place the cash portion of
the Purchase Price after adjustments payable to the
Optionor in trust with its "solicitors prior to the
Completion Date for delivery to the Optionor
immediately upon filing for registration in the
appropriate Land Title Office of the Transfer of an
Estate in Fee Simple conveying title to the Lands to
the Optionee free and clear of all liens, charges
and financial encumbrances except for the charges
described in section 5.2.1. |
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6.1 Once the within Option has been exercised, if
the Optionee fails to pay the balance of the
Purchase Price on the Completion Date this Agreement
shall be null and void and the Optionor shall be
entitled to retain and keep both the First Option
Payment and the Second Option Payment as
consideration paid to the Optionor for granting the
Option. |
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7. |
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ADJUSTMENT AND POSSESSION |
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7.1 All adjustments for taxes, rents and any other
items normally the subject of adjustment for the
Lands shall be made on the Completion Date, which
date is hereinafter called the "Adjustment Date: and
on the Adjustment Date the Optionor shall also
deliver to the Optionee vacant possession of the
Lands unless specific alternate arrangements have
been made in writing between the parties hereto. |
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8.1 The Optionee shall bear all costs of preparing
and registering the Transfer of an Estate in Fee
Simple to the Lands, the Optionor shall be
responsible for and shall pay all costs of clearing
title to the Lands. |
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9. |
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CONSTRUCTION OF THE DEVELOPMENT |
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9.1 The Optionor covenants that it shall construct
the Development in a good and workmanlike manner
using materials of a quality that is normally
accepted by the construction industry in
developments that are similar to the Development in
accordance with the National Building Code and all
municipal requirements. The Optionor shall be
entitled to make such changes to the recommended or
required by such consultants or any governmental
authority having jurisdiction over the Development
or as the Optionor may deem appropriate or necessary
provided that the Development is not thereby
substantially altered and provided that the Optionee
consents to such changes, such consent not to be
unreasonably withheld. |
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10. |
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COMPLETION OF THE DEVELOPMENT |
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10.1 The Optionor shall complete construction of
the Development such that the Completion Date shall
occur on or before June 30, 1989. If the Completion
Date has not occurred on or before June 30, 1989,
the Optionor may extend the Completion Date up to
July 31, 1989 without cost or penalty to the Optionor. |
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10.2 If either party is bona fide delayed or
hindered in or prevented from the performance of any
term, covenant or act required hereunder including,
in the case of the Optionor, from completing
construction of Development by the Completion Date
or any extension thereof, by reason of strikes,
labour troubles; inability to procure materials or
services; power failure; restrictive governmental
laws or regulations; riots; insurrection; sabotage;
rebellion; war, act of God; or other reasons whether
of a like nature or not which is not the fault of
the party delayed in performing work or doing acts
required under the terms of this Agreement, then the
performance of that term, covenant or act or the
completion of construction is excused for the period
of the delay and the party delayed will be entitled
to perform that term, covenant, act or the
completion of construction within the appropriate
time period after the expiration of the period of
the delay. |
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10.3 If the Completion Date has not occurred on or
before December 31, 1989, this Agreement shall be
null and void and all deposit monies shall be
returned forthwith to the Optionee. |
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11.1 Time shall be of the essence in this Agreement.
¶ 5
The trial judge found that it was the intention of
Laredo to sell the property it was acquiring from I.R. Capital
to R.I.A. Properties International Ltd. (R.I.A.) for the sum
of $7,815,000. Laredo concluded an agreement in writing with R.I.A. on the same day it signed the agreement with
I.R.
Capital, the terms of which substantially paralleled the
arrangements that Laredo had made with I.R. Capital. The Laredo-R.I.A. agreement contained this clause:
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4) |
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The Completion Date shall be on the 7th
business day after the Municipality of Richmond
has approved occupancy of the Development. If
the Completion Date has not occurred on or
before June 30, 1989 the Vendor shall be
responsible to the Purchaser for any lost
income the Purchaser may suffer. If the
Completion has not occurred on or before
December 31, 1989, unless the parties agree
otherwise, the agreement shall be null and void
and all deposit monies shall be returned to the
Purchaser. |
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¶ 6
As a consequence of the agreement that Laredo had
made with R.I.A., throughout the ensuing months after December
12, 1988 it was R.I.A., not Laredo, that engaged itself in the
business of organizing the sales of the 49 condominium units
to various individual purchasers in Hong Kong.
¶ 7
In June 1989, it became apparent to both parties
that construction would not be completed when anticipated. On
June 29, 1989, Mr. Rogowski, on behalf of I.R. Capital, wrote
to Laredo notifying it that pursuant to Clause 10.1 of the
agreement, I.R. Capital intended to extend the completion date
to July 31, 1989. A further extension to August 31 on
reasonable terms and conditions was requested.
¶ 8
At a breakfast meeting on June 30, 1989 an oral
agreement was reached regarding an extension. A letter dated
June 30, 1989 was sent by I.R. Capital to Laredo which was
intended to reflect the terms of the oral agreement reached
earlier in the day. The letter read, in part, as follows:
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Further to our meeting of today's date, we wish to
confirm the following regarding the captioned Option
Agreement: |
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1. |
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Extend the completion date to July 31, 1989, as
per clause 10.1, |
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2. |
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Further 30 day extension of the completion date
to August 31, 1989, for the sum of $50,000.
payable to Laredo Development Ltd. Please
acknowledge your acceptance by signing this
letter. |
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¶ 9
The letter was signed by Mr. Rogowski on behalf of I.R. Capital and on July 4, 1989 by Mr. Richert on behalf of
Laredo. The $50,000 was subsequently paid by I.R. Capital to
Laredo.
¶ 10
Between July 25 and August 6 and between August
18 and August 28, Mr. Richert was in Hong Kong for the purpose
of ensuring that the arrangements R.I.A. had in place for the
resale of the property would be completed on time for it was
relying upon the funds that it would receive from the resale
of the individual units to discharge at least in part its
obligations to I.R. Capital.
¶ 11
On August 29, 1989, Mr. Rickert returned from
Hong Kong. On August 30 he received, by courier, the
following letter from I.R. Capital, which was signed by Mr. Rogowski:
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What's going on re the deal -- 49 townhouse units to
complete August 31, 1989?? |
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Please respond immediately. |
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¶ 12
On August 30, 1989, I.R. Capital's solicitor, Mr. Panton, was instructed by Mr. Ragoski to insist upon the
transaction closing on the next day.
¶ 13
I.R. Capital received final building inspection
approvals and certificates on the morning of August 31, 1989.
¶ 14
On August 31, 1989, I.R. Capital tendered certain
documents, including an executed transfer of the property,
and demanded that Laredo complete the purchase that day.
¶ 15
On September 1, 1989, Mr. Panton wrote to Mr. Siebold, the solicitor for Laredo, demanding return of the
executed transfer. The transfer was returned.
¶ 16
On September 30, 1989, Laredo commenced the
present action claiming specific performance of the agreement
and in the alternative damages. On October 13 an order was
made requiring Laredo to post security of $1,500,000 by
October 17 to preserve its lis pendens filed against the
property. Laredo successfully applied to extend the time to
October 19, but the required security was not posted. By
letter dated October 18, 1989, from the solicitor for Laredo
to the solicitor for I.R. Capital, Laredo notified I.R.
Capital it would not be posting the required security and that
it would be pursuing its claim for damages.
¶ 17
When the action came on for trial it was common
ground that I.R. Capital had individually sold all but three
of the 49 condominium units for $7,392,800. If the last three
units were to sell for $160,000 each, I.R. Capital realized,
or could realize, something in excess of 7.8 million dollars
as opposed to the 7.1 million it would have received had the
transaction with Laredo been completed.
¶ 18
The grounds of appeal stated in the appellant's
factum are:
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1. |
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The Learned Trial Judge erred in finding that
the Appellant (Defendant) I.R. Capital Corporation
was not willing to complete the transaction in
question; that is, that it had repudiated the
Agreement. |
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2. |
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The Learned Trial Judge erred in finding that
the date set for completion of the transaction in
question was September 11, 1989 rather than August
31, 1989. |
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3. |
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The Learned Trial Judge erred in finding that
the Respondent (Plaintiff) Laredo Development Ltd.
was ready, willing and able to complete the
transaction in question, or, alternatively, need not
have been by reason of I.R. Capital's supposed
repudiation. |
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4. |
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The Learned Trial Judge erred in finding that
the Respondent (Plaintiff) Laredo Development Ltd.
was entitled not only to a return of the deposit of
$700,000.00, but also to damages in the further
amount of $429,000.00. |
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¶ 19
At the apparent invitation of counsel for Laredo
in the court below, the trial judge analyzed the rights and
obligations of the parties on two bases, firstly, on the
assumption that the date for completion of the transaction was
August 31, 1989, and, secondly, on the assumption that the
date of completion of the transaction was seven business days
later, namely September 11, 1989.
¶ 20
I am of the firm opinion that the more
appropriate approach for purposes of this appeal is to
interpret the terms of the written agreement of December 12,
1988 as varied or modified by the oral agreement struck by Mr.
Rogowski and Mr. Richert at their meeting on June 30, 1989.
Accordingly, I propose to deal with Ground 2 first.
DID THE TRIAL JUDGE ERR IN FINDING THE DATE SET FOR COMPLETION
OF THE TRANSACTION WAS SEPTEMBER 11, 1989?
¶ 21
Here counsel for I.R. Capital argued that on a
plain reading the letter agreement of June 30, 1989, and the
option agreement of December 12, 1988, clearly determined that
the completion date for closing purposes was August 31, 1989.
In this connection he relies on the Completion Date in the
option agreement as being a defined term. I do not find the
cases counsel for I.R. Capital cited as being helpful. His
final submission on this ground of appeal was that the failure
of I.R. Capital to deliver a final building inspection
certificate seven days prior to August 31, 1989, would serve
only to trigger a penalty under Clause 10.1. The "Completion
Date" would not be altered.
¶ 22
The foregoing submissions, in my view, do not
address the trial judge's analysis of the evidence of the
witnesses to the June 30, 1989 meeting, nor the trial judge's
interpretation of the written agreement as varied by the
verbal agreement made by Mr. Rogowski and Mr. Richert on
behalf of the two parties to this action.
¶ 23
I start from the following overview of the terms
of the agreement of December 12, 1988.
¶ 24
The first phase, or facet, of the agreement,
namely Clauses 1, 2 and 3, provide for the granting of the
option and the two option payments of $100,000 and $600,000
which Laredo exercised by February 28, 1989. According to
Clause 3.2 the exercising of that option changes the
relationship of the parties by deeming them to have entered
into a binding contract of purchase and sale. Clause 6
provides that if Laredo fails to complete the transaction I.R.
Capital will be entitled to keep the $700,000 as consideration
for the granting of the option.
¶ 25
The second facet of the agreement relates to I.R.
Capital's obligation to construct the 49-unit townhouse
development in accordance with specified architectural
drawings and engineering and electrical specifications which,
according to Clause 9, would be constructed "in a good and
workman like manner" and "in accordance with the National
Building Code and all municipal requirements." One such
municipal requirement is the satisfactory compliance with the
development's building permits and the issuance of a final
building inspection certificate for all 49 units comprising
the development. According to Clause 5.1, the transaction
must be completed on a date occurring seven business days
after the issuance of the final building inspection
certificate. However, that clause gives no clue as to the
date when the construction of the project was required to be
completed. To determine that date one must refer to Clauses
10.1, 10.2 and 10.3.
¶ 26
The opening words of Clause 10.1 "The Optionor
shall complete...before June 30, 1989", at first blush, have
an imperative connotation. The next sentence gives the
Optionor (I.R. Capital) the right to extend the Completion
Date up to July 31, 1989, without cost or penalty, clearly
bestowing upon I.R. Capital the unilateral benefit of an
additional month within which to complete construction,
without exposing itself to a claim by Laredo for any costs it
might incur as a result of any delay in completion of the
transaction past June 30, 1989.
¶ 27
Clause 10.2 is another provision primarily for
the benefit of I.R. Capital which would protect it in the
event that construction delays were caused by events beyond
its control. Lastly, Clause 10.3 places a final date within
which the construction of the project must be completed, the
final building inspection certificate must have issued and
still give Laredo seven business days before December 31, 1989
within which to fulfill its obligation to complete the
transaction. If these events have not occurred in a timely
fashion, according to Clause 10.3, the whole agreement shall
be null and void and the $700,000 paid as an option payment
should be returned by I.R. Capital to Laredo. Clause 10.3 is
of obvious benefit to both I.R. Capital and Laredo.
¶ 28
In summary, properly interpreted the combined
effect of reading Clauses 5.1, 10.1, 10.2 and 10.3 together is
that the parties agreed as follows:
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1. |
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The date of completion of construction of the project
would be determined by an independent third party, namely
the Municipality of Richmond when it issued its final
building inspection certificate after construction of the
49 condominium units had been completed. |
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2. |
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I.R. Capital's target date for completion of construction
was seven business days before June 30, 1989. |
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3. |
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I.R. Capital had the unfettered right to invoke an
extension for the completion of construction, that is the
issuance of the municipality's final building inspection
certificate, to seven business days before July 31, 1989. |
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4. |
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That after July 31, 1989, and up to seven business days
before December 31, 1989, I.R. Capital had the continuing
right to insist upon Laredo completing the transaction
providing the final building inspection certificate
issued seven business days before December 31, 1989,
subject to I.R. Capital satisfying Laredo's claims for
its costs incurred as a result of I.R. Capital's delays
in not completing the transaction by July 31, 1989. |
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¶ 29
In short, I.R. Capital, on December 12, 1988, did
not commit itself to a firm date for completion of
construction of the project, nor completion of the
transaction. The agreement gave to I.R. Capital substantial
flexibility in an area that usually defies accurate
predictability.
¶ 30
The third and final phase of the agreement of
December 12, 1989, following the issuance of the final
building inspection certificate, was completion of the
transaction, namely the sale of the land, together with its
improvements. The relevant provisions are to be found in
Clauses 4.1, 5.1, 5.2 and 5.3. As the object of the exercise
from Laredo's perspective was to sell, or arrange to have
sold, the 45 condominium units -- or as many of them as could
be sold -- it is not surprising, in view of the flexibility
that was accorded to I.R. Capital in the timing of completion
of construction, that Laredo had reserved for its benefit
seven business days after the issuance of the final building
inspection certificate within which to get its affairs in
order to successfully perform its completion obligations.
¶ 31
I turn now to consider the event that occurred on
June 30, 1989.
¶ 32
Prior to that date, by letter of June 29, 1989
sent by I.R. Capital to Laredo, I.R. Capital had exercised its
right to extend the Completion Date pursuant to the second
sentence of Clause 10.1 from June 30 to July 31, 1989. The
letter further requested an extension to August 31, 1989 "on
reasonable terms and conditions". That request resulted in a
meeting of the two principals, Mr. Rogowski and Mr. Richert.
Also present at the meeting was Mr. Porter who at that time
was in the employment of I.R. Capital.
¶ 33
The trial judge reviewed the evidence given by
Mr. Richert which evidence was confirmed by the effect of the
evidence of Mr. Porter. Mr. Richert's evidence in summary
was:
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The need for the extension was the fact that
construction of the project was not on target and
that Mr. Rogowski requested an extension of 15 days,
in addition to an extension to July 31, 1989,
contemplated as the extension allowed under the
agreement. At the meeting, Mr. Richert expressed
his view that 15 days would not be enough time in
which to complete the construction, for he had
inspected the job, and suggested that August 31,
9189, would be more appropriate. He further
suggested that $50,000 would be an appropriate
consideration for the extension, and this was agreed
to by Mr. Rogowski. |
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Mr. Richert further testified that, at that
time, they did not have a discussion concerning a
final completion date in terms of the completion of
the documentation and the transferring of the funds.
The whole discussion revolved around when the
project would be finished in terms of construction,
and what was the likely time frame in which the
municipality would be issuing the completion
certificate. |
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¶ 34
In reviewing the testimony of Mr. Rogowski
concerning the discussion at the June 30, 1989 meeting, the
trial judge, in paras. 34 and 35, stated this:
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I find the evidence of Mr. Rogowski as it
relates to the arrangements surrounding the oral
extension agreement to be confusing and
inconsistent. He was unable to distinguish in his
evidence between the conclusions that he reached and
the particulars of what the parties said at any
particular time or place. He had made up his mind
that Mr. Richert would not be able to complete on
time, and he acted at all times in accordance with
that belief. His evidence concerning the breakfast
meeting at the Delta Hotel is inconsistent with the
evidence given by Mr. Porter and Mr. Richert. He
insists that the arrangements were made weeks, if
not months, prior to the meeting, and that the
meeting and the later letter only confirmed what he
already had agreed upon much earlier. He further
testified that what had been agreed upon was that
the construction, the completion and the transfer of
the moneys should all be completed on August 31,
1989. He was not able at any time to articulate any
conversation that would lead one to conclude what
was the actual arrangement between the parties. |
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His evidence on discovery did not indicate that
the completion for the transaction was to be on
August 31, 1989. It reads as follows: |
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Q. |
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All right. What were the terms of
that agreement, sir, that you would extend
the completion of construction date to
August 31? |
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A. Yes.
¶ 35
Later in his reasons, when considering the
evidence on the basis of the second assumption proposed by
counsel for Laredo, the trial judge addressed the question
whether the closing date for the transaction was September 11,
1989. I agree with the trial judge's interpretation of the
combined effect of the provisions of Clauses 5.1, 10.1 and
10.3. I have reviewed all the evidence of Messrs. Rogowski,
Richert and Porter, and have come to the same conclusion as
the trial judge -- that the purpose of the verbal agreement of
June 30, 1989 was to modify the second sentence of Clause 10
to read in these words:
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"If the completion date has not occurred on or
before June 30, 1989, the Optionor may extend the
completion date up to August 31, 1989, without cost
or penalty to the Optionor." |
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¶ 36
My reading of the evidence of Mr. Rogowski leads
me to conclude that, if believed, from the time of the meeting
on June 30, 1989, the terms of the agreement of December 12,
1988 had been altered by substituting for the elaborate scheme
provided in Clauses 5.1, 10.1, 10.2 and 10.3 a firm, fixed
date for completion of the transaction by August 31, 1989. My
conclusion is supported by examining Mr. Rogowski's conduct
and his instructions to his new solicitor, Mr. Panton, late in
the day of August 30, 1989, his dealings with Mr. Richert on
the morning of August 31, 1989, and his further instructions
to Mr. Panton to insist upon precise compliance with the terms
of a letter sent by the solicitor for I.R. Capital to the
solicitor for Laredo on that date.
¶ 37
It was Mr. Rogowski's view that after the June
30, 1989 oral agreement modifying the December 11, 1988
written agreement, I.R. Capital was no longer obliged to give
Laredo seven business days after the final building inspection
certificate issued to complete the transaction, or that I.R.
Capital had to have obtained the municipality's final building
inspection certificate by the date then set for completion of
the transaction. Mr. Panton, I.R. Capital's solicitor at the
time of completion, confirmed that those were Mr. Rogowski's
instructions to him prior to the closing date.
¶ 38
Under cross-examination Mr. Rogowski responded to
questions by counsel for Laredo as follows:
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Q. |
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Thank you. That wasn't my question. My
question was when you met at the Airport Inn
and Mr. Richert and Mr. Porter, did you tell
them that under this extension there is no
requirement for a building inspection
certificate? |
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A. |
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We did not discuss about the building
inspection. |
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Q. |
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When you met at the Airport Inn, did you have
this option agreement in front of you? |
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A. |
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I don't remember, sir. |
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Q. |
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You didn't, did you? |
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A. |
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I don't remember, sir. This agreement was
drafted by Ross Porter. |
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Q. |
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When you met at the Airport Inn, was there any
discussion amongst you and Mr. Richert and Mr.
Porter about taking out paragraph 5.1 of the
agreement? |
|
|
A. |
|
When we met at the Airport Inn, we only came to
discuss the new final deal that's gonna be
completed on August the 31st. We never went
back to the agreement. They -- we give it --
we exercise our option. We discussed the
money, and that's all we did in the meeting.
We never went back to that agreement. It was
like almost a new deal was struck and that's
what we struck. |
|
|
Q. |
|
Thank you. Is the answer to my question, no,
we did not discuss paragraph 5.1? |
|
|
A. |
|
We did not discuss none of the option. |
|
|
Q. |
|
And at that meeting that you had with Mr.
Richert and Mr. Porter, did you discuss
paragraph 10.3 of the option agreement. |
|
|
A. |
|
Sir, we did not discuss the option. |
|
|
Q. |
|
So, the answer to my question was, no, we did
not discuss paragraph 10.3? |
|
|
A. |
|
No. We did not. |
|
¶ 39
Those responses by Mr. Rogowski, for me, provide
additional evidence supporting the trial judge's conclusions
on the extent of the oral modification of December 12, 1988
agreement that occurred on June 30, 1989. In light of there
being no discussion about these vital matters, I do not
understand how Mr. Rogowski could possibly have concluded that
Mr. Richert was abandoning or waiving either the requirement
for the issuance of the final building inspection certificate
or the seven business day period provided within which Laredo
could prepare for closing the transaction. It also appears
illogical, to me, that by setting a firm, fixed date for
completion of the transaction that I.R. Capital would lose the
benefit of both Clauses 10.2 and 10.3.
¶ 40
In summary on this ground of appeal I am
satisfied that the trial judge's conclusion that Laredo's
obligation to complete would arise on September 11, 1989, was
amply supported by the evidence and I agree with his
interpretation of the written agreement as orally modified. I
would reject the second ground of appeal.
¶ 41
I turn now to a consideration of the first and
third grounds of appeal articulated in the appellant's factum:
|
1. |
|
The Learned Trial Judge erred in finding that
the Appellant (Defendant) I.R. Capital Corporation
was not willing to complete the transaction in
question; that is, that it had repudiated the
Agreement. |
|
|
3. |
|
The Learned Trial Judge erred in finding that
the Respondent (Plaintiff) Laredo Development Ltd.
was ready, willing and able to complete the
transaction in question, or, alternatively, need not
have been by reason of I.R. Capital's supposed
repudiation. |
|
¶ 42
I intend to consider the fundamental question
whether I.R. Capital, through its principal, Mr. Rogowski's
words and conduct and its solicitor's letter of August 31,
1989, repudiated the agreement of December 12, 1988, as
modified orally on June 30, 1989.
¶ 43
Mr. Panton, the recently instructed solicitor for I.R. Capital, first spoke with Mr.
Seibold, solicitor for
Laredo, on August 23, 1989. During that conversation the two
solicitors came to an understanding on a mechanism for closing
the transaction which was somewhat at variance with the
closing provisions dictated by Clauses 4, 5, 7 and 8 of the
agreement of December 12, 1988. On August 30, 1989, Mr.
Seibold forwarded a letter to Mr. Panton enclosing what he
perceived to be all the necessary documents for execution for I.R. Capital to complete the transaction as they had agreed.
This letter was not delivered to Mr. Panton until the
afternoon of August 31, 1989, due to Mr. Seibold's error in
not forwarding the letter to Mr. Panton's correct office
address.
¶ 44
What next occurred is the receipt by Mr. Richert
of Mr. Rogowski's couriered letter of August 30, 1989, which
Mr. Richert received after his return from Hong Kong which I
quote again:
|
What's going on re the deal -- 49 townhouse units to
complete August 31, 1989??
Please respond immediately. |
|
¶ 45
The trial judge, at para. 26 of his reasons, made
this finding:
|
"This was the first time Mr. Richert had any
knowledge of the position taken by Mr. Rogowski. He
immediately called Mr. Rogowski and explained his
position, that he understood there were another
seven days to complete. This understanding was
denied and the 6.4 million dollars was demanded by
August 31, 1989, the next day." |
|
¶ 46
The trial judge reviewed two conversations that
Mr. Rogowski and Mr. Richert had on the morning of August 31,
in para. 27 of his reasons, which I quote:
|
On August 31, 1989, the parties met briefly at
the job site while Mr. Richert inspected the
premises to determine whether or not they were
completed. There was some work being done by a
painter, a plumber's truck was there and there were
some cleaners. Just after 9 a.m., they attended at at[sic] Mr. Rogowski's office. Mr. Richert said
that he was ready to complete according to the
agreement. Mr. Rogowski repeated his position that
completion would be today; Mr. Richert replied that
no, he had 7 more days. He was shown certain
completion certificates from the municipality, but
these were not actually final completion
certificates. Mr. Rogowski said the final
certificates were at his lawyer's office where they
could be picked up, whereupon Mr. Richert said words
to the effect of, "I'm not your messenger, send it
to me." Whereupon Mr. Rogowski said words to the
effect of, "Well, if you have not anything more
intelligent than that to say, the deal is off."
Whereupon Mr. Richert said words to the effect of,
"I wish to complete according to the agreement." |
|
¶ 47
The trial judge made further findings of fact in para. 41 of his reasons, which are amply supported by the
evidence, limited parts of which I now propose to set out:
|
The co-operative stance taken by Mr. Panton
soon ended upon the instructions of Mr. Rogowski.
On August 30, 1989, Mr. Rogowski spoke to Mr. Panton
and told him to insist on closing on August 31,
1989, and to convey to Mr. Seibold that he had no
instructions to conclude the matter in any way
except as set out in the letter drafted by Mr.
Panton (and approved by Mr. Rogowski) and sent on
August 31, 1989. Mr. Panton admits that despite his
prior agreed-upon arrangements with Mr. Seibold, the
requirements he set out in his August 31, 1989
letter unilaterally altered those arrangements. The
letter sent by Mr. Panton on August 31, 1989,
included, in accordance with cl. 5.2.1 of the
agreement, an executed transfer of an estate in fee
simple. However, it did not enclose the Form A that
had been agreed upon prior, despite the fact that
Mr. Panton admitted in cross-examination that
without Form A the transfer could not be perfected
in the land registry office (about which more will
be said later in these reasons). Part of the August
31, 1989 letter reads as follows: |
|
|
"We are instructed by our client that your
client has indicated that it may not be in a
position to complete this transaction today's
date. We wish to confirm that it is our
client's position that as a result of the June
30th Agreement the completion of this
transaction is to occur on August 31, 1989. As
time is expressed to be of the essence of this
Agreement, we must insist that the completion
monies in the amount of $6,400,000.00 by way of
certified cheque payable to our firm in trust
be received in our offices on today's date. |
|
|
. . .
In accordance with paragraph 5.2.1 of the
Agreement, we are enclosing duly executed
Transfers of an Estate in Fee Simple to the
subject lands upon your undertaking that upon
submission of the transfers to the New
Westminster Land Title Office and upon a
satisfactory post registration index being
obtained, to forward to our offices the net
sale proceeds in the amount of $6,400.000.00 on
August 31, 1989, and upon your further
undertaking that if this transaction cannot
close on today's date, that you will return the
enclosed documents to our offices immediately
upon demand. |
|
|
We further confirm that should this matter not
complete on today's date, it is our client's
position that paragraph 6 of the Option
Agreement shall govern your client's failure to
complete the transaction. |
|
|
This letter was delivered to Mr. Siebold
shortly after noon on August 31, 1989. |
|
¶ 48
Later in his reasons, in paras. 76 to 78
inclusive, the trial judge made the following findings:
|
The letter of August 31, 1988(sic), amounts to
a repudiation of the agreement. This letter in
effect provides that if the vendor does not receive
the balance of the funds in the sum of $6.4 million
by August 31, 1989, then the deal is terminated. |
|
|
I have already found that I.R. Capital was not
entitled to take that position. |
|
|
It was also not able to take that position on
August 31, 1989, for another reason, and that is
that the closing date for this transaction was
September 11, 1989, and not August 31, 1989. |
|
¶ 49
In my judgment, having previously determined on
an interpretation of the written agreement as orally modified
that Laredo had until September 11, 1989 to complete the
purchase of the 49 completed condominium units, I conclude
that I.R. Capital's repudiation of the agreement commenced on
August 31, 1989, when its solicitor demanded completion that
day in its letter to Laredo's solicitor. The repudiation was
a continuing one as the executed transfer documents were
demanded to be returned on the next business day. I.R.
Capital was in breach of its agreement with Laredo from August
31 to September 11, 1989, and thereafter in resisting the
promptly commenced action for specific performance. There is
nothing to be found in the evidence indicating a willingness
by I.R. Capital to keep the transaction alive or, as phrased
in the older cases, to keep the agreement afoot. As Mr.
Rogowski announced at the completion of the last conversation
he had with Mr. Richert on the morning of August 31, 1989,
"the deal is off".
¶ 50
Counsel for I.R. Capital, in addressing the issue
whether I.R. Capital had repudiated, made these submissions.
¶ 51
First, in para. 9 of his argument in the
appellants factum, in addressing the trial judge's finding
that "the letter of August 31, 1989 constituted a repudiation
by I.R. Capital of its contractual obligations, and thus a
demonstration of a lack of willingness to complete", counsel
for I.R. Capital asserts that "at no time did Laredo accept
such repudiation; rather Laredo maintained, beginning on
September 20, 1989, a claim for specific performance of the
option agreement."
¶ 52
Insofar as that submission goes it is correct
that Laredo promptly commenced this action, however the
statement of claim issued contemporaneously with the writ of
summons on September 20, 1989, claimed in para. (c) of the
prayer for relief:
|
(c) |
|
Damages for the breach of the Option Agreement
in lieu of or in addition to specific
performance. |
|
¶ 53
Secondly, it was maintained that while on
September 13, 1989 Laredo asserted the right to acquire title
to all 49 units, it took no active steps either to tender
documents or funds or both while in the absence of acceptance
of repudiation the contract was still clearly alive. In fact,
Mr. Seibold's letter of August 30, 1989 did tender documents
for the completion of the transaction, however it is common
ground that at no time did Laredo place the cash portion of
the balance of the purchase price after adjustments in trust
with its solicitor in compliance with Clause 5.1. I will
later address the issue whether it was required to do so.
¶ 54
Next, counsel for I.R. Capital cited text book
authorities for the general proposition that to rely on
repudiation to maintain a claim for damages, or return of a
deposit, the alleged innocent party must show by words or
conduct that it accepted the repudiation. I am not satisfied
that that broad proposition applies to the facts of this case.
¶ 55
Counsel for I.R. Capital then cited and relied
upon a passage of the reasons for judgment of Southin, J.A. in
Shaw Industries Ltd. v. Greenland Enterprises Ltd. (1991), 54 B.C.L.R. (2d) 264 at 272, where she wrote:
|
From the proposition that the contract still
subsists, it follows that neither party is relieved
of his own contractual obligation to complete by the
failure of performance of the other. He cannot
treat that failure as a repudiation. In order that
he may do so, he must himself first give such a
notice and must at the time thereby fixed for
completion be himself ready, willing and able to
perform. |
|
¶ 56
That case is clearly distinquishable from the
present.
¶ 57
There neither party exhibited a prior intention
not to complete. The day for completion simply arrived and
went without either having done what was required of it in
order to complete that day. In the present case, more than a
week before the time for performance arrived, and at a time
when the purchaser could not be expected to be ready to close,
the vendor demanded performance for which the agreement did
not call, and thereafter made it plain that it would not
perform in accordance with the agreement.
¶ 58
In the circumstances of the present case the
purchaser cannot be required to prove readiness, willingness
and ability to perform. It was known to both parties that the
vendor's unwillingness to observe the terms of their
agreement, by providing evidence of completion of construction
at least a week prior to the date of closing, and insisting
instead that the purchase money be paid forthwith on the day
of delivery of the certificate, made it impossible for the
purchaser to place itself in a position to close, and the
vendor was unwilling thereafter to complete their agreement in
accordance with its terms.
¶ 59
For the purchaser in this case to have put itself
in a position to close in accordance with the agreement would
have been an exercise in futility, and its cause of action for
damages was complete without the necessity of so doing.
¶ 60
Counsel for I.R. Capital, in para. 23 of the
argument in his factum, relied on other excerpts from Shaw
Industries Ltd. v. Greenland Enterprises Ltd., supra where Southin, J.A. said at p. 272:
|
The underlying reason for this is that a party
to a contract for the sale of land, who is in
essential default, cannot be heard to complain of
the wrongdoing of the other until he has given the
other the opportunity to do right and is himself
ready to do right. |
|
¶ 61
The short answer to that submission is that on
August 31, 1989, when I.R. Capital repudiated its agreement
with Laredo, the date for completion had not arrived and the
quoted passage has no application to the facts of this case.
¶ 62
Finally, counsel for I.R. Capital submitted in para. 25 of his factum as follows:
|
"The finding of the learned trial judge to the
effect that the respondent 'has the right to
maintain an action for damages even although it
cannot show that it was ready, willing and able to
perform (A.B. 353, ll. 8-10) flies in the face of
the Shaw Industries decision and, more particularly,
ignores the more basic proposition, namely that
while the respondent asserted a claim for specific
performance it ought properly to have been able to
perform its obligations." |
|
¶ 63
I have previously expressed the view that the
principles expressed in Shaw Industries are not directly
applicable on the facts as found by the trial judge in this
case. Apposite, in my view, is the judgment of the Supreme
Court of Victoria that has been approved by the House of Lord.
The two cases I refer to are: McKenna v. Richey (1950), V.L.R. 360 and Johnson and another v. Agnew (1979), 1 All
E.R.
883 (H.L.). Both decisions were concerned with the position
of a plaintiff entitled to a decree of specific performance
where due to impossibility of performing the decree, the
plaintiffs were permitted to pursue their rights at common law
to claim damages where the defendants had repudiated and
continued to repudiate the contracts. The principle therein
expressed is apparently applicable equally before as well as
after judgment in a specific performance action. I content
myself with a quotation from the speech of Lord Wilberforce,
with whom all of the other Law Lords agreed. He says (at p.
893):
|
Then in McKenna v. Richey, a case very similar
to the present, it was decided by O'Bryan J in the
Supreme Court of Victoria that, after an order for
specific performance had been made, which in the
event could not be carried into effect, even though
this was by reason of delay on the part of the
plaintiff, the plaintiff could still come to the
court and ask for damages on the basis of an
accepted repudiation. The following passage is
illuminating: |
|
|
' The apparent inconsistency of a plaintiff
suing for specific performance and for common
law damages in the alternative arises from the
fact that, in order to avoid circuity of
action, there is vested in one Court
jurisdiction to grant either form of relief.
The Plaintiff, in effect, is saying: "I don't
accept your repudiation of the contract but am
willing to perform my part of the contract and
insist upon your performing your part--but if I
cannot successfully insist on your performing
your part, I will accept the repudiation and
ask for damages." Until the defendant's
repudiation is accepted the contract remains on
foot, with all the possible consequences of
that fact. But if, from first to last, the
defendant continues unwilling to perform her
part of the contract, then, if for any reason
the contract cannot be specifically enforced,
the plaintiff may, in my opinion, turn round
and say: "Very well, I cannot have specific
performance; I will now ask for my alternative
remedy of damages at common law." This, in my
opinion, is equally applicable both before and
after decree whether the reason for the refusal
or the failure of the decree of specific
performance is due to inability of the
defendant to give any title to the property
sold, or to the conduct of the plaintiff which
makes it inequitable for the contract to be
specifically enforced.' |
|
|
' It is an appropriate case for a Court of
Equity to say: "As a matter of discretion,
this contract should not now be enforced
specifically, but, in lieu of the decree of
specific performance, the Court will award the
plaintiff such damages as have been suffered by
her in consequence of the defendant's breach.
That is the best justice that can be done in
this case."' |
|
|
The judge in his judgment fully discusses and
analyses the English cases but nevertheless reaches
this view. |
|
My Lords, I am happy to follow the latter case.
(Emphasis added.)
¶ 64
In the case at bar, notwithstanding the first act
of repudiation by I.R. Capital on August 31, 1989, Laredo, by
commencing action on September 20, 1989 wherein it claimed
specific performance and/or damages in lieu thereof, kept the
agreement alive "...with all the possible consequences of that
fact." However, I.R. Capital, which was in breach of its duty
and obligations under the agreement as amended, never resiled
from its position that the transaction had to be completed on
August 31, 1989. The letter from the solicitor for Laredo to
the solicitor for I.R. Capital on October 19, 1989, clearly
indicated that Laredo would be pursuing its claim for damages,
after having decided not to post 1.5 million dollars security.
This was the first clear indication that Laredo was electing
no longer to pursue its claim to keep the agreement alive, and
that thereafter it was pursuing only its common law remedies.
¶ 65
As I have previously noted, nothing done up to or
after October 19, 1989 indicated any willingness on the part
of I.R. Capital to complete the transaction. From that date
forward it was open to Laredo to claim its alternative remedy
at common law for damages.
¶ 66
As a consequence, it is my opinion that since the
conduct of I.R. Capital constituted a repudiation, Laredo was
not required to place the balance of the purchase price less
adjustments in its solicitor's trust account, nor tender
documents.
¶ 67
The trial judge said:
|
I find that Laredo has the right to maintain an
action for damages, even although it cannot show
that it was ready, willing and able to perform. |
|
For the reasons previously expressed I agree with that
conclusion and need not therefore consider the other arguments
advanced by counsel for I.R. Capital under Ground 3.
¶ 68
With respect to Ground 1, namely whether I.R.
Capital was ready, willing and able to complete the
transaction on August 31, 1989, the trial judge went to
considerable length in analyzing the evidence and concluded
that I.R. Capital's performance was defective, or in breach of
its obligations, in three additional areas. I am not
persuaded that the trial judge has been shown to have been
demonstrably in error. I reject Ground 1 on the basis that I.R. Capital repudiated the agreement as amended.
¶ 69
From that flows the conclusion that I.R. Capital
is not entitled to the benefit of Clause 6 of the agreement
and that, being itself in default by repudiating the agreement
as amended, I.R. Capital must return to Laredo the aggregate
option monies paid, namely $700,000, as the trial judge
concluded.
¶ 70
I turn now to the fourth ground of appeal and the
sole ground of appeal raised by Laredo's cross-appeal.
|
4. |
|
The Learned Trial Judge erred in finding that
the Respondent (Plaintiff) Laredo Development Ltd.
was entitled not only to a return of the deposit of
$700,000.00 but of $429,000.00. |
|
|
CROSS APPEAL |
|
|
The Learned Trial Judge erred in not awarding
Laredo the entire profit of $950,000.00[sic] which
he found Laredo would have made. |
|
¶ 71
In the unique circumstances of this case, the
trial judge assessed Laredo's damages on the basis of its lost
opportunity to sell the 49 condominium units, 3l of which were
bound in contract to R.I.A. and 18 of which Laredo would have
had to arrange to sell on the open market on and after
September 11, 1989.
¶ 72
The trial judge found that the 31 units may have
realized $5,150,000 and the other 18 might have sold over a
time netting in the order of $2,850,000 for a gross value of
$8,000,000. On the basis of Laredo's purchase price of
$7,100,000, that would leave a profit potential of $900,000.
The trial judge wrote:
|
The above analysis is approximate, and does not
allow for various contingencies that may well occur
in the marketplace, but it does indicate there was a
likelihood that I must value of 31 of the units
having ready buyers and the remaining 18 units being
able to be sold in the marketplace. |
|
|
This exercise is premised on the fact that it
was the failure of I.R. Capital that prevented
Laredo from completing its contractual arrangements
to resell the units, and it is the chance of that
successfully completing but for the default of I.R.
Capital that is to be valued. |
|
|
In all of the circumstances, I am of the
opinion that the chance of making a profit if I.R.
Capital had performed, is 60 per cent, and
accordingly, I award 60 per cent of the profit it
would have made had the sale by Laredo been
completed to RIA Properties and in turn to the Hong
Kong investors. That is 60 percent of $715,000 or
$429,000. |
|
¶ 73
Counsel for I.R. Capital does not take issue with
the principles of law applied by the trial judge, but submits
that Laredo has failed to prove that it would have been able
to complete the transaction securing the chance to earn the
profit in the first instance. Here he submits the trial
judge's findings are contrary to the evidence.
¶ 74
I have considered the facts found by the trial
judge on this issue and my review satisfies me that there was
sufficient evidence to support his conclusions.
¶ 75
Counsel for Laredo, in his factum on the
cross-appeal, first submitted that this was not a loss of
chance/opportunity case. If this submission is correct, so
the argument goes, the trial judge should have awarded Laredo
damages based either its loss of sale to R.I.A., i.e.
$7,815,000 - $7,100,000 = $715,000, or the $900,000 loss of
profits previously calculated on the basis of the actual sale
of 31 units and future sales of 18. In support of this
submission counsel for Laredo referred to a judgment of this
Court: Houweling Nurseries Ltd. v. Fisons Western Corporation
(1988), 37 B.C.L.R. (2d) 2. In that judgment Madam Justice McLachlin, then of this Court, summarized the law in these
words at p. 8:
|
In my view, the law may be summarized as
follows. The basic rule is that damages for lost
profits, like all damages for breach of contract,
must be proven on a balance of probabilities. Where
it is shown with some degree of certainty that a
specific contract was lost as a result of the
breach, with a consequent loss of profit, some
should be awarded. However, damages may also be
awarded for loss of more conjectural profits, where
the evidence demonstrates the possibility that
contracts have been lost because of the breach, and
also establishes that it is probable that some of
these possible contracts would have materialized,
had the breach not occurred. In such a case, the
court should make a moderate award, recognizing that
some of the contracts may not have materialized had
there been no breach. |
|
|
The matter may be put another way. Even though
the plaintiff may not be able to prove with
certainty that it would have obtained specific
contracts but for the breach, it may be able to
establish that the defendant's breach of contract
deprived it of the opportunity to obtain such
business. The plaintiff is entitled to compensation
for the loss of that opportunity. But it would be
wrong to assess the damages for that lost
opportunity as though it were a certainty. |
|
¶ 76
Having reviewed the evidence of Mr. Richert, Mr. Seibold, and the documents relevant to this issue, I am
satisfied that there was no justification for awarding damages
on the basis of loss of profits on the Laredo-R.I.A.
transaction. There is no evidence in the record to suggest
that by September 11, 1989 R.I.A. would have been in a
position to complete its agreement with Laredo, paying over
$6,815,000 in cash.
¶ 77
The whole scenario quarterbacked by Mr. Seibold
was an effort to entice and facilitate 31 Hong Kong purchasers
to complete in accordance with their respective interim
agreements of purchase and sale which called for completion in
many instances on dates subsequent to September 11, 1989.
There was a substantial degree of uncertainty in connection
with those transaction, as Laredo had no direct contractual
rights with those purchasers. With respect to the 18 unsold
units, there was no certainty as to when or for how much those
units were going to sell. Additionally, on the evidence
tendered by Laredo, there was nothing to indicate what costs
and expenses were to be incurred in effecting those sales or
the interest expenses that Laredo would incur until the final
unit was sold. Shortly put, the factual situation and the
manner in which the damage claim was put forward demanded an
approach to the problem on the basis of lost opportunity and
not an assessment of loss on the basis of loss of profits.
¶ 78
Counsel for Laredo's alternate submission is that
the trial judge should have used an expected level of profit
of $900,000 and a "chance" at greater than 60 percent. The
argument continued that 60 percent was an arbitrary choice
because the trial judge did not give an explanation for
arriving at the 60 percent figure. Then inconsistently in para. 15 of Laredo's factum on the cross-appeal it is asserted
that the trial judge arrived at 60 percent by finding 31 of
the 49 units had been sold through R.I.A. which, according to
my calculator, is 63.25 percent. I pause to say that that was
not what the trial judge did.
¶ 79
In my judgment, on the evidence presented to the
trial judge, he was faced with substantial uncertainties,
contingencies and a lack of evidence on the anticipated future
expenses that Laredo could reasonably be expected to realize
in selling the 18 remaining units, and the expenses incurred
in closing even the original 31 transactions with the Hong
Kong purchasers if they all had completed according to their
respective agreements. Faced with the complex situation he
was, I consider the trial judge's methodology to be
appropriate and cannot say that the 40 percent reduction in
loss of a potential profit is wrong.
¶ 80
I address the issue finally by asking myself
whether the assessment is inordinately low. I start from the
premise that had R.I.A. completed as anticipated, Laredo would
have realized a profit of $715,000 if the two sales had
completed as originally anticipated. Through no fault of I.R.
Capital, R.I.A. experienced difficulties in selling the 49
condominium units by the original target date of June 30,
1989, and by August 31, 1989 had only 31 units sold at varying
completion dates. During July and August, 1989, Mr. Richert
had travelled to Hong Kong on two occations expending energy,
time and money, no doubt, in his efforts to keep the 31
prospective purchasers onside. Also, from September 11
onward, additional costs, expenses, commissions and legal fees
would be incurred -- to say nothing of Mr. Richert's personal
involvement which would further erode the profit margin on the I.R. Capital transaction. Under the circumstances, I am not
prepared to say that $429,000 is an inordinately low damage
award.
¶ 81
In the result I would dismiss I.R. Capital's
appeal and Laredo's cross-appeal.
TOY J.A.
TAYLOR J.A.:— I agree.
ROWLES J.A.:— I agree.
