Mark Twain once made a comment about how reports of his
death were highly exaggerated.
Perhaps the same can be said about the chances of a
corporate plaintiff obtaining specific performance of an agreement
of purchase and sale for commercial property, given the recent
decision of the Superior Court of Ontario in 2329131 Ontario
Inc. v. Carlyle Development Corporation.
This case involved an agreement of purchase and sale for 3
adjacent buildings in Espanola, Ontario which contained a gas bar,
a convenience store, several quick service restaurants, and some
There was no question that the plaintiff purchaser was trying to
buy this property to own and maintain for the profit to be derived
from the leases to the various tenants.
The agreement of purchase and sale was amended by the parties on
a number of occasions. The last written amending agreement
provided for a specific closing date, which passed without either
side attempting to close. Both sides continued to behave as if
the transaction was still valid but neither party identified a new
Ultimately, and after the parties encountered difficulty
obtaining estoppel certificates from the tenants and confirmation
from the plaintiff's bank that the bank would finance the
purchase, the plaintiff purchaser announced that it was ready to
close. The defendant vendor took the position that the
transaction was no longer alive and refused to complete the
The purchaser sued and moved for summary judgment, alleging that
the vendor had breached the agreement of purchase and sale for a
number of reasons and asking the Court to order specific
performance by requiring the defendant to hand over a deed to the
After reviewing the facts, the Court was satisfied that it was
in a position to render a summary judgment simply because the
documents were sufficiently clear as to illustrate what had
The interesting aspect of the case has to do with the issue of
The Court observed that the plaintiff had explained why the
property was special to the principals of the plaintiff company,
using the language "it provides a good opportunity for them to
carry on a business and to have good tenants in the other
buildings". The Court also observed that the
plaintiff's principals had "put much effort into obtaining
Of some significance was the fact that strangely, the defendant
did not take issue with the appropriateness of an order for
There is an abundance of authority for the proposition that
specific performance will not be granted with respect to a
commercial property, at least where the only thing special or
unique about the property is its ability to generate
revenue. This is because it is assumed that a commercial buyer
will be able to find another revenue–generating property
elsewhere. These types of properties, in this context, are
considered commodity items.
Nevertheless, and presumably assisted by the defendant's
failure to challenge the plaintiff's right to an order for
specific performance, the Court determined that "it would not
be unjust" to grant specific performance in these
circumstances. The Court ruled that a substitute property
"is not readily available".
In my view, this decision is completely inconsistent with both
the trend in the jurisprudence over the last number of years and
specific comments made in earlier decisions.
Nevertheless, it does provide some support for the idea that
specific performance may be available with respect to commercial
properties. Reports of the death of that remedy, apparently,
are greatly exaggerated.
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