Peak Real Estate Marketing Ltd. v. 697604 B.C. Ltd.

Peak Real Estate Marketing Ltd. v. 697604 B.C. Ltd.

No novation occurred because the Second Assignment did not transfer obligations and lacked assent of all original contracting parties; the Assignment Agreement was terminated but its forfeiture clauses constituted a commercially reasonable pre-estimate of damages limiting the plaintiffs' contractual recovery to forfeited deposits ($360,000); separately the defendants were liable under the broad indemnity clause for the plaintiffs' reasonable settlement with the Vendors and judgment was awarded for $600,000 under that indemnity.

Citation
2009 BCSC 634
Parties
Plaintiff: Peak Real Estate Marketing Ltd.; Plaintiff: Peak Real Estate Development Ltd.; Defendant: 697604 B.C. Ltd. (formerly Landpower Developments Ltd., carrying on as Landpower Development Corporation)
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
12 May 2009
Procedural Posture
Civil Breach of Contract (real Estate) / Trial Judgment (reasons for Judgment)
Outcome
Plaintiffs' claim for the unpaid balance of the Assignment Price dismissed; plaintiffs entitled to retain forfeited deposits totaling $360,000; plaintiffs awarded indemnity of $600,000.
Legal Topics
Assignment, Novation, Forfeiture of Deposits, Liquidated Damages, Measure of Damages, Mitigation of Loss, Indemnity Clause
Source Language
English
Contract Law Property Law Real Estate Transactions Remedies (damages and Specific Performance) Indemnity Assignment Novation Forfeiture of Deposits +4 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 5 Authorities cited 14 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Peak Real Estate Marketing Ltd.

Plaintiff

Peak Real Estate Development Ltd.

Plaintiff

697604 B.C. Ltd. (formerly Landpower Developments Ltd., carrying on as Landpower Development Corporation)

Defendant

Procedural Posture

Civil Breach of Contract (real Estate) / Trial Judgment (reasons for Judgment)

Legal Issues

  1. 1 Whether the Second Assignment effected a novation relieving the defendants of liability
  2. 2 Whether the Assignment Agreement was terminated and the legal consequences of termination
  3. 3 Whether forfeited deposits constituted valid liquidated damages or were a penalty

Ratio Decidendi

No novation occurred because the Second Assignment did not transfer obligations and lacked assent of all original contracting parties; the Assignment Agreement was terminated but its forfeiture clauses constituted a commercially reasonable pre-estimate of damages limiting the plaintiffs' contractual recovery to forfeited deposits ($360,000); separately the defendants were liable under the broad indemnity clause for the plaintiffs' reasonable settlement with the Vendors and judgment was awarded for $600,000 under that indemnity.

Court Disposition

Plaintiffs' claim for the unpaid balance of the Assignment Price dismissed; plaintiffs entitled to retain forfeited deposits totaling $360,000; plaintiffs awarded indemnity of $600,000.

Orders

  • Plaintiffs' claim for the balance of the Assignment Price (approx. $616,800) dismissed.
  • Judgment for the plaintiffs against the defendants in the amount of $600,000 on the indemnity claim.