Potential 100,000-dollar adjustment to price was material to finding of no agreement
The Ontario Court of Appeal has upheld a trial judge’s threshold finding that there was no enforceable agreement for the purchase and sale of a family home because the parties did not agree to the price.
In Downey v. Arey, 2022 ONCA 673, the appellants – Heather Downey and her partner, Francesco Marchese – brought an action against the respondent, Downey’s father. They asked for the enforcement of his alleged oral agreement to sell them the family home in Mississauga, ON.
Justice Jamie Trimble of the Ontario Superior Court of Justice dismissed the appellants’ action. The trial judge found that the parties did not agree to the price, a fundamental term; that there was no enforceable agreement to transfer the home; that there was no agreement to extend the closing date even if the parties agreed on the price; and that the appellants would not be entitled to specific performance, even assuming the existence of an agreement to transfer and an agreement to extend the closing date.
On appeal, the appellants’ first argument was that the trial judge made a palpable and overriding error because they did agree to a price of $850,000. The appellants alleged that the trial judge discounted the following circumstances:
- the appellants pled that the purchase price was $850,000
- the respondent admitted in his statement of defence that the oral agreement set a sale price of $850,000
- the respondent said, in response to the appellants’ request to admit, that the parties agreed on a price of $850,000.
The appellants’ second argument was that the trial judge made a legal error by considering whether the parties subjectively had a meeting of the minds on the issue of price even though he properly directed himself that this issue involved an objective determination.
Offer of $100,000 reduction a material difference in price
First, the Court of Appeal held that the record supported the trial judge’s finding that the parties did not agree on the purchase price. The appellants pled that the price was $850,000 but also pled that the respondent agreed to reduce this price upon closing through a gift of $100,000, the appellate court noted.
The appellants claimed that this potential $100,000 adjustment was not a material or essential term of the contract and was not about the purchase price. However, this $100,000 difference was material, the appellate court said.
Second, the Court of Appeal ruled that the trial judge considered whether an objective and reasonable bystander would conclude in all the circumstances that the parties had an agreement on the purchase price. The court determined, using this standard, that the parties did not agree on the price.