[112741]

1. Party A contracts to buy a parcel of land from Party B by way of unregistered Agreement for Sale.
2. The purchaser, Party A, pays over one quarter of the purchase price to party B over a three year period, at which time both parties agree to register the sale in the Land Title Office.
3. It is at that point discovered that the vendor cannot deliver up title to the land. He attempts over a period to rectifty the situation, but is unable to do so.
4. Can the purchaser, Party A, demand the monies back which he paid to the purchaser, since the contract was frustrated because the vendor could not deliver title to the land.
And, if so, in what time must the purchaser ask for the money back? Does the Statute of Limitations apply?
Thanks.

[LisaB4657]

Homework question. Tell us what you think the answer is and we'll tell you if we think you're right, and why.

[112741]

I think that in this case there is no limitation as to time. BTW, this is in British COlumbia, Canada.
Basis for this thinking: the first payment was made in 1993: the last payment early 1996, when registration of title could not take place because the vendor could not deliver title.
There has been cooperation between the parties to solve the problems until early 2007.. in writing.
The vendor now is claiming monies are owed, but still cannot deliver title... and he now claims he is the beneficial owner, but that the purchaser owes for payments between 1996- 2009.
The purchaser takes the position that he should be refunded since the vendor cannot deliver title... monies paid with interest.
The vendor is saying he cannot do this because of the Statute of Limitations.
I think that because of the continued joint interest in the propety over the years, trying to solve the complex problems (which were boundary related), there would be no limitation blocking the purchasers claim for refund.

[LisaB4657]

Nicely done!

Ok, a couple of things... I'm not aware of the law in BC but in my area, when a contract does not provide a specific time frame for completion, and if that type of contract is not addressed by the Statute of Limitations, then the time frame for completion is "a reasonable time". I think a judge would agree that the purchaser gave the seller more than enough time to cure the problem. Since there was cooperation between the parties over the years the seller can't claim that the purchaser neglected the situation. So the Statute of Limitations argument would be out the window.

Another issue: Has the purchaser performed all of its obligations under the terms of the contract? Has it done everything it was required to do? That appears to be the case. The purchaser did what he was supposed to do, and the seller did NOT do what he was supposed to do. That means the seller was in default of the contract, was given a reasonable period to cure the default and failed to do so. Right there mandates not only a refund plus interest, but possibly damages as well. (Lost use, lost profits, etc.)

Final issue: If the contract contains a representation by the seller that it has good title and is able to convey the property (a standard provision in all contracts in my area), or if that type of provision is considered an implied warranty within the contract in your area, then the purchaser may actually have a claim against the seller for fraud.

(Oh yeah... as for the time when the purchaser must demand the refund, it should be within a reasonable time after the purchaser has discovered that the seller will not be able to cure its default.)

[112741]

Thank you. Would you have any case law to support the conclusions you kindly provided?
That is, case law in Canada?

[LisaB4657]

Sorry, no case law. Just experience. :) But now you've got plenty of buzzwords to work with and start searching.

[LisaB4657]

One more thing... have you been studying the doctrine of laches? I don't know if it applies in BC but if it does you might want to look into whether the seller had unclean hands.

[112741]

Thanks!

[LisaB4657]

My pleasure. Good luck!