



COURT 
    OF APPEAL FOR BRITISH COLUMBIA




Citation:


Johnson 
          v. Breitkreuz,







2006 
          BCCA 30



Date: 20060120





Docket: CA032951

Between:

Jack 
    Armand Johnson and Carolina Dawn Johnson

Respondents

(
Plaintiffs
)

And

Gerald 
    Harvey Breitkreuz

Appellant

(
Defendant
)












Before:


The 
          Honourable Madam Justice Prowse




The 
          Honourable Madam Justice Levine




The 
          Honourable Mr. Justice Thackray



Oral Reasons for Judgment




G.J. 
          Dykstra


Counsel for the Appellant




D.B. 
          Adair, Q.C.


Counsel for the Respondents




Place 
          and Date:


Vancouver, British Columbia




20 January 2006





[1]

LEVINE, J.A.
:  This appeal concerns an agreement for the 
    sale of land. The appellant, Gerald Harvey Breitkreuz, disputed the respondents 
    claim that there was such an agreement, and claimed that if there was, it 
    was to be completed by May 2003. The respondents took the position that there 
    was an agreement with a completion date on June 1, 2007. After a summary trial 
    under Rule 18A, Crawford J. ordered that there was an agreement for sale and 
    that the completion date be set as July 1, 2005.

[2]

The appellant raises three grounds of appeal. He maintains that the 
    trial judge erred by:

(a)        
    failing to grant an adjournment of the summary trial so that the appellants 
    counsel could cross-examine certain witnesses on their affidavits and conduct 
    further examination for discovery;

(b)        
    deciding the case on a summary trial where there were conflicting affidavits 
    and credibility issues;

(c)        finding that there was an enforceable 
    agreement for sale.

[3]

In my opinion, there is no merit to the appeal, and I would dismiss 
    it for the following reasons.

Background Facts

[4]

The appellant owned a house in Chilliwack. In 2000, he sold it to his 
    mother, who died in 2001, leaving the house to the appellant and his two brothers 
    in her will.

[5]

Ms. Johnson is the niece by marriage of the appellant. They had a close 
    relationship from the time Ms. Johnson was 17 years old. The respondents lived 
    in a rented house in Cultus Lake. In October 2000, at the appellants suggestion, 
    the respondents moved into the house in Chilliwack and paid the appellant 
    $750 per month in rent.

[6]

In May 2002, the parties discussed terms of a sale and purchase of 
    the house by the respondents. The respondents claimed they reached agreement 
    on the following terms:

(a)        the price was $180,000;

(b) 
           the appellant would obtain a mortgage for $120,000 to pay out the shares 
    of his two brothers;

(c) 
           the appellant and Ms. Johnson would open a joint account and the respondents 
    would make the mortgage payment of $437.47 every two weeks;

(d) 
           at the end of five years the respondents would assume the mortgage 
    and pay out the remaining $60,000;

(e) 
           there was no interest on the $60,000 final payment due June 1, 2007;

(f) 
            the appellant would continue to pay the house insurance, taxes and 
    mortgage insurance and the respondents would reimburse him at the time of 
    the payment of the $60,000;

(g)        the respondents 
    could work on the house as if it were their own.

[7]

The appellants evidence was that he would agree to sell the house 
    to the respondents for $180,000; that the sale would be completed within a 
    reasonable time; when that time came he would accept $60,000 as a down payment; 
    and the respondents would assume the mortgage. He would then transfer the 
    house to them.

[8]

In May 2002, the respondents did not have the money to buy the house. 
    The appellant and Ms. Johnson opened a joint bank account and the appellant 
    took out a mortgage for $120,000. The respondents made all of the mortgage 
    payments, which amounted to $874.94 per month.

[9]

In September 2003, at the appellants request, the respondents obtained 
    a market valuation for the house, which was $240,000. In December 2003, the 
    appellant began to make comments that indicated he was not going to sell the 
    house. He took the position that he had made an offer to the respondents to 
    sell the house, which they had not accepted.  He offered to pay $25,000 to 
    the respondents for work they had done on the house.

[10]

On February 26, 2004, the appellants solicitor wrote to the respondents 
    solicitor stating that: The understanding was that the down payment and the 
    owners expenses would be paid within a reasonable time. That reasonable time 
    was one year from May, 2002.  He set out terms on which the appellant would 
    transfer the property by May 25, 2004, stating: My clients offer is open 
    for acceptance for thirty (30) days from today.

[11]

On April 6, 2004, the appellants solicitor wrote again to the respondents 
    solicitor, stating that since the offer made in his earlier letter had not 
    been accepted, it was withdrawn, and the respondents were required to vacate 
    the house by May 1, 2004.

History of the Proceedings

[12]

The respondents started the proceeding by petition, seeking a declaration 
    that there was an agreement for sale. The application was converted to an 
    action; the amended statement of claim was filed September 9, 2004; and the 
    amended amended statement of defence was filed on October 20, 2004. On February 
    23, 2005, the respondents brought an application for a summary trial under 
    Rule 18A. Notice of the application had previously been given to the appellants 
    solicitor on February 11, 2005. The notice of motion stated that the respondents 
    would rely on affidavits of the appellant and four independent witnesses, 
    all of which had been sworn in 2004 and those of the independent witnesses 
    served in September 2004; affidavits of the respondents sworn on February 
    23, 2005; and the examination for discovery of the appellant, which had been 
    conducted January 19, 2005. The application was set for hearing on March 24, 
    2005.

Adjournment Application

[13]

The appellant sought an adjournment of the summary trial in order to 
    cross-examine the independent witnesses and have further examination for discovery 
    of Mr. Johnson. Counsel for the appellant also suggested to the trial judge 
    that there was another witness whose evidence he wished to obtain, but did 
    not identify the witness or describe the content of the expected evidence. 
    The proposed examination for discovery of Mr. Johnson concerned a without 
    prejudice letter sent by the respondents counsel to appellants counsel, 
    proposing a settlement of the matter, which the appellant interpreted as a 
    different version of the agreement for sale than that described in the respondents 
    evidence.

[14]

The trial judge held that the appellant had sufficient time, from the 
    time he had received the affidavits, to cross-examine the witnesses. The appellant 
    had been asked about the witnesses evidence in his examination for discovery. 
    The trial judge did not mention the without prejudice letter, but on review, 
    the letter is clearly a settlement proposal and not admissible as evidence 
    in the case.

[15]

In my opinion, the trial judge made no reviewable error in refusing 
    to adjourn the summary trial. I would not accede to this ground of appeal.

Application to Refer the Matter to the Trial List

[16]

The appellant noted that the issue in the case was the existence and 
    terms of an oral contract. He took the position that the affidavits raised 
    issues of credibility concerning conflicting evidence that could only be resolved 
    at a full trial.

[17]

The trial judge said: (at para. 34):

[34]  
    While I do have real concern about an oral agreement, it does appear that 
    the essential terms, such as the parties, subject property and price were 
    agreed on, and that the only issue in terms of contractual certainty was when 
    the agreement was to be performed, i.e., payment to be made in exchange for 
    title to the land.

[18]

The respondents point out that the trial judge had an abundance of 
    material before him to support their case: the affidavits of the parties 
    and independent witnesses; portions of the examination for discovery of the 
    appellant; copies of the document opening the joint account and the account 
    statements showing the regular mortgage payments. A review of this evidence 
    reveals that the only issue really in dispute (although the appellant claimed 
    that there was only an offer and if there was an agreement it was too uncertain 
    to be enforced) was whether the land was to be transferred in a year or five 
    years after the agreement as to price and payment terms was made. The trial 
    judge accepted the evidence of the independent witnesses which supported the 
    respondents evidence on this issue. In light of that evidence; the time that 
    had been available to the appellant to cross-examine those witnesses and to 
    put in portions of the examination for discovery of the respondents; and the 
    appellants own evidence in response to that of the independent witnesses; 
    I can find no basis on which to find that the trial judge erred in exercising 
    his discretion in concluding that the matter could be determined on a summary 
    trial.

Terms and Enforceability of the Agreement for Sale

Trial Judges Reasons

[19]

The trial judge began his analysis by noting the provisions of s. 59 
    of the
Law and Equity Act
, R.S.B.C. 1996, c. 253. Section 59(3) 
    of the
Act
provides a contract respecting land or a disposition 
    of land is not enforceable unless:

(a)        
    there is, in a writing signed by the party to be charged or by that partys 
    agent, both an indication that it has been made and a reasonable indication 
    of the subject matter,

(b)        
    the party to be charged has done an act, or acquiesced in an act of the party 
    alleging the contract or disposition, that indicates that a contract or disposition 
    not inconsistent with that alleged has been made, or

(c)        the person alleging the contract or disposition 
    has, in reasonable reliance on it, so changed the person's position that an 
    inequitable result, having regard to both parties' interests, can be avoided 
    only by enforcing the contract or disposition.

[20]

Section 59(4) of the
Act
provides:

For 
    the purposes of subsection (3)(b), an act of a party alleging a contract or 
    disposition includes a payment or acceptance by that party or on that partys 
    behalf of a deposit or part payment of a purchase price.

[21]

The trial judge summarized the respondents arguments that the appellant 
    had done an act or acquiesced in an act of theirs that indicated a contract 
    not inconsistent with that alleged, as required by s. 59(3)(b) of the
Act
where the contract is not in writing (at para. 39):

(a) the continued occupation of the premises;

(b) the increased payment to the amount specified in the mortgage;

(c) signing the joint account card.

[22]

He also noted the respondents arguments that they had changed their 
    position in reasonable reliance on the contract, for the purposes of s. 59(b)(3) 
    of the
Act
(at para. 40):

(a) increasing their monthly payments;

(b) 
    performing extensive work on the premises, for which the appellant offered 
    to pay $25,000.

[23]

While the trial judge did not expressly state that he accepted the 
    respondents arguments that the acts done or acquiesced in by the appellant 
    or the respondents changes in position satisfied the requirements of the
Act
, that conclusion must be inferred from his order, which 
    enforced the agreement for sale.

[24]

The trial judge then turned to the substantive question: whether there 
    was an agreement for sale and its terms. He summarized the appellants argument 
    that there was no consideration for the agreement (at para. 41). He noted 
    that there had been a promise for a promise, and that the respondents had 
    committed themselves to pay an increased amount each month; pay $60,000; and 
    reimburse the appellant for his related expenses.

[25]

The trial judge held (at para. 42) that it was plain from the appellants 
    examination for discovery that there was an agreement for sale and the pleadings 
    and correspondence established the principal terms. The only matter not agreed 
    on was the term of the agreement.

[26]

The trial judge accepted the evidence of four independent witnesses, 
    only one of whom was related to the respondents, that the appellant had told 
    them, in separate conversations, that the sale would complete in five years. 
    He concluded (at para. 45) that the appellant did enter into an agreement 
    for sale for $180,000, payable in five years.

[27]

The trial judge noted (at para. 46) that the respondents had initially 
    taken the position that they would forthwith take ownership of the property 
    and secure the appellants interest with a $60,000 mortgage. He determined, 
    however, (at para. 47) that the equities of the proceeding are such that 
    the respondents brought the summary trial to resolve matters and should pay 
    the appellant in advance. He therefore ordered that the sale complete on July 
    1, 2005.

Analysis of Arguments on Appeal

[28]

The appellant argues on appeal that the trial judge erred in finding 
    that there was an agreement where the evidence was in conflict. The trial 
    judge relied on the appellants own evidence, however, in finding there was 
    an agreement and that the terms as to parties, subject matter and price had 
    been agreed. There was no conflict to be resolved on these matters. The only 
    real conflict was as to the term.

[29]

The appellant disputes the evidence of the four independent witnesses 
    relied on by the trial judge, but his own evidence in response to that of 
    the independent witnesses was inconsistent. In an affidavit sworn in August 
    2004, the appellant stated that he did not discuss the terms of his arrangements 
    with the respondents regarding the house. In his examination for discovery, 
    conducted in January 2005, he recalled having conversations with each of the 
    four witnesses, but not what they discussed. He said it was possible that 
    he talked about the house and the financing for the house

[30]

The appellants counsel argues that it would be unlikely the appellant 
    would have discussed those matters, but the appellants evidence does not 
    support that argument. In my opinion, the trial judge was in a position, taking 
    into account all of the evidence, to accept the evidence of the independent 
    witnesses and find that the term of the agreement was five years.

[31]

The appellant argues that the requirements of s. 59 of the
Act
were not met. He suggests that the conditions imposed by the common law for 
    satisfaction of the
Statute of Frauds, 1677
, which was replaced 
    by the
Act
, are still relevant, and seeks to apply them in a 
    more restrictive manner than is indicated by the terms of s. 59. He argues 
    that any acts of the appellant or acquiesced in by him must be unequivocally 
    referable to the contract: see
Heyman v. Canarim Investment Corp.
, 
    [1986] B.C.J. No. 1983 (S.C.)(QL), citing
McNeil v. Corbett
(1907), 39 S.C.R. 608. He also contends that the trial judge failed to find 
    the facts necessary for the purposes of s. 59(3).

[32]

I have set out above the trial judges summary of the respondents 
    arguments supporting their claim that they satisfied the requirements of ss. 
    59(3)(b) and (c), and concluded that he must be taken to have accepted the 
    respondents arguments. In my opinion, he made no error in concluding that 
    the acts of the respondents acquiesced in by the appellant were not inconsistent 
    with the contract, and that the respondents changed their position in reasonable 
    reliance on the contract. The trial judge noted correctly (at para. 43) that 
    the courts have recognized for several hundred years that the statute cannot 
    [be] the basis for avoiding an agreement: see the discussion of the manner 
    in which courts of equity acted to prevent the Statute of Frauds to be used 
    as an instrument of fraud in
Steadman v. Steadman
, [1976] 
    A.C. 536 at 540, 551, 558 (H.L.).  The wording of ss. 59(3)(b) and (c) provides 
    relief in broader terms than the courts, indicating the intention of the Legislature 
    to codify the basis on which agreements for the sale of land would be enforced, 
    not to track the common law.

[33]

I would not accede to the appellants arguments that the trial judge 
    was wrong to find that s. 59 of the
Act
was satisfied and there 
    was an enforceable agreement for sale.

[34]

The appellant argues finally that the trial judge erred in ordering 
    specific performance of the contract, when the respondents did not claim any 
    such relief in their statement of claim. The respondents sought a declaration 
    that there was a contract on the terms they claimed, which would have completed 
    on June 1, 2007. It appears that the trial judge determined, on his own motion, 
    that it was equitable that the contract be completed forthwith, since the 
    respondents had offered to do so and the appellant had sought an earlier completion.  
    Once the trial judge found there was an agreement for sale with a term of 
    five years, I see no prejudice to the appellant in an earlier completion date. 
    I reject this argument.

[35]

In conclusion, I would dismiss the appeal.

[36]

PROWSE, J.A.
: I agree.

[37]

THACKRAY, J.A.
: I agree.

[38]

PROWSE, J.A.
: The appeal is dismissed.

The Honourable Madam Justice 
    Levine


