Executive Summary: Key Legal and Evidentiary Issues

• Determination of whether the Contracts of Purchase and Sale (CPS) expired on December 30, 2018, or remained valid based on subsequent amendments.

• Interpretation and legal effect of the Second Addendum versus the May 2017 Amended Disclosure Statement under REDMA requirements.

• Assessment of whether the defendant’s conduct constituted anticipatory breach or repudiation prior to the fulfillment of a true condition precedent.

• Analysis of the duty of good faith performance and whether delays were excusable or indicative of contractual breach.

• Evaluation of whether a reasonable time for completion should be implied in the absence of a fixed date.

• Identification of when the actual breach occurred for the purposes of liability and damages.

Facts of the case

Manjit Chitchot, Gurdeep Chitchot, and Sekha Construction Ltd. entered into Contracts of Purchase and Sale (CPS) with 0998823 B.C. Ltd. in 2016 for the purchase of subdivided lots in Abbotsford, British Columbia. The original CPS included deadlines for completion but also allowed for extensions. Following developmental delays, the parties signed a Second Addendum in 2017 that tied completion to the City of Abbotsford’s acceptance of building permit applications, without specifying a firm deadline. Meanwhile, the defendant circulated an Amended Disclosure Statement referencing a December 30, 2018, completion date, but it was never formally incorporated into the contracts.

The plaintiffs continued to rely on assurances from the defendant's representative and did not treat the contracts as expired. Disputes arose when the defendant later asserted that the CPS had expired and refused to complete the transactions, prompting the plaintiffs to commence legal action seeking specific performance or damages and securing Certificates of Pending Litigation (CPLs) over the lots.

Outcome of the case

The Supreme Court of British Columbia found that the CPS remained valid and enforceable beyond December 30, 2018. The court concluded that the Second Addendum, which tied completion to the City’s acceptance of building permit applications, superseded earlier completion dates and did not impose a “drop-dead” deadline. The court rejected the defendant's reliance on the Amended Disclosure Statement because it was neither signed nor properly incorporated according to REDMA standards.

The judge also determined that there was no anticipatory breach prior to March 2024 because the true condition precedent—municipal acceptance of permit applications—had not yet been fulfilled. Only after the City confirmed acceptance in March 2024 did the defendant’s failure to complete constitute a breach. Consequently, judgment on liability was granted in favor of the plaintiffs, with damages to be determined at a future hearing. The court reserved the issue of costs and directed the parties to schedule a hearing for the assessment of damages.