Executive Summary: Key Legal and Evidentiary Issues

• Dispute arose from a failed assignment of a pre-construction condominium agreement.

• Central issue was whether the vendor’s consent was sought “forthwith” as contractually required.

• Plaintiff’s delay in obtaining consent created prejudicial conditions not agreed upon in the original assignment.

• Defendants' refusal to sign revised consent documents was found to be justified.

• Court determined that the vendor’s consent was a true condition precedent that was never fulfilled.

• Summary judgment granted in favor of defendants, with the $70,000 deposit ordered returned.

Background and facts

In November 2020, the plaintiff, Darlene Winning, entered into an agreement of purchase and sale (APS) to buy a pre-construction condominium in Blue Mountain for $719,000. This APS was governed by the Tarion Warranty. In January 2022, she entered into an Assignment Agreement with the defendants—2483852 Ontario Inc. and Ramesh Gawri—transferring her rights and obligations under the APS. The defendants paid a $70,000 deposit as part of this assignment, equal to what the plaintiff had paid to the developer. A key clause in the Assignment Agreement made it conditional upon the vendor's consent, which the plaintiff was obligated to obtain “forthwith.”

The plaintiff delayed seeking the vendor’s consent for 15 months. By the time she engaged with the vendor, the market had changed significantly, including a steep increase in interest rates. The vendor’s consent documents, once issued, included new terms not present in the original agreement, including a waiver of Tarion-related compensation for delayed closing and a broad indemnity clause. The defendants objected to these additions, asserting they never agreed to such terms and would not have faced them had the plaintiff acted promptly.

Court’s analysis and findings

The court determined that the plaintiff breached the Assignment Agreement by failing to seek the vendor's consent in a timely manner. The delay materially changed the circumstances under which consent was granted, to the detriment of the defendants. The new consent terms imposed additional obligations and stripped rights that were originally preserved in the assignment.

The court found that the vendor’s consent was a true condition precedent—an event entirely dependent on a third party’s discretion. Because that condition was never satisfied in accordance with the contract, the agreement became null and void, and the defendants were entitled to the return of their deposit. The court also rejected the plaintiff’s arguments that the defendants breached their duty to cooperate or anticipatorily repudiated the contract. The defendants’ communications and conduct were found to be reasonable under the evolving circumstances.

Furthermore, the court emphasized that the defendants were not obligated to accept materially new and prejudicial terms from the vendor, and that negotiations alone did not constitute breach. The plaintiff’s attempt to enforce the agreement without securing consent in accordance with the original assignment was unsuccessful.

Outcome

The Ontario Superior Court of Justice granted summary judgment in favor of the defendants. The plaintiff’s claim was dismissed, and the court ordered the return of the $70,000 deposit to the defendants. The decision reinforces the importance of strict compliance with timing obligations in real estate assignment agreements and clarifies that vendor consent must align with the originally bargained terms unless otherwise agreed.