Executive Summary: Key Legal and Evidentiary Issues

• Plaintiff claimed specific performance of an alleged agreement to purchase a business and lease interest.

• Defendant moved to strike the claim, asserting lack of acceptance, standing, and compliance with the Statute of Frauds.

• No signed agreement or written acceptance existed, undermining enforceability of the alleged deal.

• The court found the plaintiff corporation lacked standing and failed to plead material facts linking it to the agreement.

• Part performance doctrine was rejected as insufficiently supported by pleaded facts.

• Only the claim for return of deposit survived, subject to proper amendment clarifying corporate standing.

Background and procedural history

1943528 Ontario Inc. sued Bayview Foodmart Ltd. seeking specific performance of a transaction it claimed had been agreed upon to purchase the defendant’s supermarket business. The plaintiff alleged that three offers were submitted, with the final one on August 17, 2023, for $3.2 million. It claimed the defendant accepted this offer, which also included assignment of the lease for the supermarket premises. A $50,000 deposit was allegedly delivered as part of this agreement.

Bayview Foodmart denied that any binding agreement existed and brought a motion to strike the claim under Rules 21 and 25 of the Rules of Civil Procedure, arguing that no reasonable cause of action was disclosed. Specifically, they contended that (1) there was no valid acceptance; (2) the plaintiff lacked standing; and (3) any such agreement would be unenforceable under the Statute of Frauds due to the absence of a written contract involving an interest in land.

Lack of enforceable agreement and standing

The court reviewed the plaintiff’s pleadings and supporting documents, noting that none of the offers were signed and that no written acceptance existed. The court found that the plaintiff’s assertion of acceptance was a “bald conclusory statement,” unsupported by material facts showing how or when the acceptance occurred.

Further, the court held that the plaintiff failed to plead its connection to the offer. The buyer in the draft agreement was named as “He Weng Qing … a new corporation to be incorporated,” but there were no facts alleging that 1943528 Ontario Inc. was that corporation or had formally adopted the agreement in accordance with the Business Corporations Act. This omission deprived the plaintiff of standing to enforce the alleged agreement.

Statute of Frauds and part performance

The court agreed that the alleged contract fell within the Statute of Frauds as it involved an interest in land (a lease assignment) and was not in writing. The plaintiff invoked the doctrine of part performance to try to bypass the statute, but the court found the facts pleaded did not meet the threshold. It held that mere payment of a deposit and preliminary steps taken toward closing were not sufficient acts of detrimental reliance. These were not unequivocally referable to a concluded agreement or demonstrative of land dealings.

Outcome

The court struck the plaintiff’s claim for specific performance and damages in its entirety, finding it was “plain and obvious” that no enforceable contract had been pleaded. However, the court granted limited leave to amend, allowing the plaintiff to reframe its claim solely to seek the return of the $50,000 deposit—on the condition that it properly pleaded its standing and incorporation details. The defendant was awarded $15,397.85 in costs.