Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether a presale contract terminated automatically if construction could not be completed by the Outside Completion Date.

• Interpretation of clauses 2 and 21 of the contract was central to resolving the termination and extension rights.

• The lower court found the developer had wrongfully terminated the contracts and awarded damages to the purchasers.

• On appeal, the court held that clause 2 mandated termination unless both parties agreed in writing to extend.

• Clause 21 did not override the need for written agreement, contrary to the trial judge’s finding.

• The appellate court reversed the damages award and dismissed the purchasers’ claims, finding no breach occurred.

Facts and outcome of the case

Anderson Square Holdings Ltd. was the developer of a residential strata project in Richmond, British Columbia. Between 2015 and early 2016, it entered into presale agreements with various individual purchasers. The contracts specified an "Outside Completion Date" of September 30, 2019. If construction was not completed by that date, the contract would be terminated unless both parties agreed in writing to an extension. The contracts also included a clause addressing delays caused by events beyond the vendor's control (referred to as “Major Outside Events”).

Construction was delayed due to disputes with the original contractor, Scott Construction Ltd., and difficulties in securing financing. Anderson Square issued termination notices in July 2019, citing both the Outside Completion Date clause and the force majeure clause. The purchasers rejected the termination and sued for specific performance, later amending their claims to seek damages after the development was completed and sold to others.

At trial, the lower court ruled in favor of the purchasers, finding that the contracts had not automatically terminated and that Anderson Square had wrongfully repudiated them. It held that delays beyond the developer’s control extended the Outside Completion Date automatically and awarded over $13 million in damages based on market value losses as of August 2021.

On appeal, the court reversed the lower court’s interpretation. It held that the presale contracts terminated automatically on notice if construction could not be completed by the Outside Completion Date, unless both parties agreed in writing to extend. The court found that the force majeure clause (Clause 21) did not create an automatic extension or conflict with Clause 2. It also emphasized the need for consistency with past case law interpreting identical language and underscored the importance of commercial certainty. Since the contracts validly terminated and no breach occurred, the court allowed the appeal and dismissed the purchasers’ claims in full.