Executive Summary: Key Legal and Evidentiary Issues

• Summary judgment was granted against the seller, Covey, for breaching a residential purchase contract by failing to deliver vacant possession as agreed.

• Covey’s argument that the term “vacant possession” was vague and ambiguous was rejected by the Court as contrary to settled legal interpretation.

• The appellant unsuccessfully claimed the contract should be rectified due to unilateral mistake, lacking evidence of a prior inconsistent oral agreement.

• The existence of a fixed-term lease with a tenant until May 31, 2023, and its non-termination by Covey, was central to the dispute.

• Specific performance had previously been ordered, confirming the contract’s enforceability and barring Covey’s later contradictory claims.

• Third-party claims against the realtors were not summarily resolved due to lack of affidavits and evidence, and will proceed to trial.

Background and contractual context

On November 19, 2022, Adriane Dueck (buyer) entered into a residential real estate purchase contract with Connie Covey (seller) for a home that was then under a fixed-term lease with a tenant expiring May 31, 2023. The contract used was the standard form developed by the Alberta Real Estate Association (AREA). Clause 2.3 specified February 24, 2023 as the Completion Day, on which vacant possession and payment of the purchase price were to occur.

The tenant's lease and presence were disclosed in the MLS listing, and Beutler, Covey’s realtor, informed Kemble, Dueck’s realtor, of the lease. Covey believed, based on Beutler’s representations, that Dueck wanted the tenants, although no direct evidence supported that assertion. Dueck had visited the property, saw the tenants, and reviewed the MLS listing, but did not speak directly with Covey or Beutler before signing the contract.

Dueck waived her conditions on December 5, 2022. On January 20, 2023, she was informed by the tenant that they intended to stay through May 31, 2023, and had not been given notice to vacate. Covey then advised Dueck on February 22, 2023 that the transaction would not proceed. Dueck filed an urgent application on February 27, 2023, and Justice Devlin granted an order for specific performance on March 1, 2023, amending the closing date to March 24, 2023. Dueck took possession on that date, with the tenant still in place, and an Assignment and Assumption of Lease was signed by both parties effective that day.

Litigation and judicial findings

Dueck filed a civil claim on July 24, 2023 for damages due to Covey’s breach. Covey defended and counterclaimed on August 3, 2023, and also filed third-party claims against the realtors, Adam Kemble and Kevin Beutler, and their respective brokerages.

On June 26, 2024, the Provincial Court granted summary judgment in favor of Dueck, dismissed Covey’s counterclaim, and reserved for trial the assessment of damages and third-party issues. Covey appealed.

Justice M.A. Marion heard the appeal on February 7, 2025 and issued reasons on February 11, 2025, dismissing the appeal in full.

Key findings on appeal

The appellate Court held that:

• The contract was valid and enforceable, and included a clear requirement for vacant possession on February 24, 2023. The argument that the term was ambiguous was not accepted, referencing settled legal interpretation.

• There was no extricable legal error in the lower court’s handling of the summary judgment application. The claim of a unilateral mistake was unsupported by any clear evidence of a prior oral agreement or that Dueck knew of any mistake by Covey.

• Dueck’s entitlement to specific performance, granted by Justice Devlin, had already resolved the issue of contract enforceability and constituted a binding adjudication, precluding re-litigation through doctrines such as issue estoppel.

• The judge did not err in refusing to summarily decide the liability of the third-party realtors due to the lack of affidavit evidence from Kemble and insufficient questioning of Beutler. These matters will proceed to trial.

Conclusion

The Court confirmed that Covey breached the contract by failing to provide vacant possession as required and upheld the granting of summary judgment in favor of Dueck. The appeal was dismissed, and the remaining issues, specifically damages and third-party claims, were left for resolution at trial.