Ruling agrees with builders' argument that parties extended completion timeline via addendum
The British Columbia Supreme Court has ruled that a developer’s inaction in a series of contracts of purchase and sale (CPS) – after the builders’ continued affirmation of the agreements and the fulfillment of the condition precedent – was an actionable breach.
In Chitchot v 0998823 B.C. Ltd., 2025 BCSC 742, the defendant was the owner and developer of a proposed 32-lot subdivision and 370-unit townhome project in Abbotsford, BC. The plaintiffs were two brothers and the residential building company they owned and operated.
In March 2016, the plaintiffs entered into identical CPS to buy individual lots in the subdivision. The CPS set the completion date as whichever was earlier between Dec. 31, 2016 and 30 days after notice of three possible operative conditions.
In May 2017, the defendant issued an amended disclosure statement under BC’s Real Estate Development Marketing Act, 2004 (REDMA), which included an unsigned draft CPS setting the revised completion date at whichever was earlier between Dec. 30, 2018 and 30 days after notice of three possible operative conditions.
In June 2017, the plaintiffs executed a first addendum to the CPS, which authorized the release of their deposits to cover development fees, upon relying on assurances from a realtor who served as a director of the defendant at the time.
In July 2017, the plaintiffs paid $25,000 more per lot directly to the defendant under a second addendum to the CPS, which tied completion to 30 days from Abbotsford City’s acceptance of building permit applications.
The plaintiffs alleged their communications with the realtor continued until early 2021, but they
later learned he was no longer a director of the defendant beginning in June 2020. In April 2021, the plaintiffs brought a civil proceeding seeking specific performance or damages.
The issue was whether the CPS remained enforceable beyond Dec. 30, 2018. The defendant alleged that the CPS expired on Dec. 30, 2018, based on the May 2017 amended disclosure statement.
The plaintiffs argued that the July 2017 second addendum indefinitely extended the completion timeline for the CPS since the addendum linked completion solely to the city's acceptance of building permit applications. The plaintiffs also claimed that the amended disclosure statement and draft CPS were never incorporated into the executed contracts.
The Supreme Court of British Columbia granted a judgment in the plaintiffs’ favour on the issue of liability. The court reserved the issue of the assessment of damages for a later hearing. The parties, consulting with the court, would agree on the date of that hearing.
First, the court ruled that the CPS remained enforceable beyond December 2018. Specifically, the court found it valid and enforceable until March 2024, when the city confirmed it would accept building permit applications, which fulfilled the operative condition in the second addendum.
The court held that the amended disclosure statement had no contractual effect, was neither executed nor delivered under the REDMA, and was never incorporated into the CPS. Thus, the court found no legal significance to the Dec. 30, 2018 reference in the draft CPS.
On the other hand, the court deemed the second addendum valid and binding. The court said that the addendum replaced the original completion date, contained no fixed expiry date, and instead tied completion to an operative condition.
Next, the court determined that the defendant’s failure to complete the transaction breached its contractual obligation in April 2024, 30 days after the city’s March 2024 confirmation it would accept building permit applications.
The defendant alleged that the CPS expired by February 2022. The court disagreed and found that the defendant was not yet legally obligated to complete the transaction at that time since there was no fulfillment yet of the second addendum’s operative condition. The court noted that the plaintiffs were entitled to expect diligence and good faith from the defendant.
The court cited Dosanjh v. Liang, 2015 BCCA 18, which stated that a contract would remain enforceable if the innocent party affirmed it while the other party mistakenly believed it was no longer binding. This ruling said a subsequent failure to perform the contractual obligation once it crystallized would lead to an actionable breach.
