Court of Appeal of Quebec

4207602 Canada inc. c. 9139-4882 Québec inc.

June 20, 2018

500-09-025849-167

St-Pierre, Hogue, Roy

Appeal from a judgment of the Superior Court dismissing an application to transfer title, damages, and reimbursement of extrajudicial fees. Dismissed.

Under a 10-year lease signed on April 7, 2004, the appellant had an option to purchase the immovable she was leasing from the respondent, the owner. In 2007, she expressed her intention to avail herself of the option, but the respondent replied that it was no longer valid because the appellant had breached the conditions of the lease. She therefore refused to sell her the immovable. Faced with the refusal to transfer title, the appellant repeated that she intended to become the owner of the immovable and started to pay her monthly rent under protest. She subsequently received an offer to purchase from a third party that she accepted on the condition that she effectively became the owner of the immovable. Following the respondent’s refusal to honour the option to purchase, the appellant initially instituted an action in damages against the respondent. Approximately four years later, she amended her proceeding and sought a transfer of title. The trial judge dismissed her application on the ground that she had not established that she fulfilled the condition under the option clause, which stipulated that the option was personal and could not be transferred to a third party without the respondent’s consent.

Even though the trial judge erred in some of her conclusions, the final outcome is the same and the appeal is dismissed. First, she erred in concluding that the appellant had already taken steps to resell the immovable to someone else at the time she wanted to exercise her option and that she tried to do indirectly what she could not do directly. According to the evidence, the appellant exercised the option for her benefit and not, as the judge found, for a third party. Moreover, under the terms of the option, the appellant could not transfer her option to a third party but nothing limited the exercise of her rights as owner of the immovable once the option had been exercised. The judge also erred in affirming that the conditions of due diligence and the deposit of the sale price were not obstacles to the application to transfer title. It is not reasonable for the appellant to have taken a little over four years to file her application to transfer title. The judge erroneously associated the notions of “reasonable time” and “prescription”. A reasonable time within which to apply for specific performance of an obligation is computed starting on the day on which the other party expresses and states that he or she refuses to transfer title until the day on which the action for specific performance is instituted. In this case, the appellant did not act within a reasonable time. In addition, there was nothing to establish that she had the capacity to pay the sale price. Last, the judge did not err in refusing to award damages to the appellant on the ground that her claim was too imprecise and hypothetical or in dismissing her claim for reimbursement of extrajudicial fees. 

*Summary by SOQUIJ
Text of the decision: Http://citoyens.soquij.qc.ca. This link open an external website in a new window.

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