The Appellant appealed the Decision of an Applications Judge dismissing its Summary Judgment Application. The Appellant sought damages for breach of a Deferred Purchase Agreement (the “Agreement”) and partial Summary Judgment for unpaid rent. Under the Agreement, the Defendants occupied the residential property through a lease while retaining the option to purchase it by a specified closing date. The Defendants paid a non-refundable holding fee but ultimately chose not to proceed with the purchase. At issue before the Applications Judge was whether Section 40 of the Law of Property Act, RSA 2000, c L-7 (the “LPA”), which restricts a seller’s ability to claim damages under an “agreement for sale”, applied and raised a genuine issue for Trial.

On Appeal, Justice Labrenz determined the appropriate standard of review was correctness, noting that no additional evidence was submitted under Rule 6.14. Granting partial Summary Judgment under Rule 7.3, Justice Labrenz found that the Appellant was entitled to recover rental arrears, though the amount was re-calculated based on the available evidence.

Justice Labrenz concluded that the application of Section 40 of the LPA could be fairly and justly decided on the existing record. Labrenz J. also found that the Agreement did not constitute an “agreement for sale” under Section 40, as it did not involve financing, the holding fee did not create an equitable interest, and the rental payments were not credited toward the purchase price. As a result, Section 40 did not preclude the Appellant from claiming damages, and partial Summary Judgment was appropriately granted under Rule 7.3. The Appeal was allowed in part.