Wes McMillan and Nojan Kamoosi win commercial real estate trial

Wes McMillan and Nojan Kamoosi successfully represented the potential purchaser of a development site in North Vancouver.  The potential purchaser signed a contract to purchase the site from the defendant owners (a bare trustee and the beneficial owner).  As is common, the contract contained a provision allowing the purchaser to convert the land purchase to a share purchase.  The plaintiff elected to do just that.  For a variety of reasons, the deal did not complete, and the plaintiff sued for return of its $1.35 million deposit. 

The case turned on the corporate structure utilized by the defendant owners.  Wes and Nojan successfully argued that the contract was unenforceable because the parties to the contract did not own the shares to be purchased (exemplified by the latin maxim nemo dat quod non habet, or, one cannot sell that which one does not own), notwithstanding that the contracting defendants and owners of the shares had common directors and were prepared to give effect to the contract (i.e. sell the shares to the purchaser).  This case highlights the importance for parties to commercial contracts to carefully consider whether all of the persons to give effect to the contract are also parties to it.

To read the decision, visit 2024 BCSC 248. For more information on Allen / McMillan’s real estate litigation practice, please contact Wes at wes@amlc.ca and Nojan at nojan@amlc.ca.