Alberta Court of Appeal reinstates claim for specific performance in farmland purchase dispute

The court found there was a genuine issue for trial regarding the proper remedy

Alberta Court of Appeal reinstates claim for specific performance in farmland purchase dispute

In a recent ruling, the Alberta Court of Appeal overturned the dismissal of a claim for specific performance, finding there was a genuine issue for trial on whether specific performance or damages was the proper remedy for a farmland purchase dispute.

The issue in Pittman Brothers Production Ltd v Evans, 2024 ABCA 185 involves a dispute between Pittman Brothers Production Ltd., a company established by brothers Jerome and Charles Pittman, and the respondents, sisters who inherited 540 acres of farmland near Warner, Alberta, from their father, Gordon Evans. The Pittman family had farmed this land under various lease agreements since 1997, continuing until the lease expired on December 31, 2019.

In late 2019, the respondents expressed their intention to sell the land, leading to email exchanges that the Pittmans claimed formed a binding agreement to purchase the land for $1.8 million. However, the respondents later negotiated a higher offer with another party, R.J. McKenzie Farms Ltd., which led to the current litigation.

The chambers judge previously dismissed the claim for specific performance, concluding that damages would be an adequate remedy and discharged the caveat and certificate of lis pendens (CLP) filed by the appellant. The appellant, however, contended that specific performance was appropriate due to the unique suitability of the disputed lands to their farming operations.

The Alberta Court of Appeal found that the chambers judge erred by placing the burden on the appellant to prove that no substitute property was available. Instead, as the moving party for summary judgment, the respondents bore the burden of proving there was no genuine issue for trial.

The Court of Appeal determined that the chambers judge incorrectly imposed the burden on the appellant and did not adequately consider whether damages would be an adequate remedy. The court emphasized that specific performance is an equitable remedy dependent on the uniqueness of the property and the adequacy of damages, which, in this case, had not been sufficiently proven by the respondents.

The court also noted the significant relationship between the Pittmans and the land, including the historical and operational connections, which added complexity to determining adequate remedies. The evidence presented did not conclusively establish that comparable farmland was available, nor did it account for the special suitability of the disputed lands to the Pittmans' operations.

Ultimately, the appeal court set aside the chambers decision, reinstating the appellant's claim for specific performance. The matter will proceed to trial to determine the existence of a binding contract and the appropriate remedy, be it specific performance or damages.

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