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Victoria Agreed to Purchase a Restaurant Owned by Gordon

Question 42

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Victoria agreed to purchase a restaurant owned by Gordon.Victoria's intention was to remodel the restaurant on a particular theme and then turn around and resell it as a going concern.She had done this quite a number of times in the past and made her living this way.Victoria had given clear instructions to her solicitor that she wanted no title problems to arise that may haunt her later in her attempt to resell the property,and that she would "walk away from the deal" if there were any.About a month before closing,her solicitor discovered that the building that formed the restaurant encroached upon city lands to the extent of six centimetres.On hearing this,Victoria instructed her solicitor to inform Gordon that she had no intention of completing the transaction.Gordon immediately brought an action for specific performance to force Victoria to purchase the property,and was willing in so doing to either accept an abatement of the sale price or obtain a licence from the city renewable yearly at a very nominal cost (currently $5).It was,however,impossible for Gordon to obtain an actual deed for the six centimetres from the city at any cost.Discuss the questions of surveys,financing,and intentions of the parties,and discuss the arguments of the parties.Render a decision.

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