Background
This appeal arose from a dispute over the assignment of an agreement of purchase and sale. The assignee, Darlene Winning, sought to enforce the assignment against the numbered company and its principal, Ramesh Gawri. The assignment was subject to a condition precedent requiring vendor approval before it could take effect.
At the motion level, Justice Papageorgiou of the Superior Court of Justice found that the vendor had demanded unreasonable terms as conditions of its approval, and that this demand constituted a “deal breaker.” Appellant’s counsel had conceded below that the respondents were not obligated to agree to unreasonable vendor terms in exchange for approval. The motion judge held that because the condition precedent of vendor approval was never satisfied, the assignment agreement was null and void, and the deposit was to be returned. Winning appealed to the Court of Appeal.
On appeal, Winning argued that the respondents had committed an anticipatory breach by attempting to negotiate an abatement in the price arrangement after the vendor’s unreasonable demands emerged, and raised additional grounds contesting the motion judge’s conclusions.
The Court’s Holding
The Court of Appeal, sitting as a panel of Paciocco, Sossin, and Wilson JJ.A., dismissed the appeal in oral reasons delivered June 17, 2026. The court confirmed that the vendor-approval clause was a true condition precedent, meaning the assignment agreement could not come into force unless and until the vendor approved the assignment on terms acceptable to all parties. Paragraph 2 of Schedule Z supported, rather than contradicted, this interpretation.
The court held that the motion judge’s determination — that the terms insisted upon by the vendor were unreasonable and constituted a deal breaker — was a finding of mixed fact and law entitled to appellate deference. No palpable and overriding error or legal error was identified, so the finding stood. Because the condition precedent was never met, the assignment agreement was null and void from the outset.
The court further held that the respondents’ subsequent attempt to negotiate an abatement in the price did not amount to anticipatory breach. The motion judge was entitled to characterize that conduct as an effort to arrange a new deal on different terms after the original condition precedent had failed, rather than a repudiation of any existing contractual obligation. Because the contract itself provided for return of the deposit upon failure of the condition precedent, the court found it unnecessary to address the remaining grounds of appeal.
Key Takeaways
- A vendor-approval clause in an assignment of an agreement of purchase and sale can constitute a true condition precedent, rendering the entire assignment null and void if approval is never obtained.
- An assignee is not required to accept unreasonable terms demanded by the vendor as the price of approval; however, if those unreasonable terms prevent approval, the condition precedent fails and the agreement does not bind the parties.
- Attempting to negotiate alternative or amended terms after a condition precedent has failed is not anticipatory breach — it is simply an attempt to reach a new agreement on new terms.
- Findings of mixed fact and law by a motion judge regarding the reasonableness of contractual terms are entitled to deference on appeal and will not be disturbed absent palpable and overriding error.
Why It Matters
This decision offers practical guidance for parties involved in real estate assignment transactions in Ontario. It confirms that vendor-approval conditions are not mere formalities — they are enforceable condition precedents that can void an assignment entirely if the vendor’s approval is withheld, even where the vendor’s demands are found to be unreasonable. Buyers and assignees cannot compel approval by simply arguing the vendor is being unreasonable; the legal consequence of unreasonable vendor demands is that the condition fails, not that approval is deemed given.
The ruling also clarifies the boundary between failed negotiations and anticipatory breach in the context of real estate contracts. Where a condition precedent has collapsed, a party’s efforts to explore alternative arrangements will not be characterized as a repudiation of the original agreement. Combined with the deposit-return provision triggered by the failed condition, this decision provides a roadmap for how assignment disputes should be resolved when vendor consent clauses are not satisfied.