Canadian Real Estate Law Blog

June 2009

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The Declining Importance of Tender in Transaction Disputes

Canadian courts continue to erode the traditional common law requirement that a non-defaulting party demonstrate its absolute willingness and ability to close a real estate transaction when responding to the default of the other party.  As illustrated by the British Columbia Supreme Court in Tatla v. Lui, [2009] B.C.J. No. 485, the process of “tendering” all closing documents and funds on the defaulting party is increasingly being rejected as a “meaningless ritual” and should no longer be seen as a determinative element influencing how real estate transaction disputes are resolved.

The dispute in Tatla arose when a purchaser breached a purchase and sale agreement and later sought the return of her deposit from trust on the grounds that the vendor failed to properly issue tender.  While the purchaser acknowledged that she was responsible for the initial breach, she took the position that the vendor’s failure to demonstrate his capacity and intention to close the transaction by attending the Land Title Office on the closing date mandated the return of her deposit.  In brief, she reasoned that both parties were in default of their obligations and consequently the deposit should be released back to her.

In real estate transactions in British Columbia where the cost of conveyance is to be borne by the purchaser, the purchaser has the obligation of preparing the transfer documents.  Failure to do so prevents the vendor from satisfying his obligation to execute the documents, and the purchaser is therefore considered to be in default.  Here, the purchaser expressed her intention not to prepare the transfer documents.  In response, the vendor communicated that he was in a position to close the transaction and demanded that the purchaser perform her contractual obligations.  When the closing date passed with no further action by either party, the vendor brought a motion for the release of the deposit.

The argument that the vendor was not permitted to keep the deposit as a result of his failure to give proper tender was not well received by the Court.  Citing the Ontario Court of Appeal decision in the analogous case of Stewart v. Ambrosino (1977), 16 O.R. 2, Dickson J. quoted:

“On the date fixed for closing both the appellant and her late husband advised the purchaser’s solicitor that they had no intention of closing the transaction.  Under such circumstances there was no necessity for tender.  The law does not require a nugatory and meaningless ritual to be performed.”


Applying this approach to the present dispute, the Court held that tender should be seen as merely a formality, and that it would have been a “nugatory and meaningless ritual” for the vendor to travel to the Land Titles Office and wait for the purchaser’s arrival with the transfer documents, knowing that it would have been pointless to do so.  Accordingly, Dickson J. concluded that the absence of proper tender would not have a detrimental impact on the vendor’s motion, and the deposit was ordered to be released to him along with his costs in the action.


This decision suggests in relatively explicit terms that the common law favours an increasingly pragmatic approach to addressing real estate disputes.  While it is not universally established that tender is an anachronistic requirement of real estate transactions, Tatla provides clear precedent for the position that it should no longer have a definitive impact on how these disputes are resolved.


Devin Anderson

June 29, 2009 in Purchases and Sales | Permalink | Comments (3)