Strategic Management

1a. Vanzanten v. Brownstone Adera Projects

1b. March 13, 2013

1c. The Honourable Mr. Justice Myers

1d. Court Room 30

1e.

This trial is regarding the interpretation of a clause in the contract for the purchase of approximately 1.1 acres of land in Surrey for $1.2 million. The plaintiff is the vendor under the contract, and the purchaser is Equitas Development Corporation. The contract is eventually assigned to the defendant, Brownstone Adera Projects. The main contentious clause of this litigation is the purchase price adjustment subject clause regarding the property. It states that if the purchaser obtains approvals from the City of Surrey to redevelop the property with a density of greater than 30 residential units to the acre, then the buyer will pay the seller, Vanzanten, an additional two hundred thousand dollars. The agreement is also subject to the buyer acquiring at least three other properties adjacent to the seller's property, and the city of Surrey approving the rezoning of the lots for development. The buyer successfully acquires the adjacent properties and receives the city's approval for development, allowing for redevelopment of up to 29.5 units per acre. The three lots are then consolidated and the buyer builds townhouse units on the property.

However, because of the layout of the buildings, the as-built density on the plaintiff's lot as it existed before consolidation is actually greater than 30 units per acre. As a result, the seller, Vanzanten, believes that this triggers the price adjustment clause. The judge, on the other hand, believes that the clear focus of the price adjustment clause, when read in the context of the entire agreement, is on the allowed zoning density for the consolidated lot as whole, which is below the 30 units per acre stated in the agreement. In addition, he believes that the only reason the as-built density on the plaintiff's parcel is greater than 30 units per acre is that the overall density of the consolidated parcel is within the approved 29.5 units per acre of the development permit. Finally, the judge says that the plaintiff ignores the fact that if the lot is taken on its own, the as-built density cannot be achieved on the lot itself. Thus, the vendor's interpretation for the contract is not only inconsistent, but also makes no commercial sense.

2. From your observations, would you say the judge's role in the trial was active or passive? Explain with reference to specific example.

I believe the judge's role was rather passive. He didn't say much when the counsels of both the defendant and the plaintiff were talking, and in most cases they finished without any interference from the judge. In one occasion, he asked