31 October 2022
COVID-19: Not a Force Majeure with regard to a Promise to Purchase (Lankry v. Larue, 2022 QCCS 3671)
Judgments from the Superior Court of Quebec are emerging more and more concerning the impact of COVID-19 upon the obligations of co-contracting parties.
Recently, the Superior Court rendered a judgment concerning the obligations of parties to a Promise to Purchase for a residential property and found that the pandemic and stay-at-home orders do not constitute a force majeure that would allow the vendor to cancel the sale.
On January 23, 2020, the parties signed a Promise to Purchase with a closing scheduled for April 15, 2020. When the health crisis is declared on March 13, 2020, the vendors have not yet found a new home. The vendors attempted to cancel the sale by invoking force majeure as they could not visit or inspect homes due to the applicable governmental decrees. The purchasers did not accept the cancellation, as they had already sub-leased their apartment, and they would have no place to live if the sale did not proceed. The vendors maintained their position and did not proceed with the sale. The purchasers filed a lawsuit to force the sale.
On September 28, 2022, the Superior Court ordered the parties to proceed with the sale and awarded damages in favour of the purchasers. The Honourable Gabrielle Brochu, S.C.J., found that the pandemic was unforeseeable, however the vendors did not establish that they were absolutely prevented or that it was absolutely impossible for them to move, therefore the criteria for a force majeure had not been established by the vendors. Brochu, J. stated that the vendors presented no serious evidence of attempting to make alternative arrangements to either rent a home or to live with family members, even though these options would be temporary or costly. There is no mention in the judgment of whether the Court took into consideration that a move would have increased the risk of exposure to COVID-19 at a time when there was no vaccine available.
This judgment serves as a reminder that the courts can look harshly upon parties who did not respect their legal obligations during the pandemic, expecting that force majeure would absolve them of any liability.