After a five-day trial in the Alberta Court of Justice, SVR Lawyers secured a successful result for client Hydeaway Stay Corporation in a complex breach of contract dispute with 1513277 Alberta Inc. (operating as Rockies Rentals). The matter centred on a failed business acquisition and raised contentious issues around contract formation, deposit recovery, and allegations of bad faith.
Background
The dispute arose from a Letter of Intent (LOI) signed by the parties in April 2023 outlining a framework for Hydeaway to purchase Rockies Rentals’ short-term vacation rental business. Under the LOI, Hydeaway paid a $50,000 deposit to Rockies Rentals, with the intention of negotiating a full Purchase and Sale Agreement (PSA). However, negotiations broke down, and the PSA was never finalized.
Hydeaway filed a civil claim seeking the return of its deposit, arguing that Rockies Rentals failed to take steps to finalize the PSA, and ultimately complete the deal. Rockies Rentals not only resisted the return of the deposit but also launched a counterclaim alleging misuse of confidential information and bad faith negotiation by Hydeaway.
The Decision
Justice Shannon found in favour of Hydeaway Stay Corporation, ruling that:
The LOI allowed for the return of the deposit if Rockies Rentals failed to enter into a definitive agreement, and that by failing to enter into a PSA, Rockies Rentals was required to return the deposit to Hydeaway;
The deposit was not tied to training or other services received by Hydeaway;
The Defendant’s counterclaim - which alleged misuse of confidential information and bad faith conduct - was entirely dismissed.
The Court rejected the defendant’s argument that the retention of the deposit had been earned through training services or proprietary knowledge sharing. It further held that there was no evidence of bad faith or misuse of confidential information by Hydeaway.
In a key finding, the Court confirmed that the LOI was not binding for the purpose of contract formation and did not impose enforceable obligation, but found that the deposit term was binding. While acknowledging the parties' intent to reach a formal agreement, the Court held that this intent was never realized, and Hydeaway was entitled to a full refund.
A Note from Counsel
SVR's Noah Hodgson, who led the case, commented:
"After a marathon five-day trial—something you don’t often see in Alberta’s Court of Justice —we’re very pleased to have delivered a clear win for our client. The ruling not only secures the return of the full deposit but also vindicates our client against serious counter-allegations of bad faith and misuse of information."
Read the full decision in Hydeaway Stay Corporation v. 1513277 Alberta Inc., 2025 ABCJ 215.