Friese v. Arfa, 2019 ONSC 3332

INTERESTING CASE - BREACH OF CONTRACT/MITIGATION/DAMAGES

SUMMARY:

Buyer signs Agreement of purchase and sale and fails to close.

Seller commences action for specific performance and in the alternative, damages.

Buyer counterclaims seeking the APS to be deemed at an end and the deposit of $15,000 to be returned without deduction.

At trial, seller has re-sold property and claims damages.

Original sale price to the defaulted buyer was $590,000.

When the property did not close as scheduled originally, the seller relisted for $599,99 which was the original list price prior to the first sale.

3 months later, the list price was reduced to $529,900 and then reduced again to $499,900.

The property ultimately resold for $425,000 and successfully closed.

The seller claims the difference between the original sale price of $590,000 and the new sale price of $425,000 plus interest, special damages for out-of-pocket expenses [legal fees, interest on money borrowed, extra property taxes paid and travelling expenses between North Bay and Keswick.

The seller takes the position that the best possible price for the resale of the property, namely the sum of $425,000 was obtained on resale and acted reasonably in mitigating damages.

The buyer takes the position that the seller should have entertained her proposal advanced by way of an Amendment to the Agreement of Purchase and Sale; and submits that the Seller should have entertained her proposal and should have made reasonable efforts to negotiate with her. And further, had the proposal been accepted and the transaction closed, there wouldn’t have been any damages.

The buyer also takes the position that the Seller did not make reasonable efforts to re-sell the property and that there was a failure in mitigation.

On the facts, the Buyer’s lawyer advised the seller’s lawyer that the buyer was unable to complete the transaction as they had not been able to sell their previous property.

Buyer proposed an amendment with a Vendor Take back. Seller did not agree and proceeded to re-list the property and did the best he could with the advice of his lawyer and real estate agent.

Conclusion:

The seller is is entitled to damages based on the difference between the contracted sale price and the ultimate sale price in the amount of $165,000 + pre-judgment interest at the applicable rate + Special Damages of $2,729.29

FULL CASE LINK: https://www.canlii.org/en/on/onsc/doc/2019/2019onsc3332/2019onsc3332.html?searchUrlHash=AAAAAQALcmVhbCBlc3RhdGUAAAAAAQ