How much have you lost when a real estate deal falls through?
The Ontario Court of Appeal recently grappled with this question in Akelius Canada Ltd. v. 2436196 Ontario Inc. 2022 ONCA 259
A sale of 7 apartment buildings in Toronto to a European investment conglomerate fell through when the seller failed to fulfil its obligation to remove various encumbrances on title. The total purchase price was to be $228,958,320. As a result of the failure to close, the purchaser incurred costs thrown away of $775,855.46 which the vendor was ordered to pay. More controversially, the prospective purchasers were also asking the Court to award $56,544.318.00 which represented the increase in value when the properties were later sold to someone else.
The Court clarified that while the date for the assessment of damages is decided on a case by case basis, the general starting point is that they are assessed as of the day of the breach. The Court cannot pick a date essentially at random when the market was either particularly high, or particularly low. Because the contract price reflected the market price of the properties as of the date of closing, other than the costs thrown away, there was no loss at law.
If you are engaged in a dispute over the failure to close on a property, call John Bradbury at Bradbury Sippel Law Corporation at 250-824-2422 or contact him via email at firstname.lastname@example.org