In the Court of Appeal’s (“ONCA”) recent decision Tribute (Springwater) Limited v. Atif, 2021 ONCA 463 (CanLII) the ONCA clarifies the law regarding damages and mitigation in cases involving aborted real estate transactions.
This decision involves an appeal from a summary judgment granting the plaintiff seller damages for the defendant purchaser’s failure to close a residential real estate transaction.
The ONCA advises that damages in a failed real estate transaction are generally determined “based on the difference between the agreed sale price under the parties’ agreement of purchase and sale and the market value of the property at the date set for closing”.
Depending on context, a court may choose a different date, other than the date for closing.
There may also be other damages, such as carrying costs and other expenses incurred by the plaintiff while holding the property for a subsequent sale.
The ONCA states that as a general rule “a plaintiff is not entitled to recover for losses which could have been avoided by taking reasonable steps”.
When a defendant alleges that a plaintiff failed to take reasonable steps to mitigate its damages, the onus is on the defendant to prove the following:
- That mitigation was possible; and
- That the plaintiff failed to make a reasonable effort to mitigate.
At Gilbertson Davis LLP, our lawyers can assist you in your real estate dispute, whether you are a purchaser or seller, and whether you require assistance commencing a lawsuit or defending against one. Gilbertson Davis LLP lawyers have experience in proceedings involving Real Estate Litigation, Contract Litigation, Commercial Litigation, and Civil Litigation matters and can assist you in resolving your legal issues in a timely and cost-effective manner. Our mission is to provide creative, sensible, cost-effective, long-term resolutions to clients. Please contact Gilbertson Davis LLP to schedule a consultation.