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.
Damages
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.
Mitigation
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.
Brief informational summaries about insurance litigation, commercial litigation and family law litigation matters in the courts of Ontario and Canada are periodically published on our website. Please note that our website content is for informational purposes only, and should not be construed or relied upon to provide legal advice. If you require legal advice, please request an initial consultation with Gilbertson Davis LLP using the Request Consultation Form on this webpage or by contacting our Intake Coordinator on (416) 979-2020, ext. 223 (both subject to the Terms of Use described on our Contact page).
Comments & Opinions by Gilbertson Davis LLP lawyers and staff on its Blog, or in media interviews, appearances or publications, or in professional publications, are personal to them, and do not necessarily represent the opinions of the Firm or anyone at the Firm other than the individual expressing those comments or opinions.
About the Author
