Executive Summary: Key Legal and Evidentiary Issues

• A developer sued the buyer for breach of a purchase agreement after she failed to close on a $3.3 million home.

• The buyer alleged misrepresentation and non-disclosure regarding environmental contamination and a Certificate of Property Use.

• The court found she had received and acknowledged all required environmental documents, including the CPU, and had legal opportunity to seek review.

• Her language barrier argument was rejected due to her prior experience in real estate and presence of a bilingual agent.

• The buyer's counterclaim for misrepresentation and breach of good faith was dismissed as unfounded.

• The court awarded the developer $741,999 in damages, plus interest and $94,000 in costs.

Facts of the case

In Country Wide Homes Upper Thornhill Estates Inc. v. Liu, the plaintiff developer, Country Wide Homes, sued Xiaowan Liu after she failed to close on the purchase of a newly constructed luxury home in Vaughan, Ontario. The agreement of purchase and sale (APS) was signed in March 2017 for a four-bedroom home priced at over $3.3 million. Liu customized the property extensively with upgrades totalling over $260,000. The closing date was set for December 4, 2018. Liu refused to close, citing concerns over environmental contamination and alleged misrepresentations.

Her defense and counterclaim focused on the presence of a Certificate of Property Use (CPU) registered on title due to historical contamination on the site. Liu claimed she was unaware of the CPU’s implications and was misled about the property's safety. She also alleged that language barriers and a pressurized sales environment deprived her of meaningful review of the contract.

Trial evidence and findings

Justice Pollak of the Ontario Superior Court found that Liu had signed a standalone CPU acknowledgment and that all required disclosure under the Environmental Protection Act (EPA) had been met. She had the opportunity to review the documents, was accompanied by a Mandarin-speaking real estate agent, and had experience buying and selling high-value properties, including pre-construction homes.

The court also noted that Liu made extensive design selections and upgrades, and returned multiple times to the sales office to complete documents and payments. Despite her arguments, she admitted to signing all documents knowingly, including waiving the right to legal review.

The court dismissed Liu’s counterclaim and held that the allegations of misrepresentation and breach of good faith lacked factual support. Her failure to close was deemed a clear breach of the APS.

Damages and judgment

Country Wide mitigated its losses by reselling the property in 2021 for $3.2 million—$711,869 less than the total original purchase price with upgrades. The court accepted the developer’s evidence on carrying costs incurred due to the delay, including interest, taxes, utilities, and commissions, totalling $356,909. Combined with the resale loss, the court found Liu liable for total damages of $741,999.

Justice Pollak ordered that Liu’s $326,779 in deposits be forfeited and awarded the full $741,999 to the developer, plus pre- and post-judgment interest. Liu was also ordered to pay $94,000 in costs. Her counterclaim was dismissed in full.

Conclusion

This case underscores the enforceability of agreements of purchase and sale in sophisticated real estate transactions and clarifies that statutory environmental disclosures are satisfied through document delivery, not detailed explanation. Courts will not accept vague claims of language barriers or lack of understanding where a buyer has signed acknowledgments and had access to legal review. The ruling sends a strong message about accountability in high-value residential transactions.