Executive Summary: Key Legal and Evidentiary Issues

• Mr. Arora fundamentally breached the purchase and sale agreement by failing to provide the balance of the purchase price for Parcel 2 on the October 17, 2019 closing date.

• La Caille did not waive the "time is of the essence" clause, as there was no clear and unequivocal intention to abandon its contractual rights despite prior extensions for Parcel 1.

• Equitable relief from forfeiture of deposits totalling $611,844.76 was denied, as the deposits represented a reasonable pre-estimate of liquidated damages at just over 13% of the purchase price.

• The Court found La Caille did not breach its contractual duties or the duty of good faith, rejecting all of Mr. Arora's counterclaim allegations including those related to subdivision delays, servicing costs, and architectural guidelines.

• Removal of servicing infrastructure from Parcel 2 by La Caille during pending litigation was deemed improper but did not constitute spoliation, and La Caille's claim for removal costs was denied.

• Consequential damages for bank loan interest and property taxes were awarded to La Caille but offset by the forfeited deposits to avoid double recovery.

The purchase and sale of land in Sky Pointe, Calgary

La Caille North Point Inc, a Calgary-based land development company operated by President Peter Livaditis and Vice President Alan Schmidt, was developing large tracts of land in a Calgary community called Sky Pointe. Harmandeep Arora, another developer, was interested in building approximately 124 townhome units on two adjacent parcels within the development. After active negotiations, the parties signed a purchase and sale agreement on May 12, 2017, for a total price of $7.625 million. The agreement required La Caille to consolidate and re-subdivide the two parcels, outlined the servicing responsibilities, and set out a schedule of four deposits along with specific closing dates — Parcel 1 was to close on November 17 of 2017, 180 days after the signing of the agreement, with Parcel 2 closing 240 days after Parcel 1.

The amending agreement and shifting responsibilities

By fall 2017, it became clear that re-subdivision would not be completed before the November closing date. Both parties contributed to this delay: La Caille had not designated anyone to work on the re-subdivision application, while Mr. Arora's submitted site plans were preliminary and changed over time. On November 17, 2017, the parties signed an amending agreement extending the Parcel 1 closing date to May 31, 2018, and shifting the re-subdivision responsibility to Mr. Arora. Mr. Arora also agreed to make an immediate fourth deposit of $458,883.57 and an additional "closing contribution" of $800,000, bringing his total payments to $1,821,844.76. The amending agreement expressly reaffirmed that time remained of the essence.

Subdivision delays and the deterioration of the relationship

Mr. Arora had already submitted a development permit application on October 11, 2017, and promptly submitted the subdivision application shortly after the amending agreement was signed in November 2017, meaning both applications were before the City concurrently. Vivian Barr, a senior architectural technician at the City involved in subdivision and development permit approvals, testified that the City preferred applicants who submit subdivision and development applications at the same time, as such a practice could shorten the approval process. The subdivision was conditionally approved on June 21, 2018, about three weeks after the May 31, 2018 closing date for Parcel 1, and was finally approved by the City of Calgary with registration completed on December 11, 2018. La Caille blamed Mr. Arora for the delay and issued a Notice of Breach on July 19, 2018, followed by a Termination Notice on August 31, 2018. The Court found, however, that Mr. Arora was not fully responsible for the delay and that a seven-month approval process was reasonable considering approvals were subject to conditions and reviews made by multiple City business units.

The architectural guidelines dispute

Complicating matters further, La Caille had initially sent Mr. Arora the wrong architectural guidelines and placed the wrong architectural guidelines on title. La Caille's architect, David Symons, sent Mr. Arora's architect, Max Tayefi, the correct architectural guidelines in November of 2017, but Mr. Tayefi knew yet forgot by the time he started working on Mr. Arora's plans and simply followed the guidelines he received from Mr. Arora. When the drawings were ultimately submitted to Mr. Symons in December of 2018, they were not in compliance. Mr. Symons advised Mr. Arora to resubmit the plans for review in 2019, which Mr. Arora never did. The Court characterized the issue of the architectural guidelines as a misstep on the part of both parties.

Closing of Parcel 1 and the road to Parcel 2

Despite ongoing litigation and a severely strained relationship, the parties verbally agreed to a new closing date, and Parcel 1 finally closed on February 19, 2019 — almost two years after the agreement was executed but about two months after subdivision was registered. This triggered the Parcel 2 closing date of October 17, 2019. In the interim, Mr. Arora installed deep servicing infrastructure on both parcels, with work starting on June 1, 2019 and completed by September 30, 2019. La Caille's site supervisor, IBI Group, was advised at least by June 18, 2019 that the installation of the deep servicing was about to start and invoiced La Caille for inspection services, though Mr. Livaditis and Mr. Schmidt testified they were not personally aware that Mr. Arora was installing the deep servicing until September of 2019.

The failed closing of Parcel 2

As October 17, 2019 approached, both parties' lawyers exchanged closing documents and communications indicating the transaction was proceeding as scheduled. On October 9, 2019, La Caille's lawyer Mr. Shapiro sent a letter enclosing executed closing deliverables and specifying that all monies were to be received no later than noon on October 17, 2019, with a reiteration that time shall remain the essence throughout the transaction. However, at 6:50 PM on October 16, Mr. Arora's lawyer, Mr. Bhangu, emailed Mr. Shapiro advising that the lender would be able to close the transaction by the end of November 2019, that they were pushing for mid-November, and that it did not seem they would be able to close on the coming Friday. La Caille offered to accommodate an extension to Friday, October 18, and then on October 17 proposed terms for a further extension to October 31, 2019, which included Mr. Arora providing an additional deposit of $1 million by October 21. Mr. Arora did not respond to the offer of an extension. La Caille issued a Notice of Termination on October 28, 2019. The Court rejected Mr. Arora's evidence that he had financing available, finding that he did not have the funds needed for closing Parcel 2 on October 17, 2019, and that there was no evidence of any genuine or concrete steps to fund the project from RBC, his brother, or One Stop Mortgage.

Key contractual clauses at issue

The agreement contained several critical provisions. Section 13.3, the "time is of the essence" clause, stipulated that time shall be the essence of the agreement and that in the event of any extension of time granted by the vendor, time shall continue to remain of the essence notwithstanding such extension. Section 11, the default clause, provided that upon termination for default, all monies paid — including deposits, the security deposit, and any other security or deposit — shall be retained by the vendor as "predetermined liquidated damages and not as a penalty." Section 7.2 governed the servicing of the lands, requiring construction by a contractor or contractors approved by the vendor, with all work supervised by the vendor's engineers at the purchaser's sole expense, and providing for reimbursement pursuant to a formula requiring La Caille to reimburse 100% of servicing costs in excess of $750,000 but less than $1,000,000, and 50% of costs exceeding one million dollars. Section 9.1(p) gave Mr. Arora the right to commence construction on Parcel 2, subject always to the provisions of the agreement including Article 9, provided the closing on Parcel 1 was completed, the third and fourth deposit paid, and La Caille had registered an unpaid Vendor's lien as first charge on the property.

The Court's analysis on breach, waiver, and good faith

The Court found that Mr. Arora fundamentally breached the agreement by failing to provide the balance of the purchase price on the closing date. La Caille had not waived the time of the essence clause; its conduct was consistently firm in emphasizing the closing deadline and warning of default consequences. The Court also rejected Mr. Arora's argument for equitable relief from the clause, finding that La Caille was ready, willing and able to close and was not responsible for the delay. On the duty of good faith, the Court applied the principles from Bhasin v Hrynew, 2014 SCC 71, and concluded that La Caille did not breach the terms of the agreement, did not breach their duty of good faith, and did not act dishonestly, as La Caille did not undermine Mr. Arora's interests during the life of the agreement and was entitled to act in its self-interest.

Spoliation and servicing costs

Mr. Arora alleged that La Caille's removal of the deep servicing infrastructure from Parcel 2 in the summer of 2024 — done without advising Mr. Arora and in contravention of caveats placed on Parcel 2 — amounted to spoliation of evidence. The Court disagreed, noting that there was documentation in evidence from Kang Construction regarding the scope of work when the services were installed and from Volker Stevin with regard to what was removed, and that the services did not need to remain in the ground as evidence for trial. The Court also denied Mr. Arora's claim for reimbursement of servicing costs, finding that when the agreement was terminated, he had not paid more than $750,000 for the installation of the services, and that after termination, La Caille was no longer responsible to pay for those servicing costs based on section 11(b) of the agreement.

The damages decision and the ruling on outstanding claims

In the initial decision dated December 19, 2025, the Court confirmed that Mr. Arora's third and fourth deposits totalling $611,844.76 were forfeited to La Caille and that relief from forfeiture was denied. La Caille's claim for the costs of removing the services from Parcel 2 was also denied, as the Court found that La Caille acted improperly when they extracted the services before litigation was completed — conduct the Court described as "akin to breaching a court order." The Court reserved judgment on La Caille's claims for bank loan interest of $695,515.03 and property taxes of $159,966.97. In the subsequent decision dated February 12, 2026, the Court awarded La Caille the bank loan interest of $695,515.03, property taxes of $159,966.97 to the end of December 2024, and property taxes calculated at a daily rate of $63.83 until the date of judgment, finding these carrying costs were foreseeable consequences of the breach. However, the Court ordered that the forfeited deposits of $611,844.76 be deducted from the total damages to avoid double recovery, following the principle established in Telsec Developments Ltd v Abstak Holdings Inc, 2020 ABCA 40. The builder's lien bearing registration number 191 201 853 was also ordered discharged. La Caille emerged as the successful party, with Mr. Arora's counterclaim dismissed. The precise total net award was not expressed as a single figure, as the daily-accruing property taxes depended on the date of judgment, and the issue of costs remained to be resolved between the parties within 60 days.