Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on damages after the purchaser repudiated a firm Agreement of Purchase and Sale (APS) for a vacant industrial property, with liability for breach admitted.
• Central issue was whether the plaintiffs’ resale of the property for $1,500,000 was an improvident, below-market sale or a reasonable mitigation reflecting true market value.
• The court examined whether an appraisal critiquing the plaintiffs’ valuation, but not their marketing process, could establish a genuine issue requiring trial on mitigation.
• Questions arose about the admissibility and weight of the plaintiffs’ own appraisal report, which was appended to an affidavit without compliance with Rule 53 expert requirements.
• The defendant’s attempt to reframe damages using an “assessment date” and expert market value, instead of the actual arm’s-length resale price, was scrutinized against established loss-of-bargain principles.
• Certain claimed carrying costs (self-invoiced maintenance and appraisal fees) were challenged and partially disallowed, narrowing recoverable damages to those reasonably incurred in consequence of the breach.

Facts of the case

The plaintiffs, James D. Taylor Holdings Ltd. and James Darcy Taylor, owned a vacant industrial property in Port Perry, Ontario, which they listed for sale at $2,500,000. The defendant, WJ Groundwater Canada Limited, agreed by an Agreement of Purchase and Sale (APS) dated January 19, 2022, to purchase the property for $2,400,000, paying a $50,000 initial deposit and later an additional $50,000 deposit. The defendant intended to use the land for parking drilling rigs and constructing a service shop. The APS was conditional on the purchaser’s inspection, with a 14-day inspection period twice extended. The defendant ultimately waived the inspection condition in writing and paid the second deposit, making the APS firm and binding. Four days before closing, on April 11, 2022, the defendant, through counsel, purported to terminate the APS on the basis that zoning did not permit its intended use. The court accepted that this amounted to repudiation and that the defendant failed to close in accordance with the APS. The litigation therefore proceeded solely on damages; liability was not in dispute.

Subsequent listing history and failed resale attempts

After the failed closing, the plaintiffs re-listed the property with the same real estate agent and on the same terms as before the defendant’s offer. In May 2022, they received a conditional offer from a third party, Hamid Vaezian, at $1,928,000, which was negotiated up to $2,110,000. That agreement, however, contained broad due diligence conditions in the buyer’s favour, allowing him to walk away unless he advised in writing that the property was suitable. Mr. Vaezian did not waive his conditions, so the agreement became void and his deposit was returned. With no other offers by mid-July 2022, the plaintiffs reduced the listing price to $2,450,000. In September 2022, they received another conditional offer at $1,500,000 from their commercial tenant, Shane Pollock. After advice from their realtor, they countered at $2,100,000, mirroring the Vaezian figure, but Mr. Pollock did not accept or renew his offer. In October 2022, the plaintiffs again reduced the listing price, this time to $2,300,000. Despite this lower price, there were no further offers or even inquiries to the end of 2022, leaving the property unsold for several months on the open market.

Final resale and appraisal evidence

On January 19, 2023, following their agent’s advice to reduce the price dramatically, the plaintiffs lowered the listing price to $1,400,000 and advertised the property as “Aggressively Priced for a Fast Sale.” The next day, January 20, 2023, they received an offer of $1,500,000, the first since September 2022. The plaintiffs countered at $1,540,000, but the buyer refused to increase the offer, and the plaintiffs accepted $1,500,000 on January 24, 2023. The transaction closed on March 22, 2023. Around the time of this reduced listing, Mr. Taylor retained a certified appraiser, who later delivered a report valuing the property at between $1,550,000 and $1,650,000 as of January 24, 2023, assuming an exposure time of one to three months. The report stated that its intended use was to assist with litigation settlement. Although appended to Mr. Taylor’s affidavit, the appraiser did not swear an affidavit or sign the required Rule 53 acknowledgement of expert’s duty. As a result, the court held that the report was not admissible as expert evidence on the summary judgment motion. The plaintiffs emphasized that they were not relying on this appraisal as expert opinion, but instead on the arm’s-length resale price after months of open-market exposure as the best evidence of fair market value at the time of resale.

Summary judgment framework and legal principles

The motion proceeded under Rule 20 of the Rules of Civil Procedure. The court reviewed the governing summary judgment test, including the obligation to grant judgment where there is no genuine issue requiring a trial and the judge’s enhanced powers to weigh evidence, assess credibility, and draw reasonable inferences. The decision closely followed the Supreme Court of Canada’s approach in Hryniak v. Mauldin, which requires the judge first to determine if the evidence allows a fair and just adjudication without using the new fact-finding powers, and then, only if necessary, to resort to those powers in a manner consistent with proportionality and the interests of justice. In the context of real estate transactions, the court noted that disputes following a purchaser’s failure to close are often suitable for summary judgment because the principles are straightforward and the material facts are usually not seriously contested. Where a purchaser is in default, the vendor may retain the deposit (crediting it against damages), must act reasonably to mitigate loss, and is entitled to loss-of-bargain damages calculated primarily by the difference between the original contract price and the arm’s-length resale price, plus reasonable carrying and related costs. Case law cited by the court confirms that when a property is re-sold on the open market in an arm’s-length transaction, the resale price is generally the best evidence of market value at the time of the resale, and expert appraisal evidence is not normally necessary.

Damages calculation and disputed carrying costs

The plaintiffs advanced a damages claim comprising the difference between the APS price of $2,400,000 and the ultimate resale price of $1,500,000, i.e., $900,000, plus specific carrying and related costs for the period between the aborted closing and the final sale. These additional items included property tax of $6,940.86, lawn and property maintenance charges of $8,780.10, snow removal and salting charges of $10,212.38, legal costs of $1,957.33, and the appraisal fee of $2,373.00, for a total claimed amount of $930,263.67 before crediting the deposit. The defendant argued that the plaintiffs failed to mitigate and that some of the claimed carrying costs were improper. On the maintenance and snow removal claims, the court agreed with the defendant. The invoices submitted post-dated the transfer of the property and, under cross-examination, Mr. Taylor conceded that he personally had rendered these invoices to his own corporation. The court held that the plaintiffs could not invoice themselves nearly $20,000 and then shift that amount to the defendant as damages. Similarly, the appraisal expense was not treated as a carrying cost; since the report itself stated that its intended use was to assist with litigation settlement, the court characterized it as a litigation expense, potentially a recoverable disbursement on a costs award but not a head of damages. In the result, the court accepted the $900,000 loss of bargain, the property taxes of $6,940.86, and the legal costs of $1,957.33 as damages attributable to the defendant’s breach.

Mitigation, expert valuation, and alleged improvident sale

The central dispute was whether the plaintiffs’ resale at $1,500,000 represented a reasonable mitigation of loss or an improvident sale below market. The defendant advanced a more complex theory, urging the court to calculate damages not by the actual resale price but by comparing the original APS price to an asserted “market value at the relevant time,” which it framed as an “assessment date” around the aborted closing or the time of the Vaezian APS. The defendant suggested that because Vaezian had conditionally agreed to pay $2,110,000, the proper measure of damages was the difference between $2,400,000 and $2,110,000, despite that deal never closing. To support its position, the defendant filed an expert appraisal from Mr. Robert Solnick of Cushman & Wakefield, who critiqued the plaintiffs’ appraiser’s methodology and concluded that the property’s market value as of January 24, 2023 (the same date used in the plaintiffs’ report, though his report mistakenly referred to 2024) was $2,240,000, or $700,000 per acre, as opposed to the lower range in the plaintiffs’ appraisal. The court held that this approach misread the authorities. The Ontario Court of Appeal in Arista Homes (Richmond Hill) Inc. v. Rahnama, along with the decision in Marshall v. Meirik, emphasizes that, where a vendor reasonably completes an arm’s-length resale without improvidence, the difference between the original APS price and the resale price is the standard measure of loss, and there is ordinarily no need for expert market value opinions. Those cases also affirm that the onus is on the defaulting purchaser to show that the vendor failed to make reasonable mitigation efforts and that a better price was realistically obtainable. In this case, the defendant’s appraisal critiqued another appraisal’s comparables and adjustments, but did not address the plaintiffs’ actual sales process, including the extended listing period on MLS, the multiple price reductions, the failed conditional offers, or the lack of interest at higher listing prices. The court noted that the property had been listed for about nine months, initially at $2,500,000, then at $2,450,000 with only one $1,500,000 offer, and later at $2,300,000 for three months with no offers or inquiries. The expert report did not identify any reasonable marketing steps the plaintiffs failed to take, nor any unreasonable steps that drove the price down, nor did it explain how a different sales strategy could have produced a higher resale price. The judge adopted the reasoning in Marshall, which holds that appraisal evidence that does not connect market value opinions to specific shortcomings in the sales process is insufficient to show a failure to mitigate. In line with that reasoning and with similar comments in Cuervo-Lorens & Zabik v. Carpenter, the court concluded that the defendant’s evidence did not demonstrate any genuine issue for trial on mitigation or improvidence.

Outcome and monetary award

The court granted the plaintiffs’ motion for summary judgment, finding this to be an appropriate case for final determination without trial. It accepted that the plaintiffs had acted reasonably in their efforts to resell the property and that the $1,500,000 resale, reached after months of open-market exposure and several price adjustments, represented the best evidence of fair market value at the time. The court therefore calculated damages as the $900,000 difference between the $2,400,000 APS price and the $1,500,000 resale price, plus $6,940.86 in property taxes and $1,957.33 in legal costs, for a gross total of $908,898.69. After crediting the $100,000 deposit previously paid by the defendant, the net damages awarded in favour of the plaintiffs were $808,898.69. The decision did not fix any specific amount for party-and-party costs of the litigation itself; instead, the judge directed the parties to exchange brief written costs submissions if they could not agree, leaving the precise quantum of costs to be determined later. As a result, the successful parties are the plaintiffs, and the total quantified monetary award at this stage is $808,898.69 in damages, with any additional costs award yet to be set and therefore not presently ascertainable.