Call us: (905) 366 9700

Legal Blog


Posted on October 1, 1999 | Posted in Lawyers' Issues

We have had a clear rule of law in Ontario since at least 1974 as a result of the Court of Appeal decision in King v. Urban & Country Transport Ltd., 1 O.R. (2d) 449. Unfortunately, not all real estate lawyers understand the concept enunciated in that decision. The most recent case in which this misunderstanding is apparent is the 1999 unreported Ontario Court of Appeal decision in Domicile Developments Inc. v. MacTavish.

The Facts

The purchaser of a new home notified the builder that the purchaser did not intend to complete the agreement of purchase and sale and requested the return of the purchaser’s deposit. The builder’s lawyer wrote back and notified the purchaser that the builder would not return the deposit and that the builder remained ready, willing and able to perform its side of the bargain.

However, by the closing date the builder had not substantially completed the home. The closing date came and went and neither party did anything at that time. Sometime later, the builder completed the home and sold it to a third party for an amount that was $85,000 less than the original sale price. The builder sued for damages.

The Rule

If there has been an anticipatory breach of contract prior to the closing date, the contract remains alive unless the innocent party accepts the repudiation by notifying the party at fault that the contract is at an end, subject to the innocent party’s right to claim damages. If the contract remains alive, then, on the completion date, each party must still be ready, willing and able to close the transaction. Tender is one method of proving this.

If neither party is ready, willing and able to complete the transaction on the closing date, the contract remains alive but in limbo. Within any reasonable time on or after the closing date, either party may set a new date for closing and that new date will be treated as the date set out in the contract for completion.


By this time, it should be apparent what the decision was in the Domicile case. The builder lost.

The builder never accepted the purchaser’s repudiation of contract. Therefore, the contract remained alive and the obligations of each party to it continued. Since the home had not been completed by the closing date, the builder was not ready, willing and able to close the transaction. The purchaser, obviously, had no intention to close the transaction. The contract remained alive.

Since the builder never gave notice setting a new closing date, the builder had no right to damages upon re-sale of the house to someone else.

After this decision, do you think that the builder’s real estate lawyer is still acting for the builder?


Download our free checklist:

“10 Questions to ask before hiring a law firm”


Speigel Nichols Fox LLP