Legal Blog

Damages Mitigation

Arista Homes (Boxgrove Village) Inc. v. Lakhany 2019 Ont SCJ

Purchaser repudiated a house sale. The developer vendor did not attempt to re-sell the house aggressively because it might have caused difficulties with other buyers in the development whose purchases had not yet closed. After an appraisal obtained by the vendor, the parties agreed that the value of the house on the closing date was $800,000 rather than the sale price of $1,204,000. The vendor claimed the difference of $404,000 in damages and, in addition, forfeiture of the purchaser’s $100,000 deposit. The vendor made no claim for the house’s carrying charges after the closing date. The court held that the damages were $404,000 and that, given that the value of the property as at the date of closing was agreed, there was no necessity to mitigate. Indeed, the defendant had the onus to show that the plaintiff’s mitigation would have resulted in the sale of the property at a price greater than its value on closing and had supplied no evidence in that regard. The vendor tried to retain the deposit, in addition to the damages, relying on a clause that noted that the deposit monies were deemed not to be partial payments. The judge refused to do so; merely because the deposit was not a partial payment did not mean that it was not be credited towards the purchase price or the damages.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.