The applicant, 2303757 Ontario Inc. ("230"), sought forfeiture of a $200,000 deposit held in trust by Bratty's LLP following a failed real estate transaction.
The respondent, 2149589 Ontario Inc. ("214"), claimed entitlement to the funds, arguing they were its money, paid without its full authorization, and that 230 was not a bona fide purchaser for value without notice.
The court found that the funds constituted a deposit subject to the Agreement of Purchase and Sale (APS), that 230 became a bona fide purchaser for value without notice when the agreement terminated due to the buyer's breach, and that 230 acquired an absolute interest in the funds at that time, regardless of whether they were physically in its hands.
The application for forfeiture was granted.
