The purchasers signed an Agreement of Purchase and Sale for a new home and paid a $10,000 deposit, but attempted to cancel the agreement the next day.
The Small Claims Court ordered the vendor to return $9,300 of the deposit, finding the vendor had not proven damages.
On appeal, the Divisional Court set aside the judgment and dismissed the purchasers' claim.
The court held that a true deposit may be forfeited without proof of damages upon a purchaser's default, and the purchasers failed to establish that the forfeiture was unconscionable or out of all proportion to the losses suffered to warrant relief from forfeiture.