The appellants appealed a Small Claims Court decision awarding the respondent damages for mental distress and legal costs following the appellants' breach of a real estate purchase agreement.
The Divisional Court allowed the appeal, finding that damages for mental distress were not pleaded and are generally unavailable for breach of a real estate contract.
The court also set aside the award for legal costs incurred in contemplation of litigation.
However, the court held that the respondent was entitled to forfeiture of the $5,000 deposit paid by the appellants, even though actual damages were less than the deposit amount.
