The plaintiff sold shares of a real estate brokerage to the defendant purchaser under a share purchase agreement and promissory note for $490,000.
After making several instalment payments, the purchaser stopped paying and alleged numerous misrepresentations and breaches of warranty relating to financial statements, agent rosters, liabilities, and business operations, seeking damages and repayment through a counterclaim.
The court found that the purchaser was a sophisticated businessperson who conducted limited due diligence and knowingly proceeded without contractual protections or price adjustments.
Alleged misrepresentations regarding financial statements, agent numbers, liabilities, and business practices were unsupported, and the purchaser did not rely on them when entering the agreement.
Although the vendor breached the agreement by failing to provide audited financial statements, the breach caused no damage and was effectively waived.
The vendor was therefore entitled to recover the outstanding balance under the promissory note and the counterclaim was dismissed.