Patrick Bernard

The plaintiff Receiver sued the defendant purchaser for damages after the purchaser failed to close a $12.2 million agreement of purchase and sale for a luxury residential property.

The purchaser argued he was entitled to terminate the agreement and receive his deposit back because the property suffered substantial water and mould damage prior to closing, and that the Receiver anticipatorily breached the agreement by refusing to extend the closing date.

The court found that the damage was not substantial, the Receiver did not repudiate the agreement, and the purchaser breached the contract by failing to close.

The Receiver was awarded over $5.3 million in damages, including the deficiency in the resale price, auction fees, and holding costs.

The claimant and the bankrupt appealed two decisions of the Registrar in Bankruptcy that refused to extend the time for the claimant to appeal the Trustee's Notice of Disallowance of her claim to a beneficial interest in a property, and subsequently granted the Trustee's motion to sell the property.

The Superior Court found that the bankrupt had standing to appeal.

The Court held that the Registrar made palpable and overriding errors of fact in applying the test for an extension of time, specifically by ignoring evidence that the claimant formed an intention to appeal within the prescribed time and had a reasonable explanation for the delay.

The appeals were allowed, the Registrar's decisions were set aside, and the time to appeal the disallowance was extended.