The parties entered into an agreement of purchase and sale for a mixed-use property, with the contract specifying that HST was 'included in' the purchase price.
After closing, the Canada Revenue Agency reassessed the transaction, significantly increasing the HST payable.
The buyers cross-claimed for breach of contract, seeking a price adjustment for the reassessed HST amount.
The court found that the vendor had assumed the risk of HST and had a duty to adjust the price.
However, the court awarded no damages because the buyers suffered no actual loss, having received input tax credits that fully offset the reassessed HST.
