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The Court of Appeal dismissed the purchasers' appeal regarding post-closing HST liability because they suffered no loss.
This appeal concerned a post-closing dispute over HST liability following the sale of a mixed-use property.
The purchasers' counterclaim, alleging HST liability, was dismissed at trial on the basis that they suffered no loss and arguably benefited from a windfall.
The Court of Appeal upheld the trial judge's finding that the purchasers suffered no loss, which justified the dismissal of the counterclaim.
Consequently, the appeal was dismissed, and it was deemed unnecessary to address other legal arguments regarding the Excise Tax Act or post-closing readjustment.
Vendor assumed HST risk in real estate sale, but buyers awarded no damages due to lack of loss.
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.
