SUPERIOR COURT OF JUSTICE - ONTARIO

CITATION: Buuck v. Murray, 2016 ONSC 858

COURT FILE NO.: 13-4194-SR

DATE: 2016-02-10

RE: June Buuck, Plaintiff

AND:

Stuart Murray (a.k.a. Stuart Cameron Murray) And

Ana Rodriguez (a.k.a. Ana Ariadna Rodriguez Garcia)

BEFORE: The Honourable Mr. Justice R.D. Reilly

COUNSEL: Meagan J. Swan, Counsel for the Plaintiff

Meaghan Richardson, Counsel for the Defendants

HEARD: January 18, 2016

RULING on notice of motion

[1] This is a notice of motion for summary judgment allowing the plaintiff’s claim as against the defendants jointly and severally for damages of breach of contract in the amount of $61,957.65.

[2] As an initial manner I declare that the deposit of $1,000 being held in trust by the plaintiff’s real estate lawyer, Mr. Craig Wilson, has been forfeited to the plaintiff. I further direct that the deposit of $1,000 being held in trust by the plaintiff’s real estate agency, Team Realty K. W. Inc., has been forfeited to the plaintiff.

[3] This is essentially an action for breach of contract. The plaintiff, June Buuck, was the owner of a residential property located at 98 Amos Avenue in Waterloo, Ontario. Under a continuing power of attorney Mrs. Buuck’s daughters, Christine Buuck and Michelle Buuck, took steps to sell their mother’s house on her behalf.

[4] The defendants Stuart Murray and Ana Rodriguez Garcia are both lawyers licensed to practise in Ontario. Stuart Murray has experience as a real estate lawyer.

[5] On or about September 25, 2011, the plaintiff listed the property at 98 Amos Avenue, Waterloo, for sale with a listing price of $345,000.

[6] On December 27, 2011, the defendants made an offer to the plaintiff to purchase the property for $310,000. This offer was accepted by the plaintiff.

[7] On December 30, 2011, the agreement was executed by the parties. The property was sold for $310,000 upon the defendants obtaining financing. The agreement was to be completed no later than March 30, 2012. A deposit of $1,000 was provided by the defendants with respect to the agreement.

[8] On January 14, 2012 the defendants waived all conditions, including the financing condition, pursuant to an amendment to the agreement.

[9] At the request of the defendants the plaintiffs agreed to have a 200 amp breaker installed so that the electrical baseboards could function properly. The plaintiffs retained Golden Triangle Electric to effect this repair at a total cost of $2,935.77.

[10] A day prior to the closing date the defendants requested an extension of the closing date and the plaintiff agreed to provide the first extension to April 16, 2012. This was on condition that the defendants would be responsible for utilities and insurance during the extension period and would provide an additional deposit. The defendants did agree and provided an additional deposit of $1,000. The closing date was extended.

[11] On April 16, 2012 the defendants failed to close the transaction and requested another extension to April 30, 2012 so they could arrange further mortgage financing.

[12] On April 17, 2012 the purchase failed to close.

[13] On April 28, 2012 the plaintiff authorized Mr. Ken Cameron of Re/Max Solid Gold Realty to relist the property for $319,000 to allow for the possibility of an offer as high as or higher than the original price.

[14] At the suggestion of Mr. Cameron, the plaintiff hired Burch Landscape Services to provide further landscaping to enhance the property’s curb appeal and marketability. This was at a cost of $1,932.30.

[15] Almost three months after this breach of the agreement no offers had been received on the property. Following Mr. Cameron’s advice the price was reduced to $299,900. This reduction was done on June 10, 2012.

[16] Between June 14, 2012 and June 17, 2012, following the reduction in price, two offers were received. One offer $290,000 from Ravi Dutt Sharma. The other was $285,000 from Raymond Zhu and Bay Zhu. The higher offer of $290,000 was accepted but was conditional on financing. This financing was not obtained and the offer fell through.

[17] Mr. Cameron recommended that the plaintiff attempt to accept the other offer from Raymond and Bay Zhu which had previously expired. Apparently the Zhus were out of the country and advised Mr. Cameron that they would be in touch when they returned.

[18] Four months after the breach of the agreement no other offers had been received. Mr. Cameron suggested that the list price for the property be reduced to $289,900. This reduction was done on August 14, 2012.

[19] Five months after the breach of the agreement an offer of $257,000 was received. This offer was rejected.

[20] Approximately 5½ months after the breach of the agreement the listing price of the property was reduced again to $269,900. This was again on the advice of Mr. Cameron.

[21] On October 5, 2012 an offer was again received for $245,000, which was rejected by the plaintiffs.

[22] On or about October 6, 2012 Raymond Zhu and Suli Zhang made an offer of $260,000. This was the highest of any recent offer and the plaintiffs accepted it. An agreement of purchase and sale was signed by the plaintiffs on October 7, 2012 and the sale closed successfully on October 26, 2012.

[23] In sum, the plaintiff suffered a diminution from the purchase price of $310,000, which the defendants had offered, to the ultimate sale price of $260,000.

[24] The normal measure of damages for a breach of contract under a sale of property would be the difference between the contract price at which the property was to be sold and the price of the subsequent sale. Having said that, the court must determine whether the seller has taken reasonable steps following the breach and that the resale maximized the return and mitigated any possible loss. The seller must demonstrate that reasonable steps were taken to reduce the loss flowing from the breach from the date of repudiation of the contract. When this is established, the onus then shifts to the purchaser to show that the damages could have been further reduced by reasonable acts, which were not undertaken by the plaintiffs.

[25] Having carefully considered the evidence in this case I conclude that notwithstanding the significant difference between the original offer to purchase and the ultimate sale price the plaintiffs did take every reasonable step to merchandise the property. The difference between the originally offered purchase price and the final sale price in this case is significant, yet I conclude on the evidence of the offered prices of other prospective purchases and the passage of time from the defendants’ breach of contract to the ultimate sale of the property, that the plaintiffs have acted reasonably.

[26] To summarize the law, the plaintiffs must demonstrate reasonable efforts from the date of repudiation. Once this has been established, which I have concluded in this case, the onus then shifts to the respondents to show that the damages could have been reduced by further reasonable acts not undertaken by the plaintiffs. Given the evidence, the relisting of the property at increasingly reduced values notwithstanding the diminution in the sale price, the plaintiffs have acted reasonably.

[27] The defendants are therefore required to pay damages to the plaintiffs for the loss on the property of $50,000. I am also prepared to award damages to the plaintiffs for other expenses incurred as a result of the delay in the sale of their property.

[28] I accept the accounting of plaintiffs’ counsel for the various expenses incurred. They include $583.38 for hydro costs during the period when the property was not sold, as well as property tax of $1,658.88, for a total of $2,242.26. I accept as well, plaintiffs’ counsel’s assessment of legal costs for the first aborted sale of $2,541.48, as well as prejudgment interest in the amount of $4,351.98. I therefore award damages from the defendants’ to the plaintiff of $59,135.72.

[29] I appreciate this is a significant amount. I have carefully considered whether the court should intervene to assess a new estimated value of the subject property at the time of breach of contract by the defendants. I choose not to do so. There is a clear loss of value based on the difference between the original price to purchase the property and the final sale price of the property. We are dealing with the principles of contract law and that is in my view, clearly the measure of damages. I therefore award those damages accordingly. The defendants will pay to the plaintiff the sum of $59,135.72, for breach of contract.

[30] If my calculations are in any way in error, the parties may address me by written submissions in chambers. If the parties are unable to agree on costs, they may as well, address me in brief submissions in chambers within 30 days of publication of this ruling.

R.D. Reilly J.

Date: February 10, 2016