Court File and Parties
COURT FILE NO.: CV-20-651894
DATE: 20210520
ONTARIO SUPERIOR COURT OF JUSTICE
RE: MEHRAN KERAMATI, Applicant
-and-
YUN CHU KO and RE/MAX WEST REALTY INC., BROKERAGE, Respondents
BEFORE: F.L. Myers J.
COUNSEL: Craig Colraine, for the applicant Symon Zucker, for the respondent Ko.
HEARD: May 18, 2021
ENDORSEMENT
Background
[1] Mr. Keramati seeks an order that Ms. Ko has forfeited her deposit of $100,000 paid under an agreement of purchase and sale dated November 25, 2019.
[2] Ms. Ko bought Mr. Keramati’s condominium. But she could not fund the purchase and did not close. She alleges no breach by Mr. Keramati and she advances no lawful entitlement to breach the contract. Rather, she submits that the court should grant relief from forfeiture to prevent the Mr. Keramati from obtaining an unconscionable windfall by keeping her deposit.
[3] For the reasons that follow, I grant judgment for Mr. Keramati. This is not a case for relief from forfeiture. The respondent Re/Max shall release the deposit to the applicant.
Facts
[4] The facts are not in dispute. I take the following from para 5 of the Ms. Ko’s factum:
- The parties to this Application are in substantial agreement as to the facts of this case, as set out in paragraphs 8-21 of the Vendor's factum, and summarized below:
a. The Vendor and the Purchaser entered into the APS to purchase the Property on or about November 25, 2019.
b. As set out in the APS, the purchase price for the Property was $1,410,000.00.
c. The Purchaser put down a $100,000.00 deposit towards the purchase price of the Property, which is currently being held in trust by Re/Max.
d. The closing date for the purchase was February 28, 2020.
e. On February 27, 2020, the Purchaser advised the Vendor, through counsel, that she was unable to complete the purchase, and that she wished to terminate the APS. On the closing date, the Vendor was ready, willing, and able to close the transaction.
f. The Vendor estimates that his damages suffered as a result of the failure to close amounted to $11,000.00.
g. Within less than two weeks of the failed transaction, the Vendor entered into a new APS with subsequent buyer, selling the Property for $1,525,000.00.
[5] Ms. Ko also testified that she listed for sale another condominium that she owns in Toronto to try to fund her purchase from Mr. Keramati. Ms. Ko instructed her agent to price that condominium for a quick sale. After two weeks, she reduced the price by $20,000. But it did not sell in time.
[6] In addition, Ms. Ko listed for sale two other properties that she owned in Iran. They too did not sell in time.
[7] Ms. Ko also notes that she did not seek an extension of the sale as some purchasers might have done. Rather, she freed Mr. Keramati to re-sell his condominium and, as a result, he re-sold it quickly, with little cost or inconvenience, for an additional $115,000.
[8] The parties accept as well that Mr. Keramti incurred carrying costs of approximately $11,000 waiting for the second sale to close after the closing date of the sale to Ms. Ko passed. These costs need to be netted from the gain of $115,000 to arrive at a profit figure of $104,000 for Mr. Keramati.
The Law
[9] The only question before me is whether the court should relieve Ms. Ko from the forfeiture of her deposit.
[10] The respondent submits that, on the particular facts of this case, Mr. Keramati is receiving an unconscionable windfall that should offend the conscience of the court.
[11] The applicable law is not in doubt. In Azzarello v Shawqi, 2019 ONCA 820 at para 45, the Court of Appeal wrote:
Where the vendor suffers no loss, the vendor may nevertheless retain the deposit, subject to relief from forfeiture.
[12] In [Redstone Enterprises Ltd. v.