Ontario Superior Court of Justice

Court File No.: CV-22-79866
Date: 2025-07-14

Between

Vineet Khanna
Applicant
Counsel: S. Ahmad

-and-

Hendrik Wilhelm Holzel, and Leonie Jacoba Holzel, by her Litigation Guardian, Hendrik Wilhelm Holzel
Respondents
Counsel: S. Bilato

Heard: May 27, 29-31, 2024; October 30-31, 2024; June 2-3, 2025

Reasons for Judgment
Justice M. Valente

Introduction

[1] In this application, the Applicant seeks damages for the Respondents’ breach of an agreement for purchase and sale of real property. Pursuant to the agreement of purchase and sale, dated January 14 and 16, 2021, between the Applicant, as purchaser, and the Respondents, as vendors (the “Agreement”), the Applicant agreed to purchase from the Respondents, and the Respondents agreed to sell to the Applicant, the lands municipally known as 563 Shaver Road, Ancaster (the “Lands”).

[2] By order of Donohue, J., dated September 12, 2023 (the “Order”), this court found that the Respondents had breached the Agreement. Pursuant to the Order, the Applicant’s damages resulting from the Respondents’ breach were to be assessed by means of a “mini trial” as defined by the terms of the Order. That trial proceeded before me.

[3] At the commencement of trial, the parties agreed that the date of the Respondents’ breach of the Agreement was February 16, 2022.

[4] The Applicant (sometimes referred to as “Mr. Khanna”), testified on his behalf and called evidence from Don Conte, accredited appraiser, who was qualified by this court as an expert to provide his opinion with respect to the market value of the Lands as at April 8, 2024. The Respondent, Hendrik Wilhelm Holzel (“Mr. Holzel”), testified on behalf of himself and his spouse. The Respondents also relied on the testimony of accredited appraiser, Pat Del Sordo, who, like Mr. Conte, was qualified to provide expert opinion evidence with respect to the market value of the Lands.

[5] This is my Judgment with respect to the assessment of the Applicant’s damages.

Background Facts

[6] The Agreement provided for a purchase price of $1,985,000 and an original closing date of August 16, 2021. Upon the acceptance of the Applicant’s offer by the Respondents on January 16, 2021, the Applicant paid a deposit of $50,000 to the Respondents’ real estate agent. Ten days later, on January 26, 2021, the Applicant waived all of the conditions to the Agreement.

[7] The Lands are a rural residential property consisting of 4.40 acres with a home that was originally constructed in 1965 and an addition constructed later in 2004. At the time that the Agreement was executed, the dwelling consisted of two storeys with a walkout basement. Although it is currently a fourplex, in January 2021 the residence consisted of a three bedroom apartment on the second floor, a three bedroom main floor apartment where the Respondents lived, and a finished basement. There was also a three car attached garage that was converted to offices from which Mr. Holzel operated his business. The Lands also had an inground pool and were for the most part treed.

[8] On June 16, 2021, 2567649 Ontario Inc. (“256”), with Abdul Hamid Hakimi (“Mr. Hakimi”) as its principal, registered a certificate of pending litigation against the Lands. The certificate of pending litigation originated from an action commenced by 256 on June 5, 2021. The 256 statement of claim sought specific performance of an agreement to purchase the Lands by 256 from the Respondents for a purchase of $1,720,000 and a completion date of August 18, 2020.

[9] On August 10, 2021, the Respondents’ motion to vacate the certificate of pending litigation registered by 256 was dismissed by Parayeski, J.

[10] On August 18, 2021, the Applicant and the Respondents entered into an extension agreement pursuant to which they agreed to extend the original completion date of August 16, 2021 for six months to February 16, 2022 with the Respondents having the option to extend the Agreement an additional three months in the event that the litigation between them and 256 had not been resolved. In consideration of Mr. Khanna extending the closing date, the Respondents agreed to pay a fee of $3,000 for each month that the Agreement was extended (“the Extension Fee”). The Respondents failed, however, to pay Mr. Khanna the Extension Fee.

[11] On September 28, 2021, the Respondents sold the Lands for $1,720,000 to 563 Shaver Holdings Inc., a corporation controlled by Mr. Hakimi.

[12] In anticipation of purchasing the Lands, the Applicant sold his family’s home at 8623 Creditview Road, Brampton (the “Creditview Property”). The sale of the Creditview Property was completed on August 31, 2021 for $2,525,000 with net proceeds of $1,408,878.34 realized from the sale.

[13] After the sale of the Creditview Property, Mr. Khanna, his spouse and two children required living accommodations. Mr. Khanna rented a three bedroom furnished Mississauga townhouse from City Gates Suites from September 1, 2021 to November 30, 2022 at an initial rate of $5,000 for each thirty day period which rate increased on June 1, 2022 to $6,400 for each thirty day period thereafter. From the City Gates Suites townhouse, the Applicant and his family ultimately moved to 1641 Blythe Road, Mississauga (the “Blythe Property”) where Mr. Khanna had constructed a custom home, not originally for his family but rather as an investment property.

[14] Following the sale of the Creditview Property, on October 27, 2021, the Applicant, through his mortgage brokerage company, Country Wide Business Solutions Inc., agreed to purchase a mixed commercial and residential building with three apartment units located at 1710 Lakeshore Road, Mississauga (the “Lakeshore Property”). The Lakeshore Property closed on February 1, 2022 for a purchase price of $1,385,000.

[15] On October 17, 2023, and pursuant to the Order, the Applicant’s $50,000 deposit for the purchase of the Lands was repaid to him plus interest of $3,661.12.

Position of the Parties

[16] The Applicant seeks three alternative remedies to compensate him for the Respondents’ breach of the Agreement. First, he seeks rescission of the Agreement and to be put back in the position that he was prior to entering into the Agreement. Mr. Khanna submits that to be put in the same position as he was in January 2021, he is entitled to damages including the increased market value of the Creditview Property, the entire cost of his City Gates Suites temporary townhouse accommodation, and interest on the $50,000 deposit at 6.3 percent for a total equitable damage award in the amount of $476,659.14 plus interest.

[17] Should the court choose not to exercise its discretion to award restitution damages, Mr. Khanna seeks two alternative forms of expectation damages: damages in lieu of specific performance and damages that would put him in the same position as he would have been in had the Agreement been completed as it was intended.

[18] In the first instance, damages are to be assessed as at the date of trial in order that the awarded damages are a true substitute for specific performance. The Applicant submits that the difference in the purchase price of the Lands and its market value at trial is $346,000 which together with the other heads of damages that he claims, including the cost of temporary housing, the unpaid extension fee and moving expenses, entitle him to a total award of $414,039.00 plus interest.

[19] Finally, Mr. Khanna submits that were this court to opt to put him in the same position as he would have been in had the contract been performed, then the difference between the purchase price of the Lands and its market value as at the date of the Respondents’ breach, agreed to be February 16, 2022, is $391,243.50, entitling him to a global principal award of $459,282.50, inclusive of all heads of damages.

[20] It is the Applicant’s position that each of these three alternative remedies are available to the court, and it is at the court’s discretion to determine which remedy is the most reasonable to compensate him for his loss.

[21] For their part, the Respondents submit that when a vendor breaches an agreement to sell real property, the normal measure of the innocent purchaser’s damages is the difference between the purchase price and the market value of the real estate on the date the sale was to be completed. The Respondents further submit that in this instance there is no reason to deviate from the norm. In addition, the Respondents’ position is that because the Applicant has failed to provide the court with any reliable evidence with respect to the market value of the Lands as at February 16, 2022, he is not entitled to be compensated for the loss with respect to any appreciation in the value of the Lands. Similarly, the Respondents submit that because Mr. Khanna has failed for the most part to satisfy his burden of proving his remaining damage claims, this court should compensate the Applicant in the limited principal amount of $23,000 plus interest at the prescribed rate.

Legal Principles and Analysis

[22] The general principle for the assessment of damages is compensatory, or in other words, that the innocent party be placed in the same position as if the contract had been performed. Where the contract is one of sale, this principle normally leads to an assessment of damages as at the date of the breach (see Semelhago v. Paramadevan [1996] S.C.R. 415 (“Semelhago”), at para. 12 quoting from Johnson v. Agnew, [1980] A.C. 367).

[23] Whereas the court has the power to deviate from this general principle or to fix such other date as may be appropriate in circumstances where fairness requires it, the presumption of assessing damages as at the date of breach should not be easily displaced; any deviation must be based on legal principle (see Semelhago, at para. 12; Rougemont Capital Inc. v. Computer Associates International Inc., 2016 ONCA 847, at para. 50).

[24] The rationale for the general presumption that damages are to be assessed as of the date of breach was articulated by Laskin J.A., concurring in Kinbauri Gold Corp. v. Iamgold International African Mining Gold Corp. (2004), 246 D.L.R. (4th) 595 (Ont. C.A.), at para. 125, in this way:

As Cronk J.A. points out, damages for breach of contract are generally assessed at the date of breach. An early crystallization of the plaintiff’s damages promotes efficient behaviour; the litigants become as free as possible to conduct their affairs as they see fit. Early crystallization also avoids speculation: the plaintiff is precluded from speculating at the defendant’s expense by reaping the benefits of an increase in the value of the goods in question without bearing any risk.

[25] Courts have deviated from the compensatory assessment of damages principle where a party to a contract has made a false or misleading material representation that the innocent party relied on to enter into the contract. In such instances, courts have exercised their discretion to order that the contract be rescinded. Rescission is an equitable remedy that is designed to put the contracting parties back in the positions they were in before entering into the contract, and in this way the assessment of damages is not compensatory (see: 10000425140 Ontario Inc. v. 1000176653 Ontario Inc., 2023 ONSC 6688, at paras. 157 and 158).

[26] Secondly, as the Supreme Court of Canada made clear in Semelhago, while the assessment of damages may be compensatory, “it would not be appropriate to insist on applying the date of breach as the assessment date when the purchaser of a unique asset has a legitimate claim to specific performance and elects to take damages instead” (at para. 14). In this instance, the damages that are awarded must be a true substitute for specific performance, and as such, fairness requires that they be assessed not in accordance with the general presumption as the date of breach but rather as at the date of trial (see: Semelhago, at para. 16).

[27] The issue to be addressed therefore is whether this is an appropriate case to order rescission of the Agreement or damages in lieu of specific performance.

(a) Rescission

[28] Before addressing the availability of the remedy of rescission in any substantive way, I note that while the Applicant has claimed equitable relief in the generic sense, Mr. Khanna has not specifically sought rescission of the Agreement in his amended notice of application. His failure to do so would normally be fatal to this court rescinding the Agreement at trial but for the Respondents’ concession that I may consider the remedy as available to Mr. Khanna.

[29] The Supreme Court of Canada in Guarantee Co. of North America v. Gordon Capital Corp., [1993] 3 S.C.R. 423, at para. 39, described the circumstances in which the remedy of rescission is to be awarded in this way:

Where one party to a contract expressed by word or act in any unequivocal manner that by reason or fraud or essential error of a material kind inducing him to enter into the contract he has resolved to rescind it, and refused to be bound by it, the expression of his election if justified by the facts, terminates the contract, puts the parties in status quo ante and restores things, as between them, to the position in which they stood before the contract was entered into (at para. 39).

[30] The Applicant submits that he is entitled to rescission of the Agreement because Mr. Holzel fraudulently misrepresented that the Respondents had good title to the Lands when he knew that there was a binding agreement to sell the Lands to a third party. Furthermore, the Applicant submits that Mr. Holzel’s representation was not only fraudulent, but it was material in the sense that it induced him to purchase the Lands.

[31] I do not find, however, that the remedy of rescission is available to Mr. Khanna.

[32] First, at no time did Mr. Khanna rescind the Agreement. The timely election to rescind the contract is a precondition to the remedy that the Applicant is now seeking. Furthermore, in his application, Mr. Khanna seeks damages in lieu of specific performance. To my mind the two remedies are mutually exclusive.

[33] Second, based on the record before me, I make no finding of fraudulent misrepresentation on the part of Mr. Holzel. The undisputed evidence of Mr. Holzel is:

• Sometime in 2019, the Respondents listed the Lands for sale. The Respondents’ realtor introduced Mr. Holzel to Mr. Hakimi who advised him that he was a part of a purchasing group who wished to buy the Lands to construct a mosque.
• Mr. Holzel was not sure of the purchase price, the closing date, or the amount of the initial deposit but his recollection was that the purchase and sale agreement with Mr. Hakimi’s numbered company was without conditions notwithstanding the purchasing group were required to obtain a satisfactory environmental assessment for the proposed use of the Lands.
• The environmental assessment was undertaken in the fall of 2019.
• There were, however, several issues and delays with the completion of the transaction and the transaction was extended by mutual agreement.
• When the transaction did not close as agreed a second time, on the advice of their lawyer, the Respondents re-listed the Lands for sale with a different agent with the result that the Agreement was signed in mid-January 2021.
• In the meantime, the group led by Mr. Hakimi took no steps to enforce their agreement to purchase the Lands until June 2021, some six months after the Agreement was signed, resulting in the registration of the certificate of pending litigation.
• On August 10, 2021, the Respondents moved to set aside the certificate of pending litigation so that they could complete the Agreement but were unsuccessful.
• Following the Respondents’ failed attempt to vacate the certificate of pending litigation, their lawyer mistakenly represented to the Applicant’s lawyer that the Respondents were still intent on completing the Agreement when the Applicants had decided to sell to the group led by Mr. Hakimi.

[34] Although Mr. Holzel might be criticized for being naïve, perhaps careless, and even negligent in not securing a release from the Hakimi group with respect to the earlier 2020 purchase and sale transaction and in not ensuring that his instructions were accurately communicated by his lawyer to Mr. Khanna’s lawyers, there is no basis to find that Mr. Holzel made fraudulent material representations to Mr. Khanna that induced him to enter into the Agreement. In sum, the evidence falls far short of supporting the equitable remedy of rescission.

(b) Specific Performance

[35] In its 1996 decision of Semelhago, the Supreme Court severely limited the availability of the remedy of specific performance. In Semelhago, the Court acknowledged that “while at one time the common law regarded every piece of real estate to be unique, with the progress of modern real estate development this is no longer the case” (at para. 21). Sopinka J. observed that specific performance will only be granted if the plaintiff can demonstrate that the subject property is unique in the sense that it has some “peculiar and special value” to the plaintiff (at para. 21) and that “its substitute would not be readily available” (at para. 22).

[36] Today it is well settled that in order to be granted specific performance, the plaintiff must prove:

i. The subject property is unique;
ii. Damages are comparatively inadequate to do justice; and
iii. There is a fair, real, and substantial justification for the claim of specific performance.
(see: Lucas v. 1858793 Ontario Inc. (Howard Park) (“Lucas”), 2021 ONCA 52, at para. 71).

[37] As the Court of Appeal stated in Lucas at para. 74, “uniqueness” does not mean singularity or incomparability. Rather it means that the property has “a quality that cannot be readily duplicated elsewhere. This quality should relate to the proposed use of the property and be a quality that makes it particularly suitable for the purpose for which it was intended” (see: John E. Dodge Holdings Limited v. 805062 Ontario Limited, at para. 39; Lucas, at para. 74).

[38] Whether the property is unique, has both a subjective and an objective component (see: Silverberg v. 1054384 Ontario Ltd., 2009 ONCA 698, at para. 19).

[39] In the lower court decision of John E. Dodge Holdings Limited v. 805062 Ontario Limited, 2001 CarswellOnt 3984 (OSCJ), Lax J. stated at para. 59:

In terms of the subjective aspect, the court should examine this from the point of view of the plaintiff at the time of contracting. In some cases, there may be a single feature of the property that is significant, but where there are a number of factors, the property should be viewed as a whole. The court will determine objectively whether the plaintiff has demonstrated that the property has characteristics that make an award of damages inadequate for that particular plaintiff. Obviously, investment properties are candidates for damages and not specific performance.

(see also Lucas, at para. 75).

[40] The principle that specific performance is the exceptional remedy where the purchaser’s interest is investment or resale was first addressed by Adams J. in Domowicz v. Orsa Investments Ltd. and later affirmed on appeal in Domowicz v. Orsa Investments Ltd.. Specific performance is the exceptional remedy in the case of a purchaser who intends to use the property as an income producing asset or where the purchaser acquires the property for profit or resale because such a purchaser would normally have no subjective attachment to the property. Furthermore, where a purchaser seeks to profit from their investment, and the vendor fails to complete the sale where other investments are not readily available, damages can be awarded to compensate the plaintiff purchaser for the diminished quality of the investment.

[41] In Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51 (“Southcott Estates”), the Supreme Court stated that “a plaintiff deprived of an investment property does not have a ‘fair, real, and substantial justification’ or a ‘substantial and legitimate’ interest in specific performance (Asamera, at paras. 668-669) unless he can show that money is not a complete remedy because the land has a ‘peculiar and special value’ to him (Semelhago, at para. 21, citing Adderley, at para. 240).”

[42] The Applicant submits that he has established that the Lands are unique. The submission is founded on his evidence that the Lands included “a beautiful, three-unit home, located on approximately 4 acres, walking distance from a nearby shopping plaza and restaurants. It had a pool in the backyard which [his] children…would have really enjoyed”.

[43] I find, however, that the Lands are not unique as required by the jurisprudence. I have reached this conclusion for the following reasons:

• The dwelling on the Lands consisted of three apartment units. The Applicant’s evidence was that he intended to move his family into the main floor apartment, but it was not suitable for his family of four without renovation.
• The Applicant planned to move his family into the upstairs unit temporarily while the renovations were undertaken. Once the renovations were completed and the family had moved into the main floor unit, they would then decide their long term plans for the Lands “based on how we enjoyed living in the main unit”.
• Once the Applicant’s family had moved into the main floor unit, his immediate intention was to lease the second floor and basement units. The Agreement contemplated the Respondents were to install two extra residential hydro meters at their expense prior to the closing.
• The Applicant testified that when he offered to buy the Lands, his intention was in part to develop a portion of the property because the Lands were of such a substantial size.
• In response to the undertaking given on his cross-examination to particularize his damages, the Applicant stated that he and his family would have lived at the Lands “for at least a year”. By November 2022, they could have decided to either sell the Lands and move into the Blythe Property – or sell the Blythe property and continue to reside at the Lands, depending on the market and the living conditions at the time.
• There is no evidence to suggest that the Applicant was searching for property in the area of the Lands for any period of time, that he was prepared to pay in excess of the listing price for the Lands, or any evidence about any physical attributes of the house on the Lands that made it objectively unique.

[44] After considering all of these factors, including the unsuitable condition of the Lands to meet the Applicant’s immediate needs, his uncertainty with respect to the appropriateness of the Lands for his future use and happiness, and the Applicant’s intention to purchase the Lands both as a source of income and for profit, I find that the Lands are not unique subjectively or objectively. In these circumstances, I am not satisfied that the Lands have a quality that make them especially suitable for the proposed use as a family home for the Applicant and that the Lands cannot be reasonably duplicated elsewhere. Nor am I satisfied that the Lands have “a peculiar and special value” to the Applicant as required by the Supreme Court in Semelhago to grant him the remedy of specific performance.

[45] Furthermore, although in the circumstances of this case I need not address the second and third factors as articulated in Lucas to determine whether Mr. Khanna is entitled to specific performance, I nonetheless find that the behaviour of the parties and a weighing of equities at play do not favour the granting of specific performance or, as in this case, damages in lieu thereof. I have already found that Mr. Holzel did not make fraudulent representations to Mr. Khanna that induced him to enter into the Agreement. Additionally, there is no evidence to support the proposition that Mr. Holzel acted in bad faith to terminate the Agreement. Otherwise, the Applicant has not pointed to any other conduct on part of the Respondents that may suggest the equities support the remedy of specific performance.

(c) Damages as at the Date of Breach

[46] Given my findings that the remedies of rescission and damages in lieu of specific performance are not available to the Applicant, I am left to determine his damages pursuant to the normal measure in failed real estate transactions, being the difference between the purchase price and the market value of the property on the date the sale was to be completed. It is an agreed fact that February 22, 2022 was to be the completion date.

[47] It is trite law that the Applicant bears the burden of proving the quantum of his damages and he is entitled to recover any reasonable damages that reasonably flow from the breach of the Agreement by the Respondents (see: Hadley v. Baxendale, (1854) 9 Exch. 341).

[48] Assessing market value for the purpose of damages of a purchase agreement for the sale of land generally requires appraisal evidence (see: The Rousseau Group Inc. v. 2528061 Ontario Inc., 2023 ONCA 814, at para. 74).

[49] The only expert appraisal evidence before the court respecting the market value of the Lands is as at April 8, 2024, the anticipated commencement date of trial. Don Conte, the Applicant’s expert, values the Lands as at April 8, 2024 in the amount of $2,331,000 and the Respondents’ appraiser, Pat Del Sordo, opines that the market value of the Lands as at the same date was $2 million.

[50] The Respondents submit that because Mr. Khanna has failed to lead expert evidence with respect to the market value of the Lands as at the date of breach, the court is unable to reach a fair and just determination of Mr. Khanna’s damages respecting the difference in the value of the Lands, and therefore, no amount should be awarded to compensate him for this head of damages.

[51] The Applicant submits that there is no expert evidence before the court respecting the market value of the Lands as at the date of breach because until the eve of trial there was no agreement between the parties regarding the completion date. Specifically, there was disagreement as to whether the relevant date was the original completion date of August 16, 2021 or the extended closing date of February 16, 2022.

[52] I am not moved by this explanation. The Applicant bears the burden of proving his damages and he could have just as easily retained Mr. Conte to provide his opinion with respect to the market value of the Lands as at August 16, 2021 and February 16, 2022 as he did for the date of April 8, 2024.

[53] Nonetheless, and notwithstanding the lack of expert evidence on this relevant issue, the Applicant submits this court is able to calculate his loss of appreciation in the market value of the Lands based on the evidence that is available, drawing reasonable inferences and using common sense (see: Market Traders Institute Inc. v. Najam Mahmood et al., [2008] O.J. No. 5065, at para. 6). The Applicant further submits that it is a well established principle that where damages are by their inherent nature difficult to assess the court must do its best to assess the loss in the circumstances even to the point of resorting to guesswork.

[54] Both experts used the Direct Comparison Approach to Value (as defined in their respective testimonies) to determine the market value of the Lands although Mr. Conte undertook a quantitative analysis while Mr. Del Sordo’s analysis was qualitative, and for the most part, the two experts used different comparable properties.

[55] Because one of the comparable properties in Mr. Del Sordo’s analysis, specifically “Comparable No. 4”, was sold in the summer of 2023 before values dipped in the autumn of 2023, the Respondents’ expert applied a downward adjustment to this comparable property to account for market conditions. He did this before considering additional adjustments to the time adjusted price of Comparable No. 4 to assist him in reaching an opinion as to the value of the Lands as of April 8, 2024. Mr. Del Sordo calculated his downward adjustment by determining the percentage change in the Ancaster average sale price in July 2023, as reported by the Realtors Association of the Hamilton-Burlington Real Estate Board (the “RAHB”), to the Ancaster average sale price in April 2024. The decrease in the average sale price of 13.91% from the time that Comparable No. 4 was sold was applied to this property’s sale price to arrive at its time adjusted price to bring it in line with the sale price of the three other comparable properties considered by Mr. Del Sordo.

[56] The Applicant submits that were the court to apply this same methodology and use the average sale prices for Ancaster properties for the date of sale (January 14, 2021) and the date of breach (February 16, 2022), as reported by the RAHB in the testimony of Mr. Del Sordo, the court could reasonably assess the loss of appreciation in the market value of the Lands.

[57] Specifically, the Applicant submits the average sale price of an Ancaster residential property as reported by the RAHB in January 2021 was $1,100,000 whereas the average sale price in February 2022 was $1,370,000, resulting in a percentage sale price increase of 19.71%. Applying this same percentage increase to the Agreement’s sale price of $1,985,000, the Applicant submits that the difference between the sale price of the Lands and their market value as at the date of breach is $391,243.50.

[58] I am not prepared to accept the Applicant’s submission as a reasonable and fair method to calculate his loss in the appreciation of the value of the Lands. I find it to be speculative and uncertain for two reasons.

• First, Mr. Del Sordo applied the Ancaster average price decrease of 13.91% between July 2022, and April 2024 not to determine the market value of Comparable No. 4, but rather, its time adjusted price before considering such other factors as its location, lot size, dwelling size, and building condition, all of which Mr. Del Sordo quantitatively adjusted upward, downward or neutrally in comparison to the Lands to establish, in conjunction with the other comparables, the market value of the Lands. In other words, Mr. Del Sordo’s adjustment of Comparable No. 4 to take into account the prevailing market conditions cannot be considered in isolation of the whole of his qualitative analysis which ultimately determined, not the market value of Comparable No. 4, but rather the Lands themselves.
• Second, the concept of using the percentage change in the average sale price to determine the market value of the Lands is inherently flawed because, as Mr. Del Sordo testified, the RAHB’s average monthly sales figures include semi-detached homes and residential condominiums, neither of which are comparable to the Lands. Furthermore, the Ancaster average sale prices do not account for the location, size, and condition of the Lands. By definition the average monthly sale prices are representative of a wide variety of properties sold in a month without any consideration for the specific characteristics of the Lands. Were the Applicant’s proposed method of determining the market value of the Lands a reasonable and reliable means of assessing his damages, there would be little need for the expert opinion of qualified appraisers.

[59] Without any expert testimony or any reliable evidence as to the market value of the Lands as at February 16, 2022, other than the expert evidence that market values increased in Ancaster from January 2021 and reached their peak in March 2022 before declining, the Applicant would have the court assess his loss in a “rough and ready manner” (see: Hertzog v. Highwire Information Inc., [1977] FCJ No. 968). I am not prepared to do so.

[60] I am reminded by the Court of Appeal’s direction in Martin v. Goldfarb (1998), 41 O.R. (3d) 16 and more recently in Westmount-Keele Limited v. Nicolas C. Tibollo Professional Corporation, 2025 ONCA 401. In both decisions, the Court stated that where the assessment of damages is difficult because of the nature of the damage proved, the difficulty of assessment is no ground for refusing substantial damages even to the point of resorting to guesswork (see: Westmount-Keele quoting Martin, at para. 24). However, the Court of Appeal also made very clear in Westmount-Keele, that the assessment of damages by guesswork is to be confined to cases where damages by their inherent nature are difficult to assess (at para. 25). Otherwise, where the absence of evidence makes the assessment of damages an impossible task, the litigant is entitled to nominal damages at best (see: Westmount-Keele quoting Martin, at para. 24).

[61] The market value of the Lands on the date of breach is not inherently difficult to assess. Just as the Applicant provided evidence with respect to the market value of the Lands as at April 2024, he could have just as easily proffered evidence with respect to its value as at February 2022. However, he failed to do so.

[62] In these circumstances but taking into consideration the evidence of Mr. Del Sordo with respect to the increase in the average residential market values in Ancaster from January 2021 to March 2022 before declining, which I accept, I exercise my discretion to assess the Applicant’s loss in appreciation of the market value of the Lands in the amount of $50,000.

(d) The Applicant’s Mitigation

[63] Where the innocent party to a failed real estate transaction is entitled to compensatory damages, they have a duty to mitigate their losses. However, a defendant who alleges that an applicant has failed to mitigate damages bears the burden of proof. In this instance the defendant must prove both that the plaintiff has failed to make reasonable efforts to mitigate, and that mitigation was possible (see: Southcott Estates, at para. 24). Damages will be reduced by the extent to which mitigation would have avoided the loss (see: Southcott Estates, at para. 75). Mitigation does not, however, have to be perfect. As this court stated in O’Hare v. Wyton, 2018 ONSC 3946, at para. 36:

Innocent parties need not demonstrate flawless efforts at mitigation. They need only act reasonably, in view of the prevailing circumstances known at the time to exist. See DHMK Properties Inc. v. 2296608 Ontario Inc., 2017 ONCA 2432, reversed on other grounds, 2017 ONCA 961.

[64] The Applicant submits that he has satisfied his duty to mitigate with his February 2022 purchase of the Lakeshore Property through his mortgage brokerage company. Apart from submitting that the purchase of the mixed commercial and residential Lakeshore Property is evidence of the Applicant’s intention that the Lands were also to be an investment property, the Respondents have not made any submissions to establish that by acquiring the Lakeshore Property, Mr. Khanna failed to mitigate his losses, or conversely that with its purchase, Mr. Khanna has reduced his losses.

[65] In these circumstances, I am not prepared to reduce the Applicant’s assessed damages respecting the Lands’ loss of appreciation in value on the basis of the duty to mitigate.

(e) Extension Fee

[66] The Applicant claims payment of the agreed monthly fee of $3,000 to extend the Agreement from its original completion date of August 16, 2021. Specifically, Mr. Khanna submits that he is entitled to an extension fee of $27,000, calculated on the basis of the agreed fee of $3,000 for nine months.

[67] The Respondents agree that an extension fee is due and payable but for a period of six months.

[68] I accept the Respondents’ position.

[69] The parties agreed to extend the completion date to February 16, 2022 from August 16, 2021 at the rate of $3,000 per month with an option to extend the Agreement a further three months at the same rate at the discretion of the Respondents. The Respondents never exercised their option. Therefore, an extension fee of six months is due and owing, or a fee of $18,000.

(f) Cost of Temporary Accommodation

[70] Because the Respondents were not in a position to complete the sale of the Lands on the originally agreed completion date of August 16, 2021, the Applicant and his family were required to seek temporary accommodation through City Gates Suites at a rate of $5,000 for each thirty day period from September 2021 to May 2022, and thereafter, at a rate of $6,400 for each thirty day period.

[71] The parties are aligned that the Applicant should be compensated to some extent for the cost of his family’s temporary accommodation, but they differ on the quantum of compensation. Mr. Khanna seeks compensation in the amount of $39,039.00 whereas the Respondents submit that Mr. Khanna’s recovery should be limited to $5,000.

[72] The Respondents take the position that compensation for the Applicant’s temporary accommodation should be no more than $5,000 because although he has produced various City Gates Suites monthly invoices, and undertook to produce proof of payment, he has failed to do so save for one e-transfer. In these circumstances, the Respondents urge the court to draw the adverse inference that had Mr. Khanna’s banking records been produced, they would have not supported a finding that the entirety of the City Gates Suites’ invoices were paid.

[73] Drawing adverse inferences from the failure to produce evidence is discretionary. An adverse inference should not be drawn unless it is warranted in all the circumstances. What is required is a case-specific inquiry (see: Parris v. Laidley, 2012 ONCA 755, at para. 2).

[74] I am also reminded of this court’s direction in the Matter of the Management of Property of the Benjamin Cochrane Trust, 2021 ONSC 5228 (cited with approval by the Court of Appeal at 2023 ONCA 546, para. 89), that while invoices and receipts will often be the simplest and most reliable way to prove expenses paid, they are not the only way to satisfy the burden of proof. The court can draw reasonable inferences from the testimony and available documentary evidence and find that some or all of the disbursements claimed are legitimate.

[75] I am not prepared to make the adverse inference that has been asked of me by the Respondents. Rather I infer from the available evidence that the City Gates Suites invoices for the relevant period were paid. I reach this conclusion based on the following evidence:

• None of the produced invoices include an unpaid amount from the previous month as is the normal commercial practice in the event of a prior unpaid invoice.
• The City Gates Suites Accommodation Agreement is for an initial term of accommodation from September 6, 2021 to December 6, 2021. The term of accommodation was extended to July 31, 2022 by the City Gates Suites confirming email, dated May 30, 2022. The unchallenged evidence of Mr. Khanna is that it was further extended until he and his family vacated the townhouse in November 2022. City Gates Suites would not have agreed to extend the accommodation period beyond December 6, 2021 were Mr. Khanna in arrears of payment.

[76] Had the Agreement been performed, the Applicant and his family would have vacated their temporary accommodation by the end of February 2022. Therefore, based on the produced invoices for the period of September 2021 to February 2022, I assess the Applicant’s claim for temporary accommodation compensation at $30,500.

(g) Moving and Storage Expenses

[77] The Applicant seeks moving and storage expenses of $2,000 to move himself and his family from the Creditview Property to their interim townhouse accommodation and to store some of their surplus furniture. Mr. Khanna advances this claim where he personally moved himself and his family and stored surplus furniture at the Blythe Property. The amount claimed by Mr. Khanna is to compensate him for his time and any disbursements in undertaking these tasks. He has not, however, produced any evidence to support the amount claimed notwithstanding his undertaking to do so.

[78] Again, in these circumstances where the Applicant has failed to prove his damages despite an undertaking to do so, the Respondents submit that the court should make an adverse finding that Mr. Khanna suffered no loss.

[79] In response, the Applicant submits that his evidence with respect to the move into the City Gates Suites townhouse and the storage of surplus furniture is unchallenged. Furthermore, in the interest of “avoiding inundating” the court with his vehicle’s odometer readings and time logs to document his claim for this head of damages, he chose the “very conservative figure” of $2,000.

[80] While I accept the Applicant’s evidence that he moved his family and stored their excess chattels, I am not persuaded by his explanation for not proving his damages. He could have and should have done so. In the absence of that evidence and following the Court of Appeal’s direction in Westmount-Keele, I assess the Applicant’s moving and storage claim at $200.

(h) Equitable Interest

[81] Finally, the Applicant claims “equitable interest” on the principal amounts assessed by the court to be due and owing at the rate of 6.3% per annum in addition to the prejudgment interest rate prescribed by the Courts of Justice Act, R.S.O. 1990 c.C.43. The genesis of the 6.3% rate of equitable interest is Mr. Khanna’s evidence that in October 2022, when this application was issued, he was paying 6.3% per annum on a variable rate mortgage registered against an unidentified property.

[82] Apart from the Applicant’s failure to claim “equitable interest” in either his original application or June 2025 amended application, he has offered the court no rational basis, or otherwise, to order interest at the requested rate on his compensatory damages as I have assessed them. Accordingly, the request for “equitable interest” is dismissed and the prescribed prejudgment interest rate will apply from October 12, 2022.

Conclusion

[83] The Applicant’s claim for rescission is dismissed.

[84] The Applicant’s claim for damages in lieu of specific performance is dismissed.

[85] The Applicant’s claim for “equitable interest” is dismissed.

[86] The Applicant shall have judgment against the Respondents as follows:

• Loss in appreciation of the market value of the Lands: $50,000
• Extension fee: $18,000
• Cost of temporary accommodation: $30,500
• Moving and storage expenses: $200

Total: $98,700

[87] The principal sum of $98,700 bears prejudgment interest from October 12, 2022 at 2.8% per annum pursuant to s.128 of the Courts of Justice Act.

Costs

[88] I urge the parties to agree on the issue of costs. In the unfortunate event that they are unable to do so, I will consider cost submissions on the following basis:

• Within 14 days of the release of these Reasons for Judgment the party seeking costs will deliver their written submissions.
• Within 21 days of the release of these Reasons for Judgment the responding party will deliver their written submissions.
• There will be no right of reply.
• All submissions are not to exceed three pages, double-spaced, and shall not include footnotes.
• The page limitation does not include bill of costs, relevant offers, and case law.
• If submissions are not received within the above timelines, the parties will be deemed to have resolved the issue of costs and costs will not be determined by me.

Justice M. Valente
Released: July 14, 2025