Court File and Parties

Court File No.: CV-23-80679 Date: October 8, 2025 Superior Court of Justice – Ontario

Re: Jerry Romano and Shelley Romano, Plaintiffs (Defendants by Counterclaim) And: Lindsay Engel and James Marchand, Defendants (Plaintiffs by Counterclaim)

Before: MacNeil J.

Counsel:

• Matthew Cino – Lawyer for the Plaintiffs (Defendants by Counterclaim)
• Michael Odumodu – Lawyer for the Defendants (Plaintiffs by Counterclaim)

Heard: April 4, 2025

Reasons for Decision

[1] Introduction

[1] The Plaintiffs (Defendants by Counterclaim) make this motion seeking summary judgment in the amount of $285,674.57, plus prejudgment interest, for damages as a result of a breach of an agreement of purchase and sale for their property located at 7 Polo Court ("the Polo Property") entered into by the parties ("the Agreement"), among other relief.

[2] The Defendants (Plaintiffs by Counterclaim) have defended against the claim made by the Plaintiffs and counterclaimed for the return of a $50,000.00 deposit that they paid towards the purchase of the Polo Property.

Background

[3] The Plaintiffs decided to sell the Polo Property in March or April 2022.

[4] In anticipation of selling, the Plaintiffs signed a lease on April 18, 2022, to rent another property on Stone Church Road West, for $2,500.00 per month commencing on May 1, 2022 ("the Stone Church Property").

[5] On May 6, 2022, the Plaintiffs took out a loan for a Flex Line of Credit. On that same day, they listed the Polo Property for sale in the amount of $1,799,999.00.

[6] The Plaintiffs received an offer for the amount of $1,750,000.00, however, that transaction did not close. Accordingly, they relisted the Polo Property.

[7] The Defendants saw a listing for the Polo Property on or about May 17, 2022. They had entered into an agreement of purchase and sale, dated May 6, 2022, to sell their own home in Woodstock for $1,159,900.00 with an original closing date of June 30, 2022; however, that closing date was subsequently changed to August 17, 2022.

[8] On June 5, 2022, the Defendants made an offer on the Polo Property for a purchase price of $1,600,000.00 with a deposit of $50,000.00 and a closing date of August 15, 2022 ("the Closing Date"); the offer was conditional upon the property appraising at the purchase price by the buyers' lender ("the Agreement").

[9] The parties were each represented by their own separate real estate agents for the purposes of entering into the Agreement.

[10] The two individual Plaintiffs are real estate agents. They disclosed to the Defendants that they were realtors by signing the required OREA Form 161 "Registrant Disclosure of Interest – Disposition of Property" and the Defendants signed same on June 5, 2022, acknowledging that they had received copies prior to making their offer to purchase.

[11] On June 7, 2022, the Plaintiffs gave a "Notice to End Your Tenancy" to their tenant, who had leased the basement living unit of the Polo Property for a one-year term commencing on January 1, 2022, for $2,000 per month, even though the deal with the Defendants was not yet firm. That Notice set out a termination date of August 8, 2022.

[12] On June 8, 2022, the Defendants delivered a "Notice of Fulfillment of Condition(s)", and the Agreement became firm and binding.

[13] On July 26, 2022, the Plaintiffs' lawyer wrote the Defendants' lawyer advising that they had learned the Defendants required the sale of their own home to complete the purchase of the Polo Property, that their home's sale had fallen through, and they had re-listed their home. The Plaintiffs' lawyer asked for information if there would be any issues with the Defendants' ability to complete the Agreement as anticipated.

[14] On July 26, 2022, the Defendants' lawyer responded that they required an extension of the Closing Date and asked what terms the Plaintiffs required in exchange for an extension; she was unable to provide a timeline for an alternate closing date.

[15] By correspondence, dated July 28, 2022, the Plaintiffs proposed a one-time extension of the Closing Date to September 15, 2022. In exchange, they asked for the non-refundable release of the initial $50,000.00 deposit and payment of a further non-refundable deposit of $50,000.00 to be made to their lawyer, in trust. If the transaction did not close on September 15, 2022, then all of the deposit funds would be forwarded to the Plaintiffs who would then re-list the property. The Plaintiffs also offered to provide financing on a vendor take back mortgage of up to $300,000.00 with a one-year term and interest at 9% per annum.

[16] By correspondence dated August 8, 2022, the Defendants did not accept the Plaintiffs' proposed terms. Instead, they asked for an extension of time past August 15, 2022, and a $100,000.00 reduction in the purchase price for the Polo Property.

[17] On August 10, 2022, counsel for the Plaintiffs responded indicating that they would not accept the Defendants' proposed terms. The Plaintiffs advised that they would tender on the Defendants and if the Agreement did not close on August 15, 2022, the Defendants would be in breach of the contract. The Plaintiffs would re-list the Polo Property and hold the Defendants responsible for any damage they incur. The Plaintiffs offered that if the Defendants agreed to a payment of $50,000.00 on or before August 15, 2022, and the release of the existing $50,000.00 deposit to the Plaintiffs, for a total of $100,000.00, the Plaintiffs would release the Defendants from any further liability.

[18] On the Closing Date of August 15, 2022, the Plaintiffs tendered on the Defendants advising they were ready, willing and able to close. They provided the Defendants with all required documents in escrow. In response, the Defendants' lawyer advised that they were not in a position to close the transaction that date. The Defendants also advised that, in the event that their house sold, they would be happy to purchase the Polo Property with the same sale price but an extension would be required so that new mortgage documents could be obtained.

[19] After the Agreement did not close, the Plaintiffs moved back into the Polo Property on September 1, 2022.

[20] Before the Plaintiffs could re-list the Polo Property on the Multiple Listing Service (MLS), the Othmans found out that the property was for sale again. The evidence is that, sometime between August 15 and August 30, 2022, the Othmans had contacted Mr. Romano about a property on Cottonwood Court for which he was the listing broker of record. In inquiring of that property, the Othmans asked Mr. Romano to act as their agent as buyers and to be the listing broker of record for their own property on Meadowlands Boulevard which they wanted to sell ("the Meadowlands Property"). During their discussions with Mr. Romano, the Othmans became aware that the Polo Property was available for sale due to the failed Agreement, and they advised Mr. Romano that they were interested in purchasing the property.

[21] On August 30, 2022, the Othmans made an offer to purchase the Polo Property for $1,600,000.00 with a $50,000.00 deposit, conditional on the sale of their own home, the Meadowlands Property, which offer was accepted by the Plaintiffs on the same day ("the Othman Agreement").

[22] On September 8, 2022, the Plaintiffs arranged for an appraiser to attend the Polo Property and give an appraisal. The appraiser prepared a report providing an opinion of value for the Polo Property at $1,305,000.00 as of November 8, 2022.

[23] On September 9, 2022, the Othmans entered into a listing agreement with the Plaintiffs' brokerage to sell the Meadowlands Property for $1,499,999.00 with a commission of 3% to the listing brokerage.

[24] On October 6, 2022, the Othmans and the Plaintiffs agreed to reduce the sale price of the Polo Property to $1,500,000.00, because the Meadowlands Property was not selling and had to be reduced in price.

[25] On November 16, 2022, the Othmans and the Plaintiffs agreed to a new sale price for the Polo Property of $1,325,000.00 with a new closing date of December 15, 2022, again, because the Meadowlands Property was not selling and had to itself be reduced in price.

[26] Ultimately, the Plaintiffs sold the Polo Property to the Othmans for a final purchase price of $1,325,000.00 and the sale was completed on December 15, 2022.

[27] By this motion, the Plaintiffs claim damages comprised of the differential between the two purchase prices for the Polo Property and various carrying costs, less the Defendants' $50,000.00 deposit (which was released to the Plaintiffs on April 14, 2023, in accordance with terms reached between the parties).

Issues

[28] The following issues will be determined on this motion:

(a) Is this an appropriate case for summary judgment?

(b) Are the Plaintiffs entitled to damages? If so, what is the quantum?

(c) Should the $50,000.00 deposit paid by the Defendants be declared forfeited to the Plaintiffs and the counterclaim dismissed?

Position of the Plaintiffs

[29] It is the position of the Plaintiffs that summary judgment should be granted since there is no genuine issue requiring a trial. The Agreement became firm and binding on June 8, 2022, when the Defendants delivered their Notice of Fulfillment of Conditions. The Defendants notified the Plaintiffs prior to the Closing Date that they would not be able to complete the Agreement on time and required an extension. When terms of an extension could not be reached, the Plaintiffs tendered on the Closing Date. The Defendants then breached the parties' contract by failing to close the transaction.

[30] There was no imbalance in bargaining power between the parties in negotiating the Agreement. The Defendants negotiated the Agreement with the assistance of a competent realtor. The Defendants knew they were relying on the funds from the sale of their own home and yet submitted a "clean offer" to the Plaintiffs. The Agreement was not conditional upon the Defendants selling their own home. Once the Defendants ran into problems selling their own property in Woodstock, there was no obligation on the Plaintiffs to extend the closing since the Agreement was without conditions, it established a date for closing, and it contained a clause that time is of the essence. If a purchaser requests an extension of time in such conditions, the seller is entitled to seek terms in exchange. It was the Defendants' choice not to agree to the proposed terms offered by the Plaintiffs. The Defendants argue that the Plaintiffs acted in bad faith in seeking payment of an additional $50,000.00 deposit but the Defendants themselves sought an extension of time and a $100,000.00 reduction in the sale price. The Plaintiffs' negotiating could be described as hard bargaining, but it was not an abuse of bargaining power.

[31] The sale of the Polo Property to the Othmans was not improvident. Since the Defendants aborted the Agreement, the Plaintiffs, as the sellers, are entitled to their loss of bargain being the difference between the original sale price and the re-sale price for which the Polo Property was eventually sold. The Plaintiffs are entitled to be put in the position they would have been in if the contract had been performed, so far as money can do it.

Position of the Defendants

[32] It is the Defendants' position that there is a genuine issue for trial respecting both liability and damages. The Defendants have been unable to put their "best foot forward" since there have not been any discoveries yet held. (A prior motion made by the Defendants, to require examinations for discovery to be held before the summary judgment motion, was denied by a different Judge.) The Defendants submit that there was an imbalance in bargaining power between the parties in negotiating the Agreement because the Plaintiffs are realtors, possessing specialized knowledge about the real estate market, and this was not known to the Defendants. The Defendants were serious and committed to attempting to complete the Agreement but could not do so without a reduction or an extension. If the Plaintiffs had accepted the Defendants' request for a price reduction of $100,000.00, then they could have reduced the price of their own home in Woodstock and both sales could have been completed. The Plaintiffs would not consider a reduction and would only grant an extension that was improvident and required further funds. There is a real question as to whether the Plaintiffs were able to complete the transaction, whether they failed to disclose material facts, and whether they negotiated in good faith.

[33] The Plaintiffs' damages are too excessive, unforeseeable and remote to be recovered. Their actual damages amount to less than the $50,000.00 deposit, which has already been released to them. Alternatively, there remains a genuine issue for trial requiring a full factual record, discoveries, expert evidence, and the evidence of witnesses not available for this motion.

[34] The Plaintiffs' sale to the Othmans turned into a non-arm's length transaction and the Plaintiffs should not be able to rely on it to establish damages. There was no shortfall in the sale price of the Polo Property to the Othmans since it was initially sold to them for $1,600,000.00, the exact same price as the sale price to the Defendants. This establishes a prima facie market value. However, before the sale of the Polo Property to the Othmans was completed, the Plaintiffs reduced the price of the Polo Property to facilitate the sale of the Meadowlands Property. The price reduction for the Polo Property was tied up in the sale process for the Meadowlands Property and, therefore, was not an arm's length transaction.

[35] The Defendants submit that, if they are found liable, they would concede to paying certain of the Plaintiffs' moving costs, carrying costs and legal fees, totalling $6,157.71.

Analysis

(a) Is this an appropriate case for summary judgment?

[36] The parties do not dispute the summary judgment legal principles.

[37] Pursuant to Rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the court shall grant summary judgment if it is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[38] Rule 20.04(2.1) sets out the court's powers in determining whether there is a genuine issue requiring a trial. It provides that the court shall consider the evidence submitted by the parties and, where the determination is being made by a judge, the following powers can be exercised for this purpose, unless it is in the interest of justice for such powers to be exercised only at a trial: (i) weighing the evidence, (ii) evaluating the credibility of a deponent, and (iii) drawing any reasonable inference from the evidence.

[39] In Pastink et al. v. 1190393 Ontario Limited et al., 2023 ONSC 6037, at para. 6, Fowler Byrne J. identified the following summary judgment principles, which I accept and adopt:

(a) There will not be a genuine issue requiring a trial if I am able to reach a fair and just determination on the merits of the motion. This will be the case when I can make the necessary findings of fact, apply the law to those facts, and this is a proportionate and more expeditious means to achieve a just result: Hryniak, at para. 49;

(b) I should first determine if there is a genuine issue requiring a trial based only on the evidence before me, without resorting to my enhanced fact-finding powers as set out in r.20.04(2.1). If, after this step, it appears that there is a genuine issue requiring a trial, I should then determine if a trial can be avoided utilizing my powers under r.20.04(2.1) and (2.2). Again, this is as long as their use is not against the interests of justice. Their use will not be contrary to the interests of justice if they lead to a fair and just result, and serve the goals of timeliness, affordability, and proportionality, in light of the litigation as a whole: Hryniak, at para. 66;

(c) The moving party bears the onus of showing that there is no genuine issue requiring a trial. It cannot rely on mere allegations or pleadings. When it has satisfied the court that there is no genuine issue requiring a trial, the burden shifts to the responding party to prove that their defence has a real chance of success. The responding party cannot rely on allegations or denial. They must set out, in affidavit material or other evidence, specific facts showing there is a genuine issue requiring a trial: New Solutions Extrusion Corporation v. Gauthier, 2010 ONSC 1037, at para. 12, aff'd 2010 ONCA 348;

(d) A party must put their best foot forward on a motion for summary judgment with respect to the existence or non-existence of material issues to be tried: Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438, at para. 7; New Solutions, at para. 12; Sweda Farms v. Egg Farmers of Ontario, 2014 ONSC 1200, at para. 32, affirmed 2014 ONCA 878, leave to appeal refused; and

(e) The court is entitled to assume that the record contains all the evidence which the parties will present if there was a trial: New Solutions, at para. 12; Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 S.C.R. 372, at para. 11; Broadgrain at para. 7.

[40] Based on the issues and evidence before the court, I find that the Plaintiffs have met their onus. The evidence presented on the motion is sufficient to permit the necessary findings of fact and credibility to be made and to enable me to reach a fair and just determination of the merits. I find that the key evidence is largely uncontroverted. For instance, there is no dispute that the Plaintiffs were ready, able and willing to close the Agreement on August 15, 2022, and that the Defendants failed to close. Further, I am able to determine the conduct of the Plaintiffs in light of their duty to mitigate, and the appropriateness of the expenses they claim. I am satisfied that there is no genuine issue advanced by the Plaintiffs that is requiring a trial.

[41] The court is entitled to assume that the Defendants have put their best foot forward on this motion. While they submit that they are prejudiced due to no examinations for discovery having been held, in my view, their defences do not require any findings of fact not already available on the record, nor any findings of credibility. Granting summary judgment in these circumstances is a fair and just result that serves the goals of timeliness, affordability, and proportionality in light of the litigation as a whole. With respect to the Defendants' submission that, as realtors representing the Othmans, the Plaintiffs had positive duties to look out for the Othmans' best interests and to advise of any information that could lead to a conflict of interest, such an assertion does not raise a genuine issue requiring a trial between the parties before me. If there was any breach of any duty owed to the Othmans, the Defendants have no standing to prosecute such a claim. I find that the Defendants have not met their onus of proving that their defence has a real chance of success or that there is a genuine issue requiring a trial.

[42] Accordingly, I find this to be an appropriate case for summary judgment.

(b) Are the Plaintiffs entitled to damages? If so, what is the quantum?

[43] The Plaintiffs have proven on a balance of probabilities that the Agreement was a valid and enforceable contract. The Agreement was an unconditional agreement that required the Defendants to complete the purchase of the Polo Property. The Agreement became firm and binding on June 8, 2022. The Defendants breached the Agreement's terms by failing to close on the agreed closing date of August 15, 2022. Their reason for failing to complete the transaction was because they did not have sufficient funds since the sale of their own home did not close. I conclude that there is no genuine issue raised requiring a trial in that regard. As the court held in Mikhalenia v. Drakhshan, 2015 ONSC 1048, at paras. 20-21, the Defendants' failure to complete the purchase constituted a breach of the contract.

[44] While the Defendants submit that the Plaintiffs had not disclosed that they were realtors, the evidence clearly establishes that they did. The OREA "Registrant Disclosure of Interest" forms were signed by the Plaintiffs and the Defendants prior to the Defendants making their offer to purchase the Polo Property.

[45] I do not accept the Defendants' contention that the Agreement was conditional upon the Defendants selling their own home. It is clear on the face of the Agreement that there was no such term.

[46] The Defendants submit that the Plaintiffs had an obligation to disclose to the Defendants information about the deal that fell apart prior to them entering into the Agreement, since that was relevant to the condition of the Polo Property. I do not agree. There is nothing in the evidence to indicate that there was a material concern or defect in the Polo Property that would have impacted on the validity of the Agreement. In any event, the Agreement did not contain a term making the purchase conditional on an inspection. Both the Plaintiffs and the Defendants were represented by their own realtors. The Defendants never spoke to the Plaintiffs or relied on their advice or relied on them to protect their interests. Through their realtor, the Defendants had access to the same information about the market as the Plaintiffs had.

[47] I find that the Defendants negotiated the Agreement with the assistance of a competent realtor. Mr. Marchand's evidence was that the Defendants' real estate agent told him a conditional offer would be a barrier to acceptance by the Plaintiffs, and if they did not remove their conditions, they would miss out on the Polo Property. The Defendants knew they needed the funds from the sale of their own property in order to complete the deal. However, they nonetheless submitted an offer to purchase with no conditions. I find that the Defendants wanted the Polo Property and took a risk structuring their offer without conditions to ensure they would get it.

[48] In the sale of a home, both sides assume the risk of fluctuations in the market value of the property, and a drop in the market for real estate is not unforeseeable: Park Avenue Homes Corp. v. Malik, 2022 ONSC 973, at para. 35.

[49] I find that the Defendants notified the Plaintiffs prior to the Closing Date that they would not be able to complete the Agreement on time and required an extension. Unfortunately, terms of an extension were not agreed to by the parties. The Plaintiffs then tendered on the Closing Date and were advised by the Defendants' lawyer that they could not complete the transaction. I am satisfied that that amounted to an express renunciation of the Agreement by the Defendants.

[50] I do not accept the Defendants' argument that the Plaintiffs acted in bad faith by not agreeing to the amended terms proposed by the Defendants. Proposing new terms that are favourable to the seller does not equate to negotiating in bad faith when faced with a request from a purchaser to extend closing: Philp v. Osungade, 2024 ONSC 3064, at para. 21; Gwyer v. Hymers, 2023 ONSC 3225, at para. 37. Such a finding would run contrary to other authorities which provide that, when a party fails to comply with its obligation to complete the transaction at a specified time and there is a time of the essence clause (which there is in the case before me), the other party has the right to terminate the agreement: see 1473587 Ontario Inc. v. Jackson, [2005] O.J. No. 710 (S.C.J.), at paras. 23-24; affirmed, 75 O.R. (3d) 484. There is no evidence of bad faith on the part of the Plaintiffs in the performance of their obligations under the Agreement. They were ready to close the purchase. The failure to close was entirely the fault of the Defendants. When the Defendants were unable to close on August 15, 2022, the Plaintiffs were entitled to treat the Agreement at an end.

[51] The Defendants rely on the decision in 2174372 Ontario Ltd v Akbari, 2023 ONSC 6047, in support of their submission that the summary judgment motion should be dismissed. However, I find that case to be distinguishable since, in Akbari, there was no sworn evidence respecting when or how much the subject property was subsequently sold after the defendants failed to close, and the property was sold to the brother of the director of the corporate plaintiff in a non-arm's length sale for approximately $100,000 less than the property's appraised value. Accordingly, the motion judge held that there were too many "unanswered questions about the subsequent sale of the property, the plaintiff's efforts to mitigate damages, and the proper calculation of damages" to grant summary judgment. That is not the case before me where there is ample evidence to answer those very questions.

[52] The Defendants contend that the Plaintiffs' sale to the Othmans was not an arm's length transaction. The nature of an arm's length transaction was discussed by the court in Doyle Salewski Inc. v. Scott, 2019 ONSC 5108, at para. 205 as follows:

In Crawford & Co. v. Minister of National Revenue, [1999] T.C.J. No. 850, at para. 43, Justice Porter aptly compared an arm's length transaction to the kind of bargain that might be struck between strangers at a marketplace. To determine whether a transaction was at arm's length, the court should consider whether the parties showed "the same kind of independence of thought and purpose, the same kind of adverse economic interest and same kind of bona fide negotiating" that you might expect to find in that marketplace. If so, the parties were dealing at arm's length. If these hallmarks are absent, they were not.

See also Montor Business Corporation v. Goldfinger, 2016 ONCA 406, at paras. 67-68.

[53] In reviewing all of the relevant evidence, I find that the Plaintiffs showed an independence of thought and purpose in their dealings with the Othmans for the sale and purchase of the Polo Property. The Plaintiffs did not have a "common mind" with the Othmans. I find that the Plaintiffs wanted to receive the highest price for their property but recognized the realities of the real estate market they were facing. I also infer that Mr. Romano wanted to obtain the highest price for the Othmans in the sale of the Meadowlands Property since the sale proceeds would be available for the Othmans to then purchase the Polo Property and any commission he received on the sale would be higher. There is no evidence before the court that the Plaintiffs did not act in their own self-interest in selling the Polo Property, or that they had influence so as to force the Othmans to transact for a price which was substantially different than the fair market value of the Polo Property at the relevant time. There is no evidence to indicate that Mr. Romano sold the Polo Property (or the Meadowlands Property) for a discounted price. I conclude that the Plaintiffs' sale to the Othmans was an arm's length transaction.

[54] The Defendants object to the use of the November 8, 2022, appraisal report that was attached to Mr. Romano's supporting affidavit, since there was no affidavit evidence provided by the appraiser and so he could not be cross-examined and since no Form 53 was signed by the appraiser, as required by Rule 53.03 of the Rules of Civil Procedure.

[55] Mr. Romano's evidence was that he obtained and considered the November 8, 2022, appraisal of the Polo Property before agreeing to reduce the sale price to $1,325,000.00. He did not want to sell the property below market value. He had already reduced the purchase price once to $1,500,000.00, so he obtained the appraisal because he wanted to know what the property was worth before doing so again. The appraisal valued the Polo Property at $1,305,000.00 as of November 8, 2022, so Mr. Romano was comfortable agreeing to the amendment on November 16, 2022 which reduced the purchase price of the property to $1,325,000.00 for the sale to the Othmans.

[56] In my view, the November 8, 2022, appraisal was properly before the court on this motion. The appraisal was obtained pre-litigation and was not tendered as an expert opinion. Rule 20.02 of the Rules of Civil Procedure provides that an affidavit for use on a motion for summary judgment may be made on information and belief. I find that the evidence establishes that, by obtaining the appraisal before reducing the sale price, the Plaintiffs were acting reasonably in selling the Polo Property and taking steps to mitigate their damages. In this regard, I adopt the approach taken by Lederer J. in Toronto Dominion Bank v. 466888 Ontario Ltd., 2010 ONSC 3798, at paras. 37-38, affirmed 2011 ONCA 149, where he held:

37 The acceptance of the appraisal reports, at least for the purpose of acknowledging the steps taken by the plaintiff in undertaking the sale, is confirmed by the decision in Handleman v. G & G Group Ltd. 2006 CarswellOnt 8245 (Ont. C.A.). In that case, the judge considered a motion for summary judgment. As here, the defendant, who was the responding party, took the position that the sale of the land which had been the subject of a charge was improvident. In dealing with whether to take into account appraisal reports that had been exhibited to an affidavit, the judge observed that Rule 20.02(1) provides that an affidavit on a motion for summary judgment may be made on information and belief. The motions judge then noted:

At the very least the appraisal establishes that, by obtaining an appraisal before the sale, the plaintiffs were acting reasonably in selling the property. (Handleman v. G & G Group Ltd., supra, at para. 18)

38 I return to the substance of the motion. I find that, in the circumstances of this case, the plaintiff has satisfied the onus placed on it by Rule 20.01. It has established that it took reasonable precautions to obtain an appropriate price.

[57] The evidence establishes that the Plaintiffs sold the Polo Property to the Othmans for a price that was higher than they understood the appraised value of the property to be as of November 8, 2022. In my view, that supports a finding that the Plaintiffs took reasonable steps in fairly assessing the real estate market interest and conditions.

[58] An affidavit was filed by Mr. Marchand, on behalf of the Defendants, stating that: "the Othman Agreement may not have been an arms' length sale and an even better price could have been obtained by listing the property on MLS. It would have been exposed to more potential purchasers. As a result, I believe that the fair market value for Polo as of August 15, 2022, was $1,600,000.00 or higher." However, Mr. Marchand's opinion on the value of the Polo Property is of little assistance since he is a party to the action and there is no suggestion that he has the appropriate expertise for providing such a valuation. His evidence in this regard does not support a determination that there is a genuine issue requiring a trial since such evidence is insufficient on its own to show that the sale to the Othmans was improvident. Courts have held that it is insufficient for a defendant to simply speculate that a higher price could have been obtained: Degner v. Cabral, 2019 ONSC 1610, at para. 67. Here, the Defendants did not file any expert evidence to show that the Plaintiffs' sale to the Othmans was improvident or that the steps taken by the Plaintiffs were unreasonable.

[59] It is not possible to determine with precision what the fair market value of the Polo Property would have been if it had been put on the open market for more time back in August of 2022. What can be determined is whether the price obtained was substantially below fair market value and whether reasonable precautions were taken for the sale. Although the re-sale of the Polo Property happened relatively quickly, I am satisfied that reasonable precautions were taken by the Plaintiffs when selling the property in the circumstances. I find that the purchase price paid of $1,325,000.00 was higher than what the Plaintiffs believed the fair market value of the Polo Property was at the time. Therefore, I am satisfied that the Plaintiffs exercised reasonable diligence in obtaining the best price in a timely manner given the changing real estate market.

Calculation of Damages

[60] The Plaintiffs seek damages in the amount of $275,000.00, being the price differential between the $1,600,000.00 purchase price set out in the failed Agreement and the final purchase price paid by the Othmans of $1,325,000.00.

[61] Generally speaking, damages are calculated to put the innocent party in the position as if the contract had been completed. Any consequential damages must be caused by the breach and be reasonably foreseeable.

$275,000.00 Price Differential

[62] Where a purchaser fails to close a real estate transaction and the seller takes reasonable steps to resell the property in an arm's length sale to a third party in mitigation of damages, and there is nothing improvident about the sale, the difference between the two sale prices will be used to calculate the damages; in such circumstances, there is no need for expert evidence: Arista Homes (Richmond Hill) Inc. v. Rahnama, 2022 ONCA 759, at para. 9. See also Degner v. Cabral, 2019 ONSC 1610, at paras. 50-53; Park Avenue Homes Corp. v. Malik, 2022 ONSC 973, at para. 38.

[63] Here, the Plaintiffs re-sold the Polo Property to the Othmans, whom I have found to be an arm's length purchaser, within 15 days of the Defendants' breach of the Agreement. While the Othmans' initial purchase price was the same $1,600,000.00 (with a $50,000.00 deposit) as the Defendants had agreed to pay, the deal was conditional on the Othmans selling their own home. I find that the Plaintiffs' conduct in agreeing to that contract and the two subsequent price reductions, resulting in a final purchase price of $1,325,000.00, was reasonable and prudent in all of the circumstances in order to mitigate their losses.

[64] As a result, I conclude that the Plaintiffs are entitled to damages in the amount of the difference between the two sale prices, being $275,000.00.

Other Damages

[65] The Plaintiffs are entitled to damages that reasonably flow from the Defendants' failure to close the Agreement: Madison Homes v. Yiman Shi, 2020 ONSC 7810, at para. 24. Such damages can include interest and interim financing costs, real estate commissions, legal fees, and other carrying costs associated with the breach: Park Avenue, at para. 39. Below, I set out my ruling on the various items claimed by the Plaintiffs.

Lost Rental Income

[66] The Plaintiffs seek $10,000.00 in rental income they claim to have lost as a result of the Defendants' breach of the Agreement.

[67] I accept the Defendants' submissions that: (i) the tenant was evicted prior to the Defendants firming up their offer to purchase the Polo Property; and (ii) the Plaintiffs have failed to lead any evidence that the tenant intended to remain until December 15, 2022, and that, but for the breach of the Agreement, she would have remained. I also find that it was the Plaintiffs' choice to pay the equivalent of one month's rent ($2,000.00) to the tenant for terminating the tenancy early, as they wished to sell the property.

[68] I decline to award any damages for lost rental income.

Moving Costs

[69] The Plaintiffs claim $2,800.00 in moving costs. The Defendants concede that those moving costs incurred are warranted. I award the Plaintiffs $2,800.00 in moving costs.

Staging Costs

[70] At the hearing of the motion, counsel for the Plaintiffs advised that they were no longer claiming staging costs.

Carrying Costs

[71] At the hearing of the motion, counsel for the Plaintiffs advised that they were claiming an amount of $7,195.65 in carrying costs on the Polo Property for the period August 15, 2022, through December 15, 2022.

[72] The Defendants submit that the Plaintiffs are only entitled to 16 days' worth of carrying costs, for the time period between the Closing Date of August 15, 2022, and the date of the Othmans' agreement being August 30, 2022. They calculate this amount to be $1,976.85 for 16 days of mortgage payments, property taxes, insurance and utilities.

[73] I do not accept the Defendants' argument that only 16 days' worth of carrying costs is owing in the circumstances. The proper time period to calculate the carrying costs amount is from the Closing Date of August 15, 2022, to the new closing date of December 15, 2022, which is 4 months.

[74] The Plaintiffs have calculated their gross carrying costs to be $14,695.65. I accept their evidence with respect to those incurred costs. They have then taken into account the fact that they would have had to pay 3 months of rent at $2,500.00 per month for their own housing needs. When that $7,500.00 is subtracted from $14,695.65, the net amount is $7,195.65. Accordingly, I award the amount of $7,195.65 to the Plaintiff for carrying costs.

Legal Fees

[75] The Plaintiffs seek damages in the amount of $1,380.86 for the legal fees they paid respecting the failed sales transaction with the Defendants. The Defendants concede that this amount is owing to the Plaintiffs. I award $1,380.86 in damages for legal fees to the Plaintiffs.

Interest on the Line of Credit and Lost Investment of Sale Proceeds

[76] The Plaintiffs claim damages in the amount of $9,567.02 for interest charges on their Flex LOC transfer. They submit that, on closing of the Agreement, they were going to transfer the Flex LOC from the Polo Property to a rental property they own on Chatham Street in Brantford ("the Chatham Property"). Under the terms of the transfer, the Plaintiffs were moving a principal amount of $572,806.00 to the Chatham Property at an annual percentage interest rate of 1.69% for a term of three years, maturing on August 15, 2025. Due to the Defendants' breach of the Agreement, the Plaintiffs did not transfer the Flex LOC in August 2022 as planned. Instead, it was transferred after the December 15, 2022, closing date with the Othmans. At that time, they could only secure a two-year term portion at a 1.69% interest rate on the transfer. At the end of their two-year term on December 16, 2024, the principal balance on the Flex LOC would have been $529,539.78. The Plaintiffs therefore lost the opportunity to pay down their Flex LOC at 1.69% between December 16, 2024, and August 15, 2025. They calculate that this results in them paying $9,567.02 more in interest on their Flex LOC due to the Defendants' breach.

[77] The Plaintiffs also claim damages in the amount of $29,731.04 for 4 months of lost interest on the net sale proceeds from the completion of the Agreement that they intended to contribute into a specific investment pool that funds private mortgages, yielding a 9% annual return.

[78] The Defendants submit that the claims for interest on the Plaintiffs' line of credit and the loss of investment interest are not connected to the failed Agreement, are too remote, and are not reasonably foreseeable as damages.

[79] In order for a party to be liable for damages for the breach of a contract, the damages must not be too remote. Remoteness applies to the type of loss suffered, not the quantity of a proximate loss. The test for remoteness is such that damages may be recovered if: (i) they arise fairly, reasonably, and naturally as a result of the breach of contract in the "usual course of things"; or (ii) they were within the reasonable contemplation of the parties at the time of contract: 1298417 Ontario Ltd. v. Lakeshore (Town), 2014 ONCA 802, 122 O.R. (3d) 401, at paras. 137-139.

[80] I find that the Plaintiffs' claims for a loss related to additional interest paid on a line of credit paid and a loss of investment interest do not naturally arise in a breach of an agreement of purchase and sale case such as this. The Defendants were not in a fiduciary relationship with the Plaintiffs such that a loss of opportunity to save interest or to invest would be clearly foreseeable. I further find that the claimed damages are not the type of damages that were in the reasonable contemplation of the parties at the time the Agreement was signed and are too remote: Saramia Crescent General Partner Inc. v. Delco Wire and Cable Limited, 2018 ONCA 519, at paras. 35-36, 41, 48. Finally, I accept that past returns on investment are not necessarily indicative of future returns.

[81] I decline to award damages for the additional interest paid on the Plaintiffs' Flex LOC or the lost investment interest on the net sale proceeds. (The Plaintiffs are entitled to prejudgment interest on the damages that are awarded.)

Saved Commission

[82] The Defendants submit that the Plaintiffs saved paying commission of 4% plus $3,000.00 or $67,000.00 as a result of the Defendants' transaction not being completed; and that the Plaintiffs were entitled to earn another 2% or $23,000.00 in commission as a result of selling the Meadowlands Property. They submit that the court should grant a deduction for these amounts: Park Avenue, at para. 40.

[83] I decline to reduce the Plaintiffs' damages by the amount of the commission they earned by selling the Meadowlands Property since Mr. Romano was entitled to earn that commission separate and apart from anything to do with the Polo Property.

[84] With respect to deducting the amount of the real estate commission that was saved by the Plaintiffs, there was no evidence before the court showing any commission paid by the Plaintiffs in respect of the purchase of the Polo Property by the Othmans. The Statement of Adjustments for the Othman closing, adjusted as of December 15, 2022, does not show any such commission paid. So, it does appear that the Plaintiffs saved the payment of commission since Mr. Romano acted as both the listing brokerage and the buyers' brokerage for the sale of the Polo Property to the Othmans. In light of this, I am prepared to adopt the approach of De Sa J. in Park Avenue, at para. 40, and deduct from the total loss suffered by the Plaintiffs the amount of $67,000.00 that they saved on commissions due to the failed sale with the Defendants.

[85] If, in fact, commission was paid by the Plaintiffs as a result of selling the Polo Property to the Othmans, then that commission amount should be taken into account. If the parties cannot resolve that issue between themselves, they may make an appointment to appear before me for further submissions.

(c) Should the $50,000.00 deposit paid by the Defendants be declared forfeited to the Plaintiffs and the counterclaim dismissed?

[86] The Plaintiffs seek a declaration that the deposit monies paid by the Defendants are forfeited as a result of their repudiation of the Agreement. By their counterclaim, the Defendants seek the return of their $50,000.00 deposit on the basis that the Plaintiffs' damages were substantially less than the deposit.

[87] Where a purchaser gives a seller a deposit to secure the performance of a contract for the purchase and sale of real estate, the deposit is forfeited if the purchaser refuses to close the transaction, unless the parties have agreed otherwise. The deposit stands as security for the purchaser's performance of the contract. If the purchase is not completed, the forfeiture of the deposit compensates the seller for lost opportunity in having taken the property off the market in the interim, as well as the loss of bargaining power resulting from the seller having revealed to the market the price at which it had been willing to sell: Benedetto v. 2453912 Ontario Inc., 2019 ONCA 149, at paras. 5-6.

[88] Where the deposit is forfeited, it must be credited against other damages awarded: 2174372 Ontario Ltd v Akbari, 2023 ONSC 6047, at para. 24.

[89] I find that the $50,000.00 amount paid by the Defendants was described as a deposit in the Agreement. The Agreement does not indicate any intention that the deposit is not to be forfeited. In light of the Defendants' breach of the Agreement, the $50,000.00 deposit is forfeited to the Plaintiffs, to be credited against the damages awarded.

Conclusion

[90] Based on the foregoing, the total amount of damages awarded to the Plaintiffs as a result of the Defendants' breach of the Agreement is $286,376.51, comprised of the following items:

(a) Resale shortfall: $275,000.00 (b) Moving costs: $2,800.00 (c) Carrying costs: $7,195.65 (d) Legal fees: $1,380.86

Total: $286,376.51

[91] The Defendants are entitled to deduct the following amounts from that total: (i) the $50,000.00 deposit which has already been released to the Plaintiffs; and (ii) the $67,000.00 in saved commission from the failed Agreement.

[92] The final damages amount still owing to the Plaintiffs then is: $286,376.51 - $50,000.00 - $67,000.00 = $169,376.51.

Disposition

[93] The Plaintiffs' motion for summary judgment is granted and the following orders made:

(a) the Plaintiffs are entitled to judgment against the Defendants in the amount of $169,376.51, plus interest to the date of judgment;

(b) the $50,000.00 is declared to be forfeited by the Defendants to the Plaintiffs; and

(c) the Defendants' counterclaim is hereby dismissed.

Costs

[94] Since the Plaintiffs were the successful parties on this motion, they are presumptively entitled to costs.

[95] I would urge the parties to agree on costs. If they are unable to do so, then costs submissions may be made as follows and submitted to the Sopinka Judicial Assistants to my attention:

(a) By October 29, 2025, the Plaintiffs shall serve and file their written costs submissions, not to exceed three pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers; and

(b) The Defendants shall serve and file their responding costs submissions of no more than three pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers, by November 12, 2025; and

(c) The Plaintiffs' reply submissions, if any, are to be served and filed by November 19, 2025 and are not to exceed two pages.

(d) If no submissions are received by November 19, 2025, the parties will be deemed to have resolved the issue of the costs and costs will not be determined by me.

[96] If the parties are able to settle the question of costs or if a party does not intend to deliver submissions, counsel are requested to advise the court accordingly.

MacNEIL J.

Released: October 8, 2025