The applicants agreed to purchase a property and paid a $40,000 deposit.
The transaction failed to close on the scheduled date due to existing encumbrances on title, including mortgages and a caution from a previous failed sale.
The respondent, who had assumed the seller's rights, attempted to extend the closing date but was unable to provide clear title.
The applicants refused further extensions and demanded the return of their deposit.
The court found that the respondent was not in a position to convey substantially what the applicants contracted for, as the property remained subject to encumbrances.
The court declared the respondent in breach of the purchase agreement and ordered the return of the deposit to the applicants.