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A purchaser may lawfully refuse to close a real estate transaction if the vendor fails to provide an executed discharge of a private mortgage.
The plaintiffs, purchasers of a property, sued for the return of their $50,000 deposit after the real estate transaction failed to close.
The defendant vendor counterclaimed for damages and forfeiture of the deposit.
The core issues were whether the vendor provided good and marketable title, specifically regarding the discharge of a private mortgage and the vendor's non-resident status under the Income Tax Act.
The court found that the vendor breached the Agreement of Purchase and Sale by failing to provide an executed discharge of the private mortgage on or before closing, as a lawyer's personal undertaking is not acceptable for private mortgages under Law Society of Ontario guidelines.
This breach entitled the purchasers to treat the contract as ended.
The court did not rule on the non-resident declaration issue.
The plaintiffs were awarded the return of their deposit plus pre-judgment interest, and the counterclaim was dismissed.
Buyer's fraudulent misrepresentation claim dismissed; seller awarded damages on counterclaim for failure to close restaurant sale.
The plaintiff agreed to purchase a restaurant from the defendant but failed to close the transaction, alleging the defendant made fraudulent misrepresentations regarding the business's profitability, equipment leases, and relationship with the landlord.
The plaintiff sought rescission of the agreement or a declaration of frustration of contract.
The court dismissed the plaintiff's claims, finding no evidence of misrepresentation and that the plaintiff had access to actual sales records before signing.
The court granted the defendant's counterclaim for breach of contract, awarding damages for the resale shortfall, commission, and carrying costs, offset by the plaintiff's initial deposit.
