Menon v. Simpson (Ontario Superior Court)
In a recent case, it is clear that damages for the failure to proceed with a purchase can certainly add up quickly. This case involved the purchase of property which backed onto Lake Ontario.
Facts
- Plaintiff Krishna Menon sold a property at 94 Cumberland Drive,Mississauga to Defendant Trivelle Simpson under an Agreement of Purchase and Sale (APS) for $8,385,000 on May 13, 2023.
- The defendant failed to close the transaction despite several extensions (final closing set for October 16, 2023).
- The plaintiff eventually resold the property to another buyer for $6,550,000.
- The plaintiff claimed:
- $1,835,000 for the loss of the benefit of the bargain (difference in sale price), and
- $550,000 for agreed carrying costs.
- The defendant admitted to breaching the contract but argued the plaintiff failed to mitigate damages, contending a trial was needed to assess this issue.
Issue
Whether the plaintiff failed to mitigate his damages sufficiently to preclude summary judgment on the loss of the benefit of the bargain.
Law
Justice Sweeny applied the summary judgment principles under Rule 20 and the Supreme Court of Canada decision in Hryniak v. Mauldin, 2014 SCC 7:
- Summary judgment should be granted where there is no genuine issue requiring a trial.
- The respondent must present concrete evidence to establish such a genuine issue—mere assertions are insufficient.
On mitigation, per Southcott Estates Inc. v. Toronto Catholic District School Board (2012 SCC 51), the defendant bears the onus to prove that the plaintiff failed to take reasonable steps and that mitigation was realistically possible.
Review
- The plaintiff provided detailed evidence of active and reasonable mitigation:
- The property was relisted within two weeks of the failed closing.
- It was listed at the same price originally agreed upon, later reduced several times.
- The property was marketed via MLS, magazines, and local channels.
- The plaintiff even considered leasing the property.
- The defendant provided no expert evidence, no appraisal, and no proof that better marketing or pricing could have achieved a higher sale price.
- The court rejected the argument that a trial was required simply because large sums of money were involved.
- The judge held that the plaintiff was not required to accept a previous $7M offer that included a vendor take-back mortgage, as that offer carried additional risk and was not directly comparable.
Holding
- Summary judgment granted in favor of the plaintiff.
- The Court found the plaintiff acted reasonably in mitigating his loss.
- The defendant failed to show any genuine issue for trial.
Damages and Costs
- Loss of bargain: $1,835,000
- Carrying costs: $550,000
- Prejudgment interest: As per the Courts of Justice Act
- Post-judgment interest: 4%
- Costs: $20,693.85 (partial indemnity, all-inclusive)
Disposition
Judgment for the Plaintiff, Seller:
The Court ordered the defendant to pay $2,385,000, plus interest and costs of $20,693.85, or $2,405,693.85.
Considerations
This case reinforces that when a purchaser breaches a real estate contract, a Seller’s reasonable efforts to re-market and sell the property soon after the breach generally satisfy the duty to mitigate. Unsupported claims that the Seller “could have done more” will not prevent summary judgment in the Seller’s favor.
In this case, the Buyer was seeking to set the matter down for trial. That would have extended the legal proceedings by at least another two years, and possibly have helped them reach a better settlement.
The Agreement was struck on 13 May 2023, and the Judgment took place on 1 December 2025, or 30 months after the deal. The transaction was extended until a final closing date of 16 October 2023, at which time the Buyer went into liquidation breach.
The Summary Judgment took place in 25 and a half months. Well worth waiting for if you are going to get $2.4 million. Many real estate agents and lawyers will say it’s just not wort the lawsuit. This one is like having a winning lotto ticket.
Brian Madigan LL.B., Broker