Seller Keeps the Resale Profit PLUS the Deposit

The Ontario Court of Appeal looked at a situation where the Buyer was purchasing a new home in Brantford.

An error was made in terms of the name of the Buyer’s lawyer. The Seller had one name and the Buyer had another. The deal fell through without the proper coordination on the Buyer’s behalf. The Judge on the application concluded that it was the Buyer’s fault, and on a defaulted transaction, the Seller should have:

  1. The deposit, and
  2. The amount paid on account of upgrades.

Subsequently, the Buyer appealed and the Court of Appeal in Dada v. Brantford Communities Ltd. stated on 26 February 2018:

“However, the application judge was aware from the record that the respondents resold the property before the hearing for an increase of $240,000 over the original purchase price.

In our view, given his finding of the appellants’ responsibility for the failure to close, the application judge did not consider the forfeiture of the deposit and upgrade fees to be unconscionable, in the circumstances, even though the respondent did receive a significant benefit.”


Unfortunately, we are missing the sale price, deposit amount and the cost of the upgrades. What we do know, is that on the resale, the Sellers made a profit of an additional $240,000. They got to keep that too, and had no duty to account. That was a separate matter.

This is not a new and novel decision, it simply reinforces the approach that the Court of Appeal takes to deposits.

Brian Madigan LL.B., Broker

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