Subsequent sale was not arm's length transaction, but part of vendor’s misconduct in quashing sale

Remedies – Specific performance – Availability in particular contracts

Applicant purchasers agreed to purchase new condominium from respondent vendor. After making required deposits and having paid monthly occupancy fees for almost one year, vendor purported to terminate contract when it came time to close agreement of purchase and sale on ground that purchasers had breached agreement by leasing unit without its consent. Purchasers had allowed friend to stay in unit, but they did not charge him rent. Vendor took position that purchasers' deposits and occupancy fees were forfeited as liquidated damages. Vendor then purported to resell unit to related parties, but purchasers placed caution on title which prevented sale from closing. Purchasers applied for relief from forfeiture and specific performance. Application granted. Considering specific performance, while unit could not be described as “unique”, as there were many similar units in building and in city, uniqueness could be established if its substitute would not be readily available. There were circumstances where damages would be inadequate, and specific performance provided more complete and just remedy. Purchasers agreed to purchase unit on advantageous terms almost five years ago, and over four years before purported termination. During that time unit had significantly increased in value. Purchasers' deposits had been provided to vendor, and that money was tied up in property, unavailable for acquiring another property as market continued to rise. Granting specific performance would better achieve justice than requiring purchasers to sue for damages. Purchasers' losses were difficult to mitigate. Policy concerns that weighed against specific performance had little application here. Purported subsequent sale of unit to related parties was not arm's length transaction but was part of misconduct by vendor in terminating sale and attempting to put unit out of purchasers' reach, and that agreement was null and void. Specific performance was only remedy that provided timely access to justice to purchasers, as it promptly and effectively put them in position they would and should have been in if contract had been performed. Purchasers were entitled to specific performance.

Lucas et al v. 1858793 Ontario Inc. o/a Howard Park et al. (2020), 2020 CarswellOnt 877, 2020 ONSC 964, Schabas J. (Ont. S.C.J.).

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