Would-be buyer who failed to close transaction says tainted groundwater may limit property's uses
The Ontario Superior Court of Justice has rejected the counterclaim of a woman who failed to close an agreement of purchase and sale (APS), who alleged that the property developer misrepresented the land’s quality in connection with specific environmental drawbacks.
In Country Wide Homes Upper Thornhill Estates Inc. v. Liu, 2025 ONSC 2494, the plaintiff was the developer of a project at Dufferin Street and Major MacKenzie Drive in Vaughan, Ontario.
In March 2017, the defendant signed an APS for a four-bedroom home on a subdivision lot within the plaintiff’s project. After a reduction, the purchase price was $3,349,999. The defendant failed to close on the scheduled closing date of Dec. 4, 2018.
To mitigate its damages, the plaintiff sold the property for $3,200,000 in May 2021. The plaintiff claimed damages of $741,999 for the shortfall in the purchase price, plus debt carrying interest and carrying costs.
The defendant countered that she had a language barrier, could not fully understand the APS, and had no chance to review the agreement carefully. She also filed a counterclaim alleging that:
The plaintiff said she contacted an expert on property contamination but did not request that this person testify at trial.
The Ontario Superior Court dismissed the defendant’s counterclaim and ordered her to pay the plaintiff total damages of $741,999 – comprising $385,090 for loss of resale and $356,909 for carrying costs – plus pre-judgment and post-judgment interest and costs.
Upon considering the evidence presented and the jurisprudence cited, the court ruled that the plaintiff met its burden to prove the defendant’s liability for the damages incurred due to her breach of the agreement by failing to close the purchase and sale transaction.
This case concerned s. 197 of Ontario’s Environmental Protection Act, 1990 (EPA), which requires a seller to disclose to a buyer any CPU governing a property. The court held that the plaintiff met the EPA’s conditions.
The court said the plaintiff had no requirement to explain the CPU but had a requirement to give a copy of the certificate before closing. The court based this finding on Country Wide Homes v. Cui, 2021 ONSC 4724; Country Wide Homes Upper Thornhill Estates Inc. v. Ge, 2020 ONCA 400; and Crosslink Bridge Corp. v. Canada National Railway, 2013 ONSC 6540.
The court found that the evidence demonstrated that the plaintiff’s sales agent gave the defendant a copy of the CPU and reviewed the standalone acknowledgement of the CPU before he reviewed the APS with her. He gave her a copy of the standalone acknowledgement and explained the restrictions on using the property.
The court added that the evidence showed that the defendant signed the standalone acknowledgement, the embedded acknowledgement of the CPU in the APS, and a purchaser’s agency disclosure form, which she admitted that she chose to sign without reading, before signing the APS.
The court noted that the plaintiff’s sales agent alleged that the defendant’s real estate agent went to the sales office, stayed during his review of every document with the defendant, communicated with the defendant in “Chinese,” spoke “good English,” and brought up no issues that she had with the English language.
The court said the evidence supported that neither the defendant nor her husband read any of the documents before signing them. The court noted that the defendant failed to call her real estate agent to testify at trial and failed to preserve the messages through which they communicated about the property sale.
