Background
Rosehaven Homes Limited and Bram-Rose Homes Inc. (the sellers) entered into a real estate purchase agreement with Salman Jamil (the buyer). The transaction failed to close because Jamil did not have the funds to complete the purchase. The sellers subsequently resold the property in an arm’s-length transaction and sued Jamil for loss-of-bargain damages — the difference between the original contract price and the resale price.
At trial, Justice Sutherland of the Superior Court of Justice awarded the sellers $36,053.02 in damages and $22,639.32 in pre-judgment interest. The sellers appealed, arguing the trial judge erred by not applying the established legal framework for calculating damages when a buyer fails to close and the seller resells. Jamil, acting in person, sought a further adjournment at the appeal hearing, which the court declined.
The Court’s Holding
The Court of Appeal allowed the appeal and increased the damages award. The court held that the trial judge erred by failing to apply the approach set out in Arista Homes v. Rahnama, 2022 ONCA 759, and affirmed in Marshall v. Hall, 2025 ONSC 910 (Div. Ct.). Under that framework, where a buyer fails to close and the seller resells in a reasonable, arm’s-length transaction that is not improvident, the difference between the two sale prices is the measure of damages — without any need for expert evidence.
The court found that Jamil adduced no expert evidence that the resale process was unreasonable or that the resale price was improvident. There was therefore no basis to depart from the resale-price differential as the measure of loss. The damages were increased to $69,761.09 (an additional $33,708.07) and pre-judgment interest at 12% per annum was recalculated to $43,806.14 (an additional $21,166.82). Because Jamil had already paid the original judgment, the outstanding balance owed was $54,874.89, plus costs fixed at $8,000.
Key Takeaways
- When a buyer fails to close and the seller resells in a reasonable, arm’s-length transaction, Ontario law measures the seller’s damages as the difference between the original contract price and the resale price — no expert evidence of market value is required.
- To challenge that measure, the defaulting buyer bears the burden of adducing expert evidence showing either that the seller’s mitigation efforts were unreasonable or that the resale price was improvident; bare assertion is insufficient.
- The Court of Appeal reaffirmed the framework from Arista Homes v. Rahnama (2022 ONCA 759) and its application in Marshall v. Hall (2025 ONSC 910 (Div. Ct.)), signalling consistent appellate commitment to this damages methodology.
- Pre-judgment interest in such cases can be substantial — here awarded at 12% per annum on the full loss-of-bargain amount.
Why It Matters
This decision reinforces a straightforward and predictable damages rule for failed real estate closings in Ontario. Sellers who resell promptly and at arm’s length can rely on the price differential as their recoverable loss, without the expense and uncertainty of obtaining a valuation expert. For buyers contemplating walking away from a purchase, the case is a stark reminder that the resale price — not a hypothetical appraised value — will typically define their liability.
The ruling also underscores the procedural consequences of failing to engage with litigation: Jamil, acting in person, neither retained counsel despite an earlier adjournment granted for that purpose nor offered any expert evidence to contest the resale process. Courts will not reduce a seller’s damages in the absence of such evidence, regardless of the buyer’s self-represented status.