Court Upholds Buyer Rights in Real Estate Dispute

Key Lessons on Contract Termination and Breach

By Puneet Shroff

In a significant decision from the Ontario Superior Court of Justice in 2025, the court ruled in favor of the buyers, Carmen Logoteta and Giuseppe Versace, in their dispute with Caivan (Creekside) Limited Partnership and Caivan (Creekside) Limited, the developers of a townhouse under construction in Oakville. This case, cited as Caivan (Creekside) Limited Partnership et al. v. Logoteta et al., 2025 ONSC 1875, highlights important principles regarding anticipatory breach, contract termination, and the rights of buyers and builders in real estate transactions.

Background

In June 2022, the defendants (buyers) entered into an Agreement of Purchase and Sale (APS) with the plaintiffs (builders) to purchase a townhouse for $3,309,990, with an expected occupancy date in July 2024. The buyers made initial payments totaling $100,000 but failed to make subsequent payments of $262,000 due in August and October 2022 due to difficulties selling their home in the United Kingdom.

The plaintiffs granted an extension until November 10, 2022, to make these payments, warning that failure to pay would give them the right to terminate the APS and forfeit deposits. The buyers informed the plaintiffs on November 4, 2022, that they could not meet the payment deadline. Despite this, the plaintiffs did not take immediate steps to terminate the contract.

Several months later, in March 2023, the plaintiffs resold the townhouse to a new purchaser for a lower price. When the original buyers inquired about the property’s availability in May 2023, they were informed it had been sold. The buyers then claimed the plaintiffs had fundamentally breached the APS and sought the return of their deposits and damages.

Legal Issues

The court was tasked with addressing several key questions:

• Whether the plaintiffs had validly terminated the APS on or after November 10, 2022.
• Whether the plaintiffs breached the APS by reselling the property.
• Whether the plaintiffs were entitled to damages if they had terminated the APS.
• Whether the buyers were entitled to the return of their deposits if the plaintiffs breached the APS.

Court’s Analysis

The court found that the buyers had committed an anticipatory breach by informing the plaintiffs they could not make the required payments by November 10, 2022. However, an anticipatory breach does not automatically terminate a contract. The non-breaching party—in this case, the plaintiffs—must clearly and unequivocally communicate their election to terminate the contract within a reasonable time.

The plaintiffs had not done so. Although they warned the buyers about potential termination and forfeiture of deposits, they never clearly communicated termination after the November 10 deadline. Instead, the plaintiffs extended payment deadlines and indicated willingness to consider reviving the transaction if payments were made and the property remained available.

The court emphasized that termination cannot be unilateral and must be communicated unequivocally. The plaintiffs’ silence and failure to act after November 10 meant the APS remained in force.

When the plaintiffs resold the property in March 2023, they breached the APS because the contract was still active. This resale prevented the original buyers from performing their obligations when they sought to resume the transaction in May 2023, constituting a fundamental breach by the plaintiffs.

Outcome

The court ruled that:

• The APS was not terminated by the plaintiffs on or after November 10, 2022.
• The plaintiffs breached the APS by reselling the property in March 2023.
• The plaintiffs were not entitled to damages arising from the resale.
• The buyers were entitled to the return of their deposits, with interest, as consumer protection legislation under Tarion required the vendor to return deposits unless the termination was due to the purchaser’s breach.

The plaintiffs’ motion for summary judgment was dismissed, and summary judgment was granted to the defendants (buyers).

Implications for Buyers and Builders

This case underscores the importance of clear communication and formal steps when terminating contracts after an anticipatory breach. Builders must act decisively and unequivocally to terminate agreements; otherwise, they risk being found in breach if they proceed with resale.

For buyers, the ruling affirms protections under consumer legislation ensuring deposits are returned if the vendor breaches the contract. It also highlights that buyers may have recourse even after initial payment defaults if the vendor does not properly terminate the agreement.

For legal advice on real estate contracts and dispute resolution, contact Puneet Shroff at pshroff@sorbaralaw.com for your real estate needs.