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SALE OF LAND - Remedies - Damages

Tuesday, January 26, 2021 @ 6:33 AM  

Lexis Advance® Quicklaw®
Appeal by the vendors from the trial judgment awarding them damages for a failed real estate transaction. The buyers failed to close the transaction. The trial judge awarded damages for the difference between purchase prices and other costs incurred due to the buyers’ breach. The vendors were liable for the commission, whether the transaction closed or not. In their claim, the appellants did not seek repayment of the commission. There was also no evidence that the appellants had in fact paid the commission on the aborted sale. The appellants argued that the trial judge erred in not including the real estate commission payable in respect of the later sale at a lower price than that agreed to by the buyers on the failed transaction in the damages award. The trial judge held that awarding the appellants an amount equal to this second commission would put them in a better position than if the breach had not occurred. 

HELD: Appeal dismissed. The trial judge used gross amounts rather than net amounts. On the facts of this case and on the methodology employed, he was correct to conclude that adding to the appellants’ damages the second commission would overcompensate them, even though on a broad view of causation, the purchasers’ breach made that expenditure necessary. On the other hand, the second commission was not as closely connected to the purchasers’ breach as the first and was not a cost thrown away or wasted. It was a cost the vendors would have had to pay in any event out of pocket and they received the benefit of the brokerage firm’s services in return. The trial judge did not err in finding that the appellants failed to prove they had paid the commission on the failed sale.

Panegos v. O’Byrne, [2020] B.C.J. No. 2023, British Columbia Court of Appeal, M.V. Newbury, M.E. Saunders and J. DeWitt-Van Oosten JJ.A., December 9, 2020. Digest No. TLD-January252021004