Mitigation Obligations: Mandates to Reduce Losses Following Breach of an Agreement of Purchase and Sale

[27]  To successfully meet their onus, the Defendants had an obligation to put evidence before the Court that, at the very least, would raise a genuine issue that the re-listing of the Property, at the same listing price as when the Defendants purchased it, was unreasonable.  The issue, as it relates to the onus on the Defendants when raising a mitigation defence, was dealt with by Paraveski J. in Cuervo-Lorens & Zabik v. Linda L. Carpenter, 2016 ONSC 4661.

[28]  In paragraph 6 of His Reasons, Paraveski J. in Cuervo-Lorens stated:

[6] I find that the purchaser reasonably mitigated her damages when confronted with the purchasers’ repudiation.  She need only have acted reasonably.  The onus is on the purchasers to show that she did not meet the standard.  The evidence demonstrates that she relisted the property within six or seven days of the repudiation.  She retained the services of the same real estate agent who had acted for her on the initial sale.  The property was marketed using essentially the same methodology that resulted in the first sale.  There were multiple offers, two or three of which did not result in binding agreements before the final one was entered into.  All of this speaks of reasonableness.  Of greater significance, however, in the context of a summary judgment motion, is the absence of evidence from a professional which opines that the shortcomings in the sale process alleged by the purchasers actually had any impact on the final sale price.  It is not enough for the purchasers, upon whom the onus rests, to plainly and merely state, for example, that the six or seven day “delay” in the relisting of the property must have negatively affected its market price.  The purchasers, it must be assumed, have put their “best foot forward” and it is lacking.  The same holds for the other criticisms raised in their amended factum.  It is similarly insufficient to argue that prices in the area generally rose during the relevant time period, thus suggesting that the vendor must have accepted less than market price when she agreed to sell the property for $50,000 less than the amount the purchasers were initially willing to pay.  In the absence of a qualified appraiser’s opinion that she did so, I am not convinced that a trial is required to determine whether she undersold the property.  There is little better evidence of market value than the price at which the property actually sold following what appears to be appropriate and apparently motivated marketing.

[29]  The decision of Paraveski J.  was upheld by the Court of Appeal in Cuervo-Lorens v. Carpenter, 2017 ONCA 109, where at paras. 2 and 3 the Court of Appeal stated:

[2]  The motion judge concluded that the respondent acted reasonably in mitigating her damages.  The property was relisted shortly after the repudiation through the same agent that handled the sale to the appellants.  The property was resold approximately two months after it was relisted.

[3]  The appellants did not file opinion evidence on the summary judgment motion indicating the steps taken on the resale were unreasonable or concerning the $50,000 price differential.  In the absence of such evidence, we see no basis on which to interfere with the motion judge’s decision to dismiss the action as against the vendor.

[30]  It is clear from review of jurisprudence that a mitigation defence can only succeed where the Defendants put before the Court evidence as it relates to market conditions, that might lend credence to the defence argument that the Plaintiffs re-listed the Property for a purchase price that was unreasonable, given the market conditions.  No such evidence is before the Court.  In fact, the only evidence is that from the Plaintiff’s real estate agent evidence that was unchallenged on cross-examination.

[31]           In my view, the Defendants have failed to put any evidence before the Court, as it relates to the defence of mitigation and, as such, summary judgment should follow.