A Surrey couple has been awarded $300,340.35 in B.C. Supreme Court in Vancouver over a real estate deal that went bad.
Eric and Cecilia Albrechtsen owned a rancher in Newton and the defendant, Jarnail Panaich, contracted to buy it for $1,260,000 and paid a $60,000 deposit but didn’t complete the deal.
Their total loss was $360,340.35, less the deposit which the court declared forfeit and to be paid to the Albrechtsens, and including other costs they incurred due to the breach of contract, for the stated award of $300,340.35.
Master Leslie Muir noted the contract was signed in May 2016 and was to be complete in September. It included clauses “that time was of the essence, that it was the entire agreement between the parties and if the balance on the purchase price was not paid, the deposit would be forfeited,” Muir said.
After Panaich didn’t complete the deal the Albrechtsens listed the property for sale and in February 2017 sold it for $910,000, substantially less than what they’d contracted to sell it to Panaich for.
“Although this offer was less that I had expected when I listed the property for sale, the market remained soft, and given that the property had been on the market for more than five months, I did not believe that Mr. Albrechtsen would receive a substantially better offer,” the couple’s realtor, John Massullo, explained to the court. “Although it was for a lower price, this offer was stronger than the previous offers I had received because it was subject-free and included a substantial deposit, which the purchaser agreed to pay directly to Mr. Albrechtsen and which was non-refundable.”
Muir cited a court case, Gagner v. McCarthy, for “the general rule that damages for breach of contract are intended to put the innocent party in the same position they would have been in had the contract been performed, and, further, that an innocent party is entitled to recover consequential damages, such as interest or the carrying costs.”
In that decision, Muir noted, the “principle is stated that damages for breach of a contract to purchase real estate are typically assessed when the loss is crystallized, particularly when the real estate market has fallen.”
Muir found, based on the realtor’s evidence, that “the impact of the foreign buyer’s tax softened the market and that that had, as a consequence, reduced the market value of the property.”