What the Court Actually Expects from a Seller

Earlier this week I published a video on deposit forfeiture in Ontario — what a deposit actually is, why you lose it if you default, and the narrow circumstances where a court might step in to give it back.

But I want to use today's newsletter to go one level deeper.

Because a recent Ontario court decision — Menon v. Simpson, (December 2025) is an extreme example of when damages go well beyond the deposit.

Here's what happened:

• In May 2023, a buyer signed an Agreement of Purchase and Sale for a property in Mississauga at a purchase price of $8,385,000.
• The seller granted an extension, in exchange for an additional deposit and per diem payments.
• The closing was extended again to September 14, 2023. Then again, to a final closing date of October 16, 2023.
• The buyer still didn't close.
• The seller relisted and ultimately sold the property to another buyer for $6,550,000.
• That's a difference of $1,835,000 from what the defaulting buyer had agreed to pay.
• On top of that, the parties agreed the seller's carrying costs (mortgage interest, property taxes, and related expenses) accumulated while the property sat back on the market.
• Total damages claimed: $2,385,000.

This wasn't a dispute about whether the buyer had to pay the seller damages... but rather how much?

And the buyer's defence was mitigation.

They argued that the seller hadn't done enough to minimize their losses, that they should have listed at a lower price from the start, and that they should have accepted a $7,000,000 offer that came with a $2,000,000 vendor take-back mortgage.

The court rejected the arguments and granted judgment in the seller's favour.

How the seller mitigated:

• Relisted the property within two weeks of the breach
• Listed at the same price as when the original APS was signed
• Reduced the asking price on several occasions over time
• Engaged in active discussions around further price reductions
• Explored leasing the property as an alternative
• Marketed beyond MLS — including in limited-circulation publications targeting high-end buyers in that market

The court found that was enough.

The seller took reasonable steps, which is the legal test.

The resulting sale price reflected the real market loss.

On the VTB offer specifically:
The court noted that a vendor take-back mortgage is not the same as cash. Accepting that structure was not comparable to the deal the defaulting buyer had signed, and the seller had no obligation to take it.

So what does this case actually tell us about mitigation?
Reasonable steps don't mean perfect steps.

Relist promptly. Price reasonably. Reduce over time. Market properly. Consider alternatives. That's the framework the court looked at.

The seller was awarded $1,835,000 in lost sale proceeds, $550,000 in carrying costs, prejudgment interest, and just over $20,000 in legal costs.

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