Executive Summary: Key Legal and Evidentiary Issues

• The Agreement of Purchase and Sale (APS) between the McKenzies and Fabco collapsed due to the buyer’s repudiation, not any defect in title.

• Fabco’s assignee, Jaymor, was found liable for breaching the APS and was ordered to pay $1,747,633.15 in damages.

• Gerald Anthony’s claim of adverse possession was rejected as entirely baseless and unsupported by law or evidence.

• Anthony was held liable for slander of title and injurious falsehood, specifically for damages linked to the delayed closing of the subsequent Marcello APS.

• The court awarded substantial indemnity costs and pre-judgment interest against both Jaymor and Anthony to fully compensate the plaintiffs.

• Although Anthony avoided liability for the Fabco APS damages, he was still ordered to contribute to the costs due to his disruptive and malicious conduct.

The failed sale and origins of the dispute

Gary and Jennifer McKenzie owned a property in Aurora, Ontario, which had been in Gary’s family for generations. In July 2016, they entered into an Agreement of Purchase and Sale (APS) with Fabco Holdings Inc. for $4.5 million. The terms included two deposits of $100,000 each, a vendor take-back mortgage of $2.5 million at 5% interest, and an "as is, where is" clause. Fabco later assigned the APS to a related company, Jaymor Specialty Housing General Partner Inc., as permitted under the contract.

Before closing, Fabco and Jaymor raised concerns about an adverse possession claim made by Gerald Anthony, who owned the adjacent property. Anthony alleged a possessory interest over a 4–5 acre portion of the McKenzie land near a pond. Despite repeated assurances from the McKenzies' solicitor, including a statutory declaration from prior owners (the Fultons) and a registered R-plan showing no encroachments, Fabco failed to close the deal on November 30, 2016.

The McKenzies re-listed the property and sold it in 2017 under a new APS (the Marcello APS) for $2,875,000. That transaction closed in April 2018 after a delay, primarily due to Anthony’s registration of a caution and application on title.

Findings on the Fabco claim

The Ontario Superior Court found that the McKenzies were able to convey good and marketable title and that the adverse possession claim was a pretext for Jaymor’s repudiation of the APS. The court held that Jaymor breached the contract and that Fabco was not liable, having validly assigned the APS.

Jaymor was ordered to pay $1,747,633.15 in damages, calculated as follows:

• $1,625,000 for loss of bargain (difference between the Fabco and Marcello sale prices),

• $128,768.72 for lost interest on the vendor take-back mortgage,

• $24,327.20 in interest on a line of credit used to finance another property purchase,

• $15,082.73 in additional property carrying costs,

• $9,492 in legal fees for the second closing,

• less a $55,037.50 commission differential credit.

The $200,000 deposit held in trust was also ordered forfeited and applied against the judgment. The court rejected any argument that the assignment to Jaymor was in bad faith, noting the plaintiffs had accepted it at the time without condition.

Findings on the title claim

The title claim focused on the torts of slander of title and injurious falsehood. Although Anthony made false, malicious, and disparaging statements about the McKenzies’ title and registered documents on title, the court found no direct or natural causal connection between Anthony’s actions and the failed Fabco sale. As such, Anthony was not liable for those damages.

However, Anthony was held responsible for damages arising from the delayed closing of the Marcello APS. His baseless filings on title directly impeded that transaction. The court awarded damages against Anthony totaling $57,790.88:

• $8,411 in additional interest on the plaintiffs’ line of credit,

• $44,521.10 in lost interest income on the vendor take-back mortgage,

• $4,858.78 in property-related expenses (taxes, insurance, utilities, maintenance).

The court emphasized Anthony’s conduct was malicious, made in bad faith, and intended to force a low-cost conveyance of land to him.

Costs and pre-judgment interest

In a subsequent decision on costs, the court awarded substantial indemnity costs and pre-judgment interest as follows:

• In the Fabco claim:

  • $150,000 in costs: $100,000 payable by Jaymor, $50,000 payable by Anthony (not jointly and severally),

  • $345,337.10 in pre-judgment interest on the damages awarded against Jaymor.

• In the Title claim:

  • $125,000 in costs payable by Anthony,

  • $10,050.76 in pre-judgment interest on the damages awarded against him.

Although Anthony avoided liability for the main breach of contract claim, the court held that his reckless and disruptive conduct played a significant role in the litigation and justified a cost award. His actions, while legally ineffective, provided the defendants with a pretext for repudiating the APS and significantly complicated the proceedings.

Conclusion

The court issued final judgments against Jaymor for breach of contract and against Anthony for tortious interference through slander of title and injurious falsehood. The court’s findings underscored the importance of acting in good faith during real estate transactions and the consequences of exploiting baseless legal claims to avoid contractual obligations.