Grant Allen McDonald (Applicant) entered into an Agreement of Purchase and Sale (APS) on May 2, 2024, to buy a rural century home in Tillsonburg, Ontario, for $775,000, with a $25,000 deposit.
The home burned down on May 22, 2024, triggering the APS insurance clause, allowing McDonald to either (1) terminate the agreement and recover his deposit or (2) take the insurance proceeds and complete the purchase.
McDonald opted to proceed but demanded a guarantee of the insurance payout amount, which the estate trustees (Respondents) refused.
Legal Issues:
Did McDonald’s demand for an insurance proceeds guarantee amount to repudiation of the APS?
Was he entitled to specific performance (forcing the sale)?
Should the $25,000 deposit be returned?
Court's Decision:
Repudiation: The court ruled McDonald was not "ready, willing, and able" to close, as he made the guaranteed insurance payout a condition. This was a variation of contract terms, allowing the estate to terminate and keep the deposit.
No Specific Performance: The home was destroyed, removing its unique qualities. Since McDonald had an alternative remedy (damages), specific performance was inappropriate.
Deposit Forfeiture: The APS clearly outlined forfeiture upon breach. This was an arm’s-length transaction with no unfair bargaining power.
Outcome:
McDonald's application dismissed; estate trustees kept the $25,000 deposit.
