Court Orders Buyer Who Said She Could Not Close to Forfeit $70,000 Deposit: Laraia v. Garber, 2026 ONSC 5868

Greg Weedon

5 hours ago

6 min read

What happens when a buyer tells the seller, weeks before closing, that she cannot complete the purchase? In a recent decision of the Ontario Superior Court of Justice, the court held that a buyer's emails saying she could not close, together with her demand that the sellers relist the property, were an anticipatory breach of the agreement of purchase and sale. The court ordered her $70,000 deposit forfeited to the sellers and awarded them $35,000 in costs.

Weedon Law acted for the sellers on the application. The buyer has appealed the decision, and we continue to act for the sellers on the appeal. The decision is a useful guide for sellers deciding how to respond when a buyer signals trouble, and a warning to buyers about what they put in writing before closing.

What happened

In April 2024, the buyer, a registered real estate agent buying on her own behalf, agreed to purchase a house in Vaughan for $1,388,000. She paid a $70,000 deposit, which the listing brokerage held in trust. Closing was set for July 16, 2024, and time was of the essence. The agreement was conditional on financing, but the buyer waived that condition on May 3, 2024, and the deal became firm.

The agreement was not conditional on the sale of the buyer's own home. Even so, the following exchanges took place in the weeks before closing:

June 13 and 14, 2024: the buyer told the sellers' agent and then the sellers' real estate lawyer that she could not sell her own property or obtain financing, and would be unable to close. She asked for either a termination or an extension. The sellers refused both and said they expected her to close.
June 21, 2024: the buyer repeated that she could not complete. The sellers again affirmed the agreement and urged her to arrange financing.
June 24, 2024: the buyer sent a signed mutual release and, as "formal notice", demanded that the sellers immediately relist the property to mitigate their damages.
June 26, 2024: the buyer confirmed again that she would not be completing and repeated the demand to relist.
June 27, 2024: the sellers' lawyer wrote that the buyer's conduct was an anticipatory breach, that the sellers accepted it, that the agreement was terminated, and that the sellers reserved their rights, including the right to the deposit.

After the termination, a clerk at the buyer's lawyer's office sent a title search letter and suggested the buyer might still be trying to arrange financing. On July 2, the buyer asked for access to the property for an appraisal while still insisting that the sellers relist. On July 3, the sellers offered to revive the deal if the buyer paid a further $20,000 deposit and signed a direction releasing the full deposit if she failed to close again. She did not respond. The deposit stayed in trust, and the sellers applied to the court for it.

What the buyer argued

The buyer, who represented herself on the application, asked for her deposit back. Her main arguments were these:

Her emails were not a clear and unequivocal refusal to perform. Asking for a mutual release, she said, is not the same as refusing to close.
The sellers had not lost substantially the whole benefit of the agreement on June 27, because the closing date had not arrived and she was still pursuing financing and an appraisal.
The sellers could not insist on performance and then treat the agreement as repudiated.
By terminating early and refusing appraisal access, the sellers themselves repudiated the agreement.
The sellers acted dishonestly and terminated for strategic reasons, to resell sooner in a better market, contrary to the duty of honest performance in Bhasin v. Hrynew and C.M. Callow Inc. v. Zollinger.
The sellers' offer to revive the deal on new terms showed they had not truly lost the benefit of the contract.

What the court decided

Justice André found for the sellers on every issue.

The emails were an anticipatory breach

An anticipatory breach occurs when one party, by words or conduct, repudiates its obligations before they fall due. The test is objective: would a reasonable person conclude that the party no longer intends to be bound? The court applied that test as set out in Zoleta v. Singh and Jedfro Investments v. Jacyk.

The court found nothing ambiguous in the buyer's messages. Read together, they said that she could not sell her house, would not have the money to close on July 16, and that the sellers should relist to mitigate their damages. The court considered her experience as a real estate agent and her voluntary waiver of the financing condition. It held that the only reasonable conclusion was a clear intention not to complete.

Later steps did not revive the agreement

Once the sellers accepted the breach on June 27, the agreement was at an end. The buyer's later requests for an appraisal, and her lawyer's office carrying on with the file, did not bring it back. The court also held that the sellers had no obligation to give appraisal access. The contract was no longer in effect, and by waiving the financing condition the buyer had given up any right of access for financing purposes she might otherwise have had. The sellers could not breach a contract the buyer had already repudiated.

An offer to revive on new terms is not a concession

The court rejected the argument that the sellers' July 3 offer undermined their position. Having terminated, the sellers were free to propose a new deal on their own terms. An offer to revive does not restore the old contract, particularly one that is never accepted.

No dishonesty or strategic termination

The court found no evidence that the sellers misled anyone. They relied on what the buyer herself had written. The court rejected the suggestion that they terminated to take advantage of the market, for three reasons: they acted only after the June 24 and 26 emails, they tried to revive the deal on July 3, and their revival terms sought a larger deposit rather than a higher price.

The deposit is forfeited

Relying on Kalis v. Pepper, the court held that a seller is entitled to the deposit where the buyer has repudiated the agreement. It ordered the brokerage to release the full $70,000, with any interest earned on it, to the sellers, and awarded prejudgment interest under the Courts of Justice Act.

Costs

The sellers sought $50,000 in costs and the court fixed them at $35,000 inclusive, payable within 90 days. The court noted that the application took no more than 1.5 hours of court time and involved no factual disputes. That is a reminder that a deposit dispute decided on a documentary record can often proceed by application, which is generally faster than a full action.

Lessons for sellers

Insisting on closing at first did not hurt the sellers. They refused the buyer's requests for a release or an extension, and that did not stop them from accepting her later, clearer repudiation.
Accept a repudiation clearly and in writing. The June 27 letter said three things: the buyer was in anticipatory breach, the sellers accepted it, and they reserved their rights to damages and the deposit.
Do not terminate on the first sign of trouble. A seller who treats an ambiguous message as a repudiation risks becoming the party in breach, which is the argument the buyer made here under Domicile Developments v. MacTavish. The safer course often depends on exactly what the buyer has said and done, so get advice before you terminate.
Keep everything in writing. The sellers' case rested on the buyer's own emails.
Once the agreement is terminated, you are not obliged to keep performing it, including by giving access for an appraisal. Here, the sellers' offer to revive the deal on their own terms did not weaken their position.

Lessons for buyers

Waiving a financing condition is a promise that you will have the money on closing. If your purchase depends on selling your current home, that needs to be a condition of the agreement.
Be careful what you write. Repeatedly telling the seller you cannot close, especially alongside a mutual release and a demand to relist, can amount to a repudiation, even if you later try to arrange financing.
Later efforts may come too late. Once the seller accepts the repudiation, steps to keep the deal alive do not revive it unless the seller agrees.
Speak to your lawyer before you contact the seller or the seller's lawyer. Asking for more time is not the same as refusing to close, and the wording of that request matters.
Industry experience matters. The court took the buyer's experience as an agent into account in reading her emails.

Need advice on a deal that may not close?

Weedon Law acts for sellers and buyers in Ontario real estate disputes, including buyer defaults, deposit claims and failed closings. Greg Weedon is certified by the Law Society of Ontario as a Specialist in Real Estate Law and in Civil Litigation. If the other side has told you they cannot close, or you are worried you may not be able to, contact us at 416.593.6723 or greg@weedonlaw.ca before you respond.

Read the full decision: Laraia v. Garber, 2026 ONSC 5868.

This article provides general information only and is not legal advice. The outcome of any matter depends on its own facts, and past results do not guarantee a similar outcome in another case. The decision is under appeal.