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Damages For Lost Opportunity Cannot Be Awarded In A Failed Real Estate Transaction – Real Estate and Construction – Canada – Mondaq News Alerts




Damages For Lost Opportunity Cannot Be Awarded In A Failed Real Estate Transaction

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A recent decision from the Ontario Superior Court of Justice has
confirmed that damages for lost opportunity will not be awarded
when a real estate deal goes wrong.

In Akelius Canada Inc. v. 2436196 Ontario Inc., 2020
ONSC 6182, Justice Morgan held that when a real estate deal falls
apart due to a seller’s default, damages are to be determined
at the closing date and a claim for the future appreciation of the
property is therefore not available.

In Akelius, two sophisticated real estate investors
entered into an Agreement of Purchase and Sale
(“APS“) in 2015 for seven residential
apartment buildings in Toronto. The plaintiff buyer was a Canadian
subsidiary of a large international investment corporation with
holdings across Europe, the United States, and Canada. Over the
course of the transaction, the purchase price was negotiated to a
final price of $225,400,000.

After the APS was executed and prior to closing, the buyer
discovered that there were several mortgages encumbering the title
of some of the properties with total outstanding amounts of over
$48 million. The existence of the mortgages constituted a breach of
the APS and the buyer therefore objected after discovering

The defendant sellers failed to remove the mortgages. However,
in an attempt to salvage the transaction, the sellers proposed to
revise the APS to exclude the encumbered properties from the sale
or alternatively, they proposed that the buyer could assume the
mortgages with a price abatement.

The buyer refused the sellers propositions, sued for breach of
contract, and brought a motion for summary judgment. The sellers
eventually sold the properties in 2018 for about $50 million more
than the purchase price in the APS. In its damages claim, the buyer
sought $50 million, reflecting the appreciation reaped by the
sellers, as well as about $770,000 in sunk costs that it incurred
as a result of the failed transaction.

Justice Morgan had little difficulty finding that the sellers
breached the APS. The buyer was ready, willing, and able to close
the transaction and the sellers were unable to convey good title on
the closing date as a result of the mortgages.

As such, the primary issue for determination was the appropriate
measure of damages. Justice Morgan noted that the basic principle
is that damages should put the injured party back in the position
it would have been in if the contract had not been breached. There
is some flexibility to this approach; courts have stated that the
date of assessment should be determined by what is fair on the
facts of the case.

However, it has also been well established that damages for lost
speculation profits is not an available remedy in a real estate
transaction. The damages must make up what the purchaser lost in
value on the closing date, not what a property speculator standing
in the purchaser’s shoes would have lost.

It was also noted that it did not matter in this case that the
buyer was an “income investor” rather than a true
property speculator. Damages were therefore measured at the date of
closing, which precluded any claims for lost appreciation

While the case law provided a complete answer to the lost profit
claim, the court in Akelius went on to discuss mitigation,
because the parties had spent much of their time fighting over that
issue. The court held that the buyer had either failed to mitigate
its damages or, more likely, fully mitigated its damages. The buyer
refused to produce records of its transactions after January 2016,
and Justice Morgan accordingly drew an adverse inference that the
funds saved on this transaction were spent on other comparable

As a result, it was held that the buyer was only entitled to
damages for the amount of sunk costs thrown away on the
transaction. Damages for lost opportunity were not awarded. Because
both parties had mixed success, no costs were awarded to either

This decision affirms the courts’ reluctance to consider
claims for lost profits from capital appreciation, even where a
buyer is unfairly deprived of a lucrative opportunity. Real estate
investors should be mindful of this before they opt to sue for

The authors would like to thank Allan Tung, Articling Student,
for his assistance with this article.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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Morguard Real Estate Investment Trust Declares December 2020 Distribution of 4 Cents per Unit – Canada NewsWire



MISSISSAUGA, ON, Nov. 30, 2020 /CNW/ – Morguard Real Estate Investment Trust (the “Trust”) (TSX: MRT.UN) today announced that it has declared a distribution of 4 cents per unit for the month of December 2020.  The distribution will be payable on December 31, 2020 to unitholders of record as at December 15, 2020.

About Morguard Real Estate Investment Trust

The Trust is a closed-end real estate investment trust, which owns a diversified portfolio of 47 high quality retail, office and industrial income producing properties in Canada consisting of approximately 8.3 million square feet of leaseable space.

For more information, please visit

SOURCE Morguard Real Estate Investment Trust

For further information: Morguard Real Estate Investment Trust, K. Rai Sahi, President and Chief Executive Officer, T 905-281-4800; Andrew Tamlin, Chief Financial Officer, T 905-281-4800

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Artis Real Estate Investment Trust Announces Settlement Agreement with Sandpiper Group and Retirement of CEO And CFO – Canada NewsWire



WINNIPEG, MB, Nov. 30, 2020 /CNW/ – Artis Real Estate Investment Trust (“Artis” or the “REIT”) (TSX: AX.UN) announced today that it has reached an agreement with Sandpiper Group (“Sandpiper”) to withdraw its unitholder meeting request and pending litigation. Under the terms of the agreement, four existing trustees, Armin Martens, Edward Warkentin, Wayne Townsend and Bruce Jack, have tendered their resignations from the Board of Artis effective immediately. Sandpiper’s five nominated trustees: Heather-Anne Irwin, Samir Manji, Mike Shaikh, Aida Tammer and Lis Wigmore will be added to the Board. Armin Martens, President & CEO, will be retiring effective December 31, 2020 and Jim Green, CFO, will be retiring effective at the conclusion of the 2021 annual meeting of the unitholders.

Edward Warkentin, Chairman of the Board, said, “We are pleased to have come to an agreement with Sandpiper that Artis believes is in the best interests of the REIT and all of its unitholders.  The reconstituted Board will provide continuity as well as adding new Trustees with a broad range of experience and expertise.  The Board and management remain committed to ensuring that this transition be effected in an orderly and responsible manner for the benefit of all of Artis’ stakeholders.  On behalf of the Board, we would like to thank Armin for his leadership and contributions to Artis over the years.  Armin was instrumental in building Artis into the successful REIT that it is today and we sincerely thank him for those efforts and wish him the best on all his future endeavours.  We are also pleased that continuity in CEO and CFO positions will be thoughtfully managed by Senior Executives at Artis in collaboration with the Board.  On a personal level, I am grateful for the opportunity of having served as the Chair of Artis since its inception.  Throughout my tenure, I have had the privilege of serving alongside an exceptional group of talented, professional, insightful and dedicated Trustees and I would like to thank each and every one of them for their contributions over the years.”  

Armin Martens, President & CEO, said, “I am pleased that Artis was able to reach an agreement with Sandpiper that Artis believes is in the best interests of the REIT and all of its unitholders.  Having served as Artis’ founding Chief Executive Officer for 16 years, I feel this is an appropriate time for leadership renewal and succession.  It has been my honour and privilege to serve this great company.  I am proud of the people of Artis and the excellent business we have built and wish the new leadership team and all Artis unitholders continued success in the years ahead.”

“We are pleased to reach an agreement with the Board of Artis that we believe will benefit all unitholders,” said Samir Manji, Chief Executive Officer of Sandpiper. “On behalf of all fellow unitholders, I would like to thank Armin, Ed, Wayne, Bruce, and Jim for their many years of service to the REIT and their commitment to a smooth transition moving forward. I look forward, alongside the continuing and newly added trustees, to contributing to the future growth and success of Artis.”

About Artis

Artis is a diversified Canadian real estate investment trust investing primarily in industrial and office properties in select markets in Canada and the United States. Since 2004, Artis has executed an aggressive but disciplined growth strategy, building a portfolio of commercial properties, comprising approximately 23.8 million square feet of leasable area. Artis is focused on growing its industrial portfolio through strategic development projects in its target markets.

About Sandpiper

Sandpiper is a Vancouver-based private equity firm focused on investing in real estate through direct property investments and public securities. For more information about Sandpiper, visit

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

SOURCE Artis Real Estate Investment Trust

For further information: Artis Contact: Heather Nikkel, Vice-President, Investor Relations, Phone: (204) 947-1250, Email: [email protected]; Sandpiper Contact: Alyssa Barry, Vice President, Capital Markets and Communications, Phone: (604) 558-4885, Email: [email protected],

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Vancouver real estate: leaky East Broadway condo for sale, price reduced, $339900, cash only – The Georgia Straight



About two weeks ago, the Straight reported the sale of a unit at a leaky Vancouver condo complex.

It was a $285,000 cash-only, no-financing deal.

Now there’s another unit for sale in the same leaky condo development, Gardenia Villa.

It’s also cash-only, and no mortgage is available.

The price for 603-2468 East Broadway has been reduced to $339,900 from its original listing tag.

Gardenia Villa is known as a leaky condo development.

On September 16, 2006, Vancouver Sun reporters Fiona Anderson and Glen Bohn wrote that owners may have to pay up to $40 million to keep the complex from rotting.

“The project, designed by architect James Cheng and developed by Hong Kong-based Maple Resources Investment Co. Ltd., is a colourful eleven building complex with three gated courtyard gardens and a pool on five acres of land,” Anderson and Bohn reported.

Owners first noticed water issues at the 250-unit Gardenia Villa located at East Broadway and Nanaimo Street, “shortly after it was built in 1994”, the Sun noted in a report about 10 years later on October 2, 2016.

Reporter Keith Fraser wrote in the 2016 report that a judge ordered the strata council to impose on the owners a $16.8 million special levy to repair the complex.

RE/MAX City Realty listed 603-2468 East Broadway on November 25, 2019 for $349,000.

The listing was terminated on January 20, 2020 at a price of $344,000.

On the same day, a new listing came up for $339,000. It expired on June 26. On the same day, a new listing was released for the same price of $339,000.

Now the seller wants a little bit more.

The current listing increased the price by $900 for the sum of $339,900.

Compared to its November 25, 2019 listing tag, the present listing price represents a $9,100 reduction.

The listing history of the property was tracked by, a real-estate information site owned and operated by Holywell Properties.

RE/MAX Crest Realty describes the property as a “large” unit on the sixth floor of a “concrete leaky condo”.

“Potentially building will be Rain-screened or sold to Developer. No Mortgage available for this complex. Must buy all cash,” the listing states.

The two-bedroom, two-bath, plus den unit “faces towards the center courtyard which is very quiet”.

The other condo unit that the Straight reported about on November 17 is on the fifth floor of the same 2468 East Broadway leaky condo building. That was Unit 502, which the listing described as one that faces a “beautiful courtyard”.


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