Claim No: 279244
IN THE SMALL CLAIMS COURT OF NOVA SCOTIA
Cite as: King v. Milner, 2007 NSSM 25
BETWEEN:
SUSAN FRANCES KING
Claimant
- and -
ALAN MILNER and CATHERINE CATON
Defendants
REASONS FOR DECISION
BEFORE
Eric K. Slone, Adjudicator
Hearing held at Dartmouth, Nova Scotia on June 12, 2007
Decision rendered on June 13, 2007
APPEARANCES
For the Claimant - Blair MacKinnon, Barrister & Solicitor
For the Defendants - self-represented
[1] The Claimant sues for a deficiency on the resale of her home following an abortive sale.
[2] The facts are not in significant dispute. The Claimant listed her home in Sackville through Prudential Property Specialists for sale during the summer of 2006, asking $134,900. The Defendants, acting through their own agent, made an offer which was countered by the Claimant, resulting in a binding agreement at $131,000, with a closing date of August 31, 2006.
[3] The agreement contained a financing condition which provided as follows:
1. (b) This agreement is subject to the Buyer being able to obtain approval for a first mortgage in a principal amount of approximately 95% of purchase price at an interest rate not to exceed current rate. This financing shall be deemed to be arranged unless the Seller or the Seller’s agent is notified to the contrary in writing on or before August 18, 2006. If notice to the contrary is received, either party shall be at liberty to terminate this contract and deposit shall be returned to the Buyer without interest or penalty.
[4] The Defendants were first time home buyers. Although they had a preliminary indication that they would be approved for financing, their application was declined on August 16, 2006. Although they were within the time to have exited the transaction, according to their evidence their own agent assured them that he could get them financing through other means. As a result, the August 18 condition date was allowed to pass.
[5] Neither the vendor nor her agent had any knowledge, verbal or written, to the effect that the Defendants were having trouble getting financing.
[6] In the meantime, the Claimant purchased another property. She had timed the closing to coincide with the closing on her property. She also ensured that her purchase would be conditional until all conditions on her sale were satisfied, as she did not want to be saddled with two properties.
[7] Unfortunately, the effort to find alternative financing was unsuccessful and on the 28th or 29th of August the agent for the Claimant was informed that the Defendants could not close.
[8] The Claimant immediately re-listed the property at a slightly lower price and was able to obtain an offer after several weeks of market exposure for $129,000, closing on October 23, 2006.
[9] In the seven weeks between August 31 and October 23 the Claimant was obliged to pay for bridge financing and carry the expenses of the two homes. This claim seeks to recover the difference in price ($2,000.00) and those additional expenses ($997.14).
[10] The Defendants did not challenge the expenses. They queried, although with more sadness than conviction, why they also had to pay the difference in the two purchase prices.
Application of legal principles
[11] The applicable legal principles are not complex. Having entered into a binding contract, the Defendants were bound to close or be responsible for the damages caused by not closing. Those damages consist of the expenses of carrying the two properties and the difference in the sale price.
[12] The difference in the sale price is recoverable because the Claimant is entitled to the benefit of the contract she made with the Defendants. Her only obligation was to act reasonably on the resale, which she very clearly did. It made sense to lower the price a bit to attract buyers and, hopefully, get a quick sale before the cost of carrying two properties became too onerous.
[13] I sympathize with the Defendants’ plight. I am reluctant to make any findings as to what went on between them and their agent, as he was not present in court to testify, but if their version of events is true they may well have recourse against him for failing to protect their interests by invoking the condition in a timely manner.
[14] In the result there will be judgment for $2,997.14 against the Defendants. No prejudgment interest is claimed. I also allow the filing fee of $160.00 plus $125.40 for service of documents. The total judgment is therefore $3,282.54.
[15] I understand that there is a $500.00 deposit being held by Prudential, pending the outcome of this case. That amount should be released to the Claimant, in partial satisfaction of the judgment. Any accrued interest thereon shall belong to the Claimant, but the judgment shall only be reduced by the principal amount of $500.00.
Eric K. Slone, Adjudicator