Sidhu v. Mand, 2025 BCSC 2324: An Overview
When a buyer fails to complete a real estate transaction in British Columbia, the breach of contract for sale of property can lead to complex damages calculations.
The recent BC Supreme Court decision in Sidhu v. Mand, 2025 BCSC 2324, litigated by Legalbird’s Kawal Atwal, provides important guidance for property sellers and assignors dealing with breached purchase agreements and highlights key considerations when determining recoverable damages in property contract disputes.
The Failed Assignment Agreement
In this case, the original purchasers entered into a presale townhouse contract in Surrey in August 2021 for $860,000 with an $86,000 deposit. In May 2023, with the developer’s consent, they assigned the contract to new buyers for a total purchase price of $955,000 through an assignment agreement.
The assignment agreement required the new buyers to pay $181,000 as the “Assignment Amount,” consisting of reimbursement of the original $86,000 deposit plus $95,000. The buyers paid a $50,000 deposit in two installments but failed to complete the purchase when the completion date arrived in October 2023, despite two extensions to November 16, 2023.
When the assignees breached the contract, the original purchasers were forced to complete the purchase themselves on November 16, 2023. They later sold the property in February 2025 for $945,000.
Key Contract Terms in Property Assignment Disputes
The court examined several critical provisions in the assignment agreement that affected the damages calculation. Clause 5.12 included an indemnity provision requiring the assignees to “indemnify and save harmless the Assignor from all actions, suits, costs, losses, damages, charges and expenses incurred” due to their breach.
Clause 5.17 stated that if the balance wasn’t paid on time, the amount paid would be “non-refundable and absolutely forfeited to the Assignor… without prejudice to the Assignor’s other remedies.”
These provisions proved central to determining what damages could be recovered beyond the forfeited deposit.
Forfeited Deposits as Liquidated Damages in BC Real Estate
Justice Sharma confirmed that in British Columbia real estate transactions, forfeited deposits typically represent pre-assessed liquidated damages. The $50,000 deposit paid by the defendants was intended as liquidated damages and was properly forfeited.
The court referenced Peak Real Estate Marketing Ltd. v. 697604 B.C. Ltd., noting that deposits must be reasonable and represent a “genuine pre-estimate of the expected loss that a party will sustain in the event of a breach of contract, based on the facts at the time of contracting.”
Calculating Actual Damages in Breach of Contract Cases
The plaintiffs initially sought $214,041.25 in damages, including $131,000 for the unpaid Assignment Amount balance, $23,677.50 in extension fees, $43,000 for GST, $15,200 for property transfer tax, and $1,163.75 for legal fees.
The court applied the principle from Mandl v. Fong that vendors must be placed in the same position they would have been had the purchaser performed the contract. Recoverable damages include the difference between contract price and resale price, plus actual costs incurred due to the breach.
The court found that property transfer tax ($15,200) and legal fees ($1,163.75) arose directly from the defendants’ breach. However, GST was not recoverable because Clause 5.18 stated the Assignment Amount was inclusive of GST. The extension fees ($23,677.50) were potentially recoverable, totaling $40,041.25.
The Importance of Proving Losses and Mitigation
Despite identifying $40,041.25 in potentially recoverable costs, the court dismissed the plaintiffs’ application. The key factor was that the plaintiffs sold the property for $945,000, which was $85,000 more than the $860,000 they paid for it, exceeding their potential losses.
The court emphasized that plaintiffs must prove actual losses and demonstrate reasonable mitigation efforts. The plaintiffs claimed $41,250 in holding costs but provided no documentary evidence. Justice Sharma noted that using “approximately” to qualify amounts without supporting documents meant they were “merely estimations.”
The court also noted the plaintiffs “presented no evidence about mitigation” and did not explain their decision to rent the property before selling it.
Lessons for Property Sellers and Assignors
This decision highlights several important considerations for BC real estate assignment agreements. The court expressed being “troubled by the lack of disclosure” regarding the plaintiffs’ initial failure to reveal the property sale, noting “the obvious concern is whether the failure to reveal the sale when they filed the application was an attempt to receive a higher amount of damages.”
Maintaining detailed records is essential – the lack of documents to support holding costs proved fatal to that claim. The burden of proving loss rests with the plaintiffs.
Protecting Your Interests in Real Estate Transactions
Whether you’re dealing with a failed property assignment, breach of purchase agreement, or other real estate contract disputes in British Columbia, understanding your rights and obligations is crucial and Legalbird can help protect your rights and future. The calculation of damages requires careful analysis of contractual terms, actual losses, and mitigation efforts.
If you’re facing a breach of contract situation involving real estate in Vancouver, Surrey, Delta, or Abbotsford, Kawal Atwal at Legalbird can help protect your interests. Contact us today for a free 30-minute consultation to discuss your civil litigation matter and explore your legal options.
