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Tse v. Sood
Superior Court of Justice—Divisional Court
Divisional Court File No: 284/13
Before:  Justice Perell
Date:     02 February 2015

This is an appeal of a decision of Deputy Judge William C. De Lucia dated 04 June 4, 2013, in an abortive real estate action involving a condominium unit.

Karmen Tse successfully sued the Defendant Jitendra Kumar Sood in Small Claims Court for the return of her deposit of $16,000, plus interest and legal costs in the amount of $3,895.

Ms. Tse refused to close the transaction and demanded her deposit back because:
under paragraph 7 of the Agreement of Purchase and Sale, Mr. Sood warranted that the common expenses for the condominium were $285.96 per month, but the Status Certificate indicated that the common expenses would be $314.56 per month (a 10% increase);
under paragraph 13 of the Agreement of Purchase and Sale, Mr. Sood represented and warranted that there were no special assessments contemplated by the condominium corporation, but the Status Certificate indicated that there was a special assessment for a one-time payment of $457.87; and
under paragraph 3 of Schedule “A” of the Agreement, the Agreement was conditional upon Ms. Tse’s lawyer reviewing the Status Certificate and attachments and finding them satisfactory in the lawyer's sole and absolute discretion, with Ms. Tse having three days after receiving the Status Certificate to give notice in writing that the condition was satisfied, else the agreement would be null and void and the deposit returned to Ms. Tse without deduction; however, Ms. Tse’s lawyer was not satisfied with the Status Certificate and attachments, and Ms. Tse did not give notice in writing that the condition was satisfied.

The Deputy Judge decided that Ms. Tse was entitled to the return of her deposit.

The appeal

The judge stated that Mr. Sood’s arguments have succeeded in other cases because materiality is often debatable, and he noted that it is always a risky course to refuse to close and put one’s deposit at risk, but in this case, with the combination of the condition precedent, breach of the warranty and misrepresentation, and the increase in the common area expenses, Ms. Tse was justified in refusing to close. The Deputy Judge made no error in law.

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