Riggall v Thompson

In the case of Riggall v Thompson, the appellant, Riggall, entered into a contract with the respondents, Thompson, for the purchase of a residential lot. When Riggall failed to pay the purchase price on the settlement date and subsequently missed extended settlement dates, the respondents terminated the contract and resold the lot. The trial judge awarded damages of $72,201.28, later amended to $72,817.16, which included loss on resale, holding costs incurred post-default, legal fees, real estate agent's fees, and costs, along with interest. The trial judge concluded that clause 9.3 of the contract entitled the respondents to exercise all options under clause 9, subject to clauses 9.4 and 9.5, and always adhering to the overarching principle of reasonableness in assessing damages.

The primary legal issues before the court were whether the trial judge erred in assessing the damages under clause 9 and whether certain components of the damages, particularly those under clause 9.4(1)(b) and clause 9.5, were permissible. Riggall contested the allowance of real estate agent's fees and costs, as well as legal fees, arguing these were penal and disproportionate to the anticipated loss at the time of the contract. Additionally, Riggall argued that the holding costs incurred after the default were not recoverable. The court was tasked with determining the enforceability of these clauses in light of the principles governing penalties and liquidated damages.

The court found that while the principle of reasonableness applied to the assessment of damages, certain components of the damages were excessive. Specifically, the court reduced the amount of legal fees and real estate agent's fees and costs to a sum that was deemed reasonable. The court also held that the holding costs were recoverable, but the amount allowed was adjusted to reflect a more equitable recovery. The overall judgment was thus reduced from $72,817.16 to $70,724.55.

In summary, the appeal was allowed to the extent of reducing the judgment ordered in the District Court from $72,817.16 to $70,724.55, with the appellant, Riggall, ordered to pay the respondents' costs of the appeal. The court's decision underscores the importance of balancing the principle of reasonableness in the assessment of damages with the specific terms of the contract and the nature of the anticipated loss.