Law360 Canada ( March 31, 2021, 6:30 AM EDT) -- Appeal by the vendor from a decision finding that the vendor wrongfully terminated the agreement of purchase and sale and granting the purchasers specific performance. In 2015, the respondents entered into a pre-construction agreement for the purchase of a condominium unit. In February 2019, just prior to the sale’s scheduled closing, the vendor purported to terminate the Agreement and forfeit the respondents’ deposit because the respondents had breached the Agreement by leasing the unit during the interim occupancy period without the vendor’s permission. The vendor then entered into an agreement to resell the unit to relatives under very favourable terms. The respondents commenced an application seeking relief from forfeiture and, in effect, specific performance of the Agreement. The application judge found the respondents had not breached the Agreement because they never had a lease agreement with the tenant and he never paid rent. He found the respondents had simply loaned out the unit for a short time. Even if there had been a breach, the application judge concluded that the vendor affirmed the Agreement by its conduct by not taking any steps to terminate the Agreement after becoming aware of the alleged breach by September 2018 at the latest. In granting specific performance, the application judge held that uniqueness arose not from the respondents’ subjective needs or the unit’s physical characteristics, but because the Agreement contained advantageous terms and could not have been readily duplicated in Toronto’s competitive, volatile real estate market. The application judge also held that the vendor’s conduct favoured granting specific performance since the vendor had continued to accept payments from the respondents while improperly trying to use the allegation of a breach to avoid its responsibility to replace a bathtub. The judge found that the vendor’s subsequent sale, which was not at arm’s length and did not contain commercially reasonable terms, was a sham designed to put the unit out of the respondents’ reach....