Gyimah v. The Roman Catholic Episcopal Corporation of the Diocese of Hearst in Ontario, 2025 ONSC 3876
Transactional real estate lawyers handle closings routinely. But a recent Ontario Superior Court decision serves as a stark reminder that even straightforward purchases can spiral into costly litigation when basic closing mechanics go wrong and when parties make poor decisions about handling funds afterward.
The Facts: A Simple Purchase Gone Wrong
In May 2019, Anthony Gyimah agreed to purchase property in Cochrane from the Diocese of Hearst for $65,000. Gyimah lived in Toronto. He paid a $9,000 deposit and, on the scheduled closing date of June 28, 2019, paid the balance of $58,600.22.
Despite full payment, the transaction never closed. The issue? Key delivery. Gyimah’s lawyer took the position that the Church breached the agreement by failing to deliver the keys to his Toronto office and refused to register the transfer.
The Church, in turn, sued for specific performance or damages. It ultimately resold the property in April 2020 for $15,000 more than Gyimah’s purchase price.
The Real Problem: What Happened to the Money?
Here’s where a simple dispute became a five-year litigation nightmare. In July 2020, the Church made a without prejudice offer to return $57,600.22 to Gyimah in exchange for a release. Notably, even if the Church had proven all its damages (approximately $25,000), the resale price meant it could only recover about $10,000. The Church was essentially offering to return money Gyimah would have been entitled to anyway.
Gyimah rejected the offer. So what did the Church do? It held onto Gyimah’s $57,600.22, money to which it asserted no claim.
The Church argued it kept the funds “in trust” for Gyimah, claiming this was equivalent to paying money into court. Justice Papageorgiou firmly rejected this reasoning: “This was the plaintiff’s money, and so the defendant was not entitled to keep it. The plaintiff was entitled to do whatever he wanted with his own money.”
The Costs Consequences
At trial, the court calculated the Church’s actual damages at $15,219.61. Given the $15,000 resale profit, the Church was awarded only $219.61. Gyimah recovered $70,142.23.
The costs awards tell the real story:
The Church sought $50,163.45 in partial indemnity costs but was denied. Instead, it had to pay Gyimah, despite the latter technically breaching the agreement.
Why? The court found that while keeping the money may not have been deliberate misconduct, “the practical effect of the offer made by the Church was that it was using the plaintiff’s own money as leverage to try to obtain a settlement equal to the full damages that it asserted.”
Justice Papageorgiou noted that if the Church found Gyimah difficult, it should have sought to pay the funds into court. A judge would have likely ordered the money paid to Gyimah immediately, potentially de-escalating the conflict.
Lessons for Transactional Lawyers
- Don’t improvise with funds held “in trust.” Holding money “in trust” is not the same as paying it into court. If your client is holding funds after a failed closing, with no legitimate claim to such funds, seek court directions promptly.
- Get keys to the right place. While the court didn’t provide extensive analysis on the key delivery issue, this entire dispute arose because keys weren’t delivered to the purchaser’s Toronto lawyer. In remote transactions, confirm delivery logistics explicitly in the agreement and on closing.
- Litigation exposure can dwarf the deal value. A $65,000 transaction generated over $110,000 in legal fees claimed by all parties. The Church alone sought over $50,000 in costs for a case where it recovered $219.61.
- Consider the optics of your position. Even though Gyimah’s own conduct was problematic (he demanded 28% interest without documentation, made unreasonable settlement offers, and caused delays), the court still awarded him costs because the Church held his money for five years when it had no claim to most of it.
- Move quickly on disputes. The Church sold the property in April 2020, crystallizing its damages. Yet the matter didn’t go to trial until December 2024. Earlier court intervention on the funds issue could have prevented years of accrued interest and costs.
The Takeaway
This case is a cautionary tale about letting transactional disputes fester. When a deal falls apart, identify what money is truly in dispute, pay out what isn’t, and get to court quickly on the rest. Using another party’s funds as leverage, even unintentionally, might result in significant costs later on.
For transactional lawyers, the message is clear: know when to hand the file to a litigator, and if you’re still involved post-closing, don’t hold onto money that isn’t yours to hold.
