Kunnath v. Cartier, 2026 ONSC 1096 | Ontario Superior Court of Justice | Released February 23, 2026
A purchaser who cannot finance a deal and asks for an extension but never closes is not simply a buyer in difficulty. In the eyes of Ontario courts, that purchaser may be in anticipatory breach of the agreement of purchase and sale (“APS”), and the vendor may be entitled to walk away, relist the property, and keep the deposit. That is precisely what the Ontario Superior Court of Justice confirmed in Kunnath v. Cartier, a decision released in February 2026 that transactional real estate lawyers should have on their radar.
The Facts in Brief
In May 2022, vendor Ajai Kunnath accepted an offer of $1,755,000 for his Vaughan property from purchaser Ellie Cartier. The offer was not conditioned on financing, which proved to be a critical detail. A $70,000 deposit was paid, and closing was set for August 8, 2022.
Two days before closing, Cartier’s agent disclosed she could not secure financing unless the purchase price was reduced. Kunnath agreed to reduce the price to $1,700,000. Then, on the morning of closing day itself, Cartier’s counsel sought a further week-long extension to August 15.
Kunnath was in a tight spot: he was relying on this closing to fund his own purchase transaction, scheduled for the same day. At 5:09 p.m. (just 51 minutes before the 6:00 p.m. closing deadline), Kunnath’s lawyer delivered an extension letter with non-negotiable terms: an additional $30,000 deposit, legal fees, mover fees, mortgage per diem, and other costs. The letter stated that anything short of full acceptance would be “treated as anticipatory breach.”
Cartier’s counsel had already closed the office for the day. No response came before 6:00 p.m. Over the next two weeks, the parties negotiated but could not agree. Cartier ultimately sought a further price reduction to $1,630,000 and a vendor take-back mortgage, neither of which Kunnath would accept. On August 22, Kunnath sold the property to a third party for $1,613,000 (effectively $1,650,290 once the commission waiver was factored in).
The Court’s Key Findings
Justice Shin Doi granted summary judgment in favour of Kunnath on all issues. Four findings stand out for practitioners.
- Anticipatory breach was found. The disclosure that Cartier could not close without financing constituted an anticipatory breach. In reaching this conclusion, the court applied the test from Rahbar v. Parvizi: would a reasonable person conclude the purchaser no longer intended to be bound? Here, the answer was clearly yes. The request for an extension was not itself the breach, the inability to close was.
- Kunnath validly accepted the repudiation. Under Ontario contract law, a repudiatory breach does not automatically terminate an agreement. The innocent party must elect to accept it. Kunnath’s August 8 extension letter expressly stated that he treated any non-acceptance as anticipatory breach and considered the transaction at an end. That was a clear and unequivocal election to terminate.
- No tender was required from the innocent party. Cartier argued that Kunnath had not formally tendered on closing day and therefore could not claim breach. The court rejected this, confirming that an innocent party is not required to tender when the other side has already repudiated the contract.
- The vendor was entitled to relist and resell. Once the APS was terminated, Kunnath had a duty to mitigate his losses, which meant relisting and selling the property as quickly as reasonably possible. The court rejected Cartier’s argument that the resale price was below market value. Kunnath had received four offers and accepted the highest, all while under time pressure to fund his own purchase closing.
Damages: How the Numbers Worked Out
The court calculated Kunnath’s damages as follows:
Loss of bargain (difference between amended APS price and resale price): $49,710
Bridge financing costs: $20,393.38
Legal fees and related costs: $8,803.11
Total damages: $78,906.49. The $70,000 deposit was applied against this amount, leaving a balance of $8,906.49 payable by Cartier.
Practical Takeaways for Transactional Lawyers
This case is a useful reference point for several common situations that arise in residential and commercial real estate transactions.
No financing condition does not mean no financing risk. Purchasers who waive a financing condition take on real risk. If they cannot close, they face not just deposit forfeiture but damages exceeding the deposit.
Extension letters should be precise. Kunnath’s extension letter was explicit about what would constitute acceptance and what would constitute termination. That precision helped the court find a clear election to treat the contract as at an end.
Post-closing day negotiations do not revive a terminated contract. Cartier argued that 14 days of ongoing negotiations showed the APS was still alive. The court disagreed: once repudiation was accepted, continued discussions did not resurrect the agreement.
Vendors must mitigate, but are given reasonable latitude. Kunnath relisted quickly and accepted the best available offer under real time pressure. The court did not penalize him for acting quickly or for accepting a price below an appraisal value, given the circumstances.
Kunnath v. Cartier is a clear and well-reasoned application of established principles to a fact pattern that will be familiar to anyone who handles residential real estate files. For lawyers advising clients on either side of a deal, whether drafting APS conditions, negotiating closing extensions, or managing a transaction that has gone sideways, this decision is worth reading.
