They pay for the seller's full loss, and if the offer was made in bad faith, punitive damages can be added on top.
In Aliasi-Sini v. Arora, 2025 ONSC 202, a realtor signed a $2.35 million agreement of purchase and sale that he never intended, or knew he was unable, to close, so that a competing unit would show as "sold" while he sold his own. The judgment came to $553,810.18 plus interest, punitive damages included.
Key takeaways
- A signed agreement of purchase and sale is enforceable even when the buyer never pays a cent of the deposit. Non-payment is a breach, not an escape.
- Bad faith changes the damages. Courts reserve punitive damages for outrageous conduct, and signing an offer to manipulate the market qualifies.
- A brokerage can be liable for its registrant's misconduct. The co-operating brokerage here was liable alongside its broker of record and sole owner.
- A defendant who ignores the lawsuit does not escape scrutiny. On default, the court still reviews the evidence before granting judgment.
- Sellers win damages fights with paper: multiple listings, documented price adjustments, and pricing that follows market feedback.
This applies to home sellers, real estate agents and brokerages, and anyone assessing the strength of an offer in Ontario.
What happened
On November 17, 2022, Izhak Aliasi-Sini agreed to sell his Toronto condo for $2,350,000 to Samir Arora, a realtor who was the broker of record, principal, and sole officer, director, and shareholder of Equinox Arora Realty Inc. Equinox acted as the co-operating brokerage on the deal, and Arora negotiated its commission himself. The agreement called for a $50,000 deposit and a further $50,000 on November 30, with a January 31, 2023 closing.
Arora paid nothing, despite repeated promises.
The seller tried to salvage the deal. On January 5, 2023 the parties signed an amended agreement extending closing to March 2 and restructuring the deposits into four smaller staged payments totalling $75,000. Arora paid none of them, and six days after signing he said he would not be able to close. The seller accepted the repudiation on January 13.
Why sign at all? On the facts before the court, Arora either never intended to complete the purchase or knew he could not, and entered the deal to have the seller's unit marked "sold" while he listed his own unit across the hall, in the same building. He listed that unit on December 14, 2022, weeks after signing. The court noted the fake deal shrank the supply of competing units and gave Arora a favourable comparable to price his own unit against.
The seller relisted and cut the price four times over six months, following his brokers' advice: $2,388,000, then $2,188,000, then $2,088,000, then $1,988,000, before a new brokerage found the buyer. Along the way, Arora resurfaced with a $2,250,000 offer conditional on a full release of his earlier breaches. The seller refused. The property finally sold in July 2023 for $1,840,000, a $510,000 drop, closing August 31, 2023.
The seller sued Arora and Equinox. The defendants did not defend and were noted in default, and even after a judge gave them a further window to respond, they stayed silent. The court still reviewed the record carefully before granting judgment.
What the court decided
Justice Merritt found liability clear on three fronts.
The buyer breached in bad faith. Arora breached his contractual duty of good faith: he either never intended to complete the transaction or knew he could not, and signed to take a competing unit off the market. Punitive damages are reserved for "malicious, oppressive and high-handed" misconduct, and the court found the conduct of both Arora and Equinox so outrageous that it deserved punishment, awarding $25,000 in punitive damages. It did not help that the Real Estate Council of Ontario had already fined Arora $12,500 in May 2024 for failing to maintain fair and honest communication and failing to demonstrate financial responsibility in another trade, or that his emails in this deal accused the seller, the listing broker, and the seller's lawyer of harassment, coercion, and unethical conduct while stringing them along with broken promises.
The seller mitigated properly. A seller claiming resale losses must show reasonable efforts to resell at fair market value in a timely way. This seller's relisting history read like a log book: four documented price reductions on brokers' advice, a change of brokerage when the market did not respond, and a refusal to be baited into releasing his claims. That record made the $510,000 price-drop claim stick.
The brokerage was liable too. Arora and Equinox abused their respective positions as broker of record and co-operating brokerage to mislead the seller about Arora's intention and ability to close. The corporate shell did not shield the conduct; Equinox was liable alongside its sole owner.
The math: $510,000 in price-drop losses, less a $12,656 offset because the resale commission came in lower, plus $4,935.92 in legal fees thrown away on the failed deal, for $502,279.92 in damages. Add $25,000 in punitive damages and $26,530.26 in costs, awarded on the elevated substantial-indemnity scale because of the conduct. Grand total: $553,810.18 plus interest.
Why this matters for Ontario real estate deals
Most failed closings are about money: financing falls through, an appraisal comes in low, a linked sale collapses. This one was about intent, and it shows Ontario courts will trace the full cost of a fake offer back to its maker.
If you are selling, confirm the deposit lands. Most Ontario agreements call for the deposit "upon acceptance," which the standard OREA form defines as within 24 hours of acceptance. A deposit that never arrives is the earliest, loudest warning that an offer is not real. Chase it on day one, through your lawyer if needed, because every week of delay is market risk you are carrying for a buyer who may never close. Deposit follow-up is part of what we watch when you sell a home in Ontario.
A worthless offer costs more than a lost sale. The seller here carried a $2.35 million asset through a falling market while his unit sat "sold." The damages award captured that: the full drop to the eventual resale price. Buyers who default for ordinary financial reasons face the same measure of damages, as the buyers in Langen v. Sharma and the chain-collapse case learned. Bad faith just adds punitive damages on top.
Mitigation evidence is the seller's half of the equation. Damages are not automatic. This seller won because his relisting history read like a log book: list, respond to feedback, adjust, repeat. Keep that record from the day a deal wobbles.
For agents and brokerages, this is a compliance case as much as a damages case. A registrant using an agreement of purchase and sale to manipulate a competing listing exposed his brokerage to more than half a million dollars in liability. Supervision of a registrant's personal trades is not paperwork. It is risk management.
Practical checklist
For sellers and listing agents:
- Diarize the deposit deadline the moment an offer is accepted, and act the day it is missed.
- Treat a missed deposit as a live risk to the whole transaction, not an administrative delay. Get legal advice on your options early.
- If the buyer is a registrant or has a competing interest nearby, note it. Motive evidence mattered in this case.
- If the deal dies, relist quickly, price on market feedback, and document every adjustment.
For buyers:
- Never sign an offer you do not intend to perform. The agreement binds you from acceptance, deposit paid or not.
- Understand that damages run from the contract price to the eventual resale price, and bad faith invites punitive damages and costs on top.
Common questions
Is an offer binding in Ontario if the buyer never pays the deposit?
Yes. The agreement is formed on acceptance, and the deposit is an obligation under it. A buyer who never pays the deposit is in breach of a binding contract, not free of one. In Aliasi-Sini v. Arora, the buyer paid nothing and was still liable for the seller's full resale loss.
What can a seller do if the deposit never arrives?
Get legal advice immediately. Depending on the agreement's terms and timing, the seller may treat the failure as a repudiation, end the agreement, relist, and claim damages. Acting quickly, and in writing, protects both the termination and the later damages claim.
When are punitive damages awarded in Ontario real estate cases?
Rarely. Punitive damages are reserved for "malicious, oppressive and high-handed" misconduct that offends the court's sense of decency, and in a contract case they require a separate wrong such as a breach of the duty of good faith. Signing an agreement of purchase and sale in bad faith to take a competing unit off the market met that bar here, drawing a $25,000 punitive award on top of $502,279.92 in compensatory damages.
Can a brokerage be liable for its agent's failed personal deal?
It can. Equinox Arora Realty Inc., the co-operating brokerage, was liable alongside Arora, its broker of record and sole owner, because the two abused their respective positions to mislead the seller about Arora's intention and ability to close.
What happens if the defendant ignores the lawsuit?
The defendant is noted in default, but judgment is not automatic. The court still examines the evidence, including the mitigation record and the damages calculation, before making an award, which is what happened in this case.
Sources and decision link
Aliasi-Sini v. Arora, 2025 ONSC 202. Read the full decision on CanLII: 2025 ONSC 202.
The decision applies the punitive damages framework from Whiten v. Pilot Insurance Co., 2002 SCC 18, the default judgment test from Elekta Ltd. v. Rodkin, 2012 ONSC 2062, and the mitigation factors from Rosehaven Homes Ltd. v. Aluko. Prejudgment interest ran under the Courts of Justice Act, R.S.O. 1990, c. C.43.
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About the author: Christian Janisse is a licensed Ontario real estate lawyer and the founder of Simplyclose Law Professional Corporation. He acts for buyers, sellers, and lenders on purchases, sales, refinances, and title transfers across Ontario — in person in Windsor and remotely province-wide.