The appellants sold their home to the respondents.
After signing the agreement of purchase and sale, which contained an entire agreement clause, the appellants completed a Seller Property Information Statement (SPIS) stating the property was not subject to flooding and undertaking to disclose any important changes.
Before closing, the basement flooded, but the appellants did not disclose this.
After closing, the basement flooded again.
The respondents sued for negligent misrepresentation.
The Court of Appeal held that while the entire agreement clause did not preclude a tort claim based on the post-contractual SPIS, the claim failed because the respondents could not prove they reasonably relied on the misrepresentation to their detriment.