This appeal concerned a failed residential property transaction due to substantial water damage occurring shortly before closing.
The purchasers (respondents) sued the vendors (appellants) for breach of the agreement of purchase and sale (APS), seeking return of their deposit and damages.
The vendors counterclaimed, alleging repudiation by the purchasers.
Both parties moved for summary judgment.
The motion judge found in favour of the purchasers, ruling that the damage was 'substantial' under s. 18 of the APS, entitling the purchasers to terminate, and that the vendors had not acted in good faith.
The vendors appealed, arguing procedural unfairness regarding the pleading of s. 18, errors in factual findings, and incorrect damages calculation.
The Court of Appeal dismissed the appeal, upholding the motion judge's findings on s. 18 and good faith, but reduced the damages awarded by the cost of an engineering report.