DATE: 20060523

DOCKET: C42687 & C42692

COURT OF APPEAL FOR ONTARIO

RE:

CHRISTINE ANNE WOOD (Plaintiff/Respondent, Cross- Appellant) – and – THE CORPORATION OF THE TOWNSHIP OF HUNGERFORD, ELLWOOD VARDY, THE ESTATE OF THE LATE EDGAR BELL, GLORIA JEAN BELL, RICHARD LAUTENBACH, GAYLE ELIZABETH LAUTENBACH, PAT GALLAGHER, COLDWELL BANKER NELLES REAL ESTATE, SUE BARLOW and RE/MAX TRENT VALLEY REALTY LTD. (Defendants/Appellants, Respondents to Cross-Appeal/Respondents to Cross-Appeal)

BEFORE:

O’CONNOR A.C.J.O., ARMSTRONG and MACFARLAND JJ.A.

COUNSEL:

Lawrence M. Foy for Township and Vardy

Aaron Postelnik for Re/Max and Barlow

David Curtis for Christine Wood

HEARD & RELEASED ORALLY:

May 9, 2006

On appeal from the judgment of Justice C.T. Hackland of the Superior Court of Justice dated October 20, 2004.

E N D O R S E M E N T

[1] The trial judge correctly approached the measures of damages on the basis of the diminution of the value of the property. However, the trial judge declined to use the sale of the property in 2004 for $47,000 as an indicator of its market value. In doing so he said that there was no evidence of the level of disclosure of the structural problems made to the purchaser. In our view, he misapprehended the evidence in this regard. A Statement of Disclosure, required under the Real Estate and Business Brokers Act, relating to the 2004 sale was entered into evidence. In that statement, the purchaser acknowledged that “resale value of the property may determine the amount of cost to replace foundation and block foundation and also replacing the basement walls (the house needs extensive work)”. Clearly, the purchaser was alerted to the structural problems.

[2] The trial judge should have accorded weight to this evidence. As a result, we are of the view that the trial judge’s assessment of damages which disregarded the 2004 sale and in effect attributed a value to the property of approximately $8,000 cannot stand.

[3] Given the history of this proceeding and the amount of money in dispute, we are not inclined to direct a new trial for the assessment of damages. The evidence is such that there is no precise way to measure the respondent’s loss. However, we think that the measuring exercise should begin with the fact that the property had a market value in 2004 equal to the sale price in that year, $47,000. The parties suggested a number of ways of adjusting this figure to arrive at the market value of the property in 1996, the year the respondent purchased it. We accept the appellant’s submission that leads to a 1996 market value of approximately $40,000. Using this figure and the diminution of value approach to measuring damages, we calculate the respondent’s loss to be $49,900 arrived at as follows: purchase price $89,900. less $40,000. We round this up to $50,000.

[4] Because we are of the view that the appropriate way to measure damages is on the basis of diminution of value, the cross-appeal is dismissed.

[5] Prejudgment interest on the $50,000 damage award from May 1, 1996, to October 20, 2004, is $23,716. Prejudgment interest on the consequential damages of $17,000 amounts to $5,435.34. The total damage award, including prejudgment interest, is $96,151.34. The appeal is therefore allowed to reflect this award and judgment in that amount is substituted for the judgment at trial.

[6] As to the costs appeal, the substituted award of damages does not better the Rule 49 offers made by the respondent. As a result, the award of substantial indemnity costs must be set aside. The parties agreed that the costs on a partial indemnity scale are $143,880 and we so order.

[7] As to costs of this appeal, the respondent, Wood, should pay costs to the appellant, the Corporation of the Township of Hungerford, in the amount of $5,000 inclusive of disbursements and G.S.T., if requested. There is no order as to costs with respect to the appellant, Barlow.

“Dennis O’Connor A.C.J.O.”

“Robert P. Armstrong J.A.”

“J. MacFarland J.A.”