SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: C-1321-11
DATE: 20121030

RE: Dino Favaro and Roxanne Favaro, Plaintiffs

AND:
Raymond Yaw and Lucie Yaw, Defendants

BEFORE: The Honourable Mr. Justice John S. Poupore

COUNSEL:
P. Peter Diavolitsis, for the Plaintiffs
Richard Guy, for the Defendants

HEARD: October 22, 2012

ENDORSEMENT

[ 1 ] The plaintiffs purchased a house from the defendants on August 31, 2005. At or before closing, the purchasers received a signed “Seller Property Information Statement” and a Statutory Declaration from the defendants, both of which they were entitled to rely upon. Amongst other things, these documents stated that:

i. The property was not subject to flooding;

ii. The vendors had not made any renovations, additions or improvements to the property; and

iii. The vendors were not aware of any moisture and/or water problems.

[ 2 ] The purchasers noticed water in the basement in the first spring after the purchase and every spring thereafter as well as in the fall.

[ 3 ] Within the first two years of occupancy, the purchasers noticed a crack in the front wall of the basement as well as some rot . They also uncovered clear evidence that at some time prior to the sale, major structural work had been done to the basement walls.

[ 4 ] In July of 2006, the purchasers discovered major structural problems with the roof and some rot . In 2008, the purchasers applied for a loan to fix the basement. On March 24, 2009, they submitted a claim to their title insurer claiming for the cracked basement wall which was leaking as well as roof problems including rot.

[ 5 ] The statement of claim in these proceedings was not issued until May 24, 2011. The statement of defence pled the Limitations Act , R.S.O. 1990 C.L. 15.

[ 6 ] I am satisfied that this is a case that stands or falls on the limitation defence. Therefore, this is a case where the issues between the parties can be fairly and justly resolved by the court exercising its powers under rule 20.04(2.1).

[ 7 ] Within two years of purchasing the house, the purchasers found signs of moisture in the basement and the roof, as well rot. This alone should have been sufficient to put them on notice that the defendant vendors were not truthful in their sale documentation. At the least it should have put them on a course of enquiry which very easily and quickly would have given them proof of the vendors’ fraud.

[ 8 ] If I am wrong in this, I am nevertheless satisfied that in March of 2009, when the plaintiffs/purchasers made their claim to the title insurance company they possessed knowledge of sufficient material facts to commence an action based upon misrepresentation. In other words, the claim was discovered outside the two year limitation period.

[ 9 ] The result is an absolute defence to the plaintiffs’ claim.

[ 10 ] The defendants shall have judgement dismissing the plaintiffs’ claims with costs.

[ 11 ] The parties shall address me in writing regarding the quantum of costs within ten days should they not agree.

Poupore J.

Date: October 30, 2012