SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: C-805-12

DATE: 2013-08-21

RE: 1784773 Ontario Inc. - Plaintiff (Responding Party)

AND:

K-W Labour Association Inc. et al - Defendant (Moving Party)

BEFORE: The Honourable Mr. Justice J. W. Sloan

COUNSEL:
J. Sebastian Winney - Counsel for the Defendant (Moving Party)
Raymond J. Wrubel - Counsel for the Plaintiff (Responding Party)

HEARD: August 20, 2013

ENDORSEMENT

[1] The defendant K-W Labour Association Inc. brings this motion alternatively to strike out the statement of claim against it, to determine questions of law or for summary judgment dismissing the claim against it.

[2] For the main part, the facts are not in dispute.

[3] In September of 2010 the plaintiff purchased a commercial property in Kitchener from the defendant.

[4] On December 28, 2010 an article appeared in the local Kitchener newspaper.

[5] Mr. Kramer, a director of the defendant, was quoted as saying the following about the subject property, to the newspaper reporter: “and it's haunted”, “I have heard this from a couple of people - up on the third floor, there is an office up there and they said some days you see somebody moving around inside of there and there is nobody there” & “we used to make jokes that Jimmy Hoffa was in the basement … It's a labyrinth in there”.

[6] Based solely on this article an action was commenced against the defendants on the basis that there was a latent defect in the subject property that the defendants knew about and essentially concealed from or failed to disclose to the plaintiff.

[7] The statement of claim states over and over again that the defect is the existence of a death and or murder at the subject property.

[8] For the purposes of this hearing I have been advised by the solicitor for the defendant that I can read into the statement of claim that there is an allegation that there are ghosts in the building.

[9] There was certainly no evidence presented by the plaintiff about anyone dying in the building whether or not that death was of natural causes or some criminal act.

[10] In Mr. Kramer's affidavit and in his cross-examination he makes it clear that he has never seen a ghost, did not believe there was a ghost and that all conversations about the property being haunted were a joke and were not serious.

[11] At page 18 of Mr. Kramer's cross examination he makes it clear that he did not think the people who told him the property was haunted believed that it was. In response to question 91 “They were just joking with you?” he replied “Oh yeah. They're both, it was at a social function kind of thing, had a few beers and talking about the ghost up the stairs, hahaha that sort of thing.”

[12] There is almost no case law on the stigmatization of property in Canada and whether or not a vendor is obligated to disclose it.

[13] In a 2006 Small Claims Court case from the province of Québec, Knight v Dionne [2006] J.Q. no. 3671 the court held that where the son of the vendor had taken his own life 10 years earlier in a personal residence, that fact did not have to be disclosed to the purchaser.

[14] At paragraph of 51 the Knight judgment the court stated “The court has a great deal of difficulty in agreeing that elements whose importance depends on the sensitivity, phobias, sentiments or purely personal and subjective apprehensions that are not related to the quality of the building should be subject to compulsory disclosure.”

[15] I am not aware of any case law that would obligate the vendor of a commercial building to disclose to the purchaser that someone has died in the building, how they died or that there is a rumor that the building might be haunted.

[16] I have reviewed articles submitted by plaintiff’s counsel from OREA, RECO and a caveat emptor article authored by Savvas Kotopoulos. While these articles suggest that a “stigma” may include a property that is haunted, (they don’t opine on how this would be proven) they fall well short of being anything approaching authoritative.

[17] In essence what we have is a double hearsay rumor about a ghost from a couple of people after they had consumed a few beers at a social function. There is no proof or even suggestion that a death took place in the building.

[18] There is no suggestion that the building is unfit for habitation as a commercial building, the purpose for which it was purchased in the first place. There is no suggestion that the purchasers intended to use the building for anything other than commercial purposes.

[19] In this case, at paragraph 26 of the Agreement of Purchase and Sale it reads in part as follows: “This agreement including any Schedule attached hereto shall constitute the entire agreement between buyer and seller. There is no representation, warranty, collateral agreement or condition, which affects this agreement other than as expressed herein.”

[20] There is no evidence before me as to how the plaintiff would prove the existence of a ghost.

[21] In Guglielmi v Russo [2010] O.J. No. 1145 Justice Swinton quotes with approval at paragraph 16 from an article by Professor Bora Laskin as he then was “… A latent defect of quality going to fitness for habitation and which is either unknown to the vendor or such as does not to make him chargeable with concealment or reckless disregard of its truth or falsity will not support any claim of redress by the purchaser.”

[22] At paragraph 25 Justice Swinton states, “In any event the vendor is not liable for damages for a latent defect of which he has knowledge unless it renders the premises unfit for habitation or dangerous.”

[23] For the reasons given above I grant the defendant summary judgment dismissing the plaintiffs claim pursuant to rule 20.04 (2)(a) a since I find that there is no genuine issue requiring a trial with respect to the claim.

[24] If the parties are unable to agree on costs Mr. Winny shall forward his brief submissions on costs to me by August 30, 2013. Mr. Wrubel shall forward his brief response to me by September 9, 2013. Mr. Winny shall then forward his reply, if any, to me by September 12, 2013. Cost submissions may be sent to my attention by email, care of Kitchener.Superior.Court@ontario.ca

Justice J. W. Sloan

Date: August 21, 2013