Court File and Parties

Court File No.: CV-23-82355 & CV-23-82762

Date: 2025-09-11

Ontario Superior Court of Justice

Between:

Cole Coppendale and Jordanna Cvitkovic, Applicants – and – Adam Mills and Tracey Mills, Respondents

And:

Adam Mills and Tracey Mills, Applicants – and – Jordanna Cvitkovic, Respondent

Counsel:

• J. Martin, for the Applicants (Coppendale and Cvitkovic)
• R. Allan, for the Respondents (Mills)
• R. Allan, for the Applicants (Mills)
• J. Martin, for the Respondent (Cvitkovic)

Heard: February 11, 2025

Before: The Honourable Justice I.R. Smith

Reasons for Judgment

A. Introduction

[1] Mr. Mills and Ms. Mills (to whom I shall refer as the "sellers") owned a house in Hamilton. Mr. Coppendale and Ms. Cvitkovic (the "buyers") entered into an agreement of purchase and sale ("APS") with the sellers to purchase that house. The APS provided for three visits by the buyers to the house before the closing date of that transaction. On the third visit, a rainy day, the buyers noticed that there was water in the basement of the house. They told the sellers that they would not be closing the transaction. The sellers demanded that the buyers close the deal, but the buyers refused.

[2] The buyers apply for a declaration that a clause in the APS permitted them to exit from the agreement they had with the sellers, for rescission of the contract, and for the return of their deposit. The sellers ask that the buyers' application be dismissed. In addition, the sellers apply for a declaration that the buyers breached the APS, for damages, and for an order that the buyers' deposit be forfeited and applied against those damages.

[3] For the reasons which follow, I find for the sellers.

B. Background

[4] The sellers owned a house on Leckie Avenue in Hamilton (the "house") which was built in 1958 and where they resided with their two children for five years. They listed the house for sale on May 11, 2023, at a price of $1,089,000. The buyers requested a viewing of the house on May 12, 2023, and that viewing took place on May 13, 2023. The buyers were accompanied by their realtor. They looked at the house for about an hour, during which time they noticed some staining on the walls of one of the rooms in the basement (referred to by the parties as the "cold room" or "cold cellar"). This observation caused the buyers no concern[1] and, within 2 hours of the viewing, they made an unconditional offer to purchase the house for $1,050,000. The APS, prepared by the buyers, included a "Schedule A" attached by the buyers on which they struck out and initialed the standard condition respecting a satisfactory inspection of the house.[2] Schedule A also contained other standard provisions to which I return below. Eventually, later that evening, the parties agreed to a purchase price of $1,075,000 with a closing date of July 24, 2023.[3] The buyers made a deposit of $20,000.00.

[5] At this time the sellers were in the process of building a new home and it was not yet habitable. Accordingly, shortly after the signing of the APS, the sellers arranged for rental accommodation for themselves so that the house would be ready for occupation by the buyers on the closing date. The sellers signed a lease for that temporary accommodation that covered the period July 1, 2023, to February 29, 2024.

[6] The APS allowed for three visits to the house by the buyers prior to the closing date. The first two visits were unremarkable. A third visit was scheduled for July 2, 2023, and on that visit the buyers were accompanied by their realtor and a contractor named Elliot Lamothe.

[7] Mr. Coppendale says that on that third visit he noticed "considerable wetness on the walls, and it appeared outflow from or behind the foundation was creating a pool of water about one inch deep on the floor" of the basement of the house. He estimated the depth of the pool by sticking his index finger into it and then by putting his hand flat on the floor. When he did so, his hand was half to three-quarters submerged. He said on cross-examination that he thought that, had a rock had been thrown into the pool of water, it would have made a splash, and that he was splashing the pool when he put his hand into it. The realtor, Gregory Meleca, swore in his affidavit that there was a significant amount of water seeping from behind the foundation of the house and creating a pool of water on the floor that was between a half and one inch deep. Mr. Lamothe made a similar observation. Mr. Meleca took photos of the water (which the sellers say demonstrate the pooling of the water) and sent them to the sellers' realtor, Massimo Iudica.

[8] In a telephone call, Mr. Meleca told Mr. Iudica that there was substantial leaking in the cold cellar in the basement of the house. Mr. Iudica relayed the concerns of the buyers to the sellers, who said that sometimes the walls of the cold cellar would sweat with condensation on hot or damp days but that they had never experienced water penetration into the cellar.[4]

[9] On July 6, 2023, the buyers' solicitor wrote to the sellers' solicitor raising various issues with the house including the "substantial water damage" in the basement and alleging that the sellers had tried to conceal evidence of water damage in the basement. On July 12, 2023, the sellers' solicitor received a letter from the litigator hired by the buyers, Mr. Martin, in which he took the position that the APS was "void ab initio" given the water issues in the basement. In so doing, Mr. Martin made reference to the following clause in the APS:

THE SELLER WARRANTS AND REPRESENTS THAT, to the best of the seller's knowledge and belief, there exists no detrimental physical or psychological condition affecting the property that might negatively affect the value of the property, or influence the Buyer's decision to proceed with the completion of this Agreement of Purchase and Sale. This warranty shall survive closing of this transaction, but shall only apply to circumstances existing at or before closing.

[10] Counsel alleged that the sellers' actions were "a direct contradiction of this clause and represent a material breach going to the root of the contract, rendering it void."

[11] The sellers' solicitor responded, denied the existence of any defects and demanded that the buyers complete the transaction contemplated by the APS.

[12] In an effort to resolve the issues between the buyers and sellers, the buyers were permitted a further visit to the house on July 21, 2023. They attended with an engineer, Salvatore De Rose, who produced a report that same day. The report identifies various "concerns" respecting the house and relating to water, mold, and drainage issues. Mr. De Rose concluded his report by noting that he would "personally not occupy the residence until the water issues and mold issues are resolved."

[13] Through counsel, the buyers advised the sellers on July 21, 2023, that they would not be completing the transaction, and it therefore did not close.

[14] The sellers quickly relisted the house for sale in late July or early August of 2023, but the real estate market had slowed in the meantime. In January 2024, the sellers entered into a new agreement with new buyers to sell the house for $915,000. The new buyers conducted an inspection of the house, and the transaction then closed on February 9, 2024.

[15] The sellers allege that their damages from the buyers' failure to close the deal reflected in the APS total $206,703.56 and are comprised of the following:

• $160,000: the difference between the purchase price the sellers agreed to pay ($1,075,000) and the price at which the house was sold in February 2024 ($915,000);

• $21,600: the rent the sellers paid ($2,700 per month x 8 months) for alternative accommodation to allow the buyers to move into the house on the closing date of July 23, 2023;

• $12,450.68: the total of various costs thrown away including moving costs ($6,202.43), solicitor's fees ($1,275.77), renter's insurance ($455.39), carrying costs relating to the house including taxes and utilities ($4,517.09); and

• $12,652.88: the loss of interest that would have accrued on the investment of the proceeds of the sale of the house in a GIC for 90 days.

[16] The buyers rely on three reports from Mr. De Rose respecting the alleged defects in the house. The sellers have also obtained reports from their own engineer, Marianne Brown. The essence of her opinion is that the house was built in the 1950's when standard home construction did not include the installation of "waterproofing or drainage layer on the exterior of the foundation wall". The absence of such waterproofing would have been discovered in any home inspection, had one been done, and, in any case, waterproofing can be installed at any time. She adds, however, that "there is no indication of leakage at this house" and that the "dampness" in the cold cellar "is typical and expected."

C. Positions of the Parties

1. The Buyers

[17] The buyers assert that the sellers were in breach of the clause quoted above at para. 9 (to which I will refer as the "detrimental condition clause"). That assertion rests on their argument that the detrimental condition clause, properly interpreted, means that the sellers were warranting and representing that the house was free of any detrimental condition affecting the value of the property on the closing date. Since the sellers became aware of the water issues in the basement of the house before the closing date, they could no longer warrant or represent that the house was free of such detrimental conditions. They were therefore in material breach of the contract. The buyers were therefore entitled to rescission of the contract.

[18] The buyers also take the position that the evidence establishes that the water issue in the basement of the house amounted to a "detrimental physical or psychological condition affecting the property that might negatively affect the value of the property, or influence the Buyer's decision to proceed with the completion" of the APS.

2. The Sellers

[19] The seller says that the detrimental condition clause, properly interpreted, means that the sellers were warranting and representing that, to the best of their knowledge and belief, the house was free of any detrimental condition affecting the value of the property on the date that the APS was signed, not thereafter. Since they were not aware of any such detrimental condition on that date, they were not in breach of the APS. In any case, the sellers say that the evidence does not establish that there was any detrimental condition affecting the value of the house. They also argue that rescission is not a remedy available to the buyers.

D. Discussion

1. Beatty v. Wei, 2018 ONCA 479

[20] Both parties rely heavily on the judgment of the Court of Appeal in Beatty v. Wei, 2018 ONCA 479. At issue in that case was the meaning of another standard clause in agreements of purchase and sale, what Brown J.A., writing for the court, referred to as the "illegal substances clause." That clause, which also appears in the APS in this case, reads as follows:

The Seller represents and warrants that during the time the Seller has owned the property, the use of the property and the buildings and structures thereon has not been for the growth or manufacture of any illegal substances, and that to the best of the Seller's knowledge and belief, the use of the property and the buildings and structures thereon has never been for the growth or manufacture of illegal substances. This warranty shall survive and not merge on the completion of this transaction.

[21] The purchasers of the house in Beatty discovered that it had been used as a marijuana "grow op" after the signing of the APS and before closing. As in the present case, the purchasers refused to close the transaction, taking the position that the illegal substances clause permitted them to do so. The sellers objected and, as in this case, competing applications were launched.

[22] Brown J.A. made several important observations about the illegal substances clause. He found that the phrase "represents and warrants" must be read together as a single term of the contract, not separately as, first, a reference to a pre-contractual representation, and then, a reference to a contractual warranty: Beatty, at paras. 28–36.

[23] Next, Brown J.A. concluded (at para. 39) that liability may attach if the sellers knew of a defect in the property (i.e., that it had been used as a grow op) and concealed it from the purchasers, but that no liability could attach to the sellers if they came to learn of the defect after the time of the execution of the APS. This was so for three reasons.

[24] First, Brown J.A. found that "that interpretation flows from the plain language in the Clause": Beatty, para. 45. Second, the conclusion was supported both by the absence of language in the illegal substances clause "that speaks of the Sellers' knowledge and belief at the date of closing" and a reading of the whole of the contract, which elsewhere does refer to representations and warranties that do operate at the time of closing: Beatty, paras. 47–49. From these facts, Brown J.A. concluded as follows (at para. 50, footnote omitted):

That other provisions of the APS use language signifying that the Sellers' representation or warranty operates at the time of closing suggests that the absence of similar language in the Illegal Substances Clause reflects the parties' intention to limit its operation to the state of affairs known at the time of the APS' execution. Put another way, it was open to the parties to craft the representation and warranty so that it either spoke to the Sellers' state of knowledge and belief on closing, or required the Sellers to give some sort of declaration or bring-down certificate about the state of their knowledge on closing. The Purchaser did neither.

[25] Third, Brown J.A. found that the final sentence of the illegal substances clause ("This warranty shall survive and not merge on the completion of this transaction.") meant only that the representation and warranty "survived closing to offer a basis for a post closing action for breach." It did not otherwise have any bearing on the meaning of the representation and warranty provided by the sellers: Beatty, paras. 51–54.

[26] For all these reasons, Brown J.A. concluded that the sellers' representation and warranty "was limited to their knowledge and belief as it existed when they executed the APS": Beatty, para. 55. Since the sellers had not known that the property had been used as a grow op at the time they executed the APS, it was the purchasers in Beatty who were in breach of contract by refusing to close the transaction.

2. The Detrimental Condition Clause

[27] The sellers say that the judgment in Beatty is a complete answer to the buyers' claim that it was the sellers who breached the APS. On the contrary, they argue, Beatty makes it plain that it was the buyers who were in breach by failing to close.

[28] The buyers say that Beatty is distinguishable. They submit that, unlike the illegal substances clause, the plain language of the detrimental condition clause captures the knowledge and belief of the sellers on the date of closing, not just on the date of the execution of the APS. Accordingly, since the sellers knew of a material defect prior to closing, they were in breach of the contract. This argument turns largely on a comparison of the final sentences of the two clauses.

[29] In my view, the sellers' interpretation of the detrimental condition clause is the correct one.

[30] First, the portion of the detrimental condition clause preceding the last sentence is of the same nature as the illegal substances clause analyzed in Beatty. To that point, then, the wording of the detrimental condition suggests that the warranty and representation being made by the sellers is as at the date of the APS. As in Beatty, nothing in the language of the clause prior to the last sentence speaks to the knowledge of the sellers at any other time.

[31] Second, as in Beatty, it is important to consider the whole of the contract. In that case, Brown J.A. referred to three other clauses of the APS which were distinguishable from the illegal substances clause because each clearly made reference to the knowledge of the sellers on closing. This contrast was evidence of the parties' intention that the illegal substances clause did not apply to the sellers' knowledge on closing.

[32] Clauses which are identical or similar to the clauses referred to in Beatty are also present in the APS in this case. As in Beatty, the sellers represented and warranted that they were not "and on completion will not be a non-resident" for tax purposes: Beatty, para. 48, emphasis added.

[33] Again, as in Beatty, here the sellers also warranted that "there are no work orders or deficiency notices outstanding against the property, and if so will be complied with at his expense, on or before closing": Beatty, para. 49(i), emphasis added.

[34] Last, the APS also included a provision very similar to the third clause referred to in Beatty (para. 49(ii)). Here, the clause reads as follows (emphasis added):

The Seller represents and warrants that the chattels and fixtures as included in this [APS] will be in good working order and free from all liens and encumbrances on completion. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to the state of the property at completion of this transaction.

[35] In my view, as in Beatty, these three clauses are distinguishable from the detrimental condition clause because they refer explicitly to the sellers' knowledge on closing. Such language is absent from the detrimental condition clause and, as in Beatty (at para. 50), "reflects the parties' intention to limit its operation to the state of affairs known at the time of the APS' execution."

[36] This brings me to the third of the considerations Brown J.A. referred to in his analysis of the meaning of the illegal substances clause: what is the effect of the last sentence of the clause?

[37] For ease of comparison, I repeat the two final sentences here:

Illegal Substances Clause in Beatty	Detrimental Condition Clause
This warranty shall survive and not merge on the completion of this transaction.	This warranty shall survive closing of this transaction, but shall only apply to circumstances existing at or before closing.

[38] As noted above, Brown J.A. concluded that the "survives closing" language in the APS in Beatty did no more than make it clear that the buyers could sue after closing. The sellers say that the same analysis applies in the present case.

[39] The buyers emphasize, however, that the detrimental condition clause contains language not included in the illegal substances clause: that the warranty "… shall only apply to circumstances existing at or before closing." The buyers argue that this underscored language shows that the parties intended that the sellers' representation continued until closing. The buyers note that Brown J.A. held in Beatty (at para. 50) that "it was open to parties to craft the representation and warranty so that it either spoke to the Sellers' state of knowledge and belief on closing, or required the Sellers to give some sort of declaration or bring-down certificate about the state of their knowledge on closing." The sellers say that the last sentence of the detrimental condition clause achieves this purpose.

[40] I cannot accept this argument. Clearly, this last sentence makes no reference to "some sort of declaration or bring-down certificate." In addition, it does not speak to the sellers' state of knowledge on closing. It merely refers to circumstances existing at that time, upon which circumstances the buyers are entitled to sue, as in Beatty. In my view, this sentence does not define the representation and warranty, or extend the knowledge and belief of the sellers to closing. Much clearer language would be required to draw that conclusion. As Brown J.A. concluded, the "survives closing" language is intended to preserve the right to sue on the representation and warranty, it "does not assist in ascertaining the content and meaning of the representation or warranty given": Beatty, para. 54, emphasis added.

[41] I add that the clause respecting chattels and fixtures, quoted above at para. 34, contains a similar closing sentence. The difference in that clause, however, is that in its preceding language, which does define the representation and warranty, it is made clear that the representation applies on closing. No similar language appears in the detrimental condition clause. If the parties had intended the detrimental condition clause to extend to closing, they would have included explicit language to that effect.

[42] Accordingly, in my view, the warranty and representation in the detrimental condition clause, properly interpreted, was limited to the sellers' knowledge and belief as it existed when they executed the APS.

[43] This leads to the question of whether the sellers had knowledge of a detrimental condition at the time of the execution of the APS.

3. The Knowledge and Belief of the Sellers

[44] Assuming that there was a detrimental condition, there is no evidence that that sellers were aware of any detrimental condition relating to a water issue in the cold cellar on or before the signing of the APS. Put another way, there is no evidence that they made any misrepresentation when they signed an APS which included the detrimental condition clause.

[45] The sellers' affidavits are clear. They knew that the cold cellar would "sweat" from time to time, with condensation forming on the walls on hot days. They had never experienced water penetration through the walls or pooling of water on the floor of the cold cellar. They advised that they rarely went into the cold cellar, except when storing or retrieving things that could safely be stored in an occasionally damp room; things like lawn ornaments, fishing equipment, and snow shovels.

[46] The photos in evidence show that there is staining and peeling paint on the walls of the cold cellar, but apart from the presence of a dehumidifier in the finished part of the basement (which appears to comprise most of the basement), there is no other evidence of any water damage or dampness issues in the basement. The sellers say that they ran a dehumidifier in the basement because it "is known to be common good home owning practice in Canada," and not because they were trying to conceal a defect in the house. In this regard, they note that the dehumidifier is plainly visible in pictures included in the MLS listing, to which the buyers and their agent had access before the buyers agreed to purchase the house.

[47] The sellers were not moved from these points in cross-examination. Mr. Mills said that the first time he learned that there was an alleged water issue in the cold cellar was on July 2, 2023, the day of the buyers' third visit to the house. Even after that time, he was of the view that there was no issue. Importantly, although there are suggestions or allegations in the early correspondence of prior knowledge, as there is in the first of Mr. Coppendale's affidavits, neither of the sellers was challenged on cross-examination on their assertion that they had no knowledge of any alleged defect (more significant than occasional condensation) prior to the signing of the APS on May 13, 2023, nor was it suggested that they had knowingly concealed a defect on or before that date.[5]

[48] Nor is there any other evidence of any issue in any other part of the basement. None of the reports of the two experts, nor their cross-examinations, nor the report of a consultant the sellers hired, notes any visible evidence of any such problem. To be sure, it is agreed that it is impossible to know definitively whether there is a water problem elsewhere in the basement without conducting destructive testing (which the sellers were not willing to do). The point, though, is that there is no evidence that suggests an apparent problem existing on or before May 13, 2023, the date of the APS, that would have informed the sellers' knowledge and belief on that date that there was a water problem – a detrimental condition – affecting the value of the house.

[49] We are left, then, with the evidence of the sellers (unchallenged on cross-examination) that their knowledge and belief of the condition of the basement was essentially the same as the opinion formed by the buyers when they had the first of their post-APS visits to the house: that the cold cellar showed signs of "dank conditions" that were no cause for concern (see footnote 1, above). In particular, there is no evidence that, before they signed the APS, the sellers ever saw or were aware of the water conditions that the sellers and their witnesses described on July 2, 2023.

[50] Mr. Coppendale described those conditions as "outflow from or behind the foundation" that was "more severe than condensation or sweating" and that "was creating a pool of water about one inch deep on the floor." Mr. Meleca, who, in addition to being a realtor, has a background in construction, also contrasted the conditions he saw in the cold cellar on July 2, 2023, with the occasional sweating which the sellers say was typical. He testified in cross-examination as follows:

… I know that these older homes with cinder blocks sometimes with a high level of humidity or dampness there could be a little bit of sweating or efflorescence leaking through, but to see pooling on the floor is a different story.

[51] In other words, the sellers say they were aware only of what the buyers considered to be of no concern. There is no evidence to the contrary.

[52] In any case, the buyers have not argued this case on the basis that the sellers knew before the APS was signed that there was a defect in the house. Their focus, instead, has been on the sellers' failure to do anything to address the alleged water problem once it was discovered by the buyers and on their unwillingness to accept that what the buyers observed in the cold cellar amounts to a detrimental condition.[6]

[53] Irrespective of the buyers' position, however, it has not been established that the sellers were aware of the water problem described by the buyers on July 2, 2023, at any time before that date. Indeed, the weight of the evidence suggests that they were unaware of any such issue.

[54] For this reason, then, the buyers' application fails. The sellers were not in breach of the detrimental condition clause and, accordingly, the buyers breached the APS by failing to close the transaction.

4. Was There a Detrimental Condition?

[55] Given the conclusions I have reached, it is not necessary to determine whether rescission was a remedy available to the buyers or whether it has been established that there was a detrimental condition at the house. On the latter issue, however, I make the following findings in the event that I have erred in any way in drawing my conclusions to this point.

[56] The buyers have failed to establish that there was a detrimental condition affecting the value of the house.

[57] First, as I have noted at footnote 6, the photos taken by the sellers' realtor do not show water on the walls or pooling of water on the floor. At best, they establish that the floor of the cold cellar was wet or damp. Mr. Coppendale said that he failed to get Mr. Meleca to take a picture of his finger or his hand in the pool of water (which might have demonstrated the depth of the pool of water) because his "frustration level was running high." Mr. Meleca said that it did not occur to him to do so. While I acknowledge that the buyers offer three witnesses who say that they saw significant water on the walls and pooling of water on the floor, the photos do little to corroborate that claim.

[58] Second, although Mr. De Rose opines that there are water, mold and drainage issues with the house, these opinions are contradicted by the opinions of Ms. Brown. I have read the reports and cross-examinations of both experts carefully. Ms. Brown's reports are measured and professional. She was essentially unshaken in cross-examination. Mr. De Rose's reports, by contrast, are inconsistent with his duty to provide the court with dispassionate and non-partisan expressions of expert opinion. He conceded errors in his report when he was cross-examined.

[58] Mr. De Rose's first report was based on nothing more than his review of the photos which the buyers' realtor had taken on July 2, 2023, and before he had attended at the house. I give it no weight. The photographs establish very little.

[60] His second report, produced immediately after his visit to the house on July 21, 2023, includes the allegation that the cold cellar had been wiped down since the photos were taken (an allegation I have already found, at footnote 5, to be unproven) by comparing the photos to what he saw in the basement. I give this opinion no weight.

[61] The second report also concludes that the mold he saw in the photographs had been wiped away and that that issue should be investigated by "a qualified remediation contractor." Ms. Brown saw no evidence of mold. There is, quite simply, little or no evidence that the house has a mold problem.

[62] Most concerning is Mr. De Rose's third report, which responds to the findings and opinions of Ms. Brown. In it, Mr. De Rose repeatedly alleges that Ms. Brown has "admitted" in her report that there is a water infiltration problem with the house when she clearly has done nothing of the sort. In addition, Mr. De Rose repeats the allegation that the cold cellar was wiped down but adds that this was done "to conceal" a mold problem. More importantly, Mr. De Rose accuses Ms. Brown of "lying in an effort to win the case without merit." This serious allegation – made by one professional engineer against another – was not put to Ms. Brown in cross-examination and it was not pursued by the buyers on these applications. On my reading of the reports, the experts merely have a difference of opinion. There is no basis for alleging that Ms. Brown has lied. Nevertheless, Mr. De Rose made the allegation a second time in this report when summing up his response to Ms. Brown. He wrote as follows (punctuation and syntax errors in the original):

Ms. Browns constant denials and retractions, in regards to moisture content and moisture damage indicates, that her perspective is biased and untrue and is trying to cover up the problem.

[63] These allegations of dishonesty, made against both the sellers and a fellow professional, should not have been made. They were without foundation and are entitled to no weight. The fact that they were made detracts from the credibility of their maker.

[64] In cross-examination, Mr. De Rose conceded that he had incorrectly noted in his second report that the downspouts at the house went directly into the ground and into the weeping tile and sump pit. Instead, they go into the ground and lead away from the house. His corrections in his last report were based on things he learned in Ms. Brown's report.

[65] For all these reasons, I prefer the evidence and opinion of Ms. Brown.

[66] I add to this, as I have observed above, that the evidence of the sellers that they lived in the house for five years and experienced nothing more than occasional sweating in the cold cellar has not been disproven by buyers.

[67] Last, the sellers were eventually able to sell the house to other buyers. Those buyers conducted an inspection and closed the transaction.

[68] The buyers have not established anything more than that the cold cellar is, like many basement rooms in older houses, occasionally damp. It has not been established on a balance of probabilities that there was a detrimental condition affecting the value of the house. The weight of the evidence is that there was no such detrimental condition.

5. Damages

[69] I have described the damages claimed by the sellers at para. 15, above. The buyers have not before me challenge either the costs claimed or the fact that they were incurred because the transaction did not close.

[70] Damages are therefore awarded to the sellers in the amount of $206,703.56.

E. Conclusion and Costs

[71] The buyers' application is dismissed.

[72] The sellers' application is granted and I make the following orders:

a. A declaration that the buyer, Jordanna Cvitkovic, is in breach of the APS.

b. The deposit monies paid by either or both of the buyers in the amount of $20,000, now held in trust by Royal LePage State Realty as a deposit paid under that APS, will be immediately forfeited and paid by Royal LePage State Realty to Adam and Tracey Mills.

c. Ms. Cvitkovic shall pay damages in the amount of $206,703.56, less the $20,000 held in trust by Royal LePage State Realty, to Adam Mills and Tracey Mills.

[73] If the parties cannot agree on costs, the sellers may serve and file brief written submissions respecting costs within 14 days of the release of this judgment. The buyers may serve and file brief responding submission within 7 days thereafter. The sellers' reply, if any, may be served and filed within 3 days thereafter.

I.R. Smith J.

Released: September 11, 2025

Footnotes

[1] With respect to their initial observations of the walls of the cold cellar, Mr. Coppendale said in his affidavit that the buyers "noted there was staining on the walls in the basement, but anticipated this was a result of the humidity and dank conditions of the basement. The [sellers] had a dehumidifier working in the area and overall, we did not believe at this time this would be cause for concern." In cross-examination Mr. Coppendale agreed that when he used the word "basement" in his affidavit he was referring only to the cold cellar.

[2] In his affidavit, Mr. Coppendale explained that the buyers waived the right to a house inspection because he has "an extensive background in construction…"

[3] Later, the APS was amended so that Mr. Coppendale was deleted as a purchaser, leaving Ms. Cvitkovic as the sole purchaser of the house. The sellers' application is, for that reason, brought against Ms. Cvitkovic alone. As Mr. Coppendale clearly remained involved in the transaction, however, I refer to him and Ms. Cvitkovic collectively as the "buyers."

[4] It seems that Mr. Iudica relayed (or attempted to relay) this information to Mr. Meleca and either he was misunderstood by Mr. Meleca or he misstated what Ms. Mills had said to him when he spoke to Mr. Meleca. In his affidavit, Mr. Coppendale says that Mr. Meleca told the buyers that the sellers were aware of the problem which the buyers had observed. Mr. Iudica says in his affidavit that Mr. Meleca told him that the sellers had "admitted to him that this happened 'once or twice a year.'" The sellers deny that that is what Ms. Mills said. Although one of Mr. Coppendale's affidavits suggests that the sellers were engaged in an "obfuscation of the truth" on this point, the suggestion that they and Mr. Iudica were lying (or obfuscating) about what was communicated to Mr. Meleca was not put to either of the sellers or to Mr. Iudica in cross-examination and was not pursued in either written or oral argument. In cross-examination, Mr. Meleca said that Mr. Iudica told him that the sellers said that the walls of the cold cellar "sweat a couple of times a year."

[5] In his reports, Mr. De Rose takes the position that there is evidence that the sellers tried to conceal evidence of water damage after July 2, 2023. This was denied by the sellers and Ms. Brown saw no such evidence. Neither of the sellers was confronted with this allegation in cross-examination. It is unproven.

[6] I note in this regard that the buyers rely heavily on the photographs that were taken by Mr. Meleca on July 2, 2025. They criticize the sellers for failing to acknowledge that the photos show evidence of water on the walls of the cold cellar and pooling on the floor. The photos were the subject of several of the cross-examinations in this case, the sellers' witnesses denying that the photos prove anything other than that the floor was wet and the buyers' witnesses asserting that the photos show water on the walls and pooling on the floor. For their respective clients, counsel took these same positions before me. I have now looked at the photos many times. I prefer the evidence of the sellers on this point. The photos show that the floor of the cold cellar was wet or damp. I can see no pooling and no water on the walls.