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SALE OF GOODS - Duties of seller - Delivery - Goods not in accordance with contract

Thursday, October 10, 2019 @ 6:23 AM  

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Appeal by the plaintiff from the dismissal of his action for breach of contract. The appellant claimed that the respondents sold him a fake painting by the renowned Anishinaabe artist Morrisseau, accompanied by a false provenance statement verifying the painting’s authenticity. The evidence overwhelmingly supported the appellant's claim that he bargained for and was promised an authentic painting with a valid provenance statement. The appellant’s expert testified that the painting was not an original Morrisseau painting. The trial judge characterized the sole issue at trial as whether the respondents had sold the appellant a forged Morrisseau painting. He determined that while the painting could indeed be a fraudulent Morrisseau, there was an equal chance that it was a real Morrisseau.

HELD: Appeal allowed. Judgment for the appellant for breach of contract and breach of the Sale of Goods Act for $50,000 and punitive damages of $10,000. In considering the painting’s authenticity, the trial judge was not obliged to accept the expert evidence tendered by the appellant, but he erred in rejecting that evidence based on his own personal research, which was not in evidence. He rejected the appellant’s expert evidence based on a contrary theory that was not put to her and on which she was not cross-examined. He drew on resources that were not in evidence but were obtained by him outside of the courtroom through research done by him or at his direction. In doing so, the trial judge stepped out of the impartiality of his position as trial judge and descended into the arena, effectively becoming the art expert posed against the appellant’s expert. It was a breach of natural justice to rely on information obtained after the hearing was completed without disclosing it to the parties and giving them an opportunity to meet it. The trial judge also failed to provide sufficient reasons for rejecting the appellant’s expert evidence. This was a sale by description within the meaning of the Sale of Goods Act. The elements of civil fraud had been fully made out. With respect to the provenance statement, the respondent McLeod made a false representation, either knowing that it was false, or recklessly without caring whether it was true or false, with the intent that the appellant would rely upon it, which he did. A modest punitive damages award was warranted in these circumstances in light of the egregious conduct of the respondents.

Hearn v. McLeod Estate, [2019] O.J. No. 4458, Ontario Court of Appeal, P.D. Lauwers, G.I. Pardu and I.V.B. Nordheimer JJ.A., September 3, 2019. TLD-October72019010