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FOR TORTS - Direct causal connection or link - Affecting property

Tuesday, June 30, 2020 @ 5:52 AM  

Lexis Advance® Quicklaw®
Appeal by the defendant real estate agent and broker from the quantum of damages they were ordered to pay to the respondent purchasers of a residential home. The appellants acted for both the vendors and the respondents on the sale of the home. The trial judge found the appellant agent failed to review and verify with the vendors and then the respondents the information contained in the Sellers Property Information Statement. The trial judge found if the agent had done so, she would have discovered the property suffered from ongoing water leakage. The trial judge apportioned the appellants’ liability at 70 per cent and the vendors’ liability at 30 per cent. He ordered the appellants to pay $315,150, being 70 per cent of the costs necessary to repair the water and mould damage. The appellants did not challenge the trial judge’s findings on liability.

HELD: Appeal allowed. The trial judge erred in his approach to causation by mischaracterizing the respondents’ loss flowing from the appellants’ negligence as their entitlement to a house free of mould and water damage. He misinterpreted Jarbeau v. McLean as standing for the general proposition that cost to repair was a more appropriate measure of damages when assessing loss related to defective property. His errors led to his rejection of the diminution in value calculation and the application of the cost to repair approach without considering whether the latter measure of damages compensated for the injury caused by the appellants’ negligence. As the appellants’ wrong did not cause the property defect, the respondents were not entitled to demand a house free of mould and water damage but only to damages to compensate them for entering into a bad transaction they would have otherwise avoided. Awarding cost to repair overcompensated the respondents. The trial judge’s finding the respondents mitigated their damages was reasonable. The matter was remitted to the trial judge to determine the diminution in the value of the property given its damaged state. The relevant measure was the difference between the purchase price paid and the actual value of the property in its damaged state at the time of trial.

Bowman v. Martineau, [2020] O.J. No. 2372, Ontario Court of Appeal, P.S. Rouleau, C.W. Hourigan and L.B. Roberts JJ.A., May 29, 2020. Digest No. TLD-June292020006