Negligent misstatements

Corchis v. Essex Condominium Corporation No. 28, 2010 ONCA 787 deals negligent misstatement.

Generally, if a plaintiff can show:

a 'special relationship' with the defendant such that they have placed trust and reliance in the defendant's statement, then they may be liable for any economic loss suffered by the plaintiff: or

an intention to induce reliance can be shown, and the defendant knew that the statement would be relied upon,

and the following:

- the defendant had, or claimed to have some special skill or knowledge;

- the plaintiff relied on that skill or knowledge;

- the claim is in relation to a serious matter; and

- the plaintiff suffered loss or damage.

then the cause is made out.

The Court writes:

[34] To make out a cause of action for negligent misstatement, among other requirements, a claimant must show that it relied, in a reasonable manner, on the negligent misrepresentation of the defendant: see Queen v. Cognos Inc. [1993] 1 S.C.R. 87, at p. 110.

[35] In this case, the trial judge's findings in the main action preclude a finding of reasonable reliance. In his reasons for judgment in the main action, the trial judge made an explicit finding that Essex did not act reasonably in 1994 when it "rejected the advice of its two professional experts and accepted the advice of London Caulking" and others. In addition, the trial judge said,

Whatever standard is imposed, this issue should have been within the Board members' abilities … The difficulty was that the Board members were so influenced by costs that they neglected to ask questions. The Board members had before them two detailed written reports by an architect and an engineer. The Board rejected the detailed opinions contained in the two reports by acknowledged experts and accepted an oral opinion from dubious experts that the roof was in excellent condition and required only minor repairs.

[36] Even assuming that Essex could show it had a "special relationship" with London Caulking (another essential element of a cause of action for negligent misstatement), the trial judge's findings in the main action preclude a finding of reasonable reliance.