Monday, August 26, 2013

In Ontario, as a general proposition, a vendor is, apart from express contract, under no general duty to disclose defects relating to title or to quality

Outaouais Synergest Inc. v. Lang Michener LLP, 2013 ONCA 526:

[76]       The trial judge found, at paras. 106-107, that the cost recovery clause could be said to be a defect relating to the quality of the lands to be conveyed and a defect relating to title – the two types of title defect to which caveat emptorrelates.[2] He noted that, aside from prohibiting active concealment or a failure to disclose a latent defect rendering premises dangerous, a vendor is under no duty to disparage his property and may remain silent. This is because, in Ontario, as a general proposition, a vendor is, apart from express contract, under no general duty to disclose defects relating to title or to quality: see Bora Laskin, Q.C. (as he then was), "Defects of Title and Quality: Caveat Emptor and the Vendor's Duty of Disclosure", in Special Lectures of the Law Society of Upper Canada 1960: Contracts for the Sale of Land (Toronto: Richard De Boo Ltd., 1960), at p. 401; McCamus, at p. 102.

[77]       This Court and the Manitoba Court of Appeal have both confirmed that silence and half-truths can amount to fraudulent misrepresentation and that, where a vendor, who has no duty to speak, decides to break that silence, the doctrine of caveat emptor falls away as a defence mechanism and the vendor must speak truthfully and completely about the matters raised: see Krawchuk v. Scherbak, 2011 ONCA 352, 106 O.R. (3d) 598, at para. 77, citing Kaufmann v. Gibson (2007), 59 R.P.R. (4th) 293 (Ont. S.C.); Alevizos v. Nirula, 2003 MBCA 148, 180 Man. R. (2d) 186, at paras. 18-25. These cases involved situations where vendors completed voluntary vendor disclosure statements in residential real estate transactions.

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