Wesley v. Geneau, 2020 ONSC 868
The Superior Court of Justice of Ontario made a decision in Wesley v. Geneau, about a rural Ontario cottage/home sold by the Geneaus to the Wesleys and later found to have a serious foundation failure. The Court held the defendants were liable for
- negligent construction and
- negligent misrepresentation/concealment,
and awarded judgment for the plaintiffs.
Facts
Noel Geneau built the home himself around 1989, largely without understanding or following the Ontario Building Code, and later sold it to the Wesleys in 2006 after signing a Seller Property Information Statement saying there were no structural or water problems.
The Wesleys later discovered major north-wall collapse, bowing, and water infiltration, with experts concluding the foundation failure was caused by excessive backfill and frost-related pressure.
Limitation issue
The defendants argued the claim was out of time, but the judge found the Wesleys did not discover the problem until February or March 2015, so the August 31, 2015 lawsuit was timely. The Court also found the Wesleys had acted reasonably and had no earlier notice of the serious structural defects.
Liability findings
The Court found Mr. Geneau owed a duty of care to later purchasers under the principles in Winnipeg Condominium Corp. No. 36 v. Bird Construction. It held he breached the standard of care by constructing the walls with excessive and improperly drained backfill, contrary to the Building Code, and that these defects created a dangerous condition.
Misrepresentation findings
The Judge found the SPIS answers were false or misleading because the Geneaus knew of structural and moisture-related problems, including frost on the wall and the concealed stud wall built in front of the failing foundation. The Court treated the concealed defect as active concealment and found the Wesleys reasonably relied on the representations when buying the home.
Damages
The court accepted repair evidence showing the foundation repairs cost about $96,879.61, plus $2,422.10 for frozen pump and pipe repairs, and $5,000 in general damages for distress and loss of use. Because the case was on simplified procedure, Judgment was capped at $100,000, plus prejudgment and post-judgment interest.
Practical takeaway
For real estate law, this case is a strong Ontario example of how a seller-builder can be liable not just for physical construction defects, but also for failing to disclose latent structural problems.
It also shows that a home inspection does not protect a vendor who has concealed a defect or given inaccurate answers on a disclosure statement.
Seller Property Information Statement
This document is rarely used in Ontario. This particular case would be one of the last examples. Discontinuance began in about 2005, and was largely eliminated by 2015.
Brian Madigan LL.B., Broker