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Bob Aaron
January 22 2005
Dream house nightmare |
Imagine living in a house, which shifts slightly under a heavy snow load or
in a high wind, because of an unstable centre-bearing wall. Whenever it
rains, water enters the building through a breach in the building envelope.
The flooding in the basement creates a proliferation of toxic mould.
Sharon Ann Mariani got more than she bargained for when she moved into her
3,459-square-foot house in the Township of Puslinch, south of Guelph, in
1991.
The house had been built as a dream home by John and Anne Lemstra back in
1987. Although not professional builders, they did much of the work
themselves, and enlisted the help of a contractor and some sub-trades. They
had a building permit, but moved in without a final inspection or an
occupancy permit.
Last week, the Supreme Court of Canada wrote the final chapter in a case
which began back in 1993 when Mariani sued the Lemstras and the township for
damages. After a nine-day trial in 2001, Justice Thomas Dunn
ruled that the house was a
write-off and had to be demolished. He awarded Mariani $300,000, plus
interest and costs. The Township was responsible for 25 per cent, but had
already settled with Mariani for $150,000.
Justice Dunn based his ruling on fraudulent representation and negligent
misstatement. The listing agreement for the house described it as
well-built, but the agreement of purchase and sale contained no warranties.
Last year, the case got to the Ontario
Court of Appeal. Justice Robert Sharpe found that there were no grounds
for finding that the Lemstras were responsible for fraudulent or negligent
misstatement.
The three-judge panel held the Lemstras liable for negligent construction.
Their liability was based on a 1995 decision of the Supreme Court of Canada
in the case of Winnipeg Condominium Corporation 36 v. Bird Construction.
That case ruled that a builder owes a duty of care to subsequent purchasers,
not just the first buyers, with respect to dangerous defects.
The Court of Appeal decided that Mariani was only entitled to ``to the
reasonable cost of putting the building into a non-dangerous state'' and not
any resulting damages such as repairing Building Code defects.
It reduced Mariani's damages from the cost of demolishing and replacing the
house to the cost of repairing the defects —slightly more than $75,000, less
$30,000 in costs awarded to the Lemstras because they were successful in
having the damages reduced. The Lemstras, however, had to pay court costs of
the original trial.
After the Ontario Court of Appeal decision, both parties were unhappy and
applied for permission to appeal to the Supreme Court of Canada.
Earlier this month, the Supreme Court dismissed both applications for leave
to appeal without giving any reasons. This effectively means that the Court
of Appeal judgment is final, and the Supreme Court in Ottawa will not
interfere with it.
In the aftermath of Mariani v. Lemstra, anyone building a home, whether a
professional or amateur builder, can be held responsible not only to the
first purchasers, but to an endless chain of subsequent owners, if the house
contains hidden dangers or unsafe conditions.
The case emphasizes once more the importance of buyers of new homes checking
out the reputation and track record of their builders. Using a professional
home inspector when buying a new or resale home is money well spent. |
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Bob Aaron is a Toronto real estate lawyer. He can be reached by e-mail at bob@aaron.ca,
phone 416-364-9366 or fax 416-364-3818. Visit
http://www.aaron.ca
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