Legal Blog

HAUNTED

We have heard, and read of, many reasons (and excuses) for a purchaser refusing to close a transaction or complaining about a property already purchased, but we have never before read of a purchaser claiming damages because the purchased property was haunted. Such was the case in 1784773 Ontario Inc. v. K.W. Labour Association, 2014 ONCA 288.

News

A director of the vendor was quoted in a newspaper article as saying the following: “and it’s haunted”, “I have heard this from a couple of people – up on the third floor, there is an office up there and they said some days you see somebody moving around inside of there and there is nobody there” & “we used to make jokes that Jimmy Hoffa was in the basement … It’s a labyrinth in there”.

Based solely on this article, the purchaser commenced an action for damages claiming that the vendor knew of a latent defect in the property and failed to disclose it. The defendant brought a motion for summary judgment to dismiss the action.

Evidence

The defendant’s representative provided an affidavit in support of the motion. He swore that he had never seen a ghost, did not believe there was a ghost, and that all conversations about the property being haunted were merely a joke, not to be taken seriously. Actually, we can go further, the action itself was a joke and its most ridiculous part was the leading of evidence regarding ghosts.

The motions judge dealt with the issues as follows:

“In essence what we have is a double hearsay rumor about a ghost from a couple of people after they had consumed a few beers at a social function. There is no proof or even suggestion that a death took place in the building… There is no evidence before me as to how the plaintiff would prove the existence of a ghost.”

The motions judge dismissed the action.

Astounding

The purchaser then appealed this decision to the Ontario Court of Appeal. We aren’t kidding! The Court dismissed the appeal, with costs of $6,200, as follows:

“Counsel acknowledge that there is no direct evidence of economic loss or damage as a result of the stigma of a haunted property, nor is there any direct evidence from anyone who observed any strange occurrences in the property.”

The result was a foregone conclusion. We cannot understand why the purchaser commenced the action and then appealed the only rational decision the motions judge could make. We also do not understand why the purchaser’s lawyer took this case. It’s embarrassing.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.

Image courtesy of Flikr, Creative Commons.