Nobody wants to be a victim of buyer’s remorse; especially when the item being purchased is a house. It’s natural for people embarking on such a serious investment to want to be careful that they are getting exactly what they pay for. While all parties involved in the sale of a home have the same ultimate goal, there can sometimes be unexpected issues that cause either the buyer or the seller to back out. In such cases the parties might take one another to court in order to determine what obligations they have to each other. This was the case in a recent decision from the Ontario Court of Appeal.
When 9 feet isn’t 9 feet
The transaction in question involved the sale of a home. The vendor had agreed to sell her home in Toronto to the purchasers. They entered into an Agreement of Purchase and Sale (“APS”). They also agreed on a closing date for the house. However, shortly before the closing date arrived, the next door neighbour asserted that a two-foot wide strip of the 26-foot long driveway encroached on their property. To demonstrate this, they fenced off the strip of driveway in question. While the vendors attempted to resolve the driveway issue, they were not able to do so before the closing date passed.
The purchasers back out
With the driveway width in dispute, the purchasers refused to close on the sale of the house on the basis that the vendor could not convey clear title to the entire driveway. The vendor responded by commencing an action for damages for the failure to close. The purchasers counterclaimed for a return on their deposit. Each party moved for summary judgment to dismiss the claims against them and for judgment on their own claims.
The summary judgment
The motion judge found in favour of the purchases. She held that the vendor represented that they owned all of what was visually apparent as the functioning private driveway at the time the APS was signed. This led to a defect in the vendor’s title that was significant enough to entitle the respondents to refuse to close.
The vendor appealed, stating that she only agreed to sell her home with a seven-foot driveway, and that the actual size of the driveway as well as the neighbour’s claim was insignificant. She also argued that the difference between the width of the driveway, and what was in the title was not significant enough to allow the purchasers to reverse course.
The Court of Appeal’s decision
The court first looked at the listing of the home, which advertised it as having a recently upgraded heated private driveway and garage. The purchasers saw the ad and then viewed the property before making an offer. At the time they viewed the property, there was no fence around any of the driveway.
While the driveway’s width was mentioned as being only seven-feet wide, the court found that the physical and visual appearance of the property should be used in interpreting the meaning of the property’s description. A 1986 decision from the same court also looked at a driveway size dispute, with the court deciding at that time that a reasonable person would assume the driveway would include “everything which to the eye appeared part of the driveway.”
In this case, the court agreed with the motion judge’s finding that “any reasonable person would assume that the driveway referred to in the APS as owned by (the vendor) would include what appeared to the eye to be the driveway”, which was “not seven feet wide but nine.”
The court also agreed with the motion judge’s finding that the significance of the driveway’s actual size was enough to allow them to back out of the purchase, noting the neighbour wanted $200,000 in exchange for giving up their assertion of ownership of the strip. The vendor ultimately sold the house for $145,000 less than the vendors had been willing to pay.
The Advocacy Team at HMC Lawyers has over 130 years of combined experience advising clients and litigating on their behalf. Our lawyers know that strategic action at an early stage can help settle matters early and expeditiously, and help prevent prolonged and expensive litigation. We work closely with clients to help them make good business decisions when facing a legal dispute.