



COURT OF APPEAL FOR ONTARIO

CITATION: Barbieri v. Mastronardi, 2014 ONCA 416

DATE: 20140521

DOCKET: C58126

Weiler, Hourigan and Pardu JJ.A.

BETWEEN

Nicolina  Barbieri

Plaintiff

(Respondent)

and

Fernando
    Mastronardi
, Joseph Leonardis Real Estate Ltd.

and
    Canada First American Title Insurance Company

o/a
    First Canadian Title Insurance Company

Defendants

(Appellant)

Alistair Riswick, for the appellant

Alex Flesias, for the respondent

Heard:  May 12, 2014

On appeal from the order of Justice P. Theodore Matlow of
    the Superior Court of Justice, dated December 2, 2013.

ENDORSEMENT

[1]

This appeal arises out of the purchase of a residential property in the
    City of Toronto (the Property) by the respondent, Nicolina Barbieri, pursuant
    to an agreement of purchase and sale (APS) executed on September 5, 2007.

[2]

The respondent commenced this action against the appellant, Fernando
    Mastronardi, in breach of contract and negligence on March 19, 2009. She
    alleged that the appellant failed to disclose that a marijuana grow-op had
    previously been operated at the Property and that the Property has an extensive
    mould problem that renders it uninhabitable.

[3]

The parties agreed that the issue of liability could be severed from the
    issue of damages. The respondent successfully bought a motion for partial
    summary judgment on the question of liability only.

[4]

For the reasons that follow, we would allow the appeal on the basis that
    the reasons of the motion judge fail to provide any insight into how his legal
    conclusion was reached and what facts were relied upon in reaching his
    conclusion. Accordingly, meaningful appellate review is impossible.

Facts

[5]

The Property is a single family residential home. In March of 2006, the
    appellant entered into a lease agreement with a third party for the rental of
    the home for a one year period commencing April 1, 2006.

[6]

On or about August 9, 2006, the Toronto Police conducted a raid at the
    Property and discovered a marijuana grow-op in the basement. The City of
    Toronto issued work orders on September 22, 2006. Those work orders made
    reference to the marijuana grow-op and stated that the Property was potentially
    in an unsafe condition and that the air quality, electrical installation and
    structural integrity of the premises were suspect. Pursuant to those work orders,
    no person could use, occupy or permit the use or occupation of the Property
    until the work orders were lifted.

[7]

The appellant commissioned a building inspection report from King
    Inspection and Environmental (the King Report). That report identified
    problems, including mould in the basement, and recommended that remedial work
    be undertaken. The appellant hired his sons company, Dimension Homes and Renovations
    (Dimension), to do the remediation work. It is unclear on the record the
    nature and extent of the remedial work done by Dimension. However, it is not
    disputed that, on February 13, 2007, the City of Toronto rescinded the work
    orders.

[8]

After the work orders were rescinded, the appellants daughter resided
    at the Property with her two young children for a period of approximately six
    months. When she moved out, the appellant listed the Property for sale.

[9]

The parties entered into the APS on September 5, 2007. The respondents
    nephew, Domenic Manno, made the purchase under a power of attorney. Mr. Manno
    swore an affidavit wherein he indicated that the respondent asked a series of
    specific questions through her real estate agent about the condition and maintenance
    of the Property. He further stated that he was advised that favourable
    responses were made by the appellant to these enquiries and that the respondent
    proceeded to make the offer to purchase in reliance on those favourable
    answers. Mr. Manno swore that the use of the Property as a marijuana grow-op
    was not revealed and, had it been, it would have materially impacted the [respondents]
    decision to purchase the property or would have been a factor in determining
    the purchase price of the property.

[10]

The
    appellant denied that he was asked the questions alleged to have been asked
    regarding the condition and maintenance of the Property prior to or at the time
    of signing the APS. The appellants wife swore an affidavit wherein she stated
    that in her discussion with the respondents real estate agent it was suggested
    that the respondent was acquiring the Property for its land value and planned
    to build a new house.

[11]

It
    is not disputed that the APS contained an entire agreement clause and that the respondent
    waived her right to request an inspection. No Seller Property Information
    Statement was requested or provided. The transaction closed on November 20,
    2007.

[12]

It
    is not clear from the evidence if the respondent ever lived at the Property. In
    or about September of 2008, Mr. Manno was approached by neighbours who informed
    him that the Property had been used as a marijuana grow-op.

[13]

In
    March of 2010, the respondent retained Fisher Environmental Limited (Fisher)
    to undertake an investigation of the indoor air quality in the Property (the
    Fisher Report). Fisher concluded that there was mould in the Property and
    that a number of remedial measures were required to be undertaken in order to
    make it safe for human occupancy.

Decision of the Motion Judge

[14]

The
    motion judge granted partial summary judgment in the respondents favour on the
    issue of liability. The entirety of the motion judges reasons is as follows:

Pursuant to rule 20.04(4), partial summary judgment is to issue
    in favour of the Plaintiff against the Defendant, Mastronardi on the issue of
    liability (a declaration) and that the action proceed to trial solely on the
    issue of damages.

I am persuaded that the defendant failed in his duty to the
    Plaintiff, to advise her or her representative that the house had been used for
    a substantial period of time by a tenant as a grow up, that the structure had
    suffered damage as a result of the activity carried out, and that his son had
    made repairs to the structure to remedy the damage caused.

It is my view that, even if the repairs had reversed all of the
    damage done to the structure, the Plaintiff would have a valid claim for the
    stigma that had attached to the subject property.

The evidence before me is sufficient to enable me to reach a
    just result on the issue of liability. It is not sufficient to enable me to
    reach a just assessment of damages. That would require consideration of further
    evidence relative to the extent to which the structure was repaired, the likely
    cost of future further repairs, the diminution of the value of the property and
    any other loss or damage that flows from the Defendants default.

I give no special directions with respect to the further
    conduct of the action.

Having regard to the outcome of this motion. I refer the costs
    of the motion, including any costs already referred to me, to the judge
    presiding at the trial on the issues of damages.

Positions of the Parties

[15]

The
    appellant admits that the existence of the grow-op was not disclosed. However,
    he asserts that as of the time of the sale, the problems with the Property were
    remediated. He submits that is why the City of Toronto lifted the work orders
    and that is why he allowed his daughter to reside there with her two children.
    It is the appellants position, therefore, that he owed no duty to disclose
    because there was no defect in the Property. Further, he relies upon the APS,
    which expressly excludes the operation of unwritten representations regarding
    the Property.

[16]

The
    respondent submits that the appellant had a duty to disclose the grow-op and
    that the failure to do so was a breach of contract and a misrepresentation. He
    relies on the King Report and the Fisher Report to establish that there was
    mould in the Property in 2006 and 2010, respectively. Counsel invites the court
    to infer that there was mould in the home throughout and that the remediation
    efforts did not solve the mould issue.

Analysis

[17]

In
    Ontario a vendor may be liable to the purchaser of a property which is not new
    if he knows of a latent defect which renders the premises unfit for habitation
    or dangerous in itself and does not disclose it to the purchaser:
McGrath
    v. MacLean
(1979), 22 O.R. (2d) 784 (C.A.); and
Dennis v. Gray
,
    2011 ONSC 1567, 105 O.R. (3d) 546.

[18]

The
    motion judge concludes that the appellant is liable to the respondent, but his
    endorsement offers no legal analysis and contains no findings of fact. He
    declares that the appellant failed in his duty to the respondent, without
    explaining how he reached that conclusion. The nature of the duty, whether in
    negligence or contract, is not identified.

[19]

More
    importantly, the motion judge reaches no conclusion with regard to the critical
    factual issue, namely whether there was mould in the Property at the time of
    closing. There was conflicting evidence on the point and the determination of
    that issue was vital in the analysis of whether the appellant was liable to the
    respondent for any damages. Similarly, there is no consideration of whether the
    appellant was aware of the existence of mould as at closing.

[20]

Having failed to reach any conclusion on the critical issue of
    the existence of mould in the Property at the time of closing, the motion judge
    goes on to find that, even if the problems in the house had been completely
    remediated, the respondent would still 
have a
    valid claim for the stigma that had attached to the subject property.

[21]

Again the motion judge provides no
    analysis as to how he reached this conclusion. There was no expert or other evidence
    before him that the fact that the Property was used as a grow-op meant that it
    had been stigmatized. The evidence at its highest was the bald statement of Mr.
    Manno that, had the plaintiff known about the grow-op, she would have either
    not purchased the Property or purchased it at a reduced price.

[22]

In order to allow for meaningful
    appellate review, the decision of the court must, at a minimum, provide some
    insight into how the legal conclusion was reached and what facts were relied
    upon in reaching that conclusion:
R. v.

Sheppard
, 2002 SCC 26,
    [2002] 1 S.C.R. 869, at paras. 24, 55; and
Crudo Creative Inc. v.
    Marin
(2007), 90 O.R. (3d) 213 (Div. Ct.).

[23]

The motion judges endorsement
    does not contain necessary findings of fact and is so lacking in analysis that
    it impedes meaningful appellate review.  While decisions of motion judges on
    summary judgment motions attract significant deference  (see
Hryniak
    v. Mauldin
, 2014 SCC 7, at para. 81), there
    cannot be deference in circumstances where the appellate court cannot
    understand the legal basis for the decision or the factual finding made in
    support thereof.

Disposition

[24]

Given the inadequacy of the
    endorsement of the motion judge, we cannot conduct a meaningful review of his
    decision.

[25]

In these circumstances, we have no
    alternative but to grant the appeal and set aside the declaration of the motion
    judge that the appellant is liable to the respondent.

[26]

As
    agreed between the parties, the appellant is entitled to costs in the amount of
    $8,000, inclusive of disbursements and H.S.T.

K.M. Weiler J.A.

C.W. Hourigan J.A.

G. Pardu J.A.


