Landmark Decision in Ontario: NBA Star Wins Recission in Hidden Defect Case

January 15, 2024

In a groundbreaking decision that highlights the importance of full disclosure in real estate transactions, an Ontario judge has ruled in favor of NBA star Shai Gilgeous-Alexander. The case, 1000425140 Ontario Inc. v. 1000176653 Ontario Inc., 2023 ONSC 6688, centers around the purchase of a luxury home in Burlington, Ontario, where the judge ordered recission due to the presence of an undisclosed safety risk constituting a hidden defect.

On May 10, 2023, Gilgeous-Alexander and his partner closed on the purchase of an $8 million mansion in Burlington, intending to start a family. Just four days later, they encountered a stranger at their door seeking information about the previous occupant, Aiden Pleterski, a self-proclaimed ‘crypto king’ facing fraud allegations and bankruptcy proceedings. The judge found that the corporate owner of the property, an Ontario numbered company, made a fraudulent misrepresentation, and failed to disclose crucial information about ongoing safety concerns.

Hidden Defects and Fraudulent Misrepresentation:

The judge’s decision highlighted that the sellers were aware of various alarming incidents, including attempted break-ins, threats to burn down the property, and a kidnapping of Pleterski. Despite this knowledge, the sellers marketed the house as “private and secure,” concealing the potential risks associated with the property.

Court’s Decision:

Justice Robert J. Centa granted summary judgment in favor of Gilgeous-Alexander, against the company that sold the Burlington property. The judge found that the corporate owner had made a fraudulent misrepresentation and failed to disclose a latent defect in the property. As a remedy, the court granted recission of the agreement of purchase and sale, along with equitable damages to compensate the plaintiffs for their mortgage and insurance payments.

Implications for Homebuyers:

This landmark decision emphasizes the obligation of sellers to provide accurate and complete information about a property’s condition, including any potential safety risks. Homebuyers should be vigilant and conduct thorough due diligence before making a purchase, ensuring they are aware of any hidden defects that may impact their enjoyment and safety in their new home.

While this decision underscores the significance of full disclosure in real estate transactions, it is essential to note that each case is unique. The ruling is specific to the undisclosed safety risk in the Burlington property and may not apply universally.

For individuals facing disputes concerning the purchase or sale of their homes, Cox & Palmer stands ready to navigate the complexities of transactional disputes. Our experienced team of lawyers understands the intricacies of real estate law and is committed to advocating for our clients’ rights. If you find yourself in a similar situation, contact Cox & Palmer to ensure you have the legal support needed to protect your interests.

Related Articles

Landlord Protection Against Frequent, Short-Term Sublets

As platforms such as Airbnb become ever more popular, tenants will increasingly seek to sublet their units on a frequent, short-term basis – potentially to even turn a profit. Although in principle sublets benefit both landlords and tenants, the unfortunate reality is that if used improperly they can create a major problem for landlords. A recent court decision has provided protection for landlords.

read more
view all
Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.