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Haunted House Litigation

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I've written in the past about the difficulty of a property buyer in Ontario suing over a house where an undisclosed murder had taken place.  Based on a decision from the Court of Appeal today, that difficulty extends to haunted houses.

From a legal perspective, a haunted house case is a form of "latent defect" case - where a buyer alleges that they did not get what they bargained for, because the seller hid some defect in the property that affects its value.  For example, if a seller knows they have a leaky basement, but cover over the evidence with drywall to sell the house, then they could be liable for that.

Of course, the idea of a ghost living in the house is not quite as straightforward an idea as finding water damage in a basement.  Which is where the plaintiff in the case of 1784773 Ont. Inc. v K-W Labour Association, 2013 ONSC 5401 ran into problems.  As the judge who initially dismissed the case said in his decision:

[17] 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.

[18] There is no suggestion that the building is unfit for habitation as a commercial building, the purpose for which it was purchased in the first place. There is no suggestion that the purchasers intended to use the building for anything other than commercial purposes.


[20] There is no evidence before me as to how the plaintiff would prove the existence of a ghost.

As a result, the case was dismissed on a summary judgment motion, essentially on the basis that there was no evidence to prove that there was a haunting, and that the haunting impacted the use of the property.

Today, the Court of Appeal confirmed the dismissal of the claim in a short decision at 1784773 Ontario Inc. v. K-W Labour Association Inc., 2014 ONCA 288.  The decision does not make any broad determination as to the law of haunted houses, but simply addresses the lack of evidence in the present case.  Since there was no direct evidence of economic loss, and no direct evidence of any "strange occurrences", the appeal was dismissed.

So it is still technically possible for a haunted house case to be successful.  Practically though, it may be impossible, since a plaintiff will have to prove both that the house is actually haunted, and that the haunting is causing some form of economic loss.


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