Jason Dennis and Rebecca Bound, the parents of two young children, bought a house in Bracebridge, Ont. from William and Helen Gray. The Grays did not disclose what was common knowledge in the area, that a person convicted of child pornography offences lived across the street. The purchasers discovered this after the sale closed, refused to move in and sued the vendors. The vendors relied on caveat emptor and moved to dismiss on the grounds that there was no reasonable cause of action.

Hoy J of the Ontario Superior Court concluded that the plaintiffs’ case, while novel, was not doomed to fail: Dennis v Gray, 2011 ONSC 1567 [Link available here]. The principle of caveat emptor generally governs sales of land, except where there is a latent defect known to (and sometimes concealed by) the vendor that the purchaser’s reasonable inspection would not reveal. The cases on latent defects are not always easy to reconcile but did not clearly preclude recovery on the facts at issue here, which also raised difficult policy considerations related to the protection of children and the reintegration of offenders into society. The plaintiffs’ case could proceed.