DYTE v TOTAL POINT DEVELOPMENTS INC

After purchasing two luxury homes (the “Properties”), the Plaintiffs discovered extensive water damage and defects. The Plaintiffs alleged that the Defendant negligently misrepresented the Properties’ condition and breached contractual obligations. They sought damages measured primarily by diminution in value. The Court found the Defendant liable for both negligent misrepresentation and breach of contract.

A procedural issue arose when the Plaintiffs filed a Notice to Admit Facts (the “Notice”) which included documentation for the Plaintiffs’ claim of over 1.2 million in alleged damages. The Plaintiff served it on the Defendant, but the Defendant did not reply. The Plaintiffs argued that pursuant to Rule 6.37(3), the Defendant’s lack of response meant that their claimed quantum of damages was deemed admitted. The Defendant did not apply to withdraw any deemed admission or to set aside the Notice.

Even without such an Application, the Court exercised its discretion to set aside the Notice. Rule 6.37 is aimed at admissions of facts not truly in dispute; it is not a vehicle to secure admissions on contentious, mixed fact-and-law issues like damages quantification. The Court held the “only satisfactory way” to resolve quantum was through Trial evidence and found no non-compensable prejudice to the Plaintiffs because they had already provided evidence regarding repair costs and diminution of value.

The Court then assessed damages, selecting diminution in value (with consequential items) as the appropriate measure on these facts, while recognizing concurrent liability principles (tort/contract) and avoiding double recovery.