In Meridian Credit Union Limited v Baig, the Ontario Court of Appeal affirmed that silence and half-truths can amount to fraudulent misrepresentation. The defendant had negotiated the purchase of property from a court-appointed receiver, but failed to disclose the intention to resell the property for more money. The court dismissed the defendant's summary judgment motion and instead found him liable for fraudulent misrepresentation. Significantly, while the motion judge acknowledged that the appellant did not have an obligation to disclose the agreement with the subsequent purchaser, the failure to correct the receiver's mistaken impression that the subsequent purchaser was a corporation created by the appellant amounted to a fraudulent misrepresentation. The representations caused the receiver to seek court approval, and consequently, the receiver lost an opportunity to negotiate a higher price with the appellant or another party. This case suggests that prudent counterparties can protect themselves by asking the right questions, so as to impose a duty to tell the truth in such a situation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
