Executive Summary: Key Legal and Evidentiary Issues

• Whether the dispute could be fairly resolved by summary judgment, or whether genuine issues required a trial, framed the threshold question.

• At the heart of the case was whether the Frechettes had a positive duty to disclose that the Property was ineligible for overland flood insurance when answering question 19 of the Property Disclosure Statement.

• 150's counterclaim for fraudulent or negligent misrepresentation turned on whether any untrue or misleading representation was actually made and relied upon.

• The defendant's failure to secure affidavit evidence from its real estate agent, Terry Duddridge, raised the question of whether the closed evidentiary record precluded a fair disposition.

• Entitlement to the forfeited deposits and consequential damages, despite a possible "windfall," required weighing established Manitoba authority.

• Which heads of damages found adequate support in the affidavit evidence ultimately determined the size of the award.

Facts of the case

Marc and Sharon Frechette are the joint registered owners of land and property known as 850 Provincial Road 200 in Richot, Manitoba. On or about August 12, 2023, they entered into a written agreement with 15019745 Canada Inc. ("150") for the sale of the Property at a purchase price of $3,500,000. Under the agreement, possession was to occur no later than September 12, 2023, with an initial deposit of $200,000 and the remaining $3,300,000 payable on or before the possession date. The transaction had its origins in a July 30, 2023 tour of the Property, during which 150's representative Michael Lue and its agent Duddridge met with Nicholas Frechette, the plaintiffs' son and a licensed agent acting for his parents through the listing broker, the Sutton Group. Following an inspection, 150 paid the $200,000 deposit on August 16, 2023, which has since been held in trust by the Sutton Group. 150 did not tender the closing funds by September 12, 2023. The parties then agreed to extend possession to October 19, 2023 in exchange for an additional deposit of $225,000 due by October 5, 2023. 150 paid neither that additional deposit nor the closing funds, and did not complete the transaction. Its stated reason was that it could not obtain overland flood insurance for the Property, though the Property was otherwise insurable. 150 requested the return of its deposit, and the Frechettes refused.

Contractual terms and disclosure at issue

The dispute centred on the purchase and sale agreement and its amended terms - specifically the deposit, additional deposit, and possession obligations that 150 admitted it had failed to meet - and on the Property Disclosure Statement. The Frechettes conceded that their answer to question 19 of the PDS did not explain that the Property was ineligible for overland flood insurance, but argued the answer required no such explanation. The defining contractual question, as the plaintiffs framed it, was whether they bore a positive obligation to disclose that ineligibility in responding to question 19. The Frechettes relied on Nicholas's evidence that he had told Duddridge "there is no insurance for flooding out here" and had provided the existing insurance policy for the Property. The procedural framework was the Court of King's Bench Rules governing summary judgment, including Rule 20.02 (the responding party's obligation to set out specific facts), Rule 20.03 (the duty to grant judgment where no genuine issue requires a trial), and Rule 39.01(4) (permitting affidavits based on information and belief).

The court's reasoning and analysis

Applying the summary judgment test from Dakota Ojibway Child and Family Services et al. v. MBH, 2019 MBCA 91, and Hryniak, the court was satisfied that there was no genuine issue requiring a trial and that summary judgment offered a proportionate, more expeditious, and less expensive route to a just result. The court rejected 150's central objection — that it had been unable to obtain a key affidavit from Duddridge — noting that a responding party must "put their best foot forward," that the record had been closed after a contested adjournment motion at the December 16, 2025 pre-trial conference, and that Rule 39.01(4) would in any event have allowed evidence based on information and belief. 150 admitted it had failed to meet its closing obligations and defended only on its misrepresentation counterclaim, yet put forward no evidence of fraudulent or negligent misrepresentation. The evidence of Lue, including his cross-examination on August 12, 2025, established that no representations were made by the Frechettes outside the PDS, that Lue did not know the plaintiffs and had never spoken to them, and that he had no conversations with Nicholas about overland flood insurance; 150 instead relied on its own inspection, which it used to negotiate a lower price. The court found support in Smith v. Lehmann et al., 2022 MBQB 155, and Gupta v. Gill, 2024 BCSC 193, both of which resolved comparable real estate disputes by summary judgment. On the deposits, the court applied the principle in Angus v. Sian, 1982 CarswellBC 618 (drawing on Dewar v. Mintoft), that a defaulting purchaser cannot improve its position by refusing to pay a deposit. The court acknowledged a possible "windfall" in awarding both deposits plus lost profit, but found that Manitoba authority — including its own decision in Jordan et al. v. Bains et al., 2023 MBKB 43 — supported recovery of those heads. It declined, however, to award the loss-of-income claim, the full ongoing monthly maintenance, or the storage fees as claimed, finding the evidence insufficient to support them in full.

Ruling and outcome

The court found the Frechettes' claim successful and dismissed 150's counterclaim. By way of summary judgment it ordered that the $200,000 deposit held in trust by the Sutton Group be released to the Frechettes (plus any accrued interest), and that 150 pay them the $225,000 additional deposit, $500,100 in lost profits (reflecting the Property's reduced listing at $2,990,000 against the $3,500,000 agreed price), $40,000 for combined storage and maintenance fees, and $40,860.45 for property taxes — together totalling $1,005,960.45 in damages, with costs additionally awarded to the Frechettes on the appropriate tariff (no fixed costs figure is specified in the decision). Marc Frechette's lost-income claim was dismissed, and the judgment expressly leaves 150 free to continue its claim against the third parties as a separate action.