Question

Before purchasing the property, Bob, on behalf of his mother, sought independent financial advice from Willie Wunder, Chartered Accountant, to ensure that his mother would not be saddled with huge bills from any “leaky condo” issues. Wunder reviewed the financial statements of the condominium complex and prepared a positive report. Six weeks into her possession of the condominium, Bob’s mother receives a registered letter asking for $10,000 for leaky condo issues. A further review has shown that this obligation was set out in the financial documents reviewed by Wunder. Bob is very upset, and wonders if there is any claim against Wunder. Discuss if there is, and if so, on what basis.

Answer 1

Since there is no detailed information as to what was presented by Willie Wunder in the report, the following can be the two possibilities:

• Consideration paid by Bob has already considered the obligation - In case the purchase consideration paid by Bob has been arrived at after considering the obligation already set out in the financial statements, then there cannot be any claim made against Willie Wunder as the seller fo the condominium complex has already set off this obligation in the price charged for the property
• Consideration paid by Bob does not consider the obligation - In case the the purchase consideration paid by Bob has not considered this future obligation, then Bob has the option to present a claim against Willie Wunder for the loss incurred by his mother. Given that the obligation was already set out in the financial documents, failure to highlight this in the report issued by Willie Wunder is sufficient to prove that there was a deficiency of service.