In Faulkner Real Estate Ltd. v. Sakto Corporation (2025 ONSC 1158), Kelly Santini LLP’s John Melia and Kara Takagi successfully represented the defendants, Sakto Corporation and Waterford Property Group Ltd., in defending a $6 million claim brought by Judy Faulkner and her brokerage, Faulkner Real Estate Ltd. The plaintiffs alleged that water leaks in their Ottawa office caused mould exposure leading to illness and business losses, constituting negligence and a breach of lease. Justice Robert Smith dismissed nearly all of the claims, finding that multiple independent air-quality tests consistently showed no elevated mould levels, the health allegations were unsupported, and that the plaintiffs failed to prove negligence and breach of lease. The court preferred the evidence of the defendants’ expert, holding that the plaintiffs’ “mould toxicity” theories lacked scientific or medical support. Justice Smith concluded that the defendants’ remediation efforts were reasonable, and the plaintiffs’ business losses stemmed from a mistaken belief in toxic mould rather than actual contamination. The only award was $4,000, representing a two-month rent abatement during repairs.

In the subsequent costs decision (2025 ONSC 2940), Justice Smith noted that the plaintiffs had reduced their claim by the close of trial from $6 million to $3.3 million but recovered only $4,000. Because the defendants were overwhelmingly successful and had made two reasonable Rule 49 offers which exceeded the trial award, the court ordered the plaintiffs to pay costs of $225,000 plus HST on a partial indemnity basis throughout the litigation, $149,823.42 in disbursements, plus post-judgment interest.