In a case heard in the Court of Appeal for British Columbia, the seller and purchaser entered into a standard form contract of purchase and sale for residential property in an amount just over $2 million. The buyer made a deposit of $100,000 but failed to complete the transaction.
The seller sold the property to another purchaser at a higher price and did not suffer any loss. However, the seller took the position that the deposit was forfeited to them.
The court ruled that where a buyer failed to complete a purchase and repudiated a contract under which a deposit had been paid, it was to be forfeited to the seller. Damages do not need to be proven in order for the seller to retain the deposit.
This was a win -win for the seller. Tang v. Zhang, 2013 BCCA 52 (CanLII)
Dual agency decision
A real estate agent acted for both the vendor and purchaser. The agent introduced the vendor to the purchaser. The purchaser was interested in buying the vendor’s 30-unit property. There was a discussion of dual agency. The purchaser agreed to buy the property for $2.5 million.
The vendor later became aware of other sales of similar property up to $120,000 a unit. The vendor then sued the real estate agent and her broker and the action was allowed. This was because the agent and broker were in a fiduciary relationship with the vendor and the real estate agent breached her fiduciary duty by failing to disclose material information of which she was aware, namely the market value of the vendor’s property (comparable to other properties in the area).
The court also concluded that the real estate agent displayed partiality towards the purchaser at the expense of the vendor. S. Maclise Enterprises Inc. v Grover, 2014 ABQB 591 (CanLII)
A sudden odour
A tenant had a retail clothing business in a store that experienced an unpleasant odour. It was worse when the air conditioning system operated. The tenant called an air conditioning technician to service the unit, which temporarily relieved the odour.
Unfortunately, the tenant immediately stopped paying rent, vacated and terminated the lease. The landlord sued the tenant.
The British Columbia Court of Appeal stated that the landlord did not cause the odour nor interfere with exclusive occupancy (without interference). The odour was not caused by an act or omission of the landlord and the failure to correct it did not deprive the tenant of the whole benefit of the lease. The odour did not undermine the “foundation of the contract” because the tenant was still able to carry on her business. She was not able to prove loss of sales or profits because of the odour. Stearman v. Powers, 2014 BCCA 206 (CanLII)
Injury to a minor
A 12-year-old student was injured when he fell from the roof of an elementary school. He reached the roof by climbing up a cherry tree, which was in close proximity to the school. When a school official yelled from an open window at the student, in order to avoid being caught, the child jumped 20 feet on to a cement surface and badly injured himself.
It was known to the school that students often used the tree to access the roof. Both the lower court and the Court of Appeal held that the split in liability of 25 per cent for the child and 75 per cent for the school under “occupiers’ liability” was reasonable and imposed a proper standard of care on the school district. Paquette v. School District No. 36 (Surrey), 2014 BCSC 205 (CanLII)
Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting for builders, real estate agents and lawyers.
