Van Beek v. Dodd, 2010 BCSC 1639

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Van Beek v. Dodd, 2010 BCSC 1639 Date: 20101119 Docket: 08 2596 Registry: Victoria Between: Corey Van Beek and Keri Van Beek Plaintiffs And Karnveer Singh Dodd Defendant Before: The Honourable Mr. Justice S.R. Romilly Reasons for Judgment Counsel for the Plaintiffs: Kelly R. Doerksen Counsel for the Defendant: Sinclair W. Mar Place and Date of Trial: Victoria, B.C. September 21-24, 2010 Place and Date of Judgment: Victoria, B.C.

November 19, 2010 Nature of the Proceedings [ 1 ] This action concerns the purchase by the plaintiffs of their current residence at 408 Nursery Hill Drive in Victoria, British Columbia (“Nursery Hill (lot 3)”), from the defendant in November 2007.

The plaintiffs allege that they were deceived by the defendant with respect to whether or not Nursery Hill (lot 3), the property they agreed to purchase, was a new or used residential premises, i.e. occupied or not occupied, and therefore whether or not the GST applied to the transaction. [ 2 ] In the alternative, the plaintiffs claim that the sale of Nursery Hill (lot 3) from the defendant to the plaintiffs constituted a “consumer transaction” as that term is defined in the Business Practices and Consumer Protection Act , S.B.C. 2004, c. 2 (the “ BPCPA ”), and amendments thereto.

The plaintiffs claim that some of the representations made by the defendant were “representations and deceptive acts or practices” and that the defendant engaged in “unconscionable acts or practices” as those terms are defined under the BPCPA . [ 3 ] The plaintiffs also claim that they have suffered loss and damages as a result of the defendant’s actions, particulars of which include: The difference between the amounts the plaintiffs were forced to pay for Nursery Hill (lot 3) and its fair market value at the time of completion; In the alternative, $41, 037.74, being the amount of GST the plaintiffs were induced by the defendant to believe was payable on the transaction; Additional property transfer tax paid by the plaintiffs in the approximate amount of $820.00; Damages for loss of the benefit of the “new home warranty” of approximately six months’ duration; Damages for the cost to repair or replace the laminate flooring in the basement of Nursery Hill (lot 3). [ 4 ] For the reasons stated below, the plaintiffs will be awarded $45,000 in tortious damages, which represents the difference between the amounts the plaintiffs were forced to pay for Nursery Hill (lot 3) and its fair market value on June 11, 1007, and $820.76 in consequential damages.

The other claims are dismissed. Evidence and Factual Findings

i. Background [ 5 ] The defendant was, at all material times, a real estate agent and developer. His father, Komal Dodd, was also, at all material times, a real estate agent and a developer. [ 6 ] Nursery Hill (lot 3) was part of a 23 lot subdivision of a joint venture operated by two numbered companies, 0715548 B.C. Ltd. of which the defendant and his brother Arunveer Dodd are the principals, and 0715552 B.C. Ltd. of which the defendant’s father, Komal Dodd, and the defendant’s mother are principals. [ 7 ] The joint venture, operating as “Lakeside Estates,” built houses on several of the lots.

Approximately half of the houses were constructed by a company of which the defendant and his brother Arunveer were principals (Dodds Developments Ltd.) and the other half were built by the company of which his father was principal (KSD Holdings Ltd.). [ 8 ] Each of 0715548 B.C. Ltd., 0715552 B.C. Ltd., Dodds Developments Ltd., KSD Holdings Ltd., Karnveer Dodd, and Komal Dodd were GST registrants with their own GST numbers.

Each files their own GST returns. [ 9 ] On September 26, 2006, following subdivision of Lakeside Estates, the defendant transferred Nursery Hill (lot 3) into his personal name. [ 10 ] From the evidence adduced at trial, I find that Nursery Hill (lot 3) came to the attention of the male plaintiff, Cory Van Beek, from an advertisement placed in the Victoria Real Estate Guide covering the period May 24-30, 2007, by the Dodds Real Estate Team. The Dodds Real Estate Team includes the defendant, who was aware of the contents of the ad.

The advertisement indicated that the first open house for Nursery Hill (lot 3) would be held that weekend and that Nursery Hill (lot 3) was a show home. It also advertised the prices of the homes in Lakeside Estates, including Nursery Hill (lot 3), as “complete packages from $599,000 to $699,000 plus GST”. [ 11 ] The plaintiffs attended the first weekend of open houses of Nursery Hill (lot 3).

They received a handout with an artist drawing of Nursery Hill (lot 3) and, at the bottom, the sale price listed as: $699,000 + GST *Prices and availability is subject to change anytime* At this time, all of the properties in the project, including Nursery Hill (lot 3), were in various stages of construction. [ 12 ] On the second weekend of open houses, Cory Van Beek attended alone. On this occasion he asked the defendant the price of Nursery Hill (lot 3). The defendant replied “$699,000 plus GST”.

Cory Van Beek also noted some clothing in one of the closets and was advised by the defendant that the defendant stayed at Nursery Hill (lot 3) “on occasion” and “for security reasons” and that he lived with his parents in Gordon Head. On a separate occasion the defendant told the female plaintiff, Keri Van Beek, that he lived with “his dad”. [ 13 ] On their second visit together to Nursery Hill (lot 3), also during the second weekend of open houses, the plaintiffs received an information package in which the house was again referred to as a “show home”.

The cover page included the following: Dodd’s Real Estate Team Proudly Presents.... LAKESIDE ESTATES 23 LOT SUBDIVISION “Houses Under Construction” The words “October end Possession” were written at the top right hand corner of the artist drawing of Nursery Hill (lot 3). The information sheet stated the price of the property to be $699,000 plus GST, and described it as a “show home”. There could be no doubt that the defendant represented Nursery Hill (lot 3) to the plaintiffs as a show home in a development project.

Further, when the defendant handed the information package to the plaintiff, the defendant again affirmed that the price of Nursery Hill (lot 3) was “$699,000 plus GST”. [ 14 ] The show home was built and the interior substantially completed by the end of April 2007. Store tags were still attached to the staging furniture in the house and pictures taken of the inside of the house clearly indicate that no one was living in the house up to the time the offer to purchase the house was made.

I find as fact that the appearance of Nursery Hill (lot 3) during the open houses attended by the plaintiffs prior to the contract being signed, and afterwards, was all consistent with a “staged” open house and nothing more. I find as fact that if the defendant was using the home as his residence, it was not obvious to the plaintiffs or to anyone. In this regard, I completely reject the evidence of the defendant and Komal Dodd. I also reject the evidence of Inderjeet Taneja, a realtor who previewed Nursery Hill (lot 3) on June 9, 2007, and gave evidence that he noticed it was lived in.

In fact, I find that by the things the defendant said and did, he purposely gave the plaintiffs the impression that no one was residing in the premises. [ 15 ] Both plaintiffs attended the third weekend of open houses at Nursery Hill (lot 3). Several matters were discussed in the presence of both plaintiffs and the defendant during this open house, including: Possible possession dates in the event the plaintiffs decided to make an offer. The defendant wanted a completion date towards the end of October, but it was made known to him that the plaintiffs were flexible in this regard.

They eventually discussed a November 14, 2007 completion.

The plaintiff, Keri Van Beek, specifically asked the defendant when the New Home Warranty would commence to run, to which the defendant replied that it would be “right around” any completion date. The plaintiff, Keri Van Beek, specifically asked the defendant how much GST was payable on the asking price, to which the defendant replied that he did not know as he did not have a calculator with him. [ 16 ] Subsequently, in their car, the plaintiffs discussed the possibility of making an offer to the defendant for Nursery Hill (lot 3).

They decided to present the offer on the basis that the asking price of $699,000 could be reduced by approximately $15,000 (representing 50% of whatever commission would have been lost to the defendant had the plaintiffs been represented by a realtor). This reduction would bring the price down to roughly $685,000. After adding approximately $40,000 for GST, the overall purchase price came out to $725,000. [ 17 ] I find as a fact that an offer, in that form ($685,000 plus GST of approximately $40,000), was presented to the defendant, who eventually accepted.

In arriving at that conclusion, I place reliance on the original statement of adjustments which was sent to the defendant’s solicitor for signature by the defendant. In the statement of adjustments, the solicitor for the plaintiffs listed the sale price of Nursery Hill (lot 3) as being $683,962.26 and the GST on the sale price as being $41,037.74. In addition, I accept the evidence of the appraiser, E.P. Humphreys, that as of June 11, 2007, Nursery Hill (lot 3) was valued at $680,000 plus GST.

I also accept the evidence of the same appraiser that as of November 14, 2007, the adjustment date, Nursery Hill (lot 3) was valued at $710,000 excluding GST. In making this finding, I am aware that the defendant filed appraisal evidence authored by Sam Smith, an appraiser. In his report, Mr. Smith was of the opinion that the fair market value of Nursery Hill (lot 3) was $725,000 as of June 11, 2007, and $740,000 as of November 14, 2007. I note, however, that Mr.

Smith’s appraisals were not adjusted in any fashion for GST; he used comparables of used residential premises; he completely ignored the actual price being asked for the subject property at the relevant time; and he admitted that if he had known that the transaction was exempt from GST, it would have made a difference to his opinion. [ 18 ] The defendant drafted a contract, which was reviewed by his father, and faxed it to the plaintiffs’ solicitor, Kristin Marrs, along with the strata contract of purchase and sale and the property disclosure statement.

The contract confirmed that no final building inspection had been approved, nor had a final occupancy permit been obtained, and stated the defendant’s address as 898 Stoneywood Court, thus supporting the statement made to both the plaintiffs that the defendant was actually living with his father rather than at Nursery Hill (lot 3). The draft contract also referred to the purchase price for the Nursery Hill (lot 3) property as being $725,000 instead of $685,000 plus GST.

It contained an ambiguous provision under “Terms and Conditions” regarding GST: “The seller is responsible for paying any GST in connection with this transaction.” The draft contract also contained the usual clauses for contracts of this type, including: REPRESENTATIONS AND WARRANTIES: There are no representations, warranties, guarantees, promises or agreements other than those set out in this Contract and the representations contained in the Property Disclosure Statement if incorporated into and forming part of this contract, all of which survive the completion of the sale.

GST (Buyer & Seller): The Buyer and the Seller agree that they must satisfy themselves concerning the applications of GST to this transaction. [ 19 ] Prior to completion, the plaintiffs and defendant held a deficiency walkthrough as contemplated in Addendum III of the draft contract. The plaintiffs identified the excessive squeaking in the basement laminate flooring as a deficiency, which the defendants accepted as such. The defendant has not rectified this deficiency; the cost of doing so will be $3,695.47. ii.

Evidence of Kristin Marrs [ 20 ] Kristin Marrs is the solicitor who acted for the plaintiffs in connection with the signing of the contract of purchase and sale, and also in connection with the completion of that transaction. She has in excess of 20 years’ experience as a solicitor acting for buyers and sellers of residential real estate. [ 21 ] Prior to meeting with her clients for the first time in connection with the contract, she received a fax from the Dodds Real Estate Team with the draft contract, a copy of title and the first meeting information.

She testified that she reviewed the contract prior to meeting with her clients and made notes of her review. She noted the reference to GST in the contract and other indicators in the contract (such as the walkthrough inspection prior to completion) and other documentation reviewed that the house was incomplete. All indications were that her clients were considering purchasing an unfinished, newly constructed residence. [ 22 ] Ms.

Marrs indicated that when she met with her clients she was told that there had been some negotiation by them with respect to the purchase price, i.e. that they had negotiated from the starting point of a purchase price plus GST. She was advised by them that it was a brand new home. [ 23 ] As a result of her review of the title, she asked her clients if the builder was living there, because she had noted that title had changed hands at the time of subdivision (she had noted an easement had been registered just days prior to title being registered in the defendant’s name).

She testified that she was advised by her clients that no one was living at Nursery Hill (lot 3), that, instead, it was the show home for the subdivision. She testified that she would have been concerned to clarify whether or not her clients were purchasing used residential premises because if the answer to that question was yes, she would follow up to determine whether or not they had included GST as an element of the purchase price.

She concluded, based upon her review of the documents provided and the answers she received from her clients, that they were purchasing a new home, which was not being used as a residence. [ 24 ] Ms. Marrs testified that as a result of her review of the documentation, including the property disclosure statement indicating that no final occupancy permit had yet been obtained, and as a result of the instructions she received from her clients, she added the “show home provision” to

Article 7 of the contract. Additionally, she added to Addendum III of the contract by adding terms typically included in contracts for the purchase and sale of newly constructed, unoccupied residential premises. These terms include:

GST . GST is included in the purchase price. The Seller shall be responsible to remit all GST payable on this transaction. Occupancy . The Seller agrees to provide an unconditional municipal occupancy certif. to the Buyer prior to the Completion Date. It shall be a fundamental term of this Contract that such Occupancy certificate be provided by Completion. Appliance Warranties . The seller shall ensure that all appliance warranty information and certificates are provided to the Buyer on the Completion Date. New Home Warranty .

The seller shall provide to the Buyer the New Home Warranty Certificate on completion and shall provide proof of such warranty prior to the Completion Date... [ 25 ] Ms. Marrs sent completion documents to Gurmail Manhas, the solicitor for the defendant, on or about November 7, 2007. She drafted her documents in accordance with her understanding of the transaction and the instructions she had received, that is that the purchase price included GST. Thus, the vendor’s statement of adjustments “backed out” the GST payable on the transaction ($41,037.74) from the overall purchase price of $725,000.

The fair market value she included in the transfer was $683,962.26. [ 26 ] On November 9, 2007, Mr. Manhas sent a reply to Ms. Marrs. Ms. Marrs indicated that she did not have an opportunity to review the material she received back from Mr. Manhas until the morning of November 13, 2007. I find that this delay was not the fault of Ms. Marrs; her calendar of “closings” indicated that the previous day November 12, 2007, was a holiday.

She said that this was the first indication she had received from the defendant’s solicitor, or any other source, that the defendant and his fiancée, Amber Miller, were in fact living at Nursery Hill (lot 3) and that the transaction was GST exempt. [ 27 ] In my view, it is significant that Amber Miller was not called as a witness to corroborate the evidence of the defendant, the defendant’s father and Inderjeet Teneja. Mr. Teneja testified at trial that on one occasion he attended Nursery Hill (lot 3) for approximately 15 minutes in June 2007.

He stated that he did not open closet doors, but he did recall some clothes in a bedroom and “cooking stuff” in the kitchen; he also recalled seeing “outdoor stuff” in the garage. [ 28 ] Upon learning this information, Ms. Marrs telephoned Corey Van Beek to advise him of the situation. She noted that she had an appointment with her clients at 11:30 a.m. that morning. When she met with her clients she witnessed their signatures to the closing documents, all of the documents related to the refinancing of their existing house and their new mortgage. She noted that Corey Van Beek was very upset.

She understood that he was attempting to reach one of Komal Dodd or the defendant concerning representations that GST was payable on the sale price. Ms. Marrs requested funds from the plaintiffs’ lender, but noted that she could have cancelled that request if her clients decided not to complete the transaction. She was aware that the plaintiffs had made numerous arrangements in connection with their anticipated purchase of Nursery Hill (lot 3). [ 29 ] Ms. Marrs noted that on the morning of November 14, 2007, she received instructions to complete the purchase and did so.

With respect to the “extra” property transfer tax payable by the plaintiffs in consequence, she confirmed that the extra property transfer tax paid by the plaintiffs was 2% of $41,037.74. iii. Evidence of Mr. Van Beek after he was advised of the Defendant’s Position [ 30 ] The male plaintiff, Mr. Van Beek, testified that upon receiving the news from Ms. Marrs about the defendant’s position regarding the GST payment, he first spoke to Komal Dodd.

He testified that, though not the vendor, Komal Dodd advised him that they could “get out of the deal” if they weren’t happy, but that the “tax problems” were “their tough luck”. Nothing was said regarding the return of the plaintiffs’ deposit of $35,000. [ 31 ] Mr. Van Beek testified that he later spoke to the defendant. The defendant explained his position regarding the house being used as residential housing, stating that he had told the plaintiffs that Nursery Hill (lot 3) would be “your” new house, not “a” new house.

The defendant did not discuss the possibility of the plaintiffs not completing the purchase or receiving their deposit back. I accept the evidence of the male plaintiff that the defendant did not tell him that he could get out of the deal if he wished at any point during this discussion. [ 32 ] Mr. Van Beek testified that the plaintiffs felt at this point that they had no practical choices in the matter.

They had made arrangements and incurred expenses related to obtaining new insurance over both houses, redirecting their mail, advertising for a tenant for their other house, refinancing their other house, and securing a mortgage over Nursery Hill (lot 3). All of their belongings were packed and ready to move.

Movers were lined up for the following day. [ 33 ] In the end, the plaintiffs instructed their solicitor to complete the purchase, which was done on November 14, 2007. [ 34 ] The plaintiffs submit that as a result of completing on the basis insisted upon by the defendant, they were forced to pay an additional $820.76, being 2% of the difference between $725,000 and $683,962.26 (that is, 2% of $41,037.74). [ 35 ] The plaintiffs also submit that due to the manner in which they now perceived the defendant, they also incurred the expense of rekeying Nursery Hill (lot 3) at a cost to them of $158.14, and having a formal inspection done of the house at a cost to them of $508.80. iv.

The New Home Warranty [ 36 ] Regarding the New Home Warranty, the plaintiffs testified that it was received by the plaintiffs in the mail two to three weeks after completion. It was provided to them not by the defendant, but by National Home Warranty (“National”). The plaintiffs testified that they were surprised and disheartened to learn that it commenced running on May 30, 2007, which is several months earlier than they had been led to believe by the defendant. The plaintiffs thought there must be some mistake and attempted to obtain clarification from

the defendant with respect to the precise start date. The defendant did not respond. [ 37 ] When the plaintiffs submitted their list of deficiencies to National, they inadvertently omitted the deficiency for the laminate flooring. At the technical inspection conducted on the property by National the deficiency was brought to the attention of the inspector. The inspector noted in his report: Laminate floor in basement unreasonable squeaking throughout . The laminate floor is a floating floor system that is not impervious to some squeaks.

This particular brand of laminate, however, does not appear to have a wax coating on the T & G click-lock joints. As a result, the non-lubricated joints squeak excessively. Excessive noise such as this is not acceptable to industry standards. [ 38 ] National declined to treat this as an item of coverage, since National did not receive notification in writing prior to the expiry of the one year period (that is, prior to May 30, 2008). [ 39 ] In an email sent by the defendant to Mr.

Van Beek on August 19, 2008, the defendant advised the plaintiffs that he would not be remedying the laminate flooring deficiency, not because it was not a deficiency, but because it was beyond the warranty period. v. Evidence of Payment of GST by the Defendant [ 40 ] The defendant testified that he incurred GST expenses for the Nursery Hill (lot 3) property of approximately $36,000.00. The “GST expenses” claimed by the defendant pre-date and post-date the defendant’s acquisition of the property. As indicated in Exhibit 13, the majority of these “GST expenses” were, in fact paid, not by him but by others.

The defendant and his father indicated that his father’s credit card was used to pay the GST on the supplies for the Nursery Hill (lot 3) property because, in doing so, the defendant could get a better purchase price on supplies. The defendant and his father both testified that the defendant paid his father for these purchases where his credit card was used.

There is, however, not one iota of documentary evidence of such repayment to the defendant’s father by the defendant for the amounts that he claims to have paid for “GST expenses” for products allegedly purchased for the Nursery Hill (lot 3) property. [ 41 ] The plaintiffs also submit that the defendant intentionally misled them so as to increase his profit on the sale of Nursery Hill (lot 3).

They submit that the defendant knew that: The “pre-acquisition” (i.e. prior to September 25, 2006) GST amounts incurred with respect to the servicing and construction of Nursery Hill were incurred before the defendant had any interest in the property and therefore would not have been usable by him personally as input tax credits on the sale of Nursery Hill if it was a taxable transaction; While he would receive $725,000 for the property, his and his father’s companies could claim the benefit of input tax credits to offset “post-acquisition” GST amounts which would otherwise have been remitted to Canada Revenue Agency by the payor of the various invoices, whether that be KSD Holdings Ltd., Dodds Developments Ltd., or Komal Dodd personally; He could avoid paying GST on the fair market value of the house when it was sold.

In other words, since the sale was exempt from GST no GST was collected on the amount by which fair market value exceeded his “notional” GST costs. The Law and Analysis i. Fraudulent Misrepresentation [ 42 ] The first claim put forward by the plaintiffs is that the defendant made material fraudulent misrepresentations, which they relied on in entering into the contract of purchase and sale of Nursery Hill (lot 3).

To succeed on this claim, the plaintiffs must establish that: 1. the defendant made a representation of fact to the plaintiff(s); 2. the representation was false in fact; 3. the defendant knew that the representation was false when it was made, or made the false representation recklessly, not knowing if it was true or false; 4. the defendant intended for the plaintiffs to act on the representation; and 5. the plaintiffs were induced to enter into the contract in reliance upon the false representation and thereby suffered a detriment. See: Casillan v. 565204 B.C. Ltd. , 2009 BCSC 1335 at para. 20 ; Islip v.

Coldmatic Refrigeration of Canada Ltd. , 2002 BCCA 255 , 100 B.C.L.R. (3d) 234 at para. 11 ; BG Checo International Ltd. v. British Columbia Hydro and Power Authority , 1993 CanLII 145 (SCC) , [1993] 1 S.C.R. 12, 75 B.C.L.R. (2d) 145; and Derry v. Peek (1889), 14 App. Cas. 337 (H.L.) . [ 43 ] The standard of proof is proof on a balance of probabilities, having due regard to the seriousness of the allegation of deceit: Wellesley Lake Trophy Lodge Inc. v. BLD Silviculture Ltd., 2006 BCCA 328 , 56 B.C.L.R. (4th) 205 at paras. 10-12 . As stated by Sigurdson J. in 415703 B.C. Ltd. v.

JEL Investments Ltd ., 2010 BCSC 202 at para. 98 : [98] An allegation of a fraudulent misrepresentation is very serious. Mackenzie J.A. in Anderson v. British Columbia (Securities Commission) , 2004 BCCA 7 at para. 29 described the standard of proof for fraud in a civil case:

Fraud is a very serious allegation which carries a stigma and requires a high standard of proof.

While proof in a civil or regulatory case does not have to meet the criminal law standard of proof beyond a reasonable doubt, it does require evidence that is clear and convincing proof of the elements of fraud, including the mental element. [ 44 ] The plaintiffs argue that the defendant made the following misrepresentations in the time leading up to the drafting and execution of the contract of purchase and sale, which they relied upon in deciding to purchase Nursery Hill (lot 3): At the first open house, he told the plaintiff, Corey Van Beek, that the price of the property was “$699,000 plus GST”; On the occasion of the second weekend of open houses, Mrs.

Van Beek asked the defendant the asking price of the show home and was told by the defendant the price was $699,000 plus GST; On the third weekend of the open houses, Mrs. Van Beek specifically asked the defendant the dollar amount of GST payable on the purchase price, to which the defendant replied that he did not have a calculator and therefore did not know the exact dollar amount; The defendant advised the plaintiff, Corey Van Beek, that the clothing Mr. Van Beek had noted in one of the closets was there because he (Mr.

Dodd) slept in the show home on occasion, for security purposes; The defendant told the plaintiff, Corey Van Beek, that he (Mr. Dodd) lived in Gordon Head with his parents; The defendant told Mrs. Van Beek that he resided with his “dad”; In addition to the verbal misrepresentations, Mr.

Dodd allowed the advertisement to run in the Victoria Real Estate Guide that initially attracted the plaintiffs to the property which listed the price of packages (including the subject property) “from $599,000 to $699,000 plus GST”; The defendant gave to the plaintiffs the “information package” during the second weekend of open houses, which misstated the price of the subject property as $699,000 plus GST not once, but twice.

The same information package referred to the property in question as a “house under construction” and as the “show home” but neglected to qualify those statements with the additional information that it was the defendant’s personal residence. [ 45 ] The plaintiffs need only make out the claim on the basis of a single fraudulent misrepresentation. In other words, the court is not required to find that all of the representations cited above constitute fraudulent misrepresentations in order for the plaintiffs to succeed in the tort action: Murray v. Affordable Homes Inc. , 2007 BCSC 1428 at para. 25 .

On the basis of the entire evidence before me, I am satisfied that each of the elements of fraudulent misrepresentation have been met in this case with respect to all but one of the alleged representations. 1. The defendant made representations to the plaintiffs and the representations were, in fact, false. [ 46 ] The defendant owes a duty to the plaintiffs to disclose all material facts regarding the purchase and sale of property: Noble v. Fuller, Ellis Realty Ltd. , [1985] B.C.J. No. 1007 (S.C.) . A false or incomplete representation of those facts may amount to an actionable falsehood.

The plaintiffs cite C.R.F. Holdings Ltd. v. Fundy Chemical International Ltd. (1982), 1981 CanLII 488 (BC CA) , 33 B.C.L.R. 291 (C.A.) [ C.R.F. Holdings Ltd. (CA)] at para. 5 , for this proposition: [5] ...“To state a thing which is true only with qualifications or additions known to, but studiously withheld by, the representors to say the thing which is not. Such a statement is a lie, and one of the most dangerous and insidious forms of lie.” [G. Spencer Bower, K.C., & The Hon. Sir A. K.

Turner, The Law of Actionable Misrepresentations , 3 rd ed. (London: Butterworths, 1974) (at p. 94)]. [ 47 ] In a more recent decision of this court, Battrum v. MacKenzie , 2010 BCSC 1285 , Fenlon J. made a similar point at para. 10: [10] ...In S.M. Waddams, The Law of Contracts , 5th ed. (Toronto: Canadian Law Book Inc., 1999), Professor Waddams suggests at ¶ 436 that an incomplete representation may amount to an actionable falsehood: ... An incomplete statement may be as misleading as a false one, and such half-truths have frequently been treated as legally significant misrepresentations.

Almost always something is said to induce the transaction and it is open to the court to hold that the concealment of the material facts can, when taken with general statements, true in themselves but incomplete, turn those statements into misrepresentations. [Footnotes omitted.] [ 48 ] There is no evidence that the defendant expressly stated to the plaintiffs that GST would be payable on top of the purchase price. There is no evidence that either plaintiff asked for an explanation of how GST would factor into the sale price.

However, it is evident from the facts that the parties knew that the price of Nursery Hill (lot 3) was “$699,000 plus GST”, although the meaning of this phrase is in issue. [ 49 ] The sale of Nursery Hill (lot 3) was, in fact, not subject to GST because the defendant sold the home as his personal residence: Excise Tax Act, R.S.C. 1985, c. E-15,

Schedule V,

Part 1, s. 3. The defendant says that he did not make false representations regarding the applicability of GST. Rather, he says that GST was remitted to the Canada Revenue Agency for the land and construction of Nursery Hill (lot 3) and that he included this in his decision to accept the plaintiffs’ offer of $725,000. However, if the defendant intended for “$699,000 plus GST” to mean anything other than GST payable on the purchase price, this is a material fact and a qualification that he needed to bring to the plaintiffs’ attention.

This applies equally to the defendant’s statement, if made, that he did not know the exact amount of GST payable because he did not have a calculator with him. I will note that if GST was not payable on the purchase price then no calculator was needed. In light of this, I find that the defendant made incomplete representations regarding the application of GST that were misleading as false.

[ 50 ] The information package included a fact sheet, which listed Nursery Hill (lot 3) as a “Show Home” priced at “$699,000 plus GST”. The defendant was aware of the details of the information package, which he handed to the plaintiffs. At that time, the defendant also affirmed the price as “$699,000 plus GST”. As discussed above, this is an incomplete representation that required qualification. Thus, the information package and the representations contained therein regarding the price are also misleading as false. See: Ross v.

Hobbis (1992), 25 R.P.R. (2d) 27 (B.C.S.C.) at paras. 34-36 . [ 51 ] When the defendant sold Nursery Hill (lot 3) to the plaintiffs he was selling his own house. However, by the things the defendant said and did, he purposely gave the plaintiffs the impression that no one was residing in the premises. This is reinforced by the fact that the defendant positively misstated his address as 898 Stoneywood Court rather than 408 Nursery Hill Drive (the address of the property in issue) in the initial and final contract of purchase and sale.

I find that the defendant made a false statement regarding his residence. [ 52 ] Finally, the plaintiffs claim that the listed price of the packages (including the subject property) in the Victoria Real Estate Guide advertisement constitutes a false statement. In my view, the advertisement cannot be found to be a false representation of the purchase price. This issue was addressed in Casillan .

In that case, a webpage advertisement for the sale of used cars by Daewoo incorporated a warranty page that led the plaintiff to believe that Daewoo included a powertrain warranty for every car purchased at Daewoo unless the factory warranty was still in effect. The webpage included a qualification, in small print, that the warranty was “not offered if factory powertrain warranty still in effect is greater than offered warranty”: para. 3.

The defendant manager/salesperson agreed in cross-examination that a customer could be confused or mistaken by the webpage page unless a Daewoo financial manager adequately explained the warranty options to them. In light of this, the court found that the webpage advertisement for the sale of vehicles by Daewoo was “sufficiently misleading to be false”: para. 24. On this issue, the case at bar can be distinguished on its facts.

Unlike the Daewoo advertisement, the Victoria Real Estate Guide advertisement was not definite; it lists a price range from “$599,000 to $699,000 + GST”; it did not clearly set out the price as it applied to Nursery Hill (lot 3) or provide additional details or qualifications regarding price; and, it could not be intended to be relied on by a potential home buyer in their decision to purchase a Lakeside Estates home to the same extent that a potential purchaser of a Daewoo vehicle would rely on a detailed warranty page.

Thus, I find that the Victoria Real Estate Guide advertisement is not misleading in the same manner as the Daewoo warranty page. [ 53 ] In any event, the representations in the Victoria Real Estate Guide advertisement would not pass the other branches of the fraudulent misrepresentation test. The advertisement brought Nursery Hill (lot 3) to the attention of the plaintiffs and started them on the track towards purchasing the property.

However, in contrast to the Daewoo advertisement, which included qualifications and fine-print details about the warranty, the evidence is not clear and convincing that the defendant intended for the plaintiffs to rely on this advertisement. Additionally, I cannot find that it induced the plaintiffs to enter into the contract. 2.

The defendant knew that the representation was false or made the false representation recklessly, not knowing if it was true or false [ 54 ] The plaintiffs must prove that the defendant must have, at the time, either known the representation was untrue or made it recklessly without an honest belief in its truth. See: Catalyst Pulp and Paper Sales Inc. v. Universal Paper Export Company Ltd ., 2009 BCCA 307 , 95 B.C.L.R. (4th) 259 at para. 55 ; and Casillan at para. 20 . On this point, the court in Noble held at para. 20: [20] The next question is whether the tort of deceit is established.

That requires proof of fraud. The statement must have been made with the intention to deceive or with reckless disregard for the truth and without an honest belief in the truth of the statement... In the case at bar there is no explanation for the statement with respect to urea formaldehyde consistent with an honest belief in its truthfulness. Nor was there any indication of an attempt to investigate to learn whether or not the statement might be true. The position of a real estate agent showing a property is one of high responsibility.

To answer an inquiry of a potential purchaser without knowing whether or not the answer is correct and without qualification constitutes reckless disregard for the truth, in my opinion. It may be, as I have earlier suggested, that Mr. MacIntyre failed to appreciate the impact of Dr. Noble's question and gave him the assurance he was seeking, confident that the insulation was satisfactory and that his answer would not matter in any event. This hypothesis, while it may explain his conduct, does not in my view excuse it or make it any the less reckless.

The essence of recklessness is not a premeditated intention to deceive, but a wanton disregard as to whether one deceives or not. When a professional salesperson chooses to give answers to serious questions from potential purchasers without ascertaining whether or not they are true, recklessness and the tort of deceit are established. [Citations omitted.] [ 55 ] The defendant was, at all material times, a real estate agent and owed a duty to the plaintiffs to ensure that he answered their questions without qualifications. On this point, Leask J. wrote in Cosway v. Boorman’s Investment Co.

Ltd. , 2008 BCSC 1482 at para. 27 : [27] ...I believe the law was stated accurately by Ryan J. (as she then was) in Shaak v. McIntyre , [1991] B.C.J. No. 2607 (S.C.) , where she stated at para. 65: In Bolton [ v.

Salaga , August 18, 1989, B.C.S.C. unreported, Victoria Registry # 85/0287, Madam] Justice Huddart stated that the duty of a selling agent is: ...to check the completeness and accuracy of all information which it is usual or customary for brokers to verify and of all other information as to completeness and accuracy of which he is in doubt before conveying that information to the purchaser. (p.7) (my emphasis) From this I gather that the broker is under a duty to check information of which he or she is in doubt (or ought to have been in doubt) before passing it on to the purchaser. [ 56 ] I find the evidence clearly establishes, on a balance of probabilities, that the defendant knew that the representations he made to the plaintiffs and the representations in the information package were false.

The defendant did live at Nursery Hill (lot 3); he was selling his own home. The defendant also admits that he knew that GST was not payable on the purchase of Nursery Hill (lot 3).

[ 57 ] The defendant submits that all of the alleged answers to questions forming allegations of misstatements were made before any indication by the plaintiffs that an offer was made and were not in the nature of pre-contractual negotiations. The fact that the defendant made false statements in the context of general discussion with the plaintiffs does not relieve him from liability. The defendant was responsible for making complete and accurate representations throughout his course of dealings with the plaintiffs: Noble at para. 20.

To find otherwise would result in an inefficient and frustrating house hunting experience for interested purchasers. 3. The defendant intended for the plaintiffs to act on the representation [ 58 ] At this stage of the test, the defendant’s motive is immaterial. The plaintiffs do not need to establish that the defendant intended to cheat or injure them. The plaintiffs do have to establish that the defendant intended for them to act on the false representations. See: Derry at 374; and Carreau v. Turpie , [2006] O.J. No. 4224 (S.C.J.) at para. 18 . [ 59 ] On this element, G.H.L.

Fridman writes ( The Law of Torts in Canada, 2nd ed. (Toronto: Carswell, 2002) at 749-751, cited in Catalyst at para. 57): The false statement must be made with the intent that the plaintiff, to whom it is made, should act upon it. It must be intended to deceive the person to whom it is made, in other words to cause that person to believe in the truth of the statement and act accordingly.

Clearly if the defendant does not know his statement is false then he can not have the requisite intent to deceive. [ 60 ] For the foregoing reasons, I find that the defendant intended to deceive the plaintiffs into believing that Nursery Hill (lot 3) was a new home and therefore GST applied to the transaction in an effort to secure a purchase price of $725,000. [ 61 ] The evidence establishes that the plaintiffs were interested in Nursery Hill (lot 3). One or the other or both plaintiffs attended three open houses and spoke to the defendant on each occasion.

On the third weekend of the open houses, the parties discussed the completion date and the New Home Warranty, which indicated a genuine interest to purchase. In my opinion, it can be inferred from the facts that the defendant had knowledge of the plaintiffs’ interest. Their interest was founded on the basis of the belief that the property they were purchasing was an uncompleted, unoccupied show home and that they would be paying GST on the purchase price. In light of this, the plaintiffs made an offer on Nursery Hill (lot 3) in the amount of $685,000 plus GST of approximately $40,000.

This offer, which the defendant accepted, reflected the fair value of the property as determined by Mr. Humphreys on June 11, 2007 (the date on the contract of purchase and sale). It is noteworthy that the housing market was rising during the parties’ course of dealings. Between June 11, 2007 and November 14, 2007, the closing date, the value of Nursery Hill (lot 3) increased to $710,000 excluding GST. [ 62 ] The defendant’s position is that the price of $725,000 took into account the GST remitted for the purchase and construction of the property.

However, the defendant did not bring this to the attention of the plaintiffs prior to the closing date. The defendant also argues that not only was the property worth more than the alleged $680,000 net GST, it was likely worth more than the asking final purchase price of $725,000. This argument is based on the appraisal of Mr.

Smith, to which I can give no weight. [ 63 ] The initial contract prepared by the defendant, referred to the purchase price as $725,000 (no reference to the exclusion or inclusion of GST) and included a provision that “[t]he seller is responsible for paying any GST in connection with this transaction.” Although Ms. Marrs removed this line from the contract, she added the GST provision in Addendum III, which is a typical inclusion in contracts for purchase and sale of newly constructed homes.

There is nothing in the initial or final contracts that would give the plaintiffs or their lawyer a reason to believe that references to GST contained therein pertained to anything other than GST payable on the purchase price. [ 64 ] The defendant argues that the GST clause in the final contract of purchase and sale is ambiguous and should be interpreted in a manner that is against the plaintiffs’ interest, i.e. that it refers to GST as contemplated by the defendant. The rule as stated by Pearlman J. in Karim v.

Seo , 2010 BCSC 746 at para. 17 is: [17] ... where the court is unable to resolve an ambiguity in the terms of a contract, the language of the contract will be construed against its author where the other party has had no meaningful opportunity to modify the wording... Where the rule applies, the author of the contract “must live with the consequences”... [Citations omitted.] [ 65 ] I do not think that it is fair to read the GST clause drafted by Ms. Marrs in the manner suggested by the defendant.

The contra proferentum rule, if it were to apply in this case, actually resolves ambiguity in favour of the plaintiffs. Although Ms. Marrs modified the wording of the initial contract, she did so solely on the basis of the plaintiffs’ understanding that Nursery Hill (lot 3) was a new home and GST was payable on the purchase price. [ 66 ] The manner in which the defendant drafted the contract of purchase and sale, misstating his address, including the term regarding GST and a provision for the pre-completion walkthrough, is a further indication of deceptive intent.

I find nothing in the initial contract of purchase and sale that would give the plaintiffs a reason to ask if Nursery Hill (lot 3) was a used residence or if the purchase was GST exempt. [ 67 ] The defendant further argues that he lacked the requisite intention under this branch of the test because he was unaware of the plaintiffs’ view that GST was payable on the purchase price as they never brought it to his attention. It is doubtful that the plaintiffs, who are not experienced in residential real estate development or sales (Mr. Van Beek is an air traffic controller by occupation and Mrs.

Van Beek is an office administrator), would come to any other conclusion based on the representations that Nursery Hill (lot 3) was a new show home and that it was priced at “$699,000 plus GST”. It is unreasonable for the defendant to expect that the plaintiffs would have a reason to ask for clarification on this matter. [ 68 ] Finally, the defendant submits that he first became aware of the plaintiffs’ understanding regarding the GST on November 7, 2007, and that he promptly made sure that the error was cleared up in his return letter to Ms. Marrs on November 9, 2007.

Further, the defendant submits that in a conversation with Mr. Van Beek on November 13, 2007, he told Mr. Van Beek that he could walk away from the deal without penalty. In my opinion, the evidence in support of either argument is not sufficient to overcome a finding that the

defendant intended for the plaintiffs to act on the false representations in an effort to induce them to purchase Nursery Hill (lot 3). [ 69 ] In sum, the plaintiffs have established, on a balance of probabilities, that the evidence supports a finding that the defendant intended for the plaintiffs to act on the false representations. To succeed on this branch of the test, the plaintiffs do not need to prove that the defendant had a deceitful motive.

However, the facts support the plaintiffs’ proposition that the defendant’s intent to deceive was motivated by a desire to recover some of the GST expenditures that he claimed to have incurred in association with the initial purchase and construction of Nursery Hill (lot 3) at a time when the market prices were on the rise. 4. The plaintiffs were induced to enter into the contract in reliance upon the false representation and the plaintiffs suffered a detriment [ 70 ] To maintain an action for deceit, the plaintiffs must prove in fact that the defendant’s false representation induced the contract.

Madam Justice Fenlon articulated the test under this element in Battrum at paras. 24-25 : [24] The test of materiality of the representation and reliance on it is a subjective one; it is not a matter of asking whether a reasonable person would have relied on the representation, but whether this plaintiff relied upon it in the circumstances of this case. [25] Battrum was induced to enter into the investment in AOI by a number of factors.

It is likely that the opportunity to make a large and quick profit was a greater inducement than the security afforded by the units held in trust, but the law does not require the misrepresentation to be the only or even the most significant reason for the plaintiff’s action. As stated in George Spencer Bower, The Law of Actionable Misrepresentation , 3d ed. (London: Butterworths, 1974) at 139: 120 It is sufficient to prove that the representation was an inducing cause. It is not necessary to establish that it was the inducing cause.

Whether, if a full disclosure of the truth had been made, the representee would or would not have altered his position in the manner in which he did, is a question to which the law does not require an answer. It is enough if a full and exact revelation of the material facts might have prevented him from doing so—if it would have “given him pause”. [Emphasis in original; footnote omitted.] In Sidhu Estate v.

Bains , 1996 CanLII 3332 (BC CA) , [1996] 10 W.W.R. 590, 25 B.C.L.R. (3d) 41 (C.A.), Finch J.A. (as he then was) stated the following at para. 36 (cited to W.W.R.): It is therefore sufficient in my view to found liability in deceit if the fraudulent representation is a material inducement upon which the representee relied, even if that representation is only one of several factors contributing to her decision. [ 71 ] In C.R.F. Holdings Ltd. (CA), the Court of Appeal considered the requisite materiality of a fraudulent statement made in the context of a sale of property.

At para. 9, Craig J.A. wrote (Macdonald J.A. concurring; Anderson J.A., dissenting, in part, on a different point): [9] What constitutes an inducement depends on the circumstances of each case. There may be only one thing which induces a transaction or there may be several things collectively which induce it. Whether it be one thing or several things, it must be a material factor, not merely an incidental factor. In Hinchey v.

Gonda (1955) 1954 CanLII 343 (ON SC) , O.W.N. 48, Schroeder J. said at pages 49- 50, In order that a misrepresentation, whether innocent or fraudulent, may support an action or a defence, it is essential that it should be material in its nature, that it should be intended to be acted upon and should be a determining ground of the transaction [citing among other cases Smith v. Chadwick (1884) 9 A.C. 187]. A misrepresentation, to be material, must be one necessarily influencing and inducing the transaction and affecting and going to its very essence and substance.

Misrepresentations which are of such a nature as, if true, to add substantially to the value of property, or are calculated to increase substantially its apparent value, are material. [ 72 ] The defendant’s representations to the effect that Nursery Hill (lot 3) was an unoccupied home added to the apparent value of the property and, as such, were material to the purchase and sale of the property.

These representations reinforced the plaintiffs’ understanding that GST would be payable on the purchase price and their reliance on the defendant’s statements that the home cost “$699,000 plus GST”. [ 73 ] I find that the new status of the home and the asking price of $699,000 are factors that contributed significantly to the plaintiffs’ interest in the property. The plaintiffs discussed the possibility of making an offer to the defendant for Nursery Hill (lot 3) after attending the third weekend of open houses.

The discussion centered around the asking price of $699,000 and the inclusion of the GST on that sale. When Mr. Van Beek presented his offer in the form of $685,000 plus GST of approximately $40,000, the defendant accepted it and did not raise any issue regarding the GST at that time.

I accept the plaintiffs’ submission that this occasion was an opportunity to correct any misunderstandings, which the defendant did not take, and supports a finding that the defendant intended to deceive. [ 74 ] The events leading up to November 13, 2007, clearly demonstrate that the defendant’s representations induced the plaintiffs to enter into the June 11, 2007 contract of purchase and sale of Nursery Hill (lot 3) and continue dealing with the defendant up to the point of no return.

It would be unjust to suggest that on November 13, after making all the necessary arrangements and knowing that movers were booked for the following day, the plaintiffs repudiate on the agreement. [ 75 ] On the basis of the entire evidence before the court, it is clear that the defendant’s false representations induced the plaintiffs’ belief that the property they were purchasing was a new, unoccupied show home, and that GST applied to the transaction. It is probable that the plaintiffs would have paused upon learning that the defendant resided at Nursery Hill (lot 3).

In the very least, this information would have been passed on to the plaintiffs’ lawyer, who testified that she would have followed up to determine whether or not the defendant included GST as an element of the purchase price if the plaintiffs thought that someone was living in the house. In the

circumstances of this case, that is sufficient to found liability in deceit. [ 76 ] The plaintiffs clearly suffered a detriment as a consequence of the defendant’s actions: Murray at para. 23 . The plaintiffs were induced to enter into a contract for $725,000, which is substantially more than what they were prepared to pay and would have paid for Nursery Hill (lot 3) had they known the true facts. 5.

The ‘Representation and Warranties’ clause does not exclude fraudulent misrepresentation. [ 77 ] The defendant argues that the Representation and Warranties clause excludes liability in tort for the representations in issue: The character of and the context in which the alleged representations that were made during conversations at the open houses, puts them squarely into the representations that the Contract of Purchase and Sale in paragraph 18 (Ex. 1 Tab 7) at page 3 of 7 intends to preclude.

Paragraph 18 states: “There are no representations, warranties, guarantees, promises or agreements other that those set out in this Contract and the representations contained in the Property Disclosure Statement if incorporated into and forming part of this Contract, all of which will survive the completion of the sale”. [ 78 ] However, fraudulent misrepresentations, which induce a plaintiff to enter into a contract, cannot be repudiated by an ‘entire agreement’ clause: Casillan at para. 23 . See also: Ballard v. Gaskill (1955), 1955 CanLII 274 (BC CA) , 14 W.W.R. 519 (B.C.C.A.). In Thiel v.

Milmine , 1995 CarswellOnt 3299 (Ont. Gen. Div.) , the court awarded damages in a case where a vendor failed to disclose a latent defect of which he was aware. In reaching its decision, the court wrote at paras. 37-38: [37] In Hughes v. Ojibway Realty Co. Ltd., [1924] 55 O.L.R. 611 , the Ontario Court of Appeal per Middleton J.A. approved of the following statement in Kerr on Fraud and Mistake 5th ed., p. 403: The party defrauded may, instead of rescinding his contract, stand to the bargain even after the discovery of the fraud, or he may recoup in damages if sued by the vendor for the price.

The affirmance of the contract by the vendee after discovery of the fraud merely extinguishes the right to rescind. His other remedies remain unimpaired. [38] Clause 22 of the agreement of purchase and sale, which is Exhibit 3 in these proceedings, is the " entire agreement " clause.

It provides, in part, that: There is no representation, warranty, collateral agreement or condition, whether direct or collateral or expressed or implied, which induced any party hereto to enter into this Agreement or on which reliance is placed by any such party, or which affects this Agreement or the property or supported hereby, other than as expressed herein. This clause is vitiated by fraud and it is not open to the defendant to rely upon it in the circumstances.

See Ballard v Gaskill (1955), 1955 CanLII 274 (BC CA) , 14 W.W.R. 519 (B.C.C.A.). [ 79 ] I will also note the statement of Masuhara J. in RC Hotel Ventures Ltd. v. Meristar Sub 2C, L.L.C. , 2008 BCSC 918 at para. 23 , that: [23] …an action of fraudulent misrepresentation will not be precluded where the plaintiff failed to exercise due diligence, where there is an exclusion clause in the contract, or where there is a clause that purports to exclude liability for fraud: Sanghera v.

Danger Figure Centre (Burnaby) Ltd. [2007 BCSC 1308]. [ 80 ] In light of the foregoing analysis, I find the Representation and Warranties clause in the contract of purchase and sale does not protect the defendant from liability. The plai ntiffs are successful in the tort action and are entitled to damages. ii. The Business Practices and Consumer Protection Act [ 81 ] The plaintiffs argue that

Part 2 (Unfair Practices) and

Part 10 (Inspections and Enforcement) of the BPCPA apply with respect to real estate transactions and, specifically, the purchase and sale of Nursery Hill (lot 3). [ 82 ] The relevant portions of the BPCPA provide: 1(1) In this Act: “consumer” means an individual, whether in British Columbia or not, who participates in a consumer transaction, but does not include a guarantor; “consumer transaction” means

a) a supply of goods or services or real property by a supplier to a consumer for purposes that are primarily personal, family or household, or (

b) a solicitation, offer, advertisement or promotion by a supplier with respect to a transaction referred to in paragraph (a), and, except in Parts 4 and 5, includes a solicitation of a consumer by a supplier for a contribution of money or other property by the consumer; ...

“supplier” means a person, whether in British Columbia or not, who in the course of business participates in a consumer transaction by (

a) supplying goods or services or real property to a consumer, or (

b) soliciting, offering, advertising or promoting with respect to a transaction referred to in paragraph (

a) of the definition of “consumer transaction”, whether or not privity of contract exists between that person and the consumer, and includes the successor to, and assignee of, any rights or obligations of that person and, except in Parts 3 to 5 [ Rights of Assignees and Guarantors Respecting Consumer Credit ; Consumer Contracts ; Disclosure of the Cost of Consumer Credit ], includes a person who solicits a consumer for a contribution of money or other property by the consumer; ... 4

(1) In this Division: “deceptive act or practice” means, in relation to a consumer transaction, (

a) an oral, written, visual, descriptive or other representation by a supplier, or (

b) any conduct by a supplier that has the capability, tendency or effect of deceiving or misleading a consumer or guarantor; “representation” includes any term or form of a contract, notice or other document used or relied on by a supplier in connection with a consumer transaction.

(2) A deceptive act or practice by a supplier may occur before, during or after the consumer transaction.

(3) Without limiting subsection (1), one or more of the following constitutes a deceptive act or practice: (

a) a representation by a supplier that goods or services ... (ii) are of a particular standard, quality, grade, style or model if they are not, (iii) have a particular prior history or usage that they do not have, including a representation that they are new if they are not, ... 5(1) A supplier must not commit or engage in a deceptive act or practice in respect of a consumer transaction.

(2) If it is alleged that a supplier committed or engaged in a deceptive act or practice, the burden of proof that the deceptive act or practice was not committed or engaged in is on the supplier. ... 171(1) Subject to subsection (2), if a person, other than a person referred to in paragraphs (

a) to (e), has suffered damage or loss due to a contravention of this Act or the regulations, the person who suffered damage or loss may bring an action against a (

a) supplier, ... who engaged in or acquiesced in the contravention that caused the damage or loss. [ 83 ] I find that the transaction at bar is a “commercial transaction” under the BPCPA . In determining if a transaction is a “commercial transaction” pursuant to s. 1, the test is not “whether the provider of services is a commercial operation. It is whether the purchaser is an individual purchasing for primarily personal, family or household purposes”: Nanaimo Shipyard Ltd. v. Keith , 2008 BCSC 1150 at para. 57 .

The plaintiffs are individuals and “consumers” who purchased Nursery Hill (lot 3) as their primary residence for personal, family and household purposes. The defendant was, at all material times, a real estate agent and developer and admitted that he is a “builder” as that term is defined in the Excise Tax Act . He was actively involved in the transaction and, thus, is a “supplier” within the meaning of the Act: Holmes v. United Furniture Warehouse LP , 2009 BCSC 1805 at paras. 28 and 31 .

This case falls squarely under the BPCPA . [ 84 ] The defendant argues that the evidence does not support a finding that he engaged in any deceptive act or practice during the sale of Nursery Hill (lot 3) pursuant to s. 4 of the BPCPA . With respect, I disagree. In Casillan , at para. 27 , Dillon J. (citing from Cummings v. 565204 B.C. Ltd. , 2009 BCSC 1009 at para. 21 ) said: [27] ... that even an inadvertent deception can found a deceptive practice leading to a claim for damages.

Once an allegation of deceptive practice is made, the burden shifts to the supplier... to show either that it did not make the misrepresentation as alleged or that the misrepresentation was in fact true. [ 85 ] I find that the same representations, oral and written, made by the defendant constituting the tort of deceit also meet the

definition of “deceptive act or practice” as defined in s. 4. The defendant may be found liable for any loss to the plaintiffs as a result of his promotion and participation in the sale of Nursery Hill (lot 3). iii. Breach of Contract [ 86 ] The plaintiffs claim contractual damages on the basis that the defendant refuses to rectify the excessive squeaking of the laminate flooring in the basement of the home in breach of the contract of purchase and sale.

Addendum III of the contract of purchase and sale includes the following provision: The buyers will conduct a walk through inspection of the property no later than 21 days before the completion date. The parties will immediately write and sign a deficiency list if any. The seller will complete or repair any work in the deficiency list in a professional manner before completion. [ 87 ] The plaintiffs did not include this deficiency in a final deficiency list at closing or at any time thereafter as contemplated by the contract.

Thus, the defendant is not liable for the cost of remedying the laminate flooring. [ 88 ] The laminate flooring was covered under the home warranty, but the plaintiffs inadvertently failed to cite it in their list of deficiencies to National. The plaintiffs are out of time in this respect. In any event, this claim is based upon pure contract and not breach of any home warranty claim. iv. Damages 1. Common Law Damages [ 89 ] Madam Justice Dillon, in Casillan at paras. 29-30 , quoting from Wiebe v.

Gunderson , 2003 BCSC 1282 , 13 R.P.R. (4th) 78 (rev’d on a different point 2004 BCCA 456 , 243 D.L.R. (4th) 1 [ Wiebe (CA)]), provides a helpful

summary of the law on the measure of damages for fraudulent misrepresentation in a case where the tortious act induced the plaintiff to enter into a contract: [29] ... In cases such as this, where a misrepresentation has induced the plaintiff to enter into a contract, the tortious measure of damage is appropriate. The court [in Wiebe (SC)] said at paras. 229-230: [229] In England and in Canada the authorities have consistently found that the proper approach is to apply the tortious measure of damages.

This is an important distinction for this approach awards a measure of damages which places the plaintiff in the position he would have occupied if the statement had not been made rather than in that he would have occupied if the statement was true. This distinction is recognized in McConnel v. Wright , [1903] 1 Ch. 546 .

It is not an action for breach of contract, and, therefore, no damages in respect of prospective gains which the person contracting was entitled by his contract to expect come in, but it is an action of tort – it is an action for a wrong done whereby the plaintiff was tricked out of certain money in his pocket; and therefore, prima facie , the highest limit of his damages is the whole extent of his loss, and that loss is measured by the money which was in his pocket and is now in the pocket of the company.

That is the ultimate, final, highest standard of his loss. [230] This approach has been applied in numerous cases in Canada including, in this jurisdiction Enns v. Panju , 1978 CanLII 2621 (BC SC) , [1978] 5 W.W.R. 244 (B.C.S.C.); McDonald v. Palanio (1960), 1960 CanLII 548 (BC SC) , 31 W.W.R. 43 (B.C.S.C.); Noonan v. Roe (1971), 1971 CanLII 1037 (BC SC) , 21 D.L.R. (3d) 102 (B.C.S.C.); Sorensen v. Kaye Holdings Ltd. , 1979 CanLII 621 (BC CA) , [1979] 6 W.W.R. 193 (B.C.C.A.) and Zorzi v.

Barker , 1957 CanLII 284 (BC CA) , [1957] 8 D.L.R. (2d) 164 (B.C.C.A.) to name but a few. [231] The general rule is that the date on which damages are assessed is at the date of the breach. This difference is important here where, as will be seen, the measure of damage for the statutory breach is contractual. [30] Further, the plaintiff may be able to recover consequential damages caused by the fraud in appropriate circumstances.

Parrett J. continued in Wiebe at paras. 232-233: [232] To complicate the issue further while the authorities clearly reject a recovery of a contractual measure of damages by a plaintiff complaining of fraud, they have held that in appropriate circumstances the plaintiff is entitled to recover consequential damages caused by the fraud. [233] This development flows, in part, from the decision of Lord Denning, M.R. in Doyle v. Olby (Ironmongers) Ltd. (1969), 2 Q.B. 158 . In that case a plaintiff had been fraudulently induced to purchase a business.

On appeal the damages recovered at trial were increased to compensate the plaintiff for further losses incurred in attempting to run the business. Lord Denning, M.R. held that the rules of mitigation and remoteness were, as against a fraudulent defendant, to be construed generously. He went on at p. 167 to say: The defendant is bound to make reparation for all the actual damages directly flowing from the fraudulent inducement. The person who has been defrauded is entitled to say: I would not have entered into this bargain at all but for your representation.

Owing to your fraud, I have not only lost all the money I paid you, but what is more, I have been put to a large amount of extra expense as well and suffered this or that extra damages. All such damages can be recovered: and it does not lie in the mouth of the fraudulent person to say that they could not reasonably have been foreseen. For instance, in this very case Mr. Doyle has not only lost the money which he paid for the business, which he would

never have done if there had been no fraud: he put all that money in and lost it; but also he has been put to expense and loss in trying to run a business which turned out to be a disaster for him. He is entitled to damages for all his loss, subject, of course to giving credit for any benefit that he has received. There is nothing to be taken off in mitigation; for there is nothing more that he could have done to reduce his loss.

He did all that he could reasonably be expected to do. [ 90 ] In the case at bar, the plaintiffs are entitled to recover the amount of the difference between the price paid and the actual value of the property on the date of sale: C.R.F. Holdings Ltd. v. Fundy Chemical International Ltd. (1982), 1982 CanLII 726 (BC SC) , 39 B.C.L.R. 43 (S.C.) [ C.R.F. Holdings Ltd. (SC)]. The calculation is based on an objective assessment of the actual value of the property: Wiebe (CA) at para. 24 . According to the property assessment conducted by Mr.

Humphreys on June 11, 2007, the fair market value of Nursery Hill (lot 3) was $680,000 excluding GST. Having paid $725,000, the plaintiffs are entitled to damages in the amount of $45,000. [ 91 ] The plaintiffs claim $820.76, which represents the additional property transfer tax paid by them on the transaction based upon a “fair market value” of the property of $725,000 (as opposed to $683,962.26). The plaintiffs would not have paid this sum but for the defendant’s tortious act.

Therefore, the defendant is liable to the plaintiffs for this amount as consequential damages. [ 92 ] The claims for the visual home inspection and rekeying of locks are too remote and are dismissed: C.R.F. Holdings Ltd. (SC) at para. 23 . [ 93 ] In sum, the plaintiff is entitled to damages in tort in the amounts of: Tortious measure of damages (deceit): $45,000.00 Consequential damages: 820.76 $45,820.76 2.

Statutory Damages [ 94 ] On the issue of damages to be awarded under the BPCPA , the court in Casillan wrote at para. 34 : [34] The measure of damages under the BPCP Act , s. 171, is the damage “due to a contravention of this Act”. In Mikulas v. Milo European Cars Specialists Ltd. (1993), 52 C.P.R. (3d) 1 (B.C.S.C.) , under the previous legislation [the Trade Practices Act, R.S.B.C. 1996, c. 457 ], the measure of damages was the amount required to repair the engine to the standard represented.

On appeal, Lambert J.A. said that “damages must be calculated on the basis of what it cost the plaintiff to be put in the position that it would have been in if the representation had been true”: Mikulas v. Milo European Cars Specialists Ltd. (1995), 1995 CanLII 2431 (BC CA) , 60 C.P.R. (3d) 457 at para. 9 (B.C.C.A.). By this was meant the position for which the plaintiff had contracted. [ 95 ] In the case at bar, the measure of statutory damages is repetitive of the damages awarded in tort. Double recovery is not permitted in this instance, nor are the plaintiffs seeking it: Ratych v.

Bloomer , 1990 CanLII 97 (SCC) , [1990] 1 S.C.R. 940, 69 D.L.R. (4th) 25. The defendant is only liable for the amount awarded above. 3. Contractual Damages [ 96 ] The plaintiffs failed to succeed on this claim. They are not entitled to contractual damages. Conclusion [ 97 ] The plaintiffs have established, on a balance of probabilities, that they purchased Nursery Hill (lot 3) on the basis of fraudulent misrepresentation by the defendant.

The defendant made material and false representations to the plaintiffs, the defendant knew that the representations were false at the time they were made, the defendant intended for the plaintiffs to act on the representations, and the plaintiffs were induced to enter into the contract in reliance upon them. Thus, the plaintiffs are entitled to damages in the amount of $45,820.76, which is the measure of damages that returns the plaintiffs to the position that they would have been in if the fraudulent statements had not been made. [ 98 ] The plaintiffs have achieved substantial success in this litigation.

They are entitled to their costs and interest in accordance with the Court Order Interest Act , R.S.B.C. 1996, c. 79 . “Romilly J.”