Sull v. Huang, 2021 BCPC 99

Citation: Sull v. Huang 2021 BCPC 99 Date: 20210426 File No: 1966073 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SANDEEP SULL CLAIMANT AND: ALLAN HUANG DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE W. LEE Appearing on his own behalf: S. Sull Appearing on his own behalf: A. Huang Place of Hearing: Vancouver , B.C.

Date of Hearing: April 9, 2021Date of Judgment: April 26, 2021 INTRODUCTION [1] In June 2019, Sandeep Sull purchased a condominium on Alberni Street in Vancouver BC. Mr. Sull alleges that the seller’srealtor, Allan Huang, failed to disclose critical information to him about a proposed strata levy. Mr. Sull alleges that had he known of theproposed strata levy he would have purchased the apartment for less. Mr. Sull claims for damages against Mr. Huang. [2] Mr.

Huang says he did not know of any proposed levy until after he was served with the Notice of Claim and he denies liability. [3] The issues I must decide are as follows: 1. Did Mr. Huang know about the proposed levy? 2. If Mr. Huang knew about the proposed levy, was he under an obligation to tell Mr. Sull? 3. If Mr. Huang was under an obligation to tell Mr. Sull about the proposed levy, did that failure cause Mr. Sull any damages orfinancial loss? THE EVIDENCE [4] The property in question is located on Alberni Street in Vancouver, B.C. (the “Apartment”).

The property is a mixed-use strataproperty with both residential and commercial owners. [5] Mark Gomes was the realtor for Mr. Sull. Mr. Huang was the realtor for the seller. [6] On June 8, 2019, Mr. Sull made an offer to purchase the property for $600,000. [7] The offer contained “subject clauses” requiring disclosure and approval of a number of documents. This included minutes fromstrata council meetings and annual, extraordinary or special general meetings from May 2017 to May 2019. It appears that the sellerprovided all required documents to Mr. Sull’s approval because Mr.

Sull removed the subject clauses on June 18, 2019. [8] The sale completed on June 28, 2019. [9] Sometime afterwards, Mr. Sull learned of a dispute between the residential owners and the commercial owners in the building.According to Mr. Sull, the residential owners were in favour of a proposed levy for all owners to pay for repair work. However, theproposal was voted down at a general meeting of all residential and commercial owners. Mr.

Sull said this result has led to litigation inthe Supreme Court between the two different groups of strata property owners. [10] The amount of the proposed levy for his Apartment is $23,414.65. [11] Mr. Sull argues that had he known of the possible levy, he would have offered a reduced price for the Apartment. Mr. Sulltendered a market value appraisal for the Apartment that, taking into account the possible levy, the Apartment was valued at $565,000.Mr. Sull’s claim is for the difference between the price he paid, $600,000, and the appraisal value of $565,000, a difference of $35,000. [12] Mr. Sull says that Mr.

Huang was aware of the possible levy. In December 2019, Mr. Sull phoned Mr. Huang, pretending to besomeone else, and he questioned Mr. Huang about the levy. Mr. Sull says Mr. Huang admitted to knowing about the levy about a yearago. Mr. Sull secretly recorded this conversation and asked to put it into evidence. I did not permit this, as I was not prepared to sanctionthe use of evidence obtained in such a surreptitious manner. Mr. Sull was still able to testify about his discussion with Mr. Huang and theapparent admission. [13] Mr.

Huang denied knowing about the proposed levy until December 2019 when the Notice of Claim was served on him. [14] Mr. Sull’s claim is based on the suggestion Mr. Huang owed him a duty of care to disclose information about the proposed levy. [15] There were discrepancies with Mr. Huang’s evidence. He initially said that Mr. Sull made an offer on the Apartment of $615,000but later said that this was in fact a counter-offer from the seller. Mr. Huang also filed an affidavit in support of an application to set asidea default order.

In that affidavit, he said the strata management company sent disclosure documents directly to Mr. Sull’s real estateagent. At trial, Mr. Huang said the strata management company sent the documents to him and he forwarded them to Mr. Sull’s agent.Given these changes in Mr. Huang’s testimony, I am wary of relying upon his evidence. ANALYSIS [16] Mr. Sull referred to provisions in the Real Estate Services Act, S.B.C. 2004, c. 42, and the Real Estate Rules, which sets outvarious duties and obligations on a real estate agent.

I find that these standards can provide me with guidance as to the expected standardof care for a real estate agent. [17] There can be no dispute that a real estate agent owes a duty of care to their principal. As was stated in the decision Phelan v.Empire Realty Ltd., (BC SC): In my view, the duty owed by a real estate agent is that owed by every agent for reward, and is clearly set out in Bowstead on Agency,13th edition,

article 50, as follows:

Every agent acting for reward is bound to exercise such skill, care and diligence in the performance of his undertaking as is usual ornecessary in or for the ordinary or proper conduct of the profession or business in which he is employed, or is reasonably necessary forthe proper performance of the duties undertaken by him. [18] To be clear, the Supreme Court was describing the duty an agent owes to their principal. In the case of Mr. Huang, that would bea duty owed to the seller. [19] A listing agent may also owe a duty of care to a purchaser.

In such a case, a purchaser’s claim against a listing agent is generallybased on a negligent misstatement: see for example Walls v. Ross, 2001 BCPC 187. [20] As set out in the Supreme Court of Canada decision Queen v. Cognos Inc., (SCC), the elements of negligentmisrepresentation are: 1. There must be a duty of care based on a special relationship between the representor and representee; 2. The representation in question must be untrue, inaccurate or misleading; 3. The representor must have acted negligently in making the said misrepresentation; 4.

The representee must have relied in a reasonable manner on the said negligent misrepresentation; and 5. The reliance must have been detrimental to the representee in the sense that damage resulted. [21] Mr. Sull does not allege that Mr. Huang gave incorrect information but that he failed to disclose information. The law is clearthat there is a duty to disclose latent defects, being significant or dangerous defects in the property that are not readily observable uponreasonable inspection: see McIntosh v. Papoutsis, 2009 BCSC 174, at para. 59.

Latent defects generally describe physical defects ormatters that affect the intended use of the property. In this case, the possible levy did not affect the use of the property. In fact, the levywas rejected at a general meeting of the owners. In the circumstances, there was neither a negligent misrepresentation nor a failure todisclose a latent defect. [22] In addition, Mr. Sull was already in possession of information about the possible levy. This is set out in the market valueappraisal report prepared for Mr.

Sull by CDC Inc., which has the following comment: A review of the Annual General Meeting agenda from May 14, 2019 notes that the EIFS building system is nearing the end of [its] life-span, and is due for an update. The AGM vote was for a $5,327,969 assessment, resulting in a proposed levy of $23,414.65. Theproposal was voted down in the Annual General Meeting. [23] This reference to the May 14, 2019 Annual General Meeting Agenda and the AGM vote would be information provided to Mr.Sull as part of the document disclosure for the purchase. I find that the information about the proposed levy was available to Mr.

Sullprior to the purchase of the property. At a minimum, he should have been put on notice about this issue. Either Mr. Sull did not reviewthe minutes, or he did review them and did not understand their significance. Regardless, Mr. Huang was not under a duty to ensure thatMr. Sull understood the significance of the documents sent to him. [24] A decision from Her Honour Judge Mrozinski of the B.C. Provincial Court called Wagner v. Maloney et al., 2018 BCPC 107,seems applicable.

At paragraph 75, Judge Mrozinski states: [75] The rule of caveat emptor, or buyer beware, places a heavy onus on property buyers to satisfy themselves of the quality of theirpurchase. They assume the risk of any defects, other than those latent defects that render the property dangerous or uninhabitable and ofwhich the vendor is aware.

In this litigation, the buyers bear another onus and that is to prove their claim against all of the defendants onbalance. [25] Furthermore, because the levy has not been assessed, and was in fact rejected at a general meeting of the strata property owners,then any loss due to the levy is at best speculation. The levy may never be assessed. As such, Mr. Sull has not proven that he hassuffered any damages. [26] Mr. Sull also claimed that Mr. Huang should have ensured that Mr. Sull pay only the fair market price for the Apartment. In myview, Mr. Huang is under no obligation to Mr.

Sull to ensure that he pay a lower price. To do so would place Mr. Huang in breach of hisduty to his own client, the seller. DECISION [27] I turn now to answer the three questions I posed at the beginning of these Reasons. [28] Did Mr. Huang know about the proposed levy? Although I have concerns about Mr. Huang’s evidence, I need not decide thisquestion because of my answer to the next question. [29] If Mr. Huang knew about the proposed levy, was he under an obligation to tell Mr. Sull? As set out above, Mr. Huang wasnot under an obligation to tell Mr. Sull about the proposed levy.

Furthermore, the evidence suggests that Mr. Sull had the informationabout the proposed levy already. [30] If Mr. Huang was under an obligation to tell Mr. Sull about the proposed levy, did that failure cause Mr. Sull anydamages or financial loss? Mr. Sull did not suffer any damages. The levy was already rejected at a general meeting of the strataproperty owners. [31] Because of the above, I dismiss the claim.

[ 32 ] Typically, I would require Mr. Sull to reimburse Mr. Huang for the fee paid for filing a Reply. However, I note that Mr. Sull obtained a default order in these proceedings, which Mr. Huang was able to set aside. Mr. Huang was not required to pay any costs in relation to this. I think it only fair in the circumstances that Mr. Sull need not reimburse Mr. Huang for the filing fee. _____________________________ The Honourable Judge W. Lee Provincial Court of British Columbia