Louie et al v Diaz et al Date:, 2014 BCPC 142

Citation: Louie et al v Diaz et al Date: 20140530 2014 BCPC 0142 File No: 24726 Registry: RICHMOND IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: JEINNY LOUIE FERDINAND MILAN CLAIMANT AND: LEONARD DIAZ SEACREST SALES LTD. DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE WINGHAM Appearing on their own behalf: J. Louie and F. Milan Counsel for the Defendant: J. Clee Place of Hearing: Richmond , B.C. Date of Hearing: May 23, 2014

Date of Judgment: May 30, 2014 [1] The claimants have sued the defendant realtor Leonard Diaz and the agency he formerly worked for, Seacrest Realty, for$25,000 damages for what they allege was negligent misrepresentation. They say that the defendants negligently misrepresented theproperty which the claimants purchased in Steveston in 2011 as being in the catchment area of the Tomekichi Homma ElementarySchool (“Homma”) and that they relied on that representation in their purchase of the property #301-4111 Bayview Street, Steveston.

They say that the representation was false and that they suffered damages as a result. They claim compensation up to the maximummonetary jurisdiction of this court. They say they incurred unnecessary moving expenses, property purchase tax and the cost of sendingtheir child to a private school for kindergarten. They also claim that the property was not worth what they paid for it because it was notin the Homma catchment area. [2] The claimants had been living with their two-and-a-half-year old daughter in central Richmond in the spring of 2011.

In April2011 they were in Steveston and they went through a realtor’s (Mr. Diaz’) open house at #201-4111 Bayview Street. They obtained acopy of the MLS listing from Mr. Diaz. The listing stated, among other things, “Tomekichi Homma Elementary and AlexanderMcGrath Secondary catchment”. It also stated at the bottom of the listing agreement, "The enclosed information, while deemed to becorrect, is not guaranteed." The claimants considered Homma to be a desirable school for their daughter. They were also interested inmoving to Steveston and they liked the floor plan of the unit that they viewed.

They were in fact interested in buying that unit but it hadan offer on it and it was subsequently sold to another purchaser. Mr. Diaz, however, advised them that the unit right above it, #301-4111Bayview Street might come on the market and it in fact did. The MLS listing for #301 had the same school catchment information on itand the same disclaimer, that “while the information was deemed to be correct, it was not guaranteed”. [3] The claimants entered into a contract of purchase and sale for #301. They were required to obtain their own realtor as Mr. Diazcould not obtain a dual agency agreement from the vendor.

The claimants obtained Mr. Henry Su to represent them in negotiating thepurchase. They ultimately agreed to purchase #301 for $670,000. The contract was entered into on May 19th, 2011. It contained anumber of subjects which were to be, and were, removed by May 27th, 2011. None of those subjects related to the verification of theschool catchment area. The claimants did not check the school catchment area either before the contract was entered into or before thesubjects were removed. They relied on the MLS listing and what they said they were told by Mr.

Diaz when they first viewed unit#201. [4] The claimants say they believe that they overpaid for unit 301 because they wanted to be in the Homma catchment area. Theypresented various other listings in the same building and a detailed chart showing an analysis of the price per square foot they paid incomparison to the price per square foot for other properties that were listed in the same building. The claimants attempted to get theirdaughter into Homma for kindergarten but were unsuccessful and eventually enrolled her in Southpointe in Tsawwassen and paid$14,000 in tuition for the year.

They hope to have her enrolled at Homma for Grade 1. She is currently on a waitlist. If she does not getinto Homma she will be attending the Richmond Christian School where she has been accepted for Grade 1. [5] The prerequisites for establishing a claim for negligent misrepresentation were set out in Kingu v. Walmar Ventures Ltd.(1986), (BC CA), 10 B.C.L.R. (2nd) 15 (B.C.C.A.) At page 25 McLachlin, J.A. as she then was stated: “The question then is whether the requirements of tort liability on the basis of Hedley Byrne are satisfied in the case at bar. Thoserequirements may be summarized as follows:

(1) A false statement negligently made;

(2) A duty of care on the person making the statement to the recipient. A duty of care does not arise unless (

a) the person making the statement is possessed of special skill or knowledge on the matter in question, and (

b) the circumstances establish that a reasonable person making that statement would know that the recipient is relying upon his skill orjudgment;

(3) Reasonable reliance on the statement by its recipient; [and]

(4) Loss suffered as a consequence of the reliance.” [6] With respect to the first prerequisite, that is, a false statement negligently made Mr. Diaz testified that he looked up the schoolcatchment area for the listing on a map of Richmond. He said, "It turns out I misread it." With respect to the second prerequisite that isdid Mr. Diaz have a duty of care, the first part of that prerequisite is: Was Mr. Diaz possessed of special skill or knowledge on the matterin question? The second

part is, would a reasonable person making the statement know that the recipient was relying on his skill orjudgment in making the statement? Those two parts are conjunctive; they both have to exist. [7] In this case, the evidence does not establish that Mr. Diaz had a special skill or specialized knowledge as to the schoolcatchment areas in Richmond. It would have been a simple matter for the claimants or anyone else who was interested to contact theRichmond School Board to check on the catchment area. This case, in that respect, is similar to Fritz v. Ray et al, an unreporteddecision of the B.C.

Supreme Court dated March 20th, 2001, Victoria registry number 98-1167. In that case, the claimant sued fordamages for negligent misrepresentation by the realtor of the square footage of a lot. The court dismissed the claim, finding that it couldnot be said that the realtor had any special skill or knowledge in arithmetic. It is a high school student's exercise. That is what the courtsaid about calculation of square footage in that case.

[ 8 ] Whether or not I find that the second part of the duty of care test is met, I conclude that the defendant, Mr. Diaz, did not possess any special skill or knowledge concerning the school catchment area. As the two parts of the duty of care test are conjunctive, i.e., both must be proven to show a duty of care exists, I conclude that the evidence does not establish on a balance of probabilities that the defendant owed a duty of care to the claimants in relation to the school catchment area. If I am wrong as to whether the defendant Mr.

Diaz had a duty of care to the claimants on the issue of the school catchment area, I must determine whether there was a reasonable reliance on it by the claimants. There was reliance by the claimants but was that reliance reasonable? In Sleightholm v. East Kootenay Realty Ltd. , [1999] BCJ No. 462 , the purchasers relied on a statement in an information sheet prepared the realtor which was incorrect as to the square footage of a property.

The information sheet contained a disclaimer that the information " while believed to be correct is not warranted or guaranteed and should not be relied on without verification ". The court found that the purchasers in that case, that their reliance on the information sheet was not reasonable, in part because of the statement that the information was not warranted or guaranteed, but also because the purchasers had ample opportunity to inspect what he was in fact getting. Similarly in this case, the MLS listing agreement contained a disclaimer.

I have already read it but I will repeat it, " The enclosed information, while deemed to be correct, is not guaranteed ." In Tabakis v. Villarosa , an unreported decision of the B.C. Supreme Court New Westminster Registry number F850211 dated September 26th, 1986 the court came to a similar decision in a case where there was a disclaimer. [ 9 ] In this case, both claimants are well-educated professionals. They did not check the school catchment area in which the property was located, despite the disclaimer in the MLS listing.

It would have been a simple matter for them to do so and they had plenty of time to do so, both before they entered into the contract of purchase and sale and before the subjects were removed. I conclude that the claimants have not proven on a balance of probabilities that they reasonably relied on the statement as to the school catchment area that the property was situated in. [ 10 ] If the claimants have failed to prove damages they would not be entitled to succeed on a claim that Mr. Diaz breached a duty of care to them in any event.

The measure of damages in a case such as this is the difference between the price paid by the claimants for the property and the actual market value of the property (see Milner v. Century 21 Burns Realty Ltd.

(1985) B.C.J. No. 870 (B.C.S.C.) para. 28 ). In this case, the claimants went to a great deal of effort to prepare a spreadsheet showing other listings in the building and the price per square foot of the properties described in those listings. Some properties were on different floors, some had different square footage, some were sold, some listings had expired and some listings were still active. The claimants did not adduce any expert evidence such as an appraisal as to the value of the property that they purchased, either when they purchased it or currently.

They point to the fact that unit 201 sold for $648,000 while they paid $670,000 as evidence that they paid too much. That $22,000 difference does not, in my view, lead to the conclusion that they overpaid. There is evidence that 301 was one floor higher and that would increase its value. There is evidence that it had some upgrades, such as California closets, retractable screens and new paint. The difference in price paid could also be a result of the negotiating skills of the parties to the purchase and sale.

Without some expert evidence as to the value I cannot conclude that the price paid and the market value was different. [ 11 ] For all of the above reasons, I conclude that the claimants have not proven their case on a balance of probabilities and the claim is dismissed. [PROCEEDINGS] [ 12 ] This is a case where having heard the evidence and having reviewed the law and having given my reasons, I am of the view that there was no reasonable prospect of success of this case for all of the reasons that I have given.

I also recall that it was part of the evidence that these claimants did receive $4,000 in some kind of a settlement from Mr. Su. They are also sophisticated parties. They are not people who are uneducated or unable to understand principles when they are provided with them. I am told that they were given the law ahead of time, Ms. Louie admits that they did. I am of the view a penalty is appropriate. The penalty will be $1,000, which is less than five percent. Thank you. (REASONS FOR JUDGMENT CONCLUDED)