Ian Hack v. Carla Bugera, 2013 SKPC 128

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2013 SKPC 128 Date: August 26, 2013 File: 74/12 Location: Yorkton _____________________________________________________________________________ Between: Ian Hack and Carla Bugera - and - Diane Rusnak, Royal Lepage Premier Realty, Bridgette Carl, Brook Andres and Vanessa Andres Evan B. Thompson For the plaintiffs Colin D. Clackson For the defendants Diane Rusnak and Royal Lepage Deryk J.

Kendall For the defendant Bridgette Carl Brook Andres For the defendants Brook and Vanessa Andres _____________________________________________________________________________ JUDGMENT R. GREEN , J _____________________________________________________________________________ I. INTRODUCTION [ 1 ] The plaintiffs Ian Hack and Carla Bugera purchased a house, 215 Betts Avenue in Yorkton, from the defendants Brook and Vanessa Andres in early July 2008. The plaintiffs were engaged to be married and were looking for a so-called starter home.

The plaintiffs’ real estate agent was the defendant Bridgette Carl, who showed a number of houses to the plaintiffs, the last of which was 215

Betts Avenue. The listing agent of this property was the defendant Diane Rusnak. Both agents worked for the defendant Royal Lepage Premier Realty (Royal Lepage). [ 2 ] At the time of the purchase, the plaintiffs were told by Ms. Carl, relying on information provided by Mrs. Rusnak, that the house was 868 square feet in size.

Over three years later, after the plaintiffs separated, they listed the house for sale and discovered the house was in fact 672 square feet in size. [ 3 ] The plaintiffs claim damages from the defendants for the difference between what they paid for the house ($120,000.00) and what they say the house, at 672 square feet, was in fact worth on the purchase date ($103,000.00). That difference is $17,000.00. The plaintiffs’ claim against Mrs. Rusnak is both in the tort of negligent misrepresentation and the tort of negligence and against Ms. Carl in the tort of negligence.

They further claim against Royal Lepage saying the brokerage is vicariously liable for the action of their agents Mrs. Rusnak and Ms. Carl and against Mr. and Mrs. Andres saying they are vicariously liable for the negligence of their agent Mrs. Rusnak. [ 4 ] The plaintiffs each testified and as well called Brian Blyth as a witness. Mr. Blyth was qualified as an expert in the appraisal of residential real estate. Mrs. Rusnak and Royal Lepage called no evidence. Ms. Carl testified in her defence, as did Mr. Andres.

I will set out some background information about the purchase, and then determine the liability, if any, of the defendants. II. BACKGROUND [ 5 ] The original offer to purchase by the plaintiffs was dated June 30, 2008 (Exhibit P-2). That offer was done on the standard form of the Saskatchewan Real Estate Commission and contained no reference to the square footage of the house.

Article 6.4 of the offer provided: The seller and the buyer acknowledge that except as otherwise described in this contract, there are no other warranties, representations or collateral arrangements made by or with the other party, the seller’s brokerage and the buyer’s brokerage about the property, any neighboring lands and this transaction, including any warranty, representation or collateral agreement relating to the size/measurements of the land and buildings or the existence of any environmental condition or problem and the buyer hereby agrees to purchase the above- described property as it stands at the price and terms and subject to the conditions above set forth. [ 6 ] The original offer by the plaintiffs was $125,000.00, with conditions that mortgage approval be received by July 8, 2008 and that a home inspection be done.

The sellers, Mr. and Mrs. Andres, counter-offered $127,500.00 and that amount was agreed to by the plaintiffs. After the home inspection was done, a further reduction to $120,000.00 was agreed to between the parties, through an amendment to the original offer. [ 7 ] The so-called MLS features sheet for 215 Betts Avenue (Exhibit P-3), which I accept was prepared by Mrs. Rusnak and signed by Brook and Vanessa Andres, lists the square footage of this house as 868 square feet.

On February 12, 2012, Brian Blyth measured the house to be 672 square feet. [ 8 ] Counsel for Royal Lepage admits that it is vicariously liable for the actions of Mrs. Rusnak. As both Mrs. Rusnak and Ms. Carl were agents for that brokerage at the times relevant to this action, I am satisfied that Royal Lepage is, as well, liable for the actions of their agent Ms. Carl. Whether the remaining defendants are liable requires a consideration of the relevant evidence in the context of the applicable legal principles. III. LIABILITY OF THE REAL ESTATE AGENTS AND THE SELLERS

a) The relevant testimony (

i) Ian Hack

[ 9 ] In June 2008, Mr. Hack was 21 years of age and was living with Ms. Bugera in the basement of his grandmother’s house. The two contacted Ms. Carl to be their agent as they were looking for a first home to buy. He told Ms. Carl that they were looking for a home as large as his grandmother’s house (900 square feet), or larger, and that they could spend a maximum of $130,000.00. [ 10 ] Ms. Carl took them to see a number of homes, none of which were satisfactory. At the end of June, Ms. Carl contacted Mr. Hack and indicated that 215 Betts Avenue was on the market.

She said the house was in their budget and it was “going fast”. Mr. Hack and Ms. Bugera viewed the house with Ms. Carl. He said Ms. Carl told him that the house was 860 square feet. [ 11 ] Mr. Hack and Ms. Bugera were impressed with 215 Betts Avenue when they saw it. This property was within their price range, and they spent thirty minutes viewing the house. Ms. Carl told them they would have to move quickly if they wanted to make an offer on the house.

As a result, two hours later they met with her at her office to do so. [ 12 ] While at the office, they discussed making an offer with her after going through the dual agency form - as the listing agent was Diane Rusnak, an agent in the same brokerage. He said, during their conversation with Ms. Carl at the office, there was no discussion about

Article 6.4 in the offer. He said the only risk Ms. Carl mentioned was that they could lose their deposit. [ 13 ] At the time of making the initial offer, Mr. Hack had never purchased a home, nor had he seen a purchase agreement. He was in the house once, before they took possession of it, and said that he first saw the MLS features sheet about the house after the agreement was reached but before the date of possession. [ 14 ] Some time after moving into this house, the plaintiffs decided to put new siding on the exterior.

He said, based on the square footage of 860 square feet, he went to the hardware store and bought siding. After he had finished the job he noted that there was a significant amount of siding left over. He assumed that the hardware store employee had measured the amount of siding improperly. [ 15 ] In the fall of 2011, Mr. Hack and Ms. Bugera separated. They initially tried to sell the house privately, and put an ad in the paper listing the house as 868 square feet (the number which appeared on the MLS features sheet, Exhibit P-3).

After they were unable to sell the house privately, they contacted a real estate agent named Evan Johnson in March 2012. He listed the property for them in the Multiple Listing Service (MLS). Mr. Johnson was concerned that the square footage of the house was not accurate. Mr. Hack then paid for an appraisal by Mr. Blyth, who found the house to be 672 square feet in size. [ 16 ] In cross-examination Mr. Hack admitted that the market was hot at the time of the purchase.

He said they were initially looking for a house with three bedrooms but settled for this house, which had one less bedroom and was just under the 900 foot limit they were seeking. [ 17 ] Mr. Hack said he listed the property in March 2012, in the range of $150,000.00 to $155,000.00, because of the penalty he would owe on his mortgage.

He maintained that, based on their inspection of the house, he thought that the house was about 100 feet smaller than his grandmother’s house given that it only had two bedrooms and said it was difficult to assess the exact square footage with no furniture in the house at the time of viewing. [ 18 ] Despite not having any problems with the home until the square footage issue arose, Mr. Hack claimed he and Ms. Bugera paid too much for the house, because of the inaccuracy of the information about square footage at the time of purchase.

When asked why he bought the home without personally measuring it, he said he didn’t think he needed to do this. He assumed the square footage they were advised of was accurate. He was young and he depended on the expertise of the real estate agents. (ii) Carla Bugera [ 19 ] Ms. Bugera said they had advised Ms. Carl that they could spend a maximum of $130,000.00 and that they wanted a house of 900 to 1,000 square feet. When they viewed the house, Ms. Carl said that the house was a little smaller than 900 square feet. In their discussions, Ms. Carl spent more time talking with Mr. Hack than with her.

[ 20 ] When Ms. Bugera and Mr. Hack attended at Ms. Carl’s office, they filled out the paperwork for an offer. She claimed the features sheet (Exhibit P-3) was at the office at the time they made the offer. She said Ms. Carl advised them to do a home inspection, but said nothing about verifying the square footage. Nor did Ms. Carl go through

Article 6.4 of the contract with them. She said they were in the office twenty to thirty minutes. [ 21 ] At the time of purchasing the house, Ms. Bugera was 23 years of age and had never before hired a real estate agent or purchased a house. In her words, she didn’t know where to start and therefore hired a professional realtor. When asked why she didn’t measure the square footage of the house, she said she didn’t know how and it was not her job. She denied she was present when the home inspection was done. (iii) Bridgette Carl [ 22 ] Ms. Carl became a licenced real estate agent in 2007.

She said her training contained no requirement for a buyer’s agent to re-measure a property. She, however, was aware of Bylaw 715 of the Saskatchewan Real Estate Commission, and the need to take reasonable steps on behalf of a buyer. [ 23 ] Ian Hack and Carla Bugera told Ms. Carl they wanted a starter home, similar in size to his grandmother’s house with at least two bedrooms and within their price range. She showed them a number of homes but they were not interested in any of these. On Friday, June 27, 2008, she became aware from Mrs. Rusnak that 215 Betts Avenue was going to be placed on the market.

She received a copy of the data input form (Exhibit P-1) from Mrs. Rusnak. That form listed the square footage of the house at 868 square feet. She arranged to show the house to Mr. Hack and Ms. Bugera that evening. They were in the house for a half an hour. [ 24 ] Ms. Carl said, when she entered the house, it felt small, and she told the plaintiffs this. Despite Mr. Hack’s evidence that she told him the house was 860 square feet, she admitted that she told Mr. Hack and Ms. Bugera what the square footage of the house was.

It was clear that she had, shortly before showing them the house, received and viewed the data input sheet from Mrs. Rusnak which listed the size of the house as 868 square feet. As a result, I accept and find, that Ms. Carl told Mr. Hack and Ms. Bugera that this house was 868 square feet, based on the representation made by Mrs. Rusnak in the data input sheet. [ 25 ] Ms. Carl said that, although she did not measure the entire house, she did measure some of the interior rooms (a measurement that did not indicate the overall problem). She said the two very much liked the house as it was new, clean and renovated.

They went through every room and, later, Mr. Hack and Ms. Bugera wanted to make an offer. [ 26 ] When they met later at her office - for about an hour - Ms. Carl said she: (1) explained the issue of dual agency to them as Mrs. Rusnak worked for the same brokerage; (2) went through the offer form page by page; (3) talked to them about financing and how long they would need to arrange that; and (4) went through the ancillary services form regarding what sort of inspections they could ask for. They then decided on the closing date and a possession date and completed the offer.

She then gave them a copy of everything they had signed, but said that the MLS features sheet was not completed on this property until the following week, when the property was entered on to the MLS. Given Mr. Hack’s similar evidence on this point, in contrast to that of Ms. Bugera, I accept that the features sheet was not yet prepared on the date the plaintiff made their initial offer. [ 27 ] The two conditions on the offer were approval of mortgage financing and a home inspection. Ms. Carl was present when the home inspection was done, as were Mr. Hack’s parents. [ 28 ] Ms.

Carl admitted that these buyers were young and inexperienced, but then said it was not the duty of the buyer’s agent to re- measure the property, unless asked to do so by the buyer, but rather it was the duty of the seller’s agent. She said it was her practice, when acting as a seller’s agent, to measure the property being sold. Ms. Carl said that square footage is one of the first questions asked by buyers but not the most important question. She as well admitted that she never advised these buyers that they should re-measure the home.

[ 29 ] Ms. Carl acknowledged that the Saskatchewan Real Estate Commission is the licencing body for real estate agents in Saskatchewan and the body that sets the standards of practice for the profession. She said she was aware of the discipline decisions of that Commission, including the decision regarding Carmen Cartier (SREC file 2009-17). (iv) Brook Andres [ 30 ] Mr. Andres testified both on behalf of himself and his wife Vanessa. He denied that he ever measured this house, or that he ever knew what the square footage of it was.

While he admitted that the house was advertised at 868 square feet, he did not know where that figure came from. He admitted that his wife sent an email to lawyer David Rusnak, which included a rebuilding cost evaluation report, apparently for insurance purposes. That reports lists 215 Betts Avenue as 780 square feet. It is not clear who authored the report or provided the square footage figure, and Mr. Andres denied any knowledge of where that square footage figure came from.

b) Is Mrs. Rusnak liable in the tort of negligent misrepresentation? [ 31 ] Counsel for Mrs. Rusnak submitted that the plaintiffs, in

Article 6.4 of the agreement, contracted away their right to sue Mrs. Rusnak in the tort of negligent misrepresentation. While there are no cases on this point from Saskatchewan, I am satisfied that the British Columbia Supreme Court, in Brown v. Fritz [1] , sets out the appropriate law: that a real estate agent cannot be protected by such a clause as they are not a party to the vendor/purchaser contract and as the words of the clause (here

Article 6.4) do not expressly provide such protection for the agent regarding a representation made to a purchaser. [2] As a result, I hold that

Article 6.4 does not prevent liability by Mrs. Rusnak to the plaintiffs, under this tort. [ 32 ] Mr. Clackson further submitted that Mrs. Rusnak was not liable in the tort of negligent misrepresentation as the plaintiffs did not prove the appropriate standard of care that she was said to have breached. For the reasons that follow, I disagree, and am satisfied that she is liable to the plaintiffs in the tort of negligent misrepresentation. Because of that finding, I need not consider Mr. Thompson’s alternate submission that Mrs.

Rusnak is liable in the tort of negligence, simpliciter . [ 33 ] The Supreme Court of Canada has established the following elements of the tort of negligent misrepresentation: (1) there must be a duty of care based on a "special relationship" between the representor and the representee; (2) the representation in question must be untrue, inaccurate, or misleading; (3) the representor must have acted negligently in making said misrepresentation; (4) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted. [3] (

i) Was there a duty of care? [ 34 ] Mr. Clackson conceded that a duty of care, based on a special relationship, existed between Mrs. Rusnak and the plaintiffs. (ii) Was the representation inaccurate?

[ 35 ] The representation of 868 square feet, as made by Mrs. Rusnak in the data input sheet and as communicated to Ms. Carl, was undoubtably inaccurate based on the later measurement by Mr. Blyth of 672 square feet. (iii) Did Mrs. Rusnak act negligently in making the representation? [ 36 ] Whether Mrs. Rusnak acted negligently in making this representation about square footage depends on an assessment of what the appropriate standard of care is for a seller’s agent and whether she breached that standard.

While expert evidence is often adduced to show the standard of care required by a real estate agent in such a claim, I accept that this is not a necessity. [4] I further accept that the rules and standards of the Saskatchewan Real Estate Commission can be considered in determining the appropriate standard of care for a real estate agent. [5] [ 37 ] The Saskatchewan Real Estate Commission was created by the Saskatchewan Legislature through provisions of The Real Estate Act [6] .

Amongst other duties and responsibilities, the Commission sets standards regarding the manner and method of real estate practice. [7] The bylaws of the Commission [8] provide standards for real estate agents in Saskatchewan (who are called “registrants”). The relevant standard to be observed by a seller’s agent is set out in Bylaw 714: 714.

A registrant shall take reasonable steps to discover facts pertaining to every property for which the registrant accepts an agency agreement that a prudent registrant would take in order to fulfill the obligation to avoid error, misrepresentation or concealment of pertinent facts. [ 38 ] I accept this to be the appropriate basis for establishing the standard of care for the seller’s agent in this case. As a result, did Mrs.

Rusnak take such reasonable steps to discover facts pertaining to 215 Betts Avenue that a prudent agent would have taken in order to fulfill the obligation to avoid error, misrepresentation or concealment of pertinent facts? [ 39 ] The plaintiff, in submitting she did not, relied on: (1) a number of decisions of the Saskatchewan Real Estate Commission - each in which a seller’s agent was found guilty of professional misconduct by failing to measure, or to measure accurately, the total square footage of a house or property; and (2) the evidence of Ms.

Carl, who testified that, based on her practice and the practice of other agents she had observed, it was the duty of the seller’s agent to measure the property being sold. Mr. Clackson argued that neither could be considered, as the Court could not take judicial notice of these disciplinary decisions and as Ms. Carl was stating her opinion, without first being qualified as an expert. I do not agree with Mr. Clackson’s submissions on these points. [ 40 ] Dealing with the latter point first, I don’t accept Ms. Carl was giving an opinion.

Rather, I find she was simply stating the practice she followed when acting as a seller’s agent, and the practice of other seller’s agents she had observed. Regarding the disciplinary decisions of the Commission, given its statutory role in determining the standards of practice, I am satisfied that I can take judicial notice of these decisions as one - and only one - factor in determining whether the standard of care was breached by Mrs.

Rusnak. [ 41 ] The disciplinary decisions of the Commission, which involve discipline against a seller’s agent, and which are relevant to a breach of the standard of care by a seller’s agent are:

(1) Re: Lou Doderai [9] : Mr. Doderai pled guilty to professional misconduct by breaching Bylaw 714. He could not measure the exterior of the house and instead measured the interior rooms and relied on two previous listings. The representation he made was 716 square feet when the actual square footage was 516. The Hearing Committee said this was a major difference in the property being purchased.

(2) Re: Annette Sinclair [10] : Ms. Sinclair incorrectly measured, and then advertised, a house as 894 square feet when it was actually 764 square feet. She pled guilty to professional misconduct. The Hearing Committee referred to this as a major difference in property size and said a “hot” market was not an excuse for her to fail her client.

(3) Re: Shahzad Ahmed [11] : In this case Mr. Ahmed improperly measured the size of a residential lot. The Hearing Committee said it was important for agents to verify the information they put out as the public relies on this information, and should not have to take independent steps to verify it.

(4) Re: Dan Torwalt [12] : Mr. Torwalt listed a property as ten acres when it was in fact only four acres. The Hearing Committee said it was the responsibility of agents to verify all of the facts related to the property in question and that the public relies on agents to be professional and to seek proper confirmation of such information. [ 42 ] In this case, Mrs. Rusnak, the seller’s agent, represented to potential buyers that 215 Betts Avenue was 868 square feet. I find that this square footage did not come from the sellers, the Andres, as I accept Mr.

Andres’ evidence that they did not measure, and therefore did not know, the square footage of their house. Mrs. Rusnak was the one person who could have answered the question of where the figure came from or how it was determined. She did not testify, and I draw an adverse inference against her for that reason. [13] [ 43 ] I am satisfied, from the evidence of Ms.

Carl and from the disciplinary decisions of the Saskatchewan Real Estate Commission referred to above, that the reasonable steps to be taken by a seller’s agent would include measuring, or otherwise verifying, the accuracy of the square footage of such a house. Considering: (1) that the representation about square footage was significantly high - 196 square feet above the true size of 672 - and as a result that the error would have become obvious upon any reasonable investigation; and

(2) Mrs. Rusnak’s failure to testify; I am further satisfied, on a balance of probabilities, that she did not take reasonable steps to discover or verify the square footage of 215 Betts Avenue, steps that a prudent agent would have taken in order to fulfill the obligation to avoid error, misrepresentation or concealment of pertinent facts. [ 44 ] As a result, I find that Mrs. Rusnak breached the standard of care on her and that her representation was negligent. (iv) Did the plaintiffs rely on the misrepresentation? [ 45 ] Given the testimony of Mr. Hack and Ms.

Bugera, I accept that the size of this house was a significant factor in their purchase, and, whether or not the house was less than their original goal of 900 square feet, they did rely reasonably on the figure they were given: 868 square feet. I do not accept, as argued by Mr. Clackson, that the inclusion of

Article 6.4 in the standard form offer - which I am satisfied they did not consider with Ms. Carl - meant they did not rely on the square footage figure they were given.

v) Was the plaintiffs ’ reliance detrimental to them through damages? [ 46 ] Based on the evidence of Mr. Blyth, I am satisfied the plaintiffs suffered damages as a result of the misrepresentation about the size of this house. They did not get the house they thought they were purchasing. I will deal with the best evidence about the level of those damages later in this judgment.

c) Is Ms. Carl liable in the tort of negligence? [ 47 ] I accept that a duty of care, based on a special relationship, existed between Ms. Carl and the plaintiffs. The question, then, is whether she breached the standard of care, and as a result was negligent. Counsel for the plaintiffs submitted that she breached the standard of care by: (1) failing to measure the property; (2) relying on unverified information provided to her; and (3) failing to advise or warn of the potential that the square footage could be less than represented.

I disagree. [ 48 ] Similar to my discussion above regarding the standards placed on agents acting for a seller, Bylaw 715 of the Saskatchewan Real Estate Commission provides the following standard for agents acting for a buyer:

715. Prior to obtaining an Offer to Purchase on a property from a client, a registrant shall take reasonable steps to discover facts pertaining to the property that a prudent registrant would take in order to fulfill the obligation to avoid error, misrepresentation or concealment of pertinent facts. [ 49 ] As further determined above, I accept this bylaw to be the appropriate basis for establishing the standard of care for the buyer’s agent in this case. As a result, did Ms.

Carl take reasonable steps to discover facts pertaining to 215 Betts Avenue that a prudent registrant would have taken in order to fulfill the obligation to avoid error, misrepresentation or concealment of pertinent facts? [ 50 ] I view the evidence on this question to be equivocal. On the one hand, Ms. Carl did not measure the size of this house, despite realizing that it felt small to her, and did not advise her clients of the significance of the square footage issue or that they should have the house measured. On the other hand, Ms.

Carl: (1) told the plaintiffs, while viewing the house, that the house felt small; (2) measured some of the inside rooms but found no inconsistency with what she saw on the data input form; (3) advised the plaintiffs they should get a home inspection; and (4) testified that it was not her responsibility when acting as a buyer’s agent to measure every house she showed to a potential buyer, unless asked to do so by the potential buyer. [ 51 ] Mr.

Thompson argued that the disciplinary decision of a Hearing Committee of the Saskatchewan Real Estate Commission, in Re: Carmen Cartier [14] , in effect, set a standard of care which required all buyer’s agents to measure each house they showed to a client. In that case, Ms. Cartier pled guilty to professional misconduct for breaching Bylaw 715 by failing to measure the outside of a house. The seller’s agent, Mr. Doderai, from the same brokerage, as well pled guilty to misconduct by breaching that bylaw.

The Hearing Committee, speaking of both agents, said: “The measurement of the outside of the property was their responsibility to the buyer and the seller, yet neither Ms. Cartier or Mr. Doderai took the time to do so.” [ 52 ] Mr. Kendall, in response, argued that the standard of care cannot be interpreted in a way that would make a buyer’s agent responsible for guaranteeing all the facts represented by the seller. Further, he submitted that a requirement that a buyer’s agent measure every property viewed with a potential buyer is untenable.

In support of this latter argument he provides a hypothetical: If a potential buyer flew into town from out of province, and had only one day to find a house, their agent could not possibly measure each house they looked at. I find his argument and example persuasive, in the sense that I do not accept that, for a buyer’s agent, there is an absolute requirement to measure every house seen. I as well note that in Hamel v.

Junek [15] , Madame Justice Gunn found that the plaintiff, a buyer, failed to establish that her agent’s conduct fell below the required standard of care - when repeating to the plaintiff, without further investigating, what she was told by the seller’s agent about water problems in the house. Justice Gunn commented that: “No evidence was led to suggest that [the buyer’s agent] had a responsibility to independently investigate each assertion made by the [seller’s agent] or the vendor”. [16] [ 53 ] When considering the conflicting submissions of counsel on the standard of care to be applied to Ms.

Carl, I have concluded there is no absolute requirement that every buyer’s agent re-measure every house that they show to a client. That agent must take reasonable steps to discover facts pertaining to the property so as avoid any error, misrepresentation or concealment of pertinent facts. The question in each case will be whether the evidence shows such steps were or were not taken. [ 54 ] Taken together, I am not persuaded that Ms. Carl’s actions fell below the standard of care on her.

Put another way, I am not persuaded on a balance of probabilities - considering the equivocal nature of the evidence on this issue - that Ms. Carl did not take reasonable steps to discover facts pertaining to 215 Betts Avenue that a prudent registrant would have taken in order to fulfill the obligation to avoid error, misrepresentation or concealment of pertinent facts. [ 55 ] The action against Ms. Carl is dismissed.

d) Are Brook and Vanessa Andres vicariously liable? [ 56 ] There was no direct communication between the plaintiffs and the Andres during the sale. The plaintiffs, at trial, withdrew their initial claim of breach of contract against them, because of the contents of

Article 6.4 in the contract of sale.

[ 57 ] The plaintiffs, however, claim that the Andres are vicariously liable for the misrepresentation of their agent Mrs. Rusnak. I disagree. [ 58 ] Mr. Thompson cites Betker v. Williams [17] in support of his argument. There, the British Columbia Court of Appeal found “nothing fundamentally unjust in a vendor being required to reimburse a purchaser to the extent that the price which the vendor has received from the purchaser exceeds the value of the property as a result of misrepresentations made by the vendors agent”. I, however, respectfully reach a contrary conclusion.

That is because the Saskatchewan Court of Appeal, in Roy v. Thiessen [18] , found that the presence of an exclusion clause (similar to

Article 6.4 in this case) protected the vendor from claims in both contract and negligent misrepresentation. While the Roy case did not involve a misrepresentation by a real estate agent, I am nevertheless satisfied that

Article 6.4 protects the Andres from a claim in negligent misrepresentation, whether that misrepresentation was made by them or by their agent. [ 59 ] The action against Brook Andres and Vanessa Andres is dismissed. IV. WHAT ARE THE PLAINTIFFS ’ DAMAGES?

a) The test to be applied [ 60 ] I agree with the plaintiffs’ submission that the proper quantum of damages is the difference between the price paid for the house and the fair market value of the house at the date of sale. The issue becomes what is the best evidence of this difference?

b) The testimony of Brian Blyth [ 61 ] Mr. Blyth prepared two appraisals of the value of 215 Betts Avenue. He was initially contacted in January 2012, and attended to the property on February 12, 2012. In preparing this appraisal (Exhibit P-6) - for a value of the property as of February 28, 2012 - he did a physical inspection of the house and property, and measured the building. He measured the square footage of the house to be 672 square feet. He then, by using the MLS data base, found three comparable home sales with similar square footage and lot size.

He chose three comparables for a house of 672 square feet and a house of 868 square feet, for a total of six comparables. He then adjusted the value of the comparable properties for any difference in condition to 215 Betts Avenue and for what a normal house buyer would pay for any added feature. [ 62 ] In his initial appraisal report, he opined that, as of February 28, 2012, the value of this 672 square foot home was $134,500.00.

He also said that, as of that date, if this house had been 868 square feet, rather than 672 square feet, its value would have been $160,000.00. [ 63 ] On May 14, 2013, he was asked to do a second appraisal report on the value of 215 Betts Avenue. Without attending further to the property, he followed the same process as the first appraisal report by finding comparables on MLS. His second appraisal report (Exhibit P-5), for the date October 31, 2008, described the market on this date to be in balance between sellers and buyers.

He concluded that, as of October 31, 2008, 215 Betts Avenue (at 672 square feet) was worth $103,000.00. He further concluded that, if this property had been 868 square feet, its value on that date would have been $130,000.00. [ 64 ] Mr. Blyth said that, between the purchase date in July 2008 and the date chosen of October 31, 2008, there would be no adjustment in time required between the two dates as to value. However, in cross-examination, Mr. Blyth admitted that just prior to July 2008, the market was heating up, and therefore favoured sellers over buyers.

He further admitted that the value he found for October 31, 2008, had no application to the purchase date in early July 2008, as the comparables he used (which were sales on September 15 and 22 and October 14, 2008) came from after, and not before, the purchase of 215 Betts Avenue. Indeed, his report (Exhibit P-5) contained a limiting condition that:

Because market conditions, including economic, social and political factors change rapidly and, on occasion, without warning, the market estimate expressed as of the date of this appraisal cannot be relied upon as of any other date except with further advice advice from the appraiser confirmed in writing. [ 65 ] Mr. Blyth admitted that the “further advice” referred to in this condition would have required him to do further work - here, finding comparable sales at the date of purchase - which he did not do in this case. [ 66 ] Mr.

Blyth further said that, in 2008, the factor he used to adjust the value of a house for a difference in square footage was around $2,050.00 per square metre. When divided by 10.76, to convert square metres to square feet, this equalled an adjustment factor of $23.23 per square foot.

c) What damages were proved? [ 67 ] Mr. Thompson submitted the damages proved by Mr. Blyth’s testimony were $17,000.00, the difference between the price the plaintiffs paid for the house and its fair market value on the date of purchase. Further, he said the proper method of determining the value of lost square footage is by using market comparison data, as was done by Mr. Blyth, rather than by using some other piece-meal formula to calculate the loss. In support of that proposition he cited Re/Max Crown Real Estate v. Thieu [19] and Genereux v. Hallmark Realty & Associates [20] . [ 68 ] In the alternative, Mr.

Kendall submitted - after citing the reasons that Mr. Blyth’s appraisal report for October 31, 2008 did not apply to the date of purchase, as admitted by Mr. Blyth in cross-examination - that the best evidence of the difference in fair market value resulting from the misrepresentation comes through application of the adjustment factor for area testified to by Mr.

Blyth to the number of square feet involved: 196 square feet x $23.23 per square foot = $4,553.08. [ 69 ] Although market comparison data was used to assess the damages in the two cases cited by the plaintiffs, nevertheless I must determine what is the best evidence of the plaintiffs' loss. While, on direct examination, Mr.

Blyth said no adjustment in time, as to value, was required between the two dates in question, he clearly admitted, in cross-examination, that the value he found for October 31, 2008 had no application to July 2008, given that the comparable sales he used in making the calculation came from after, and not before, the purchase of 215 Betts Avenue. The limiting condition on his report supports this admission. On the other hand, there were no limitations stated by him regarding the area adjustment factor he identified in cross-examination. [ 70 ] Considering the admissions by Mr.

Blyth and the reality that the sales he used as comparisons (after the purchase date) came during a time when the market was cooling from a sellers’ market to a balanced market, when the market value would be expected to be decreasing, I am satisfied that the best evidence of the loss caused by the misrepresentation about square footage - and hence the difference between what was paid and what the fair market value was on the date of purchase - comes from applying the adjustment factor for area that Mr. Blyth used to adjust for fair market value in 2008 to the difference in square footage.

As calculated above, that results in a difference of $4,553.08, which I find to be the loss by the plaintiffs. V. COSTS [ 71 ] The plaintiffs seek costs of this action, including the cost of Mr. Blyth preparing two appraisals, the first which was $500.00 and the second which was $250.00, for a total of $750.00. While I have not accepted that the value Mr. Blyth placed on this house was the best evidence of loss by the plaintiffs, nevertheless his services were necessary to the plaintiffs in determining the factual basis of their claim and in proceeding with it.

As a result, I am satisfied they are entitled to recover a portion of Mr. Blyth’s fees, in the amount of $400.00, from the liable defendants, together with the cost of issuing this claim ($100.00), for total costs of $500.00. VI. CONCLUSION

[72] For the reasons set out above:

(1) The plaintiffs’ claim against Bridgette Carl, Brook Andres and Vanessa Andres is dismissed.

(2) The plaintiffs shall have judgment against Diane Rusnak and Royal Lepage Premier Realty in the amount of $4,553.08, together withcosts in the amount of $500.00, jointly and severally. R. Green, J [1] (BC SC), [1993] B.C.J. No. 2182. [2] Supra, at para. 45. [3] Queen v. Cognos, (SCC), [1993] 1 S.C.R. 87 at para. 33. [4] See Bourdages v. Chanathavone, 2011 SKPC 69 at para. 20. [5] As has been held by the Ontario Court of Appeal, in Krawchuk v. Scherbak, 2011 ONCA 352 at para. 147, and by the Alberta Courtof Queen’s Bench in Power v. Goodram, 2012 ABQB 50 at para. 146. [6] S.S. 1995, c.

R-1.3, as amended. [7] In s. 14(1)(v). [8] May, 2012. [9] Commission file 2009-17 (http://www.srec.ca/pdf/mh-DoderaiLouSept2009.pdf). [10] Commission file 2010-02 (http://www.srec.ca/pdf/mh-SinclairAnnetteJuly2010.pdf). [11] Commission file 2010-35. [12] Commission file #2009-51. [13] Murray v. Saskatoon, (SK CA), [1952] 2 D.L.R. 499 (Sask. C.A.) at para. 20. [14] Commission file 2009-17 (http://www.srec.ca/pdf/mh-CartierCarmenSept2009.pdf). [15] 2009 SKQB 274. [16] At para. 67. [17] (1991), (BC CA), 86 D.L.R. (4th) 395 (B.C.C.A.). [18] 2005 SKCA 45. [19] 2002 SKQB 384 at para. 3. [20] 2002 SKPC 121 at para. 14.