Blackall and Homan v. Jarrold and Foster Date:, 2013 BCPC 4

Citation: Blackall and Homan v. Jarrold and Foster Date: 20130109 2013 BCPC 0004 File No: 69288 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: BRYAN WILLIAM BLACKALL and MICHELLE LEE HOMAN CLAIMANTS AND: THOMAS RALPH JARROLD and DELLA DARLENE FOSTER DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE K. ARTHUR-LEUNG Counsel for the Claimants: D. Meslin Counsel for the Defendants: S. Charles Place of Hearing: Surrey , B.C.

Dates of Hearing: June 6 and August 2, 2012 Date of Judgment: January 9, 2013 [ 1 ] This is an action by the Claimants against the Defendants seeking damages in the amount of $10,000.00 for the lost value of a second parking stall. While not specifically put in the pleadings, in opening submissions the Claimants allege a breach of contract. The Defendants have filed a reply denying all such responsibility and liability.

EVIDENCE Bryan Blackall (the Claimant) [ 2 ] Mr. Blackall (one of the Claimants) was the purchaser, along with his spouse, of the property located at Unit 102, 14859 100 Avenue, Surrey, British Columbia (hereinafter referred to as “the Property”). Exhibit 1, Tab 2, contained the Contract of Purchase and Sale dated November 1, 2010, between the Claimants and the Defendants for the Property for a purchase price of $225,000.00; a deposit of $10,000.00; a completion date of January 11, 2011, and possession and adjustment date of January 16, 2011 (hereinafter referred to as “the Contract”).

The Purchasers acknowledged to viewing the Property on October 31, 2010. The 9-page Contract contained various subjects, including subject to the Purchasers/Claimants approving “the Property Disclosure Statement – Strata Title Properties...with respect to information that reasonably may adversely affect the use or value of the strata lot, including any bylaw, item of repair or maintenance, special levy, judgment or other liability, whether actual or potential.

If approved such statement will be incorporated into and form part of this contract”; a subject “...to the Buyer verifying on or before November 22, 2010, that the parking stall(

s) with the strata lot is (are) designated under the following arrangement (e.g. as a separate strata lot, or as a part of the strata lot, or the common property of the Strata Corporation, or limited common property, or under a short term exclusive use agreement or special privilege, or under a lease....or under a licence agreement....”; subject “...to the Buyer verifying on or before November 22, 2010, that the storage locker(

s) associated with the strata lot is (are) designated...”; subject to the Seller/Defendants advising the Buyer/Claimants about any resolution to amend bylaws; subject to the Buyer being furnished with the home warranty insurance, and subject to the Buyer “...on or before November 22, 2010, receiving and approving the following documents with respect to information that may reasonably may adversely affect the use or value of the strata lot, including any bylaw, item of repair or maintenance, special levy, judgment or other liability, whether actual or potential” which included the Form B, a copy of the registered strata plan, bylaws, financial statements, minutes of Strata meetings, and engineering reports.

Additional subjects included financing, title search, an agency disclosure and “the Seller declares that the monthly maintenance fee is $____ per month and parking stalls 598 and 601 are included in the purchase price and/or assigned to the strata lot along with storage locker #291, all of which will be assigned by the buyer on completion date.” The Contract, including the subject pages, was signed by the Claimants and the Defendants. Both the Claimants and the Defendants were represented at all times by real estate agents.

All subjects were removed including the Claimants acknowledging receipt and approval of the strata records including the property disclosure statement, title search, parking stalls, locker, home warranty, Form B, financial statements, strata plan, bylaws, and so forth.

Those subject removals were signed by all parties. [ 3 ] The Property Disclosure Statement was prepared by the real estate agent for the Defendants and signed by the Claimants and the Defendants set out that there are two parking stalls (numbers 598 and 601) and that they are limited common property. [ 4 ] Prior to the completion date, it was determined that there is only one limited common parking stall. The Defendants always had full use of the two spots; however, only one is limited common property.

The purchase proceeded and the registration in the Land Title Office between the Claimants and the Defendants completed. There was no holdback of funds. There was no delay in the Land Title registration. Both parties had real estate agents assist them. Both parties used lawyers, rather than a notary public, for the actual Land Title registration and transfer. The Complainants have full use of the two parking stalls and continue to do so, however, they are suing the Defendants alleging damages as only one is a limited common parking stall. [ 5 ] On cross-examination, Mr.

Blackall acknowledges that he was represented at all times by a real estate agent (his father). He acknowledges that the Claimants have full unhindered use of two parking stalls. He acknowledges that the Claimants have not taken any steps available to them under the Strata Property Act, RSBC 1996 and amendments thereto (hereinafter referred to as the “ Act ”), to seek an extraordinary resolution from the strata that both of the parking stalls be formally designated and registered as limited common property. Thomas Jarrold (the Defendant) [ 6 ] Mr.

Jarrold was the vendor in the transaction for the subject Property. Exhibit 2, Tab 1, showed that the Defendants purchased the Property from Mr. And Mrs. Grewal with an exhibited Contract of Purchase and Sale dated March 31, 2009. This Contract also contained clauses prepared by the parties’ respective real estate agents including subject to the Buyer (the current Defendants) approving the Property Disclosure Statement – Strata Title Properties, dated January 13, 2009, with respect to information that may impact the property.

That identical clause (save and except the date) was inserted in the Contract between the Claimants and the Defendants. In 2009, the Purchasers (the current Defendants) removed such subject and proceeded with the purchase. A further written term of the Contract of Purchase and Sale dated March 31, 2009 included: “Seller warrants that the unit comes with 2 parking stalls and a storage locker.” The Disclosure Statement which formed part of the March 31, 2009, Contract of Purchase and Sale prepared by the vendors and their real estate agent stated that there were two limited common property parking stalls.

That Disclosure Statement was signed by the Purchasers (the current Defendants). [ 7 ] Produced as Exhibit 2, Tab 3, in these proceedings is a Parking Stall Purchase Agreement dated June 15, 2005, between Guildford Park Enterprises Limited and Mr. Grewal. When the Grewals purchased the Property in 2005, they paid the sum of $5,350.00 (inclusive of GST) to the developer of the Property for a second parking stall. Neither the Developer nor the Grewals amended the strata or title to reflect that the Property had two limited common property parking stalls.

Both the Developer and the Grewals proceeded relying at all times upon the Parking Stall Purchase Agreement which stated: The Purchaser acknowledges and agrees to use the parking stall in accordance with the bylaws, rules and regulations of the Strata Corporation and as further stipulated in the Disclosure Statement.

The Purchaser further agrees that all subsequent purchaser for this parking stall must be a registered owner of a strata unit of the strata plan LMS 921, Section–29, Block 5 Range 1 West New Westminster District Plan 85069. [ 8 ] When the Claimants and the Defendants realized that only one parking stall was limited common property, their respective legal counsel prepared a Parking Stall Assignment as between the Grewals and the Defendants. Exhibit 2, Tab 4, in these proceedings shows that a Parking Stall Assignment document was prepared wherein stalls 598 and 601 were assigned over to the Defendants and

signed by the Grewals on November 19, 2010, some two months before the scheduled completion date between the Claimants and the Defendants. Both the Claimants and the Defendants in the matter before me had real estate agents and lawyers.

The Claimants and the Defendants relied upon those parties throughout this transaction and in particular, when the matter of only one parking stall being limited common property, the Grewals were contacted to sign the Parking Stall Assignment. [ 9 ] Then, when the Land Title transfer and registration documents were prepared by the Claimant and Defendant’s legal counsels, a Parking Stall Assignment was prepared as between the Claimants and the Defendants.

The Defendants signed the document assigning over the two parking stalls. [ 10 ] Neither the real estate agents nor the lawyers who represented each party took any further steps. The Claimants knew that there was only one limited common property stall but proceeded with the Land Title transfer. [ 11 ] On cross-examination, the Defendant testified that he is a CMA. He stated that he only saw Exhibit 2, Tab 3, in November 2010. He had not seen the document before such date that his real estate agent obtained and furnished to the Claimants through their real estate agent.

When asked, the Defendant acknowledged that he does not know what limited common property means and believed it meant that they had exclusive use of two parking stalls, which the Defendants had during the course of the time that they owned the Property. He testified that he believed that the two stalls were for his and only his use (and that of his wife, the other Defendant). Della Foster (the Defendant) [ 12 ] Ms. Foster is retired and has no experience in land development. While being an owner of the Property, she testified that she had full and exclusive use of the two parking stalls.

She acknowledged that the Contract prepared by her real estate agent and signed by the Defendants with the Disclosure Statement declare two limited common property parking stalls. When asked what she believed limited common property means, she testified that she thought it was limited and limited to only herself and her husband (the other Defendant) for their use.

DECISION [ 13 ] Counsel for the Claimants submits that the Contract with the Property Disclosure Statement signed by the Defendants declared two limited common parking stalls, that the Claimants relied upon such and while the Claimants still continue to have unhampered use of those two parking stalls, they have suffered damages because when, or if, the Claimants sell the Property, they can only state that there is one limited common parking stall, thus a decrease in value to the Property.

Counsel for the Defendant states that the Defendants acknowledged at trial that they did not know the correct legal definition of what is limited common property and therefore were reckless. I disagree. Counsel for the Claimants states that the Defendants knowingly misrepresented. I disagree. There is nothing to support such or to conclude such. The Claimants are seeking $10,000.00 in damages, relying upon their letter produced and forming part of Exhibit 1 and further Rule 20 in the form of legal expenses. [ 14 ] I am not convinced that the Claimants are entitled to damages.

The Contract of Purchase and Sale and the supporting exhibited documentation, between the Grewals as vendors and the Defendants as the Purchasers, support the Defendants’ claim that they held an honest but mistaken belief in that their purchase included two limited common property parking stalls. Both the Grewals and the Defendants used real estate agents. Both real estate agents erred and failed to exercise a reasonable standard of care placed upon them in representing their respective parties’ interests. However, neither those real estate agents nor the Grewals form part of this action.

The actions on the part of the Defendants, from the time of first entering into their own purchase to the time of this transaction, support an honest but mistaken belief and no evidence of any breach. I cannot find any evidence to support the Court concluding that the Defendants had any knowledge or belief other than that the two parking stalls were limited common property throughout. They relied upon a real estate agent when first purchasing, relied upon the documentation, and relied upon their own real estate agent at the time of the sale.

There is nothing to support a breach of contract. [ 15 ] In Hanslo v Barry, 2011 BCSC 1624 ( hereinafter referred to as “Hanslo”), the Court held that other remedies must be exhausted prior to engaging the Courts. The Claimants failed to do so. Sections 73 and 75 of the Strata Property Act , RSBC 1996 and amendments thereto ( hereinafter referred to as the “Strata Act”), provide that common property may be designated as limited common property by a resolution passed at an annual or special general meeting.

The Claimants never pursued such remedy available to them. [ 16 ] Misrepresentation may give rise to a claim for damages, particularly negligent misrepresentation, if the statement misrepresents the vendor’s knowledge of the matter and that the purchaser relied upon those representations. I am not convinced that the Defendants (vendors) misrepresented to the Claimants.

I find no evidence to support a finding of negligent or fraudulent misrepresentation. [ 17 ] Of key importance is that the fact that both parking stalls were not limited common property was discovered well before the Land Title registration and transfer. The Claimants took no steps to repair the matter. The Claimants continued to proceed with the Land Title registration. The Exhibit shows that the Grewals signed a Parking Stall Assignment in November 2010, some two months before the Land Title transfer between the Claimants and the Defendants. The real estate agents and the lawyers took no further steps.

There was no delay in the transaction completing. There were not steps taken to have either party, through their counsel or real estate agent, rely upon the Strata Property Act . There was no hold back of funds. There was no evidence of any negotiations on the part of the Claimants, the real estate agents, or the lawyers, for a reduction of the purchase price. The Claimants, knowing as early as November 2010 that there was only one limited common property parking stall, yet having the use of two parking stalls, still proceeded with the Contract.

There is no evidence of innocent or negligent misrepresentation or fraudulent misrepresentation. [ 18 ] I find that there are a number of other parties, jointly and severally, not part of this action, for whom fault, if any, should be found over and above and in addition to the Claimants, whose Claim will fail. When the Grewals purchased the second parking stall from the Developer, no steps were taken by the Developer or the Grewals to have the second parking stall registered as limited common property.

When the Grewals sold the Property to the Defendants, the real estate agents engaged by both parties wrote that there were two limited common parking stalls. The real estate agents failed in a reasonable duty and standard of care required of them. When the Defendants sold the Property, both the Claimants and the Defendants used real estate agents. I, too, find that those real estate agents failed in a reasonable duty of standard and care required of them. None of the real estate agents testified in this matter before me, so I do

not know what steps were taken to actively ensure that such information was correct, particularly on the part of the Claimants and theirreal estate agent. I also find that the Contract had an abundance of “subject to” clauses that protected the Claimants and had theClaimants taken the steps afforded to them in the “subject to” clauses, they would have determined, prior to subject removals, that onlyone of the parking stalls was registered as limited common property.

I heard no evidence from the Claimants, their real estate agent, orany other party on behalf of the Claimant, as to what steps, if any, that they took prior to the lifting of subjects contained in the Contract.

The Contract, prepared by the Claimants’ real estate agent and signed by the Claimants, contained a number of “subject to” clauses thatprotected the Claimants including: a) “Subject to the Buyer on or before November 22, 2010, providing the Property Disclosure Statement – Strata Title Properties, dated_____ [sic] with respect to information that reasonably may adversely affect their use or value of the strata lot, including any bylaw, itemof repair or maintenance, special levy, judgment or other liability, whether actual or potential.

If approved such statement will beincorporated into and form part of this contract. This condition is for the sole benefit of the Buyer.” b) “Subject to the Buyer verifying on or before November 22, 2010, that the parking stall(

s) associated with the strata lot is (are)designated under the following arrangement: (e.g. as a separate strata lot, or as part of the strata lot, or the common property of the StrataCorporation, or limited common property, or under a short term exclusive use agreement or special privilege, or under a lease between_____ [sic], as landlord, and _________ [sic] as tenant , or under a licence agreement between _____ [sic], as licensor [the person whogives the licence] and __________ [sic], [the person who takes the benefit of the licence], etc.).

This condition is for the sole benefit ofthe Buyer.”; and c) “Subject to the Buyer, on or before November 22, 2010, receiving and approving the following documents with respect toinformation that reasonably may advisedly affect the use or value of the strata lot, including any bylaw, item of repair or maintenance,special levy, judgment or other liability, whether actual or potential: A copy of the registered strata plan, any amendments to the strataplan, and any resolutions dealing with changes to common property.” [19] On November 19, 2010, a written Addendum was prepared by the real estate agent for the Buyers and signed by the partieswherein the subjects pertaining to “receipt and approval of the strata documents, records, including the property disclosure statement,title search, parking stall, locker, home warranty, Form B, financial statements and budget, rental disclosure agreements, strata plan,bylaws, minutes of council and general meetings and engineering and envelope studies are now satisfied and removed.” Subjects thatwere inserted solely for the protection of the Buyers/Claimants were lifted and removed. [20] There was more than one “subject to” clause contained in the body of the Contract solely for the benefit of theClaimants/Buyers to ensure that had they actually looked at the registered strata plan and Property Disclosure Statement, it would haveclearly shown to them there are not two limited common property parking stalls.

Those clauses were put into the body and formed theContract solely for the benefit of the Buyers. In turn, the Buyers/Claimants took it upon themselves to remove those subjects. There waszero evidence on behalf of the Claimants as to any allegations that the Strata Plan and/or the Property Disclosure Statement was actuallyreviewed by the Claimants, that they took steps to obtain them at all. It was within the sole control and choice of the Claimants toremove subjects that would have clearly protected them and would have provided them with documented evidence to show only onelimited common property stall.

The Claimants bore that risk by their own choice and there is zero reason why they failed or neglected totake those steps afforded to them for their own protection with the “subject to” clauses. Had they undertaken their own due diligencewith clauses contained in the Contract that afforded them that protection and taken reasonable steps that any reasonable and prudentPurchaser would have done, they would have found out that there was only one limited common property stall. [21] I therefore conclude that this was an honest but mistaken belief on the part of the Defendants.

However, I, so, too find that theClaimants are not entitled to any damages or that they have suffered any damages. The Claimants were represented by a fully licensedreal estate agent. That real estate agent put into the Contract and formed part of the Contract more than one clause of “subject to” thatwas solely for the protection of the Claimants and had the Claimants taken those very simple steps, of adhering to the subject of thecontract, not once, but at least twice, the documentation would have shown that while there are two parking stalls, that only one islimited common property.

The Claimants failed to take any of those steps that were afforded to them in writing for their sole protection. The Claimants willingly lifted all those subjects and proceeded with completion. The Claimants had “subject to” clauses that affordedthem protection and failed to take any reasonable steps or make the proper, prudent and reasonable inquiries upon the signing of theContract and receipt of the Property Disclosure Statement. [22] The Claimants rely upon Meslin v Lee and Boldak

(2011) BCSC 1208 (hereinafter referred to as “Meslin”), however Meslin iseasily distinguishable on the facts alone. In Meslin, the Buyers/Purchasers/Defendants entered into a Contract of Purchase and Sale withthe Plaintiff for the purchase of a condominium. There was a proviso about an Engineer’s Report. It was determined after the Contractof Purchase and Sale had been signed that indeed there was such a Report and the Defendants sought to not complete and to rescind theContract.

In Meslin, the Court held that the Plaintiff had no intention to deceive the Defendants and that he erred, but such mistake wasneither an honest mistake nor fraudulent. In Meslin, the Plaintiff proceeded to sell the property to another individual and as the Courtnotes at Paragraph 98, “...effectively accepting the rescission of the Purchase Contract.” No such facts are before me in this matter. TheClaimants had more than one subject in their Contract to protect solely themselves regarding the strata, title, and the DisclosureStatement.

The Claimants had the professional assistance and representation for them of a real estate agent. The Claimants by their ownchoice lifted the subjects. The Claimants, even after lifting the subjects that were their for their own and sole protection, found out thatthere was only one limited common property parking stall, however, still proceeded with the completion. All choices made were withinthe full control and decision of the Claimants. [23] I find no negligence or liability on the part of the Defendants. I have carefully considered Meslin (supra) and Queen v Cognoze, (SCC), [1993] 1 SCR 87.

Even prior to the completion when the honest but mistaken belief was determined, with legalcounsel, no steps were taken before proceeding with completion to mitigate or not to complete. Even since the Land Title completion,the Claimants have not taken steps available to them to mitigate under the Strata Property Act. By their own admission, the Claimantshave testified that they have full, unhindered, and unrestricted use of the two parking stalls as numbered that formed part of the Contract.

There are no damages suffered by the Claimants and in the alternative, if there are (of which this Court fails to see any), the Claimantsare the very author of their own misfortune in failing to take the opportunity afforded to them in two separate “subject to” clauses in the

Contract and simply removed all of the subjects, thus placing them in a position of completion and choosing to complete the transaction. This is a very classic case of caveat emptor , meaning buyer beware.

While it was an honest but mistaken belief on the part of the Defendants, the Claimants were afforded two separate written opportunities in the Contract with specific subjects solely for their protection that would have avoided this and they chose to lift those subjects. [ 24 ] While I find no liability on the part of the Defendants, I shall address the issue of the quantum of damages and such documentation produced before me.

The one page letter from a real estate agent setting out no qualifications and setting out no comparisons fails to afford the Court any consideration of weight, had this Court found that damages were to be assessed, and falls far short of anything that one should reasonably be able to rely upon had damages been found. However, that being said, I have clearly found that the Claimants are the author of their own misfortune and proceeded with the purchase despite having clauses inserted in the binding Contract afforded to them solely for their own protection.

The Claim fails. [ 25 ] WHEREFORE this Court Orders the following: 1. The Claim is dismissed; and 2. Each Party bears their own costs. [ 26 ] These are my Reasons. ________________________________ The Honourable Judge K. Arthur-Leung Provincial Court of British Columbia