Mitchell v. Zenterra et al, 2019 BCPC 14

Citation: Mitchell v. Zenterra et al 2019 BCPC 14 Date: 20190204 File No: 81535 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: DWAYNE MITCHELL CLAIMANT AND: JANE DOE, ZENTERRA DEVELOPMENTS LTD., ZENTERRA GRANDVIEW DEVELOPMENTS LTD., ZENTERRA GRANDVIEW LIMITED PARTNERSHIP DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE A. WOLF

Counsel for the Claimant: M. Carter Counsel for the Defendant: M. Kular Place of Hearing: Surrey , B.C. Dates of Hearing: October 31, November 1, December 17, 2018 Date of Judgment: February 4, 2019 INTRODUCTION [ 1 ] These are the reasons in the small claims matter of Dwayne Mitchell versus Zenterra Grandview Limited Partnership, Zenterra Developments Ltd., Zenterra Grandview Developments Ltd., and Jane Doe. In this judgement, I will simply refer to the corporate entities and Jane Doe collectively as the defendants or “Zenterra”. [ 2 ] The Claim was filed July 11, 2017. There were two settlement conferences.

As well as a number of court appearances. The trial took two full days of court time. In short, both parties have spent a considerable amount of time, effort, and money to deal with this case. THE NOTICE OF CLAIM – FILED JULY 11, 2017 [ 3 ] Dwayne Mitchell claims $26,006.00 for “loss and expense for breach of contract and negligent misrepresentation.” [ 4 ] The claim is detailed in a 25 paragraph

Schedule attached to the Notice of Claim. [ 5 ] A

summary of the claim is useful. [ 6 ] The claimant [Mitchell] bought a townhome from the defendants [Zenterra]. Breach of Contract [ 7 ] There are three claims being made by Mitchell. First, it is claimed that Zenterra breached the terms of a contract that existed between Mitchell and Zenterra. This heading of damage is a significant portion of the claim being made. [ 8 ] To summarize the claimant’s position, Mitchell submits that he saw a show home for “a G Plan townhome” in the townhome complex known as “Hyde Park” located in Surrey, British Columbia. [ 9 ] An agreement was signed December 21, 2015, for the purchase and sale of a “G Plan townhome” legally described as Strata Lot 58,

Section 23 Township 1 New Westminster Land District Strata Plan EPS2381 [“The Townhome”]. [ 10 ] The plan showed: 1. A finished Italian hardwood beam [the “Wood Beam”] 2. A shower and bathtub in the master bedroom en suite ; and 3. a laundry area containing a washer and dryer in the basement [ 11 ] Mitchell argues that Zenterra failed to supply the beam, failed to install a bathtub and failed to supply and install plumbing or appliances for the laundry room in the basement.

Negligent Misrepresentation [ 12 ] Second, and in the alternative, it is claimed that Zenterra committed a tort on Mitchell by negligently misrepresenting certain things to Mitchell. Essentially, Mitchell claims that Zenterra made a representation to him that he would get a particular “wood beam” in his townhome. Further, that he relied on this representation and was in fact “was induced by it to enter into the Contract”.

Vicarious Liability [ 13 ] Mitchell claims any representations made to them by a Zenterra sales employee creates a situation whereby, in law, Zenterra is vicariously liable for any loss or damage suffered as a result of Zenterra’s employee’s actions. Damages Being Sought [ 14 ] Paragraph 25 of the Notice of Claim clearly states what Mitchell seeks: 25. Particulars of the Claimant’s loss and damage are as follows: a. Cost to supply and install a bathtub in the master bathroom: $20,000 b. Cost to supply and install plumbing for a laundry area in the basement: $1,819.00 c.

Cost to supply and install appliances for laundry area in the basement $2,500 d. Cost to supply and install Wood Beam: $1,687. The total amount being claimed is $26,006.00.

THE REPLY – FILED AUGUST 31, 2017 [ 15 ] In my view, paragraph 5 of the reply clearly sets out the position of the defendants: 5. The Defendants deny each and every allegation set out in the Notice of Claim filed by the Claimant … as if denied seriatim , and put the Plaintiff to the strict proof thereof unless expressly admitted herein. [ 16 ] The reply essentially admits that Mitchell bought a townhome from Zenterra. [ 17 ] In its simplest form, Zenterra argues that they did not promise to provide the above items that are in dispute. They rely on the Contract of Purchase and Sale.

Specifically, there are two conditions listed in the Contract of Purchase and Sale as Number 13 and 14, which they argue “gave Zenterra the right and authority to remove, change or modify the inclusion of those items in its discretion”. Thus, even if there was a ‘promise’ they argue these provisions allow them to change their mind. THE EVIDENCE Mitchell [ 18 ] Mr. Dwayne Mitchell [Mitchell] described how he had sold his home in December 2015 and wanted to find a good home for his family. He was interested in the “larger ‘G’ units in Hyde Park”.

He, his wife and adult daughter would be living in the home and each one had some very particular likes and dislikes. The Beam [ 19 ] Mitchell testified, “I remember the first thing that I liked when I saw the show home, it was the wood beam… it was such a striking feature it looked great. It tied the whole place together, as there was wood all around the place, probably ten different locations in the condo with that wood.” He described that he is a television producer and has a very visual way of looking at things.

He recalled asking one of the sales representatives whether the unit he was interested in came with the wood beam. He clearly recollects where he was standing when the sales representative said “Yes it does.” Thus, at this point in time, he is looking at a display unit that has a particular wood beam that is being represented as part of the unit and he asked whether the beam was included and he was told yes. [ 20 ] After purchasing the unit he had come to view the building site a number of times. He explained that he did this because “he was excited to show friends and family his new home”.

He recalls one visit to the site when he was able to view the interior of the home from the outside. On this occasion he remembers he was there with his daughter and some other friends. [ 21 ] Mitchell testified that “I could see the beam in the middle from the outside – I noticed it was still white”. He then acted on his observations.

He told the court that he went over to the show home representative and said, “I notice the beam is still white, are you going to get to that?” To which Mitchell said the Zenterra representative said “Absolutely.” In fact, Mitchell recalls having almost exactly the same conversation with Zenterra representatives a number of times. He also remembered that the issue with the beam was mentioned on February 29, 2016 at the time of possession. [ 22 ] Mitchell testified that at no time did Zenterra make good on their promise to deal with the beam.

In fact, he recalls that on April 20, 2016 there was another walk through the property with Derek Fenton, another representative of Zenterra. I note that these “walk throughs” at time of possession and after about a month are very common in the building industry. It is common sense that there will be potential imperfections that need to be addressed that might not be noticed until living in the home for a short time period. [ 23 ] Mitchell recalls asking Mr. Fenton “Where’s my beam?” He also recalls the response.

He was told “It’s Italian hardwood, it’s really expensive and we decided not to import them anymore and you’re not getting that.” I note what was not said. Zenterra did not say: “Sorry we forgot; it’s not included; we never promised one”; or even plain old “sorry” for any misunderstanding. [ 24 ] I wish to observe that Mitchell presented as an honest and forthright witness. At no time did it appear that he was being unfair or biased. His recollection of events and ability to recount them to the court was excellent.

He knew what he remembered, why he remembered it and was able to recollect his understanding in a clear and concise manner. [ 25 ] A

summary of the events at this stage is worth noting. Prior to entering into any Contract of Purchase and Sale, Mitchell: 1. Viewed a display home. 2. Saw a particular beam. 3. Asked if that beam came with the unit he wanted and was told yes. 4. Noticed a discrepancy in colour between the beam he saw, confirmed he was getting one installed. 5. Brought this issue to the attention of Zenterra a number of times. 6. Relied on representations that the issue would be addressed. 7. Noted the discrepancy at time of possession and on the second walk through.

From the first point of contact with Zenterra, throughout the building process through the date of possession, right up until about 30 days living in the unit, Mitchell was given reason to believe that he was going to have this issue resolved. [ 26 ] Mitchell hears for the first time at this trial that the beam “was an optional upgrade and if it was requested it would have been put on as an upgrade.” The Zenterra witness estimated the cost of the beam was in the range of $800 to $1,000. He told the court that

this was just a “rough guess”. There was no suggestion that the wood was no longer available. Implicit in the evidence of the Zenterra witness Fenton is that, if “he wanted it, he could have asked for it and it would have been done.” On this point, I am not sure what Mitchell could have done to make the point any more clear that he liked the beam, wanted the beam and expected that the beam was going to be in the unit at time of possession. This is what he bargained for.

When it was not there, I understand before taking immediate possession, he received legal advice that he should complete the transaction and have this issue resolved at a later date. [ 27 ] By way of mitigation, when he was finally told by a Zenterra representative that he was not going to get the beam, he testified that he spent approximately 12 hours to make the current beam look like the beam that he thought he was going to get. He knew he could take some action based on information received from other owners. Mitchell testified that Zenterra had made “similar promises to others and not kept their word”.

He learned that there was a way to paint the current beam to “kind of look like the Italian hardwood beam”. At $50 per hour, he estimates the painting cost him approximately $600 plus some paint. I note that this was an effort to make the beam look like a different type of wood. [ 28 ] As an exhibit in the proceedings is a professional estimate of $1,601.60 to take out the old beam and replace it with the new beam. Mitchell seeks this amount, versus the $600 actual expense which was meant to be a temporary measure until this trial settled the issue.

The Tub in the Master/The basement Laundry [ 29 ] In order to address these two items, it is extremely important to understand how the Contract of Purchase and Sale [the Contract] came to be signed by the parties. [ 30 ] I agree that the Contract of Purchase and Sale is the usual starting point of the analysis. Generally, the “four corners” of the contract provide great detail in what is included in the contract and what is not.

Under what circumstances was the contract signed in this case? [ 31 ] Before signing the contract, Mitchell and his wife “went through each of the three levels” of one of the show homes and decided “that main floor living would be better for us”. They decided that they “wanted an end unit with the master upstairs”. [ 32 ] At the show home office they located “unit 153”.

They were able to use a computer program that showed the unit to be “a particular floor plan and location, facing the park… this was the one we wanted… We then asked for the floor plan, which was ‘GE4’… the plan showed a master up and living room downstairs.” Mitchell testified that he remembered the plan they saw showed “a washer and dryer on the lower floor and this was important because we had a 21-year-old daughter who would be in the downstairs bedroom” and his wife was tired of doing her laundry for her.

This is the plan they bargained for. [ 33 ] Mitchell also testified that while the display home did not have a bathtub in the master en suite , the plan they viewed did have one. Exhibit 3 in this trial is the floor plan that they looked at. It clearly shows a tub in the en suite off the master bedroom upstairs. Mitchell recalls this being extremely important to his wife. He even joked that he has always been a “shower guy” but his wife was very clear that she wanted a bathtub upstairs, she did not care if there was a shower or not.

This tub, as indicated in the plan, is what they bargained for. [ 34 ] Just before Mitchell signed the floor plan, which would become part of the Contract of Purchase and Sale, he noticed that Zenterra had sent the wrong floor plan over. He brought this to the immediate attention of his realtor who was present. His realtor then immediately contacted the Zenterra representative, who sent over the correct plan. [ 35 ] Mitchell confirmed that this correct plan showed a tub upstairs, a beam in the main room and a laundry downstairs. The plan did show this.

Mitchell and Zenterra signed the plan, initialled it as being correct and the deal was struck. A contract came into existence. In Mitchell’s eyes, the bargain was struck for a tub, beam and laundry room. [ 36 ] I note that Mitchell was the only one that testified on behalf of the claimant. In fairness, Mitchell’s wife was present, had been excluded from the trial and was prepared to provide evidence. Nevertheless, after hearing submissions from Mr. Mitchell as to what he thought Ms. Mitchell would testify to, it was my view that Ms. Mitchell would simply confirm the same evidence that Mr. Mitchell provided.

I concluded that having Ms. Mitchell testify would not provide any additional evidence that would help me consider the issues. It would not have been a good use of court time and I invited Mitchell to not call her as a witness. He agreed to not call her. Mr. Boyce [ 37 ] The second witness called in the trial was Mr. Brian Boyce. Zenterra called him as a witness to their case, in anticipation of somehow using his evidence to support the position of Zenterra. [ 38 ] Mr. Boyce has been a realtor for over 20 years.

He testified that in this type of real estate transaction, his role was not to draft a Contract of Purchase and Sale agreement as this document is all pre-prepared by the developer. He immediately made his view clear that these contracts are “always slanted in favour of the developer.” [ 39 ] He recounted that when he and Mitchell first sat down to sign the Contract of Purchase and Sale the incorrect floor plan was provided. They requested that the proper floor plan be provided and Zenterra provided the “G” plan. On December 23, 2015, the “GE4” plan was initialled. [ 40 ] Mr.

Boyce said this plan indicated that there was “a tub in the master and washer and dryer in the basement”. [ 41 ] He explained to the court that in his view when the contract was signed, “We took it when the floor plan was initialled in the contract, that this is what we would receive.”

[42] He told the court “The sales staff at Zenterra gave us these representations. It was stated what you see is what you get. I didn’tneed to write into the contract certain finishing to be done in certain areas, such as wood beam. We specifically asked if it needs to benoted and they said no, “don’t worry it will be finished out like you see.

No problems.” So I took it that if they were showing this finishon those items, then that is what we would be getting.” This essential piece of evidence was not even addressed in cross-examination, letalone rebutted by any other evidence. [43] He confirmed that the Mitchell’s went to the building site a number of times. He also told the court that he even went withthem a few times as well. [44] He recalled the stress on the day of possession. He was present when Mitchell and he saw the unit was not delivered aspromised.

He called his lawyer and asked “what are we supposed to do?” He was told “by law we still have to complete” and try andfix the issues at a later date. [45] I note at this point in the trial, Zenterra counsel wished to stop the examination in chief of his witness and sought that the“testimony be struck from the record”. I indicated that this could not be done but he could cease questioning the witness if he did notwant to continue with his examination. The Problem [46] In the first instance, Zenterra sent the wrong floor plan to be signed. It was thought that this was remedied when they sent asecond floor plan.

The details of this floor plan accorded with Mitchell’s understanding of what he was buying. Zenterra at the signingof the contract believed the floor plan was in accordance of what they were providing. However, this second set of floor plans was alsonot the correct floor plan. In fact, Mitchell was never shown the proper plans because Zenterra had changed the design before thesigning. Zenterra Changed the Units design [47] Mr. Derek Fenton was a witness for Zenterra. He provided the court with a good understanding of the development.

Hedescribed some changes in the marketing and design of the units. [48] He provided a snapshot of the development: “Hyde Park is a development located in South Surrey. It has 156 homes and is 107acres in size. There are four core plans ranging from 1,200 square feet to 1,600 square feet. There is a master on the main G plan whichis 2,300 to 2,600 square feet. There is a master open about the same size.” [49] He was not able to recall if Mitchell asked about any features in the show home but admitted that he may have. He could notrecall if Mitchell asked for two washers and dryers, one up and one down.

He said it would have been noted if he did. [50] He did recall the first set of floor plans provided were not correct. It showed a master bedroom on the main floor versus themaster bedroom upstairs, which is what Mitchell said he wanted. [51] The new plans, assumed to be the correct ones, were provided. He confirmed that these plans “showcased a bathroom upstairswith a tub and a washer and dryer downstairs at the lower level.” [52] Mr. Fenton was able to describe that the development in its initial stages had to revise their plans.

As time went on theybelieved that buyers generally wanted a shower with a vanity in the master bedroom en suite. He said “in discussion with themanagement team, we thought it would make the most sense to have a vanity and shower instead of a bathtub.” [53] By his evidence, it appears that “new plans” showing this change had been created by the time the contract was signed. It wassimply a mistake that the new plans, reflecting this change, had not been provided to Mitchell.

It should have been this new floor planthat was provided to and signed by the Mitchells, not either of the two other plans that were actually tendered for their review. [54] Similarly, there was a determination that the unit Mitchell chose would not have a laundry downstairs. [55] To be clear, Mitchell believed he was getting a washer and dryer upstairs and a washer and dryer downstairs. On this point, Mr.Fenton is clear that none of their units came with two sets of washers and dryers.

Further, while at one point in time there was apossibility of having the washer and dryer downstairs in some units, this was not an option available to Mitchell at the time the contractwas signed, even though the bargain struck according to Mitchell included plans with the laundry. [56] As for the wood beam, Mr. Fenton stated it was an optional upgrade that Mitchell could have had for an additional cost ofupwards of $1,000. In cross-examination, Mr. Fenton could not recall whether he told Mitchell the beam was “too expensive” and thatthey decided to stop getting them.

He does not refute Mitchell’s testimony on this point. [57] After confirming that the first set of plans were sent by mistake, he then confirmed that the second set of plans that were signedwere provided by mistake. In fact, it was a revised set of plans that should have been provided. Clearly, by his evidence heacknowledges that the incorrect plans were provided to, signed by and relied upon by Mitchell. [58] On the topic of floor plans, Mr.

Fenton pointed the court to the writing on the bottom of the plan that was signed where it waswritten “In a continued effort to improve our homes, we reserve the right to modify plans, specifications and prices without notice. Room sizes, square footage, features and outdoor spaces may vary.” THE LAW [59] Zippy Print Enterprises Ltd v. Pawliuk et al (BCCA) stands for the general proposition stated in paragraphtwo that “a party cannot be permitted to gain an advantage from that party’s own wrongful act, unless that outcome is specifically

contemplated in the relationship between the parties.” [60] In Zippy Print, one party saw an advertisement about a franchise opportunity. They reviewed some promotional material andmet with a sales representative. That representative told them certain things. A number of these “representations” were not correct. Inother words, the representations that were made were false. The party who received these representations asserted that had they knownthese representations were incorrect, they would not have entered into the contract.

The claimant makes a similar argument with respectto the beam. [61] The court considers whether certain representations were made intentionally in an effort to “induce” one party to enter into acontract. If yes, then the party that received the representation would be able to rely on it. [62] The court also considered the applicability of an exclusionary clause which read: 19.4 ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties and supersedes all previous agreements and understandings betweenthe parties in any way relating to the subject matter hereof.

It is expressly understood and agreed that the Company has made norepresentations, inducements, warranties or promises whether direct, indirect, or collateral, oral or otherwise, concerning this Agreement,the matters herein, the business licensed hereunder or concerning any other matter, which are not embodied herein. [63] The court concludes that there was a negligent misrepresentation that was specifically not excluded by the exclusion clause. Aswell, the court found that there was a contractual misrepresentation. [64] With respect to the finding in tort, the court wrote at paragraph 39 that: 39.

The usual rule in relation to clauses excluding liability is that if liability can be based on negligence or on some other ground, andif the clause does not specifically state that liability for negligence is excluded, then liability for negligence is not excluded. SeeAlderslade v. Hendon Laundry Ltd., [1945] 1 All E.R.244 (Eng. C.A.) and Cavell Developments Ltd. v. Royal Bank of Canada (1991), (BC CA), 78 D.L.R. (4th) 512 (B.C.C.A.). [65] With respect to contract, the court wrote at paragraph 42 that: 42. In Mendelssohn v.

Normand Ltd., [1970] 1 Q.B. 177 (Eng.C.A.), Lord Denning said this: There are many cases in the books when a man has made, by word of mouth, a promise or a representation of fact, on which the otherparty acts by entering into the contract. In all such cases the man is not allowed to repudiate his representation by reference to a printedcondition, see Couchman v. Hill [1947] K.B. 554; Curtis v. Chemical Cleaning and Dyeing Co. [1951] 1 K.B. 805; and Harling v. Eddy[1951] 2 K.B. 739; nor is he allowed to go back on his promise by reliance on a written clause, see City and Westminster properties(1934) Ltd. v.

Mudd [1959] Ch. 129, 145 by Harman J. The reason is because the oral promise or representation has a decisive influenceon the transaction - it is the very thing which induces the other to contract - and it would be most unjust to allow the maker to go back onit. The printed condition is rejected because it is repugnant to the express oral promise or representation. [66] This raises the question, were there false representations made to Mitchell that were meant to induce him into signing theContract of Purchase and Sale? [67] Taggart v.

Seabright Holdings et al. 2008 BCSC 1412 is a decision of the Honourable Justice Prowse that examinedrepresentations made in the context of a Contract of Purchase and Sale. The court concluded that certain representations were made by anumber of individuals both verbally and by conduct.

Then there was consideration of the entire agreement clause which read: Entire Agreement This agreement shall constitute the entire agreement between the Parties and no representations, warranties and previous statementsmade by any person or agent other than those in writing in this Agreement signed by the Parties shall be binding on the parties. [68] In that case, as in this case, the defendants contend that the claimants are precluded from bringing a claim because of this clausewhich is found in the Contract of Purchase and Sale. [69] On the separate issue of whether tort liability is excluded always depends on the circumstances of each case.

Paragraph 109 ofthe Taggart judgement sets out the test for the tort of negligent misrepresentation. The defendant concedes that many of theseconditions set out below have been satisfied but they argue representations concerning the beam may have been mistaken, but notnegligent. In short, they do not concede that the representations regarding the beam were intentionally designed to induce Mitchell toenter the contract. They further argue that any reliance by the claimant was not done in a reasonable manner; that they should haveincluded it in the contract. [109] As is set out in Queen v.

Cognos at 110, the elements for the tort of negligent misrepresentation are: (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 the misrepresentation; (4) the representee must have relied, in a reasonable manner, on the negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted.

[70] I acknowledge that the claimant argues that negligence need not be expressly referred to in an exclusion clause in order toexclude an action in negligence. They further urge the court to find that Mitchell is not unsophisticated. To quote the recurringsubmission of the defendants, counsel in their closing, “If certain things were of such great importance to the defendant, then they shouldhave put it in an addendum and attached the terms to the Contract of Purchase and Sale.” [71] I find the Supreme Court’s analysis in Queen v.

Cognos, (SCC), [1993] 1 SCR 87 helpful when decipheringsome of the issues concerning the relationship between an action in contract versus an action in tort. That case, and I conclude in thiscase, is not one of concurrency. In other words, in that case the action in tort was independent of the action in contract. The words ofChief Justice Iacobucci after setting out the test above in the headnote are helpful: Per Sopinka and Iacobucci JJ: … An action in tort for negligent misrepresentation may lie even though the relevant parties to the actionare in a contractual relationship.

The fact that the alleged negligent misrepresentations are made in a pre-contractual setting, such asduring negotiations or in the course of an employment hiring interview, and the fact that a contract is subsequently entered into by theparties do not, in themselves, bar an action in tort for damages caused by the misrepresentations. Depending on the circumstances,however, the subsequent contract may play a very important role in determining whether or not, and to what extent, a claim for negligentmisrepresentation will succeed.

Such a contract can have the effect of negating the action in tort and of confining the plaintiff towhatever remedies are available under the law of contract. Moreover, even if the tort claim is not barred altogether by the contract, theduty or liability of the defendant with respect to negligent misrepresentations may be limited or excluded by a term of the subsequentcontract so as to diminish or extinguish the plaintiff's remedy in tort. Equally, however, there are cases where the subsequent contractwill have no effect whatsoever on the plaintiff's claim for damages in tort.

The first and foremost question should be whether there is a specific contractual duty created by an express term of the contract which isco-extensive with the common law duty of care which the representee alleges the representor has breached.

If the pre-contractualrepresentation relied on by the plaintiff became an express term of the subsequent contract then absent any overriding considerationsarising from the context in which the transaction occurred, the plaintiff cannot bring a concurrent action in tort for negligentmisrepresentation and is confined to whatever remedies are available under the law of contract. Here, there is no concurrency. Theemployment agreement signed by the appellant does not contain any express contractual obligation co-extensive with the duty of careCognos is alleged to have breached.

The appellant's claim was not that the manager negligently misrepresented the amount of time hewould be working on the project in question or the conditions under which his employment could be terminated. Rather, the appellantargued that the manager negligently misrepresented the nature and existence of the employment opportunity being offered.

It is theexistence, or reality, of the job being interviewed for, not the extent of the appellant's involvement therein, which is at the heart of thistort action, and the employment agreement contains no express provisions dealing with Cognos's obligations with respect to the natureand existence of the project. There existed a "special relationship" between the parties, and Cognos and its representative, the manager, accordingly owed a duty ofcare toward the appellant to exercise reasonable care and diligence in making representations as to the employer and the employmentopportunity being offered.

The misrepresentations by the manager during the interview were made negligently, and the duty of care wastherefore breached. It is not sufficient that the manager was truthful during the interview and that he believed in what he wasrepresenting. The applicable standard of care should be the one used in every negligence case, namely the universally accepted"reasonable person". The standard of care required by a person making representations is an objective one: it is a duty to exercise suchreasonable care as the circumstances require to ensure that representations made are accurate and not misleading.

The trial judge did notdepart from the applicable standard of care in rendering his decision. He found that, "in all the circumstances", the misrepresentationsmade by the respondent's representative were negligently made. The trial judge did not impose a duty to make full disclosure on therespondent and its representative. He simply imposed a duty of care, the respect of which required, among other things and in thecircumstances of this case, that the appellant be given highly relevant information about the nature and existence of the employmentopportunity for which he had applied.

The specific employment agreement signed by the appellant is, in the circumstances of this case, irrelevant to his action for negligentmisrepresentation. The common law duty of care invoked by the appellant is "independent" of the employment agreement, and neitherCognos's duty of care nor its liability is affected by the terms of the agreement. In particular, the agreement does not contain any validdisclaimer of responsibility for the representations made during the interview. [72] Common ground as far as the legal analysis goes is that an examination of the entire agreement clause is required as a first step.

The Contract of Purchase and Sale [73] The Contract of Purchase and Sale was executed on December 2015. Condition #4 reads: The Purchase Price Includes the following items unless otherwise noted in the Disclosure Statement: See Addendum B attached Home Customization Form. Fixtures and features as represented in the Disclosure Statement shall also be included, provided that the Vendor may substitute materialsof reasonably equivalent or better quality.

Presentation Centre/Display Suite decorator features, fixtures, wall treatments, finishings,fittings, dining light fixtures and furnishings are not included in the Purchase Price. … THE TERMS AND CONDITIONS ATTACHED HERETO AS ADDENDUM “A” ARE PART OF THIS AGREEMENT, READTHEM CAREFULLY BEFORE YOU SIGN. … 9. Entire Agreement/Representations. The Purchaser acknowledges and agrees that this Agreement constitutes the entire agreement

between the parties with respect to the sale and purchase of the Strata Lot and supersedes any prior agreements, negotiations or discussions, whether oral or written, of the Vendor and the Purchaser, and that there are no representations’, warranties, conditions or collateral contracts, expressed or implied, statutory or otherwise, or applicable hereto, made by the Vendor, its agents or employees, or any other person on behalf of the Vendor, other than those contained herein and in the Disclosure Statement, including, without limitation, arising out of any sales brochures, models, websites, representative view sets, showroom displays, photographs, illustrations or renderings or other marketing materials provided to the Purchaser or made available for his viewing.

In particular, the Purchaser acknowledges and agrees that the materials, specifications, details, dimensions and floorplans set out in any materials viewed by the Purchaser are approximate and subject to change without notice in order to comply with building site conditions, municipal, structural, Vendor and/or architectural requirements. 10. Construction (

a) The Vendor will cause the Strata Lot to be constructed and completed in a good and workmanlike manner substantially in accordance with the plans and specifications (the “Plans and Specifications”) for the Development prepared by the Vendor’s architect subject to any changes required by the City of Surrey.

The Vendor may, in its reasonable discretion, make alternations to the features, design and layout of the Strata Lot and/or may use materials other than as prescribed in the Plans and Specifications if they are reasonably similar to what is prescribed. [ 74 ] I note that page 14 of 19 in the addendum is a “GE 4 floor plan” with a hand annotation written on it “Home #153”. Both buyer and seller have initialled the plan. The plan shows a tub in the upstairs and a laundry in the downstairs.

Apparent on the face of the bargain struck, contained within the four corners of the contract, is the “tub” and “laundry” [ 75 ] The Disclosure Statement found at tab 3 of the claimant’s materials at condition 2.1 sets out the general description of the development. The development is a 15 phase residential strata lot development. This

section also states that “This Disclosure Statement relates to the strata lots within Phases 1 and 2 of the Development.” [ 76 ] The claimant argues that his particular Disclosure Statement does not apply to the Mitchell unit as it is part of phase 5, not phase 1 or 2. I do not have a clear understanding as to the defendant’s response to this argument. In any event, I note that a similar styled condition as set out above regarding allowing the Vendor to change layouts or switch materials is incorporated into this condition.

For our purposes, it is my view that the parties had intended that this Disclosure Statement be used to each of their benefit, notwithstanding that technically it may be argued that it does not apply to phase 5. It is detailed and summarizes, amongst other things, the rights of the purchaser under the Real Estate Development Marketing Act. It does not make sense to allow a right of rescission to flow to the purchaser if they wanted to rescind the contract, but then to allow the purchaser on the other hand to argue the rest of the disclosure statement does not apply. ANALYSIS [ 77 ] Is there a contract?

Is the Contract of Purchase and Sale meant to be binding on either party? Clearly the answer to this question must be yes. It is a fundamental principle of property law that when purchasing land, or in this case a strata lot, the agreement between the parties must be in writing. The purpose is to create a written document that will reflect the consensus of the parties. Clearly the parties both bargained for and entered into a contract to buy and sell the townhome. [ 78 ] With respect to interpreting the contract, there are two arguments by the defendants that I would like to address.

First, it is submitted that the “entire agreement” clauses are intentionally designed with wording that provides a great deal of discretion to the Vendor to make changes to the homes that are being built. Secondly, the defendant argues “if something is so important to the purchaser, then they should be incorporating the item into an addendum.” In my view, there needs to be a balancing of rights of the Vendor on the one hand to make discretionary changes and the rights of the Purchaser on the other hand to have certain reasonable expectations.

To approach it differently in my view creates a contractual void, or an agreement too fleeting to be anything other than ambiguously vague. [ 79 ] For example, it may be the case that a certain brand of appliance is anticipated by all parties to be placed into a unit. That particular brand of appliance, such as a fridge, may no longer be available when construction is completed. Common sense and a reasonable

interpretation of the agreement demands that a degree of flexibility be allowed to the Vendor to deal with this issue. Common sense dictates that the Vendor would be able to put a different fridge into the unit. That fridge might be the same quality or even better. This is a decision for the Vendor to make. The list of possibilities is endless. Perhaps a door knob, a particular faucet, type of door or kitchen sink all need to be addressed in some discretionary manner by the Vendor.

To not allow this sort of flexibility would otherwise potentially tie the hands of the Vendor and make them hostage to what might be considered unreasonable demands by the Purchaser. In the case of the fridge not being available, it does not make sense for the Purchaser to say to the Vendor “I know it is not available, but I want that exact fridge anyways.” [ 80 ] Equally, on the other hand, it does not make sense to argue that “if something is important to the purchaser that he or she should write it into the contract.” Certain things should be obvious and reasonably expected.

For example, if I were a purchaser, a floor and ceiling are important. Why would I need to write it into an addendum? Where would it stop? I want a door, framed in two by fours, attached by a hinge and screws, primed and painted, hung properly, placed between these two rooms? Or must a purchaser write in the contract, “I want a four bedroom, two bathroom home” and write in the contract that “the Vendor may not make it a three bedroom and one bathroom home?” Both the Vendor and Purchaser are entitled to the benefit of some doubt when interpreting contracts.

Neither is able to hide behind the plain meaning of words that are clear. Liability for The Beam [ 81 ] Condition #4 above, on the face of it, seems clear. “Presentation Centre… decorator features… treatments, finishings... are not included in the purchase price.” Thus a pure reading of the contract seems to favour the defendant. [ 82 ] However, while this condition is straight forward, it is only the beginning of the analysis. To be clear, this is not a situation

where the purchaser took a look at a display home and assumed he was going to receive an exact replica. That assumption would be rebutted by the clear meaning that the dark beam – or the decorator feature – is not included in the purchase price. This clause is consistent with the defendant’s testimony that this dark beam was an upgrade that it costs extra money, and if it was ordered, it would have been provided. [ 83 ] I note that it is not included in any hand written addendum. It would have been open for the purchaser to include this in the written document. The problem is this.

The purchaser had no way of knowing that he needed to include it. He did not rely on an assumption from his viewing of the display unit. In fact, he was misled – more than likely accidentally - to believe that it was all part and parcel of the same unit. Like the door or a floor or ceiling, he was told “all units come with it.” But for this misinformation Mitchell might have happily paid the small extra fee for the upgrade that he really liked. If he had been properly informed of his choices, then it might be in the contract. But he relied on the misrepresentation made by a staff member in the display unit.

I accept Mitchell’s testimony that the beam was important to him. He was able to explain in clear terms why he thought the beam was so integral to the design of the unit. I accept on the balance of probabilities that the beam effectively acted as a visual “hook” that induced him to enter into the contract. I am only left with his testimony as the defendant has not provided any testimony that provides any other possibilities. The evidence suggests that there were low sales, the staff may or may not have been trained properly and other representations were made to purchasers that may not have been true as well.

I conclude that there was a contractual misrepresentation, perhaps falling short of a tortious negligent misrepresentation. [ 84 ] But the misinformation – or false representation – does not stop there. Not only was he misled, but he carefully and meticulously monitored the building of the unit. His testimony is clear that on more than one occasion, Zenterra confirmed that he was going to be getting the dark beam as promised. He was reassured with the words “Absolutely.” [ 85 ] At the time of possession and a later date, he again raised the issue.

In his eyes there was a promise, that promise was confirmed and he has every reason to believe he would be getting the beam, it was just a matter of time. I cannot imagine how Mitchell could have taken any more responsible and reasonable steps. I conclude that the oral promises were contractually binding on the parties.

To conclude otherwise would be to essentially allow people to say whatever they want with no consequence because they could later escape the consequences of their promises by referring to a written term of a contract. [ 86 ] I find that Mitchell has proven on the balance of probabilities that contractual representations were made by staff that he would get a dark wood beam. Zenterra then did not provide the beam. To be clear, if the defendants said that for their own reasons they “chose not to put in these beams” into the units, they would probably be entitled to do so.

It would be a call within their contractual discretion. For example, maybe the beam was not structurally sound or the dark colour was no longer available. But even according to the defendant’s evidence that is not the case. [ 87 ] He was able to rely on the representation and is entitled to the damages he suffered as a result of the breach of contract. Mitchell provided invoices that clearly set out the cost to take out the old beam and insert the new beam. His claim is granted. The temporary fix of painting the beam was

an act of mitigation upon which Zenterra could have settled on prior to the commencement of the trial. In fact, to me, it is also a sign of good faith on Mitchell’s behalf that he genuinely wanted the beam to look the way he saw it originally. In any event, Zenterra chose not to do the right thing and are not allowed to now benefit from their lack of good faith approach. Liability - The Upstairs Tub & Laundry [ 88 ] The evidence is clear that the Purchasers wanted a tub upstairs in the master bathroom.

The evidence is clear that at one point in time this was an option incorporated into the architectural display plans. Equally the evidence is clear that the Vendor may have the ability to change those plans at their discretion. However, in my view the changes need to be reasonable. More importantly, Zenterra needed to act reasonably. [ 89 ] Did the vendor act reasonably in this matter? In my view they did not. It is fine to say, “we can change the layout and design of the bathroom”. Once more, imagine the case where a certain faucet is not available.

It would be a discretionary decision to determine which other faucet would be used instead. Perhaps even in a situation where one expects a double sink in a bathroom and only gets one sink is reasonable, depending on the situation. For example, maybe the design of a unit’s bathroom does not allow for a double sink – then it makes sense that the design has to be changed. [ 90 ] In this case, however, the Vendor did certain things wrong. First, they provided the wrong plans at the time the contract was signed. Second, when asked to provide the proper plans, they again provided the wrong ones.

Third, even if they were allowed to change the bathroom from one with a tub and shower to one with a shower and vanity, they should have brought this change to the attention of the purchaser within a reasonable time period. As an aside, I question whether a developer can simply decide to take out a fixture without a good reason.

Again, even if they could, and even if the reasons they have provided are reasonable, they had the opportunity to provide notice of this change in a timely way and did not. [ 91 ] The evidence suggests that the Vendor knew of this change in the bathroom design prior to the signing of the Contract of Purchase and Sale. This information was within their sole ability to disclose. If they had, then the purchaser could have considered different options. Mitchell could have continued with the sale, with the new design.

He could have negotiated a slightly lower price, perhaps with an intention of putting in a tub at a later date. Or he could have said, “No. The tub is too important.” [ 92 ] In my view, withholding this change in design by not telling Mitchell about the change at the first opportunity, which was prior to the signing of the contract, was unreasonable. [ 93 ] By providing misleading documents – even if by accident - that show a design with a bathroom that has a tub was unreasonable.

I further conclude that the act of providing Mitchell with the wrong plans was in fact, not only unreasonable, but it was a clear misrepresentation. In essence, Zenterra promised one thing and delivered something very different. Thus, they breached the contract. Mitchell bargained for a tub, the agreement showed a tub, Zenterra agreed (perhaps mistakenly) to provide a tub. A tub was not provided.

[ 94 ] I reach the same conclusion with respect to the downstairs laundry room. The defendant Vendor provided the document that the Purchaser relied on. It was the wrong document. The document clearly indicates that it has “Laundry and optional Bar”. This note is written on the left of the diagram that also depicts a washer and dryer. [ 95 ] I appreciate that the Defendant argues that the drawing depicted at tab 2, page 14, of the exhibits is not an actual “architectural drawing”. Rather, it is a drawing or plan designed for promotional purposes. I also understand that the plan was provided in error.

However, clearly it was provided for the purpose of assisting both Vendor and Purchaser to have some confidence that they were buying and selling the same place or that there was in fact a consensus ad idem . If the Vendor was not trying to represent a sale of a home with a downstairs laundry, then they should not have mistakenly and contractually allowed a purchaser to rely on this contractual misrepresentation. [ 96 ] In my view, it makes perfect sense that a developer must be allowed a certain degree of discretion when building such large developments.

I accept, as was expressed by Mitchell’s realtor in this case, that Contracts of Purchase and Sale in these large strata developments are always drafted in great favour of the developers. One might even argue that there is no real problem with this. After all, a potential purchaser is free to make a choice to enter a contract with terms that are more favourable to a developer or not. A purchaser can choose whom to do business with.

One could argue that if you choose to do business with a developer and agree to terms that you think are unreasonable, then the fault lies at your feet. [ 97 ] But there are some characteristics of this case that make it unique. [ 98 ] Mitchell saw a beam that was promoted in a show home. He immediately made enquiries about it and was told he was going to get one just like it. For whatever reason, this statement was misstated. Whether a by-product of ill-trained staff or for some other reason, he was promised something, he relied on that promise and Zenterra did not fulfill the promise.

Zenterra was reminded numerous times about the promises that were made. Zenterra did not decide to change the design. They simply failed to explain the situation properly – which was the beam was available but not included in the price. It was an extra cost. Why would Zenterra not remedy the issue without the necessity of having Mitchell go through a very expensive trial?

Rick Johal was even told by his experienced builders that they should pay Mitchell the $600 to repaint the beam and that it would be a “bargain” to settle this issue for that price. [ 99 ] Mitchell made his position and dissatisfaction very clear. He raised the issues verbally. He barraged Zenterra with emails. In one internal email dated April 25, 2016 the builder wrote to Zenterra management: “Unit 153 keeps emailing and contacting Gary on a daily basis.

I was going to tell him to stop sending us daily emails and will later today, but look at the latest.” (Referring to an email written after the 30 day walk through listing numerous deficiencies, some of which this law suit deals with.) [ 100 ] Other internal correspondence dated April 25, 2016 shows that Zenterra knew there were many deficiencies and that they “can’t be swept under the rug … the one item that we do need to look at is the AC as this was still being marketed in the sale centre as included in the G plans.

It was on one of the marketing boards in the show suite saying they get it and he (obviously) didn’t get it.” [ 101 ] As an aside, it appears that there is a pending law suit concerning the air conditioning units promised but not delivered. As a further aside, there was a list of dozens of deficiencies identified by the claimant. Some were addressed, some were not. [ 102 ] It appears one employee of Zenterra told management that “Simply telling them to ‘fuck off’ isn’t the answer either.” In response, Rick Johal of Zenterra Developments Ltd. responded to this email: “ok.

He [referring to Mitchell] is going to get a fuck off from me today then. If that’s what he wants to hear. And im going to send him an invoice for everyones time.” [ 103 ] In continuing correspondence a few days later, and in an apparent attempt to discredit Mitchell’s very valid complaints and concerns, one employee wrote: “He [again referring to Mitchell] seems bi polar do hopefully you get him on a good day. The wife seems to be the problem. …” [ 104 ] Rick Johal of Zenterra Developments Ltd. then in an email dated April 29, 2016 writes: “…you need to use this as a training exercise for the sales staff.

This is a direct result of the sales people not giving proper information to buyer. Bath tubs/drapes/a/c. This guy is not getting anything, they will never stop then.” [ 105 ] I recall Mr. Johal being asked about this last email. He said “just because I said it doesn’t make it true.” [ 106 ] This in essence to me is the crux of the defendant’s case. “Just because I say it doesn’t make it true.” [ 107 ] I am of the view that when one person says something in a professional capacity, that they should try and ensure that what is being said is actually the truth.

You cannot intentionally or accidentally mislead someone then come back after and say “Oops, my mistake for misleading you but I do not need to be accountable to what I promised.” [ 108 ] I am of the view when a developer promises a tub, but changes it for a vanity, they might even be allowed to do that – if the contract gives them this right.

However, if you know this prior to the contract being signed, you should let the other party know. [ 109 ] I am of the view that if I ask for the proper plans for my home that you are building, and you give me the wrong plans – not once but twice – and you build a different place, you are in breach of the contract. I conclude that Zenterra breached the contract.

[110] I need not consider in any great detail the heading of negligent misrepresentation as I have found Zenterra to have breached theterms of the contract. However, if I was required to provide my conclusions, I also would have concluded that Zenterra is the author andcreator of numerous negligent misrepresentations. Further that the Zenterra representative made negligent misrepresentations about thebeam. Lastly, I expect I would have concluded that Zenterra representatives made negligent misrepresentations about the tub andlaundry.

CONCLUSION [111] Based on the totality of the evidence, the claimant has met their burden of proof. [112] The claimant has proven on the balance of probabilities that Zenterra has breached their obligations under the Contract ofPurchase and Sale. [113] Zenterra is liable for the damages being sought by the claimant in paragraph 25 of the Notice of Claim. [114] Zenterra is to pay Dwayne Mitchell $26,006.00. [115] I would award legal costs to the claimant if the Small Claims Court Rules allowed for this finding.

However, they do not. [116] I have put my mind to the possibility of awarding punitive damages in favour of the claimants and against Zenterra. However, Iam mindful that punitive damages have not been sought. I am also aware of the Honourable Judge Meyer’s decision in Burke v.Draegestein 2009 BCPC 319 , 2009 BCPC 0319 that cautions me that punitive damages are rarely awarded in breach of contractcases. At times Zenterra’s lack of willingness to address problems that they themselves created has been, to use the politest of terms,insensitive. The Honourable Judge A. Wolf Provincial Court of British Columbia