IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20100114

Docket:
L050980

Registry: Vancouver

Between:

Lawrence Ernest Perrault and

Jacqueline
Margaret Perrault

Plaintiffs

And:

The
Corporation of the District of North Vancouver,

Norman
Sibson, Hazel Sibson, Sutton Group Reality Services Ltd.

carrying
on business as Sutton Group West Coast Realty,

Jim
Hendricks, Re/Max of Western Canada (1998) Inc.

carrying
on business as Re/Max Crest Realty, Craig Clark

Defendants

Before: The Honourable Madam Justice Kloegman

Oral Reasons for Judgment

[1]            
THE COURT: In
the middle of the night on January 19, 2005, the plaintiffs awoke to find that
a large portion of their backyard had slid down the hill.  They later learned
that the slide had killed one resident of the house below, and seriously
injured the other resident.  The plaintiffs had only owned the property at 2175 Berkley Avenue in North Vancouver for about a year, and had no idea of any geotechnical
issues regarding it or properties in the area.

[2]            
What followed the landslide can only be
described as a nightmare for the plaintiffs, who lost their home, and suffered
from the ire of the community.  Consequently the plaintiffs brought this
lawsuit against the District of North Vancouver; the vendors, Norman and Hazel
Sibson; the plaintiffs’ realtors, Mr. Hendricks and Sutton Realty; and the
Sibsons’ realtor, Mr. Clark, and Re/Max Crest Realty.

[3]            
I was told at the outset of trial that the
plaintiffs had settled with the District of North Vancouver.  All parties
consented to a dismissal of the action against the District, and a dismissal of
the District’s third-party claim against the Sibsons.  What remains in the
lawsuit are the claims against the defendant realtors and vendors.

[4]            
At the heart of the allegations against all the
defendants is the historical fact that in 1979, abnormally severe rainfall
caused a landslide involving at least three properties in close proximity to
the subject property.  As a result, residents in this Blue Ridge area
petitioned the District to investigate the slope’s stability and perform any
necessary remedial work.

[5]            
In April 1980, the District sent a letter to
residents in the Blue Ridge area, including the defendant Sibsons, advising
them that the District had authorized the commission of a report by
geotechnical engineers, but that the report would not be commissioned, or at
least not made public unless the residents agreed not to use it in any claims
against the District.  There is no evidence that the Sibsons agreed to the
District’s terms.

[6]            
The District proceeded to commission the
November 30, 1980, report of Klohn Leonoff, which I shall refer to as "the
Report".  Mr. Brenner, who was the Director of Parks and Engineering for
the District at the time, testified that a copy of the Report was kept in the
planning department, and a decision was made to place a copy in the North
Vancouver Public Library, but he was not sure if this was done.  He assumed
that the specific sections of the Report pertaining to 2175 Berkley Avenue
would have been delivered to the Sibsons, but he did not know if this was done. 
23 years later, in August 2003, Mrs. Sibson signed a Disclosure Statement in
which she stated that no notices or claims affecting the property had been
received from any person or public body. 

[7]            
The claims against the two individual real
estate agents and their respective employers are founded in breach of contract,
negligent misrepresentation, and breach of fiduciary duty.

[8]            
The specific allegations can be summarized as
failing to adequately investigate the property, and failing to discover the
report or any information concerning the slope’s stability risks described
therein.  Further, the plaintiffs alleged that all the defendant realtors are
liable for failing to check the accuracy of the Disclosure Statement provided
to them by Mrs. Sibson, in particular clause 1(j), wherein she states that she
had not received any notice or claim affecting the property, from any person or
public body.

[9]            
Finally, the plaintiffs allege with respect to
their agents, Mr. Hendricks and Sutton Realty, that these defendants breached
their duty to exercise reasonable care and skill when providing information and
opinions which could be reasonably expected to be relied upon by the plaintiffs
in their decision to purchase the property.

[10]        
The plaintiffs have now closed their case, and
the defendant realtors jointly bring an application for a dismissal of the
action against them, on the basis that no expert evidence has been adduced to
establish the requisite standard of care of the realtors, or a breach thereof.

[11]        
At the close of the plaintiffs’ case, the
defendants may apply under Rule 40(89) of the Rules of Court to have an
action dismissed for no evidence to support the plaintiffs’ case without the
defendants having to decide whether to call a defence.  I must consider, but
not weigh, the evidence called up to the time Mr. and Mrs. Perrault closed
their case, and I must determine whether there is some evidence to support each
element of the cause of action that the Perrault’s must prove in order to
succeed: Sawchuck v. ICBC, 2000 BCCA 511; Birkenhead v.
Bemister, 2001 BCCA 178; Roberge v. Huberman, 1999 BCCA
196. 

[12]        
The plaintiffs have framed their action in
negligent misrepresentation.  The first element of this action requires that
there be some evidence put forward with which a trier of fact action reasonably
could find that a false statement has been negligently made: Kingu v.
Walmar Ventures Limited (1986), 10 B.C.L.R. (2d) 15 (C.A.).

[13]        
The false statement to which the plaintiffs
point is found in paragraph 1(j) of the Disclosure Statement, which I have
described earlier.  The defendant realtors submit that there is no evidence to
establish that the failure by the realtors to discover the inaccuracy in the Disclosure
Statement, or the failure to discover the Report, or any geotechnical risk
associated with the property, constitutes a breach of the standard of care of
the ordinary prudent realtor in the circumstances.

[14]        
They submit that there is no evidence about the
standard of care required of a listing agent, or a purchaser’s agent in 2003,
when arranging for the completion and delivery, or receipt and analysis of a
disclosure statement.

[15]        
Specifically, the defendants say evidence is
required to establish the standard practice of realtors in the relevant time
period, by attesting to such things as:

(a)        The investigation that a
reasonably prudent listing realtor would carry out in listing a property for
sale;

(b)        The extent if any to which
those investigations would involve inquiry into the history of the property;

(c)        The extent if any which
those investigations would involve inquiries of the District of North
Vancouver, and the nature of any such inquiries;

(d)        Information regarding the
training and licensing of realtors;

(e)        Relevant passages from
practice manuals, guidelines, codes of ethics, business practices, and other
publications existing in the profession at the relevant time;

(f)         The standard practice of a
reasonably prudent realtor relating to the completion by a vendor of a
disclosure statement;

(g)        The
extent, if any, of discussions between a reasonably prudent listing agent and
the vendor about the information provided by the vendor on the Disclosure
Statement.

[16]        
Similar comments apply to the type of evidence
that would be required to establish the standard practice of the purchaser’s
agent.

[17]        
The plaintiffs submit that expert evidence is
not required to establish what in their view is a clear case of negligence. 
The plaintiffs’ counsel submits that the law governing realtors’ negligence has
set the standard of care of a reasonable and prudent realtor.  He points out a
quotation taken from William Foster, Real Estate Agency Law,
(Toronto: Carswell, 1984) at p. 245 as cited in Sedgemore v. Block Bros.
Realty Ltd. (1985), 39 R.P.R. 38, at p. 49 (B.C.S.C.), as well as Brown
v. Fritz, [1993] B.C.J. No. 2182 (S.C.) and Bolton v. Salaga,
[1989] B.C.J. No. 1565 (S.C.). 

[18]        
The relevant portion of the quotation from Real
Estate Agency Law is as follows:

A broker must at
least check the completeness and accuracy, both of all information which is
usual or customary for brokers to verify, and of all other information as to
the completeness and accuracy of which he [or she] is in doubt.

[19]        
The difficulty with this submission of the
plaintiffs is that there is no evidence before me as to what information is
usual or customary for brokers to verify.  Put another way, is searching the Municipal
Planning Department or the Public Library for notices or claims issued by a
public body over two decades earlier a usual or customary step taken by a
reasonable and prudent realtor?  The same question could be asked about
searching for geotechnical reports that were issued over twenty years ago. 

[20]        
Furthermore, there is no evidence before me to
indicate that the realtors should have had doubts about the accuracy and
completeness of the Disclosure Statement.  Perhaps it was customary or usual
for realtors in 2003 to have checked for geotechnical issues when properties
were on a slope or backed onto a greenbelt, but I had no such evidence before
me. 

[21]        
In short, I am being asked to find that these
four defendants fell below the standard of care in failing to discover the
existence of the Report or the information contained therein, or the notice
sent to Mrs. Sibson.  However I have not been presented with evidence as to the
standard of care regarding these matters because I have been provided with no
evidence from an expert or through the discovery process.

[22]        
In my opinion, this is not a case where the
realtors’ conduct is so blatantly negligent, or so egregious as to be clearly
negligent, such that there is no need for expert evidence to establish the
standard of care: Sedgemore v. Block Bros. Realty Ltd. supra.

[23]        
Furthermore, this is not a case of deliberate
concealment such as was found by Drossos J. in Brown v. Fritz, supra;
or false advertising as in Betker v. Williams (1991), 86 D.L.R. (4th)
395 (B.C.C.A.).

[24]        
I place this case in the same category as the
decisions in Mileos v. Block Brothers Realty Ltd. (30 September
1994), Vancouver C913338 (S.C.); Shaak v. McIntyre, [1991] B.C.J.
No. 2607 (S.C.); or Snijders v. Morgan (27 January 1997), Nelson
4747 (S.C.). 

[25]        
In the latter case, Drost J. said:

…it is alleged that Mr. Leaky and Nelson
Realty were negligent in failing to properly investigate the nature, identity
and extent of the property they advertised for sale.  There is no evidence
whatsoever of that being a duty or responsibility that the law or the custom or
the nature of that business imposes upon persons in that type of business in
this province.

Similarly, with
respect to Item (4) of the particulars, the allegation that they were negligent
in failing to advise the Plaintiffs that a plot plan or survey should be
obtained at any time, and more particularly once they became aware that a misdescription
of the property was involved, there is no evidence of a standard of care that
would impose upon them a duty to so advise the Plaintiffs accordingly.

[26]        
The same could be said in the case at bar.  The
plaintiffs allege that a prudent realtor would have discovered the extent of
the misrepresentation of the facts here, but have led no evidence to prove that
allegation. 

[27]        
Therefore, regrettably, the case must be
dismissed at this juncture against the defendants Sutton, Hendricks, Clark, and
Re/Max Crest.

“Kloegman J.”