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SALE OF LAND - Misrepresentation - Fraudulent misrepresentation

Monday, May 27, 2019 @ 9:48 AM  

Lexis Advance® Quicklaw®
Appeal by the plaintiff from trial judgment dismissing her action for breach of contract and allowing the respondent’s counterclaim for fraudulent misrepresentation. The appellant was the registered owner of a home in which her daughter resided with her family. The appellant’s son-in-law, an alleged member of a criminal gang, was fatally shot in front of the home. As a result, the appellant’s granddaughter was forced to leave the private school and had to be enrolled in a new school far away from the home. The appellant’s daughter thus decided to move closer to the new school. The respondent agreed to purchase the home. The appellant’s realtor told the respondent that the reason for selling the house was the child’s change of school. Before closing, the respondent discovered that the appellant’s son-in-law was shot in front of the house and refused to close the transaction. The trial judge found that although the realtor’s representation was true on its face, it was incomplete and concealed the fact that the appellant’s granddaughter changed schools because of her father’s death, and that the death was a factor in the appellant’s decision to sell the property. The trial judge found that although the respondent was induced to buy the house by its location, size, beauty and price, the trial judge said she also relied on the appellant’s representation regarding the reason for selling the property. He ruled that the fraudulent misrepresentation vitiated the contract of purchase and sale and that the appellant was precluded from relying on a no representations clause in the contract.

HELD: Appeal allowed. The trial judge erred in law in ruling that the realtor’s answer to the buyer’s question constituted a misrepresentation by omission and erred in fact in finding that her answer concealed a fact that the appellant knew was important to the buyer. The answer given by the realtor was an honest answer as far as it went and was not required to supplement it with a description of the entire chain of events that led to the enrolment of the granddaughter at the new private school. The trial judge erred in characterizing the representation as incomplete and designed to conceal the place and manner of the death of the appellant’s son-in-law. There was no evidence the appellant knew or should have expected that the respondent would have a sensitivity to an event that occurred two years earlier and that did not affect the quality of the house or its usefulness. Without such evidence, any omission would not be material.

Wang v. Shao, [2019] B.C.J. NO. 681, British Columbia Court of Appeal, M.V. Newbury, D.M. Smith and P.M. Willcock JJ.A., April 23, 2019. Digest No. TLD-May272019002