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REAL ESTATE AGENTS AND BROKERS - Liability - Types of - Breach of contractual duties

Tuesday, November 21, 2017 @ 8:39 AM  


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Appeal by Anderson from a Court of Queen’s Bench decision finding Anderson caused a loss, along with the other parties, related to representation on a sale of residential property. Braun and five companies Braun controlled sued Peszko and Roe, who were solicitors, alleging negligence by Peszko related to representation on a sale by Braun and his companies of residential property called the McNab Park. Braun sought damages against Peszko for inappropriately giving credit to the purchaser of McNab Park for the amount owing under a forgivable Residential Rehabilitation Assistance Program mortgage. Peszko added Thompson, Anderson and Machula as third parties, claiming they owed a duty of care to Braun and his companies in drafting and completing the sale contract for McNab Park and claiming contribution for damages. Anderson was a real estate agent who represented the purchaser of McNab Park. Thompson was the real estate agent representing Braun and his companies and Machula was an entrepreneur working with Anderson. Thompson cross-claimed against Anderson and Machula. The trial judge found each of the parties cause the loss and apportioned fault pursuant to the Contributory Negligence Act (CNA). This finding of causation, fault and apportionment was central to the appeal. Anderson argued that the trial judge erred in determining the causation for the loss Braun and his companies incurred, in his determinations with respect to the third party claim and cross-claim and in applying the CNA and apportioning fault.

HELD: Appeal dismissed. It was open to the trial judge to find that Anderson, by not reading the contract and by breaching an obligation not to undertake anything in the process that was not transparent and not contemplated in the contract, caused the loss. The trial judge appropriately observed that the actions of Braun, Thompson, Anderson and Machula were directed to the drafting and execution of the contract before Peszko became involved, and acknowledged Peszko’s negligence was a separate negligent act. It was open to the trial judge, applying the “but for” test, to find Peszko not reviewing the statement of adjustments was not the sole cause of loss and that other causes were Braun’s, Thompson’s, Anderson’s and Machula’s actions surrounding the genesis of the offer. The trial judge made no error in finding the cross-claim against Anderson had been made out. There was sufficient proximity between Thompson and Anderson on all the evidence. Anderson owed a duty of care to Thompson and Braun as a result of their relationship. The trial judge appropriately applied the CNA and determined fault. There was no palpable and overriding error in the trial judge’s apportionment of fault to Anderson. The decision in that respect was entitled to deference.

Braun v. Peszko (c.o.b. Roe & Co.), [2017] S.J. No. 478, Saskatchewan Court of Appeal, R.G. Richards C.J.S., G.R. Jackson and R.K. Ottenbreit JJ.A., October 26, 2017. Digest No. TLD-November202017004