COURT OF APPEAL FOR ONTARIO
MacPherson, Zarnett and Jamal JJ.A.
BETWEEN
Hassan Issa
Plaintiff (Respondent)
and
John Wilson, Wasim Jarrah and Alexander Realty Centres Inc. cob as Keller Williams Realty Centres
Defendants (Appellants)
Hans Engell, for the appellants
Howard L. Shankman, for the respondent
Heard: November 23, 2020 by video conference
On appeal from the judgment of Justice Jane Ferguson of the Superior Court of Justice, dated November 22, 2019, with reasons reported at 2019 ONSC 6744.
REASONS FOR DECISION
1The appellants, real estate agent Wasim Jarrah and realty company Keller Williams Realty Centres, appeal from the judgment, following a one day trial, of Ferguson J. of the Superior Court of Justice. In that judgment, the trial judge granted the remedy sought by the respondent, Hassan Issa, namely, rescission of an agreement of purchase and sale of a residential property in Stouffville. The trial judge also ordered the return of the $50,000 deposit paid by the respondent.
2The appellants acted for both the respondent and the vendor of the property, John Wilson. Mr. Wilson was originally a party to the action, but by agreement he was released from the action on the understanding that the issue of whether the respondent was entitled to rescission of the purchase agreement and return of the deposit would be determined as between the appellants and the respondent.
3Mr. Issa was a 26 year old first time home buyer. He wanted to buy a home in which he could live with his parents and three sisters. He retained Mr. Jarrah to help him find a suitable home.
4Mr. Jarrah told Mr. Issa that the home size was 2,100 square feet. He relied on information provided by Mr. Wilson and information from a previous listing of the home (12 years prior) to record the size of the home as 2,000-2,500 square feet in the MLS listing. He did not conduct a measurement exercise himself. In an agreed statement of facts, Mr. Jarrah admitted that he was negligent in failing to measure or verify the size of the home.
5Mr. Issa visited the property twice before making an offer to purchase. He saw all the rooms and was allowed to inspect the entire home. On his second visit, he was accompanied by family members, and on that occasion Mr. Wilson, the vendor, told Mr. Issa that the property was about 2,000 square feet.
6In late May or early June 2017, Mr. Issa received an appraisal of the property in connection with his mortgage application. The appraisal indicated that the size of the home was 1,450 square feet.
7Mr. Issa decided not to complete the purchase of the home. He commenced an action seeking a declaration that the agreement of purchase and sale was null and void and the return of his $50,000 deposit.
8The trial judge agreed with Mr. Issa. She concluded:
In this case I do not find that Mr. Issa’s inspection of the subject property determined his expectations. He was given representations from both Messrs. Jarrah and Wilson that the property was 2000 or greater than 2000 square feet and as well relied upon the MLS agreement which set out 2000 to 2500 square feet. His inspections did not override his expectation that this was the size of the property. (I take his young age, inexperience with square footage, and being a first time home buyer into account when considering the reasonableness of his belief.)
9The appellants appeal from this decision.
10The appellants submit that the trial judge erred by not accepting the proposition that where a purchaser inspects a property their reliance on a misrepresentation as to the size of the property will be displaced.
11We do not accept that this is an absolute proposition of law. In some cases, it has been applied; in other cases it has not governed because of a constellation of facts that would make a strict application unfair in the circumstances.
12The remedy of rescission of a contract may be obtained on the basis of misrepresentation where the defendant made a false statement that was material and induced the plaintiff to enter into the contract: Panzer v. Zeifman et al. (1978), 1978 CanLII 1658 (ON CA), 20 O.R. (2d) 502 (C.A.), at p. 5; Singh v. Trump, 2016 ONCA 747, at para. 156.
13In this case, in our view, the trial judge did not err by concluding that the appellants’ misrepresentation concerning the size of the home was material to the respondent’s decision to purchase. We say this for several reasons.
14First, Mr. Jarrah made explicit statements about square footage to Mr. Issa (2,100 square feet) and in the MLS listing that Mr. Issa saw (2,000-2,500 square feet). At trial, he formally admitted that he was negligent in making these statements. Mr. Wilson also admitted that he told Mr. Issa that the property was about 2,000 square feet. As the trial judge found, “Mr. Issa was told (at least once) by both Messrs. Wilson and Jarrah that the property was 2000 or more than 2000 square feet.”
15Second, the discrepancy between the negligently communicated size of the home (2,100 square feet and 2,000-2,500 square feet) and the actual size (1,450 square feet) is substantial – either 27, 32 or 42 per cent.
16Third, Mr. Issa’s reliance on Mr. Jarrah’s and Mr. Wilson’s representations about the size of the home is supported by the fact that he remained ready to close the purchase until the moment he discovered, through the appraisal of the property related to his mortgage application, that its actual size was only 1,450 square feet. With this new knowledge, he immediately communicated that he was not prepared to complete the purchase.
17Fourth, the trial judge did not err by making reference to Mr. Issa’s age and inexperience in home buying. These can be, in appropriate cases, relevant contextual factors: Beer v. Townsgate I Limited (1997), 1997 CanLII 976 (ON CA), 36 O.R. (3d) 136 (C.A.), at para. 20.
18For these reasons, we conclude that the trial judge did not err in her analysis and disposition on the main issue.
19The appeal is dismissed. The respondent is entitled to his costs of the appeal fixed, through the agreement of counsel, at $10,000, inclusive of disbursements and HST.
“J.C MacPherson J.A.”
“B. Zarnett J.A.”
“M. Jamal J.A.”
