COURT FILE NO.: 346/05

DATE: 20070328

Toronto

SUPERIOR COURT OF JUSTICE - ONTARIO

DIVISIONAL COURT

RE: SAEID SHARIFARA Plaintiff (Respondent)

A N D:

NADER AKHBARI and

RE/MAX REALTRON REALTY INC. Defendants (Appellants)

BEFORE: JUSTICES CARNWATH, MATLOW and JENNINGS

COUNSEL: H. J. Ash, for the Plaintiff (Respondent)

Aaron Postelnik, for the Defendants (Appellants)

HEARD: March 7, 2007.

E N D O R S E M E N T

MATLOW, J.;

[1] This appeal is allowed, the judgment in appeal is set aside and this action is dismissed. As well, the cross-appeal of the respondent is dismissed. Despite this result which is favourable to the appellants, I decline to make any award of costs either with respect to this appeal or the trial below, having regard to the fact that it was the appellants’ conduct which contributed to the commencement of these proceedings,

[2] The appellants, Akhbari and Re/Max, the defendants in the action, submit that the respondent, Sharifara, the plaintiff, had failed at trial to prove that he had suffered damage by reason of the negligence of the appellants and that the trial judge erred in awarding any damages to him. For the purposes of this appeal, the appellants’ counsel does not challenge any of the findings of fact made by the trial judge. The facts essential to the determination of this appeal are summarized below.

[3] This appeal arises from a failed real estate transaction in which the respondent, through the appellants who were real estate agents or brokers, submitted a written offer to purchase a certain residential property. The respondent and his wife were then refugees from Iran who had started their own business and had accumulated sufficient savings for a deposit on a home. The respondent was an interior decorator, trained in Iran, and had rudimentary oral English and some difficulties with written English. The offer, which was prepared by the appellants, was submitted on December 15, 2001, was made conditional on certain events including the arranging of financing within seven business days. The date for completion of the resulting transaction was January 12, 2002.

[4] On the following day, December 16, 2001, after he learned that there were other potential buyers bidding for the property, the respondent submitted a second written offer to purchase, which was also prepared by the appellants, in which the price and the amount of the deposit were increased. When he signed the second offer, the respondent believed that only the price and the amount of the deposit had been increased and that the new offer was conditional in the same way as the first, However, unknown to the respondent and without his consent, the provisions which had been inserted by the appellants in the first offer to make it conditional, including the provision relating to financing, were not inserted by them in the second offer. As a result, when the second offer was accepted by the vendor, an unconditional agreement of purchase and sale was made..

[5] On December 20, 2001, within the seven business days conditional period stipulated in the respondent’s first offer, the respondent was approved for financing by the Bank of Montreal. As a result, he began his preparations to move.

[6] On January 10, 2002, the Bank of Montreal withdrew its approval for financing because of certain discrepancies which the bank claimed to have discovered in the respondent’s application and supporting documentation. All of the dealings which the respondent had with the bank were carried out by a mortgage broker on behalf of the respondent and without any involvement or participation of the appellants.

[7] The appellants, in an effort to salvage the transaction, proceeded to obtain another source of financing for the respondent. However, the respondent refused to accept it.

[8] Instead, he consulted a lawyer to whom he showed the relevant documentation in his possession and sought the lawyer’s advice. It was only then that the respondent learned that the provisions that he had believed made his second offer to purchase conditional had not been inserted in it by the appellants.

[9] Following that consultation, the respondent decided not to proceed further with the transaction. He then retained another lawyer who negotiated the return of one-half of the deposit paid. Several months later, the respondent purchased another home.

[10] As these facts reveal, the appellants’ failure to make the respondent’s second offer conditional did not, as it turned out, change the respondent’s position to his detriment. The real cause of his ultimate problem was the decision of the bank to withdraw the financing that it had earlier offered to provide to him. Even if the second offer had been made conditional as the respondent expected, the period during which the resulting agreement would have remained conditional would have expired by January 10, 2002, and the respondent would have been left in exactly the same position he would have been it had the offer been conditional, namely, without the desired financing from the bank. Even if the offer had been made conditional at the time it was presented to the vendor for acceptance, the resulting transaction would, in any event, have become firm before the bank withdrew its approval, It follows, therefore, that the respondent suffered no damage as a result of any act or omission of the appellants. The only cause of the respondent’s damage was the withdrawal by the bank of its prior approval of the respondent’s financing, an event for which the appellants had no responsibility.

[11] Accordingly, I respectfully conclude that the trial judge’s judgment awarding damages to the respondent reflects a palpable and overriding error in her analysis of the evidence which now requires this Court to intervene.

Matlow, J.

Carnwath, J.

Jennings, J.

Released: March 28, 2007