COURT OF APPEAL FOR ONTARIO
DATE: 20000724
DOCKET: C31307
LABROSSE, WEILER and SHARPE JJ.A.
B E T W E E N :
GAIL VAZ-OXLADE and 618988 ONTARIO LIMITED c.o.b. as THE CATENA GROUP
Plaintiffs
(Appellants)
- and -
JOHN VOLKENSTEIN, THE ESTATE OF KATHY VOLKENSTEIN, J. R. DENCH REAL ESTATE LTD. and DAVID W. JONES
Defendants
(Respondents)
Charles J. Brannen, for the appellants
Warren H. O. Mueller, Q.C. for the respondent Jones
J. H. Gardner, Q.C. for the respondents Volkenstein and J. R. Dench Real Estate Ltd.
Heard: July 21, 2000
On appeal from the judgment of Mr. Justice M. Cullity dated
December 2, 1998
BY THE COURT:
[1] The primary issue on this appeal is whether John Volkenstein
and his late wife Kathy Volkenstein breached the warranty given
by them with respect to a septic system on their cottage property
when they sold the property to the appellant Gail Vaz-Oxlade. The
trial judge held that there was no breach of warranty. Vaz-
Oxlade appeals from that finding.1 She also sued J. R. Dench Real
Estate Ltd. (“Dench”), who acted for both sides in the
transaction, and David W. Jones, her solicitor on the
transaction. The action against Dench was dismissed. Vaz-Oxlade
appeals the dismissal of her action against Dench. She alleges
that Dench breached a duty when it failed to draft a more
extensive warranty clause with respect to the septic system and
by failing to ensure that the system was in compliance with the
warranty. The action against Jones was allowed. The trial judge
found that Jones was negligent because he did not check to ensure
that the septic system was in compliance with the provisions of
the “Local Health Authority”. Jones appeals that finding.
[2] The warranty, which was inserted into the agreement of
purchase and sale signed by the parties, reads as follows:
Vendor warrants that the Septic System has operated
satisfactorily during his ownership of the property
and to the best of his knowledge was installed
according to the provisions of the Local Health
Authority.
The trial judge’s reasons respecting the warranty are as follows:
The warranty executed by Mr. and Mrs. Volkenstein
on September 27, 1988, states that, to the best of
their knowledge and belief, the septic system was
“installed according to the provisions of the Local
Health Authority”. Prior to 1974 sewage disposal was
governed by the provisions of the Public Health Act
and bylaws of some municipalities. Permits from a
public health officer were required before such
systems were installed but, as already mentioned,
the extant records date from approximately 1955. Mr.
Volkenstein testified that he thought the cottage
dated from the late 1940’s or early 1950’s and that
his knowledge with respect to the local health
authority’s requirements were based on the answers
he received when he questioned the former owner of
the property at the time of the Volkenstein’s
purchase in 1980. As he had no information with
respect to the precise date that the system was
installed, and no other way of knowing whether a
permit from the local health inspector had been
obtained, he said that the terms of the similar
warranty in the agreement of purchase and sale,
that were based on the information he had received
when he purchased the property, were “the best that
I could do”.
As I have indicated, I believe Mr. Volkenstein was
a credible witness and I accept his evidence with
respect to the source and content of his knowledge
and belief in connection with the legality of the
system. I interpret the warranty as meaning that,
to the best of such knowledge and belief, the
system complied with all requirements of the local
health authority at the time it was installed. As
I accept his evidence that this was, in fact, his
knowledge and belief, no breach of that warranty
has occurred, nor is there any evidence that would
support a finding that there were negligent or
fraudulent misrepresentations by Mr. Volkenstein
with respect to the extent that the system complied
with relevant laws or other standards.
Accordingly the claims against Mr. and Mrs. Volkenstein
must be dismissed.
[3] The appellant submits that the trial judge erred in finding
Mr. Volkenstein to be a credible witness. The assessment of the
credibility of a witness is peculiarly the province of the trial
judge. We are not persuaded that the trial judge’s assessment of
Mr. Volkenstein’s evidence is against the weight of the evidence.
Moreover we agree with the trial judge’s interpretation of the
warranty. Accordingly, we would dismiss the appellant’s appeal
against the Volkensteins.
[4] With respect to Dench, the trial judge found that the agent
was not negligent in failing to include a wider warranty in the
agreement of purchase and sale. He stated:
In the circumstances of this case—including the age
of the property and the relatively short period of
ownership by the Volkensteins—I am not prepared to
find that Mr. Wilkinson might reasonably have
expected that a warranty wider than the one he
inserted in the agreement could have been obtained.
Nor, on the basis of Ms. Vaz-Oxlade’s testimony with
respect to her instructions to him, am I able to
find that he ought reasonably to have anticipated
that the warranty in the agreement was less extensive
than was required to meet her concerns. This is, to
some extent, confirmed by the fact that neither Ms.
Vaz-Oxlade—an intelligent and educated person who is
a writer on financial matters for newspapers and
periodicals—nor Dr. Rapp questioned the adequacy of
the warranty when they read it. This is not a case
where the meaning of the clause was obscured by the
use of technical language or otherwise.
The trial judge was entitled, on the evidence, to come to the
conclusion he did. The appeal against Dench is also dismissed.
[5] We now turn to the appeal by the solicitor David W. Jones.
He was found to be liable for the amount of $8,500, representing
the loss of the opportunity to negotiate an abatement of the
purchase price of the cottage.
[6] At the time that Vaz-Oxlade consulted Jones, she had already
signed the agreement of purchase and sale. The trial judge held:
The existence of the binding agreement of purchase
and sale at the time that the Solicitor was retained
does not, in my judgment, entitle him to take the
position that there was no possibility of obtaining
an abatement and, therefore, no loss incurred by the
purchasers. As Gotlib J. stated in Wong et al.
v. 407525 Ontario Ltd. (1996), 1 R.P.R., (3d) 245
(Ont. G.D.) at p. 262: No lawyer should presume that
no rights can be negotiated.
[7] The decision in Wong, supra, on which the trial judge relied
as the basis for the imposition of a legal duty on the solicitor
has been reversed by this court and is reported at (1999), 179
D.L.R. (4th) 38 (Ont. C.A.). That decision is dispositive of the
issue of whether Jones had a duty to advise the appellant to try
to negotiate a price abatement for a concluded deal. Laskin J.A.
held that there is no such duty on the solicitor who is presented
with a signed offer to purchase. At para. 45 of his reasons he
stated:
In my view, the trial judge was not sensitive enough
to the limitation on Hui’s retainer implicit in his
being consulted after the agreement had been signed.
Mr. Lamont’s opinion [that there was such a duty]
may represent a counsel of perfection, but I find it
hard to admonish Hui, let alone make a finding of
negligence against him, for failing to try to
negotiate something to which his client had no legal
entitlement. Cases may arise where a duty of this
kind should be imposed on a lawyer but the court
should at least take into account the timing of the
lawyer’s retainer.
The comments of Laskin J.A. in Wong, supra, are equally
applicable here. There is no basis on which to distinguish the
Wong decision from this case.
[8] Furthermore, we agree with the submission made on behalf of
Jones that, in the circumstances of this case, there is no
reasonable probability that the purchasers acting reasonably
would have obtained a price abatement. There was no breach of the
warranty and therefore no reason for the Volkensteins to grant an
abatement. Finally, the claim for an abatement was not pleaded
and there was not a proper evidentiary foundation for it.
[9] Accordingly, the appeal by Jones is allowed and the decision
of Cullity J. is set aside in this respect. In all other
respects the appeal is dismissed.
[10] In the result, the appeal is dismissed against the
Volkensteins and Dench with costs. The appeal of Jones is
allowed and the claim against him is dismissed with costs here
and below.
Released: JUL 24 2000 Signed: “J.M. Labrosse J.A.”
JML “Karen M. Weiler J.A.”
“Robert J. Sharpe J.A.”
1 At the outset of this appeal and in response to questions
from the bench it was conceded that the appellant 618988 Ontario
Ltd., a subsequent purchaser, was not a proper party to the
action. Accordingly, the appeal by the numbered company is
dismissed.