Battersby v. Roman, 2015 ONSC 1083
Court File No. CV-10-396639
Date: 20150304
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID RICHARD BATTERSBY and CYNTHIA ELAINE McADAM
Plaintiffs
No one appearing for the Plaintiffs
- and -
GINA ROMAN, KELLER WILLIAMS REFERRED REALTY BROKERAGE, and JANIS ELIZABETH CAMERON
Defendants
Hans Engell for Gina Roman and Keller Williams Referred Realty Brokerage
Alfred Schorr for Janis Cameron
HEARD: October 20-24, 2014
REASONS FOR DECISION
M.A. SANDERSON J.
Introduction
[1] Janis Elizabeth Cameron ("Cameron") cross-claimed against Keller Williams and Gina Roman ("Roman") for damages for misrepresentations allegedly made at the time she sold her property at 355 Manor Road Toronto ("the Property"). As the Plaintiffs have settled their claim against Keller Williams and Roman, the trial of Cameron's cross-claim against Keller Williams and Roman proceeded as if it had been a free-standing action. Cameron claims that but for their misrepresentations, she would not have sold the Property on February 7, 2009 for $545,000, and that she would still be the owner of the Property, at the time of trial said to be worth $1,090,000. She claims the difference, $445,000, in damages.
The Evidence
[2] Cameron gave evidence that in 2008 she spoke to three realtors apart from Roman about selling the Property and requested that they prepare value estimates for her. She said that all three estimated its value at $650,000 or higher. At that time, Cameron thought it was worth more than $950,000.
[3] In the summer of 2008, Cameron also spoke to Roman. Cameron said she had met Roman at a neighborhood open house in the late 1990s and since then had spoken to her about real estate in her neighborhood at least two times per year. She had been receiving "Gina’s Gems," Roman's monthly publication about real estate activity in the area where Cameron owned the Property and two others. Cameron told Roman that her tenant had left and she was considering offering the Property for sale.
[4] Roman’s account of their first meeting about the sale of the Property differed markedly from Cameron's. She said that several days before August 12, 2008, at Cameron's request, she and Cameron met for over three hours. Cameron told her she wanted to sell the Property because she was tired of dealing with tenants and wanted to travel more. Roman recorded in Exhibit 9 notes that she said she took at that first meeting, that Cameron had told her she had met with three other agents. One, Eli, had provided a higher value estimate; Another, Liz Taylor had suggested the Property should be listed at $599,000 and had said she should expect a sale price of $605,000-$610,000.
[5] Roman said in Exhibit 9 when she wrote "knob & tube – no – insurance checked," she was recording a question that she had asked of Cameron about wiring at the Property and Cameron’s response to her question.
[6] Cameron gave evidence she told Roman there was a mix of wiring, knob & tube and more current wiring.
[7] Roman said that after she made the note in Exhibit 9, Cameron took her through the house. She said she could not see knob & tube wiring in the basement ceiling.
[8] Cameron gave evidence that when she took Roman to the basement, she showed her exposed knob & tube wiring in the ceiling.
[9] Roman said the house was dated as it did not have for instance granite countertops or stainless steel appliances.
[10] Roman said at their first meeting she told Cameron that before she would be able to provide a value estimate, she would have to research the prices at which comparable houses in the area had sold during the previous six months. They agreed to meet again. After Roman did that research, they met again on August 12, 2008. Roman said she told Cameron that she felt that a listing price of $649,900 was "a little on the high side but [that] it would be okay to give it a try."
[11] Cameron said she signed the first listing agreement, Exhibit 1 tab 7, “unexpectedly” and “reluctantly,” without the benefit of reading it, on August 12, 2008 at her first meeting with Roman. She had not thought to bring her glasses to that meeting. She said she had intended to get more advice. She was leaving for British Columbia the next day.
[12] Roman said Cameron was wearing her glasses at the time she signed the August 12, 2008 listing agreement.
[13] As of August 12, Roman said she thought the Property would sell within 60 days. Tabs 7, 8, 9, and 10. [Tab 10, a data information form, was signed August 12, although it was dated September 12. The listing price was $649,900.]
[14] Cameron gave evidence that since she owned and lived in a house across the street from the Property, she and Roman agreed that Cameron would communicate with Roman by leaving documents for Roman at the Property. Cameron said during the period spanning August 15, 2008-April 30, 2009, she typed and left the letters or memos addressed to Roman contained in Exhibit 4. Cameron said she regularly left them in a red file folder on a white wicker shelf in the Living Room. When the red folder was empty, she assumed that Roman or someone acting on her behalf had picked up its contents.
[15] Roman denied receiving any of the documents included in Exhibit 4. For that reason, I have bolded references to Exhibit 4 to highlight the fact that Roman asserted she had not received them until after this litigation was commenced. Her lawyer submitted that Cameron prepared them after Battersby and McAdam, the purchasers of the Property, sued Cameron, Roman and Keller Williams about the knob & tube wiring that they had discovered at the Property after the closing.
[16] Cameron said she did not save the files in Exhibit 4. She has disposed of her computer.
[17] She conceded that the dates on the letters and memos in Exhibit 4 were not necessarily the dates on which she had written them. She said she could say she had addressed the issues when they were fresh in her mind "within 1-2 days."
[18] On August 15, 2008, Cameron said she sent Tab 1 of Exhibit 4 to Roman. Cameron allegedly wrote:
…wiring … a combination mix of current plus knob & tube. Evidence of wiring mix in basement unfinished ceiling. You asked me about knob & tube wiring in walls and ceilings. I cannot warranty this wiring. I have no knowledge. I have done no major renovations to those areas. I do know new wiring was installed in basement for GFI plus. New wiring in kitchen for two GFI plugs, new wiring for new furnace. That is the extent of my knowledge. Complete wiring information unknown ... I also informed you that my insurance company contacted me once a couple of years earlier for access to inspect the knob & tube wiring before renewing my policy. I met the man on site. Accompanied him on inspection and he said everything was fine. When I asked about wiring replacement he told me that if the knob & tube was in good condition don’t replace it…
September-October 11
[19] Exhibit 1 Tab 21 is a list of showings of the Property. It contains comments and feedback from some of the attendees, including one who wrote that the property was dark and needed repainting, and another dated September 19 from someone named Arias re knob & tube wiring: "looks like work to be done on electrical knob & tube." Roman said she did not follow up on Arias' comments.
[20] The witness Madigan gave evidence that by October of 2008, the global financial crisis had become a factor in the Toronto real estate market. The newspaper reports of doom and gloom could not have been worse. October 2, 2008 and October 27, 2008 were two of the worst days on the TSE.
[21] In the October 2008 "Gina's Gems," Tab 25, Roman wrote:
You would think the world is coming to an end, watching the news or listening to the radio … Here are my thoughts … I am seeing that homes are on the market a little longer and inventory is building. Volume of sales has dropped and prices have dropped as well. Nobody will be able to tell you when this decline will end.
[22] She also wrote: "In my experience you can’t time the market."
[23] By early October, Cameron had not received any offers. Roman advised her to lower the listing price. Exhibit 1 contains a Cancellation of Listing Agreement dated October 11, 2008 and a new listing agreement ("the second listing agreement"), in which the listing price was reduced to $599,900.
[24] Exhibit 1 Tab 13 is an MLS data sheet dated October 11, 2008.
[25] Roman said on October 11, 2008, she took notes (Exhibit 1 Tab 17) during her discussion with Cameron about the second listing agreement. She wrote "no knob & tube" because Cameron had been asking her to include that information on the listing. Exhibit 1 Tab 4 contains the MLS Listing Sheet at the time of the second listing agreement. Roman said she included "no knob & tube" under "Remarks for Clients" only because Cameron had specifically requested her to do so.
[26] The expiry date of the second listing agreement [which came into effect on October 20] was December 31, 2008. Cameron said she did not read the second listing agreement before she signed it on October 11, 2008 because she did not have her glasses with her. Roman said Cameron was wearing her glasses.
[27] Between October 11 and October 20, 2008, when the second listing agreement was to take effect, Cameron and Roman agreed that the living room, dining room and hallways would be painted and that the Property would not be shown until the painting was completed.
[28] Cameron alleged that she wrote a letter to Roman dated October 14, included in Exhibit 4, containing the following: "On your expert advice I have agreed to reduce the property to $599,900..."
[29] On October 27, 2008, the first offer on the Property, Exhibit 1 Tab 22 for $550,000, was made to Cameron by David Battersby and Cynthia McAdam. It was irrevocable until 9:00 P.M. on October 30, 2008 [i.e., if Cameron did not accept it by 9:00 P.M. on October 30, 2008, the offer would expire].
[30] Cameron said she was in British Columbia between October 16 and October 30, 2008.
[31] Exhibit 4 Tab 6 is a note that Cameron said she wrote to Roman on November 5, 2008 about the Battersby/McAdam offer:
…I confirm we spoke about the offer. I was not interested in the price or closing date and instructed you to inform the buyers that I would be home on October 30 and we could deal with it on October 31... On Monday you indicated the buyers were no longer interested. A copy of their offer was never presented to me.
[32] Cameron said she did not see the Battersby/McAdam offer at that time.
[33] On November 15, 2008, Cameron listed a property she owned in British Columbia for sale for $579,000. [She later reduced the sale price to $559,000 and on June 16, 2009 sold it for $525,000. Cameron gave evidence she sold that property because distance was an issue, her sister was ill in Ontario and her father had passed.]
[34] Cameron said she wrote to Roman, Exhibit 4 Tab 8, on December 8, 2008:
We agreed to meet at the Sunnybrook restaurant for breakfast on Saturday…You indicated that the showings were slow in December because of Christmas holidays and the market was falling fast and buyers were being scared off … I suggested removing the house from the market when the listing expired and waiting until spring. I said I did not want to give the house away. You advised against it, saying the market was falling fast, and that you had worked very hard and did not want to see your commission going to someone who would only list the house for less to sell it…I assured you I had not contacted anyone else for a relist. I wanted to wait for the spring market…
[35] Between October 27, 2008 [the date of the first Battersby/McAdam offer] and the expiry of the second listing agreement on December 31, 2008, no other offers were received.
[36] In "Gina's Gems" for November-December 2008, Roman wrote: "Media coverage of the global financial crisis they say has undermined consumer confidence, causing the recent dip in Real Estate." She wrote about a panel discussion that she had recently attended: "Pointing to healthy indicators like strong employment, stable immigration and low interest rates, panelists are confident that economic fundamentals in Canada [to] …support a healthy housing market will remain in place."
[37] Cameron said the negative media coverage of the global financial crisis mentioned in Gina's Gems did not affect her decisions with regard to the sale of the Property.
[38] On December 29, 2008 Cameron said she left Roman another note, Exhibit 4 Tab 9, in the red folder: "You may continue to show the house after the listing expires. I am still considering removing the Property from the market and relisting in spring."
[39] Roman gave evidence that after the second listing agreement expired on December 31, 2008, another agent called her during January of 2009, wanting to show the Property.
[40] On January 10, 2009 in Exhibit 4 Tab 10, Cameron said she wrote Roman: "…You indicated you cannot continue to show the house without a signed listing…"
[41] Roman gave evidence that in January she met with Cameron for three hours and 40 minutes over breakfast to discuss a further listing of the Property. She said she did not recall Cameron saying that she wanted to wait for the spring market. Roman said in any event the January to May period was the spring market.
[42] By then, there had been 55 showings. Roman said she suggested listing the Property at a sale price of $549,000-$559,000. Cameron instructed her to list it at $559,000.
[43] On January 21, 2009, Cameron signed a new listing agreement ("the third listing agreement"). Cameron gave evidence that when she signed it, she did not have her glasses with her. She did not want to sign. She wanted to discuss the listing with a friend, Eli, before she signed.
[44] She said she thought that the third listing agreement covered just one showing. She said she did not know it would be in force for 90 days.
[45] Cameron gave evidence that on January 21, 2009, immediately after she signed the third listing agreement, she went home and wrote [Exhibit 4 Tab 11], a letter that she left for Roman at the Property in the red folder, containing the following:
I confirm we met at the property to discuss relisting the house…I do not want to give the house away. I want to wait til spring. You state the market is falling fast and the spring market will be flat. You say the market moves in cycles and will not be good for another 8 years. You indicated you sold your personal residence because you did not want to be tied in for 8 years waiting for the market to come back. You sold now so you could move on. You recommended I do the same. Dump it now at a good price. You said the owner of Keller Williams predicted this market was coming and he is always accurate in his market predictions. I told you I did not want to keep reducing my home to sell it. I could do that myself…Based on your expert knowledge and advice I agreed to relist and reduce the price to $545,000 However, be advised at the end of this 90 day listing I will not be renewing… I will be pulling the property until spring.
[Emphasis added.]
[46] I note the third listing agreement effective January 26, 2009 was not for $545,000 but for $559,000. [$545,000 was the sale price on February 7, 2009.]
[47] Roman denied telling Cameron either that the market was falling fast or [in the future] that the spring market would be flat. She said she did not know where the market would go, or what would happen in the spring. She passed that view on to Cameron. They reviewed a number of comparables [recent sale prices]. Roman said she did not push Cameron to sign the third listing agreement. Cameron did not tell her that she did not want to sign. Had Cameron advised her that she did not want to list the Property at that time, Roman said she would have said fine. Rather, Cameron told her to try one more time.
[48] Cameron denied that she was worried that the market/sales prices were going to drop further. She said she signed the third listing agreement because she was relying on Roman's advice.
[49] Roman said on January 21, 2009, they agreed that Cameron would sign the third listing agreement, but then she would still be free to consult about the advisability of signing it. If Cameron was advised against proceeding with the third listing agreement, Roman agreed that Cameron would so advise Roman and that Roman would simply tear up the third listing agreement.
[50] Roman gave evidence that on January 26, Cameron advised Roman that after speaking to her advisor, she wanted to go ahead with the third listing agreement.
[51] Thereafter, Roman showed the Property. Exhibit 1, Tab 21 lists 48 showings of the Property during the currency of the third listing agreement until the date that the Battersby/McAdam offer became a firm offer.
[52] Exhibit 1, Tab 23 is the Battersby/McAdam Offer originally for $535,000 dated February 7, 2009 that was presented to Cameron at a 4:00 P.M. meeting on February 7, 2009. Cameron counter-offered at $555,000. Battersby and McAdam then counter-counter-offered to pay $545,000, that offer to expire at 6:00 P.M.
[53] Cameron said she had wanted to wait until Monday so she could seek advice from three people. She knew Battersby/McAdam had walked away from their October 27 offer.
[54] On February 7, Roman pressured her to sign the offer. Cameron said she told Roman, "I will only sign if you believe based on your expertise that the market will fall."
[55] Roman denied pressuring Cameron to sign the February 7 offer. She said she asked Cameron what she would like to do. After sitting quietly for a time, five minutes before the $545,000 offer was due to expire at 5:55 P.M., Cameron signed a confirmation of acceptance.
[56] Roman said that on February 7, 2009, Cameron wanted to sell the Property.
[57] Cameron gave evidence that she was "furious" because Roman had talked her into giving her house away for next to nothing. However, there is nothing about that in Exhibit 5, a transcript of a voicemail Cameron left for Roman after Cameron accepted the Battersby/McAdam offer on February 7, 2009.
[58] Exhibit 4 contains another document at Tab 14 dated February 23, 2009 that Cameron said she left for Roman in the red file folder. It also contains Tab 13, a corrected version of the same letter. [Cameron said in Tab 14 she had used an incorrect date for the date of her meeting with Roman.] The letter included in the following:
…The offer presented was for $545,000 with a three month closing. I was not happy with this and told you I was going to pull the listing until spring and maybe do some additional renovations. You, Gina, advised against this. You said the market was falling fast and would continue to do so. The spring market would be depressed and I would not get as good an offer. I should sell and get rid of the rental headaches. Otherwise, I would have to wait 8 years to even come near this offer price…I confirm I told you Gina, if I sold at that price it would be because of your market expertise…When I wanted to make changes to the offer you advised against it….When I hesitated, you continued your badgering that the market was falling, the economy was horrendous and half a million dollars was a lot of money…Sadly I believed you had my best interest at heart and reluctantly signed. I knew I had made a huge mistake when you immediately said you were in a hurry, it was Saturday and everyone had other things to do … I am not pleased at all how you have conducted yourself and this deal. I am thoroughly disgusted. This is an unacceptable way to do business…
[59] Exhibit 5 contains a transcript of a voicemail from Cameron to Roman dated February 23, 2009 in which Cameron said: "It was my mistake. I had control. I blame myself. I’ve learned something."
[60] On March 30, 2009, in another voicemail to Roman, Cameron said: "My house in Barrie is sold, so it's closing this week on Friday. Next week is 355 [Manor Road/the Property]. Everything's under control there, and hopefully BC shortly."
[61] In early April of 2009, Roman advised Cameron that Battersby and McAdam had found and were complaining about knob & tube wiring in the Property.
[62] Exhibit 5 contains a transcript of a voicemail message that Cameron left for Roman on April 9, 2009 including the following:
I didn’t warranty there was no knob & tube. How am I going to know because I did not see it behind the walls? If you put no knob & tube in that offer, then you made a mistake, Gina, because I didn’t know if there was any knob & tube…I had my insurance company come in and inspect the property. They said what they saw in the basement. Everything had been upgraded as far as they knew. There was lots of stuff that was not knob & tube, that was obviously dead and not connected. But how am I going to know, Gina there is knob & tube in the walls? …You better check that little note that says knob & tube. It probably says unknown, because it's not possible…I’m not impressed that you would call and tell me I should do the right thing. I paid you a lot of money to give my house away…So I suggest you get out that listing and again if you put in there there was no knob & tube that was your error, Gina, not mine. You couldn’t possibly know that, I couldn’t possibly know that, and I wouldn’t have warranted that…How am I going to know Gina there was knob & tube. You couldn’t know. I couldn’t know
[Emphasis added.]
[63] Exhibit 4 Tab 15 contains a letter dated April 30, 2009 that Cameron said she left for Roman in the red folder including the following
You have conducted yourself in a deceitful, dishonest manner. In order to not lose one commission or at least defer the commission until spring you gambled and forfeited numerous referrals…You did not act in good faith or in my best interests. You had an obligation to provide accurate truthful information as given by you to me. You failed to do so. You stated no knob & tube when clearly I provided information otherwise. I even showed you the wiring mix in the basement ceiling!!!!!!!...you … under-marketed my house. I paid you a lot of money for giving my house away. I lost a lot of money as a result of your careless incompetent actions…You knowingly advertise false information.
[Emphasis added.]
[64] Cameron said when the Statement of Claim was served upon her in November 2009, she was shocked.
[65] Battersby and McAdam were originally the plaintiffs in this action against Keller Williams, Roman and Cameron.
[66] Battersby gave evidence at this trial. He said that he and McAdam reached a settlement with Keller Williams and Roman. He and McAdam signed a release acknowledging that Keller Williams/Roman had not admitted liability.
[67] Keller Williams/Roman are not seeking contribution and indemnity from Cameron in this action.
[68] Battersby also gave evidence that in the basement, the ceiling was fence lattice painted brown. He couldn’t really see the wiring. At the time he did not know what knob & tube looked like.
Expert Evidence
[69] Mr Brian Madigan ("Madigan"), called to give evidence by counsel for Cameron, opined that Cameron’s belief that her Property was worth $950,000 in August 2008 was not realistic. Roman’s recommendation of an initial listing price of $649,900 was realistic. Even assuming that 355 Manor Road had been in the “renovated” category [which it was not], a fully renovated and superior property had sold for $875,000 on May 9, 2008. Another property, 347 Manor Road, which in his view was much more comparable to 355 Manor Road, had sold for $635,000 on April 3, 2008.
[70] Madigan opined that decreasing the $649,900 listing price to $599,900 on October 11, 2008 was realistic. He said in October 2008 the newspaper reports of doom and gloom could not have been worse. He said at that time “pessimists would be inclined to sell, optimists to buy.” However, he said, "A reasonable real estate professional would have been inclined to wait for greater certainty in the market, and clearer indications of market directions. Selling and locking in losses at a time of uncertainty, unless it were absolutely necessary, would seem rather cavalier.”
[71] In giving his opinion, Madigan assumed that the information provided in Question 4 by Cameron was accurate, including that Cameron had told Roman she wanted to take the Property off the market and leave it until the spring.
[72] Counsel for Cameron asked Madigan to answer the following question in respect of the third listing:
Question 5:
In connection with the listing agreement the plaintiff stated that she did not want to give her house away and wanted to wait until the Spring. Roman told her "the market is falling fast and the spring market will be flat. The market moves in cycles and will not be good for another 8 years. The owner of Keller Williams predicted that this market was coming and he is always accurate in his market predictions. The market is volatile and falling daily. You need to sell now or wait 8 years before seeing higher prices again.” Was this reasonable advice?
[73] In giving his opinion, Madigan made the assumption that the information contained in Question 5 was accurate, including that Cameron told Roman that she did not want to give her house away. She wanted to wait until spring. On the assumption that the information was correct, Madigan could not see any justification for Roman advocating for a price reduction and an early sale. He said such timing would only benefit the agent, not the seller. Madigan opined that in hindsight Cameron was correct. This timing would simply lock in the losses.
[74] Madigan said that the worldwide financial crisis in 2008 had taken its toll on prices. The highest average price in 2008 had been reached in April. The market had then continuously declined until January 2009. After a 4.9% decline in January 2009, in February 2009 the market resumed an upward direction. The agent should not have commented beyond her expertise. Madigan said there was no evidence in January the market was "falling fast." A statement that the market was "volatile and falling daily" could not be supported by the facts.
[75] Counsel for Cameron asked Madigan to answer the following question:
Question 6:
When an offer was presented for $545,000, with a three month closing, the Plaintiff stated that she was not happy with the offer and wished to pull the listing until the spring and maybe do some additional renovations. The agent advised against this and stated “the market was falling fast and would continue to do so. The spring market would be depressed and you will not get a good offer. you should sell to get rid of the rental headaches otherwise you will have to wait 8 years to come even near this offer price” She further stated “the spring market will be flat. I dumped my own personal residence because the owner of Keller Williams predicted what would happen and he was never wrong...this is the best advice you can expect under such volatile conditions” Was this reasonable advice?
[76] Again, Madigan assumed that the facts set out in the question were accurate. On that basis, Madigan said such advice was "unreasonable." He gave evidence that there was no clear evidence of a depressed spring market. On the facts set out in the question, a sale would be in Roman's best interests, not Cameron's.
[77] Madigan said if one looked at the results from the last two weeks of January, it appeared that the market had bottomed out. As of February 7, it would have made sense to wait to sell. By February 7, 2009, all the indicators pointed to a recovery.
[78] However, Madigan gave evidence that he was not saying that the Property had sold at an undervalue in February 2009.
[79] Question 7 was "Please track the market from the date of closing April 7, 2009 to date."
[80] Madigan opined that as of April 2014, 355 Manor Road would be worth $1,090,000.
[81] Madigan was also asked to assume that the Property had been listed for sale in the spring of 2009 and had sold with a closing in the summer or fall of 2009. On those assumptions, he was asked how much more Cameron would have received for the Property.
[82] He gave evidence that prices in that timeframe increased by 12% so Cameron would have received $545,000 + 12%.
William Johnston
[83] William Johnston ("Johnston") was called to give evidence by counsel for the Defendants.
[84] Johnston said when Cameron first listed the Property, the market was hitting the brakes. In the fall, sales were down by 50%. As of January, early February 2009, there was no consensus among realtors. "We were pretty discouraged." News from the U.S. was getting "worse and worse." As of February 7, 2009, there was a general sense that the market was in decline. Within a couple of months after February 2009, the market started picking up again.
[85] He said trying to keep ahead of a declining market is very tricky. It was impossible to predict when and how rapidly it would go down.
[86] Johnston disagreed with Madigan's opinion that on February 7, 2009, a reasonable real estate agent would have counselled his client to wait for greater certainty. Johnston said if a seller wants to sell, the agent’s job is to sell.
[87] Johnston agreed with Madigan that Roman had a duty to keep up to date on data with respect to sales in the Manor Road area and to be aware of the statistics. However, he disagreed with Madigan’s interpretation of the November-December 2008 and the January 2009 statistics. In Johnston's view, they were not suggestive that the market was moving in a positive direction.
[88] If, in February of 2009, Madigan's view was that a rebound was about to occur, Johnston said that was not a typical view.
[89] Johnston gave evidence that at that time he was on the Board of the Toronto Real Estate Board (TREB). Members of that Board shared the opinion that the market was in the doldrums. No one had any idea how long it would stay there. It was not until March 2009 that realtors had any sense that the nerve shattering conditions had stopped.
[90] Johnston agreed that Cameron was entitled to honest and competent advice and that Roman's duty was to put Cameron's interests first and to advise her if she felt it was the wrong time to list or sell.
[91] He said if Cameron had advised Roman that she wanted to wait until spring and if Roman had told Cameron that the market was falling, that the spring market would be flat and that the market would not recover for 8 years, Roman would have given Cameron very bad advice.
[92] Johnston opined that Roman should have said it’s up to you. However, the indications are that we are in a down market. Who knows how long it will last. You have a choice between the certainty of selling and the speculation of keeping the investment. If you think it is in your interest to sell, go ahead. I’m not in the crystal ball business.
[93] Johnston concluded that 355 Manor Road was sold at market value. Market value never lies. If a property is properly priced and exposed to the market, and if an agreement is reached between a willing seller and a willing buyer, neither of whom is under duress, the sale price is what the property is worth. The Property had been on the market for a lengthy period. It was only sold after price reductions. Cameron had a choice whether or not to sell.
Findings of Fact
[94] The evidence of Cameron and Roman was markedly different.
General Credibility and Reliability Findings - Cameron
[95] In my view, Cameron was an unreliable witness.
[96] In effect, she claimed indifference about being able to sell the Property, despite the fact that in the summer of 2008, before she met with Roman, she had sought and obtained three letters of opinion on its value from three other realtors.
[97] Although at the material time Cameron owned 14 properties [three in Toronto, one in British Columbia and ten in Barrie], and although she had bought and sold numerous properties, Cameron claimed that she was not a real estate investor.
[98] Although she was attempting to sell two other properties [one of the Barrie properties and a property she owned in British Columbia] at the same time as she was attempting to sell the Property, she denied that she was motivated by any concern about the global financial crisis or the potential negative effects on the value of the Property of a worldwide financial meltdown. She denied that she was at all fearful that property values would decline further. Yet after they had failed to sell, she repeatedly signed listing agreements for all three properties at decreasing sale prices.
[99] She claimed to be relying exclusively on Roman as an expert. Yet she repeatedly gave evidence about seeking opinions from others.
[100] The content of many of Cameron’s memos contained in Exhibit 4 are inconsistent with her own voice mails to Roman. For instance, in Exhibit 5, her voicemail to Roman dated April 9, 2009, Cameron said, "Gina, I didn’t know there was any knob & tube," but in her April 30 memo in Exhibit 4 at tab 15 [that she claimed to have left for Roman in the red folder], she wrote: "…You stated no knob & tube when clearly I provided information otherwise. I even showed you wiring in the basement ceiling." [Emphasis added.]
Specific Factual Findings
[101] I reject Cameron's evidence that she was indifferent to the sale of the Property. I find that in the summer of 2008, Cameron wanted to sell it. I find that that is why she obtained letters of opinion from three realtors apart from Roman, and then another from Roman.
[102] At the time Cameron originally listed the Property for sale, Cameron had been renting it and it was vacant.
[103] I reject Cameron’s evidence at trial that before she met with Roman in August 2008, three other realtors had given her value opinions exceeding $649,000. I accept the evidence of Roman, as Roman recorded in her notes, that Cameron told her she had received opinions for instance, from Liz, who had suggested to Cameron that she should list the Property for $599,000 and should expect to receive $605,000-$610,000 for it.
[104] I accept Roman’s evidence that when they first met several days before August 12, Roman made notes. I find that before they inspected the house together, they discussed the wiring in the house. I accept Roman’s evidence as corroborated by Exhibit 9, her handwritten notes, that she discussed: "knob & tube –No–Insurance checked" with Cameron [Emphasis added] I find that Cameron advised Roman at that time that there was no knob & tube wiring in the Property.
[105] I find that on August 12, 2008, after Roman had had the opportunity to research values of comparable properties, they met again. I accept Roman’s evidence that at that time, Roman thought a listing price of $649,900 was a little high. However, she thought it would be appropriate for the sale price in the first listing agreement to start out at that level.
[106] I accept Madigan’s view that Cameron’s own estimate of value [more than $950,000] was unrealistic. The property was not fully renovated. A comparable property had sold for $635,000 on April 3, 2008.
[107] I reject Cameron’s evidence that she did not read many of the contentious documents including the first, second and third listing agreements, because she was not wearing her glasses. Roman had a clear recollection that Cameron was wearing her glasses. At any rate, Cameron generally signed documents at the Property that was located right across the street from where she lived. If she didn't have her glasses but needed them to read those important documents, she could have readily gone across the street to get them.
[108] World economic conditions were clearly unstable in the fall of 2008 and early 2009. I accept the evidence of Madigan and Johnston that sales in the Toronto real estate market were down.
[109] Between the first listing dated August 12, 2008 and the second listing that took effect on October 20, 2008, there were many showings but no offers were made.
[110] I find, based in part on Madigan's evidence, that the listing prices recommended by Roman in the first and second listing agreements were reasonable.
[111] I accept Roman's evidence that at the time they discussed the second listing agreement in October of 2008, Cameron complained that earlier listing documents had not specifically mentioned that there was no knob & tube wiring in the Property. I find that at that time, Cameron specifically requested Roman to include, under Remarks to Clients, "no knob & tube." Roman did.
[112] The October listing was to run until December 31, 2008.
[113] Between October 20 and December 31, 2008, there were many showings but only one offer was received.
[114] On October 27, 2008, when Cameron was in British Columbia, Battersby and McAdam made an offer for the Property of $550,000 irrevocable until October 30. Although Cameron was notified before October 30, she allowed the offer to expire.
[115] Before December 31, 2008, when the second listing agreement expired, no further offers were received.
[116] I find that market conditions in late 2008 and January-February of 2009 were uncertain to say the least. I accept the evidence of Johnston that in November and December of 2008 and January of 2009, he and other TREB Board members did not conclude that the market was moving in a positive direction. Their shared opinion was that the real estate market was in the doldrums. They had no idea how long those doldrums would persist.
[117] I accept Roman's evidence that in January 2009, Cameron and Roman spent several hours discussing a new listing. After speaking to Roman at length, I find that on January 21, 2009, subject to receiving contrary advice from Eli, Cameron decided to relist the Property for 90 days [a period that, according to Roman, spanned most of the spring market]. I find that at that time, Cameron wanted to sell the Property. In the third listing agreement, Cameron relisted at a price lower than that in the second listing agreement because she was aware of the market conditions, the Property had not sold at the higher price and she still wanted to sell the Property. [During the same time frame, Cameron was also trying to sell properties that she owned in Barrie and Burnaby.]
[118] I reject Cameron’s evidence that she advised Roman that she wanted to wait to spring to relist and that Roman in effect pressured her to do so. I accept Roman's evidence that had Cameron said she wanted to wait until spring, Roman would have said fine.
[119] I accept Roman’s evidence she did not say the market was falling daily.
[120] I accept Roman's evidence that on January 21, Roman did agree that Cameron would consult with Eli and others about the advisability of entering into the third listing agreement.
[121] I accept Roman's evidence that on January 26 Cameron called her to say she wanted to go ahead with the third listing agreement. I accept Roman's evidence that had Cameron said otherwise, Roman would have simply torn up the third listing agreement dated January 21, 2009.
[122] I do not accept Cameron's evidence that Roman told her that the spring market would be flat and would not recover for 8 years.
[123] I accept Roman's evidence that she did not pressure Cameron to accept the February 7, 2009 offer. I find that Cameron quietly considered what she was going to do and agreed to take $545,000 just minutes before that offer was due to expire.
[124] Because I have rejected much of Cameron’s evidence I have not accepted many of the “facts” upon which Madigan’s opinion was based. I do not accept Madigan’s assumptions [based on the content of the questions posed to him] about what Roman had told Cameron, and what Cameron had told Roman.
[125] Based on Johnston's evidence, which I generally accept, and the inaccurate factual underpinning of Madigan's opinions, I reject Madigan's opinion that a reasonable real estate agent would have advised Cameron to wait for a time of greater certainty.
[126] I accept the evidence of Johnston that there was no consensus among realtors as of late January early February 2009 as to how the market would go. He and he said others on the TREB Board did not conclude from the November, December, January statistics that the market was moving in a positive direction. Their shared opinion was that the market was in the doldrums. No one had any idea how long it would stay there.
[127] While counsel for Cameron and Madigan emphasized that prices increased in the last two weeks of January, the fact remains that overall in January, prices had declined.
[128] I do not accept Madigan’s evidence that Roman should have perceived that the market was recovering and should have advised Cameron to hold off selling. I accept Johnston’s view that if Madigan was of that view, it was not typical of views of people in the industry at the time.
[129] The statistics could reasonably be differently interpreted.
[130] I find that some time after Cameron agreed to sell the Property, she started to suffer from seller's remorse. At first, she acknowledged it was not Roman's fault: "I had control…I don’t blame you, Gina, I blame myself."
[131] I find that after Battersby/McAdam complained about the knob & tube wiring in the Property, Cameron tried to blame Roman.
Re Exhibit 4
[132] I do not accept that Cameron contemporaneously wrote and sent [by way of deposit in a red folder at the Property] and that Roman received and read the documents in Exhibit 4. I accept Roman's evidence that she never received any of those memos, until she received them as productions in this litigation. As already mentioned, the contents of Exhibit 4 differ markedly from contemporaneous voicemails in evidence. I also accept Battersby's evidence that he did not recall seeing a red folder in the living room on a shelf on a white wicker table at the Property and that there were no tables in the living room at some point before February 7, 2009.
The Law
[133] In Liberty Mutual Insurance Company v. Bank of Nova Scotia, 2008 37060 (ON SC), Himel J. wrote at paragraph 63:
[63] . . . An opinion expressed concerning future events is not a misrepresentation or concealment of a material fact. A forecast of a future event happening is not a material fact upon which a claim of misrepresentation can be founded: see Queen v. Cognos 1993 146 (SCC), [1993] 1 S.C.R. 87
[134] In PD Management Ltd. v. Chemposite Inc., 2006 BCCA 489 at paragraphs 13-14:
[13] However, even if, as found by the learned chambers judge, the alleged representations were true representations, they did not give rise to actionable misrepresentations. A “misrepresentation” is an “intentional false statement respecting a matter of fact, made by one of the parties to a contract, which is material to the contract and influential in producing it" (Black’s, supra at 1301).
[14] It is settled law that an alleged misrepresentation must pertain to a matter of fact. In MacMillan v. Kaiser Equipment Ltd., 2003 BCSC 672, aff’d 2004 BCCA (), this Court dismissed the claims for damages for misrepresentation because “it is clear that each of the alleged representations relate to a future occurrence, and not to an existing state of events. A future offer…is not an actionable representation” (para. 85).
[135] In Fraser v. Powell River Real Estate Ltd., 1998 5930 (BC CA):
[6] In her reasons for judgment, Madam Justice Allan disposed of each complaint on the basis of the evidence before her. She dealt with the allegations regarding Mr. Zroback's sales talk in this way:
With the exception of any misrepresentations relating to the condition of the Property, I think it clear that a real estate agent is generally not liable for the sort of broad exhortations made by Mr. Zroback. He did not unduly pressure them to purchase the Property.
In my respectful submission, that is an incontrovertible statement of the law. Purchasers must make up their own minds as to what is suitable for them and what constitutes a good buy.
[136] Counsel for Cameron submitted that Esso Petroleum v. Mardon, [1976] Q.B. 801, [1976] 2 W.L.R. 583, [1976] 2 All E.R. applies in the case at bar. He also relied on paragraph 16 of PD Management:
[16] In Esso, the representations comprised statements that the lease agreement’s subject matter, which was a petrol filling station, had a certain potential selling capacity; that the lessors were experts in that area; and that the lessees could rely on the statements. The Court of Appeal held that the impugned statements gave rise to a contractual warranty that the forecast was sound. Lord Denning stated as follows at 818:
… [If a person with special knowledge and skill] makes a forecast, intending that the other should act upon it – and he does act upon it, it can well be interpreted as a warranty that the forecast is sound and reliable in the sense that they made it with reasonable care and skill.
[137] Counsel for Cameron submitted that Roman made a number of statements as to what would happen in the future that amounted to contractual warranties. Cameron said she was relying on Roman's expertise and would not have acted as she did but for Roman's expert advice.
Application of Law to Facts
[138] On the facts as I have found them, I hold that Roman did not breach any duty to Cameron to act in her best interest.
[139] She did not misstate information about the state of the market or the relevant sales data.
[140] It should have been obvious to Cameron that Roman did not have a crystal ball and could not predict the future.
[141] I have held the statements Roman made were not misrepresentations. Cameron decided to list and then sell all three properties she was concurrently selling. Each sale price for each property was lower than the initial sale price. Roman was not her agent on the other two. I find Cameron was not relying on Roman to predict the future course of the Toronto real estate market, and Roman was not purporting to be able to do so. Roman's statement did not amount to contractual warranties.
[142] Therefore, Cameron's action must be dismissed.
Damages
[143] In the event I am wrong on liability, I shall indicate here why I am of the view that the Plaintiff has failed to prove any damages.
[144] Counsel for Roman relied on the following passage in Dhaliwal v. Plantus, 2007 46164 (ON SC), at para 47:
[47] Mr. and Mrs. Dhaliwal have failed to establish on any cogent evidence that DMAC made an improvident sale and that they should be awarded damages. They failed to provide any expert evidence as to the value they say the property was worth or evidence that a better price would not only have been possible but likely if the property was continued to be offered for sale. I find that there is no evidentiary basis on which I can find that DMAC could have sold the property for more money at a later date. Indeed, the length of time the property was on the market with regular price reductions and no offers suggest that the opposite would have been the result of waiting longer. At the end of the day, property is worth what a willing purchaser in an open market will pay for it.
[145] I have held Cameron wanted to sell the Property. I have not accepted that if she had not agreed to sell it on February 7, 2009, she would have held the Property to the present day. I have accepted the evidence of Johnston and I have found that at that time, Cameron sold the Property at market value. [I note that Madigan also said he was not saying that the Property sole at undervalue in February 2009.]
[146] Even if she had been entitled to the difference between sale price and present value, I would have held the Plaintiff has failed to prove the value of the Property at the time of the trial.
[147] Madigan never went into the Property. His "value" was based only on statistics. Madigan is neither a statistician nor an appraiser. There is no appraisal evidence before this Court.
Disposition
[148] The action is dismissed.
[149] Costs submissions of no more than three pages may be made in writing by March 16, 2015.
M.A. SANDERSON
Released:
Citation: Cameron v. Williams, 2015 ONSC 1083
Court File No. CV-10-396639
Date: 20150304
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID RICHARD BATTERSBY and CYNTHIA ELAINE McADAM
Plaintiffs
- and –
GINA ROMAN, KELLER WILLIAMS REFERRED REALTY BROKERAGE, and JANIS ELIZABETH CAMERON
Defendants
REASONS FOR DECISION
M.A. SANDERSON J.
Released: March 4, 2015