Buyer’s Going to Fail – No Expert Witness
In Drolet v ReMax Riverview Realty Ltd., the plaintiff purchased a property which he believed to be a “buildable lot”. In fact, that turned out not to be the case.
The Buyer then sued the real estate agent that acted for him in the transaction.
What did the Judge say about this?
Taken from the Reasons for Judgment:
“34. No expert evidence was called as to the standard of care of a real estate agent in circumstances such as those in this case.
37. In this case, there is no evidence which would allow me to conclude that Holtzman failed to meet the usual or customary standard of a purchaser’s agent with respect to her efforts to verify the accuracy of the Vendor’s information regarding the suitability of the Property as a building lot.
Other than perhaps obtaining a zoning certificate in respect of the Property, no evidence was led by the Plaintiff as to the standard practice of real estate agents with respect to confirmation of zoning or suitability of a property for building.
38. John Jonkman, an experienced real estate broker and the owner of Riverview, testified that it is not standard practice for a purchaser’s real estate agent to obtain a zoning certificate to confirm zoning for a purchaser.”
No Expert Witness?
How are you going to be able to prove that the agent’s conduct fell below the appropriate standard of care when you don’t call any evidence as to what that standard of care might be?
Yes, it would have cost money to have such an Expert!
But, without the Expert, there is no case!
Trial Judge
This was a Small Claims Court Judgment. The Trial Judge did not go on and on, about why an Expert is necessary, that’s simply a given.
Real Estate Profession and the Expert Witness
The Ontario Court of Appeal dealt with the issue of a real estate agent’s liability in Krawchuk v. Scherbak (6 May 2011). An appeal was subsequently turned down by the Supreme Court of Canada.
Here are some relevant comments from the decision dealing with the issue of calling and Expert Witness:
[123] In my view, the difficulties associated with the trial judge’s analysis of Ms. Krawchuk’s claims against the real estate respondents started with the issue of the standard of care. His analysis of this issue is, with respect, faulty, for two reasons. First, the trial judge erred by holding that he could determine the standard of care without expert assistance: against this [page 626] backdrop he refused to admit the only expert evidence tendered on this issue. Then, he erred by not identifying the standard of care. See Fullowka v. Pinkerton’s of Canada Ltd., [2010] 1 S.C.R. 132, [2010] S.C.J. No. 5, at para. 80.
[124] As will be seen, the error of primary importance for the purpose of my analysis is the trial judge’s ruling that he could assess the various claims without having the benefit of expert evidence. I start with some general observations. [125] To avoid liability in negligence, a real estate agent must exercise the standard of care that would be expected of a reasonable and prudent agent in the same circumstances.This general standard, a question of law, will not vary between cases and there is no need for it to be established through the use of expert evidence: see Wong v. 407527 Ontario Ltd., [1999] O.J. No. 3373, 179 D.L.R. (4th) 38 (C.A.), at para. 23; Fellowes, McNeil v. Kansa General International Insurance Co., [2000] O.J. No. 3309, 138 O.A.C. 28 (C.A.), at para. 11. The translation of that standard into a particular set of obligations owed by a defendant in a given case, however, is a question of fact (Wong, at para. 23; Fellowes, at para. 11).
External indicators of reasonable conduct, such as custom, industry practice and statutory or regulatory standard, may inform the standard.
Where a debate arises as to how a reasonable agent would have conducted himself or herself, recourse should generally be made to expert evidence.
[126] In Ontario, real estate brokers and salespersons are required to be registered under the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sch. C in order to trade in real estate as an agent or broker. At the time of the transaction at issue in this case, the conduct of real estate agents and brokers in Ontario was governed by the Real Estate Council of Ontario’s Code of Ethics, 1998 (the “Code”). [127] Counsel for Ms. Krawchuk tendered the Code into evidence to assist the trial judge in determining the standard of care by which Ms. Weddell’s conduct should be measured.While the trial judge accepted this evidence, he refused to admit the expert evidence that Ms. Krawchuk’s counsel sought to introduce in order to explain the duties of a real estate broker when acting under a dual agency agreement and the requirements of various documents, including the Code.
The main basis for the trial judge’s refusal to admit the evidence was his view that he did not need the assistance of an expert to determine whether Ms. Weddell met the requisite standard of care: the Code was before him and he was competent to determine, on his own, whether Ms. Weddell had complied with a particular provision. [page627] [128] Unfortunately, however, the trial judge did not refer to the Code in his reasons. In fact, he did not address the standard of care that applied to Ms. Weddell’s representation of Ms. Krawchuk at all, save for the reference at para. 67 of his reasons where he said that “there was no obligation on Ms. Weddell to inquire further or independently of [the Scherbaks] to discern what if any other structural defects might exist”.
[129] In my opinion, in the particular circumstances of this case, the trial judge erred in concluding that he could identify the applicable standard of care without the benefit of expert evidence.This error was compounded by his failure to identify the standard of care that he thought was applicable and by his failure to address the import of the Code in relation to the question of the governing standard of care.
[130] The jurisprudence indicates that, in general, it is inappropriate for a trial court to determine the standard of care in a professional negligence case in the absence of expert evidence.…..
In Haag v Marshall (1989), 61 D.L.R. (4th) 371 (B.C.C.A.), Mr. Justice Locke, concurring with two others in the result in a case of alleged solicitor’s negligence, said:
[t]he professional evidence led in this case was unsatisfactory . . . nowhere was it said that what was not done fell short of a professional standard of conduct. In cases of professional negligence above all, with the many difficult and varied situations met, if a plaintiff hopes to succeed on the grounds of lack of competency it must be fairly demonstrated that it has fallen below an established standard or practice in the profession.……
To similar effect in Mileos v. Block Bros. Realty Ltd. and others, unreported, September 30, 1994, Vancouver No. C913338, Mr. Justice Thackray, in the context of alleged realtor’s negligence, said (at page 8):
. . . I am of the opinion that the onus is on the plaintiff to show that there was a certain standard of care required by the real estate agent and the agency, that that standard was breached, and that the breach caused damages. No evidence was called to establish the standard.
In Shaak v. McIntyre (supra), Madam Justice Ryan said:
[t]he (selling) broker is under a duty to check information of which he or she is in doubt (or ought to have been in doubt) before passing it on to the purchaser . . . The selling agent must also check the completeness and accuracy of all information which it is usual or customary for brokers to verify. In the case at bar there is no evidence of the usual or customary information which selling agents check. I cannot find that (the selling agent) fell below that standard, whatever it may be. (emphasis added) [page629]…….
A review of the cases referred to in these reasons suggests that unless conduct is particularly egregious, the court likely requires expert evidence of the usual or customary standard in the real estate industry regarding:
a) the kind of information that must be checked or verified by realtors, where it has not been demonstrated that the realtor had cause to doubt the information;
b) a duty to take positive steps to confirm the nature, identity and extent of the property they advertise, including any duty to recommend a purchaser secure a plot plan or survey; and
c) a duty to recommend that the purchaser secure an inspection regarding the soundness of premises, including any structural defects.
…..
[132] While the authorities discussed above indicate that, as a general rule, it will not be possible to determine professional negligence in a given situation without the benefit of expert evidence, they do indicate two exceptions to this general rule. [133] The first exception applies to cases in which it is possible to reliably determine the standard of care without the assistance of expert evidence. As explained by Southin J.A., at para. 44 of Zink, this will be the case only where the court is faced with “non-technical matters or those of which an ordinary person may be expected to have knowledge”. [134] This exception is not engaged in this case, a case that involves the determination of obligations arising out of a property with unique issues, an SPIS that contained incorrect representations negligently made and a dual agency relationship — issues that cannot be said to be of a non-technical nature within the knowledge and experience of the ordinary person. [135] The second exception applies to cases in which the impugned actions of the defendant are so egregious that it is obvious that his or her conduct has fallen short of the standard of care, even without knowing precisely the parameters of that standard: see [page630] Cosway v. Boorman’s Investment Co., [2008] B.C.J. No. 2081, 2008 BCSC 1482, at para. 35. As can be seen, this second exception involves circumstances where negligence can be determined without first identifying the parameters of the standard of care rather than identifying a standard of care without the assistance of expert evidence.…..
[145] It is most unfortunate that there is no evidence that bears directly on the standard of care the real estate respondents owed to Ms. Krawchuk in protecting her interests in this transaction. In such circumstances, this court would ordinarily have to order a new trial. [146] However, I am of the view that, on this record and in the light of my conclusion that the evidence supported a finding that Ms. Weddell was put on her inquiry as to the accuracy of the Scherbaks’ representations, this court is in a position to determine whether the real estate respondents were negligent in their representation of Ms. Krawchuk.”So, quite clearly and unmistakably, the Court wants to hear from an Expert.
In the Krawchuk case, and Expert was required, and the case did not fall within either of the two exceptions, but there were incorrect conclusions drawn from the facts. The Court then decided, that based on those facts; that the agent had fallen below the standard. This is rare! This is unlikely! This is rather remote! Don’t bank on this, it likely won’t happen again.
The Court wants an Expert to testify.
Drolet Case
The plaintiff did not make any attempt to call an Expert. It was only one of the Defendant’s namely the Broker of Record for the Brokerage who testified.
It would be very dangerous to attempt to rely upon the cross-examination of one of the Defendants to “prove your case”. In fact, Mr. Jonkman didn’t even have to testify, but if he did, what do you think he will say? Is he going to favour the Plaintiff? Or, do you think that he might say something that would support himself?
Brian Madigan LL.B., Broker