Duad Inc. v. Shi, 2025 ONSC 5258
Sloppy Is Not the Same as Negligent
When a real estate deal collapses, frustrated buyers and sellers often look for someone to blame, and the agent can be an easy target. But as the Ontario Superior Court of Justice confirmed in Duad Inc. v. Shi, even “sloppy” work is not necessarily negligent work.
The Case
The dispute arose from the failed sale of a $1.8 million farm property near Hamilton. The buyer refused to close, alleging that the property’s two gas wells were unlicensed and that the seller had breached an environmental warranty in the Agreement of Purchase and Sale (APS).
Both the buyer and seller then turned their attention to the real estate agent, who had represented both sides in the transaction. The buyer claimed the agent misled him, inserted an “as is, where is” clause without consent, and favoured the seller’s interests.
The Expert Advantage
At trial, the agent came prepared. His lawyer called an expert witness, an experienced real estate professional who testified that while the agent’s paperwork was imperfect, it still met the industry standard of care expected of a competent agent.
The agent had previously received a disciplinary warning from RECO for using outdated forms and failing to provide a written disclosure of multiple representation. However, the expert characterized this as little more than a “slap on the wrist” for administrative sloppiness, not negligence.
The Buyer’s Fatal Mistake
The buyer, however, came to court without expert evidence. He alleged that the agent had breached his duties but failed to prove what those duties actually required under professional standards.
Without an expert to define the standard of care or show how it was breached, the buyer’s case collapsed. The court accepted the agent’s expert testimony and concluded that the agent’s conduct, though less than perfect, did not fall below the expected standard.
The judge found no evidence that the buyer had been misled and noted that the buyer had continued working with the agent even after the initial failure to close.
The Court’s Message
The court made an important distinction between regulatory discipline and civil negligence. A RECO warning may demonstrate poor administrative practice, but it does not automatically prove negligence in a court of law.
As the Supreme Court of Canada has confirmed in Galambos v. Perez (2009 SCC 48), a breach of professional conduct rules does not necessarily mean a breach of legal duty.
The Lesson
If you plan to sue a real estate professional for negligence, bring an expert.
Without expert evidence to establish the professional standard of care, your claim will almost certainly fail.
In Duad Inc. v. Shi, the difference between winning and losing came down to one thing: the agent had an expert; the buyer did not.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com