Case: Wang v. Shao, 2019 BCCA 130 (CanLII)

Keywords: Murder; Real Estate Transactions; Fraudulent Concealment

Synopsis:

This case arises in the context of “the sale of a large and expensive residence” in the Shaughnessy area of Vancouver. The home was owned by the Appellant, Ms. Wang. When asked why she was selling, Ms. Wang’s agent answered that Ms. Wang’s granddaughter was changing schools.

What Ms. Wang and her agent both declined to mention was the reason why Ms. Wang’s granddaughter was changing schools. Her father, Mr. Raymond Huang, was shot to death on the sidewalk outside the front gate of the property. The private school Ms. Wang’s granddaughter had been attending asked her to leave following media reports associating Mr. Huang with organized crime.

Upon discovering that a murder had occurred at the front gate, the buyer (Ms. Shao) refused to complete the purchase. Ms. Wang then sued for breach of contract and the buyer counterclaimed, alleging, inter alia, fraudulent misrepresentation. The Trial Judge found Ms. Wang liable for fraudulent misrepresentation; ordered rescission and the return of the buyer’s deposit, with accrued interest. The Court of Appeal allowed Ms. Wang’s appeal.

Importance:

The Court of Appeal held that the Trial Judge erred in law by ruling,

  • Wang’s response “concealed” the reason for the move; and
  • the owner was liable for fraudulent misrepresentation by omission. (See para. 46).

On appeal, the Court of Appeal ruled there was no obligation to provide further disclosure. Ms. Wang and her agent did not know the fact of the murder would be material to the buyer. For the Court of Appeal, materiality is assessed objectively:

If the law were now to be modified to require that upon being asked a general question like the one asked in this case, vendors must disclose all of their personal reasons and explain the causes for those reasons, even when they bear no relationship to the objective value or usefulness of the property, the door would be open to a huge number of claims. Buyers, perhaps unhappy with their purchases, could claim that information was ‘concealed’ or that a misrepresentation by omission had occurred — despite the fact the undisclosed information is, on an objective view, completely irrelevant to the value and desirability of the property. As the trial judge stated earlier in his reasons “it would be extremely difficult to determine where the line should be drawn.” (Quoting from Knight v. Dionne at para. 48.) (See para. 46).

For the Court of Appeal, the answer given by Ms. Wang’s agent “…was an honest answer as far as it went” and there was no requirement to “supplement” that answer with a description of the entire series of events which led to Ms. Wang’s granddaughter changing schools. (See para. 47). The Court of Appeal hinted that, had the purchaser specifically asked whether any violent deaths had occurred during Ms. Wang’s tenure of the property, the outcome might be different in this case. (See para. 47).

The Court said the following about the doctrine of caveat emptor:

The doctrine of caveat emptor is not intended to permit sellers to deceive buyers. It is a principle that recognizes that if buyers were required to disclose every possible feature relating not only to the physical and extrinsic qualities of their properties but also to all possible sensitivities and superstitions buyers might have, there would be no end to the resulting litigation. The doctrine places on the buyer the onus of asking specific questions designed to unearth the facts relating to the buyer’s particular subjective likes and dislikes. (See para. 47).

Counsel for the Appellant: Robert Wickett, Q.C., Quang Duong, and E. Dvorak [Articled Student] (Mackenzie Fujisawa LLP, Vancouver)

Counsel for the Respondent: Wallace Wong (Wong, Wallace M., & Company, Richmond)

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