SALE OF LAND – Agreement of purchase and sale – Remedies – Specific performance – Real estate agents – Real estate brokers – Duty to disclose information.

Action by the plaintiff, Rakhra, for forcing a contract to go through (specific performance) for the purchase and sale of residential real estate property owned by the defendants, the Jhuttys. The defendants rented the real estate property to renters prior to listing the real estate for sale. Tang was licensed as a real estate agent and the director of Metro-City Projects. He told the defendants that Metro-City wanted to buy their real estate. He gave them with a disclosure statement showing that he was the director of Metro- City and a licensed real estate agent. The defendants signed the contract for the purchase and sale of real estate and accepted a $10,000 deposit toward the purchase price of $299,000. The plaintiff took assignment of the interest of Metro- City Projects, paying an assignment price of $9,000 plus an additional $10,000 to reimburse for the payment of the deposit. The plaintiff was interested in owning the defendants’ property and the real estate next door to it for subdivision into three lots for him and his family, his brother and his parents. The defendants failed to remove all the non-permitted encumbrances from title and the transaction did not got through, leading to the law suit. The plaintiff won an order for specific performance in court. The order was set aside when it was appealed and sent for a new trial to decide the sufficiency of the disclosure statement provided by the real estate agent to the defendants, and the extent to which the defendants had notice of the assignment to the plaintiff of the contract of purchase and sale of real estate. Actions by the plaintiff against Tang and Metro- City were settled.

HELD: Action dismissed. The court decided that the real estate agent followed his usual practice of giving the disclosure statement to the defendants before the offer to purchase. The claimby Mr. Jhutty that the disclosure statement was backdated was not believable. An adverse inference was made from his wife’s wife failure to testify. Nonetheless, the disclosure statement was defective by failing to disclose the intention of the purchaser to resell the real estate property. It followed that the contract for purchase and sale was voidable by the defendants against the real estate agent. The defendants did not get notice in writing of the contract and thus the assignment was not enforceable by the plaintiff against the defendants.

Rakhra v. Jhutty, (2012) B.C.J. No. 1212, British Columbia Supreme Court, P.J Pearlman J., June 15, 2012. Digest No. #212-011