Garibaldi Springs, Squamish: Court finds Windermere Sea to Sky Real Estate Limited and agents Jerry Halstom and Basil Milne breached their fiduciary duty to purchaser of a townhouse strata unit; provided inaccurate information about significant features of the property

Citation:

Matthias v. Garibaldi Springs Development et al

Date:

20070412

2007 BCPC 0138 

File No:

05-09058

 

Registry:

Vancouver

 

 

IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

    

 

 

 

BETWEEN:

RENATE MATTHIAS

CLAIMANT

 

 

AND:

GARIBALDI SPRINGS DEVELOPMENT LTD., WINDERMERE SEA TO SKY
REAL ESTATE LTD., JERRY HALSTROM AND BASIL MILNE

DEFENDANTS

 

 

   

   

 

 

 

 

EXCERPTS FROM PROCEEDINGS

REASONS FOR JUDGMENT

OF THE

HONOURABLE JUDGE A. EHRCKE

 

 

 

 

Counsel for the Claimant:

C. Gleadow

Counsel for the Defendant Garibaldi:

S. Anderson

Counsel for the Defendant Windermere:

B. Nelson

Place of Hearing:

Vancouver, B.C.

Date of Judgment:

April 12, 2007

               

 


[1]        THE COURT:  This is for decision today, and I would like to thank counsel for their helpful submissions.  This lawsuit arises from the claimant's pre-construction purchase of a townhouse strata unit in the Garibaldi Springs Development near Squamish, British Columbia. 

[2]        The defendant, Garibaldi Springs Development Limited, is the developer.  Windermere Sea To Sky Real Estate Limited was the exclusive listing agent which also acted for the claimant as purchaser.  Jerry Halstrom was the realtor with Windermere responsible for marketing the project, and Basil Milne was the realtor at Windermere who had contact with the claimant.

[3]        Dr. Matthias claims against Garibaldi for breach of contract, unjust enrichment and negligent misrepresentation.  She claims against the other defendants for breach of contract, negligent misrepresentation and breach of fiduciary duty. 

[4]        Garibaldi issued a third party notice against the other defendants claiming indemnification. 

[5]        In a nutshell, the claimant says she was led to believe her unit would have granite countertops in the kitchen and a crawl space with a forced air heating system.  As it turned out, it did not. 

FACTS

[6]        The facts are reasonably straightforward.  In November 2003, the claimant became interested in the project.  She has bought a number of investment properties in the past.  At the time, she was in California.  She requested information from Mr. Milne with whom she had dealt before.  He referred her to the project website.  When she requested more information, he provided a map of the development showing the strata lot plans for the different buildings, and, she testified initially, the feature sheet, which is at tab 3C of Exhibit 2.  The plans for the A units, one of which the claimant purchased, are at tab 3D of Exhibit 2.  The plans were also on the project website at all relevant times. 

[7]        Later in her testimony, Dr. Matthias said it was possible she did not receive the feature sheet until she returned from California.  It is more probable than not that she had it in California, and in any event, she had it before the conditions were removed from her contract. 

[8]        The claimant testified that a number of things attracted her to this project, including the location, which is on a golf course, and the information and the material provided.  She testified that she based her decision to purchase on the material provided.  I am satisfied that she relied on the information in the feature sheet and plans when she decided to purchase the property. 

[9]        On November 22nd, 2003, she made an offer to purchase with conditions, one of which was inspection of the site.  She also signed a Dual Agency Agreement with the defendant realtors, which is at tab 6 of Exhibit 1.  It is dated November 21st, 2003, but the claimant did not sign it until November 22nd.  The names of the realtors, Milne and Halstrom, are printed.  It is not clear whether they ever signed it.  Mr. Halstrom testified that he and Mr. Milne were bound by this agreement because they worked for Windermere.  Mr. Milne did not testify. 

[10]       In December, the claimant visited the site but her building had not been started to any extent.  It was not framed.  There was no display suite.  There were preliminary starts to other buildings.  The claimant also went to Windermere's offices.  She saw a display board for choosing finishings.  Her memory of the board differs from the board which was displayed in court by the defendants.  The claimant recalled seeing only floor tile, carpet and cupboard wood samples.  Mr. Halstrom testified that the only boards in Windermere's offices were the board on display, and another similar board with a second colour scheme.  His evidence is probably more accurate on this point than that of the claimant.  These events occurred in 2003.  The display board shows a granite sample and a very small laminate sample on top of a larger tile, as well as other samples.  The granite and laminate samples pertain to the kitchens.  In any event, the only choice to be made was between two colour schemes.  Mr. Milne gave the claimant an official package of material at this time. 

[11]       There was evidence respecting the claimant's receipt of the disclosure statement.  As it turns out, the statement is not specific enough on the points at issue to be relevant. 

[12]       Following the site visit, the conditions were removed.  The subject removal document is at tab 10, Exhibit 1, and is dated December 12th, 2003. 

[13]       The feature sheet given to the claimant was never the approved feature sheet for the project.  It was a preliminary draft for discussion prepared by Mr. Halstrom, which he distributed to the other agents at Windermere.  It is stamped with his name and title.  The website contained a different feature sheet.  The draft feature sheet lists “granite countertops and glamorous kitchens” as a feature.

[14]       A subsequent feature sheet is at tab 4 of Exhibit 1.  It contains no reference to granite countertops.  As built, the A units have laminate countertops with granite on the kitchen islands only.  Mr. Brickman, president of Garibaldi, recalled another later feature sheet specifying this.  The granite on the island in the claimant's unit had a large red marking in the stone, which was unsatisfactory to the claimant, as were the laminate countertops.  She ultimately had them all replaced with new granite at a cost of $4,186.96.   The plans show a crawl space hatch, near the furnace and hot water tank.  The implication is that there will be a crawl space with a furnace, ducting and a hot water tank.  In fact, the units were built on slabs with baseboard heating. 

[15]       I accept the evidence of Mr. Brickman that this was done because the site is on a flood plain.  The incorporation of crawl spaces would have required raising the level of the units by about four steps to conform to hydrologic requirements.  He did not want to do this for various reasons of which cost was not one.  It would have required re-designing the units to conform with the height restrictions.  As built, the buildings are only six inches below the maximum height.  He was trying to appeal to the market and he considered handicapped accessibility.  His evidence was that it was more expensive in this instance to build on slabs because the grade had to be raised considerably, with a particular compacted fill.  This cost more than the crawl spaces would have.  Although there was argument, there was no evidence to the contrary. 

[16]       The plans which were given to the claimant and were on the website were never the approved plans.  The changes were made early on, before the claimant learned of the project.  Mr. Halstrom was responsible for the website.  He did not change the plans on the website because he considered the elimination of the crawl space an improvement.  At all relevant times, the website displayed inaccurate plans showing crawl spaces. 

[17]       There were construction delays and the completion date was extended.  On June 23rd, 2004, the claimant inspected the unit for deficiencies with Laura Farquhar, a representative of the developer, for about 45 minutes.  The claimant was rushed and had not brought her materials.  Ms. Farquhar filled out the certificate, at Exhibit 1, tab 21.  It lists deficiencies but not omissions.  This was the claimant's understanding of its purpose.  The claimant noted that aside from the island, the kitchen countertops were laminate.  She discussed the countertops with Ms. Farquhar.  Ms. Farquhar said they were not supposed to be granite countertops.  The claimant had not brought her feature sheet, but she said she was sure granite countertops were a feature.  The claimant also said she did not like the red blotch in the middle of the granite on the island.  Ms. Farquhar said it was supposed to be like that.  Ms. Farquhar hovered near the claimant. 

[18]       Towards the end of the inspection, they went into an empty space on the lower floor near a hot water tank.  The claimant asked what it was.  Ms. Farquhar said it was for storage.  The claimant did not notice the missing crawl space, but felt uneasy and added “nothing else noted but may find something in future, assured this will be dealt with if necessary” to the certificate.  Ms. Farquhar said they would take care of any other problems in the future. 

[19]       On June 28th, 2004, the claimant faxed Ms. Farquhar her feature sheet, with a note saying “the kitchen is hardly glamorous with the countertops that are in place at the moment.” 

[20]       Some time later, the claimant examined her documents and realized that the crawl space and furnace were missing.  Dr. Matthias completed the purchase on June 29th, 2004, and took possession on June 30th.  Her legal advice was to complete and then try to address the issue of the granite countertops. 

[21]       I note that the Statement of Adjustments at Exhibit 1, tab 26, page 24 states:

“All representations, warranties, covenants and agreements contained in any and all agreements relating to the purchase and sale contemplated in this statement, and as set out in this statement will survive the completion of the purchase and sale and the registration of the lands in the name of the purchaser.”

 

This is signed by a representative of Garibaldi. 

 

[22]       Shortly after completion, the claimant went to Mr. Milne's office.  She wanted the countertops changed.  She intended to rent the townhouse as a luxury residence.  The countertops were not changed.  The unit was rented for a short term, and in September 2004, the claimant arranged to replace the countertops with granite herself. 

[23]       On October 10th, 2004, she wrote to Mr. Brickman advising that she had been unable to resolve this issue with his representatives, that she was having the countertops replaced, and that she would send him the invoice and proceed with legal action unless she was compensated.  When the countertops were changed, she stored the original granite from the island in her garage for two years, but it was a hazard to children so she gave it to a friend for use in a tool shed.  As noted, the cost of changing the countertops was $4,186.96. 

[24]       The claimant testified that had she known of the problems with the granite, crawl space and furnace initially, she is not sure what she would have done.  She may have looked at other properties or tried to reduce the price.  However, she said at another point that at the time of purchase, she did not think it was possible to negotiate a different price than the price set by the developer.  She prefers forced air heat to baseboard heating.  She finds it faster and more efficient and it does not interfere with furniture placement.  She noted that the unit has attractive high ceilings.  As it turns out, the value of this townhouse has been climbing since the sale. 

[25]       The claimant filed the Notice of Claim on September 27th, 2005.  An expert report obtained by the claimant is at tab 5, Exhibit 2.  The writer, Toby Mallinder, is a surveyor and a partner in BTY Group which provides costing and project management services to the construction industry.  He indicated that baseboard heating is less expensive than forced air.  He also said that a crawl space with forced air heating would have been more expensive to build, but it does not appear from the report that he was aware of the issues respecting grade and height.  His capital cost estimate for building on a slab does not include raising the grade. 

[26]       In summary, the two real estate salesmen involved provided inaccurate information to the purchaser.  The sheet provided by Mr. Milne indicated that the kitchen counters would be granite.  The plans distributed by both salesmen and shown on the website showed that the unit would have a crawl space and furnace. 

[27]       Mr. Halstrom gave some explanation for these things.  As noted, he testified that somehow the claimant must have received a copy of his draft feature sheet.  He did not replace the plans he had used with accurate plans because, in his opinion, the plans actually constructed were an improvement on the plan circulated.  As noted, Mr. Milne did not testify. 

LEGAL CONSIDERATIONS AND CONCLUSIONS 


 (More)

Squamish, Howe Sound Secondary School: Leaky school information deleted from Wikipedia

The following information was deleted from Wikipedia by an editor. 

The facts are the facts, despite the editor's attempt to censor them.   

Howe Sound Secondary is a public Secondary school in Squamish, British Columbia part of School District 48 Howe Sound.

Notable alumni include: Dr. James Balderson B.Ed. M.Ed. Ph.D. Q.S. (Class of '57; President of the Student Council; Founding Member, COLCO: Coalition of Leaky Condo Owners - www.myleakycondo.com ) ;

 

History

A new building was erected in the 1950s; the addition was completed in March 1996.

The leaky schools issue

Like thousands of leaky condos in British Columbia, The Howe Sound Secondary School building has been plagued with leaks and rot since the 1996 expansion project was completed.

Litigation regarding defective design and construction remains unsettled.

The BC Supreme Court ruled in January 2007 that the School Board waited too long to sue the architect.

The current [January 2007] estimated cost of repairs is about $1 million. The final cost may be much higher.