Case information

Property — Real Property — Contract of purchase and sale — Property disclosure statement —Misrepresentation — Applicant listing property for sale — Applicant and respondent entering into contract of purchase and sale — After paying first deposit, respondent learning addition had been built to property without permit — Respondent refusing to close and suing for return of first deposit — Applicant bringing counterclaim, seeking payment of second deposit — Whether contract can be interpreted in manner leading to internal inconsistencies, including reliance on crossed-out terms — Whether test for negligent misrepresentation should be expanded to no longer require standard of care, evidence of reasonable reliance, or evidence of damages — Whether negligent misrepresentation always results in rescission of contract — Whether test for fraudulent misrepresentation should be expanded to no longer require evidence that representor intended representee to rely on the representation or evidence of damages — Whether caveat emptor should be expanded to require disclosure of all defects, no matter how minor, if seller makes unrelated statement about property at issue — Whether reasons are adequate when they: do not refer to legal tests being applied; do not explain how evidence establishes all necessary elements of applicable legal tests; do not rely on case law or secondary sources; do not justify and explain the result; do not tell losing party why they lost; and do not satisfy the public that justice has been done

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Applicant Ehsan Abadian was the prospective seller, and respondent Carolyn Eileen Sewell the prospective buyer, of a residential property. The parties entered into a contract of purchase and sale, with a deposit to be delivered in two installments.

A dispute arose between the parties after the first deposit had been delivered. Ms. Sewell sued for the return of the first deposit and Mr. Abadian brought a counterclaim, seeking delivery of the second deposit. The matter was heard by way of summary trial.

The summary trial judge dismissed Ms. Sewell’s claim and granted Mr. Abadian’s counterclaim. The Court of Appeal for British Columbia allowed Ms. Sewell’s appeal. The court set aside the summary judge’s order, granted Ms. Sewell’s claim, and dismissed Mr. Abadian’s counterclaim.