



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Dosanjh v. Liang,









2015 BCCA 18




Date: 20150114

Docket: CA041619

Between:

Kuldip Dosanjh

Respondent

(Plaintiff)

And

Xuemei
Liang

Appellant

(Defendant)

Corrected
Judgment: The text of the judgment was corrected on page 2

on January 19, 2015.




Before:



The Honourable Mr. Justice Lowry

The Honourable Mr. Justice Groberman

The Honourable Madam Justice Bennett




On appeal from: An
order of the Supreme Court of British Columbia,
dated January 31, 2014 (
Dosanjh v. Liang
, 2014 BCSC 162,
New Westminster Docket S137347)




Counsel for the Appellant:



D.P. Davison





Counsel for the Respondent:



H.S. Nirwan





Place and Date of Hearing:



Vancouver, British
  Columbia

November
  26, 2014





Place and Date of Judgment:



Vancouver, British
  Columbia

January 14, 2015









Written Reasons by:





The Honourable Mr. Justice Groberman





Concurred in by:





The Honourable Mr. Justice Lowry

The Honourable Madam Justice Bennett








Summary:

The
plaintiff agreed to purchase residential property from the defendant. The
defendant refused to complete the transaction because she considered the
purchase price to be too low. After initially insisting on completion, the
plaintiff wrote to the defendant, accepted her repudiation and sued for
damages. The trial judge found that the purchaser had not unequivocally
affirmed the contract, and that he was entitled to accept the repudiation and
sue for damages. Over the objection of the vendor, the judge accepted a
property assessment under the Assessment Act as evidence of the market value of
the property. The vendor appealed. Held: Appeal allowed to the extent of
remitting the assessment of damages to the trial court. While the purchaser had
unequivocally affirmed the contract, the vendors conduct amounted to a continuing
repudiation, and the purchaser was entitled to accept the repudiation when he
did. The property assessment was not admissible evidence to establish the
market value, and it should not have been considered by the judge. The court
acknowledges that property assessments are sometimes used as evidence of value
in family law cases; whether or not that is proper practice, it does not extend
to other types of civil litigation.

Reasons
for Judgment of the Honourable Mr. Justice Groberman:

[1]

This appeal arises out of a residential real estate sale that failed to
close. Mr. Dosanjh, the purchaser, alleges that Ms. Liang, the
vendor, repudiated the contract, and that she is liable to him in damages. While
Ms. Liang accepts the trial judges finding that her actions constituted a
repudiation of the contract, she says that Mr. Dosanjh thereafter elected
to affirm the contract rather than accept the repudiation. She says that he
cannot, therefore, claim damages for her breach. She also argues that Mr. Dosanjh
himself breached the agreement by failing to pay a deposit in a timely manner, and
that that breach bars him from recovery.

[2]

The trial judge found that Mr. Dosanjh did not affirm the contract,
and that he was entitled to accept the repudiation and sue for damages. She awarded
Mr. Dosanjh $37,400, which she found to be the difference between the contract
price and the market value of the property on a date three months after the closing
date. She found that it was reasonable to expect that Mr. Dosanjh would
have found another suitable house by that time. The appellant appeals the
judgment, both in respect of liability and damages.

[3]

I am of the view that the judge was correct in finding the appellant
liable for breach of contract. Her assessment of damages, however, was based on
inadmissible evidence, and cannot stand. In the course of the appeal, both
parties agreed that, in the event that the appeal is allowed on the issue of
damages alone, the matter should be returned to the trial court for a new
hearing to assess the quantum of damages.

The Agreement for Purchase
and Sale

[4]

The appellant owned residential property in Burnaby, which she rented to
tenants. In August 2011, the RCMP informed her that her tenants had been using
the property to grow marijuana. Ms. Liang was upset by this news, and
immediately contacted a realtor for the purpose of putting the property up for
sale.

[5]

The realtor arranged for an advertisement on Craigslist, which first
appeared on August 26, 2011. It listed the property for sale for $629,000. The
realtor also arranged for the property to be listed on the Multiple Listing
Service (MLS), but the listing was not to take effect until the following
Monday, August 29.

[6]

Mr. Dosanjh saw the Craigslist listing on the day that it was
published, and contacted the realtor to express interest in the property. He
was given the address of the property, and arranged to meet with the realtor
the following day.

[7]

Mr. Dosanjh viewed the exterior of the house on August 27, but did
not have access to the interior. He then met with the realtor, as planned, and
made an offer to purchase the property. After some negotiations, the parties
reached an agreement that same day, under which Mr. Dosanjh would purchase
the property for $605,000, with an October 1, 2011 completion date.

[8]

Mr. Dosanjhs offer was subject to three conditions inserted for
his sole benefit. First, he was entitled to inspect the property for the
presence of asbestos products, and was entitled to demand that Ms. Liang
arrange for the removal of any such products. Second, he was entitled to have
any oil storage tanks on the property removed by Ms. Liang prior to the
completion date. Finally, the agreement was conditional upon Mr. Dosanjh
obtaining a building permit and municipal approvals by September 15, 2011.

[9]

The deposit clause in the contract read as follows:

DEPOSIT: A deposit of $30,000.00 which will form part of the
Purchase Price, will be paid on the following terms:

Deposit to be paid after subjects
are removed.

All monies paid pursuant to this
section (Deposit) will  be delivered to [the realtor] and held in trust.

[10]

By August 29, Ms. Liang had second thoughts about the deal. Late
that evening, Ms. Liangs realtor sent an e-mail to Mr. Dosanjh as
follows:

I wanted to let you know right away of a situation that has
developed. The owner of 7849 18
th

Ave has contacted me and advised me she will
not proceed with this contract. She explained to me that she was under great
duress in making a decision. She was contacted by the police about the grow [o]p
the previous day and then felt so much pressure in having to make a major
decision within a few hours. I tried to contact her today but her family told
me she is being treated by her doctor at the hospital for anxiety and
depression and has not called me back. Her family told me they have an
appointment with the lawyer on Thursday to discuss this situation. Its all I
know at this point. I am gathering from what I know that the family feels that
the price was unreasonable in the current market place.

I dont know what else I can do
at this point.

[11]

Mr. Dosanjh attempted to contact the realtor by telephone, but was
not immediately successful. On August 30, he sent an e-mail indicating that he
had not observed Ms. Liang to be under stress on August 27, and stating
that he wished to proceed to have an inspector check the property for asbestos
and for oil tanks. Mr. Dosanjh also spoke with the realtor after sending
the e-mail, and told him that he wanted to remove the conditions and to proceed
to complete the purchase.

[12]

The MLS listing resulted in considerable interest in the property, and
on August 30, Ms. Liang increased the asking price on the MLS listing to
$669,000.

[13]

On September 6, 2011, Mr. Dosanjh sent another e-mail to the
realtor, which read, in part:

Although the subject removal date
is September 15, 2011  on August 31st we  told you that we are ready to
remove all subjects. We tried several times but you dont pick up the phone so
we are removing the subjects and sending it to your office. As soon as the
seller signs the subject removal form, we are ready to send the $30,000 deposit
cheque.

[14]

On September 8, 2011, Mr. Dosanjh sent a fax to the realtor in the
same terms. Attached to the fax was a copy of the addendum to the contract that
contained the conditions, upon which he wrote Removal of following subjects
to clauses. On the same day, Mr. Dosanjhs lawyer sent a letter to Ms. Liang
and to the realtor which included the following:

We advise that the Buyer is ready, willing and able to
complete this transaction on the completion date, October 1, 2011.

With respect to the email letter of August 28, 2011 in which
[the realtor] says [t]he owner... has contacted me and advised me she will not
proceed with this contract we ask that you, Ms. Liang, immediately
contact the writer to confirm whether that statement should be viewed as any
anticipatory breach of Contract by the Seller.

We advise that should you fail to
complete the transaction on October 1, 2011 our client will take immediate
proceedings to pursue any and all remedies available  under the Contract
including, but not limited to, the specific performance of the Contract and
damages, or alternatively, damages.

[15]

Ms. Liang received the letter, but did not respond to it. It is not
clear whether the realtor also received the letter; in any event, he did not
respond to it.

[16]

Mr. Dosanjh went to the realtors office with the intention of
dropping off a cheque for the deposit. The receptionist advised him that the
realtor was not in. Mr. Dosanjh did not leave the cheque at the office,
but attempted, unsuccessfully, to contact the realtor by telephone. It appears
that the realtor was, in fact, away from British Columbia between September 4
and September 11, 2011.

[17]

On September 14, Mr. Dosanjhs lawyer couriered a cheque for the
deposit amount to the realtors office during business hours. The courier was
unable to deliver it because the office was closed. On September 15, the lawyer
wrote to Ms. Liang as follows:

We confirm that the deposit of $30,000.00 was sent via
courier in the form of a certified cheque to the offices of [your realtor]. Our
courier advises that the office was closed and that no one was present to
accept the deposit .

Coupled with the letter by the Realtor  of August 29, 2011
in which [he] advised our client that you did not intend to complete this
transaction, and given that you have not responded to our letter of September
8, 2011 which was sent to you by registered mail and because the deposit was
not accepted today, please be advised that our client regards this conduct as
amounting to an anticipatory breach of the contract of purchase and sale and
our client will pursue all available remedies.

This is clear and unequivocal
notice to you that we accept your repudiation of said contract and that this
acceptance ends any obligation on our client to tender the purchase price on
the date stipulated in the contract as a precondition to seeking enforcement in
this action.

[18]

Ms. Liang received the letter on September 19, and did not respond
to it. Mr. Dosanjh immediately commenced an action. Neither party took any
steps to close the transaction on the scheduled completion date.

The Trial Judges Decision

[19]

At trial, Mr. Dosanjh contended that Ms. Liangs realtors e-mail
of August 29, 2011 constituted a repudiation of the contract. Ms. Liang,
on the other hand, argued that the e-mail merely outlined concerns that she
had, and was not a statement that she was refusing to proceed with the
contract.

[20]

The judge found that the e-mail did constitute a repudiation of the
contract. She noted that the realtors e-mail unequivocally stated: The owner
 has advised me she will not proceed with this contract. At para. 47 of
her reasons, she accepted that Mr. Dosanjh was entitled to conclude, from
reading the whole of the e-mail, that Ms. Liang did not intend to proceed.
She also noted that the realtors subsequent telephone conversations with Mr. Dosanjh
confirmed that Ms. Liang would not proceed with the sale.

[21]

The next issue was whether Mr. Dosanjh accepted the repudiation or,
instead, affirmed the contract. Mr. Dosanjh took the position that he accepted
the repudiation in his lawyers letter of September 15, 2011. Ms. Liangs
position was that Mr. Dosanjh had unequivocally and irrevocably affirmed
the contract prior to September 15, and could, as of that date, no longer
choose to accept the repudiation. In support of her position, she relied on Mr. Dosanjhs
e-mail of August 30 and his telephone conversations with the realtor
around that time. She also points to his September 6 e-mail, his September 8
fax, and his attempts to deliver the deposit cheque to the realtors office.

[22]

Ms. Liang argued that, having affirmed the contract, Mr. Dosanjh
was no longer in a position, on September 15, 2011, to accept the repudiation.
Further, she argued that Mr. Dosanjh had himself breached the contract by
failing to tender the deposit when he waived the subject to conditions. She contended
that a party, while himself in breach of a contract, cannot purport to accept
the other sides repudiation and sue for damages.

[23]

The trial judge noted, at para. 55, that the court should be
careful not to find that a party has affirmed a contract without very clear
evidence that he or she has irrevocably chosen to go with the contract. At para. 64,
she characterized Mr. Dosanjhs actions between August 29, 2011 and
September 15, 2011 as assessing the circumstances, considering his options,
attempting to resolve the situation, and trying to ensure that he did what he
had to do to complete the Contract in the event he was able to convince Ms. Liang
to recognize her obligations. She concluded that he did not affirm the
Contract, and that he was still entitled, at the time he communicated his
intentions by his lawyers letter of September 15, 2011, to accept Ms. Liangs
repudiation.

[24]

The judge found it unnecessary to resolve the issue of whether Mr. Dosanjh
was in breach of the contract by failing to pay the deposit on time. She said:

[72]
Mr. Dosanjh
did not succeed in delivering the deposit prior to accepting Ms. Liangs
earlier repudiation. However, even if this amounted to a breach of the deposit
clause in the Contract, Ms. Liang did not do anything to exercise her
right to terminate the Contract pursuant to the terms of the deposit clause or
under the common law. Accordingly, even if Mr. Dosanjh breached the
Contract by failing to pay the deposit when it was due, his repudiation
remained unaccepted and the Contract continued in existence until Mr. Dosanjh
accepted Ms. Liangs earlier repudiation by his letter dated September 15.

[73]      For these reasons, I
find that the Contract was not discharged by Mr. Dosanjhs failure to pay
the deposit.

[25]

With respect to remedy, the judge accepted Ms. Liangs argument
that Mr. Dosanjh could not claim specific performance because he had
accepted the repudiation of the contract. She also found that, as specific
performance was not an available remedy, damages in lieu of specific
performance were also unavailable. In the result, Mr. Dosanjh was not
entitled to damages based on the value of the property at the date of trial.

[26]

The judge recognized that, ordinarily, damages are to be assessed on the
date of the breach, but noted that circumstances may, in some instances,
justify a court in choosing a different date. The judge chose January 2012,
based on her view that Mr. Dosanjh should have located another residential
property to purchase by that time, some three months after the closing date.

[27]

The judge noted that there was evidence to suggest that the $605,000.00
purchase price was materially less than the market value of the property. She
found that Ms. Liangs primary reason for refusing to proceed with the
deal was that she considered the purchase price to be below market value. She
also noted that there was considerable interest in the property as soon as the
MLS listing appeared, and that Ms. Liang increased the list price to
$669,000. The judge concluded, at para. 90, that the increase was
motivated by the fact that the market value [of the property] materially
exceeded the Contract price.

[28]

With respect to the quantification of damages, the judge mentioned that
the plaintiff had obtained an appraisal of the property (as of November 8,
2012). The appraisal did not comply with the requirements for expert evidence,
and it was not tendered as evidence of the value of the property, though it
was, apparently, tendered for the limited purpose of showing that an appraisal
had been obtained. The judge did not use the appraisal as evidence of the value
of the property.

[29]

Instead, over the objections of Ms. Liang, she used the 2013
assessment by the BC Assessment Authority (prepared under s. 2 of the
Assessment
Act
, R.S.B.C. 1996, c. 20) as evidence of the value of the property.
That assessment report attributed values to the property as of July 1 of each of
2011, 2012 and 2013. The trial judge took the arithmetic mean of the 2011 and
2012 values as the appropriate market value of the property in January 2012.

Issues on this Appeal

[30]

On this appeal, Ms. Liang accepts the judges finding that her real
estate agents letter of August 29, 2011 constituted a repudiation of the
contract. She says, however, that Mr. Dosanjh unequivocally and
irrevocably affirmed the contract in his subsequent communications and actions.
She says that it was no longer open to him to accept the repudiation when he
purported to do so in his letter of September 15, 2011.

[31]

She also argues that, whether or not Mr. Dosanjh affirmed the
contract, it was not open to him to accept the repudiation by his letter of
September 15, 2011, because he was, by then, himself in breach of the contract,
having failed to deliver the required $30,000 deposit to her. She also says
that the judge erred in finding that Ms. Liang did not, by her actions,
show that she was accepting Mr. Dosanjhs breach as a repudiation of the
contract.

[32]

Finally, Ms. Liang argues that the judge erred in her assessment of
damages, both by using inadmissible evidence to determine the market value of
the property and by inappropriately choosing January 2012 as the date for
assessment of damages.

Did Mr. Dosanjh
Unequivocally Affirm the Contract?

[33]

The trial judge summarized the general law with respect to a partys
right to accept a repudiation of a contract at para. 50 of her judgment:

The consequences of a repudiation, whether by anticipatory
breach or breach of a fundamental term, are well established. They are referred
to in
Sethna v. 350 Kingsway Development Ltd.
, 2011 BCCA 434, at para. 24,
and

Homestar Industrial Properties
Ltd. v. Philps
(1992), 72 B.C.L.R. (2d) 69 (C.A.), at para. 13, and
may be summarized as follows:

·

A party to a contract has two alternatives if the other party
repudiates the contract: the innocent party may accept the repudiation or
affirm the contract.

·

If the innocent party accepts the repudiation, the contract is at
an end, both parties are relieved of their obligations under it, and the
innocent party may sue for damages immediately without waiting for the time
that the contract should have been performed.

·

If the innocent party affirms the contract, the contract remains
alive in all respects for both parties, and the risk exists that the party
beginning as the innocent party will subsequently commit a breach of its own.

·

If the innocent party wishes to accept the repudiation, he or she
must make his or her election known.

·

Once made, the election is irrevocable.

[34]

Neither party quarrels with these general propositions, which are
well-supported in the case law. As I will indicate, however, the last
proposition  that an election, once made, is irrevocable  requires some
qualification to ensure that it is not inappropriately applied in cases of
repeated or continuing repudiation.

[35]

A court will not find that an innocent party has affirmed a contract in
the absence of clear evidence leading it to that conclusion. The trial judge
expressed the proposition as follows:

[55]

Affirmation
may be express or implied, but the court should be careful not to find that a
party has affirmed a contract without very clear evidence that he or she has
irrevocably chosen to go on with the contract. This is explained in
Chitty

[
Chitty on Contracts,

31st
ed (London, UK: Sweet & Maxwell Ltd., 2012) vol 1]
at 1696-97 as
follows:

[The innocent party] will not be held to have elected to
affirm the contract unless, first, he has knowledge of the facts giving rise to
the breach, and, secondly, he has knowledge of his legal right to choose
between the alternatives open to him. Affirmation may be express or implied. It
will be implied if, with knowledge of the breach and of his right to choose, he
does some unequivocal act from which it may be inferred that he intends to go
on with the contract regardless of the breach or from which it may be inferred
that he will not exercise his right to treat the contract as repudiated.  Mere
inactivity after breach does not of itself amount to affirmation, nor (it
seems) does the commencement of an action claiming damages for breach. The mere
fact that the innocent party has called on the party in breach to change his
mind, accept his obligations and perform the contract will not generally, of
itself, amount to an affirmation

[36]

The judge then cited
Yukong Line Ltd. of Korea v. Rendsburg
Investments Corporation of Liberia
, [1996] 2 Lloyds Rep. 604
.
She
also referred to the following passage from
Abraham v. Coblenz Holdings Ltd.
,
2013 BCCA 512:

[28]

In
my view, an innocent party is not required to communicate its acceptance of a
repudiation immediately. An innocent party must have a reasonable opportunity
to assess the circumstances it finds itself in, to assess its options, and to
explore the possibility of resolving the situation. That is particularly so
where, as here, the tenants had invested a substantial amount of money in the
premises and were not willing to walk away without trying to negotiate a workable
arrangement. What matters is whether, in all of the circumstances, the tenants
acted reasonably in communicating their course of action so as not to prejudice
the other party by inducing it to act as if its repudiation of the agreement
had not been accepted:

Allen v. Robles
, [1969] 3 All E.R. 154
(C.A.).

[37]

I accept that, where a party has repudiated a contract, the opposite
party is entitled to a reasonable period of time in which to decide whether to
affirm the contract or accept the repudiation. I also accept that, at least
until that reasonable period of time has elapsed, a court should be slow to
treat equivocal statements or acts as affirmations of the contract. The courts
solicitude toward the innocent party, however, must not extend to ignoring
unequivocal acts or statements of affirmation made by a party that is aware of
its legal rights.

[38]

In the case before us, I am not persuaded that Mr. Dosanjhs
statements and actions in the aftermath of Ms. Liangs repudiation of the
contract can be interpreted as anything other than an affirmation of the
contract. Immediately after being advised of Ms. Liangs intentions not to
complete the contract, Mr. Dosanjh indicated that it was his intention to
proceed with the purchase. All of his subsequent actions up to September 15,
2011 were consistent only with an intention to treat the contract as an ongoing
one.

[39]

Of particular importance is the lawyers letter of September 8, 2011,
which affirmed that Mr. Dosanjh was ready, willing and able to complete
this transaction on the completion date, October 1, 2011 and indicated that if
Ms. Liang failed to complete, he would pursue remedies including specific
performance. The letter is not consistent with an acceptance of the
repudiation. Further, and most importantly, it is a letter sent at a time when Mr. Dosanjh
had had some time to reflect on the situation, and had obtained legal advice as
to his position.

[40]

Mr. Dosanjhs communications and actions (up until the letter of
September 15, 2011) unequivocally demonstrated an intention to affirm the
contract. There was no evidentiary basis for the judges finding to the
contrary. The evidence establishes that by September 8, 2011 Mr. Dosanjh made
an election to affirm the contract rather than accept Ms. Liangs
repudiation of it.

To What Extent was the
Affirmation of the Contract Irrevocable?

[41]

Normally, after a party has repudiated a contract, the opposite party must
elect whether to affirm the contract or accept the repudiation. If it affirms
the contract, it cannot, later on, re-elect, and choose to accept the
repudiation.

[42]

That does not mean, however, that a party that repudiates a contract is
free to commit fundamental breaches without fear that the contract will be
terminated, nor does it mean that a party guilty of a fundamental breach may
continue to refuse to perform with impunity. Each time a party commits an act
amounting to a repudiation, the opposite party is entitled to elect to affirm
the contract or accept the repudiation. The fact that the innocent party has
previously affirmed a contract does not disentitle it from accepting a new
repudiation of it by the guilty party.

[43]

Equally, a party that has affirmed a contract after a repudiation by the
other party may, if the repudiation is continuing, choose to accept it and
treat the contract as at an end. The issue was explored by Lowry J.A. (Prowse
J.A. concurring) in
Doman Forest Products Ltd. v. GMAC Commercial Credit
Corp.  Canada
, 2007 BCCA 88. After discussing a number of authorities,
including
Fletton Ltd. v. Peat Marwick Ltd.
(1988), 27 B.C.L.R. (2d) 209
(C.A.) leave refused [1988] 2 S.C.R. vi;
Elderfield v. Aetna Life Insurance
Co. of Canada
(1996), 27 B.C.L.R. (3d) 1 (C.A.); and
Bridgesoft Systems
Corp. v. British Columbia
, 2000 BCCA 313, he summarized the law as follows:

[109]

Where a party to an agreement commits a fundamental breach of its terms,
the agreement is repudiated. There has been what amounts to a refusal to
perform. If the repudiation is not accepted, the agreement is affirmed. Where
the breach is ongoing, as distinct from one instance of fundamental
non-performance, there is a continuing repudiation which may, in the absence of
subsequent affirmation, be accepted as long as the repudiation continues. What
in my view is important is that, in order to establish the existence of a
continuing repudiation, particularly when an extended period of time has
elapsed following the affirmation of an agreement, it must be clear beyond
question that there is a continued (
Elderfield
)

or repeated (
Bridgesoft
)

refusal
to perform. The refusal may be manifest in different ways, which may include
silence in response to a request for performance at the time the request is
made, but the refusal must be clear for it is that refusal which is the
repudiation to be accepted.

[44]

In my opinion, the current case is one of continuing repudiation by Ms. Liang.
Mr. Dosanjh and his lawyer undertook extensive communications with Ms. Liang
and her realtor, attempting to ascertain whether Ms. Liang would complete
the transaction. Ms. Liang was unresponsive. Her own silence, combined
with the silence or indifference of her real estate agent, clearly communicated
to Mr. Dosanjh that she would not complete the sale.

[45]

While it became apparent, at trial, that the real estate agent was not
actually avoiding receipt of the deposit, Mr. Dosanjh and his lawyer
reasonably believed that he was doing so. The failure of the realtor to
communicate with them, and his failure to make arrangements for receipt of the
deposit, played a significant role in leaving them with the impression that he
was trying to ensure that the deposit could not be paid.

[46]

In all the circumstances, it is my view that Ms. Liangs
repudiation of the contract was not a single incident, but rather a continuing
fundamental breach of contract. Mr. Dosanjh was, in the circumstances,
entitled to affirm the contract after the initial repudiation on August 29,
2011, and then later, in response to Ms. Liangs continued repudiation, to
treat the contract as at an end.

[47]

In the result, while I differ from the trial judge somewhat in my
analysis of the events, I find that she did not err in finding that Mr. Dosanjh
was in a position, on September 15, 2011, to accept Ms. Liangs
repudiation of the contract.

Was Mr. Dosanjh in
Breach of the Contract?

[48]

Ms. Liang contends that Mr. Dosanjh breached the contract by
failing to pay the $30,000 deposit at the time he waived the conditions that
had been inserted in the contract for his benefit. She argues that this,
itself, constituted a fundamental breach of the agreement, and that she
accepted the breach, thus terminating the contract. In the alternative, she
argues that Mr. Dosanjh was not entitled to accept her repudiation of the
contract at a time when he, himself, was in breach.

[49]

In my view, the issue is simply resolved with reference to the
contractual provisions concerning the deposit. Nothing in the contract required
Mr. Dosanjh to pay the deposit at the time he waived the conditions.
Rather, the deposit was to be paid
after
the conditions were removed. It
can be inferred that the deposit was to be paid before the closing date. Beyond
that, there is little in the contract that sheds light on precisely when the
deposit was to be tendered.

[50]

In my view, the best that can be done with the contractual language is
to interpret it as requiring Mr. Dosanjh to tender the deposit within a
reasonable period once the conditions were waived. Given the unavailability of
the real estate agent, his failure to keep his office open during office hours,
the absence of any communications from Ms. Liang or her realtor on the
issue of the deposit, and Mr. Dosanjhs attempts to tender the deposit, it
is my view that Mr. Dosanjh did not fail to tender the deposit within a
reasonable time period after waiving the conditions. He was, on September 15,
2011, when he gave notice of his decision to accept Ms. Liangs
repudiation of the contract, not in breach of the term requiring him to deposit
funds. The same situation subsisted on September 19, 2011 when Ms. Liang
received his letter.

[51]

I am, therefore, not persuaded that the judge erred in finding that Mr. Dosanjh
was entitled to accept Ms. Liangs repudiation of the contract and sue for
damages. I also agree with her conclusion that he did accept the repudiation,
and did so in a timely manner.

Damages

[52]

Ms. Liang says that the trial judge erred in two respects in
assessing damages. First, she says that the damages crystallized on the date of
the breach, and that the judge erred in awarding damages assessed at a date
three months after the closing. Second, she says that the judge erred in
relying on an assessment by the BC Assessment Authority, which was prepared for
the purposes of municipal taxation, as evidence of the value of the property.

[53]

Ms. Liang points out that the normal rule for damages in breach of
contract is that damages are assessed as of the date of the breach. There are
exceptions to the rule. In particular, where a party is entitled to specific
performance and is awarded damages in lieu thereof, there will be a basis to
assess damages as of the date of trial rather than as of the date of the breach:
Semelhago v. Paramadevan
, [1996] 2 S.C.R. 415.

[54]

In the case before us, Mr. Dosanjh accepted Ms. Liangs
repudiation of the contract on September 15, 2011. As a matter of law, he was
not entitled, thereafter, to seek specific performance. The trial judge,
nonetheless, held that it would be fair to assess damages as of January 2012,
because Mr. Dosanjh could not be expected to find another residence
immediately.

[55]

In my view, the presumption that contract damages are to be assessed as
of the date of the breach is not so easily displaced. It is important that the
law in this area be predictable, and such predictability is not served by
allowing judges unbounded discretion as to the date for assessment of damages.

[56]

In the case before us, there was no evidence of an unusual rise in real
estate prices in Burnaby between September 19, 2011 (the date that acceptance
of the repudiation was communicated) and January 2012. There was also very
limited evidence of any efforts made by Mr. Dosanjh to find an appropriate
residence in Burnaby. In the circumstances, it cannot be said that the ordinary
rule that damages are assessed at the date of breach was displaced.

[57]

A more serious difficulty with the assessment of damages was the trial
judges reliance on the assessment to determine the property value.

[58]

In deciding to admit the assessment as evidence, the trial judge
referred to a number of family law cases in which assessments had been used by
the trial court to determine the value of real property. She purported to rely
on the opening words of Rule 11-7 of the
Supreme Court Civil Rules
, B.C.
Reg. 168/2009, as providing her discretion to admit the evidence.

[59]

There is some difficulty in relying on family law cases for the
proposition that assessments should be admissible evidence to determine the
value of real property. While the rules of evidence are applicable to family
law proceedings, they are often applied in a relaxed manner. I agree with the
recent observations of Kent J. in
Walker v. Maxwell
,
2014 BCSC 2357:

[64]      Of course, one of the stark realities of family law
litigation is that the parties are often unrepresented by counsel and/or are
unable to afford the substantial cost of experts and the procuring of expert
evidence.

[65]

Evidence
in family law cases is subject to the same rules applicable to any other area
of civil law. In reality, however, the technical yields to the practical and
the strict rules of evidence are often ignored or accorded only slight
deference.


[60]

While trial courts have, with some frequency, admitted property assessments
as evidence of property value in family law cases, they have generally done so
either with the agreement of the parties, or, alternatively, where no other
evidence of value has been tendered (e.g.
Chung v. La
, 2011 BCSC 1547). Where
proper expert evidence of value has been tendered, the courts have been
reluctant to consider property assessments as evidence (see, for example,
Hall
v. Mougan
, 2009 BCSC 645).

[61]

In family law cases, a court is often faced with having to assess the
value of real property in a situation where neither side is clearly subject to
any burden of proof. Rather, the court is simply required to estimate the value
of property for the purpose of dividing a family asset. It is not surprising,
in such situations, that a court may grasp at straws in an attempt to reach a
just result. It is simply a matter of doing the best job possible with limited
evidence.

[62]

It seems to me that different considerations arise in non-family cases,
where one party or the other will generally bear the onus of producing evidence
of property value.

[63]

It is not necessary, in this case, to make any pronouncement as to the
scope for admission of property assessments as evidence of property value in family
law cases, and I will refrain from doing so. In my view, however, there is,
absent agreement, no scope for using assessments in place of expert opinion
evidence in cases such as the present one.

[64]

The trial judge erred in her reliance on the opening words of Rule 11-7.
The relevant provisions of the rule are as follows:

11-7 (1) Unless the court otherwise orders, opinion evidence
of an expert, other than an expert appointed by the court under Rule 11-5, must
not be tendered at trial unless

(a) that evidence is included in a
report of that expert that has been prepared and served in accordance with Rule
11-6, and

(b) any supplementary reports
required under Rule 11-5 (11) or 11-6 (5) or (6) have been prepared and served
in accordance with Rule 11-6 (5) to (7).



(6)
At trial, the court may
allow an expert to provide evidence, on terms and conditions, if any, even
though one or more of the requirements of this Part have not been complied
with, if

(a) facts have come to the
knowledge of one or more of the parties and those facts could not, with due
diligence, have been learned in time to be included in a report or
supplementary report and served within the time required by this Part,

(b) the non-compliance is unlikely
to cause prejudice

(i) by reason of an inability to
prepare for cross-examination, or

(ii) by depriving the party against
whom the evidence is tendered of a reasonable opportunity to tender evidence in
response, or

(c) the interests of justice require it.

[65]

Rules 11-6 sets out special requirements for expert opinion evidence. It
is designed to ensure that adequate notice is given of the intention to adduce
expert evidence, and to ensure that expert reports are presented in a
particular form. Rule 11-7 allows the court to dispense with the requirements
of Rule 11-6 in certain limited circumstances (see
Perry v. Vargas
, 2012
BCSC 1537 and
XY, LLC v. Zhu
, 2013 BCCA 352).

[66]

In those limited circumstances, Rule 11-7 allows a judge to admit
opinion evidence at trial where the evidence, though otherwise admissible,
fails to meet the requirements of Rule 11-6. Nothing in Rule 11-7 purports to
allow a judge to admit into evidence an expert opinion that does not meet the
requirements of
R. v. Mohan
,
[1994] 2 S.C.R. 9.

[67]

The basic difficulty with the property assessment as evidence of
property value is that the court had no basis on which to evaluate its cogency.
The court was not able to determine how the assessor went about making the
assessment, and had no basis for determining what weight to give it. This was a
particular problem in this case, as the court had no basis for determining the
effect of the recent use of the property to grow marijuana on the property
value.

[68]

I acknowledge, again, that these sorts of difficulties have not always
been seen as precluding the admission of assessments as evidence of value in
family law cases (see, for example,
Dykman
v. Dykman
, 2011 BCSC
883). Whatever discretion a court may have to admit such evidence in a family
law case, however, it did not have that discretion in the case before us.

[69]

As the trial judge observed, there was some evidence before her to the
effect that the market value of the property in September 2011 was
substantially higher than the contract price. The evidence of how much higher,
however, was minimal. Given that the assessment report was not admissible, the
trial judge was faced with a formidable (perhaps impossible) task in trying to
determine the quantum of damages.

[70]

Fortunately, the parties, recognizing the problem, agree that if the
assessment is found to be inadmissible, it is appropriate for this Court to
remit the matter to the trial court for a new hearing on the issue of quantum
of damages. Given the agreement of the parties on this issue, I would remit the
matter of quantum of damages for a new hearing.

Conclusion

[71]

In my view, the judge was correct in finding that Mr. Dosanjh was
entitled to accept Ms. Liangs repudiation of the contract, and that he
did so in a timely manner. I would not disturb her finding that Ms. Liang
is liable in damages.

[72]

I am, however, of the view that this case did not present a basis for
assessing the damages on a date other than the date of breach. I am also of the
view that the judge erred in relying on contested evidence of property value in
the form of a property assessment.

[73]

Given the position taken by the parties, I would allow the appeal to the
extent of returning the matter to the trial court for an assessment of the
amount of damages suffered by Mr. Dosanjh.

The Honourable Mr. Justice Groberman

I agree:

The
Honourable Mr. Justice Lowry

I agree:

The Honourable Madam Justice
Bennett


