



COURT OF APPEAL FOR ONTARIO

CITATION: Issa v. Wilson, 2020 ONCA 756

DATE: 20201130

DOCKET: C67821

MacPherson, Zarnett and Jamal JJ.A.

BETWEEN

Hassan
    Issa

Plaintiff (Respondent)

and

John Wilson,
Wasim Jarrah and Alexander Realty
    Centres Inc.

cob as Keller Williams Realty Centres


Defendants (
Appellants
)

Hans Engell, for the appellants

Howard L. Shankman, for the respondent

Heard: November 23, 2020 by video conference

On
    appeal from the judgment of Justice Jane Ferguson of the Superior Court of
    Justice, dated November 22, 2019, with reasons reported at 2019 ONSC 6744.

REASONS FOR DECISION

[1]

The appellants, real estate agent Wasim Jarrah
    and realty company Keller Williams Realty Centres, appeal from the judgment,
    following a one day trial, of Ferguson J. of the Superior Court of Justice. In
    that judgment, the trial judge granted the remedy sought by the respondent,
    Hassan Issa, namely, rescission of an agreement of purchase and sale of a
    residential property in Stouffville. The trial judge also ordered the return of
    the $50,000 deposit paid by the respondent.

[2]

The appellants acted for both the respondent and
    the vendor of the property, John Wilson. Mr. Wilson was originally a party to
    the action, but by agreement he was released from the action on the
    understanding that the issue of whether the respondent was entitled to rescission
    of the purchase agreement and return of the deposit would be determined as
    between the appellants and the respondent.

[3]

Mr. Issa was a 26 year old first time home
    buyer. He wanted to buy a home in which he could live with his parents and
    three sisters. He retained Mr. Jarrah to help him find a suitable home.

[4]

Mr. Jarrah told Mr. Issa that the home size was
    2,100 square feet. He relied on information provided by Mr. Wilson and
    information from a previous listing of the home (12 years prior) to record the
    size of the home as 2,000-2,500 square feet in the MLS listing. He did not
    conduct a measurement exercise himself. In an agreed statement of facts, Mr.
    Jarrah admitted that he was negligent in failing to measure or verify the size
    of the home.

[5]

Mr. Issa visited the property twice before
    making an offer to purchase. He saw all the rooms and was allowed to inspect
    the entire home. On his second visit, he was accompanied by family members, and
    on that occasion Mr. Wilson, the vendor, told Mr. Issa that the property was
    about 2,000 square feet.

[6]

In late May or early June 2017, Mr. Issa
    received an appraisal of the property in connection with his mortgage
    application. The appraisal indicated that the size of the home was 1,450 square
    feet.

[7]

Mr. Issa decided not to complete the purchase of
    the home. He commenced an action seeking a declaration that the agreement of
    purchase and sale was null and void and the return of his $50,000 deposit.

[8]

The trial judge agreed with Mr. Issa. She
    concluded:

In this case I do not find that Mr. Issas
    inspection of the subject property determined his expectations. He was given
    representations from both Messrs. Jarrah and Wilson that the property was 2000
    or greater than 2000 square feet and as well relied upon the MLS agreement
    which set out 2000 to 2500 square feet. His inspections did not override his
    expectation that this was the size of the property. (I take his young age,
    inexperience with square footage, and being a first time home buyer into
    account when considering the reasonableness of his belief.)

[9]

The appellants appeal from this decision.

[10]

The appellants submit that the trial judge erred
    by not accepting the proposition that where a purchaser inspects a property
    their reliance on a misrepresentation as to the size of the property will be
    displaced.

[11]

We do not accept that this is an absolute
    proposition of law. In some cases, it has been applied; in other cases it has
    not governed because of a constellation of facts that would make a strict
    application unfair in the circumstances.

[12]

The remedy of rescission of a contract may be
    obtained on the basis of misrepresentation where the defendant made a false
    statement that was material and induced the plaintiff to enter into the
    contract:
Panzer v. Zeifman et al.
(1978), 20 O.R. (2d) 502 (C.A.), at
    p. 5;
Singh v. Trump
, 2016 ONCA 747, at para. 156.

[13]

In this case, in our view, the trial judge did
    not err by concluding that the appellants misrepresentation concerning the
    size of the home was material to the respondents decision to purchase. We say
    this for several reasons.

[14]

First, Mr. Jarrah made explicit statements about
    square footage to Mr. Issa (2,100 square feet) and in the MLS listing that Mr. Issa
    saw (2,000-2,500 square feet). At trial, he formally admitted that he was
    negligent in making these statements. Mr. Wilson also admitted that he told Mr.
    Issa that the property was about 2,000 square feet. As the trial judge found,
    Mr. Issa was told (at least once) by both Messrs. Wilson and Jarrah that the
    property was 2000 or more than 2000 square feet.

[15]

Second, the discrepancy between the negligently
    communicated size of the home (2,100 square feet and 2,000-2,500 square feet)
    and the actual size (1,450 square feet) is substantial  either 27, 32 or 42
    per cent.

[16]

Third, Mr. Issas reliance on Mr. Jarrahs and
    Mr. Wilsons representations about the size of the home is supported by the
    fact that he remained ready to close the purchase until the moment he
    discovered, through the appraisal of the property related to his mortgage
    application, that its actual size was only 1,450 square feet. With this new
    knowledge, he immediately communicated that he was not prepared to complete the
    purchase.

[17]

Fourth, the trial judge did not err by making
    reference to Mr. Issas age and inexperience in home buying. These can be, in
    appropriate cases, relevant contextual factors:
Beer v. Townsgate I Limited
(1997), 36 O.R. (3d) 136 (C.A.), at para. 20.

[18]

For these reasons, we conclude that the trial
    judge did not err in her analysis and disposition on the main issue.

[19]

The appeal is dismissed. The respondent is
    entitled to his costs of the appeal fixed, through the agreement of counsel, at
    $10,000, inclusive of disbursements and HST.

J.C
    MacPherson J.A.

B.
    Zarnett J.A.

M.
    Jamal J.A.


