September 5th - 2003

Put your best (business practice) foot forward

The seller decided to sell his farm and listed it for sale at $173,500 and told the REALTOR he did not want a VTB mortgage as he was 91 years old and in poor health.

The seller decided to sell his farm and listed it for sale at $173,500 and told the REALTOR he did not want a VTB mortgage as he was 91 years old and in poor health. The seller accepted an offer of $140,000 with a $106,000 VTB mortgage. The REALTOR represented both clients in the transaction and the judge found that he did nothing inappropriate.

The seller’s son-in-law was a businessman who owned 12 farms. When he heard about the sale he looked at the offer and said it was no good. He offered to buy the farm for $4,000 more and for cash. He took the seller to his lawyer, had the necessary papers signed, went to the Registry office and registered a Deed and paid the seller by a certified cheque. Since the seller was nervous about the existing contract, the son-in-law also agreed to pay one-half of the seller’s legal costs if the buyers sued.

The buyers did sue and the judge awarded damages of $11,000 for breach of contract and then considered a claim for the tort of conspiracy and for inducing a breach of contract. He allowed an additional $5,000 “to take into account the additional harm caused to the buyers feelings by reprehensible or outrageous conduct” on the part of the son-in-law. He then went on to order a further $10,000 against the elderly seller (by then deceased) in punitive damages. Then he ordered the son-in-law to pay $25,000 in punitive damages for his “high-handed, arbitrary and highly reprehensible” conduct.

Kaur v Baille 2003 ONSC 1419/98

Merv’s comments

The parties to a contract can be liable in damages for breach of contract when they fail to honour their bargain. Others who interfere with those contractual obligations may be liable in tort law.The elderly seller made a mistake in listening to his son-in-law and it cost his estate several thousand dollars. The interfering son-in-law got whacked even harder! Can you imagine telling someone to ignore their contract?

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Jean-Adrien Delicano

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Ontario Real Estate Association
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