Legally Speaking with Michael Mulligan
Legally Speaking with Michael Mulligan
Through the Legal Looking Glass: BC Court Cases That Matter
The BC Court of Appeal has delivered a significant ruling that serves as a stark warning to property sellers: crossing out questions on disclosure forms doesn't eliminate your responsibility to be truthful. When a seller drew lines through all disclosure questions, writing only that the property was tenant-occupied and he'd never lived there, he created a legal nightmare for himself. After discovering an unpermitted addition, the buyer backed out – but the seller kept the $300,000 deposit and sued for more. Though initially successful, the Court of Appeal reversed the decision, finding the seller knew about the problem and his line-crossing technique didn't absolve him of responsibility.
The case highlights a critical point for anyone engaging in real estate transactions: disclosure forms are binding components of your contract. If you choose to complete one, everything you state (or strategically avoid stating) can have serious financial consequences. Sellers must either be meticulously accurate or explicitly mark properties as sold "as is" with no representations or warranties.
In a separate ruling that exposes the troubling state of Indigenous child welfare, the Court restored a $150,000 human rights award to a First Nations mother who successfully proved discrimination by an Indigenous child protection agency. The statistics remain deeply concerning – Indigenous children represent a staggering 68% of those in government care despite comprising just 6% of BC's population. The case offers a glimpse into a system still struggling with its approach to Indigenous families.
These rulings demonstrate how the courts continue to shape responsibilities in property transactions and protect human rights in child welfare matters. Whether you're buying, selling, or navigating family services, understanding these legal precedents could save you from costly mistakes or help you assert your rights when systems fail.
Follow this link for a transcript of the show and links to the cases discussed.
It's time for our regular segment with Michael Mulligan, with Mulligan Defence Lawyers Legally Speaking on CFAX 1070. Afternoon Michael, how are we doing?
Michael Mulligan:Hey, I'm doing great. Always good to be here.
Adam Stirling:Some interesting topics on the show this week. I'm reading the first one. It says real estate disclosure form with a line through. It is quote still a material misrepresentation. What does that mean?
Michael Mulligan:Well, really, it's a cautionary tale for anyone who's buying or selling a house. So that's why I thought it'd be worth knowing about this decision that just came out from the BC Court of Appeal and the case involved a house sale right and there's a common practice although I should say it is not a legal requirement in most circumstances that there be a disclosure statement filled out by a person who's selling a house. Now, there are some circumstances where disclosure statements are mandatory, like I think, with some new property, condo sales and things like that. But this one deals with the sort of statement that somebody might be asked to fill out if they were selling a house, and it's a form that asks a whole bunch of questions about the property. It would ask questions like are you aware of any problems with the electrical system? Are you aware of any problems with the plumbing system? There's an interesting question that used to be on. It used to be. It's been modified but it asks are you aware that the premises have never been used to grow cannabis? They've added now bracket other than, as permitted by law, close bracket, because in the past that wasn't so. Anyways, it's this form that would be filled out and where they are filled out, ordinarily included as part of the contract to buy or sell a house.
Michael Mulligan:Now, in this particular case, a house is being sold by a fellow who was not living in it. This is being rented out and there was a deposit paid when the original contract was signed for some $300,000. Was signed for some $300,000. And there was a request for one of these forms that was filled out and sent over to the real estate agent for the buyer and in this case, the person selling the house drew a line through all of the questions asked on the form and wrote at the bottom tenanted property. Owner has never occupied. And that's what the form said. Now you can probably see where this is going, or maybe not, but anyways, one of the questions on there was whether there had been anything built on the property without a building permit. Now, that was one of the questions. Had the line drawn through it? Now, after that first deposit had been paid the $300,000, and before the $200,000 second deposit had been paid, the buyer discovered through their own efforts that there had been an unpermitted addition built on to the home and for that reason refused to close on the deal and that resulted in the seller keeping the $300,000 first deposit and suing to get the $200,000 second deposit, saying, well, hold on, you just haven't complied with this deal. I didn't make any representation about whether there had been any permits for some addition that was added onto the house, and so that's the case that went to court.
Michael Mulligan:A case that went to court and at trial, the judge hearing the case relied on a previous decision from back in 2005, another BC Supreme Court decision and in that case there was a similar form that was filled out and in that case the seller wrote at the bottom of the form quote buyer to satisfy themselves property is sold as is, in capital letters, the as is. And in that case, in that 2005 case, the judge concluded well, look, this person didn't make any representations on this form and so you can't rely on it. And the judge dealing with the trial of the case that we're talking about now followed that case. Well, this is the same. The person had drawn a line through everything and wrote that you know, tenant and property owners never occupied. Well, at trial, the seller or the buyer lost and the seller got to keep the damaged, the first deposit of $300,000 and a judgment for another $200,000. I guess the cautionary tale there is when you enter into a real estate contract. It's a contract and if you don't complete you may find yourself sued.
Michael Mulligan:Now the case went to the Court of Appeal. A lot of money involved and the decision on that just came out and the Court of Appeal reversed what the trial judge had done. And the Court of Appeal said that. Well, the judge overlooked some material evidence, which is interesting. Generally the Court of Appeal is pretty differential to sort of findings of fact and things the judge relied upon, but here they went in a different direction and they pointed to several things. They pointed to, first of all, the fact that the seller was an experienced in real estate sales, had previously been a licensed realtor, although was not in this particular case, and they found that the seller was aware that there had been this addition added on to the house without a permit, described as a back garden room, whatever that might be, that it had been enclosed without a permit.
Michael Mulligan:And there was evidence that he knew that because that was written on the disclosure form that he got when he bought the place. I guess he didn't care, he just bought it anyways, right? And so they found, well, he would have been aware of it. And then they found that his drawing a line through all of the things and writing on it that he was tenanted and he'd never lived there didn't amount to the same thing as when the person wrote on it property is sold as is and found that that wasn't really responsive to what was written on the form and then relied upon some of the other fine print that's included at the bottom of the form about how the form and its comments and so on must be filled out completely and form part of the contract for the purchase and sale of the home completely and form part of the contract for the purchase and sale of the home. And so found that there was a basis to conclude that the buyer had relied upon that thing before entering into the contract and, given the wording on it, that what he'd written on there wasn't sufficient, and so reversed the judge's decision. The court of appeals ordered the $300,000 deposit return and overturned the award of. Ordered the $300,000 deposit returned and overturned the award of the additional $200,000.
Michael Mulligan:And so the takeaway for people with this is pay really careful attention to this document. Know that if you're selling a house, you're generally not required to fill one out, but if you start filling one out and making representations about things like you know, are you aware of any problems with the electrical system? Are you aware of any problems with the plumbing system? You know, are you aware that anyone grew marijuana in the house without a permit, for example? And it turns out that those things are wrong. You did know about some problem with the system or the plumbing, or the electrical or the whatever it might be. You might find yourself either the deal not concluding and the person being able to get out of it, or you might find yourself sued. Right If you say, well, hold on, you know the plug didn't work or the faucet leaked, or the you know something or other on there turns out to be inaccurate.
Michael Mulligan:So if you do choose to fill one of these things out, when selling a property, you need to be very careful that it's accurate. If it's not filled out accurately, you are effectively warrantying the house in every way. You're putting down there oh yes, everything's fine, I'm not aware of any problem. That turns out to be wrong. You may wind up on the hook for it. And if you decide you don't want to fill one of these things out, you might either not fill it out at all, just no thanks. Or you might choose some language along the lines of what that person chose back in 2005,.
Michael Mulligan:As is, other things that are not responsive to what's there, given this Court of Appeal decision may not be enough to mean that that doesn't form part of the contract.
Michael Mulligan:To mean that that doesn't form part of the contract, and so this is the sort of thing which I rather expect is going to be affecting a lot of people. Right, there are thousands of people buying and selling homes, and this is a decision which is materially going to affect how those contracts are interpreted. So pay very careful attention to the form. If you're filling one out and you're selling a property, also bear in mind you might have received one of these things, and so if somebody told you there was a problem with the plumbing five years ago, or somebody 10 years ago told you they didn't get a permit for the back garden room enclosure, well you better make sure that's written on the same form, or the form that you're passing along to the potential buyer, or you better make sure you don't either fill one out at all or write on it very clearly that it's as is and none of that is to be relied upon. So that's the very latest from the Court of Appeal on disclosure statements in real estate transactions.
Adam Stirling:Michael Mulligan with Mulligan Defense Lawyers. Legally Speaking will continue right after this. Legally Speaking continues here on CFAX 1070. Joined, as always, by Michael Mulligan, barrister and solicitor, with mulligan defense lawyers. Michael up. Next, our second story on the day.
Michael Mulligan:I'm reading 150 000 awarded, says here, for discrimination against a first nations woman by a first nations child protection agency upheld by the bc court of appeal yeah, I must say this is a story that I think highlights just how far off the rails some of the issue of care for Indigenous children is in the province, or just how troubled many Court of Appeal here in terms of the grossly disproportionate number of Indigenous children that are in government care. And just to give listeners some idea of what that amounts to, as of the end of January 31st 2024, of the 4,835 children that were in care, that's to say they've been apprehended by social workers that are in care of the government in some form or other, and 68% of them, more than 3,000, are Indigenous, and that's to say there's about 6% of the population that's Indigenous and 68% of the children who are in care are Indigenous. So that's just not good by any measure. And so the particular case here that the Court of Appeal just dealt with was a case out of Vancouver and, interestingly, the agency dealing with the, in this case the apprehension of this woman's four children, is itself an Indigenous agency. In Vancouver, the responsibility for child safety has been turned over to the Vancouver Aboriginal Child and Family Services Society and they've got delegated authority under the provincial legislation to deal with safety and care of children, and the case involved a Indigenous woman who had four children.
Michael Mulligan:She had a fifth one who tragically died as an infant, and this woman had all sorts of problems described by the Court of Appeal, including things like being an intergenerational survivor of residential schools that's code, for she didn't go to residential school, but likely her parent or grandparents did. She as a child, was in care herself and as an adult she dealt with low income, housing, insecurity, mental health issues and substance use disorder and described as having. The three of the four children are described as having quote complex needs, so you just imagine what that all looks like. She's a single mother too, so you can just imagine what that looks like. And in this case the children were apprehended by the Vancouver Aboriginal Child and Family Services Society as a result of things including a report from her eldest child that she had been physically abused by her mother or physically assaulted by her mother. Two of the middle children claimed they were scared and hungry at home, had been locked in their rooms with bungee cords and had been pinched and slapped, and there were marks that the doctor indicated looked like they could be cigarette burns. So you can imagine apprehension. Probably not a large surprise given that fact pattern.
Michael Mulligan:There were investigations and various multiple other complaints some 33 complaints, although only three of them were investigated in a thorough way and found to be substantiated. Some of the original complaints. Issues arose about them. One of the quoted cigarette burns turned out to be a birthmark. Other cigarette burns were reportedly caused by the child running past the mother with a lit cigarette, reportedly caused by the child running past the mother with a lit cigarette and then later the eldest child retracted the allegations of physical assault. So tragic and very sad.
Michael Mulligan:The details some of those details, you just never know what the truth of them were. While in care, the mother continued to have concerns about the children, which were also turned out to be well-founded, and I must say they are rather an indictment of what it looks like when a child winds up in care, remembering, of course, that this mother wound up in care herself when she was a child. Things including one of the middle child, while in care in foster care, attempted suicide twice. One of the, the eldest child, ran away from foster care for as absent for several days and then engaged in what's described as serious self-harm. One of the child children described being held down by arms and legs and there was bruising consistent with that, although that was investigated and turned out not to be abuse. So horrific right On every level, right In terms of the, no doubt, what the challenges were for this person trying to raise children, all of the various things that she was dealing with and the circumstances these children found themselves in. In any case, they wound up out of her care for some three years approximately and eventually they were placed back with her and it resulted in her then bringing a human rights complaint against the Vancouver Aboriginal Child and Family Services Society, alleging that they discriminated against her because that she was Indigenous, alleging that they discriminated against her because she was Indigenous. And so it's a human rights complaint that the Indigenous Child and Family Services Society discriminated against the woman because she was Indigenous, arguing that they had made racially informed assumptions about the impact of things like mental health or substance use and so on. And she won.
Michael Mulligan:The Human Rights Tribunal found that the Aboriginal Child Family Services Society had discriminated against her on the basis that she was Indigenous and they awarded her $150,000 for injury to her dignity, feelings and self-respect by the government to the BC Supreme Court. The Supreme Court trial judge, who heard it, allowed the appeal, found that the tribunal member had unfairly expanded the scope of the complaint and overturned the award. That was just appeal to the Court of Appeal and that decision just came out. Also interestingly, the decision is written by the Chief Justice of the BC Court of Appeal, who is himself Indigenous. The Chief Justice of the BC Court of Appeal, who is himself Indigenous. And so you have an Indigenous woman making a human rights complaint about the Indigenous Child Family Services Society, which is ultimately decided by the Chief Justice of the Court of Appeal for British Columbia, who is himself Indigenous. The Chief Justice overturned the trial, the judge at trial who determined that that decision was not proper and restored the $150,000 award for injury to dignity and self-worth and so on. And one of the things pointed to by the judge who overturned the award was to say well, look, if that's how this is interpreted, that's to say how the human rights codes interpret.
Michael Mulligan:In relation to the Child Family Community Services Act, which is intended, as its core principle, to protect children, One of the concerns was that would hamstring social workers.
Michael Mulligan:You know, if you have a report from somebody saying, hey, you know, I'm being abused by my mother, or there's cigarette burns on the children, or they say they're being trapped in the room with bungee cords or something that they're going to feel like they can't do anything for fear that there might be a complaint made, the Chief Justice concluded that wasn't a legitimate concern, that those two acts could be read harmoniously, and pointed out that the Child Family Community Services Act the one that deals with child protection, which delegates authority to the Indigenous Family Services Society in Vancouver, the social workers enjoy legal protection as long as they don't make decisions that are in bad faith, and so what that means effectively is that you can't sue the social worker right, and so the social worker isn't protected, and so the Court of Appeal has found that the social workers will not be hamstrung by this award, and so the award can be upheld, and instead these two acts are to be read in a harmonious fashion, and so that's the decision of the Court of Appeal the $150,000 award is restored.
Michael Mulligan:But I must say, the entire case start to finish in virtually every aspect.
Michael Mulligan:When you read it is a rather disheartening history of just how seriously troubled the circumstances are for these children, for the children's mother, for the agency trying to protect the children, in terms of how they're doing that, and when you still look at the stats about how many, what percentage of children that are in care are Indigenous, I must say the entire thing just leaves you at least leaves me just really disheartened about what chance do these 3,000-some-odd children in care have, right, and what do we do about it. And I'm not sure that we've solved the problem with the Human Rights Tribunal complaint or the award that might help this particular woman somewhat. But you know, where are we right in 2025 when this is what's going on? This is the state that First Nations kids are finding themselves in in British Columbia. You know these kids are our future. This is a pretty disheartening state of affairs. So that's the latest from the BC Court of Appeal on liability for discrimination by the Aboriginal Child Care Society against an Indigenous woman.
Adam Stirling:We have about 90 seconds left and we have the costs against 7-Eleven story.
Michael Mulligan:Yeah, that one. I think we can sum up in about that time. So this case we talked about when the original trial decision came out and it was a woman who she tripped in a pothole going in to get coffee from 7-Eleven on her way to work and unfortunately the trip in the pothole caused just terrible damage to her ankle. It broke in three places. She wound up on crutches, eventually in a wheelchair. Long-term problems caused her to fall down again swollen foot, lost her job just horrific circumstances for her and she was ultimately awarded north of $900,000 in compensation for her lost income and pain and suffering and future care and all of this. But the amendment to that, or the add-on to that story, is a decision that just came out dealing with costs, and the reason that was an issue is that the woman in this case who was suing, she had not much money and made various offers to settle while the litigation was going on over a period of years, and she made a total of three offers to settle the case one for $125,000, another for $345,000, and another for $250,000 plus various costs and so on and then wound up and none of which were accepted by 7-11. And so the case went to trial, and she wound up with more than $950,000. What that led to is an application for double costs, which he was successful on.
Michael Mulligan:And the point there is that in a civil case where there's an offer to settle something, if it would be reasonable to have accepted the offer to settle, and you don't accept it when it would be reasonable to have done so and more money is awarded, there's a presumption that you're going to get double costs from the time that the offer was made. And that's exactly what's happened here double costs from the time that the offer was made. And that's exactly what's happened here. And the intention of that is to strongly encourage people look, if there's a reasonable offer to settle something, take it and don't carry on and engage in litigation if that isn't necessary. And the court here on that front found that. Well, 7-eleven would have been fully aware of all the facts, including pothole maintenance and everything else, and so it would have been reasonable to have accepted the much lower offers prior to trial. And so that's the final judgment on the case of the terrible pothole in the 7-Eleven parking lot.
Adam Stirling:Michael Mulligan, with Mulligan Defense Lawyers. After the second half of our second hour every Thursday, it's Legally Speaking on CFAX. Michael, thank you so much. Pleasure as always.