Kokanee Mortgage MIC Ltd. v. Concord Appraisals Ltd., 2000 BCSC 1197

• Judge: Neilson, J.
• Court: Supreme Court of British Columbia (Canada)
• Case Date: August 04, 2000
• Jurisdiction: British Columbia
• Citations: 2000 BCSC 1197;[2000] B.C.T.C. 595 (SC)

Kokanee Mortgage v. Concord Appraisals, [2000] B.C.T.C. 595 (SC)

MLB headnote and full text

Temp. Cite: [2000] B.C.T.C. TBEd. AU.130

Kokanee Mortgage MIC Ltd. (plaintiff) v. Concord Appraisals Ltd. (defendant)

(25746; 2000 BCSC 1197)

Indexed As: Kokanee Mortgage MIC Ltd. v. Concord Appraisals Ltd.

British Columbia Supreme Court

Kamloops

Neilson, J.

August 4, 2000 and August 28, 2000.

Summary:

The plaintiff mortgage investment company granted a mortgage on property relying on an appraisal conducted by the defendant. The plaintiff alleged that it suffered a loss where the defendant grossly overvalued the mortgaged property. The plaintiff sued for negligent misrepresentation. The defendant submitted that property appraisals were a matter of judgment and opinion, not an exact science. Mere overvaluation of a property did not constitute negligence.

The British Columbia Supreme Court found the defendant liable for negligent misrepresentation. Real estate appraisal was a matter of judgment, not an exact science. However, an appraisal must be undertaken with acceptable standards of skill and expertise, and be based on rational assumptions. The mortgaged property was unique, with a lack of similar comparable properties. The defendant made clear errors in valuing the property. Many of the defendant's assumptions were made without any foundation. Notwithstanding the difficulty in valuing the property, the defendant did not "red flag" the valuation by providing a cautionary note. The property was grossly overvalued by at least $170,000. The defendant owed the plaintiff a duty of care and the plaintiff reasonably relied on the appraisal to its detriment. The plaintiff would not have loaned the monies but for the negligent appraisal. The plaintiff was entitled to damages equal to the monies lost from not being able to invest the loan monies elsewhere.

Damages - Topic 3630

Deceit and misrepresentation - Negligent misrepresentation - See paragraphs 82 to 98.

Evidence - Topic 2401

Special modes of proof - Presumptions - Specific presumptions - Inference from failure to call or adduce available evidence - See paragraphs 65 to 76.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - See paragraphs 1 to 64.

Fraud and Misrepresentation - Topic 2743

Misrepresentation - Negligent advice - What constitutes - See paragraphs 1 to 64.

Professional Occupations - Topic 4065

Appraisers - Negligence - Standard of care - General - See paragraphs 1 to 64.

Professional Occupations - Topic 4074

Appraisers - Negligence - Measure of damages - See paragraphs 82 to 98.

Cases Noticed:

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, refd to. [para. 49].

Cari-Van Hotel v. Globe Estate Ltd., [1974] 6 W.W.R. 707 (B.C.S.C.), refd to. [para. 51].

Baxter v. Gapp & Co., [1938] 4 All E.R. 457 (K.B.), affd. [1939] 2 All E.R. 752 (C.A.), refd to. [para. 52].

Haven Investments Ltd. v. Harper, [1985] B.C.J. No. 190 (Co. Ct.), refd to. [para. 52].

Esselmont v. Harker Appraisals Ltd. (1979), 14 B.C.L.R. 116 (S.C.), refd to. [para. 54].

McTavish v. MacGillivray et al., [1997] B.C.T.C. Uned. A88; 38 B.C.L.R.(3d) 306 (S.C.), refd to. [para. 65].

R. v. Jolivet (D.) (2000), 254 N.R. 1; 185 D.L.R.(4th) 626 (S.C.C.), refd to. [para. 68].

R. v. Rooke (1988), 40 C.C.C.(3d) 484 (B.C.C.A.), refd to. [para. 69].

R. v. Smith (F.E.) (1993), 141 A.R. 241; 46 W.A.C. 241 (C.A.), refd to. [para. 71].

Fomo Products Inc. v. Salcan Enterprises Ltd. (1986), 4 B.C.L.R.(2d) 264 (C.A.), refd to. [para. 71].

Cairns v. Cairns, [1931] 3 W.W.R. 335 (Alta. C.A.), refd to. [para. 71].

Winter v. Winter, [1993] B.C.J. No. 2275 (S.C. Master), refd to. [para. 71].

Lampropoulos v. Pyrgos, [1992] B.C.J. No. 695 (S.C.), refd to. [para. 73].

Shobridge v. Thomas (1999), 16 B.C.T.C. 161; 47 C.C.L.T.(2d) 73 (S.C.), refd to. [para. 75].

Swingcastle Ltd. v. Alastair Gibson, [1991] 2 All E.R. 353; 199 N.R. 305 (H.L.), refd to. [para. 82].

Conex Services Inc. v. Bogner Developments Ltd. et al. (1999), 130 B.C.A.C. 101; 211 W.A.C. 101; 70 B.C.L.R.(3d) 1 (C.A.), refd to. [para. 82].

Rainbow Industrial Caterers Ltd. et al. v. Canadian National Railway Co. et al., [1991] 3 S.C.R. 3; 126 N.R. 354; 3 B.C.A.C. 1; 7 W.A.C. 1, refd to. [para. 82].

Authors and Works Noticed:

Wigmore on Evidence (Chadbourn Rev. 1972), vol. 2, para. 290 [para. 69].

Wigmore on Evidence (3rd Ed.), vol. 2, p. 162 [para. 68].

Counsel:

Leonard S. Marchand, for the plaintiff;

James A. Horne, Q.C., for the defendant.

This action was heard on May 29 and 31 and June 1-2, 2000, before Neilson, J., of the British Columbia Supreme Court, who delivered the following judgment on August 4, 2000, and a supplemental judgment on August 28, 2000.

Please note: The following judgment has not been edited.