Executive Summary: Key Legal and Evidentiary Issues

• Dispute centred on a failed agreement of purchase and sale for a residential property where the buyer refused to close, alleging misrepresentation about zoning.
• The MLS listing incorrectly described the property as “residential” when it was actually zoned W2, raising a negligent misrepresentation defence focused on zoning information.
• Text messages between the buyer and her real estate agent became crucial evidence, showing the buyer knew of the W2 zoning before making the offer and chose not to reveal it to the sellers’ side.
• The court carefully assessed credibility through a mini trial, ultimately preferring the agent’s evidence and authenticating the text message screenshots over the buyer’s assertions and claimed lack of recollection.
• Because the buyer did not actually rely on the incorrect MLS zoning description when entering the contract, her negligent misrepresentation defence failed, clearing the way for summary judgment.
• Damages were calculated on the loss on resale plus reasonable carrying costs, less the deposit, with a separate order that the deposit be released to the sellers and costs to be determined after written submissions.

Background and facts of the real estate dispute

The case arises from a failed residential real estate transaction involving a property at 60 Riverview Drive in LaSalle, Ontario. The plaintiffs, Russell and Shelley Mino, owned the property, a single detached dwelling, and listed it for sale with real estate agent Dean Beliveau of Manor Windsor Realty Ltd. on April 1, 2022, at a list price of $299,000. The market was at its peak and the plaintiffs received five offers, with the lowest at $350,000 and the highest from the defendant buyer, Florry Margaret Foster, at $557,000. That highest offer was accepted. The parties entered into a standard agreement of purchase and sale (APS) dated April 19, 2022, later amended on April 30, 2022. The APS was in standard form and contained all the usual clauses. Importantly, there was no financing condition; the buyer’s offer was effectively a cash offer. The APS provided that the present use was residential and could continue, which was accurate, but it did not contain any warranty or representation that the buyer’s future intended use would be lawful unless specifically provided, and there was no such special provision. Paragraph 9 of the APS expressly stated that the seller and buyer agreed there was no representation or warranty that the buyer’s future intended use would be lawful, absent an express clause to that effect. The original closing date was set for June 3, 2022, later extended at Ms. Foster’s request to June 30, 2022, with a requisition date of June 23, 2022. The buyer’s lawyer delivered a requisition letter on time, but it raised no zoning issues. Shortly before closing, however, the transaction collapsed when the buyer refused to complete.

Zoning status and the alleged misrepresentation

Central to the dispute was the property’s zoning. The buyers’ side asserted that Ms. Foster’s offer was based on an MLS listing on the Windsor-Essex County Association of Realtors website, which identified the zoning as residential. In fact, under LaSalle’s Comprehensive Zoning By-law 8600 (in force since August 30, 2021), the property was zoned W2. That zoning category permitted additional uses but specifically allowed single-detached dwellings that existed before the by-law, meaning the property’s existing residential use remained lawful and could continue. The defendants claimed this discrepancy was a misrepresentation about the property’s zoning, and that the buyer relied on the “residential” notation in the MLS listing when deciding to purchase. Ms. Foster said she intended to renovate the dwelling to make it wheelchair accessible due to significant health issues, including chronic fibromyalgia, Hashimoto’s disease, loss of a kidney, and bilateral hip replacements. She also hoped to build an additional dwelling unit on the property for her daughter. She asserted that W2 or “commercial” zoning might have prevented the renovations she envisaged and that the more onerous financing terms attached to a non-residential classification made the purchase no longer viable. Her evidence was that, after the offer was accepted, a mortgage broker advised her the land was not zoned residential and that, framed as commercial, the mortgage would require a larger down payment and carry substantially higher interest, insurance, and payments than she anticipated. On this basis, her lawyer wrote on June 29, 2022, saying she would not complete the purchase because the property had been “misrepresented as residential” on the APS when it was in fact zoned W2. The court found that this letter was inaccurate: there was no zoning representation in the APS itself, and the APS correctly stated only that the current use was residential and could continue.

The negligent misrepresentation defence and mini trial

Ms. Foster’s defence was built around negligent misrepresentation. She pleaded that she was misled by the zoning information in the MLS listing, that the zoning designation was a critical factor in determining the purchase price, and that she lawfully rescinded the APS when she discovered the true W2 zoning. She stated that she relied on the MLS “residential” indication to believe the property would be suitable for renovations and mobility-related modifications, and that W2/commercial zoning might not have permitted those changes or an additional dwelling. In an earlier decision on the plaintiffs’ summary judgment motion, the court recognized that the negligent misrepresentation defence raised credibility issues and ordered a mini trial. Under Rules 20.04(2.2) and 37.13(2)(b) of the Rules of Civil Procedure, the court directed that a focused, oral-evidence hearing be held to determine three key questions: whether Ms. Foster actually relied on the alleged misrepresentation, whether that reliance (if any) was reasonable, and whether the representation was material to her decision to purchase. This mini trial was necessary because Ms. Foster had sworn that zoning information was “a critical factor” in her decision and that she relied on it in setting her price, but there were conflicting indications in the record, especially in the documentary communications. The court considered that resolving these factual disputes, particularly credibility, was essential to deciding whether her negligent misrepresentation defence could succeed.

Evidence of the real estate agent and text message history

At the mini trial, two witnesses testified: Todd Burns, Ms. Foster’s real estate agent, and Ms. Foster herself. Their relationship was strained; Ms. Foster had complained to the Real Estate Council of Ontario about both Mr. Burns and the plaintiffs’ agent, though the complaint against Mr. Burns had been dismissed. Mr. Burns testified that he first met Ms. Foster on April 19, 2022, after her daughter asked him to contact her. Ms. Foster told him she was interested in the Mino property and wanted to submit an offer. After reviewing the MLS listing, which did identify the zoning as residential, Mr. Burns checked the Town of LaSalle’s website and discovered the zoning had been changed to W2. He retrieved and reviewed the W2 zoning description. According to his evidence, he conveyed this information to Ms. Foster both by phone and by email on April 19 and provided a hard copy of the W2 zoning description when he met her later that day. Offer presentation was scheduled for that same day, so any offer from Ms. Foster had to be made then to be considered. Mr. Burns further testified that Ms. Foster independently chose the offer price of $557,000, that they discussed possible conditions but she insisted on making a firm offer without conditions, and that she said financing was not an issue. He prepared the offer, she signed it after viewing the property, and a $20,000 deposit accompanied the firm agreement. When Ms. Foster later experienced difficulty arranging financing, Mr. Burns helped arrange a meeting with a mortgage broker, where various financing options were presented but rejected by Ms. Foster. He then approached the plaintiffs to seek a mutual release, which they refused. A key part of Mr. Burns’ evidence consisted of screenshots of text messages between him and Ms. Foster, spanning 56 pages. These included messages from April 18 and 19, 2022, immediately before and on the offer date. In one exchange, Ms. Foster messaged about considering an offer price and confirmed she was “not concerned with financing,” saying she would simply update her bank. Later on April 19, after Mr. Burns supplied the legal description, Ms. Foster sent a message referencing W2 zoning, stating that it allowed additional residential uses and noting that the listing was incorrect because the property was not residential but W2. She also directed that this information not be shared with the other agent, remarking that the listing agent “really didn’t do their work.” Mr. Burns responded that this was good news, and they proceeded with the scheduled viewing and offer.

Evidence of the buyer and credibility assessment

Ms. Foster testified about her medical conditions, her desire to find a smaller, accessible home without stairs, and her plan to potentially add a separate dwelling for her daughter. She said she located the subject property on MLS, noted its residential zoning, and did not discuss zoning with Mr. Burns prior to making her offer. Based on her past experience of buying or selling roughly 13 properties, she believed she understood what residential zoning allowed and insisted she would not have offered on the property had she known it was zoned W2. She claimed that she first learned of the true zoning classification at a later meeting with a mortgage broker, appraiser, and Mr. Burns. According to her account, the appraiser could not proceed because he was licensed only for residential appraisals, and she was informed that the mortgage would be treated as commercial, requiring a much larger down payment and carrying a very high interest rate. At that point, she said she instructed that the sellers be told she would not close due to misrepresentation. When confronted with the text messages filed by Mr. Burns, Ms. Foster acknowledged that they had communicated by text but asserted that she could not recall many of the specific messages. She did not produce her own texts from her phone. She accepted certain messages, such as those exchanging email addresses and confirming procedural details around the offer and closing, but denied or professed no memory of the messages in which she herself referred to W2 zoning, stated that the listing was wrong, and asked that the corrected zoning not be shared with the selling side. The court observed that both witnesses were more straightforward when questioned by their own counsel and more argumentative and combative under cross-examination, but it still needed to resolve whose account was more accurate.

The court’s findings on reliance and misrepresentation

The court found the text message evidence compelling and authentic. The screenshots showed consistent dates, times, and identifiers, including Ms. Foster’s first name and initials on each page, with no apparent gaps or inconsistencies. The fact that Mr. Burns produced a full 56-page chain, including many irrelevant messages, weighed against any suggestion that the exchange had been selectively edited. The court rejected Ms. Foster’s suggestion that the texts had been tampered with, finding that allegation improbable in light of the internal consistency of the record and her failure to produce contrary messages from her own device. It accepted Mr. Burns’ evidence that the messages were genuine and complete. Applying the test for negligent misrepresentation, the court accepted that the plaintiffs’ agent had made a false statement in the MLS listing by incorrectly identifying the property as residentially zoned rather than W2. However, that was only the first element of the analysis. To succeed, Ms. Foster needed to show she actually relied on that false statement when entering into the APS, that such reliance was reasonable, and that the misrepresentation was material to her decision. On the crucial question of reliance, the court held that she did not rely on the MLS notation at the time of contracting. The text messages showed that once she had the property’s legal description, she independently checked the zoning, discovered it was W2, and informed Mr. Burns of this before she viewed the property and before she signed the offer on April 19. The messages also showed that she regarded the W2 status as “good news” and specifically instructed that the selling agent not be told about it. The court emphasized that Ms. Foster was an experienced real estate participant, having already been involved in 13 transactions, and that her interest in renovations and an additional dwelling unit made zoning particularly important to her. In that context, her decision to proceed with a firm, unconditional offer after learning the true zoning was inconsistent with her later claim that she had relied on the MLS misdescription and would never have offered if she had known the truth. Because the court found that she did not in fact rely on the MLS statement when entering the APS, it concluded that her negligent misrepresentation defence must fail and that there was no need to analyze in depth whether any hypothetical reliance would have been reasonable or material. With the defence defeated on factual grounds, the court held that there were no genuine issues requiring a full trial on liability and that the matter was appropriate for summary judgment in favour of the plaintiffs.

Damages calculation and final outcome

Having decided that Ms. Foster was liable for failing to close, the court turned to damages. The plaintiffs had been unable to complete their sale on June 30, 2022, and eventually sold the property on December 1, 2022, for $329,000. The original contract price had been $557,000, so the loss on resale amounted to $228,000. The court accepted this as the primary component of damages. It then considered the plaintiffs’ claimed carrying costs from the extended period of ownership, including additional mortgage interest, property taxes, utilities, and insurance. It allowed additional mortgage interest of $3,303.74 and further reasonable expenses for realty taxes, hydro, gas, water, reliance expenses, and insurance, all supported by evidence. The plaintiffs also claimed a loss of rent of $4,500, but the court found the evidentiary foundation for that item insufficient and declined to include it. The total damages accepted by the court came to $233,175.41. A $20,000 deposit remained held by the brokerage, Manor Windsor Realty Ltd. The judge ordered that this deposit be released to the plaintiffs, and after crediting that amount, fixed the net damages payable by Ms. Foster at $213,175.41. In formal disposition, the court granted summary judgment to the plaintiffs, ordered Ms. Foster to pay them $213,175.41 in damages, and directed release of the $20,000 deposit to them. It also set a timetable for written costs submissions but did not fix a specific costs amount in this decision, leaving the quantum of costs to be determined later. Overall, the successful parties were the sellers, Russell and Shelley Mino, who obtained a total monetary benefit of $233,175.41 (comprised of $213,175.41 in damages plus the $20,000 deposit), with any additional costs award to be assessed in separate written submissions.