Graham v. Moore

2002BCSC0691 Citation: GRAHAM and FERRIER v. MOORE et al Date: 20020510 2002 BCSC 691 Docket: S012369 Registry: Vancouver IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: NANCY JANE GRAHAM and DONALD JAMES FERRIER PLAINTIFFS AND: MILDRED ELIZABETH MOORE, aka MILDRED ELISABETH MOORE, aka MILDRED E. MOORE, THE BANK OF NOVA SCOTIA TRUST COMPANY (formerly known as Montreal Trust Company of Canada) AND BARRIE WENDELL MOORE in their capacities as the Executors of the Estate of MILDRED ELIZABETH MOORE, BARRIE WENDELL MOORE in his personal capacity AND BERNARD CAMPA DEFENDANTS AND: THE BANK OF NOVA SCOTIA TRUST COMPANY DEFENDANT BY COUNTERCLAIM REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE MELNICK Counsel for the Plaintiffs: D.P. Church and A. Pearson Counsel for the Defendant Bank of Nova Scotia Trust Company: J.E. Milton Counsel for the Defendant Barrie Wendell Moore: G.A. Phillips Counsel for the Defendant Bernard Campa: B.E. McLeod Date and Place of Hearing: April 29 and 30; May 1, 2, and 3, 2002 Vancouver, BC [1] This is an application by the plaintiffs for judgment pursuant to Rule 18A for a specific performance of an alleged agreement in writing to purchase residential real property. The application is opposed only by the defendant, Bernard Campa ("Mr. Campa") on the basis that the plaintiffs do not have a valid and enforceable agreement. He says this is because he has an agreement to purchase the property. This, he claims, is either pursuant to an agreement with the executors of the estate of Mildred Elizabeth Moore ("the Moore Estate") to "meet or beat" the offer of any other prospective purchaser, or pursuant to a "bidding agreement" pursuant to which he says he submitted the highest bid by the close of business of the executor, the Bank of Nova Scotia Trust Company ("BNS Trustco") or, alternatively, pursuant to an agreement in writing made with one of the executors of the Moore Estate, Barrie Wendell Moore ("Mr. Moore") on April 2, 2001. I. BACKGROUND [2] Mildred Elizabeth Moore ("Mrs. Moore") died on January 11, 2001. She appointed her son, Mr. Moore, and Montreal Trust Company of Canada (to which BNS Trustco is successor) as executors. Pursuant to the terms of Mrs. Moore's Will, BNS Trustco assumed the burden of the administration of her estate together with the custody of assets and maintenance of accounts. The individuals in the Vancouver offices of BNS Trustco directly responsible for the administration of the Moore Estate were Mr. Douglas Derish ("Mr. Derish") who is the Manager of Estates and Trusts, Personal Trust Services and Ms. Cathy Adam ("Ms. Adam"), Senior Trust Officer. [3] The assets of the Moore Estate include a residential property at 2785 West 30th Avenue in Vancouver. The legal description of that property is: Lot 20, Block L, D.L. 27, Plan 5702, L.D. 36, P.I.D. 011-086-475 ("the property"). The home, while modest in appearance, is in a very desirable location being located on a ridge with commanding views of the city, English Bay, and the mountains. [4] Campa's parents live in a home across the lane from the Moore property. He lives 2 to 3 blocks distant from the home of his parents. Within a matter of days of the death of Mrs. Moore, Mr. Campa wrote to one of Mrs. Moore's housekeepers introducing himself and expressing his interest in purchasing the Moore home. He indicated that he was not looking for any favours with respect to the price of the home but that, if he could purchase directly from the Moore Estate, it would save real estate commission. His expression of interest came into the hands of the Moore family because he became known to Mr. Moore and his daughter, Ms. Brenda Moore. Both were apparently motivated to maximize the return to the Moore Estate by taking Mr. Campa up on his proposal, thus saving the Moore Estate considerable real estate commission. [5] Mr. Derish and Ms. Adam of BNS Trustco, however, were of the view that the value of the property to the Moore Estate would be maximized if it was exposed to the market. They thus had the property appraised. It was subsequently listed on March 14, 2001, at $679,000. Although the listing documentation did not immediately reflect it, I am satisfied that, despite some initial reluctance by the listing agent Dexter Properties Inc., Mr. Campa was always regarded as an excluded party for the purpose of paying commission. After a for sale sign was erected on the property, but before the listing actually reached the multiple listing service ("MLS") directory, a number of offers were received. Two of those initial offers were over, or effectively over, the asking price. Mr. Campa offered $672,000 which, because the Moore Estate was not obliged to pay commission on a sale to him, would have netted the Moore Estate that amount. The plaintiffs offered $684,000 which, net of commission, would have left the Moore Estate with close to $661,000. [6] Officials at BNS Trustco cautioned Mr. Moore that, as executors, they should hold off accepting any offer until it was determined whether any further, better, offers might result from the exposure of the property on the MLS directory. [7] In the meantime, Mr. Campa, rebuffed in an attempt to get information as to the offers being made by other prospective purchasers from Mr. Derish, established a line of communication with Brenda Moore by e-mail and telephone in which she fed him, to the extent that she was able to find out, the offers being made by others, notably by the plaintiffs. The plaintiffs, their realtor Ms. Sharon Bardsley, the listing agent Ms. Margaret Hilton of Dexter Properties Inc., and officials at BNS Trustco were all apparently unaware that Mr. Campa was getting inside information indirectly (and later directly) from Mr. Moore. [8] Thus, Mr. Campa was always able to come back with an offer that beat anything any other party, including the plaintiffs, was able to offer. He did not, however, have an agreement with the executors of the Estate to "meet or beat" the offer of any other prospective purchaser. What he had was the connivance of a member or members of the Moore family to feed him inside information, undoubtedly with the object of maximizing the return to the Moore Estate from the sale of the property. [9] In his cross-examination, Mr. Campa made it plain that he made no apologies for taking the steps he did to "tilt the playing field" (the expression used on cross-examination) in his favour. He undoubtedly is of the school of thought that the Marquis of Queensbury Rules do not apply to a person who has his heart set on acquiring a desirable piece of property. Despite his being painted in various shades of black by counsel for the other parties as a consequence, no one referred me to any authority that suggested the actions he took were in any way illegal. Undoubtedly, the conduct of the Moores resulted in prospective purchasers such as the plaintiffs being used as pawns by the Moores to drive up the price of the home with Mr. Campa secure in the knowledge, he thought, that he could always match or better the offer of anyone else, should he chose to do so. [10] Faced with a number of offers, Ms. Adam, on behalf of BNS Trustco, contacted the various prospective purchasers, including Mr. Campa and Ms. Bardsley on behalf of the plaintiffs, and told them that they should get in their best offer by 5:00 p.m. on March 29, 2001. BNS Trustco did not, however, suggest through Ms. Adam to Mr. Campa or Ms. Bardsley that the highest offer received at that time would be accepted. Undoubtedly, however, that is what was in the minds of the plaintiffs and Mr. Campa. Thus, the plaintiffs submitted an offer of $740,000 which would leave a net return to the estate of just over $715,000 while Mr. Campa submitted an offer of $720,000. Mr. Campa's offer was no coincidence. He had been told by Mr. Moore of the plaintiffs' offer of $740,000. He crafted his offer on that occasion as he had on previous occasions, not to just exceed the plaintiffs' offer by a few dollars, as well he could have done with the information received, but by a sufficiently large amount to disguise the fact that he was receiving inside information. [11] Undoubtedly, everyone involved in these events on March 29, 2001, were probably of the mind that, quite aside from the fact there had not been any commitment to do so, the highest price net to the Moore Estate received by 5:00 p.m. would be accepted. Further, it is Mr. Campa's recollection denied by Ms. Adam that she told him that it was not the practice of BNS Trustco to make counter-offers in this type of situation. I accept the evidence of Ms. Adam on this point. [12] During this critical time, Mr. Moore was vacationing in the United States with his wife. On March 29, he was driving back to Vancouver in considerable pain and discomfort because of a recent fall. Whether because of the fact that he was taking pain killers during this period, or whether it is because of the fact that, generally, his powers of recollection are not good, I found Mr. Moore's evidence on cross-examination to lead me to the conclusion that his evidence, overall, is unreliable. [13] Mr. Moore was to have contacted BNS Trustco around 5:00 p.m. on March 29 to discuss offers received that day. Because he was late in telephoning, he was not able to contact either Mr. Derish or Ms. Adam. I accept the evidence of Mr. Derish that Mr. Derish spoke with Mr. Moore the morning of March 30 at which time he discussed with Mr. Moore the offers received by 5:00 p.m. the previous day. He related to Mr. Moore a strategy devised between he, Ms. Adam and Mr. Rod Scheuerman, Vice-President, Personal Trust Services of BNS Trustco, at a meeting late the previous day, to advance a counter-offer only to the plaintiffs in the amount of $765,000. This strategy, of course, potentially "tilted the playing field" in favour of the plaintiffs. Mr. Moore was not made aware of the legal reality, however, that if the plaintiffs happened to accept the counter-offer, there would be no opportunity for a further offer by Mr. Campa. BNS Trustco did not have any particular reason to explain that to Mr. Moore because, of course, they were not aware that the Moores were feeding information to Mr. Campa. [14] Knowing that there was pressure on them to make a decision, and also knowing that it had proved very difficult for them to contact Mr. Moore, Mr. Derish sought, and obtained, from Mr. Moore his authority as BNS Trustco's co-executor to accept any counter-offer from the plaintiffs that was over $740,000. It was Mr. Moore's version of events that he was, in fact, agreeable to BNS Trustco accepting any offer over $740,000 if that was the end of it. In other words, if it was the highest offer received from anyone. I do not accept that that was the force of the conversation between Mr. Moore and Mr. Derish. I conclude that Mr. Moore, as one co-executor, specifically gave Mr. Derish, as a representative of BNS Trustco, the other co-executor, the specific authority to accept any offer from the plaintiffs over $740,000. [15] On March 30, Mr. Moore spoke with Mr. Campa and told him of the executors' intention to advance a counter-offer, to the plaintiffs only, in the amount of $765,000. However, at that point, Mr. Campa's mole, Brenda Moore, failed him. She was unable to tell him whether the plaintiffs responded with a further counter-offer and, if so, in what amount. He was shocked when, on April 1, 2001, he saw a sold sign on the property. He telephoned Mr. Moore, who by then had return to Vancouver, and was led to believe that Mr. Moore had not signed anything. That was true, of course, at that point Mr. Moore had not signed anything. However, on the afternoon of March 30 the plaintiffs had submitted a counter-offer in the amount of $752,000. Relying on its verbal authority from Mr. Moore to accept any counter-offer from the plaintiffs over $740,000, BNS Trustco had accepted the plaintiffs' offer by signing a faxed summary of that offer from Ms. Bardsley on behalf of the Estate. That offer and acceptance is as follows: FAX COVER SHEET FROM SHARON BARDSLEY SUTTON GROUP HERITAG WEST Cell: (604) 644-3320 Fax: (604) 732-7415 Office: (604) 267-3800 DATE: March 30, 2001 TO: Cathy Adams FAX: 718-7149 Cathy, As both Don & Nancy are hard to reach to get initials I have a verbal for $752,000 with the condition you requested: Subject to the Seller receiving grant of letters of probate re: the Last Will and Testament of Mildred Elizabeth Moore by April 23, 2001. This condition is for the sole benefit of the Seller. My clients are very disappointed with how everything has transpired. First, they make an offer, which is in competition with 3 others. They are then told to rewrite giving their best offer and it will be presented March 29, 2001. Now, not only having to wait one week and an extra day in anticipation because the family executor cannot be reached, they have been countered. Cathy, I understand and respect your position in all of this and know your hands are somewhat tied, but unfortunately my clients and I are feeling like we are not being dealt with in good faith. Can you tell me what we might anticipate in future negotiations? Yours truly, MILDRED E. MOORE ESTATE The above offer and terms are acceptable. Bank of Nova Scotia Trust Company Per: C. Adam Co-executor March 29th [sic] 2001 3:35 p.m. "Sharon Bardsley" [16] Mr. Campa responded by presenting a written offer to purchase directly to Mr. Moore on Monday, April 2, 2001. After a meeting with his family, Mr. Moore took it upon himself to accept Mr. Campa's offer, purporting to do so on behalf of the Estate. However, unlike BNS Trustco which, on March 30, had accepted the plaintiffs' offer with Mr. Moore's authority, Mr. Moore did not have the authority of his co-executor, BNS Trustco, to accept Mr. Campa's offer. [17] In the meantime, Ms. Bardsley, having presented a standard form of Purchase and Sale agreement for the signatures of the co-executors on Monday, April 2, found, through Ms. Hilton, that Mr. Moore had refused to sign this document. She was very upset. Apparently, Ms. Hilton, a friend of the Moore family, felt herself unable to deal with the situation and act as an intermediary. She gave Ms. Bardsley permission to phone Mr. Moore and BNS Trustco directly. Ms. Bardsley wasted no time in doing so, letting Mr. Moore know in no uncertain terms that she was not impressed with his position or his morals. [18] At what I take to be the urging of BNS Trustco, Mr. Moore then sought independent legal advice. Consequent to receiving that advice, he then made the decision that he would confirm the acceptance of the plaintiffs' March 29 offer by signing on April 5, 2001, together with a representative of BNS Trustco, the standard form version of the plaintiffs' offer to purchase in the amount of $752,000. This document is the only form of offer of purchase and sale signed by both co-executors. [19] Mr. Campa's offer of April 2 provided that he would increase his deposit of $2,500 to $50,000 within 48 hours of acceptance of his offer. The additional funds have never been paid. He says that this is because officials of BNS Trustco made it plain to him that it would be fruitless to do so. [20] The plaintiffs are ready, willing and able to complete the transaction. All documentation was put in place to do so but, days before registration of the conveyance of the property to them, Mr. Campa, on April 24, 2001, filed a caveat, claiming an interest in the property, on the following grounds: 1. On or about the 2 day of April, 2001, the Estate of M.E. Moore entered into a contract of Purchase and Sale with the Caveator, Bernard Campa and/or nominee, to sell the land to him on or before May 24, 2001. 2. There were no conditions contained in the contract. 3. The Caveator claims an interest in the land pursuant to the contract. 4. The Caveator has reason to believe that the Estate of M.E. Moore will transfer the property before the completion date of May 24, 2001 to a third party. [21] Thus, the plaintiffs brought this action for specific performance. II. DISCUSSION [22] In his final argument on behalf of Mr. Campa, Mr. McLeod did not pursue either the position of Mr. Campa that he had an agreement to "meet or beat" the price offered by any other prospective purchaser of the property or his position that there was an agreement that the party submitting the highest offer by 5:00 p.m. on March 29, 2001, would be the successful purchaser. As noted earlier, the facts do not support either position. [23] Mr. Campa's argument is founded on the assumption that Mr. Moore did not give BNS Trustco the authority to accept a counter-offer from the plaintiffs. In any event, he argues, the document executed by BNS Trustco on March 29 was insufficient to form a binding agreement of purchase and sale. Thus, he argues, when, on April 2, 2001, he presented an offer for $745,000 to Mr. Moore, there was no binding offer of purchase and sale in place. When Mr. Moore signed his offer, Mr. Moore did so on behalf of the Estate without holding out that he had the authority of any co-executor to do so. Thus, pursuant to some venerable English authorities referred to by Mr. McLeod, he bound the Estate to sell the property to Mr. Campa. The law, suggested his counsel Mr. McLeod, is that a co-executor cannot bind his fellow co-executors if he holds out that he has the authority of those co-executors to do so, but, in fact, does not (the situation with BNS Trustco and Mr. Moore on March 30 suggested Mr. McLeod). However, a co-executor can bind an estate when he enters into a contract on behalf of an estate when he does not specifically hold out, either in the contract or separately, that he has such authority (as in the case of Mr. Moore's signing Mr. Campa's offer said Mr. McLeod). See cases such as Ewart v. Gordon, 13 Gr. 40, Cumming v. Landed Banking and Loan Co. (1893), 22 S.C.R. 246, Sneesby v. Thorne (1855), 7 De GM & G 399, and Fountain Forestry v. Edwards and another, [1974] 2 All E.R. 280. [24] Thus, argued Mr. McLeod, Mr. Moore and BNS Trustco had no authority to enter into the contract with the plaintiffs on April 5 because, by then, Mr. Moore had already bound the Moore Estate to sell to Mr. Campa on April 2. [25] Mr. McLeod's argument is misplaced both in fact and in law. [26] It is misplaced in fact because, I have found, Mr. Moore did give authority to BNS Trustco to accept a counter-offer from the plaintiffs if it was in an amount over $740,000. Thus, Ms. Adam did have the authority to accept the plaintiffs offer on March 30 both on behalf of BNS Trustco and on behalf of Mr. Moore. The fax that she signed was sufficient as to the terms of the agreement to bind the executors to sell to the plaintiffs for $752,000. In any event, the reality is that, with the benefit of independent legal advice, Mr. Moore subsequently signed, with BNS Trustco, the Moore Estate's acceptance of the standard form offer to purchase of the plaintiffs on April 5, 2001. [27] The corollary of the fact that Mr. Moore and BNS Trustco had accepted the plaintiffs' offer on March 30, 2001, is that Mr. Moore did not have the authority to accept Mr. Campa's offer of April 2, 2001. [28] I do not accept the argument advanced by Mr. Campa that Mr. Moore ultimately signed the plaintiffs' offer on April 5, 2001, under the duress of threats by Ms. Bardsley. Although undoubtedly Ms. Bardsley used strong language to him, I did not get the impression that Mr. Moore was cowed in anyway by that, nor by her suggesting that the plaintiffs' lawyers would be in contact with him. In any event, he had the opportunity for independent legal advice after his conversations with Ms. Bardsley and it was only then that he signed the plaintiffs' offer on April 5. [29] Further, aside from missing one of the factual foundations for his argument, Mr. McLeod's otherwise interesting argument overlooks the reality that, under British Columbia law, one co-executor cannot sell real property without the authority of the other. [30] Section 78 of the Estate Administration Act, R.S.B.C. 1996, c. 122 provides, in part: 78.(3) The powers, rights, duties and liabilities of personal representatives in respect of personal estate and all enactments and rules of law relating to (a) the effect of probate or letters of administration as respects chattels real, (b) dealings with chattels real before probate or administration, and (c) the payment of costs of administration and other matters in relation to the administration of personal estate, apply to real estate, so far as they are applicable, as if that real estate were a chattel real vesting in the personal representatives. (4) As an exception to subsection (3), it is not lawful for some or one only of several joint personal representatives to sell or transfer real estate without the authority of the court. [31] Thus, Mr. Moore had no right, in law, to purport to bind the Moore Estate on April 2 to sell to Mr. Campa. III. CONCLUSION [32] The plaintiffs have a verbal and binding agreement with the Moore Estate to purchase the property. Mr. Campa does not. The plaintiffs are entitled to an order for specific performance as sought. Mr. Campa's claim fails. His counterclaim is dismissed to the extent that it seeks specific performance of alleged agreements to purchase the property. Mr. Campa's caveat and certificate of pending litigation should be removed forthwith. [33] The parties may make submissions as to costs at a time to be arranged. "T.J. Melnick, J." The Honourable Mr. Justice T.J. Melnick May 21, 2002 - Corrigendum to the Reasons for Judgment issued by Mr. Justice T.J. Melnick advising that paragraph 32 should read as follows: [32] The plaintiffs have a verbal and binding agreement with the Moore Estate to purchase the property. Mr. Campa does not. The plaintiffs are entitled to an order for specific performance as sought. Mr. Campa's claim fails. His counterclaim is dismissed to the extent that it seeks specific performance of alleged agreements to purchase the property. Mr. Campa's caveat and certificate of pending litigation should be removed forthwith. Those changes are noted and have been applied. September 30, 2002 - Corrigendum to the Reasons for Judgment issued by Mr. Justice T.J. Melnick advising that the sentence in paragraph which reads: "Mr. Campa offered $672,000 which, because he was not obliged to pay commission, would have netted the Moore Estate that amount" should read: "Mr. Campa offered $672,000 which, because the Moore Estate was not obliged to pay commission on a sale to him, would have netted the Moore Estate that amount". The word "apologizes" in the second line of paragraph 9 should read "apologies". These changes are noted and have been applied.