The B.C. Court of Appeal has partially upheld an appeal by Fernie Real Estate Agent, Todd Fyfe, against a ruling from 2021 that would have seen him on the hook for over $1.5 million in damages owed to a former client.
In February 2021 Fyfe was found negligent in alerting his client, Kevin Dunn, that a property he eventually purchased through Fyfe was being considered for inclusion in the Agricultural Land Reserve, and therefore plans to develop the property into an executive retreat wouldn’t be possible without action to opt out. Without the knowledge of the ALR border review, the entirety of the property was included in the ALR after Dunn purchased it, without his knowledge.
The ALR is land in B.C. that protected agriculturally suitable land for agricultural use.
While a retreat was eventually completed in 2018 after some back-and-forth on planning and design, Dunn sued Fyfe for costs associated with throwing away design plans, costs in developing new plans, difference in costs between the plans, costs of seeking professional advice, and for lost profits.
It was the last item which Fyfe was successful in appealing, which was originally calculated to be $675,277.
In a ruling on May 27, the appeal court revised those damages down to $219,084, citing issues with the calculation process and an unlikely development timeline listed by the developer.
Justice DeWitt-Van Oosten published the written reasons for the appeal decision, which was unaimously concurred by the other two justices that make up an appeal court panel.
In the original ruling, damages were awarded for lost profits between 2016 and 2019, but Justice DeWitt-Van Oosten wrote that without issues with the ALR, if construction had begun in 2015 (as submitted by Dunn), a 19-month construction timeline (projected by Dunn) wouldn’t have seen the retreat open until late 2017 in a best-case scenario.
Justice DeWitt-Van Oosten therefore ruled that the lost profits part of the settlement be revised to exclude 2016 and 2017, with only 2018 and 2019 included.
After calculating revenues and operating expenses, past loss profits were left at $219,084 for 2018 and 2019.
No other portions of Fyfe’s appeal were upheld, including a further downward revision of lost profits by 10 percent due to an ailing Albertan economy at the time. His appeal on liability, which took up most of Justice DeWitt-Van Oosten’s ruling was rejected.
The remainder of damages owed were not changed, meaning Fyfe now owes $1,080,087 in damages due to negligence.
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