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Silence by a seller can be taken as a fraudulent misrepresentation if, by staying silent, the seller intends to deceive the buyer. If a seller is asked a question and the seller knows the answer, it is not acceptable for the seller to say “I don’t know” in an attempt to avoid a potential fraudulent or negligent misrepresentation.
Seller’s Liability for Agents Sellers will be liable for fraudulent or negligent misrepresentations made by their agents. This is what happened in the Sutton case, as the defendant owner did not make any statements to the claimant as to the horse’s history or prior injuries. All such statements were made by her agent. However, due to the rule of vicarious liability, the owner was equally responsible for the fraudulent misrepresentations of her agent.
Agent’s Fiduciary Duties Buyers and sellers often rely upon trainers or agents when buying and selling horses. In these situations, the trainer or agent owes a fiduciary duty to the person they are assisting and may be liable for breaching that duty. In the Ontario case of Albert v. Storms, the plaintiff hobby farm owner retained the defendant to train his horses. The defendant advised the plaintiff to sell one of his horses because it was going lame. Unbeknownst to the plaintiff, the defendant bought the plaintiff ’s horse and re-sold a two-third’s interest in it to a third party. The plaintiff sued the agent for fraudulent misrepresentation, negligence and breach of fiduciary duty. The court found that the defendant had committed a fraudulent misrepresentation by telling the plaintiff that his horse was lame. The court also found that the plaintiff relied upon the defendant to advise him in the sale process and that the defendant owed the plaintiff a fiduciary duty. The defendant breached this duty and was liable to pay damages to the plaintiff.
Conclusion The law of tort and contract is now starting to make a visible mark on equine purchases. Although the cases discussed in this article have direct application in British Columbia and Ontario only, the general principles of law discussed are applicable throughout Canada. Sellers must act honestly and disclose relevant information they possess with respect to the horse’s history. The deliberate failure to do so, with the intent to induce the buyer to purchase the horse, constitutes a fraudulent misrepresentation. A finding by a court that a seller has acted fraudulently is a very serious matter as it impugns the seller’s credibility and honesty. It can have profound effects on a seller’s
professional reputation. This is something that most sellers who trade off their “good name” in the horse industry should strive to avoid. Karen Weslowski is a litigation partner at Miller Thomson in Vancouver, B.C. Prior to practicing law, she was a certified Level 1 Equine Canada coach and a regular horse show competitor. For further advice or information about the issues discussed in this article, Karen can be reached at 604.643.1290 or kweslowski@ millerthomson.com. Ms. Weslowski was counsel for the claimant in the Sutton case. The full text of the Sutton v. Burch and Knies case is available on the Provincial Court of British Columbia’s website at: http://www. provincialcourt.bc.ca/judgments/pc/2011/04/p11_0408.htm. This article is provided as an information service only and is not meant as legal advice. Readers are cautioned not to act on the information provided without seeking specific legal advice with respect to their unique circumstances and the applicable law in their province of residence.
Best Practices Guide for Future Horse Owners During the 2011 Equine Industry Forum, one of the major initiatives to come forward for the Industry Council was the creation of a comprehensive consumer guide identifying recommended best practices for buying, selling or leasing a horse, as well considerations when choosing a boarding or training facility for your horse. The consumer guide will be published in sections, with the first section dealing specifically with the purchase and sale of a horse. A second section will provide guidance on the issues involved with leasing a horse and considerations for placing your horse in a boarding or training facility. “The consumer guide will be a practical publication and will cover the issues that are involved and the recommended best practices to follow when a horse is being purchased,” states Mike Boyd, Chair, Canadian Hanoverian Society and member of EC’s Industry Council and the working group drafting the consumer guide. Topics to be included in the consumer guidebook are: » how to go about buying the right horse for you » the Bill of Sale/Purchase Agreement » role of agents and the issue of commissions » veterinary pre-purchase examinations » what to do when problems arise post purchase “The overall intent of this guide will be to provide education to both buyers and sellers so that each party will better understand the issues involved with buying a horse,” explains Mike. “And ultimately, will result in a sale transaction that is satisfactory to both the buyer and seller”.
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