2003BCSC1282

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:	*Wiebe v. Gunderson et al*
	2003 BCSC 1282

Date: 20030819

Docket: 9912551

Registry: Williams Lake

Between:

Linton Keith Wiebe and Linda Yvonne Wiebe

Plaintiffs

And

Donald Charles Gunderson and Arlene Faith Gunderson,

Countrywide Videoview Realty Inc. and Maurice Alexandre

Defendants

And

Countrywide Videoview Realty Inc. and Maurice Alexandre

Third Parties

Before: The Honourable Mr. Justice Parrett

Reasons for Judgment

Counsel for the plaintiffs:	G.S. McAlister M. Wolters
Counsel for the defendants:	A. McDonnell, Q.C. A.P. Czepil
Date and Place of Trial:	July 5,6, 9-13, 16-20, 23-27, August 1,2, and December 20, 2001
	Williams Lake, B.C.

INTRODUCTION

[1] In this action the plaintiffs seek damages from the defendants Donald Charles Gunderson and Arlene Faith Gunderson arising from their purchase of the Rocky Point Ranch from the Gundersons. The plaintiffs say that the Gundersons made a series of representations in connection with the ranch on which they relied in completing the purchase. The plaintiffs say that the representations were both material and false and that as a result they have suffered damages.

[2] The present action, insofar as it involves the defendants and third parties, Countrywide Videoview Realty Inc. and Maurice Alexandre, was settled prior to the commencement of this trial. The agreement effecting that settlement is Exhibit 1 at the trial.

BACKGROUND

[3] The Rocky Point Ranch is a 586 acre farm property located 60 k. north of Williams Lake. It is made up of four adjoining parcels of land; three large parcels ranging from 160 acres to 225 acres, and a fourth parcel 23 acres in size. The property is an impressive looking ranch property located on three terraces; two of these are long narrow terraces along the banks of the Fraser River which forms the western and southerly boundaries of the property. The eastern portion of the ranch is crossed by both Highway 97 and the B.C. Railway right-of-way.

[4] The farm buildings are located at the south end of the property where it narrows between the river, to the west, and Highway 97, to the east.

[5] The defendants, Donald Charles Gunderson and Arlene Faith Gunderson (“the Gundersons”), offered to purchase the Rocky Point Ranch from the Toronto Dominion Bank February 13, 1986, for $200,000.00. They took title to the property on April 2, 1986.

[6] At the time they acquired the ranch there were two wells located on the property; a small well that provided water for domestic needs and a 425’ deep, 12” well which provided water for irrigation. It is this source of irrigation water that is central to the present lawsuit.

[7] In April of 1987, the Gundersons began installation of a large 360° irrigation pivot in the large field at the north end of the ranch. This large irrigation pivot was installed and operational by June 15, 1987.

[8] On September 7, 1990, the Gundersons ordered equipment for a smaller 180° irrigation pivot to be installed to the south between the area covered by the large pivot and the ranch buildings. By October 16, 1990, this second pivot was in place but not yet operational. It was fully operational by May 8, 1991.

[9] By this time, the Gundersons, who had begun efforts to sell the property in May of 1990, were increasing those efforts. On October 19, 1990, Mr. Gunderson met with Maurice Alexandre who was, at that time, with NRS Laketown Realty (1990) Inc. The following year, he met with another realtor in 108 Mile House, Len Monical. Mr. Monical ran advertisements offering the Rocky Point Ranch for sale in September of 1991.

[10] On October 24, 1990, Maurice Alexandre and a colleague visited the ranch. Shortly after that visit he prepared an information sheet on the ranch from information provided to him by Mr. Gunderson during their meetings on October 19^th and 24^th.

[11] At the time of trial the plaintiff Linton Keith Wiebe was 41 years of age and Linda Yvonne Wiebe was 39. They were married in 1980 and have four children ranging in age from 12 to 19. Linton Wiebe has a grade 7 education and last attended school at the age of 14. At the age of 15 he began working on a variety of farms and ranches in Saskatchewan, eventually moving to British Columbia and working on various ranches, farms and feedlots.

[12] In the spring of 1980 the Wiebes returned to Saskatchewan and, after obtaining some government funding, leased a section of land and began to build a dairy farm. At the start the property was essentially undeveloped. They moved a mobile home onto the property, built roads, put in power and built barns. By 1993 they had established a diary operation involving 200 to 250 head. They were also growing a variety of crops as feed for the herd. There were two wells established on the property; both drilled by a contractor hired by the Wiebes.

[13] In 1992 or 1993, the Wiebes decided to sell their dairy operation and relocate to B.C. Their efforts to sell the operation as a going concern were unsuccessful and in the spring of 1993 they sold their dairy quota and cows. They sold the bulk of their machinery in the fall of the same year and Linton Wiebe’s brother bought the land.

[14] In the summer of 1993 the Wiebes began their search for a ranch property in B.C.; looking at several properties in the Cache Creek and Ashcroft area. Nothing they saw was suitable. The Wiebes were looking for a ranch operation which would, in addition to calf sales, allow them to grow and sell hay to provide additional cash flow. This was an important factor to them for, in their view, it added a level of financial stability.

[15] In October of 1992, Linton Wiebe had contacted Maurice Alexandre, of Countrywide Videoview Realty Inc., about another ranch property he was advertising. He eventually discussed properties in the Williams Lake area with Alexandre, who sent him some information. None of it related to the Rocky Point Ranch.

THE WIEBE PURCHASE OF THE ROCKY POINT RANCH

[16] The Wiebes were in the Williams Lake area in 1993 but were unsuccessful in their search and they returned to Saskatchewan. Shortly after their return to Saskatchewan, Alexandre telephoned them to advise them about the Rocky Point Ranch and on October 22, 1993, he wrote to them enclosing an information sheet and some maps.

[17] On October 29, 1993, he wrote again. Accompanying this letter was a series of photographs. The Wiebes were impressed and Linton Wiebe and his brother Lorne travelled to Williams Lake. They met Alexandre in Williams Lake, and on November 13, 1993, they toured the ranch.

[18] Linton Wiebe was very impressed with the property and shortly afterwards he offered to purchase the property for $900,000.00. Further discussions occurred, and on December 2, 1993, an interim agreement was completed with the Wiebes agreeing to purchase the property for $950,000.00.

[19] With this agreement signed, the Wiebes proceeded to arrange bank financing. In the course of this an appraisal was prepared and a copy delivered to the Wiebes in January 1994. What caught Linton Wiebe’s attention was a reference to the two pivots irrigating an estimated 260 acres. The information sheet with which he had been provided indicated that there were 320 acres under pivot. Linton Wiebe and his father calculated the area from information in the appraisal and confirmed the discrepancy. He then contacted Countrywide at their weekend phone number, spoke to Barb Leonard, one of the owners and the Real Estate nominee for Countrywide, and expressed his concern.

[20] Ms. Leonard prepared and transmitted to the Wiebes, by facsimile transmission, an addendum to the interim agreement, advising him to sign both options, leaving it to the Gundersons to select one of the two options. Leonard neither sought legal advice herself nor did she suggest the Wiebes obtain advice.

[21] The Gundersons accepted the first of the options on the addendum and elected to collapse the transaction.

[22] By the middle of January, the Wiebes had indicated that they wanted to “come back on the contract” and as a result the Gundersons indicated, through Alexandre, that although they wanted the same price they would now include all of the hay in the hayshed, which included 5,000 bales of top quality horse hay, worth $5.00 per bale. Wiebe considered the offer a fair compromise and on January 20, 1994, a second interim agreement was entered into.

[23] The transaction closed on February 14, 1994, and the Wiebes arrived to take possession on February 24, 1994.

THE REPRESENTATIONS RELIED UPON

[24] For the most part, the representations the plaintiffs rely upon in the present action are found in an information sheet provided to them by the real estate agent, Maurice Alexandre. These representations are as follows:

a) The two pivots “cover about 320 acres”.

b) Those 320 acres produce “about 5 tons per acre with 2 crops”.

c) The acreage under pivot “could put up about 1,650 tons of hay”.

d) In 1992, 150 calves, average weight 600 lbs., had been sold at $1.08 per lb. for a yield of $97,200.00.

e) In 1992, approximately 16,000 bales of hay had been sold at $4.50 per bale for a yield of $72,000.00.

f) In 1993, the vendor had sold his calves, average weight 590 -600 lbs. at $1.30 per lb.

g) In relation to the irrigation system:

i) The irrigation well had been “tested for 5,000 gal. per minute”.

ii) The “system uses 2,100 G.P.M.”.

THE FALSITY OF THE REPRESENTATIONS

[25] By agreement between counsel, the admissions made by Donald Charles Gunderson at his examination for discovery were binding on the defendant Arlene Faith Gunderson.

[26] Leaving aside for the moment the issue of the source of the information set out in the information sheet prepared by Maurice Alexandre, and the other issues related to it, the plaintiffs initially read into evidence the defendant’s, Donald Charles Gunderson, examination for discovery admissions concerning the various representations. Those admissions included the following:

a) As for the two pivots covering about 320 acres, Mr. Gunderson admitted that was not true.

b) As for those 320 acres producing about 5 tons per acre with two crops, Mr. Gunderson admitted that this was not true.

c) As for the acreage under pivot being able to put up 1,650 tones of hay, Mr. Gunderson admitted that this was not true.

d) As for 150 calves being sold with an average weight of 600 lbs. at $1.08 per lb. for a yield of $97,200.00 in 1992, Mr. Gunderson admitted that there were only 147 sold, that the average weight was not true and that the revenue stated was “ . . . definitely false.”

e) As for 16,000 bales of hay being sold at $4.50 per bale for a yield in 1992 of $72,000.00, Mr. Gunderson admitted that both the number of bales and the stated revenue were false.

f) As for the suggestion he had sold his calves in 1993 for $1.30 per lb. and that they had an average weight of 590 lbs. to 600 lbs., he admitted that the stated weight was false.

g) The remaining representations relied upon by the plaintiffs were that the irrigation well had been “tested for 5,000 gal. per minute” and that the “system uses 2,100 G.P.M.”. It is abundantly clear on the whole of the evidence that neither of these allegations was true.

THE GUNDERSONS AND THEIR TIME ON THE ROCKY POINT RANCH

[27] In this action the credibility of the Gundersons was a highly contested issue.

[28] In February of 1994, at the same time the sale of the ranch completed and as they moved from the Rocky Point Ranch, the Gundersons separated after 38 years of marriage. Arlene Gunderson moved to Quesnel, B.C., and Donald (“Duff”) Charles Gunderson commenced a commonlaw relationship with Corrina Thompson.

[29] Over some years the Gundersons had bought and sold a number of ranches, eventually amassing the capital used to acquire the Rocky Point Ranch in 1986.

[30] Throughout the material times, Arlene Gunderson kept a meticulous diary recording events on a daily basis. These diaries (extracts of which are entered as Exhibit 55) represent an important part of the evidence in this case. In addition to her diary, Arlene Gunderson kept detailed books of accounts related to the farming operations, consisting of a handwritten ledger for each year as well as various statements of farming income.

[31] At the time they purchased the Rocky Point Ranch the Gundersons were living on the Fort Alexanderia ranch on the west side of the Fraser River near the Rocky Point Ranch. Within two weeks of completing the purchase on April 11, 1986, Arlene Gunderson’s diary noted:

Agric here. Looked at land here for frozen alphalpha [sic] & they flew across river to check well and land samples.

[32] Two Irrigation Water Analysis Reports, dated April 17, 1986, were produced from the defendants’ files. While the analysis of the small domestic well was satisfactory, that of the larger irrigation well was not. The analysis showed a sodium reading of 6.0900 (compared to 0.8700 for the domestic well) and a sodium absorption ration (SAR) of 9.190 (compared to 2.105 for the domestic well). It also had the following warning printed on the report:

Will present an appreciable sodium hazard in fine-textured soils having high cation-exchange capacity, especially under low-leaching conditions unless gypsum is present in the soil. This water may be used on coarse-textured or organic soils with good permeability.

[33] From 1986, when no hay was produced on the Rocky Point Ranch, until 1993, when the first interim agreement was signed with the Wiebes, the Gundersons records reflect the following results from their ranch operations:

Year	Hay Sales	Calf Sales	Average Weight
1986	Ø	$ 50,015.95	540 lbs
1987	$ 859.00	$ 57.789.20	530 lbs
1988	Ø	$ 47,565.20	623 lbs
1989	$ 14,260.02*	$ 50,120.66	572 lbs
1990	$ 5,109.00	$ 70,323.63	533 lbs
1991	$ 10,291.65	$ 66,278.920	555 lbs
1992	$ 7,690.80	$ 77,805.70	524 lbs
1993	$ 13,998.48	$ 98,599.99	553 lbs

* less than

It can readily be seen from this table not only that the Gundersons’ hay sales in 1992 were not $72,000.00 as represented, but that in the Gundersons’ entire time on the ranch from 1986 until 1993 their hay sales did not approach that number in total. Total hay sales over the whole period were $52,208.95 averaging $6,526.12 per year.

THE MARKETING OF THE ROCKY POINT RANCH AND THE REPRESENTATIONS

[34] From September 2, 1991 to September 30, 1991, Len Monical, a real estate agent employed by Cariboo Realty at 108 Mile House, ran an advertisement in British Columbia Report. The ad appeared in the issues published on September 2, 1991, September 9, 1991, September 16, 1991, September 23, 1991, and September 30, 1991. In each case the following text appears under a photograph of the ranch:

ROCKY POINT RANCH 585 acre deeded Fraser River bottom land with 335 under 2 pivot & 1 wheel line irrigation system, 3 bedroom home, shop, barns, hay storage, bunk house. 5000 gal. per min. deep well. 3 crop area, averages 5 T./acre. $780,000.

[35] Len Monical testified that he had heard “through the grapevine” that the Rocky Point Ranch was for sale and he dropped by to see if he could get a listing. He went on to testify that although he did not get a listing, Mr. Gunderson told him that if he found a buyer he would pay a commission.

[36] On the same visit he took photographs of the ranch, one of which appears in the ads. He testified that the information about the ranch in the ads came from Mr. Gunderson and that, in particular, Gunderson told him that the well produced 5,000 gallons per minute.

[37] Mr. Gunderson, when he testified at the trial, testified that he didn’t know Len Monical and that he didn’t even know him when he walked into the courtroom. He went on to testify that he did not tell him he would pay him a commission and he did not tell him the capacity of the well was 5,000 gallons per minute. Arlene Gunderson’s diary records Len Monical visiting the Ranch on June 14, 1991.

[38] Maurice Roy Alexandre was another witness called at this trial. Mr. Alexandre is a real estate agent who, in October 1990, was employed by NRS-Laketown Realty Ltd. in Williams Lake. In February 1993 he moved from that agency to Countrywide Videoview Realty Inc.

[39] Mr. Alexandre testified that on October 19, 1990, the defendant, Duff Gunderson, came into his office in Williams Lake and asked him to sell his ranch. On October 24, 1990, he, in company with a colleague, Jeanette Rennie, visited the Rocky Point Ranch where they took photographs and spoke to the Gundersons for the express purpose of gathering information to enable them to market the property. Once again Arlene Gunderson’s diary records “Morris to list the property” on October 19, 1990 and visiting the property on October 24, 1990.

[40] Mr. Alexandre testified that he told the Gundersons he needed the information to pass on to prospective purchasers. He went on to testify that he compiled the information provided to him into an information sheet and that generally the information on that sheet was provided to him by the Gundersons. In particular, he testified that Mr. Gunderson advised him:

a) that the two pivots covered 320 acres;

b) that those 320 acres produced about 5 tons per acre with two crops;

c) as to the income information outlined in the information sheet;

d) that he sold approximately 16,000 bales at $5.00 per bale but that he wrote it down as $4.50 per bale to be on the safe side;

e) that the deep well had been “tested for 5,000 gallons per minute”;

f) that there had been a well test done by some firm from the coast and that the results showed 5,000 gallons per minute;

g) that “the system uses 2,100 gallons per minute in 12 inch, 10 inch and 6 inch lines; and

h) that they had just sold their calves which averaged 590 lbs. to 600 lbs. at $1.30 per pound.

[41] Mr. Alexandre also testified that he had shown Mr. Gunderson the information sheet and that he explicitly remembered him reading it. He went on to testify that Mr. Gunderson came to his office once or twice a year and that on those occasions the Information Sheet would be reviewed and revised.

[42] Mr. Gunderson, in his direct evidence, denied ever seeing the information sheet before January 17, 1994, the day the agreement collapsing the first interim agreement was signed. He went on to testify that on that day, Maurice Alexandre came to his ranch with the “collapse document” and that he read the information sheet and saw that the information on it was not right. He testified that he told Alexandre that day that the well was not tested and the calf weights were not right. He went on to testify that Alexandre just said it was void and put it back in his file.

[43] Mr. Gunderson then was taken step-by-step through the information set out in Mr. Alexandre’s information sheet and denied that he had given Mr. Alexandre each piece of information.

[44] During the course of his cross-examination this evidence was touched on in very specific terms. This process began with Mr. Gunderson’s sworn evidence from his examination for discovery of January 29 and 30, 1996, being put to him.

59 Q You never did. What did you tell Mr. Alexander [sic] about how much water this well produced per minute?

A When I told him that was probably in the fall of ’91.

60 Q What did you --

A He came up to look at the ranch and there was just a discussion that I had heard, something that I had heard from around the neighbourhood that the well produced, had pumped 5,000 gallons a minute, which I believed to be true.

[45] This seemingly simple evidence was then followed by Mr. Gunderson’s sworn evidence at the continuation of his examination for discovery on January 17, 2001, where he gave the following evidence:

981 Q Where did you get the information concerning 5,000 gallons per minute as being the capacity of that well?

A That was hearsay on the people that were renting the house when I bought Rocky Point.

982 Q Renting which house?

A The ranch house, renting it off the Bank of Toronto Dominion. They had mentioned they pumped 5,000 gallons a minute which I didn’t believe.

983 Q You didn’t believe it?

A No. Why would I believe 5,000 gallons a minute, I had no concerns about it.

984 Q You have raised two issues. One is believing 5,000 gallons about it, one is having no concern about it. You said you didn’t believe it when you were told it?

A I didn’t have -- it didn’t bother me at all, I didn’t think too much about it.

985 Q You said you didn’t believe it?

A No, I didn’t believe it.

986 Q And yet not believing it you passed that information on to Mr. Alexandre, didn’t you?

A What I had heard, yes.

987 Q Did you tell Mr. Alexandre you better not use this because you didn’t believe it?

A I told him not to believe it because I didn’t believe it.

988 Q You told him not to believe it?

A Why would I tell him it was true.

989 Q Because it wasn’t true, was it?

A It was not true and I didn’t believe it to be true.

990 Q I just want to see if I have this straight. You told Mr. Alexandre that he should not believe it because it wasn’t true?

A I didn’t guarantee that well would pump 5,000 --

991 Q That’s not what I asked you. My question was: Did you or did you not tell Mr. Alexandre you should not believe this because it is not true?

A It is not true and it is just a word of talk around the river that it pumped 5,000 gallons a minute is all it was.

992 Q When you first imparted that information to Mr. Alexandre you told him not to believe it because it wasn’t true?

A That’s right.

[46] As this passage was put to Mr. Gunderson at trial he offered the explanation that these answers were not true and that at the discovery counsel had got him so upset that he couldn’t even think what he was saying.

[47] Mr. Gunderson then went on to testify that he had never told Mr. Alexandre that the 5,000 gallons per minute was not true ‘because he had no reason not to believe it’. He then concluded by observing that ‘everything I said about not believing the 5,000 gallons per minute was true on January 17, 2001, was not true’.

[48] The next sequence of the evidence of Mr. Gunderson that is of importance relates to the copy of the information sheet and the “collapse agreement”, marked as Exhibit 54. The information sheet is a typed document on which there are certain hand written markings and notations. At the top of the document a price of $900,000.00 plus stock is typed, to the left of this notation the word ‘void’ has been written with an arrow pointing to the price.

[49] Below there is a line which reads “185 Head Range Permit”. A line has been drawn through the ‘85’ in 185 and written next to it is the notation ‘135 head’. Further down in the document there appears the line ‘Deep well tested for 5000 Gal. per min. System uses 2100 G.P.M. in 12”, 10”, and 6” lines. All underground and easily drained in winter.’ A line has been drawn through the first part of this entry crossing out everything up to and including the ‘2100 G.P.M.’.

[50] Mr. Gunderson was insistent that he first saw the information sheet the day he signed the “collapse agreement”, January 17, 1994, and that he noticed the errors in it at that time and, in particular, he crossed out the details concerning the well. Whether or not that was the first time he saw the information sheet he went on to give the following evidence at his examination for discovery:

75 Q When was the first time you saw a copy of this before amendments and so on or even with amendments, when is the first time you saw that?

A A copy of that?

76 Q Yes.

A Was when Maurice Alexander came up, when Wiebes had, we signed off the deal, we backed out of the deal, he signed off and I did, that’s when that was brought up and that’s when I scratched that line on that.

77 Q And you say you never had seen a copy of this document.

A I never did.

78 Q What was the date then that Mr. Alexander came and showed you this?

A This paper?

79 Q Yes.

A I don’t know, beginning of January, end of January.

The evidence continues:

86 Q All right. And whose writing is void and an arrow pointing to the $900,000.00?

A I’m not sure. I’m not sure if it was Arlene or Maurice Alexander’s.

87 Q But you say it was you that stroked out and put a line through the deep well tested for 5,000 gallons per minute?

A Yes I did.

88 Q And that was when Mr. Alexander came to you?

A He came up to sign off the property for me to release it and the Wiebes to release it on the no sale.

. . .

95 Q All right, once again you are saying the very first time you ever saw the first page of Exhibit 1 [Exhibit 54] was when the deal collapsed, the first deal collapsed?

A That’s right.

[51] During his examination for discovery on January 17, 2001, Mr. Gunderson described, in considerable detail, the discussions he says took place between he and Maurice Alexandre after he saw the information sheet on January 17, 1994:

928 Q Now, as I understand what you did, and I’m going back to Exhibit 1 [54], when you saw that document and according to you what you did is scratched out the reference to deep-well tested and 5,000 gallons per minute, right?

A That’s right.

929 Q What did you tell Mr. Alexandre about that being wrong? Did you say this was false, it was never deep-well tested?

A I said it was completely false.

930 Q That’s what you told Mr. Alexandre?

A Exactly what I told him. This stuff on here is false, the weight of the calves, the well, the amount of acreage on pivot.

. . .

934 Q So you are saying that when you first had this shown to you, you said to him this is all false, the weight of the calves, the price of the calves, the price of the hay, the fact of it being deep-well tested, you told him all of these things were false?

A Yes.

935 Q You told that to Mr. Alexandre?

A Damn rights I told that to him.

936 Q Who was in the room with you when you told this to Mr. Alexandre?

A My wife was, Arlene was.

937 Q What else did you tell Mr. Alexandre about the information sheet?

A At that time when he came up, when this void was put on here, that was scratched out, what did I tell him?

938 Q Yeah?

A I told him not to use it for selling the ranch because it was false.

. . .

947 Q You had this, according to you, you had this meeting with Mr. Alexandre and your wife and it was in the ranch house?

A That’s right.

948 Q And the way I hear you describe it, you were kind of shocked about all this information that was in the information sheet?

A I was upset with it.

949 Q And did you go to the Wiebes and say, by the way, I just want you to know that the information that was passed on to you as part of this information sheet is all false, did you do that?

A No, I did not.

950 Q Why not?

A Because I wasn’t selling the ranch, Maurice Alexandre was, it was up to him to straighten out his mistakes.

951 Q So you considered that despite the fact that you viewed all of this information on the information sheet as being false, you didn’t have to say anything to the Wiebes?

A Why should I have to say anything to the Wiebes. I wasn’t dealing directly with the Wiebes, Maurice Alexandre was dealing with the Wiebes.

952 Q He was dealing with the Wiebes, according to you, on your property and having provided information, according to you, that was false. So why didn’t you consider letting the Wiebes know this was all false?

A This information didn’t come from me, it came from Maurice Alexandre. I did not state this stuff, it was wrong.

953 Q But we have gone past that point, sir. We got to the point where you are sitting down with Maurice Alexandre, according to you, and you identify the content of this information sheet as being substantially false, right?

A Yes.

954 Q And this is before the second contract with the Wiebes is signed?

A Right.

955 Q So you sign the second contract with the Wiebes, according to you, at a time when you knew that all of the information that had been given to them was substantially false?

A It was false, that’s right.

[Emphasis added]

[52] Mr. Gunderson, at trial, acknowledged being asked those questions and giving those answers at his examination for discovery, but went on to say that counsel had him so mixed up he didn’t know what he was saying.

[53] Mr. Gunderson testified that his answer to questions 934 and 935 were not true but that he did tell Mr. Alexandre not to use the information sheet because it was false.

[54] In comparison, Linton Wiebe’s evidence about these contacts was straightforward and consistent. After receiving a telephone call from Maurice Alexandre about the Rocky Point Ranch he received a letter from him dated October 22, 1993, which included the information sheet and some maps of the property.

[55] A week later Alexandre forwarded a second letter, including photographs of the ranch. The Wiebes were impressed both by the photographs and by the information in the information sheet. In particular they were impressed with the substantial fields “under pivot”, the good hay production at 5 tons per acre, the amount of hay sales which represented to them an important source of cash flow, the tremendous volume of irrigation water, and the good calf weaning rates which, to them, indicated there was good pasture land.

[56] On November 13, 1993 Linton Wiebe and his brother, Lorne travelled to Williams Lake where they me Maurice Alexandre before touring the ranch. After completing the tour they spoke to Mr. Gunderson at the ranch house for half an hour or so while they had coffee. During this conversation Mr. Gunderson advised them that on his other ranch Fort Alexandria, he pumped water from the river and that the irrigation well water was much better and cleaner. Linton Wiebe testified that Mr. Gunderson then talked about the pump cavitating when both pivots were running, but that it was not a problem and it could be solved by lowering the pump 40 feet.

[57] Wiebe then indicated he asked Gunderson if it was possible to leave the pump running while you turned one pivot off and the other on. He indicated that this was very hard on the pivot centre and that he could not “guarantee the pump” if that was done. He said this was the only mention of guarantee and that Gunderson at no time said he would not guarantee the well.

[58] The price the Gundersons were asking for the Rocky Point Ranch was substantial and would take virtually all of the Wiebes’ capital, but the property appealed to him because of the cash flow from both calves and the hay crop. In addition, Linton Wiebe felt he could log the lower bench providing further revenue and turning that area into another 70 to 80 acres of arable land. The excess water supply from the well he felt would enable him to irrigate both the lower bench once it was logged and the “bluff” field on the east side of highway 97.

[59] The Wiebes’ first offer of $900,000 to include all hay on the property was not accepted but the Gundersons counter-offered at $950,000 to include all the hay except that in the hayshed.

[60] After seeking confirmation of the value of wood on the ranch and that Weldwood would pay $200,000 for the wood, the first interim agreement was signed on December 2, 1993.

THE COLLAPSE OF THE FIRST INTERIM AGREEMENT AND THE MAKING OF THE SECOND

[61] With the interim agreement in place the Wiebes set about putting their bank financing in order. During this process an appraisal was completed for the bank by Ron Hume valuing the property “as at December 15, 1993.”

[62] The Wiebes received a copy of the appraisal in January of 1994 and Linton Wiebe noted that on page 17 of the appraisal it was stated that the two pivots irrigated an “estimated 260 acres”. He was surprised because the Information Sheet he had received indicated that there was 320 acres under pivot. He and his father utilizing the information in the appraisal report calculated the area and confirmed the apparent discrepancy.

[63] Linton Wiebe telephoned the number he had for Countrywide and ended up speaking to Barbara Leonard, one of the owners. He advised her of the discrepancy and his concern that he had been lied to. In so far as Leonard’s evidence differs from that of Linton Wiebe, I prefer and accept his evidence.

[64] The discrepancy is found in whether or not Ms. Leonard advised him that other things might be wrong and he should check them. I specifically find that she did not make this suggestion to Wiebe but rather reassured him that the discrepancy was an honest mistake.

[65] Ms. Leonard set about drafting a form of agreement that protected her company, herself, her agent Alexandre and the Gundersons. The document was drafted as an addendum to the contract consisting of two options. In the first the Wiebes request the collapse of the agreement and the return of their deposit and release “the vendor, their salesperson and Countrywide Videoview Realty Inc. of any further obligations . . . .” The second option proposes a $50,000 abatement of the purchase and includes the following:

Purchaser further agrees that he is fully aware that:

1. The acreage under pivot is 262+/-acres.

2. The time of 90 days projected by vendor of June 15 – Sept. 15 is maximum range time allowed and that the purchaser has all the information in hand concerning said range rights. Re: time head allowed.

3. B.C. has a property purchase tax as purchaser has been informed about by his conveyance lawyer.

4. That the exclusion list of equipment has been received and signed by him.

If the purchaser and vendor do agree to continue this contract that each party is in full agreement that this addendum supercedes any written or oral agreement between these parties with regard to said amendments contained within.

Agreement to continue also releases Countrywide Videoview Realty Inc. and salesperson Maurice Alexandre from any representation written or verbal made by either vendor or purchaser prior to the amendment of this contract.

[66] Ms. Leonard advised Linton Wiebe that this agreement was necessary “to protect his deposit” and that he should sign both parts and leave the Gundersons the option of what they wanted to do. She made no attempt to suggest to Wiebe that he should seek legal advice. The document was transmitted by facsimile transmission to Mr. Wiebe on January 17, 1994, and returned the same day by the same means with both parts signed as Ms. Leonard had advised.

[67] The same day the Gundersons executed the portion of the addendum related to the first option.

[68] Two days later Linton Wiebe advised Leonard he would like to come “back on the contract”. Shortly after Maurice Alexandre contacted Wiebe and advised him that the Gundersons were prepared to include all of the hay in the hayshed as a part of the deal but that they still wanted $950,000. Wiebe calculated the 5000 bales of “top quality horse-hay” as having a value of $25,000. Wiebe felt this was a reasonable compromise and advised Alexandre to go ahead.

[69] On January 20, 1994, the second interim agreement was signed. It differed from the first in two respects, firstly it included the hay in the hayshed and secondly, the lowering of the pump in the irrigation well was now at the expense of the purchasers.

[70] The completion date fixed in the agreement was February 14, 1994, and the deal closed on that date. As part of the closing documents the Gundersons executed a Vendor’s Statement of Adjustments that included the following clause:

9. The Vendor’s agree that all the vendor’s representations, warranties, guarantees, either verbal or written, if any, together with the obligations contained in the Contract of Purchase and Sale dated January 20, 1994 in so far as they do not specifically relate to the Title, shall survive the completion of the transaction and shall remain in full force and effect in all respects and shall in no way merge with the conveyance of the lands and premises to the Purchasers herein.

THE WIEBES’ AND THEIR TIME ON THE ROCKY POINT RANCH

[71] The Wiebes arrived on the Rocky Point Ranch on February 24, 1994, some 10 days after the completion of the purchase. While in the final stage of the trip they stopped at the Dome Creek Cafe where they encountered a truck driver, Dan Wheeler. During a casual conversation Wiebe mentioned that they had bought the Rocky Point Ranch. Wheeler advised Wiebe that his grandfather lived in the area and it was known that the irrigation well was salty.

[72] Within the week following their arrival Wiebe confronted Mr. Gunderson about the conversation. He testified that Gunderson told him that he knew about the salt problem and had checked into it. He said that it would not bother him in his lifetime.

[73] In late April 1994, Wiebe began to use the pivots for the first time, within a few hours both had shut down and the pressure gauge fluctuations indicated to Wiebe that the pump was sucking air. He decided he had to lower the pump as soon as possible and he thought that a copy of the well test would help him with placing the pump at the proper depth.

[74] When he asked Mr. Gunderson for a copy of the well test he was told he didn’t have one but he could get a copy from Al Dupilka at West Fraser Mills. After obtaining a copy of the Pacific Hydrology report Wiebe was shocked and contacted Barb Leonard asking her if they had another well test. At her request he provided her with a copy of the report.

[75] On July 2, 1994, Gunderson came to the ranch at Wiebe’s request. Present were Linton Wiebe, his brother, Lorne, and Donald Gunderson. I accept the Wiebes’ evidence of what went on at this meeting.

[76] &