Good record keeping is important for optimizing the resolution of a civil claim, whether through negotiation, mediation or trial.
Civil claims against licensees, including for breach of an agency agreement, negligent misrepresentation, and even breach of fiduciary duty, often involve conflicting accounts of your words and deeds. Where the primary evidence available is your memory, a dispute often becomes a “swearing contest” over opposing versions of events.
Where good records exist, however, the scope for disagreement is curtailed and the facts supported by the records can be asserted forcefully, often in an early defence.
While the importance of good record keeping is well known, those of us who defend claims against licensees continue to see cases where important records are uneven or non-existent. In such cases, your defence is built around your unsupported recollection, which is vulnerable to being attacked as unreliable or self-serving. Typically, these cases are more difficult to evaluate, more challenging to defend, and take longer to resolve.
This article offers guidance to improve your record keeping, with a view to enhancing your ability to effectively and efficiently resolve a civil claim.
What is a “record”?
Generally, a record is anything that contains information or memorializes past events, including occurrences, dealings and relationships. A record need not be in a particular form for use in civil proceedings. The B.C. Supreme Court’s Civil Rules use a broad definition of records or “documents” that includes a “photograph, film, recording of sound, any record of a permanent or semi-permanent character and any information recorded or stored by means of any device.”
Thus, various means may be used to create a record that can be used in a civil proceeding. A record can be a conventional hand- or typewritten note or memorandum, or it can be an electronic file including email, text message, or audio files. In the context of a civil case, a record’s form is usually less important than its content.
What records MUST be kept?
The Real Estate Services Rules require brokerages and/or licensees to create and keep certain types of written records. These records contain important information about transactions and relationships, and often feature prominently in resolving a civil claim.
Examples include service agreements and disclosures under Part 5 and records of brokerage referral fees under Part 8. The Real Estate Services Rules also require specific information to be included: for example, service agreements must contain the date on which the agreement is effective, the date on which the agreement expires, and a general description of services to be provided by the brokerage.
What records SHOULD be kept?
Whether you are a licensee or a managing broker, it’s good practice to keep records beyond those that you are required to keep. Record keeping that exceeds the mandatory requirements will usually provide further evidentiary support and can be critical to the efficient resolution of a civil claim.
For example, you should record the dates, times and content of key communications with clients and other licensees, even if only as notes in an electronic calendar. Document any step taken on behalf of a client and, ideally, send an email or letter confirming what has (and has not) been done.
You should keep notes of discussions at in-person meetings and consider confirming key in-person discussions through a letter, an email or even a text message. When you send an important document or communication to a client or another licensee, you should obtain a written acknowledgement of receipt.
It’s also good practice to keep a record of any methodology applied and/or considerations taken into account when preparing a market analysis or making a recommendation to a client. If a client later claims that an analysis or recommendation was negligent, a contemporaneous written record (one written at the time) of the basis for the analysis or the reasons for the recommendation is usually more compelling than an explanation recalled from memory at a later date.
How can record keeping be improved?
Basic considerations when keeping records include the following:
- Any form of paper or electronic writing, including handwritten notes, email and text messages, can be a record used in a civil proceeding, including in settlement negotiations and mediation.
- Use consistent and clear language and stick to the facts in written records. Avoid impressions and editorial comments.
- Confirm client instructions with the client in writing, and record the date on which the instructions were received.
- Request an acknowledgement of receipt for important information or documents.
- Avoid casual communications. To this end, use text messaging carefully, especially in communications with clients and other licensees. Text messages are often short, casual, and prone to misinterpretation, but must still be disclosed in civil proceedings and can be admitted as evidence in Court.
The recent B.C. case Chohan v. KHK Holdings Ltd. 2015 BCPC 131 provides a good example of how a licensee’s failure to keep certain records made an unhappy difference.
In Chohan, the claimant-buyer bought a blueberry farm from the defendants-sellers. Under the CPS, the buyer could require the seller to replace dead plants or provide a $15,000 credit. The buyer and his licensee counted the number of dead plants and the buyer’s licensee recorded the total in a note written on his hand. The buyer requested the $15,000 credit, the seller refused, and the buyer sued.
At trial, the buyer’s licensee testified that the seller’s licensee said that the seller would prefer to provide the $15,000 credit than to replace the plants. The buyer’s licensee had not made notes of or confirmed the conversation. The Court dismissed the buyer’s claim and, in doing so, was critical of the licensee’s poor record keeping, stating as follows:
Everyone recognizes that this lawsuit would likely have not been commenced if only the [buyer’s licensee] had made some sort of more tangible record of the count of the blueberry plants that took place (other than writing it on his hand), of how he communicated that information to [the seller’s licensee], and what it was he said. In an age of email, text messages, and other means of instantaneous communication, it is baffling why no reasonably contemporaneous written record was kept of the results of the count and of the communication of that information to [the seller’s licensee].
The message is simple: keep track of the facts! Investing a little time to create and keep good records will yield a distinct advantage when it comes to defending and resolving a civil claim.