Katharine, an 82 year old widow could no longer maintain her cottage property which she and her husband had owned for 40 years. The annual taxes and upkeep were more than she could afford and Katharine had not felt well recently. She felt that she had no choice but to sell the property. Katharine contacted her nephew, Patrick a local realtor who specialized in cottage properties and asked if he could find a buyer for the property. After listening to Katharine discuss her financial and health problems Patrick asked how much she wanted for the property. Katharine told him that although she really had no idea of the value, the property must be worth at least $500,000.00. Patrick told her that he would list her property for sale at that price. Two days later Patrick presented Katharine with an offer of $475,000.00 from Lakeside Properties Ltd. When Katharine asked what she should do, Patrick recommended that she accept the offer since it was close to her price and Lakeside Properties Ltd. was a reputable developer. He also said that the real estate market was overheated and prices might drop at any time. Finally Patrick said that he would lower his commission from 5% to 4% if she accepted the offer. Katharine didn't understand contracts or finances since her husband had looked after everything and, feeling pressured by Patrick, she signed. Before the sale was completed, Katharine learned that Lakeside Properties Ltd. had entered into an agreement to sell her property for $650,000.00 to Erica. Katharine also learned that Patrick was the sole owner of Lakeside Properties Ltd. She had thought, based on what Patrick had said, that Lakeside Properties Ltd. was a Toronto developer. Katharine does not want to complete the sale and comes to you for advice.

Required:

(i) Discuss whether there is any legal basis for Katharine to refuse to sell the property. What is her potential liability if she does refuse to sell?

(ii) Assume that Katharine learns that Patrick owns Lakeside Properties Ltd. after the property is resold to Erica. Does she have any basis to insist that Erica reconvey the property to her?