Wagner v. Maloney et al., 2018 BCPC 107

Citation: Wagner v. Maloney et al. 2018 BCPC 107 Date: 20180423 File No: 160328 Registry: Victoria IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: STEPHEN WAGNER and ALLISON WAGNER CLAIMANTS AND: CHRISTOPHER MALONEY, DEBORAH MALONEY, JUDITH GERRETT, JOHN BRUCE, D.F.H. REAL ESTATE LTD., DALE WELCH and DIGGER DALE CONTRACTING LTD. DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE L. MROZINSKI Appearing on their own behalf: S. Wagner, A. Wagner Appearing on their own behalf: C. Maloney, D. Maloney Counsel for the defendant J. Gerrett : S. Hamilton Counsel for the defendants J. Bruce, D.F.H.

Real Estate Ltd. : O. Hyatt Counsel for the defendants Dale Welch, Digger Dale Contracting Ltd. : P. Waller Place of Hearing: Victoria , B.C. Date of Hearing: December 4, 5, 6, 2017 Date of Written Submissions: January 28, 2018 Date of Judgment: April 23, 2018 I. Introduction [ 1 ] The claimants, Stephen and Allison Wagner, seek damages from one or all of the defendants herein for the cost of the replacement of a septic system on property they had owned for less than two years.

At issue in this trial is whether the claimants have discharged their onus to prove on balance that one or more of the defendants are liable for their damages, particularly given the “buyer beware” rule that continues to govern residential real estate transactions.

II. Background [2] In the fall of 2012, the Wagners purchased a rural property in North Saanich (the “Property”) from the defendants, Christopherand Deborah Maloney. As described in the real estate listing, the Property is private, charming, and somewhat unique. It sits on 1.43acres, with a large lawn area, as well as some flower and vegetable gardens. Two residences are located on the Property. One is anolder home in which the Maloneys resided. The other is a newer cottage style home that the Maloneys rented out from time to time.

Both residences are served by a single septic system. [3] The Maloneys listed the Property with their realtor, the defendant, Judith Gerrett, for $769,000. The Wagners were representedin the sale by the defendant, John Bruce, who associated with the defendant, D.F.H. Real Estate Ltd. Mr. Bruce attended with theWagners on their first visit to view the Property. [4] On that first visit, both Mr. and Mrs. Wagner were slightly taken aback when they noticed grey water pooling in the front fieldnear the main house. Mrs. Wagner recalled asking Mr. Bruce why spaghetti noodles would be floating in the middle of the field.

Shefelt comforted when Mr. Bruce told her the deposit of grey water was a common practice in that area. [5] In due course, the Wagners received the Maloney’s Property Disclosure Statement (“PDS”) in which the Maloneys representedthat they had no knowledge of any problems with the septic system. Still, doing their due diligence, the Wagners made a purchase offersubject to an inspection of the sewage system on the Property. At the suggestion of Mr. Bruce, the Wagners retained Save On Septic Inc.(“Save On”) to conduct a performance inspection. Mr.

Bruce and the Wagners were present on the Property when a representative ofSave On attended, opened the lid of the septic tank, closed it, and instantly declared the system a catastrophic failure.

Save Onsubsequently provided a performance inspection report which stated, among other things, that “the system was not operating as intendedby its design and is functioning in a compromised capacity due to its age and deterioration.” [6] The Wagners were highly dissatisfied with Save On’s work but reduced their purchase offer by $25,000, slightly less than SaveOn’s estimate of the cost of the installation of a new system. The Maloneys rejected the offer. Instead, they hired the defendant DiggerDale Contracting Ltd. (“Digger Dale”) to look at their septic system and make whatever repairs were necessary.

An employee of DiggerDale, Mr. Robert Reid, attended at the Property and repaired what he was told was a flooded septic tank. Mr. Reid testified that heemptied the tank and cleaned the lines. After completing what he described as aggressive maintenance on the system, Mr. Reid satisfiedhimself that the system worked as it was intended to and that it would not cause or contribute to a health hazard. The Wagners ultimatelysatisfied themselves that the system was in working order and the sale completed.

They took possession of the Property in lateNovember, 2012. [7] Several years later, in August 2014, the Wagners had their driveway excavated to divert water away from their residence. Inthe course of the excavation, Mrs. Wagner noticed a pool of water in the middle of their driveway which she soon determined was rawsewage. Further inspection uncovered the line leading from the septic tank. At some point a plastic pipe had been attached to the linewhich ran down the ditch along the Wagner’s driveway.

Dye testing confirmed that within approximately five minutes of flushing,water from the Wagner’s toilet travelled directly into the ditch. [8] The Wagners sought the assistance of Mr. Doug Marshall, someone with considerable experience in the installation,maintenance and inspection of septic systems. Mr. Marshall attended at the Property and after inspecting the system, declared it afailure.

His report concluded that the system was a health hazard both because of the grey water diversion onto the Property, andbecause effluent from the septic tank appeared to drain directly into a ditch along the Wagner’s driveway. Island Health subsequentlygave the Wagners to November 21, 2014 to construct a sewerage system that complied with sewage regulations. In the result, theWagners were required to quickly remediate the system which they did for $38,824.00.

They seek compensation for this expenditurefrom any one or all of the defendants. [9] Each of the defendants deny any liability for the cost of the installation of a new septic system on the Property. III. The Issue [10] At issue in this trial is whether the Wagners have discharged their onus to prove on balance that any or all of the defendants areliable for having failed to warn or advise them of the true state of the septic system on the Property. The Wagner’s case is complicatedby the sheer number of defendants and their various roles: the factual and legal analysis for most of the defendants is distinct.

Moreover,the law is well settled that real estate transactions continue to be governed by the maxim caveat emptor or “buyer beware”. In the caseof the septic system generally, all of the defendants deny any knowledge of the system as Mr. Marshall is said to have found it. Whilenot admitting the system was as Mr. Marshall described, all of the defendants characterized whatever defect that did exist as a latentdefect not known or detected by any of them before the sale.

To the extent the grey water issue played a role in the subsequent failure,all of the defendants point to the fact that the Wagners well knew of the issue; it was, they say, patent. [11] In addition, several of the defendants who had no contractual relationship with the claimants maintain that even if this courtwere to find them liable, the claimants have not proven their case for damages. There is no evidence, as there must be in such cases, thatthe value of the Property was overpriced having regard to the defect at the time of purchase: Sorenson v. Kaye Holdings Ltd., (BC CA), [1979] 6 W.W.R. 193 (B.C.C.A.).

I am convinced that the absence of this evidence is fatal to the Wagner’s claimagainst the defendants Ms. Gerrett, Digger Dale and Dale Welch. Still, I am satisfied for the reasons set out below that the Wagners havenot in any event established liability on the part of any of the defendants. IV. The Liability of the Defendants [12] In analysing the diverse claims in this case, I have found it useful to determine the liability of each of the defendants or categoryof defendants separate from the others. I will begin with my findings regarding the claim against the vendors, Mr. and Mrs. Maloney. (

a) The Vendors

[ 13 ] The Wagners submit that the Maloneys are liable for damages either for breach of the sales contract, or in tort. It is submitted firstly that the Maloneys misrepresented their knowledge of the state of their septic system in the PDS. Alternatively it is argued the Maloneys breached their common law duty to notify the Wagners of any latent, dangerous defects in the Property up to the point of sale.

Duties of the Purchaser and the Vendor [ 14 ] In the context of a real estate transaction, the purchaser is obligated to make reasonable inquiries and conduct or arrange for the conduct of a reasonable inspection of the property. This obligation or onus is captured by the doctrine of caveat emptor . However, the vendor also has obligations and those are usefully described in the following passage of the decision of our British Columbia Court of Appeal in Nixon v.

MacIver , 2016 BCCA 8 , at paragraph 47 : … the doctrine of caveat emptor remains very much alive in the context of real estate transactions in BC… In general, purchasers bear the risk of defects in the quality of a property. Liability for this risk may shift to the vendor where it is established: (

i) a breach of contract; (ii) active concealment (i.e., fraud); (iii) non-innocent misrepresentation; or (iv) an implied warranty of habitability in the case of newly-constructed homes. Liability for this risk may also shift where latent defects are established that render a property dangerous or uninhabitable. In short, a vendor has a common law duty to disclose: (

i) a latent defect that is not discoverable through a reasonable inspection or through reasonable inquiries; and (ii) the latent defect renders the property dangerous or unfit for habitation.

If a defect does not render a property dangerous or uninhabitable, caveat emptor applies regardless of whether the defect in question is patent or latent. [ 15 ] To make out their claim against these defendants, the Wagners must prove either that the Maloneys breached the sales contract by a misrepresentation in the PDS - and that the breach caused the damages they later suffered - or that the Maloneys breached their obligation to disclose their knowledge of a latent defect in the Property that rendered it either dangerous or unfit for habitation.

The PDS [ 16 ] As is the case in the majority of residential real estate transactions, the Maloneys filled out a PDS in which they made various representations concerning their knowledge of the Property. The Maloney’s PDS, dated June 30, 2012, contained a representation that they were unaware of any problems with their septic system. This was not entirely accurate. When they filled out the PDS, the Maloneys suspected something was wrong with their septic system but satisfied themselves that it was only a temporary problem. [ 17 ] Mrs.

Maloney testified largely on behalf of herself and her husband who was, at the time of trial, clearly struggling with his memory due to an age related illness, though he did testify however briefly. Mrs. Maloney outlined the couple’s history on the Property and their knowledge of the state of their sewerage system. She testified that she and her husband bought the Property in June, 2001 directly from its previous owners. They never had an inspection done. The septic system in place when the Maloneys bought the Property was the same system in place when they sold it to the Wagners.

The Maloneys did, however, have the septic tank pumped when they first took possession of the Property. [ 18 ] Mrs. Maloney testified that she and her husband filled out the PDS to the best of their knowledge and that at the material time neither had any knowledge of any problems with the system. Still, she testified that while there had been no problems with the system for the twelve or so years she lived there, about six months before listing the Property she noticed the system starting to slow.

She attributed it to a new tenant living in the adjacent residence, who was suffering from colon cancer and using the washroom constantly. As I understand the evidence, Mrs. Maloney and her husband formed the impression the slowdown was temporary and not noteworthy. [ 19 ] When Save On declared the system a catastrophic failure, the Maloneys were taken aback. They subsequently rejected the Wagner’s reduced offer which was based on the Save On report, deciding instead to ask Digger Dale to come in and repair the system. Mrs. Maloney testified that Mr.

Reid came out right away, examined the tank, did the work, and invoiced them for it. Mrs. Maloney testified that she and her husband were satisfied based on the information provided by Digger Dale that everything was fine. Mrs. Maloney may not have been present, however, when Mr. Maloney had a conversation with Mr. Welch of Digger Dale concerning the state of the system. That conversation was quickly followed up with a contract proposal for the replacement of the septic system.

The proposal was not disclosed to the Wagners. [ 20 ] Even after learning of the Save On report, and receiving the report of work done by Digger Dale, the Maloneys did not amend their PDS to indicate they now knew of a problem with the septic system, albeit one Mrs. Maloney at least thought was rectified. The Wagners point to this failure to amend as a sort of misrepresentation. I agree with the Maloneys that such an amendment, at that stage, would have been pointless. The Wagners submit also that the evidence suggests the Maloneys were reluctant to give Mr.

Bruce permission to view the Vancouver Island Health Authority (“VIHA”) files regarding their septic system. I accept that by the time the Wagners were seeking permission to view the VIHA files the Maloneys were getting impatient. Still this evidence does not go so far as to support any attempt on their part to hide the true state of the system. [ 21 ] The more difficult question is what follows from the undeniable fact that the Maloneys were not scrupulously frank when filling out the PDS.

Even accepting that they satisfied themselves the slowdown was of a temporary nature arising out of their tenant’s health issues, the PDS is not accurate in that they were at the time aware of at least a minor problem. The problem, had it been disclosed in the PDS, was clearly with the capacity of the system; specifically, its ability to accept the demands placed upon it. [ 22 ] The issue of capacity was, I find, addressed when the Wagners arranged for an inspection of the septic system. It was clear to all, once the representative from Save On removed the lid of the septic tank, that the tank was full.

At a minimum, the tank lacked capacity as the Maloneys would have suspected. Moreover, the issue of capacity was redressed when the tank was pumped and lines cleared by Mr. Reid of Digger Dale. [ 23 ] What the Maloneys ought to have disclosed in the PDS was their concern that the tank was slowing. Whether they did or not, the Wagners had the tank inspected. As a result of that inspection, the tank was pumped and capacity restored.

I agree with the submission of the Maloneys that whatever they did or did not disclose regarding their understanding of the septic system when they filled out the PDS, that failure had no bearing on the Wagner’s decision to buy the Property. That decision, at least insofar as the septic system

was concerned, was based on their understanding of Mr. Reid’s report and Diggers Dale’s certificate filed with the Capital RegionalDistrict (“CRD”). It was also informed by the Save On report, whether or not the Wagners agreed with it. [24] There can be no doubt that the work done by Mr. Reid of Digger Dale, including arranging for the pumping of the tank, causedthe septic system to work. It was to be sure an old system, and that much was obvious to anyone. However, the issue with the system,and the cause of this litigation is not with the septic tank, or the capacity of the tank; rather, as Ms.

Wagner put it, their claim is that thesystem did not exist as it was described by Mr. Reid. Having inspected the system, Mr. Marshall concluded that it consisted of a 321gallon tank, out of which flowed a line connected to a pipe dispersing sewage into a ditch running along the Wagner’s driveway. Mr.Marshall maintained there was no septic field, or lines or Tees as described by Mr. Reid.

It was for that reason that the Wagners wererequired to install an entirely new system, including of course a new tank. [25] Accepting that the Maloneys failed to disclose their concern in the PDS that the septic system was slowing, that concern relatedto the capacity of the system; not its very existence. The concern around capacity was addressed when the system was inspected first bySave On and then repaired by Digger Dale. When Save On opened and then closed and failed the system, the Wagners knew as much asthe Maloneys. At that point, it was no longer open to the Wagners to say they relied on the PDS.

They had been warned of problemswith the system. Common Law Duty to Disclose Latent Defects [26] To the extent the Maloneys had any knowledge of any latent defects with their septic system, it was, I find, limited to theirnagging concern that the system was slowing because of overuse. There is no evidence even suggesting the Maloneys knew anythingabout the state of the system as described by Mr. Marshall. Assuming, for the sake of argument, that Mr. Marshall’s inspection turnedup a system entirely unlike that described by Mr.

Reid, it was not information the Maloneys hid from the Wagners. [27] What the Maloneys did learn, and did not disclose to the Wagners, was Mr. Welch’s contract proposal, provided further to hisadvice to Mr. Maloney, that the septic system was old and needed replacing. Mr. Welch’s advice was not that the system constituted ahealth hazard: indeed, he filed a certificate with the CRD indicating it was not. Rather, what Mr. Welch recommended was thereplacement of an old septic system. [28] I find the Maloneys had no obligation to disclose this information to the Wagners.

The age of the system is almost certainly alatent defect, but not on its own a dangerous defect or one that at the time of sale rendered the property a health hazard. Rather, it is nodifferent than learning an older roof needs replacing; the owner need not disclose that to a prospective purchaser; it is the purchaser whobears the risk of this defect and the purchaser who is obligated to make reasonable inquiries as to the qualities of the property. In thisinstance, the purchasers did make such inquiries.

The Save On report provided the Wagners with as much information as they needed,and as much as the Maloneys had, regarding the state of the system. Patent Defects - the Grey Water System [29] Though vendors have a duty to disclose latent defects within their knowledge that make their property dangerous or a healthhazard, there is no duty on a vendor to disclose patent defects. Patent defects are defined as those that can be discovered by making areasonable inspection and making reasonable inquiries about the property: Cardwell v. Perthen, 2007 BCCA 313 at paragraph 25. [30] In this regard, even accepting Mr.

Marshall’s opinion that the grey water system was on its own a health hazard, it was a patenthazard. The Maloneys never sought to hide the grey water system, nor, I find, did they make any representation to the Wagners aboutthe system. It was simply there for the Wagners to see and to assess. [31] Finally, the Wagners point to the fact the Maloney’s moved their grey water system dispersal pipe many years before the salewithout a permit after receiving a complaint from their neighbour. I fail to see the relevance of this last point.

Even accepting that Mr.Marshall failed the Wagner’s septic system because of the grey water issue as well as the state of the septic tank and field as he maintainshe found it, the absence of a permit does not serve to make the Maloney’s any more or less liable for the Wagner’s damages. [32] In

summary, with respect to the claim against the Maloneys, while I accept that they ought to have warned the Wagners of theirconcerns regarding the slowdown of the septic system, the value of such a warning was overtaken when the Wagners retained their owninspector. Following that, to the extent the Wagners satisfied themselves of the quality of the septic system before completing thepurchase, it was not based on any representation by the Maloneys. There is, in addition, no evidence that the Maloneys withheld anyknowledge of latent dangerous defects on the Property. For these reasons, I find the claim against these defendants must be dismissed. (

b) The Vendors’ Agent, Ms. Gerrett [33] In their written submissions, the Wagners argue that Ms. Gerrett, the listing agent for the Maloneys, knew they were havingtrouble with their septic system before the subject to’s were removed in September, 2012. If what is meant by this is that Ms. Gerrettknew of the Maloney’s concerns regarding the slowdown of their system, I find no evidence to support that allegation. If what theWagners mean is that Ms.

Gerrett knew of the problems with the septic system following the inspection by Save On, I find, as I did withrespect to the Maloneys, that such an amendment would have been pointless. It would have only had the effect of telling the Wagnerswhat they already knew. [34] Counsel for Ms. Gerrett also notes the Wagners appear to take the view that Ms. Gerrett had a duty to verify the informationprovided by the Maloneys in the PDS. Ms. Gerrett provided numerous authorities, which she submits hold there is no such duty,including Harrop v.

Vandrishe, Unreported, August 7, 2002 BCPC 1 , 2002, BCPC, No. 01-3576, 3577, 100 Miles HouseRegistry. While Harrop does not explicitly stand for the proposition that no duty is owed, it does confirm at paragraphs 43 and 44 that areal estate agent’s duty is no higher than his or her principal. In Harrop, the court held as a matter of law that the vendor’s agent had nogreater duty than the vendor to inspect the home for soundness or to discover structural defects. The agent’s duty is to ascertain allpertinent facts concerning a listing: not to go further and make inquiries beyond those expected of the vendor.

[35] Still an agent, like a vendor, has a duty of honesty in terms of what is represented to the purchaser. If Ms. Gerrett knew of alatent, dangerous defect not disclosed by the Maloneys, I have no doubt she would have been obligated to disclose that to the purchasers. That much is clear in many of the authorities cited including Arthur v. Bassett Enterprises Ltd. et al, [1985] BCSC 1123, at paragraph23. There is a paucity of evidence suggesting or supporting that Ms. Gerrett knew or frankly could have known of the state of the septicsystem on the Property. [36] What Ms.

Gerrett was aware of was the diversion of the Maloney’s grey water to the field. Like the Maloneys, Mr. Reid, Mr.Welch, and Mr. Bruce, Ms. Gerrett was under the impression - based on her experience and knowledge of the area - that the irrigation ofproperty with grey water was common in the area. She considered it a feature. The Wagners say Ms. Gerrett, among the otherdefendants, misled them about the greywater. It was they claim, not normal; rather, based on the testimony of Mr.

Marshall and thefailure of their system by Interior Health, the Wagners maintain the grey water system was a health hazard. [37] In deciding the question of Ms. Gerrett’s duty in regard to the grey water, it bears reiterating that the Wagners too were aware ofthe discharge of the grey water into the field. They found it curious that in addition to grey water, the pipe also disgorged what appearsto have been kitchen waste in the form of spaghetti. The Wagners were, as Mrs. Wagner testified, taken aback at the sight. It is clear onthe evidence that their concerns were allayed first by Mr.

Bruce, and secondly by the lack of any concern of the grey water in the DiggerDale invoice. There is no evidence they relied on any representation by Ms. Gerrett. [38] Even if the Wagners could be said to have relied on Ms. Gerrett’s views regarding the grey water, I am satisfied on theevidence, despite Ms. Gerrett having taken a “Septic Savey” course, that she honestly believed the grey water system was common,lawful, and an added feature of the Property. To find Ms.

Gerrett liable in these circumstances I would have to conclude that she not onlyhad a duty to advise the Wagners of something more regarding the grey water than she did, but also that Ms. Gerrett breached that dutyby negligently failing to advise the Wagners, as Mr. Marshall did, that the grey water was a health hazard. Such a finding would imply acertain level of knowledge or standard of care expected of realtors in the area. In turn, this Court would require some evidence regardingthe standard of care expected of a reasonably prudent real estate agent acting, in the case of Ms. Gerrett, for the vendor: Haag v.

Marshall, (1989) (BC CA), 61 D.L.R. (4th) 371 (B.C.C.A.), at p. 382. This is expressed also by the court in Mileos v.Block Bros. Realty Ltd., et al, Unreported, September 30, 1994, BCSC, No.

C91338, Vancouver Registry, where the court held at p. 8that in a claim such as this of negligence, the onus is on the claimant to show that there was a certain standard of care required by the realestate agent and that standard was breached and the breach caused damages. [39] In the absence of any evidence regarding the standard of care expected of a realtor in these circumstances, this Court can makeno finding as to whether Ms. Gerrett met or failed to meet industry standards. Should she have known the Maloney’s grey waterdiversion pipe was unlawful? Would a reasonably prudent agent have known?

The issue is all the more difficult to determine withoutevidence of the standard of care as three witnesses in this case, all with considerable experience in the septic system business, disagree onthe matter. [40] Both Mr. Welch and Mr. Reid are adamant that the grey water diversion as they saw it on the Property was common and not ahealth hazard. Still, neither saw the spaghetti. For that matter, neither did Ms. Gerrett. These parties knew of the diversion by theMaloneys of their grey water as a form of irrigation. They saw nothing untoward about it. On the other hand, Mr.

Marshall was equallyadamant the grey water dispersal system on its own - with no evidence of the deposit of food waste - was a health hazard. [41] In the end I cannot be satisfied on the balance of the evidence or lack of evidence in this instance that Ms. Gerrett is in breach ofany duty to warn or advise the Wagners of the state of the septic system on the Property or the legality of the grey water diversionsystem. As such, the claim against Ms. Gerrett is dismissed. (

c) The Purchasers’ Agent, Mr. Bruce [42] Much of what I have just stated regarding the duty and standard of care of a real estate agent in respect of the claim against Ms.Gerrett would apply equally to Mr. Bruce. Still it is important to note some significant differences among these two defendants as well. [43] Although I found no evidence that Ms. Gerrett made any representation to the Wagners regarding either the septic system or thegrey water diversion, I am satisfied on the evidence that Mr.

Bruce made several representations on which the Wagners relied, ultimatelyto their detriment. [44] First, upon seeing the spaghetti in the field, Mr. Bruce advised the Wagners that the diversion of grey water was common in thearea. The Wagners clearly relied on this representation in that moment. Secondly, when the representative from Save On opened the lidof the Maloney’s septic tank and just as quickly shut it, the Wagners took Mr. Bruce’s advice and refused to pay Save On. Hiscomments were to the effect that the company was notorious for inspecting and quickly failing systems.

The Wagners, who werepresent for the inspection, clearly agreed with that view, yet reduced their offer to purchase based on Save On’s estimate for theinstallation of a new system in any event. [45] In regard to this second representation, I find that even though the Wagners might have been persuaded in part by Mr. Bruce’scomments (as well as their own observations) to forgo reliance on Save On’s report, there is no evidence that Mr. Bruce urged theclaimants to forgo any report or further inspection. While Mr.

Bruce’s comment may have been imprudent, it did not displace theclaimants’ responsibility to satisfy themselves of the quality of the septic system. I would not find Mr. Bruce liable in damages for thisrepresentation. [46] With respect to the grey water, as with Ms. Gerrett, I accept that Mr. Bruce told the Wagners what he sincerely believed. Iaccept it was his experience, as well as Ms. Gerrett’s, that property owners in the area commonly irrigated with their grey water. I do notbelieve either was dishonest about this evidence. To the extent this was a misrepresentation as Mr.

Marshall’s testimony would imply, itwas not dishonest or fraudulent on the part of Mr. Bruce. However, the question remains whether Mr. Bruce’s advice concerning thegrey water on the Property amounts to a negligent misrepresentation.

[ 47 ] Mr. Bruce submits that the Wagners have failed to make a case for negligent misrepresentation on several grounds. Mr. Bruce relies on two decisions; first, Haag v. Marshall , which sets out the test for a claim in negligence, and second Perrault v. North Vancouver (District), 2010 BCSC 382 , which sets out the test for negligent misrepresentation. In both cases, one element which the courts have found to be necessary in order to make out a case in negligence against a real estate agent is some evidence of the standard of care against which the agent’s actions can be measured. [ 48 ] Like the Wagners, Mr.

Bruce saw the grey water pipe leading from the Maloney’s residence into their field. Accepting for the moment that this system did accord with Mr. Bruce’s understanding of what was common in that particular rural area, the question becomes whether the sight of food waste in the grey water (i.e., the spaghetti) should have given Mr. Bruce pause. As an example, Mr. Welch testified that he and Mr. Reid mooted the idea of reporting the Maloney’s grey water system to VIHA but did not as they saw no evidence of effluent coming to the surface. In Mr.

Welch’s words, if the grey water system was creating something that someone was going to get contaminated from, it would create a health hazard. I find it obvious from this evidence that if Mr. Welch had seen spaghetti in the field where the grey water was deposited, or even the pool of water seen by the Wagners and Mr. Bruce that first day, he would have reported the system. [ 49 ] Unlike Mr. Bruce, I am satisfied that Mr. Welch has expertise in such matters. Mr. Bruce clearly does not; nor is there any evidence he held himself out to the Wagners as having specialized knowledge in sewerage systems generally.

That does not end the matter as the question remains whether Mr. Bruce ought to have known that his representation that the grey water system was common and - implicitly - nothing to worry about - was also very likely untrue given what he and the Wagners saw on their first site visit. [ 50 ] The Wagners maintain they relied on Mr. Bruce’s knowledge of the local area as a local real estate agent, and not on his expertise in sewerage systems. I have already found that I accept Mr. Bruce was being honest when he said that the diversion of grey water onto the Property was a common feature in the area.

This was the same view held by Mrs. Maloney, Ms. Gerrett, Mr. Reid, and Mr. Welch. What Mr. Bruce seems not to have appreciated is the fact that the Maloney’s grey water irrigation system was depositing food waste onto the Property almost certainly made it a health hazard. Whether as a real estate agent Mr. Bruce ought to have known that is a question that goes directly to the standard of care expected of real estate agents. Should Mr. Bruce have known? Can I say the Wagners reasonably relied on his advice that first day in the circumstances? Though I am troubled by Mr.

Bruce’s easy representation of the grey water system as being of no concern even in light of the food waste present, I regret that I am unable on the evidence in this trial to find Mr. Bruce’s representation was negligent. There is no evidence of a standard of care against which to measure this conduct and in the result, it is not open to this court in my view to make such a finding. [ 51 ] Mr.

Bruce also submits that whether or not the Wagners relied on his representation as to the normalcy of the Maloney’s grey water system, once the Wagners retained Save On, reliance shifted away from him to Save On, and subsequently to Digger Dale. In support, Mr. Bruce relies on Manghat v. Tchilinguirian , 2009 BCSC 1809 .

In Manghat , Justice Shultes, citing a number of authorities in support, concluded at para 29 that the purchaser’s reliance on a listing description and a property disclosure statement ceased to be a proper basis for reliance once the plaintiffs had sought and relied on their own inspection. [ 52 ] Applying Manghat in this case, once the Wagner’s retained Save On, they could no longer claim any reasonable reliance on either the Maloney’s PDS or any representation regarding the state of the sewerage system on the Property by Mr. Bruce. I have already addressed the effect of Mr.

Bruce’s comments regarding Save On on the Wagners who, despite that comment, reduced their offer to purchase based on Save On’s report. Thereafter, the Wagners based their decisions on what they say were discussions with Mr. Reid of Digger Dale, as well as the certificate filed by Digger Dale with the CRD. [ 53 ] I find that the Wagner’s reliance on Save On and their subsequent reliance on Digger Dale undermines their case against the Maloneys as well as both Ms. Gerrett and Mr. Bruce.

In some regard, the Wagners appear to recognize this as adjudged by their submission that the “bulk of liability lies directly with Dale Welch and Digger Dale…”. For the reasons given above, I find the claim against Mr. Bruce must be dismissed as well as the claim against D.F.H. Real Estate Ltd. [ 54 ] I now turn to the claim against Digger Dale Contracting Ltd., and Dale Welch. (

d) Digger Dale Contracting Ltd. and Dale Welch [ 55 ] After Save On visited the Property, failed the system, and prepared an estimate for the cost of the installation of a new system, the Wagners presented the Maloneys with a reduced offer, which the Maloneys rejected. Instead, because Save On had declared the system a health hazard and the Maloneys lived on the Property, they called Digger Dale to come examine the system and make whatever repairs were necessary. The Wagner’s subject to was extended for a few weeks. [ 56 ] Mr.

Reid, a Registered Onsite Wastewater Practitioner (“ROWP”), with more than a decade of experience in the industry, attended at the Property for what he was told was an incidence of a flooded septic tank. Mr. Reid first examined the tank and, noting it was flooded, called for a pumper. He then attempted to locate the distribution box and, like the inspector from Save On, found a blockage - in his case about five feet from the tank. Mr. Reid received authorization from the Maloneys to do some digging and ultimately dug up the pipe.

He described being able to camera out another 15 feet of the pipe before hitting another blockage. He testified he then found a vitrified Tee and subsequently three other Tees which he removed. He then “jet loaded the fuel lines”, and reinserted the Tees with PVC and put the system back together. [ 57 ] Mr. Reid drew a diagram of the system as he understood it from his work, as well as from some information sent to him. He completed his maintenance, and invoiced the Maloneys for septic maintenance and repair.

The invoice included a bill from Coast Environmental which pumped 620 gallons of effluent from the system. Based on that invoice and his own inspection of the tank, Mr. Reid estimated it could hold up to 750 gallons. Mr. Reid also referenced the grey water system in his invoice noting that the outlet of the pipe was surrounded by drain rock. He testified such systems were common in the area. Still, he asked his employer, Mr.

Dale Welch, to come look at the system, including the grey water pipe. [ 58 ] Subsequent to this, a certificate was filed at the CRD, Environmental Services Department, signed by Dale Welch, ROWP, declaring firstly that maintenance on the sewerage system on the Property was conducted on September 10, 2012, and secondly that the

system functioned properly in a manner that did not cause or contribute to a health hazard. Although Mr. Welch signed the certificate, it was based for the most part on Mr. Reid’s work. [ 59 ] While Mr. Reid was responsible for the work at the Property, Mr. Welch testified that he too attended at the Property and saw Mr. Reid and his assistant, Greg, doing extensive digging mainly around the driveway, as Mr. Reid had testified. Mr. Welch saw one Tee as well as some fresh holes. He accepted Mr. Reid’s explanations that those were the locations of other Tees that Mr. Reid had removed and reinstated with PVC pipe.

Mr. Welch recalled Mr. Reid expressing some concern about the grey water line leading from the house to the field and, consequently, he took a look at the system. Mr. Welch satisfied himself that there was no puddling to the surface. He testified he advised Mr. Maloney that ultimately the grey water would have to be rerouted back to the septic tank and that they would also need a new tank. Mr. Welch recalled that Mr. Maloney was hesitant because of the cost and the two agreed that Mr. Welch would try to figure something out and get back to him. On September 15, 2012, Mr.

Welch’s company, Digger Dale, presented a contract proposal to Mr. Maloney in the amount of $23,146.00 for the replacement of the septic tank. The offer was never taken up by the Maloneys. [ 60 ] The Wagners were naturally interested to learn the results of the work done by Digger Dale. Mr. Bruce testified that on or about September 10, 2012, he called Mr. Reid and from that conversation formed the impression that things were going well. He later received a copy of Digger Dale’s invoice to the Maloneys, which he forwarded to the Wagners, along with a copy of the certificate signed by Mr.

Welch. [ 61 ] The following day Mr. Bruce forwarded to the Wagners a copy of Mr. Reid’s diagram of the septic system on the Property. Mr. Bruce was convinced Mr. Reid had the orientation of the system wrong and reoriented it as he thought it must have been located. He advised in his email of September 12, 2012, that the Maloneys did not appear to be inclined to adjust their price. He warned the Wagners the deal could collapse. [ 62 ] With nerves being somewhat strained at this juncture, the Wagners continued to press, this time for access to the VIHA file for the septic system.

In addition, in an email dated September 12, 2012 addressed to Susan Pipes, an agent assisting Ms. Gerrett, Mr. Bruce wrote that the Wagners were going to speak to Digger Dale. [ 63 ] Mr. Wagner maintains that he had a conversation with Mr. Reid about the septic system. Mr. Reid had no such recollection though he did not deny it could have taken place. I am prepared to accept on balance that Mr. Wagner did have a conversation with Mr. Reid, but on the evidence, I find the conversation would have done nothing other than confirm what work Mr. Reid had done as outlined in his invoice to the Maloneys and his diagram.

If there was any additional clarification, it was that the system was old and that its functional lifetime was limited to five or perhaps ten years if properly maintained. In the result, the Wagners knew they would eventually have to replace the system; it was simply a question of when. [ 64 ] Based on this conversation, the work done by Mr. Reid, the certificate, and the absence of any red flags in the VIHA file, the Wagner’s concerns around the septic system were assuaged. Several years later, in 2014 when the system was again revisited, they were aghast when advised by Mr.

Marshall that he could not find the system as described and drawn by Mr. Reid. [ 65 ] While Mr. Reid estimated the tank held up to 750 gallons, Mr. Marshall measured four times and determined it was a 321 gallon tank. Where Mr. Reid found four Tees and four lateral lines, Mr. Marshall found none. Where Mr. Reid described the septic field as being composed of 250 feet of clay tile, Mr. Marshall found 91 feet of clay tile, which he described as clay tile pipes just abutted together in the ground. Mr. Marshall was of the opinion that this did not qualify as a septic field.

Moreover, he found that the clay tile line that came from the septic tank was attached to a plastic “Big O” pipe, which drained into the ditch along the driveway. [ 66 ] The Wagners allege that Mr. Reid negligently failed to ascertain the true state of the septic system. That is to say, that Mr. Reid failed to exercise the requisite standard of care in assessing the system and reporting back on it. [ 67 ] To find Digger Dale liable for the cost of the replacement of the Wagner’s septic system based on the tort of negligent misrepresentation, I must be satisfied on balance that Mr.

Reid did misrepresent the state of the system in 2012, and that in doing so he fell below the standard of care expected of someone engaged in maintenance work. If I am satisfied on balance that this is proven, I must also consider whether the Wagner’s reasonably relied on the information provided by Mr. Reid to the Maloneys, to the CRD, and in his conversation with Mr. Wagner. [ 68 ] If I am satisfied that the system as described by Mr. Reid did not exist based on the evidence of Mr. Marshall, it would be implicit in such a finding that Mr.

Reid lied about the work he purported to have done at the Property for the Maloneys. It would follow that Mr. Welch would also have lied when he told the court he saw at least one Tee at the Property on the day Mr. Reid was repairing the system. Digger Dale points to the Save On report which references lateral lines but I find, based on the evidence of Mr. Bruce and the Wagners, that is seems unlikely Save On did much in the way of inspecting the lines. The report cannot on its own corroborate the evidence of Digger Dale. Still, I find no basis on which to disbelieve Mr. Reid or Mr. Welch.

Nothing in their testimony suggests either was dissembling before the court. Their evidence was internally consistent and consistent with one another even though, of course, Mr. Reid was not present in the courtroom until he had given his evidence. I find that I believe Mr. Reid’s evidence but it does not follow that I disbelieve Mr. Marshall. I believe both witnesses as well as the testimony of Mr. Welch. [ 69 ] I accept that in the fall of 2014, Mr. Marshall did not find what Mr. Reid found in September, 2012 but I am not prepared to draw from that fact alone that Mr. Reid lied about the system.

It is possible, as Digger Dale submits, that Mr. Marshall simply missed the Tees. The Wagners do bear the onus of proving on balance that Digger Dale misrepresented the system to them as it existed in 2012, and on the evidence, I find the onus has not been met. [ 70 ] Even if I were to find Mr. Reid’s report on the system was negligently made, I must also be satisfied that the Wagners reasonably relied on his various representations. Here it is important to note that Digger Dale was not called upon to inspect the system. Digger Dale was called by the Maloneys to repair the system.

I accept the evidence of both Mr. Reid and Mr. Welch that an inspection of a septic system is a matter entirely separate and apart from maintenance work. Among other things, the reports are quite distinct. Mr. Reid was acting on a maintenance call when he attended at the Property and repaired the system. He made no warranties as to the

soundness of the system; rather, his view was that it was functioning properly in a manner that did not cause or contribute to a health hazard. In other words, that the tank which had been overflowing was pumped and the lines cleared, such that it would function as a septic system, though clearly not for any great length of time given its age and state. I accept this was a true and accurate statement of the system based on Mr. Reid’s repairs and nothing more. [ 71 ] Nothing in the evidence on balance in my view contradicts Mr. Reid’s view of the system as it existed following his repairs in 2012 but for Mr.

Marshall’s opinion that the grey water itself made the system a health hazard. The Wagners maintain that Digger Dale ought to have failed the system on that basis alone. Mr. Marshall’s opinion is based on his many years of work in the industry and his standing as an ROWP. On the other hand, both Mr. Welch and Mr. Reid are ROWP’s and formed a different opinion based on their observation of the grey water system at the material time. [ 72 ] The weight of the expert opinion in this trial does not support the case against Digger Dale.

The overwhelming weight of the evidence as a whole was that the grey water system at the Property at the time of sale was a common feature in the area. That was the view of the Maloneys, Mr. Bruce, Ms. Gerrett, Mr. Reid and Mr. Welch. It is somewhat telling that the Save On report also makes no mention of the grey water system constituting a health hazard though it does reference the system. Even Mr. Marshall agreed that on occasion he had seen the odd grey water system running out into a yard. [ 73 ] In

summary, in regard to the case against Digger Dale I find I cannot be satisfied on balance that the representations made by Mr. Reid and Mr. Welch regarding the system on the Property at the time of sale were false, even despite the evidence and findings of Mr. Marshall. Moreover, I find it unfair and unreasonable, particularly in light of the Save On report, for the Wagners to have relied on the work of Digger Dale, which was only maintenance work done for the Maloneys, to satisfy themselves of the state of the septic system. [ 74 ] For these reasons, I would dismiss the claim against Digger Dale and Dale Welch personally. V.

Summary [ 75 ] The rule of caveat emptor , or buyer beware, places a heavy onus on property buyers to satisfy themselves of the quality of their purchase. They assume the risk of any defects, other than those latent defects that render the property dangerous or uninhabitable and of which the vendor is aware. In this litigation, the buyers bear another onus and that is to prove their claim against all of the defendants on balance. [ 76 ] I am not unsympathetic to the claimants, nor in my view are several of the defendants.

Still, it is a question of ascertaining legal liability for the cost of replacing the septic system on the Property. Bearing in mind the obligations of a purchaser, and the onus in a civil claim, I find the claimants in this case, the Wagners, have not made their case against any of the defendants for the reasons I have given. As such, the claim is dismissed in whole. [ 77 ] In the normal course, each of the defendants is entitled to reasonable costs for the litigation. If the parties are unable to agree on those costs, they are at liberty to set the matter down before the Registrar for an assessment of costs. L.

Mrozinski, PCJ