Wanda Bourdages - v. -, 2011 SKPC 69

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2011 SKPC 069 Date: April 29, 2011 File: SC#120 of 2009 Location: Saskatoon _____________________________________________________________________________ Between: Wanda Bourdages - and - Susan Chanathavone and 100% Realty Associates Ltd., carrying on business under the name of RE/MAX SASKATOON and Kathy Fehr Self For the Plaintiff B. Borden For the Defendant, Susan Chanathavone Kevin Clackson For the Defendant, 100% Realty Associates Ltd. And Kathy Fehr _____________________________________________________________________________ JUDGMENT R.D.

JACKSON , J _____________________________________________________________________________ I INTRODUCTION

[ 1 ] The Plaintiff Wanda Bourdages (Bourdages) a first time homebuyer, purchased a dwelling located at 209 Avenue Q North in Saskatoon on March 3, 2008, taking possession of the premises May 1, 2008. At the time of purchase the home was owned by the Defendant Susan Chanathavone (Chanathavone) who rented out the premises to a family with young children.

The home was actually purchased in Chanathavone’s name by her mother less than a year earlier and at no time did either Chanathovone or her mother occupy the said home. [ 2 ] Upon taking possession in early May, Bourdages immediately detected a very powerful foul smell emanating from the basement. Subsequent investigation traced the smell to an unused coal chute blocked off with a piece of board about half way up the basement wall. Inside the chute was found large quantities of black mould which produced the offensive odour and additionally was considered to be a potential health hazard.

At the time of viewing the home in March, neither Bourdages nor the realtor Kathy Fehr (Fehr) detected any unusual odours in the home nor specifically in the basement. [ 3 ] Coincidental with this discovery, Bourdages commissioned renovation work in the main floor bathroom to repair a tub crack and replace the linoleum due to a visible stain surrounding the toilet pedestal. Upon removal of the linoleum, the sub-floor and supporting joists where found to be rotten necessitating replacement.

Additionally, black mould was found to permeate this area as well. [ 4 ] Bourdages consequently expended in excess of $7,000.00 to extirpate the mould and seal the coal chute and roughly $1,200.00 for replacement of the bathroom sub-floor which also included eradication of the mould found there.

She now seeks to be compensated by the owner and/or the realtor (as well as her employer RE/MAX vicariously) for these damages. [ 5 ] At the conclusion of trial, Bourdages was permitted to amend her Statement of Claim to include negligence simpliciter as against Fehr (and by extension RE/MAX) in addition to her pleading of negligent misstatement. Although an amendment to the pleadings at this stage is, to say the least, highly unusual, the Court exercised its discretion to permit a full and fair adjudication to the Plaintiff as an unrepresented litigant of all potential remedies available to her at law.

Counsel for Fehr was invited to consider and advise as to whether any further evidence would be called as a result however ultimately this was declined. [ 6 ] The trial was lengthy resulting in excess of five hundred pages of transcript which the Court has had the benefit of careful review in reaching its conclusions.

The proceedings could have been easily further protracted but for the concessions by both Defense counsel concerning the clinical identification of the mould and the extent of costs incurred for the mould remediation and necessary repairs, for which the Court is grateful. [ 7 ] That aside, the trial focus devolved to issues of who, in law, was responsible for the Plaintiff’s reparations.

II LIABILITY OF THE VENDOR CHANATHAVONE [ 8 ] Two defects were identified at trial for the subject premises, namely presence of black mould in the basement coal chute and bathroom sub-floor as well as the rotten sub-floor and underlying floor joists of the main floor bathroom. [ 9 ] Cases of complaints by buyers (be it for real or personal property) regarding after-noted discovered defects are unfortunately, all too common.

Absent the very rare circumstance of vendor warranties or guarantees, or legislative protection in the case of purchase from retail sellers [1] , the law has become well-settled as to whether the buyer or seller should bear responsibility for remedying the defect. [ 10 ] In any such purchase situation, the maxim caveat emptor (buyer beware) looms large as the foremost responsibility of the purchaser. Simply put, the onus rests upon the buyer to take all reasonable steps to inspect and educate himself or herself in relation to

the sale. [ 11 ] If certain defects are apparent, or ought to have been so by reasonable inspection, these are classified as PATENT (meaning obvious) defects for which the buyer would have no subsequent claims against the seller. If, on the other hand, the defect(

s) later complained of were hidden (as in not easily or readily apparent) these are classified as LATENT defects. In order for a seller to be held responsible to remedy such a hidden defect however, it must be established on the evidence that not only was the defect hidden but also, that the defect was known to the seller at the time of sale.

It is this act of concealment by the seller of the hidden defect that attracts liability, not the fact that the defect exists. [2] [ 12 ] In regard to the mould found in the coal chute, notwithstanding that no offensive smell was noted at the time of viewing, this arguably was a patent defect inasmuch as the board was easily removed and the chute readily accessible should the buyer have chosen to look. However, even if this mould was determined to be a latent defect there is no evidence whatsoever that the vendor Chanathavone had any knowledge of the presence of the mould at any time.

No complaint was ever made to her by the tenants of any noxious smell or health issue with the family members nor did anyone for that matter appear to have noticed anything untoward in this regard until possession date. [ 13 ] A stronger argument could be made for the water damage to the sub-floor and joists for the bathroom and the black mould found there as well being a patent or obvious defect.

The workman, Maurice Charles, called by the Plaintiff, testified regarding the floor joist immediately underneath the main bathroom, that “anybody could see that is was rotten - just by looking at it”. [3] Further, Bourdages and Fehr both testified that the water stain on the linoleum in the bathroom was plainly visible such that it could be inferred damage had occurred in that area.

Again, however, even if it was latent or hidden there is no evidence before the Court that Chanathavone had any direct or indirect knowledge of same or that she took any steps to alter or repair the premises during her tenure as owner. [ 14 ] In all respects, Chanathavone cannot be held liable for the mould remediation and repair. The claim against her is dismissed accordingly.

III LIABILITY OF THE SELLING AGENT FEHR AND HER EMPLOYER, 100% REALTY ASSOCIATES LTD. [ 15 ] The success of the Plaintiff against Fehr’s employer is plainly tethered by the doctrine of vicarious liability since the evidence is irrefutable that Fehr at all material times was acting in the scope of duty in her capacity as selling agent. It will therefore be necessary only to focus on the liability of Fehr directly, without which no stand-alone finding could be made against 100% Realty Associates. If she is found liable, so too would 100% Realty Associates be responsible.

Negligent Misstatement [ 16 ] The test to determine negligent misstatement has been articulated by the Supreme Court of Canada in R. v. Cognos [4] . In order to succeed, a Plaintiff must establish:

a) there must be a duty of care based upon a “special relationship”; (not contested by the Defendants in this case)

b) the representation must be untrue, inaccurate or misleading;

c) the representor must have acted negligently in making the representation;

d) the Plaintiff must have reasonably relied on the representation;

e) the reliance must have been detrimental such that he or she suffered damages as a result.

[ 17 ] There is no evidence before the Court that Fehr made any representation about whether mould was an issue in older homes or whether this should be a concern to the Plaintiff, nor were there any comments made about the structural integrity of the home or any other representation concerning the quality of the home that subsequently proved to be untrue, inaccurate or misleading. [ 18 ] The only statement perhaps that the Plaintiff could rely upon to found liability under this heading would be whether the Plaintiff was told by Fehr that “anyone could do a home inspection” as alleged by the Plaintiff and denied by Fehr.

The importance of the home inspection was underscored by the fact that no Property Condition Disclosure Statement (PCDS) was available for the subject property. Therefore, if Fehr had misled Bourdages by such a statement and Bourdages had relied upon this to her detriment, perhaps her claim could be made out. [ 19 ] Fehr recalled Bourdages asking whether or not her father could perform the home inspection and Fehr replying that if this was the only person that was going to be utilized it would be better than not having one done at all.

The evidence is clear however that no one performed any home inspection, including Bourdages’s father at any time prior to or following the sale process prior to taking possession. Accordingly, even if the Court could conclude on balance that Fehr stated “anybody can do a home inspection” which on the contradictory evidence it cannot, the Plaintiff in no way relied upon this statement to her detriment. She did not choose someone less than professional or unqualified to inspect her home relying upon what the realtor had said, and then been dissatisfied with the result.

Rather, she chose no one at all and therefore cannot succeed on this ground. IV NEGLIGENCE [ 20 ] At the outset, Counsel for Fehr argued ably that the Plaintiff had not met the evidentiary onus of calling expert evidence to establish the standard by which his client should be judged. The Court is of the view however that not all circumstances of alleged negligence would necessarily require expert evidence to set the bar, so to speak, before any finding of negligence could be made. My sister judge Scott J., in Schiltroth v.

R.D.S. [5] , a case involving the alleged negligence of a home inspector, stated at paras. 24 and 25: [24] There was an implied term of the contract between the parties that the defendant would inspect the property according to the normal standards applicable to building inspectors and would identify significant defects that a person knowledgeable about buildings would observe through a careful inspection and about which a purchaser would want to know prior to buying property ( Fraser v. Knox , [1998] O.J. No. 4379 para. 36 (Ont.

S.C.J.) . [25] No expert was called to testify as to the industry standard for conducting a home inspection. However, expert evidence is not always necessary to establish professional breach of contract or negligence ( Blake v. Chen , [2009] O.J. No. 3967 (Ont. S.C.J.) .

The contract in this case sets out the standards for conducting a home inspection. [ 21 ] Other common sense examples come to mind such as driving down the road deliberately on the wrong side, travelling against lights through busy intersections, or as discussed in argument, a doctor leaving a surgical tool in the body cavity, where expert evidence would be unnecessary to establish negligence. [ 22 ] What then should Fehr as a reasonably competent realtor have done to better protect the interest of Bourdages and where has she failed to meet this standard? [ 23 ] It would have been negligent in the Court’s view for Fehr not to have discussed getting a home inspection and further to have dissuaded Bourdages against this particularly since there was no PCDS and Bourdages was a first time homebuyer.

The evidence is clear however that the necessity of obtaining a home inspection was indeed raised prior to placing the offer and that more likely than not as Fehr contended, Bourdages for financial reasons chose not to proceed with same.

[ 24 ] Support for Fehr’s contention that Bourdages was clearly apprised of the issue regarding obtaining a home inspector but chose not to by reason of her finances can be found in the following exchange under cross-examination commencing at page 337 line 19 and continuing to page 338 line 23: Q: While you were a first time home buyer, how would you know that you had a right to have the home inspected? A: Pardon me? Q: How would you know that you had the right to have the home inspected? A: It was part of going through this. Q: Okay. So I suggest to you that Ms.

Fehr told you that you had the opportunity to have the home inspected and you asked her how much is it going to cost. A: Yeah. Q: Okay. And she said to you about $350.00. A: I remember $500.00. Q: So with these new costs and you factor in the renovations you are going to have to make to the house, the purchase of this house was – the purchase price was climbing in your view. A: Mm hmm. Q: Yes? A: Yes. Q: And that was a concern to you? A: Yes. Q: You were on a limited budget? A: Yeah. Q: So if you could find a way to reduce the cost of purchasing the house, that’s what you wanted to do? A: Wouldn’t anybody?

Q: Certainly. But certainly you did. A: Oh yeah. [ 25 ] Bourdages also maintained that she only had one tour of the property prior to the offer being made and this was done without benefit of seeing the bathroom as it was occupied at the time of the tour. Fehr testified that the offer was not placed until after the second tour of the property when she and the Plaintiff had the opportunity to view the bathroom.

Certainly if Fehr had encouraged Bourdages as a first time homebuyer to make an offer before having had the opportunity to view all of the rooms, particularly the bathroom where plumbing and other cosmetic problems may well exist, this could be seen as falling short of her professional responsibilities to Bourdages. [ 26 ] The Court cannot conclude on the evidence however that this was done and even if the Court were to side with the Plaintiff in this regard, it appears that nothing would have turned on the inspection in any event as illustrated by the following evidence in cross- examination of the Plaintiff commencing line 16 page 339 continuing to page 340 line 2: Q: I am curious, after you inspected the home and you - or, sorry, the second tour you had and – which you say occurred after Offer to Purchase, and you noted the condition of the bathroom, did you say to Kathy, is there some way I can get out of this deal because the bathroom doesn’t look that great?

A: No, I don’t think so. Q: Is there some reason why you didn’t do that? A: Well it didn’t look like a big thing to clean up. Like, you know, new linoleum in the bathroom, you can - $25.00. It was just a cosmetic thing in my mind. It wasn’t a big issue. [ 27 ] So whether the bathroom was seen before or after the offer was placed, on these facts, Bourdages would have proceeded with the sale regardless.

In her words, “it wasn’t a big issue”. [ 28 ] Bourdages also testified that Fehr made several comments to the effect that this was a “sweet deal” and that she could “double her money with little effort” and that she would consider buying the property if Bourdages did not. Again, these statements were denied by Fehr. In Fraser v. Powell [6] the purchaser alleged that her realtor made the following similar statements:

a) the property was ideal for the purchasers’ needs, including their horses;

b) the purchasers should not pass up the opportunity to purchase the property;

c) the property was an excellent buy for $102,000.00;

d) the water well produced a sufficient supply;

e) a small ditch on the property was to handle overflow from the well;

f) the basement suite could be rented for $500.00 a month. [ 29 ] The B.C. Court of Appeal upheld the trial judge’s decision dismissing the action, stating at para. 6 of the decision: 6 In her reasons for judgment, Madam Justice Allan disposed of each complaint on the basis of the evidence before her. She dealt with the allegations regarding Mr. Zroback’s sales talk in this way: With the exception of any misrepresentations relating to the condition of the Property, I think it clear that a real estate agent is generally not liable for the sort of broad exhortations made by Mr. Zroback.

He did not unduly pressure them to purchase the Property. In my respectful submission, that is an incontrovertible statement of the law.

Purchasers must make up their own minds as to what is suitable for them and what constitutes a good buy. [30] In the present case the Court finds that the comments attributed to Fehr are of the same variety as set forth in Fraser, and could not on the evidence before the Court be said to have unduly pressured the Plaintiff to proceed with her purchase. [31] In all other respects, Fehr appeared to be conscientious in going through the sale documentation, viewing sales comparables, and otherwise advising Bourdages as to what should be done in relation to the sale. [7] [32] For the foregoing reasons, the Court cannot conclude that Fehr was negligent in any respect regarding her duties and obligations respecting the Plaintiff.

By extension, 100% Realty Associates Ltd. is therefore not liable either. IV RESULT [33] The Court must accordingly dismiss the claim of the Plaintiff in this matter. It is indeed unfortunate that she was put to such additional expense when she could ill-afford it. However for the reasons stated herein, neither the seller of the home nor the real estate agent can be found responsible in law to compensate her for these expenditures.

__________________________ R.D. Jackson, J [1] Viz. The Consumer Protection Act S.S. chap. C-30.1 [2] See Frey v. Sarvajc [2000] S.J. 382, 2000 SKQB 281 (Sask.Q.B.) paras. 15 - 18 incl. [3] Transcript page 75, lines 13 - 25 [4] (SCC), [1993] 1 S.C.R. 87 (S.C.C.) [5] [2010] S.J. No. 244 (Sask. P.C.); See also Johnson v. Erdman [2002] S.J. No. 651 (Sask. Q.B.) at para. 28 where counsel citesWilliam F. Foster in Real Estate Agency Law in Canada (2d ed.) (Scarborough: Carswell, 1994) outlining realtors liability for erroneousadvice. [6] [1998] B.C. J No. 2281 (B.C.C.A.) [7] See Wabugwe v.

Whitfield et. al. 2007 SKPC 157 (Sask. P.C.) where the same result was reached on very similar facts to the presentcase.