Charlene Bateman - v. -, 2014 SKPC 081

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2014 SKPC 081 Date: April 16, 2014 File: 7/13 Location: Wynyard _____________________________________________________________________________ Between: Charlene Bateman - and - Les and Valerie Steed and Kelly Swartz Self-Represented For the Plaintiff Michelle G. Marquette For the Defendants _____________________________________________________________________________ JUDGMENT J.A. PLEMEL , J _____________________________________________________________________________ INTRODUCTION [ 1 ] The Plaintiff and Les and Valerie Steed (the Steeds) entered into a Residential Contract of Purchase and Sale signed by the

Plaintiff on September 9, 2012 and the Steeds on September 11, 2012 whereby the Plaintiff agreed to purchase the Steed’s home in Kelvington for $30,000.00. Ms. Bateman was in a hurry to find accommodation as she had already given notice to leave the home she was renting for herself and her family in British Columbia. Therefore, she took possession of the house in question on September 15, 2012. [ 2 ] Ms.

Marquette, acting for the three Defendants accurately states in her Brief of Law: “The terms of the contract stated the Plaintiff would pay an initial deposit of $5,000.00 with the balance of the payment of $25,000.00 to be paid on or before June 15, 2013 with the Plaintiff receiving an additional $100.00 credit towards the purchase price from their $400.00 monthly payment for ten months.

The Plaintiff abandoned the property in June of 2013 and is seeking to have her deposit returned on the basis that the condition of the property was misrepresented by the Defendants, the Steeds, the owners and the Defendant, Swartz, the realtor involved in the transaction.” [ 3 ] The Plaintiff claims for damages suffered as a result of purchasing a house in deplorable condition.

She complains of windows not opening, floors sagging, the roof leaking and mould. [ 4 ] The three Defendants dispute the claim, stating it was the Plaintiff’s decision to purchase the home without viewing it and that she elected not to obtain any additional information or clarification concerning the property before purchasing it. She knew the roof required shingles. They state she should have removed snow from the roof while she occupied it. [ 5 ] The Steeds are Plaintiffs by counterclaim. They claim Ms. Bateman owes property tax in the amount of $767.13. The Steeds also claim payment by Ms.

Bateman of $200.00 for a wardrobe, $200.00 for the services of a plumber, $225.00 for missing drapes and $300.00 for cleaning the house after Ms. Bateman and her family vacated the premises. [ 6 ] The Plaintiff bears the onus of proving her claim on a balance of probabilities and the Defendants, Les and Valerie Steed, for proving their counterclaim on a balance of probabilities. MS. BATEMAN ’S CLAIM [ 7 ] The poor state of the roof’s shingles was a patent defect which even the Plaintiff was aware of as it was apparent in the photographs on multiple listing.

The Steeds did not hide this defect and referred to it in the Property Condition Disclosure Statement (PCDS). [ 8 ] The water stains in the ceiling and wall of the house were also patent defects. At least some were there when the Steeds bought the house. Although they made no attempt to hide the stains, they stated in the PCDS that they were not “aware of any roof leaks or moisture or water problems or unrepaired water damage in the dwellings/improvements.” However, Mr.

Steed acknowledged in testimony that the roof did leak on one occasion shortly after they bought the house and, in order to prevent this from happening again, he used a snow rake to get snow off the roof. I accept the Plaintiff’s evidence that the roof leaked while she and her family occupied the home. I am also satisfied that the roof leaked before they took possession. Furthermore, I am satisfied that the leaking roof caused moisture and water problems in the house and that the water damage was not repaired.

At a minimum the Property Condition Disclosure Statement should have made it clear that the roof was liable to leak if there was too much snow on the roof. NEGLIGENT MISREPRESENTATION BY LES AND VALERIE STEED [ 9 ] I find that Les Steed did not speak truthfully and completely when he stated in the PCDS that he was not aware of any roof leaks or moisture or water problems. Ms. Steed signed the PCDS and was aware of the misrepresentation. Mr. Steed did not correct this misrepresentation simply by writing later in the PCDS that the roof needed shingling. Mr.

Steed’s misrepresentation about leakage, moisture and water might be viewed as a fraudulent misrepresentation. At the very least it was a negligent misrepresentation. [ 10 ] The elements necessary to establish the tort of negligent misrepresentation are summarized by Iacobucci J. in the Supreme Court of Canada as follows: ...(1) there must be a duty of care based on a “special relationship” between the representor and the representee; (2) the representation in question must be untrue, inaccurate, or misleading; (3) the representator must have acted negligently in making said misrepresentation;

(4) the representee must have relied, in a reasonable manner, on the said negligent misrepresentation; and (5) the reliance must have beendetrimental to the representee in the sense that damages resulted. ... (Queen v. Congnos Inc., (SCC), [1993] 1 S.C.R.87 at para. 33). [11] Ms. Bateman has established each of those elements on a balance of probabilities. [12] Since the PCDS contained a material misrepresentation the doctrine of caveat emptor falls away. As Wright J. stated in Shirav.

Karpinski, “once a vendor responds incorrectly to questions posed and signs a PCDS the doctrine of caveat emptor falls away as adefence mechanism and the vendor must speak truthfully and completely...” (2009 S.J. No. 593; 2009 SKQB 394, para. 129) [13] In the circumstances of this case the Steeds are liable for damages because of their negligent misrepresentation of a materialfact. [14] However, I find that they are not solely responsible. The defects mentioned were patent defects clearly visible to anyonegoing upstairs. The Steeds did not attempt to hide them. I find that Ms.

Swartz and the Plaintiff also bear some responsibility for theloss incurred for reasons which I will now state. NEGLIGENCE BY DEFENDANT KELLY SWARTZ [15] Exhibits P-4 and D-16 are copies of a Limited Dual Agency Acknowledgement Form provided to the Plaintiff and to theSteeds by Ms. Swartz. It shows it was signed by them on September 9, 2012. It acknowledges that Ms. Swartz’s brokerage firm, RoyalLePage Carlton has duties to both the buyer and seller.

In it is stated “The Brokerage shall disclose to the Buyer all material defectsabout the physical condition of the property known to the Brokerage” and “the Brokerage will not represent the interest of either theBuyer or the Seller to the advantage of one over the other.” [16] Exhibit D-15 is a series of emails. One is dated September 8, 2012 at 6:02 p.m. from the Plaintiff to Ms. Swartz saying she isstill interested in buying it and asking if the foundation and roof are okay. We see Ms.

Swartz reply on September 8 at 6:31 p.m. stating“Not leaking yet but does need attention.” There is another on September 9, 2012 at 12:14 a.m. from the Plaintiff to Ms. Swartz asking“Do you think that the roof can last the winter?...If so we would love to get this place...” Ms. Swartz’s reply at 2:59 p.m. is “In myopinion the roof will last the winter...” [17] I find that Ms. Swartz is liable for negligent misrepresentation in stating that the roof did not leak yet. The water stains in theupstairs ceiling showed a patent defect and the probable cause was the poor roof and shingles.

As the listing agent she highlighted theselling features of the house. This included photographs of the nicely renovated downstairs, but not the un-renovated deplorable state ofthe upstairs. To be clear, she did not hide the state of the shingles, as they are sufficiently shown in the photographs which were postedon multiple listing. However, I am satisfied that at the time of the contract of purchase and sale, Ms. Swartz was aware of the waterstains in the ceiling upstairs as well as the water stain on the wall of the addition to the house.

I accept the Plaintiff’s evidence that thesestains were there when she moved in. Ms. Swartz had shown the house to three potential buyers between May and September of thatyear. The water stains mentioned, were indicative of patent defects, suggesting that the roof leaked. Ms. Swartz was negligent in notrecognizing this and mentioning it to the Plaintiff. She failed in her duty to exercise reasonable skill and care towards the Plaintiff. [18] In her defence, Ms. Swartz states that she advised the Plaintiff to have a home inspection done or to come out and see itherself before she bought it.

The Plaintiff denies that Ms. Swartz told her this. I am resolving this conflicting evidence in favour of Ms.Swartz, and find that Ms. Swartz told her in general terms of the benefits of a home inspection or a visual inspection. Indeed, Ms.Bateman knew of the benefits of a home inspection, given her own recent reliance on one in deciding not to buy a house in anothercommunity. However, Ms.

Swartz should have told her about the deplorable state of the upstairs and the water stains in the ceiling tobring home to her that this was not only routine advice from a real estate agent, but based on her visual observations of the house. Instead, she told her that the roof did not leak and that in her opinion it would last the winter. It was not enough that she simply took LesSteed’s word for it that the roof did not leak. She knew that when the Plaintiff signed the agreement to purchase, she was relying on herrepresentation that the roof did not leak.

Merely mentioning a home inspection under these circumstances was not enough. She shouldhave mentioned the water stains and forcefully recommend that she see the house for herself or have a home inspection done. (See forexample paragraph 141, Shira v. Karpinski, supra.)

[ 19 ] Justice Ryan-Froslie recently discussed a real estate agent’s fiduciary and professional duty to her client including this caution: “If a real estate agent does not know if something is correct or accurate, they have an obligation to advise their clients so that the client may take steps to obtain the information or direct the agent to do so.” ( Forbes v. Morrison , 2014 SKQB 40 , para. 76 ) THE PLAINTIFF ’ S CONTRIBUTORY NEGLIGENCE [ 20 ] Can a Plaintiff be found to be have contributed to her loss through her own negligence when negligent misrepresentations were made to her by the Defendants?

Justice Ryan-Froslie held that contributory negligence does apply in these situations stating that it goes not to the fact of the loss but to the extent of the damages. “Contributory negligence relates to a plaintiff’s obligation to act reasonably to protect himself or herself from foreseeable losses.” ( Forbes v. Morrison , supra at para. 178 ) [ 21 ] Since the Plaintiff was in a hurry to buy a home in Saskatchewan, she rushed her purchase and this contributed to the loss which she has sustained. She knew the roof needed attention and only had Ms. Swartz’s stated opinion that the roof would last the winter.

She had no reason to believe that Ms. Swartz was a roofing expert. For this reason, the Plaintiff bears some of the responsibility for her loss. Had the Plaintiff been more prudent and not rushed into the purchase of the home she could have seen for herself what she was purchasing. Ms. Swartz may well have been left with the impression that, in spite of the home’s obvious deficiencies, given the Plaintiff’s rush to buy, this was as good as she could do in the few days she allowed herself to make the purchase. [ 22 ] It is important to note that when Ms.

Bateman signed the Offer to Purchase she also signed an Ancillary Services form provided by the Association of Saskatchewan Realtors which listed additional information buyers might want to consider to assist in the determination of property defects (Exhibit P-9). It states that if a buyer is of the opinion that a problem may exist, a prudent buyer should consider an inspection report from a qualified individual to determine the facts with the potential problem.

It states further that “the buyer assumes any and all liability arising from all defects related to and that may have been determined and discovered by inspections listed herein but not chosen.

Your real estate agent can write a condition, or conditions, in the Contract of Purchase and Sale to allow for sufficient time to complete all requested inspections and/or reports.” Included in the list are a roof inspection and a Property Condition Disclosure Statement. [ 23 ] Though I find this agreement does not succeed in placing all the liability on the buyer as it purports to do, it does give the buyer an indication of steps she might take to ensure she knows what she is buying before signing a contract to purchase.

The intentional misrepresentation by the Steeds that the roof did not leak, and the negligent representation by Ms. Swartz which I have referred to led Ms. Bateman to believe that the roof did not leak and to ignore these safeguards. The Defendants are liable for making the false representations. The Plaintiff bears some responsibility for her loss in rushing the sale of the house and in failing to avail herself of some of the safeguards afforded to her in this ancillary services agreement.

APPORTIONING LIABILITY [ 24 ] The Plaintiff resided in the house from September 15, 2012 to June 20, 2013, a period of nine months. She demands the return of her $5,000.00 deposit and $700.00, being the monthly payments she made towards the purchase of the house while she and her family resided there. In addition she demands $57.00 for issuance of the summons in these proceedings. This totals $5,757.00 and I am satisfied it accurately reflects Ms. Bateman’s loss. [ 25 ] I find the Defendant Steeds 50% liable and Ms. Swartz 25% liable for the Plaintiff’s loss.

The Plaintiff herself is responsible for 25%. [ 26 ] Therefore the Plaintiff is entitled to judgment in her claim against the Defendants, Les and Valerie Steed, jointly and severally in the amount of $2,878.50, being one half of the total loss. This will be offset by the amount I refer to below in dealing with the counterclaim. [ 27 ] There will be judgment against the Defendant Kelly Swartz in the amount of $1,439.25, which is one quarter of the total loss.

[ 27 ] There will be judgment against the Defendant Kelly Swartz in the amount of $1,439.25, which is one quarter of the total loss. THE COUNTERCLAIM [ 28 ] The Defendants, Les and Valerie Steed, are Plaintiffs by Counterclaim. During the time Ms. Bateman resided in the house in question they incurred property taxes of $726.13, for which they claim judgment. Given the comments previously made, I find that Ms. Bateman is responsible for payment of 25% of the taxes or $181.53. [ 29 ] In addition they claim judgment against Ms.

Bateman for $200.00 for the cost of a wardrobe, $200.00 for the cost of a plumber to replace the kitchen and tub faucets, $225.00 for missing drapes and $300.00 for cleaning costs. [ 30 ] I am satisfied on a balance of probabilities that when Ms. Bateman left the property, she took with her a wardrobe valued at $200.00. This was to be hers if she purchased the house, but as the sale was abandoned, she must now pay for the wardrobe. There is conflicting evidence about the drapes and I am not satisfied that she is responsible for their loss. Nor am I satisfied that she is responsible for the cost of plumbing.

I am satisfied that the Steeds paid the equivalent of $300.00 to clean the house after Ms. Bateman left and for this she is liable. [ 31 ] I therefore award judgment of $681.55 in favour of the Defendants Les and Valerie Steed in the counterclaim, arrived at as follows: Taxes: $181.53 Wardrobe: $200.00 Cleaning: $300.00 Total: $681.55 [ 32 ] This amount will be deducted from the damages awarded to Ms. Bateman in her claim. CONCLUSION [ 33 ] Ms.

Bateman shall have judgment in her favour against the Defendants Les and Valerie Steed, jointly and severally in the amount of $2,878.50 less $681.55 for a total of $2,196.95. [ 34 ] Ms. Bateman shall have judgment in her favour against the Defendant Kelly Swartz in the amount of $1,439.25. [ 35 ] I am making no order as to costs.

J.A. Plemel, J