Bernard v. Madeline Storzuk, 2013 SKPC 209

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Date: December 13, 2013 2013 SKPC 209 File: SC#287 of 2013 Location: Saskatoon _____________________________________________________________________________ Between: Bernard and Madeline Storzuk - and - Ken and Marcella Kuemper Selves For the Plaintiffs Selves For the Defendants _____________________________________________________________________________ JUDGMENT B.G. MORGAN , J _____________________________________________________________________________ Introduction [ 1 ] By contract dated March 7, 2013, the Plaintiffs agreed to purchase a condominium property in Saskatoon, Saskatchewan

from the Defendants. Possession date was set for May 1, 2013. [ 2 ] Attached to that Offer to Purchase, and specifically incorporated into and forming a part of the Offer to Purchase, was a Property Condition Disclosure Statement (the PCDS) , signed by all parties on March 7, 2013. [ 3 ] One of the questions in the PCDS, under the heading Structural, was: Are you aware of any problems with the central air conditioning system?

Of the three boxes to be checked off, being “Yes”, “No”, and “N/A”, the box for “No” was checked. [ 4 ] The Plaintiffs claim that the Offer to Purchase indicated that an existing working air conditioner was included, and maintain that, when they first tried to use the air conditioner in the spring of 2013, it did not work.

The Plaintiffs are claiming the sum of $3,301.75 from the Defendants, representing the replacement cost of the air conditioner, plus the cost of servicing of the unit, less $200.00 the Defendants did pay towards that servicing. [ 5 ] The Defendants state that they had no problem with the air conditioner when they last used it in the late summer of 2012, and that the answer “No” in the PCDS was accurate. Thus, they argue, the claim should be dismissed.

Issues [ 6 ] The sole issue in this case is whether or not the Defendants are liable to the Plaintiffs for replacement, or perhaps repair, of the air conditioning unit. As the plaintiffs did not specify in the claim the specific basis for attaching liability to the defendants, I will address the following issues: 1. Are the Defendants liable for a breach of the contract? 2. Did the Defendants make a misrepresentation on the PCDS? 3. Did the Defendants conceal a defect, latent or patent? 4.

If the answer to any of the above questions is “yes”, what are the damages? [ 7 ] I will first make my findings of fact, and then apply the law to the facts in the order set out above. The Facts [ 8 ] Each of the four parties testified as to the general background of what occurred, and it is apparent there is no major disagreement on background matters. On March 7, 2013, all four parties signed the Offer to Purchase, which was on a form that had been prepared by a local lawyer. The same witness signed next to the names of each of the purchasers and defendants.

Attached to that Offer to Purchase was a PCDS which was also signed the same date. There were a number of conditions on the contract, all of which were to be removed by March 22, 2013, with a possession date of May 1, 2013. I understand possession may have been granted a day or two earlier, but nothing turns on that.

[ 9 ] This property was a townhouse style condominium located on Heritage Lane in Saskatoon, Saskatchewan. The condominium plan bears number 93-S-42591, which would make the property approximately 20 years old. The Defendants moved into the property in 1995, and at that time, had the air conditioning unit in issue installed. [ 10 ] The air conditioning unit was last used by the vendors in the summer of 2012. I find that up until the time the Defendants used the air conditioner, which could have been as late as September, 2012, depending on the weather, it was in working order. Mrs.

Kuemper testified that she could set it to any temperature, and it worked, and that when she and her husband put the cover on the outside portion of the unit in the fall of 2012, nothing was out of the ordinary at that time. Mr. Kuemper testified to the same thing. He said they had no problems with it, and that they shut it down in the winter, put the cover on it, and during the time they used it, they would set the thermostat, the unit would run until it hit the requested temperature, and then it would shut off appropriately. [ 11 ] Mrs.

Kuemper testified the unit was serviced four or five years ago and that there were no problems. Mr. Kuemper said it was all working five years ago, and at that point, as it was 13 years old, and as an acquaintance had said he had his air conditioner serviced, the Kuempers did the same thing. The service work done, I am satisfied, was regular maintenance, as the unit had not previously been serviced; that is, there was no specific reason for that service. The unit continued to work properly after that servicing. Mr.

Kuemper testified that he taped a drain hose, apparently around that time, and the tape was still present when the house was viewed by the Storzuks. He expanded on that somewhat and clarified that what he was working on at that point had to do with the furnace, and did not in any way affect the operation of the air conditioner. [ 12 ] The Plaintiffs do not take issue with what the Defendants say; they acknowledge that they were not able to inspect the air conditioner at the time they looked at the house, as it would have been in winter, and of course the air conditioner would not have been operable at that time.

The evidence of Mr. Storzuk is that he and his wife probably turned it on some time in May, 2013, obviously after they had taken possession and just as obviously at a time when the weather would have been such that cooling the house would have been required. He stated that it did not cool the house. Accordingly, he had a gentleman named Terry Myers, from T. M. Mechanical Ltd., come to their home to look at it. Exhibit P-2 is an invoice from Mr. Myers, dated July 19, 2013, although I accept Mr. Storzuk’s evidence that Mr.

Myers was actually there some time in June, 2013, the account being rendered well after that time. [ 13 ] Although Mr. Myers did not testify, Exhibit P-2 was filed without objection, and I rely on it pursuant to s. 28.1 of The Small Claims Act , as I consider the evidence to be credible and trustworthy and, quite frankly, the only evidence from a non-party who would have knowledge of the state of the air conditioning unit. [ 14 ] That document states as follows: Worked on a Lennox a/c system that was about 20 years old and did not work. Discovered unit was extremely low on refrigerant.

Pressurized unit with nitrogen to inspect system for leaks. Found no obvious leaks but found evaporizer coil was pretty corroded in drain (?) pan w/drain plugged. Evacuated unit and recharged so a/c would function for the weather was hot. Unit did not have the right pressure so I performed a test on compressor’s efficiency. It was not good. Recommend replacement of system. [ 15 ] Exhibit D-1 was a second report from Mr. Myers, dated September 17, 2013, which states: To Whom It May Concern: - Was requested to repair a 20 year old Lennox air conditioner, located at 644 Heritage Lane.

Saskatoon, owned by Bernie Storzuk (was not present). - unit was low on refrigerant and compressor performance was poor

- left unit operating in suboptimal capacity - Mrs. Storczuk was informed - I believe the date was in late June or early July, 2013. [ 16 ] Based on Mr. Myers’ first invoice and comments, Mr. Storzuk determined to get a second opinion. He therefore contacted Canadian Tire for a quote (Exhibit P-3), which was performed by a Mr. Ryan Hunt of Heat - Rite Mechanical Ltd., which shows a total cost to provide (and I assume, install) a Bryant two ton air conditioner package for a total cost of $3,307.50. Exhibit D-2 is a letter from Mr.

Hunt dated September 18, 2013, addressed “To Whom It May Concern” indicating that he was sent out to quote on the new air conditioner, and at no time did he ever test the existing unit to determine what was wrong or if it ran properly. [ 17 ] The above evidence tendered from or through Mr. Storzuk satisfies me that in fact the air conditioner unit was in the condition that is reflected in the letters from Mr. Myers in late June or early July of 2013, and that based on the initial report from Mr. Myers, the Storzuk’s decided to get a quote from Canadian Tire.

However, they did not install a new unit, as they chose to commence this action and await this decision. [ 18 ] I accept as well Mr. Storzuk’s evidence that the air conditioning unit worked for a week or two after Mr. Myers did the servicing/repair in late June or early July, 2013, although the air conditioning unit was not working to Mr. Storzuk’s satisfaction. [ 19 ] At the date of trial in November, 2013, the air conditioner unit was of course shut down for the winter. However, I accept as well Mr.

Storzuk’s comment that the fan will operate on the unit, and it will blow, but it will not blow cold air, at least not cold enough for his liking. [ 20 ] Mrs. Storzuk testified that in early May, she and her husband had asked their son-in-law to take the cover off the air conditioning unit, that Mr. Myers was present at the end of June, and he had told her that he “fixed it a little bit but it isn’t going to work long”.

She testified as well that she had no knowledge of the state of the air conditioner unit at the time of the purchase and that the lowest temperature she could get the unit to lower the house to was 74 degrees. [ 21 ] That is essentially the factual background. There were some other minor issues raised, but they are not relevant to the determination of this case.

There were communications between the Plaintiffs and the Defendants, and there is no question that the Defendantspaid $200.00 to the Plaintiffs, although there is some considerable dispute over whether that was to be accepted in full and final satisfaction of the Plaintiffs’ claim, or was more of a goodwill gesture on the part of the Defendantsto defray the cost of servicing the unit. [ 22 ] Against that background, I will address the specific issues identified earlier. The Issues 1.

Are the Defendantsliable for a breach of the contract? [ 23 ] Under this heading, I will confine myself to the question of whether or not the Defendantsbreached the contract clause 9, part of which states that the property is sold “as is” but the vendor “. . . must preserve it at the Vendor’s expense and the Purchaser must receive it on closing in substantially the same condition as it is at the date this offer is presented to the Vendors”.

[ 24 ] I am satisfied on the evidence that the Vendors “preserved” the property from the date the Offer to Purchase was executed. They had covered the exterior portion of the air conditioning unit in the autumn of 2012, as they did each year, and the air conditioning unit, for obvious reasons, was not operated again until after the possession date. [ 25 ] Did the purchaser receive the air conditioning unit in “substantially the same condition as it is at the date this offer is presented to the Vendors”?

I am satisfied they did receive it in that condition. [ 26 ] In so stating, I note that this was an 18 year old air conditioning unit at the time the Plaintiffs purchased a property that was, at that time, 18 to 20 years old.

When the Plaintiffs operated the air conditioning unit, it operated for a short time, once it was re- charged, and I am unable to conclude on a balance of probabilities that in fact the air conditioning unit was inoperable in March, 2013, when the contract was executed or at any time prior to that. [ 27 ] In a civil case, the Plaintiffs must establish their case on a balance of probabilities. They have failed to do so with respect to any claim that would be founded on simple breach of the contract clause that required preservation of the property they purchased, as set out in clause 9 of the Agreement. 2.

Did the Defendants make a misrepresentation on the Property Condition Disclosure Statement? [ 28 ] There are many different types of misrepresentations, ranging from innocent to negligent or fraudulent. The one feature that any type of misrepresentation has in common with any other type is that the statement made must be untrue. [ 29 ] The alleged misrepresentation is contained in the impugned clause of the Property Condition Disclosure Statement, that is, “are you aware of any problems with the central air conditioning system”? The answer given by the Defendants was they were not aware. [ 30 ] In Hanson v.

Dumont , 2005 SKQB 158 , Gunn, J held at para. 59, that the PCDS required the Defendants“to disclose problems of which they were aware”, citing an earlier case from the British Columbia Supreme Court. In

summary, that case stated that the PCDS “...is not necessarily a warranty. Its main purpose is to put purchasers on notice with respect to known problems . . .It merely indicates that the statements therein are true according to the sellers “current actual knowledge”. [ 31 ] That latter principle is clearly set out in the PCDS in this case, which contains the following caution directly above the signing line for the purchasers, highlighted in bold letters: The Purchasers should understand this statement may not provide a remedy for many problems they may discover with the Property.

It is not an exhaustive list of concerns. Some statements only say what the seller knows rather than being a guarantee there are no problems. The Purchasers should have the property inspected by qualified professionals (emphasis added). [ 32 ] What the Defendants stated, by checking “no”, was that they were not aware of any problems with the central air conditioning system. That is not a guarantee that there were no problems with the air conditioning system.

I find as a fact that there were no problems with the system; I merely point out that, even if there were problems in existence at the time of the signing of the PCDS, that would not necessarily mean that the Defendants were aware of such problems. [ 33 ] In this case, I find as a fact that the Defendants answered the question truthfully. Thus, there is no misrepresentation. [ 34 ] I note as well that, after the servicing was effected in June, 2013, the air conditioner did work, albeit not up to the standards of a new air conditioner.

However, the evidence is that the air conditioner did work for a few weeks, and although Mr. Myers recommended replacement of the unit, that does not mean the air conditioner was not working; what it means is that the air conditioner

was not working as a brand new air conditioner would, which is not surprising considering the age of the unit. [ 35 ] I find that there was no misrepresentation of any type with respect to the air conditioning unit. 3. Did the Defendants conceal a defect, latent or patent? [ 36 ] Numerous cases have dealt with latent and patent defects. In brief, a patent defect is one that is obvious, easily discoverable upon inspection (see: Nowasad v. Hanson , 2005 SKQB 233 ). A latent defect is one that is not discoverable by observation. Rather, it is one that has been hidden. (The case of Britt v.

Klimczak , 2010 SKQB 407 , contains a useful review of the distinction between the two types of defects at paragraphs 42 and 43). [ 37 ] In this case, I find firstly that there was no defect; this is a case of an 18 year old air conditioner operating as an 18 year old air conditioner can be expected to operate. [ 38 ] I also find that there is no evidence whatsoever that the Defendants, or either of them, did anything to conceal an existing defect, which I find in any event was itself not in existence.

As such, the application of the doctrine of latent and patent defects, and the consequences that can flow from a Defendant concealing a known or suspected problem, and/or failing to disclose it, simply do not arise on the facts of this case. 4. If the answer to any of the above questions is “yes”, what are the damages? [ 39 ] As I have determined that no liability can be affixed to the Defendants in any event there is no need to assess damages.

However, I will comment on the topic briefly, as provision of a brand new unit is the relief claimed by the Plaintiffs. [ 40 ] What the Plaintiffs in fact contracted for was an 18 to 20 year old condominium property that had an 18 year old air conditioner as a fixture. That is what they got.

Even had I found there was a breach, their true measure of damages would be the cost of repairing the existing air conditioning unit to make it operable; the true damages would not be to replace an old unit with a brand new one, as that would be compensation far beyond what was lost. [ 41 ] I appreciate that, from a practical point of view, there might not be a lot of point in spending a significant amount of money to repair an 18 year old air conditioner, just as it is probably not cost effective to spend a lot of money repairing an 18 year old automobile.

However, I am not at all convinced that the unit could not have been repaired. I appreciate that Mr. Myers recommended replacement of the unit, but on the evidence, the fan was working prior to the unit being serviced by Mr. Myers, and once serviced, the air conditioner did work for a couple of weeks afterwards, albeit in “sub-optimal capacity”, but that is to be expected of a unit that old. [ 42 ] Finally, I have no evidence of the cost of repair to the unit, and I don’t know what would need to be repaired other than replacing the coil that was “pretty corroded”.

I do know that the fan was working when the Plaintiffs first operated it, their main complaint being that the unit was not blowing air that was cool enough for their liking. [ 43 ] Thus, even had I found liability, the remedy would have been repair of the existing unit. [ 44 ] For the above reasons, I dismiss the Plaintiffs’ claim. There will be no order as to costs. _______________________________

B.G. Morgan, J