Bernie Chrun v. Darcy Chrun, 2011 SKPC 157

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2011 SKPC 157 Date: November 10, 2011 File: SC#48 of 2011 Location: Saskatoon _____________________________________________________________________________ Between: Bernie Chrun and Darcy Chrun - and - Agnes Rimmer Selves For the Plaintiff Mr. Evan H. Jenkins For the Defendant _____________________________________________________________________________ JUDGMENT D.C. SCOTT , J _____________________________________________________________________________ Introduction [ 1 ] The plaintiffs Bernie Chrun and Darcy Chrun purchased a condominium property in Saskatoon from the defendant Agnes

Rimmer with a possession date of June 15, 2010. In the Property Condition Disclosure Statement (PCDS) the defendant indicated she was unaware of any unrepaired damage due to rodents. [ 2 ] While conducting repairs to the house, and after removing the basement walls and ceiling, the plaintiffs discovered evidence of a previous mouse infestation. [ 3 ] The defendant acknowledged that in 2006 there had been a problem with mice, but she thought the problem had been solved, as there was no evidence of mice in the house after she hired an exterminator.

Further, she had no knowledge of what was lurking behind the basement walls. [ 4 ] The plaintiffs rely on the PCDS and claim the maximum allowable damages of $20,000.00, based upon a contractor’s estimate of $21,440.00, for materials and labour to refinish the basement. [ 5 ] The defendant brought a counterclaim for the amount of $623.15 to recover the cost of the alarm system contract, which the plaintiffs agreed, but failed, to assume. At trial, the plaintiffs admitted the defendant’s counterclaim.

Background [ 6 ] Although the Chruns were represented by a realtor, they learned of the condominium from the internet. The plaintiffs viewed the property, with their realtor, on one occasion before making an offer to purchase it for $233,000.00. The plaintiffs observed a musty smell in the condominium when they first viewed it, but made no inquiries about the odour; they noticed the smell again when they moved in. [ 7 ] The offer was conditional only on financing being approved. No home inspection was done.

The plaintiff Darcy Chrun testified they were advised by their realtor an inspection was not necessary. [ 8 ] A PCDS was completed by the defendant. In particular, the defendant answered “no” to the question, “Are you aware of any unrepaired damage due to wind, fire, insects or rodents?” [ 9 ] Two to three weeks after moving into the house, a water pipe burst on the main floor.

The plaintiffs removed a wall they had previously planned to take out and found three mouse carcasses inside the wall between the den and kitchen. [ 10 ] The plaintiffs brought this to the attention of the defendant, who informed them for the first time that she’d had a problem with mice, but that professional exterminators addressed the problem. [ 11 ] When the plaintiffs’ renovations were almost completed they found carpenter ants living in a window sill. At trial, the plaintiffs abandoned their claim with respect to the ants.

The plaintiffs called exterminators who, while addressing the ant problem, discovered evidence of mice in the basement ceiling. Specifically, they observed mouse droppings and a couple of poison cups. According to the plaintiffs, the exterminator recognized the smell in the house as relating to mice. [ 12 ] The basement walls were subsequently removed and extensive evidence of dead mice was discovered. The plaintiffs were understandably distressed. In particular, mouse nests, carcasses, some infested with maggots and mouse feces were found. The wood framing was permanently damaged due to mouse urine.

As well, the plaintiffs found copper stuffing and spray foam around the basement window, which had been hidden by built-in bookshelves. The copper stuffing was also placed in pipe holes in the basement. The plaintiffs estimated they found approximately 100 nests in the walls. At no time did the plaintiffs observe any live mice.

[ 13 ] It is the plaintiffs’ position that the defendant ought to have informed them of the previous mouse problem. Further, they submit that when the mice were discovered by the defendant in 2006, she ought to have removed the basement walls and had all of the mice removed properly. [ 14 ] The defendant is 83 years of age and was the sole occupant of the condominium at the time of its sale. Prior to the sale, the defendant had resided there for 32 years.

Over the years, a number of improvements had been made to the condominium, including renovation of the kitchen, replacement of windows, bathroom vanities and toilets and installation of a new furnace. The basement was finished in 1978. [ 15 ] The defendant testified that she had a mouse problem in the condominium in 2006. She tried to use traps, but continued to catch mice every day. She contacted the condominium maintenance manager and then a professional exterminator, Poulin’s Pest Control. [ 16 ] According to Poulin’s invoice dated June 6, 2006 (Ex.

D1), they conducted an inspection for rodent entry, plugged a few holes, cleaned and disinfected areas where mouse droppings were found and placed six bait stations and eight glue bands to catch any remaining mice. [ 17 ] According to the defendant, Poulin’s disinfected all areas they could reach with spray and foam. They used mouse bait in saucers in the ceiling and glue pads on the floor, behind the furnace and under furniture. [ 18 ] Poulin’s did not suggest that the defendant remove the walls.

Poulin’s placed the copper stuffing, which could be seen without dismantling walls, in holes on either side of the basement shelves and around pipes to prevent the mice from moving throughout the walls. Ms. Rimmer relied on the expertise of Poulin’s; she believed they had done their job. [ 19 ] Following Poulin’s work in June 2006, the defendant saw no further evidence of mice.

In February 2007, she installed a new basement ceiling, this time using drywall instead of tiles. [ 20 ] The defendant explained that in the PCDS she answered as she did because the question referred to unrepaired damage and as far as she was aware any damage had been repaired. Issues 1. Was the defendant’s statement in the PCDS a misrepresentation? 2. Does the principle of caveat emptor or “buyer beware” apply in this case? 3. If the defendant is liable, to what damages are the plaintiffs entitled? Analysis

1. Was the defendant’s statement in the PCDS a misrepresentation? [21] The plaintiffs contend the defendant’s answer in the PCDS misrepresented the condition of the property with respect to thematter of the mouse infestation, and they relied on her statement. The defendant however believed she was answering truthfully, becauseshe had addressed the mouse problem through extermination four years prior. [22] An action for misrepresentation lies both in contract and tort (Stann v. Lukan, 2007 SKQB 366 , [2007] S.J. No. 572(Q.B.)).

Breach of Contract [23] For a misrepresentation to result in damages, arising from breach of contract, the representation must be a term of thecontract. However, statements in a PCDS do not necessarily become warranties. As stated in Zaenker v. Kirk, [1999] B.C.J. No. 3033(B.C.S.C.): 19. Although the property condition disclosure statement forms part of the agreement for a purchase and sale, it is not necessarily awarranty.

Its main purpose is to put purchasers on notice with respect to known problems…It merely indicates that the statementstherein are true according to the seller’s “current actual knowledge”… [24] Attached to the PCDS in the present case is a document entitled “Information About the Property Condition DisclosureStatement”, signed by the plaintiffs and defendant. The document includes various cautions to sellers and buyers as well as arecommendation that should the buyer wish to rely on the PCDS the buyer should incorporate it into the Contract of Purchase and Sale. According to the Contract of Purchase and Sale (Ex.

P3), this was done. Therefore, the PCDS formed part of the contract between theparties. [25] The contract required the defendant to disclose the unrepaired damage from rodents of which she was aware. However, thePCDS did not constitute a warranty that there was no unrepaired damage from rodents. Neither did the contract require the defendant todisclose previous problems with rodents. [26] In June 2006, the defendant took steps to rid the house of mice by hiring a professional exterminator. She relied on theirexpertise to solve the problem.

Subsequent to the exterminator’s efforts, there was no further evidence of mice. The defendant testifiedshe did not notice any foul smell in the home. She attributed this to a diminished sense of smell as a result of her age. The defendantconcluded that the ongoing problem had been solved. [27] It is important to be clear about the nature of the problem discovered by the plaintiffs. While not minimizing the situation inany way, the plaintiffs found no evidence of live mice in the house. Rather, they found remains of a previous infestation.

This supportsthe defendant’s contention that the exterminators had done their job. [28] Further, all damage caused by the mice was behind the basement walls and ceiling. According to the defendant, the basementhad been finished in 1978. The mouse problem occurred in 2006. The Court accepts the defendant did not know that behind thebasement walls were the remains of numerous dead mice. The defendant could not have been aware of the nature and extent of anydamage from the mice. The Court finds the defendant did not breach the contract by her representation in the PCDS related to rodents. Negligence

[29] The law of negligent misrepresentation requires that (1) there is a duty of care based upon a “special relationship” between theparties; (2) the representation must be untrue, inaccurate or misleading; (3) the representor must have acted negligently in making thestatement; (4) there must have been reliance on the statement; and (5) the reliance must have been detrimental, in that damages resulted(Queen v. Cognos Inc., (SCC), [1993] 1 S.C. R. 87 at p. 110; Stann, para. 71).

In the present case, as vendor andpurchasers of a condominium, there was a special relationship between the parties. [30] The Court must then consider whether the defendant’s statement that she was unaware of any unrepaired damage from rodentswas untrue, inaccurate or misleading. In assessing whether the defendant acted negligently in making the statement, the Court must alsoconsider what a reasonable person in the defendant’s position would have done (Cognos, p. 121). [31] The exterminators placed copper stuffing in strategic locations, to prevent mice from entering the walls.

The problemappeared to have been resolved because there was no further evidence of mice in the following four years. It was reasonable for thedefendant to conclude the copper stuffing and foam prevented mice from moving through the walls. The defendant had a new basementceiling installed in 2007, but the walls remained intact. There is no indication that the mouse remains could have been detected withoutdismantling the walls, as the plaintiffs did. [32] In completing the PCDS as she did, the defendant acted reasonably based upon the knowledge she had.

The Court cannotconclude that in all of the circumstances, the defendant’s statement was untrue, inaccurate or misleading or that she acted negligently inmaking the statement. [33] The plaintiffs testified they relied on the statements contained in the PCDS, but was that reasonable in the circumstances? The Information Sheet attached to the PCDS stated in bold letters: Prudent buyers will use the PCDS as the starting point for their own inquiries.

Buyers are urged to carefully inspect theproperty and, if desired, to have the property inspected by an inspection service of their choice… [34] The plaintiffs viewed the property on one occasion only. Although they noticed a musty smell in the basement, they did notfollow up with questions, further inspection of their own or through an inspection service. Because a home inspection does not typicallyinvolve dismantling walls, it likely would not have uncovered the problem behind the walls. However, the copper stuffing and foamwere visible.

A trained inspector might have warned the plaintiffs about the smell and the stuffing. In the circumstances, the Courtconcludes it was not reasonable for the plaintiffs to rely solely on the PCDS. [35] The Court is not satisfied that the plaintiffs have established their claim in negligence. 2. Does the principle of caveat emptor or “buyer beware” apply in this case? [36] When considering the liability of the seller of a home regarding defects discovered after possession date, a distinction must bemade between patent and latent defects.

Patent defects are those which are discoverable through ordinary vigilance on the part of thebuyer. In such cases, the principle of caveat emptor or “buyer beware” applies. Latent defects are not readily apparent during ordinaryinspection. If latent defects are known and actively concealed by the seller, caveat emptor does not apply and the defendant may beliable for damages (Gronau v. Schlamp Investments Ltd. (1974), (MB KB), 52 D.L.R. (3d) 631 (Man. Q.B.); Thomasv. Blackwell, 1999 SKQB 168 , [1999] S.J. No. 769 (Q.B.); Roske and Whitely v. Overs et al, 2008 SKPC 63).

If the seller doesnot have knowledge of the defect, the seller cannot be said to have actively concealed the defect, even if it is not readily apparent.

[ 37 ] In Wiebe and Scott v. Loconte , 2007 MBQB 19 , a case relied upon by the defendant, the seller answered “no” to the question “to your knowledge, during the ownership of the property, has there ever been any damage to the buildings due to…rodents”. The Court found in favour of the seller, interpreting the term “damage” in the PCDS to mean structural damage.

While the house was infested with live mice, there was no evidence of structural damage. [ 38 ] In the case before this Court, given the extent of the infestation, I conclude the remnants of the mouse infestation to be a defect—although not necessarily structural in nature, given the extent of the problem, the only way to rid the house of the mouse carcasses, nests and feces was to remove the basement walls, framing, ceiling and carpet. [ 39 ] Could the defect have been discovered by the plaintiffs’ ordinary vigilance? The plaintiffs detected a foul smell, but did not make further inquiries about it.

Neither did they have a home inspection completed, although it is not clear such an inspection would have uncovered the mouse problem. At best, an inspector might have considered the smell and copper stuffing to be red flags for a hidden problem that required further investigation. Although the plaintiffs ought to have been alerted to a problem from the foul smell, I cannot conclude that they could have associated it with the nature and extent of the problem that existed. [ 40 ] This Court finds the remnants of the mouse infestation did not amount to a patent defect.

The question, then, is whether the defendant was aware of and actively concealed the latent defect. [ 41 ] I find the installation of bookcases in front of the window was not

an act of concealment. The defendant explained that the basement window had been covered when a bookcase was installed. It was done to better protect the basement from cold drafts, not mice. They did not want to destroy the window, so they placed the bookshelves on top. This had been done in approximately 1995, well before the mouse problem. [ 42 ] Neither was the placement of the copper stuffing an attempt to conceal the problem. It was designed by Poulin’s to prevent the mice present in 2006 from travelling through the walls.

The stuffing was observable without dismantling the walls. [ 43 ] I find there is insufficient evidence the defendant had knowledge of the extent of the mouse infestation or its remnants behind the basement walls and ceilings. As such, she could not have taken steps to actively conceal it. [ 44 ] The plaintiffs have the burden of proving their claim on a balance of probabilities. They have failed to establish that the defendant’s statement in the PCDS amounted to a breach of contract or was a negligent misrepresentation.

They have also failed to establish that the defendant was aware of and concealed a latent defect. Therefore, caveat emptor or buyer beware applies. As such, the defendant cannot be held liable. The plaintiffs’ claim is dismissed. 3. To what damages, if any, are the plaintiffs entitled? [ 45 ] I have found the plaintiffs have failed to prove their claim and therefore are not entitled to damages. Nonetheless, I will address the evidence with respect to the damages claimed by the plaintiffs. [ 46 ] Their claim is for $20,000.00, the maximum allowable according to The Small Claims Act and Regulations .

The basis of their claim is a written quote of Marvin’s Construction dated January 8, 2011 (Ex. P6). The quote estimates the cost of materials to be $6,700.00 and the labour to be $14,740.00. The work is identified as “removal of all drywall and insulation and carpet and replace all building materials”, without more detail. [ 47 ] The plaintiffs removed all of the basement walls themselves. They also removed the carpet, because the mouse droppings fell onto the carpet when they dismantled the walls and ceiling. The plaintiffs installed insulation and spray foam to protect against future infestation.

At the time of trial, other than the work done by the plaintiffs, the walls and carpet had not yet been replaced and no further

work to finish the basement had been completed. [ 48 ] There was insufficient evidence upon which the Court would have been able to assess the actual cost to the plaintiffs to finish the basement, had their claim been successful. Conclusion [ 49 ] The Court finds that the plaintiffs have failed to prove their claim on a balance of probabilities. Therefore, their claim is dismissed. [ 50 ] The plaintiffs admitted the defendant’s counterclaim. The defendant will have judgment against the plaintiffs, jointly and severally, in the amount of $623.13, along with pre-judgment interest from June 15, 2010.

Costs [ 51 ] The defendant asked that the Court award costs to compensate her for legal expenses and to send a message to plaintiffs who might otherwise bring unsuccessful claims. [ 52 ]

Section 31 of The Small Claims Act allows the Court to award costs, other than lawyer-related costs, on such terms and conditions as the judge considers appropriate. [ 53 ] The Court recognizes the burden placed upon the defendant to defend the plaintiffs’ claim in a one and a half day trial. The plaintiffs, as is often the case in civil matters in the Provincial Court, were unrepresented by counsel and may not have appreciated the strengths and weaknesses of their claim. Although the plaintiffs were not successful, the Court does not consider their claim to have been frivolous. [ 54 ] Each party will bear their own costs. ________________________ D.C. Scott, J