Daniel Chalupiak v. Nichole Chalupiak, 2014 SKPC 141

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2014 SKPC 141 Date: July 2, 2014 File: 26/13 Location: Moose Jaw _____________________________________________________________________________ Between: Daniel Chalupiak and Nichole Chalupiak - and - Adam Fellinger and Teresa Fellinger Daniel Chalupiak For the Plaintiffs Adam Fellinger For the Defendants _____________________________________________________________________________ JUDGMENT D.

KOVATCH , J _____________________________________________________________________________ BACKGROUND [ 1 ] In March of 2012, the plaintiffs executed a written agreement to purchase a residential home from the defendants. The property contained an outdoor swimming pool. At the time, it being in the month of March, the pool was not holding any water and it was apparent to all that it required some repair. The plaintiff took possession of the property on June 1, 2012.

Shortly after taking possession, the plaintiffs had a company involved in the repair and installation of swimming pools look at the pool and quote on the cost of repairs. The quote came in substantially higher than the plaintiffs anticipated, as a result of which the plaintiffs launched this action.

THE EVIDENCE [ 2 ] The defendants’ property was listed through the multiple listing service and was being sold by a licenced real estate agent. The plaintiff entered as Exhibit P-1 the listing information. The listing information indicates that the property has a swimming pool and “a large deck area and pool”. The plaintiff inspected the property on a number of occasions. It was obvious that the pool was not holding any water, and it needed some repair.

The plaintiff made inquiries about this and testified that his real estate agent advised him that the liner was ripped, and that the pool simply needed a new liner. The parties exchanged a series of offers and counter-offers. On March 17, 2012, they executed the final written agreement. The agreement is in the standard form utilized by the Association of Saskatchewan Realtors. It provides that the sale price is $390,000.00, and the purchasers are to take possession on June 1, 2012. The agreement also provides that the offer is subject to a number of conditions.

Firstly, it is subject to a condition of the buyer obtaining mortgage approval by March 23, 2012. It further provides that the offer is subject to: Buyers approving of and being satisfied with the following on or before 23 rd of March 2012 - professional home inspection at buyer’s expense. [ 3 ] Lastly, it provides the offer is subject to: Property condition disclosure statement which is included and forms part of this offer to purchase. [ 4 ] The property condition disclosure statement (Exhibit D-1), prepared by the defendants, is dated February 21, 2012.

One of the questions posed in that statement is as follows: Are you aware of any problem with any built-in appliances or attached fixtures and associated equipment? (Eg. pool ...) [ 5 ] In answer to this question, the defendants answered “yes” and under additional comments stated: “Pool wall needs fixing.” [ 6 ] On March 22, 2012, Mr. Curtis Beaudry of Capital Home Inspections prepared and supplied the plaintiff with a formal written inspection report (Exhibit P-5). In paragraph 2.6 is a picture of the pool.

It is obvious to me, and I would suggest it should be obvious to anyone, that the pool required considerable repair. In Exhibit P-5 Mr. Beaudry stated: Pool was not in operation at time of inspection. I recommend that buyer and seller discuss operating systems, safety issues, insurance and bylaw issues so that buyer has a clear understanding of pool operations. [ 7 ] Further, at paragraph 2.7: Pool house and sheds were not part of this inspection. Discuss function with seller for more information. [ 8 ] In a footnote to the report, Mr. Beaudry also stated:

The exterior of the house was inspected and reported on with the above information. While the inspector makes every effort to find all areas of concern, some areas can go unnoticed. Please be aware that the inspector has your best interests in mind. Any repair items mentioned in this report should be considered before purchase. It is recommended that qualified contractors be used in your further inspection or repair issues as it relates to the comments in this inspection report. (emphasis added) [ 9 ] Mr.

Chalupiak testified that when the offers were executed and the property inspected, it was obvious that the pool liner needed to be replaced. However, at these times, the wall of the pool structure was standing and intact. Mr. Chalupiak said that on the date of possession, the pool wall had collapsed and was laying on the floor of the pool. He said that a friend helped him stand up the wall. On June 14, 2012, approximately two weeks after taking possession, he had the pool inspected by a professional, who provided him with a written quote of the cost of repairs. This quote was entered as Exhibit P-7.

It indicates that the total cost of repairs will be $15,715.35. [ 10 ] Mr. Chalupiak admitted that he did not have any professional inspect the pool or give him an estimate of the cost of repairs prior to taking possession. He stated that he accepted the realtor’s statement that the pool only required a new liner. [ 11 ] The plaintiff also called his real estate agent, Mr. Chris Parrott. Mr. Parrott said he was under the impression that all the pool required was a new liner. He was cross-examined about the property condition disclosure statement, which indicates that the pool wall needs fixing.

He said it was his understanding that this merely meant a new liner. He said that if the pool was not structurally sound, the property condition disclosure statement should have so stated. He also stated that the listing information should not have indicated that the pool was a feature of the home. [ 12 ] Mr. Curtis Beaudry testified. He did the home inspection report, and presented that report. He testified that he told Mr. Chalupiak the pool was not in good shape, and had not been used in two years.

He said he didn’t spend much time looking at or advising about the pool. [ 13 ] The defendant, Adam Fellinger testified. He stated that the pool was about 15 years old. He had the original bill of sale. He stated that the pool had not been used for one and a half years prior to sale of the home. He testified that he knew the liner to the pool needed to be replaced, and he so advised the purchasers. There was also a problem with the wall and thus the statement in the property condition disclosure statement: “The wall needs fixing.” Mr.

Fellinger said that he brought all of this to the plaintiff’s attention, and did not cover anything up. At one point in time he stated that he did not know what more he could have or should have done. [ 14 ] In cross-examination, Mr. Chalupiak suggested that the defendant’s statement that the wall required fixing was inaccurate. He suggested that Mr. Fellinger should have stated the wall needs to be replaced. Mr. Fellinger said he identified the problem, and he didn’t know what the solution was. [ 15 ] The defendants’ real estate agent, Mr.

Rod Bearchell testified as to the process he went through with the defendants to list the property and to execute the appropriate agreements. He too was of the view that he and the defendants had been open and accurate as to their disclosure of the problems with the pool. PLAINTIFF ’S ARGUMENT [ 16 ] The plaintiff makes two arguments as to why the defendants are liable. Firstly, there is the argument as set forth by the plaintiff’s Statement of Claim. In the Statement of Claim, the plaintiffs allege that the defendants misrepresented that the swimming pool merely required a new liner.

Further, that the pool was structurally unsound and repair of these structural problems will result in significant damages. [ 17 ] Secondly, the plaintiff argued that the defendant was legally obligated to transfer the property to him in the same terms and conditions as it existed on the date the agreement for sale was executed. The plaintiff said that on that date, the pool wall was standing and intact. However, on the date that the plaintiff took possession, the pool wall was very significantly damaged and had fallen inwards. Mr.

Chalupiak argued this was due to high winds and argued the defendant must be responsible for these damages.

ANALYSIS Was there a latent defect with respect to the condition of the pool? Was there a misrepresentation by the defendants as to the condition of the pool? [ 18 ] I begin by asking and answering the second question first. Was there a material misrepresentation by the defendants, or a warranty provided as to the fitness of the pool? In contract law, it is trite to say that the parties are bound by their contract. As a result, the first and foremost goal of the Court is to interpret and apply the contract document.

If, in the contract, the defendants provided a warranty as to the fitness of the pool, they will be bound by that warranty. If the defendants made a material misrepresentation that induced the plaintiffs to enter that contract, that material misrepresentation may be actionable. [ 19 ] All agreed that the defendants advised of the problem with the pool liner. That was also perfectly apparent on any kind of visual inspection.

As part of the agreement for sale, the defendants transferred to the plaintiff a brand new pool liner. [ 20 ] The written contract to purchase provides: Property condition disclosure statement which is included and forms part of this offer to purchase. [ 21 ] The property disclosure statement clearly indicates: “The pool wall needs fixing”.

Clause 6.4 of the written agreement provides as follows: The seller and the buyer acknowledge that, except as otherwise described in this contract, there are no other warranties, representations or collateral agreements made by or with the other party, ... [ 22 ] On the basis of the written agreement, I would suggest it is very obvious that the defendants provided no warranty as to the fitness of the pool. The agreement says there was no warranty, and the pool and in particular the problem with the pool wall was specifically identified in the agreement. [ 23 ] Mr.

Chalupiak argued that the statement in the property condition disclosure statement to the effect that the pool wall requires fixing was misleading and a misrepresentation. He argued that the disclosure statement should have indicated the wall needs replacing. I reject that argument and don’t agree that there has been any misrepresentation by the defendants. It seems to me that whenever one discusses maintenance and repair of some item of personal property, it may involve repair of a single item and replacement of nothing. Alternatively, it may involve replacement of the whole.

Alternatively, it may come somewhere in-between and involve replacement of a part or parts and repair of others. The defendant said the wall needs fixing and in my view there was no inaccuracy or misrepresentation in that statement. [ 24 ] Most of these cases involve a discussion as to whether the problem was a latent or patent defect. See for example Roske v. Whitley , 2008 SKPC 63 ; Franks v. Wade , 2011 SKPC 45 ; Haviland v. Pickering , 2011 SKPC 144 ; Chrun and Chrun v. Rimmer , 2011 SKPC 157 and Brown and Brown v.

Anderson and Anderson , unreported decision of the Provincial Court in Moose Jaw dated March 2011, File No. 111/09. All of these cases define a patent defect as a defect which is discoverable by inspection and ordinary vigilance on the part of the purchaser. A latent defect is that kind of defect which is not readily discoverable by the purchaser through prudent inspection. As I understand the situation, because a patent defect is ascertained or ought to be ascertained by the reasonably vigilant purchaser, there is no reason to not apply the terms of the contract and hold the purchaser to those terms.

As a result, the purchaser is deemed to have purchased the property as is and without any warranty with respect to these matters. [ 25 ] The Courts have held a vendor liable where the defect is a latent one and have repeatedly said that a vendor must disclose a latent defect.

[ 26 ] In this case, I am compelled to the conclusion that the defect is a patent one. The problems with the pool were perfectly apparent and anyone who looked at the pool could see that there was a significant problem. In addition, the property condition disclosure statement identified the problem with the wall. Mr. Chalupiak attempted to argue that the extent or the degree of the problem made it a latent problem and that there was not proper disclosure. I don’t agree. The problem was disclosed. What wasn’t disclosed was the cost of fixing the problem.

The cost of fixing the problem does not affect my determination as to whether it was latent or patent. Moreover, Mr. Chalupiak could have and should have made the offer to purchase subject to a satisfactory inspection by someone who regularly dealt with swimming pools. He then could have backed away from the deal or negotiated concessions.

Is the defendant liable by reason of a change in the condition of the wall between the time the parties executed the agreement and date of possession? [ 27 ] As mentioned above, the plaintiff argued that the defendant was obligated to turn over possession of the property in the same state as that property existed at the time the agreement was executed. For two significant reasons, this argument must also fail. Firstly, this matter was not pleaded or made part of the Statement of Claim.

If the plaintiff was claiming liability by reason of the defendant altering that property between execution of the contract and purchase, that matter would have to be pleaded, and the defendant would have to be afforded the opportunity to defend such an action. This matter was not raised by the plaintiff until near the end of the trial and I could not give judgment on this basis. [ 28 ] Secondly, and perhaps more importantly, there is no evidence to support any judgment on this basis. Clearly the wall needed fixing at the time the property condition disclosure statement was prepared and at the time of possession.

Part of the wall had fallen over by the date of possession. Does that mean that the wall was in a greater state of disrepair, or that repairing the problem was more costly on the date of possession? I don’t know. There is no evidence on this. I cannot conclude that the pool wall was altered or damaged between the time it was viewed and the date of possession. CONCLUSION [ 29 ] In my view, the plaintiff has failed to establish any basis upon which the defendant could be held liable.

The plaintiff’s claim is hereby dismissed. [ 30 ] Dated at the City of Moose Jaw, in the Province of Saskatchewan, this 2 nd day of July 2014. D. Kovatch, J