Kenny Tsang - v. -, 2018 SKPC 30

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2018 SKPC 030 Date: April 26, 2018 File: SC#249 of 2016 Location: Saskatoon _____________________________________________________________________________ Between: Kenny Tsang - and - Realty Executives Saskatoon, Randy Singler & Margaret Fitzpatrick Mr. K. Tsang For the Plaintiff Mr. D. Kendall For the Defendant _____________________________________________________________________________ JUDGMENT D.C.

SCOTT , J _____________________________________________________________________________ Introduction [ 1 ] On February 20, 2014, the plaintiff Kenny Tsang entered into a written residential contract to purchase the property at 927 – 9 th Avenue North, Saskatoon from the seller, Margaret Fitzpatrick. The defendant Randy Singler was the realtor representing Mr. Tsang. The defendant Realty Executives Saskatoon was the brokerage with which Mr. Singler was associated.

[ 2 ] Mr. Tsang took possession of the residence on March 30, 2014. Thereafter, a number of defects were found. [ 3 ] According to Mr. Tsang, Mr. Singler made negligent or fraudulent representations to him regarding the condition of the property and cost to repair and renovate. Mr. Tsang states he relied on those representations and suffered loss as a result. Mr. Tsang further claims that Mr. Singler breached a fiduciary duty owed to him. As such, Mr.

Tsang claims judgment for $25,000.00, which he says represents his excess costs to repair deficiencies and upgrade, along with aggravated and punitive damages. [ 4 ] The defendant Randy Singler denies that he made any misrepresentations to Mr. Tsang. The defendant Realty Executives Saskatoon denies it was liable for Mr. Singler’s actions as Mr. Singler was an independent contractor. Both defendants assert the plaintiff’s claim is statute-barred by The Limitations Act , SS 2004, c L-16. [ 5 ] Prior to trial, Mr. Tsang settled with the seller and withdrew his claim against her in return for payment of $2,500.00.

Background [ 6 ] On the advice of his mortgage broker, Mr. Tsang contacted Mr. Singler to represent him in the purchase of a home. Mr. Singler showed Mr. Tsang a home at 927 – 9 th Avenue North in City Park, an area in which Mr. Tsang was interested. Mr. Tsang viewed the property with Mr. Singler on two occasions before making an offer. On both occasions, Mr. Tsang brought with him friends for support, as this would be his first home purchase. Being from Hong Kong, Mr. Tsang had no family present and was uncertain about home construction in Canada. Mr.

Tsang estimated that he viewed the property for approximately 30 minutes on each occasion. [ 7 ] On February 12, 2014, Mr. Tsang made a conditional offer to purchase the property for $272,800.00. The seller made a counter-offer of $278,000.00 on February 13, 2014, which Mr. Tsang accepted, conditional upon the completion of a satisfactory home inspection, a Property Condition Disclosure Statement and financing. The conditions were to be removed no later than February 20, 2014. [ 8 ] Mr. Singler arranged for Allan Breziniski of Complete Home Inspection Services Inc. to do the inspection on February 20, 2014. Mr.

Singler provided Mr. Tsang with a copy of the home inspection report at approximately 7:00 p.m. on February 20, while Mr. Tsang was working. Although the report referenced Mr. Tsang’s participation in the home inspection, he says he was not given an opportunity to meet with or to be present for a walk-through with the home inspector. [ 9 ] Mr. Singler advised Mr. Tsang that he could sign the removal of conditions at that time, but take the report with him to review. If Mr. Tsang had questions, they could discuss the report and Mr.

Singler would not submit the removal of conditions to the seller unless and until he had Mr. Tsang’s approval, so long as that was done before midnight. [ 10 ] Mr. Tsang’s uncle, Andrew Li, who resided in Montreal, was a co-signor to the mortgage and therefore needed to sign the notice to remove conditions. Mr. Singler sent the notice to Mr. Li electronically, had Mr. Li sign the form and return it to Mr. Singler electronically. Although Mr. Singler signed as a witness, he admitted in his testimony that he did not actually witness Mr.

Li’s signature, a fact this Court finds troubling. [ 11 ] On the evening of February 20, 2014, Mr. Singler went through the report with Mr. Tsang and highlighted certain items in a handwritten note (Exhibit P-4), which he left with Mr. Tsang. The note seems to reference a number of items addressed in the report or raised by Mr. Tsang. With regard to the basement, Mr. Singler itemized “ tear out walls and patching certain areas of subfloor which would include the plywood and labour cost and a sump pump-upgrade better over time ” .

The note also states “ only major thing found small seepage in basement in areas (said was from wicking up walls from subfloor in corner) ” . [ 12 ] Mr. Tsang and Mr. Singler engaged in a text message conversation between 10:41 p.m. and 11:49 p.m. on February 20.

[ 13 ] Excerpts from the text message conversation on February 20, 2014 are set out below (emphasis is mine): From Mr. Tsang at 10:57 p.m.: If I were to replace the subfloor and do the other minor repairs, how much do you evaluate the total cost will be? Approx. From Mr. Singler at 11:00 p.m.: … I don ’ t think you have to do all the subfloor. Just areas that need it. I cannot seeing [sic] more than 10,000 in repairs and adding a bathroom and taking walls out. That would be everything. At the most. All your major Mechincal [sic] and big cost home items are new and good. All the things you will do is cosmetic.

I have guys that work as handyman [sic] that can help if you need also. You always have me in your corner for advice always . From Mr. Tsang at 11:19 p.m.: Since the report indicates to put a moisture barrier/vapour barrier and repairs to deterioration in slab might mean the whole thing redone, also replacing windows would those all be in the 10k and what do you recommend based on the inspection? Would there be some wiggle room on the offer due to the obvious issues of basement moisture, window replacement etc?

A bit nervous about the fact that there is no access to view foundation and there are moisture issues, from what I ’ ve heard foundation problems can be costly. What do you recommend the offer base [sic] on the inspection? From Mr. Singler at 11:24 p.m.: Windows I would not replace unless you are going to stay more than 5 years. It doesn ’ t pay, I alwYs [sic] say put in to mechanical and yours is done. The foundation will not have to be done , if you are going to redo walls on the exterior you can put poly and insulation which wod [sic] be in the cost of 10,000 They are not going to move on price … From Mr.

Singler at 11:28 p.m.: He shot the foundations with his infra camera and didn ’ t see structural flags I think this house is very strong and all the major cost [sic] are done on the house . The value is under priced for the area in City Park … From Mr. Singler at 11:34 p.m.: Sorry buddy, the other agent is texting me. We have to let them know right away . We can do what you want I just have to let them know they are waiting up for our removal. From Mr. Tsang at 11:42 p.m.: Go ahead randy [sic]. In you I trust From Mr. Singler at 11:43 p.m.: I wouldn ’ t ever let you down. I am always in your corner.

I think this house is underpriced. I would buy it myself and I use [sic] to be a home inspector. From Mr. Tsang at 11:46 p.m.: Let ’ s move forward with the offer. Thank you randy [sic] From Mr. Singler at 11:49 p.m.: OK Kenny, you will not regret it. You bought your first home. [ 14 ] At the conclusion of the text conversation Mr. Tsang authorized the removal of conditions. [ 15 ] Mr. Tsang took possession of the home on March 30, 2014. Mr. Tsang’s friends, Desmond Myers and Kerby Senat, began work on the plaintiff's home during the week of April 1, 2014.

They planned to refinish the basement, specifically to repair the subfloor, replace the carpet, tear down an existing wall, and add a bathroom. They removed wall panels in the basement and observed water damage at the lower end of the panels. Upon removing the subfloor, they discovered there was no concrete slab, only a dirt floor and no footings. Photos taken April 1, 2014 (Exhibit P-6) illustrate these defects. It became apparent that additional work would be necessary in the basement and that the initial budget of $10,000.00 was insufficient.

[ 16 ] Mr. Tsang applied for a building permit from the City of Saskatoon on April 24, 2014, submitting plans from a draftsperson hired by Mr. Tsang. The planned work involved basement modifications including the kitchen, bathroom, bedroom and mechanical room. In his application for the permit, Mr. Tsang estimated the cost for renovations to be $25,000.00. [ 17 ] Following the City’s footing inspection on May 13, 2014 (Exhibit P-8), the City halted work on the basement and required a report from an engineer or architect regarding the cracks and the bowing in the foundation wall. [ 18 ] Mr.

Tsang hired Pearson Engineering, which prepared a report dated June 17, 2014 (Exhibit P-9) recommending steps to remediate the foundation. Mr. Pearson did not testify, but the court received his report as evidence at the trial for limited purposes. [ 19 ] According to Mr. Myers, who has worked as a carpenter for six years, the engineer’s report proposed two options and Mr. Tsang chose the less expensive option. Inside the basement, Mr. Myers built a 2x6 support wall using pressure-treated boards. On the exterior, he and Mr.

Senat excavated, poured footings, and installed weather proofing around the foundation, weeping tile, gravel, and then backfilled. Photos (Exhibit P-7) show the exterior excavation done in relation to the foundation. [ 20 ] Work to support the foundation, along with other repairs and upgrades were eventually completed on the house. Mr. Tsang filed invoices in support of his claim that the costs exceeded the $10,000.00 suggested by Mr. Singler. [ 21 ] Issues to be decided 1) Is Mr.

Tsang ’ s claim statute-barred under The Limitations Act ? 2) Was the defendant Randy Singler fraudulent or negligent in his representations to Mr. Tsang? 3) Did the defendant Randy Singler and Mr. Tsang have a fiduciary relationship and if so, did Mr. Singler breach his fiduciary duty? 4) Is Realty Executives Saskatoon vicariously liable for Mr. Singler’s conduct in relation to Mr. Tsang’s purchase of the home? 5) Was Mr. Tsang contributorily negligent? 6) If the defendants are liable, what are the appropriate damages? 7) Is an award of aggravated or punitive damages warranted in this case? Discussion 1) Is Mr.

Tsang ’ s claim statute-barred under The Limitations Act ? [ 22 ] Before considering the plaintiff’s claim on its merits, I must consider whether the claim is statute-barred. [ 23 ] Relevant provisions of The Limitations Act , provide as follows: 5 Unless otherwise provided in this Act, no proceedings shall be commenced with respect to a claim after two years from the day on

which the claim is discovered . [emphasis added] 6(1) Unless otherwise provided in this Act and subject to subsection (2), a claim is discovered on the day on which the claimant first knew or in the circumstances ought to have known: (

a) that the injury, loss or damage had occurred; (

b) that the injury, loss or damage appeared to have been caused by or contributed to by

an act or omission that is the subject of the claim; (

c) that the act or omission that is the subject of the claim appeared to be that of the person against whom the claim is made; and (

d) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it.

(2) A claimant is presumed to have known of the matters mentioned in clauses (1)(

a) to (

d) on the day on which the act or omission on which the claim is based took place, unless the contrary is proved. . . . 19 If, after the commencement of a proceeding, it is established that a limitation period applicable to the claim had expired before the commencement of the proceeding, the claim is barred and the proceeding shall not be maintained. 20 Notwithstanding the expiry of a limitation period after the commencement of a proceeding, a judge may allow an amendment to the pleadings that asserts a new claim or adds or substitutes parties if: (

a) the claim asserted by the amendment, or by or against the new party, arises out of the same transaction or occurrence as the original claim; and (

b) the judge is satisfied that no party will suffer actual prejudice as a result of the amendment. [ 24 ] Mr. Tsang took possession of the home on March 30, 2014. He discovered the rotten walls and absence of the concrete slab on April 1, 2014. Some cracks in the foundation were discovered during the initial basement demolition in early April. Once work began on the exterior, removing dirt from the foundation, further cracking was discovered. [ 25 ] On April 24, 2014, Mr. Tsang requested a building permit from the City of Saskatoon for the work in the basement.

The proposed work was detailed on a draftsperson’s plans, attached to the application. The work included structural modifications, such as the concrete slab, footings and wall construction, as well as improvements, such as the addition of a kitchenette and improvements to the bathroom. On the application, Mr. Tsang valued the work at $25,000.00. [ 26 ] The City of Saskatoon building permit (Exhibit P-8) was issued May 2, 2014. The scope of the permit was “alteration of OUD, basement rooms, interior weeping tile and stair modification and decks.” No evidence was presented as to the meaning of OUD.

According to the General Notes attached to the building permit, under “Foundation Wall” is stated “N/A”, indicating no work was originally anticipated on the foundation wall.

[ 27 ] Following an inspection on May 13, 2014, the City of Saskatoon directed that work be stopped and required Mr. Tsang to obtain a report from an engineer or architect due to the cracks and the bowing in the foundation wall. A report to that effect was issued by the City on May 14, 2014. [ 28 ] The Pearson Engineering report dated June 17, 2014 recommended solutions to support the deteriorating foundation. [ 29 ] As of April 1, 2014, Mr. Tsang was aware that there were certain latent defects to the home, such as rotten walls and the absence of a concrete floor in the basement. [ 30 ] On May 13, 2014, Mr.

Tsang became aware of bowing in the foundation wall. On June 17, 2014, he received the engineer’s report assessing the foundation and recommending remediation. [ 31 ] Mr. Tsang filed his original claim against the defendants Realty Executives Saskatoon and paid his filing fee in the amount of $100.00 on May 13, 2016. He filed a revised claim on May 24, 2016, adding the seller as a defendant. The summons was issued on June 6, 2016. A further amended claim was filed by Mr. Tsang on February 28, 2017. [ 32 ] The defendants argue that Mr.

Tsang became aware of the defects in the home on April 1, 2014 when demolition began. At that time, Mr. Tsang discovered the dirt floor and rotten walls. [ 33 ] Mr.

Tsang submits that he may have been aware of some of the defects on April 1, 2014, but did not become fully aware of the extent of his damages until June 17, 2014 when the engineer provided his report. [ 34 ] As cited above, s. 6(1) of The Limitations Act states that “ discovery ” of the loss occurs on the first day when the plaintiff knew or ought to have known that the loss or damage had occurred and that the loss or damage appeared to have been caused by or contributed to by the actions of the defendant. [ 35 ] In Lemisko v Saskatchewan Watershed Authority , 2016 SKPC 107 [ Lemisko ] , the plaintiffs asserted that the date upon which their claim was discovered was the date when they ascertained the full extent of their loss, several months after the initial event which caused the damage.

Jackson J held that s. 6(1) is clear, the crucial date for assessing the commencement of the limitation period is the first day the injury, loss or damage occurred and not when the full extent of the loss was known. [ 36 ] In Lemisko , the plaintiffs knew the date of the catastrophic event, flooding, which caused the subsequent loss. It was the flood that triggered the limitation period. [ 37 ] The circumstances are different in this case. In essence, Mr. Tsang discovered two different and distinct problems. The first was the lack of a concrete floor and rotting walls discovered on April 1, 2014.

The second was the bowing foundation, which is of a structural nature, discovered on May 13, 2014. [ 38 ] I am satisfied that the first day on which Mr. Tsang knew or ought to have known that there were defects related to the basement floor was April 1, 2014. However, at that time he was unaware of the problems with the foundation. [ 39 ] In a text message, Mr. Singler told Mr. Tsang on February 20, 2014 that “the foundation will not have to be done” and that the home inspector had used an infrared camera on the foundation, seeing no indications of structural problems. Mr.

Brezinski's home inspection report did not refer to foundation problems. Mr. Tsang had no reason to suspect there were problems with the foundation. [ 40 ] It was not until May 13, 2014, when the City of Saskatoon inspected, halted work and asked for an engineer’s report, that Mr.

Tsang became aware of the structural problems with the foundation. That was the first date on which he would have been aware of apossible misrepresentation by Mr. Singler regarding the foundation. [41] Mr. Tsang filed his claim with the Court and paid his filing fee on May 13, 2016. According to Bakaluk v McGregor,2003 SKQB 386, 239 SaskR 185, an action in Small Claims Court is commenced on the date the plaintiff applies for a summons byfiling a claim and paying the filing fee, not the date on which the judge issues the summons. Therefore, Mr.

Tsang commenced hisproceeding in this court on May 13, 2016. [42] As previously cited, s. 5 of The Limitations Act provides that no proceeding shall be commenced after two years fromthe day on which the claim was discovered. The question then arises whether the date of the claim, May 13, 2016, falls within the two-year period from the date of discovery, May 13, 2014. [43] The

Interpretation Act, 1995, SS 1995, c I-11.2, states in s. 24(7) that “a period of time expressed to be after, from orbefore a specified day does not include that day.” In this case, the day Mr. Tsang discovered the foundation problem on May 13, 2014 isnot included in calculating the time limit for bringing a claim. Therefore, Mr. Tsang’s claim filed May 13, 2016 is within the two-yearlimitation period. [44] Mr. Tsang’s claim was subsequently amended on May 24, 2014, adding the seller as a defendant and on February 28,2017, adding further particulars as well as a claim for punitive and aggravated damages.

Section 20 of the The Limitations Act allows foramendments, which add new parties or assert new claims, arising out of the same transaction or occurrence as the original claim after theexpiry of a limitation period. The plaintiff's amendments clearly arose out of the same transaction or occurrence as the original claim. Iam satisfied that the amendments made to the plaintiff’s claim are those contemplated by s. 20. [45] Mr. Tsang’s claim regarding the lack of a concrete basement slab is statute-barred, because he was aware of thedefective basement on April 1, 2014. However, I conclude that Mr.

Tsang’s claim in respect to the foundation is not statute-barred. 2) Was the defendant Randy Singler negligent or fraudulent in his representations to Mr. Tsang? [46] Mr. Tsang alleges Mr. Singler was negligent or fraudulent in his representations to Mr. Tsang regarding the condition of thehome and the cost of repairs and upgrades. Fraudulent Misrepresentation [47] According to Alevizos v Nirula, 2003 MBCA 148 , 180 Man R (2d) 186, silence and half-truths as well asactive concealment of an otherwise patent defect can amount to fraud: paras 24 and 29. In the present case, I am satisfied Mr.

Singler’sstatements to Mr. Tsang regarding the foundation and the cost to repair were not fraudulent. The foundation walls were covered bywallboard on the inside and snow on the outside. There is nothing to indicate that Mr. Singler was aware of the condition of thefoundation or that the cost to repair the defects would have increased because of it. Negligent Misrepresentation [48] In Queen v Cognos Inc., (SCC), [1993] 1 SCR 87 (SCC) [Cognos] at para 33, the Supreme Court ofCanada identified five requirements for finding liability based on a negligent misrepresentation, paraphrased as follows: a.

There must be a duty of care based on a “special relationship”;

b. The representation must be untrue, inaccurate or misleading; c. The representor must have acted negligently in making the misrepresentation; d. There must have been reliance and it must be reasonable; e. The reliance must have been detrimental in that damages resulted. [ 49 ] I will address each of these requirements to determine whether or not Mr. Singler made negligent misrepresentations to Mr. Tsang. a. There must a duty of care based on a “ special relationship. ” [ 50 ] It is not disputed that as Mr. Tsang’s realtor, Mr. Singler had a special relationship with Mr.

Tsang and accordingly owed a duty of care to Mr. Tsang. b. The representation must be untrue, inaccurate or misleading [ 51 ] The representations alleged by the plaintiff to be untrue are those set out in the text messages to Mr. Tsang on February 20, 2014 and Mr. Singler’s handwritten note highlighting certain items from the home inspection report. It is alleged Mr. Singler misrepresented (1) the condition of the foundation and (2) the cost of repairs and upgrades contemplated by Mr. Tsang.

Foundation [ 52 ] The handwritten note states “Only major thing found small seepage in basement in areas (said was from wicking up walls from subfloor in corner).” In this regard, the home inspection report states “There is evidence of water intrusion/moisture issues in basement. Expect the foundation may have spalling or deterioration as a result.” The report referenced similar water issues in relation to the subfloor. The home inspector found no other major problems. [ 53 ] In response to the discovery of seepage in the basement, Mr. Tsang, in his 11:19 p.m. text to Mr.

Singler specifically expressed concern about the foundation because he had “heard foundation problems can be costly.” In response, Mr. Singler, in his 11:24 p.m. text, stated definitively that “the foundation will not have to be done.” He stated the building inspector examined the foundation with an infrared camera and did not see any “structural flags”. [ 54 ] It is clear from the inspection report that access to the foundation walls was limited as the basement and exterior of the house were covered. [ 55 ] The

section of the home inspection report dealing with “2. Structural Components”, the only place that references the foundation, does not mention the infrared camera nor provide photos of the foundation. However, other sections of the report such as “9. Insulation and Ventilation” and “10. Interiors” refer to the use of an infrared camera and provide photos. Neither of those sections address the foundation. [ 56 ] There was no basis upon which Mr. Singler could definitively represent to Mr. Tsang that the foundation “would not have to be done”.

Neither is it apparent from the report that the inspector used the infrared camera to assess the structural integrity of the foundation. [ 57 ] As it turned out, the foundation was not structurally sound. When the City of Saskatoon inspected the renovations, it determined the foundation walls were bowing and halted work until an engineer could examine the problem and suggest a solution. The engineer proposed two solutions.

[ 58 ] According to Mr. Myers, the foundation needed to be reinforced because it could not bear the weight of the house. Structural walls and a vapour barrier were installed in the basement. Outside, after digging around the foundation, footings were poured and weeping tile and gravel were placed. [ 59 ] Although the engineer did not testify, I am satisfied on a balance of probabilities that this work was necessary. The City of Saskatoon would not allow work to continue until the matter of the foundation issue was addressed. There were no original plans to build structural walls and Mr.

Tsang would not have undertaken the expense had it not been recommended by the engineer. Mr. Myers, who was experienced in construction, had nothing to gain by undertaking unnecessary work, because he worked for Mr. Tsang at no charge. [ 60 ] I accept that any problems with the foundation were not known to either the home inspector or Mr. Singler. [ 61 ] However, Mr. Singler gave Mr. Tsang assurances regarding the foundation without knowing whether those assurances were accurate. He bolstered his opinion by telling Mr.

Tsang that the home inspector did not detect any structural defects after having used an infrared camera, although that does not appear to have been the case. In cross-examination, Mr. Singler acknowledged that he did not know the purpose of using an infrared camera but believed it might show temperature differences. Further, Mr. Singler told Mr. Tsang he had been a building inspector at one time, thereby attempting to add credence to his opinion about the foundation. [ 62 ] I find the statements made by Mr.

Singler that the foundation had been viewed by the inspector with an infrared camera and that work on the foundation would not have to be done were inaccurate and misleading. Cost of repairs and upgrades within $10,000.00 [ 63 ] Mr. Tsang also alleged that Mr. Singler misrepresented the cost to repair known deficiencies and planned upgrades. In his text to Mr. Singler at 10:57 p.m., Mr. Tsang asked what the total cost would be to replace the subfloor and do other minor repairs. Mr. Singer replied that he believed Mr. Tsang would not have to do the entire subfloor.

He estimated the total cost to add a bathroom, take out walls, exterior walls with poly and insulation for a vapour barrier and minor repairs as being $10,000.00 “at the most” because only “cosmetic” fixes were required. [ 64 ] According to the quotes and invoices filed by Mr. Tsang, his costs to repair and upgrade the property exceeded $10,000.00. [ 65 ] I find Mr. Singler’s statements that the cost to repair and upgrade would be no more than $10,000.00 were inaccurate and misleading. c. The representor must have acted negligently in making the misrepresentations. [ 66 ] Mr.

Singler had a duty to exercise reasonable care to ensure that the representations he made to Mr. Tsang were accurate and not misleading: Cognos , para 63 . His duty to Mr. Tsang was not only to be honest but also to be careful: Cognos , para 62 . [ 67 ] The issue is not whether Mr. Singler knew the statements he made to Mr. Tsang were untrue. Rather, it is whether Mr. Singler took the proper care to ascertain whether they were true. [ 68 ] In this case, the standard of care is that of the objectively reasonable realtor. Ms.

Dale Dodman, a realtor since 1988, associated with various real estate brokerages and currently an independent agent was qualified as an expert witness with respect to the standard of care expected of realtors acting for purchasers and vendors. [ 69 ] It is Ms. Dodman’s practice to have a home inspection completed at least one day before removal of conditions. Inspectors

routinely advise the buyer to be available for the last one-half hour of the inspection, so that they can ask questions of the inspector. [ 70 ] Ms. Dodman testified that she went to Mr. Tsang’s property after he had taken possession. She observed a small amount of water and mold which, in her experience, would pose an on-going problem. [ 71 ] Ms. Dodman testified that if a buyer has major concerns about something in a house, arising from the inspection, their choice is to ask for a price adjustment, ask for an extension of the time within which to remove conditions or to walk away from the deal.

In this case, she would have asked for a 24 hour extension. If the buyer insisted on removing conditions, she would have asked the buyer to sign a waiver that they had been advised not to proceed. [ 72 ] She testified one of their governing bylaws is that a realtor take reasonable steps to discover facts regarding the property in question. [ 73 ] Mr. Singler arranged for a home inspection of the property. To that extent, he took the proper care to ascertain the condition of the property. However, once the inspection was complete, Mr. Singler did not convey accurately or carefully the contents of the report to Mr.

Tsang. Further, by conveying the results of the inspection to Mr. Tsang just hours before conditions were to be removed, he did not offer Mr. Tsang sufficient time to consider his position, given his reservations. [ 74 ] The home inspection report explicitly stated the inspector could not view the foundation because it was covered on the interior and the exterior. Neither did it mention using an infrared camera on the foundation. In fact, the report flagged that moisture seepage might have an effect on the foundation. [ 75 ] Mr.

Singler made assertions about the structural integrity of the property and in particular the foundation without a basis for doing so. [ 76 ] Instead of cautioning Mr. Tsang, once the home inspection found moisture issues in the basement, Mr. Singler made unequivocal statements about the foundation and the costs of repair and improvements. [ 77 ] Mr. Singler was not careful to address impartially Mr. Tsang's concerns or to suggest an alternative course of action, such as seeking an extension to remove conditions, offering a lower price, or terminating the transaction.

Instead, in his text at 11:34 p.m, he applied pressure to Mr. Tsang by conveying a sense of urgency. [ 78 ] When Mr. Tsang asked about the possibility of a price adjustment, Mr. Singler told Mr. Tsang the vendors would not agree. He told Mr. Tsang he would purchase the property, implying the problems were not significant. He told Mr. Tsang that he had been a building inspector to add weight to his opinion. I find these statements were made with the intention of closing the sale rather than representing Mr.

Tsang ’ s interests. [ 79 ] Once surplus water in the basement was identified by the home inspector, I accept that a reasonable realtor would not have made definite statements about the foundation’s integrity and would have advised Mr. Tsang to proceed with caution and investigate further. [ 80 ] Mr. Singler knew that Mr. Tsang was relying on his representations, particularly because Mr. Tsang had not met directly with the inspector or done a walk-through with him. [ 81 ] In the circumstances, Mr. Singler was reckless and did not take reasonable care when representing the condition of the foundation to Mr.

Tsang or potential costs to repair and upgrade the basement.

d. There must have been reliance and it must be reasonable. [ 82 ] It is apparent from the text messages that Mr. Tsang relied on Mr. Singler’s advice. After an exchange, Mr. Tsang texted that he trusted Mr. Singler. Was Mr. Tsang’s reliance on Mr. Singler’s representations reasonable? [ 83 ] Mr. Tsang had the benefit of the home inspector’s report. However, Mr. Tsang testified he was given the report late on the day that conditions were to be removed. Because of the timing of the inspection, Mr. Tsang was not provided an opportunity to do a walk- through with the home inspector.

He did not have the benefit of independently assessing the home inspector's report or seeking clarification. Instead, Mr. Singler interpreted the home inspection report for Mr. Tsang. [ 84 ] Mr. Singler was aware Mr. Tsang was a first-time home buyer. Mr. Singler told Mr. Tsang he would not let him down. Further, his statement that he would buy the house himself and at one time, he had been a home inspector, were made to encourage Mr. Tsang to rely on Mr. Singler ’ s expertise. [ 85 ] In these circumstances, it was reasonable for Mr. Tsang to have relied on the statements made by Mr. Singler. e.

The reliance must have been detrimental in that damages resulted. [ 86 ] I am satisfied that Mr. Tsang relied on Mr. Singler to his detriment. He proceeded with the purchase on Mr. Singler ’ s advice that he would not have to fix the foundation and that any repairs would be cosmetic, the cost of which would not exceed $10,000.00. However, Mr. Tsang was required to undertake structural repairs to reinforce the foundation, in addition to the contemplated repairs and upgrades, which resulted in increased cost to Mr. Singler. [ 87 ] I conclude, based upon the requirements in Cognos , that Mr.

Singler was negligent in his representations to Mr. Tsang with respect to the foundation and the costs associated with repairs and improvements. Mr. Singler and Mr. Tsang had a special relationship. Mr. Singler made representations that were inaccurate and misleading. He did so without being careful, knowing that Mr. Tsang relied on him and damages resulted. 3) Did Mr. Singler breach his fiduciary duty to Mr. Tsang? [ 88 ] I accept that Mr. Singler owed a fiduciary duty to Mr. Tsang. As Mr. Tsang’s realtor, Mr. Singler was required to act in the best interests of Mr.

Tsang and to disclose information that might reasonably affect Mr. Tsang’s decision to purchase the property. Mr. Singler had influence over Mr. Tsang and it is clear Mr. Tsang relied on Mr. Singler to be honest in his representations regarding the property. Mr. Tsang was in a vulnerable position and relied on Mr.

Singler’s knowledge, experience and advice: Forbes v Morrison , 2014 SKQB 40 , paras 129-136 , 437 Sask R 124 [ Forbes ] . [ 89 ] Typically, damages arising from a breach of fiduciary duty take the form of restitution, which is an equitable remedy, based not on what the plaintiff has lost but rather on the unjust benefit to the defendant: Forbes , paras 134-135 . [ 90 ] In this case, the defendant’s benefit was his commission.

No evidence was presented as to the amount of the defendant’s commission. [ 91 ] In any event, the Small Claims Court in Saskatchewan does not have jurisdiction to grant equitable relief such as restitution: Hope v R.M. of Parkdale #498, 2015 SKQB 194 , 473 Sask R 15. 4) Is Realty Executives Saskatoon vicariously liable for Mr. Singler ’ s conduct in relation to Mr. Tsang ’ s purchase of the home?

[ 92 ] Although named as a party, no one from Realty Executives Saskatoon attended the trial. [ 93 ] Mr. Tsang testified that he believed he was dealing with Realty Executives. [ 94 ] Mr. Singler testified he is a licenced realtor and at the time of these events practised with the brokerage of Realty Executives. As a realtor, he is required by law to be affiliated with a brokerage in order to act for a buyer or seller. Any advertising done must include the name of the brokerage with whom the realtor is attached. As such, his business card included the name Realty Executives Saskatoon. [ 95 ] Mr.

Singler described his association with Realty Executives as that of an independent contractor. A portion of an agreement between Realty Executives and Mr. Singler dated April 7, 2009 (Exhibit D-3) specifically states their relationship is not one of employer- employee and that Mr. Singler operated as an independent contractor. [ 96 ] Mr. Singler’s compensation was entirely from commissions. He was not paid a wage and his hours were not regulated. Realty Executives provided Mr. Singler with premises, supplies and services necessary for his real estate business in consideration of administration fees paid by Mr.

Singler to Realty Executives. However, Mr. Singler chose to keep his own office. Mr. Singler was free to set his commission rates. [ 97 ] In McKay Career Training Inc. v Baker, 2016 SKQB 215 [ McKay Career Training ] , Allbright J found the defendant Baker was not liable for negligent misrepresentation or breach of contract.

Nonetheless, had the Court found Baker liable, a real estate brokerage with whom Baker was associated would not have been held vicariously liable because Baker was an independent contractor not an employee, providing “ his own tools of the trade ” and completely responsible for his “ chance of profit and risk of loss ” : para 206 [ 98 ] In Khullar v Lee, 2011 BCSC 1648 [ Khullar ] , the Court held there was no vicarious liability on the part of a brokerage for a realtor ’ s breach of contract where the realtor was an independent contractor: paras 100-102. [ 99 ] In the present case, I accept the evidence of Mr.

Singler that, although associated with Realty Executives Saskatoon, he operated as an independent contractor not unlike the realtor in McKay Career Training , a decision which is binding on this Court. [ 100 ] Accordingly, the brokerage Realty Executives Saskatoon is not liable for Mr. Singler’s negligence. 5) Was Mr. Tsang contributorily negligent? [ 101 ] A plaintiff has an obligation to act reasonably to protect himself or herself from foreseeable loss. This principle has been found to apply in cases of negligent misrepresentation.

A plaintiff’s contributory negligence affects the extent of damages, not the fact of the loss: Forbes , paras 178-181 . [ 102 ] Mr. Tsang had the benefit of a home inspector's report, which raised red flags, due to the presence of moisture in the basement. The inspection report cautioned that the foundation might have spalling or deterioration as a result. Mr. Tsang was alive to potential problems as he expressed his concern about the foundation with Mr. Singler. Yet, Mr. Singler told Mr. Tsang the foundation “would not have to be done.” [ 103 ] Upon reviewing the home inspection report, Mr.

Tsang might have taken steps to have a contractor look more closely at the seepage in the basement for an assessment of the potential costs associated with the problem. Even had he done so, the structural problem with the foundation likely would not have been discovered.

[104] Mr. Tsang asked Mr. Singler about reducing his offer in light of the inspection report, but Mr. Singler did not pursue thatpossibility, instead responding that the seller would not consider a reduction in the price. In response, he reassured Mr. Tsang that thehouse was “very strong” and “all the major costs are done on the house”. [105] These text conversations occurred approximately one-half hour before conditions were to be removed. Because Mr. Tsang wasa first-time home buyer, he relied extensively upon Mr. Singler. [106] I am satisfied that Mr.

Tsang did not contribute to the extent of damages he sustained. 6) What are the appropriate damages? [107] The measure of damages for negligent misrepresentation is to place the plaintiff in the position he would have been hadthe misrepresentations not been made: BG Checo International Ltd. v British Columbia Hydro and Power Authority, (SCC), [1993] 1 SCR 12 para 39; Forbes, para 165. [108] The defendants argue that the proper assessment of damages is the difference between the amount the plaintiff paid forthe property and the fair market value of the property at the time of the purchase: Forbes, para 170; Genereux v Hallmark Realty &Associates Ltd., 2002 SKPC 121, 226 Sask R 276; Hack v Rusnak, 2013 SKPC 128 at para 67, 428 Sask R 251.

In each of those cases,the misrepresentation was in relation to the square footage of property purchased by the plaintiff. [109] In this case, no evidence was presented regarding the diminution in the value of the property arising from the negligentmisrepresentation of Mr. Singler. Therefore, damages must be assessed by considering the cost of repairing the house, so that Mr. Tsangcan be restored to the position in which he otherwise would have been: Snider v Karpinski, 2009 SKQB 394 para 150, 342 Sask R 235[Snider]. [110] There are a number of considerations in calculating damages in this case. Mr.

Tsang filed invoices for work done in relation tothe foundation and other repairs and improvements to the home. Some of the costs are associated with the concrete basement slab,which are not recoverable because that portion of the claim is statute-barred. Portions of some invoices relate to work other than thatflowing from the misrepresentations. Some invoices itemize work done but do not provide the cost associated with each item. Mr.Myers did not charge Mr. Tsang for his work. Mr. Tsang settled with the seller prior to trial. [111] Therefore, it is difficult to assess with precision Mr.

Tsang’s damages arising from Mr. Singler’s negligent misrepresentations. However, it is well accepted that difficulty in determining damages cannot relieve a wrongdoer from paying damages and the court must“do the best it can” even if the amount is a matter of guesswork: Satara Farms Inc. v Parrish & Heimbecker, Ltd. (c.o.b.

New-LifeFeeds), 2006 SKQB 229 para 52, 280 Sask R 44; Wood v Grand Valley Railway Co. (1915), (SCC), 51 SCR 283 p.289; Penvidic Contracting Co. v International Nickel Co. of Canada, (SCC), [1976] 1 SCR 267. [112] I am satisfied, based upon the handwritten note and the text conversation, that Mr.

Singler intended to be included in his costingof $10,000.00 for minor repairs and upgrades: (1) removal of the kitchen wall; (2) paint and patching $80.00; (3) removal of basementwalls; (4) patching subfloor; (5) sump pump upgrade; (6) adding a bathroom; (7) vapour barrier; (8) poly and insulation on exteriorwalls; and (9) minor repairs. [113] In addition to the anticipated repairs and upgrades, according to Mr. Myers the work also involved the construction of a 2x6pressure treated support wall, installation of damp proofing and a vapour barrier, and the placement of weeping tiles. Mr.

Myers builtthe support walls, while Mr. Senat did the excavation, poured gravel and installed weeping tiles. [114] The work was commenced April 1, 2014 and structural work completed at the end of August 2014. The City of SaskatoonInspection Report indicates that the footing and pre-backfill inspections were complete on September 30, 2014, the framing inspectionwas April 1, 2015, the vapour barrier inspection was April 15, 2015 and the final inspection was March 14, 2016.

[ 115 ] Mr. Myers testified that they tried to work within the original budget of $10,000.00 but that was not possible after the condition of the foundation was discovered. Mr. Myers testified that the structural work to support the foundation would have cost $25,000.00 to $30,000.00, but he performed the work for Mr. Tsang as a gift, not charging him. Because Mr. Tsang did not pay Mr. Myers for his work, Mr. Tsang cannot recover damages related to Mr. Myers’ work. [ 116 ] According to Mr.

Senat’s invoice, he charged $12,000.00 for excavation, installation of weeping tile, membrane, crushed rock, curtain drain and sod, along with deck construction. Mr. Myers testified the excavation and installation of the membrane, rock and weeping tile related to the foundation work. I find the sod and deck are property enhancements which were not included in the $10,000.00 quote by Mr. Singler. [ 117 ] Mr. Senat’s invoice does not break down the price associated with each item and Mr. Senat did not testify. I attribute one-half of Mr.

Senat’s invoice to the foundation and therefore, allow $6,000.00 for his work. [ 118 ] The invoice from Mun Electric Ltd. in the amount of $1,398.15 is for the installation of a 100 amp electrical service. This is an improvement undertaken by Mr. Tsang. There is no evidence to suggest that this was work contemplated in the $10,000.00 suggested by Mr. Singler and I therefore disallow this portion of the claim. [ 119 ] The Action Plumbing and Heating Ltd. quote of $11,750.00 is for roughing in plumbing; installing new water lines and fixtures for the new bathroom; and installing a sump pit and pump.

The plaintiff submitted a quote only and not the final invoice for the work done. I conclude that had the invoice varied from the quote, the plaintiff would have submitted the final invoice. [ 120 ] The Action Plumbing quote is broken down as follows: (

a) Rough in plumbing $4,518.48 (

b) Install sump pit and pump 1,148.22 (

c) Remove and reinstall furnace and water heater to pour concrete slab 920.56 (

d) Update ducts 2,835.24 (

e) Install new water lines for toilet, laundry 2,056.86 (

f) Install fixtures in renovated basement, including basin, toilet, tub 1,672.35 TOTAL $13,151.71 [ 121 ] The quote makes reference to plumbing for a “dog wash”. I find that all items except (

c) above and the “dog wash” were improvements contemplated in the text discussion between Mr. Singler and Mr. Tsang to be included in Mr. Singler’s $10,000.00 estimate. The Action Plumbing quote indicates Mr. Tsang would be discounted and charged $11,750.00 including tax and permits. Item (

c) represents approximately 7 percent of the entire cost. Therefore, if Mr. Tsang was charged $11,750.00, as quoted, 7 percent of that amount, or $822.50, would have been for work not contemplated by Mr. Tsang and Mr. Singler. Because there was no specific allocation in the invoice with respect to the “dog wash”, I fix the cost at $700.00 and deduct it from the balance. The balance of $10,227.50 was for work intended to be covered by Mr. Singler’s quote of $10,000.00. [ 122 ] Disposal of materials related to repairs and contemplated upgrades were foreseeable expenses.

The Loraas Disposal invoices in the total amount of $3,367.39 were for the disposal of rotten materials such as walls and floors, as well as the disposal of materials related to the construction of the support wall and installation of weeping tiles. I will not allow the invoice dated April 28, 2014, as it must relate to damages that are statute-barred. Invoices dated August 31, 2014, September 30, 2014, October 8, 2014, November 30, 2014 and December 31, 2014 were also filed. The City of Saskatoon reports show final inspections on the vapour barrier were done in April 2015.

[123] Some of the work was unrelated to Mr. Tsang’s claim and therefore I will allow only a portion of the disposal costs. Theinvoice dated August 31, 2014 for $1,508.11 has endorsed on it “exterior damp proofing” and therefore I allow that invoice as it isrelated to the foundation fix. The balance of the disposal costs are $1,176.54. I find that 50 percent of the remaining disposal work, or$588.27, would have been related to the foundation and the contemplated minor repairs and upgrades.

The remainder of the disposalcosts would have been related to other repairs or upgrades not associated with the plaintiff’s claim. [124] The Pearson Engineering Ltd. invoice in the amount of $1,200.00 is for the preparation of a structural engineer’s report inrelation to the foundation. The report was required by the City and Mr. Tsang could not have proceeded until the engineer had assessedthe foundation. This is a cost incurred by Mr. Tsang directly related to Mr. Singler’s misrepresentation regarding the foundation. [125] The Prairie Fire concrete invoice relates to the concrete basement slab.

I have found that Mr. Tsang’s claim regarding thebasement slab is statute-barred and therefore costs associated with its installation are not allowed. [126] The Got Mold Disaster Recovery Services Inc. invoice in the amount of $8,061.61 is in relation to the removal of asbestos in thehouse. Mr. Tsang testified that in the Property Condition Disclosure Statement the seller stated there was no asbestos. The homeinspection report indicated there was a small trace of asbestos. Mr. Tsang settled his claim against the seller for $2,500.00. Mr. Singlermade no representations in relation to asbestos.

I therefore disallow this portion of Mr. Tsang’s claim. [127] To summarize, I allow the following damages, noting that Mr. Tsang expected to pay $10,000.00: K. Senat $6,000.00 Action Plumbing and Heating 10,227.50 Pearson Engineering 1,200.00 Loraas Disposal 2,096.38 Less anticipated cost -10,000.00 Total $9,523.88 Aggravated and punitive damages [128] According to Wright J in Snider, aggravated damages are awarded in “cases of intentional wrongdoing that causeintangible injuries such as distress, humiliation or hurt feelings.

They are not intended to punish the wrongdoer, but rather to compensatethe victim”: para 164. In that case, the plaintiff’s realtor did not disclose certain facts and did not recommend that the plaintiff have thehouse inspected. The seller’s realtor represented the residence was of “quality construction” and did not disclose to the plaintiff, amongother things, that the house she purchased had been moved onto the property from another location. The plaintiff suffered “utterdisruption for years and without the financial resources to simply have the problems fixed.

Her mental well-being suffered, and herrelationships with those closest to her were impaired”: para 165. Accordingly, aggravated damages were awarded. [129] While there is little doubt that Mr. Tsang was distressed in learning of the structural defects in the foundation, I am not satisfiedthat his distress warrants an award of aggravated damages in this case. [130] The object of punitive damages is to punish the defendant rather than compensate the plaintiff.

Such damages arelimited to exceptional cases where the defendant’s conduct is so malicious, oppressive and high-handed that it offends the court’s senseof decency: Lynch v Hashemian 2006 SKCA 126, at para 18, 289 Sask R 105; Whiten v Pilot Insurance Co., 2002 SCC 18 ,[2002] 1 SCR 595 [Whiten] at paras 36, 100-101. [131] In Khullar, the seller, who was also a licenced realtor, breached the contract of sale of his property with the plaintiffs,by entering into another contract for sale of the same property with a different buyer, resulting in two outstanding sales contracts on the

same property. The Court described the defendant's actions as shocking, duplicitous, deceitful, high-handed and outrageous. Nonetheless, in those circumstances, the Court declined to order punitive or exemplary damages even though they may have been warranted, assessing special costs against the defendant instead. [ 132 ] In the present case, while Mr. Singler's statements to Mr.

Tsang may have been reckless, there is nothing to suggest that his actions were malicious, oppressive or high-handed, such that punitive damages are rationally required to punish or deter: Whiten . [ 133 ] I therefore decline to award aggravated or punitive damages. Conclusion [ 134 ] I conclude that Mr. Singler negligently made misrepresentations to Mr. Tsang, who suffered damages as a result. I have found Mr. Tsang’s damages to be $9,523.88. [ 135 ] I therefore grant judgment against Randy Singler in favour of Kenny Tsang, in the amount of $9,523.88, along with pre- judgment interest from the date of Mr.

Tsang’s demand letter to Mr. Singler of May 10, 2016. [ 136 ] Mr. Tsang will also have his costs of these proceedings, which included a two-day trial. According to s. 36 of The Small Claims Act, 2016 , SS 2016, c S-50.12 and The Small Claims Regulations, 2017 , c S-50.12, Reg 1, s. 6(3), I fix costs at $500.00. _______________________ D.C. Scott, J `