Mar 17, 2014

Summary of Snider v. Karpinski

Snider v. Karpinski, 2009 SKQB 394 (CanLII)
The plaintiff bought a house. She used the services of Cecilia Mui, a realtor associated with the defendant 100% Realty Associates Ltd. operating as Re/max Saskatoon. The house was purchased from the defendants Edward and Verl Karpinski. The vendors' realtor was the defendant, Mario Jacobucci, owner of the defendant Trevi Holdings Ltd. The house did not meet the plaintiff's expectations. She now sues the defendants seeking recovery of damages for alleged latent defects. She claims Ms. Mui fell below the standard of care required of a realtor representing a purchaser. She claims Ms. Mui was negligent in misrepresenting certain facts and breached the fiduciary duty expected of her. The plaintiff claims the Karpinskis misrepresented facts to her, negligently and fraudulently. The plaintiff claims that Mr. Jacobucci and his company are liable to her in damages, both in negligence and as parties to the misrepresentations made by the vendors. Special and general damages are claimed as are aggravated damages and punitive damages. The trial took place over 22 days, spanning several years and included testimony from 14 witnesses. Two main issues are raised. The first is the liability of each of the defendants. The second issue is quantum of damages. The credibility of the parties is at the forefront of the determination of the issues.HELD: The vendors are liable to the plaintiff for breach of contract. Each of the defendants is a tortfeasor, each having breached an obligation or duty owed to the plaintiff, whether through negligence or misrepresentation. Their wrongful acts and omissions all contributed to the same damage. In that respect their liability is concurrent. The liability of the vendors and Mr. Jacobucci is joint, and that of Ms. Mui is several. As concurrent torfeasors, the fault for the damage shall be apportioned equally among the four of them. 1) Credibility is not a science, see R. v. Gagnon, 2006 SCC 17. It is not always possible to articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events. The principles and tools to be used in assessing credibility are summarized in Novak Estate (Re), 2008 NSSC 283. 2) Certain of the evidence of the Karpinskis and Ms. Mui is so unreliable that the whole of their evidence is cast with doubt. 3) The opinions and conclusions of Mr. Loraas and Mr. Epp are accepted by the court. They are professionals with no interest in the outcome of the action. Their evidence was largely unchallenged. The Court finds that the pine shakes were rotten, sealant had been applied to the shakes on at least two occasions and prior to the plaintiff offering to buy the property, the shakes were not properly installed allowing water to seep into the house, the skylight leaked and caulking had been applied to stop the leaking before the plaintiff offered to buy the house, there was improper and inadequate venting which resulted in moisture damage to the interior of the house and mold in the attic, the moisture damage in the house included damage to drywall and paint blisters. Nail pops throughout the house were largely the result of the house being moved. No inspection was done after the house was moved. 4) The Court finds the Karpinskis did not speak truthfully or completely when they answered the questions in the Property Condition Disclosure Statement (PCDS). The Court does not accept that the vendors were not aware of water and moisture damage arising from the improperly installed shingles, the missing ridge caps, the leaking skylight or the lack of venting. The sealant on the roof was sufficiently old to predate the plaintiff's purchase of the house. The vendors repaired the sink holes and moisture pockets and effectively concealed the problems. It should have been disclosed. Although the vendors denied knowing of the structural damage to their house, they knew the house had been cut in half and moved 300 kilometers and had sustained damage. The structural problems were concealed by the vendors through repairs to the dry wall, reinforcement at stress points, and repainting and patching of wall paper. The fact that the house had been cut in half and moved should have been disclosed on the PCDS. 5) It is not only current defects or ongoing problems that need to be disclosed on a PCDS. A prospective purchaser does not look to the PCDS only to ascertain that the roof is not leaking on the day it was signed, see Kaufmann v. Gibson, [2007] O.J. No. 2711 (Ont. S.C.) (QL). The Karpinskis are liable to the plaintiff for breach of contract for failing to disclose the existence of structural defects, damage due to water and roof leakage. The terms of the PCDS formed part of the agreement between the parties and the deliberate withholding of this information amounted to a false representation as to the condition of the home. With respect to damage arising from these defects, the doctrine of caveat emptor does not apply. 6) The requirements for negligent misrepresentation have been established by the plaintiff. The failure to disclose, or silence as to a known defect, amounts to an act of concealment of a material fact and has the same effect as an express misrepresentation and is sufficient to attract liability, Thomas v. Blackwell, 1999 SKQB 168. 7) The false representations knowingly made by the vendors and their silence as to material facts were fraudulent. 8) Ms. Mui was negligent and her conduct and advice to the plaintiff fell below the standard of care expected of a realtor acting for the purchaser of a rural property in 1999. She did not conduct any preliminary background checks with the Rural Municipality, which would include determining if proper permits had been obtained, prior to the plaintiff's offer to purchase. Ms. Mui did nothing more than merely mention a home inspection to the plaintiff on one occasion. At no time did she recommend a home inspection even after she knew the house had been moved and before the condition regarding a satisfactory PCDS was removed. Another reason to strongly recommend a home inspection would be in circumstances where the realtor knew that a rural municipality did not require building inspections and Ms. Mui knew this to be the case. The plaintiff relied on the representation of Ms. Mui to her detriment. Had Ms. Mui disclosed all material facts to the plaintiff and explained and recommended a home inspection, the Court is satisfied that the outcome for the plaintiff would have been different. Knowing the house had been moved and had not been inspected the plaintiff would have most likely reconsidered her decision to purchase. 9) The Court is satisfied that Mr. Jacabucci is liable to the plaintiff for negligent misrepresentation. He represented that the home was of 'quality construction'. This was incorrect. Mr. Jacobucci was also complicit in, and party to, the negligent misrepresentations made by the vendors in the PCDS. He knew the house had been moved and sustained damage. He also knew the skylight leaked. The plaintiff relied on these misrepresentations and damages resulted. 10) The costs incurred by the plaintiff to repair the house total $17,613. She is awarded $15,000 as compensation for personal time and effort that she expended in repairing the home. There is no evidence that the distress the plaintiff experienced constituted a physical injury, or a recognized psychiatric illness and she cannot be compensated for mental distress, whether under tort or breach of contract. She is awarded $10,000 for aggravated damages. Her claim for punitive damages is dismissed. Her claim for solicitor and client costs is dismissed. Corrigendum received dated December 3, 2009 and added to fulltext.