Mar 17, 2014

Summary of Roske v. Overs

Roske v. Overs, 2008 SKPC 63 (CanLII)
Plaintiffs claim $14,000 in damages from the owner defendant as the cost of repairing a structural defect in a home that was purchased. The action also named the listing real estate broker for the seller and the real estate broker for the plaintiffs. The plaintiffs claim that all of the defendants knew of the structural defect in the house but failed to disclose it to the plaintiffs at time of purchase. The house was purchased for $125,000. After repair, the plaintiffs sold the house for $235,000.HELD: The claim against all defendants is dismissed. There is a distinction between latent and patent defects. Patent defects are those discoverable by inspection and ordinary vigilance by the purchaser. If the purchaser discovered patent defects after taking possession, he will have no claim against the seller because the doctrine of caveat emptor applies. However, if there was fraud or if the patent defect was concealed, the caveat emptor doesn't apply. The act of concealment must be such as to turn the patent defect into a latent defect. Latent defects are those which are not readily discoverable by a purchaser through a prudent inspection. Latent defects which go to 'quality only' and not the structural integrity of the building are also subject to caveat emptor unless there has been active concealment by the seller. Latent defects going to the structural integrity of the house and that are known to the seller give rise to liability if they significantly effect the value of the property and the seller fails to disclose this. Silence respecting structural latent defects is an act of concealment. On the evidence here, the Court was satisfied that the foundation defect was a patent one. Indications of foundation problems were visible to a reasonably prudent buyer. Had the buyer done a more thorough inspection of the home the defect would have been apparent. As a result, caveat emptor applies and the seller defendant is not liable. Further, even if the defect had been a latent one, the Court was satisfied that this information was disclosed to the plaintiffs through various parties. Finally, the claim against the seller would have been dismissed in any event, as the plaintiffs failed to establish that they had sustained any damages as a result of the repair as the seller had already discounted the listing price of the house to reflect the foundation problem. The claim against the seller's real estate agent is dismissed also as there was no contractual relationship between them and the plaintiffs and thus, no action for breach of contract. No tort action arises and there was no misrepresentation or negligence on their part. The claim against the buyers real estate agent was based on negligence only. They did owe a duty of care to the buyer and breached it by not recommending that the plaintiffs obtain an engineer's report or a home inspection. However, the plaintiff's failed to prove damages and the claim is dismissed.