Alevizos v. Nirula,

• Jurisdiction: Manitoba
• Judge: Scott, C.J.M., Kroft and Hamilton, JJ.A.
• Neutral Citation: 2003 MBCA 148
• Citation: 2003 MBCA 148,(2003), 180 Man.R.(2d) 186 (CA),234 DLR (4th) 352,[2004] 10 WWR 634,[2003] MJ No 433 (QL),127 ACWS (3d) 563,15 RPR (4th) 167,180 Man R (2d) 186,(2003), 180 ManR(2d) 186 (CA),234 D.L.R. (4th) 352,180 ManR(2d) 186,180 Man.R.(2d) 186,[2003] M.J. No 433 (QL)
• Date: 11 September 2003
• Court: Court of Appeal (Manitoba)

Alevizos v. Nirula (2003), 180 Man.R.(2d) 186 (CA);

    310 W.A.C. 186

MLB headnote and full text

Temp. Cite: [2003] Man.R.(2d) TBEd. DE.021

Ioannis Alevizos and Darcie Single-Alevizos (plaintiffs/appellants/respondents) v. Jasbir Nirula and Sartaj Nirula (defendants/respondents/appellants)

(AI 02-30-05293; 2003 MBCA 148)

Indexed As: Alevizos et al. v. Nirula

Manitoba Court of Appeal

Scott, C.J.M., Kroft and Hamilton, JJ.A.

December 5, 2003.

Summary:

The plaintiffs purchased a house from the defendants. The plaintiffs commenced a small claims action against the defendants, alleging that they had made a fraudulent misrepresentation with respect to the condition of the house.

The Manitoba Court of Queen's Bench, on appeal from the Small Claims Court, allowed the action and awarded the plaintiffs damages. The defendants appealed.

The Manitoba Court of Appeal dismissed the appeal.

Fraud and Misrepresentation - Topic 6

Fraudulent misrepresentation (deceit) - General principles - What constitutes deceit or fraudulent misrepresentation - In response to a question on a property condition statement (PCS), the vendors indicated that the only flooding or leakage was due to a frozen water tap - They were aware of leakage from windows but did not mention it - The Manitoba Court of Appeal affirmed that caveat emptor did not apply because the vendors deliberately omitted to provide a full and honest answer respecting "flooding and leakage" - Their response was a positive falsehood that no other leakage took place and amounted to both fraud by silence and by active concealment - "Once the vendors voluntarily undertook to complete the PCS, they were obliged - indeed they were under a duty 'in the circumstances' - to do so honestly and completely." - The purchasers' knowledge of the staining and blackening on the windowsills would not alert them independently of the answer in the PCS to the fact that there was an actual leakage problem - They were entitled to rely on the vendors' unequivocal representation - See paragraphs 1 to 43.

Fraud and Misrepresentation - Topic 11

Fraudulent misrepresentation (deceit) - General principles - Deceit by silence - [See Fraud and Misrepresentation - Topic 6 ].

Sale of Land - Topic 807

The contract - Property condition disclosure statement - A property condition statement (PCS) was used to advise purchasers about the state and condition of a property - The Manitoba Court of Appeal stated, inter alia, that "Declarations made in a PCS are representations as opposed to terms of the contract. ... Such statements do not constitute a warranty, rather the purpose of a PCS is to put purchasers on notice, to make purchasers aware of a problem if there is one. ... Since the purpose of the PCS is to give the purchasers a 'heads up' with respect to potential problems, liability will ordinarily be disallowed when the problem in question is obvious. ... This is because purchasers in such circumstances should not have been misled by the disclosure statement. ... If the vendor answers the PCS honestly and does not deliberately intend to mislead, then liability will not follow even if the representation turns out to be inaccurate." - See paragraph 36.

Sale of Land - Topic 807

The contract - Property condition disclosure statement - [See Fraud and Misrepresentation - Topic 6 ].

Sale of Land - Topic 6216

Completion - Seller's duties - General - Known defects - [See Fraud and Misrepresentation - Topic 6 ].

Sale of Land - Topic 8108

Defences of vendor - Caveat emptor - Exceptions - [See Fraud and Misrepresentation - Topic 6 ].

Sale of Land - Topic 8757

Remedies of purchaser - Damages - Breach of warranty or false representation - [See Fraud and Misrepresentation - Topic 6 ].

Sale of Land - Topic 8762

Remedies of purchaser - Damages - Concealment of defects - [See Fraud and Misrepresentation - Topic 6 ].

Cases Noticed:

Stotts v. McArthur (1991), 75 Man.R.(2d) 212; 6 W.A.C. 212 (C.A.), refd to. [para. 18].

Peek v. Gurney (1873), L.R. 6 H.L. 377, refd to. [para. 23].

Tapp and another v. Lee (1803), 3 Bos. & P. 367; 127 E.R. 200, refd to. [para. 24].

Curtis v. Chemical Cleaning and Dyeing Co., [1951] 1 All E.R. 631 (C.A.), refd to. [para. 24].

C.R.F. Holdings Ltd. et al. v. Fundy Chemical International Ltd. et al. (1980), 14 C.C.L.T. 87 (B.C.S.C.), varied [1982] 2 W.W.R. 385 (B.C.C.A.), refd to. [para. 24].

Ontex Resources Ltd. v. Metalore Resources Ltd. et al. (1990), 75 O.R.(2d) 513 (Gen. Div.), revd. in part (1993), 63 O.A.C. 258; 13 O.R.(3d) 229 (C.A.), refd to. [para. 24].

Leeson v. Darlow et al., [1926] 4 D.L.R. 415 (Ont. C.A.), refd to. [para. 27].

Gronau v. Schlamp Investments Ltd. (1974), 52 D.L.R.(3d) 631 (Man. Q.B.), refd to. [para. 28].

Belzil v. Bain et al. (2001), 300 A.R. 72; 45 R.P.R.(3d) 233 (Q.B.), refd to. [para. 28].

Unrau and Unrau v. Gay (1983), 61 N.S.R.(2d) 256; 133 A.P.R. 256; 30 R.P.R. 198 (T.D.), refd to. [para. 28].

McGrath v. MacLean (1979), 22 O.R.(2d) 784 (C.A.), refd to. [para. 29].

Gumbmann et al. v. Cornwall et al. (1986), 44 R.P.R. 114 (Ont. H.C.), refd to. [para. 29].

Allen et al. v. McCutcheon et al. (1979), 9 R.P.R. 191 (B.C.S.C.), refd to. [para. 29].

Rasch v. Horne, [1930] 3 D.L.R. 647 (Man. C.A.), refd to. [para. 30].

Abel v. McDonald, [1964] 2 O.R. 256 (C.A.), refd to. [para. 30].

Mohammed v. Canada (Minister of Citizenship and Immigration) (1997), 130 F.T.R. 294 (T.D.), refd to. [para. 31].

Davies v. London and Provincial Marine Insurance Co. (1878), 8 Ch. D. 469, refd to. [para. 33].

Opron Construction Co. v. Alberta (1994), 151 A.R. 241 (Q.B.), refd to. [para. 34].

Zaenker v. Kirk et al. (1999), 27 B.C.T.C. 141; 30 R.P.R.(3d) 9 (S.C.), refd to. [para. 36].

Anderson v. Kibzey, [1996] B.C.J. No. 3008 (S.C.), refd to. [para. 36].

Ward et al. v. Smith, [2001] B.C.T.C. 1366; 45 R.P.R.(3d) 154 (S.C.), refd to. [para. 36].

Davis v. Stinka, [1995] B.C.J. No. 1256 (S.C.), refd to. [para. 36].

Taschereau et al. v. Fuller et al. (2002), 165 Man.R.(2d) 202 (Q.B.), refd to. [para. 36].

United Shoe Machinery Co. of Canada v. Brunet et al., [1909] A.C. 330 (P.C.), refd to. [para. 40].

Kalmbach v. Diemert, [2000] B.C.T.C. Uned. 14 (S.C.), refd to. [para. 40].

RMI Properties Ltd. and Chan v. Canada Mortgage and Housing Corp. (1989), 103 A.R. 179 (Q.B.), refd to. [para. 40].

Farah v. Barki, [1955] S.C.R. 107, refd to. [para. 41].

May v. Platt, [1900] 1 Ch. 616, refd to. [para. 41].

Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd. and O'Connor (No. 2), [2002] 1 S.C.R. 678; 283 N.R. 233; 299 A.R. 201; 266 W.A.C. 201, refd to. [para. 41].

Central Railway Co. of Venezuela v. Kisch (1867), L.R. 2 H.L. 99, refd to. [para. 41].

United Services Funds (Trustees of) v. Richardson Greenshields of Canada Ltd. (1988), 22 B.C.L.R.(2d) 322 (S.C.), refd to. [para. 42].

Authors and Works Noticed:

DiCastri, Victor, Law of Vendor and Purchaser (3rd Ed. 1988), vol. 1, para. 239 [para. 18].

Fridman, Gerald Henry Louis, The Law of Contract in Canada (4th Ed. 1999), pp. 309 [para. 36]; 315 [para. 40]; 324 [para. 22]; 325 [para. 15]; 474 [para. 36].

Halsbury's Laws of England (1980) (4th Ed. - Reissue), vol. 42, p. 48 [para. 28].

Halsbury's Laws of England (1998) (4th Ed. - Reissue), vol. 31, paras. 748 [para. 20]; 749, 750 [para. 21]; vol. 42, para. 46 [para. 26].

Spencer-Bower, George, and Turner, Alexander K., The Law of Actionable Misrepresentation (3rd Ed. 1974), pp. 94 [para. 25]; 209 [para. 34].

Counsel:

R.E. Olschewski and J.M. Feuer, for the appellants;

B.R. Kress, for the respondents.

This appeal was heard on September 11, 2003, by Scott, C.J.M., Kroft and Hamilton, JJ.A., of the Manitoba Court of Appeal. The judgment of the Court of Appeal was delivered on December 5, 2003, and the following opinions were filed:

Scott, C.J.M. (Hamilton, J.A., concurring) - see paragraphs 1 to 43;

Kroft, J.A. - see paragraphs 44 to 50.