Finstad v. Neilson et al., (1993) 139 A.R. 305 (ProvCt)

• Judge: Gilbert, P.C.J.
• Court: Provincial Court of Alberta (Canada)
• Case Date: May 06, 1993
• Citations: (1993), 139 A.R. 305 (ProvCt)

Finstad v. Neilson (1993), 139 A.R. 305 (ProvCt)

MLB headnote and full text

Blair Eugene Finstad (plaintiff) v. Everett Neilson, Iris Neilson, Elizabeth Page and Royal LePage Real Estate Services Ltd. (defendants) and Everett Neilson and Iris Neilson (third parties)

(No. P9290103369)

Indexed As: Finstad v. Neilson et al.

Alberta Provincial Court

Gilbert, P.C.J.

May 6, 1993.

Summary:

The plaintiff purchasers wanted a house with hardwood floors. The defendant vendors represented that there were hard­wood floors under the living room and master bedroom carpets. The defendants' real estate agent accepted their statement with only cursory examination and further com­municated it. There were no hardwood floors in the living room or bedroom. The plaintiffs elected to complete the sale and sue the defendants and real estate agent for damages for negligent misrepresentation. The plain­tiffs claimed, inter alia, the cost of installing hardwood flooring. The real estate agent added the defendants as third parties.

The Alberta Provincial Court allowed the action against both the defendants and the real estate agent. However, the court ordered that the real estate agent was entitled to full contribution and indemnity from the defend­ants.

Contracts - Topic 2122

Terms - Express terms - Exclusionary clauses - Bars - A purchase and sale agreement contained a standard disclaimer clause excepting the vendor's liability for representations - The vendor negligently misrepresented to the purchaser that the house contained hardwood floors - The existence of such flooring, although not a term of the agreement, was admittedly a prerequisite to the purchasers executing the agreement - The Alberta Provincial Court held that the negligent misrepresentation induced the purchasers to contract and the vendor's liability was not excluded by the disclaimer clause - The clause did not expressly exempt liability for negligent misrepresentation inducing a party to contract - See paragraphs 19 to 26.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - Negligent misrepre­sentation - The vendors told the pur­chasers that there were hardwood floors under the living room and master bedroom carpets - The vendors honestly believed the statement, but had never checked to ensure the statement was true - The ven­dor's real estate agent accepted the repre­sentation, and communicated it further, without ensuring it was true - There were no such floors - Both the vendors and agent knew the purchasers were interested only in houses with hardwood floors and that the purchasers relied on their repre­sentations - The Alberta Provincial Court held that the vendors and agent were liable for damages for negligent misrepresenta­tion - The purchasers were entitled to sue in tort absent a contractual provision ex­cluding that right - The court ordered that the real estate agent was entitled to full contribution and indemnity from the vendors - See paragraphs 1 to 17.

Fraud and Misrepresentation - Topic 2827

Misrepresentation - Defences - Where tort arose out of performance of a contract - [See Fraud and Misrepresentation - Topic 2508 ].

Sale of Land - Topic 8758

Remedies of purchaser - Damages - Neg­ligent misrepresentation - [See Fraud and Misrepresentation - Topic 2508 ].

Cases Noticed:

BG Checo International Ltd. v. British Columbia Hydro and Power Authority (1993), 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241 (S.C.C.), refd to. [para. 9].

Queen (D.J.) v. Cognos Inc. (1990), 38 O.A.C. 180; 69 D.L.R.(4th) 288 (Ont. C.A.), revsd. 147 N.R. 169; 60 O.A.C. 1 (S.C.C.), refd to. [para. 9].

Central Trust Co. v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109; 37 C.C.L.T. 117; 42 R.P.R. 161; 31 D.L.R.(4th) 481; 34 B.L.R. 187, refd to. [para. 9].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465 (H.L.), refd to. [para. 14].

Kingu v. Walmar Ventures Ltd. (1986), 10 B.C.L.R.(2d) 15 (C.A.), refd to. [para. 14].

Windsor Motors Ltd. v. Powell River (Municipality) (1969), 68 W.W.R.(N.S.) 173 (B.C.C.A.), refd to. [para. 16].

Komarniski et al. v. Marien (1979), 8 R.P.R. 229 (Sask. Q.B.), refd to. [para. 17].

Hayward and Grovier v. Mellick and Mel­lick (1984), 2 O.A.C. 161; 5 D.L.R. 740 (C.A.), refd to. [para. 22].

Mendelssohn v. Normand Ltd., [1969] 2 All E.R. 1215; [1970] 1 Q.B. 177 (C.A.), refd to. [para. 24].

Statutes Noticed:

Contributory Negligence Act, R.S.A. 1980, c. C-23, sect. 2(1) [para. 32].

Counsel:

Grant R. Vipond, for the plaintiff;

Laurence E. Bowes, for Everett Neilson and Iris Neilson;

George C. Stewart, for Elizabeth Page and Royal LePage Real Estate Ltd.

This action was heard before Gilbert, P.C.J., of the Alberta Provincial Court, who delivered the following decision on May 6, 1993.