Olson v. New Home Certification Program of Alberta, (1986) 69 A.R. 356 (QB)

• Judge: Lutz, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: April 11, 1986
• Citations: (1986), 69 A.R. 356 (QB);1986 CanLII 1640 (AB QB);44 Alta LR (2d) 207;69 AR 356;[1986] AJ No 347 (QL)

Olson v. New Home Certification (1986), 69 A.R. 356 (QB)

MLB headnote and full text

Olson v. New Home Certification Program of Alberta

(No. 8301-29933)

Indexed As: Olson v. New Home Certification Program of Alberta

Alberta Court of Queen's Bench

Judicial District of Calgary

Lutz, J.

April 11, 1986.

Summary:

A homeowner brought an action to enforce a claim under the New Home Certification Program of Alberta for the repair of major structural defects in his house. The builder was no longer in business. The program offered compensation where builders failed to construct homes to a set standard or failed to honour repairs to that standard after construction. The four members of the program's insurance committee, none of whom had any training, experience or background in construction or engineering, had rejected the homeowner's claim in spite of a technical recommendation to the contrary and clear evidence of structural defects. At trial, the program conceded that there were major structural defects which the owner was entitled to have repaired under the program.

The Alberta Court of Queen's Bench awarded the homeowner damages in contract for the diminution in the value of his home. The court refused to award damages equal to the repair cost, because to do so would give the homeowner a windfall. The court held that the program was not liable in tort and was not liable for general or punitive damages for breach of contract. However, the court held that the conduct of the program justified an award of solicitor-client costs to the homeowner.

Building Contracts - Topic 3581

Liability of builder - Damages - Measure of loss or diminution in value of owner's property - A homeowner's action to enforce a claim for repairs under the New Home Certification Program of Alberta was allowed - The defects diminished the value of the home by $22,900.00; the cost of repairing the defects was $46,950.00 - The Alberta Court of Queen's Bench awarded the homeowner $22,900.00 damages, because damages equal to the repair cost would, in these circumstances, give the homeowner a windfall - The court discussed when damages equal to the repair costs, as opposed to diminution in value, would be considered - See paragraphs 70 to 86.

Contracts - Topic 4005

Remedies for breach - Negligent breach - Availability of tort action - The Alberta Court of Queen's Bench allowed a homeowner's action in contract to enforce a claim under the New Home Certification Program of Alberta - The court held that the breach of contract did not also give rise to a tort action, where the relationship was governed by a contract and the negligence relied on was not an "independent tort" unconnected with the performance of that contract - See paragraphs 51 to 54.

Damages - Topic 1305

Exemplary or punitive damages - Breach of contract - The New Home Certification Program of Alberta was held liable in contract for rejecting a homeowner's claim under the program - The Alberta Court of Queen's Bench held that the homeowner was not entitled to punitive damages for the breach of contract, because there was no concurrent breach of fiduciary duty, fraudulent misrepresentation or any other tort and the program had a right to disagree with a homeowner and reject his claim - See paragraphs 89 to 97.

Damages - Topic 5706

Contracts - Breach of contract - Injured feelings and emotional upset - A homeowner's claim for the repair of structural defects to his home under the New Home Certification Program of Alberta was wrongfully rejected - The homeowner suffered a great deal of aggravation, but since he purchased the home on a commercial or investment basis, he suffered no loss of personal enjoyment of the property - The Alberta Court of Queen's Bench refused to award general damages for personal disappointment, etc., for breach of contract - See paragraphs 87 - 88.

Equity - Topic 3607

Fiduciary relationships - Relationships which are not fiduciary - The New Home Certification Program of Alberta offered compensation to new homeowners where builders failed to construct homes to a set standard or failed to honour repairs to that standard after construction - The warranty set out the extent of coverage and rights and obligations of each party - The Alberta Court of Queen's Bench held that there was no fiduciary relationship between the program and the homeowner, because there did not exist the requisite inequality between the parties - See paragraphs 61 to 69.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - Negligent misrepresentation - What constitutes - An investigator with the New Home Certification Program of Alberta investigated a homeowner's complaint of major structural defects in his home and advised that he was 99% sure that the insurance committee of the program would accept his recommendation that the program compensate the homeowner - The homeowner knew that the final decision rested with the insurance committee - The insurance committee rejected the investigator's recommendation and denied compensation - The Alberta Court of Queen's Bench held that there was no negligent misrepresentation - See paragraphs 55 to 58.

Fraud and Misrepresentation - Topic 4086

Misrepresentation - Practice - Pleadings - Fraud - The Alberta Court of Queen's Bench refused to deal with the plaintiff's claim that a defendant was liable for fraudulent misrepresentation, where the fraudulent misrepresentation was not pleaded in the plaintiff's statement of claim and no amendment was sought to include the claim - See paragraphs 59 - 60.

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to - Improper, irresponsible or unconscionable conduct - A defendant attempted to delay, deceive and defeat justice by failing to admit facts, resulting in a prolonged trial and adjournments - The defendant concealed material documents and failed to produce others in a timely fashion - The Alberta Court of Queen's Bench held that the defendant's "abhorrent" conduct entitled the successful plaintiff to costs on a solicitor and client basis - See paragraphs 98 to 101.

Cases Noticed:

Canadian Western Natural Gas Company Limited v. Pathfinder Surveys Ltd. (1980), 21 A.R. 459; 12 Alta. L.R.(2d) 135 (Alta. C.A.), refd to. [para. 52].

J. Nunes Diamonds Ltd. v. Dominion Electrical Protection Co. (1972), 26 D.L.R.(3d) 699 (S.C.C.), folld. [para. 53].

Sealand of the Pacific v. Robert C. McHaffie Ltd. et al. (1974), 51 D.L.R.(3d) 702 (B.C.C.A.), refd to. [para. 53].

Hedley Byrne and Co. v. Heller & Partners Ltd., [1964] A.C. 465, refd to. [para. 56].

Nocton v. Lord Ashburton, [1914-15] All E.R. 45 (H.L.), dist. [para. 64].

Laskin v. Bache & Co. Ltd. (1971), 23 D.L.R.(3d) 385 (Ont. C.A.), dist. [para. 64].

Ontario Metal Products Co. v. Mutual Life Insurance Company of New York (1923), 54 O.L.R. 299, revised [1924] S.C.R. 35; [1924] 1 D.L.R. 127, dist. [para. 64].

Scottish Union National Insurance Company v. Calp's Ltd., [1961] I.L.R. 1-043 (N.B.C.A.), dist. [para. 64].

Denison v. Fawcett (1958), 12 D.L.R.(2d) 537 (Ont. C.A.), dist. [para. 64].

Follis v. Albemarle, [1941] 1 D.L.R. 178, appld. [para. 66].

Tate v. Williamson (1866), 2 Ch. App. 55, refd to. [para. 68].

Tito v. Waddell (No. 2), [1977] 1 Ch. 106, refd to. [para. 71].

Radford v. De Froberville, [1977] W.L.R. 1262 (Ch. D.), refd to. [para. 74].

Dodd Properties Ltd. and another v. Canterbury City Council and others, [1980] W.L.R. 433, refd to. [para. 75].

Karod v. Lingstrom (1983), 30 R.P.R. 1, refd to. [para. 81].

Allen v. Pierce (1895), 3 Terr. L.R. 319, dist. [para. 84].

Livingstone v. Rawyards Coal Co. (1879-80), 5 App. Cas. 25, refd to. [para. 86].

Jarvis v. Swan Tours, [1973] 1 All E.R. 71 (C.A.), refd to. [para. 87].

Nelson v. Bayda Surveys Ltd. (1980), 31 A.R. 80, refd to. [para. 88].

Denison v. Fawcett (1958), 12 D.L.R.(2d) 537, dist. [para. 92].

Paragon Properties Ltd. v. Magna Investments Ltd., [1972] 3 W.W.R. 106, refd to. [para. 94].

Rookes v. Barnard, [1964] A.C. 1129 (H.L.), refd to. [para. 94].

Mobil Oil Canada Limited v. Canadian Superior Oil Ltd. et al., [1980] 1 W.W.R. 453; 21 A.R. 111 (Alta. Q.B.), refd to. [para. 98].

Fiege v. Cornwall General Hospital (1979), 117 D.L.R.(3d) 152, refd to. [para. 99].

Fort Smith v. Berton (1983), 54 A.R. 367 (N.W.T.S.C.), refd to. [para. 99].

Statutes Noticed:

Rules of Court (Alta.), rule 113, rule 115 [para. 59].

Authors and Works Noticed:

Cheshire and Fifoot, The Law of Contract (6th Ed.), p. 245 [para. 68].

Cheshire and Fifoot, The Law of Contract (10th Ed.), p. 549 [para. 88].

Corpus Juris Secundum, vol. 36A, p. 381 [para. 62].

Halsbury's Laws of England (4th Ed.), vol. 10, para. 1277 [para. 80].

Sedgwick on Damages (9th Ed.), para. 387 [para. 92].

Counsel:

David B. Reesor, for the plaintiff;

James E. Polley, for the defendant.

This action was heard before Lutz, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on April 11, 1986.