Snider v. Karpinski et al., 2009 SKQB 394

• Judge: M-E. Wright, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: October 06, 2009
• Jurisdiction: Saskatchewan
• Citations: 2009 SKQB 394;(2009), 342 Sask.R. 235 (QB)

Snider v. Karpinski (2009), 342 Sask.R. 235 (QB)

MLB headnote and full text

Temp. Cite: [2009] Sask.R. TBEd. OC.040

Sylvia Snider (now Sylvia Schira) (plaintiff) v. Edward Karpinski, Verl Karpinski, Cecilia Mui, 100% Realty Associates Ltd., operating as Re/Max Saskatoon, Mario Jacobucci and Trevi Holdings Ltd., operating as Mario Jacobucci Realty (defendants)

(2000 Q.B. No. 365; 2009 SKQB 394)

Indexed As: Snider v. Karpinski et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

M-E. Wright, J.

October 6, 2009.

Summary:

The plaintiff sued the defendants for damages suffered as a result of a contract for sale of a residence. Against the defendants Karpinskis, she claimed in misrepresentation and breach of contract. She sought recision of the agreement for sale and special damages for emotional distress. In the alternative, she sought damages for breach of contract and misrepresentation, special damages, general damages, punitive damages and costs on a solicitor and client basis. Against the defendants, Mui and 100% Realty Associates Ltd., she claimed in negligence, negligent misrepresentation and breach of fiduciary duty. She sought general damages, special damages and costs. Against the defendants Jacobucci and Trevi Holdings Ltd., she claimed in negligence and negligent misrepresentation and sought general and special damages and costs. After the conclusion of the evidence at trial, but prior to final argument, the plaintiff moved to amend her pleadings to claim in deceit against the defendants Mui, 100% Realty Associates Ltd., Jacobucci, and Trevi Holdings Ltd. From all defendants, jointly and severally, she wanted to recover both punitive and aggravated damages as well as solicitor and client costs.

The Saskatchewan Court of Queen's Bench, in a decision reported at 291 Sask.R. 255, allowed the application in part.

The Saskatchewan Court of Queen's Bench allowed the action. While the defendants Karpinskis were liable for breach of contract, each of the defendants was 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 was concurrent. The liability of the defendants Karpinskis and Jacobucci was joint, and that of the defendant Mui was several. As concurrent tortfeasors, the fault for the damage would be apportioned equally among the four of them. The plaintiff was awarded judgment against the defendants in the amount of $49,608.87. The plaintiff was entitled to pre-judgment interest under the Pre-Judgment Interest Act. The plaintiff would have her assessed costs up to the commencement of the trial. Thereafter she would have her costs at the rate of 150% of the usual tariff.

Brokers - Topic 3144

Duties of broker to principal - Real estate brokers - Negligence - Duty of care - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - She alleged that the defendants failed to inform her that the house had been moved over 300 kms from its original building site - The plaintiff also alleged that there were issues with leakage and moisture damage - The Saskatchewan Court of Queen's Bench held that the defendant Mui was negligent and that her conduct and advice to the plaintiff fell below the standard of care expected of a realtor acting for a purchaser of a rural property - Mui 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 - Further, 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 that the house had been moved and before the condition regarding a satisfactory property condition disclosure statement was removed - Rather than provide the plaintiff with all the relevant facts which she had a duty to disclose, Mui instead encouraged the plaintiff to finalize the transaction so that it would not be necessary to "start over" - The plaintiff relied on the representations and advice of Mui to her detriment - Similarly, Mui was liable in negligent misrepresentation - See paragraphs 140 to 145.

Brokers - Topic 3144

Duties of broker to principal - Real estate brokers - Negligence - Duty of care - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - She alleged that the defendants failed to inform her that the house had been moved over 300 kms from its original building site - The plaintiff also alleged that there were issues with leakage and moisture damage - The Saskatchewan Court of Queen's Bench held that the duty to disclose all information about a property that might influence the decision to purchase was equally applicable to listing and selling realtors - Particularly, the listing realtor was bound to disclose known latent defects - In this case, Jacobucci had an obligation to disclose the fact that the house had been moved - He did not - Even so, the court could not conclude on the evidence that the plaintiff relied upon Jacobucci to her detriment in this regard - She placed her reliance and trust in Mui who, had she adequately represented the plaintiff's interests, would have made the necessary inquiries from the rural municipality at the outset - Such inquiries would have revealed that the house had been moved, and further questions could have been put to Jacobucci - See paragraph 147.

Brokers - Topic 3150

Duties of broker to principal - Real estate brokers - Misrepresentation - [See first Brokers - Topic 3144 ].

Brokers - Topic 3150

Duties of broker to principal - Real estate brokers - Misrepresentation - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - She alleged that the defendants failed to inform her that the house had been moved over 300 kms from its original building site - The plaintiff also alleged that there were issues with leakage and moisture damage - The Saskatchewan Court of Queen's Bench held that Jacobucci was liable to the plaintiff for negligent misrepresentation - Jacobucci represented the Karpinski residence to be of "quality construction" - This representation was incorrect - Evidence established that the house did not approach quality construction - Jacobucci made this representation negligently - He had no particular expertise in construction and relied only on limited information obtained from the Karpinskis and his own observations as to the floor plan and finishings - Jacobucci was also complicit in, and party to, the negligent misrepresentations made by the Karpinskis in the property condition disclosure statement - He knew, at minimum, that the house had been moved and damage sustained - He also knew that the skylight leaked - The plaintiff relied on all these misrepresentations - Damages resulted - See paragraph 148.

Brokers - Topic 3152

Duties of broker to principal - Real estate brokers - Fiduciary duty - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - She alleged that the defendants failed to inform her that the house had been moved over 300 kms from its original building site - The plaintiff also alleged that there were issues with leakage and moisture damage - The Saskatchewan Court of Queen's Bench held that it was not disputed that Mui was in a fiduciary relationship with the plaintiff, and as such owed her certain duties - While the court was confident that Mui was negligent in fulfilling her responsibilities to the plaintiff, it was not satisfied that she failed to fulfill those obligations to her client in favour of advancing her own interests, or those of another, whether pecuniary or otherwise - The evidence was not sufficient to reach such a conclusion and, accordingly, the plaintiff's claim for breach of fiduciary duty had to be dismissed - See paragraph 146.

Damage Awards - Topic 2027.5

Exemplary or punitive damages - Outrageous conduct (e.g. stabbing) - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - The court found that while the defendants Karpinskis were liable for breach of contract, each of the defendants was a tortfeasor, each having breached an obligation or duty owed to the plaintiff, whether through negligence or misrepresentation - The plaintiff sought punitive damages of $100,000 as against the defendants Karpinskis, Jacobucci and Trevi Holdings Ltd. - The Saskatchewan Court of Queen's Bench rejected the claim - Punitive damages were non-compensatory - They were restricted to advertent wrongdoing that was so deliberately malicious and outrageous that it was deserving of punishment on its own - The threshold was high - The conduct of the Karpinskis, and that of Jacobucci, when completing the property condition disclosure statement and in making negligent or false representations regarding the condition of the house was in error, and sufficient to attract liability for breach of contract and in tort - However, the court was not persuaded that their conduct, taken as a whole, insofar as it related to their dealings with the plaintiff prior to the commencement of this litigation, was so egregious that punitive damages were rationally required as retribution and as a deterrence - See paragraphs 167 to 169.

Damage Awards - Topic 2416

Aggravated damages - Infliction of mental suffering - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - The court found that while the defendants Karpinskis were liable for breach of contract, each of the defendants was a tortfeasor, each having breached an obligation or duty owed to the plaintiff, whether through negligence or misrepresentation - The plaintiff sought aggravated damages - The Saskatchewan Court of Queen's Bench held that aggravated damages were awarded in cases of intentional wrongdoing that caused intangible injuries such as distress, humiliation or hurt feelings - They were not intended to punish the wrongdoer, but rather to compensate the victim - The tortious conduct of all of the defendants caused the plaintiff considerable distress, anxiety and emotional turmoil - She believed that she was purchasing her dream home - Instead, she found herself in a situation of utter disruption for years and without the financial resources to simply have the problems fixed - Her mental well-being suffered, and her relationships with those closest to her were impaired - Merely compensating the plaintiff for her labour and the expenditures made by her did not adequately reflect the injuries and damages that she sustained because of the combined conduct of the defendants - The court awarded aggravated damages in the amount of $10,000 - See paragraphs 164 to 166.

Fraud and Misrepresentation - Topic 141

Fraudulent misrepresentation - Knowledge of falsity of representation - General - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - She alleged that the defendants failed to inform her that the house had been moved over 300 kms from its original building site - The plaintiff also alleged that there were issues with leakage and moisture damage - When answering the property condition disclosure statement (PCDS), the Karpinskis answered "No" to the following structural questions: "B. Are you aware of any structural defects with the dwellings/improvements? E. Are you aware of any moisture and/or water problems in the basement or crawl space? F. Are you aware of any damage due to wind, fire, water, insects or rodents? G. Are you aware of any roof leakage or unrepaired damage?" - The Saskatchewan Court of Queen's Bench held that the defendants Karpinskis were liable for fraudulent misrepresentation - The five requirements for misrepresentation had been established by the plaintiff - First, there was a duty of care on the part of the Karpinskis to correctly, truthfully and completely report the condition of the property in the PCDS - Second and third, the representations made in questions B, F and G were inaccurate and misleading - Fourth, the plaintiff relied on the statements in the PCDS, and finally, damages resulted - The false representations were knowingly made by the Karpinskis and their silence as to material facts were fraudulent - See paragraph 139.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - [See first Brokers - Topic 3144 and second Brokers - Topic 3150 ].

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - She alleged that the defendants failed to inform her that the house had been moved over 300 kms from its original building site - The plaintiff also alleged that there were issues with leakage and moisture damage - When answering the property condition disclosure statement (PCDS), the Karpinskis answered "No" to the following structural questions: "B. Are you aware of any structural defects with the dwellings/improvements? E. Are you aware of any moisture and/or water problems in the basement or crawl space? F. Are you aware of any damage due to wind, fire, water, insects or rodents? G. Are you aware of any roof leakage or unrepaired damage?" - The Saskatchewan Court of Queen's Bench held that the defendants Karpinskis were liable for negligent misrepresentation - The five requirements for negligent misrepresentation had been established by the plaintiff - First, there was a duty of care on the part of the Karpinskis to correctly, truthfully and completely report the condition of the property in the PCDS - Second and third, the representations made in questions B, F and G were inaccurate and misleading, and the Karpinskis were, at minimum, negligent in making those representations - Fourth, the plaintiff relied on the statements in the PCDS, and finally, damages resulted - The failure to disclose, or silence as to a known defect, amounted to an act of concealment of a material fact and had the same effect as an express misrepresentation and was sufficient to attract liability - See paragraphs 137 and 138.

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to - Improper, irresponsible or unconscionable conduct - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - The court found that while the defendants Karpinskis were liable for breach of contract, each of the defendants was a tortfeasor, each having breached an obligation or duty owed to the plaintiff, whether through negligence or misrepresentation - The plaintiff sought solicitor and client costs to punish the defendants for "convoluted, confusing, inconsistent and dishonest evidence" prior to and during trial - The Saskatchewan Court of Queen's Bench rejected the claim - There was no breach of a fiduciary relationship and no misappropriation of funds - The evidence of Mui, as well as the Karpinskis was at times confusing and inconsistent - It was also at times misleading and reconstructed - To a lesser extent, Jacobucci's evidence was evasive and inconsistent - While this conduct, during the trial, was deserving of censure, the court was not persuaded that an award of solicitor-client costs was warranted - See paragraphs 170 to 175.

Sale of Land - Topic 807

The contract - General - Property condition disclosure statement - The Saskatchewan Court of Queen's Bench stated that "a [property condition disclosure statement (PCDS)] is not intended to act as a warranty. As pointed out in the document itself, its purpose is, in part, to put a potential purchaser on notice with respect to defects known to the vendor. This allows the purchaser to make an informed decision. A PCDS is similarly not a guarantee that there are no defects in the house other than those addressed in the statement. However, once a vendor responds incorrectly to questions posed and signs a PCDS the 'doctrine of caveat emptor falls away as a defence mechanism and the vendor must speak truthfully and completely ... ' about those matters." - See paragraph 129.

Sale of Land - Topic 807

The contract - General - Property condition disclosure statement - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - She alleged that the defendants failed to inform her that the house had been moved over 300 kms from its original building site - The plaintiff also alleged that there were issues with leakage and moisture damage - When answering the property condition disclosure statement (PCDS), the Karpinskis answered "No" to the following structural questions: "B. Are you aware of any structural defects with the dwellings/improvements? E. Are you aware of any moisture and/or water problems in the basement or crawl space? F. Are you aware of any damage due to wind, fire, water, insects or rodents? G. Are you aware of any roof leakage or unrepaired damage?" - The Saskatchewan Court of Queen's Bench held that the defendants Karpinskis were liable for breach of contract - The Karpinskis did not speak "truthfully and completely" when answering the questions in the PCDS - The court accepted that neither might have appreciated the effects of the improper venting into the crawl space and attic, the inadequate exterior venting or the non-continuous vapour barrier - If neither had recently been in the attic, they might not have been aware of the water and moisture damage that was accumulating in that area - However, given their lack of veracity on key issues, the court did not accept that they were unaware of other water and moisture damage - The Karpinskis also denied knowing of any structural defects with either the dwelling or the improvements - Both, however, knew that their house had been cut into two pieces and had been transported some 300 kms and had sustained damage - The act of moving the house should have been disclosed on the PCDS - See paragraphs 124 to 132.

Sale of Land - Topic 807

The contract - General - Property condition disclosure statement - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - She alleged that the defendants failed to inform her that the house had been moved over 300 kms from its original building site - The plaintiff also alleged that there were issues with leakage and moisture damage - When answering the property condition disclosure statement (PCDS), the Karpinskis answered "No" to the following structural questions: "B. Are you aware of any structural defects with the dwellings/improvements? E. Are you aware of any moisture and/or water problems in the basement or crawl space? F. Are you aware of any damage due to wind, fire, water, insects or rodents? G. Are you aware of any roof leakage or unrepaired damage?" - The Karpinskis asserted that only current defects or ongoing problems needed to be disclosed - If repairs had been completed, then disclosure was not necessary - The Saskatchewan Court of Queen's Bench rejected the assertion - A prospective purchaser did not look to the PCDS only to ascertain that the roof was not leaking on the day that it was signed - Accordingly, the Karpinskis were liable to the plaintiff for breach of contract for failing to disclose in questions B, F and G of the PCDS the existence of structural defects, damage due to water, and roof leakage - The terms of the PCDS formed part of the agreement between the Karpinskis and the plaintiff, 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 did not apply - See paragraphs 133 to 136.

Sale of Land - Topic 8108

Defences of vendor - Caveat emptor - Exceptions - [See first and third Sale of Land - Topic 807 ].

Sale of Land - Topic 8752

Remedies of purchaser - Damages - General damages - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - The court found that while the defendants Karpinskis were liable for breach of contract, each of the defendants was a tortfeasor, each having breached an obligation or duty owed to the plaintiff, whether through negligence or misrepresentation - The Saskatchewan Court of Queen's Bench awarded damages of $17,613.46 for the costs incurred by the plaintiff for repairs, $6,713.46 for repairs yet to be done and $15,000 as compensation for the personal time and effort that she expended in repairing the house - See paragraphs 150 to 159.

Sale of Land - Topic 8752

Remedies of purchaser - Damages - General damages - The plaintiff hired a real estate broker (the defendants Mui and her employer 100% Realty Associates Ltd.) to help her purchase a home - The plaintiff purchased the defendants Karpinskis' home - They were represented by the defendants Jacobucci and Trevi Holdings Ltd. - The plaintiff sued the defendants for damages suffered as a result of latent defects in the house - The court found that while the defendants Karpinskis were liable for breach of contract, each of the defendants was a tortfeasor, each having breached an obligation or duty owed to the plaintiff, whether through negligence or misrepresentation - The plaintiff sought damages for emotional distress - The Saskatchewan Court of Queen's Bench rejected the claim - The situation in which the plaintiff found herself arising from the breaches, or acts and omissions of the various defendants, extracted an emotional toll - However, there was no evidence that the distress that she experienced constituted a physical injury, or a recognized psychiatric illness - Accordingly, she could not be compensated under this head of damages, whether under tort or breach of contract - See paragraphs 160 to 163.

Sale of Land - Topic 8758

Remedies of purchaser - Damages - Negligent misrepresentation - [See both Sale of Land - Topic 8752 ].

Sale of Land - Topic 8772

Remedies of purchaser - Damages - Latent defects (incl. contaminated soil remediation costs) - [See first Sale of Land - Topic 8752 ].

Cases Noticed:

R. v. Gagnon (L.), [2006] 1 S.C.R. 621; 347 N.R. 355; 2006 SCC 17, refd to. [para. 103].

R. v. R.E.M., [2008] 3 S.C.R. 3; 380 N.R. 47; 260 B.C.A.C. 40; 439 W.A.C. 40; 2008 SCC 51, refd to. [para. 103].

R. v. D.R., H.R. and D.W. [1996] 2 S.C.R. 291; 197 N.R. 321; 144 Sask.R. 81; 124 W.A.C. 81, refd to. [para. 103].

R. v. J.H., [2005] O.A.C. Uned. 3; 192 C.C.C.(3d) 480 (C.A.), refd to. [para. 103].

Novak Estate, Re (2008), 269 N.S.R.(2d) 84; 860 A.P.R. 84; 2008 NSSC 283, refd to. [para. 104].

Murray v. Saskatoon (City), [1952] 2 D.L.R. 499 (Sask. C.A.), refd to. [para. 108].

Blatch v. Archer (1774), 1 Cowp. 63; 98 E.R. 969, refd to. [para. 108].

Kaufmann v. Gibson et al., [2007] O.T.C. Uned. E35 (Sup. Ct.), refd to. [para. 129].

Alevizos et al. v. Nirula (2003), 180 Man.R.(2d) 186; 310 W.A.C. 186; 2003 MBCA 148, refd to. [para. 129].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, refd to. [para. 138].

Thomas v. Blackwell, [1999] Sask.R. Uned. 269; 1999 SKQB 168, refd to. [para. 138].

Drake et al. v. Newfoundland (1999), 180 Nfld. & P.E.I.R. 335; 548 A.P.R. 335 (Nfld. T.D.), refd to. [para. 157].

Satara Farms Inc. et al. v. Parrish & Heimbecker Ltd. (2006), 280 Sask.R. 44; 2006 SKQB 229, refd to. [para. 161].

Turczinski v. Dupont Heating & Air Conditioning Ltd. et al. (2004), 191 O.A.C. 350; 246 D.L.R.(4th) 95 (C.A.), refd to. [para. 161].

Lynch v. Hashemian - see Hashemian v. Wilde et al.

Hashemian v. Wilde et al. (2006), 289 Sask.R. 105; 382 W.A.C. 105; 2006 SKCA 126, refd to. [para. 167].

Siemens et al. v. Bawolin et al. (2002), 219 Sask.R. 282; 272 W.A.C. 282; 2002 SKCA 84, refd to. [para. 170].

Authors and Works Noticed:

Klar, Lewis N., Remedies in Tort (1987) (Looseleaf Update), vol. 2, c. 16, para. 218 [para. 162].

Counsel:

G.D. Dufour, for the plaintiff;

R. Borden, for the defendants, Edward Karpinski, Verl Karpinski, Mario Jacobucci and Trevi Holdings Ltd.;

G. Thompson and K. Smith, for the defendants, Cecilia Mui and 100% Realty Associates Ltd.

This action was heard by M.-E. Wright, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on October 6, 2009.