Editors’ note: Corrigendum released December 3, 2009. Original judgment has been corrected, with text of corrigendum appended. QUEEN’S BENCH FOR SASKATCHEWAN Date: 2009 10 06 Citation: 2009 SKQB 394 Docket: Q.B. No. 365 of 2000 Judicial Centre: Saskatoon BETWEEN: SYLVIA SNIDER (now Sylvia Schira) and 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 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. JUDGMENT M-E. WRIGHT J. October 6, 2009 1) In 1998 the plaintiff, Sylvia Snider, now Sylvia Schira, decided to purchase home. To assist her she engaged the services of the defendant, Cecilia Mui, realtor associated with the defendant, 100% Realty Associates Ltd., operating as RE/MAX Saskatoon. After lengthy search house was purchased the following year. It was owned by the defendants, Edward and Verl Karpinski. Their realtor was the defendant, Mario Jacobucci, the owner of the last defendant, Trevi Holdings Ltd. 2) The house did not meet Ms. Schira’s expectations. She now sues the defendants seeking recovery of damages for alleged latent defects in the house. She says that Ms. Mui and RE/MAX Saskatoon fell below the standard of care required of a realtor representing the purchaser of a residential property. She also says that Ms. Mui was negligent in misrepresenting certain facts and breached the fiduciary duty expected of her. Mr. and Mrs. Karpinski, according to Ms. Schira, similarly misrepresented facts to her, negligently and fraudulently, both in information given to her which induced her, in part, to purchase the home, and in answers that they gave in a Property Condition Disclosure Statement (PCDS) which formed a condition of the contract for sale. They failed to tell her the home been moved over 300 kilometres from its original building site. In so doing, it is alleged by Ms. Schira that they breached the terms of the contract between them. 3) Ms. Schira also says that Mr. Jacobucci and his company are liable to her in damages, both in negligence and as parties to the misrepresentations made by Mr. and Mrs. Karpinski. Prior to trial, Mr. Jacobucci and Trevi Holdings Ltd. entered into confidential agreement with Ms. Schira. Although they remained parties to the action, they did not participate, except to the extent that Mr. Jacobucci was called as witness on behalf of Mr. and Mrs. Karpinski. 4) Special and general damages, including damages based upon mental and emotional distress, are claimed against all defendants. Ms. Schira also claims aggravated damages against all defendants and punitive damages against Mr. and Mrs. Karpinski and against Mr. Jacobucci and Trevi Holdings Ltd., asserting that their acts and omissions exacerbated her distress. 5) All allegations are denied by the defendants. In the event that any defects existed in the house, the defendants say that they were patent, and that the law of caveat emptor applies. They take issue as well with the quantum of damages claimed by Ms. Schira saying that many of the items claimed by her are not related to any alleged damage. 6) The trial took place over 22 days, spanning several years and included testimony from 14 witnesses, several of whom were qualified as experts, many hours of video tapes, and numerous exhibits. I. The Evidence 7) Because of my findings on credibility, it is necessary to set out the testimony of each of the parties and certain of their witnesses in some considerable detail. 1. The Plaintiff’s Case (a) Sylvia Schira 8) When Ms. Schira embarked upon her search for new house she had been divorced for several years and was living in rental accommodation owned by her sister. Her means were limited. She was not employed and while she had savings of some $400,000 from property settlement with her former husband, Victor Snider, her spousal support was set to terminate within two years. She was single and knew that she needed “good” home one that would not require extensive renovations or repairs one that she could simply move into without concern. 9) Ms. Schira connected with Ms. Mui through their church. She explained her needs, which at the time were relatively simple. She wanted home in “move-in” condition in good location, with nice kitchen, lots of windows and two or three bedrooms. Ms. Schira wanted to spend between $100,000 and $125,000 an expectation that Ms. Mui knew was unrealistic. She told this to Ms. Schira who then decided that she could go as high as $150,000. 10) Ms. Mui and Ms. Schira spent considerable time together. They viewed perhaps as many as thirty homes within the city, an experience that was undoubtedly frustrating for Ms. Mui. Ms. Schira was very particular. Only one offer was made and was not accepted. The search for suitable home then expanded to acreages in the neighbouring environs. 11) Ms. Schira first became aware of the country home being offered for sale by Mr. and Mrs. Karpinski in the fall of 1998. Ms. Mui provided her with the information on the property after an initial inquiry made by Ms. Schira. The brochure advertising the home touted it to be of quality construction and energy efficient. It was located in an idyllic rural setting. Ms. Schira was captivated, but knew that it was beyond her price range. It was listed for sale at $299,000. The brochure did not indicate that the home had been moved. 12) The house, located in the Rural Municipality of Corman Park, was the “dream home” of Mr. and Mrs. Karpinski. They had personally selected the plans for construction of the house and had overseen its erection in 1987 in the Rural Municipality of Gary. They tastefully decorated it and made it into lovely and attractive home. It was moved to its present location in 1995. Unfortunately, due to financial setbacks, Mr. and Mrs. Karpinski needed to sell the property, something which turned out to be more difficult than anticipated. It was first listed for sale in 1998, first with realtor not party to this action, and then later the same year with Mr. Jacobucci. When it did not sell after several months, it was taken off the market until 1999 when Mr. Jacobucci relisted it. 13) Ms. Schira decided she wanted to view the property, even though she knew it was not within her means. She simply wanted to see what property of this value would look like. Along with one of her daughters and Ms. Mui, Ms. Schira first saw the property in November, 1998. It was only cursory viewing during which time, at the request of Ms. Schira, Mr. Snider, her former husband, joined them for approximately 20 minutes. In the short time she was there, Ms. Schira fell in love with the house. It appeared perfect the decor was wonderful there was room for her daughters and Mr. Snider to board their horses, an unfinished loft where one of her adult children could possibly live, and an outdoor building where she could have music studio. On this first viewing of the property, she and Ms. Mui had only quick look at the other details of the home. Mr. Snider, who is journeyman plumber, had peek into the attic and crawl space. While captivated, Ms. Schira still understood that she could not realistically afford to buy the acreage, an opinion that her former husband concurred with. 14) According to Ms. Schira, the next time she viewed the property was approximately seven months later on June 19, 1999. She still had not found home to her liking and asked Ms. Mui to take her back to the Karpinski acreage when she learned it had come back on the market. They spent about an hour there on that occasion and were met once again by Mr. Snider. He stuck his head into the crawl space and the attic, which he said appeared to be dry. Ms. Mui commented on the large rooms, vaulted ceilings and the decor. She pointed out crack in the foundation. Otherwise, Ms. Schira noticed no defects of any concern to her. Neither Mr. nor Mrs. Karpinski were present. 15) After this viewing, Ms. Schira accompanied Ms. Mui to her office. In the car, Ms. Mui asked if Ms. Schira wanted to have home inspection done. Ms. Schira was uncertain, as she still did not know whether she intended to make an offer on the property. This was the first time that Ms. Schira heard mention of home inspection. There was no explanation offered about what home inspection would entail, other than it would be at Ms. Schira’s expense. When they reached Ms. Mui’s office, Ms. Mui told her that there was an offer on the property, but that it was subject to financing. Before making her own offer, Ms. Schira said she wanted to learn several more things, including whether or not certain chattels remained, and how close the abutting highway would come to the house if it was widened in the future. 16) In response to these inquiries, Ms. Mui phoned the Karpinski residence. Mr. Karpinski invited them to return to the property and have closer look at the proximity of the road. They did so in the late afternoon. Mr. Snider joined them. Upon their arrival, Mr. Karpinski was waiting near the entrance to the acreage with measuring tape and an offer to assist with any required measurements. He and Mr. Snider did some measuring and had conversation about the fence. Ms. Schira overheard discussion between them about the roof. She heard Mr. Karpinski tell Mr. Snider that nothing needed to be done to the roof, and that it would be good for 50 years. Ms. Schira remained at the property for between 30 and 60 minutes. She did not go into the house. Ms. Mui then drove her home. 17) That evening, after speaking to Mr. Snider and considering her options, Ms. Schira decided she would proceed to purchase the acreage. Ms. Mui came to her house and the first of two offers was completed. Ms. Schira offered to purchase the property for $265,000 with possession date of August 6, 1999. The only conditions to attach to the offer were that it was subject to the approval of satisfactory PCDS by June 21, 1999 and that any existing mineral rights be included. Ms. Mui explained to Ms. Schira that PCDS would reveal to them any conditions of the property that were not readily apparent. There was no discussion of home inspection. The offer was open until midnight that day. 18) The offer was rejected by Mr. and Mrs. Karpinski. Ms. Mui however returned with counter-offer from them at $285,000, open until noon the next day. All other terms remained the same. After thinking about it for several hours, Ms. Schira phoned Ms. Mui to tell her that it was acceptable, provided that the riding lawn mower was included. Late that night, Ms. Schira signed second offer. She was prepared to pay $275,000 for the property, and separately offered to buy the mower for an additional $10,000. The only change from the original conditions was that the PCDS would be subject to approval by June 22, 1999, and this time Ms. Mui remembered to add that the PCDS would be incorporated into the agreement. Again, there was no discussion about home inspection. The offers were open until June 20, 1999 at noon, and were accepted by Mr. and Mrs. Karpinski the next morning. 19) On June 22, 1999, Ms. Mui dropped off the PCDS in Ms. Schira’s mailbox. When Ms. Schira found it, she asked Mr. Snider to review it with her, which they did that evening. She was satisfied with the statement, but at Mr. Snider’s suggestion, phoned Ms. Mui to request copy of the building permit. This was to ensure, according to Ms. Schira, that the house was built “to code” and that all necessary permits were in place. Ms. Mui called back late that night to tell Ms. Schira that Mr. and Mrs. Karpinski would check into the permit the next day. The Notice to Remove Conditions was not signed pending that information. 20) The following day, June 23, 1999, Ms. Mui phoned Ms. Schira and told her that she had just learned that the house had been moved to its present site, and that because of this, she was uncertain that she could obtain permit. Ms. Schira was shocked, and after again talking to Mr. Snider, insisted that building permit be obtained. She was reassured later that day when Ms. Mui called again to say that the R.M. of Corman Park had issued permit and that all was “O.K.”. She had obtained this information over the phone from someone employed by the rural municipality. It was not yet in writing since the municipality was experiencing power outage, but Ms. Mui was expecting fax as soon as the problem was rectified. She would then have the permit. In neither of these two conversations was there any discussion about when the house had been moved, where it had been moved from, whether the rural municipality would have inspected the house, nor was there any discussion about the advisability of home inspection. 21) On the afternoon of that day, Ms. Schira, with some hesitation, executed the Notice to Remove Conditions. She remained concerned that she still did not yet have enough information and told this to Ms. Mui. Ms. Mui advised her she could rely on the PCDS, that she had the permit number, that they were already late in removing the conditions, that they needed to “sign off”, and if they did not remove the conditions they would have to “start all over again.” According to Ms. Mui, there was nothing to worry about. Ms. Mui did not go through the property disclosure statement with Ms. Schira in any detail. She said that it “looked good”. Ms. Schira wanted to know if she could rely on the PCDS. Ms. Mui told her that she could. There was no discussion about home inspection. There was also no discussion about extending the deadline to remove the conditions so that further investigations into the condition of the house could be carried out. 22) On June 24, 1999, the day after the conditions were removed, Ms. Schira received from Ms. Mui copy of letter of the same date provided by the Rural Municipality of Corman Park confirming the amount of the taxes for the previous year, and that the property was assessed based upon single family dwelling, attached garage and shed being on the site. The letter also indicated that “[p]ermit #63/95 was issued July 13, 1995 for residence to be moved on to the above mentioned.” Ms. Mui’s accompanying note confirmed the foregoing and included the statement that the “[b]uilding is legal, has permit #63-95 issued in 1995.” Ms. Mui did not enclose copy of the permit. Ms. Mui never provided Ms. Schira with copy of the permit. 23) Ms. Schira was at the acreage one more time before she took possession, she says at the invitation of Mr. Karpinski. He had indicated that he was interested in selling quadrunner. It was also an opportunity to learn from him how to operate the mower and maintain the septic tank. She and Mr. Snider went out on July evening at about 7:30 p.m. While Mr. Snider was outside with Mr. Karpinski, Ms. Schira went into the house with Mrs. Karpinski, but not beyond the kitchen area. 24) On July 28, 1999, Ms. Schira moved into her new home. Apart from piece of eavestroughing lying on the back deck, and the general state of cleanliness, Ms. Schira noticed nothing out of the ordinary. That night, however, she was awakened by the sound of cracking noises which seemed to her be coming from the attic of the house. They were irregular and of varying intensity. Within the first few weeks of her residency, Ms. Schira discovered other problems. There was bulge in the lower part of the wall in her bedroom. In early August, 1999 large crack developed in the living room, the first of several. Window panes were cracked or missing. space between the house and the foundation allowed crickets to enter. And, after the first big rain, the skylight between the kitchen and the back door leaked badly. Ms. Schira found shakes that had blown off her roof. 25) Ms. Schira contacted Ms. Mui to tell her there was moisture pocket in the master bedroom, that the skylight was leaking and that there were insects in the house. Ms. Mui first came to the house with her husband, and then later with Mr. Jacobucci. According to Ms. Schira, Mr. Jacobucci told her that she had valid complaints and that he would be in touch with Mr. Karpinski. It would have to wait, however, because Mr. Karpinski was busy with harvest. 26) About month later, Mr. Karpinski did come to the acreage. He caulked under the door in the back entrance. He went up onto the roof to caulk around the skylight. He offered to replace broken handles on bedroom windows. 27) Also in the fall of 1999, Ms. Schira began to engage contractors to either carry out work at the house, or to assess the cause and extent of the problems that she was encountering. Although she did not plan to redecorate or replace wallpaper, she hired painter in September to paint certain beams, the sun room and spare bedroom. It was the painter, Diane Pawalenko, who raised the alarm with Ms. Schira about other cracks, moisture pockets, sink holes, nail and screw pops, and blistering. She pointed out to Ms. Schira an area in the hallway leading to the garage where screw pops had been camouflaged with new paint. Some holes had been filled. It was Ms. Pawalenko’s suggestion that Ms. Schira contact roofer to determine if problems existed with the roof. 28) Over the next several months, Ms. Schira had the roof inspected by several roofers. She accompanied one of them onto the roof to cover the still leaking skylight with plastic. It was then that she discovered staples surrounding the skylight, up the sides, and across the top. The roofers who looked at the roof advised Ms. Schira that the shingles were rotten and to delay any work in the interior of the house until the roof was fixed. Ms. Schira also hired an architect in 2000 to provide an opinion about the problems with her house. It was this architect, Darryl Epp, who first provided Ms. Schira with copy of the building permit that had been requested of Ms. Mui. It was only then that Ms. Schira realized that the building permit issued by the Rural Municipality of Corman Park was one only granting Mr. and Mrs. Karpinski permission to move their residence onto the site. At the same time Ms. Schira learned from Mr. Epp that prior to 2000, the rural municipality did not do any inspections of moved or newly constructed residences. This was clear from reading of the building permit. 29) As cracks continued to appear in areas not covered by wallpaper, Ms. Schira’s concerns about the state of her home intensified. She became more aggressive in her own investigation of the interior of the house. She started to run her hands over the papered walls and discovered cracks underneath. In certain areas where she removed the wallpaper, the gyprock was discolored or crumbling. Some areas had been patched with polyfill and in rooms including the kitchen, living room and master bedroom, the wallpaper had been patched where cracks existed. The patches were cut to match the pattern of the wallpaper. Above the doorway leading from the hallway to the sun room, Ms. Schira found steel reinforcement under the wallpaper. It had been installed over the original wallpaper. 30) Ms. Schira recounted in great detail the extent of the damage to her home that became apparent to her only after she took possession of the property in July, 1999. She began to document her observations in videos and DVD’s, but not until early 2002. The problems were numerous and included cracking, nail pops and sink holes in virtually every room of the house. The kitchen and bathroom were improperly vented into the attic, and the dryer into the crawl space. The vapour barrier in the crawl space was not continuous and was improperly installed. “Roughed in” plumbing did not exist in the unfinished bathroom and the pine shakes on the roof were rotten. The skylight continued to leak and water leaked through the roof into the attic. Water entered through dormer window with rotting casing. 31) Over several years, Ms. Schira started to repair her home. Some work was contracted out, but she and friends performed, according to Ms. Schira, thousands of hours of unpaid labour, including stripping wallpaper, repairing cracks, sanding and painting. The skylight was removed and reinstalled, the pine shakes were replaced with asphalt shingles, and make-shift ridge caps were installed. The attic was equipped with proper gable and soffit venting, mold removed, and insulation replaced. Segments of eavestroughing were completed. The foundation was repaired and the outside deck reinforced. According to Ms. Schira, work still remained to be done at the time of trial. 32) Ms. Schira moved away from the house in 2004 to continue her education, but remains the owner. She testified that the house had “stolen” years of her life. She had thought she was buying good, quality home. Instead, she said that she spent six years living “continuous and disastrous nightmare” not even being able to completely unpack because of the work being undertaken in the house. For several years her own labour and dealing with trades people consumed most of her waking hours. Her relationship with her daughters, one of whom she hoped would be living with her, became strained. Ms. Schira says she suffered emotionally far beyond the mere time and financial expenditures that were required of her. 33) According to Ms. Schira, had she known about all the problems she would encounter, she would not have bought the acreage. She would have “run the other way”. While it was her decision to buy the house, she relied on Ms. Mui to help her obtain the quality home she had been seeking. She accepted Ms. Mui’s assurances that there was building permit issued by the rural municipality and from that assumed that the house would have been inspected after it had been moved. She relied on the terms of the PCDS and on Ms. Mui’s assurances that she could do so. (b) Victor Snider 34) Mr. Snider testified on behalf of Ms. Schira. Although divorced for many years, they remain friends. This was Mr. Snider’s motivation in helping Ms. Schira find suitable home. That along with the fact that they have three children together. Mr. Snider has been in the plumbing and heating business for more than 35 years, but apart from that has no particular expertise or knowledge about construction. Mr. Snider’s recollection of the events leading up to Ms. Schira’s decision to purchase the property was largely confirmatory of the evidence given by Ms. Schira. 35) The first time that Mr. Snider viewed the Karpinski property was in the fall of 1998. He was there for only 20 or 30 minutes at the request of Ms. Schira. One of his daughters and Ms. Mui were also present. As far as he was concerned, the property was too expensive for Ms. Schira to afford, and he told her so. 36) The following spring, Ms. Schira contacted Mr. Snider again. She was still interested in the house and as it was heated by wood, she wanted to ensure that there was also gas line onto the property. She asked Mr. Snider to find this out, so at her request he went to the acreage and spoke to Mrs. Karpinski. He was there for approximately 10 minutes and was invited into the home. According to Mr. Snider, he looked at nothing in particular, since he was not the one buying the property. 37) The third occasion that Mr. Snider visited the acreage was on June 19, 1999. Again, he attended at the request of Ms. Schira. Ms. Mui was also present. He had small flash light with him and had “glance” into the attic to see if it was dry, and did the same with the crawl space. Then he, Ms. Schira and Ms. Mui toured the surrounding land in his truck, looking at, among other things, the fencing. Later that same day, Mr. Snider returned once more to the acreage to meet Ms. Schira and Ms. Mui. This time it was to check the fence line. Mr. Karpinski was waiting for them near the property line with tape measure to take any requested measurements. According to Mr. Snider, he and Mr. Karpinski discussed the roof. Mr. Snider wanted to know if the shingles would require treatment. He was told by Mr. Karpinski that would not be necessary the shingles were good and would last for 50 years. 38) Mr. Snider also confirmed that he stopped by Ms. Schira’s home to review the PCDS with her on June 22, 1999. Although his memory was somewhat vague on all the details of that meeting, he did recall suggesting that she needed to know that the chimney was approved for wood fireplace. He also suggested that Ms. Schira get copy of the building permit because the property was rural acreage. He wanted to ensure that the septic tank and water source were the proper distances apart. He, as well as Ms. Schira, spoke to Ms. Mui about the permit that night. He asked Ms. Mui to have the rural municipality fax copy of the building permit the next morning. At this point Mr. Snider did not know that the house had been moved, nor was he aware that the rural municipality did not at that time do inspections of permitted work. He thought the building permit would tell Ms. Schira that the construction was done to Code, that all necessary permits had been taken out and that inspections had been completed. 39) The next time that Mr. Snider went to the Karpinski property was during the month of July. He went to clear fence line and to start erecting new fence. Mr. Snider also confirmed that Mr. Karpinski later telephoned to indicate he was interested in selling quadrunner and offered to show Mr. Snider how to run the mower and operate the mechanical systems. Mr. Snider went to the acreage that night, along with Ms. Schira. Mr. Snider was clear that he did not conduct any “inspection” of the property with Mr. Karpinski that evening. In particular, he did not go into either the attic or crawl space. The only time that he peered into those spaces was prior to any offer to purchase being made and when Mr. Karpinski was not present. While with Mr. Karpiniski in July, Mr. Snider did notice ridge caps in the garage which Mr. Karpinski said he would be putting up. He also saw piece of eavetrough that needed to be reinstalled. 40) Apart from his telephone conversation with Ms. Mui on June 22, 1999 about the building permit, Mr. Snider did not recall generally having any discussions with Ms. Mui about the house. He specifically did not recall hearing any mention by her of the prospect, or advisability, of having home inspection completed. Mr. Snider was not aware in 1999 that home inspection services were available. 41) After Ms. Schira took possession of the property, Mr. Snider discovered that the roughed in plumbing for the additional bathroom and wet bar was not connected to any water lines or to the septic tank. He also discovered that the bathroom was vented into the attic which led him to go into the attic for the first time. There he found moisture damage and mold. 42) Mr. Loraas inspected the roof and attic of the house in the fall of 1999 at the request of Ms. Schira. He was asked to determine the cause of the leaking and prepare report. At the time of trial, Mr. Loraas had been roofer for 45 years. 43) Mr. Loraas looked at the entire roof and found it to be in similar condition throughout. In any area where he lifted shingle, he found no tar paper. He found rotted shakes, some of which could be moved with mere finger pressure, and many of which were cracked to such an extent that they would permit water to permeate the underlying joints and decking. He also found misplaced shakes due to incorrect installation. He discovered sealant that had been applied down the center of valleys in areas where the shakes were rotted. In one spot, Mr. Loraas found two different sealants that had been applied at different times. Some of the sealant was already flaking, indicating to Mr. Loraas that it had been applied at least several years earlier. According to Mr. Loraas, sealant is applied to remedy leaks. On the eastern side of the house, Mr. Loraas found total lack of ridge capping to protect the underlying area from seepage. With no tar paper, there was nothing to prevent water from seeping into the attic. 44) In the attic, Mr. Loraas found mold in the area where the slope of the roof met the rafter. The bathroom and kitchen exhaust fans were vented into the attic. He observed areas where frost and condensation had accumulated over the mold. 45) Mr. Loraas’ evidence and observations, recorded by photographs taken by him, were largely unchallenged in cross-examination by any of the defendants. (d) Darryl Epp 46) Darryl Epp is the architect retained by Ms. Schira in 2000 to provide an opinion regarding both the cause of her problems and the best way to remedy them. Mr. Epp is registered architect. He was qualified as an expert to give opinion evidence in house construction, and particularly the proper installation of shake shingles, the effect on residence of being moved from one location to another, the cause and effect of moisture in residential homes and, with some limitations, the cause and effect of mold in residential buildings. He was also qualified as an expert on compliance with the provisions of the National Building Code. 47) At the request of Ms. Schira, Mr. Epp attended at her home in November, 2000. He was asked to investigate the extent and source of the problems that she was experiencing with the house, and to try to ascertain the length of time that the problems had existed. He did visual inspection of the interior and exterior of the property, including the attic and crawl space. He did not go onto the roof, relying instead on the report and photographs taken by Mr. Loraas, and earlier reports provided by other roofers. 48) Regarding the roof, it was Mr. Epp’s opinion, and conclusion, that the pine shakes needed to be replaced. There was significant rot caused, according to Mr. Epp, by improper installation. This improper installation was readily apparent to Mr. Epp from reviewing the photographs taken by Mr. Loraas. There were large gaps between some shingles, and the offset of the shingles was weak, insufficient to prevent water from leaking down the cracks and entering the substrata of the roof. Other photographs confirmed to Mr. Epp the absence of valley flashing in certain areas. This deficiency alone could lead to rotting of shingles from water damage and resulting susceptibility to fungus. 49) Of significance to Mr. Epp was the lack of ridge cap on the eastern side of the house. Even had there been an underlay of tar paper, the absence of the ridge cap would still allow the paper to become saturated over time. Holes would develop, allowing water into the house. 50) Mr. Epp could also observe the application of sealant, or caulking, in certain locations photographed by Mr. Loraas. In one spot, there were two types of sealant that Mr. Epp could see, one being tar, and the other being something else. In his opinion, this indicated attempts to repair leakage and water damage at two different times, and an obvious attempt to correct problems with the roof. It was an endeavour to put flashing on the top of the shingles, rather than on the bottom, where it should have properly been installed. Further, it was Mr. Epp’s opinion that these remedial actions were useless and would not resolve the fundamental problems with the roof. 51) It came as no surprise to Mr. Epp that the roof leaked and allowed water into the house. Had the pine shakes been properly installed, he expected that they would have lasted 20 to 30 years. In this case, however, improperly installed, they had rotted, had caused interior damage, and needed to be replaced. The fact that the sheeting under the shingles appeared to be in relatively good condition did not detract from Mr. Epp’s conclusion that the roof was leaking. With properly installed shingles or shakes, the slope of the roof was sufficient to prevent water from accumulating in sufficient amounts, or for sufficient lengths of time, which would otherwise allow fungus or mold to grow and cause rotting. In this case, however, the poor installation permitted the water to run through the seams into the house, and down the outside of the house. Significant caulking around the skylight was evidence to Mr. Epp that leaking had occurred in that area as well. 52) Apart from the roof, Mr. Epp identified problems with the interior of Ms. Schira’s home. The venting was not adequate and in several cases was inappropriate, resulting in interior moisture damage over and above that caused by the roof. The inadequacy of the external venting was compounded by the improper venting of the dryer, bathroom, and kitchen, whether into the attic or into the crawl space. The venting of the dryer into the crawl space over number of years would alone contribute to significant negative effects on the house, and particularly so in this case since the vapour barrier in the crawl space was not continuous and was not properly sealed. 53) In the attic, Mr. Epp found signs of mold. Again, this was most likely caused by improper venting into that area for many years. The extent and condition of the mold was such that Mr. Epp was able to conclude that the problem had originated prior to Ms. Schira occupying the home. The excessive moisture and humidity in the attic not only created the mold problem, but also caused damage to the interior of the house. In cold weather, and during the heating season, the moisture would turn to frost which would then accumulate during the winter months. When the frost melted, it would find its way into the house, causing deformation in the drywall and creating paint blisters. This blistering was observed by both Ms. Schira and her painter. Mr. Epp observed gyprock that was dry and brittle, condition also caused by water damage. 54) The fact that the house had been moved was also of concern to Mr. Epp. When house is lifted, its entire structural integrity is sent into disarray. Cracks, particularly those running from the tops of windows to the corners of room are common. If the house is properly installed and well cemented to its new foundation, the cracking will subside relatively quickly. If, however, the house is not well placed on the foundation, or is improperly secured, the cracking will continue. For this reason, it was Mr. Epp’s opinion that if Ms. Schira was continuing to experience cracking in the house, several years after the move, it was because the house was not properly installed on the foundation. Mr. Epp could observed cracks in the house, some of which had been concealed. 55) Nail pops are another common occurrence after house is moved, caused by the structure of the house shifting to greater extent than the drywall. When Mr. Epp viewed Ms. Schira’s property, certain repairs were already underway. Some of the wallpaper had been stripped from the walls. He could see many nail pops. Again, according to Mr. Epp, if the nail pops were continuing to happen after Ms. Schira took possession of the house, it was due to the house continuing to shift on its new foundation. 56) Mr. Epp’s main concerns about this house were the roof and the excessive ventilation that had occurred into the attic. He was of the opinion that the pine shakes had to be replaced, and that the mold in the attic had to be removed. The ventilation in the attic also had to be improved through additional soffit vents. The vapour barrier in the crawl space needed improvement. Mr. Epp was not of the opinion that this home was of “quality construction”. In his view, it did not even approach quality construction. During his inspection of the home, Mr. Epp observed many instances of non-compliance with the provisions of the National Building Code, whether the one in effect at the time the house was constructed, or at the time it was moved. Had the rural municipality undertaken inspections in 1999, the foundation would have been examined during construction and an inspection would have been done upon completion to determine that the residence was fit for occupancy. Code violations would have also been considered. (e) Robin Friesen 57) Mr. Robin Friesen is realtor and broker who was qualified, with the consent of the parties, to give expert evidence on the standard of care expected of realtors acting for purchasers and vendors in the late 1990’s and, in particular, in circumstances where the property is located in rural municipality. It was his opinion that realtor, acting for either purchaser or vendor, would in those circumstances have an obligation to: 1. do preliminary background checks with the rural municipality including obtaining tax information, legal descriptions, the site plan if house was situated on the property, and ascertain whether or not any special levies had been assessed; and 2. determine if proper permits had been obtained for any structures, including permits for renovations, and electrical and plumbing work. 58) The realtor acting for purchaser would also have an obligation to assist the purchaser, when viewing the home, in ascertaining whether there were any latent or patent defects. With respect to this latter obligation, Mr. Friesen indicated that realtor would be expected to exercise ordinary care in pointing out patent defects to purchaser those things that are obvious such as cracked driveway. They should also be observant for signs of moisture and, to that extent, examine the condition of the windows and walls. realtor would not be expected to move furniture to look for defects or deficiencies. 59) Other defects, latent in that they are not readily apparent, and may or not be known only to the vendor, require the assistance of home inspector. According to Mr. Friesen, home inspections had started to become important by 1995 and were much more common in 1999, and satisfactory inspection was regularly included as condition in an offer to purchase. By that time, prudent realtor, acting for purchaser, and with any concerns about foundation or moisture problems, would recommend an inspection. The inspection would provide the prospective purchaser with complete overview of the home including the exterior walls, the roof, the condition of the plumbing and electrical systems, as well as the foundation. In Mr. Friesen’s opinion, in 1999, purchaser’s realtor should have been telling his or her client about the benefits of home inspection. If there were any indications of moisture damage, the realtor should encourage further investigation, and if the realtor knew that house had been moved, that would be reason to forcibly recommend home inspection. Another reason to strongly recommend such an inspection would be in circumstances where the realtor knew that rural municipality did not require building inspections. 60) As to the duty to disclose, Mr. Friesen indicated that any information that realtor knows about property, that may influence the decision to purchase, must be disclosed. This duty extends to both the realtor for the purchaser and to the realtor for the vendor. The realtor is bound by the same disclosure obligation as the vendor if aware of latent defect. It is incumbent upon the purchaser’s agent to consult with the listing agent about any special characteristics of house, and it is incumbent upon the listing agent to reveal those characteristics. In this case, that would include the obligation to disclose that the house had been moved, whether the house had been constructed as “ready-to-move” or otherwise. Mr. Friesen said that it would be important to know because of different structural and building code considerations. 61) PCDS’s were required in 1999. Even problems that have been corrected should be disclosed. If there are no disclosed problems, then purchaser and his or her agent should be able to rely on the statement. Finally, Mr. Friesen indicated that it is not the responsibility of realtor to check compliance with building codes. If the property is inhabited, it is reasonable for the realtor to conclude that there is compliance with the relevant code. Realtors will not check into this aspect of property unless specifically asked. He has never been asked. 2. The Defendants’ Case (a) Verl Karpinski 62) Mrs. Karpinski’s evidence began during the first segment of the trial. According to her, there were no concerns with the house while she and her family were living in the Rural Municipality of Gary. Only after the move to the Rural Municipality of Corman Park did she notice frost build up on one of the windows in the master bedroom. The move, and the rain encountered en route, also caused drywall damage to the interior of the garage which was unprotected with no floor and no doors. Part of the ceiling collapsed. Inside the house several cracks appeared in the bedroom and above the doors in the kitchen and living room. drywaller, James Garinger, was hired to repair the damage and to also stipple the ceilings in the kitchen and sun room. After these repairs were completed, Mrs. Karpinski patched the affected areas with matching wallpaper. 63) Apart from the foregoing, Mrs. Karpinski could identify no problems with the home. There was no leaking, no moisture problems, and no other cracking. When the house was moved, it was severed to detach the garage and the skylight was removed. After it was placed on its foundation in the new location, the house was reattached to the garage, new shake shingles were installed along the line of attachment, the skylight was reinstalled and caulked, and the deck was rebuilt. Stairs that had been detached were repositioned in different location. This work was done by carpenter and, according to Mrs. Karpinski, there was no other repair work done to the house between then and the time it was sold to Ms. Schira. Mrs. Karpinski denied that either she or Mr. Karpinski concealed any defects in their home. 64) As to the sealant on the roof observed by Mr. Loraas, Mrs. Karpinski said the roof did not leak, she had never been on the roof, and to her knowledge, Mr. Karpinski had only been on the roof once to assist with the reinstallation of the skylight. The staples observed by Ms. Schira in the area of the skylight were left behind after the move when, according to Mrs. Karpinski, large waterproof tarps were attached to the house as protection during transport. There was no leaking from the roof, and Mrs. Karpinski initially said she knew nothing about ridge caps. This evidence, however, changed number of weeks later when the trial resumed after an adjournment. During cross-examination, Mrs. Karpinski was able to say that the ridge caps were simply decorative. Pointing to various photographs of the roof, she testified that metal cap had been installed over the dormers where the ridge caps were missing, and then covered with black jack. 65) The numerous patches in the wallpaper identified by Ms. Schira were, according to Mrs. Karpinski, fabrication. Mrs. Karpinski suggested that the chalk marks shown in Ms. Schira’s photographs of the kitchen were nothing more than scribbles there was no patching and there were no seams in those areas. Mrs. Karpinski testified that when she repapered the kitchen, she started at one end and worked her way around, using continuous pieces of wallpaper but for one area over the cupboards where it was necessary to patch with several pieces. 66) Mrs. Karpinski’s evidence regarding the occasions when Ms. Schira and Mr. Snider came to the home, without Ms. Mui, differed materially from that given by each of them. She says that Mr. Snider first came to the acreage while she was there in May, 1999. Mrs. Karpinski did not know who he was, but confirmed for him that the house was for sale and told him he was welcome to go through it. He did not stay long, and Mrs. Karpinski did not go into the house with him, but rather continued to mow the lawn. It was after that, according to Mrs. Karpinski, that Ms. Schira came to the property by herself, after first making arrangements with Mrs. Karpinski over the telephone. Mrs. Karpinski says that she left the house leaving the door unlocked for Ms. Schira. She says that Ms. Schira came to the acreage by herself on two occasions. Next, Mr. Snider returned to inquire about the gas line, but Mrs. Karpinski could not recall if he went into the house, or even if she was aware at that time of the connection to Ms. Schira. The third occasion that Mrs. Karpinski says that she met Mr. Snider was approximately four days before the offer to purchase was made on June 19, 1999. Again, according to Mrs. Karpinski, Ms. Schira telephoned directly to make the arrangements and this time she was accompanied by Mr. Snider to “inspect” the property. They were there for about five hours between 6:00 and 11:00 p.m., and during that time went through each room in the house, including the attic and the crawl space, along with Mr. and Mrs. Karpinski. The last time prior to possession that Ms. Schira and Mr. Snider came to the acreage without Ms. Mui, apart from when Mr. Snider came to do fencing, was when they looked at the quadrunner for sale and learned how to operate the mower. 67) According to Mrs. Karpinski, Mr. Jacobucci went through the PCDS with both her and Mr. Karpinski before it was signed. She testified that the answers to the questions were correct. There were no defects in the house. Although admitting that she had never been in the attic or crawl space, or on the roof, she was insistent that there were no problems in any of those areas. There was no damage in the home due to water or excess moisture, other than the frost in the master bedroom. The roof did not leak and the shingles were fine. Mrs. Karpinski said any crack filling in the house was merely cosmetic, which is why there was no reference made to it the PCDS. She cannot recall discussing with Mr. Jacobucci whether or not the fact that the house had been moved should be disclosed. 68) Mrs. Karpinski acknowledged receiving copy of the building permit from the rural municipality on June 24, 1999. She could not say who sent it to her. The document indicates that it was faxed to her at 1:30 p.m. She denied however having any discussions with either Ms. Mui or Mr. Jacobucci about the permit. She also denied having any knowledge that Ms. Schira was unlikely to complete the sale without the permit. (b) Edward Karpinski 69) Mr. Karpinski’s testimony regarding the condition of the house before it was moved from the Rural Municipality of Gary was the same as that of his wife. There were no problems no leaking and no evidence of excess moisture, and no structural problems. 70) Prior to the move to the Rural Municipality of Corman Park, the house was cut between two dormers, and through the skylight, to separate it from the garage. This also involved cutting through the eavestroughs. The hole created by removing the skylight was tarped and shingles were removed in the area where the house was severed. The move took three days, mostly over paved roads, but also some gravel, at least one field and several ditches. He and carpenter put the house back together once it arrived at its present site. There was no building permit taken out in the Rural Municipality of Gary, and there were no inspections done in the Rural Municipality of Corman Park. 71) During the move to the Rural Municipality of Corman Park, Mr. Karpinski acknowledged that there was damage to the house. The garage ceiling collapsed and other pieces of drywall came off. Unlike his wife, however, Mr. Karpinski said this had nothing to do with rain or water infiltration during transport. The ceiling and the drywall in the garage, as well as the cracks in the interior of the house, were repaired by Mr. Garinger. 72) Like Mrs. Karpinski, Mr. Karpinski said there were no other repairs required to the house after the damage occasioned by the move had been fixed. There were also no maintenance issues. When they sold the house in 1999, there were no visible cracks other than one in the master bedroom which Mr. Karpinski said could be observed because of wrinkles in the wallpaper. 73) The absence of ridge caps in two locations was, according to Mr. Karpinski, not of any concern since they were merely for “appearance” to give the roof finished look. He said when the house was constructed, metal cap was installed in these areas over the sheeting and black jack applied over the seams. Mr. Karpinski did acknowledge that the building plans for the house included ridge caps in all areas. 74) Notwithstanding his direct testimony that the house required no further maintenance or repairs other than those completed shortly after the move, Mr. Karpinski agreed that he had filled many cracks in the walls himself. He said those cracks were “not that bad”. He could not recall if it was him who had installed the cardboard over the drywall leading into the unfinished bathroom. He did not think that he had done it. As to the metal brace above the hallway door, Mr. Karpinski said he installed it at the time of construction because it was provided by the manufacturer. It was the only such brace supplied. He offered no explanation why it was installed over an original layer of wallpaper. 75) Mr. Karpinski also had recollections of the visits make to the acreage by Ms. Schira and Mr. Snider that differed from other testimony at trial. He says that Ms. Schira came to the house three times prior to the June 19, 1999 viewing. He was not present on any of those occasions, but says he learned of the visits from his wife. It was on June 19, 1999 that Mr. Karpinski testified that he first met Ms. Schira and Mr. Snider personally when they came to the acreage with Ms. Mui to “inspect” the property. He says that upon their arrival mid-afternoon, they all viewed the property together and walked around the acreage. During his walkabout with Mr. Snider, Mr. Karpinski says he pointed out the “cut away” hill where excavation had occurred when the house was moved from the Rural Municipality of Gary. He said he also showed Mr. Snider the still evident tire tracks where the semi-trailer had crossed the neighbour’s field and entered onto the acreage. At the house, Mr. Karpinski told Mr. Snider that the shingles would be good for 40 years, and says he told him that when the building was moved, it was supported by beams. He showed him the missing eavestroughs that had been cut off at the time of the move. 76) Inside the house, Mr. Karpinski says he took Mr. Snider into the crawl space and together they examined the concrete footings. Mr. Karpinski showed Mr. Snider where the “roughed in” plumbing had been disconnected before the move and indicated that it still needed to be reconnected to water and the septic tank. According to Mr. Karpinski, Mr. Snider went into the attic with flashlight at about 7:30 p.m. 77) Mr. Karpinski testified that Ms. Schira and Mr. Snider were at the home until approximately suppertime, returning about 30 minutes to one hour later, and then staying late until 10:00 or 10:30 p.m. It was three or four days after this visit that Mr. Karpinski says that the two of them returned again to see how the various systems worked and to start on the fencing. When it was suggested to Mr. Karpinski that it was unlikely that Ms. Mui, Ms. Schira and Mr. Snider were at his home until as late as 10:30 p.m. on June 19, 1999, since that was when the offers and counter-offer were being made, he said that Ms. Mui must have left earlier. He then said that Ms. Schira must also have left earlier, but that Mr. Snider remained. Mr. Karpinski insisted that it was on June 19, 1999, before any offer was made, that Mr. Snider was informed of the house being moved. 78) Mr. Karpinski recalls completing the PCDS with Mr. Jacobucci on June 21, 1999. He says that he directed his mind to all the questions and asked Mr. Jacobucci about several of them. He understood that “structural” meant ceiling, roof, walls and floors. He did not believe Ms. Schira would need to make any structural repairs. Regarding “damage due to water”, Mr. Karpinski said that he was aware of none the problem with frost on the master bedroom window was due to “frost”, not “moisture”. This was not, according to Mr. Karpinski, structural damage. In any event, Mr. Karpinski said that the damage had been corrected when they removed the wallpaper, fixed the damage and repainted. The PCDS completed by Mr. and Mrs. Karpinski on June 21, 1999 did not disclose any general or structural problems with the house. 79) After Ms. Schira took possession of the acreage, Mr. Karpinski returned once in late September, 1999, at the request of Mr. Jacobucci. While there, he applied more caulking around the leaking skylight. (c) James Garinger 80) James Garinger is an experienced drywall contractor and has known Mr. and Mrs. Karpinski since 1994 or 1995 when he first did some work for them at their business site. He testified on their behalf. After they moved their home to the Rural Municipality of Corman Park, they asked him to repair drywall damage occasioned by the move. He was told by Mr. Karpinski to fix the drywall that had dropped from the garage ceiling, and to fix any nail pops or cracks in the interior of the house. He repaired several cracks in the master bedroom, several above doorways, and the longest one, stretching about four feet, in the kitchen. He also fixed, to his recollection, about six nail pops inside the house. He remembers being surprised that there were not more in house that had been moved. While he was doing the repairs to the home, he did not notice signs of water damage. (d) Roman Cherlounogrobsky 81) Roman Cherlounogrobsky testified on behalf of Mr. and Mrs. Karpinski. In 1996 he prepared an appraisal report of their home for his client, financial institution. His independent recollection of being at the house was vague, given the lapse of time, but his report assisted him in his testimony. Generally speaking, when doing an appraisal, he goes into every room and makes notes of any observable damage or other problems. He approaches the appraisal from market perspective for lending purposes. There are, accordingly, things that he would miss that contractor or engineer would not. His reports assume that there are no hidden defects. 82) During the course of his inspection of Mr. and Mrs. Karpinski’s home, Mr. Cherlounogrobsky made no notes indicating any observable water damage which, according to him, is the primary source of damage to house. He would have, as is his usual practice, been watching for stains on the ceiling, blistering paint, discoloration and damaged gyprock. Mr. Cherlounogrobsky could not recall specifically if he entered either the crawl space or the attic. He knows that he did not go onto the roof. He also did not review any building permits, nor did he have any knowledge about the interior venting of the dryer and kitchen range. (e) Mario Jacobucci 83) Mr. Jacobucci has been realtor since 1967. When he first listed Mr. and Mrs. Karpinski’s property in 1998, he followed his usual practice of conducting visual inspection of the premises. Based upon this inspection, and information obtained from his clients, he prepared the brochure that came to the attention of Ms. Schira. It was entitled “Country Luxury”. The special features included that the home was of quality construction. He based this representation upon his comparison to what he considered to be, in his experience, an “average” home in terms of design, finish, maintenance, setting and upkeep. The floor plan was functional, and the finishings, including the trim and windows, were of better quality. The use of lumber in the framing, in Mr. Jacobucci’s view, would also permit greater insulation factor, although he conceded that he did not know the nature or type of insulation in the house. He also agreed that he knew nothing about construction, but “thought” that quality materials had been used in the building of the property. 84) According to Mr. Jacobucci, he observed no obvious problems with the home other than in several areas where finishing work was still required. He saw no signs of water or moisture damage and noticed no leaking during the open houses that he conducted, several of which occurred during heavy rains. He did know, however, that the skylight had leaked in the past. This, according to Mr. Jaccobucci, was not concern leaking was common problem with skylight. Mr. Jacobucci did concede on cross-examination that he noticed three or four areas where the wallpaper above the kitchen cabinets had been patched. He was also aware, from the time of his first or second meeting with Mr. and Mrs. Karpinski that the house had been moved from the Yorkton area. Mr. Jacobucci testified that this too was not an issue for him, and not fact that needed to be disclosed to any potential purchaser. He accordingly did not include this information in his “Country Luxury” brochure. In reaching this decision, Mr. Jacobucci said that he relied upon his past experience marketing “ready-to-move” homes category of homes that are constructed off-site with the intention that they will be moved to different site for placement on foundation. Mr. Jacobucci also testified that he would not require vendor to disclose the fact that house had been moved on PCDS unless he was aware of an apparent problem such as “a wall out of whack”. In this case, Mr. Jacobucci says there were no such “tell-tale” signs that the home had been moved. 85) It was for these reasons that Mr. Jacobucci did not tell Ms. Mui that the house had been moved. When she presented him with the first offer from Ms. Schira he did, however, have several questions for her, the first querying why single woman would be buying such large property, and more importantly, why there was no condition attached requiring satisfactory home inspection. He said that Ms. Mui told him that Mr. Snider, who was plumber, would be doing the inspection. But even that had not been made condition of the offer. Mr. Jacobucci confirmed that the offer and acceptance were concluded on June 20, 1999, conditional upon the approval of satisfactory PCDS by June 22, 1999. 86) During direct examination by his counsel, Mr. Jacobucci acknowledged that prior to the transaction between Mr. and Mrs. Karpinski and Ms. Schira being finalized he learned that there was an issue over the permit for the property. He said that he relied upon assurances from Mr. and Mrs. Karpinski that such permit existed. The trial adjourned for several months, and when Mr. Jacobucci was cross-examined on this issue, his testimony was different. He then said that he did not become aware of this issue until after the possession date. He said he did not receive any calls from Ms. Mui about this issue, nor did he authorize her to speak directly to either of his clients. He denied being aware of any conversations about this matter that may have occurred directly between Ms. Mui and either of his clients. He did confirm, however, that through his past dealings with the Rural Municipality of Corman Park, he knew that inspections were not required of homes moved into the area. He also acknowledged seeing copy of the permit that was issued by the rural municipality, he believed shortly after Ms. Mui obtained it from the municipality. 87) According to Mr. Jacobucci, he did not have completed PCDS on his file, although it was established that he had completed one at the time that he obtained the listing. Mr. Jacobucci completed new PCDS with Mr. Karpinski on June 21, 1999 which differed in several respects from the original. He did not recall any specific discussion with either Mr. or Mrs. Karpinski about the need to disclose any repairs to the home arising from water damage. Mr. Jacobucci did not recall specifically discussing with either of them the need to disclose any roof leakage, although he was aware that the skylight had leaked, or the need to disclose any unrepaired damage. He would, in any event, not have considered it necessary if the problems were in the past and not recurring. He would have disclosed only current problems. 88) Shortly after Ms. Schira took possession of the property, Mr. Jacobucci began to receive calls from Ms. Mui regarding her client’s concerns about the house. He was unable to contact either Mr. or Mrs. Karpinski, so he went to the property in August or September of 1999, the same time referred to by Ms. Schira, and observed for himself the leaking that had occurred through the skylight. He suggested to Ms. Schira that caulking was required. She did not agree to having one of his maintenance people perform this task. Although complaints continued, via Ms. Mui, Mr. Jacobucci did not return to the property again for several years, after this litigation had commenced. He apparently also did not respond to the many complaints to the satisfaction of Ms. Mui who in frustration took it upon herself to write directly to Mr. and Mrs. Karpinski in October of 1999. When Mr. Jacobucci learned of this development from Ms. Mui, he went to the home of Mr. and Mrs. Karpinski and removed the letter from their mailbox before they could take delivery of it. (f) Cecelia Mui 89) Ms. Mui was realtor from 1992 until 2000. She first met Ms. Schira in April, 1998 to discuss the type of home that she wished to purchase. Ms. Schira was not in hurry, but wanted to find three bedroom home, with nice sized kitchen, lots of windows, basement and garage. She wanted the home to be in good location, and she only wanted to spend between $100,000 and $125,000. Ms. Mui told her this was not possible and they agreed upon price range of up to $150,000. 90) Together, Ms. Mui and Ms. Schira looked at many houses within the city and in the fall of 1998 began exploring acreages. Mr. Snider would generally meet them when they were viewing rural properties. The Karpinski property was first considered when Ms. Schira noticed the sign advertising it for sale. Ms. Mui printed off detail sheet and then arranged viewing through Mr. Jacobucci. This occurred in November, 1998 and was brief, general viewing only. Mr. Snider was present for short time. 91) The property was clearly too expensive for Ms. Schira. No offer was made and the acreage was subsequently taken off the market. In May, 1999, however, when Mr. Jacobucci obtained the relisting, Ms. Mui says that Ms. Schira contacted her for second viewing. According to Ms. Mui, they visited the property that month and spent nearly two hours looking at the house. Mr. Snider was present, but again only for short time and had merely “quick” look around. Ms. Mui says that while Mr. Snider was there, she asked if they would like to have home inspection, pointing out that they would have to pay for it. Ms. Mui says that she told them that home inspection would be appropriate for such big house. According to Ms. Mui, Ms. Schira did not respond, but continued walking down hallway with Mr. Snider. 92) Ms. Mui recollected no further contact between herself and Ms. Schira until June 18, 1999 when she says that Ms. Schira phoned her wanting to make an offer on the acreage. This resulted in what Ms. Mui says was the third showing of the property on June 19, 1999. They arrived there in the early afternoon and were met by Mr. Snider. On this occasion, Ms. Mui says they did more thorough viewing, going through the house room by room. She did not see Mr. Snider go into the attic, nor could she recall him entering the crawl space. Ms. Mui says she again mentioned, on two occassions, that they should have home inspection and include it in the offer. Once again, she says that Ms. Schira did not respond nor did she look in her direction. Ms. Schira and Mr. Snider were busy and talking between themselves. Ms. Mui thinks Ms. Schira heard her on the second occasion but even so, there was no response. Outside the house, the three of them toured the property in Mr. Snider’s truck and noticed the missing eavestroughs, gap in the foundation and particle board under the deck. They looked at the roof, but noticed nothing out of the ordinary. 93) Ms. Schira accompanied Ms. Mui to her office at about 4:00 p.m. They discussed making an offer of $265,000 and the possibility of home inspection. Ms. Mui did not stress the advisability of such an inspection. According to Ms. Mui’s testimony on direct examination there was no second visit to the acreage on June 19, 1999. The first offer was written in her office and delivered to Mr. Jacobucci between 5:00 and 6:00 p.m. Ms. Mui confirmed that when Mr. Jacobucci saw the offer he asked her why it was not conditional upon home inspection. The Karpinski’s counter-offer was faxed to Ms. Mui’s home later that evening and was open until noon the next day. Ms. Mui had two telephone conversations with Ms. Schira and it was during the second conversation that Ms. Schira agreed that she would pay the price requested by Mr. and Mrs. Karpinski $285,000 provided that the riding mower was included. 94) After consulting with Mr. Jacobucci, Ms. Mui wrote two new offers the first for the house at $275,000 and the second for the mower at $10,000. It was late in the evening when the offers were signed and Ms. Mui then delivered them to Mr. Jacobucci’s mailbox. 95) Ms. Mui said that there was no second visit to the Karpinski acreage on June 19, 1999, the day of the offer. She says that occurred the next day when she, Ms. Schira and Mr. Snider returned in the early evening to check the easement and to check the property line. The visit lasted 30 to 45 minutes and none of them went inside the house. Later in her testimony and during cross-examination, Ms. Mui did recall second visit to the acreage on June 19, 1999. She remembered meeting there with Mr. Snider to do some measurements. The visit lasted only twenty minutes during which time she overheard Mr. Kaprinski tell Mr. Snider that the roof shakes would be good for 40 years. 96) On June 21, 1999, Ms. Mui testified she picked up copy of the PCDS from Mr. Jacobucci and left it in Ms. Schira’s mailbox. According to Ms. Mui, she then met with Ms. Schira at 8:00 p.m. on June 23, 1999 after obtaining an extension of the time to remove the conditions on the offer because Ms. Schira was out of town. She says that the meeting with Ms. Schira was lengthy as they went through each clause of the PCDS. As Ms. Schira wanted to discuss the contents of the document with Mr. Snider, he was contacted by telephone. Ms. Mui says that she read every clause out loud to Ms. Schira, who then repeated them to Mr. Snider. According to Ms. Mui, Ms. Schira accepted the PCDS that night, the conditions were removed and the Notice to Remove Conditions was delivered to Mr. Jacobucci. It was also that night that Ms. Mui says Ms. Schira asked about the building permit for the property and Ms. Mui agreed to make inquiries at the office of the rural municipality the next day. Ms. Mui testified that the only reason that Ms. Schira was interested in the permit was to determine if the taxes had been assessed. She says that she phoned Mr. Karpinski that night, after obtaining the permission of Mr. Jacobucci, who confirmed that building permit did exist. It was Ms. Mui’s evidence that at that point, neither she nor Ms. Schira were aware that the house had been moved. 97) According to Ms. Mui, she telephoned the Rural Municipality of Corman Park the next morning, June 24, 1999 and asked to have the permit faxed to her. The rural municipality was experiencing power outage, so Ms. Mui obtained certain information over the phone and then received fax from the rural municipality early in the afternoon once power had been restored. The letter from the rural municipality advised that the taxes had not yet been assessed for 1999 and confirmed the number of the permit authorizing Mr. and Mrs. Karpinski to move the house onto their acreage. She also received copy of the development permit granted by the rural municipality year earlier. Ms. Mui says this was the first that she knew about the move. She told Ms. Schira immediately and sent to her the documentation that she had received, which according to Ms. Mui did not include copy of the building permit. Ms. Mui says that she had no discussion with Ms. Schira about the contents of that documentation nor did they discuss the fact that the house had been moved. According to Ms. Mui, Ms. Schira’s concern was about the taxes and she never asked about the move, and she did not express any concerns. 98) Ms. Mui says since she never received copy of the building permit from the rural municipality she did not provide one to Ms. Schira. She testified that Ms. Schira only wanted to “know” that there was building permit, she did not ask to “see” one. Ms. Mui also testified that she knew in 1999 that the rural municipality did not, at that time, do any inspections of homes. She did not tell this to Ms. Schira then, or at any subsequent time, because Ms. Mui says Ms. Schira did not ask. copy of the building permit was disclosed by Ms. Mui in her Statement of Documents delivered in this proceeding. No explanation was offered as to when, or how, the building permit came into Ms. Mui’s possession. 99) Shortly after Ms. Schira took possession of the property, Ms. Mui began to receive telephone calls from her with various complaints. In response, Ms. Mui and her husband went to Ms. Schira’s home in mid-August, 1999. It had been raining for several days and the skylight was leaking. Both Ms. Mui and her husband were able to poke their fingers through moisture pocket in the wall of the master bedroom. Ms. Schira pointed out other bulges in the wallpaper and told Ms. Mui about the crickets entering the house, and about the cracking noises she had been hearing since her first night in the home. 100) That was the last time that Ms. Mui recalls being at Ms. Schira’s home. She did not testify about attending at the property later accompanied by Mr. Jacobucci. She did, however, continue to receive repeated phone calls from Ms. Schira. According to Ms. Mui, Ms. Schira was becoming desperate. She was concerned that water was coming into the house and was worried that the roof would fail. She wanted compensation to carry out the repairs. Ms. Mui said that Ms. Schira did not start to make “fuss” about the house being moved until her complaint to the Saskatoon Real Estate Board. Ms. Mui’s attempts to obtain any co-operation from Mr. and Mrs. Karpinski, through Mr. Jacobucci, were largely unsuccessful. She finally wrote directly to Mr. and Mrs. Karpinski, but her letter was removed from their mailbox by Mr. Jacobucci. 101) In 1999, Ms. Mui testified that her usual practice was to gather documentation regarding property only if she had any “doubts” about it. She would not obtain any information, including copy of the title, until after an offer had been made. It was her standard practice at that time to mention home inspection to prospective purchaser, but it was not her duty or obligation to recommend one. The Issues 102) Broadly speaking, this proceeding raises two main issues, the first being the liability of each of the defendants. There was no suggestion made that should Ms. Mui and Mr. Jacobucci be found liable to Ms. Schira, that the corporate entities, 100% Realty Associates Ltd. and Trevi Holidngs Ltd., would not be vicariously liable for their acts or omissions. The second issue is the quantum of damages, if any, sustained by Ms. Schira. Costs is also an issue. determination of the forgoing will depend, to large extent, upon the credibility of the respective parties, and it is for this reason that address that matter first. 1. The credibility of the respective parties 103) As noted, while the facts of this case raise several important issues, the one at the forefront is that of the credibility of the parties. The assessment of credibility is not science and, as pointed out in R. v. Gagnon, [2006] S.C.R. 621, 2006 SCC 17 (CanLII) at para. 20, it is not always possible to “articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events.” Assessing credibility is “a difficult and delicate matter that does not always lend itself to precise and complete verbalization”. (R. v. R.E.M., [2008] S.C.R. 3, 2008 SCC 51 (CanLII) at para. 49). There is no requirement that trier of fact must accept or reject the evidence of witness in its entirety. None or part of witness’s evidence may be accepted, and different weight may be attached to various parts of the testimony. (R. v. D.R. 1996 CanLII 207 (SCC), [1996] S.C.R. 291 at para. 93 and R. v. J.H. (2005), 2005 CanLII 253 (ON CA), 192 C.C.C. (3d) 480 (Ont. C.A.) at para. 44). 104) There are, nonetheless, certain principles, or tools, that have emerged from the jurisprudence that can assist the trier of fact when assessing credibility. These factors were summarized in Novak Estate (Re), 2008 NSSC 283 (CanLII), 269 N.S.R. (2d) 84 (N.S. S.C.) at para. 36: a) The ability to consider inconsistencies and weaknesses in the witness’s evidence, which includes internal inconsistencies, prior inconsistent statements, inconsistencies between the witness’ testimony and the testimony of other witnesses. b) The ability to review independent evidence that confirms or contradicts the witness’ testimony. c) The ability to assess whether the witness’ testimony is plausible or, as stated by the British Columbia Court of Appeal in Faryna v. Chorny, 1951 CanLII 252 (BC CA), [1951] B.C.J. No. 152, 1951 CarswellBC 133, it is “in harmony with the preponderance of probabilities which practical [and] informed person would readily recognize as reasonable in that place and in those conditions”, but in doing so am required not to rely on false or frail assumptions about human behavior. d) It is possible to rely upon the demeanor of the witness, including their sincerity and use of language, but it should be done with caution (R. v. Mah, [2002] N.S.J. No. 349, 2002 NSCA 99 (CanLII), paras. 70-75). e) Special consideration must be given to the testimony of witnesses who are parties to proceedings; it is important to consider the motive that witnesses may have to fabricate evidence. R. v. J.H., 2005 CanLII 253 (ON CA), [2005] O.J. No. 39 (Ont. C.A.), paras. 51-56). 105) In addition to the foregoing, there are other factors, or subsets of the foregoing, that have considered when assessing the credibility of the parties and their witnesses. Of importance is whether or not the witness actually observed the factual matters underpinning his or her testimony. And, while the demeanor of witness is not per se reliable measure of credibility, that witness’s ability to provide evidence in candid and straightforward manner is worthy of note. Just as worthy of note is that witness’s tendency to be evasive or argumentative, and his or her ability to make admissions against self-interest, as opposed to repeated self-serving statements. 106) With the above in mind, I have determined that certain of the evidence of each of Mr. Karpinski, Mrs. Karpinski and Ms. Mui is so unreliable that the whole of their evidence is cast with doubt. It is because of this that where their evidence contradicts or conflicts with that of other witnesses on material facts, have rejected their evidence. 107) There are many reasons for me reaching this conclusion. First, while like any party to proceeding, Ms. Schira had much to gain from this litigation, her evidence was given in candid and forthright manner. She answered questions posed to her directly and without argument. Her evidence was consistent throughout and remained intact after cross-examination. The same can be said of Mr. Snider, and the other of Ms. Schira’s witnesses. 108) Both Mr. Loraas and Mr. Epp are professionals with no interest in the outcome of this action. Their evidence was largely unchallenged and alternate defence theories to the conclusions reached by Mr. Loraas and the opinions given by Mr. Epp were not supported by any independent or expert evidence. Ms. Mui did, however, suggest that the observations of Mr. Loraas that the pine shakes were largely rotted should be rejected or discounted, thereby undermining in part the basis for Mr. Epp’s opinion that they required replacement. She argued an adverse interest should be drawn since Ms. Schira did not have the roofer who actually did the repair work testify. Relying on Murray v. Saskatoon (City)(No. 2), 1951 CanLII 202 (SK CA), [1952] D.L.R. 499 (Sask. C.A.), Ms. Mui says this leads to an inference that different testimony from that of Mr. Loraas would have been provided. do not accept this argument. While Murray, supra, does stand for the proposition that an adverse inference may be drawn where party does not call witness by which certain facts may be elucidated, it applies not only to the party that bears the onus of proof, but also to the party who wishes to rebut certain evidence. In Murray, supra, at para. 15, the Saskatchewan Court of Appeal cited with approval the decision of Blatch v. Archer (1774), Cowp. 63 at p. 65, 98 E.R. 969 where Lord Mansfield is reported as “[i]t is certainly maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.” Here, Ms. Mui and all other defendants were aware of the identity of the contractor who repaired the roof. They also knew the names of the roofers who had inspected the roof before Mr. Loraas. None chose to call the contractor, or anyone else, to contradict the evidence of Mr. Loraas. The commentary from Mr. Karpinski that the shingles didn’t look rotten in the video tape is not sufficient to rebut Mr. Loraas’ evidence. I have, accordingly, accepted the observations of Mr. Loraas and the opinions of Mr. Epp. 109) There are several parts of the evidence of Mr. and Mrs. Karpinski, and of Ms. Mui, that were troubling. For Mr. and Mrs. Karpinski, it was important for them to have the Court believe that Ms. Schira knew that the house had been moved to its present site and that she was aware of certain problems before the offer to purchase was made. For Ms. Mui, the opposite was true. It was to her benefit to have the Court find that neither she nor Ms. Schira had this knowledge until after the conditions had been removed. In the case of each of these defendants, am satisfied that their evidence in this area went beyond the mere frailties associated with the hazy recollection of past events, but was deliberately designed to mislead for the purpose of advancing their own interests in this litigation. Some of the evidence was reconstructed. 110) On this issue, start with the evidence of Mr. Karpinski regarding what he says was lengthy visit by Ms. Mui, Ms. Schira and Mr. Snider on June 19, 1999 for the purposes of “inspecting” the property. It is simply implausible, if not impossible, to accept that all three of these individuals, or even one or two of them, were at the property until 10:00 or 10:30 p.m. as alleged by Mr. Karpinski. This was the evening that negotiations by way of offers and counter-offer were being conducted. It was not disputed that the counter-offer made by Mr. and Mrs. Karpinski was faxed from Mr. Jacobucci’s office at 9:38 p.m., and was accordingly executed at some time prior to then. When confronted with this absurdity, Mr. Karpinski changed his story to suggest that perhaps Ms. Mui left earlier, followed later by Ms. Schira. After further waffling on this matter, Mr. Karpinski maintained his position that Mr. Snider stayed late in the evening. According to Mr. Karpinski, it was not Mr. Snider who needed to sign the offer, and it did not seem unusual to him that Mr. Snider would be present while he, his wife and Mr. Jacobucci discussed and executed counter-offer. 111) Not only was this evidence internally inconsistent, it did not conform with the evidence that Mr. Karpinski gave at his examination for discovery. There, he could not identify the date that Mr. Snider was at the property, not even if it was weekday or weekend. By way of explanation at trial, Mr. Karpinski said he was now certain of the date because it was the date the offer was made and that at the examination for discovery he was uncertain of the date of the offer. Mr. Karpinski was forced to agree, however, that copy of the offer to purchase was before him at the examination for discovery. 112) reject Mr. Karpinski’s evidence regarding the events of June 19, 1999 as concocted. Specifically, do not accept that Mr. Snider conducted any lengthy “inspection” of the property prior to the offer to purchase, including an examination of the attic, crawl space and footings. Mr. Karpinski did not tell Mr. Snider that the “roughed in” plumbing was not connected to the septic tank and water, and he did not tell Mr. Snider on or before June 19, 1999 that the house had been moved, none of which was even put to Mr. Snider during cross-examination. Along with this, reject both his and Mrs. Karpinski’s evidence that Ms. Schira came to view and inspect the property, without Ms. Mui, on at least three occasions before June 19, 1999. 113) In direct contrast to the evidence of Mr. Karpinski, Ms. Mui presented almost equally implausible evidence that neither she nor Ms. Schira knew that the house had been moved until after the conditions had been removed on June 23, 1999. In brief summation, Ms. Mui testified on this issue that she delivered the PCDS to Ms. Schira’s mailbox on June 21, 1999, but did not meet with her to discuss its contents until the evening of June 23, 1999. Mr. Snider was on the telephone. Ms. Schira accepted the PCDS and removed the conditions. At the same time, Ms. Schira inquired for the first time about building permit because, according to Ms. Mui, she had concerns about the tax assessment. Ms. Mui says she learned only the next day, June 24, 1999, that the house had been moved when she contacted the rural municipality. 114) The foregoing account does not accord with other testimony given by Ms. Mui during the trial. For example, she also testified that she spoke to Mr. Snider on the telephone at 11:00 p.m. on June 22, 1999 when she called to tell him that Mr. Karpinski had confirmed the existence of the building permit. She said Mr. Snider was upset with her for phoning Mr. Karpinski so late in the evening. This account accords with that of Mr. Snider. As well, Ms. Mui’s evidence at trial did not correspond with answers given by her at her examination for discovery where she said that she thought she knew that the house had been moved when she removed the conditions, but was unaware of all the details. Ms. Mui’s explanation for the discrepancy was that she now remembered things differently and had mixed up the dates at the examination for discovery. Further, Ms. Mui’s “urgent” fax to the rural municipality on June 23, 1999 wanted confirmation that the tax assessment was “with house on land”. 115) In these circumstances, accept the evidence of Ms. Schira and Mr. Snider. building permit was requested on the evening of June 22, 1999 after they had reviewed the PCDS together. The reason for the request was as testified to by Mr. Snider. Ms. Mui contacted the rural municipality by telephone the following morning. It was then that Ms. Mui learned the house had been moved. This information was known to Ms. Mui, and to Ms. Schira, before the conditions were removed later in the day of June 23, 1999. 116) There were other areas where Ms. Mui’s evidence was inconsistent but, with one exception, can in my view be attributed to confusion and the lapse of time. For example, Ms. Mui said that she, Ms. Schira and Mr. Snider viewed the acreage in May, 1999 when am satisfied they did not. Both Ms. Schira and Mr. Snider denied that any viewing occurred that month and Ms. Mui agreed that she might be mistaken, acknowledging that unlike other viewings, the visit was not recorded in her daytimer. In any event, nothing turns on this. Another area of her testimony where Ms. Mui appeared confused was with respect to whether there were one or two viewings on June 19, 1999. Ms. Mui initially did not recall the second visit, then she remembered it, and then forgot it again, all within the space of several hours of testimony. 117) The area, however, where have concluded that Ms. Mui’s inconsistent evidence was not due to confusion, but rather designed to meet her own self-interest, was in an area that is central to core issue in this proceeding. That is the advice that Ms. Mui did, or did not, give with respect to home inspection. At trial, Ms. Mui said that she first mentioned home inspection to both Ms. Schira and Mr. Snider during the viewing in May, 1999, viewing which as previously indicated, am satisfied did not occur. Ms. Mui then testified that she brought up the subject twice during the viewing which occurred on the afternoon of June 19, 1999. She said that on the second occasion Ms. Schira heard her, but did not respond. This evidence, both as to the frequency with which Ms. Mui said she broached the possibility of home inspection, and Ms. Schira’s reaction, again differed from Ms. Mui’s evidence at her examination for discovery. The discrepancy was in Ms. Mui’s favour. The most significant contradiction in her testimony on this subject occurred during cross-examination. For the first time Ms. Mui said that she actually recommended home inspection to Ms. Schira, rather than merely mentioning it. This differed from Ms. Mui’s previous testimony, both earlier in the trial and at her examination for discovery. As to the conflicting answers at the examination for discovery, Ms. Mui said that her memory was now better than it had been in 2001, the year of the discovery. According to Ms. Mui, her memory had been “refreshed”. 118) return now to other aspects of the testimony of Mr. and Mrs. Karpinski which casts doubt on their evidence as whole. Generally speaking, the evidence of both was at times argumentative, evasive and with respect to Mr. Karpinski in particular, replete with unsupported theories. intend to point out by way of example only several instances where it was most apparent that their evidence was unreliable. 119) As noted earlier, during the first part of the trial, Mrs. Karpinski testified that she knew nothing about ridge caps. After an adjournment, lasting number of weeks, Mrs. Karpinski returned armed with an explanation about the missing ridge caps. She now was able to testify that the ridge caps were not necessary they were merely decorative. Mrs. Karpinski went into some considerable detail about this aspect of roof construction. She said there was metal cap, tar paper and black jack in the areas where the ridge caps had not been installed. She suggested that the sealant on the roof identified by Mr. Loraas in one of his photographs was this black jack. 120) Also during her testimony, Mrs. Karpinski was insistent that Ms. Schira had “staged” the chalk lines in the pictures showing patched wallpaper in the kitchen. Mrs. Karpinski reiterated that in that area the wallpaper had been installed in one continuous strip and was solid piece. She challenged someone to go and check they would find that the patches did not exist. 121) Someone did check. Diane Pawalenko, the painter who first did repair work for Ms. Schira in September, 1999 was called as rebuttal witness on this issue. Ms. Pawalenko compared the photograph to the actual condition of the wallpaper. She counted seven patches of wallpaper in that area and more in an upper corner. She could feel cracks under the paper and the chalk lines corresponded to the seams where the paper had been patched. 122) Both Mr. and Mrs. Karpinski admitted that they had discussed their evidence, and that of other witnesses, on many occasions. Mrs. Karpinski agreed that much of her testimony regarding facts of which she had no personal knowledge came from her husband. Overall, the evidence of both is so unreliable that, as noted above, have rejected it where it is in contradiction to that of other witnesses. 2. The liability of the parties 123) In considering the liability of each of the defendants I have, as previously noted, accepted the conclusions and opinions of Mr. Loraas and Mr. Epp. In particular, I find:(i) The pine shakes were rotting and many were cracked to such an extent that water could permeate the underlying joints and decking. The rot was caused by improper installation of the shakes and the absence of flashing in certain areas. The pine shakes needed to be replaced. (ii) Sealant had been applied to the center of valleys in the roof in the area of rotted shakes on at least two occasions prior to Ms. Schira offering to buy the property. It was applied to remedy leaks in the roof. (iii) Ridge caps were missing in two areas of the roof. The ridge caps were necessary, and their absence allowed water to seep into the house. (iv) The skylight leaked and caulking had been applied to stop the leaking, again before Ms. Schira offered to purchase the property. (v) Improper and inadequate venting, both interior and exterior, resulted in moisture damage to the interior of the house, in addition to that caused by the faulty roof. The improper venting needed to be corrected and additional venting was required in the attic. For the same reasons, the vapour barrier in the crawl space needed to be made continuous. (vi) Mold in the attic was due to excessive moisture, whether through roof seepage or improper venting, and predated Ms. Schira’s occupation of the residence. The mold needed to be removed. (vii) Excessive moisture and humidity in the house because of the foregoing problems caused interior damage including moisture pockets, paint blisters and damaged drywall. (viii) Nail pops throughout the house were largely the result of the house being moved, and the disruption to its structural integrity. (ix) The house was not of quality construction. Additionally, had an inspection been done after it had been moved to the Rural Municipality of Corman Park, many instances of National Building Code violations would have been discovered. (a) Edward and Verl Karpinski 124) As noted earlier, Ms. Schira has alleged that Mr. and Mrs. Karpinski are liable to her for breach of contract as well as negligent and fraudulent misrepresentation. The claim for breach of contract has its foundation in the lack of disclosure provided by Mr. and Mrs. Karpinski when completing the PCDS. In this case, the PCDS was incorporated into the agreement for sale and its provisions accordingly became part of the contract between Ms. Schira and the parties. 125) The PCDS in use in 1999, and signed by Mr. and Mrs. Karpinski, had 10 “General” questions and three questions relating to “Condominium Property”. These 13 questions all allow the vendor to answer in one of four ways “Yes”, “No”, “Do Not Know” or “Does Not Apply”. There are 15 questions under the category “Structural”. There are only three ways in which seller may answer these questions “Yes”, “No” or “Does Not Apply”. Finally, there is space available to provide additional comments and/or explanations. 126) At the top of the PCDS, emphasized in bold type and capital letters is the statement “PLEASE READ THE INFORMATION ON THE REVERSE SIDE OF THIS FORM”. There, there are several clauses of general application, including the following: ANSWERS MUST BE COMPLETE AND ACCURATE This disclosure statement is designed in part to protect the sellers by establishing that all relevant information concerning the property has been provided to the buyers. It is important that the sellers not answer “do not know” or “does not apply” if, in fact, they know the answer. An answer must provide all relevant information known to the sellers. In deciding what requires disclosure, the sellers should consider whether they would want the information if they were potential buyer of the property. BUYERS MUST STILL MAKE THEIR OWN ENQUIRIES The buyers must still make their own enquiries after receiving the disclosure statement. Each question and answer must be considered and, where necessary, keeping in mind that the sellers’ knowledge of the property may be incomplete, additional information can be requested from the sellers or from an independent source such as the Municipality. Buyers can hire an independent inspector to examine the house to determine whether defects exist and to provide an estimate of the cost of repairing problems that have been identified on the disclosure statement or on inspection report. 127) When completing the PCDS, Mr. and Mrs. Karpinski 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? 128) In the section for additional comments or explanations, the only comment made by Mr. and Mrs. Karpinski was with respect to power line encroachment. 129) PCDS is not intended to act as warranty. As pointed out in the document itself, its purpose is, in part, to put potential purchaser on notice with respect to defects known to the vendor. This allows the purchaser to make an informed decision. PCDS is similarly not guarantee that there are no defects in the house other than those addressed in the statement. However, once vendor responds incorrectly to questions posed and signs PCDS the “doctrine of caveat emptor falls away as defence mechanism and the vendor must speak truthfully and completely...” about those matters. (Kaufmann v. Gibson, [2007] O.J. No. 2711 (Ont. S.C.) (QL) at para. 119. See also: Alevizos v. Nirula, 2003 MBCA 148 (CanLII), 180 Man. R. (2d) 186 (Man. C.A.) at para. 38). 130) In this case, I have concluded that Mr. and Mrs. Karpinski did not speak “truthfully and completely” when answering all the questions in the PCDS. accept that neither may 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 may 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, I do not accept that they were unaware of other water and moisture damage, whether arising from the improperly installed shingles, the missing ridge caps, the leaking skylight or inadequate venting that was occurring elsewhere in the interior of the house. They knew of water damage in the master bedroom from frost build up and they knew the skylight leaked. am also satisfied, based upon the evidence of Mr. Loraas and Mr. Epp, that the roof leaked, that the sealant evident on the roof was sufficiently old to predate Ms. Schira purchasing the house, and that it was applied while Mr. and Mrs. Karpinski occupied the house to remedy leakage problem. This, along with other moisture damage to the interior of the home, including sink holes and moisture pockets, was repaired and effectively concealed by Mr. and Mrs. Karpinski. It should have been disclosed. 131) Mr. and Mrs. Karpinski also denied knowing of any structural defects with either their dwelling or the improvements. Both, however, knew that their house had been cut into two pieces through the roof, had been transported some 300 kilometers over the course of three days, and had sustained damage. The garage ceiling collapsed and drywall fell off the walls. Cracks appeared in the interior of the house which am satisfied were ongoing, and of greater severity and frequency than either Mr. or Mrs. Karpinski were prepared to admit. This ongoing problem was concealed by Mr. and Mrs. Karpinski through repairs to the drywall, reinforcement at stress points, repainting and patching of wallpaper. 132) Severing house through its roof and lifting it from its foundation would, to any reasonable person, amount to damage to its structural integrity, whether repaired or not. As Mr. Epp said the entire structural integrity is sent into “disarray”. This is factor that could influence the decision of purchaser to acquire the property, or at minimum, to consider or reconsider the advisability of home inspection. The act of cutting the house into two pieces and moving it was structural damage that should have been disclosed on the PCDS. 133) Before finally determining the issue of contractual liability to Ms. Schira on the part of Mr. and Mrs. Karpinski based upon their answers in the PCDS, it is necessary to address an argument raised by them, and by Mr. Jacobucci. They all took the position that only current defects or ongoing problems needed to be disclosed. If repairs had been completed, then disclosure was unnecessary. 134) This precise issue was considered in Kaufmann v. Gibson, supra. There, two questions in the disclosure statement were in all material respects the same as questions and in the PCDS in this case. The questions were framed in the present tense and started with the words “Are you aware...”. The disclosure statement included similar general paragraphs regarding the obligations on the part of vendors to answer the questions completely and accurately, and on the part of buyers to make their own inquiries. 135) At paras. 101-108, Killeen J. rejected the “present-tense” or “current” interpretation with respect to these questions, finding it patently impossible to give such narrow reading to the questions. The questions deserved, particularly in light of the spirit and purpose of disclosure statement as set out in the general clauses, to be given “a plain, common-sense reading rather than narrow or tortured one.” 136) agree with the conclusion of Killeen J. prospective purchaser does not look to the PCDS only to ascertain that the roof is not leaking on the day that it is signed. Accordingly I find Mr. and Mrs. Karpinski liable to Ms. Schira 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 Ms. Schira, 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 does not apply. 137) The second claim made by Ms. Schira against Mr. and Mrs. Karpinski is in tort and is based upon misrepresentation, negligent and fraudulent. The failure to disclose latent defect in response to question can result, depending upon the circumstances, in finding of negligent, or fraudulent, misrepresentation. In this case, the defects addressed in the PCDS were latent. It was not discernable on reasonable visible inspection to Ms. Schira, nor to Ms. Mui or others who viewed the property at various times, that the house had been moved, that the skylight leaked, that the roof was rotting and had been caulked, or that there was water damage to the interior of the house. Certain of these defects, or the consequential damage, were actively concealed by Mr. or Mrs. Karpinski, and the answers given on the PCDS were, to the knowledge of both of them, incorrect or incomplete. Ms. Schira relied on the representations in the PCDS, and suffered damage. The same can be said about the representations made by Mr. Karpinski about the absence of any problems with the roof. 138) The five requirements for negligent misrepresentation have been established by Ms. Schira. First, there was duty of care on the part of Mr. and Mrs. Karpinski to correctly, truthfully and completely report the condition of the property in the PCDS. Second and third, the representations made in questions B, and were inaccurate and misleading, and the Karpinskis were, at minimum, negligent in making those representations. Fourth, Ms. Schira relied on the statements in the PCDS, and finally, damages resulted. (Queen v. Cognos Inc., 1993 CanLII 146 (SCC), [1993] S.C.R. 87 at para. 33). The failure to disclose, or silence as to known defect, amounts to an act of concealment of material fact and has the same effect as an express misrepresentation and is sufficient to attract liability. (Thomas v. Blackwell, 1999 SKQB 168 (CanLII), [1999] S.J. No. 769 at para. 18). 139) As to fraudulent misrepresentation, the requirements are the same with the exception that the false representations must be knowingly or recklessly made. Again, silence or half-truths as to known latent defects, or active concealment of patent defects can amount to fraud. (Alevizos v. Nirula, (2003) 180 Man. R. (2d) 186, 2003 MBCA 148 (CanLII) at para. 24). finding of fraudulent misrepresentation may result in recision of the contract, claim that has in this case been abandoned by Ms. Schira. For reasons already set out, I would find that the false representations knowingly made by Mr. and Mrs. Karpinski, and their silence as to material facts, were fraudulent. (b) Cecilia Mui and 100% Realty Associates Ltd. 140) Ms. Schira has sued Ms. Mui in negligence, negligent misrepresentation and breach of fiduciary duty. I have concluded that Ms. Mui was negligent and that her conduct and advice to Ms. Schira fell below the standard of care expected of a realtor acting for the purchaser of a rural property in 1999. 141) Mr. Friesen, whose expert opinions were uncontradicted, set out in the evidence the obligations expected of Ms. Mui. Ms. Mui fell short in many respects. She did not conduct any preliminary background checks with the Rural Municipality of Corman Park, which would include determining if proper permits had been obtained, prior to Ms. Schira’s offer to purchase. According to Mr. Friesen, this gains particular importance where it is known that rural municipality does not conduct its own inspections. Based upon my findings as to credibility, am also satisfied that Ms. Mui did nothing more than merely mention home inspection to Ms. Schira on one occasion, and that was in her vehicle on the afternoon of June 21, 1999. At no time did she recommend home inspection even after she knew that the house had been moved and before the condition regarding satisfactory PCDS was removed. According to Mr. Friesen, realtor’s obligation in 1999 would be at minimum to advise client about the benefits of home inspection, and to forcibly recommend one where there was knowledge that house had been moved. Ms. Mui did neither. Another reason to strongly recommend home inspection would be in circumstances where the realtor knew that rural municipality did not require building inspections. Ms. Mui knew this to be the case. 142) Not only was Ms. Mui aware in 1999 that the rural municipality did not require building inspections, she did not pass that information on to Ms. Schira, even after the request was made for building permit. On this issue, again accept the evidence of Ms. Schira and Mr. Snider over that of Ms. Mui. The reason that Ms. Schira wanted the building permit, and which was conveyed to Ms. Mui, was to ensure that the property had been inspected, and was constructed “to Code”. This request from Ms. Schira was even more emphatic once it was learned by her that the house had been moved. Ms. Mui knew that the existence, or non-existence, of building permit was important to Ms. Schira, and that the existence of such certificate would mean to her that there had been municipal inspection. When it came time to remove the condition regarding satisfactory PCDS, Ms. Schira trusted Ms. Mui’s advice that the PCDS “looked good”, that there was nothing to worry about, that “all was legal” and that she had the number for the building permit. Rather than provide Ms. Schira with all the relevant facts which she had duty to disclose, Ms. Mui instead encouraged Ms. Schira to finalize the transaction so that it would not be necessary to “start over”. 143) Ms. Schira relied on the representations and advice of Ms. Mui to her detriment. Ms. Schira wanted good, quality home that was in move-in condition. Ms. Mui knew this. accept Ms. Schira’s evidence that had she know of the problems with his home, she would have “run the other way”. Had Ms. Mui made adequate inquires of the rural municipality at the outset, both she and Ms. Schira would have known from the beginning that the house had been moved and as Ms. Schira said, armed with this knowledge, she would have viewed the property with different eyes. Further, had Ms. Mui fulfilled her obligation first to disclose all material facts to Ms. Schira, and second, to explain and, in these circumstances, recommend a home inspection, I am satisfied on a balance of probabilities that the outcome for Ms. Schira would have been different. Knowing the house had been moved and had not been inspected, Ms. Schira would quite likely have reconsidered her decision to purchase. At minimum, she would have had the knowledge to make an informed decision about home inspection and would have required one. home inspection, as pointed out by Mr. Friesen, would have provided complete overview of the condition of the house, from top to bottom. It would have revealed that the roof was rotting, and had been caulked. It would also have revealed the incomplete vapour barrier in the crawl space, the improper venting and the moisture problems in the attic and master bedroom. While the home inspection may not have discovered the latent defects in the home caused by the move and largely concealed, it would have put Ms. Schira on notice about the existence of, or the potential for, any moisture problems in the home. 144) Before leaving the issue of negligence on the part of Ms. Mui, it is necessary to consider an argument raised in her defence. She suggested that Ms. Schira relied on Mr. Snider for guidance and advice when purchasing the property. In effect, Mr. Snider was her “inspector” whom Ms. Schira looked to when considering the condition of the home. The evidence does not support this conclusion, nor would it alone absolve Ms. Mui from liability in negligence. Mr. Snider, despite being former spouse, remained trusted friend who Ms. Schira respected. Although experienced in plumbing and heating, he was not qualified home inspector, nor did he do home inspection. His viewings of the house prior to any offer to purchase being made were all relatively brief, and largely cursory. Further, he did not have any knowledge at that time either that the house had been moved, or that the rural municipality did not then conduct inspections of residential properties. 145) Given my findings regarding negligence, it is not necessary to consider in depth Ms. Schira’s claim arising from any negligent misrepresentation on the part of Ms. Mui. Suffice it to say that many of same facts that demonstrate Ms. Mui’s negligence, also lead to conclusion that she negligently made incorrect representations to Ms. Schira. Again, silence may amount to misrepresentation. Ms. Mui knew that the rural municipality did not conduct inspections, yet she did not disabuse Ms. Schira of her belief that building permit would be confirmation that such inspections were performed. She reassured Ms. Schira that “all was legal”, with the knowledge that, to Ms. Schira, this meant that an inspection had been done and the house was constructed “to Code”. 146) The third cause of action asserted by Ms. Schira against Ms. Mui is for breach of fiduciary duty. It is not disputed that Ms. Mui was in fiduciary relationship with Ms. Schira, and as such owed her certain duties. While am confident that Ms. Mui was negligent in fulfilling her responsibilities to Ms. Schira, am 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 is not sufficient to reach such conclusion and, accordingly, that aspect of Ms. Schira’s claim must be dismissed. (c) Mario Jacobucci and Trevi Holdings Ltd. 147) The claim against Mr. Jacobucci is in negligence and negligent misrepresentation. Mr. Friesen’s evidence was that the duty to disclose all information about property that may influence the decision to purchase is equally applicable to listing and selling realtors. Particularly, the listing realtor is bound to disclose known latent defects. In this case, according to Mr. Friesen, Mr. Jacobucci had an obligation to disclose the fact that the house had been moved. He did not. Even so, cannot conclude on the evidence that Ms. Schira relied upon Mr. Jacobucci to her detriment in this regard. She placed her reliance and trust in Ms. Mui who, had she adequately represented Ms. Schira’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 Mr. Jacobucci. 148) I am satisfied however that Mr. Jacobucci is liable to Ms. Schira for negligent misrepresentation. Mr. Jacobucci represented the Karpinski residence to be of “quality construction”. This representation was incorrect. Mr. Epp testified that the house did not approach quality construction. Mr. Jacobucci made this representation negligently he had no particular expertise in construction and relied only on limited information obtained from Mr. and Mrs. Karpinski and his own observations as to the floor plan and finishings. Mr. Jacobucci was also complicit in, and party to, the negligent misrepresentations made by Mr. and Mrs. Karpinski in the PCDS. He knew, at minimum, that the house had been moved and damage sustained. He also knew that the skylight leaked. Ms. Schira relied on all these misrepresentations. Damages resulted. 3. The quantum of damages 149) Ms. Schira is seeking special and general damages, including damages for mental distress, aggravated damages and punitive damages. Her claim for punitive damages extends only to Mr. and Mrs. Karpinski, Mr. Jacobucci and Trevi Holdings Ltd. will deal with each of these categories of damages in order. (a) Special and General Damages 150) No evidence was proffered by any party regarding the diminution in the value of the property arising from the breach of contract or negligence of the defendants, with one exception discussed later at para. 153. That leaves the assessment of damages to be determined through consideration of the cost of repairing the house so, that to the extent possible, Ms. Schira can be restored to the position she would have been in but for the undisclosed or concealed defects, including any reasonably foreseeable consequential damage. 151) Ms. Schira provided detailed evidence regarding the money that she had already expended for repairs to her house, or to remedy certain Code violations, as well with respect to her estimate of the costs that she will still incur to complete the repairs. None of the defendants offered evidence in contradiction to that tendered by Ms. Schira, but certain of her itemized expenses were successfully challenged in cross-examination, whether as to necessity or amount. Ms. Schira reduced her claim accordingly. She also eliminated any claim for repairing defects that were clearly patent such as missing eavestroughs, cracked windows or missing handles, or expenses that she could not substantiate. Her claim for painting and wallpapering was reduced for work that she would have completed, irrespective of any damage. 152) Taking these reductions into account, Ms. Schira says that her out-of-pocket expenses, to the date of trial were $17,613.46. Of this amount, $10,900 was expended to replace the rotting pine shakes with asphalt shingles. The remaining $6,713.46 was used to pay $1,684.78 to Mr. Loraas and Mr. Epp for their advice and inspections, with the balance of $5,028.68 going towards labour, materials and tools. Her estimate of the cost of repairs yet to be done is $6,995.41. 153) In addition to the foregoing, Ms. Schira seeks compensation for the fact that she now has an asphalt shingle roof rather than pine shake roof that she was led to believe would last for another 40 to 50 years. The roof repairs were necessary, and Ms. Schira did not have the finances to install pine shakes. She obtained two estimates for pine shakes, the average cost being $25,560.70. She asks that she be paid, in damages, the amount that this cost exceeds that which she actually paid $10,900. The difference, $14,660.70 is, according to Ms. Schira, representative of diminution in the value of the house because it no longer has the attribute of more expensive roofing. 154) This argument cannot be sustained. Ms. Schira did not expend these funds, and she does not intend to do so in the future. Further, there is nothing that would support her contention that the “dollar for dollar” difference in the value of pine shakes as opposed to asphalt shingles is in fact representative of the true, or any, diminution in the value of the home. find that the costs incurred by Ms. Schira, and those yet to be incurred, total $17,613.46. The defects in the house required investigation and subsequent repair to correct existing damage and to prevent ongoing damage in the future. While small portion of the cost of materials, in excess of any reduction already made by Ms. Schira may possibly be attributed to what the defendants say is cosmetic work, that amount cannot be ascertained with any degree of certainty or precision. It would not, in any event, be of such significance to warrant adjustment. The work needed to repair the defects and consequent damage was largely labour intensive. 155) The most significant claim made by Ms. Schira is for general damages relating to her own personal labour, and that of her friends and family. Ms. Schira estimates that the time that she spent between the autumn of 1999 and August of 2004, whether in dealing with trades people, obtaining opinions, on the phone, or in actually conducting repairs was 5,142 hours. Her friends and family spent an additional 1,264 hours assisting her, for total of 6,406 hours. Ms. Schira suggest that reasonable rate of remuneration is $15 per hour. This would increase the amount of Ms. Schira’s damages by the sum of $96,090. 156) Ms. Schira, together with her friends and family, did much of the repair work to the house out of necessity. Ms. Schira did not have the financial resources to contract the work out to trades people. Wallpaper was stripped and gyprock repaired. Painting and wallpapering followed. Insulation was removed from the attic and replaced after time was spent eliminating mold. This is but short summary of the time and effort expended by Ms. Schira and her assistants. None were professionals. No doubt much of the work was done inefficiently in terms of time, and by trial and error due to lack of experience. 157) Initially, Ms. Schira’s claim for labour was based upon quantum meruit. This was abandoned when she opted to no longer seek to rescind the contract between herself and Mr. and Mrs. Karpinski. She is nonetheless entitled to damages based upon her own personal time and effort. In Drake v. R., [1999] N.J. No. 305, 548 A.P.R. 335 (Nfld. S.C.), Barry J. endorsed the following at para. 22: [22] In Jones v. Stroud, [1988] All E.R. (C.A.), the Court held that where the plaintiff has proven damage to property and the court is satisfied the property would be, or had been, repaired, it is irrelevant whether the plaintiff paid for the repairs himself. Neither should plaintiffs be penalized because they do the work personally. See, Brown v. Atlantic Insurance Co. (1996), 1996 CanLII 6603 (NL SC), 142 Nfld. P.E.I.R. 259 (Nfld. T.D.). 158) While it would be inappropriate, as noted in Jones, supra, to penalize Ms. Schira by not awarding damages for work performed personally, it would similarly be inappropriate to penalize any of the defendants for work that was not performed efficiently. Ms. Schira’s estimate of the personal time expended on labour would equate to three people working 40 hours per week, 52 weeks year, for slightly more than one year. While the hourly rate of $15 suggested by Ms. Schira is reasonable, the amount of time expended is not. Her estimate of time no doubt also included an element of repairs that were cosmetic in nature, and not reasonably consequential to the defects in the house for which Ms. Schira is entitled to compensation. Few homes are entirely free of blemish. 159) Unfortunately, Ms. Schira did not provide any quotations from trades people as to the amount that would have been charged had the work been done professionally, and do not accept her argument that because there was no evidence to the contrary, her evidence and estimates must be accepted. By the same token, none of the defendants provided any such estimate. In these circumstances, my decision is of necessity arbitrary. I award Ms. Schira $15,000 as compensation for the personal time and effort that she expended in repairing the house. 160) Ms. Schira is also seeking damages for emotional distress. From her evidence, there is no doubt that she suffered emotionally during her lengthy ordeal identifying and attempting to remedy the defects that she found in her home. As she testified, it consumed her daily life for several years. Her relationship with her children, and probably Mr. Snider as well, became strained. This alone however is not enough to attract compensation under this category of damages. 161) Recently in Satara Farms Inc. v. Parrish Heimbecker Ltd., 2006 SKQB 229 (CanLII), 280 Sask. R. 44, R.S. Smith J. reviewed both the literature and jurisprudence relating to an award of damages for mental distress. In the case of breach of contract the circumstances in which such an award will be made are severely curtailed. When dealing in the commercial context, there must be clear evidence “that the contracting parties were specifically aware of the potential for consequential damages, such as for significant mental distress, before such damages are awarded for breach of the contract.” (Turczinski Estate v. Dupont Heating Air Conditioning Ltd. (2004), 2004 CanLII 35549 (ON CA), 246 D.L.R. (4th) 95 (Ont. C.A.) at para. 40). 162) With respect to tortious liability for mental distress, R.S. Smith J. commented that the recovery of damages is subject to the same policy considerations as recovery under breach of contract and is reasonably circumscribed. “... Recovery is only permitted where the damages are foreseeable consequence of the negligence and is founded on some physical injury or recognizable psychiatric illness”. (Lewis N. Klar et al, Remedies in Tort, looseleaf (Thomson Canada Limited, 1987) vol. 2, ch. 16 at para. 218). 163) As noted, the situation in which Ms. Schira found herself arising from the breaches, or acts and omissions of the various defendants, extracted an emotional toll. However, there is no evidence that the distress that she experienced constituted a physical injury, or a recognized psychiatric illness. She, accordingly, cannot be compensated under this head of damages, whether under tort or breach of contract. (b) Aggravated Damages 164) Aggravated damages are sought against all the defendants. These damages are awarded in cases of intentional wrongdoing that causes intangible injuries such as distress, humiliation or hurt feelings. They are not intended to punish the wrongdoer, but rather to compensate the victim. 165) am satisfied that the tortious conduct of all of the defendants, Mr. and Mrs. Karpinski, Ms. Mui and Mr. Jacobucci, caused Ms. Schira considerable distress, anxiety and emotional turmoil. She believed that she was purchasing her dream home. Instead, she found herself in 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 Ms. Schira for her labour and the expenditures made by her does not adequately reflect the injuries and damages that she sustained because of the combined conduct of the defendants. 166) There will be an award for aggravated damages, with respect to all defendants, in the amount of $10,000. (c) Punitive Damages 167) Ms. Schira is asking that punitive damages in the amount of $100,000 be awarded against Mr. and Mrs. Karpinski, and Mr. Jacobucci and Trevi Holdings Ltd. Punitive damages are non-compensatory. They are restricted to advertent wrongdoing that is so deliberately malicious and outrageous that it is deserving of punishment on its own. The threshold is high.The law in this area was recently summarized by Smith J.A. in Lynch v. Hashemian, 2006 SKCA 126 (CanLII), 289 Sask. R. 105 at para. [18] The objective of punitive damages is to punish the defendant rather than compensate plaintiff, whose just compensation will already have been assessed. They are confined to exceptional cases where the defendant’s conduct was so malicious, oppressive and high-handed that it offends the court’s sense of decency. See Hill v. Church of Scientology, 1995 CanLII 59 (SCC), [1995] S.C.R. 1130. In Whiten v. Pilot Insurance Co., supra, at paras. 100-101, Binnie J. enunciated test of “rationality”, explaining that punitive damages should only be awarded where the misconduct of the defendant is so outrageous that punitive damages are rationally required to act as deterrence in the future. The test of rationality is to be applied both to the question of the availability of punitive damages and to the quantum. Thus, for example, if compensatory damages are adequate to punish and deter the defendant, punitive damages will not be awarded. In this sense, the quantum of punitive damages serves as “topping up” award to achieve the goals of punitive damages, and, in particular, deterrence both general and specific. 168) The conduct of both Mr. and Mrs. Karpinski, and that of Mr. Jacobucci, when completing the PCDS 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, am not persuaded that their conduct, taken as whole, in so far as it relates to their dealings with Ms. Schira prior to the commencement of this litigation, was so egregious that punitive damages are rationally required as retribution and as deterrence. 169) This aspect of Ms. Schira’s claim for damages is accordingly dismissed. 170) Solicitor and client costs are claimed by Ms. Schira. Such costs are unusual. The principles which lay the foundation for such an award are found at para. 118 in Bawolin v. Siemens, 2002 SKCA 84 (CanLII), 219 Sask. R. 282. There Jackson J.A. said: ... 1. solicitor and client costs are awarded in rare and exceptional cases only; 2. solicitor and client costs are awarded in cases where the conduct of the party against whom they are sought is described variously as scandalous, outrageous or reprehensible; 3. solicitor and client costs are not generally awarded as reaction to the conduct giving rise to the litigation, but are intended to censure behaviour related to the litigation alone; 4. notwithstanding point 3, solicitor and client costs may be awarded in exceptional cases to provide the other party complete indemnification for costs reasonably incurred. 171) The foregoing principles were considered and explained more recently in Lynch, supra. Smith J.A. said at para. [32] In the course of her analysis Jackson J.A. had noted divergence in the case law on the question of whether solicitor-client costs should be awarded to mark the court’s disapproval of the conduct which had given rise to the litigation or whether they should be confined to condemnation of conduct in relation to the litigation itself. Clearly, point in the principles enunciated reflects general conclusion in favour of the latter position. It would appear that the exception set out in point 4, then, relates to those exceptional cases where the principle of indemnification for the wrongdoing (and not merely disapproval, however strong, of the wrongdoing) justifies such an order. 172) Smith J.A. further noted at para. 33 in Siemens, supra, that the award of solicitor-client costs was upheld on the basis of both the third and fourth principles to punish the defendant for “convoluted, confusing, inconsistent and dishonest evidence” prior to and during the trial, and also to fully indemnify the plaintiff for costs reasonably incurred for what was found, in that case, to be breach of fiduciary duty in circumstances where no order for punitive damages had been made. 173) It is important to consider some of the facts in Siemens, supra. There it was found that the defendant deceived the plaintiffs and misappropriated property in breach of his fiduciary duty. The plaintiffs were put to enormous cost, both before and during the trial, due to the conduct of the defendant. Smith J. (as she then was) found that the plaintiffs should be fully indemnified for the costs incurred solely as the result of the defendant’s dishonest and reprehensible behaviour in breach of his duty. These circumstances made it one of those exceptional cases where solicitor-client costs were warranted. Second, in making the award, Smith J. also relied on the inconsistent, convoluted and dishonest evidence of the defendant which she found to be worthy of censure. 174) In my view, this case is not one of such exception that it would fall within the ambit of the fourth principle found in Siemens, supra. There was no breach of fiduciary relationship and no misappropriation of funds. As to the third principle, the evidence of Ms. Mui, as well as Mr. and Mrs. Karpinski was at times confusing and inconsistent. It was also at times misleading and reconstructed. To lesser extent, Mr. Jacobucci’s evidence was evasive and inconsistent. While this conduct, during the trial, is deserving of censure, am not persuaded that an award of solicitor-client costs is warranted. 175) In these circumstances, Ms. Schira will have her costs in the normal fashion up to the commencement of the trial. Thereafter, she will have costs at the rate of 150 per cent of the usual tariff. Conclusion 176) While Mr. and Mrs. Karpinski are liable for breach of contract, each of the defendants is a tortfeasor, each having breached an obligation or duty owed to Ms. Schira, whether through negligence or misrepresentation. Their wrongful acts and omissions all contributed to the same damage. In that respect, their liability is concurrent. The liability of Mr. and Mrs. Karpinski and Mr. Jacobucci is joint, and that of Ms. Mui is several. As concurrent tortfeasors, the fault for the damage shall be apportioned equally among the four of them. 1. Ms. Schira shall have judgment against the defendants in the amount of $49,608.87. 2. Ms. Schira is entitled to pre-judgment interest under The Pre-Judgment Interest Act, S.S. 1984-85-86, c. P-22.2 calculated from February 8, 2000. 3. Ms. Schira shall have her assessed costs up to the commencement of the trial. Thereafter she shall have her costs at the rate of 150% of the usual tariff. J. M-E. Wright J. QUEEN’S BENCH FOR SASKATCHEWAN Date: 2009 12 03 Citation: 2009 SKQB 394 Docket: Q.B. No. 365 of 2000 Judicial Centre: Saskatoon BETWEEN: SYLVIA SNIDER (now Sylvia Schira) and 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 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. December 3, 2009 CORRIGENDUM M-E. WRIGHT J. to October 6, 2009 Judgment (2009 SKQB 394) 177) Pursuant to Queen’s Bench Rule 343A, my judgment of October 6, 2009 is amended at para. [176], clause 1, as follows: 1. Ms. Schira shall have judgment against the defendants in the amount of $49,608.87. This amendment is necessitated by reason of my failure to include in the final calculation of damages the cost for repairs yet to be completed. This amount, $6,995.41, is referred to at para. [152] of the judgment. J. M-E. Wright J.
The plaintiff bought a house. She used the services of Cecilia Mui, a realtor associated with the defendant 100% Realty Associates Ltd. operating as Re/max Saskatoon. The house was purchased from the defendants Edward and Verl Karpinski. The vendors' realtor was the defendant, Mario Jacobucci, owner of the defendant Trevi Holdings Ltd. The house did not meet the plaintiff's expectations. She now sues the defendants seeking recovery of damages for alleged latent defects. She claims Ms. Mui fell below the standard of care required of a realtor representing a purchaser. She claims Ms. Mui was negligent in misrepresenting certain facts and breached the fiduciary duty expected of her. The plaintiff claims the Karpinskis misrepresented facts to her, negligently and fraudulently. The plaintiff claims that Mr. Jacobucci and his company are liable to her in damages, both in negligence and as parties to the misrepresentations made by the vendors. Special and general damages are claimed as are aggravated damages and punitive damages. The trial took place over 22 days, spanning several years and included testimony from 14 witnesses. Two main issues are raised. The first is the liability of each of the defendants. The second issue is quantum of damages. The credibility of the parties is at the forefront of the determination of the issues. HELD: The vendors are liable to the plaintiff for breach of contract. Each of the defendants is 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 is concurrent. The liability of the vendors and Mr. Jacobucci is joint, and that of Ms. Mui is several. As concurrent torfeasors, the fault for the damage shall be apportioned equally among the four of them.  1) Credibility is not a science, see R. v. Gagnon, 2006 SCC 17. It is not always possible to articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events. The principles and tools to be used in assessing credibility are summarized in Novak Estate (Re), 2008 NSSC 283. 2) Certain of the evidence of the Karpinskis and Ms. Mui is so unreliable that the whole of their evidence is cast with doubt. 3) The opinions and conclusions of Mr. Loraas and Mr. Epp are accepted by the court. They are professionals with no interest in the outcome of the action. Their evidence was largely unchallenged. The Court finds that the pine shakes were rotten, sealant had been applied to the shakes on at least two occasions and prior to the plaintiff offering to buy the property, the shakes were not properly installed allowing water to seep into the house, the skylight leaked and caulking had been applied to stop the leaking before the plaintiff offered to buy the house, there was improper and inadequate venting which resulted in moisture damage to the interior of the house and mold in the attic, the moisture damage in the house included damage to drywall and paint blisters. Nail pops throughout the house were largely the result of the house being moved. No inspection was done after the house was moved. 4) The Court finds the Karpinskis did not speak truthfully or completely when they answered the questions in the Property Condition Disclosure Statement (PCDS). The Court does not accept that the vendors were not aware of water and moisture damage arising from the improperly installed shingles, the missing ridge caps, the leaking skylight or the lack of venting. The sealant on the roof was sufficiently old to predate the plaintiff's purchase of the house. The vendors repaired the sink holes and moisture pockets and effectively concealed the problems. It should have been disclosed. Although the vendors denied knowing of the structural damage to their house, they knew the house had been cut in half and moved 300 kilometers and had sustained damage. The structural problems were concealed by the vendors through repairs to the dry wall, reinforcement at stress points, and repainting and patching of wall paper. The fact that the house had been cut in half and moved should have been disclosed on the PCDS. 5) It is not only current defects or ongoing problems that need to be disclosed on a PCDS. A prospective purchaser does not look to the PCDS only to ascertain that the roof is not leaking on the day it was signed, see Kaufmann v. Gibson, [2007] O.J. No. 2711 (Ont. S.C.) (QL). The Karpinskis are liable to the plaintiff for breach of contract for failing to disclose the existence of structural defects, damage due to water and roof leakage. The terms of the PCDS formed part of the agreement between the parties 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 does not apply. 6) The requirements for negligent misrepresentation have been established by the plaintiff. The failure to disclose, or silence as to a known defect, amounts to an act of concealment of a material fact and has the same effect as an express misrepresentation and is sufficient to attract liability, Thomas v. Blackwell, 1999 SKQB 168. 7) The false representations knowingly made by the vendors and their silence as to material facts were fraudulent. 8) Ms. Mui was negligent and her conduct and advice to the plaintiff fell below the standard of care expected of a realtor acting for the purchaser of a rural property in 1999. She 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. Ms. 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 the house had been moved and before the condition regarding a satisfactory PCDS was removed. Another reason to strongly recommend a home inspection would be in circumstances where the realtor knew that a rural municipality did not require building inspections and Ms. Mui knew this to be the case. The plaintiff relied on the representation of Ms. Mui to her detriment. Had Ms. Mui disclosed all material facts to the plaintiff and explained and recommended a home inspection, the Court is satisfied that the outcome for the plaintiff would have been different. Knowing the house had been moved and had not been inspected the plaintiff would have most likely reconsidered her decision to purchase. 9) The Court is satisfied that Mr. Jacabucci is liable to the plaintiff for negligent misrepresentation. He represented that the home was of 'quality construction'. This was incorrect. Mr. Jacobucci was also complicit in, and party to, the negligent misrepresentations made by the vendors in the PCDS. He knew the house had been moved and sustained damage. He also knew the skylight leaked. The plaintiff relied on these misrepresentations and damages resulted.  10) The costs incurred by the plaintiff to repair the house total $17,613. She is awarded $15,000 as compensation for personal time and effort that she expended in repairing the home. There is no evidence that the distress the plaintiff experienced constituted a physical injury, or a recognized psychiatric illness and she cannot be compensated for mental distress, whether under tort or breach of contract. She is awarded $10,000 for aggravated damages. Her claim for punitive damages is dismissed. Her claim for solicitor and client costs is dismissed. Corrigendum received dated December 3, 2009 and added to fulltext.