Case Studies, Pendrell Place: Crowe complains about collecting drips in pots and pans

Robert Crowe, a licensed realtor who purchased his leaky rotten condo at Pendrell Place (Suite #402) in September 1998, writes to the property managers, Ascent Real Estate Management Corporation (Rick Dickson, President), as follows:

1999 February 27

Re: Repairs to Strata lot #16 VR 1008

Dear Sirs,

Please find enclosed payment on account for February and March Maintenance fees - I did not pay before this as I was not notified as to where to send payment and was awaiting instructions.

In addition, I want to remind you that the necessary repairs to my unit are long overdue.

For the past two months, water has been leaking into both my livingroom and dining rooms from a broken deck membrane on the deck above.

While I understand there are limits to the work that can be undertaken, I have been living with pots placed all over my apartment for too long.

By now the inside of the walls must be wet and will require opening up and the replacement of insulation.

Secondly, my deck [located above Daphne Bramham's Suite #302] is retaining water and you can hear a "sloshing" sound when walking on it.

This deck was redone about two years ago and was obviously poorly repaired.

I would like to know that the company that did the work will be responsible and come back to fix the problem without further cost to the strata.

Lastly there are birds nesting in the open dryer vent outside my bedroom window, besides the unsightly look of the torn cover, there is an unbearable noise of chatter and a metallic sound as they scramble in and out starting early each morning - this needs to be addressed and the hole closed over to prevent further damage.

Your prompt attention to these matters would be greatly appreciated.

Sincerely yours,

[signed]

Robert Crowe

Vancouver, Galleria II: Court rules owners can sue personal defendants in Molnar leaky condo case

                                                Date:  19990222
Docket: C956420
Registry: Vancouver




IN THE SUPREME COURT OF BRITISH COLUMBIA



BETWEEN:

THE OWNERS, STRATA PLAN NO. VR 1720


PLAINTIFFS


AND:

BART DEVELOPMENTS LTD., GALLERIA II DEVELOPMENTS LTD.
PARTNERSHIP, MOLNAR CONSTRUCTION LTD., SPACEWORKS
ARCHITECTS (A PARTNERSHIP), PETER REESE, THADDEUS
YOUNG, GORDON SPRATT & ASSOCIATES LTD., TAMM/TACY
AND ASSOCIATES LTD., SCOTT CALVERT, SPECTRUM
INDUSTRIES LTD. (FORMERLY WESTERN WATERPROOFING &
MEMBRANES LTD.), CSA BUILDING SCIENCES LTD., CSA
BUILDING SCIENCES WESTERN LTD., RALPH JECK, MURRAY
FRANK and CHRISTIAN SKENE

DEFENDANTS



REASONS FOR JUDGMENT

OF THE

HONOURABLE MR. JUSTICE E.R.A. EDWARDS



Counsel for the Plaintiff: Ian G. Schildt


Counsel for the Defendants
Ralph Jeck, Murray Frank & Christian Skene: Craig A.B. Ferris


Place and Date of Hearing: Vancouver, B.C.
February 18, 1999


[1] Messrs. Jeck, Frank and Skene, "the personal defendants',
apply for summary dismissal of the action against them on the
basis they owed no duty of care to the defendants.

[2] Mr. Skene, a professional engineer, is the principal of
the defendant CSA ["Christian Skene Associates'] Building
Sciences Ltd. ("CSA"). He and the other two personal
defendants are employees of CSA.

[3] The plaintiffs contracted with CSA to conduct a condition
survey of their building, in response to CSA's proposal which
bore the letterhead "CSA Building Sciences Ltd. Consulting
Engineers' and contained the statement "The engineers,
architects and technologists staffing this firm and the
associated firm of Christian Skene Associates, Ltd. Architects
and Engineers, focus their interests and efforts exclusively
upon resolving the problems affecting existing buildings as
opposed to engaging in the design of new buildings' [original
emphasis].

[4] The building was a "leaky condo" complex which this
proposal characterized as "plagued with problems ranging from
extreme window condensation, moisture penetration through
concrete, odour transfer, electrical and fire system failures,
etc."

[5] The condition survey reported problems, primarily with the
roof, which the plaintiffs took steps to rectify. A later
condition survey by another firm "JNA" disclosed much more
significant and widespread problems with the fabric of
building.

[6] The plaintiffs allege that CSA and the personal defendants
were negligent in failing to discover and report these
additional problems and that as a consequence the cost of
repairs was needlessly exaggerated.

[7] Relevant portions of the Statement of Claim are these:

28. In or about July 1989, the defendant CSA
undertook a condition survey of Galleria II (the
"Survey"). The defendant Skene was the professional
engineer responsible for the survey. In undertaking
the Survey, the defendants CSA and/or Skene were
under a professional duty to review Galleria II and
properly identify the deficiencies which were the
cause of the leakage problems. The Survey identified
the deficiencies in the roof system, but failed to
identify the majority of the building defects.

29. As a result of the Survey, the Strata
Corporation undertook the repair of the roofing
system during the course of 1991, but failed to
address the other major building defects present at
that time.

33. As a result of the defects and By-law violations
set out above, all of which were caused or
contributed to by the breach of warranty and/or
negligence of the defendants, Galleria II has
suffered significant damage, primarily due to the
water leaks and premature deterioration of the
external walkway. The resulting damage has resulted
in a reasonable apprehension of harm to the life and
safety of the occupants of Galleria II, including the
danger of collapse of the external walkway.

34. The plaintiff claims against the defendants CSA
and its successor CSA Western, Jeck, Frank and Skene
for damages for breach of contract and professional
negligence arising out of the failure to undertake a
proper survey and/or inspection of Galleria II in or
about July 1989. As a result of the negligence of
the defendants CSA, Jeck, Frank and Skene, the
deficiencies were not identified until the review
undertaken by JNA in 1995. The cost of identifying
and repairing the defects is significantly higher
than it would have been had the deficiencies been
properly identified in 1989.

[8] The personal defendants' position that they owed no duty
of care to the plaintiffs rests on what might be described as
Mr. Justice LaForest's concurring "explanation" of the
unanimous judgment of the Supreme Court of Canada in Edgewater
Construction Ltd. v. N.D. Lea & Associates (1993), 83 B.C.L.R.
(2d) 145 at 154, paragraphs 23 and 25. I need not quote those
passages.

[9] The Court of Appeal considered the Supreme Court of
Canada's Edgewater decision in British Columbia v. R.B.O.
Architecture Inc. (1994) 94 B.C.L.R. (2d) 96 and in Boss
Developments Ltd. v. Quality Air Maintenance Ltd. (1995), 5
B.C.L.R.(3d) 209. In the latter case Gibbs J.A. distinguished
Edgewater and found an engineer could be personally liable to
an aircraft purchaser for signing a report indicating an
aircraft was properly maintained when it was not, although his
employer, not he, had a contractual relationship with the
vendor to inspect the aircraft.

[10] In Boss, as in this case, there was nothing in the
relevant contract purporting to limit the tort duty of the
defendant or its employees.

[11] With respect to the individual employee, Gibbs J.A. noted
in Boss that the he was liable because "Only an individual can
be qualified as an aircraft maintenance engineer in this field
of special skill and knowledge ... it follows that it is the
individual mechanic who certifies whose skill is being relied
upon."

[12] While it is true that the plaintiffs did not engage CSA
because they intended to rely on the skill of any individual
they could identify by name, it is equally true that CSA held
itself out as a firm of "consulting engineers', with
"engineers, architects and technologists ...[who] focus their
interests exclusively upon resolving" the very problem,
building deficiencies, the plaintiffs contracted with CSA to
address.

[13] There is no question that all three of the personal
defendants had a degree of experience and technical skill nor
that each was actively involved in the survey and preparation
or presentation of the report to the plaintiffs. The personal
defendants must have known the plaintiffs would rely on their
report. The extent of their involvement distinguishes them
from the engineers in Edgewater, who merely affixed a seal
"without more".

[14] This case is indistinguishable from Boss. It cannot be
plausibly argued that a limited company purporting to offer
professional services of "consulting engineers' and indicating
that its employees have special skill and experience is not
inducing its clients to rely on those individuals' expertise.
It is immaterial whether the client can identify that expertise
with individual employees of the firm.

[15] Limited companies cannot exercise professional functions
except through qualified individual employees. Those employees
must realize it is their skill and experience the clients are
engaging and will rely on. They therefore owe a concomitant
duty of care to those clients and are potentially liable in
tort if they fail meet that duty.

[16] As Macfarlane J.A. pointed out in R.B.O at paragraph 42,
it is open to a limited company to limit its and its employees'
exposure in tort by appropriate contract language. No such
language was brought to my attention here.

[17] The application is dismissed with costs on Scale 3.



"E.R.A. Edwards, J."
__________________________
Mr. Justice E.R.A. Edwards

Case Studies, Pendrell Place: Oldaker puts Council on notice

15 February 1999

Strata Plan VR 1008
1819 Pendrell Street
Vancouver, B.C.

Attention: The Members of Council

I am writing this letter to deal with two issues that have become of vital concern to me.

The first issue relates to water damage to my unit, which in turn has resulted in measurable financial loss for which the Plan is responsible.

During November/December 1997, my unit was flooded as a result of water backing up and over the windowsills and entering into the upper bedrooms. The water saturated the carpets and passed through cracks in the floor, consequently saturating the carpets in the living area below. The unit was rendered uninhabitable and my tenant terminated the lease in December.

I did not become aware of the damage until after the tenant left, which was shortly before Christmas. The manager at the time never bothered to contact me with respect to this question.

The carpets were not restored until late in the month of January. The unit was finally rented again effective the 1st March 1998. I therefore suffered the loss of two months rent or $2,500. The carpets were, in addition, badly damaged and their useful life seriously reduced. A monetary estimate of that damage is yet to be determined. In addition to the above, the ceiling in the living area was stained with the water and still requires repainting and refinishing.

In an effort to seek compensation from my tenant, who failed to notify me of the problem in a timely manner, as was required in our lease agreement, I attempted to obtain details of the occurences from Ms. Dewar. Her cooperation left much to be desired and numerous telephone calls unanswered.

The same sequence of events occured in Dec/98. My current tenant was kind enough to put up with the inconvenience and all that resulted was further damage to the carpets.

The reason that the damage occured is, and was, obvious. The blame rests with the Strata Plan, which has never discharged its duty to properly maintain the common areas for which it is responsible. That duty includes properly clearing the gutters and downspouts. If these simple tasks had been carried out on a regular and routine basis (after the leaves have fallen) such events would not have taken place. The policy of only noting after the fact never prevents damage, it only repairs it and at greatly increased cost.

This letter will place the Strata Plan on notice that, unless I receive an undertaking to compensate me for the damages sustained. I will commence legal action to obtain a judgment against it. I will invite other unit owners who have experienced similar problems to join me in any such action.

The second issue relates to the growing liability to the Maintenance Company for services being rendered to the Strata Plan. I would like to receive assurances that the council has the legal authority to assume a debt on my behalf that is securedby a potential mechanics lien which could result in a judicial sale of my property. I do not believe such authority exists, but am willing to be proven wrong.

It should be clear to all members of council that what they are doing is making the owners hostage to one supplier of services who can, at any time, file a lien against the Plan if he becomes disenchanted with his arragement. Stated another way, if you decide to engage another supplier to do an element of work, the Maintenance Company can demand payment in full of the amount owing - or else!

The members of council have a duty to act in our best interess. I fail to see how that can be done without competitive sourcing of services and supplies.

It is for that reason that I wish to formally protest using any supplier as a source of financing. The only acceptable way to handle budget overruns is by making a special assessment. If an individual unit holder cannot, or does not, pay then the Plan always has the remedy of attaching the deliquent's property to secure the interests of those who do pay.

I do not see that the existing debt is overwhelming and I would be willing to prepay my fees to discharge it - if that should be necessary or helpful. Such an action on my part would, quite naturally, have to be subject to terms to be negotiated. It is, however, something that would be far preferable to what is now being done which I believe is ultra vires.

In this latter regard I might suggest that members of council should reflect on their own personal liability if their action in encumbering our assets without our permission should go "off the rails". I, for one, would not expose myself to such a liability unless I had an unequivocal legal opinion that I had the authority to do so and was fully indemnified so long as I acted in good faith. Such an opinion would, at the very least, give the council members the benefit of the lawyer's E.O.E. insurance "just in case" they got sued.

Yours truly,

Richard B. Oldaker
(Unit 504)

Case Studies, Pendrell Place: Kautzman lists more leak repairs

Letter from Randy Kautzman of The Maintenance Company, which provided repair and handyman services to Pendrell Place:


February 15, 1999

Please find following, a list of the work still required immediately on the building [Pendrell Place] to help ensure there is no more water and weather damage. We have been stalled in making these required repairs, both by financial constraints, and weather conditions. Optimistically speaking, once these deck membranes are completed, the damage to this building is minimal considering all other Vancouver buildings.

Our goal is to complete these remaining units promptly, with as little inconvenience as possible.

Those units requiring work are as follows:

Unit Ph 502 new membrane to stop leaks in unit 402

Unit Ph 501 new membrane and small roof replacement (membrane and gravel)

Unit 103 Requires a new concrete poured base over the membrane to be re-installed. This new concrete base shall be approx. 3 in. thick causing the membrane to be sealed.

Unit 205 (Grace) requires a new membrane and the removal of the champhor strip (rotted wood)

Unit 203 planters need sealing to prevent further damage to unit 103 walls.

Unit 301 [?] requires immediate replacement of the patio membrane to stop the water from entering living room.

Unit 203 water damage to wall and carpet in living room.

Roof vent repairs.

Unit 303 [? Illegible]

Average cost of these repairs, if done systematically and in conjunction will be significantly lower than the last decks due to the size and debris on the decks.

We estimate the costs shall range from $1500.00 to maximum $3500.00 per deck.


Total costs could reach $25,000.00 depending on additional interior wall damage.



Alberta, Edmonton, Quail Ridge: Court determines purchasers of leaky rotten condos have triable issues; refuses to dismiss claims against Re/Max realtors

Condominium Plan No. 822 2960 (Owners) v. 75252 Manitoba Ltd., 1999 ABQB 111 (CanLII)

Reflex Record (noteup and cited decisions)

Related decisions

Decisions cited

  • Allied-Signal Inc. v. Dome Petroleum Ltd. et al., 1991 CanLII 2722 (AB Q.B.) — [1991] 6 W.W.R. 251 • (1991), 81 Alta. L.R. (2d) 307
  • Alpine Resources Ltd. v. Bowtex Resources Ltd., (reflex-logo) reflex[1989] 96 A.R. 278 • (1989), 66 Alta. L.R. (2d) 144
  • Anchor Fence Inc. v. Polaris Realty Corp., (reflex-logo) reflex(1994), [1995] 156 A.R. 81 • [1994] 10 W.W.R. 574 • (1994), 22 Alta. L.R. (3d) 311
  • Beer v. Townsgate I Ltd., 1997 CanLII 976 (ON C.A.) — (1997), 36 O.R. (3d) 136 • (1997), 152 D.L.R. (4th) 671 • (1997), 104 O.A.C. 161
  • Betker v. Williams, 1991 CanLII 1160 (BC C.A.) — (1991), 86 D.L.R. (4th) 395 • (1991), [1992] 2 W.W.R. 534 • (1991), 63 B.C.L.R. (2d) 14
  • Bright v. Tanguay, (reflex-logo) reflex(1995), [1996] 1 W.W.R. 62 • (1995), 32 Alta. L.R. (3d) 116
  • Condominium Plan No/ 86-s-36901 (Owners) v. Remai Construction (1981) Inc., (reflex-logo) reflex(1991), 84 D.L.R. (4th) 6 • (1991), [1992] 1 W.W.R. 66 • (1991), 93 Sask. R. 211
  • Exchanger Industries v. Dominion Bridge Co., (reflex-logo) reflex[1986] 69 A.R. 22
  • Fletcher v. Hand, (reflex-logo) reflex(1994), [1995] 156 A.R. 142 • (1994), 21 Alta. L.R. (3d) 346
  • H.W. Liebig Co. v. Leading Investments Ltd., 1986 CanLII 45 (S.C.C.) — [1986] 1 S.C.R. 70 • (1986), 25 D.L.R. (4th) 161 • (1986), 14 O.A.C. 159
  • L.K. Oil & Gas Ltd. v. Canalands Energy Corp., 1989 CanLII 223 (AB C.A.) — (1989), [1990] 98 A.R. 161 • (1989), 60 D.L.R. (4th) 490 • [1989] 6 W.W.R. 259 • (1989), 68 Alta. L.R. (2d) 269
  • Novel Energy (North America) Ltd. v. Glowicki, (reflex-logo) reflex(1994), 16 Alta. L.R. (3d) 26
  • Ocean City Realty Ltd. v. A & M Holdings Ltd., (reflex-logo) reflex(1987), 36 D.L.R. (4th) 94
  • Queen v. Cognos Inc., 1993 CanLII 146 (S.C.C.) — [1993] 1 S.C.R. 87 • (1993), 99 D.L.R. (4th) 626 • [1993] 45 C.C.E.L. 153 • (1993), 60 O.A.C. 1
  • Ramrakha v. Zinner, (reflex-logo) reflex(1994), [1995] 157 A.R. 279 • (1994), 24 Alta. L.R. (3d) 240
  • Reidy Motors Ltd. v. Grimm, (reflex-logo) reflex(1996), 38 Alta. L.R. (3d) 131
  • Soulos v. Korkontzilas, 1997 CanLII 346 (S.C.C.) — [1997] 2 S.C.R. 217 • (1997), 32 O.R. (3d) 716 • (1997), 146 D.L.R. (4th) 214 • (1997), 46 C.B.R. (3d) 1 • (1997), 100 O.A.C. 241
  • Suncor Inc. v. Canada Wire & Cable Ltd., (reflex-logo) reflex[1993] 3 W.W.R. 630 • (1993), 7 Alta. L.R. (3d) 182
  • Waterloo North Condominium Corp. No. 64 v. Domlife Realty Ltd, (reflex-logo) reflex(1989), 70 O.R. (2d) 210
  • Zippy Print Enterprises Ltd. v. Pawliuk, 1994 CanLII 1756 (BC C.A.) — (1994), [1995] 3 W.W.R. 324 • (1994), 20 B.L.R. (2d) 170 • (1994), 100 B.C.L.R. (2d) 55

Condominium Plan No. 822 2960 v. 75252 Manitoba Limited, 1999 ABQB 111

 

                                                                                                                              Date:  19990211

                                                                                                                    Action No. 9703 06875

 

 

                                IN THE COURT OF QUEEN’S BENCH OF ALBERTA

                                             JUDICIAL DISTRICT OF EDMONTON

 

 

BETWEEN:

 

                        THE OWNERS: CONDOMINIUM PLAN NO. 822 2960 and

                              THE OWNERS: CONDOMINIUM PLAN NO. 822 2961

 

                                                                                                                                            Plaintiffs

 

                                                                        - and -

 

                              75252 MANITOBA LIMITED, 539902 ALBERTA LTD.,

                                    RE/MAX REAL ESTATE (EDMONTON) LTD.,

                    SHELDON WOLANSKI, MARK KORNELL, RANDY JOHNSON,

                     JOHN (JACK) JOHNSON, LARRY HURTIG, ROBERT SHAER,

                           DON McFEELY, LAURETTE BARON, JOHN DO. NO. 1

                                                         and JOHN DOE NO. 2

 

                                                                                                                                                           

                                                                                                                                      Defendants

 

                                                                        - and -

 

                                 DEBI HOLM, LORELEI CALENDA, ERIC KRENZ,

                                       LINDA THEBERGE and SHAUNA ROWAN

 

                                                                                                                                    Third Parties

 

                                                                        - and -

 

                                    THE REAL ESTATE COUNCIL OF ALBERTA

 

                                                                                                                                Statutory Party

 

 

 

 


                           _____________________________________________

 

                                                   REASONS FOR JUDGMENT

 

                           OF THE HONOURABLE MADAM JUSTICE J.C. COUTU

                           _____________________________________________

 

 

THE APPLICATION:

 

[1]               The Defendants Re/Max Real Estate (Edmonton) Ltd., Sheldon Wolanski, Mark Kornell and John (Jack) Johnson (the “Realtors”) apply for summary judgment to dismiss the Plaintiffs’ causes of action. The application is made pursuant to Rule 159 of the Alberta Rules of Court. The Realtors submit that there is no merit to the action; that there are no issues to be tried; and that the Realtors know of no facts which substantiate the claim against them.

 

[2]               The Plaintiffs submit that the Realtors’ application should be dismissed as there are triable issues of fact and law as to whether the Plaintiffs have valid causes of action.

 

[3]               To date, there have been no exchange of Affidavits of Documents and no discoveries in the action.

 

FACTS AS ALLEGED IN THE AMENDED STATEMENT OF CLAIM:

 

[4]               The Plaintiffs (the “Condominium Corporations”) are two adjacent Edmonton condominium properties called Quail Ridge. The Condominium Corporations bring the action as the statutory representatives of the individual unit owners.

 

[5]               From 1986 through 1993, the Defendant, 75252 Manitoba Limited (the “Vendor”) owned all the units and operated them as rental properties. By an agreement executed on September 7, 1993, the Vendor agreed to sell the condominium units to 539902 Alberta Ltd. (the “Intervening Purchaser”), which in turn sold condominium units to the public.

 

[6]               The Intervening Purchaser hired real estate salesmen employed by Re/Max Real Estate (Edmonton) Ltd. (“Re/Max”) or employed by the Intervening Purchaser. These salesmen, named Sheldon Wolanski (“Wolanski”), Mark Kornell (“Kornell”), Randy Johnson (“Randy Johnson”) John (Jack) Johnson (“Jack Johnson”) (the “Realtors”) sold the units to individual buyers (the “Individual Purchasers”).

 

[7]               Wolanski and Kornell were also the directors and shareholders of the Intervening Purchaser.

 


[8]               The Defendants, Larry Hurtig (“Hurtig”), Robert Shaer (“Shaer”), Don McFeely (“McFeely”), Laurette Baron (“Baron”), (collectively, the “Former Board”) were the Board of Managers for the Condominium Corporations prior to the appointment of a Board of Managers elected by individual unit owners in 1994. McFeely and Shaer were also directors of the Vendor. Hurtig and Shaer were directors of 406342 Alberta Ltd., an encumbrancee of the lands. Hurtig, Shaer and McFeely were also, at all material times, employees or officers of Chartered Financial Services Inc., 406342 Alberta Ltd.’s sole shareholder.

 

[9]               During 1993 and 1994, the Realtors marketed units to the general public. The Realtors and the Intervening Purchaser represented to the Individual Purchasers that the common property of the Condominium Corporations was in a state of good repair. In particular they represented that the roofs had recently been re-roofed, the furnaces and hot water tanks had been inspected and were in good repair, the roofs and other common property had been inspected by an engineer and had passed inspection, and all decks were repaired or would be repaired.

 

[10]           In the course of marketing the units, the Realtors verbally represented to certain Purchasers that the Condominium Corporations were in good financial condition and condominium fees were unlikely to go up after sale to the Individual Purchasers.

 

[11]           In addition, during the course of marketing the units, the Realtors and the Intervening Purchaser provided prospective purchasers with a “1994 Detailed Budget” for both Condominium Corporations. The Realtors and Intervening Purchaser knew or ought to have known that the Condominium Corporations’ financial condition and state of repair were material considerations in any prospective purchaser’s decision to buy a unit, and that they would rely on the budget. The budget and the estimated condominium fees generated from the budget were expressly included as part of the Purchasers’ Real Estate Purchase Contracts as Schedule “A” to such contracts.

 

[12]           The budget represented, among other things, that repairs to the walls and decks would be completed at no cost to purchasers, minor repairs were budgeted for roofs, condominium fees would range between approximately $54.00 and $64.00, and that a yearly capital reserve contribution of $9,600.00 would be made.

 

[13]           The Plaintiffs allege that pursuant to Schedule “A” to the Real Estate Purchase Contracts, the representations contained in the budget formed part of the contracts, and that all representations contained in the budget survived execution and closing of the Purchasers’ Real Estate Purchase Contracts.

 


[14]           After the sale transactions were concluded, the Purchasers and subsequent Purchasers learned that the representations were false. That is, the property had not been inspected by an engineer and there were numerous deficiencies: the roofs were in an advanced state of deterioration; balconies, railings and stairwells were unsafe and in a state of severe deterioration caused by water leakage; ventilation and insulation were inadequate; furnace room floors, corner posts and studs were severly deteriorated. 

 

[15]           The Plaintiffs incurred expenses of $567,276.46 to repair some of the deficiencies, and further monies need to be spent to rectify deficiencies. The Plaintiffs total claim is for $859,620.00.

 

[16]           The Plaintiffs state that the representations were false and were known by the Realtors and Intervening Purchaser to be false. Alternatively, they were recklessly made without knowing whether they were false or true. These respresentations were relied upon and induced the Purchasers to purchase.

 

[17]           In addition, the Plaintiffs state that the Realtors and Intervening Purchaser fraudulently concealed deficiencies. In particular, they directed or authorized repairs to the decks by covering the decks with plywood, thereby concealing the severe rot from visual inspection. Further, the Realtors and Intervening Purchaser instructed workers to install drywall and to paint walls and ceilings which were disclosing water stains so that purchasers would not be aware of the extent of water leakage or damage.

 

[18]           The Plaintiffs state that the Realtors held themselves out as professional real estate salespersons knowledgeable in condominium real estate transactions, common property ownership issues, the purpose of condominium fees and the importance of providing realistic reserves and budgets for necessary capital improvements. The Purchasers relied on the Realtors’ expertise in their decisions to purchase.

 

[19]           The Plaintiffs state that the Realtors’ verbal and written representations in the budget were false and were relied upon and materially induced the Purchasers to purchase. These representations were negligently made by the Realtors: in failing to confirm the accuracy of the budget figures, in failing to advise the Purchasers that the common property had not been professionally inspected and in failing to advise the Purchasers that condominium fees were set at a level which could not realistically meet the Condominium Corporations’ expense and capital reserve requirements.

 

[20]           The Plaintiffs state that the Vendor and Intervening Purchaser are liable as principals for the Realtors’ fraudulent or negligent misrepresentations or active concealment.

 

[21]           Alternatively, the Vendor and Intervening Purchaser are liable for breach of contract in respect of the deficiencies. Wolanski and Kornell, as agents of the Vendor and Intervening Purchaser, agreed to repair various deficiencies.

 


[22]           Alternatively, the Realtors acted as purchaser’s agents for certain Purchasers and owed a fiduciary duty, including the obligation to disclose any material fact that might affect the Purchasers’ decision to enter into the transaction. The Realtors breached their fiduciary duties or were negligent in the performance of their duties to the Purchasers. Some of the particulars of breach of fiduciary duty or negligence, include: the failure to disclose the existence of deficiencies, failure to verify the accuracy of the information contained in the budget, failure to advise that the common property had not been professionally inspected prior to preparation of the budget, failing to disclose the need for major repairs and that the reserve fund was inadequate, failing to act in the best interests of their clients by placing their personal and financial interests in conflict with their duties as agents for the Purchasers.

...

CONCLUSION:

 

[53]           For the reasons outlined above, I dismiss the Defendants’ application for summary judgment. I decline to order that the action proceed with respect to only certain causes of action. In my view, there are triable issues of law and fact with respect to each of the causes of action.

 

COSTS:

 

[54]           The Plaintiffs having been successful in this application, I award costs in any event of the cause, under the appropriate column as against those Defendants who brought the application.

 

 

 DATED at Grande Prairie, Alberta this 17th day of February, 1999

 

 

 

                                                                                         ______________________________

                                                                                                                                          J.C.Q.B.A

 

 

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