Annis v. Barbieri, 2012 ONSC 6479

CITATION: Annis v. Barbieri, 2012 ONSC 6479

DIVISIONAL COURT FILE NO.: 401/11

DATE: 20121119

SUPERIOR COURT OF JUSTICE - ONTARIO (DIVISIONAL COURT)

RE: KRISTYN ANNIS v. MAURIZIO BARBIERI

BEFORE: Justice Swinton

COUNSEL: Kristyn Annis in person (Plaintiff/Appellant) Douglas H. Levitt for the Defendant (Respondent on Appeal)

HEARD AT TORONTO: November 15, 2012

ENDORSEMENT

Overview

[1] The appellant appeals from a decision of Deputy Judge Richardson dated June 17, 2011, which dismissed her claim for damages against the respondent Maurizio Barbieri arising after she purchased a home from him. The trial judge heard a day of evidence and received written submissions before making his decision.

[2] On this appeal, the appellant submits that the trial judge erred in failing to find that the respondent made fraudulent misrepresentations on which she relied in purchasing the house. She also submits that the reasons of the trial judge are inadequate.

[3] For the reasons that follow, I would dismiss the appeal.

The Standard of Review

[4] The standard of review on an appeal from a trial judge is correctness with respect to questions of law. On a question of fact, the standard is palpable and overriding error (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at paras. 8 and 10).

Background Facts

[5] The appellant, a lawyer specializing in energy law, purchased a home from the respondent, who is also a real estate agent. The house is almost 100 years old, and the respondent was in the process of converting it from a duplex back to a single family residence at the time of purchase.

[6] The appellant visited the home twice in October 2009 and made an offer conditional on a home inspection. That inspection occurred on October 14, and the appellant accompanied the inspector. She received a written report on October 21, a copy of which she provided to the respondent.

[7] The inspection report identified a number of concerns, including an old drain from the house to the city, an old galvanized water pipe, a flat roof that needed repair, shingles that needed replacing, moisture on the ceiling in two second floor rooms and in the basement, and a drain not connected in the second floor kitchen. The inspector did not inspect the water supply in the second floor kitchen because there was no drain connected to the sink.

[8] The appellant subsequently visited the home with her contractor, and she also tried to negotiate a reduced purchase price. As the parties could not agree, she let her offer lapse. However, she made a renewed offer to purchase dated November 9, 2009, which was accepted. That offer indicated that there were no warranties from the vendor, and that she had had the opportunity to obtain a home inspection.

[9] Shortly after the closing in early December 2009, the appellant encountered problems. For example, she noticed that the damage to the second floor ceiling was worsening, and she had a sewage backup in the basement, which apparently was caused by a broken external trap. Her contractor opened the floor on the third floor and a wall and found evidence of water damage. As well, the insulation was wrapped in plastic bags. The contractor also discovered that the water pipes to the second floor kitchen were not connected, and there was no receptacle to plug in the second floor dryer. Finally, the two electric panels for the house were found not to be separated.

The Trial Decision

[10] The appellant sued for damages for breach of contract and fraudulent misrepresentation, claiming some $21,000. The trial judge rejected the contract claim, and he found that there was no evidence capable of supporting a finding of fraudulent misrepresentation. While the appellant alleged five incidents of misrepresentation, the trial judge discussed only the clogged drain in the basement. He went to find that even if there had been misrepresentations, the appellant had not been induced to enter the agreement because of them and, therefore, she had not proved the elements of fraudulent misrepresentation.

The Appeal

[11] Essentially, the appellant takes issue with the trial judge’s findings of fact on misrepresentation, fraud, and reliance. She also takes issue with the adequacy of the reasons.

[12] In my view, the reasons are adequate to permit meaningful appellate review, particularly when read in conjunction with the transcript and exhibits. The trial judge set out the correct legal principles governing a claim for fraudulent misrepresentation. He then concluded that two elements of the test were not met, as he found there were no misrepresentations and no reliance. Given those findings, he was not required to make a finding as to whether there was an intent to deceive.

[13] It is true that the trial judge did not discuss, in detail, the five areas of misrepresentation. With respect to the basement drain, which he did discuss, there was evidence on which he could base his conclusion that there was no fraudulent misrepresentation or active concealment of the condition of the drain.

[14] With respect to the other areas of complaint, I note that the appellant was aware of the condition of the second floor ceiling, and she had to know that there had been a water leak in the ceiling at some time, given the appellant’s statement about the damage caused by the power washing. She had also been told of the need for a new roof by the inspector and had obtained a quote for a new roof and a new ceiling.

[15] With respect to the dryer, she admitted that the machine worked. The problem was the lack of an electrical connection. The dryer could have been tested during the inspection, but apparently was not. I see no error by the trial judge in concluding there was no misrepresentation here. Similarly with the breaker panels, there were two panels, and it was open to the inspector to have investigated the setup.

[16] More problematic was the lack of a water connection for the kitchen. It would not have been obvious that the pipes inside the walls were not attached. However, there was evidence from the respondent that he told the appellant that the water was cut off, and she was aware that there was no drain attached to the sink, and her inspector had not tested the water connection.

[17] While it might have been preferable if the trial judge had made a finding on this issue, it was not strictly necessary for him to do so, given his finding on reliance. He concluded that any misrepresentations did not induce the appellant to buy the house. He gave a number of reasons for reaching this conclusion: her own inspections of the home, her clear desire to purchase it, her knowledge of its age, the report of the inspector which identified a number of concerns, and her plan to renovate the second and third floor. I note, as he did, that the appellant made a second offer to purchase following the report and after a visit with her contractor. She knew of the problems identified by the inspector, which included the need for a new roof, moisture problems on the second floor, an aged drain, and apparent water problems in the basement (for example, because of the identified need for parging and new weeping tiles). The appellant proceeded with the purchase without demanding any warranties from the respondent and, indeed, signed an agreement stating that there were no outstanding conditions and warranties.

[18] The appellant is, in effect, asking this Court to overturn the findings of the trial judge and to substitute its own findings of fact. That is not the role of an appellate court. The trial judge heard all the evidence and made findings of fact that have a basis in the evidence. The appellant has identified what may be some errors in the findings of fact (for example, the timing of the cancellation of the listing agreement), but I am satisfied that none of them reach the level of palpable and overriding errors of fact. Accordingly, the appeal is dismissed.

[19] The respondent seeks costs of the appeal on a substantial indemnity basis because of the unproved allegations of fraud. I would not award costs on that scale. While the appellant has not established fraud, I share the view of the trial judge that the respondent has not been as forthright and open as he could have been – for example, with respect to the sink and the dryer.

[20] While I would award costs on a partial indemnity basis, the amount sought – over $10,000 – is excessive for a Small Claims Court appeal. In my view, costs in the amount of $5,000.00 inclusive of HST and disbursements would be reasonable and fair, and I so order.

Swinton J.

Released: November 19, 2012