Michaud c. Levesque, 1980 CanLII 3140 (NB CA)
Source: CanLII
[page 370]
34 N.B.R.(2d) and 85 A.P.R.
MICHAUD v. LEVESQUE and COUTURIER REAL ESTATE LTD.
(138/80/CA)
New Brunswick Court of Appeal
Cormier, C.J.C.Q.B., Bugold and Richard, JJ.A.
December 18, 1980.
[page 371]
MICHAUD v. LEVESQUE
(RICHARD, J.A.)
COUNSEL:
ROGER POITRAS, for the appellant Couturier Real Estate Ltd.;
RICHARD G. SHAW, for Reginald Levesque;
PAUL E. PELLETIER, Q.C., for the plaintiff.
This appeal was heard by CORMIER, C.J.C.Q.B., BUGOLD and RICHARD, JJ.A. of the New Brunsick Court of Appeal on December 17, 1980.
The judgment of the Court of Appeal was delivered by RICHARD, J.A., on December 18, 1980.
1 RICHARD, J.A.: The appellant appeals a decision finding him negligent and awarding damages in favour of the plaintiff in the amount of $4,650.00 along with annual interest of 10% from October 23, 1979 until June 5, 1980, the date of judgment.
2 The facts on which the trial judge based their decision are the following (extracts of relevant passages from their reasons):
The plaintiff claims damages against the defendants on the ground of misrepresentation.
The plaintiff claims damages against the defendant company on the ground that it was guilty of negligent misrepresentation.
I find that he (the president and owner of the appellant) did not familiarize himself nor did take the trouble to ascertain the system of water and sewer in the said property.
The question is whether or not the defendant company acted reasonably or did the failure to check out the
[page 372]
34 N.B.R. (2d) and 85 A.P.R.
information as to the sewage system, at least so far as the plaintiff was concerned amount to a negligent misrepresentation giving rise to a duty on the basis of the Hedley Byrne case? In my opinion … the defendant company did act negligently …
3 The grounds of appeals are as follows:
It is submitted that the learned trial judge erred:
The Facts
4 On February 6, 1974, Mr. Réginald Levesque and his spouse, by “[TRANSLATED] legal agreement”, gave the appellant real estate agency, “[TRANSLATED] the unique, exclusive and irrevocable authorization to sell” their property located at 31 Ouellett Street in the city of Edmunston. On March 27, 1974, the respondent became the purchaser. Mr. Paul Dubé was the only one who acted for the corporate appellant and he never knew, at any time, that one of the two units in the property in question, the basement unit, was not connected to the city sewage system. The reason for this situation is simple: the house was built in 1948 before the construction of the city sewage system in this part of the city, and when this system was built it turned out that it was too elevated to service the basement, which was at a lower level. It was therefore impossible to foresee such a situation. It was perfectly normal for Mr. Dubé as well as the purchaser to assume that the property was connected to the public sewage system for three logical reasons: first, Mr. Dubés verification with city authorities that indicated that $48.00 in taxes were paid for water and sewage; second, it was impossible to even conduct a meticulous inspection of the property in question to discover such a situation; and third, within their considerable experience in real estate in Edmunston, this was the first property with such a situation. There was no reason, in this case, for Mr. Dubé to question the vendor of such a possibility. The vendor, for their part, consciously or unconsciously, made no mention of such a situation. Two years after the purchase, there was a sewage blockage in the basement apartment and it was at this time that they discovered a sump pump. The total repair cost was $180.00 and the respondent suffered no loss in rent. It was established at trial that such a sump pump had to be cleaned every seven years or so because it is located in “[TRANSLATED LITERALLY] yellow ground” and it would cost $4,470.00 to install a new bathroom in the basement at a higher level which would allow it to be connected to the public sewage system. It is on these two amounts, totalling $4,650, that the trial judge based his judgment on. The trial judge rejected any claim against the vendor of the property and there is no appeal against this aspect.
Ground No. 1
5 To address this ground of appeal, it is necessary to examine the grounds the plaintiff relied on in their claim against the appellant. The following sections of the claim may be relevant:
5. At all material times, the defendants well knew that the plaintiff believed that the house located at 31 Ouellet Street was connected to and served by the City of Edmundston's sewage system.
6. Pursuant to the said agreement, the plaintiff purchased said land and premises relying upon the representations made to him concerning the land and premises and the conditions thereof.
7. As a result of the breach of the said contract by the defendants, the plaintiff suffered loss and damage …
6 The judge, in arriving at their decision, relied on Hedley Byrne & Co., Ltd. v. Heller & Partners, Ltd., [1963] 2 All E.R. 575, and on Windsor Motors Ltd. v. District of Powell River (1969), 4 D.L.R.(3d) 155, decisions of the House of Lords and the British Columbia Court of Appeal, respectively. The summary of principles found in the first of these two decisions were adequately summmarized by Lord Morris of Borth-y-Gest in the following passage on page 594:
My Lords, I consider that it follows and that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies on such skill, a duty of care will arise. Furthermore if, in a sphere in which a person is so placed that others could reasonably rely on his judgment or his skill or on his ability to make careful inquiry, a person takes it on himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows, or should know, will place reliance on it, then a duty of care will arise.
7 In the second decision, Branca J.A., of the British Columbia Court of Appeal, commented on Hedley Byrne & Co., Ltd. as follows on page 158:
In the Hedley Byrne & Co. Ltd. case it was held that quite apart from a contractual or fiduciary relationship, a negligent though honest misrepresentation, whether verbal or in writing, might form the basis of an action for damages for financial loss, as the law implies a duty of care when and where a party seeking information from one possessed of special skills trusted that person to exercise due care and the party who makes the representations knew or should have known that reliance was being placed on his skill and his judgment.
8 I am not convinced that the legal principles given in these decisions can be applied in this case. The evidence clearly shows that the appellant had no knowledge of the sump pump and no reason to suspect there was one. I gave the reasons for such a conclusion in the summary of facts. Additionally, the vendor made no such allusion and the purchaser conducted them-self in the same way as the appellant had no way of knowing of the existence of the sump pump and consequently, had no reason to ask such questions. When one examines the totality of the circumstances in this specific case, it would be absolutely unreasonable to impose a penalty on the appellant for failing to foresee such circumstances. It would be as reasonable to impose a requirement that the appellant know the thickness of the insulation inside the walls, a proposition that makes little sense. Given the conclusion that there was no such requirement, there was also no negligence to inform. I am of the view to allow the appeal and overturn the decision.
9 The appeal is allowed with costs.
Appeal allowed.