Case Name:

Newell v. Ziegemen
Between
Ferris Newell and Holly Newell, plaintiffs and
Penny Ziegemen, defendant
[2003] S.J. No. 857
[2004] C.C.S. No. 4017
2003 SKPC 159
File No. S.C. #03-0619
Saskatchewan Provincial Court
Small Claims Division
Prince Albert, Saskatchewan
Goliath Prov. Ct. J.
December 31, 2003.
(22 paras.)
Sale of goods -- Breach -- Remedies of buyer -- Damages
-- Conditions precedent -- Breach of warranty or false
representation -- Concealment of defects -- Restitution --
Unjust enrichment -- Bars -- Claim based on justice or
fairness alone.
Action by Newell against Ziegemen for the cost of
removal and replacement of carpets. Newell purchased
Ziegemen's home. He became aware of a strong odour that
emanated from the furnace ducts. The smell was from the
basement carpets that were contaminated with cat urine.
Carpets in other portions of the house also had to be
replaced at a cost of $3,800. Ziegemen had kept pets in the
house but had had the carpets professionally cleaned every
three years. The contract of sale or the property condition
disclosure statement did not deal with this issue.
HELD: Action dismissed. There was nothing in the
contract or disclosure statement that supported a claim for
breach of contract. There was no misrepresentation by
Ziegemen. There was also no intentional or reckless
concealment by her. The requirements of unjust enrichment
did not apply. Recovery could not be based on fairness
alone.

Counsel:
Ferris Newell and Holly Newell, for the
plaintiffs.
Penny Ziegemen, for the defendant.
JUDGMENT
[para1] GOLIATH PROV. CT. J.:-- The plaintiffs' claim is
for the cost of removal and replacement of carpets in a house
purchased from the defendant in Prince Albert in October 2002.
The plaintiffs say that once they moved into the premises and
turned on the heat they became aware of a strong odour
emanating from the furnace ducts. This turned out to be from
the basement carpets which were contaminated with cat urine.
[para2] A professional cleaning job did not alleviate the
problem. The carpet was then removed and the floors
disinfected.
[para3] In May, about 7 months after taking possession of
the premises, the plaintiffs say they "were still noticing a
smell upstairs". Subsequent testing by a fire and flood
restoration company revealed the presence of cat urine in the
hallway and two bedrooms. These carpets were also taken out
and the sub-floors sealed.
[para4] The claim is based upon estimates of $2,758.85 and
$2,057.06, being the cost of replacing the basement and
upstairs carpets respectively. The total would be reduced by
approximately $1,000.00 for a lower grade material.
The Contract of Sale
[para5] The offer, counter-offer, and acceptance was
contained on Saskatchewan Real Estate Commission standard
forms, including a property condition disclosure statement,
stated to be part of the contract. This statement is attached
to an information form which cautions buyers to use it only as
a "starting point" for their inquiries about the property in
question, and strongly urges buyers to make their own
inquiries as follows:
"BUYERS are urged to carefully inspect the property and
if desired to have the property inspected by an
inspection service of their choice at their expense.
BUYERS can hire an independent inspector to examine the
property to determine whether defects exist and to
provide an estimate of the cost repairing old problems
that have been identified on a Disclosure Statement or on
an inspection sheet."
[para6] In the disclosure statement the sellers answer
certain specific questions regarding water supply, waste
disposal, insulation, etc., and some general questions
regarding zoning, taxes, plumbing, electrical, structural
defects, etc. None of the questions are about stained floor
coverings. The disclosures appear to deal with matters not
readily discernable through inspection.

[para7] The residential contract form contains the usual

exclusionary clause:
"12. IT IS UNDERSTOOD AND AGREED that there are no other
representations, warranties, guarantees, promises or
agreements between the Buyer and the Seller other
than those contained in this contract and the Buyer
hereby agrees to purchase the above described
property as it stands at the price and terms and
subject to the conditions above set forth."
[para8] There is nothing in the contract of sale or the
property condition disclosure statement which could support a
claim by the plaintiffs for a breach of contract.
Misrepresentation
[para9] The subject of the condition of the floor
coverings does not appear to have been discussed. The upstairs
carpets had been in place since the defendant acquired the
premises in 1991. The lower level had been done more recently.
The defendant did have pets in the house over the years, as
well as young children, but says that she had the carpets
professionally cleaned every two or three years. She says that
she was not aware of any problem, but concedes that it was
"entirely possible" that there were urine stains. The
plaintiffs have said that they noted the odours when they
turned on the furnace after taking possession, but the
defendant says that she hadn't noticed any problem whether the
furnace was on or off. In fact she says that the furnace was
never shut off, since she still had plants in the house as
late as September. She says that while she had not ordinarily
resided in the house for about a year, her son who was working
in Alberta was there from time to time, and she attended there
every day in order to keep her home insurance current.
[para10] The defendant also says that the plaintiffs
inspected the premises several times during September and
October, sometimes with other persons, and should have been
able to discern any odour problem if there was one.
[para11] The plaintiffs' realtor, Mr. Cadieu, also says
that he did not detect any smell, and that the first he heard
of any problem was when the plaintiffs phoned him after they
moved in.
[para12] A misrepresentation is a misstatement of some
fact which is material to the making or inducement of a
contract; The Law of Contract, Fridman, (2nd ed.) p. 275.
Without delving too deeply into the subtleties of the
different kinds of misrepresentation and their effects, it is
quite clear on the facts of this case that there were no
operative misrepresentations regarding the condition of the
premises, fraudulent or otherwise.
Failure to Disclose
[para13] Some forms of non-disclosure may amount to
fraudulent misrepresentation, as for example when a partial or
fragmentary statement of fact results in false or misleading
information, Fridman, (supra.), p. 289, or where a party fails
to report that a prior representation is no longer true.
Complete silence on a matter, however, cannot amount to a
misrepresentation unless it relates to some fact of which
there is a duty to disclose. Bank of Nova Scotia v. Boehm,
[1973] 3 W.W.R. 757.
[para14] A vendor of residential premises has a duty to
disclose blatant defects rendering the premises unfit for
habitation and may be held liable for intentionally or
recklessly concealing such defects, McGrath v. MacLean,
(1979), 95 D.L.R. (3d) 144. On the facts of this case,
however, I find no intentional or reckless concealment on the
part of the defendant.
Unjust Enrichment
[para15] Where there has been no breach of contract (and
indeed in some situations no contract), which might have
entitled an aggrieved party to recover damages, equitable
rules may sometimes apply. An order for restitution in such
circumstances is based, not on contractual notions of damages,
"... but upon the idea that one party must disgorge any
benefit by virtue of which he was enriched at the expense
of the other party, in circumstances in which it would be
unjust for him to retain such benefit."
[Fridman, (supra.) p. 12]
[para16] In Peel v. Canada; Peel v. Ontario; [1992] 3
S.C.R. 762, McLachlin, J., quotes the American Restatement of
the Law of Restitution, 1937 as follows:
"A person who has been unjustly enriched at the expense
of another is required to make restitution to the other."
[para17] And further:

"[Unjust enrichment] presupposes three things: first that

the defendant has been enriched by the receipt of a
benefit; secondly, that he has been so enriched at the
plaintiff's expense; and thirdly, that it would seem
unjust to allow him to retain the benefit.
(Goff and Jones, The Law of Restitution
(3rd ed. 1986), at p. 16.)"
[para18] These latter three requirements have been
recognized by our Supreme Court in Pettkus v. Becker, [1980] 2
S.C.R. 834.
[para19] In this case one might argue that the defendant
has been unjustly enriched at the plaintiffs' expense,
inasmuch as she received a price for her house which may have
been in excess of its value, having regard to the contaminated
condition of the carpets. While I have found no intentional
misrepresentation or failure to disclose, can the plaintiffs
show "that it would seem unjust" for the defendant to retain
the full purchase price paid?
[para20] The "injustice" argument was discussed by
McLachlin, J., in the Peel case (supra.) at p. 803:
"This argument raises two questions. First, where the
legal tests for recovery are clearly not met, can
recovery be rewarded on the basis of justice or fairness
alone? Second, if courts can grant judgment on the basis
on justice alone, does justice so require in this case?"
[para21] The first question, on a review of authorities,
was answered in the negative. Courts have chosen a "middle
course" between the extremes of inflexible rules and case by
case "palm tree justice". Recovery cannot be based upon a bare
assertion that "fairness" so requires. There must in addition
be at least a general congruence with accepted legal
principle.
Conclusion
[para22] Thus, in a case such as this one, while it may
seem "unfair" or "unjust" not to allow the plaintiffs at least
a portion of their claim, there does not appear to be any
justification in law or equity to allow it. The claim is
accordingly dismissed.
GOLIATH PROV. CT. J.

QL UPDATE: 20040114
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