New Rules of Court Interpreted: Rule 13.7 and Fraudulent Misrepresentation

Case commented on: Terrace Consulting Inc. v. Jackson, 2011 ABQB 108

The Plaintiff applied for summary judgment to enforce its remedies under an offer to purchase a condominium. The Defendants alleged misrepresentation and contended that they were told they were signing a rent to own contract. They also counterclaimed for damages in the amount of the deposit paid, which they understood to be refundable. The Defendants argued that in light of the misrepresentation, summary judgment should not be granted. The Plaintiff argued that an entire agreement clause in the purchase contract precluded the defence of misrepresentation and summary judgment should be granted.

Master Hanebury found that fraudulent misrepresentation had been pled by the Defendants, but the particulars had not been adequately described as required by new rule 13.7. Relying on new rule 13.7 and decided cases (at para. 13), she stated that it is established law that fraudulent misrepresentation must be plead with specificity. The pleadings should include: the alleged misrepresentation; when, where, how, by whom and to whom it was made; its falsity; the inducement; the intention that the plaintiff should rely on it; the alteration of the plaintiff of his or her position relying on the misrepresentation; and the resulting loss of damage.

The evidence provided by the Plaintiffs’ affidavits supported a claim of intentional misrepresentation, either fraudulent or negligent. The counterclaim was based in tort law and therefore not defeated by the entire agreement clause. It raised a triable issue and should proceed to trial. The defence if properly pled, would also defeat the application for summary judgment. Master Hanebury found that the matter should proceed to trial and directed the Defendants to amend their statement of defence to better particularize the alleged misrepresentations as required by the Rules of Court.

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