Roberts v. Hutton, 2013 BCSC 640

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Roberts v. Hutton, 2013 BCSC 640 Date: 20130412 Docket: 10-1374 Registry: Victoria Between: Hugh Roberts Plaintiff And Tracy Hutton and Glenn Anderson Defendants Before: The Honourable Mr. Justice Davies Reasons for Judgment Counsel for the Plaintiff: D.T. Juteau Counsel for the Defendant, Tracy Hutton: K.T. Karaszkiewicz The Defendant, Glenn Anderson: In Person Place and Date of Trial: Victoria, B.C. February 4-6 and 13, 2013 Place and Date of Judgment: Victoria, B.C.

April 12, 2013 I. introduction [ 1 ] This judgment concerns allegations by the plaintiff, Hugh Roberts, that the defendants, Tracy Hutton and Glenn Anderson, misrepresented the condition of their three-storey home at 2905 Harriet Street in Victoria (the “Building”), when they sold it to Mr.

Roberts in July of 2007. [ 2 ] At issue are the contents of a Property Disclosure Statement (the “Disclosure Statement”) related to that sale, dated June 23, 2007. [ 3 ] Of concern are the following statements: 1) Paragraph 2H, which asks the vendor: “Are you aware of any structural problems with the premises or other buildings on the property?” to which the defendants answered “no”; and 2) Paragraph 2K, which asks the vendor: “Are you aware of any damage due to wind, fire or water?” to which the defendants answered “yes,” and under “additional comments” also wrote: 2K- Deck was leaking where a pond was installed.

Pond has been removed and repairs have been made to area. Fixed as far as we are aware. [ 4 ] On the Disclosure Statement, Glenn Anderson also stated that he is a licensed realtor in B.C., and also that he “has not lived in the [B]uilding for four years.” [ 5 ] The “deck” referred to in these additional comments (which for ease of reference I will refer to as the “Main Deck”), is approximately 800 square feet in area. It is located on the top floor of the Building and acts as a roof over part of the middle floor of the Building. [ 6 ] After the purchase of the Building was completed, a tenant of Mr.

Roberts, as well as an electrical contractor hired by him, discovered evidence that water had penetrated the ceiling and a wall in two rooms (which I will refer to as the “Office” and the “Living Room”) below the Main Deck. [ 7 ] Those discoveries led to further investigation by the plaintiff, which established that water emanating from a drainage system on the Main Deck area had not only caused water to enter into the Office and Living Room, but had also caused the Main Deck to rot to the point of structural instability.

[ 8 ] After that investigation the plaintiff hired a contractor to remove the Main Deck and replace it with a new vinyl coated deck. [ 9 ] He also hired a contractor to replace a smaller deck located on the middle floor of the Building (which for ease of reference I will refer to as the “Middle Deck”) because of water leakage issues identified by his contractor related to an adjacent sloping roof over the ground floor entrance to the Building. II. ISSUES [ 10 ] Mr.

Roberts alleges that the defendants’ statements in paragraphs 2H and 2K, as well as the additional comments under paragraph 2K in the Disclosure Statement, were misleading and negligently failed to fully disclose the real state of water leakage affecting the Building.

He says that those misleading statements caused the losses he incurred in: 1) investigating the problem; 2) effecting the repairs he undertook including replacing the Main Deck and the Middle Deck; and 3) lost rental income, lost due to the disruption of the renovation work. [ 11 ] The issues to be decided are: 1) Did the defendants negligently fail to fully disclose the condition of the Building in the Disclosure Statement; and, if so 2) Is the plaintiff entitled to recover, as damages for negligent misrepresentation, the costs which he incurred for the investigation and renovation work done, as well as for lost rental income?

III. BACKGROUND [ 12 ] The defendants purchased the Building in 1998 in foreclosure proceedings. They purchased it as a rental property consisting of a number of occupied suites. A. Renovation, Repairs and Maintenance from 1998 to 2006 [ 13 ] The Building was in poor condition when the defendants purchased it; however, primarily through the efforts and supervision of the defendant Glenn Anderson, they undertook work to improve both the Building and a shop located on the same property.

That work included replacing the roofs on both the Building and the shop. [ 14 ] Work to improve the Building intensified in 2002 when the defendants decided to sell another property in which they were then living so they could move into the top floor of the Building while continuing to rent out suites in the bottom two floors. [ 15 ] That work (in 2002 and 2003), to the extent that it is relevant to these proceedings, included: 1) Moving the front wall of the top floor backwards from its previous location off the Main Deck to comply with municipal regulations; 2) Repairing the surface of the new larger Main Deck because of differences between the height of the surface of the Main Deck and the surface of the top floor of the Building; 3) Applying material to fill in the gaps in the otherwise unaligned surfaces of the newly configured Main Deck and drains; 4) Replacing the drains in the Main Deck with a gutter collection system and new drain piping to prevent pooling of water on the Main Deck; 5) Covering all of the Main Deck surface with new ceramic tile; 6) Creating an elevated enclosed landscaped garden area, including a plastic pool, on a portion of the Main Deck to provide a “green space”; and 7) Installing shingles over the fibreglass coating on the sloping roof over the ground entrance to the Building adjacent to the Middle Deck. [ 16 ] Glenn Anderson’s brother Paul Anderson, an experienced renovation contractor, provided assistance with the repairs to the Main Deck including the installation of the new gutter drainage system to replace the existing drains. [ 17 ] After all of that work was done, the defendants lived in the top floor of the Building after 2003, and Glenn Anderson’s adult son, Robert Anderson, occupied a bedroom located at the back of the middle floor of the home. [ 18 ] Other parts of the Building were still rented out to various tenants, many of whom had occupied the Building before the defendants purchased it. [ 19 ] The evidence establishes that both before and after the defendants began to reside in the Building all renovations, repairs and maintenance of the Building were the responsibility of Glenn Anderson, and that his son Robert assisted him in doing the necessary work.

[ 20 ] After completing renovations to the Building and moving into the top floor of the Building, the defendants experienced marital difficulties in 2004, which eventually ended in a divorce. [ 21 ] When those marital difficulties began, Glenn Anderson stopped residing in the Building, while Tracy Hutton continued to live there with their young son. [ 22 ] Robert Anderson continued to live in the same bedroom on the middle floor he had occupied before the defendants separated. [ 23 ] After ceasing to reside in the Building, Glenn Anderson’s regular involvement in the day-to-day repair and maintenance of the Building ceased. [ 24 ] He then attended to problems only when advised of them by Tracy Hutton. [ 25 ] Tracy Hutton testified that she was working outside of the home throughout that period and that she learned about necessary repair or maintenance issues concerning the Building from either Robert Anderson or tenants. [ 26 ] When Tracy Hutton learned of issues requiring attention, she communicated those concerns to Glenn Anderson, either directly or through Robert Anderson.

She did not otherwise get involved. [ 27 ] The totality of the evidence establishes that after Glenn Anderson left the Building in 2004 until shortly before the defendants sold it to the plaintiff, its general condition deteriorated. Also, the property on which the Building and the shop were situated became overrun with garbage, furniture and other debris left by tenants, as well as by Robert Anderson. B.

Unsuccessful Attempts to Sell the Building (August 10, 2006 to June 7, 2007) [ 28 ] On August 10, 2006, the defendants listed the Building for sale for $649,900. [ 29 ] In doing so, Glenn Anderson prepared, and both he and Tracy Hutton signed a Property Disclosure Statement. [ 30 ] Germane to the issues to be decided in this case is that in response to questions asked of them on that statement, the defendants answered that: they were aware of damage “due to wind, fire or water”; and were also aware of “roof leakage or unrepaired roof damage.” Under “additional comments”, Glenn Anderson also wrote: Glenn Anderson is a licensed realtor and is part owner but has not lived in the Property for past three years.

Upstairs deck [Main Deck] needs repairing and has leaks that occur during heavy rainfall and wind. This has caused ceiling leaks in office [Office] and front room area [Living Room] and floor of upstairs kitchen [ 31 ] Concerning the repair and leakage issues identified on that Property Disclosure Statement, Glenn Anderson testified that he had learned of the leaks disclosed in the statement from Tracy Hutton.

He also testified that when he had later attended at the Building, he found that: 1) The leaks in the ceiling of the Office of which he had been advised came from a disconnected drain pipe above the Office window below the Main Deck on the exterior wall of the Building, which he reconnected to fix the problem; 2) The leaks in the Living Room ceiling were near the chimney area where water entered at the top of brickwork near the ceiling during heavy rainfall.

His subsequent investigation of the Main Deck area near the chimney, which included removing siding from part of the Main Deck wall, disclosed an open channel at the base of the wall that allowed water to enter the Building. The point of entry was at the top of the chimney on the ceiling of the Living Room. When water entered, it would then trickle down the brickwork.

To attempt to prevent water entering then, as well as in the coming winter, Glenn Anderson and his father placed a tarpaulin over the affected area; and 3) The water in the kitchen area pooled there during periods of heavy rainfall and wind, after entering the Building at the base of an exterior wall.

Water entered on those occasions because the area had not been properly protected with flashing and caulking, which Glenn Anderson then installed. [ 32 ] When the Building did not sell under the August 10, 2006 listing, on May 7, 2007, Tracy Hutton signed a second listing as well as a second Property Disclosure Statement. [ 33 ] Neither of those two documents was signed by Glenn Anderson. [ 34 ] Tracy Hutton testified that she received the information for the Property Disclosure Statement from Glenn Anderson, while Glenn Anderson denied that he provided it. [ 35 ] Because of the content of that Property Disclosure Statement, Tracy Hutton’s evidence about her confusion as to the questions asked, Glenn Anderson’s role as a realtor, as well as the fact that he had communicated with Tracy Hutton to complete the earlier August 10, 2006 Property Disclosure Statement, I have concluded that I accept Tracy Hutton’s evidence that the information she relied upon came from Glenn Anderson. [ 36 ] On that May 7, 2007 Property Disclosure Statement, Tracy Hutton responded affirmatively to questions concerning whether she was aware of any structural problems with the Building and also whether she was aware of any water or moisture problems in the walls, basement or crawl space. [ 37 ] Although she responded negatively concerning whether she was aware of any damage due to wind, fire or water, she also provided the following additional comments:

- pond removal estimate available - damage to ceiling in living room and office from exterior weather (water damage) [ 38 ] Under cross-examination, Ms.

Hutton testified that she believed that the “structural problems” referenced on that Property Disclosure Statement were water-related and that her comments were meant to clarify the extent of the water issues of which she was aware. [ 39 ] I find that evidence to be credible because: 1) The earlier August 10, 2006 Property Disclosure Statement had identified the same problem areas although with more specificity. 2) Although by May 7, 2007, the removal of the pool on the Main Deck had not yet been undertaken, it was in contemplation because of the leakage from the Main Deck onto the brick facing of the chimney area in the Living Room. 3) Also, by May 7, 2007, the water issues above the window of the Office and on the floor of the kitchen in the top floor had been remedied by Glenn Anderson. [ 40 ] The Building did not sell under the May 7, 2007 listing and on June 7, 2007, the defendants signed another listing for the sale of the Building for $560,000, as well as a third Property Disclosure Statement. [ 41 ] In that June 7, 2007 Property Disclosure Statement the defendants responded affirmatively to the question about their awareness of damage due to wind, fire or water, and negatively to the question about their awareness of structural problems. [ 42 ] Also, in the “additional comments” section, Glenn Anderson wrote: [Main] Deck had been leaking past 3 years- Did not leak when pond/garden was tarped off- not positive on where leaks are coming from C.

The Sale of the Building to the Plaintiff [ 43 ] After a potential sale targeted by the June 7, 2007 listing did not complete, Glenn Anderson, his brother Paul Anderson, his father Ed Anderson, and his son Robert Anderson, with the help of others embarked upon a major clean-up of the Building and the property. [ 44 ] Part of the work undertaken that summer included the deconstruction of the pool and garden area of the Main Deck which had been “tarped off” the winter before because of Glenn Anderson’s belief that it was the likely source of leakage into the chimney area in the Living Room on the middle floor. [ 45 ] When that pool and garden area was removed from the Main Deck, Glenn Anderson and his father also reconstructed the Main Deck wall where they had earlier located the open channel at the base of the wall that Glenn Anderson believed was the source of water leaking into the chimney area of the Living Room. [ 46 ] They did so by placing tar paper behind the siding to the base of the wall and installing flashing to attempt to block the ingress of water through the channel. [ 47 ] After that work was done, Mr.

Roberts offered to purchase the Building, leading to the Disclosure Statement which is the subject of this proceeding. [ 48 ] As noted above, in answering the question “Are you aware of any damage due to wind, fire or water?” the defendants indicated “yes” and under “additional comments” wrote: [Main] Deck was leaking where a pond was installed. Pond has been removed and repairs have been made to area as far as we are aware. [ 49 ] The defendants also responded “no” to the question of whether they were aware of any structural problems with the Building. [ 50 ] Mr.

Roberts testified that he relied on the truthfulness of the Disclosure Statement in deciding to complete the purchase of the Building and that he would not have purchased it had he been aware of all of the water issues disclosed by the defendant in the three earlier disclosure statements of August 10, 2006, May 7, 2007, and June 7, 2007. [ 51 ] Notwithstanding that testimony, before determining to complete the sale, Mr. Roberts retained the services of a building inspector to examine the Building. Mr.

Roberts testified that due to the contents of the Disclosure Statement, he asked the inspector to pay attention to evidence of water damage and leaks. [ 52 ] The building inspector retained by the plaintiff did not testify, but his inspection report was admitted into evidence by consent. [ 53 ] Relevant to the issues now before the Court, that inspection report included the statement: *Evidence of leaking at sometime around middle floor ceiling D. Discovery of Leakage after the Sale of the Building [ 54 ] After he purchased the Building, Mr.

Roberts continued to rent out its various rooms and small suites to tenants.

[ 55 ] Later, however, he decided to convert the Building from a Single Family Dwelling to a Single Family Dwelling with a Secondary Suite, which would involve renovations to the middle floor. To that end, on January 28, 2008, he applied for a building permit. [ 56 ] Before the work contemplated by that permit was undertaken, Antoine Newman, a tenant who then occupied the Office, discovered that water had penetrated the dividing wall between the Office and the Living Room.

Concerning his discovery of water concerns, Antoine Newman testified that while doing some work related to a cabinet area of that wall between the Office and the Living Room, he discovered areas of dampness at the base of that wall, close to a sink, which he repaired in lieu of payment of rent. [ 57 ] For the planned renovation and conversion of the Building, Donald Greenberg, an electrician retained by Mr.

Roberts, and his crew had to cut into both the ceilings of the Office and the Living Room of the middle floor, as well as into the wall dividing the two rooms. [ 58 ] In doing so, the electricians found extensive rot caused by water leakage into those areas. [ 59 ] Further investigation of the water issues uncovered by the electrical crew was then conducted by Read Jones Christoffersen (“RJC”), a structural engineering firm retained by the plaintiff.

That investigation included opening up the ceilings in affected areas in the Office and Living Room, as well as the removal of insulation material situated between the beams of the Main Deck to which the drywall of those ceilings was attached. [ 60 ] The RJC investigation and the repair work that eventually followed established that water emanating from the Main Deck area had not only caused water to enter into the ceiling of the Office and the Living Room and the wall dividing the two rooms, but had also caused the rotting of the Main Deck itself to the point of structural instability. [ 61 ] RJC’s report of that investigation was not filed as an expert report but was admitted into evidence by consent as background information relevant to Mr.

Roberts’ decision to undertake the remedial work that he undertook. The plaintiff seeks damages in the amount of $2,733.15 for the RJC investigation. [ 62 ] After receipt of the RJC report, Mr.

Roberts sought quotations for the work deemed necessary to effect repair of the identified water and structural damage. [ 63 ] He rejected a quotation for that work from RJC and eventually retained Deck and Roof Master Inc., at a lower price to do the work. [ 64 ] The work undertaken eventually included the removal of the Main Deck and replacement of it with a new vinyl coated deck that was engineered to drain water away from the Building rather than collect in drains. [ 65 ] The cost of that repair work was $41,895, and Mr.

Roberts also incurred additional costs of $4,130.39 for interior repairs to the Office and Living Room ceilings necessitated by the renovation of the Main Deck. [ 66 ] In addition to replacing the Main Deck and undertaking the associated repairs to the interior of the Building, the plaintiff also retained Deck and Room Master Inc. to replace the Middle Deck and repair the adjacent sloping roof over the ground floor entrance to the Building.

He paid $6,615 for that work, which he also claims as damages. [ 67 ] The plaintiff says that all of the work undertaken by him was necessary because of the RJC investigation into the condition of the Building, Main Deck and due to problems with the sloping roof adjacent to the Middle Deck, identified when renovation work was being done. [ 68 ] In making his submissions, the plaintiff also relied upon a report by Bill Phelps, the owner of Deck and Room Master Inc., to which I will later refer, which was filed by consent of the parties as an expert report without requirement by the defendants to require his attendance at trial. [ 69 ] In addition to the costs incurred related to the investigation of the water damage, the replacement of the Main Deck and interior repairs, the replacement of the Middle Deck and the repairs to the adjacent sloping roof in the total amount of approximately $56,000, Mr.

Roberts seeks to recover as damages from the defendants, lost rental income of $7,100, because the Building could not be fully occupied while the necessary renovations were ongoing. IV.

ANALYSIS AND DISCUSSION [ 70 ] The plaintiff has alleged that while the Building was occupied by both the defendants Glenn Anderson and Tracy Hutton, and later by Tracy Hutton alone, they were aware of many leaks in the Building that they failed to fully disclose in the Disclosure Statement. [ 71 ] The plaintiff further submitted that all of the information disclosed by the defendants in the prior Property Disclosure Statements of August 10, 2006, May 7, 2007, and June 7, 2007, should have also been included in the Disclosure Statement to fully disclose the true state of affairs concerning water leakage, water damage and structural damage in and to the Building. [ 72 ] He says that the defendants’ failure to do so constituted negligent non-disclosure amounting to actionable misrepresentation. [ 73 ] Although the plaintiff also initially pleaded and advanced at trial the theory that Glenn Anderson had deliberately and fraudulently covered up evidence of known structural defects relating to the construction of the Main Deck and of extensive water damage to the interior of the Building, those allegations were formally withdrawn by his counsel at the close of the evidence. [ 74 ] The specific areas of leakage and water damage which the plaintiff alleges were either known or ought to have been known to

the defendants and that were negligently or alternatively, recklessly, not disclosed are: 1) on the middle floor below the Main Deck:

a) in the ceilings of the Office and Living Room and the dividing wall between those rooms;

b) above the window in the Office; and

c) adjacent to the brick chimney in the Living Room; 2) in the kitchen on the top floor; 3) in a bedroom at the back of the middle floor, occupied by Robert Anderson; 4) in the garage on the bottom floor; and 5) below the sloping roof adjacent to the Middle Deck at the front door entrance. [75] I will examine the evidence in relation to each of those specific areas of complaint after first discussing the legal principles thatapply in this case. V.

Applicable Legal Principles [76] The parties agree that the Disclosure Statement was incorporated by reference into the terms of the contract between theplaintiff and the defendants for the purchase of the Building. [77] Although different legal principles sometimes apply in determining whether liability exists for breach of contract or for the tortof negligent misrepresentation, no such distinctions arise in this case because the incorporation of the Disclosure Statement into thecontract of purchase and sale constitutes representations by the defendants upon which the plaintiff was entitled to rely.

See: Ward v.Smith, 2001 BCSC 1366 at para. 31; Kiraly v. Fuchs, 2009 BCSC 654 at para. 46 [Kiraly]; and 413255 B.C. Ltd. v. Jesson et al, 2006BCSC 1070. [78] To establish that the defendants negligently misrepresented the condition of the Building, the plaintiff must prove on a balanceof probabilities that the representations in the Disclosure Statement concerning structural damage to the Building and/or the existenceand extent of water damage and leaks were: (1) untrue, inaccurate or misleading; and also (2) that they were negligently made. See:Hanslo v.

Barry, 2011 BCSC 1624 at paras. 108 and 109. [79] The standard against which the defendants’ representations must be assessed is that of a reasonable person having thatknowledge. See: Zaenker v.

Kirk (1999), 30 R.P.R. (3d) 9 (B.C.S.C.) [Zaenker], aff’d 2001 BCCA 399. [80] Inquiry into whether the representations in the Disclosure Statement were untrue, inaccurate or misleading requires analysis ofthe veracity of the statements in the context of the circumstances that existed when the defendants signed the Disclosure Statement. [81] If it is determined that representations were factually untrue, inaccurate or misleading, the inquiry into whether they werenegligently made then focuses upon the state of the defendants’ knowledge of the state of affairs which they represented and uponwhether they made full and complete disclosure that accorded with the extent of their knowledge. [82] Two other principles which arise in this case must also be considered. [83] Those principles are that: 1) A disclosure statement is not a warranty.

Its main purpose is to provide information with respect to current known problems. See:Kiraly at para. 47, and Zaenker at para. 19; and 2) When what is at issue is a latent as opposed to a patent defect, the disclosure obligations of a vendor may be enhanced. See:Cardwell v. Perthen, 2006 BCSC 333 [Cardwell]; and McCluskie v.

Reynolds (1998), (BC SC), 65 B.C.L.R. (3d) 191[McCluskie]. [84] Concerning that second principle, in Cardwell, in considering the distinction between patent and latent defects on the issue ofdisclosure, Ballance J. wrote at para. 122: [122] The distinction between patent and latent defects is central to a vendor’s obligation of disclosure under the doctrine. Patent defectsare those that can be discovered by conducting a reasonable inspection and making reasonable inquiries about the property. Theauthorities provide some guidance about the extent of the purchaser’s obligation to inspect and make inquiries.

The extent of thatobligation is, in some respects, the demarcation of the distinction between latent and patent defects. In general, there is a fairly high onuson the purchaser to inspect and discover patent defects. This means that a defect which might not be observable on a casual inspectionmay nonetheless be patent if it would have been discoverable upon a reasonable inspection by a qualified person: 44601 B.C. Ltd. v.Ashcroft (Village), [1998] B.C.J. No. 1964 (S.C.) [Ashcroft]; Bernstein v. James Dobney & Associates, 2003 BCSC 986 [Bernstein].

Insome cases, it necessitates a purchaser retaining the appropriate experts to inspect the property (see for example Eberts v. Aitchison(2000), 4 C.L.R. (3d) 248, 2000 BCSC 1103. [85] Also, in McCluskie at para. 54, Bennett J. (as she then was) stated:

[54] In conclusion, I find that although the law of vendor and purchaser has long relied on the principle of caveat emptor to distribute losses in real estate cases, the rule is not without exception. Two major exceptions are in the case of fraud, and in cases where the vendor is aware of latent defects which he does not disclose. The law also supports the imposition of a duty to disclose latent defects on the vendor where he is not subjectively aware of those defects, but where he is reckless as to whether or not they exist.

It is up to the plaintiff to prove this degree of knowledge or recklessness. [Emphasis added.] [ 86 ] The plaintiff submits that the structural defects with the Main Deck and the full extent of water damage to the interior of the Building and the Main Deck in this case were latent defects that were either known or ought to have been known by the defendants. [ 87 ] He submits that the state of knowledge of the defendants about those latent defects was such that consideration of the extent to which the defendants met their disclosure obligations in the Disclosure Statement should, although falling short of fraud, be judged on the recklessness standard suggested by McCluskie . [ 88 ] In response to all of the plaintiff’s claims, the defendants say that the totality of the evidence does not support findings that the impugned statements in the Disclosure Statement were untrue, inaccurate or misleading. [ 89 ] The defendants also submit that the plaintiff’s submissions amount to an attempt to convert their truthful representations about a current state of affairs into contractual warranties. [ 90 ] I now turn to the specific areas of leakage, water damage and structural damage which the plaintiff says were either known or ought to have be known to the defendants and were negligently, or alternatively recklessly, not disclosed.

A. Areas in the Middle Floor below the Main Deck and in the Kitchen on the Top Floor [ 91 ] By far the greatest amount of time at trial was concerned with problems related to the Main Deck itself and the areas of water ingress into the Building in the Office and Living Room. [ 92 ] Those two rooms are, in part, situated directly below the Main Deck, which acts as a roof over them. [ 93 ] The drywall of the ceilings of the two rooms is attached to the bottom of the cross beams of the Main Deck in those areas where the Main Deck serves as a roof.

The surface of the Main Deck is attached to those same cross beams, and the area between the surface of the Main Deck and the ceiling of the rooms below is filled with insulating material. [ 94 ] The evidence establishes that the Main Deck drainage system that gave rise to the water problems in this case consisted of two drain holes connected to piping below the surface of the Main Deck and above the ceiling of the Office and Living Room. [ 95 ] The purpose of that piping was to remove the water from the surface of the Main Deck to the outside of the Building. [ 96 ] That type of drainage system was necessary because, as constructed by the original builder, the Main Deck did not slope away from the walls of the Building. [ 97 ] When he replaced the Main Deck after the RJC investigation, the plaintiff not only altered the slope of the deck to allow water to drain away from the Building and off the Main Deck, but also changed the surface by removing the ceramic tiles as well as the underlying concrete upon which those tiles had been placed.

He then replaced the whole of the deck surface with a vinyl covering that significantly reduced the weight of the deck. [ 98 ] The recommendations by RJC which gave rise to that renovation included the following: 3.0 OBSERVATIONS Moisture related deterioration to the structure was observed adjacent to the deck drain, concentrated between the drain and the third floor exterior wall above, and at an isolated spot along the outside edge of the deck. The area of deck between the drain and outside edge appeared to be in generally good condition.

This deterioration pattern would suggest that the primary area of deterioration is likely a result of a building envelope failure associated with the deck drain. The deterioration was for the most

part limited to the re-sawn planks installed above the supporting joists, while three joists were observed to have the onset of deterioration along the top edge. Elsewhere in the ceiling and wall cavity adjacent to the drain, evidence of limited moisture ingress was observed but not significant enough to affect the integrity of the structure. During the review, unconventional framing was also observed. The initial indicator of this was the ‘bowed’ ceiling in the adjacent room which was later confirmed to be a result of a cut and sloped top plate of the support wall.

Several floor joists were also observed to be spliced as they were too short to bear directly on the support wall. It was observed that these spliced joists were also the same joists that displayed the onset of moisture related deterioration along the top surface. Beyond these observations, further review was not made into the structural integrity of this original work. In reviewing the deck itself, the tile finish appeared to be intact with no signs of deterioration observed in the tiles or the mortar joints (see photo 1).

It was noted that a new concrete topping and tile surface was installed over the original deck prior to the sale of the Residence to the current Owner. This note was corroborated with the step observed in the third floor door leading out to the deck. 4.0 CONCLUSIONS AND RECOMMENDATIONS The observed moisture related deterioration below the deck appeared to be limited in area and related to the performance of the deck

drain and the membrane transition. It appears, given the extent of deterioration, that the deterioration had started some time ago. The deterioration was mainly limited to the re-sawn planks and a few joists (the same joists that were extended through splicing). The deterioration observed at the outer edge of the deck was not further reviewed as it was outside the understood area of review and did not appear to compromise the structure of the deck. A load review of the deck was completed with the existing construction proving to be adequate under the

Part 9 requirements for the applicable code (BCBC 1985). The deterioration, at this time primarily limited to the re-sawn planks, does not significantly compromise the performance of the structure but unless the source of deterioration is addressed, deterioration will continue and could quickly result in structural compromise that will reduce the adequacy of the deck structure. Of most significance and concern is the addition of the second concrete layer which has increased the dead load significantly. The calculated load with the additional topping layer exceeds the load carrying capacity of the deck.

This calculation is based on the current building code (BCBC 2006), on the note that the extra layer of concrete topping results in a total topping thickness of 3” and on quickly measured spans and wood species identification. It is RJC’s opinion that the deck is under designed to support the loads as stipulated by the current building code and further use of the deck should not be considered until the thickness of the concrete topping is positively identified and addressed as required.

While addressing the concrete dead load, it is recommended that the deteriorated structural elements of the deck be replaced, including the spliced joists, and a new protective membrane be applied to provide the necessary protection against the elements and prevent future deterioration. If a new concrete topping is to be reapplied, it should be limited to the original intended thickness of 1.5”.

In completing such extensive restoration work to the deck, RJC also recommends that the building envelope performance of the deck be reviewed to address possible alternative sources of deterioration including interior conditions. [ 99 ] In addition, the contractor Bill Phelps (to whom I earlier referred), offered the opinion that: Leaking Our preliminary investigation of the deck found it to be approximately 840 square feet in size. It was an outside deck, built over living space, which required the deck to be sealed from the elements to prevent leaking into the interior of the home.

During our replacement of the deck, we discovered that the original deck construction included a layer of concrete that had cracked and been patched sometime during its life. At some point, a second layer of concrete had been added over top of the first layer. Over that concrete, mud and tile was added. The deck floor was not in compliance with appropriate standards under the BC Building Code. It also did not provide an appropriate envelope for interior living space.

Neither the two layers of concrete, nor the mud and tile would have acted as a reliable building envelope, though they would likely acted to keep water out of the residence for a few years. Due to the extensive rot that we discovered, I estimate that the deck had been leaking for at least two years. In my opinion the resident must have known there was a serious issue due to the extent of the damage. The duration of the leaks is supported by the extensive rot found inside the building envelope.

During our investigation, we discovered rot in almost every portion of the ceiling and main supporting wall under the deck and around the area of one of the drains. The rot was extensive enough that it was in danger of collapse under the deck's weight. The deck had to be completely removed so that the support structure could be entirely replaced. Given the amount of rot in the building envelope, I would expect there would have been some visible signs of water damage in the interior of the home; however we discovered no visible damage. The home had been recently painted.

In my industry we see this type of cover-up often. The seller only makes superficial changes to avoid paying for repairs done correctly. Excessive Load We did not know that there were two layers of concrete until we began taking the deck apart, as it was not possible to tell the thickness of the concrete until we dug into it. We discovered that there were two layers of concrete laid over at two separate times. I completely agree with the engineer's opinion (RJC No.: VIC100318.0000

section 4.0), “The calculated load with the additional topping layer exceeds the load carrying capacity of the deck.” The addition of a second layer of concrete, mud and tile coupled with the extensive rot in the building, resulted in a deck that was too thick and had a dangerous weight load that could have resulted in collapse of the structure.

We had no alternative but to replace the support structure and replace it with a vinyl deck. [ 100 ] The concerns expressed by RJC and Bill Phelps about the weight and thickness of the concrete and tile surface of the Main Deck, are significant in assessing the plaintiff’s claims because he alleges that the need to replace the Main Deck was due not only to water leakage into the Building and the rotting of the Main Deck but also due to the overweight of the Main Deck and its non- compliance with present Building Code standards. [ 101 ] As such, those allegations raise issues concerning the state of the defendants’ knowledge of not only water ingress issues but also of the extent to which that knowledge led or ought to have led to their awareness of the alleged non-compliance with the Building Code , as well as the alleged lack of structural integrity and defective design of the Main Deck. [ 102 ] It is accordingly necessary to consider in more detail evidence of the history and evolution of the defendants’ awareness of water issues involving the Main Deck in 2002 and 2003, after the defendants had decided to move into the top floor of the Building. [ 103 ] As I have previously discussed, work on the Main Deck undertaken by the defendants consisted of: 1) Moving the front wall of the top floor backwards to comply with municipal regulations, which required addition of material to the existing surface of the deck in the affected area because of differences between the height of the surface of the Main Deck and the appurtenant floor;

2) Replacing the drains in the Main Deck with a gutter collection system and new drain piping to prevent the pooling of water on the Main Deck; 3) Installing ceramic tiles over the newly configured Main Deck and drain gutters, after applying material to fill in the gaps in the otherwise unaligned surfaces; and 4) Creating an elevated enclosed landscaped garden area and pool on a portion of the deck. [ 104 ] It was suggested to Mr.

Anderson in cross-examination that he knew of the extent of the thickness of the Main Deck when he decided to resurface it with ceramic tile and that he ought to have known that the weight of the fill material used, as well as the weight of the ceramic tiles, would create the structural deficiencies noted by Bill Phelps and RJC. [ 105 ] It is, however, important to note that all of the evidence led by the plaintiff concerning the excessive thickness of the concrete on the Main Deck (including the proposition that the defendants had used excessive concrete to patch cracks or add a second layer of concrete), was discovered when the Main Deck was replaced. [ 106 ] That evidence does not, however, support the allegation that the defendants were involved in or aware of the underlying thickness, weight or structural problems. [ 107 ] In that regard, I accept Glenn Anderson’s evidence that he was not involved in any alleged repairs to the original Main Deck before he undertook repair work in 2002. [ 108 ] I also accept his evidence that the work undertaken by him in 2002 and 2003, including the use of fill materials and ceramic tiles on the surface of the Main Deck, and the improvement to the Main Deck drainage system by installing gutters, was all done in consultation with, and with the approval of the City of Victoria’s building inspection department. [ 109 ] I accordingly find that when they signed the Disclosure Statement, the defendants had no knowledge of or reason to suspect the existence of any of the post-purchase discovered non-compliance with the Building Code or of any structural or design deficiencies related to the Main Deck. [ 110 ] The plaintiff’s allegations concerning the extent of the defendants’ knowledge of water leakage into the Office and the Living Room and deterioration of the Main Deck due to drainage problems must also be considered against the circumstances that existed in 2002 or 2003, when the work on the Main Deck was undertaken. [ 111 ] Either when the defendants’ major renovation of the Main Deck was ongoing in 2002 and 2003, or shortly thereafter, Glenn Anderson became concerned about light bulbs in the ceiling of the Living Room of the middle floor of the Building “shorting out.” After some time he discovered that a small amount of water had pooled in a light receptacle in that area of the ceiling, close to where one of the two drains on the Main Deck was located. [ 112 ] At about the same time, the ceiling of the Office adjacent to the Living Room also showed signs of water leakage with the area of ingress being at or near the location of the other drain on the Main Deck. [ 113 ] The evidence as to the cause of both of those leaks was both contradictory and confusing. [ 114 ] In part, that confusion arose from the fact that Glenn Anderson directed Robert Anderson to look into the water problems with the Office ceiling, while Glenn Anderson himself was involved with issues concerning the light receptacle in the Living Room. [ 115 ] Robert Anderson, who was called as a witness by the plaintiff, testified that when he opened the water-affected Office ceiling, he discovered dampness from a leaking drain from the Main Deck.

He also, however, agreed in cross-examination by his father that the leak came from a pipe that had not been properly attached to the Main Deck drain and that the leak was repaired by gluing the pipes together. [ 116 ] In final argument Glenn Anderson submitted that the ceiling in the affected area of the Living Room by the lighting receptacle was also opened up and disclosed similar pipe connection issues.

That assertion was not, however, based upon his sworn evidence and was not supported by Robert Anderson’s evidence. [ 117 ] Evidence concerning what Robert Anderson and Glenn Anderson saw and did, or did not do concerning the evidence of water ingress in the ceilings of the Office and Living Room during the Main Deck renovation work in 2002 or 2003 must, however, also be considered in light of the evidence of the water damage that was discovered in 2008, at least six months or more after the plaintiff purchased the Building in July of 2007. [ 118 ] As I have previously noted, the plaintiff’s tenant, Antoine Newman, testified that when doing some work related to a cabinet area of the wall between the Office and the Living Room in 2008, he discovered areas of dampness at the base of that wall close to a sink, and later repaired that area in lieu of payment of rent. [ 119 ] As I have also previously noted, when Donald Greenberg and his electrical crew cut into the ceilings of the Office and the Living Room in 2008, as well as into the wall between the two rooms in order rewire the Building, they found evidence of rot caused by water ingress. [ 120 ] Unfortunately, however, neither Mr.

Newman, nor Mr. Greenberg, nor the plaintiff took photographs of the dampness or the condition of the wall or ceilings before any repairs were undertaken. [ 121 ] Further, although Mr. Greenberg testified that he found rot in the interior wall, he also testified that he did not see water damage other than related to that wall rot.

[ 122 ] The determination of the issues concerning the cause and timing of ingress of water into the Building and the state of the defendants’ knowledge of alleged water and structural problems associated with the Main Deck is further compromised by the fact that when the plaintiff’s contractor removed the surface of the Main Deck, exposing both affected ceiling areas, no care was taken to preserve the evidence of the condition of the ceilings in either the Office or Living Room before their destruction in the renovation process. [ 123 ] That is so, notwithstanding that the plaintiff had been advised by RJC of its observations and recommendations before renovation work was undertaken. [ 124 ] Further, although Bill Phelps did offer opinion that: Given the amount of rot in the building envelope, I would expect there would have been some visible signs of water in the interior of the home. … and also stated that: … however we discovered no visible damage. [ 125 ] He then, however, went on to suggest that the home had been recently painted, saying that: In my industry we see this type of cover-up often.

The seller only makes superficial changes to avoid paying for repairs done correctly. [ 126 ] I give no weight to that speculation that a cover-up occurred in this case because: 1) It is not supported by any reliable evidence concerning when any alleged “cover up” painting occurred; 2) It is inconsistent with the building inspector’s report obtained by the plaintiff before purchasing the Building, which disclosed to the plaintiff “evidence of leaking at some time around middle floor ceiling”; and 3) If there was evidence of a cover-up, it was not only open to, but incumbent upon the plaintiff, who owned the Building both before and after the investigation and repairs, to either preserve that evidence or provide photographic or other cogent evidence of the alleged cover-up. [ 127 ] In result, doing the best that I can with the evidence that was adduced and bearing in mind the burden of proof upon the plaintiff to prove his case on a balance of probabilities, I make the following findings about the history of the leaks in the ceilings of the Office and the Living Room at or near the two Main Deck drains: 1) The evidence of Robert Anderson and Glenn Anderson satisfies me that in 2002 or 2003, there was a leak in the ceiling of the Office near the wall dividing the Office and Living Room, very near one of the drains in the Main Deck.

When the ceiling of the Office was opened to investigate that leak, it was discovered that a drain pipe had not been properly connected to the newly-installed drain system on the Main Deck. It was then connected to the drain to solve the problem. 2) When that discovery and repair were made, neither Robert nor Glenn Anderson saw significant water damage or rotting wood within the Main Deck structure below the Office ceiling.

If rotting wood did then exist, which cannot now be known, it could not have been seen at the time because only enough of the insulation between the beams was removed to allow the re-gluing of the pipe and drain. 3) The dampness at the base of the cabinet area of the wall dividing the Office and the Living Room, discovered by Antoine Newman in 2008, could possibly have emanated from the same leaking drain pipe connection repaired in 2002 or 2003.

More likely, however, given the location of the dampness at the base of the wall (well away from the ceiling) the dampness arose from problems with the sink that was situated very near the affected area. 4) The areas of rot in the dividing wall discovered by Donald Greenberg and his electrical crew were likely in the same wall where Antoine Newman found dampness. 5) The rot in the ceiling areas uncovered by subsequent investigations could also have been in the ceiling area of the Office that was discovered and repaired in 2002 or 2003.

More likely, however, it was in the ceiling of the Living Room where Glenn Anderson identified the existence of water in a lighting receptacle.

I reach that conclusion because the sworn testimony does not convince me that I should accept Glenn Anderson’s assertions in argument that leaks in both the Office area and the Living Room area were repaired in the same way as the Office ceiling leak. 6) My finding that I cannot conclude that the area of leakage from the Main Deck drain that was found in the Living Room in 2002 or 2003 was not repaired as suggested by Glenn Anderson in argument does not, however, convince me that Glenn Anderson was aware or ought to have been aware of a continuing water problem in that area or in the Main Deck below it after 2004. 7) I reach that conclusion because:

a) Although the plaintiff took many photographs of the condition of the Building, both before and after deciding to replace the Main Deck, which resulted in the destruction of any evidence of water leakage in the two affected ceiling areas, he tendered no photographs establishing that leakage in the ceiling of the Living Room had continued after 2003;

b) The more than 200 photographs that were tendered in evidence by the plaintiff gave no such indication;

c) The evidence of Donald Greenberg, that he saw no evidence of water damage before opening up the ceiling and walls of the middle floor for electrical work, leads me to conclude that any leakage from the drain in the Main Deck after the water was found by Glenn Anderson in the light receptacle in 2002 or 2003 was not readily observable; and

d) The fact that Bill Phelps saw no evidence of water damage before replacing the Main Deck also leads to the same conclusion. [ 128 ] In result, I conclude that: 1) Although the defendant Glenn Anderson knew about water leakage in the ceiling of the Office and the Living Room of the middle floor during the renovation of the Main Deck in 2002 or 2003, or shortly thereafter, he reasonably believed that those problems were resolved before he sold the home in 2007; and 2) The defendants had no reason to believe that the leakage in those areas had continued or recurred or had penetrated the structure of the Main Deck when they signed the Disclosure Statement in June of 2007. [ 129 ] The two other areas in the interior of the Building below the Main Deck which the plaintiff says the defendants failed to fully disclose on the Disclosure Statement concern alleged leaks above the window in the Office and adjacent to the brick chimney in the Living Room. [ 130 ] Those issues arise because of the Property and Disclosure Statement which the defendants signed on August 10, 2006, which included the comment: Upstairs deck [Main Deck] needs repairing and has leaks that occur during heavy rainfall and wind.

This has caused ceiling leaks in [O]ffice and front [Living] [R]oom area and floor of upstairs kitchen. [ 131 ] I accept Glenn Anderson’s testimony to which I earlier referred, that he learned of those leaks from Tracy Hutton, and that when he subsequently attended at the Building, he found that: 1) The leaks in the ceiling of the Office arose from a disconnected drain pipe above the Office window below the Main Deck.

He reconnected the pipe, which solved that problem of water ingress into the Office. 2) The leaks in the Living Room ceiling were near the chimney area where water entered at the top of brickwork near the ceiling in heavy rainfall. He and his father subsequently investigated the deck area near the chimney by removing the siding from part of the deck wall in the area, and discovered that there was an open channel at the base of the wall that allowed water to enter the Building at the top of the chimney on the ceiling of the middle floor from where it would then trickle down the brick.

To attempt to alleviate the problem, he and his father placed a tarpaulin over the whole of the area to prevent water entering into the channel. 3) The water in the kitchen area had pooled in one area during periods of heavy rainfall and wind after entering the Building through an area at the base of an exterior wall that had not been properly protected with flashing and caulking.

He repaired the area by installing flashing and applying caulking. [ 132 ] There is no evidence to suggest that after the reconnection of the drain pipe outside and above the Office window and the repairs made to the exterior wall of the Building, that water continued to enter the Office from above the window or in the previously affected kitchen area of the top floor identified in the August 10, 2006 Property Disclosure Statement either before or after the plaintiff purchased the Building. [ 133 ] Unlike the Office window and kitchen floor areas, however, Glenn Anderson did not believe that problems related to water ingress into the Living Room at the ceiling near the brickwork were resolved by the temporary measure of covering the suspected area with a tarpaulin on the Main Deck. [ 134 ] That state of affairs is reflected in the comment in the June 7, 2007 Property Disclosure Statement that: [Main] Deck had been leaking past 3 years- Did not leak when pond/garden was tarped off- not positive on where leaks are coming from. [ 135 ] As I discussed above, after June 7, 2007, but before June 23, 2007, Glenn Anderson took steps to implement a more permanent solution to the problems with the ingress of water from the Main Deck.

That work was undertaken after June 7, 2007, at the same time as a major clean-up of the property. [ 136 ] The work that was done to the Main Deck at that time included the deconstruction of the pool and garden area which had been “tarped off” because of Glenn Anderson’s belief that the area was the likely source of leakage into the chimney area and down the brick facing of the chimney area in the Living Room. [ 137 ] After the pool and garden were dismantled and removed from the Main Deck, Glenn Anderson and his father reconstructed the deck wall where they had earlier located the open channel which they suspected as the source of the water that had entered the chimney area. [ 138 ] In doing so, they placed tar paper behind the siding from the top of the wall to the base of the wall where it met the surface of the Main Deck and installed flashing to attempt to block the ingress of water through the channel. [ 139 ] No evidence was led by the plaintiff that establishes that the repairs undertaken by the defendants to the area of Main Deck that had previously been covered with a tarpaulin were not effective to correct the problem of water ingress into the ceiling of the Living Room near the chimney.

B. Bedroom at the Back of the Middle Floor and Garage on the Bottom Floor [ 140 ] Although Robert Anderson testified about water leaks that he said had occurred in his bedroom, as well as in the garage on the bottom floor of the Building, I accept the evidence of both Glenn Anderson and Tracy Hutton that if such leaks existed, they were not told about them by Robert Anderson.

[ 141 ] Also, while I accept the evidence of a neighbour, David Fry, who testified that he saw pots he thought were used to collect rain water in Robert Anderson’s bedroom in the middle floor of the Building, I am also satisfied that he did not discuss those observations with either defendant. [ 142 ] I also note that no photographs were adduced in evidence by the plaintiff to support any allegation that there had been leaks in the garage or in any middle floor bedroom, and the plaintiff led no evidence of any steps he was required to take to repair the interior of the garage or any bedroom as a consequence of the existence of alleged leaks. [ 143 ] I accordingly find that when they signed the Disclosure Statement, neither defendant was aware of any alleged leaks in Robert Anderson’s bedroom or in the garage. [ 144 ] The totality of the evidence also satisfies me that if any leaks did occur in either the garage or in Robert Anderson’s bedroom, due to the location of both rooms in the Building, such leaks could not in any way have been connected to water or drainage issues related to either the Main Deck or the Middle Deck.

C. Below the Sloping Roof adjacent to Middle Deck at the Front Door Entrance [ 145 ] As I have noted above, in addition to replacing the Main Deck, Mr.

Roberts retained Deck and Room Master Inc. to replace the Middle Deck and repair the adjacent sloping roof over the ground floor entrance to the Building at a cost of $6,615, which he claims as damages. [ 146 ] The plaintiff says those costs are recoverable from the defendants as damages because Robert Anderson testified that when Glenn Anderson was doing work to improve the condition of the Building in 2002 or 2003, before the defendants took up residence there, he nailed wooden shingles over the sloping fibreglass roof situated adjacent to the Middle Deck and above the front door entrance to the Building. [ 147 ] In making that submission, the plaintiff also relies upon the opinion of Bill Phelps, who wrote: We also replaced a small roof over the ground level entrance because it was leaking.

The roof was originally a fibreglass construction that would have been waterproof, except that whoever added the shingles did so by driving nails through the fibreglass to affix them. This is not accepted practise and was clearly responsible for compromising the envelope and allowing water through.

It was necessary to repair this damage to fix the leaks. [ 148 ] The plaintiff submits that the Middle Deck had to be replaced because of its proximity to the leaking sloping roof. [ 149 ] Photographic evidence offers some support for the proposition that the penetration of nails through the fibreglass of the sloping roof likely caused or contributed to the leaks which Robert Anderson says occurred under that sloping roof. [ 150 ] Glenn Anderson testified that he placed the shingles on the sloping roof in 2002 or 2003 for cosmetic purposes only and was unaware of any of the leakage identified by Robert Anderson or Bill Phelps and was not told about such leaking. [ 151 ] Given that Glenn Anderson resided in the Building for only about one year after doing that work and had not resided there for about four years when he signed the Disclosure Statement, I am satisfied that his evidence on that issue is truthful. [ 152 ] Similarly, there is no evidence upon which I could safely determine that Tracy Hutton was aware of the existence of leaks at the front door entrance to the Building.

She lived on the top floor only and generally used a side entrance rather than the front entrance for the Building. Although she had access to the ground floor, I accept her evidence that she rarely went there. [ 153 ] I am also satisfied that had Tracy Hutton been aware of leaks under the sloping roof now complained of by the plaintiff, she would have asked Glenn Anderson to investigate them.

I reach that conclusion because of the approach she took in August of 2006 to the issues she raised with respect to concerns she had about leaks in the top floor kitchen, in the Living Room by the chimney, and above the window in the Office. VI.

SUMMARY AND CONCLUSION [ 154 ] For the reasons I have discussed in detail above and after considering the totality of the evidence, the submissions of counsel as well as those of the defendant Anderson, and the legal principles I have addressed, I have concluded that: 1) The defendant Glenn Anderson was aware in 2002 or 2003 that water had leaked from the Main Deck into the ceilings of the Office and Living Room on the middle floor of the Building.

He believed that the source of the water in the Office ceiling was the incorrect or non-attachment of a pipe to the drain which Robert Anderson reconnected and glued. 2) Neither Glenn Anderson nor Robert Anderson saw rotting wood in the Main Deck under the ceiling of either the Office or Living Room when they discovered and repaired leaks from the drainage system. 3) No visible problems with leaking in the ceiling of either the Office or Living Room occurred after 2003, and Glenn Anderson reasonably believed that the problems that had created those leaks had been rectified. 4) Glenn Anderson was never aware that water had penetrated the wall between the two rooms. 5) There is no evidence that Tracy Hutton knew anything about the 2002 or 2003 leaks in the Office or Living Room, other than what the defendant Glenn Anderson knew and may have told her in 2002 or 2003.

6) The work done by Glenn Anderson to replace the drain system on the Main Deck by installing gutters; moving the front wall of the top floor back from its previous location; effecting the necessary levelling of the Main Deck required by moving that wall; and covering the surface of the Main Deck with ceramic tile, was done in consultation with and under the supervision of the City of Victoria’s building inspection department. 7) Neither of the defendants was ever aware of any of the structural, weight-bearing, or Building Code compliance issues with respect to the original construction of the Main Deck adverted to by RJC or Bill Phelps. 8) After Glenn Anderson stopped residing in the Building in about 2004, he only learned of water ingress issues from either Robert Anderson or Tracy Hutton. 9) When he was told of the leak above the window of the Office, the pooling of water on the kitchen floor, and the entry of water into the Living Room and onto the brick in the chimney area in August of 2006, Glenn Anderson repaired the cause of the leaks in the Office and kitchen, and with his father’s help isolated what he believed to be the cause of the chimney area leak by using a tarpaulin to cover the area of the Main Deck which he believed was the source of that ingress. 10) In June of 2007, Glenn Anderson made permanent repairs to the same area by removing the pool and garden, and repairing the side wall of the Main Deck to attempt to preclude water from continuing to enter the open channel behind the siding he had found in 2006. 11) The plaintiff has not established that water continued to enter the Building in any of those areas of alleged concern after he purchased the Building. 12) Neither defendant was ever told by Robert Anderson or was otherwise aware while they owned the Building of any water leaks that may have occurred in the garage or in Robert Anderson’s bedroom.

The plaintiff has also not proven that he suffered any loss or damage as a consequence of those alleged leaks. 13) Neither defendant was aware of water leaks that may have been caused by the cosmetic nailing of shingles onto the sloping room above the front door entrance to the Building. 14) I am satisfied that the information disclosed by the defendants in the prior Property Disclosure Statements of August 10, 2006, May 7, 2007, and June 7, 2007, was true as of the time those statements were made and must be assessed in that way. 15) Specific issues addressed in those previous statements were addressed by Glenn Anderson before the June 23, 2007 Disclosure Statement was signed. 16) Further, the fact of the existence of previous problems with water was made known on the Disclosure Statement when the defendants confirmed that they were aware of damage caused by water, and the fact of prior ingress of water was confirmed by the inspector retained by the plaintiff when he reported that there was “Evidence of leaking at sometime around middle floor ceiling.” 17) Given the defendants’ state of knowledge on June 23, 2007, the plaintiff has not proven on a balance of probabilities that any of the impugned statements made by the defendants that were made on the Disclosure Statement were untrue, inaccurate or misleading. 18) I also find that the defendants were not negligent in the making of any of those impugned statements.

The defendants fairly notified the plaintiff of their knowledge of the present state of affairs with the Main Deck, as well as their knowledge of the existence of previous damage to the Building due to water. 19) The discovery of water leakage problems in the Building by the plaintiff’s tenant Antoine Newman and his electrician Donald Greenberg; the investigation of those problems by the RJC structural engineers; and the confirmation of problems involving the Main Deck by Deck and Roof Master Inc., all occurred only after interior walls, ceilings, or both were cut into to expose the existence and extent of rot and other damage. 20) To that extent the problems with the Main Deck, including rot and structural deficiencies, must be seen as latent defects. 21) With the benefit of hindsight and the evidence of the investigations and replacement work undertaken by the plaintiff, it is possible to say that Glenn Anderson was wrong in determining that his efforts in 2002 and 2003 had corrected water problems with the Office and Living Room ceilings emanating from drainage problems with the Main Deck. 22) I am not, however, prepared to find that Glenn Anderson’s failure to more specifically disclose the problem of water in the Office or Living Room ceilings five or six years later, when it had not to his knowledge again manifested in those areas, constituted recklessness that could allow the plaintiff recovery based on the enhanced disclosure principles discussed in Cardwell and McCluskie . [ 155 ] For all of these reasons, the plaintiff’s claims against both defendants are dismissed. [ 156 ] In those circumstances it is not necessary for me to address issues of damages. [ 157 ] I am, however, compelled to observe that the plaintiff’s damages claims for investigation, replacement, repair and loss of rent are in substance founded upon principles of damage assessment applicable to breaches of warranty, rather than upon principles applicable to the assessment of damages for negligent misrepresentation. [ 158 ] Generally speaking, damages for negligent misrepresentation in the sale of real property will reflect any difference between the price actually paid for the property and that which should have been paid if the impugned representations were true.

No such evidence was led by the plaintiff in this case.

VII. COSTS [ 159 ] The defendant Hutton is entitled to her costs of the defence of the plaintiff’s claims on Scale B. [ 160 ] Although the defendant Anderson, who represented himself, did not seek costs, he is entitled to reimbursement by the plaintiff for reasonable disbursements incurred in defending the plaintiff’s claims against him. “Davies J.”