Andersen v. Sikora Date:, 2015 BCPC 137

Citation: Andersen v. Sikora Date: 20150522 2015 BCPC 0137 File No: 103135 Registry: Kelowna IN THE PROVINCIAL COURT OF BRITISH COLUMBIA SMALL CLAIMS COURT BETWEEN: John Andersen and Barbara Barry CLAIMANTS AND: Wayne Sikora and Lynn Sikora DEFENDANTS AND: Trinity Valley Drilling THIRD PARTY REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE E.M. BURDETT

Appearing on their own behalf: John Andersen and Barbara Barry Appearing on their own behalf: Wayne Sikora and Lynn Sikora Appearing for Trinity Valley Drilling : Shane Ramsay Place of Hearing: Kelowna , B.C. Dates of Hearing: April 30 and May 14, 2015 Date of Judgment: May 22, 2015 INTRODUCTION [ 1 ] This action concerns the purchase of property in Kelowna, British Columbia. The claimants allege there were a number of defects in the property which they have had to remedy, including a well, chimney and plumbing.

The defendants argue that they had no knowledge of the well defects, and added the well pump installer as a third party. The defendants argue that the other defects were apparent to any purchaser who did a reasonable inspection of the property. FACTS [ 2 ] On September 23, 2013 John Andersen and Barbara Barry offered to purchase 5954 Sierra Drive, in Kelowna from Wayne and Lynn Sikora for $687,500. This property is acreage with a main house and a mobile home located on it.

The offer to purchase was subject to a number of conditions, in particular, the completion of an inspection by a home inspector, obtaining a property disclosure statement from the vendors, removal of debris and obtaining a report regarding the quality and quantity of well water. The offer to purchase was accepted by the Sikoras. [ 3 ] The claimants retained Hugh Cairns, a home inspector with 15 years’ experience. Mr. Cairns inspected both the principal residence and the mobile home. Mr. Andersen was present and Mr. Cairns had a running conversation with Mr.

Andersen while he completed the inspection, during which he pointed out areas of concern to Mr. Andersen. Mr. Cairns later provided a report detailing his findings for both the principal residence and the mobile home on September 26, 2013. [ 4 ] The claimants eventually removed the subject conditions and took possession of the property on November 15, 2013. [ 5 ] On January 15, 2014 the claimants experienced problems with the main electrical panel. At the same time no water was coming out of the taps. It appeared the electric pump in the well was not working.

When an electrician arrived and investigated, he found the entire control box was electrified. Randall Woods, a certified well pump inspector and electrician, was retained to remedy the problem. Mr. Woods found that there was a substantial amount of illegal wiring in the well pump which was contrary to code. He found dead shorts throughout the electrical system for the well, and live shorts in the well itself. In his opinion, there were substantial irregularities in the wiring for the well which were very dangerous and compromised the safety of the residence.

In his opinion, the wire used was too small for the well, the design was unsafe and the installation was not to code. The improper wiring had caused the well pump to burn out. The entire well system - pump and wiring - had to be redone. Through exhibits 4, 5 and 6, the claimants have established that they incurred $13,663.84 to rectify the well deficiencies. [ 6 ] The new wiring had to be placed in a trench leading from the well to the house, which couldn’t be dug during the cold weather.

The claimants also discovered that the earlier trench, installed by the Sikoras, was dug on an unregistered right of way, and not on the property. It was not until April that the work was completed. During the lengthy period of time that the well was being redone, the claimants had to truck in water for their use. Through exhibit 7, the claimants have established that they had to pay $390.58 for water while the well was being repaired. [ 7 ] In February 2014, the claimants experienced problems with the furnace in the main residence.

The furnace was a dual fuel heater, in that wood could be burned to provide heat, or electricity could be used. Mr. Sikora left a supply of dry wood to use in the furnace. [ 8 ] Mr. Andersen became concerned with using wood in the furnace because the smell of smoke and creosote permeated the house. He contacted Jonathon Biggins, a WETT technician, who is trained in wood energy technical transfer. Mr. Biggins noted the strong smell of creosote in the house, and when he inspected the chimney in the basement, he found creosote pouring out of its base. The creosote had soaked through the drywall and the floor.

He then inspected the two chimneys and found gallons of creosote in both. The tiles in the chimneys were cracked due to the build-up of the creosote and previous chimney fires. Mr. Biggins tested the wood Mr. Andersen was using and found that it was sufficiently dry so as not to cause a build-up of creosote. It was Mr. Biggin’s opinion that the creosote had been deposited over at least two and a half seasons of burning wood in the furnace. He was of the view that the chimneys had not been cleaned in years.

Remedial work costing $5,494.55 was done on the chimneys. [ 9 ] The claimants also experienced problems with respect to the mobile home. The mobile home had sat empty for a number of years before the property was purchased. The claimants had decided to fix it up, and asked relatives to come and stay in the home and help with the renovation. During the cold winter in early 2014, the pipes under the mobile home froze. Mr. Andersen crawled under the mobile home to inspect the pipes and discovered that insulation which had been previously installed to protect the pipes had been torn off.

Further plumbing and insulation repairs were required to fix this problem, costing $2,221.44. [ 10 ] Mr. and Mrs. Sikora filled out a property disclosure statement at the time of listing the property. Under clause 1.A, both answered “No” to the question: “Are you aware of any encroachments, unregistered easements or unregistered rights of way?” Under clause 3.I, both answered “No” to the question: “Are you aware of any additions or alterations made without a required permit and final

inspection, e.g. building, electrical, gas, etc.?” [11] Both Mr. and Mrs. Sikora testified that the well was working properly when the property was transferred to the claimants. [12] Mr. Sikora testified that he had many conversations with Mr. Andersen regarding the proper use of the dual fuel furnace. Inparticular, he warned Mr. Andersen that he must only burn very dry wood in the furnace. If green wood was used, the build-up ofcreosote in the chimneys would be very rapid. Mr. Sikora testified that he cleaned the chimneys twice a year when he owned theproperty. [13] Mr.

Sikora testified that when he owned the property, there were tenants in the mobile home and there were no problems withfreezing pipes in the winter when someone occupied the home. It was Mr. Sikora’s evidence that the reason the pipes froze was becausethe mobile home was unoccupied. [14] Mr. Sikora hired Cyclone Drilling to dig a deeper well in the summer of 2012, as the current well had run dry. Cyclone Drillingrecommended that Trinity Valley Drilling do the pump hook-up and necessary electrical work. Mr. Sikora then followed therecommendation and hired Trinity. He had never met Shane Ramsay before Mr.

Ramsay arrived to do the pump hook-up. [15] In early 2013, the well began to run out of water again and Mr. Sikora re-engaged Cyclone Drilling to drill down another 200feet. Mr. Ramsay returned to drop the pump down to the new level. [16] Mr. Sikora is not an electrician and not familiar with well pump installation. He did not check to see if either Cyclone or Trinityhad obtained the necessary permits to do the work he requested. [17] Shane Ramsay is the manager of Trinity Valley Drilling. The company has been in business since 1993. Mr.

Ramsay testifiedthat he is a qualified pump installer and a qualified well builder in British Columbia and Alberta. He described his training as “hands on”and testified that he obtained his certification by challenging the exam in Alberta, and then was able to be certified in British Columbia. [18] Mr. Ramsay first worked on the well in question in 2009 when he installed a water hydrant for Mr. Sikora. In 2011 he installeda cistern. He returned to do more work when the well was deepened in 2011 and again in 2013 when the well was dropped another 300feet. Mr. Ramsay installed a larger pump and wired it.

He did not obtain a permit to do the work, and acknowledged that while he didn’tneed a permit to install the pump, he needed a permit to do any electrical work. Mr. Ramsay acknowledged that he is not an electrician. He agreed that he has since learned that he requires to be certified as an electrician in order to do any electrical wiring in the installationof well pumps. Mr. Ramsay acknowledged that he may have used the wrong size of wire in the work he did in 2013. Mr. Ramsaytestified that he checked on line for the correct size wire and was given erroneous information.

He also acknowledged that the workdone may not have been compliant with the electrical code. [19] I am satisfied that the wiring for the well did not meet the proper electrical code and was negligently installed. [20] Hugh Cairns has been a home inspector for fifteen years. He inspected the property on September 28, 2013 over a period ofthree hours. As noted earlier, Mr. Andersen was present during the inspection, and Mr. Cairns pointed out various items to him as heconducted the inspection. Mr. Cairns was not retained to inspect the well or water system.

He did examine the dual fuel furnace, andnoted some staining on the floor at the base of the furnace. He thought it may be due to a deteriorated flue system and advised Mr.Andersen that it needed further examination. Mr. Cairns advised the claimants to contact a WETT specialist and have a chimneyinspection. He also advised in his report that the claimants contact a masonry specialist. [21] It was Mr. Cairns’ opinion that the mobile home had reached the end of its reliable service life and probably wasn’t worthrepairing. Mr.

Cairns was able to see under some of the mobile home, but debris blocked his ability to fully see the underside of thehome. He did see that the insulation and vapour barriers were detached in places and required remediation, and advised Mr. Andersen ofthese problems. He also noted that tree trunks were used as support for the mobile home and the skirting was deteriorating. Exhibit 2 isMr. Cairns’ inspection report for the mobile home. In that report, Mr. Cairns noted the presence of Poly B plumbing and advised theclaimants to get an evaluation from a qualified plumber. Mr.

Cairns noted historic water intrusion and concluded there was a failure ofthe building envelope components. He specifically noted in his report that “the insulation and vapour barriers under the home requireremediation as they are detaching from the upper floor structure and do not appear continuous.” DISCUSSION [22] In Cresswell Investments Ltd. v.

Pavone [2011] B.C.J. 1523, Smith J. discussed the law concerning real estate transactions atparagraphs 20 to 23: 20 Real estate transactions are generally subject to the doctrine of caveat emptor ("let the buyer beware"), which denies thepurchaser a remedy for defects and deficiencies discovered in the property.

However, as summarized by Ballance J. in Cardwell v.Perthen, 2006 BCSC 333 [Cardwell], aff'd 2007 BCCA 313, there are exceptions: [120] Caveat emptor has been described as operating passively because the vendor need not do anything to inform himself about thestate of the property being sold or the existence of any defects: that burden falls to the purchaser. A vendor therefore has no obligation toreview the condition of the home in order to be able to describe to prospective purchasers which areas are worn out, in need of repair,were constructed in a shoddy fashion or to the highest standard.

Partly for historical reasons and in part because the buyer is in the bestposition to determine the quality of the home he wishes to purchase, the law has put the onus on the purchaser to determine the state andquality of the property being sold. [121] Although on its face caveat emptor appears to offer a vendor a complete defence to any claims made by a purchaser regardingdefects in the property (absent specific contractual terms), the doctrine has been attenuated by a number of exceptions.

Circumstanceswhere caveat emptor will not operate to deny a plaintiff recovery were summarized by Bennett J. in McCluskie v. Reynolds (1998), (BC SC), 65 B.C.L.R. (3d) 191, 19 R.P.R. (3d) 218 at para. 53 (S.C.) [McCluskie]:

1. where the vendor fraudulently misrepresents or conceals; 2. where the vendor knows of a latent defect rendering the house unfit for human habitation; 3. where the vendor is reckless as to the truth or falsity of statements relating to the fitness of the house for habitation; 4. where the vendor has breached his duty to disclose a latent defect which renders the premises dangerous. [Emphasis added.] 21 In McCluskie v.

Reynolds (1998), (BC SC), 65 B.C.L.R. (3d) 191 (S.C.) [McCluskie], Bennett J. (as she thenwas) discussed the nature of any representations made, at paras. 47 and 48: If a representation is entirely innocent, however, there can be no recovery.

Between innocent misrepresentation, however, and active concealment, there lie the possibilities of negligent misrepresentation, orreckless disregard for the truth. 22 The concept of a latent, as opposed to a patent, defect is discussed in Victor Di Castri, Law of Vendor and Purchaser, loose-leaf(last updated 2011-Rel. 4), 3d ed. (Toronto: Carswell, 1988) [Law of Vendor and Purchaser] at 7-32: A patent defect which can be thrust upon a purchaser must be a defect which arises either to the eye, or by necessary implication fromsomething which is visible to the eye. ...

A latent defect, obviously, is one which is not discoverable by mere observation. In the case of a patent defect, as distinguished from a latent defect as to quality or condition, and where the means of knowledge areequally open to both parties and no concealment is made or attempted, a prudent purchaser will inspect and exercise ordinary care:caveat emptor. [Internal footnotes omitted.] 23 Whether a defect is patent or latent, a vendor who makes a fraudulent or negligent misrepresentation as to the quality of theproperty will be held liable for that misrepresentation.

The analysis therefore begins with the question of whether there was any suchmisrepresentation in this case. [23] The absence of a fraudulent intent or negligence does not necessarily protect a vendor who fails to disclose a latent defect in theproperty. One must first start any analysis with a determination of whether the undisclosed defect is a latent or patent one. The chimney and furnace defects [24] Patent defects are those which can be discovered by conducting a reasonable inspection and making reasonable inquiries aboutthe property.

As noted in Cardwell, supra: …there is a fairly high onus on the purchaser to inspect and discover patent defects. This means that a defect which might not beobservable on a casual inspection might nonetheless be patent if it would have been discoverable upon a reasonable inspection by aqualified person…In some cases, it necessitates a purchaser retaining the appropriate experts to inspect the property. [25] Here, the claimants retained a home inspector. Mr.

Cairns noted suspicious markings on the floor in the furnace room andalerted the claimants for the need to retain an expert to examine the furnace and the chimney. The claimants chose not to do so. In myview, the chimney and furnace defects were clearly patent defects which would have been discovered if they had hired the appropriateexpert to inspect them. The rule of caveat emptor applies, and the defendants are not liable for the cost of remedying these deficiencies. The mobile home plumbing [26] Mr. Cairns again recommended to the claimants that they retain a plumber to examine the plumbing in the mobile home.

Hewarned them that the insulation and vapour barriers under the home needed remediation. It was clear to the claimants that all of theunderside of the mobile home could not be inspected because of debris. In my view, any defects with respect to the insulation of theplumbing would have been readily apparent had the claimants chosen to retain a plumber to do a further inspection after receiving Mr.Cairns’ advice. The rule of caveat emptor applies and the defendants are not liable for the cost of remedying the plumbing deficienciesin the mobile home.

The well wiring and pump installation [27] It appears that the claimants had the well water tested and also obtained the documents contained in Exhibit 14 prior tocompleting the sale. Those documents are the invoices from Trinity Valley Drilling and Cyclone Drilling for the work done in 2013, aswell as a Well Alteration Report filed by Cyclone Drilling with the Ministry of Environment, outlining the work which was done. Thedefendants did not disclose that the trench was dug on a non-registered easement, despite being asked that specific question in theProperty Disclosure Statement.

The defendants did not disclose that a permit was not obtained, nor was an inspection of the electricalwork. While Mr. Sikora testified that he simply assumed that Mr. Ramsay had obtained the necessary permits, this falls short of what areasonable property owner should have done in the circumstances. He should have ensured that an electrical permit was obtained, and

the well wiring was properly inspected. Further, both Mr. and Mrs. Sikora could have answered “I don’t know” on the property disclosure statement when asked about electrical work and permits. I find both answers on the Property Disclosure Statement to be negligent misrepresentations. [ 28 ] In my view, obtaining the Property Disclosure Statement, having the water tested, and acquiring the documents related to the 2013 work were reasonable steps for a reasonable purchaser to take in these circumstances.

The defects which were present - that is the trench dug on non-easement land, and the negligent installation of the wiring were not reasonably discoverable by the claimants, particularly when accompanied by the non-disclosure on the Property Disclosure Statement. [ 29 ] The claimants are entitled to recover all of the expenses related to the water issues, namely $14,954.42, from the defendants, as well as pre-judgment interest from March 21, 2014, as well as filing and service fees of $236.00. That judgement is payable forthwith.

Third Party Claim [ 30 ] The evidence has established that Trinity Valley Drilling negligently installed the pump wiring. The defendants are entitled to judgment in the amount of their Third Party Claim, namely $12,500, plus $45.00 filing and service fees. That judgement is payable forthwith. _____________________________ The Honourable Judge E.M. Burdett