Zammit v Bining Date:, 2015 BCPC 72

Citation: Zammit v Bining Date: 20150408 2015 BCPC 0072 File No: 1343670 Registry: Prince George IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: ANTHONY LUKE ZAMMIT CLAIMANT AND: MOHINDER SINGH BINING, also known as MOHINDER BINING DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE S. K. KEYES Counsel for the Claimant: Ms. Oliver-Dunbar Appearing on their own behalf: M. Bining Place of Hearing: Prince George , B.C. Date of Hearing: March 10, 12; May 5, 6; July 28, 29; August 1, 2014 Date of Judgment: April 8, 2015

INTRODUCTION [ 1 ] Mr. Zammit purchased a house (the “house”) located at 1601 Fir Street, Prince George BC, from Mr. Bining on April 30, 2013. He began to renovate the basement of the house approximately a week after obtaining possession. He discovered extensive fire damage to the interior of the house, primarily in the basement, which had been completely hidden by previous renovations to the house. Mr.

Zammit contends that this damage is a material, latent defect, that is, a defect which would involve great expense to remedy and renders the property dangerous, which could not be discerned through a reasonable inspection of the property. Although Mr. Bining admits that he extensively renovated the house after purchasing it in 2010, Mr. Bining contends that he was unaware of any fire damage when he sold the house to Mr. Zammit, and in any case argues that the house was purchase “as is, where is”.

ISSUES TO BE DECIDED [ 2 ] There is no dispute that the house was in fact extensively damaged by fire, that the fire damage poses a serious health and structural danger, nor is there any dispute advanced with respect to the work or cost to remedy the damage. Mr. Zammit obtained an expert report prepared by Fergus Foley, Structural Engineer, as well as an estimate from Northern Capital Restorations, which address those issues. There is no dispute that the fire damage pre-existed the purchase of the house by Mr. Zammit. There is no dispute that the fire damage was in fact not discernible by a reasonable inspection.

There is no dispute that the existence of fire damage was not disclosed to Mr. Zammit prior to the purchase. The primary issue appears to be whether Mr. Bining was aware of the fire damage when he sold the property to Mr. Zammit. A corollary issue is whether, despite the lack of disclosure, Mr. Zammit purchased the house on an “as is, where is” basis. EVIDENCE [ 3 ] Mr. Zammit decided to purchase the house particularly because it was advertised as having a basement suite.

His plan was that he and his girlfriend would move into the upstairs, and he would rent out the basement suite, in order to subsidize his living expenses while he returned to University. He thoroughly inspected the home, observed a beam in the basement that concerned him, had it inspected by an engineer who confirmed that the beam required augmentation, and negotiated an adjustment in the price to accommodate that. Mr. Zammit did not observe any fire damage to the home.

It was not possible to examine any of the structural members of the basement ceiling (which was the support for the main floor) because the walls and ceilings in the basement were completely enclosed with drywall and the ceiling and some of the walls were surfaced with a textured finish. [ 4 ] After he purchased the house, Mr. Zammit decided to remove the drywall on the basement ceiling so that he could put sound insulation into place in order to minimize any disturbances to or by potential tenants in the basement suite. He discovered that the ceiling joists throughout much of the basement had been burned. Mr.

Zammit took photographs of the state of the ceiling in the basement as he took down the drywall. The burning was apparently so severe that many of the ceiling joists had been cut out, and new joists had been attached to the charred remnants of the burnt joists.

It was clear that the plumbing and electrical wiring had been replaced, as undamaged plumbing pipes and wiring ran through both the fire damaged joists and the new joists. [ 5 ] The areas of the ceiling that are adjacent to the basement stairs and the ceiling of the basement bathroom and storage room are of particular interest, because the evidence is clear that workmen hired by Mr. Bining to build the basement bathroom and to provide exhaust venting for the bathroom fan installed wiring and plumbing in those areas within the ceiling cavity. Those ceiling cavities are very obviously damaged by fire.

Indeed, it is clear that a portion of new plumbing line going to the upstairs bathroom, which was installed by Mr. Bining’s workmen, has been attached in the ceiling cavity of the basement bathroom to a water line which shows smoke and fire damage. When Mr. Zammit removed the drywall from the ceiling of the bulkhead in the storage room, he found a packing slip label stuck to the back of it. The packing slip is from Home Depot, has an invoice number, is dated “September 24 ‘10” and states “pulled by Marvin (Mohinder Bining).” [ 6 ] It is undisputed that Mr.

Bining purchased the house on September 14, 2010, for the sum of $129,000.00. I heard evidence from him that he immediately undertook extensive renovations of the house. On October 6, 2010 Mr. Bining listed the property for sale asking 189,900.00. The MLS listing, Exhibit 9 in these proceedings, states “wow! Located close to Fort George Park, this three- bedroom home has been newly renovated - from plumbing to the paint.

Also included is a new kitchen, 2 new bathrooms, new roof, all new flooring, paint, baseboards and baseboard heaters!” I note that the house only has two bathrooms, one upstairs and one in the basement. Did Mr. Bining know about the fire damage to the house when he sold it to Mr. Zammit? [ 7 ] Mr. Bining called evidence from Debbie Piete, a realtor with whom he has been doing business for many years. She testified that she showed the residence to about 20 people, including Mr. Bining, prior to his purchase of the house.

She said she did not see any evidence of fire damage, nor did the previous owners disclose any, but she also said that she did not go into the basement, as she needed a hip replacement and could not navigate the basement stairs. She said the basement was a “black cavern” without any light and that the power had been cut off to the residence at the time that she was showing it. She said the residence was a “hovel” and would require extensive renovations. I also heard from Leah Mayer, Ms. Piete’s daughter and business partner. She said that she showed the basement

to Mr. Bining, but that there was no power and they had to use flashlights. There was no bathroom in existence in the basement, but she believed the basement ceilings were finished. She saw no sign of fire damage. She said after the renovations were completed, the house was lovely. [ 8 ] Mr. Bining called evidence from Trevor Chadderton, a handyman who has worked for Mr. Bining doing odd cash jobs for about ten years. He said he painted the basement floors, put in cement in the basement floor, built a new bathroom downstairs and did some painting upstairs.

He said that the ceiling in the basement was covered when he was first there, and he believed Mr. Bining hired other people to tear it down in order to change the lighting. He said he did not see any fire damage, but he also said he had nothing to do with the ceilings and that Mr. Bining hired other people to do the drywall. Mr. Chadderton’s evidence that he saw no fire damage and does not help to resolve the question of what Mr. Bining knew about the fire damage that obviously did exist, since he claimed he never saw the ceiling uncovered. [ 9 ] Mr.

Carrier, the plumbing and heating contractor, admits that he saw some open joist spans in the basement in the mechanical room, where the furnace and hot water tank was, but insisted that he did not see any fire damage. Mr. Carrier is obviously in error, because photograph 66, which shows the ceiling in the area of the hot water tank, clearly shows fire damage, which must have been observable to anyone working in that area. Although Mr.

Carrier insisted that he would not have installed plumbing or venting through a burnt out area, he agreed that the ceiling would have to be removed in order to install the ducting in the cavities between the joists. He did charge for the installation of flex ducting for both the dryer and for the basement bathroom fan and his invoice notes “drywall to be removed by others before ductwork installation”. The “flex” ducting for the bathroom fan was in fact installed by Mr Vassallo, an employee of Mr Carrier, and it clearly runs through burnt out areas adjacent to the basement stairs.

When showed photos of the ducting, Mr Carrier suggested that the ducting was old and of the same vintage as the other fire damaged areas and therefore had not been installed by his workmen. [ 10 ] Mr. Tony Vassallo, who worked for Mr. Carrier at the time, testified that installed new flex ducting in the basement ceiling during the 2010 renovation. He remembered seeing Mr. Bining when he worked there. He said that he specifically remembered a burnt area between the joist spans, next to the stairs in the basement, where he installed the bathroom fan ductwork vented to the outside.

He said that there were a few sheets to drywall on the ceiling in one corner of the rec room in the basement, but the rest of the ceiling was open. He said that he installed the duct work that can been seen in photographs 66 and 67, that it was new when he installed it, and he specifically recalled that a portion of the plastic coating on the dryer vent “flex” duct was melted by the construction lights that he was using. The ductwork installed by Mr. Vassallo, including the damage to the plastic coating on the ductwork can be seen in photographs 66 and 67.

That ductwork runs right through the burnt area of the ceiling in the basement. Mr. Vassallo’s testimony is consistent with the invoices rendered to Mr. Bining by Mr. Carrier, which include “2 boxes of 5” insulated Flex.” [ 11 ] Mr. Carrier’s evidence that that the flex ducting shown in photo 66 and 67 is old (pre-existing) and fire damaged is in direct contradiction to the evidence given by Mr. Vassallo. I do not accept Mr. Carrier’s evidence that the ducting shown in photo 66 and 67 is “old” ducting, since Mr.

Vassallo specifically recognized it and explained how he had caused the melting to the surface plastic coating with his construction light. If a construction light alone could cause the plastic coating on the ducting to melt, I infer that had that ducting been through the fire that caused so much damage to the wood joists in the basement, it would certainly have melted the rest of the plastic coating on the duct work. However, the plastic coating on the flex ducting is intact, with the exception of that portion which Mr. Vassallo says he accidentally melted. Mr.

Carrier’s evidence is simply not consistent with the physical evidence. Mr. Carrier’s evidence about not seeing any fire damage is not consistent with installing that flex ducting, which required that the ceiling be open - in which case the fire damage would have been visible. [ 12 ] It follows that I do not accept Mr. Carrier’s evidence that he did not see any fire damage. The damage was there and Mr. Carrier must have seen it, just as Mr. Vassallo did. I note that Mr. Carrier gave evidence that he worked for Mr.

Bining on many projects and it may be that his business relationship has adversely affected his ability to testify reliably. I accept Mr. Vassallo’s evidence that the fire damage was pre-existing when he installed the flex ductwork and I infer that it was as readily observable at that time as it is in the photographs presented to court by Mr. Zammit. [ 13 ] Kelly Romaniuk, an electrical contractor who did work at the house, also gave evidence. He said he did not recall seeing any fire damage.

However, he also said that the ceilings were covered when he was there and that he or his workmen would have been able to fish the electrical wire through an existing ceiling in order to do the work that they did. His evidence is not helpful with respect to what Mr. Bining did or did not know about the fire damage. [ 14 ] Mr. Bining gave evidence. He contradicts the evidence of Leah Mayer, his own witness, claiming that when she showed him the basement the lights were working.

He said that the entire ceilings in the basement were covered with drywall and that no drywall was ever removed from the ceilings in the basement. In this regard he contradicts the evidence of both Mr. Carrier and Mr. Vassallo. He said that whenever anyone works in his house he always stays there, insisting that he was present while the workers did their work. He said that when they did their work downstairs, he was downstairs. He later agreed that the ceiling drywall was removed by Mr.

Vassallo so that he could put in the ductwork for the venting, but when it was pointed out that this evidence contradicted his earlier evidence that no drywall was removed, he said that he did not see it happening so he didn’t know about it. He then contradicted his earlier evidence that he was always present while the workmen did their work, claiming that he was present when the drywall was removed but he did not stay there and did not look at it.

He contradicted his earlier evidence about being present when the workmen worked claiming that he did not watch them when they were working because if he watches them than they do not work. [ 15 ] Mr. Bining suggested that Mr. Vassallo did not have any actual memory of the work that he did and was lying and making up his evidence based on the photographs. When asked about the texture that was sprayed on the ceilings and on the portion of the duct work that Mr. Vassallo says he installed, Mr.

Bining said he had no knowledge of the texture that was sprayed on the ceilings in the basement suite, claiming that it was 50 years old for all he knew. The difficulty with this position is that the textured ceiling was sprayed on portions of the basement that were installed by Mr. Bining’s workers, such as Mr. Chadderton and Mr. Vassallo. Therefore, the textured ceiling could not have been pre-existing and it is plain that Mr. Bining is not telling the truth. [ 16 ] Mr. Bining testified that Mr. Zammit could have got the packing slip from anywhere and placed it on that piece of drywall and

further, that the piece of drywall did not come from the ceiling. He said that Mr. Zammit was lying. However, Mr. Zammit brought into court the actual piece of drywall to which the 2010 packing slip with Mr. Bining’s name on it is affixed on the underside. The exposed surface of the drywall is covered with texture, which matches the texture that was sprayed on the ceiling in the rest of the suite, which is clearly visible in the photographs of the basement suite. [ 17 ] I found Mr. Bining to be an utterly unreliable witness. His account of events contradicted the evidence of Ms. Piete, Ms. Mayer and Mr. Vassallo.

Mr. Bining’s evidence regarding the ceilings of the basement is internally inconsistent, in that he says that the drywall was never removed from the ceilings and then admits that it was removed in certain places, and in particular by Mr. Vassallo. He gave evidence that he was present to watch the workmen at all times and then he contradicted himself by saying that he did not watch them because if he did they would not work. I accept Mr. Bining’s evidence that he was always present when the workers were there, because that is consistent with the accounts given by the various workers who gave evidence.

Since he was present, he must have been aware of the obvious fire damage to the basement of the house. There is no other rational conclusion. [ 18 ] Mr. Bining’s assertion that Mr. Zammit is lying about the packing slip is frankly insulting, not only to Mr. Zammit but also to common sense. In my view it is absurd to suggest that in 2013, Mr. Zammit fabricated a packing slip from Home Depot dated September 24, 2010 with Mr. Bining’s name on it in order to falsely implicate Mr. Bining with knowledge of fire damage, when that fire damage clearly pre-existed the renovations that Mr.

Bining performed in the basement of the house. Those renovations could not have been performed without the fire damage being evident to those present. WAS THE HOUSE SOLD “AS IS, WHERE IS?” [ 19 ] Mr. Bining further argues that a diagonal line drawn through some pages of the disclosure statement should be interpreted to mean that the property was purchased “as is where is.” The document was executed first by Mr. Zammit (which copy was retained by Mr. Zammit’s realtor) and was then faxed to Mr. Bining, who executed it afterward.

The diagonal line through page 3 of the disclosure statement appears only on the version of the document signed by Mr. Bining. The first difficulty with Mr. Bining’s argument is that nowhere in the contract of purchase and sale is there any indication that the property is to be sold “as is where is”, nor is any meaning attributed to the diagonal line, in either the agreement of purchase and sale or in the disclosure statement. [ 20 ] I note that page 3 of the disclosure statement includes the question “L. Are you aware of any damage due to wind, fire or water?

The answer “does not know” “does not apply” is blocked in on the form in answer to the question. If the placement of the diagonal lines across the disclosure form was intended to render the whole of the disclosure a nullity, it begs the question as to why the answers were filled out on the form at all. In my view if that had been the parties’ intention, it would have been a simple matter to write that on the form, instead of taking the trouble to fill out answers to the disclosure questions.

I cannot infer, in the absence of any such definition within the disclosure statement or the contract of purchase and sale, that the diagonal lines mean that the property was sold “as is where is”. [ 21 ] The bigger difficulty with Mr. Bining’s argument is that it is clear that the diagonal line found on page 3 of the disclosure statement was placed on the document after it was signed by Mr. Zammit. Thus, whatever the meaning of the diagonal line found on page 3 of the disclosure form signed by Mr.

Bining, it does not represent an agreement between the parties, since that line was not present on the document signed by Mr. Zammit. Since the diagonal line does not appear on the copy of the document signed by Mr. Zammit, and since Mr. Bining seeks to take advantage of the

interpretation he places on it, I infer that Mr. Bining placed it there when he executed the document after Mr. Zammit faxed it to him. I further infer that he did so in an attempt to avoid liability for his false answer to the question about fire damage on the disclosure form. [ 22 ] I find that Mr. Bining was entirely aware of the fire damage to the basement which was obvious to anyone present when the ceiling in the basement was open, including Mr. Bining, during the renovations undertaken by Mr. Bining. Those renovations, once complete, completely hid the fire damage. I am satisfied that Mr.

Bining was well aware that if such damage were disclosed, the selling price of the house would be significantly reduced and the house may well have been unsalable unless the fire damage were properly remediated. I find that Mr. Bining deliberately failed to disclose the fire damage, and that he fraudulently altered the disclosure statement after it was executed by Mr. Zammit. [ 23 ] Liability for such a misrepresentation cannot be avoided by such a ruse. I infer from Mr.

Bining’s employment of such a tactic, that he was not only aware of the fire damage, but that he hoped to escape liability for it, not only by covering up the damage and failing to disclose it, but by fraudulently altering the contract of purchase and sale after its execution by Mr. Zammit, in an effort to avoid liability if the fire damage were discovered. CONCLUSION [ 24 ] It follows from the foregoing that I give judgment in favor of Mr. Zammit. Mr. Bining must forthwith pay Mr.

Zammit the amounts sought, including $16,568.55 for remediation and restoration, $384.30 for replacing the drywall on the ceiling and $1,000.00 for the report of Mr. Foley, for a total of $17,952.85, as well as filing and service fees and prejudgment interest. PENALTY [ 25 ] I am of the view that Mr. Bining has behaved in an outrageous and egregious fashion, by pleading an “as is, where is” argument in his reply, based upon on the diagonal line he fraudulently placed on the disclosure form. Such a position had no legitimate hope of

success. Mr. Bining’s denial of knowledge of the fire damage was similarly doomed to failure. In my view the evidence is overwhelming that Mr. Bining knew about the fire damage, deliberately concealed it, and then altered the contract of purchase and sale after it was executed by Mr. Zammit, in a fraudulent attempt to bolster an argument that the house was sold “as is where is.” This egregious behaviour was exacerbated by Mr. Bining’s assertions, in his testimony, that Mr.

Zammit fraudulently fabricated and placed the packing slip, and that Anthony Vassallo was lying about seeing the fire damage when he performed his work. [ 26 ] I am satisfied that Mr. Bining filed a Reply and proceeded through trial with no reasonable basis for success. In view of that finding, I order pursuant to Rule 20(5) of the Small Claims Rules , that in addition to the damages ordered above, Mr. Bining must pay forthwith to Mr. Zammit a penalty of 10% of the value of the claim, in the amount of $1,795.29. ________________________ S. K. Keyes Provincial Court Judge Province of British Columbia