2019 QCCQ 7239, 2019 QCCQ 7239

Paunet c. Hodge 2019 QCCQ 7239 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-702888-175 DATE: October 30, 2019 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI, J.C.Q. ______________________________________________________________________ BOGDAN STEFAN PAUNET Plaintiff v.

DAVID HODGE And LISA HANLEY Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Stefan Paunet claims $10,200 from David Hodge and Lisa Hanley from whom he purchased a residential property in 2016. [ 2 ] He alleges that he is a victim of misrepresentation by the Defendants.

He claims that while they declare in the seller’s declaration that the subfloor of the basement bathroom was replaced due to rot and mold, this cannot be true because he discovered a rotten subfloor in the bathroom. [ 3 ] He further alleges that the Defendants agreed to carry out certain the repairs to the carport in the promise to purchase, but that they failed to perform these repairs. [ 4 ] Mr. Paunet alleges that these omissions and misrepresentation have caused him to suffer $10,200 in damages, which is the amount he will have to spend to remedy the sellers’ breaches. [ 5 ] Mr. Hodge and Mrs.

Hanley argue that they did not breach any of the terms of the promise to purchase because they carried out the repairs to the carport that they had undertaken to perform. They add that they did not make any false statements in their written representations to the Plaintiff since did in fact carry out the repairs mentioned in the seller’s declaration. Issues

a) Did the Defendants misrepresent to Plaintiff the repairs carried out in the basement bathroom?

b) Did the Defendants fail to respect their obligation to carry out repairs to the carport?

c) What damages were caused to the Plaintiff by the Defendants’ breaches? Context [ 6 ] In June 2016, Defendants David Hodge and Lisa Hanley sold to Mr. Paunet a residential property located in the borough of Pierrefonds. [ 7 ] This sale was preceded by a promise to purchase signed by Mr. Paunet on March 29, 2016 (“ Promise to Purchase ”). [1] [ 8 ] On April 16, 2016, the Defendants submitted to Mr. Paunet a counter proposal to his Promise to Purchase, which he accepted on the same day. [2] [ 9 ] On April 23, 2016, Mr.

Paunet had the property inspected by his building inspector. [ 10 ] Following this inspection, the parties agreed to amend the Promise to Purchase. [3] [ 11 ] On June 28, 2016, Mr. Paunet took possession of the property and moved in to it.

[ 12 ] In the spring 2017, Mr. Paunet noticed that the ceramic tiles in the basement bathroom emitted a cracking noise when he walked on them. In early May of that year, the tiles of the basement bathroom cracked and became unglued from the wood subfloor. Mr. Paunet then discovered that the wooden subfloor was rotten and water logged. [4] [ 13 ] On August 23, 2017, the Defendants received a formal demand letter from Mr. Paunet in which he complains of the rotten wooden subfloor of the basement bathroom and claims that he is a victim of misrepresentation in their seller’s declaration.

He also adds that the Defendants failed to repair the carport as they had promise to do. [5] [ 14 ] On September 11, 2017, Mr. Paunet filed his Application in damages before the Court of Québec, Small Claims Division. Analysis and decision

a) Did the Defendants misrepresent to Plaintiff the repairs carried out in the basement bathroom? [ 15 ] Mr. Paunet argues that when he decided to purchase the Defendant’s property, he notably relied on a document entitled seller’s declaration. [6] This documents contains numerous written representations by the Defendants as to the state of the property, including the replacement of the wooden subfloor of the basement bathroom carried out in 2016. [ 16 ] Mr.

Paunet asserts that the representation pertaining to these repairs is false because he discovered one year after taking possession of the property that the wooden subfloor of the basement bathroom was rotten and need to be replaced. [ 17 ] The Defendants deny that the seller’s declaration contains a misrepresentation as to the repairs carried out in the basement bathroom. [ 18 ] In civil law, a party to a contract can obtain damages from the opposing party if he proves that that his consent to the contract was vitiated by error. [7] Error includes what the civil law refers to as “fraud” (in French, “ dol ”). [ 19 ] Fraud may include a misrepresentation from the opposing party, where but for the false statement, the victim would not have contracted or would have contracted, but on different terms. [8] [ 20 ] “Fraud” may result from the silence or concealment of the opposing party. [9] [ 21 ] The party who alleges fraud has the burden of proving that the opposing party made a material misrepresentation.

Evidence of fraud must be clear and convincing. [ 22 ] In the present case, the alleged fraud or misrepresentation stems from the seller’s declaration, a document commonly remitted to prospective buyers by vendors in real estate transactions in the province of Québec. [ 23 ] In this document, the Defendants declare that there has been water infiltration in the property (D3), the presence of water spills and foundation cracks in the basement (D5), evidence of mold or rot (D6), and confirm that there has been a liquid spill in the basement. [10] [ 24 ] They specify in

section D14 of the seller’s declaration: “D3.1 – 1999 infiltration basement, south west corner of foundation. Repaired by injection, no infiltration has reoccurred. D5.1 – 2016 basement shower base drain was broken causing water infiltration in subfloor. Subfloor was replaced due to rot and mold and new shower enclosure was replaced. D5-2 – there is a foundation crack on the south side of foundation. To the vendors knowledge there is no infiltration.” (Emphasis added.) [ 25 ] Mr. Paunet takes issue with the representation made in clause D5.1 above.

He claims the statement is false because in May 2017, one year after he purchased the property, he discovered that a number of tiles in the basement bathroom cracked and became unglued from the wooden subfloor. When he removed the tiles, he discovered that the wooden subfloor was rotten due to moisture. [ 26 ] Based on this discovery, he argues that it is impossible that the Defendants changed the subfloor in the basement bathroom in 2016. [ 27 ] The Defendants argue that clause D5.1 is accurate and contains no misrepresentation.

They contend that its language is clear and that they never represented that the entire subfloor of the basement bathroom was replaced, but only that portion of the subfloor below the shower base where the drain was located. [ 28 ] They add that the area of bathroom where Mr. Paunet discovered the rotten subfloor is located some distance from the area of the bathroom where they replaced the subfloor in 2016. They surmise that the rot Mr.

Paunet complains of results from a different and distinct problem that gave rise to the repairs they carried out in 2016 and which they allude to in D5.1. [ 29 ] To resolve this issue, a description of the basement bathroom is in order. [ 30 ] The basement bathroom measures 15 feet in width and 6.3 feet deep. [11] A prefabricated shower stall is located in one corner of the bathroom. A toilet bowl is located immediately adjacent to the shower stall along with a sink and vanity immediately in front of the

toilet bowl. The doorway entrance of the bathroom is located at the opposite end of the bathroom away from the shower stall. A washer and dryer are installed along the outside wall of the bathroom immediately in front of the entrance door to the bathroom. [12] [ 31 ] The rotten wooden subfloor which caused the tiles to dislodge and crack is located in an area approximately two feet by two feet and located immediately in front of the entrance to the bathroom and roughly ten feet from the shower drain. [13] [ 32 ] The sketch below illustrates the basement bathroom: [14] [ 33 ] In 2015, Mr.

Hodge discovered that the shower base drain was broken. Upon inspection, he discovered that this caused water infiltration in the subfloor immediately under the prefabricated shower stall. He removed the prefabricated shower, and removed the rotten wooden subfloor located immediately under the shower stall. [ 34 ] He did not replace the wooden subfloor elsewhere in the bathroom because he saw no signs of water or rot elsewhere than immediately below the shower stall. [ 35 ] This explains why the Defendants added clause D5.1 in the seller’s declaration. Mr. Hodge adds that he never represented to Mr.

Paunet that the entire wooden subfloor of the bathroom was replaced. He asserts that the language of clause D5.1 is clear and in no way do the Defendants represent in this clause that the entire wooden subfloor was replaced. [ 36 ] The Court agrees with the Defendants. The terms “Subfloor was replaced due to rot and mold and…” must be read in their entire context.

This context includes the whole language of clause D5.1 and the circumstances surrounding the sale transaction. [ 37 ] When read as a whole, clause D5.1 cannot be interpreted to mean that the entire subfloor of the basement bathroom was replaced. [ 38 ] Mr. Paunet does not convince the Court that the parties ever intended clause D5.1 to mean that the entire subfloor was replaced. [15] [ 39 ] Accordingly, Mr.

Paunet was not a victim of fraud or misrepresentation as it pertains to clause D5.1 of the seller’s declaration. [ 40 ] The Court adds that the discovery of the rotten wooden subfloor in the bathroom cannot constitute a latent defect for the purposes of the warranty of quality. [16] [ 41 ] To succeed in a claim based on the warranty of quality, the claimant must prove that the defect (

i) was serious, (ii) it existed at the time of sale, (iii) it was unknown to the buyer, and (iv) was hidden. [ 42 ] The rotten subfloor is not a latent defect for the purposes of

article 1726 C.C.Q. because it was not hidden. While the subfloor itself was hidden, there were numerous warning signs that should have alerted Mr. Paunet about the existence of a potential water leak in the basement bathroom. [ 43 ] These warning signs include the fact that the sellers declare in the seller’s declaration that there has been water infiltration in the property (D3), the presence of water spills and foundation cracks in the basement (D5), evidence of mold or rot (D6), and the content of clause D14. [17] [ 44 ] Moreover, when the property was inspected in April 2016, Mr.

Paunet’s property inspector discovered two cracks in the foundation, including one on the north foundation wall, immediately adjacent to where he later discovered the rotten wooden subfloor. [18] [ 45 ] Given these multiple warning signs, a prudent and diligent buyer would have carried out further investigations with respect to potential water infiltration in the basement. [ 46 ] Mr.

Paunet has not discharged his burden of proving that the Defendants misrepresented the repairs carried out in the basement bathroom. [ 47 ] Moreover, the rotten wooden subfloor cannot constitute a latent defect. [ 48 ] Accordingly, this portion of his claim will be dismissed.

b) Did the Defendants fail to respect their obligation to carry out repairs to the carport?

[ 49 ] Following the prepurchase building inspection carried out on April 23, 2016, Mr. Paunet’s inspector pointed out the presence of foundation cracks in the north and south walls as well as rotted fascia board on the carport. [ 50 ] As a result of these findings, the promise to purchase was amended to include the following undertaking by the Defendants: Following the pre-purchase inspection performed by Michel Angelo Laforte of the firm AL INSPECTION M on April 23, 2016, the parties agree that the following work will be performed by the Seller on the property prior to the Act of Sale: (1) replace and repaint

section of rotted fascia board on the carport. [19] [ 51 ] Mr. Paunet claims that the Defendants did not carry out this work despite their promise. [ 52 ] The photos of the carport entered into evidence by Mr. Paunet do not clearly depict that the work that the Defendants promised to carry out was not performed. [20] [ 53 ] Moreover, Mr. Hodge asserts that he performed the work. [ 54 ] There is no reason to set aside Mr. Hodge testimony as it is clear and credible. [ 55 ] Considering that Mr.

Paunet had the burden of proving that the Defendants did not carry out the work on the carport as they undertook to do, and considering that he did not discharge this burden, this portion of his claim must also be dismissed.

c) What damages were caused to the Plaintiff by the Defendants’ breaches? [ 56 ] Mr. Paunet claims $10,200 in damages, which includes $10,000 to repair the bathroom and $200 to repair the carport. [ 57 ] Considering that the Court has concluded above that the Defendants did not breach their obligations, there is no need for the Court to evaluate and assess damages. [ 58 ] That said, if the Court had concluded that Mr. Paunet was a victim of misrepresentations and that the Defendants, it would have awarded him at most $7,500. [ 59 ] Mr.

Paunet did not file documentary evidence to support the claim related to the car port. [ 60 ] He supports his claim related to the bathroom by filing two estimates for the renovation of the basement bathroom. [21] None of the authors of the estimates testified at trial [ 61 ] The Construction RT Rocs estimate contains repairs to the outside wall of the property, damages which are unrelated to the alleged misrepresentation. [22] Moreover, the court would have deducted an amount from the estimate to take into account deprecation. In total, the Court would have awarded $7,500 if it had granted his Application.

FOR THESE REASONS, THE COURT: [ 62 ] DISMISSES Mr. Paunet’s Application; [ 63 ] WITH LEGAL COSTS of $200 payable by the Plaintiff to the Defendants. __________________________________ ENRICO FORLINI, J.C.Q. Date of hearing: July 4, 2019