2010 QCCQ 13132, 2010 QCCQ 13132

Orawiec c. Zieba 2010 QCCQ 13132 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-112123-080 DATE: December 16, 2010 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ DANIEL ORAWIEC -and- DOROTHY MEZYNSKI […] Kirkland, Quebec […] Plaintiffs vs.

RICHARD ZIEBA […] Hudson, Quebec […] Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiffs, who purchased their home on 28 Haendel in Kirkland from the Defendant, Richard Zieba, sue him for $6,939.64, an amount they allege as the direct result of a latent defect in the building giving rise to water damages in March 2006. [ 2 ] Mr Zieba denies liability claiming there was no defect in the house at the time of the sale in August 2005.

He also alleges that the amount claimed is exaggerated and relates to improvements made to the house as opposed to damages directly related to the alleged defect.

FACTS [ 3 ] It is not in issue that Mr Zieba, the original owner of the home had an incident of water infiltration in the basement in October 1993. [ 4 ] The foundation of the house, which was new at the time, was cracked and, rather than claim under the contractor's warranty, Mr Zieba hired a specialised firm, Injection Classique who injected epoxy and bentonite into the cracks. [ 5 ] According to Mr Zieba, he finished the basement the following year and never had a problem with any water infiltration since then. [ 6 ] The invoice, dated October 13, 1993 (D-1), shows a charge of $433.99, taxes included.

The description of the work is: Inject 1 crack under patio with epoxy + bentonite to prevent leaking or recracking. Inject cracks between foundation + bricks to prevent leaking. [ 7 ] It is also not in issue that the water infiltration and the work done to fill the cracks in 1993 were not mentioned, in any way, by Mr Zieba, neither to his agent nor directly to the Plaintiffs and their building inspector.

[ 8 ] It is also clear that, at the time of the sale, all of the concrete walls of the basement were covered with finishes and it was impossible to see any indication of cracks, water infiltration or any other defect concerning the foundation. [ 9 ] The ownership in the property was transferred in August 2005.

The problem of infiltration from which the claim arises occurred in March 2006 when, during the spring thaw, water infiltrated into the basement soaking the carpet, which was laid directly on the concrete floor. [ 10 ] The Plaintiffs promptly informed the Defendant of the infiltration and called upon him to investigate.

Attempts were made from May to settle the matter. [ 11 ] On March 22, 2006, Mr Orawiec sent a letter of demand to Mr Zieba notifying him of the problem and confirming Mr Zieba's conversation of March 10, 2006 after the verbal denunciation of the problem in which Mr Zieba admitted the initial water infiltration that had occurred in 1993 and that he had had the problem repaired. [ 12 ] The Plaintiffs notified their property insurer who agreed to settle the loss for $9,500 less a deductible of $500.

The settlement was based on the insurer's assessment of the cost of tearing out the wall finishes and the carpet and included a component for the loss of contents. [ 13 ] It was necessary to tear out the wall finishes of the left and rear wall of the building in order to have access to the areas of the concrete foundation that were cracked. [ 14 ] The insurer accepted the necessity of replacing the carpet, which, although it had been initially installed by Mr Zieba, was still in relatively good condition prior to the water infiltration. [ 15 ] The Plaintiffs, in fact, spent substantially more money on the repairs to the basement than were allowed by the insurer, detailed as follows: Repairs made by general contractor: $ 9,892.00 Replacement of carpeting: $ 4,799.98 Repairs of the foundation cracks: $ 747.66 Insurance deductible: $ 500.00 Total damages and costs: $15,939.64 [ 16 ] The amount of $747.66, for the repairs of the cracks, was obviously not covered by insurance because it was the alleged defect in the house that was identified as the cause of the problems.

An insurer will pay for the consequences of a loss but not for the repair of the defect that is the cause thereof. [ 17 ] The circumstances in which the Plaintiff spent substantially more money than was recognised by the insurance company is somewhat complex. [ 18 ] One the one hand, in its first estimate the insurer only allowed for the replacement of wall finishes in the areas torn out have access to the cracks and of the carpet in the area actually affected by the flood. [ 19 ] The Plaintiffs decided to change the carpet in the entire basement area including those areas that were not damaged in the March event. [ 20 ] They also change the carpet on the stairway so that it would match the other areas. [ 21 ] These repairs to areas not affected by the March event had to be carried out for aesthetic reasons: it was not feasible to have two different colors of carpet in the same architectural area. [ 22 ] As well, it came out at the trial that there was a second event of infiltration in the summer of 2006. [ 23 ] It had been difficult to find the contractor to come and repairs the cracks and water infiltration continued. [ 24 ] The Plaintiff made an additional claim to their insurer who assessed the global amount of damages from the two floods at $18,196, taxes included. [ 25 ] The insurer refused however to settle the loss on this basis for reasons that were not made known to the Court.

It was confirmed by the insurer's estimator that the amount of the insurance settlement was as the Plaintiffs indicated, $9,500 less a $500 deductible. QUESTIONS IN ISSUE [ 26 ] The Court must decide: 1) Whether the water infiltration into the basement from the period beginning March 2006 was caused by a latent defect that existed at the time of the sale was undisclosed by the vendor? 2) In the affirmative, what is the amount of damages suffered by the Plaintiffs beyond the amounts received by their insurer?

ANALYSIS [ 27 ] If the Plaintiffs are liable, then the amount paid by the insurance company gives rise to a subrogation in the insurance company's favour for the claim that the Plaintiff would otherwise have. [ 28 ] This subrogation takes place automatically when the insurance company settles the loss. In the present case, however, the insurer allowed three years to pass without bringing a recourse against the Defendant.

He would have a valid defence of prescription for the part of the claim settled by the insurer. [ 29 ] The Plaintiffs claim is for the amount they paid over in above the $9,000 received from their insurer. [ 30 ] Water infiltrations through cracks in the foundation can be characterised as a defect of quality. [ 31 ] If such a defect is not apparent at the time of the sale and not disclosed to the purchasers then the vendor is liable under the warranty of quality as defined in the Civil Code of Quebec : 1726.

The seller is bound to warrant the buyer that the property and its accessories are, at the time of the sale, free of latent defects which render it unfit for the use for which it was intended or which so diminish its usefulness that the buyer would not have bought it or paid so high a price if he had been aware of them.

The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect; an apparent defect is a defect that can be perceived by a prudent and diligent buyer without any need of expert assistance. [ 32 ] In the present case, the existence of the defect at the time of the sale can be inferred from the fact that water infiltration occurred in the first spring thaw following the sale. [ 33 ] The Defendant disclosed, only after the sale, that he had had water infiltration problems because of cracks in 1993.

The fact that he had repaired these cracks to his satisfaction and that he had had no problems since shows that he was in good faith when he failed to disclose this history to the purchasers. [ 34 ] As far as he knew, the problem had been solved and would not reoccur. [ 35 ] The facts however speak for themselves: after the subsequent water infiltration suffered by the Plaintiffs in March 2006, the cracks were again repaired, this time with injection of water-proofing foam.

The effectiveness of these injections is guarantied for 10 years. [ 36 ] The default in the foundation has always existed and the repair carried out by the Defendant was not a permanent solution to the problem, as he may have believed. [ 37 ] At the time of the sale, the repairs had deteriorated to the point that a vulnerability existed which became manifest in the spring thaw of 2006. [ 38 ] While it is impossible to prove with scientific certainly that the cracks were defective at the time of the sale, it is most probably the case that they were. [ 39 ] Plaintiffs' duty is to prove the case on the balance of probabilities and the facts are sufficiently consistent with their theory of the case to constitute a presumption of fact.

There is no evidence of anything that occurred between the time of the sale and the appearance of water in March 2006 to suggest that the condition of the foundation changed after the sale. [ 40 ] The Defendant is, therefore, responsible for the latent defect, which is not to say that he was in bad faith. [ 41 ] The definition of a latent defect is a defect that is not known or apparent. [ 42 ] The law chooses between an innocent vendor and an innocent purchaser and puts the risk on the vendor, providing the purchaser with relief. [ 43 ] The quantification of the loss is more difficult problem. [ 44 ] The purchasers, in acquiring the home, proceeded to various redecoration projects.

While they may have been able to continue with the carpet and paint colors that were in the basement at the time of the sale there had been no damage, it is also clear that by replacing the carpet and repainting the entire basement, they renewed and refreshed the finishes and added value to the property. [ 45 ] It would not be fair to hold the vendor accountable for the full costs of these renovations: they have provided the Plaintiffs with a product that is newer and more valuable than what they purchased. [ 46 ] The carpet, for example, dated from 1994.

At the time of the repairs, this was approximately 12 years earlier. [ 47 ] Considering, generously, that an interior carpet has a useful life of, say, 25 years, the new carpet should be considered to give an added value of 50%. [ 48 ] The repairs carried out by the contractor in removing and replacing the wall finishes should be reduced by smaller factor because there is much less depreciation on wall finishes which do not become worn over time. There is, however, probably an added value in that the contractor would have done his work according to current practises.

[ 49 ] Proceeding somewhat arbitrarily, because no expert evidence was available on the point, the Court considers that the contractor's bill should be reduced by 10%. [ 50 ] The quantum damages assessed by the Court is therefore as follows: - Carpet (50%) $ 2,400 - Contractor (90%) $ 8,900 - Repair of foundation cracks: $ 748 TOTAL: $12,048 [ 51 ] From this amount, the Court will deduct the part of the insurance settlement that related to the building (as opposed to the contents) evaluated by the insurer's estimator, Guy Bélanger, at $7,700. [ 52 ] Taking into account the deductible of $500, the Court calculates the amount of the loss for which the Defendant is responsible, at $4,848. [ 53 ] The Court reiterates that the Defendant was not in bad faith so there should be no additional damages awarded.

FOR THESE REASONS, THE COURT: CONDEMNS the Defendant to pay the Plaintiffs the sum of $4,848 together with interest at the legal rate of 5% per annum and the additional indemnity provided at

article 1619 of the Civil Code of Quebec , calculated from December 7, 2006; CONDEMNS the Defendant to pay, to the Plaintiffs, judicial costs in the amount of $155. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: November 22, 2010