2019 QCCQ 7241, 2019 QCCQ 7241

Vallejo c. Adoranti 2019 QCCQ 7241 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-703229-171 DATE: October 21, 2019 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI, J.C.Q. ______________________________________________________________________ HORACIO VALLEJO And CATHERINE VALLEJO Plaintiffs v.

CARLO ADORANTI And LAKSHMI SHARMA Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Horacio and Catherine Vallejo claim from Carlo Adoranti and Lakshmi Sharma $3,036.08 on the grounds that the Defendants have failed to honor their obligations under a promise to purchase agreement. [ 2 ] Plaintiffs purchased a residential property from the Defendants further to a promise to purchase agreement.

Under the agreement, the Defendants had the obligation to prove that a back flow valve was present in the basement bathroom, failure which, they undertook to install one and return the bathroom in the state it was when the property was inspected. When no back flow valve was found to exist, Plaintiffs agreed to let Defendants install one. Plaintiffs contend that the Defendants did not complete the repairs to the bathroom and therefore they hired a contractor to complete the repairs.

They paid their contractor $3,036.08 and claim this amount form the Defendants. [ 3 ] The Defendants argue that they should not be responsible for the entire amount of the costs claimed by the Plaintiffs because they were never given the opportunity to have the work carried out by a contractor of their own choosing. Moreover, they add that the costs claimed by the Plaintiffs are excessive in that they include expenses not related to restoring the bathroom in its original state. Issue

a) Have the Plaintiffs proven that the Defendants failed to respect the terms of the promise to purchase agreement?

b) If so, what damages are they entitled to? Analysis and Decision

a) Have the Plaintiffs proven that the Defendants failed to respect the terms of the promise to purchase agreement? [ 4 ] The outcome of this case turns on the Courts’

interpretation of the following clause in an amendment to a Promise to Purchase Agreement : “$5,000 from the proceeds of the sale will be held by the notary until the back flow valve in the basement bathroom is proven to exist. Should the vendor fail to produce this proof to this satisfaction of the buyer by July 15 th , the buyer will be entitled to use this funds to rectify the situation at his discretion.” (the “ Clause ”). [ 5 ]

Article 1458 of the Civil Code of Québec provides that every person has a duty to honour his/her contractual obligations. When he/she doesn’t, that person is liable for any injury he causes to the other contracting party and is bound to make reparation for the injury. [ 6 ] The Court must apply the Clause to the facts of this case and determine whether the Defendants honoured their obligations arising under the Clause.

[ 7 ] In June 2017, Catherine and Horacio Vallejo signed a Promise to Purchase a residential property belonging to the Defendants Carlo Adoranti and Lakshmi Sharma. [1] [ 8 ] On June 20, 2017, the parties signed the amendment to the promise to purchase, which contains the Clause that is at the heart of this litigation. [2] [ 9 ] On June 27, 2017, the parties execute the notarized deed of sale. [3] [ 10 ] As per the Clause, $5,000 from the proceeds of sale was withheld by the notary and deposited in his trust account until the vendors (the Defendants) executed their obligations under the clause. [4] Indeed, the notary’s disbursements

schedule indicates: $5,000 withheld until completion of repairs as per AM 99153 to be achieved by vendor by July 15 th , 2017; failing this delay, the sum shall be remitted to purchasers (…) [ 11 ] On July 3, 2017, the Plaintiffs took possession of the property. [ 12 ] Prior to this date, it had been occupied by tenants of the Defendants. [ 13 ] When the tenants moved out from the property, the Defendants were able to ascertain that there was no backflow valve in the basement bathroom. [ 14 ] Accordingly, while the strict language of Clause does not contemplate this, the parties nonetheless agreed that the Defendants themselves would install the backflow valve at their own cost. [ 15 ] Since this installation required the removal of some of the tiles of the bathroom floor, making an opening in the bathroom wall, and removing the toilet bowl, the parties further agreed that the Defendants would be obliged to return the bathroom in the state it was prior to the installation of the backflow valve, at their own cost. [ 16 ] The backflow valve is installed by the Defendants’ plumber sometime between July 3 and July 14.

After the installation, the Defendants still had to return the bathroom in its original state, namely by replacing a few tiles, closing the hole in the wall, painting the wall and reinstalling baseboards and the toilet (hereinafter the “ Repair Work ”). [5] [ 17 ] The Defendants did not carry out the Repair Work by the July 15 the deadline provided for in the Clause.

They had an estimate from Sonic Renovation to carry out the Repair Work for $919.80. [6] [ 18 ] Since the Repair Work was not completed by the deadline, the Plaintiffs informed the Defendants that they had forfeited their right to carry out the Repair Work and that they would have this work performed by their own contractor. [ 19 ] The Plaintiffs obtained an estimate from Construction et Inspection Moisan Inc. (“ Moisan ”) (P-6) and forwarded it to Mr. Adoranti on July 20. [7] [ 20 ] On July 25, Mr. Adoranti informed Mrs.

Vallejo that the Moisan estimate was excessive and covered work beyond the scope of the agreement. [8] [ 21 ] The Plaintiffs had the Repair Work carried out between December 2017 and July 2018, although not by Moisan. They claim that this Repair Work cost them $3,036.08, amount which they claim from the Defendants. [9] [ 22 ] The Clause is clear and unambiguous.

It states that if the vendor (the Defendants) cannot prove to the satisfaction of the buyer (the Plaintiffs) by July 15, 2017 that the basement bathroom is equipped with a backflow valve, the buyer (the Plaintiffs) will be entitled to use the withheld funds ($5,000) to remedy this deficiency “at his discretion”. [10] [ 23 ] If the words of a contract are clear, the Court’s rule is limited to applying them to the facts before it. [11] [ 24 ] In the instant case, the Defendants did not complete the Repair Work by July 15.

By failing to do so, the Court concludes that the Defendants failed to honour their obligations under the Clause.

b) If so, what damages are they entitled to? [ 25 ] Based on the terms of the Clause, the Plaintiffs were entitled to use at their discretion the $5000 held in trust by the notary to remedy the Defendants’ failure to complete the Repair Work. [ 26 ] They claim $3,036.08. [ 27 ] Of course, while they could do so at their discretion, they had to exercise the right afforded in the Clause in good faith (art. 6 C.C.Q. ). There is no evidence that the Plaintiffs did not act in good faith. [ 28 ] The claim for $3,036.08 [12] is supported by the following invoices:

a) Gestion CVA Plus: $689.85; [13]

b) Service d’installation Réni-Dépôt (Construction SYME Prestige): $2,242.01; [14]

c) Paint purchase: $105.22. [15] [ 29 ] The Plaintiffs are entitled to claim from the Defendants the costs they incurred for carrying out the Repair Work. Any work

unrelated to the Repair Work is beyond the scope of the Clause. [ 30 ] The Réno-Dépôt invoice includes an expense related to installing an access trap in the basement bathroom for the water meter. No access trap was present in the bathroom prior the installation of the backflow valve. [ 31 ] Accordingly, this portion of the invoice is outside the scope of the Clause and will be deducted.

That said, the invoice is not detailed and does not indicate what portion of the total invoice amount pertains to installing the access trap. [ 32 ] The Court has no other option but to use its discretion to deduct $400 from the invoice. [ 33 ] Similarly, baseboards had to be removed prior to installing the backflow valve. According to Mr.

Adoranti, the baseboards that were removed were in good condition and could have been reinstalled as part of the Repair Work. [ 34 ] The Court finds his testimony credible and un-contradicted and concludes that the portion of the Réno-Dépôt invoice pertaining to new baseboards is beyond the scope of the Clause. The Court will use its discretion and deduct an additional $100 from the Réno- Dépôt invoice. [ 35 ] Mr. Adoranti argues that there was no need to repaint the entire bathroom. The Court disagrees.

Given that the Repair Work includes the replacement of the gyproc for a large portion of the wall of the bathroom, it was reasonable for Plaintiffs to repaint the entire bathroom for esthetic reasons. [ 36 ] Finally, the Gestion CVA Plus invoice includes a trailer to remove debris from the property while renovations were undergoing. The Court agrees with Mr. Adoranti when he argues that this expense was unrelated to the Repair Work.

Rather, it was likely an expense related to the renovation work performed in the basement further to the flood experienced by the Plaintiffs. [ 37 ] The trailer expense is beyond the scope of the Clause.

The Court will deduct $200 from the CVA invoice. [ 38 ] In total, the Court finds that $700 in expenses claimed by the Plaintiffs are beyond the scope of the Clause and must be deducted from $3,036.08 they are claiming. [ 39 ] Plaintiffs are entitled to claim damages of $2,336.08. [ 40 ] As per Mtre Dugas’ June 27, 2017 letter (P-1), $5,000 was withheld from the proceeds of sale and deposited in his trust account. [ 41 ] In the notary’s August 14, 2017 email to the parties, he writes “due to your current disagreements, I will only disburse the withheld sum of $5,000 upon common instructions from both the seller and the buyer, or following a final judgment from the court” (P- 8).

Given this undertaking by Mtre Dugas and considering that he is not an impleaded party, the Court cannot order him to disburse the funds. However, the Court trusts that the parties will inform Mtre Dugas of this judgment so that he may disburse the funds as per the conclusions of the judgement. FOR THESE REASONS, THE COURT: [ 42 ] GRANTS in part Plaintiff’s claim; [ 43 ] CONDEMNS the Defendants solidarily to pay to the Plaintiffs $2,336.08 with interest at the legal rate and the additional indemnity provided for

article 1619 of the Civil Code of Québec , as of October 12, 2017; [ 44 ] WITH COSTS of $185 payable by the Defendants solidarily to the Plaintiffs. __________________________________ ENRICO FORLINI, J.C.Q. Date of hearing: June 26, 2019