McLay v. Smith, 2022 NSSM 21

SMALL CLAIMS COURT OF NOVA SCOTIA Citation: McLay v. Smith, 2022 NSSM 21 SCCH 512977 Between: Rory Justin McLay and Talia Jennifer Beech Claimants — and — Tyler Jordan Mitchell Smith and Guylaine Perron Defendants Adjudicator: Augustus M. Richardson, QC For the Claimants: Stephen A. Russell, counsel For the Defendants: Tyler Smith and Guylaine Perron (self represented) Heard: June 28, 2022 (by Zoom) Decision: June 29, 2022 DECISION [ 1 ] This claim arises out of the purchase of a home.

The claimant purchasers say that the washing machine that was included in the purchase was defective and leaking at the time of closing; that the leak had caused damage to the surrounding floor; and that as a consequent a new washing machine and new flooring had to be purchased. They say that these costs were the result of the defendant sellers’ breach of contract or negligent representation, or both, and seek a total of $6,017.84 The Hearing [ 2 ] On behalf of the claimants I heard the testimony of Mr. McLay and Ms. Beech. I also heard from their contractor, Mr. Paul Bellefontaine. I note here that Mr.

Bellefontaine is a Red Seal carpenter, has been in the trade as both a contractor, carpenter and house inspector for roughly 40 years. [ 3 ] On behalf of the defendants I heard the testimony of Mr. Smith and Ms. Perron. I also heard the testimony of Ms. Beverly Sims, who had worked as their housekeeper for at least a year prior to the sale of the house, and had done laundry once every two weeks during that time.

[ 4 ] I also received a number of exhibits. These included the agreement of purchase and sale, the Property Condition Disclosure Statement and a house inspection carried out for the claimants prior to closing. [ 5 ] I should note here that the parties spent much of their time talking about what they thought the duties, obligations and expectations of the others were or should be, rather than about the facts of what they actually saw or did or heard at the times material to the claim. They were repeatedly reminded that the most helpful evidence remained that related to those facts.

Notwithstanding such reminders they often veered away from such evidence to focus instead on their opinions. However, in the end I was able to glean enough information to be able to arrive at some determinations as to the facts. The Facts [ 6 ] The claimants purchased the house in Dartmouth, Nova Scotia from the defendants. The parties entered into an agreement of purchase and sale (“APS”) on June 19, 2020 with a closing date of August 10, 2020. The claimants had done a walk through of the house before closing.

They also had a home inspection conducted on June 23, 2020. [ 7 ] Clause 6.2 of the APS stated that certain chattels, and in particular a “washer,” were “included in the purchase price and shall be conveyed to the Buyer in good working order, free and clear of encumbrances, on the date of closing.” Clause 11.2 stated that “[a]ll representations given by the Seller contained in this Agreement shall survive the closing unless otherwise stated in this Agreement.” [ 8 ] The claimants took possession of the house on closing. Ms.

Beech started a load of laundry in the washing machine that morning, before the movers showed up. She noticed that water leaked onto the floor next to the washing machine. The claimants called a repair technician. He attended that day or the next. Upon inspection he noted that “there is a flex in one of the rear spider arms which I believe is pushing down on the front outer tub and door seal allowing water to leak out significantly.” As well, the drain pump was estimated to have “about 25% life left in it.” He advised that the cost of repair exceeded the value of a new washing machine.

The repair technician also noted “damage done to the flooring which I suspect this leak started as slow then progressed.” Since the repair technician did not give evidence, and given the rest of the evidence before me (discussed later in these reasons), I take it that the damage he observed was beneath the washing machine rather than in front of it. [ 9 ] The claimants hired Mr. Bellefontaine to investigate the floor around the washing machine. He lifted a tile and noted that the wrong underlay had been used at some point.

The underlay had caused water to wick through the material, making it brittle and liable to delaminate more quickly than normal. The underlay was rotted. The subfloor was not rotted, but he thought that the rot in the underlay would eventually spread to it and affect the floor integrity. He added that if the underlay and subfloor became wet that it could lead to mould and insect infestations. He recommended replacement. The claimants had him repair the floor in the laundry room and adjacent bathroom.

The cost of these actions broke down as follows: a. .............................................................................. new washing machine $1,178.32 b. ......................................................................... cost of repairs to flooring $4,475.00 c. ......................................................................... cost of flooring materials $272.32 d. .......................................................................... cost of initial service call $91.94. [ 10 ] I note here that on the evidence of Mr.

Bellefontaine, as well as the house inspector’s report, I am satisfied that the problems with the floor were latent rather than patent. That is, they were not observable on normal inspection. They became apparent only once the surface tiles were removed. [ 11 ] I am also satisfied on the same evidence that the normal practice of house inspectors is to turn on a washing machine to see if (

a) it turns on and (

b) if they here water starting to cycle into the machine. Once they are satisfied that they have heard water starting to cycle

into the machine they turn it off. They do not, in other words, wait for the machine to fill or to run through an entire wash cycle. [ 12 ] The claimants say that the leak in the washing machine means that it was not in good working order at the time of closing. Hence, they say the defendants were in breach of clause 6.2 of the APS. They also say that the defendants negligently misrepresented the state of the washing machine as well as the condition of the floor under it.

They say that the defendants must have known that the machine was leaking and concealed that fact from the claimants. [ 13 ] The defendant’s evidence on this point was that the washing machine was part of the house when they purchased it in 2011. It was new at the time. They had had no problems with the machine since that time. Ms. Sims had done laundry once every two weeks. She testified that she had never seen any leaks of water from the machine. As far as the floor was concerned, the defendants testified that whatever work had been done had been done by the previous owner.

They had not done anything to the floor during the time they owned the house. Nor had they noticed any problems in the floor prior to the sale to the claimants. [ 14 ] At this point I need to break the claimants’ claim into two parts, one relating to the washing machine, and the other to the damage to the underlay. The Washing Machine [ 15 ] The onus of proof on a balance of probabilities lies on the claimants. To establish their claim in negligence they had to establish that the defendants knew or ought to have known prior to closing that the machine was leaking. This they failed to do.

There was little evidence as to the nature and extent of the leak when it was first noticed by Ms. Beech. I am satisfied that there was a leak when Ms. Beech operated the machine. But to succeed in negligence the claimants have to establish on balance that it existed and was observable to the defendants before closing. And here the evidence was not sufficient to meet the burden of proof. Given the evidence of the defendants and in particular Ms.

Sims (who had no apparent reason to dissemble on this point) I am satisfied that any leak that pre- existed closing was minor and not observable to someone standing in front of the machine. It may have been under the machine but, if so, it was not immediately apparent outside. [ 16 ] I should note too that the fact that the machine was not in good working order on the day of closing is not proof that it was not in good working order the day before—or that the defendants knew it had become defective in some way. Appliances do not always provide signs of a problem before it manifests itself.

They wear down over time, working all the while, until they suddenly stop working. [ 17 ] As a result, I was not satisfied that the claimants had proved any negligent misrepresentation on the part of the defendants. [ 18 ] However, there remains the claim in contract. Clause 6.2 provided that the washing machine “shall be conveyed to the Buyer in good working order.” Clearly the washing machine, as of the date of closing, was not in good working order. It leaked on the day of closing. A leaking machine is not one that is in good working order.

On this point then I am satisfied that the defendants were in breach of their contractual obligation to convey the washing machine in good working order. [ 19 ] As for damage, damages in contract provide a claimant with the value of what they were to receive which, in this case, was a machine that was roughly nine years old. It had only 25% of its working life (or at least, that of its drain pump) left. To award them the cost of a new machine would be to overcompensate them for their loss. I accordingly award 25% of the value of a new machine ( i.e. the one they purchased), or $294.58.

I award 100% the cost of the service call ($91.94), since all of it was necessary to investigate the source of the problem. The Damage to the Underlying Floor [ 20 ] The law is clear that as a general rule purchases of houses that are not new are subject to the rule of caveat emptor —buyer beware. Absent fraud, mistake or misrepresentation a purchaser takes an existing property as they find it. The rule is subject to an exception in the case of latent defects (that is, defects that are not observable on reasonable inspection).

Sellers may be liable for latent defects that they have knowingly or intentionally covered over; or which are dangerous in some way; or which they have misrepresented in response to a direct question from the purchaser: see, for e.g., Forbes v. Woodroffe 2022 NSSM 18 at paras.82-84.

[ 21 ] The evidence here is clear that the damage to the floor in the laundry room and adjourning bathroom was latent. It had not been detected by the house inspector or by the claimants prior to closing. The defendants were unaware of any problem. They were not the ones who installed the floor. And on the evidence of Mr. Bellefontaine, the damage only became apparent once he lifted the floor tiles that hid it from view. [ 22 ] There was no evidence of fraud on the part of the defendants. Nor was there any evidence of misrepresentation, negligent or otherwise, as to the state of the floor under the tiles.

Nor was the damage that was hidden by the tiles dangerous, albeit that over time it might lead to mould growth or insect infestation. Given these facts the general rule of caveat emptor applies, and I must dismiss that part of the claim relating to the floor.

Conclusion [ 23 ] For the above reasons I find the defendants liable in breach of contract only for the washing machine, and will award the following amounts: a. ..................................................................................... washing machine $294.58 b. ............................................................................................... service call $91.94 c. ........................................................................................................ costs $199.35 d. ...................................................................................................

TOTAL $585.87 DATED at Halifax, Nova Scotia this 29 th day of June, 2022 Augustus M. Richardson, QC Adjudicator