2018 QCCQ 1401, 2018 QCCQ 1401

Inez Jack c. Romani 2018 QCCQ 1401 COURT OF QUEBEC (Small Claims Division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-154012-167 DATE: March 6, 2018 ______________________________________________________________________ BY THE HONOURABLE DOMINIQUE GIBBENS, J.C.Q. ______________________________________________________________________ Cindy INEZ Jack Plaintiff v.

Marco Romani -and- Caroline blouin Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiff claims $13,565.89 from Defendants, from whom she purchased a property in 2015. She discovered water infiltrations in the basement of the property shortly after she moved in, which she considers to be a latent defect for which Defendants are responsible.

The amount claimed represents the estimated cost of the work needed to correct the alleged defect ($10,200) and the fees paid to her expert for the preparation of his report ($3,365.89). At trial, she added to her claim, as part of the legal costs, the fees of her expert for his testimony ($1,178.49). [ 2 ] Defendants contest the claim. They deny knowledge of any water infiltrations and argue that because the pre-purchase inspection report obtained by Plaintiff revealed a high risk of water infiltration in the basement, the alleged defect was an apparent defect for which they are not responsible.

They also contest the amounts claimed. questions in issue [ 3 ] Given the position of the parties, the case raises the following questions:

a) Was the property affected by a latent defect giving rise to Defendants’ liability at the time of the sale to Plaintiff?

b) If so, is Plaintiff entitled to the amounts that she claims? FACTUAL CONTEXT [ 4 ] Plaintiff purchased a property in Pointe-Claire (the “ Property ”) from Defendants on June 4, 2015 for a price of $440,000. [1] Prior to the purchase, she obtained a pre-purchase inspection report indicating the following: “ BASEMENT 9.1 BASEMENT WATER INFILTRATION There is no visual evidence of prior water leakages in the basement. 9.2 PROBABILITY OF INFILTRATIONS Our opinion on the probability of getting water infiltrations is: High.

To reduce the risk of water infiltrations, repair the drainage around the building (grading of the land to ensure positive drainage, extending downspouts, etc.). 9.3 WATER INFILTRATION OBSERVATIONS The basement is finished or filled with personal effects about 100%. This impedes our visual inspection for water infiltrations. There is an absence of historical clues due to new finishes and/or paint. 9.4 WATER INFILTRATION NOTES We cannot ensure that your bit basement will be dry. If the dry basement is a necessity, consult a specialist immediately.

Most buildings built before 1980 will not have French drains or they are usually no longer functional. This fact makes having the proper drainage around the building even more important. (…)” [2]

[Emphasis added] [ 5 ] Plaintiff took possession of the Property on June 7, 2015 and moved in on August 7, 2015. During heavy rains on August 11, 2015, she noticed some water on the floor in the basement, at the base of a foundation wall in a storage room.

A small stream of water was trickling towards the drain and along the wall between the base of the chimney and the front-right corner of the Property. [3] She could not see where the water was coming from, as the wall in this area was covered by rigid Styrofoam sheet insulation. [ 6 ] She immediately consulted two foundation contractors (Akton Injection and Injection Classique), who recommended that she remove the insulation and perform a water test to locate points of entry. She did so on October 5, 2015, running water from a hose on the outside near the corner at issue.

She saw that water was entering through a condemned chimney clean-out, a rod in the foundation and the seam at the base of the wall. [ 7 ] Plaintiff notified Defendants of the problem on October 16, 2015. [4] On November 1, 2015, Defendants responded that they had no knowledge of any water infiltrations [5] and, in January 2016, they denied liability. [6] Plaintiff reiterated her demand on February 1, 2016. [7] [ 8 ] In July 2016, Plaintiff retained the services of Mr. Vincent Arcobelli, an engineer, to perform a building expertise and provide his opinion on the water infiltration issue.

After examining the Property and performing a water test, he concluded that the infiltration was caused by cracks in the foundation, which pre-dated Plaintiff’s purchase of the Property, but that there were likely no visible signs of infiltration at the time because of the rigid insulation covering the foundation wall at the points of entry. [8] [ 9 ] To remedy the problem, he recommended excavating to the footing of the foundation; repairing the cracks at the base of the chimney and in the foundation wall; waterproofing the below-grade portion of the foundation and covering it with a membrane; and installing a French drain connected to the sump pit in the front-right corner of the Property.

He estimated the cost of this work at $10,200 (inclusive of taxes). [ 10 ] Plaintiff provided Defendants with Mr. Arcobelli’s report on July 12, 2016, and demanded payment within 10 days of $13,565.89. [9] Having received no response from Defendants, she filed her application on September 8, 2016. ANALYSIS

a) Was the Property affected by a defect giving rise to Defendants’ liability at the time of the sale to Plaintiff? [ 11 ] Plaintiff’s claim is based on the legal warranty of quality to which sellers are bound, as provided for in articles 1726 and following of the Civil Code of Québec (the “ C.C.Q. ”). [ 12 ] Under these provisions, a seller must guarantee to the buyer that the property sold is free of latent defects that render it unfit for its intended purpose or significantly diminishes its usefulness.

The warranty does not extend to latent defects known to the buyer or to apparent defects (i.e., defects that can be perceived by a prudent and diligent buyer without the assistance of an expert). [10] [ 13 ] A seller is held to this warranty whether or not he is aware of the defect.

If he is, his liability is greater: in addition to restoring a portion of the price, the seller is then liable for the damages suffered by the purchaser. [11] [ 14 ] To succeed on a claim based on latent defects, a purchaser must demonstrate, on a balance of probabilities [12] that the property was, at the time of the sale , affected by a defect that was serious , hidden and unknown to the purchaser . [ 15 ] The purchaser must also demonstrate that he gave notice of the defect to the seller within a reasonable time of discovering it [13] and that the seller was given the opportunity to remedy the defect and is in default of doing so. [14] [ 16 ] Does Plaintiff meet these conditions? [ 17 ] As concerns the existence of a serious defect, the uncontested opinion of Plaintiff’s expert, Mr.

Arcobelli, which the Court accepts, is that there is a crack (or cracks) in the foundation wall at the base of the chimney, causing water to infiltrate through the chimney cleanout, and that water is also infiltrating through the joint between the foundation wall and the concrete slab. [15] This is clearly a serious defect. [ 18 ] The Court also concludes that this defect existed at the time of the sale in June 2015. Again, the Court accepts Mr.

Arcobelli’s opinion that water had been infiltrating through the foundation for some time when Plaintiff purchased the Property. [16] It seems highly unlikely, moreover, that water infiltrations began suddenly within a month of the sale of the Property, when Plaintiff noted water in the basement. [ 19 ] Defendants argue that the defect was not hidden or unknown to Plaintiff, as she was made aware of a high risk of water infiltration in the basement through the pre-purchase inspection report that she obtained. [17] The Court disagrees. [ 20 ] It is true that the pre-purchase inspection report refers to a high risk of water infiltration, but the inspector’s comments in this regard are based strictly on the grading of the land and not on any evidence of cracks or seepage in the foundation.

These are two very different issues. Imperfect grading can be corrected at a fairly low cost to keep water away from the foundation and avoid potential future infiltrations. Below-grade cracks or seepage in a foundation normally require an immediate intervention and may represent costly corrective work if excavation is required.

[ 21 ] Here, the inspector noted that he saw no visual evidence of prior water infiltrations in the basement and there is no mention of cracks or seepage through the foundation wall. [18] This is understandable, as sheet-insulation covered the foundation wall in the problem area and stored boxes partially impeded visual inspection of the floor when the inspection was conducted. [ 22 ] Given the above, the Court cannot conclude that Plaintiff was made aware of the water infiltration issue through the pre- purchase inspection report.

On a preponderance of probabilities, the defect was hidden and unknown to Plaintiff at the time of the sale. [ 23 ] Finally, Plaintiff gave prompt notice of the defect to Defendants, who were given ample opportunity to remedy the defect and were placed in default of doing so. [19] [ 24 ] Defendants’ liability pursuant to the legal warranty of quality is therefore engaged.

b) Is Plaintiff entitled to the amounts that she claims? [ 25 ] Where a defect covered by the warranty of quality is proven, the purchaser is entitled to an appropriate reduction in price, taking into consideration all relevant circumstances. [20] The reduction in price should reflect the lower value of the property given the defect or the cost of the work needed to correct the defect; it should also take into account any added value brought by the corrective work so as to avoid the unjust enrichment of the purchaser. [21] If the seller was aware of the defect, he must also compensate the purchaser for the damages suffered. [22] [ 26 ] In the instant case, the Court concludes, on a balance of probabilities, that Plaintiff were unaware of the defect.

After purchasing the Property in 2008, Defendants obtained a thermographic inspection report which makes no mention of water infiltrations. [23] The Court accepts Mr. Romani’s testimony that he installed the sheet-insulation on the foundation wall afterwards for better insulation and that there were no visible signs of water infiltration at the time. [ 27 ] Defendants are therefore not liable for damages. [ 28 ] As for the reduction in price, Plaintiff seeks $10,200, corresponding to the cost of the corrective work needed as estimated by Mr. Arcobelli.

The Court cannot grant this amount for the following reasons. [ 29 ] Firstly, the Court cannot ignore the lower estimates obtained by Plaintiff in 2015. Injection Classique’s estimate is for a more limited scope of work and can be set aside. Akton Injection’s estimate of $5,875, however, is for essentially the same work as that recommended by Mr. Arcobelli.

Under the circumstances, the Court will retain Akton Injection’s estimate, but will round it off to $7,000 to include applicable taxes and to take into account that it dates back from 2015. [ 30 ] Secondly, the $7,000 must be reduced to reflect the fact that after carrying out the work, Plaintiff will have solved the grading problem that she was made aware of prior to purchasing the Property and will benefit from a new French drain in the area concerned. Granting the full estimated cost would result in an unjust enrichment for Plaintiff.

Under the circumstances, it is reasonable and appropriate to grant Plaintiff a reduction in price of $5,000. [ 31 ] This leaves the issue of Mr. Arcobelli’s fees, which total $4,544.38 ($3,365.89 for the preparation of his report and $1,178.49 for his testimony at trial). [24] [ 32 ] As the successful party, Plaintiff is entitled to legal costs, [25] which include expert fees. [26] The Court considers, however, that the fees of Plaintiff’s expert are exaggerated given the amounts at issue in the proceedings and it will use its discretionary powers to mitigate said fees to $2,500.

FOR THESE REASONS, THE COURT: GRANTS the action in part; CONDEMNS Defendants Marco Romani and Caroline Blouin solidarily to pay to Plaintiff Cindy Inez Jack the amount of $5,000, together with interest at the annual rate of 5%, plus the additional indemnity stipulated in

article 1619 of the Civil Code of Québec from July 23, 2016; WITH LEGAL COSTS of $200 representing the court costs on the Application and $2,500 as expert fees. __________________________________ DOMINIQUE GIBBENS, J.C.Q. Date of hearing: February 12, 2018