Gardner v. Lyons, 2020 BCPC 240

Citation: Gardner v. Lyons 2020 BCPC 240 Date: 20201215 File No: 42028 Registry: Kamloops IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (Civil Division) BETWEEN: JEANETTE MARIE GARDNER and ROBERT LLOYD GARDNER CLAIMANTS AND: COLLEEN JOYCE LYONS and ROBERT GERALD BAMBRICK DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE S.D. FRAME Appearing on their own behalf: J. Gardner and R. Gardner Appearing on their own behalf: C. Lyons and R. Bambrick Place of Hearing: Kamloops , B.C.

Dates of Hearing: October 21, 2019, November 4, 2020 Date of Judgment: December 15, 2020 [ 1 ] This is a claim by the Gardners against Ms. Lyons and Mr. Bambrick with respect to the purchase of a property which was served by a septic field. The allegation is that the septic field failed soon after the claimants purchased the property resulting in over $7,000 worth of damages. The claim itself seeks $6,872.47 including costs rather than all of the costs incurred. [ 2 ] This trial had an inauspicious beginning. The claimants were not prepared properly with their witnesses and nor were the defendants.

Despite having canvassed preparation for trial, both parties thought they could proceed with letters on contentious points. As a consequence, shortly after evidence commenced, this matter was adjourned. This is important because the trial was adjourned from its

continuation date due to COVID. At the “pre-trial” conference the parties determined that the matter had to proceed in person rather thanby MSTeams or some other method. However, on the day the trial resumed essentially one year after it started, the claimants did notbring a key witness they wished me to hear from regarding the state of the septic system and a conversation that potential witnesspurportedly had with Mr. Bambrick. It may have altered the cause of this trial but that evidence is not before me. [3] Jeanette Gardner testified first.

She testified that they purchased the property in the spring of 2018, paying $635,000. Thecontract of purchase and sale had conditions including a house and septic inspection. The contract is a standard one. It incorporates theProperty Disclosure Statement into the contract. It contains a subject to the claimants obtaining an inspection at their cost.

There is also aspecific term with respect to the sewage system. [4] That sewage system term provides as follows: 8) Subject to the Buyer, at the Buyer’s expense, having a property assessed (“Assessment”) by an appropriate authorized person (asdefined in the British Columbia Sewerage System Regulation), to determine the feasibility of installing an on-site wastewater treatmentsystem on the property (“System”), along with the cost associated with the installation of the System, and the Buyer being satisfied withthe assessment. [5] Under Terms and Conditions, the defendants represented and warranted that: 1.

The waste water treatment system on the property (“System”) was installed, inspected and approved by an authorized person asdefined in the British Columbia Sewerage System Regulation; and 2. A permit/letter of certification respecting the system is on file with the local health authority. [6]

Article 18 of the Contract provides that: There are no representations, warranties, guarantees, promises or agreements other than those set out in this Contract and therepresentations contained in the Property Disclosure Statement if incorporated into and forming part of this Contract, all of which willsurvive the completion of this sale. [7] The Property Disclosure Statement identifies that the sanitary system is septic and that the defendants were not aware of anyproblems with it. It also provides that the defendants were not aware of any material latent defects.

It is incorporated into the Contract. [8] The claimants viewed the house and everything appeared to be fine. The defendants were having the septic system cleaned outthe day of the viewing after the claimants had viewed the property. Concerned about the septic, Ms. Gardner sent an e-mail to her realtor.A response was received from the defendant’s realtor, Sam Hodgson. This e-mail confirmed that the septic had been emptied and a copyof the receipt for same was also attached. [9] Ms. Gardner said that they were also provided with a diagram of the septic field of what was supposed to be in place.

They weregiven this when they were doing the viewing. A copy of the diagram was also provided. The diagram depicts a sewage system with fourpipes, and a cleanout installed in 2011. Astonishingly, Mr. Bambrick testified that he drew it at his realtor’s request but it was only aconcept drawing of what he assumed was there. He purchased the property after the sewage system was installed, so did not actuallyknow what was there. [10] Nowhere on the diagram does he say that this was a concept drawing. Mr.

Bambrick claims he had no idea why his realtorwanted the drawing but it is clear he knew the condition of the sewage system was very important to the claimants. [11] Based on this diagram, the assurances made by the realtor for the defendants, and their own viewing, the claimants removed theirsubjects and completed the sale. [12] The Gardners moved into the property in the beginning of April. In August, they learned that the septic was overflowing. Theyhad a company come in to empty it out.

Because they were occupied with their daughter’s wedding that weekend, they did not havesomeone dig out the tank until the following weekend. As it turned out, there was nothing wrong with the tank but there was no septicfield as represented in the diagram. All that was found was some wood, sand and rocks. They said there were no pipes in the septic fieldand the system did not look at all as the diagram that was presented. However, there was also evidence that there were pipes. There werebroken pieces of pipe visible.

It was certainly not as the diagram represented, either way. [13] The claimants then had to retain someone to drain the field and get it operating properly. They received a quote for over $15,000as well as a quote from a person who ultimately did the septic field repairs. The repair costs were $6,726.47. ANALYSIS OF LAW Latent Defects [14] Latent defects are defects that are not discoverable through a reasonable inspection or reasonable inquiries: Nixon v. McIver,2016 B.C.C.A. If portions of the property or building must be removed to find the defect, it likely qualifies as latent.

The defects in theseptic field were not discovered until the claimants had the tank dug out. However, I have no evidence of whether a proper inspection ofthe field and the permit or letter of certification would have alerted the claimants to potential problems. [15] Unless a latent defect renders the property unfit for habitation or dangerous, sellers do not have a duty to disclose latent defects toprospective buyers: Nixon v. MacIver; McCluskie v. Reynolds, (BC SC), [1998] 65 B.C.L.R. (3d) 191 (B.C.S.C.).Neither condition was the case.

The claimants continued with the wedding and had the tank dug out a week later. The septic field failure,therefore, cannot be said to have rendered the property unfit for habitation or dangerous.

[16] Further, sellers only have a duty to disclose current actual knowledge of such latent defects and that knowledge does not have tobe correct: Nixon v. MacIver. Because a defect is relatively easy to discover after purchase does not necessarily establish that the sellerwas aware of the deficiency and concealed or misrepresented it: Weller v. Gordon, [2001] O.J. No 1277. In this case, Mr. Bambrick andtheir daughter Catharine Lyons testified that they did not experience any problems with the septic field in the time they lived there.

Thisis unchallenged. [17] Generally, buyers of real property have an obligation to perform their own due diligence before purchasing a property and mustmake appropriate inquiries and investigations themselves: Fraser-Reid v.

Droumtsekas, (SCC), [1980] 1 S.C.R. 720.This principle is known as caveat emptor and, in the absence of fraud, leaves buyers without remedy if they fail to obtain an expresswarranty or independent examination of the premises. [18] The pleadings show that the Gardners did acquire a property inspection, however, they admit that the inspector was unable toinspect the septic system because the ground was frozen and covered in snow. [19] Incorporating a Property Disclosure Statement into purchase and sale contracts does not turn the representations contained inthem into contractual warranties: Hamilton v.

Callaway, 2016 BCCA 189 , 2016 B.C.C.A. 189. Property disclosure statementsare “representations as to the true state of knowledge of the vendor and may support a claim in breach of contract if the statement wasuntrue and did not accord with the vendor’s true belief at the time”: Hamilton v. Callaway (B.C.C.A.). Property disclosure statements donot require sellers to warrant any state of affairs but merely put prospective buyers on notice of any concerns or latent defects that maynot be easily discoverable.

Sellers have no obligation to disclose information that is “not directly responsive to one of the specificquestions in the PCDS [property condition disclosure statement], provided the information did not relate to a latent defect that renderedthe property dangerous or unfit for habitation”. [20] There is no general duty of care between the seller and buyer of real property, however, a special relationship is formed with theprovision of a Property Disclosure Statement which gives rise to a duty of care: Hanslo v. Barry.

This is because sellers intend for therepresentations made in a Property Disclosure Statement to be relied upon by buyers: Hanslo v. Barry. This is explained by the Court inHanslo v Barry at paragraph 118: However, I find that the special relationship extends only as far as the representations made in the PDS. If it is the PDS that creates thespecial relationship between the parties, that relationship must, therefore, be confined to the representations made therein.

If the specialrelationship extended further than the PDS, the result would be that all vendor/purchaser relationships would be “special relationships”.This would defeat the purpose of the doctrine of caveat emptor entirely. Caveat emptor is intended to be the rule, not the exception.

Inmy view, it would not be appropriate to extend any exceptions beyond their current state in law. [21] However, if the defendants represented that they were not aware of any problems with the sewage system, and this was theirhonest belief, later finding the system to be defective does not render their representation false: Hamilton v. Callaway (B.C.C.A.). [22] Sellers are only obligated to disclose their current actual knowledge and are not required to warrant that knowledge is actuallycorrect: Hamilton v.

Callaway (B.C.C.A.). [23] There is no such representation or warrantee in the contract of purchase and sale or Property Disclosure Statement that fallswithin any area of liability for the defendants. The claimants built their protection into the contract and then settled for less than it gavethem when they removed their subjects. It is galling, to be sure, that Mr. Bambrick so negligently misrepresented the septic system buthis representation forms no part of the contract. [24] I am compelled to dismiss the claim under the law but I shall not award costs to the defendants.

Unless the parties exchangedformal offers in accordance with the Rules, there shall be no costs to either party. _________________________ S.D. Frame Provincial Court Judge