2018 QCCQ 3811, 2018 QCCQ 3811

Kalimidis c.

Tao 2018 QCCQ 3811 COURT OF QUÉBEC (Small Claims Division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-153201-167 DATE: June 7, 2018 ______________________________________________________________________ BEFORE THE HONOURABLE DOMINIQUE GIBBENS, J.C.Q. ______________________________________________________________________ ATHANASIOS KALIMIDIS -and- helen kalimidis-kluger Plaintiffs v. tao tao -and- xinzhi he Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiffs claim $15,000 from Defendants, from whom they purchased a duplex in 2011.

They claim that Defendants falsely represented that water infiltrations in the basement had been resolved by the installation of a French drain. The system installed, however, was not a French drain, and it did not resolve the infiltration issue. [ 2 ] The amount claimed represents the cost incurred by Plaintiffs to install a French drain ($8,761.23) and eliminate mold ($4,254.08), as well as damages ($1,984.69). [ 3 ] Defendants deny any liability towards Plaintiffs.

They admit their mistake in describing the work completed in 2008 to remedy the water infiltration issue, but claim that the documentation provided to Plaintiff prior to the purchase of the property accurately described the work. They also argue that the claim must be dismissed because Plaintiffs did not notify them of the alleged defect or put them in default prior to completing corrective work on the property.

FACTUAL CONTEXT [ 4 ] On February 26, 2011, Plaintiffs purchased from Defendants a duplex located on West Hill Avenue in Montréal (the “ Property ”) for a price of $408,000. [1] The Property, a row house with adjoining properties on both sides, includes a basement rental unit which had been occupied by the same tenant since 2004. [ 5 ] Prior to the sale, Defendants completed the standard form entitled Declarations by the seller of the immovable , [2] in which they stated that there had been water infiltrations in the past in the basement or elsewhere, but that these “[…] ha[d] been fixed with French drain ”. [3] Defendants also mentioned the installation of the French drain in 2008 as a major improvement to the Property. [4] [ 6 ] These statements were inaccurate, in that Defendants did not install a French drain in 2008.

They retained 2896788 Canada Inc. (doing business under the name of BWN (“ BWN ”)) to “ waterproof subsoil masonry walls of the property ” by installing a drainage system on the inside of the Property, comprised of perforated pipes installed in the concrete floor of the basement (along the back and North walls) and connected to a sump pump. [5] This is different from a French drain, which is located on the outside perimeter of a property. [6] [ 7 ] The evidence shows that Defendants did not intentionally mislead Plaintiffs, as they believed that the system installed was a “French drain”.

They provided the BWN contract, which was communicated to Plaintiffs’ real estate broker before Plaintiffs decided to purchase the Property. [7] [ 8 ] In 2012, when the basement-unit tenant moved out, Plaintiffs discovered what they believed to be mold on the walls in the washroom and kitchen of that unit. They believed at the time that this was the result of past water infiltrations, before the installation of a French drain.

Humidity and what appeared to be mold were again noted the following year, when the subsequent tenant moved out. [ 9 ] In the fall of 2014, Plaintiffs retained a foundation expert, Les Goudrons du Québec (“ Goudrons ”), to determine the cause of the apparent mold and humidity.

They were advised that contrary to what Defendants had stated, no French drain had been installed and water infiltrations were ongoing at the back of the Property. [ 10 ] In October 2014, Plaintiffs excavated the foundation at the back of the Property, installed a waterproofing membrane on the exterior of the foundation wall, and installed a French drain, at a total cost of $8,761.23. [8] [ 11 ] Afterwards, in November 2014, Plaintiffs notified Defendants of the absence of a French drain and ongoing water infiltration,

summoning them to assess the damages themselves without mentioning that corrective work had already been completed. [9] [ 12 ] Shortly after receiving this letter of demand, Defendants went over to the Property and saw that corrective work had been carried out. After that, several exchanges took place between the parties. [10] Defendants provided Plaintiffs’ lawyer with a copy of the BWN contract [11] and BWN was approached on the basis of the conventional guarantee granted to Defendants.

BWN denied liability, however, because it was not advised in a timely manner of the change of ownership as required by the contract. [ 13 ] Defendants were given the opportunity to assess the damage on the inside of the Property and they were provided with an estimate of the interior work required to fix the water infiltration damage. [12] The interior work was completed in March 2015 at a total cost of $4,254.08. [13] ANALYSIS

a) Do Plaintiffs have a recourse based on the legal warranty of quality (warranty against latent defects)? [ 14 ] Plaintiffs’ claim calls into question, firstly, the legal warranty of quality to which sellers are bound pursuant to Articles 1726 and following of the Civil Code of Québec (the “ C.C.Q. ”). [ 15 ] Under these provisions, the 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 diminish 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). [14] [ 16 ] A vendor is held to this warranty whether or not he is aware of the defect.

If he is, his liability is greater: in addition to the cost of the work needed to correct the defect, the vendor is liable for the damages suffered by the purchaser. [15] [ 17 ] To succeed on a claim based on latent defects, a purchaser must prove, on a balance of probabilities, [16] that the property was, at the time of the sale, affected by a defect that was serious , hidden and unknown to the purchaser . [ 18 ] The purchaser must also demonstrate that he gave notice of the defect to the seller within a reasonable time of discovering it [17] and that the seller was given the opportunity to remedy the defect. [18] [ 19 ] In addition, the purchaser must place the seller in default of executing his obligation of warranty. [19] A letter of demand must be given before corrective work is carried out, unless it is possible to demonstrate that the seller was in default by the effect of the law. [20] [ 20 ] The Court concludes that these conditions are not met in the instant case, for the following reasons. [ 21 ] The absence of a French drain does not, in and of itself, constitute a latent defect that can give rise to liability under the legal warranty of quality.

Many properties do not have French drains and have no water infiltration issues. [ 22 ] The evidence shows, however, that when Plaintiffs purchased the Property in 2011, water infiltration was ongoing through the back foundation wall. This constitutes a serious defect, which was hidden and unknown to Plaintiffs. Although the pre-purchase inspection revealed high levels of humidity in the basement, this problem was associated to the absence of a fan; [21] there were no visible signs of ongoing water infiltrations at the time.

Moreover, Defendants’ representation that past infiltrations had been resolved by the installation of a French drain understandably reassured Plaintiffs that all was resolved. [ 23 ] Plaintiffs did not, however, give notice to the Defendants of the defect within a reasonable time of discovering it and, moreover, they proceeded to corrective work without giving them the opportunity of remedying the situation.

This is fatal to their claim from the point of view of the warranty against hidden defects. [ 24 ] Notification of a defect within a reasonable time is intended to allow the seller to verify the existence and seriousness of the alleged defect and to correct it and it is a substantive condition of the implementation of the warranty. [22] Failure to give notice within a reasonable time – and before proceeding to corrective work – is fatal to a claim based on the warranty of quality, except where there is urgency or where the failure to give notice does not prejudice the seller’s rights. [23] [ 25 ] Plaintiffs realized or should have realized long before 2014 that there was a serious infiltration problem in the basement.

Mr. Kalimidis discovered what he believed to be mold in the basement unit in 2012 and again in 2013. From then on, he could certainly suspect that there was a serious problem and should have given notice to Defendants without delay, as required by

article 1739 C.C.Q.: 1739. A buyer who ascertains that the property is defective shall give notice in writing of the defect to the seller within a reasonable time after discovering it. Where the defect appears gradually, the time begins to run on the day that the buyer could suspect the seriousness and extent of the defect .

The seller may not invoke the tardiness of a notice from the buyer if he was aware of the defect or could not have been unaware of it. [Emphasis added] [ 26 ] Yet, Plaintiffs waited until November 2014 before giving notice to the Defendants and putting them in demand and by then, they had already installed a French drain. On the facts, there was no urgency to act and Defendants were not in default by the effect of the law.

Defendants were therefore deprived of the opportunity of remedying the situation. [ 27 ] In view of the foregoing, the Court concludes that Plaintiffs have no recourse against Defendants based on the legal warranty of quality (warranty against latent defects).

b) Do Plaintiffs have a recourse based on a breach of Defendants’ obligation of delivery given the inaccurate representation that a French drain had been installed? [ 28 ] Defendants’ potential liability must also be considered in light of their obligation of delivery as sellers as provided in Articles 1616 and 1717 C.C.Q. [ 29 ] Under these provisions, a seller must ensure that the property he or she delivers strictly complies with what was described or represented and what the purchaser agreed to. [24] If it does not, the seller is liable, irrespective of whether he or she was aware of the non-conformity.

The purchaser can then obtain a reduction of the price and damages. [25] [ 30 ] It the instant case, Plaintiffs have established that the Property is not as it was described and represented by Defendants in that a French drain was not installed in 2008.

This is a violation of Defendants’ obligation of delivery that can give rise to liability and provide a recourse against them. [ 31 ] To succeed on such a recourse, however, a purchaser must place the seller in default and give him the opportunity to remedy such default prior to proceeding to any corrective work. [ 32 ] Here, Plaintiffs did not place Defendants in default before installing the French drain. Their recourse must therefore fail.

FOR THESE REASONS, THE COURT: DISMISSES the action; WITH LEGAL COSTS of $200 representing the judicial stamp on the Contestation. __________________________________ DOMINIQUE GIBBENS, J.C.Q. Date of hearing: February 26, 2018