2012 QCCQ 14433, 2012 QCCQ 14433

Kelton c. Leriou 2012 QCCQ 14433 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-32-121486-106 DATE: November 5, 2012 ______________________________________________________________________ BY THE HONOURABLE SUZANNE HANDMAN, J.C.Q. ______________________________________________________________________ LORNE KELTON -and- REGINA PEREIRA […], Kirkland, QC. […] Plaintiffs v.

ARTEMIS LERIOU […], Kirkland, QC. […] Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Lorne Kelton and Regina Pereira are suing Artemis Leriou for $7,000, alleging that the property they purchased from Mr. Leriou is affected by hidden defects. [ 2 ] Defendant claimed he would be out of the country on the date of the hearing and requested a postponement. However, given his failure to substantiate his allegation, his request was denied.

The evidence: [ 3 ] Plaintiffs purchased Defendants’ home on July 20, 2007, after they had the property inspected by Pro-Inspexx Services. Plaintiffs took possession in August 2007. [ 4 ] While renovating their basement, styrofoam insulation panels were removed from the wall. Plaintiffs found a major structural foundation crack, running from the ceiling to the mid point of the wall, which had not been noted at the inspection. [ 5 ] Plaintiffs hired several engineering firms to determine the cause of the problem and what corrective measures were required.

The preliminary report of one of the firms noted fissures in the retaining wall of the stairway to the basement, a minor fissure next to the electrical panel and two major fissures on the foundation wall next to the rear basement stairway and cracks on the basement floor. The solutions of the different firms vary from $11, 400 to over $30,000. [ 6 ] Plaintiffs contacted Pro-Inspexx Services. It returned to verify the property where the crack was found.

The inspector, Peter Elliott, concluded that although he had noted cracks, before the purchase of the house the severity of the cracks was hidden: “While problems with the retaining wall and cracking in the foundation are identified in our initial inspection report, the severity of these particular cracks was hidden behind the Styrofoam and, as such, may constitute a hidden defect under the Quebec Civil Code.. .”

[ 7 ] Plaintiffs' attorney advised Defendant of the problem on October 19, 2007 and subsequently sent further letters informing Defendant of the cost of preliminary work. [ 8 ] Defendant initially indicated he intended to carry out his own inspection. Following several letters from Plaintiffs' attorneys, requesting the name of Defendant's expert, Defendant denied all responsibility. Analysis: The applicable principles: [ 9 ] The essence of the legal warranty of quality, incumbent on sellers, is set out in

article 1726 of the Civil code of Quebec , which reads as follows: 1726. The seller is bound to warrant the buyer that the property and its accessories are, at the time of the sale, free of latent defects which render it unfit for the use for which it was intended or which so diminish its usefulness that the buyer would not have bought it or paid so high a price if he had been aware of them. The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect; an apparent defect is a defect that can be perceived by a prudent and diligent buyer without any need of expert assistance. [ 10 ] The object of the warranty of quality provided in

Article 1726 CCQ is to ensure that the property and its accessories are fit for the use for which they were intended. To give rise to the warranty, the defect must be serious, hidden, have existed prior to the sale and be unknown to the purchaser. In addition, the buyer must advise the vendor of the defect. [ 11 ] As indicated above, one of the required conditions for the warranty to apply is that the defect must be hidden.

This entails that the defect must not have been noted by a prudent and diligent buyer at the time of sale. [ 12 ] A defect is considered apparent when the buyer readily notices that the defect renders the property improper for the use for which it was intended. Therefore, a buyer is expected to be reasonably diligent in his inspection of an immoveable, more particularly where there are visible signs of a defect. [ 13 ] When there are indices or revealing signs that will enable a problem to be noted, the defect is no longer qualified as hidden.

In fact, in many cases, the Courts have held that the simple possibility of discovering a defect suffices, such that the defect is deemed not to be hidden. Moreover, a defect remains apparent where an adequate inspection would have allowed the defect to be discovered [1] . [ 14 ] These principles apply in the present case.

Discussion: [ 15 ] After removing the Styrofoam in their basement during renovations, Plaintiffs found a major crack in the basement, at the bottom of the stairs, in the back of their house. [ 16 ] The reports obtained from different engineering firms indicate that Plaintiffs home is clearly affected by a structural defect. [ 17 ] The inspector, who carried out the inspection before the purchase, had noted a number of cracks.

One such crack was situated just outside the basement, on the retaining wall facing the room where the structural crack was found. [ 18 ] Page 4 of the inspection report states with respect to the retaining wall at the rear basement entry: “Attention needed - The retaining wall is in need of some repair in order to function properly.” (…) [ 19 ] Page 13 of the same inspection report, under the title “Structural” shows a photograph of a crack below the window in the back of the house.

The text states: “Attention Needed - The exterior siding material or finish is in a condition that requires minor repair to prevent further deterioration.” (the underlining is ours) [ 20 ] Defendant in his written contestation submits that the defect was visible at the time of the inspection and since it was not subjected to further analysis, it is qualified as an apparent defect. [ 21 ] The question therefore is whether the indices from the inspection were sufficient to lead to the possibility of discovering a major structural defect, in which case the defect is qualified as apparent or whether the defect was, in fact, hidden. [ 22 ] Clearly, a couple of cracks were noted at the inspection.

However, as seen in the photographs taken before the purchase and as noted in the inspection report, they appear to be minor. Typically such cracks can be successfully treated at a reasonable cost and resolve the issue.

[23] It should also be recalled that a pre-purchase inspection consists of a visible inspection of the property's components; it is not anexpertise. Moreover, neither a buyer nor an inspector is required to carry out any invasive measures. [24] In the present case, the major structural defect was not visible without the removal of the Styrofoam insulation from the interiorwall of the basement.

Since a pre-purchase inspection is visual and does not entail exploratory or invasive work, the Court considers thatthe massive fissure, that was found only after removing the styrofoam insulation, could not have been detected before dismantling thebasement wall. [25] In light of the evidence, including Plaintiff's testimony, the inspection report prior to the purchase and the photographsproduced, the Court considers that the defect is a hidden defect.

It existed at the time of sale; it is serious, hidden and it was unknown toPlaintiffs. [26] The cost to repair the structural problem varies from $11,400 to over $30,000. Since the Small Claims Division has competenceover claims that do not exceed $7,000 and since Plaintiffs have reduced their claim to that amount, the Court considers that it isappropriate to grant Plaintiffs the sum of $7,000. FOR THESE REASONS, THE COURT: GRANTS Plaintiffs' action; CONDEMNS Artemis Leriou to pay Lorne Kelton and Regina Pereira $7,000 plus interest at the legal rate and the additional indemnityforeseen by

section 1619 of the Civil code of Quebec since November 11, 2009, plus judicial fees of $157. __________________________________ SUZANNE HANDMAN, J.C.Q. Date of hearing: October 1st, 2012 [1] Levine c. Horner (SCC), [1962] S.C.R. 343.