2011 QCCQ 15139, 2011 QCCQ 15139

Zawidzki c. Swinghammer 2011 QCCQ 15139 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-167321-101 DATE: November 10, 2011 ______________________________________________________________________ BY THE HONOURABLE ELIANA MARENGO, J.C.Q. ______________________________________________________________________ RICHARD ZAWIDZKI and ANNA LO FARO Plaintiffs v.

LAURI SWINGHAMMER Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] On June 20, 2006, plaintiffs bought defendant's home, for $380,000.00. Alleging latent defects, they are now suing him, in damages, for $36,991.79. THE FACTS [ 2 ] Before purchasing the 42 year old cottage, located at 45 Aspen Lane, in Hudson, plaintiffs had it inspected. [ 3 ] The inspection report (exhibit P-4) contained the following relevant findings and recommendations: "REPORT

SUMMARY [ … ] INTERIOR Install an air exchanger and a Humidex system in order to control the moisture of this home. EXTERIOR Create a positive grade around the foundation. The key to the humidity in this home is a control of the high water table, keep the water away from the home and keep a two foot clearance around the slab. Decorative stone would be a good choice. Each of these items will likely require further evaluation and repair by licensed tradespeople.

Obtain competitive estimates for these items. (…)" (page 1) " Site Drainage : Action Necessary – There are areas of the lot that need adjustment to allow water to run off of the property. There are areas that may allow water to interfere with the foundation. (page 4) " Driveway Condition : Attention Needed – The driveway needs attention and minor repair to prevent further deterioration. Regular maintenance to the gravel and drainage will be required every year.

[ … ] Walkway Condition: Action Necessary – The walkways need action. Repair or replacement is indicated. There is heaving noted in the walkways that needs to be repaired to prevent further deterioration or a trip hazard. Action Necessary – The walkway slope is such that water either does not run off or run-off is directed towards the house. This run-off may interfere with the foundation.

The driveway should slope to allow water to run away from the structure and foundation." (page 5) "Type of Foundation: Slab on grade – Refers to a concrete slab poured on a prepared gravel or sand base at grade level." (page 7) " Earth-to-Wood Clearance: Action Necessary – There is earth-to-wood contact. This condition needs immediate action. This contact can cause water infiltration and give access to insects. It is suggested that there should be a minimum of a 4" clearance between the earth and any wood siding or framing materials.

Structural Caulking : Attention Needed – Several spots around the structure were noted that need to be caulked. Caulk should be applied to areas where brick and wood siding meet, trim around window frames or doors, and piping and service penetrations.

Also, any cracks that allow moisture or wind entry should be caulked to prevent deterioration." (page 10) [ 4 ] Exactly three years after they bought the property, plaintiffs discovered that there were cracks in the foundation. [ 5 ] Plaintiff Lo Faro discovered these cracks quite coincidentally, as she was "digging out flowers next to the aluminium siding next to the foundation wall." She first saw "a small crack", and, after digging some more, "saw more of the crack on the cement part (of the foundation)." [ 6 ] After consulting landscapers, who were unable to advise, plaintiffs contacted foundation specialists Héneault et Gosselin Inc., Roger Bisson Inc. and finally Groupe Atlantech Inc. ("Atlantech"), with a view to assess the cracks which had been uncovered. [ 7 ] In September, 2009, plaintiffs received a repair estimate from each of the above (exhibit P-9), and decided to hire Atlantech to execute the repairs. [ 8 ] Atlantech essentially proposed to build a new concrete foundation to support the affected exterior wall along 25 feet; to reinforce the existing foundation; and to waterproof the foundation with a membrane, for a total cost of $15,750.00. [ 9 ] Plaintiffs entered into a contract with Atlantech, on October 21, 2009 (exhibit P-11). [ 10 ] In November, 2009, plaintiffs retained the services of architect Richard Santo ("Santo"), with a view to assess the situation. [ 11 ] In his report, dated November 13, 2009 (exhibit P-12), Santo wrote: " OBSERVATIONS: The Unipave walkway has been removed and landscaping was destroyed which included trees, shrubs and plants.

Front and side foundation walls have been excavated to expose them to just above the footing. The bricks on the front façade of playroom appear to have been added after garage construction (to blend wall into front wall of house), and are supported by a steel angle bolted to the existing 8" thick foundation wall.(Bricks are suspended outside of foundation wall!).

This steel angle is held into existing foundation wall with bolts. (Vertical brick loading is transferred in top foundation wall via bolts) The length of the horizontal crack extends 22 ft on front of playroom foundation bulging outwards, the corner is broken, multitude of horizontal and vertical cracks continue around to the side wall, continue past the brick chimney 26" horizontally to the breezeway addition built in 1989 by vendor. All cracks show signs of previous attempt at repair. (See photos) The horizontal cracks below ground have formed, opened, and repairs are noted.

Foundation wall is now cracked right through. The garage concrete floor slab now has a level finished interior ceramic tile floor, in very good condition. DISCUSSION: The front wall loaded in such a way gives eccentric force and an imbalance in the loading of the foundation wall (probably without any

steel reinforcing). Foundation walls are designed to take vertical loads and dissipate them into the soil from center of the footing. (Soil must have a superior capacity than building loads imposed) The broken foundation wall now cannot support existing loads and has failed, and will collapse. Unsupported floor of family room is in danger of movement and cracking (the finished floor tiles). PROBLEMS: The foundation wall is unsafe, and must be replaced immediately before further costly structural damages occur.

SOLUTION: A new concrete foundation wall has to be repaired monolithically on extended footing to support the two walls, as well as bricks. Re-support the floor slab underneath. Repair resulting cracks or holes in walls and floors caused by repair works. CONCLUSION: The defect could not be discerned prior to the sale. It was discovered only later on excavating the earth next to the foundation walls. This defect is not recent, and was there when the house was sold recently in 2006.

Some repairs have been attempted by others in the past below the ground (broken joint shows patching cement) An attempt to repair by vendor? This defect needs immediate repair. An engineer's (member of Order of Engineers of Quebec) stamped plan and specifications must be provided by contractor selected prior to start of work. Plans and specifications must be followed. A City building permit is required.

Budget to carry out all work. ± $ 25 000 plus taxes." [ 12 ] Plaintiffs duly notified defendant, before proceeding with the work; however, defendant ultimately chose not to visit the site. [ 13 ] The work was carried out over the course of several months.

The project included landscaping and drainage work, as appears from exhibit P-17. [ 14 ] Plaintiffs' total claim amounts to $38,217.95, plus Santo's fees, as per their amendments at trial. [ 15 ] Part of the claim ($10, 000.00) is for "perte de jouissance, perte de temps, stress, etc." (par. 32 of the introductory motion), plaintiffs contending that defendant was aware of the alleged defect and wilfully chose not to disclose it. [ 16 ] Defendant, on the other hand, flatly denies having had prior knowledge of the cracks in the foundation. [ 17 ] Defendant's expert, engineer David Khudaverdian, an expert in building envelopes, concrete restoration and waterproofing, assessed the problem, and basically concluded as follows: "Our comments following our review of these documents are as follows: 1.

The presence of cracks in the concrete foundation wall is very common and should be expected, especially in a home nearly 50 years old, built in the 1960's; 2. In the absence of a basement level and waterproofing membrane, the crack does not lead to the possibility of any risk of water ingress within the home; 3. There have never been any signs of reported building movement of cracking within the home or along the exterior masonry wall directly above the foundation wall reported by home owners, or the many experts (including the pre-purchase inspector) who reviewed the condition of the home.

The points above would suggest that despite the presence of the crack in the foundation wall likely since 1979 (and possibly since the time of original construction), the wall and the home itself has remained structurally stable.

Regarding the cost for damages being claimed, we note that description of work relating to the contractor quotations obtained included many supplementary repair items unrelated to repairing the crack in the foundation wall, including: • Pouring of new concrete footings; • Installation of new waterproofing membrane system along the foundation wall; • Piles installation; • Pouring of new concrete slab; • Installation of new below grade drainage layer; • Pouring of new concrete within gap below suspended floor slab.

All of the above items are considered improvements to the existing structure and home, and are supplementary to addressing the crack in the foundation wall. Consequently, the cost for any of the works performed above should not be considered within the damages being claimed by the Owners (Lo Faro/Zawidski). At this time, we do not have any confirmation of the actual scope or cost of the repair work executed.

Based upon our own calculations, a reasonable budget cost required to execute the repairs to address the crack in the foundation wall, including excavation and backfill, would be in the order of $ 9,500 plus taxes. In addition, we should point out that the generally accepted useful service life of a residential structure is often considered to be in the order of 100 years.

Given that the home itself is in the order of 50 years old, it is logical to suggest that the costs being claimed to improve the existing foundation wall and extend the useful life of the home, should consequently further be reduced by half." (exhibit D-3, pages 1 and 2) ANALYSIS [ 18 ] In virtue of

article 1726 of the Civil Code of Québec , 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. [ 19 ] The issue, in this case, is not whether the defect was latent or whether it existed at the time of the sale. [ 20 ] Given that the cracks were below ground and the foundation is slab on grade, they were indeed hidden. [ 21 ] Furthermore, both Santo and Khudaverdian agreed that the cracks existed at the time of the sale.

In fact, they may have existed and been created, at the time of the original construction. [ 22 ] The issue is rather whether or not the cracks in question rendered the property unfit or diminished it usefulness to such an extent as to warrant a recourse under

article 1726 C.C.Q. [ 23 ] According to Santo, the broken foundation wall could not support the load created by the brick wall added by defendant in 1992; and, the unsupported floor of the family room was in danger of movement and cracking.

He concluded that the affected area of the wall was unsafe and needed to be replaced immediately, before further costly structural damage occurred. [ 24 ] According to Khudaverdian, despite the presence of these cracks in a restricted area of the foundation, "the wall and the home itself (had) remained structurally stable". [ 25 ] Khudaverdian concluded that the load on the inverted steel shelf angle under the bricks was negligeable, given the strength of the concrete.

Khudaverdian also declared that this type of installation (which Santo condemned) was quite "common, used and proven", and that he had seen similar installations involving three (3) stories of bricks, with no damage to the concrete. He stated that the cracks probably appeared at the time of construction and worsened over time, due to water seepage and cycles of freezing and thawing. [ 26 ] Khudaverdian repeatedly underlined the absence of structural distress to the building. Indeed, there was no evidence of movement therein, namely no damage to the masonry wall directly above the problem area or inside the home.

There were no cracks in the walls or tiles of the family room, and all doors and windows opened and closed properly. [ 27 ] Furthermore, Khudaverdian did not understand or agree with the extent of the repairs carried out by plaintiffs, who, according to him, "went overboard". He failed to understand why a thickening wall was built to support a brick wall which had been shown to be well-supported.

It had been there for "16 to18" years; had "stayed plum"; and "the so-called damaged foundation wall was directly beneath it, so it (had) stood the test of time." [ 28 ] Khudaverdian opined that, if the masonry wall and inverted steel shelf angle installation had been a problem, "Movement would have been reflected in the masonry, in the interior finish and around the doors and windows, which would not have closed." [ 29 ] In short, according to Khudaverdian, the cracks in the foundation wall, which were located in a "relatively small area", had no structural effect on the rest of the home.

Had they not been repaired, they may have widened, but the structure would have stayed in the same condition "for many many years".

[ 30 ] At pages 140 to 142 of Vente, Louage, Contrat d'entreprise ou de service [1] , Professor Jacques Deslauriers writes: "A. Les caractéristiques du vice donnant ouverture au recours pour vices caches Pour réussir un recours fondé sur des défauts cachés, l'acheteur doit prouver toutes les caractéristiques permettant de conclure au caractère caché du défaut, telles qu'énoncées ci-après: son caractère caché, sa gravité, l'ignorance qu'avait l'acheteur de son existence et l'existence de ce défaut au moment de la vente. [ … ] 1) Vice grave ( art. 1726 C.c.Q. )

a) Principes généraux Le défaut invoqué doit présenter un caractère suffisamment grave pour rendre le bien impropre à l'usage auquel il était destiné. Le vice ne doit pas nécessairement empêcher toute utilisation du bien; il suffit qu'il en réduise notablement l'utilité ou en empêche l'usage normal . La gravité du défaut doit être telle qu'elle justifie un recours en resolution de la vente ou en reduction du prix. Autrement dit, l'acheteur n'aurait pas acheté ou n'aurait pas payé si haut prix s'il avait connu ces défauts. Ces affirmations sont en fonction du degré de gravité du vice affectant le bien. D'ailleurs, l'

article 1604 C.c.Q. empêche la résolution d'un contrat si le défaut du débiteur de l'obligation, en l'occurrence le vendeur débiteur de la garantie, est de peu d'importance. Il n'y a lieu alors qu'à la diminution proportionnelle de la prestation, évaluée selon les circonstances.

b) Exemples et applications Pour illustrer la gravité d'un défaut donnant ouverture à un recours pour défaut caché, on peut citer certains exemples tirés de la jurisprudence et concernant des ventes immobilières ou autres.

i) Édifices La découverte lors des travaux de rénovation d'un défaut des poutres, jadis calcinées par un incendie ou confectionnées de façon inhabituelle, sans affecter la solidité de l'immeuble, ne constitue pas un défaut justifiant un recours pour défauts cachés. L'aménagement des fondations d'un immeuble sous la nappe phréatique constitue un défaut caché.

Toutefois, l'anomalie dans des fondations reposant de façon néanmoins stable sur le roc depuis 20 ans ou l'absence de dale de béton dans un sous-sol, n'affectant pas la solidité d'un édifice, ne donnent pas non plus ouverture à un recours pour vices cachés." (emphasis added) [ 31 ] Plaintiffs had an obligation to prove their allegations, by a preponderance of evidence (articles 2803 and 2804 C.C.Q.). [ 32 ] Respectfully, the Court is unable to grant more weight and credence to Santo's opinion over Khudaverdian's, and, if anything, prefers Khudaverdian's theory over Santo's, as it appears to be more logical and consistent with the facts. [2] [ 33 ] Given that the cracks had probably existed for many years; given that the imperfect foundations had supported a 2 car garage, later converted into a family room with a ceramic floor upon which lay a 2,500 to 3,000 pound billiard table, for years, without evidence of distress to the building; given that the masonry wall was erected in 1992 and remained intact for years; given that, some 18 years later, there were still no signs of structural distress to the building; given that no samples were taken and no tests conducted with a view to assess the strength and durability of the concrete; given the absence of conclusive and preponderant evidence as to the alleged diminished usefulness ("déficit d'usage") of the foundation wall; the Court is unable to find in favour of plaintiffs: " [ 105 ] Le professeur Jeffrey Edwards écrit au sujet des vices cachés ce qui suit: Le vice réprimé est celui qui porte atteinte à une certaine fin, soit l'usage du bien.

Il ne s'agit pas d'un vice de construction ou de fabrication dont la finalité peut être bénigne ou anodine. Lorsque le vice obstrue la fin prescrite, le bien souffre d'un déficit d'usage. En réalité, la garantie réprime moins la présence d'un vice que l'état défectueux qu'il provoque. Elle assure l'inexistence d'un déficit d'usage ou, de façon plus concise, l'usage du bien." [3] [ 34 ] In La vente , Professor Pierre-Gabriel Jobin states as follows: "157. Vice grave – La première condition exige que le vice soit grave – condition qu'il ne faut pas confondre avec l'existence même du vice.

Le texte du Code indique les critères de la gravité du vice : celui-ci doit être tel que, si l'acheteur l'avait connu, il n'aurait pas acheté le bien ou l'aurait acheté mias à un moindre prix.

Pour decider si un vice est assez grave pour donner ouverture à la garantie, on ne considère pas seulement le coût de sa réparation par rapport à la valeur du bien : on regarde tous les aspects, dont notamment la baisse de la valeur marchande du bien, la diminution de son usage normal (ou déficit d'usage), les inconvénients, actuels ou prévisibles, du vice pour l'acheteur, étant entendu que les attentes légitimes de l'acheteur sont plus grandes pour un bien neuf que pour un bien usagé – parfois une même lacune ne constitue pas un vice pour un bien passablement usagé alors qu'elle l'est pour un bien neuf.

Un juge a écrit que " la garantie légale contre les vices cachés s'éteint progressivement avec le temps ". [4] [ 35 ] It is to be noted that the diminished usefulness or "deficit d'usage" of the property must be evaluated as it existed at the time

of the sale, as the seller is not bound to warrant the buyer that the property will not suffer a diminished usefulness in the future [5] . [ 36 ] As regards the expenses incurred for landscaping, drainage, the walkway and the driveway, they were foreseeable, given the inspector's findings and recommendations relating thereto (pages 1, 4, 5 and 10 of report P-4). [ 37 ] What is more, other expenses, such as the installation of a membrane, constitute an improvement [6] . [ 38 ] What should be made of plaintiffs' allegations of bad faith on defendant's part? [ 39 ] The evidence showed that the foundation walls had been repaired in the past. [ 40 ] The first owner of the home, George Ellerbeck, credibly testified that he did not carry out these repairs. [ 41 ] Defendant, who was the only other owner of the home, repeatedly answered, "I don't recall.", to several questions posed by the lawyers regarding these repairs. [ 42 ] It seems improbable that defendant, who is a mechanical engineer, had the breezeway and new garage built, in 1989, and then the exterior masonry wall built, in 1992, and did not see or was not made aware of the presence of cracks, repaired or not, in the foundation.

After all, said additions required excavating around the same area. [ 43 ] What effect, if any, does this have on plaintiffs' recourse? [ 44 ]

Article 1728 C.c.Q. states as follows: "1728. If the seller was aware or could not have been unaware of the latent defect, he is bound not only to restore the price, but to pay all damages suffered by the buyer." [ 45 ] Deslauriers states the following, on the subject of the seller's bad faith: "(…) Les recours pour vices cachés peuvent être intentés malgré la bonne foi du vendeur; des dommages-intérêts pourront s'ajouter au remboursement du prix, total ou partiel selon le cas, si le vendeur connaissait ou ne pouvait ignorer les défauts dont le bien vendu était affecté ( art. 1728 C.c.Q. ).

Par ailleurs, l'acheteur qui invoque le dol doit, pour avoir gain de cause, prouver ce dol en démontrant qu'il a été incité à contracter par les manoeuvres ou les réticences du vendeur ou d'un tiers à la connaissance de celui-ci ( art. 1401 C.c.Q .). Si le dol est prouvé, ceci pourra permettre à l'acheteur d'obtenir gain de cause, même si le défaut invoqué n'a pas toutes les caractéristiques d'un défaut caché." [7] (emphasis added) [ 46 ] In Pominville c.

Demers [8] , the Court of Appeal decided as follows: "Les appellants n'ont démontré aucune erreur dans le jugement de première instance, qui justifierait l'intervention de la Cour; D'une part, la juge a conclu de son appreciation de la prevue à la bonne foi de l'intimé lors de sa transaction avec les appellants. Elle écrit: Or, le défendeur avant de vendre a habité l'immeuble pendant dix-huit ans sans n'éprouver aucun problème qui aurait pu être relié à l'incendie. On ne peut dans les circonstances assimiler sa conduite à un dol.

Il a de bonne foi informé les demandeurs d'une inondation et n'a pas pensé à les aviser de l'incendie puisqu'il était survenu il y a plus de vingt ans et qu'il n'en avait pas éprouvé de consequences fâcheuses." [ 47 ] Although it is probable that, at some point, defendant became aware of the existence of the cracks in the foundation, there is no evidence that he purposely and fraudulently withheld this information from plaintiffs, with a view to incite them to buy, as the building showed no signs of distress.

Of course, had the cracks affected the building structurally, he would have had no choice but to disclose this information. However, this was not the case. [ 48 ] Furthermore, the Court does not know which cracks defendant saw; if they were repaired when he saw them; or if he himself had them repaired. [ 49 ] However, it is also probable, that the cracks, as they appeared in 2006, had deteriorated over time, having been exposed to water run-off from the adjacent downspout and the surrounding land and to the effects of freezing and thawing, as reported by Khudaverdian.

Moreover, this is exactly what the inspector predicted would happen (exhibit P-4, report

summary). [ 50 ] In conclusion, plaintiffs did not convince the Court that the defects in question jeopardized the structural soundness of the cottage, and that the present recourse was warranted, under the circumstances. [ 51 ] Finally, as there is no evidence that defendant wilfully withheld information from plaintiffs regarding the fissures in the foundation, with an express view to mislead them and incite them to buy, the action cannot be maintained. WHEREFORE THE COURT HEREBY: DISMISSES plaintiffs' action, with costs, including expert's costs, which the Court limits to $1,500.00 (article 477 C.C.P.).

__________________________________ ELIANA MARENGO, J.C.Q. Henry Altschuler Lazare & Altschuler Attorneys for plaintiffs Marie-Pierre Charland Séguin & Associés Avocats Inc. Attorneys for defendant Dates of hearing: September 14, 15 & 16, 2011