2017 QCCQ 2921, 2017 QCCQ 2921

Ceasar c. Michalakopoulos 2017 QCCQ 2921 COURT OF QUEBEC “Small claims Division” CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL No: 500-32-138671-138 DATE: March 23, 2017 ______________________________________________________________________ BY THE HONOURABLE SYLVIE LACHAPELLE, J.C.Q. ______________________________________________________________________ ALAI CEASAR AND HELEN LAN Plaintiffs vs.

THEODOROS MICHALAKOPOULOS AND PANAGIOTA PENNY ALEXANDRES Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiffs, Mr. Ceasar and Mrs. Lan purchased a home at […] Pointe-Claire from the Defendants, Mr. Theodoros Michalakopoulos and Mrs.

Panagiota Penny Alexandres. [ 2 ] The Bilateral promise to purchase consisting of a series of offers and counter-offers and modifications was made between May 10, 2012 and June 7, 2012. [ 3 ] The accepted counter-offer provided for a closing on July 31 st , 2012.

This date was moved up to June 15, 2012 at the request of the Defendants because of legal hyphotheque that had been placed on the property and the debt had to be paid by June 30 th , by Defendants. [ 4 ] It was agreed therefore that the property would be transferred earlier, on June 12 in order to permit the vendor to use the proceeds of sale to pay the creditor. [ 5 ] The vendors would stay in possession until August paying as rent, an amount equal to the first two months of the Plaintiff’s mortgage payments. [ 6 ] Plaintiffs allege defects to the electrical system of the house that they only discovered upon carrying out certain repairs. [ 7 ] First, the Plaintiffs sue the Defendants for 7,000.00 $ then for 15,000.00 $ after they filed on May 17, 2016, a modified application to increase the amount of their claim since the limit of jurisdiction of the Small claims Division was raised to that amount. [ 8 ] In the matter at end, the Plaintiffs had the benefit of a pre-purchase inspection that was carried out May 18, 2012 by Mico Spec and Technologies Inc. (Michel Cordeau). [ 9 ] The inspection took place in the presence of the parties and their real estate broker on May 18, 2012, but the written report was only given later, according to Mr.

Ceasar, only 2 ½ to 3 weeks later. [ 10 ] In the course of the inspection, Mr. Cordeau would have informed him orally of two problems: one was a small amount of aluminium wiring that was combined with copper wiring and had to be removed and replace, because there was a fire hazard. [ 11 ] The second problem was with soffits that Mr.

Michalakopoulos agreed to correct. [ 12 ] The invoice P-4 dated June 27 from Alex Electric (Vincent Walrond) for 569.12 $ refers to the replacement of 42 feet of aluminium wire and the removal and restauration of fixtures in the bathroom with new fixtures, and the replacement of 1 GF box. These are apparent defects, and the Plaintiffs agreed to pay for them. [ 13 ] Mr. Ceasar testifies that Mr. Walrond did not have to his understanding to open the main panel box when he replaced the wire on June 27 th , 2012. [ 14 ] According to Mr.

Ceasar, it is only on July 15 when he changed the fixtures in the bathroom that the electrician would have

discovered that the electrical panel is overloaded and needed to be changed. [ 15 ] By letter dated July 16, Plaintiffs informed Defendants about all the electrical problems that are existing in the residence. [ 16 ] By letter dated September 18, 2012, addressed to “whom it may concern”, by Alex Electric, Mr. Walrond writes that on 15 of July, Mr. Ceasar asked him to do an inspection on his electrical panel to be assured of his safety of his home and he concludes he will have no choice but to change the electrical panel. [ 17 ] Regarding his visit of June 27, 2012, Mr.

Walrond testifies that “the wire was indicated by the inspector by tag” and “I opened the panel box and saw the connections not compatible”. [ 18 ] Mr. Walrond adds that “when I opened the panel box, I saw other things to be changed. The box was too small. That was visible. I took the pictures and gave him the pictures”. [ 19 ] At the hearing Mr. Walrond testifies that because of the risks of fire he changed the wire and sent the letter to confirm that it had been done to the insurance company and he explained to Mr.

Ceasar that he had to change the box which was done later by a subcontractor as he himself was too busy. [ 20 ] Mr. Michalakopoulos testifies that Plaintiffs had seen and examined the house before the sale to their satisfaction and had had a thorough pre-purchase inspection and were in full knowledge of everything. [ 21 ] Not only that the inspector informed him verbally previously to the closing date of all the problems but these problems are also fully explained in Mr. Cordeau’s report dated May 18, 2012. [ 22 ] Mr. Ceasar was following the inspector when he did the inspection that lasted approximately 4 hours.

According to Mr. Michalakopoulos, Mr. Ceasar knew about the various electrical problems but he first proceeded to immediately change the wires otherwise he wouldn’t be able to insure the property and obtain the financing. [ 23 ] Mr. Michalakopoulos testifies that after the inspection he would have told Mr. Ceasar that either he buys the house as it is or he doesn’t buy it and if he buys it, he takes care of doing the work. [ 24 ] Mr.

Michalakopoulos files a counter-claim asking damages to the amount of 15,000.00 $ for all the trouble and inconveniences caused by the alleged abusive and ill-founded demand of Plaintiffs.

JUDGMENT [ 25 ] First the Court has to clarify the question raised by the modified application to increase the amount of the claim to 15,000.00 $. [ 26 ] Since the original application was initiated before the date the jurisdiction of the Small claim Division was increased, the amount of the claim cannot be modified from 7,000.00 $ to 15,000.00 $ as it was decided by the Court of Appeal [1] . [ 27 ] Thus, as it was explained to Plaintiffs in the course of hearing, the amount of the claim remains 7,000.00 $. APPLICABLE LEGAL PRINCIPLES [ 28 ] The legal principles applicable to latent defects under

article 1726 of the Civil Code of Quebec are well established : “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 the need to resort to an expert.” [ 29 ] When a defect in a building is alleged as a latent defect, affecting the property when sold, the principles concerning the warranty of quality, as set out in the Civil Code of Quebec , provide that a defect, in order to give right to a reduction of price of other remedy such as a resolution of the sale must be serious to the extent that the purchaser would not have paid so high price had he known of them. [ 30 ] They must not be apparent from a normal inspection, without the assistance of an expert. [ 31 ] The Plaintiffs must not know of the defects when he agrees to the sale.

JUDGMENT a. Did Plaintiff knew before the sale about the exact condition of the electrical system of the house? [ 32 ] In the matter at end, the Plaintiffs had the benefit of a pre-purchase inspection that was carried out May 18, 2012, by Mr. Michel Cordeau. [ 33 ] There is a 28 pages report (P-14) consisting of findings of all aspects the building. [ 34 ] There is a complete

section with respect to the electricity (p. 22-23), but also we can read in other sections observations of electrical problems.

[ 35 ] For example, at page 18, in

section bedroom it is reported: electrical problems observed, this room has a grounding problem with the plugs, reverse polarity plugs, to be verified by the electrician, see images no. 0194 and 0196. Aluminium circuit branch wiring suspected, to be verified. [ 36 ] The expert specifies among other recommendations that an electrician is required to verify the complete electrical system and is required to promptly correct all problems as they are all considered as hazards. [ 37 ] On the view of these recommendations, the Court asked Plaintiff, Mr.

Ceasar, why he didn’t ask for a complete evaluation by an electrician before he bought the house. [ 38 ] Mr. Ceasar ensured that he didn’t have the inspection report at hand at that moment which he received only one week before the sale. [ 39 ] The Defendant, Mr. Michalakopoulos, contradicts Mr. Ceasar on that issue, as he himself received a copy of the written report three days after the inspection that took place, May 18. This is corroborated by his real estate agent, Mr.

Mitchell. [ 40 ] When the Court was going through the expert report to find the date of the signature of that report, it became evident that the last page was missing which actually is the page on which the expert signs and inscribes the date of the completion of the report which is May 18, 2012. [ 41 ] It is the Defendant who provided the Court with a copy of the last page of the report. [ 42 ] Questionned on the reason why that page would be missing, Mr. Ceasar stated that he didn’t know what happened and that he actually never received page 28 of the report. [ 43 ] The Court doubts it.

Because the last page was not filed, the only date mentioned is the date of the visit that took place May 18. [ 44 ] Accordingly, Mr.

Ceasar let the Court believe that he necessarily received the report several days following the visit. [ 45 ] But page 28 of the report reveals that the report was completed the day of the inspection. [ 46 ] It is therefore most probable, as Defendant testified, that the report was received by both parties only a few days after the visit. [ 47 ] If Defendant received his copy a few days after the inspection, Plaintiff who retains the service of the inspector should have received the report within the same time frame. [ 48 ] But there is more.

Defendant filed an amendment to the offer of purchase that was signed by Plaintiff on May 25, 2012 that specifies : (My underlining) “ Following the receipt of the inspection report dated from May 18, 2012 of the Firm Mico Spec Technologies by Michel Cordeau suggesting a more in-depth inspection of the SOFFITS/ATTIC/ROOF, the parties agree to amend the time period of 10 days provided for in clause B2.4 till May 30, 2012 in order to allow the BUYER to proceed with the suggested inspection. (D-1)” [ 49 ] This document (D-1) shows that as of May 25, Plaintiff had received the copy of the written report of Mico Spec Technologies. [ 50 ] Plaintiff argues that “I didn’t have the time to read the whole report and since the electrical problems are described on page 23, I did not go that far.

I didn’t read the whole thing because first I had until July 31 st , 2012”. [ 51 ] Firstly, there are mentions regarding the electricity defects in several sections of the written report and secondly, the argument that Plaintiff did not have time to read the report is not serious. [ 52 ] Not only Plaintiff had received the report at the latest on May 25, but it appears from D-1 that he had read it. [ 53 ] The fact that the closing date was changed didn’t have any impact on the inspection.

If on May 25, Plaintiff was allowed an additional time period of ten (10) days to obtain a more in-depth inspection of the soffits as suggested by the inspector Cordeau, Plaintiff could have asked an electrician to verify the complete electrical system as also suggested by the inspector. [ 54 ] Plaintiffs argue that they were under the impression that they had limited amount of work to bring the property to the appropriate level of quality so that it could be insured and that they were not reasonably led to believe that there was a need for further investigation and repairs. [ 55 ] This is contradicted by the inspection report and also by Andrew Mitchell defendant real estate broker who was present the day of the inspection. [ 56 ] According to Mr.

Mitchell, the inspector did open the panel and he mentioned orally the same comments that were thereafter described in writing in his report. Thus, the inspector recommended a further investigation by an electrician first verbally on May 18, and in writing thereafter. [ 57 ] Mr. Ceasar denies that the inspector would have opened the panel: “the inspector did the overview but he is not allowed to open the box. Mr. Mitchell said that the inspector opened the panel. That’s not true”.

[ 58 ] Thus on page 23, the inspector note the following under the

chapter “electrical verification” Main distribution panel inspection procedure: panel was opened . (my underlining). [ 59 ] For the Court, Mr.

Ceasar’s testimony is not reliable. [ 60 ] Based on the evidence, the Court concludes that the Plaintiffs were informed orally and in writing of numerous and serious electrical abnormalities before they purchase the property and notwithstanding the recommendations of the inspector to require an electrician to verify the complete electrical system they did not do so. [ 61 ] The electrical problems could be objectively ascertain by a prudent and diligent buyer. [ 62 ] For these reasons, the Court finds that the vendor is not liable to the purchaser for the breach of the warranty of quality as they were aware of the defects when they agree to buy.

COUNTER-CLAIM [ 63 ] Defendants claim from Plaintiff the amount of 15,000.00 $ for all the stress, trouble and inconveniences caused by these proceedings that they allege to be abusive. [ 64 ] The Court has the power to impose sanctions for abuse of procedure as articles 51 and 54 of the Civil code of procedure prevails : “51. The courts may, at any time, on an application and even on their own initiative, declare that a judicial application or a pleading is abusive.

Regardless of intent, the abuse of procedure may consist in a judicial application or pleading that is clearly unfounded, frivolous or intended to delay or in conduct that is vexatious or quarrelsome. It may also consist in a use of procedure that is excessive or unreasonable or that causes prejudice to another person, or attempts to defeat the ends of justice, particularly if it operates to restrict another person’s freedom of expression in public debate. 54.

On ruling on whether a judicial application or pleading, including one presented under this division, is abusive, the court may order a provision for costs to be reimbursed, order a party to pay, in addition to legal costs, damages for any injury suffered by another party, including to cover the professional fees and disbursements incurred by that other party, or award punitive damages if warranted by the circumstances.” [ 65 ] In Lévesque c.

Carignan [2] the Court of Appeal decided that there is abuse of procedure not only in the course of the litigation, but also at the beginning of the litigation when the proceedings have been done in bad faith. [ 66 ] Also according to

article 7 of the Civil Code of Quebec , no right may be exercised with the intend of injuring another or in an excessive and unreasonable manner and therefore, contrary to the requirements of good faith. [ 67 ] Considering all the information provided by the expert regarding the electrical defects, the Court is of the opinion that this demand should not have been introduced against Defendants. [ 68 ] In addition, there is evidence that the Plaintiff has hidden information on a very important issue which is the date he received the pre-inspection report, that he omitted to file the last page of the report and also the amendment to an offer of purchase dated May 25, that clearly indicates that at that date he had taken cognizance of the entire report. [ 69 ] Plaintiffs mislead the Court and attempted to defect the end of Justice. [ 70 ] Based on the foregoing, the Court concludes that Plaintiffs caused prejudice to Defendants who had to defend themselves in a difficult context which caused them stress, trouble and inconvenience. [ 71 ] Accordingly, Defendants are awarded 1,500.00 $ to compensate the damages they seek.

FOR THESE REASONS, THE COURT: DISMISSES Plaintiffs demand introductory of suit, with costs; GRANTS partially Defendants counter-claim; CONDEMS Plaintiffs solidarily to pay to Defendants the amount of 1,500.00 $ plus interests and additional indemnity according to

article 1619 of the Civil Code of Quebec , since April 15, 2016, date of the filing of the cross-demand, plus the costs of 167.00 $.

__________________________________ SYLVIE LACHAPELLE, J.C.Q. Date of hearing: October 11, 2016.