2018 QCCQ 9472, 2018 QCCQ 9472

Macri c. Raco 2018 QCCQ 9472 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-700140-165 DATE: December 10, 2018 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI, J.C.Q. ______________________________________________________________________ STEFANO MACRI And ELIA DI NICOLANTONIO Plaintiffs v.

ROCCO RACO And ANGELA RIZZO Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiffs claim $15,000 from the Defendants on the grounds that the property they purchased from them was afflicted with latent defects at the time of the sale.

Specifically, they argue that the carpenter ants and water infiltrations which they discovered after moving into the property constitute latent defects. [ 2 ] The Defendants contest the claim and argue that the Plaintiffs inspected the property prior to the purchase and obtained a building inspection report which made no mention of the presence of carpenter ants. They add that the report identified cracks on the outside walls of the property and therefore, if there was a water infiltration defect, it was not hidden.

Finally, they argue that the damages claimed are exaggerated as they include improvements to the property. Issues

a) Does the presence of carpenter ants and the water infiltration constitute a latent defect?

b) What amount in reduction of the purchase price are Plaintiffs entitled to?

c) Are Defendants liable for repairing any other injury allegedly suffered by the Plaintiffs? Context [ 3 ] Up to August 12, 2015, Defendants Rocco Raco and Angela Rizzo were the owners of a semi-detached bungalow located in the Rivière-des-Prairies borough of Montréal (‘’ Property ’’). [ 4 ] On June 18, 2015, the Plaintiffs signed a promise to purchase the Property and offered to pay $306,000. [1] [ 5 ] On June 21, 2015, the Defendants accepted Plaintiffs’ offer to purchase. [2] [ 6 ] The Plaintiffs had the Property inspected by a building inspector on June 29, 2015.

The building inspector’s inspection report was remitted to them shortly thereafter (‘’ Building inspection report ’’). [3] [ 7 ] On August 12, 2015, the parties signed a notarized deed of sale for the Property. [4] The sale was made with legal warranty. [ 8 ] On or about August 15, 2015, Plaintiffs moved into the Property. [ 9 ] In March 2016, Plaintiffs allege that they discovered the presence of a significant quantity of carpenter ants in the cold room and the second floor bedrooms of the Property.

They further allege that they tried to resolve this problem by themselves by applying insecticides, but to no avail. [ 10 ] Throughout the months of May, June and early July 2016, the Plaintiffs consulted specialists in the field of insect extermination to assess the scope of the ant infestation and to identify solutions to eliminate the problem.

[ 11 ] By demand letter dated July 14, 2016, Plaintiffs wrote to Mr. Raco to inform him of the discovery of the carpenter ants and sent him copies of proposals obtained from specialists to eliminate the carpenter ants and presence of mold in the cold room. [5] [ 12 ] On or about July 26, 2016, Mr. Raco wrote to Mr. Macri to inform him that he had lived in the Property for 29 years and had never witnessed the presence of carpenter ants or of mold. [6] [ 13 ] On August 3, 2016, Mr. Macri wrote again to Mr.

Raco to inform him that he considered the presence of carpenter ants as a latent defect and thus a violation of the warranty of quality. Further, he informed him that he would incur costs of $11,073.84 to eliminate the presence of carpenter ants, demolish the cold room and restore it in its original state. [7] [ 14 ] On August 18, 2016, Mr. Raco responded to Mr. Macri’s August 3 letter and denied all responsibility for the alleged latent defects.

He added that he was unaware of the presence of carpenter ants and that if there was mold which caused a foul smell, then this was not a hidden defect as it was visible during the inspection of the Property. [8] [ 15 ] The parties exchanged further correspondence in August 2016 in which they reiterated their respective positions. [ 16 ] On December 12, 2016, Plaintiffs filed their claim with the Court of Québec, Small Claims Division. Analysis and Decision

a) Does the presence of carpenter ants and the water infiltration constitute a latent defect? [ 17 ] Plaintiffs’ claim against the sellers is based on the legal warranty against latent defects, which is codified in

article 1726 of the Civil Code of Québec ( C.C.Q. ). and which reads as follows: III. Warranty of quality 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 the need to resort to an expert. (Underlining added) [ 18 ] To succeed on a claim based on this warranty, the buyer(

s) must prove the following four conditions: • The defect must be sufficiently serious; • The problem must have existed at the time of the sale; • The problem was hidden ( i.e. , latent); and • The defect was unknown to the buyer. [9] [ 19 ] Moreover, the Civil Code requires, that the buyer must give notice in writing of the defect(

s) to the seller within a reasonable time after discovering it. [10] [ 20 ] Finally, the Civil Code also requires, that the buyer(

s) put in default its vendor prior to carrying out any repairs, except where the debtor is in default by the sole operation of the law or exceptional circumstances dispense the buyer from sending a demand letter. [11] [ 21 ] The Defendants do not contest that they received from Plaintiffs a written notice of the alleged defects nor that they were duly put in default.

In any event, the evidence establishes that the Plaintiffs complied with these duties. [12] [ 22 ] Plaintiffs seek compensation equivalent to the cost required to remedy the defects, plus other injury related to depreciation and loss of enjoyment of the Property. Is the carpenter ant infestation a serious defect and did it exist at the time of the sale? [ 23 ] The Property includes a cold room which is located on the ground floor at the rear of the building and adjacent to the kitchen. The cold room is square in shape and comprised of three concrete walls.

It is insulated with styrofoam and finished with pressed wood. The roof of the cold room acts as the deck of a balcony adjacent to a second story bedroom and patio door. [13] [ 24 ] In March 2016, M. Macri and Mrs. Di Nicolantonio discovered the presence of ants in the cold room and in the upstairs bedrooms. [14] Mr. Macri attempted to eliminate the presence of the ants by adding pesticides, but to no avail. [ 25 ] The presence of carpenter ants in significant quantity was also observed by third parties, including Mr.

De Santo. [15] [ 26 ] Since he was not able to rid the Property of the carpenter ants by himself, Mr. Macri contacted Biotech, a professional exterminator in July 2016. [16] [ 27 ] Denis Delisle, an employee of Biotech, visited the Property in July 2016 for the purpose of preparing a proposal for Mr. Macri.

Mr. Delisle was recognized as an expert in bug control, with a specialty in carpenter ants. [ 28 ] He visited the Property in July 2016 and prepared a report which was filed into Court as an expert report. [17] He discovered a significant carpenter ant infestation and nest in the styrofoam insulation of the cold room. The ants were found to have wings, which means that they had been present in the cold room for at least four years. The styrofoam insulation in the cold room is conducive to the creation of carpenter ant nests because it is an area of high humidity and because wood is present.

The high humidity resulted from water seeping into the cold room at the joint of the roof of the cold room and brick wall of the Property. [18] [ 29 ] He recommends applying an insecticide to the carpenter ant nest and elsewhere around the property to eliminate the ant infestation. [ 30 ] Moreover, Biotech recommends that the plaintiffs apply a sealant at the juncture of the brick wall of the Property and the roof of the cold room and to seal the weep holes since this is the source of the water infiltration which created the conditions conducive to the creation of the carpenter ant nest. [19] [ 31 ] Mr.

Delisle discovered the presence of a second carpenter ant nest in the wooden door frame of the door leading to the cold room. [ 32 ] Following receipt of the Biotech report, Mr. Macri began demolishing the interior of the cold room by removing the pressed wood and the Styrofoam insulation. During this work, Mr.

Gammieri, who assisted him, saw the presence of carpenter ants throughout the cold room. [ 33 ] This evidence was unrefuted by the defendants. [ 34 ] The Court concludes that the cold room was infested by the presence of carpenter ants and that they were present in the Property at the time of the sale. [ 35 ] The courts of the province of Québec have consistently ruled that the presence of carpenter ants in a residential property constitutes a serious defect. [20] [ 36 ] The Court agrees with this case law and concludes that the presence of the carpenter ants at the Property constitutes a serious defect.

Was the carpenter ant infestation hidden? [ 37 ] The presence of carpenter ants in the cold room and elsewhere in the Property was not visible at the time of the sale nor at the time of the prepurchase building inspection. The carpenter ant nest was found in Styrofoam installed beneath a pressed wood wall in the cold room and could not be visible to a prudent purchaser prior to the sale. Defect unknown to the buyer [ 38 ] Finally, there is no evidence, and nor did the Defendants argue this, that the Plaintiffs were aware of the presence of carpenter ants.

Water infiltration [ 39 ] The discovery of the carpenter ant infestation also led to the discovery of a water infiltration problem. [ 40 ] The evidence reveals that water infiltrated into the cold room because of inadequate sealing of the concrete roof of the cold room with the base of the brick wall and micro-cracks in the concrete slab which made up the floor of the balcony and ceiling of the cold room. [21] [ 41 ] This constitutes a serious defect.

Moreover, this defect existed at the time of the sale since no modifications were made in this area of the Property between the date of purchase and the discovery of the carpenter ant infestation. Was the source of the water infiltration hidden? [ 42 ] The Defendants argue that this defect was not latent, i.e. it was visible, because the building inspection report mentions the presence of cracks in the wall of the cold room. [22] [ 43 ] The Court disagrees with the Defendants.

The cracks which are identified in the Building Inspection Report are not the source of the water infiltration that Plaintiffs complain of in their claim. [ 44 ] Mr. Delisle explained that the source of the water infiltration in the cold room which made the area conducive to the carpenter ant infestation was distinct from the cracks which the building inspector identified in his report. Patrick Forget’s testimony corroborates this. [23] [ 45 ] Secondly, according to Mr.

Macri’s uncontradicted testimony, he discussed the issue of water infiltration stemming from the crack identified by the building inspector with Mr. Raco. Mr. Raco told him that these were not foundation cracks but rather cosmetics cracks in the pargeting and that no water had ever infiltrated into the cold room from these cracks. [ 46 ] If there were any red flags raised by the Building Inspection Report with respect to the cracks identified therein, these were eliminated by Mr.

Raco’s representations. [ 47 ] The Court concludes that the water infiltration problems raised by the Plaintiffs constitute a latent defect.

[ 48 ] In conclusion, the Court considers that the Plaintiffs have proved all of the conditions required to establish that the presence of carpenter ants and the water infiltration issue constitute latent defects within the meaning of the warranty of quality.

b) What amount in reduction of the purchase price are Plaintiffs entitled to? [ 49 ] Plaintiffs claim damages of $15,000. This amount is broken down as follows: i. Extermination expenses: $1,121.01 i. Demolition of the interior of the cold room: $1,298.84 ii. Restoration of the cold room to its original state: $10,117.80 iii. Depreciation and loss of enjoyment of the property: $2,462.35 iv.

Total: $15,000.00 [ 50 ] Where the conditions required for enforcing the warranty of quality have been proved, and the seller has been properly notified of the existence of the defects and put in default, the buyer is entitled, at his discretion, to one of two remedies. [ 51 ] Firstly, he/she can obtain the cancellation of the sale if the defect is sufficiently serious. [ 52 ] If the buyer elects to maintain the sale, he/she may obtain a reduction of the purchase price.

The Plaintiffs have elected to ask for this second remedy in the present case. [ 53 ] The reduction of the purchase price may correspond to the cost of remedying the hidden defect or to the diminution in value of the good sold caused by the defect. [24] [ 54 ] In assessing the reduction in price, the court must not simply add up all the repair costs incurred by the buyer. Rather, the amount of the reduction must be reasonable.

The court must consider all the circumstances and must be careful not to confer on the buyer an undue advantage or to unduly enrichen him. [25] [ 55 ] The amount of the reduction must not be disproportionate in regards to the purchase price. [26] [ 56 ] Moreover, where as a result of the repairs the property has been improved and gives rise to a plus-value, the court is justified in depreciating the reduction in price, even in the absence of expert evidence. [27] [ 57 ] The Court will address each of the heads of damages claimed by the Plaintiffs in light of the legal principles summarized above.

Extermination expenses [ 58 ] Plaintiffs paid Biotech Extermination $1,121.01 for applying chemicals throughout the Property to kill and eliminate the carpenter ants. [28] [ 59 ] This is a legitimate and reasonable expense related to remedying the latent defect. Demolition of the interior of the cold room [ 60 ] Plaintiffs claim $1,298.84 under this head of damages, which includes 1) $1000 for the cost of stripping the wall covering of the cold room, 2) $100 for construction waste disposal, and 3) $398.84 for supplies. [ 61 ] In July 2016, following receipt of the Biotech Report, Mr.

Macri demolished the interior of the cold room, which included removing the styrofoam insulation and the pressed wood wall covering. He performed this work himself with the help of Mr. Gammieri. It took them 32 hours to complete the work and he claims $25/hour. [ 62 ] As he performed the work himself with the help of Mr. Gammieri, it is understandable that Mr. Macri does not have an invoice to justify this expense. Notwithstanding this lack of documentary evidence the amount claimed is reasonable. [ 63 ] This portion of the claim also includes three trips to a waste disposal site to discard construction debris.

He claims he incurred expenses of $100. This amount is reasonable. [ 64 ] Finally, Mr. Macri purchased supplies (equipment masks, mold remover, etc.) totalling $398.84. All of these expenses are reasonable and legitimate and represent expenses incurred to remedy the defect. [ 65 ] Accordingly, the court will award $1,298.84 for this portion of the claim.

Restoration of the cold room to its original state [ 66 ] Plaintiffs claim $10,117.80 under this head of damages, which includes 1) $7,467.63 to restore the cold room to its original state and 2) $2,660.98 to correct the source of the water infiltration. [29] [ 67 ] In early August 2016, Mr. Macri obtained an estimate of $8,800 plus taxes from Les Trois Maçons Inc. to renovate the cold room so as to return it to its original state. [30] [ 68 ] Les Trois Maçons Inc. carried out the work in September 2016 and the actual cost was less, namely $7,467.63 taxes inclusive. [31]

[ 69 ] Les Trois Maçons Inc.’s invoice includes adding aluminum siding to the exterior walls of the cold room. This constitutes an improvement rather than the cost of remedying the consequences of the defect. Accordingly, the Court will deduct the expense related to the aluminum siding (plus applicable taxes) from Les Trois Maçons Inc.’s invoice. Therefore, it will award Plaintiffs $6,432.85 ($7,467.63 – $1,034.78), subject to any potential depreciation. [ 70 ] Plaintiffs paid $2,660.98 to Base Solide. This expense was incurred to correct the source of the water infiltration which originated from (

i) micro-cracks in the concrete slab which served as the ceiling of the cold room and the floor of the balcony, and (ii) the joint formed at the base of the brick exterior wall and the concrete slab which served as the ceiling of the cold room was defective because there was no flashing. This water infiltration caused water to seep into the cold room and created conditions conducive to the carpenter ant infestation. [32] [ 71 ] This expense is reasonable and directly related to remedying the water infiltration problem which allowed the carpenter ants to develop in the cold room.

Accordingly, this amount will be awarded to the plaintiffs. [ 72 ] That said, Plaintiffs paid $306,000 for a 30 year old property. [33] After performing the corrective work to remedy the defects, the Plaintiffs have not simply restored the cold room to its original state, but rather they now have a brand new cold room which increases the market value of the Property. The Court considers it fair and reasonable to depreciate by $1,000 the expenses incurred to “restore” the cold room. [ 73 ] In

summary, the Court will award Plaintiffs $10,513.68 ($1,121.01 + $1,298.84 + $6,432.85 + $2,660.98 - $1,000) in terms of reduction of purchase price.

c) Are defendants liable for repairing any other injury allegedly suffered by the Plaintiffs? [ 74 ] In evaluating the Plaintiffs’ claim for damages,

article 1728 C.C.Q. dictates that the Court must distinguish between the reduction in purchase price portion of the claim and the other injury the Plaintiffs allege they have suffered. [ 75 ] Plaintiffs are only entitled to compensation for the other injury they allegedly have suffered if they prove that the Defendant sellers were aware of the defect at the time of the sale. [34] [ 76 ] Plaintiffs claim $2,462.35 which they allege represents the value of the loss of enjoyment of the Property and the fact that it has depreciated because of the defects. [ 77 ] The Plaintiffs have not proven on a balance of probabilities that the Defendants were aware of the defects.

They are not entitled to this head of damages. [ 78 ] Moreover, the Plaintiffs did not adduce any evidence whatsoever to prove that the Property has depreciated because of the defects. FOR THESE REASONS, THE COURT: [ 79 ] GRANTS in part Plaintiffs’ claim; [ 80 ] CONDEMNS defendants solidarily to pay to Plaintiffs $10,513.68 with interest and the additional indemnity provided for by

article 1619 of the Civil Code of Québec , as of August 13, 2016; [ 81 ] WITH LEGAL COSTS of $200. __________________________________ ENRICO FORLINI, J.C.Q. Date of hearing: August 20, 2018