2012 QCCQ 7149, 2012 QCCQ 7149

Vargotskii c. De Gaspé Beaubien 2012 QCCQ 7149 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-22-180343-116 DATE: July 5, 2012 ______________________________________________________________________ BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ VIKTOR VARGOTSKII Plaintiff v.

CLAUDE DE GASPÉ BEAUBIEN -and- SYLVIE MARTINE FRANCINE ADAM Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ PARTIES AND PROCEEDINGS [ 1 ] The Plaintiff, Viktor Vargotskii, purchased a residential property from the Defendants Claude de Gaspé Beaubien and Sylvie Martine Francine Adam in December 2010. [ 2 ] He claims from them the amount of $50,924.48 (reduced at trial to $39,738.18), alleging that the presence of asbestos in the walls and ceilings of the property constitutes a latent defect that was not disclosed to him at the time of sale. [ 3 ] In her written Defence, Mrs.

Adam takes the position that the action should be dismissed because she did not receive a notice of the alleged defect before the Plaintiff carried out his alleged corrective works, and was therefore unable to take or to obtain cognisance of the alleged defect herself an independent technical report. [ 4 ] Subsidiarily, she alleges that part of the amount claimed, $14,500 represents costs that were inherent in the Plaintiff's renovation project and therefore do not represent a prejudice. [ 5 ] At trial, she raised an additional issue: that the presence of asbestos in building materials does not constitute a latent defect. [ 6 ] She also brought a motion pursuant to articles 54.1 and followings C.C.P. based on a factual analysis related to the notion that there was no putting in default prior to the works being carried out and that there was no urgency. [ 7 ] The Co-Defendant, Claude de Gaspé Beaubien, allowed the case to proceed against him by default.

ISSUES [ 8 ] The present conflict raises three issues: 1. Does the presence of asbestos in the residential property sold constitute a latent defect within the meaning of

article 1726 of the Civil Code of Quebec ? 2. Did the Defendants receive sufficient notice and were they put into defaut? 3. Assuming liability, what is the fair quantification of the reduction of price to which the Plaintiff is entitled? FACTS The sale

[ 9 ] The parties passed title to the property, […] in Montreal, on December 13, 2010, (P-1) pursuant to a bilateral promise to purchase made on October 6. [ 10 ] The Plaintiff took possession of the property on the date of the transfer, and began certain renovations. [ 11 ] The construction dated from circa 1912. [ 12 ] The Plaintiff did not commission a pre-purchase building inspection although an inspection had been completed sometime prior to 2006.

The Defendants provided him with a copy of the report they had on hand, based on an inspection done at their request. [ 13 ] There is nothing of interest in this report for the purposes of this litigation. [ 14 ] It is uncontested that the sale was made in accordance with the legal warranty. [ 15 ] The Plaintiff bought the property with the intention of carrying out renovations by expanding both the upstairs bathroom and the kitchen, situated on the ground floor. This would involve some demolition to walls and ceilings. [ 16 ] Mrs.

Adam admits, to a certain extent, that the Plaintiff informed her, prior to the offer to purchase, of his intention to carry out some works in the house. More specifically, she testifies that she had offered to sell him the refrigerator, because it fit in the cabinetry that she and her husband had had installed. He declined the offer saying that he intended to redo the kitchen. The renovations and testing for asbestos [ 17 ] Upon taking possession of the property in mid-to-late December 2010, the Plaintiff contacted a construction company, H.B. Construction ("H.B.").

In early January 2011, Mr Hugo Brais, the principal of H.B., a general contractor, visited the property to give the Plaintiff a quote for the renovation work. [ 18 ] Upon visiting the property, Mr Brais suggested that the walls and ceilings be tested for the presence of asbestos before beginning any construction work.

Mr Brais took several samples from both the ground floor and the second floor of the house and sent the samples to Micral Konios, a laboratory specialising in microscopic analysis of building materials, to be analysed for the presence of asbestos. [ 19 ] The Court heard the expert testimony of Mr Maurice Hrycak Jr., the principal of Micral Konios, who analysed the samples and produced laboratory reports (P-5) concerning samples of plaster taken, apparently, in various areas of the building. [ 20 ] Mr Hrycak received three samples for asbestos analysis from Mr Brais on January 18, 2011 and a further eight samples on January 20, 2011. [ 21 ] His conclusions on the first three samples indicate the presence of asbestos in the amount of 0.1% to 1% in two samples referred to as "Hall d'entrée (partie beige)" and "Plafond 2ième (partie grise)" respectively and no presence of asbestos in the third sample called "Cuisine". [ 22 ] In the second series of eight samples remitted January 20 th , he found no indication of asbestos. [ 23 ] Mr Brais received the results of the laboratory analysis promptly after he had remitted the samples.

Attempts to notify the defendants [ 24 ] The Plaintiff testified that he attempted to advise the defendants of the situation towards the end of January 2011 by contacting the notary who prepared the deed of sale and by telephoning Mr de Gaspé Beaubien. [ 25 ] According to the Plaintiff, both of these attempts were unsuccessful. He testified that Mr de Gaspé Beaubien’s phone line was disconnected and the address provided by the notary was his own address at the Coolbrook property. The notary did not provide him with a forwarding address or telephone number for either of the Defendants.

The corrective works [ 26 ] The Plaintiff accepted that because of the presence of asbestos in some of the samples, he would have to have it removed before carrying out his renovations. [ 27 ] Mr Brais testified that, according to his knowledge of the health and safety regulations, special care must be taken in handling of building materials containing asbestos during demolition, to prevent workmen from inhaling dust that could contain this contaminant, which is a carcinogen. [ 28 ] His advice to Mr Vargotskii was to hire a firm specialising in this type of demolition. [ 29 ] Demco Construction Inc. ("Demco") issued a submission to H.B. dated January 25, 2011 for an amount of $22,900 plus taxes, for work described as follows: Les travaux consistent à l'enlèvement de plafond de plâtre en condition d'amiante à risque élevé avec certificat conformité à la fin

Le coût pour le projet d'amiante: 22,9000$ + taxes [ 30 ] The decontamination work began, on the basis of this estimate, during the week of January 25, 2011. [ 31 ] H.B. made two payments to Demco for $13,557.08 and $12,531 on February 11 and 16 respectively for a total of $26,088.03 (Cheques recto-verso P-9 en liasse) based on two invoices (P-11). [ 32 ] There are two versions of H.B.'s invoice to the Plaintiff, number 067, for the decontamination work: one incorporates the amount of Demco's price of $22,900 plus taxes plus miscellaneous items provided by H.B. described as preparatory work, container and analysis for a total of $30,200, to which tax is added for a total of $34,405.35 (P-2 en liasse); the other adds 5% administration and 10% profit, for a grand total of $39,738.18. (P-6).

The renovations [ 33 ] The Plaintiff produced an estimate given by H.B. for the reconstruction of the ceilings that had been removed by Demco (P-2) in the amount of $14,500 plus taxes. It is unclear on what date this document was written; it is dated "févr-11". [ 34 ] A bill for the reconstruction of the ceiling, including the insulation of the attic and electrical work is for a lesser amount: $7,400 plus 5% administration and 10% profit for a total, tax in, of $9,737,16.

It is dated "avr-11". [ 35 ] Mr Brais testified that the decontamination and reconstruction of the ceiling took three weeks and was completed by mid- February 2011. [ 36 ] Upon completing the demolition and reconstruction of the ceiling, Mr Brais began the renovation work on the bathroom and kitchen that the Plaintiff had initially asked him to do.

This project was completed in May 2011, according to the Plaintiff’s testimony. [ 37 ] An undated bill for the "aménagement d'une salle de bain" , for the very modest price of $3,800 plus taxes, a total of $4,329.15 is produced (P-8). [ 38 ] The three bills, P-6, P-7 and P-8 amounting to a total of $53,804.49 are stamped "payé". [ 39 ] No invoice is produced with respect to the work done on the kitchen. [ 40 ] Mr Brais testified that he received payment for a total amount of approximately $50,000 in cash from the plaintiff for the combined reconstruction and decontamination work.

There is no documentary proof of payment produced in the record. The notice and the action [ 41 ] At the end of January 2011, the Plaintiff contacted and retained a lawyer concerning his intention to claim the cost of the decontamination and reconstruction work from the Defendants. The Defendants received a demand letter dated February 18, 2011, from the Plaintiff’s lawyer requesting payment in the amount of $50,924.48. (P-3) [ 42 ] The action followed on March 28, 2011 for the same amount, based on exhibit P-2, the first version of invoice no. 067 and the estimate for the reconstruction work. [ 43 ] Mrs.

Adam testified that, prior to the receipt of the letter of demand, she had never received a telephone call from the Plaintiff regarding this or any other matter.

She states that she had given her mobile phone number to the Plaintiff and that this number remained valid until at least February 8, 2011, which was the first court date of her proceedings in divorce from the Defendant Mr de Gaspé Beaubien. [ 44 ] After that date, because of the provisional measures, her husband no longer had the responsibility of paying for the phone and service was cut off. [ 45 ] At trial, the Plaintiff reduced his claim from $50,924.48 to $39,738.18.

According to the Plaintiff, the revised amount reflects the decontamination and reconstruction costs plus Mr Brais’ administration fees and profit and excludes the cost of improvements to the bathroom. ANALYSIS Latent defect [ 46 ] The Plaintiff does not allege that the Defendants knew that asbestos was present in the walls and ceilings of the property prior to selling it to the Plaintiff. [ 47 ] There is no question, then, of bad faith and an award of damages.

The question is essentially whether presence of asbestos constitutes a latent defect. [ 48 ] There may be cases where asbestos can be considered a contaminant. In the case to be decided, it is clear that asbestos, as a component of plaster used in the finishing of residential walls, is inert, and not likely to harm anyone. [ 49 ] Mr Hrycak, testifying as an expert, stated the matter simply, if the material is not " dérangé ", meaning disturbed, it poses no problem. The difficulty is in demolition of existing plaster, because the fibres of asbestos can be disengaged from the solid and become

portable in the air. Special precautions are therefore imposed to protect the workmen, and residents. [ 50 ] Only in the case of demolition and disposal of materials containing asbestos can it be considered hazardous. [ 51 ] The notion of use is inherent in the theory of latent defect as a component of the warranty of quality as defined at

article 1726 CCQ: 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. (underlining added for emphasis) [ 52 ] The leading case dealing with the question of asbestos ("amiante") as a latent defect when present in inert building materials is Immeubles Jacques Robitaille . [1] [ 53 ] In its brief decision, the Court of Appeal confirms the approach taken by the trial judge in her finding that legal constraints imposed in the case of a demolition do not constitute a diminution of use: La juge de première instance a correctement interprété les règles applicables en l’espèce et, notamment l’

article 1726 C.c.Q ., lorsqu’elle a conclu qu’une contrainte juridique imposée lors de la destruction du bien vendu, même lorsque cette contrainte se traduit pour l’acheteur par un coût qu’il n’avait pas prévu au moment de l’achat, ne constitue pas au sens de la garantie des vices cachés, un déficit d’usage de ce bien. [ 54 ] The facts in this case were somewhat more extreme: the purchaser carried out extensive demolition of the immovables purchased, but the principle is the same.

The purchaser could have continued to use the building in the same manner as the seller, without any diminution of use. [ 55 ] The partial demolition associated with the changes made to the bathroom are not a use inherent in the building at the time of sale, but, rather a new condition of transformation or improvement to which the purchaser decided to subject the building once he became its owner. [ 56 ] The purchaser, not the seller, bears the risks associated with such a building project including the financial risks associated with legal constraints such as health and safety regulations the application of which he may have been unaware at the time of sale. [ 57 ] Of course, freedom of contract would permit the buyer and seller to agree to reassign such risks on the purchaser through a specific warranty: En l’espèce, vu la nature de la contrainte juridique susmentionnée, il revenait à l’appelante d’obtenir les assurances nécessaires de l’intimée, ou les garanties contractuelles appropriées, si elle souhaitait se prémunir contre une dépense imprévue [2] [ 58 ] It would also be possible for a proposing purchaser whose interest in the sale depends upon the absence of asbestos in the inert building materials to make the sale conditional upon acceptable test results. [ 59 ] In the present case, the information given by the Plaintiff, whether it was partial, dealing only with the kitchen, as the Defendant Adam recollects, or more complete, including the plan to enlarge the upstairs bathroom, as the Plaintiff argues, falls short of constituting an assurance or contractual warranty on the part of the sellers of the fitness of the building for the purposes of renovation. [ 60 ] The burden of proof of the existence of such an assurance or warranty would be that of the Plaintiff. [ 61 ] The Court had no reason to doubt the sincerity of the Defendant Adam's testimony, and the Plaintiff did not provide testimony clearly establishing that he made an issue of his plans for renovation at the time of the negotiations.

The deed of sale records no declaration of any kind that would help the Plaintiff's case, setting out only the usual boilerplate declarations and obligations. [ 62 ] As was mentioned previously, the Defendant's presumed good faith is not at issue. [ 63 ] Concluding on this point, the presence of asbestos fibres in the inert materials constituting the plaster of the ceiling of the upper floor did not constitute a latent defect. Notice and putting in default [ 64 ] The Defendant Adam's motion to dismiss the action pursuant to

article 54.1 of the Code of Civil Procedure was deferred to the merits. [ 65 ] For his part, the Plaintiff alleges that notice was properly given in mid-February, while the works were still in progress. In the alternative, the Plaintiff argued that invalid notice is not sufficient grounds to dismiss his action because of the difficulties he experienced in notifying the Defendants, whose addresses he did not know. [ 66 ] There are two distinct notification requirements that are in play in a case such of this, that of

article 1739 CCQ: 1739. A buyer who ascertains that the property is defective may give notice in writing of the defect to the seller only within a reasonable

time after discovering it. The time begins to run, where the defect appears gradually, on the day that the buyer could have suspected the seriousness and extent of the defect. The seller may not invoke tardy notice from the buyer if he was aware of the defect or could not have been unaware of it. and the ordinary requirement of putting in default articulated in articles 1594 and following.

The two notifications may be made by a single document, so long as it complies with the requirements of both. [ 67 ] The two notions, sometimes confused, are explained and contrasted by Edwards [3] : 420
[…] Or, la dénonciation de la garantie et la mise en demeure ont des objectifs différents. L'exigence de l'

article 1739 C.c.Q. vise à prévenir l'insécurité contractuelle due à la protection conférée par la garantie. Quant à la mise en demeure, elle sert à avertir le débiteur du manquement à son obligation et à lui fournir une occasion d'y remédier. Les deux avis se démarquent aussi par l'information différente que chacun requiert. Pour se conformer à l'article 1739 C.c.Q., il suffit que l'avis fasse état de la présence du vice. Notons que le droit du vendeur d'examiner le vice dénoncé est presque absolu.

L'acheteur ne peut poser aucune restriction déraisonnable à un examen visuel non destructif, faute de quoi son recours peut être jugé irrecevable. La mise en demeure doit, en plus, sommer le débiteur de s'exécuter. À cet égard, la demeure est constitutive du droit du débiteur à s'exécuter dans un certain délai. Les deux avis se distinguent encore par les délais auxquels ils sont soumis. La dénonciation de l'article 1739 C.c.Q. doit être faite dans un délai raisonnable.

La mise en demeure, de son côté, n'est soumise à aucun délai; elle doit cependant être envoyée avant la réalisation de la réparation, faute de quoi l'action peut être rejetée. […] (references omitted) [ 68 ] The demand letter, P-3, dated February 18, 2011 and delivered in the following days, does not meet the requirements of either a notice or a putting in default in that it was sent after the demolition work had been carried out. [ 69 ] The text informs the Defendants of a monetary claim representing the costs of removing the asbestos and the reconstruction according to the statements of accounts of H.B. of which a copy is joined, and, failing payment within 15 days, threatens legal proceedings. [ 70 ] The removal of the defect and, therefore, the evidence of is existence as well as the repairs are a fait accompli at the time when the letter is delivered. [ 71 ] As previously stated, the Plaintiff does not allege that either Defendant was aware or could have been aware that asbestos was present in the house prior to the sale.

He accepts that he was under the obligation to provide the Defendants with timely notice of the alleged defect. [ 72 ] The notice requirement is a condition de fond of the warranty against latent defects.

The objective of the notice requirement is to give the seller the chance to repair the defect, perhaps at a lower cost than that proposed by the buyer, and to determine whether a defect indeed exists. [4] [ 73 ] A plaintiff can be relieved of the requirement to give notice in certain exceptional circumstances, for instance in cases of emergency. [5] [ 74 ] These considerations do not apply to the Defendant Adam, who diligently contested the action and, visibly, was deprived of any opportunity to obtain a technical report about the presence of asbestos. [ 75 ] The demand letter advising the Defendants of the alleged defect was sent by the Plaintiff on February 18, 2011.

According to Mr. Brais, the decontamination and reconstruction work was completed at approximately the same time. By the time she received notice of the alleged defect, it was already impossible for her to determine whether a defect in fact existed or to remedy it by her own means. [ 76 ] While the Plaintiff testified that he was unable to reach the Defendant de Gaspé Beaubien despite his attempts to do so, he did not offer any explanation for his failure to notify the Defendant Adam. The Court accepts the Defendant Adam’s testimony that the Plaintiff retained her phone number until February 8 th .

As noted, the corrective works began the week of January 25 th . The Plaintiff was therefore in a position to notify her before the works began. [ 77 ] The Plaintiff's position that he was unable to locate the defendants is unconvincing. He did not make all reasonable efforts to do so before beginning the corrective works. [ 78 ] The action should therefore be dismissed on this basis as well. Quantum. [ 79 ] Although it is not necessary, the Court will make a few comments concerning the quantum. Proof of the quantum was unsatisfactory.

The proof of payment was not documented and raised doubts about the sincerity and accurately of the billing which assigned what seemed to be a disproportionate cost to demolition. FOR THESE REASONS, THE COURT: DISMISSES the Plaintiff's action, with costs.

__________________________________ DAVID L. CAMERON, J.C.Q. Mtre Vassilios Giannis BOUCHER HARPER Attorneys for the Plaintiff Mtre Bernard Côté Attorney for the Defendants Date of hearing: January 27, 2012 [1] Immeubles Jacques Robitaille inc. c. Province canadienne des religieux de St-Vincent-de-Paul ( 2007 QCCA 1184 ), paragraph 5, confirming the judgment of the honorable Dominique Bélanger, J.C.S.