2022 QCCQ 7064, 2022 QCCQ 7064

Azoulay c. Nadler 2022 QCCQ 7064 COURT OF QUÉBEC « Small Claims Division » CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTRÉAL TOWN OF MONTRÉAL Civil division N° : 500-32-160569-192 DATE : October 21, 2022 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ MÉLANIE AZOULAY PATRICIA GAMLIEL EYAL GAMLIEL Plaintiff c.

JILL NADLER Defendant -and- SYNDICATE OF THE CO-OWNERS OF THE MEADOWNS CONDOMINIUM Called in warranty ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Parties and proceedings [ 1 ] The Plaintiff, Mélanie Azoulay et al., Gabriel and Eyal Gamliel, who purchased a residential dwelling that is part of the Meadows Condominium in Côte-Saint-Luc sue their vendor, the Defendant Jill Nadler, alleging prejudice in relation to special assessments made by the condominium’s syndicate in the period subsequent to the transfer of ownership.

The syndicate is called in warranty by the Defendant. [ 2 ] The action was initiated in the Civil Chamber for a condemnation of $8,259 representing a special assessment in that amount payable by the Plaintiffs no later than February 2019 and a further $24,700.00 in respect of anticipated future special contributions. There is an alternative conclusion reserving the Plaintiff’s rights in respect of a future assessment. This second conclusion for $24,700.00 was subsequently removed in a modified version of the proceedings.

This led to the transfer of the file to the Small Claims Division to be treated as a claim not exceeding $15,000. [ 3 ] At the hearing, the Court accepted a modification adding another claim for $1,658.00, a contribution that was claimed by the Syndicate from the co-owners in respect of legal costs in a litigation file known as Antebi v.

The Syndicat of the co-owners of the meadows condominium. [ 4 ] The Court allowed the modification of the proceedings and the filing of documents pertaining to the modification despite the objections of the Defendant, who asserted that she was taken by surprise. [ 5 ] As will be seen in the analysis of the case, the Defendant suffers no prejudice from this modification.

Nature of the proceedings [ 6 ] As it is often the case in actions following the sale of property held in divided co-ownership, the Plaintiffs’ action has a dual nature. [ 7 ] Firstly, it is an action where the quality of the immovable is raised as an issue and in that respect, it resembles an action based on the warranty of quality or as it is sometimes called an action in latent defects. [ 8 ] At the same time, the form that the action takes is a claim for financial loss occurring through special assessments.

The problems that the Plaintiffs point to have to do with costs incurred in respect of common portions such as the swimming pool. To some extent, it is an action alleging bad management on the part of the syndicate. Hence, the syndicate’s presence was necessary for a complete resolution of the conflict. [ 9 ] At the same time, it is an action pertaining to a contractual condition in the sale agreement. The bilateral promise of purchase contained a condition whereby the purchasers were to be given access to minutes and other similar documents issued by the syndicate of co-owners going back two years.

[ 10 ] They received those documents and did not exercise their right to annul the sale, thereby tacitly admitting their satisfaction with the degree of information given and the content of this information. [ 11 ] The Plaintiff’s allegations also concern the answers to questions given in writing by the vendor as to the characteristics of the immovable and the general allegation that the vendor did not give disclosure of facts that she knew. [ 12 ] Allegations such as this concerning the sufficiently of information given at the time of the negotiation of the sale agreement, stand alongside allegations based on the warranty of quality.

In this case, they are, as well, allegations that the condominium budget and increases to it came as a surprise to the purchasers.

Discussion and analysis [ 13 ] The condominium unit is part of a complex of buildings consisting in row housing built in 1972. [ 14 ] Although it is obviously a property in divided co-ownership where there are common portions, the form used by the brokers for the declaration by the seller does not really take this into account, at least the questions do not show any particular attention to the common portions. [ 15 ] As well, the purchasers candidly admitted that they did not examine the common portions such as the swimming pool although they did carry out what could be considered a normal inspection of the privative portions of the immovable. [ 16 ] The evidence shows to a certain degree that the Plaintiffs only became aware of a potential water infiltration in the basement after the sale. [ 17 ] There is, however, no claim made in respect of this possible problem and no expenses have been incurred. [ 18 ] The evidence made by the Plaintiffs shows that, when handed over, the property was not particularly clean and there were some burn marks on some marquetry and other minor issues, none of which would be important enough to assert that the purchasers would not have paid such a high price had they known of them.

The finances of the syndicate [ 19 ] To make out a case that the vendors are liable to the purchasers for special assessments occurring after the sale, the purchaser would have to demonstrate that the vendor knew of them and failed to disclose them or that the information provided was misleading and that the vendors are responsible for this. [ 20 ] In terms of causality, the purchasers would have to establish that a normal review of the financial statements and minutes would not have permitted them to anticipate or suspect that the funds of the syndicate were not adequately capitalized. [ 21 ] The Plaintiffs have simply not made this case.

They candidly admitted that they made no effort to examine the financial statements. No demonstration was made at trial in respect of any financial aspect of the condominium syndicate as being unexpected, unusual, or extraordinary. In reading the minutes of the previous years that were provided in the sale process, it is quite apparent that this is a building that requires ongoing maintenance. There had been repairs required to foundations for several units, because of water infiltration. There had been a program of replacement of windows and patio doors and repairs to cracks in the foundations.

In the past, some of the units had required the installation of pilings to support their foundation. [ 22 ] This can be seen in the minutes of 2 June 2016, the last general assembly before the bilateral promise of purchase in the spring of 2017. It can be seen that there was flooding in November, that windows had been installed, but that there were still some problems, that a programme of restoration of the swimming pool has commenced.

In short, someone reading these minutes would see that this is a typical aging condominium project that has elements that have reached the end their useful life such as windows and are being replaced. The indication that there is a restoration taking place of the pool should prevent any surprise if, later in the game, the costs associated with that restoration are adjusted or the programme has changed.

These types of problems are simply inherent in older buildings and do not constitute defects. [ 23 ] To make a case that the potential planning was inadequate or that information of a financial character was somehow misleading, the Plaintiff would have to firstly show that they in fact looked at the financial information before deciding to buy and then show how the information they relied upon was something that misled them as to potential costs.

The Plaintiffs case has failed in both respects. [ 24 ] The special assessment that they received to be paid on or before February 2019, i.e. approximately two years after they reached a bilateral offer to purchase, presumably relates to various miscalculations, surprises, or changes of costs. [ 25 ] To establish that the vendors or the syndicate owe a duty to a purchaser due to any such special assessment would require, at the minimum, some financial analysis.

The case was presented by the Plaintiffs on the notion that they could simply receive reimbursement of any amount that they have to pay over and above ordinary assessments. This does not hold up. If the budgeting process had been more accurate, they would have simply paid more at the time that they were assessed for the general annual assessments and the reserve fund. If the reserve fund at the time of purchase had been flush, with adequate capital to cover all contingencies, it would have been a property with a higher market value. In a fair market, they would have normally paid a higher price.

This is the case because a condominium purchaser is not simply buying a building, she is also buying her share of the funds that the syndicate owns. [ 26 ] To make the case that she was misled as to the value of the funds in respect to contingencies, she would have to first prove that she had taken cognizance of the funds and had informed herself of the known contingencies. [ 27 ] The Plaintiffs’ proof is simply silent on these points.

[ 28 ] The small amounts added through amendments relate to legal fees that had not been adequately reserved in the budgets. At the time that the Plaintiffs received this assessment, they had already been through more than one financial cycle. Adequate budgeting would have simply increased the general assessment that they received when they became liable for it after the sale. The Settlement [ 29 ] As it turned out, the programme of replacement of windows was not entirely successful and this led to litigation, which was eventually settled.

The settlement resulted in payments to specific owners, because, under the declaration of co-ownership, individual co- owners have the personal obligation to replace windows when required. [ 30 ] The suit began in 2017, after the annual general meeting that the Plaintiff Eyal Gamliel attended. At that meeting, it was clear that there were problems with the windows, but Mr.

Gamliel states that he was quite tired the night of the meeting and cannot remember anything that took place. [ 31 ] Whatever the expectations of the Plaintiffs might have been when they closed the sale after that annual meeting, the Plaintiffs would not have any complaint to be made about the litigation and how it was handled in that they received a generous settlement of $14,015 [1] : In order to complete the full and indisputable settlement of any issues whatsoever that may arise directly or indirectly from the windows located at the meadows and more particularly located at the homeowner unit. [ 32 ] With this fund, the Plaintiffs can decide for themselves whether there is any problem with their windows and if they need to be changed. [ 33 ] It may be that in the special assessment of just over $8,000, there was an element of this that related to the window problem generally and to certain amounts that had to be paid to owners who had water infiltration problems.

Even so, it would appear that the Plaintiffs actually made a windfall, because they have not replaced their windows which apparently do not present any problem. They are funded should they decide to replace the windows at a future time, and they have not demonstrated that this compensation is inadequate in respect of the special assessments, because they have not established through any financial analysis that this special assessment itself is an injustice.

Claim for Abuse of Procedures [ 34 ] The Defendant, Jill Nadler, brings a claim for legal fees in association with her defence of the matter when it was in the Civil Division of the Court and not treated as a small claim.

She and her former husband explained how they had substantial legal fees in connection with their lawyer’s representation which led to the syndicate being called in warranty and the case eventually being transferred to the Small Claims Division in light of the reduction of the amount claimed. [ 35 ] While it is unfortunate that they were put to legal expense in a claim that does not have merit, that does not make the claim an abuse of procedure. [ 36 ] At the time that the Plaintiffs brought the suit, they may have believed sincerely that the finances of the syndicate were such that they would face future assessments and their claim for a further $24,777.00 was always expressed as a possible future claim, never as an actual prejudice. [ 37 ] An examination of the litigation, when it was in the civil chamber, shows that there was case management, communications back and forth and other fairly routine procedures that are typical to an action that is remaining fairly latent.

There is no evidence that the Court can see that the action, although ill founded, was what we could consider to be an abuse. Therefore, the counter claim demand fails. Given the complex nature of the case, there shall be no award of judicial costs. FOR THESE REASONS, THE COURT DISMISSES the Plaintiffs’ actions against the Defendant, Jill Nadler and against the Syndicate of co-owners of the Meadows condominium. DISMISSES the third-party proceedings brought by the Defendant Jill Nadler against the syndicate of co-owners of the Meadows condominium. DISMISSES the counter claim by the Defendant Jill Nadler.

THE WHOLE, WITHOUT COSTS. __________________________________ David L. Cameron, J.C.Q. Date of hearing: September 6, 2022