2018 QCCQ 437, 2018 QCCQ 437

Hafshejani c. Szewczyk 2018 QCCQ 437 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-146528-155 DATE: February 1, 2018 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI, J.C.Q. ______________________________________________________________________ LEILA DORJ HAFSHEJANI And HADI EL-DUWEINI Plaintiffs v. WLODZIMIERZ SZEWCZYK And BARBARA CICHOCKA And 9135-4894 QUÉBEC INC. d.b.u.n.

AMERISPEC BUILDING INSPECTION SERVICES Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiff’s claim from the defendants $15,000 in damages following the purchase of a residential property in March 2014.

They argue that the defendants Wlodzimierz Szewczyk and Barbara Cichoka (collectively referred to hereinafter as the “Sellers”) are liable on the grounds that the property they purchased from them was afflicted with latent defects at the time of the sale. [ 2 ] As for the defendant 9135-4894 Québec Inc, doing business as Amerispec Inspection Services (“AmeriSpec”), a firm which carries out the building inspections, Plaintiffs argue that its building inspector was negligent in carrying out the building inspection mandate and failed to point out in its report numerous defects with the Property. [ 3 ] AmeriSpec denies all liability and argues that it executed the building inspection contract in compliance with the terms of the agreement between the parties. [ 4 ] As for the defendant Sellers, although they were duly served with the Plaintiffs’ Claim, they did not defend the claim on the merits and therefore the Plaintiffs proceeded by default against them.

Questions in Dispute

a) Was the Property sold by the Sellers to the Plaintiffs afflicted with one or more latent defects at the time of the sale?

b) Did AmeriSpec commit a fault in the execution of the building inspection agreement?

c) What damages are Plaintiffs entitled to, if any? Context [ 5 ] In March 2014, the Plaintiffs purchased from the Sellers a split level bungalow (“Property”) located in Dollard-des-Ormeaux, Québec, and paid $370,000. [ 6 ] On February 7, 2014, prior to the purchase of the Property, the Plaintiffs entered into a residential building inspection agreement with AmeriSpec [1] (“Building Inspection Agreement”). On the same day, Co-Plaintiff Mr.

El-Duweini inspected the Property along with Gary Wolff, a building inspector employed by AmeriSpec. [ 7 ] Following this inspection, AmeriSpec remitted to the Plaintiffs its Inspection Report. [2] [ 8 ] After taking possession of the Property on March 28, 2014, Plaintiffs allege that they discovered numerous hidden defects relating to the property. [ 9 ] By letter dated June 27, 2014, Plaintiffs notified the Sellers of these defects and enjoined them to repair them. [3]

[ 10 ] By letter dated July 11, 2014, the Sellers denied all liability for the defects raised by the Plaintiffs. [4] [ 11 ] In March 2015, the Plaintiffs wrote to the Sellers to reiterate the existence of the defects already disclosed in June 2014, to raise additional defects and to inform them that they claim $32,075 to cover the cost of repairs. [5] [ 12 ] In the same month, the Plaintiffs also sent AmeriSpec a demand letter in which they allege that the building inspector failed to exercise an adequate and appropriate level of care while carrying out the inspection in February 2014.

They claim from AmeriSpec $30,475 in damages. [6] [ 13 ] On March 31, 2015, Plaintiffs filed their Claim against the Sellers and AmeriSpec with the Court of Québec, Small Claims Division, and claim against them $15,000 in damages, plus court fees and expert fees. [ 14 ] The Plaintiffs sold the Property in 2016 for $372,500. [7] Analysis and Decision

a) Was the Property sold by the Sellers to the Plaintiffs afflicted with one or more latent defects at the time of the sale? [ 15 ] 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) [ 16 ] 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) or not apparent; and • The defect was unknown to the buyer. [8] [ 17 ] 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. [9] [ 18 ] 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. [10] [ 19 ] Where the conditions for enforcing the warranty 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, Firstly, he/she can obtain the cancellation of the sale if the defect is sufficiently serious.

If the buyer elects to maintain the sale, he/she may obtain a reduction of the purchase price. The reduction amount may correspond to the cost of remedying the hidden defect or to the diminution in value of the good sold caused by the defect. [11] [ 20 ] It is also open to the buyer to seek damages if the seller knew about the defect or is presumed to have known about it (1728- 1729 C.C.Q.). [ 21 ] In the present case, Plaintiffs seek compensation equivalent to the cost required to remedy the defects.

They allege that they actually suffered a loss of more than $15,000, but reduce the amount of their claim to this amount so as to bring their claim within the jurisdiction of the Small Claims Division. [ 22 ] In their demand letter to the Sellers and in their Claim, the Plaintiffs complain of no less than 13 hidden defects.

These include: 1. mould and water infiltration in the closet of an upstairs bedroom; 2. defective porch roof; 3. carpenter ant infestation; 4. defective paint in one of the upstairs bathrooms; 5. improper installation of a window in the upstairs bathroom; 6. clogged plumbing in the drain of the kitchen sink;

7. rodent in the kitchen cabinet near the stove vent caused by a defective roof vent; 8. improper installation of the dishwasher; 9. inadequate insulation and heat escape of the property; 10. leak in the basement ceiling (problem with brick joints on the outside wall underneath the deck); 11. incorrect plumbing evacuation for the basement washing machine; 12. crack in the foundation; and 13. broken fence in the yard. [ 23 ] Based on the documentary evidence, namely the photos entered into evidence, as well as Mrs.

Dorj’s testimony, Plaintiffs have established that the conditions required for enforcing the warranty against latent defects have been proven in regards to the following defects: 1. mould and water infiltration in the closet of an upstairs bedroom; 2. defective porch roof; 3. carpenter ant infestation; 4. defective paint in one of the upstairs bathrooms; 5. improper installation of a window in the upstairs bathroom; 6. rodent in the kitchen cabinet near the stove vent caused by a defective roof vent; 7. improper installation of the dishwasher; 8. leak in the basement ceiling (problem with brick joints on the outside wall underneath the deck); 9. incorrect plumbing evacuation for the basement washing machine; 10. crack in the foundation; and 11. broken fence in the yard. [ 24 ] As for the alleged defect with respect to the clogged kitchen sink, the Court considers that this does not fall within the legal warranty against latent defects as the Plaintiffs have not proven that this condition existed at the time of the sale. [ 25 ] Moreover, the Plaintiffs have not discharged their burden of proof as required by articles 2803 and 2804 C.C.Q. in regards to proving that the alleged inadequate insulation and heat escape of the Property constitutes a latent defect within the meaning of

article 1726 C.C.Q. [ 26 ] The Court recognizes that the windows of the Property appear to have been changed in June 2015. [12] However, no probative evidence was adduced to establish that this change was caused by improper insulation. Finally, no mention of the need to replace the windows was ever made in the notice of defect sent to the Sellers nor in the demand letter. [13]

b) Did AmeriSpec commit a fault in the execution of the building inspection contract entered into with Plaintiffs? [ 27 ] Plaintiffs claim against AmeriSpec is premised on articles 1458 and 2100 C.C.Q., which read as follows: 1458. Every person has a duty to honour his contractual undertakings.

Where he fails in this duty, he is liable for any bodily, moral or material injury he causes to the other contracting party and is bound to make reparation for the injury; neither he nor the other party may in such a case avoid the rules governing contractual liability by opting for rules that would be more favourable to them. 2100. The contractor and the provider of services are bound to act in the best interests of their client, with prudence and diligence.

Depending on the nature of the work to be carried out or the service to be supplied, they are also bound to act in accordance with usage and good practice and, where applicable, to ensure that the work carried out or service supplied is in conformity with the contract. Where they are bound to an obligation of result, they may not be relieved from their liability except by proving superior force. [14] [ 28 ] To succeed in their claim against AmeriSpec, Plaintiffs must prove, on the balance of probability, that their provider of services failed to honour its contractual undertakings.

In other words, they must prove that AmeriSpec did not carry out the building inspection services in conformity with the Building Inspection Agreement, in conformity with usage and good practice. [ 29 ] The courts have stated in numerous cases that pre-purchase building inspections, have, as a general rule, a limited scope. This principal was summarized as follows by Justice Christian Brunelle in Duplain c. Roy [15] : [81] Ceci dit, l’inspection pré-achat, qui participe pour ainsi dire de « l’obligation de s’informer » qui s’impose à l’acheteur, demeure d’une portée limitée :

L’inspection préachat consiste à identifier les défauts apparents importants qui affectent l’immeuble et en diminue l’usage ou la valeur. Il s’agit d’une inspection des composantes visibles, sans qu’il ne soit requis de sonder planchers, murs, plafonds ou fondations. … [83] En d’autres termes, « la mission de l’inspecteur est de déceler les défauts apparents majeurs ou de constater des indices qui pourraient révéler des défauts cachés, susceptibles d’affecter l’usage de l’immeuble et d’en diminuer la valeur » : […] l’inspection pré-achat n’est pas une expertise.

En principe, cet examen doit être attentif et sérieux quoique plutôt rapide et non approfondi.

En l’absence d’un indice révélateur , l’acheteur ou l’inspecteur n’a pas à ouvrir les murs ou creuser autour des fondations. [ 30 ] In the instant case, when Plaintiffs contacted AmeriSpec to enquire as to what type of building inspection services it offers, it was informed that it could opt for a non-exhaustive inspection or an exhaustive inspection, the latter at a greater price. [ 31 ] This distinction is also explicitly mentioned in the Building Inspection Agreement which AmeriSpec sent by email to Plaintiffs a few days before the contract was signed and the inspection was carried out.

The non-exhaustive inspection provides for a “Visual inspection not technically exhaustive and excluding minor problem” whereas the exhaustive inspection includes “Detailed technical inspection including minor problems”. [16] [ 32 ] The Plaintiffs opted for the non-exhaustive inspection and paid AmeriSpec $475 (plus taxes) for its services. [ 33 ]

Section 5.4 of the Agreement sets out the scope and limitation of the non-exhaustive inspection services: 1. The inspection consists of a visual examination of the ready readily accessible systems and components of the immovable, as listed in the standards of practice attached hereto. Such an examination shall be careful but brief and is intended to provide the client with the necessary information required for a better understanding of the condition of the immovable, as observed at the time of the inspection. 2.

The inspection is not aimed at discovering, nor to allow for the discovery of latent defects affecting the immovable, but is aimed at discovering apparent defects and signs revealing the problems, that could substantially affect the integrity and the usefulness of the immovable, as well as meeting the requirements of a prudent and diligent examination of the immovable data is imposed on a given buyer by

article 1726 of the Civil Code of Québec , printed on the reverse, all in order to protect the clients rights to allow claims for latent defects against the seller. [ 34 ]

Section 6 of the Agreement states that the “inspection shall be performed in accordance with the Standards of Practice for the building inspection of NBIEA… which forms an integral part of the present agreement.” Mr. El-Duweini signed a box immediately opposite this statement where he confirms that he has received and understands the Standards of Practice. He also admitted at trial that he had received the standard. [ 35 ] Finally, the

Preamble to the Standards of Practice provide as follows: The visual inspection together with the written report need not deal with compliance regarding building codes, or with standards and regulations governing the construction industry and the health and safety industry, or with standards and regulations governing building insurability for any insurance risks.

As the visual inspection is being performed in accordance with these standards of practice inspection is not technically exhaustive, the Inspector must recommend that a technically exhaustive inspection be performed by a specialist when a sufficiently high number of potentially important indications are identified that allow him to conclude that a deficiency or potentially important defect may affect a system or component of the building. [17] [ 36 ] The language of the Building Inspection Agreement confirms the limited scope of AmeriSpec’s obligations when it carried out the inspection of the Property in February 2014. [ 37 ] While Plaintiffs argue that they expected more than what AmeriScep wrote in its Report, they received what they bargained and paid for. [ 38 ] For example, while Plaintiffs complain of the fact that AmeriSpec should have indicated in its Report that the heating systems of the Property was inadequate or that is was a sign of a lack of proper insulation, the Standards of Practice state that the building inspector is not required to calculate the mechanical strength, adequacy or efficiency of any system or component, which includes heating systems. [18] Moreover, insulation is hidden behind walls or in the attic and is not visible or accessible for someone who carries out a “visual inspection”. [19] [ 39 ] Similarly, unless obvious, the presence of insects is specifically beyond the scope of the inspector’s mandate. [20] [ 40 ] Plaintiffs did not adduce proof as to what constitutes “usage and good practice” in the pre-purchase building inspection industry. [ 41 ] The Plaintiffs did enter into evidence a building inspection report of the Property drafted by Inspecto-Pro Inc. dated April 8, 2015. [21] They argue that the Inspecto-Pro Report is much more exhaustive than the AmeriSpec Report and shows that AmeriSpec’s building inspector was negligent in the performance of Building Inspection Agreement. [ 42 ] However, the Court ignores the scope of the building inspection carried out by Inspecto-Pro.

Was it a non-exhaustive inspection or an exhaustive one? The Court has no answer to this important question. [ 43 ] The building inspection mandate the Inspecto-Pro inspector which is referred to at page 2 of its report and supposedly included in Annex E was not annexed to the report.

[ 44 ] The Inspecto-Pro Report states that the inspection has been conducted “in accordance with the Standards of Practice as set forth by A.S.H.I. (American Society of Home Inspectors) and the Canadian Association of Home Inspectors (C.A.H.I.)”.

These standards of practice were not entered it into evidence by the Plaintiffs and the Court ignores its contents and whether they are identical in scope to the Standards of Practice [22] which form an integral part of the Building Inspection Agreement entered into between Plaintiffs and AmeriSpec. [ 45 ] The author of the Inspecto-Pro Report did not testify at trial to explain the scope of his mandate. [ 46 ] Finally, the Court notes that Plaintiffs paid $475 for the AmeriSpec Report whereas they paid $2,750 plus taxes for the Inspecto-Pro Report. [ 47 ] In short, the Inspecto-Pro Report has little or no probative value in terms of assisting the Court in determining whether or not AmeriSpec breached its obligations in rendering its services to the Plaintiffs. [ 48 ] In conclusion, the Plaintiffs have not established that AmeriSpec breached its obligations in the performance of the Building Inspection Agreement.

Their claim against AmeriSpec will be dismissed.

c) What damages are plaintiffs entitled to, if any? [ 49 ] Plaintiffs claim they incurred at least $15,000 to remedy the defects which the Court has found to constitute latent defects for the purposes of

article 1726 C.C.Q. [ 50 ] The Court has found that the following items constitute latent defects: 1. mould and water infiltration in the closet of an upstairs bedroom: 2. defective porch roof; 3. carpenter ant infestation; 4. defective paint in one of the upstairs bathrooms; 5. improper installation of a window in the upstairs bathroom; 6. rodent in the kitchen cabinet near the stove vent caused by a defective roof vent; 7. improper installation of the dishwasher; 8. leak in the basement ceiling (problem with brick joints on the outside wall underneath the deck); 9. incorrect plumbing evacuation for the basement washing machine; 10. crack in the foundation; and 11. broken fence in the yard. [ 51 ] For items # 1 and 3 above, Plaintiffs paid $4,069.98 to remedy the defects. [23] [ 52 ] For items # 4 and 5 above, Plaintiffs paid $631.22 to remedy the defects. [24] This amount is justified and will be awarded. [ 53 ] For item # 6 above, Plaintiffs paid $735.84 to an exterminator [25] plus $400 to repair the defective roof vent. [ 54 ] For item # 11, Plaintiffs’ paid $126.47 for a temporary repair of the fence. [26] [ 55 ] The total expended by Plaintiffs for items # 1, 3, 4, 5, 6, 11 is $5,963.51.

This amount is justified and will be awarded. [ 56 ] For item # 8, Plaintiffs’ contractor repaired this defect free of charge [ 57 ] For item # 2 above, Plaintiffs obtained an estimate of $1,000, but never carried out the remedial work. Likewise for item # 9, Plaintiffs obtained an estimate of $300 for the plumbing work but never carried out the repairs. For item # 7, Plaintiffs obtained an estimate of $2,000 to correct the defect. The Plaintiffs did not file into evidence written estimates for these items.

For item # 10, Plaintiffs’ filed an estimate of $1,075 plus taxes. [27] [ 58 ] For items # 2, 7, 9, and 10, the corrective work was never carried out as the Plaintiffs sold the Property in 2016, roughly two years after they had purchased it from the Sellers. [ 59 ] Plaintiffs claim they nonetheless suffered a loss on the re-sale of the Property because of the defects which they claim they had to disclose to the new purchasers. The Property was purchased in 2014 and Plaintiffs paid $370,000.

It was resold in 2014 for $372,500. [ 60 ] That said, the Plaintiffs had the burden of proving that the sale price in 2016 would have been higher but for the existence of the defects which were not remedied and disclosed to the new purchasers. This proof called for evidence on the market value of the Property with and without the unrepaired defects. This proof was never made. [ 61 ] All the Court has to assess this part of the claim is one written estimate (item # 10) and the Plaintiffs’ verbal testimony (items # 2, 7, 9). Using its discretion, the Court will award Plaintiffs $2,187.50 for these items.

[ 62 ] Plaintiffs filed the invoice for legal fees incurred when they consulted a lawyer to seek advice with respect to their claim against the Sellers. [28] These fees are not recoverable under Québec civil law in the circumstances of the present case. [29] [ 63 ] Likewise there is no basis to order the compensation of the fees paid to Inspecto-Pro. This expert report was not useful to the Court in the determination of the questions in dispute. [ 64 ] In conclusion, the Court will award Plaintiffs $8,151.01 ($5,963.51 + $2,187.50).

FOR THESE REASONS, THE COURT: DISMISSES Plaintiffs’ Application against 9135-4894 Québec Inc. d.b.u.n. AmeriSpec Building Inspection Services, WITHOUT COSTS ; GRANTS in part Plaintiffs’ Application against Wlodzimierz Szewczyk and Barbara Cichoka; CONDEMNS Wlodzimierz Szewczyk and Barbara Cichoka to pay to Plaintiffs $8,151.01 with interest at the legal rate plus the additional indemnity provided for by

article 1619 of the Civil Code of Québec , as of March 30, 2015 WITH COSTS of $200 payable by Wlodzimierz Szewczyk and Barbara Cichoka. __________________________________ ENRICO FORLINI, J.C.Q. Dates of hearing: December 8, 2016 and October 3, 2017.