2017 QCCQ 3570, 2017 QCCQ 3570

Porter c. Graham 2017 QCCQ 3570 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division N°: 500-32-149088-157 DATE: April 13, 2017 ______________________________________________________________________ BY THE HONOURABLE VINCENZO PIAZZA, J.C.Q. ______________________________________________________________________ KEITH PORTER and SUSAN PORTER Plaintiffs v.

JASON GRAHAM and KATHERINE SEAMAN Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] On June 11, 2015, Mr. and Mrs. Porter sold their house to Mr. Graham and Mrs. Seaman [1] . The following clause was accepted by the parties on June 2 and 3, 2015, and incorporated by reference in the deed of sale: The sellers hereby guarantee the buyers that the repairs will be done in the master bedroom bathroom at their cost fully, without any cost to the buyers.

The repairs include but are not exclusive to the following: changing the shower and the bathroom flooring for a new shower and flooring of equal value. The buyers will have the opportunity to choose the materials for the renovation. Also included will be all other associated repairs required to fix the damage caused by the leaking shower (e.g. ceiling on 1 st floor below master bathroom, damaged flooring in the master closet). These repairs are to be completed by the date of signing the act of sale and written proof given to the buyers that the contractor has been paid in full.

The buyers may request a walk-through prior to the signing of the act of sale should they request it. Should the repairs not be completed by the date of signing the act of sale: The acting notary shall withhold the amount of ten thousand dollars ($10,000) from the sellers at the time of signing the act of sale, until the following conditions are met: 1) The bathroom and associated repairs are completed to the satisfaction of the buyers. 2) The contractor has been paid in full with the sellers providing written evidence of such to the buyers.

These conditions are to be fulfilled no later than July 30, 2015 at which time the acting notary shall remit the $10,000 to the sellers. Should these conditions not be met by July 30, 2015 the $10,000 shall be remitted to the buyers. [ 2 ] The repairs were not completed on June 11, 2015. The acting notary thus withheld $10,000.00 and still holds this sum in trust, pending the outcome of the parties’ litigation herein. [ 3 ] The Porters claim that if the repairs were not completed by July 30, 2015, it is entirely because on numerous occasions, Mr. Graham and Mrs.

Seaman restricted their contractor’s and workers’ access to the property, and that from July 17, 2015 onwards, they systematically denied them any access at all. [ 4 ] Mrs. Porter testified at trial that she was present at a meeting between her husband, Mr. Graham and the contractor on May 22, 2015, and that she heard them discuss and agree on the deadline of July 30 for the completion of the work. [ 5 ] The Porters also contend that some of the work which was carried out per Mr. Graham and Mrs.

Seaman’s demands exceeded the scope of the clause, as they were not repairs to damages, but rather improvements or renovations. [ 6 ] Mr. Graham and Mrs. Seaman’s

interpretation of the above-quoted clause is summarized in the following passage of a letter they sent to the plaintiffs’ lawyer [2] : The signing date for the Property remained June 11, 2015 based on Mr. Porter’s confirmation that Renovco would be finished the

renovation work by June 14, 2015. The holdback

section of the clause allowed for the renovation work to proceed with a finish date of June 14, 2015, allowed 30 days for the contractor to be paid in full, and ensured there was no lien registered on the Property. In good faith we also agreed to give the Porters some buffer for the payment to be processed and the lien removed from the house by July 30, 2015. However, the intent of this clause was not to have renovation work run from June 1, 2015 through until July 30, 2015. [ 7 ] In support of their position, they refer to an email dated May 29, 2015, where Mr.

Porter writes that the work is to start on Monday (i.e. June 1 st ) and take two weeks to complete [3] . [ 8 ] They add that the contractor was completely disorganized, repeatedly missed appointments and deadlines, and that the work was very poorly executed. [ 9 ] Finally, Mr. Graham and Mrs. Seaman form a cross-demand seeking a condemnation of the Porters in the amount of $15,000.00 [4] .

Their claim breaks down as follows: 9.1. $2,165.54 for expenses to complete the bathroom repairs; 9.2. $10,000.00 that is being held by the notary; 9.3. $7,147.00, representing the estimated depreciated replacement cost of the septic system, as a result of the Porters’ misrepresentation of the age of said system. ANALYSIS

a) The $10,000.00 holdback [ 10 ] In case of doubt, a contract is interpreted in favour of the party who contracted the obligation and against the party who stipulated it [5] . The Civil Code defines a penal clause as one by which the parties assess the damages in advance, stipulating that the debtor will suffer a penalty if he fails to perform his obligation [6] . [ 11 ] This is what the parties have done here. Mr. Graham and Mrs. Seaman have stipulated that t he Porters would suffer a $10,000.00 penalty if the repairs to the bathroom were not completed on time and to their satisfaction. [ 12 ] Therefore, the Porters’

interpretation of the clause, whereby they had until July 30, 2015 to carry out the repairs to the bathroom, must be preferred to that of Mr. Graham and Mrs. Seaman, who consider that they did not need to accommodate the Porters’ contractor and workers beyond June 14. [ 13 ] This

interpretation is also supported by Mrs. Porter’s testimony on her husband and Mr. Graham shaking hands, on May 22, 2015, on a termination date of July 30. [ 14 ] The Court appreciates that it could have been annoying for Mr. Graham and Mrs. Seaman to make arrangements for the workers to have ongoing access to their home for several weeks after the sale. However, in light of the applicable rules of

interpretation, this is how the Court reads the clause that was drafted by their realtor. [ 15 ] The parties to a contract must cooperate with one another [7] . The evidence establishes that Mr. Graham and Mrs. Seaman did not provide access to the workers for several days during the period which was granted to the Porters to finalize the repairs. As a result, they cannot avail themselves of the Porters’ failure to complete this work on

schedule and to their satisfaction. [ 16 ] By the same token, Mr. Graham and Mrs. Seaman obviously cannot claim the expenses they have incurred to finalize these repairs.

b) The septic system [ 17 ] In the vendor’s declaration they provided to Mr. Graham and Mrs. Seaman, the Porters stated that the system composed of a septic tank with weeping field was installed in 2005 [8] . In response to the question “ To your knowledge, has major work or renovations ever been done to the immovable other than those already mentioned? ”, they checked “yes” and completed their answer as follows: “ Major modernization throughout.

Upgrades to plumbing, wiring, insulation, new bathrooms, roof, including installation of hot wires, new sump pumps, new septic system weeper field was extended and improved . New furnace, heat pump, hot water tank. All necessary permits were obtained. ” [9] (Emphasis by the Court.) [ 18 ] After they had taken possession of the house, Mr. Graham and Mrs.

Seaman received a letter from the municipality stating that the septic system had been installed in 1987 and that in the context of an extension of the house in 2005, the weeper field was modified to comply with the applicable setbacks [10] . [ 19 ] Based on a quote in the amount of $10,721.42 for a new septic system [11] , and their statement that a septic system has a normal lifetime of thirty years, Mr. Graham and Mrs. Seaman claim $7,147.00, i.e. 2/3 of the quoted price for a new system.

They calculate that had it been installed in 2005, the septic system would have had twenty years of use remaining as of the date of purchase of the house. [ 20 ] The Porters have not challenged the statement that a septic system has a normal lifetime of thirty years. Their contestation is predicated on the fact that Mr. Graham and Mrs. Seaman have asked no questions about the septic system prior to making their promise to purchase, whereas they should have understood that if it had indeed been installed in 2005, the information in

section D13.2 of the vendor’s declaration would make no sense. They argue that a reasonably prudent purchaser would question the fact that a septic system installed in 2005 need to be “extended and improved” so shortly thereafter.

[ 21 ] The Court disagrees with this argument. [ 22 ] If it indeed meant to inform potential purchasers that the septic system predated the Porters’ acquisition of the house in 1997, and that only a modification of the weeper field had been carried out in 2005, the vendor’s declaration completely failed. Rather, one gets the very clear impression from this declaration that a new septic system was indeed installed in 2005. [ 23 ] In light of the evidence that the system was installed in 1987 and the uncontested statement that such a system has a normal lifetime of thirty years, Mr. Graham and Mrs.

Seaman will likely need to replace it only two years after the purchase, instead of twenty as they could legitimately expect based on the Porters’ declarations. They thus are entitled to be compensated for the eighteen missing years. [ 24 ] Their cross-demand will therefore be maintained for 60% of the amount of the quote they supplied for a new system [12] .

FOR THESE REASONS, THE COURT: GRANTS the action; CONDEMNS Jason Graham and Katherine Seaman to pay $10,000.00 to Keith Porter and Susan Porter, with interest at the legal rate, plus the additional indemnity provided by law, to accrue from July 17, 2015, with costs in the amount of $200.00; GRANTS the cross-demand, in part; CONDEMNS Keith Porter and Susan Porter to pay $6,432.52 to Jason Graham and Katherine Seaman, with interest at the legal rate, plus the additional indemnity provided by law, to accrue from June 11, 2015, with costs in the amount of $90.00. __________________________________ VINCENZO PIAZZA, j.c.q.

Date of hearing: December 21 st. , 2016 [7] Art. 1375 CCQ. See also Jean-Louis Baudouin and Pierre-Gabriel Jobin, Les obligations, 7 th ed., by Pierre-Gabriel Jobin and Nathalie Vézina, Cowansville, Éditions Yvon Blais, 2013, n° 162, p. 270.