Katan and Baird v. Brown Date:, 2013 BCPC 89

Citation: Katan and Baird v. Brown Date: 20130422 2013 BCPC 0089 File No: C21273 Registry: Port Alberni IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SHAWNA KATAN and ANDREW BAIRD CLAIMANTS AND: ALLAN BROWN DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE GOUGE Appearing in person: the Claimants

Appearing in person: the Defendant Place of Hearing: Port Alberni , B.C. Dates of Hearing: July 18, October 10, 2012, April 15, 2013 Date of Judgment: April 22, 2013 [ 1 ] Mr. Jeff Simmons and Ms.Kathy Fehr were the owners of a house, located at 10232 South Drive, Port Alberni, B.C., which they offered for sale in 2010. Ms. Katan and Mr. Baird were interested in purchasing the house, and arranged for it to be inspected by Mr. Todd Flaro, who is a qualified home inspector. Mr. Flaro inspected the house on November 29, 2010 and provided a written inspection report to Ms. Katan and Mr. Baird. In his report, Mr.

Flaro noted that a full inspection of the roof structure and attic was not possible because there was no attic access. He observed nothing which caused him concern about the roof structure, and made no comment on that subject in his report. Ms. Katan and Mr. Baird decided to purchase the house, and completed the purchase in January, 2011. In March, 2011, Ms. Katan and Mr. Baird retained Manson Renovating & Construction Ltd. to perform some renovation work on the house. When Mr. Holmquist, the foreman on the job, opened up a wall, he was drenched by water running out of the insulation in the wall.

Upon investigation, it was discovered that the insulation in the roof was saturated with water, and that the plywood sheathing in the roof structure was covered in black mould. [ 2 ] Mr. Holmquist and his employer, Mr. Manson, testified that mould of that kind is a hazard to the health of the occupants of a house and that, in this case, the only remedy to render the house safe for habitation was to remove the existing roof, discard the materials contaminated by mould, and replace the old roof with a new one. Ms. Katan and Mr. Baird instructed Mr. Manson to do that, and he did the work on a cost-plus contract.

The Defendant did not exercise his right to cross-examine either Mr. Holmquist or Mr. Manson. Their evidence is unchallenged and uncontradicted, and I accept it. [ 3 ] In April, 2008, Mr. Simmons and Ms. Fehr, then the owners of the house, retained the Defendant to install a new roof. Mr. Simmons and Ms. Fehr were called by the plaintiffs to give evidence of the events surrounding that repair. The Defendant called one of his employees, Mr. Robert Wilson, to provide a contradictory account of those events. [ 4 ] Mr. Simmons said that: a. he retained Mr. Brown in 2008 to re-roof the house; b. Mr.

Brown drew to his attention a condensation problem within the roof structure; c. he instructed Mr. Brown to do whatever was necessary to effect a proper repair and (implicitly) agreed to pay the cost of a proper repair; d. he assumed that Mr. Brown had implemented his instructions. [ 5 ] Mr.

Wilson said that: a. he worked on the 2008 roof repair from “... tear off to clean up ...”; b. when he and his colleagues pulled off the existing roof, they found black mould on the plywood sheathing; c. he knew that black mould was a health hazard, caused by excessive moisture within the roof structure; d. in this case, the problem was that the entire space between the ceiling and plywood sheathing was tightly packed with insulation, with the result that there was “no possibility” of ventilation to allow moisture to escape; e. on a scale of 1 to 10 (1 being good, and 10 bad), the moisture and ventilation problem in this roof was a 10; f. he advised Mr.

Simmons that the entire roof structure needed to be removed and replaced, and that none of the mouldy material should be re-used; g. Mr. Simmons rejected that advice, and told him to replace the roof as it was; h. he proffered an alternate solution; i.e. to leave the mouldy material in place, and to install polystyrene battens to provide some separation between the insulation and the plywood sheathing, and so to allow some air to circulate; i. Mr. Simmons accepted that solution, which was implemented; j. everyone on the Defendant’s crew disagreed with Mr. Simmons’ decision - as Mr. Wilson put it, Mr.

Wilson and others told Mr. Simmons the “right way” to resolve the problem (essentially the same solution as that recommended and implemented by Mr. Manson two years later), but Mr. Simmons was unwilling to spend the money; k. Mr. Wilson advised Mr. Simmons that none of the mouldy material should be re-used, but accepted and implemented Mr. Simmons’ instruction to re-use it anyway; l. Mr. Wilson had never used the batten method before, but expected that it would produce a satisfactory outcome; m. Mr. Simmons told Mr. Wilson that Mr. Simmons intended to sell the house and move.

[6] Both Mr. Wilson and Mr. Holmquist said that the contaminated plywood should have been removed and discarded in 2008. The reason is obvious. Having once established itself, the mould was likely to propagate and spread even if improved ventilation wasprovided. [7] Mr. Brown urged me to accept Mr. Wilson’s evidence in preference to that of Mr. Simmons. I will first analyze the case on thepremise that Mr. Wilson’s evidence is truthful and accurate. [8] On that premise, the question is whether a contractor (Mr. Brown) who accepts the instructions of his client (Mr.

Simmons) toperform a substandard repair, which leaves in situ an existing health hazard, incurs a liability to a subsequent purchaser of the house whoincurs a cost to remedy the repair and eliminate the health hazard. Subject to the issue of patent and latent defects, discussed below, Ianswer the question in the affirmative. A person who implements a dangerously defective repair is in no different legal position than amanufacturer who manufactures and distributes a dangerous product.

Manufacturers owe a duty of care to consumers to take reasonablesteps to ensure that their products are reasonably safe for use by the ultimate consumer. Repairers owe the same duty in relation to itemswhich they repair. Because the duty is owed both to the ultimate consumer and others who may be injured by dangerous products, it isno answer to say that consumers will not pay for a safe product. If a safe product cannot be produced or repaired at a price which themarket will bear, the product ought not to be produced or repaired.

Until the decision of the Supreme Court of Canada in WinnipegCondominium Construction Corporation #36 vs Bird Construction Co (SCC), [1995] 1 SCR 85, the liability of amanufacturer or repairer of a dangerous product was limited to compensation for personal injury or property damage caused by thedangerous item. In Winnipeg Condominium Construction, the court extended liability to compensation for costs incurred by the ownerof the item to repair the defect and render the item safe for use. Mr. Brown is entitled to ask rhetorically what course of action the lawexpected him to pursue when confronted by Mr.

Simmons’ instruction to refrain from following Mr. Wilson’s advice that the entire roofshould be replaced and the contaminated materials discarded. In a case, like this one, where the course of action demanded by thehomeowner would create a risk to the health of the people living in the house (including future purchasers), the answer is that thecontractor should refuse to carry out the homeowner’s instructions. The appropriate response to Mr. Simmons’ instruction would havebeen for Mr. Brown to say: “If you won’t pay for a proper repair, I will not perform any repair at all.” It was wrong for Mr.

Brown toaccept and implement instructions which he knew or ought to have known would create a health hazard for future occupants of thehouse. [9] I proceed to analyze the case on the alternate premise; i.e. that Mr. Simmons’ evidence is accurate and truthful. In such acircumstance, Mr. Brown’s liability is clear. Mr. Wilson concedes that he knew of the health risk posed by the black mould, and thatMr. Simmons intended to sell the house. He could therefore reasonably foresee that a failure to remove the contaminated material wouldlikely pose a health risk to a purchaser of the house.

As a result, he owed a duty of care to prospective purchasers to take reasonablesteps to effect a proper repair and eliminate the health risk. He concedes that the repair which he implemented was not an appropriaterepair (in his words, not the “right way” to do the repair). On the current premise, his client, Mr. Simmons had instructed Mr. Wilson toperform a proper repair and undertaken to pay for it. On that premise, Mr. Wilson has no excuse for the failure to implement a properrepair and liability follows. [10] Because liability follows on either premise, I need not decide whether to prefer the evidence of Mr.

Wilson or that of Mr.Simmons. For the reasons which follow, I should not decide that issue of credibility in this case. If Mr. Wilson’s evidence is accurateand truthful, Mr. Brown may have a claim for contribution or indemnity against Mr. Simmons under

section 4 of the Negligence ActRSBC 1996 c 333. Mr. Brown may yet decide to pursue that claim. At this trial, Mr. Brown had, and exercised, a right to cross-examine Mr. Simmons. Mr. Simmons had no opportunity to cross-examine Mr. Wilson. The issue of credibility should be determined,if at all, only at a trial in which both Mr. Simmons and Mr. Brown have an opportunity to lead evidence and to cross-examine. [11] There remains, however, the issue of patent or latent defects.

The leading authority is the judgment of Ballance, J in Cardwell vs Perthen 2006 BCSC 333; 38 CCLT (3d) 210; 41 RPR (4th) 118, affirmed at 2007 BCCA 313; 2007 BCCA 313 , 68 BCLR (4th) 117; 48 CCLT (3d) 137; 57 RPR (4th) 37. At paragraph 171, Ballance J said: ... the negligent construction defects about which the authorities are concerned are dangerous latent defects, not patent ones.

In theabsence of fraud or negligent misrepresentation or active concealment by a builder or similar reprehensible conduct, there is no basis inthe jurisprudence, as it presently stands, to hold a negligent builder liable to a purchaser for patent construction defects. Winnipeg Condominium Construction Corporation is one of the authorities to which her Ladyship referred in this passage.

She defined“latent” and “patent” defects in the following terms at paragraph 122 (citations omitted): Patent defects are those that can be discovered by conducting a reasonable inspection and making reasonable inquiries about theproperty. The authorities provide some guidance about the extent of the purchaser's obligation to inspect and make inquiries. The extentof that obligation is, in some respects, the demarcation of the distinction between latent and patent defects. In general, there is a fairlyhigh onus on the purchaser to inspect and discover patent defects.

This means that a defect which might not be observable on a casualinspection may nonetheless be patent if it would have been discoverable upon a reasonable inspection by a qualified person .... In somecases, it necessitates a purchaser retaining the appropriate experts to inspect the property .... [12] Mr. Brown conceded at trial that Mr. Flaro is a properly-qualified home inspector, and declined my invitation to cross-examineMr. Flaro as to his qualifications. It necessarily follows that Ms. Katan and Mr. Baird retained an appropriate expert to inspect the housebefore they agreed to purchase it. Mr.

Flaro observed no cause for concern respecting the roof structure where the condensationproblem arose. Those simple facts might be sufficient, taken alone, to justify a conclusion that the defect in this case was latent ratherthan patent. However, the explanation offered by Mr. Flaro provides further support for that conclusion. No moisture was visible whenMr. Flaro inspected the ceiling. The ceiling was a cathedral ceiling. There is no attic space.

The only way to inspect for the presenceof moisture would have been to remove some of the drywall ceiling to allow access to the space (some 12 – 18 inches, created by therafters) between the ceiling and the roof. Many vendors object to such destructive examination by a prospective purchaser. In somecases, such an inspection cannot be done without causing widespread damage to the drywall, which is expensive to repair. Mr. Flarosaid that such an inspection is not normally conducted unless there is a reason to suspect a moisture problem, and that he had no suchreason in this case. I conclude that Mr.

Flaro’s inspection conformed to the generally-accepted practice in his profession, that the

practice is not manifestly unreasonable, and that, accordingly, the inspection which he conducted was reasonable. Because the problem in this case was not apparent on a reasonable inspection, it was latent, not patent. [ 13 ] There was some suggestion that infra-red photograph would have indicated the presence of moisture, and hence the need for further inspection. Both Mr. Flaro and Mr.

Wells, another of the plaintiffs’ experts, said that infra-red photography yields many false positives, with the result that destructive investigations are sometimes conducted unnecessarily, and that it is not the industry practice to use infra-red photography for that reason. In light of that evidence, I cannot conclude that the omission of infra-red photography in this case was unreasonable. [ 14 ] The Plaintiffs incurred costs of $24,935.07 to remedy the problem.

They are entitled to judgment for that amount, together with prejudgment interest from May 31, 2011 to April 22, 2013 and filing fees and disbursements of $167.50. __________________ T. Gouge, PCJ