Forbes v Woodroffe, 2022 NSSM 18

IN THE SMALL CLAIMS COURT OF NOVA SCOTIA Citation: Forbes v Woodroffe, 2022 NSSM 18 SCCH 508483 Between: Daniel Jason Forbes Claimant — and — John Woodroffe and Jill Hurley Defendants Adjudicator: Augustus M. Richardson, QC For the Claimant: Kristen Stallard, counsel For the Defendant: Craig Arsenault, counsel Heard: March 21, 30 and April 1, 2022 (by Zoom) Decision: May 20 th , 2022 DECISION and ORDER [ 1 ] The claimant purchased the house at 136 Miller Lake Road, Fall River, Nova Scotia (the “Property”) from the defendants on November 12, 2019. The Property is serviced by a septic system.

The claimant now says the septic system was defective and liable to sewage backups. He says the defendants had negligently misrepresented the state of the septic system; and that as a result he had suffered special and general damages. He says that he had relied on the defendants’ representations as to the state of the septic system when deciding to purchase the property and the price he was willing to pay.

He seeks recompense for the expenses he has incurred to repair damage caused by those defects, and the need to replace the system. [ 2 ] The defendants say that there was no issue with the septic system, and that if there was they were unaware of it. They say that the claimant had both a home inspection and a septic system inspection, conducted prior to purchase, and made no objections at the time. They say that any remediation expenses were the result of damage caused after the closing date, or were the result of renovation work the claimant had intended to perform all along. Procedural Background

[ 3 ] This claim began on January 8, 2021 as an Application in the Supreme Court of Nova Scotia. The matter was initially set to be heard on November 8 and 9, 2021. However, the claimant then elected in August 2021 to quantify his loss at $25,000.00 and as a result to have the proceedings transferred to this Court. [ 4 ] The parties agreed to proceed in this court by way of extensive affidavit evidence. They also agreed that the affiants could be asked additional questions in direct, and that they could then be cross-examined.

Documentary Evidence [ 5 ] With respect to documents, I was provided with the following: a. Ex 1, Claimant’s Book of Exhibits; b. Ex 2, Defendants’ Book of Exhibits; and c. Ex 3, Defendants’ Supplemental Book of Exhibits. Claimant’s Witnesses [ 6 ] On behalf of the claimant I had the following affidavit evidence, some of which was supplemented by additional questions in direct and/or cross examination: a. Daniel Forbes (Ex 4), the claimant; b. Jason Frayne (Ex. 5), a tenant of the defendants in the basement apartment of the Property and then of the claimant (after closing), in the upstairs apartment; c.

Reggie Dyck (Ex. 6), the owner of R & R Video Inspections and Repairs, who had conducted an inspection of the septic system for the claimant in February 2020; d. Kevin Steeves (Ex 7), a tenant of the defendants who said that he had informed the defendants in the past of problems with the septic system; and e. Melissa Reid (Ex 8), a tenant of the defendants, and then of the claimant, in the upstairs apartment of the Property. [ 7 ] I also heard from two witnesses whose testimony was not supplemented by affidavits. These were a.

Connor Smith, a septic technician who had met with the claimant in July 2020 to discuss the problems the latter was having with the Property’s system. During the course of that discussion he had looked into the large septic tank that formed part of the septic system, and b. Frank Lockyer, a civil engineer for over 40 years, who had experience with the design of septic systems. He testified as to the design, installation and operation of various types of septic systems, and what could go wrong with them.

Defendants’ Witnesses [ 8 ] On behalf of the defendants I had the following affidavit evidence, some of which was supplemented by direct questions or cross examination: a. John Woodroffe (Ex 9), one of the defendants; and b. Jill Hurley (Ex 10), one of the defendants. [ 9 ] I also heard the testimony of Mr Greg Skelhorn, a shareholder and principal of North Star Surveying & Engineering Ltd (“North Star”).

Mr Skelhorn is an engineer with extensive experience in the design and installation of septic systems who had looked at the claimant’s septic system prior to its replacement in July 2020. [ 10 ] I should note that at the hearing counsel for the claimant had objected vigorously to my permitting Mr Skelhorn to testify. She had only learned of the defendants’ intention to call him to testify a week before the first day of the hearing. She had registered her objection with defence counsel, and then at the hearing.

There were two grounds for the objection. [ 11 ] First, counsel had briefly spoken to him about the matter. It was not clear when exactly she spoke to him, but I proceeded on the basis that it was either just before or just after the proceedings were commenced in the Supreme Court. She had discussed the claimant’s theory of the case with him. Once Mr Skelhorn learned from her that a North Star employee had designed and certified the defendants’ system in 2012 he declined any retainer. [ 12 ] Second, Mr Skelhorn, by virtue of his involvement with North Star, was not an objective witness.

He was in a conflict of interest. [ 13 ] I ruled that Mr Skelhorn could testify. With respect to the first objection, I ruled that merely discussing the bare bones of a case with a potential expert did not create a privilege of any kind. To explain the theory of the case was not much different from pleading details of a claim. To rule otherwise on such facts could encourage a party to “sterilize” possible experts by discussing a matter with them in a general way without actually retaining them.

With respect to the second, the fact that Mr Skelhorn was a principal of North Star (which was not a party in any event) might go to weight; it didn’t preclude his testimony. Findings of Fact [ 14 ] As already noted, the evidence of many of the witnesses was contained in affidavits that were supplemented by questions in direct and on cross. Overall there was not much difference in their testimony as to the facts—the differences lay more in the inferences (legal or factual) to be drawn from those facts.

That being the case, I will simply set out the facts as I found them to be, supplementing those finds with a discussion of any conflicting testimony where necessary. [ 15 ] The defendants own 14 apartment units, 12 of which have septic systems. They are familiar with the use, operation and maintenance of such systems. [ 16 ] The Property, at least as of Oct 1995, had been authorized by the Halifax Regional Municipality (“HRM”) as a single unit dwelling: Ex. 2, Tab 6. [ 17 ] The defendants purchased the Property in 2011. They never lived there.

At the time the Property had a finished basement apartment with its own kitchen, small bathroom and shower. The defendants had purchased the Property for their daughter and her husband. Ms Hurley’s son lived in the basement while her daughter and husband lived in the upper part of the Property.

[ 18 ] In 2012 the defendants became aware of issues with the septic system: Ex 10 (Hurley), para.12. In August 2012 the defendants engaged North Star to design and install a replacement septic system for the Property. The defendants accepted North Star’s recommendations as to what needed to be replaced or installed: Ex. 10 (Hurley), paras.14-16; Ex 9 (Woodroffe), paras.13-16. The system was designed for a flow of 1,000 litres per day.

As installed, it consisted of the following parts, moving downstream from the house: a. a pipe from the house to the existing concrete septic tank, where solids settled to the bottom (assisted by baffles) while the lighter waste water flowed through a filter to b. a pump chamber, which pumped the waste water to c. a Ecoflo biofilter tank, which was designed to filter out impurities, which then flowed past d. a UV disinfection unit, which then flowed into a ditch by the Miller Lake Road: see Ex. 1, Tab 1. [ 19 ] The decision to use the existing septic tank in an otherwise new system was not unusual.

The tank was concrete, large and heavy. Such tanks have a long life cycle, much longer that the other parts of a septic system. It is possible that during or after the installation of the other parts of the replacement system that there was some uneven settling in the ground. There was some suggestion that any such unevenness could have caused some back flow to the house, or some overflow from the septic tank into the pump chamber. The evidence was uncertain at best.

Suffice it to say at this point that the system was approved and certified following its installation. [ 20 ] After the installation of the new septic system the defendants did not hear of any issues or complaints about slow sink draining, or septic related issues, before late 2017 or early 2018: Ex. 10 (Hurley), para.17.

Ms Hurley also testified that they had never had more than three tenants living in the Property, and that to her knowledge the septic system was designed to accommodate more than three people. [ 21 ] The daughter’s marriage broke up and the husband (and then the daughter) moved out of the upper unit in 2014. The defendants’ son lived for a time in the basement apartment. [ 22 ] The defendants rented the upper unit to Ms Reid in mid 2014: Ex 10 (Hurley), para.19. [ 23 ] In January 2015 the defendants rented the lower flat to Mr Steeves: Ex. 10 (Hurley), para.18.

Sometime in 2017 they consented to Mr Frayne moving into the lower flat along with Mr Steeves: Ex. 10 (Hurley), para.20. The Evidence Regarding Reports of Slow Drains or Septic Issues [ 24 ] Ms Reid lived in the upstairs unit until November 2020. She deposed that she never experienced any overflows from the septic system. She deposed that she did “experience slow drainage in my sink whenever the septic overflowed,” and that the slow sink happened “multiple times each year” while she lived in the Property: Ex. 8, paras.7 and 8.

In cross examination she clarified that she did not report the slow drain to anyone, and that she had not actually witnessed any septic backup. Her assumption about there being a septic backup was based on calls from the downstairs tenants for her to stop putting any more water into the system; and from a smell from the septic system outside the house. [ 25 ] Ms Hurley deposes that from late 2017 forward she would receive roughly two calls or texts a year from Ms Reid about her sink draining slowly. The calls would coincide with communications from the lower unit ( i.e.

Mr Steeves or Mr Frayne) about the same issue: Ex. 10 (Hurley), para.21. [ 26 ] Mr Frayne moved into the downstairs apartment in 2017 or 2018. There was some uncertainty in the affidavit evidence as to when exactly he moved in with Mr Steeves, but in cross Mr Frayne acknowledged that it was likely January 2018. He deposed that while living there he witnessed “the septic system backing up into the apartment many times:” Ex. 5 (Frayne), Tab 8. He estimated it happened once every four to six months. However, on cross he changed the frequency to once every three to four weeks, or a month. When it happened

he called one of the defendants. He testified that when he called Mr Woodroffe would come over and remove the septic filter to clean it. [ 27 ] Mr Steeves deposed that after he moved into the lower apartment he experienced a number of sewage system “back ups” into the apartment. He estimated that it happened three or four times a year: Ex. 7 (Steeves), paras. 7-8, adding in cross examination that it “depended on water usage.” Each time it happened he advised the defendants. He testified in cross that Ms Hurley would respond, either by having the system pumped or snaked.

He said the defendants always responded, either immediately or within a day or two. [ 28 ] Mr Woodroffe, who generally performed any maintenance required of the properties owned by the defendants, would attend the Property to deal with the reports of slow drainage. He deposed that his understanding at the time was that something had been flushed down the toilets or the sinks that had caused the slow drainage.

He would visit the Property and do three things: open the top of the septic tank to check the height of the water; check to see if anything was blocking the filter; and open the top of the septic pump to confirm that it was working properly. He deposed that each time he did this the system would appear to be working properly—and that in any event the slow drainage problem had resolved itself by the time he arrived: Ex. 9 (Woodroffe), paras.23-25. [ 29 ] In May 2018 there was another complaint about slow drainage. Mr Woodroffe attended and performed his three-step procedure.

He deposed that the system appeared to be working, but that the interior plumbing pipes in the house were still draining slowly: Ex 9 (Woodroffe), paras.26-27. He contacted Moslemi Mechanical, who was asked to “troubleshoot toilet/floor drain back up.” The pipes were snaked and the problem resolved: Ex. 2, Tab 9. [ 30 ] In June 2018 the defendants were advised by the tenants that the septic pump alarm was sounding. Mr Woodroffe attend and performed his three-step procedure. On this occasion the water level in the septic tank was higher than normal. He removed the screen to see if it was clogged with solids.

It did not appar to be: Ex. 9 (Woodroffe), paras.28-29. As a result he contacted AIM Pumps & Filtration. It checked and replaced the septic pump as well as cleaned the septic screen: Ex. 2, Tab 10. The Defendants List the Property for Sale [ 31 ] On July 24, 2019 the defendants listed the Property for sale for $250,000.00. Central to one of the claimant’s complaints is the following passage in the listing cut: “This charming duplex consists of two well-maintained units.

All the heavy lifting has been completed for you, with new roof (2014), windows (2019), rear decks (2015), renovated garage (2018), and septic system (2012):” Ex 2, Tab 1. [ 32 ] Mr Forbes testified in direct that he had taken this statement to mean that the entire septic system ( i.e. including the septic tank) had been replaced. He did not discuss this understanding with the defendants. [ 33 ] On August 7, 2019 the claimant made an offer for $235,000.00 with a closing date of October 1, 2019.

The defendants countered for $241,000.00, with a closing date of November 1 st , which was accepted by the defendants on August 8 th . Included in the completed agreement of purchase and sale (“APS”) were the following: a. the APS form had a

section allowing for either the provision of, or request for, a property condition disclosure statement (“PCDS”) —but it was not “ticked”—hence no PCDS was provided or requested; b. the claimant as buyer was entitled to conduct a property inspection, such to be deemed satisfactory unless notified in writing to the contrary by August 20, 2019; and c. the APS was “subject to Buyer, at the Buyer’s expense, to conduct tests and inspections of the systems, if applicable, to determine the condition and function of the septic system,” the results of which were deemed satisfactory unless notified to the contrary in writing by August 20, 2019: Ex. 2, Tabs 2-5.

[ 34 ] The APS also contained a number of fixes to the Property at the defendants’ expense, including a requirement to have the exterior septic UV light utility box repaired and inspected to ensure the unit is working properly, if not it is to be repaired or replaced: Ex 2, Tab 5. [ 35 ] On August 20, 2019 the claimant received a home inspection report from Priority Home Inspections Inc: Ex. 4 (Forbes), Tab C. The report runs to 77 pages, and covers most sections of the house.

Excluded from the inspection were the following: “Septic system - concealed plumbing - the performance of floor drains or clothes washing machine drains:” p.57. It recommended “consulting with seller concerning private systems and inspection, if present, by appropriate licensed professional familiar with such private systems:” p.57. It notes that the bottom of the shower stall in the basement was “very dirty:” p.58. A photo of the stall shows what appears to be a black substance of some kind around the bottom edges and floor of the stall.

The report goes on to note that the inspection does not include “underground components (e.g. oil tanks, septic fields, underground drainage systems:” p.65. With respect to the basement level, at p.71 there is the following under the subhead “Basement\Wet basements – vulnerability:” “Condition: I did not observe a floor drain or sump pump in the basement to deal with any potential water issues. Recommend you correct by installing a drain or a sump pump.” [ 36 ] The claimant also obtained a video inspection of the septic system on August 20, 2021.

The report was not reduced to writing, but the video was attached as Ex. B to Mr Forbes’ affidavit: Ex. 4 (Forbes), Tab B. As described by the video technician, the camera was inserted through a clean out in the kitchen and then pushed out into the septic tank. The camera was then withdrawn from the tank and then through the waste water pipe connecting the tank to the house’s plumbing system.

While he is withdrawing the camera the technician notes that there must have been a blockage in or about the tank at one point, but that “it was clear now.” When the camera came out of the kitchen clean out he observed that one could see “a little bit of grease there.” He also noted that the pump and alarm flow had been tested and that “all that stuff is working.” [ 37 ] Mr Forbes deposed that while he was concerned about purchasing a property with a septic system he was assured, based on the listing cut, “that the septic system on the Property had been recently replaced [ i.e. in 2012]:” Ex. 4 (Forbes), paras.8-9.

In his testimony he acknowledged that he did not ask the technician about the comment about the blockage in the past. [ 38 ] Mr Forbes did attend the Property himself to view it twice prior to closing. [ 39 ] On August 21, 2021 the defendants received a maintenance report with respect to the EcoFlo filtration system. The only thing of note in the report related to the peat filtering material: “very degraded:” Ex. 3, Tab 9. The testimony of Mr Skelhorn was that EcoFlo systems used peat as a filtration medium, and that depending on use the peat had a life cycle of between eight to ten years.

Calling it “degraded” was simply a way of signalling that the peat that filtered the effluent water was nearing the end of its life cycle and would have to be replaced. It was, in other words, a function of a normal system. It was not necessarily a sign of a problem. The report was addressed “to the owner” at 136 Miller Lake Road. The defendants did not pass this report on to the claimant, though the evidence as to whether they received it before the closing.

Events Post August 20 th (Completion Date for Conditions) and Prior to Closing on November 1 st [ 40 ] Mr Frayne deposed that on October 2, 2019 the septic system backed up into the basement apartment. He took a video: Ex 5 (Frayne), para.15. The video shows some water on the flow that appears to have oozed out from between the joins in the laminate floor covering.

Mr Frayne can be heard saying that this is the “15 th or 20 th time, at least the 20 th time” it has happened and “why can’t it be fixed.” The water in the video appears clear, which did not seem consistent with his testimony that there was faeces and bits of toilet paper in the water. He elaborated by saying that the wall between the living room and the furnace/laundry room prevented faeces from entering the former—but that there was a septic smell in the laundry room. [ 41 ] He did not send the video to the defendants.

He explained that he “figured word of mouth was good enough.” He did send the video to the claimant after the sale closed. He allowed in cross that the water may have come from the washing machine “because it was hooked in to the sewer ... it was the same pipe as the toilet, so for sure could have washed back.” [ 42 ] Mr Woodroffe agreed that there had been a water spill in October 2019. However, his understanding at the time was that the spill occurred while a tenant was running the washing machine—and further that the spill stopped once the machine was turned off.

When he attended the Property the next morning he was told that the water had been cleaned up and that the washing machine was working again.

He was not told that the spill was sewage: Ex. 9 (Woodroffe), paras.36-37. [ 43 ] This spill was not passed on by the defendants to the claimant. [ 44 ] Mr Forbes also testified that sometime between August 20 th and November 1 st he and his real estate agent visited the Property. They happened so see Ms Hurley. She described to him how to remove the septic filter and clean it. Ms Hurley testified to similar effect. She said that she showed Mr Forbes where the screen was and that it was cleaned from time to time.

She said that she herself had never actually removed the filter, just that she had had others do it. [ 45 ] Ms Hurley acknowledged that they did not mention that there had been issues with slow drains in the past, on the ground that calls about slow drains were “not a regular thing,” happening only roughly twice a year. She agreed she had not mentioned the spill of water in October 2019, or the fact that the septic tank was older than the other components that had been installed in 2012.

Events After Closing on November 1, 2019 [ 46 ] The claimant’s original intent had been to move into the lower unit so that he had a place for his young daughter to stay when visiting. [ 47 ] Shortly after closing the claimant and his father came to the Property to perform some painting. The claimant noticed that some of the laminate flooring near the laundry room had warped or lifted a bit: Ex. 4 (Forbes), paras.21-22. His father and he pulled up a few floor boards and saw that the bottoms were black with mildew and mold.

His father testified that there was a bad odour to it, “more towards a sewage smell.” He also testified in cross examination that “as soon as you walked in it had a really bad smell to it” though after a while one got accustomed to it. The claimant and his father kept pulling up floor boards, finding mold underneath, and eventually decided to replace the entire floor. In the basement laundry room (which was bare concrete) they found flecks of white paper which they took to be bits of toilet paper. They painted that over. [ 48 ] Their repair and replacement work extended into the bathroom.

The claimant deposed that “[t]he rot in the bathroom led us to discover extensive mold growth on the drywall:” Ex. 4 (Forbes), para.27. [ 49 ] The repair and replacement work took longer than expected. As a result the claimant spent Christmas at his parents’ house. On December 25, 2019 he received a call from Ms Reid (who was still a tenant in the upstairs unit) that she smelled sewage in the house, and thought that the septic was backing up: Ex. 4 (Forbes), para.34.

Ms Reid for her part deposed that on that day she “noticed my sink backing up” and that she had texted the claimant to let him know, saying that she “thought it was the septic backing up:” Ex.8 (Reid), paras.10-11.

What appears to be a selection of her text messages with the claiimant was attached to her affidavit, and include the following: [Ms Reid]: I think the sewer may be backed up. or the screen needs to be scraped is what they did when backed up b4. there’s a strong sewer smell out front of the house that just started to be smell at around 6pm when I got back. just a heads up. not sure how bad it backs up in basement. [Mr Forbes]: Ok. Thanks for the heads up. I’ll see if ... [rest of text is cut off] *** [Ms Reid]: I’ve noticed drains in kitchen sink are a bit slower to drain. [Mr Forbes]: Ok.

Cause I notice when you do laundry I get a bit of a septic smell downstairs. Which normally indicates a plugged vent. Symptom is drains are slow. I’ll look into it. Next week I’ll try to install the dryer vent for you. I’ll see if I can come through the day when your not home.

[ 50 ] I pause to note here that while the first text of the exhibit is dated December 25, 2019, the text exchange between Ms Reid and Mr Forbes does not have a date. I assume given Ms Reid’s statement in her affidavit (and hence find) that the second exchange was on the same day. The claimant deposes that Ms Reid’s text was the first notice he had of “the septic backing up at the Property:” Ex. 4 (Forbes), para.35. [ 51 ] The claimant deposed that since he was two hours away on that day he asked Mr Reid to use water sparingly and that he would investigate when he got back.

Upon his return he opened the septic tank cover and saw nothing wrong. He added that he “had noticed a sewage smell in the apartment a few times, but hadn’t seen anything concerning:” Ex. 4 (Forbes), para.38. [ 52 ] On January 2, 2020 while at home the claimant notice that the septic had backed up into the shower. He went outside, pulled up the septic filter, and cleaned it in the way Ms Hurley had demonstrated to him. This appeared to stop the backup: Ex. 4 (Forbes), paras.39-40.

However, he “started noticing a strong and persistent sewage smell throughout the Property:” para.41. [ 53 ] On January 20, 2020 the claimant’s toilet would not flush and appeared to be plugged. He asked Ms Reid to minimize water use as he tried to determine the cause. He deposes that at that point Ms Reid told him that “the sewage smell and the septic back ups were a common problem at the property:” Ex. 4 (Forbes), para.45.

At that point he was introduced to Mr Frayne (who was then living with Ms Reid) and “shared reports of chronic, systemic issues with the home’s septic.” Mr Frayne also told him about the October 2019 water spill and showed him the video he had taken at the time: Ex. 4 (Forbes), paras.47-49. [ 54 ] Mr Forbes deposed that Mr Frayne then “showed me a hidden hole in the furnace room under a shelving unit and washing machine that the sewage typically backed into.

Raw sewage was sitting stagnant in a hole in my floor:” Ex. 4 (Forbes), para.50 [ 55 ] For his part, Mr Frayne deposed (Ex.5) as follows: 16 While I lived in the basement apartment, I also discovered a hole in the furnace room that was hidden by the washing machine and a shelving unit.

This was often where the overflow from the septic would seep into the apartment. 17 When it was not overflowing, this hole would sit filled with sewage. [ 56 ] Mr Steeves in his affidavit did not refer to any “hidden hole.” There is nothing in Mr Frayne’s affidavit to suggest that he had mentioned the existence of this hole to the defendants.

The defendants in their affidavits deny ever having had any knowledge of the hole, or that sewage was backing up into it: Ex 9 (Woodroffe), para.9; Ex 10 (Hurley), para.9. [ 57 ] The claimant also deposed that Mr Frayne at the same time “also pointed out that the white material on the floor was not dryer lint as I had thought. He explained it was actually toilet paper that had made its way through the system and back into the house:” Ex 4 (Forbes), para.51. [ 58 ] The next day the claimant had a plumber come to snake the system.

The plumber reported after snaking that “as of now everything is as per normal:” Ex. 4 (Forbes), para.52 and Tab J. [ 59 ] The claimant then turned to his insurer. He was denied an insurance claim on the grounds that the problematic back up had happened prior to his ownership of the house. He sought an estimate to restore and repair the septic system and was told it would cost in the range of $39,000.00: Ex. 4 (Forbes), paras.53-54. [ 60 ] On February 11, 2020 the claimant had to remove and clean the filter when the tank began backing up again. However, when

removing the filter it broke: Ex. 4 (Forbes), paras.55-56. He then obtained another video inspection of the system.

He deposed that he was advised that “the primary [septic] tank was a concern as it consisted of an old bell syphon system, and that someone had adapted a new style filter to it:” Ex 4 (Forbes), para.57. [ 61 ] On February 11, 2020 the claimant asked his agent to ask the defendants who had installed the septic system since he had “someone giving a price on repairing and they’d like some information on it.” His agent replied the next day as follows: “The new peat moss system and pump tank was designed by North Star Engineering, installed by an approved installer overseen by them.

The initial tank that the effluent flows out of the house into had been there for many years, don’t know who did it. Premiere Tech out of Quebec does annual inspections and warrants the peat moss system if you contract them to, costs about $150-200 per year:” Ex. 4 (Forbes), paras.58-59 and Tab M. [ 62 ] After learning that North Star had been involved the claimant called it. Mr Skelhorn came out to take a look at the system.

The claimant recalls him telling him that “the issue was likely with the primary tank:” Ex 4 (Forbes), para.61. [ 63 ] Mr Skelhorn testified that primary tanks such as the one were heavy, constructed of concrete and had a life span of 50-60 years. He explained how these types of systems worked. Effluent would flow from the house to the primary tank by a pipe. Once the effluent entered the tank the solids would settle to the bottom. That process was assisted by the existence of one or two baffles in the tank that slowed the fluid, letting the solids settle.

The lighter fluid then moved through a filter into the pump chamber. The filter was intended to stop any large solids from passing into the pump chamber. The pump chamber had two floats, one lower, one higher. When the lower float was lifted the pump would come on and pump the water into the top of the Ecoflo. The effluent would then filter down through the peat moss, emerge at the bottom, and then flow through a UV light (to kill bacteria) and from there flowing out via a pipe to a road side ditch.

If for some reason the pump chamber filled too quickly, or the pump was not working properly, then the water in the chamber would rise to the upper float which, once activated, would trigger an alarm. [ 64 ] Mr Skelhorn also testified as to what could go wrong with such a system. If the primary tank was not draining for some reason the effluent level might rise and then flow back up into the inlet pipe. In such a case it could also overflow into the pump chamber and again cause a backup through the system.

He testified that when he was there he did not see anything of concern about the system (though he allowed that he only looked in the tank from the outside). He offered that some neighbouring construction work might have affected the discharge pipe in some way which may have caused a problem. [ 65 ] Mr Forbes eventually decided to replace the septic tank with a new one. That took place in July 2020. The Hidden Hole in the Laundry Room and the Cause of Backups [ 66 ] As noted above, some time after closing Mr Forbes discovered the existence of a hole in the basement floor.

The hole was hidden by under a metal cover, which in turn was under the washing machine. I am satisfied that the defendants, who had never lived in the Property, were not aware of its existence. Mr Frayne (tenant) himself referred to it as “hidden.” [ 67 ] The evidence as to the purpose of this hole was inconclusive. One of the witnesses suggested that a previous owner had considered installing a toilet in what became the laundry room, or that it had been intended for a sump pump. The evidence was that there was a pipe that led from the hole to the septic tank.

Looking at the totality of the evidence regarding the septic system, the various episodes of slow draining sinks and back ups, and the sewage smell that was sometimes noticed, I was satisfied on balance that at least some of the issues were caused by effluent or odour that backed up through the pipe into the hole and then overflowed the top of the hole. [ 68 ] I should also say at this point that I was not persuaded that the claimant had established on a balance of probabilities that there was any one cause for the slow draining sinks or back ups that had been complained about by the tenants.

Some of the problems (for example those rectified through snaking) may have been the result of the tenants’ use of the system; some may have been caused by something blocking the filter; some many have been caused by the way the new parts of the system were connected to the old tank; and some may have been caused by subsistence in the system. Nor was there any evidence as to whether the number of issues was unusual for a septic system being used by tenants although, having said that, I am prepared to accept for purposes of what follows that the number of problems was higher that would “normally” be the case.

The Sale of the Property by the Claimant [ 69 ] As already noted, the claimant commenced this action in the Supreme Court of Nova Scotia on January 8, 2021. On June 3, 2021 the claimant listed the Property for sale for $399,100.00. He eventually sold it on June 18, 2021 for $398,000.00. The difference between his purchase price and his resale price was $157,000.00. The claimant then capped his claim against the defendants and transferred his claim to this court in August 2021.

In the brief filed on his behalf on March 7, 2022 the claimant laid out his damage claim as follows (with numbers that were slightly modified by counsel at trial): a. ....................................................... contractors to address septic back ups $772.25 b. ............................................................................ cost of replacing filters $2,740.45 c. ................................................................. cost of replacing septic system $4,600.00 d. ..... Removal of damaged basement flooring, cabinets, walls, and bathroom $1,114.97 e. ................

Supplies to fix basement flooring, cabinets, walls and bathroom $4,917.77 f. .............. Cost of claimant’s labour for repair damage caused by mould, etc $4,200.00 g. ...................................... Cost of claimant’s father’s labour for same work $4,200.00 h. ..................................................................................... General damages $100.00 i. .................................................................................................... TOTAL $22,655.44 Costs j. ..................................................................................................

Filing fee $218.05 k. ............................................................................................. Transfer fee $99.70 l. ............................................................................................... Witness fee $30.00 m. .................................................................. Service of witness subpeonas $739.00 n. ................................................................................................ Expert fee $920.00 Submissions on Behalf of the Claimant

[ 70 ] Counsel acknowledged that a finding of negligent misrepresentation required a duty of care; a representation that was misleading and was negligent; that the person to whom the representation was made must have relied upon it to their detriment; and causation of loss. Counsel submitted that the statement in the listing cut sheet to the effect that the septic system was new (at least as of 2012) was wrong and was negligently made. She submitted that the septic system was defective, and that the defect was latent.

A prospective buyer, relying on the listing cut, would have no reason to know that the system was no in fact new, but was rather cobbled together out of an old pre-existing tank and new parts that were fastened or connected to it. The frequent complaints of slow draining sinks was a sign that the system was defective, as was the spill in October 2019. The defendants had a duty to reveal both to the claimant, but they did not.

They did not tell the claimant about the sewage odour. [ 71 ] Counsel pointed to the testimony of Mr Smith (of Premiere Tech) to the effect that he would not have connected new components to an old tank; and to the testimony of Mr Lockyer that the tank was undersized for the number of people living in the house. When the system was first designed there were only three bedrooms in the house, which meant that the design flow of 1,000 litres/day was acceptable.

However, by the time of the sale there were four bedrooms, which, according to Mr Skelhorne, called for a flow of 1,200 litres/day—meaning that the system was undersized. That fact was evidenced by the frequent back ups and smell. [ 72 ] Counsel submitted that because of the defendants’ misrepresentation the claimant had to expend the cost of repairs and replacement, both of the damage caused by the backups and for a new tank. He also could have sold the house for more (or at least achieved a larger profit) in what by all accounts was a red-hot housing market.

Submissions on Behalf of the Defendants [ 73 ] Counsel submitted that the claimant had “fallen down a rabbit hole” inasmuch as most of the evidence in this case was irrelevant insofar as negligent misrepresentation was concerned. [ 74 ] Counsel submitted that there were only two representations that the claimant could ground his claim on: the listing cut, and Ms Hurley’s discussion about the septic system at the site in the period between the condition completion date and the closing. [ 75 ] Dealing with the listing cut, counsel submitted that on a fair reading it could not be interpreted as a representation that the entire septic system was new.

First, the statement “with new roof (2014), windows (2019), rear decks (2015), renovated garage (2018), and septic system (2012)” was ambiguous at best. Did the word “new” refer to each and every item in the list? Or just to roof, windows and decks, with “renovated” referring to the garage and the septic system? Moreover, and even assuming that “new” could be applied across the list, how “new” in the spring of 2019 could a 2012 septic system be said to be? As well, and assuming that the defendants had intended the word “new” to apply to the “septic system,” there was no negligence on their part.

They had approached North Star in 2012 to design and install a septic system. North Star was the expert. North Star told them what they needed, and they accepted that representation. There was nothing to suggest that they knew or should have suspected that North Star’s decision to incorporate the old existing tank into the design might be problematic. [ 76 ] The claimant may have assumed that the system was new, but the assumption was unreasonable.

He did not confirm his assumption with the defendants—and if it was so important to him then he ought to have done so. [ 77 ] As far as Ms Hurley’s comments about the system are concerned, they were made after August 20 th . The condition as to the septic system was satisfied as of that date. What Ms Hurley said after that date was irrelevant, as was the October spill and for the same reason. [ 78 ] Turning to the question of reliance, counsel submitted that the claimant did not rely on the representation in the cut sheet. He instead relied upon his own home and septic system inspections.

Indeed, he and his inspector had noted the broken UV light and had made it a condition of closing. [ 79 ] Then there was the question of causation. Counsel submitted that the claimant had not proved that the back ups were caused by defects in the old tank. What evidence there was suggested that the problems originated from inside the house, by way of blockages caused by materials being flushed down the system. The fact that on previous occasions back ups or slow draining sinks could be resolved through the use of a snake proved that fact.

Counsel also pointed to the fact that there was a floor or back up even after a new tank was installed.

[80] Counsel accordingly submitted that the claim should be dismissed. Submissions in Reply for the Defendants [81] In brief reply counsel distinguished some of the cases relied upon by the defendants. Analysis and Decision [82] The law with respect to the purchase of second-hand (that is, not new) homes is well established. Such sales are subject to the ruleof caveat emptor.

Absent fraud, mistake or misrepresentation a purchaser takes an existing property as he or she finds it, “whether it bedilapidated, bug-infested or otherwise uninhabitable or deficient in expected amenities, unless he protects himself by contract terms:”Prof Laskin (as he then was), cited in Nixon v. MacIver, 2016 BCCA 8, approved in Apogee Properties Inc v Livingstone 2018 NSSC143 at para.36; Thompson & Martin v. Schofield & White 2005 NSSC 38 at para.16.

The rule means that an agreement of purchase andsale for a second-hand house does not carry with it any statutory express or implied warranties, such as those created under the Sale ofGoods Act or the Consumer Protection Act. If a purchaser wants a warranty of some kind he or she must make it an express condition ofthe APS. [83] However, caveat emptor applies only to patent defects. It does not apply to latent defects, which are defects not discoverable by apurchaser through reasonable inspection. Even here the law is rather strict.

A seller must disclose a latent defect “only if it is dangerousin some way, or if asked directly whether a particular defect is known by the seller to exist:” Black v Honsberger 2021 NSSM 55 atpara.16.

If the seller fails to disclose a latent defect that is dangerous; or responds to questions regarding the existence of latent defects ina fraudulent or negligent manner; or if they have intentionally covered over such defects and thereby made them difficult to spot, he orshe will become liable: Apogee at para.37; Thompson at para.18. [84] I emphasize here that the duty to disclose latent defects applies only to dangerous defects. There is a suggestion to the contrary inMacIsaac v.

Urquhart 2019 NSCA 25 at para.53: “One exception [to the rule of caveat emptor] is that it does not apply where a vendoris aware of a latent defect of the property and does not disclose it to the purchaser.” However, a review of the two authorities cited insupport—McCluskie v. Reynolds (1998) (BC SC), 65 BCLR (3d) 191 (BCSC) at para. 54 and Torfason v. Booth 2017ABQB 387 at para.81—does not reveal support for such an extension of the rule. Torfason was a case involving defects in title, notphysical defects in the property.

And a review of the discussion in McCluskie at paras.46-53, which led up to para.54, make clear that thereference was to latent defects that render a house unfit for human habitation or render it dangerous. [85] Turning to the claim before me, it rests on two allegations of negligence. The first is what the claimant says was a representationthat the septic system was new, a representation he says was wrong—and negligently made—because one of its components was a pre-existing septic tank.

The second is what he alleges was a duty on the defendants’ part to advise him of septic back ups that, he alleges,were signs of a defective septic system. The Misrepresentation As To The Age Of The System [86] I deal here with the first allegation. Bearing in mind the elements of proof, I note the following. [87] First, and however the statement in the listing cut is read, it was clear that the system itself was not “new” in the sense of havingjust been installed prior to being listed for sale. The septic system was represented as having been installed roughly seven years beforethe property was listed for sale.

That is seven years of winter freezes and spring rains. It is seven years of occupancy and use. Even if theentire system was new in 2012, the relevant issue in 2019 was whether it had worked—not how old it was, or whether it was composedof all new parts on installation. Hence the question that would normally arise in such a case was whether and for whatever reason, itbacked up or became clogged more frequently than could be said to be normal.

But the claimant asked no such questions, relying insteadon what his home and septic inspectors reported to him. [88] Answers to the question of how well a septic system is working are to be found in direct questions to a seller, or in a PCDS. Thelatter can obligate a seller to disclose, to the best of their knowledge, the existence of any issues—latent or not—in the property. I believe

I can take judicial notice of the fact that PCDS generally do have sections that deal with septic systems. But in the case before me the seller did not provide, and the buyer did not ask for, a PCDS. I was not persuaded that a buyer who does not require a PCDS as a condition of purchase can be in the same or better position as a buyer who has asked for and relied upon, as a condition of the APS, a PCDS. [ 89 ] Second, and on that point, despite all the evidence that was adduced the claimant failed to establish on a balance of probabilities what it was that was causing any or all of the back ups.

The evidence instead pointed to a number of possible causes unrelated to the use of an old tank. For example, the fact that snaking would relieve a back up or slow draining sink points to a blockage caused inside the house or between the house and the septic tank. That points to the occupant’s use of the system, not to a problem with the system itself. [ 90 ] To take another example, there is the issue of the hidden hole that was found covered up under the washing machine.

The hole— perhaps intended by an earlier owner for use as a sump pump or for another toilet—was connected to the septic tank by means of a pipe that opened into the hole. Given that construction it would not be surprising that the smell of sewage could seep into the laundry room. Nor is it surprising that a blockage somewhere in the system could lead to effluent backing up into the hole and then, on occasion, overflowing that hole.

But neither has anything to do with whether the septic system was old or new. [ 91 ] Third, the claimant also failed to establish that the defendants were negligent in making the statement that they (or rather their agent) made in the listing cut. The evidence was clear that in 2012 they asked an expert in the design and installation of septic systems (North Star) to design and install one for them. North Star did. It received approval for the system from the appropriate authorities.

While there was some evidence that some installers might prefer to use all new components, there was no evidence to suggest that North Star’s decision to incorporate the existing tank was wrong in all cases. Even it was, there was no evidence to suggest that the defendants knew or ought to have known that it was wrong. In the end then the defendants were relying upon the design and recommendations of a professional experienced in the field.

There was nothing to suggest that they knew or ought to have known that there was a defect in the design recommended to–and accepted by—them in installing the “new” system in 2012. The Alleged Failure To Warn Or Advise Of Problems With The Septic System [ 92 ] The claimant alleges that the defendants should have warned him about the number of back ups. There are several difficulties with this allegation. [ 93 ] First, it again assumes rather than proves that there was something wrong with the system itself rather than with the way it was being used.

As already noted, the claimant did not establish on a balance of probabilities that there was a problem with the system itself as opposed to the way it was being used. [ 94 ] Second, it assumes that the defendants knew or ought to have known that the septic back ups were signs of a defective system. However, it is common knowledge that septic systems are susceptible to clogs and resulting back ups. Septic systems are not municipal sewer systems. The fact that back ups happen from time to time—and can be fixed by snaking a pipe or cleaning a filter—is not in and of itself a sign of a defective system.

There was no evidence to suggest that the defendants thought the back ups they had to fix from time to time was anything other than par for the course with a septic system. [ 95 ] Third, and in any event, it assumes that a seller of property on a septic system warrants that the system is working perfectly for all purposes. But that cannot be the case, if only because a septic system’s efficiency is dependent at least in part on the burden the purchaser will put on the system. A couple places a different burden on a septic system that a family of five with three teenagers.

If a purchaser wants a warranty he or she must ask for one. There was none here. The APS had standard form conditions with respect to the provision of a PCDS that could have been required by either the seller or the purchase. None was requested. In fact, the onus was expressly placed on the claimant as purchaser to satisfy himself as to the suitability of the system. He had it inspected; he was told by his inspector that it was working; he relied on that advice.

The onus lay on him to satisfy himself that the system was working, or that it could service the needs of the home’s occupants and the uses they were making of it. [ 96 ] Finally, if the frequency of back ups was a latent defect, it was by definition then one that the seller had a duty to disclose only if it rendered the property unfit for human habitation or dangerous.

And as unpleasant as the back ups or smell might have been from time to time, there was no evidence to suggest that they rendered the property dangerous or unfit for habitation. [ 97 ] For these reasons and on these facts I was not satisfied that the claimant had proved his claim, and for that reason it must be

dismissed.

Provisional Assessment of Damages [ 98 ] If I am wrong in this conclusion, and if I had found the defendants negligent in their representations, I would have assessed the claimant’s loss as follows. [ 99 ] The claimant’s damages break into two parts: a. the repair and replacement of the water damage (rot, mould and mildew) in the flooring and drywall, and b. the costs associated with investigating and eventually fixing (by replacing the main tank) the septic system. [ 100 ] The first—for the repairs necessitated by the discovery of the water and mould damage—is by far the largest part of the claim, and totals $14,432.74. [ 101 ] It is clear that the damage in question constituted a latent defect.

To establish this part of his claim Mr Forbes must, as a first step, establish on a balance of probabilities that the defendants knew or ought to have known of the rot and mould that was under the floor boards and inside the drywall in the basement. This he failed to do. The evidence was that it was under the floor or inside the drywall. It was not visible to the naked eye. Nor was it discoverable on reasonable inspection. The tenants who testified did not refer to any such damage.

The fact that neither the house inspector nor the claimant noticed any issue prior to sale is further support for the hidden or latent nature of the problem. [ 102 ] Did the defendants fraudulently hide this latent defect from the claimant? There is no evidence that they knew of the damage. There is no evidence that, knowing of it, they covered it up. [ 103 ] The best that could be said was that there may have been signs of a potential problem with water or dampness. It was after all a basement apartment.

The photo of the shower stall taken by the house inspector has signs of what could be black mould, and it was certainly described by him as dirty. But these are all things that were apparent to the claimant, his agent and the home inspector prior to sale. [ 104 ] For these reasons I would not have awarded this part of the claimant’s claim. [ 105 ] I turn now to the second part of the claim, which is for the costs associated with investigating and eventually fixing (by replacing the main tank) the septic system. These costs, being related to the septic system, would have been allowed.

They relate to the improvement to the septic system that was necessary to reduce the frequency of problems to “normal.” Conclusion and Order [ 106 ] Based on the above facts and reasons, I am satisfied that the claim must be dismissed. DATED at Halifax, Nova Scotia this 20 th day of May, 2022

Augustus M. Richardson, QC Adjudicator