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Sultan c

Sultan c. Gitman

2009 QCCS 4627

JM2232

 
SUPERIOR COURT

 

CANADA

PROVINCE OF QUEBEC

DISTRICT OF

MONTREAL

 

N°:

500-17-026431-059

 

DATE:

October 6, 2009

______________________________________________________________________

 

IN THE PRESENCE OF:

THE HONOURABLE PAUL MAYER, J.S.C.

______________________________________________________________________

 

DAVID SULTAN

and

CINDY DAHAN

Plaintiffs

 

v.

 

LARRY GITMAN

and

MOLLY GITMAN

and

ANITA GITMAN

And

MARC COUTURE, ING.

Defendants

______________________________________________________________________

 

JUDGMENT

______________________________________________________________________

 

1.            INTRODUCTION

[1]                      Mr. David Sultan ("Sultan") and Mrs. Cindy Dahan ("Dahan") (the "Sultans") are seeking the following damages as a result of oil contamination[1] in the basement of the home they purchased from the Defendants, Larry, Molly and Anita Gitman (the "Gitmans") in April 2004:

(a)    cost of decontamination and reconstruction                                 $138,500.00

(b)    inconvenience, loss of time and aggravation                                 $50,000.00

(c)     extrajudicial fees                                                                                $24,564.94

[2]                      With respect to Defendant, Marc Couture ("Couture"), they are claiming $188,500 for his negligent inspection of the property prior to the sale.

[3]                      The Gitmans contest the claim, arguing that the Sultans:

(a)    purchased the property below its market value without warranty as to latent defects;

(b)    were negligent in their inspection of the property; and

(c)     did not establish that the oil contamination occasioned them any harm.

[4]                      The Gitmans counterclaim an amount of $15,000, alleging that the Sultans' claim is abusive and their legal proceedings vexatious.

[5]                      Couture also contests the claim.  He affirms that he carried out his inspection with prudence and diligence.  He argues that the oil contamination was a hidden defect which was impossible to detect given that the Gitmans had camouflaged the problem.

2.            THE ISSUES TO BE DECIDED

[6]                      The Court identifies and proposes to analyse the following questions of fact and law:

(a)         Was the property affected by a latent defect at the time of sale?

(b)         Did the Sultans renounce to their recourse against the Gitmans because they purchased the property without warranty as to latent defects?

(c)         Did Couture commit a fault in the execution of his inspection and if so, what proportion of the damages claimed by the Sultans are related to that fault?

(d)         What are the damages suffered by the Sultans for which any one or more of the Defendants are liable?

(e)         In the event that the Sultans prevail in their claim against the Gitmans, are they entitled to obtain the payment of their extrajudicial fees from them? and

(f)           Are the Gitmans entitled to their counterclaim if the Sultans' claim does not prevail?

3.            WAS THE PROPERTY AFFECTED BY A LATENT DEFECT AT THE TIME OF THE SALE?

[7]                      Article 1726 of the Civil Code of Quebec stipulates that a vendor has an obligation to warrant the quality of a property sold.[2]

[8]                      In order to succeed in a claim for latent defects, the Sultans must prove that the defect:

(a)         existed prior to the sale;

(b)         was serious, the nature of which must be appreciated objectively[3];

(c)         was unknown to them, i.e. it was hidden; and

(d)         was notified in writing within a reasonable period of time.

[9]                      There is no debate over whether the written notice was given within a reasonable delay.  The Gitmans were notified of the oil contamination within days of the Sultan's knowledge that a problem existed.  We shall thus analyze the other conditions.

3.1          Did the oil contamination exist prior to the sale?

[10]                 Built in 1961, the property is situated in the City of Côte St-Luc. It was purchased by the Gitmans' mother in 1969.  It is composed of three residential units: (i) an apartment on the upper floor, (ii) one including the ground floor and the basement and (iii) one situated behind the garage.  Although Defendant Larry Gitman ("Gitman") administered the property since 2000, the Gitmans only became owners in 2002 when they inherited it from their mother.

[11]                 It is in the fall of 2000 that Gitman detected a "terrible stench" coming from a room in the basement (the "Cold Storage Room").  He sensed that the smell was caused by a leak from the oil tank.  He says he called Ultramar.

[12]                 Ultramar inspected the property for its annual routine verification on October 5, 2000.  The invoice for this service call indicates that the oil tank was sweating and leaking.  Handwritten remarks on it declare that the inspector: "a avisé que le réservoir coule - à changer - bureau avisé 6-10-2000 réservoir va être changé".  It bears Gitman's signature.[4]

[13]                 Gitman asserts that he told Ultramar to replace the oil tank and to clean up the leak[5] and that Ultramar charged him for those services.[6]

[14]                 Ultramar's records show that they, in fact, removed and replaced the oil tank on October 6th, but they do not show any amount charged for cleaning up spilled or leaking oil. [7]   Moreover, two witnesses from the company affirm that Ultramar did not clean up any oil contamination.

[15]                 Gitman recalls that, when he went to verify the work, he found what looked like woodchips on the floor and he noted the smell of oil fumes.  When he telephoned Ultramar to complain about the odour, he was advised that sometimes oil penetrates the cement and that "all he had to do was to leave the door open and air out the room".[8]

[16]                 Although he did this from time to time, in the summer of 2001 there were still odours of oil fumes.  He says that evidently "leaving the door open did not do the trick".

[17]                 He thought a lot about the problem until he had what he calls "a brain wave".  Believing that oil had permeated the cement slab, he decided to remove and replace it.  He asked a long time family employee, Vladimir Cavojsky ("Flado"), to do this.

[18]                 Gitman went to inspect the work once it was completed.  As he described it, he "had a lovely new cement slab".  There was only one problem.  The odour was still there: "hardly diminished".

[19]                 He concluded that oil must have entered the walls of the space housing the oil tank.  "Somewhat frustrated", he decided to leave things as they were and to let "the efflux of time … remove the odour".[9]

[20]                 Gitman affirms that, because of language difficulties, it is only recently that he discovered that Flado had not actually removed the cement slab, but had simply added another layer of cement over it.

[21]                 Nevertheless, Gitman decided at this point that the odour of oil was a problem he could live with, explaining that he knew "in his mind … (that) … he had an odour problem and even at that, the odour was only a problem if it disturbed his tenants, in which case, they would disturb him and then it would be a problem".[10]

[22]                 In the fall of 2003, Gitman decided to sell the property.  Since Mark Rintoul ("Rintoul"), the property manager, had his entire confidence, Gitman asked him to prepare a listing of the property[11].  Rintoul fixed the sale price at $479,000 without consulting Gitman.  He claims that he did not even see the listing that Rintoul showed to prospective purchasers.

[23]                 The Sultans visited the property with Rintoul and told him that they wanted to make an offer in the $300,000 range.  Gitman, in return, told Rintoul that he was willing to entertain a selling price of $450,000.

[24]                 Rintoul drafted an offer to purchase at that price using a model form prepared by Gitman, a member of the Quebec Bar.  Without consulting any professionals, the Sultans signed the two and half page document (the "First Offer") on November 23, 2003.[12]

[25]                 Although that evening Rintoul telephoned Dahan to let her know that Gitman had accepted their offer, a few days later he told her that she must have misunderstood that conversation.  Apparently, Gitman had decided not to accept their offer, as he felt he could obtain more for the property.

[26]                 Three months later, in late February 2004, Dahan passed by the property and noticed that it was still for sale.  She met Rintoul.  He told her that if they made a new offer at the same price, it would probably be accepted.

[27]                 The Sultans signed an offer to purchase on March 2nd in the amount of $450,000 (the "Second Offer").  It was accepted by Gitman on March 4th [13].  The deed of sale was signed on April 20, 2004.[14]

[28]                 In light of these events culminating in Gitman's decision to do nothing more about the odour of oil in the summer of 2001, it is clear that the contamination problem existed prior to the sale in 2004.  This first criterion is therefore met by the Sultans.

3.2          Was the defect serious?

[29]                 The Gitmans argue that the oil contamination was not a serious defect and that there is no proof that the oil in the ground had occasioned any harm or that it would in the future.  Their expert, Raymond Morel ("Morel"), testified that the Sultans would have had to "eat the soil to suffer from oil in it".[15]

[30]                 Morel states that the letter of September 2004 sent by the City to the Sultans had "aucune valeur".  According to him, "cette lettre veut strictement rien dire.  Ce sont des lettres faites pour terroriser les clients.He opines that if the Sultans had ignored it, nothing would have happened, as there is no legal obligation to decontaminate.

[31]                 Following up on that point, the Gitmans reproach the Sultans for not having consulted an attorney knowledgeable about such matters before proceeding with the decontamination.[16]

[32]                 The Court does not share the Gitmans' point of view on this issue.  As a matter of fact, the Court concludes that the oil contamination was a serious defect.

[33]                 Barely a month after the signing of the deed of sale, Mrs. Hezrony, the ground floor tenant, complained to the Sultans that oil smells were coming from the Cold Storage Room.  She recalls that the odours were "insupportable".  They gave her headaches.

[34]                 After Mrs. Hezrony complained to City Hall, a municipal employee inspected and took samples.  That resulted in a letter from the City in September 2004 advising the Sultans that they had 30 days to produce an environmental report and to decontaminate the property.[17]

[35]                 The Sultans, in turn, hired Mr. Simon Bensoussan ("Bensoussan") to carry out an environmental inspection in November 2004.[18]  He discovered that the original concrete slab had been covered with polyethylene sheets and topped with a half-inch of cement.  He exposed the original slab and noted that it was "impregnated with a hydrocarbon/oil related smells".[19]  It was clear to him that, instead of removing the contamination from the concrete slab and the subsoil, someone had covered up the problem.[20]

[36]                 He conducted a Phase II Environmental Assessment in May 2005 and confirmed the presence of petroleum hydrocarbon concentrations in the cement slab and the subsoil under the Cold Storage Room that significantly exceeded the Ministry of Environment criteria levels for residential properties. [21]  He recommended that the concrete slab, subsoil rocks and earth under the Cold Storage Room be removed to a soil treatment facility.[22]

[37]                 The Sultans hired Biogénie S.R.D.C. Inc. ("Biogénie") to decontaminate an area of approximately 10 feet by 10 feet to a depth of 4 feet in the Cold Storage Room at a cost of $11,209.50.[23]  The work included the demolition and removal of the partition walls and the concrete slab as well as the excavation and removal of several tonnes of contaminated soil.

[38]                 In the course of the work, Biogénie discovered that the pollution had spread to an area of over 400 square feet in the basement and 300 square feet outside the house.  Further excavation was thus necessary.  Greatly frustrated by the turn of events, the Sultans agreed to continue with the required work.

[39]                 Biogénie removed the walls, ceilings and concrete slab of the basement family room, and trucked away some 150 tonnes of contaminated soil, excavating to a depth of 9 feet below the slab[24].  This cost an additional $78,456.43.[25]

[40]                 In spite of all this, additional testing showed that the soil beneath the garage was also contaminated.  Corrective measures were not, however, taken at the time since the Sultans did not have the estimated $25,769 required to proceed with this work.[26]

[41]                 These facts convince the Court that the oil pollution was a serious defect.  We also reject Gitman's suggestion that the Sultans had no legal obligation to decontaminate the property.

[42]                 The Environment Quality Act provides that the Minister of the Environment has the power to order a person to decontaminate[27] and the proof shows that the City notified the Minister of the Environment of the situation, as it was its obligation to do.[28]

[43]                 Moreover, the effect of the contamination on the property's market value and on the Sultans' ability to renew their mortgage is further proof that the oil contamination was a serious defect.

[44]                 Clément Lacaille, who inspected the property in May 2003, testified that oil contamination can have a significant effect on the value of a property.  On that point, Bertrand Tremblay, the evaluator who established the property's market value in 2006, stated that Gitman never told him that there was an environmental problem with the property. According to him: "Cela fausse le rapport.  On devrait enlever le plein montant de la décontamination pour obtenir la juste valeur marchande de la propriété."

[45]                 The second criterion is thus met by the Sultans.

3.3          Was the defect unknown by the Sultans at the time of the sale?

[46]                 The Gitmans argue that the Sultans were not prudent when purchasing the property.  According to them, Dahan absolutely "had to have this duplex!"[29] and, as a result, acted recklessly, wilfully blinded by her desire to obtain the property.  In furtherance of this, they allege that the Sultans did not:

(a)          have the offer to purchase reviewed by an expert, as is evidenced by the fact that the Gitmans did not have to provide a certificate of location, as is customary;

(b)          enter the Cold Storage Room during their visits;

(c)          ask any questions of Gitman or of the tenants of the property;

(d)          pay close attention during the inspection; and

(e)          carry out a Phase I Environmental Assessment.

[47]                 Gitman argues that the mere fact that a building is heated with an oil furnace is a warning in itself that there might be a latent defect.  A reasonable person seeing a new oil tank with an old furnace would conclude that an old tank had been removed and would therefore obtain a Phase I Environmental Assessment.

[48]                 In addition, the Gitmans insist that Couture was negligent.  He "missed the boat.  He did not go into the cold room nor did he ask any questions about the old oil tank".

[49]                 On these points, the Court recognizes that the warranty of quality imposed upon a seller by Article 1726 C.C.Q. does not protect a negligent or reckless buyer from his own negligent acts and omissions.

[50]                 A buyer must demonstrate that he conducted a serious inspection or that he had one done by an expert who acted in a professional manner.  When an expert is retained, the Court must examine whether the inspection was carried out with prudence and diligence and whether any visible defects were brought to the buyers' attention by the inspector.[30]

[51]                 That said, neither the buyer nor the inspector are required to take unusual steps such as digging around foundations or opening up walls and floors to discover defects.  Rare is the vendor who would tolerate such measures!

[52]                 Although the Court has discretion in its appreciation of what constitutes a reasonable inspection[31], it is unnecessary to exercise it here.  It is clear that the oil contamination was unknown to the Sultans at the time of the sale through no fault of their own.  They acted prudently in their inspection of the property for several reasons.

[53]                 The Second Offer was conditional upon a satisfactory inspection and the Sultans hired Couture, an engineer highly recommended by their mortgage broker, to carry it out.[32]

[54]                 After a thorough three-hour inspection of the property on March 9, 2004, Couture went through his draft report with the Sultans page by page.  He delivered his detailed, 19-page final report[33] a few days later.[34]

[55]                 The report concludes that the property was in a good state, save and except for numerous items of wear and tear.  In particular, it notes that the furnace had outlived its normal life expectancy.

[56]                 According to the Sultans, this report was the "green light" they required to buy the property without fear of any immediate major repairs being needed.

[57]                 The fact that they did not order a Phase I Environmental Assessment is not determinative of negligence.  These reviews are not generally necessary when one purchases a residential property.

[58]                 Moreover, the oil contamination problem was not apparent.  It was as camouflaged as it can get:  hidden under a cover of cement, plastic sheets, furniture and other personal property.

[59]                 Although two persons testified that oil fumes could be smelled:  Mrs. Hezrony and Gitman, many others who had access to the property did not:

(a)          Molly Gitman does not remember any smells in the basement after Ultramar replaced the old oil tank in the year 2000;

(b)          Rintoul, who was in the property on numerous occasions to coordinate repairs and to show it to prospective tenants and purchasers, does not recall any odours of oil;

(c)          Dahan and Sultan visited the property three times without noticing any smells;

(d)          Clément Lacaille, who inspected the property in May 2003 to establish its market value, writes in his evaluation report that it did not appear that there were "any contamination or pollution problems".[35]  He says that he is normally very careful when he inspects a property to detect any odours of oil or signs of leaking oil given the significant impact oil contamination would have on the market value of a property.  He cannot, however, remember whether he visited the Cold Storage Room;

(e)          Ultramar's annual service records of the property until March 2004 do not make note of any oil smells after they changed the oil tank in the fall of 2000;[36] and

(f)            Couture says he did not notice any oil smells during his inspection of the Cold Storage Room.

[60]                 In this regard, how can it be that there were no odours of oil in March 2004 when strong odours flowed from the Cold Storage Room two months later?

[61]                 Several experts testified that odours of oil will increase as a result of, among other things, warm temperatures and a rising water table.[37]  Since, the exterior temperature during Couture's March 2004 inspection was noted to be -40 Celsius, this could be a factor.[38]

[62]                 It could also be that physical activity such as, moving furniture, etc., could have broken the thin and brittle layer of cement in the Cold Storage Room, thus releasing oil fumes.

[63]                 The Court is satisfied with these explanations and rejects the Gitmans' contention that the Sultans failed to act prudently in this matter.  They were not aware, nor could they reasonably have been aware, of the oil contamination in the property.  As well, in Section 5 hereof the Court comes to the same conclusion concerning Couture.

[64]                 The Sultans have thus meet the third and final criterion to succeed in a claim for latent defects.

4.            DOES THE "WITHOUT WARRANTY" CLAUSE PREVENT THE SULTANS FROM EXERCISING A RECOURSE AGAINST THE GITMANS?

[65]                 The Gitmans insist that, pursuant to the second paragraph of Article 1733 C.C.Q., the legislator specifically allows non-professional sellers, such as themselves, to exclude their liability for hidden defects even if they had knowledge of same.

[66]                 Gitman asserts that by insisting that the property be sold without warranty he was not trying to avoid responsibility for the oil contamination.  He states that this is his way of proceeding at all times, and he showed that he sold another of the family's properties in the same manner.[39]

[67]                 He indicated a number of the reasons for insisting that the property be sold this way: (i) it is his way of shifting the "risk of venturing" to the purchasers; (ii) the practice of law made him "wary […] that there is risk everywhere and if it can be avoided, prudence dictates that one should diligently endeavour to do so";[40] and (iii) he was acting as "a good brother to his sisters" by minimizing the risk to them.[41]

[68]                 Gitman also insists that the property was sold below its market value because it was a sale without warranty.  Here is how he phrased it in his letter of June 22, 2005 addressed to the Sultan's attorney:

"In our humble opinion the property was sold to your clients at the price agreed upon because your clients agreed to assume the risk of latent defects.  Had they insisted upon a warranty against latent defects they could not have bought the property at the price they did.  Their efforts now to renegotiate their contact by means of the threatened legal proceeding are illegitimate."[42]

[69]                 As evidence of that fact, he filed an appraisal report establishing that the most probable market value of the property on April 20, 2004 was $492,000, i.e., $42,000 more than the Sultans paid.[43]

[70]                 Concerning the issue of market value, although it is one of the criteria sometimes examined by courts in the appreciation of what constitutes a reasonable inspection, the Court is not convinced of its relevance in the present case.  In any event, the Court concludes that this argument is without merit for several reasons.

[71]                 Firstly, Gitman himself testified that, irrespective of the price, he wanted to sell the property without warranty.  As the Gitmans state in paragraph 34 of their Plea and Cross Demand, they would "not have sold the property save without warranty as to title and as to latent defects.  They sold the property in the first place to disencumber themselves of the travails that ownership carries."

[72]                 As well, Gitman testified that his objective was "to sell without a headache" and that he would have insisted on the without warranty clause "even if the property sold for $550,000".

[73]                 Secondly, the evidence shows that Gitman accepted the Second Offer because it was the only one he had received after four months on the market.

[74]                 Rintoul recalls that, in the fall of 2003 and the early winter of 2004, he conducted eight to ten visits of the property with potential purchasers, none of whom made an offer.  He suspects that Gitman accepted the Sultans' Second Offer because he had not received any other.

[75]                 Thirdly, his own expert, Tremblay, stated that his evaluation of $492,000 was distorted by the fact that Gitman had not told him of the oil contamination at the time he did his evaluation.  Further, it is interesting to note also that a May 2003 evaluation done for succession purposes estimated the value of the property at $350,000 as of December 14, 2002.[44]

[76]                 Finally, Gitman acknowledged that the Sultans might not have been aware that they bought the property $42,000 below its market value.[45]

[77]                 Sultan, on the other hand, stated that he believes that he paid full price for the property as it was purchased at the peak of the real estate market.

[78]                 The Gitmans thus fail to establish that there was a meeting of the minds that the Sultans would assume the risk of a hidden defect in exchange for a lower purchase price.

[79]                 In addition, the Court finds that the without warranty clause in the deed of sale does not exclude the Gitmans' liability for the oil contamination, and this, for a number of reasons.

[80]                 The Civil Code does permit a vendor to contract out of the legal warranty.[46]

[81]                 The Second Offer stipulated that the sale was "made without any warranty whatsoever, it being added for greater certainty, that we take the immovable, equipment and accessories as-is and without any warranty as to latent defects".  As for the deed of sale, it provides as follows:

"Warranty

This sale is made without legal warranty.",

with the following words which had been added in by hand by Gitman on a previous draft:

"and without warranty as to latent defects".[47]

[82]                 The words used in the deed of sale are not, however, the words required by the second paragraph of Article 1733 C.C.Q.

[83]                 A noted expert on the question of latent defects, Jeffrey Edwards, is of the opinion that any clause purporting to exclude the legal warranty of a seller must be interpreted restrictively and that a vendor can only exclude his liability for latent defects if he uses the exact words of the Code: "at his own risk" ("risques et périls").  He writes that a proper exclusion of a warranty clause requires: "… impérativement l'emploi précis de ces termes.  Des mots analogues nous sembleraient insuffisants".[48]  Moreover, a number of cases have upheld that view.[49]

[84]                 Gitman, the author of the without warranty clause, is a member of the Bar since 1974.  During his testimony, he expressed his pride concerning his experience, talent and success with both legal and real estate matters.  He testified that he owns and administers numerous commercial and residential properties.  He stated that his legal skills in the area of reading and negotiating commercial leases have been instrumental in helping him create capital value in the past.

[85]                 He admitted that he had every opportunity and the full latitude necessary to draft the without warranty clause the way he wanted it, as is evidenced by the fact that he made handwritten corrections to it.[50]

[86]                 In spite of all this, he got the clause wrong.  He omitted the words "at his own risk".

[87]                 His attorney pleads that those words cannot be that important, since the English version of Article 1733 C.C.Q. omits the words: "and perils", but the Court does not agree.  In the absence of the words "at his own risk" in this particular case, the Gitmans are subject to the general rule of Article 1733 C.C.Q.: a seller cannot exclude his liability unless he has disclosed the defect "of which he was aware or could not have been unaware".

[88]                 Furthermore, the Civil Code provides that when a person's consent has been vitiated by an error induced by fraud, which can result from silence or concealment, he may apply for a reduction equivalent to his damages.[51]

[89]                 In this case, the Sultans' consent was clearly vitiated by an error.  Dahan thought the property would be an ideal home for her young family.  It had large rooms and was located across from a park.  Her sister-in-law lived nearby.  There was rental income from two units which would help pay the mortgage.  She recalls "falling in love with it right away" and pressuring her husband to buy it.  Unfortunately, her dream home turned out to be contaminated.

[90]                 They both testified that if they had been told of the oil contamination they would not have purchased the property.  As Sultan described it:  "I would have taken my wife's hand and we would have walked away from the proposed transaction".

[91]                 Moreover, the case law and doctrine indicate that even when a purchaser has renounced to the warranty of quality, he is not foreclosed from pleading that he is the victim of fraud and that his consent was vitiated.[52]  That said, fraud must be proven.

[92]                 Gitman argues that he was not obliged to tell the Sultans of the oil contamination, since a seller has the right to remain silent.  He insists that the Sultans were negligent by not asking him any questions.[53]

[93]                 As Judge LeBel indicated in the Court of Appeal case of Proulx-Robertson v. Collins[54], selling a property is not a game of cat and mouse:

"Les relations entre un vendeur et un acquéreur d'une propriété immobilière ne s'assimilent pas à un jeu de cache-cache.  Les vendeurs demeurent soumis à des obligations d'honnêteté et de loyauté vis-à-vis de l'acquéreur potentiel."

[94]                 It is not a question of "I do not need to tell you if you do not ask me".  The obligation of good faith imposes an obligation of honesty and disclosure.  Gitman did not respect that obligation.  He defrauded the Sultans by camouflaging the problem and by not divulging the oil contamination he was aware of or is deemed to have been aware of. 

[95]                 For all of these reasons, the Court concludes that the without warranty clause does not prevent the Sultans from exercising the present recourse.

5.            DID COUTURE COMMIT A FAULT IN THE EXECUTION OF HIS INSPECTION?

[96]                 The Sultans argue that Couture was negligent in his inspection of the property in March 2004 when he missed an obvious problem.  Moreover, they claim that he admitted his negligence when he returned to visit the property in the fall of 2004.

[97]                 The Gitmans agree.  They criticize the Sultans for hiring an incompetent inspector whose inspection was negligent for several reasons:

(a)       he should have inspected the Cold Storage Room;

(b)       he should have advised the Sultans that a Phase I Environmental Assessment was required;

(c)       he missed the "apparent" odour of oil that the Hezronys denounced a few months later;

(d)       he missed evident indicia of possible latent defects given the existence of a new oil tank and an old furnace; and

(e)       he missed the evident fact that an oil tank had been situated in the Cold Storage Room because there were holes on the outside wall of that room caused by the fill and vent line pipes.

[98]                 The person who inspects a property prior to purchase is governed by Article 2098 C.C.Q. [55]  He has an obligation to act prudently, diligently and in accordance with usual practice and the rules of art.[56]

[99]                 The Court concludes that Couture respected that obligation in the present case.

[100]             Couture is an experienced individual with respect to property inspections.[57]  On March 9, 2004, he performed a summary visual inspection of the property lasting 2 to 3 hours for the sum of $450.00.  The type of inspection he contracted to do is described on the first page of his report.[58]

[101]             Couture remembers spending much of his visit with Rintoul, although Dahan and her father were also present, with Sultan arriving towards the end of the inspection.  Couture found Rintoul to be useful and able to answer general questions about the property, including whether he was aware of any problems and if there had been any recent repairs.

[102]             After spending approximately an hour and a half outside the building, he began his interior inspection in the basement, which is his normal way of proceeding.

[103]             As for the Cold Storage Room, it is situated below the front steps of the property.  It is composed of a passageway leading to an outside door, with a small storage closet located on one side and a bigger storage space on the other.  It is within this bigger space that the oil tank was previously located.

[104]             There are different versions of Couture's inspection of the Cold Storage Room.

[105]             Dahan says that he did not inspect it.  She remembers that Rintoul told them that it was a storage room and that Couture opened the door leading into the passageway.  He saw a washer or a dryer in the corridor, flashed his flashlight, as there was no light, and moved on.

[106]             Rintoul recalls that during the inspection they "traveled in a pack".  He believes that they went into the furnace room but does not recall whether Couture went into the Cold Storage Room.  He says that he himself never went into this room.

[107]             Couture denies Dahan's recollection of events, asserting that he went into the Cold Storage Room.  His attention was drawn to the door leading outside.  He felt it was important to verify that this passageway was functional.

[108]             He clearly remembers opening the door from the basement into the passageway, stepping into it and opening the doors to both closets as well as the exit door, the closets being filled to capacity with furniture and personal belongings[59].  He insists that there were no indications that would lead him to further inspect the room and that he did not smell any humidity or oil.

[109]             He recalls that, throughout the inspection, he was followed step by step by a group of persons.  He does not, however, recollect if anyone followed him into the Cold Storage Room or whether he used his flashlight.

[110]             Eight months later, on Sunday, November 14, 2004, he revisited the property at the Sultans' request to examine the oil contamination problem.  He was not told by the Sultans that they had Bensoussan's report of November 11th in hand.

[111]             Couture says that he smelled the odour of oil upon entering the house.

[112]             He states that the Cold Storage Room had changed since his initial inspection.  The furniture and personal belongings were gone and a wall and a door had been removed.  He saw two plastic sheets on top of the old slab under a crumbling half-inch layer of cement in a section where the materials had been displaced.

[113]             He told Sultan that it was one of the worst hidden defects that he had ever seen and that it was obvious that someone had tried to camouflage the odour of oil.

[114]             Both Sultan and Dahan (who was in the driveway outside the house) insist that Couture was "astonished" that he had failed to inspect the Cold Storage Room and thus had overlooked such an obvious problem.[60]  Couture denies saying this or having overlooked anything.

[115]             How is the Court to resolve such a contradiction?

[116]             To begin, we believe that, on the balance of probabilities, Couture inspected the Cold Storage Room.

[117]             He insists that it is his practice to open every door and window for two reasons:  doors and windows are the best indicator of any structural problem and doors can hide potential problems.  This seems to be only common sense and we believe him.

[118]             As well, the minute attention to detail set out in his 19 page report is impressive.  It reflects meticulousness and thoroughness.  He does not appear to be someone who would cut corners or omit to inspect such a critical area as a passageway leading out of the property.

[119]             On that point, Rintoul testified that Couture's inspection was detailed.  He admitted that he was so struck by the quality of his work that he subsequently called him to do an inspection for one of Gitman's other properties.

[120]             Further, the Court does not believe that Couture admitted his negligence in November 2004.

[121]             On the one hand, Couture was a credible witness.  He stated that when he inspected the oil contamination in the fall of 2004 he did not feel threatened.  It was evident to him that someone had tried to camouflage the problem.  This seems reasonable and, in that light, it would not make sense to make the kind of statement that the Sultans attribute to him that day.

[122]             On the other hand, the testimony of the Sultans is less credible then Couture's.  Dahan was not physically present when he would have admitted his negligence.  As well, Sultan was hesitant when he testified on this point, which is somewhat surprising, since his main objective in having Couture come back was to get him to admit or explain why he had missed the problem.

[123]             Nor does it help the Sultans' argument that such a crucial fact was only alleged for the first time when they amended their initial motion in September 2005, in reaction to Couture's Motion to have the case against him dismissed.  Neither in the Sultans' two demand letters going back to January and June 2005 nor in their original Motion to Institute Proceedings did they mention this all-important admission!

[124]             With respect to Couture's not recommending that his clients obtain a Phase I Environmental Assessment, there is no fault in that.  According to Morel, Gitman's own expert, and Louis Cyr, such a report is not customary for residences of less than six units.  This is partly evidenced by the fact that mortgage lenders do not require them for such buildings.

[125]             A property inspection is not a detailed historical research.  It is not an Environmental Assessment of a property.

[126]             As Judge LeBel indicated in the Court of Appeal decision of Placements Jacpar v. Benzakour[61] an inspector has an obligation to proceed to a visual inspection:

"… des principaux éléments constitutifs de l'extérieur et de l'intérieur, des principaux systèmes mécaniques accessibles de la toiture et en vérifiant l'état de quelques-uns des appartements.  Il ne serait pas obligé de tout vérifier dans le détail et encore moins, de commencer à ouvrir ou à sonder planchers, murs, plafonds ou fondations   Cet examen n'est pas un examen approfondi.  S'il doit être attentif, il peut demeurer sommaire."

[127]             In that sense, it requires some indicia of a problem before an inspector is obliged to go deeper into the inspection.  Couture says that: "le nez est quelque chose d'important pour un inspecteur.  Quand on sent quelque chose, on le note.He testified that there were no smells in the Cold Storage Room and the Court believes him.  Smelling oil does not require any particular expertise, and the Court notes that the Sultans never smelt anything prior to purchasing the property. 

[128]             There was, therefore, no reason to provoke him to press on with his examination of the Cold Storage Room.  He had no obligation to remove furniture or other personal property, much less to break through the cement of the floor to check what was below.

[129]             Much was made of the fact that there existed two patched-over holes on the outside wall of the Cold Storage Room that formerly housed the old oil tank's fill and vent lines.  The Gitmans attempted to dramatize them by producing photos without the caulking that normally covers and, to a large extent, camouflages the holes.

[130]             Couture explains that it is not his practice to note every hole that has been sealed in his report.  He will normally note only those that need to be sealed.

[131]             The Court finds no negligence in that.  An inspection is an examination of a property's current status.  It is not an archaeological exercise. 

[132]             As such, there were no warning signs to awaken Couture's suspicion and prompt him to push his inspection further.  He inspected all of the property as thoroughly as conditions required.

[133]             The Court determines that Couture acted prudently during his inspection.  He asked the right questions.  In the conduct and scope of his inspection, Couture followed the guidelines established by L'Association des Inspecteurs en Bâtiment du Québec, which have been recognized by the jurisprudence and doctrine as the "rules of art"[62] and the usual guidelines for property inspectors.[63] These rules of practice provide that inspectors are not required to determine the presence of any environmental hazard in a property.[64]  Furthermore, inspectors do not need to move personal property, furniture and/or equipment in the performance of their work.[65]

[134]             Gitman argues that if the Sultans had hired Bensoussan, an environmental expert, instead of Couture, this case might have been avoided.[66]  While that might be true, it is totally irrelevant and useless for present purposes.  Not only, as we have already noted, was it not necessary to do an environmental assessment of the property, but also, the functions and roles of two such experts are so different as to make it unreasonable and useless to compare them in the present context.

[135]             The Court concludes that Couture committed no fault in the execution of his inspection.  His work met the standard of prudence and diligence imposed by the jurisprudence and doctrine.  It was done in accordance with usual practice and the rules of art.  The Court, therefore, dismisses the Sultans' claim against Couture.

6.            WHAT ARE THE DAMAGES SUFFERED BY THE SULTANS?

[136]             Article 1728 C.C.Q. provides that a purchaser is entitled to all damages suffered if the seller was aware or could not have been unaware of the defect.[67]  In that light, the Court must determine whether Gitman was aware or could he not have been unaware of the oil contamination.  It seems clear that he was.

[137]             Gitman offers contradictory versions of his knowledge of the contamination. He has a fishing line on each side of the boat and this does not help his credibility.

[138]             One the one hand, he testified that he had no knowledge of an oil spill or that the oil tank was even leaking.  On the other, he acknowledged that he knew there was an oil smell but insisted that he did not know the extent of the contamination.  He goes on to say that the smell was not a manifestation of a hidden defect but, rather, one of an apparent problem because whenever he was in the Cold Storage Room "it did smell".

[139]             During his cross-examination, Gitman denied that he was aware that the oil tank leaked in 2000, saying that he had not been notified of a leak and that he had not seen the tank sweating.  Confronted with his signature on Ultramar's invoice of October 5th, which indicates that the oil tank is sweating and leaking and that he was advised of same[68], he continued his denial: "I did not read the chicken scratches" on the invoice"I thought I was authorizing a change of oil tank."

[140]             This testimony is troubling given that it contradicts his own Plea and Cross Demand that states that: "In October 2000, the oil tank in the said duplex leaked."[69]

[141]             It also contradicts his statement that he thought that oil must have gone into the walls of the property, since the smell of oil persisted in the summer of 2001.

[142]             Moreover, there exists evidence that Rintoul was made aware of oil fumes in July 2003 by the new tenants, the Hezronys.  Although Gitman testified that  the Hezronys never "made a single complaint about an odour",[70]  Mrs. Hezrony testified that she complained to Rintoul about a rather important odour of oil fumes coming from the Cold Storage Room and that he quickly sent a handyman to correct the problem. 

[143]             Gitman and Rintoul deny both the complaint and any effort to correct the problem.  To corroborate that, Gitman points out that Mrs. Hezrony never once mentioned the odour of oil in the many letters she wrote complaining about the state of her apartment[71], an issue which eventually ended before the Régie du logement.[72]

[144]             She explains that she did not complain about this issue because the odours of oil were taken care of by Rintoul shortly after they moved to the apartment, as described above.

[145]             The Court determines that Mrs. Hezrony's version to be the most credible.  She testified without bias, as she had no reason to favour either the Gitmans or the Sultans.  Furthermore, her story about alerting Rintoul of the problem in the summer of 2003 is consistent with what Bensoussan reports that she told him in November 2004.[73]

[146]             On the other hand, Gitman's evidence was often self-serving and untruthful.

[147]             As for Rintoul, he is certainly not as impartial a witness as Mrs. Hezrony.  He indicated that he was indebted to Gitman for giving him work and, in light of his role in the sale of the property, his own personal liability, or at least his reputation, could be at play in this matter.

[148]             Furthermore, Gitman admitted being aware of the problem.  His allegation that he did not know its extent and that he thought that it was "at most a $1,500 problem" confirms his knowledge and brings him under the application of Article 1728, as noted by the author, Jeffrey Edwards:

"Il n'est pas nécessaire d'établir que le vendeur avait une connaissance de l'identité précise du vice ou de sa cause.  La prise de conscience du vendeur relativement au fait que le bien souffre d'un déficit d'usage emporte connaissance de l'existence du vice.  De fait, l'article 1728 C.c.Q. n'oblige pas à la connaissance de l'identité précise ou de la nature du vice mais simplement de son existence."[74]

[149]             The Court concludes that Gitman had the requisite knowledge for Article 1728 to render him liable for all of the damages the Sultans suffered in this matter.  We now turn to an examination of the alleged damages.

6.1          The cost to decontaminate

[150]             The Sultans' claim the sum of $89,665.93 paid to Biogénie to carry out the decontamination of the property.  This amount is supported by invoices and proof of payment.

[151]             The Court will award the full amount claimed.

6.2          The cost to finish the decontamination work

[152]             The Sultans claim the sum of $25,769.65 for the decontamination work that still remains to be done under the garage.

[153]             The most experienced of Biogénie's witnesses, Robert Marier, testified that it is most likely that only half of the garage will need to be decontaminated.  He estimates that it will probably cost between $15,000 and $20,000 to do so.

[154]             The Court will award the sum of $20,000 for this expense.

[155]             As this work has not yet been done, interest at the legal rate and the additional indemnity will only be awarded as of the date of this judgment.

6.3          The cost to rebuild the basement

[156]             The Sultans claim the sum of $23,220.73 for this work, as shown on invoices sent by Dahan's father's construction company in 2006[75].  Given the other expenses they had to meet, the Sultans have not yet had the financial means to pay for this work.

[157]             Although the Court believes that the work was done for the price indicated, it notes that the original basement walls date from the early 1960s'.  To grant the full amount of this work would lead to an unjust enrichment with respect to the added-value of improving the property.

[158]             Since no proof was made on the residual value of the walls at the time of replacement, the Court will arbitrate the amount at $15,000.00 for this expense.

[159]             As this amount has not yet been paid by the Sultans, interest at the legal rate and the additional indemnity will only be awarded as of the date of this judgment.

6.4          Damages for stress and inconvenience

[160]             The Sultans claim the sum of $50,000 for their inconvenience, loss of time and aggravation.

[161]             Money is often the root of family conflicts and the present case is no exception.

[162]             The Sultans are a young married couple with four children under the age of nine. Their finances were already tight when they purchased the property.  They had to borrow from family members to pay a portion of the purchase price and they had to forego certain renovations because they did not have enough money to pay for them.

[163]             When they faced the unexpected expense of decontamination, they were forced to obtain loans from family members and to negotiate various margins of credit and a credit card with different banking institutions.[76]

[164]             Dahan described the past five years as hell.  She testified that she got into many arguments with her husband who blamed her for pushing them into buying a "lemon".  She was not able to sleep.

[165]             She described the stress she lived through during the coordination of the decontamination work as the problem kept getting bigger and bigger.  At the time she was pregnant with her third child and her mother was dying.  She had to leave her part-time employment as a teacher.

[166]             Sultan related that he had difficulties juggling the payments of the various lines of credit on his $40,000 a year salary.  He used one line of credit to pay the other in order to satisfy the required minimum monthly payments.  He spoke of the bitterness and arguments with his wife.

[167]             The debts incurred to correct the problem also caused them emotional harm.

[168]             Nearly a year after the decontamination was finally completed, Biogénie sent them a demand letter for $22,000 plus $2,000 of interest.[77]  In July 2006, they finally reached a settlement under which the Sultans will be making monthly payments until November 2009.  The pressure exerted by Biogénie was no doubt very stressful for both him and his wife

[169]             As well, Sultan indicated that, in addition to incurring over $26,000 of interest payments for the lines of credit and credit card used to pay the decontamination,[78] the constant juggling of accounts was most difficult.

[170]             It was thus not surprising when he testified that the situation made him angry.  He says that he is still stressed by it all and gets a lump in his throat just thinking about it.  He feels that he and his wife were "cheated" by Gitman and, because of this, they lost time, money and peace of mind.

[171]             In light of the case law[79] and:

(a)          the stress and aggravation caused to the Sultans by the presence of an unknown quantity of health-threatening pollutants in and around the house;

(b)          the Sultans' inability to use or access the basement level of their home from August 2005 to June 2006;

(c)          the first years of their young marriage spent in fear and financial insecurity, scarred by stress and marital strife;

               the Court finds that the amount of $15,000 is appropriate in the circumstances, that is $7,500 for each of the Plaintiffs.

7.                        ARE THE SULTANS ENTITLED TO OBTAIN THE PAYMENT OF THEIR EXTRAJUDICIAL FEES FROM THE GITMANS?

[172]             The Sultans claim the sum of $24,564.94 from the Gitmans for the extrajudicial legal fees they incurred to pursue this action and to defend against the cross-demand.

[173]             While every person has the fundamental right to address a Court to have his or her rights determined, the exercise of that right should not be abusive.  Such abuse not only contributes to the clogging up of the court system but it also can cause both emotional and financial damages to the party who is the victim of it.

[174]             The general legal principle is that each party must pay for his own extrajudicial fees, i.e., his lawyer's bills.  There exist, however, exceptions to this rule, in particular, in the case of an abusive defence and/or cross demand.

[175]             The victim of such abuse may claim his legal fees when there is a direct causal link between the faulty defence or cross demand of the defendant and the damage suffered by the plaintiff.

[176]             As the Court of Appeal stated in the case of Collette Viel v. Les Entreprises Immobilières du Terroir Ltée[80]:

"une partie qui abuse de son droit d'ester en justice causera un dommage à la partie adverse qui, pour combattre cet abus paie inutilement des honoraires judiciaires à son avocat.  Il y a dans ce cas, un véritable lien de causalité entre la faute et le dommage."

[not our underlined]

[177]             Our courts have held that an abusive defence is one which is taken in bad faith.[81] As Judge Dalphond stated in the Court of Appeal decision of Royal Lepage Commercial Inc. v. 109650 Canada Ltd.[82], in order to succeed in obtaining extrajudicial fees, the victim of abusive legal procedures must demonstrate "un comportement contraire aux finalités du système juridique".  He also wrote in that case that:

"[45]  Pour conclure en l'abus, il faut donc des indices de mauvaise foi (telle l'intention de causer des désagréments à son adversaire plutôt que le désir de faire reconnaître le bien-fondé de ses prétentions …) ou à tout le moins des indices de témérité.

 

[46]  Que faut-il entendre par témérité?  Selon moi, c'est le fait de mettre de l'avant un recours ou une procédure alors qu'une personne raisonnable et prudente, placée dans les circonstances connues par la partie au moment où elle dépose la procédure ou l'argumente, conclurait à l'inexistence d'un fondement pour cette procédure. Il s'agit d'une norme objective, qui requiert non pas des indices de l'intention de nuire mais plutôt une évaluation des circonstances afin de déterminer s'il y a lieu de conclure au caractère infondé de cette procédure.  Est infondée une procédure n'offrant aucune véritable chance de succès, et par le fait, devient révélatrice d'une légèreté blâmable de son auteur.  Comme le soulignent les auteurs Baudoin et Deslauriers, précités: «L'absence de cette cause raisonnable et probable fait présumer sinon l'intention de nuire ou la mauvaise foi, du moins la négligence ou la témérité»."[83]

[178]             Having received no reply from Gitman to their first letter in November 2004, the Sultans consulted an attorney who sent the Gitmans and Couture a demand letter in January 2005.[84]  Gitman responded a few days later that the property had been sold without warranty and that the price reflected the risk assumed of any latent defects. He threatened a counterclaim against them and "the lawyers and/or office that indulges them".[85]

[179]             To a further letter from the Sultan's attorney in June 2005, pointing out that it can be considered bad faith and fraudulent for a vendor to withhold knowledge of a defect from a purchaser, Gitman replied with the following threat:

"fraud is difficult to prove and may be a costly allegation to make, in that it leaves a party making such allegations open to a claim for libel and moral damages.  While an attorney enjoys some immunities, you would do well to study the jurisprudence in that regard.  You may rest assured we will sue, if such an allegation is placed in the public record."[86]

[emphasis in the original]

[180]             At that point, instead of investigating the problem with the Sultans, Gitman took the approach that the best defence was a strong offence.

[181]             Further, the plumitif of this case illustrates dramatically the over-abundance of legal process on Gitman's part, despite the fact that the case was a fairly simple one.  In reviewing the plumitif, the Court notes that, among others, Gitman submitted before the Superior Court:

(a)          three notices of substitution of attorneys and one motion to do so;

(b)          two motions to strike;

(c)          one motion for revocation of judgment and sursis;

(d)          one motion to review a decision of the Special Clerk;

(e)          one motion for particulars;

(f)            one motion for permission to examine; and

(g)          one motion to provide exhibits.

This context caused no less than thirteen judges of the Superior Court to hear various aspects of this matter.  In addition, Gitman appealed two procedural decisions before the Court of Appeal, both of which were rejected.

[182]             Gitman clearly put the threats he made in his letters of January and June 2005 into action.  There is a real sense that he tried to drown the Sultans with legal process at a time that they could barely afford to assume the expenses of decontamination.  This was a particularly attractive option for him, since, as a member of the Quebec Bar, he attested to having done more than half of the legal work in the file.  For the rest, he was represented by several former law school classmates, one of whom, he stated, did not charge him for what he estimates to be $30,000 worth of legal work.  Another was a young lawyer from his law firm.

[183]             In the words of Justice Dalphond, these are clear "indices de mauvaise foi (telle l'intention de causer des désagréments à son adversaire plutôt que le désir de faire reconnaître le bien-fondé de ses prétentions …) ou à tout le moins des indices de témérité".[87]

[184]             Certain aspects of Gitman's defence remind the Court of the ancient Chinese proverb:  "There is much noise in the stairs but no one comes in."  Gitman pursued numerous legal arguments completely devoid of merit, including:

(a)          that the property was sold below its market value to justify the without warranty clause;

(b)          that the Sultans had no legal obligation to decontaminate; and

(c)          that the defect was not serious and that the Sultans had suffered no damage from the oil contamination.

[185]             As for the futility of the cross demand, it suffices to note that Gitman could not adequately articulate the merit of his $15,000 counterclaim, except to insist that he had been the victim of a seriously abusive process having been deprived of essential rights and to proclaim that the Sultans' attorney is "unfit to practice law".  The Court is convinced that it represents nothing other than a bald effort at intimidation of younger, less experienced adversaries.

[186]             The Court notes as well that Gitman was untruthful in several aspects of his defence, including when he claimed that he had paid Ultramar for the clean-up costs[88] and when he stated that the Hezronys had not complained of oil odours in July 2003. 

[187]             All these tactics and assertions, as groundless as they turned out to be, still engendered the need to present proof and argument to counter them.  The Gitmans' fault is not just that this added to the length and expense of the hearing, but, rather, that they had no good-faith reason to contest the action in the first place, save and except with respect to the issue raised in Section 4 hereof concerning the "without warranty clause".  There is thus a direct link between their fault and the legal fees related to the Sultans' claim against them and the defence of the counterclaim.  As we note below, however, this reasoning does not apply to the claim against Couture.

[188]             Counsel for the Sultans submitted invoices for professional fees and disbursements totalling $24,564.94[89].  These appear to be entirely reasonable in the circumstances, particularly given the nine days of hearings.

[189]             The comments concerning the abusive nature of the Gitmans' proceedings do not apply to Couture.  As such, the Sultans should not be reimbursed for the legal fees related to their claim against Couture.  No proof having been made on the breakdown of fees between the two volleys of the action, the Court will arbitrate the portion relating to Couture at 25% of total legal fees in the action.

[190]             Given that the Gitmans' defence with respect to the issue of the "without warranty clause" had some legal merit, the Court will arbitrate the portion to be assumed by the Sultans to half of the remaining 75% and will award them sum of $9,211.86.

[191]             As the legal fees were not immediately incurred, interest at the legal rate and the additional indemnity will only be awarded as of the date of the institution of the action by the Sultans.[90]

[192]             In light of the Court's finding concerning the Gitmans' liability, it is not necessary to address the appropriateness of their counterclaim against the Sultans.  It will be dismissed with costs.

FOR THESE REASONS, THE COURT:

[193]             GRANTS the Plaintiffs' Re-Re-Re-Re Amended Motion to Institute Proceedings in part;

[194]             DISMISSES the Defendants' counterclaim THE WHOLE WITH COSTS;

[195]             CONDEMNS the Gitmans solidarily to pay the Plaintiffs the sum of $148,877.79 to compensate them for the following:

(a)          $89,665.93 for the cost to decontaminate the property;

(b)          $20,000 for the cost to decontaminate the rest of the property;

(c)          $15,000 for the cost to rebuild the basement and the Cold Storage Room;

(d)          $15,000 for their inconvenience, loss of time and aggravation; and

(e)          $9,211.86 for a portion of their extrajudicial legal fees;

the whole with: (i) interest at the legal rate as of November 10, 2004, plus the additional indemnity provided for pursuant to Article 1619 C.C.Q. with respect to the sum of $104,665.93; (ii) interest at the legal rate as of the date of this Judgment, plus the additional indemnity provided for pursuant to Article 1619 C.C.Q. with respect to the sum of $35,000; and (iii) interest at the legal rate as of June 29, 2005 plus the additional indemnity provided for pursuant to Article 1619 C.C.Q. with respect to the sum of $9,211.86;

[196]             THE WHOLE WITH COSTS, including those of experts against the Defendants, the Gitmans;

[197]             DISMISSES the Plaintiffs' Re-Re-Re-Re Amended Motion to Institute Proceedings against the Defendant Couture, THE WHOLE WITH COSTS, including those of experts against the Plaintiffs.

 

 

__________________________________

PAUL MAYER, J.S.C.

 

Mtre. Eric De Louya

De Louya Pierre Markakis, Avocats

For the Plaintiffs

 

Mtre. Gordon M. Selig

For the Defendants Larry Gitman, Molly Gitman and Anita Gitman

 

Mtre. Stephen Wishart

Fraticelli Provost

For the Defendant Marc Couture, Ing.

 

Dates of hearing:

June 1, 2, 3, 4, 5, 8, 9, 10 and 22, 2009

 



[1]     Estimated to be 175 litres of oil by the expert witness Louis Cyr, M.Sc. Env., B. Sc. A., Senior Project Manager with Technisol.

[2]     "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 any need of expert assistance."

[3]     ABB Inc. v. Domtar inc. [2007] 3 S.C.R. 461 .

[4]     Exhibit D-57.

[5]     Defendants' Plea and Cross Demand, paragraph 28.

[6]     Ibid, paragraph 29.

[7]     Exhibit D-56.

[8]     Supra note 5, paragraph 30.

[9]     Defendants' written pleadings of June 22, 2009, paragraph 36.

[10]    Supra note 9, paragraph 41.

[11]    Exhibit P-19.

[12]    Exhibit D-33.

[13]    Exhibit D-36.

[14]    Exhibits D-48 and P-1.

[15]    Supra note 9, paragraphs 185 and 186.  Morel has a degree in geology and a Master's in business administration. He is a partner with the environmental audit firm Inspec-Sol.

[16]    Supra note 9, paragraph 105.

[17]    Exhibit P-14.

[18]    Bensoussan has engineering (1993) and bio-chemistry (1987) degrees.  He has been a building inspector for over 15 years, specializing in building systems and air quality issues.

[19]    Exhibit P-3, p. 5.

[20]    Ibid.

[21]    Exhibit P-7.

[22]    Ibid, p. 8.

[23]    Exhibit P-11.

[24]    Exhibit P-15.

[25]    Exhibit P-16.

[26]    Exhibit P-22.

[27]    Article 20 and following, R.S.Q., c. Q-2.

[28]    Sorel (Ville de) v. Dumont, B.E. 99BE-896 (S.C.).

[29]    Supra note 9, paragraph 159.

[30]    St-Louis v. Morin, 2006 QCCA 1643 (C.A.).

[31]    Placements Jacpar v. Benzakour [1989] R.J.Q. 2309 (C.A.).

[32]    Couture has a Bachelor's degree in engineering (1986), a Master's degree in urban planning (1996) and a Master's degree in business administration (2000).

[33]    Exhibit P-2.

[34]    Letter of March 10, 2000 from Couture to Dahan - Exhibit DC-1.

[35]    Appraisal Report - Market Value, by Raymond Joyal Cadieux Paquette & Associés Ltd. (Exhibit D-54), p. 5.

[36]    Supra note 7.

[37]    See Technisol report of February 13, 2007- Exhibit DC-9, p. 2.

[38]    Supra note 33, p. 1.

[39]    Exhibit D-53.

[40]    Supra note 9, paragraph 77.

[41]    Supra note 9, paragraph 79.

[42]    Exhibit P-9.

[43]    Exhibit D-49.

[44]    Supra note 35, p. 1.

[45]    Supra note 9, paragraph 27.

[46]    "1732.  The parties may, in their contract, add to the obligations of legal warranty, diminish its effects or exclude it altogether but in no case may the seller exempt himself from his personal fault.

1733.  A seller may not exclude or limit his liability unless he has disclosed the defects of which he was aware or could not have been unaware and which affect the right of ownership or the quality of the property.

An exception may be made to this rule where a buyer buys property at his own risk from a seller who is not a professional seller."

[47]    Exhibits D-40 and D-48.

[48]    Jeffrey EDWARDS, La garantie de qualité du vendeur en droit québécois, Montréal, Wilson & Lafleur Ltée, 2008, paragraph 292, p. 130.

[49]    Wells v. Dubé, 2007 QCCQ 13071 , paragraph [9] (Q.C.): "De l'avis du Tribunal … la garantie … ne peut être écartée conventionnellement que par la mention "aux risques et périls de l'acheteur"."; Massie v. Tardif, 2007 QCCQ 13285 (Q.C.); Dallaire v. Guérin, 2002 Can LII 29887 paragraph [11] (Q.L.): "il faut évidemment … que la clause du contrat soit claire et non ambiguë."; Maheux v. Randlett, 2004 Can LII 9611 (Q.L.): A snowmobile was sold: "tel que vu (sic) et sans aucune garantie".  The Court held at paragraph [13]: "Comme il n'y a pas de stipulation expresse que l'acheteur achète à ses risques et périls, le vendeur demeure tenu à la garantie légale prévue à l'article 1726 C.c.Q."; Sainis v. Johnston, 2004 Can LII 16111 (Q.C.): "[30] Le Tribunal est d'avis que l'expression « as seen and as is » n'équivaut pas à l'expression « acheté à ses risques et périls ». [31] Seuls les termes « achète à ses risques et périls » peuvent dégager un « vendeur non professionnel » de sa responsabilité légale en regard des vices cachés."

[50]    See paragraph [81] hereof.

[51]    "1401.  Error on the part of one party induced by fraud committed by the other party or with his knowledge vitiates consent whenever, but for that error, the party would not have contracted, or would have contracted on different terms.

Fraud may result from silence or concealment."

"1407.  A person whose consent is vitiated has the right to apply for annulment of the contract; in the case of error occasioned by fraud, of fear or of lesion, he may, in addition to annulment, also claim damages or, where he prefers that the contract be maintained, apply for a reduction of his obligation equivalent to the damages he would be justified in claiming."

[52]    Girard v. Développement du lac Hamelin inc., 2008 QCCS 3440 , paragraph [110].  See also EDWARDS, Supra note 48, paragraph 291, p. 129; P.G. JOBIN, La Vente, 3e edition, Montréal, Éditions Yvon Blais, 2007, p. 178, paragraph 239.

[53]    Supra note 9, paragraphs 97(n), 104 and 110.

[54]    [1992] R.D.I. 154 (C.A.), p. 4.

[55]    "2098.  A contract of enterprise or for services is a contract by which a person, the contractor or the provider of services, as the case may be, undertakes to carry out physical or intellectual work for another person, the client or to provide a service, for a price which the client binds himself to pay."

[56]    Article 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 provided, they are also bound to act in accordance with usual practice and the rules of art, and, where applicable, to ensure that the work done or service provided is in conformity with the contract."

[57]    He worked for over a decade as an inspector, an engineer and a director of public works with several municipalities.  He has been with the engineering firm, BPR, since the year 2000 where he is currently a partner and Vice-President, Infrastructure Business Development.  From 1991 to 2005, he carried out approximately 20 to 30 residential inspections each year.

[58]    Supra note 33, p. 1:  "Il s'agit de rendre compte de l'état des lieux le jour de l'inspection et ce, en se basant sur des indices visibles sans avoir à défaire les matériaux fixes ou déplacer les meubles lourds.  Aucune responsabilité reliée à des problèmes survenant après l'inspection, qu'ils soient ou non la conséquence de vice caché, ne sera assumée si ces problèmes n'étaient pas raisonnablement prévisibles par l'observation de ces indices au jour de l'inspection."

[59]    Paragraph 32 of Defendant Couture's Défense Re-amendée.

[60]    Paragraph 6.3 of Plaintiffs Re-Re-Re-Re-Amended Motion to Institute Proceedings.

[61]    Supra note 31, paragraph 38.

[62]    Article 2100 C.C.Q.

[63]    Mélanie HÉBERT, "L'inpecteur pré-achat: sa responsabilité professionnelle a-t-elle des limites?", Développement récents en droit immobilier (2002), p. 3; See also Lord v. Architecture & Design Chabot Tremblay, J.E. 2005-1441 (C.Q.), paragraph [111].

[64]    Article 3.2(B)(9).

[65]    Article 3.2(B)(8).

[66]    Supra note 9, paragraph 116.

[67]    "1728.  If the seller was aware or could not have been unaware of the latent defect, he is bound not only to restore the price, but to pay all damages suffered by the buyer."

[68]    See paragraph [12] hereof.

[69]    Supra note 5, paragraph 27.

[70]    Supra note 9, paragraph 46.

[71]    Exhibits D-1 to D-31, incl.

[72]    Exhibit P-34 evidences that Mrs. Hezrony obtained an award of $1,312 because her family had to leave the apartment in February 2004 as they were deprived of water due to a frozen pipe and because two rooms in her apartment lacked adequate heat.

[73]    Supra note 19, p. 6.

[74]    Supra note 48, paragraph 582, p. 282.

[75]    Exhibit P-23.

[76]    Exhibit P-33 shows that they obtained various lines of credit with CIBC, RBC, TD, BMtl and MBNA.  They also obtained a credit card with Quixtar MBNA.

[77]    Exhibit P-17.

[78]    Supra note 76.

[79]    Lagacé v. Guyon, J.E. 99-2372 (C.S.); Huot v. Martineau, J.E. 2005-91 (C.S.).

[80]    [2002] RJQ 1262 (C.A.).

[81]    Tremis v. Vertzayias, 2007 QCCA 1265 (C.A.); Immeubles La Chaloupe Inc. v. Immeubles Demontingy Ltée, 2008 QCCS 4591 (C.S.).

[82]    [2007] QCCA 915 , p. 9.

[83]    Ibid, p. 10.

[84]    Exhibit P-4.

[85]    Exhibit P-5.

[86]    Exhibit P-9.

[87]    Supra note 80, p. 10.

[88]    Supra note 5, paragraph 29.

[89]    Exhibit P-31.

[90]    Syndicat des soutiens de Dawson v. Baena, J.E. 2002-631 (C.A.).

AVIS :
Le lecteur doit s'assurer que les décisions consultées sont finales et sans appel; la consultation du plumitif s'avère une précaution utile.

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