De Luca c. Oberman						2015 QCCS 4307
JS1335     SUPERIOR COURT
CANADA
PROVINCE OF QUEBEC
DISTRICT OF			MONTREAL
No:		500-17-071671-120
DATE:	SEPTEMBER 18, 2015
______________________________________________________________________
IN THE PRESENCE OF:				THE HONOURABLE	STEPHANE SANSFAÇON, J.S.C.
______________________________________________________________________
LOUIE DE LUCA
and
CARMEN BARATTA
Plaintiffs
v.
MORTY OBERMAN
and
MARIE-ANDRÉE CHARLAND
Defendants, Plaintiffs in warranty and Cross-Defendants
AND
9257-4805 QUÉBEC INC.
Defendant in warranty
and
CONSTRUCTION VOYER INC.
Defendant in warranty and Cross-Plaintiff
______________________________________________________________________
JUDGMENT
______________________________________________________________________

INTRODUCTION

[1]            The Petitioners asked the Court to order defendants to pay the expenditures related to the repairs that they had to do on the house that they bought from them in July 2008. They proposed that the latent defects of the house are covered by the legal warranty of quality prescribed by the Civil code of Quebec .

[2]            The Defendants having bought the house from 9257-4805 Québec inc. in August 1999, [1] known until recently as Construction René Voyer inc, the company who built the house, they took an action in warranty against it, asking that it be condemned to discharge them from the obligation of paying any sums of money they might be ordered to pay to the principal Plaintiffs.

[3]            The Defendants also took an action in warranty against Construction Voyer inc., a company incorporated in February 2001, alleging that both companies are the alter ego of one another and that, because the creation of the later company led the latter company to shy from its legal obligations or defraud 9257-4805 Québec inc.'s clients in general and Plaintiffs in warranty in particular, their corporate veil should be removed. Consequently, they asked that the later company be ordered to pay whatever sums of money 9257-4805 Québec inc. is responsible for under its legal obligations to warrant the quality of the property.

The facts

[4]            In 1999, Defendants bought from Construction René Voyer Inc. an immovable located at […] in Dollard-des-Ormeaux with a house to be built on, for which they paid in total $282 107.88. [2]

[5]            When the excavation started, they discovered that the land could not support the weight of a house, for it was being built on the site of a former watercourse that was filled with earth, garbage and other material a few years before. Mr. René Voyer, the President of Construction René Voyer Inc., found old plans of the area that showed the passage of said watercourse. The aerial pictures presented at trial [3] show clearly the presence of a relatively large watercourse going through the area and partly on Defendants’ property. It appears that the filling of the watercourse was done during the 80’s, for the pictures taken in 1993 show not only that the watercourse disappeared, but also that a great number of houses were built not far from Defendants’ property during that period.

[6]            Mr. René Voyer recognised that the land could not be used for the purpose for which it was being sold to Defendants, and used heavy equipment to dig a V shape hole 18 feet deep and remove between 60 and 100 truck loads of soft soil, then filled the bottom of the hole with truckloads of rocks that were between 3 and 6 inches wide, and truckloads of compacting sand, which altogether amounted to 60 truckloads of material.

[7]            It is during that work that Mr. Oberman, one of the Defendants, drove by the property and took a picture of the hole [4] which shows the property, the rock and a large hydraulic excavator on top of it.

[8]            According to Mr. Oberman, Mr. Voyer and his company’s sale representative explained to him that they had discovered that the land was not solid enough to be built on and that they were doing what was necessary to solve the problem so that they could build on it a much bigger property than the one bought by Mr. Oberman and his wife. Mr. Voyer then informed Mr. Oberman that he would have to pay an additional $20,000.00 to pay for the additional costs incurred, which Mr. Oberman, with good reasons, refused to pay.

[9]            Construction René Voyer Inc. and the Defendants signed the sale contract on August 31, 1999. [5] The sale was made with legal warranties, but the contract did not mention the former presence of a watercourse running through the land.

[10]         Years went by and Defendants decided to sell their property. On July 28, 2008, the Petitioners signed the sale contract [6] by which they bought Defendants’ property, with legal warranty, for $730,000.00. Nothing was mentioned about the land or the building or the said watercourse.

[11]         Prior to buying the house, the Petitioners hired Maloney Home Inspections Inc., who sent them on June 6, 2008 a report [7] which mentioned that there were sealed cracks on one side of the foundation of the house and one additional crack at the rear of the property, near a vent, for which it recommended using mortar calking to seal said crack. The inspector also recommended to Mr. De Luca that he communicate with the sellers to inquire about their knowledge of the nature of the cracks. Mr. Oberman assured Mr. De Luca that the 3 cracks were mere hairline cracks that did not go through the foundations and had been sealed for esthetic reasons only. The future proved him right: those 3 cracks were indeed surface cracks and do not play a part in the rest of the story.

[12]         As for the crack located near the back vent, Mr. De Luca was told by his inspector that, because it was located on a weak point of the brick wall, between the foundation and a window, there was no cause for worry. As for the previous hairline cracks, this additional crack, perhaps one foot long, does not play a role in the rest of the story.

[13]         There was also another crack, this one going through the joints over the balcony at the back of the house, that had been repaired by Mr. Oberman.

[14]         The Court already mentioned that Construction René Voyer Inc., according to Mr. René Voyer’s testimony, realised during the digging of Petitioners’ property that a watercourse used to go through the area. Strangely, Mr. Voyer did not find it necessary to do the work that he had done on Petitioners’ property on at least two other properties which were in or close to the path of the watercourse.

[15]         One of the Petitioners’ neighbours, Mr. Steve Drizos, bought from Construction René Voyer Inc. in 1999 a property located right across the street from Petitioners’ property. During the first few years after the purchase of the property, some cracks appeared and they were repaired, but around 2008 or 2009, Mr. Drizos started experiencing serious difficulties with his property. Cracks seemed to be appearing all over the place.

[16]         Understanding that patch up jobs would not solve the problem, he called upon the services of Alerte Fissures Inc. which recommended that the whole foundation be underpinned in order to stabilize the building. The total cost of the work was $135,000.00, which was paid by the APCHQ, under a warranty program.

[17]         A neighbour of Plaintiffs, Mr. Frank D’Atilia, bought his property located at [address 1], in June 1999, also from Construction René Voyer Inc. He also experienced major foundation problems like Mr. Oberman and Mr. Drizos. He noticed what was considered minor settling problems during the first two years following the construction of the building. The small cracks were repaired. In 2007-2008, further and more important cracks appeared on his property. Mr. D’Atilia’s house was the first to be built on that street. New cracks occurred on the kitchen tiles in 2010, and on the master bathroom tiles the next year, as well as on walls inside the house.

[18]         Mr. D’Atilia then called Mr. René Voyer, who came to inspect the building with an expert. They concluded that the house was shifting from the back to the front and that the only solution was to underpin the whole foundation of the house, as was the case for Mr. Drizos. As for the cost of the repairs, Mr. D’Atilia signed an agreement with Construction René Voyer Inc. that split the costs between the parties, Mr. D’Atilia paying more than Construction René Voyer Inc. Again, the total costs of the repairs exceeded $100,000.00.

[19]         During his testimony, Mr. René Voyer admitted that, in these two cases, he missed the fact, when digging the foundation, that the land was soft. He explained that he did not make any tests to verify the exact state of the soil and its capacity to support a building.

[20]         As for the Petitioners’ property, Mr. Voyer mentioned that, although he was convinced that the filling was done properly and could support weights much heavier than that of the house, he did not make any tests to make sure that he was right.

[21]         In March or April 2010, Mr. De Luca called Mr. Oberman about the cracks. It is then that Mr. Oberman told him for the first time about the watercourse, adding that the problem could not be similar to that of his neighbours’ because his land had been filled with an 18 foot pile of rocks and sand right underneath the house, and could support a much larger building.

[22]         Towards the end of the summer 2011, Mr. De Luca discovered new vertical cracks between two floor windows. [8] At the end of October or in early November, a vertical crack appeared on the front wall of his property, from the foundation up, [9] and two other vertical cracks appeared on the side wall, longer and bigger, from the foundation up to the roof, right through the bricks. At that point in time, Mr. De Luca had learned about his neighbour’s previous difficulties and was beginning to believe that he was facing the same problems.

[23]         Cracks continued to appear. At the end of March or in early April 2011, Mr. De Luca hired Alerte Fissures Inc., a company specialized in foundation repairs. On April 8, 2011, Alerte Fissures Inc. sent him a proposition [10] that mentioned that they had inspected the property and calculated the levels of the foundation walls in order to examine the deformation and evaluate if the building had to be stabilized on posts. They mentioned that the underpinning of the foundation in order to stabilize the building was necessary if it was noted that there was continuous deformation that caused structural damages to the building. According to their observations, the addition of deformations that exceeded one inch and damages to the building made them recommend that the building be stabilized by underpinning all the foundations, at a cost of approximatively $65,700.00 plus taxes, exclusive of any accessory work such as the repairs of the pavement or the surrounding landscape.

[24]         On May 12, 2011, Plaintiffs’ lawyers sent a written notice of denunciation and a formal notice to Defendants [11] by which they informed them of the extent of the problems they were experiencing and the solutions recommended by Alerte Fissures Inc. The letter added that further tests on the immovable were in the progress of being carried out, the results of which would be promptly brought to their attention.

[25]         The Petitioners then hired Le Groupe Solroc and asked them to prepare a geotechnical expertise of the building. Le Groupe Solroc inspected the property and prepared a report that was sent to the Petitioners on July 21, 2011. [12] They recommended the underpinning of the whole foundation of the house in order to stabilize the building, and that the underpinning be total and not partial, so that the foundations placed upon natural soil would also be underpinned. The rationale behind the recommendations goes as follows:

Indeed, the risk to partially underpin any construction is to found it on two (2) different foundation systems which could create differential reactions under various stress and consequently differential settlements and structural damage could occur without specific precautions (reinforcement of the structure, isolation joint, etc.).

[26]         On October 20, 2011, Petitioners’ lawyer sent to Defendants’ lawyer a copy of the experts’ report and of the estimates they had requested from the contractors that would be hired to do the work that was recommended by the experts. [13]

[27]         Even though the Defendants would eventually refuse to make, or pay for, the repair work requested by the Petitioners, they did not refrain from any actions. Mr. Oberman hired what he then referred to as an expert, and asked the Petitioner if that expert could inspect his property, and the Petitioner authorized such an inspection. The proof presented to the Court is that no report was ever written by an inspector, and no expert witness was ever presented to the Court by Defendants during the trial. The same is true for all Defendants in warranty.

[28]         Mr. Oberman also called Mr. René Voyer. He suggested to him that the underpinning of the house could be made and the cost split equally between the Petitioners and Construction René Voyer Inc., and suggested that Construction René Voyer Inc.’s employees and equipment could be used so as to lower the costs of the repair work. It is at that point that the telephone line went dead. Mr. Oberman called back Mr. Voyer, left him a polite message. Mr. Voyer never returned the call.

[29]         The Petitioners went on with the correction work, as per the recommendations, and then had the action prepared and served on Defendants.

[30]         Upon the reception of said action, the Defendants served in June 2012 their action in warranty Construction René Voyer Inc. Petitioner in warranty’s lawyers were then told by Construction René Voyer Inc.’s lawyers that the name of the company had been modified a few months earlier, on January 26, 2012, to 9257-4805 Québec Inc. During his testimony, Mr. René Voyer explained to the Court that the name of the company was changed following his accountant’s recommendation, mainly, if not solely, in case an upcoming judgment would condemn the company that uses his own name, thus his name would not be sullied.

[31]         In August 2012, the correct name was therefore substituted in the procedure, at which time Construction Voyer Inc. was added as a co-Defendant in warranty.

The position of the parties

[32]         The Petitioners’ position is quite straightforward: they spent three quarters of a million dollars to buy a property which, according to them, had serious defects. They would not have paid such a price had they known about these defects beforehand. In fact, Petitioners’ position is that they never would have bought the property had they been told before the sale that the building had been built directly over the bed of a former waterway.

[33]         The Petitioners add that they advised the Defendants on time, right after they themselves learned about the defects, that they hired the appropriate expert and did the corrective work - and only the work - required in order to bring the building back to its original state, that is, free of latent defects.

[34]         The Defendants oppose the Petitioners’ pretentions, mainly because, according to them, there were never any latent defects, nor other kinds of defects, when they sold them the property, because the preliminary work done by their contractor Construction René Voyer Inc. took care of all the problems that would have been caused by the soft soil.

[35]         The Defendants rather take the position that the shifting of the house was caused not by the nature or the quality of the underlying soil, but by the work that the Petitioners did after they bought the property, that is, the installation of a swimming pool too close to the property. According to them, the hole that was dug in order to install the swimming pool caused the soil underneath the building to shift and move away from it. That, and not the quality of the soil itself, would be the cause of the problems.

[36]         As for the amount being claimed, they argue that a partial underpinning would have sufficed in correcting the shifting of the house, that the replacement of the paving stones of the driveway was not called for, and that part of the costs cannot be claimed because it relates to items that were not present when the sale occurred.

[37]         As for the action in warranty, the Petitioners in warranty argue that the Defendant in warranty Construction Voyer Inc. is the alter ego of 9257-4805 Québec Inc. (formerly Construction René Voyer Inc.) because the former was created and controlled by the same persons who controlled the latter, when it was created in 2001. They add that both companies and their administrators organized their publicity in order to confound the public into believing that they are one and the same, doing so with the intent of transferring all the assets, good will and value to the new company, leaving the liabilities to the old one.

[38]         9257-4805 Québec Inc. did not appear in Court and consequently, did not present any defence or proof during the trial.

[39]         The Defendant in warranty Construction Voyer Inc. proposes that that company was created for the sole benefit of Mr. Jean-François and Pascal Voyer, Mr. René Voyer’s sons, legally, in good faith, and without any intent of defaulting the public or any of their clients or Construction René Voyer Inc.’s former clients. They argue that, even though 9257-4805 Québec Inc. has no assets anymore, it is solely because its founder and sole administrator and shareholder, Mr. René Voyer, who is almost 70 years old, decided a few years ago to retire, and not because he wanted to avoid meeting his obligations or making himself judgment proof.

[40]         Construction Voyer Inc., cross-Plaintiff, also asks the Court to condemn the Petitioners in warranty to be liable for damages in the amount of $20,000.00, as the allegations in their procedure tarnished their reputation.

Analysis

[41]         The Civil Code of Quebec prescribes the following warranty of quality which accompanies any sale of a property in the province:

Art. 1716 . The seller is bound to deliver the property and to warrant the ownership and quality of the property.

These warranties exist by operation of law, whether or not they are stipulated in the contract of sale.

Art. 1726 . The seller is bound to warrant the buyer that the property and its accessories are, at the time of the sale, free of latent defects which render it unfit for the use for which it was intended or which so diminish its usefulness that the buyer would not have bought it or paid so high a price if he had been aware of them.

The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect; an apparent defect is a defect that can be perceived by a prudent and diligent buyer without the need to resort to an expert.

Art. 1727 . If the property perishes by reason of a latent defect that existed at the time of the sale, the loss is borne by the seller, who is bound to restore the price; if the loss results from superior force or is due to the fault of the buyer, the buyer shall deduct from his claim the value of the property in the condition it was in at the time of the loss.

Art . 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 also to make reparation for the injury suffered by the buyer.

[42]         In ABB Inc. vs Domtar Inc., [14] the Supreme Court of Canada explains that to be covered under the legal warranty of the civil code, the defect must meet four essential prerequisites: it must be latent, it must be sufficiently important, it must exist at the time of the sale and it must be unknown to the buyer.

[43]         So what is a latent defect? At what point should it be instead considered apparent? The authors Jobin et Cumyn [15] answer these questions in the following manner:

L’article 1726 précise qu’il faut entendre par un vice apparent celui « qui peut être constaté par un acheteur prudent et diligent sans avoir besoin de recourir à un expert ». Cette disposition, qui reprend une recommandation de l’Office de révision, met fin à une importante controverse doctrinale et jurisprudentielle sur la nécessité, pour l’acheteur profane acquérant un bien usagé, de le faire examiner par un expert afin de déceler les vices, s’il veut satisfaire l’exigence du vice caché. Dans la décennie précédant la réforme du Code civil , la jurisprudence avait déjà tempéré l’exigence de recourir à un expert.

(…) L’obligation de recourir à un expert, aujourd’hui, ne pourrait se justifier d’après nous que de façon exceptionnelle lorsque l’examen initial fait par l’acheteur révèle un indice sérieux de vices potentiels que seul un expert peut identifier ou encore quand le vendeur révèle certains faits préoccupants.

(we underline; references omitted)

[44]         Our Court of Appeal explains the line of thought that must be followed when one must evaluate the characteristics of a defect affecting an immoveable that was sold, in Blanchard vs Guertin . [16] In this decision, the Court of Appeal referred with approbation to the commentaries of Justice André Rochon, then at the Superior Court, [17] concerning the obligations of both the seller and the buyer :

Cette disposition écarte la controverse quant à la nécessité d'avoir recours à un expert. Cette obligation n'apparaissant pas aux dispositions du Code civil du Bas-Canada (art. 1522 et ss). Ce sont les tribunaux qui avaient en matière immobilière défini le vice caché à partir d'un concept objectif : le vice sera caché s'il échappe à l'examen visuel de l'expert sans investigation poussée ou destruction partielle des éléments du bâtiment. L'absence de recours à l'expert n'était pas fatale si la partie établissait que pareille assistance n'aurait été d'aucune utilité. L'obligation de recourir à un expert était également modulée suivant différents critères dont l'âge du bâtiment.

Ceci étant dit, comment doit-on interpréter les dispositions du Code civil du Québec à cet égard?

L'acheteur prudent et diligent d'un immeuble procède à un examen visuel attentif et complet du bâtiment. Il est à l'affût d'indice pouvant laisser soupçonner un vice. Si un doute sérieux se forme dans son esprit il doit pousser plus loin sa recherche . D'une part, on ne peut exiger d'un acheteur prudent et diligent une connaissance particulière dans le domaine immobilier. D'autre part, on ne peut conclure au vice caché si le résultat d'un examen attentif aurait amené une personne prudente et diligente à s'interroger ou à soupçonner un problème. À partir de ce point l'acheteur prudent et diligent doit prendre des mesures raisonnables, selon les circonstances, pour connaître l'état réel du bâtiment. Il ne saurait se replier sur son manque de connaissance si son examen lui permet de soupçonner une anomalie quelconque.

Il faut donc examiner, suivant chaque cas d'espèce, la conduite d'un acheteur prudent et diligent. Antérieurement à 1994 on exigeait également de l'acheteur qu'il soit prudent et diligent. Sans revenir à l'ancienne règle jurisprudentielle au sujet des experts, il est possible dans certains cas que le fait de ne pas recourir à un expert pourra être perçu en soi, comme un manque de prudence et de diligence. Le tribunal ne veut pas réintroduire dans notre droit une exigence spécifiquement exclue par le législateur en 1994. Par ailleurs, cette exclusion ne saurait être interprétée comme autorisant l'acheteur à agir de façon insouciante ou négligente. Cet acheteur ne fera pas preuve de prudence et de diligence alors qu'il existe des indices perceptibles pour un profane, s'il ne prend pas les moyens (y compris le recours à des experts le cas échéant) de s'assurer que l'immeuble est exempt de vice .

(we underline)

[45]         Thus, article 1726 CCQ requires that the behavior of the buyer be objectively analysed, using as a standard the image of the «reasonable person». [18]

[46]         Also, the normal wear and tear of the immoveable will not be treated as a latent defect under article 1726 CCQ [19] Moreover, as mentioned by Justice Pierre C. Gagnon [20] , the latent defect will have to be important, in that one should be able to conclude that the buyer would not have bought the property had he known about it, or alternatively, that the price that he would have paid, had he known about it, would have been considerably lower.

[47]         This being said, an apparent defect may be considered latent under article 1726 CCQ if the seller misleads the buyer through his actions or words, or if the former makes the latter believe that the defect is much less important than it really is. If the intent of the seller was to mislead the buyer, then his behavior will be considered a deceit or a fraud, in which case he may be condemned to indemnify the buyer. These rules are in addition to those associated to the legal warranty of the civil code and are in keeping with the principle of good faith that must govern the behaviour of all parties to a contract, as prescribed by article 1375 CCQ [21]

[48]         In this case, the buyers became aware of the shifting of the house in the fall of 2010, verbally advised its sellers in the days that followed, acted promptly to get advice from the appropriate experts, sent a written notice to the sellers in which they reiterated their claim as well as its nature, then again acted promptly in order to get more detailed information as to what had to be done in order to correct the defect, and finally took the legal proceedings in April 2012. Given the circumstances and the nature of the defect, they cannot be blamed for taking too much time to settle the steps of their actions.

[49]         The fact that the defect - if present - was not apparent at the time of the sale is also not in dispute: the few cracks that were then visible were minor and could be, and in fact were, explained by the settling of the house in the month after it was built. The first sign that something was wrong occurred in the fall of 2010 when Mr. De Luca noticed a major crack on the front wall of the house.

[50]         Therefore, only one question remains: was the defect, that is, the cause of the shifting of the house, present at the time of the sale?

[51]         The answer to that question depends on what was the source of the defect. The Petitioners argue that the shifting of the house was caused by the poor quality of the soil underneath it, in that the removal of the soft soil and its replacement with rock and sand was not done properly.

[52]         The Defendants and Defendant in warranty Construction Voyer inc. oppose that view. They propose that the soft earth was removed properly and replaced with adequate rock and sand that could sustain a much bigger and heavier building. The cause of the shifting of the house could therefore be explained solely by the fact that the Petitioners decided to put a swimming pool in the backyard too close to the house, and to put paving stones right up to the back wall of the property, and that the latter necessitated the use of a piling machine which must have caused strong vibrations that affected the foundation of the house.

[53]         After reviewing all the elements presented to the Court, it appears that we will never know with absolute certainty what caused the house to shift as it did.

[54]         However, the Court is not called upon to decide that question “without a shadow of a doubt”, as per the criminal criteria, but rather to decide according to the balance of probabilities as prescribed by the Legislator:

2804.       Evidence is sufficient if it renders the existence of a fact more probable than its non-existence, unless the law requires more convincing proof.

[55]         Let us now examine the proof that was presented to the Court related to what caused the shifting of the house, and the conclusion that it leads to.

[56]         Firstly, no one disputes the fact that three houses were built a few weeks or a few months apart in 1999, and that except for the occurrence of a few small cracks early after their construction, no major problems occurred until about 9 years later, except perhaps for Mr. Drizos’s house that started having important cracks a few years earlier. It remains that all three houses were built the same year and suffered the same problems at about the same period, between 2008 and 2010, and that the source of the problem for two of these houses could certainly not have been the installation of a swimming pool or paving stones.

[57]         As for the time that it took for these problems to surface, not a word was said during the trial, at least for two of these houses that belong to the Petitioners’ neighbours. Was the end of the first decade of the millennium particularly wet so as to cause the water to follow its former natural path and cause the soil underneath the houses to become softer? Was the temperature on the contrary particularly dry but caused the soil to shrink, with similar consequences? What we know is that the aerial pictures taken in 1928, 1958, 1972, 1981, 1993 and 2001 clearly show that the three houses were built either directly over or in the vicinity of a watercourse and, according to Mr. René Voyer’s testimony, it had been filled with ordinary material and garbage and had been bulldozed over, which made it vanish into thin air, at least to the naked eye.

[58]         Mr. René Voyer admitted during his testimony that even though he had done some soil testing before buying the much larger lot (which was afterward subdivided in approximately 50 lots), he had missed the fact that a watercourse ran through the lot some years earlier. He also admitted that even though he knew that the architect that drew the plans of defendants’ house he was about to construct for his clients wrote that, because of the weight of the house, which was to be covered with bricks and stones, the land had to be able to support 2000 pounds per square foot, he did not have any soil tests made in order to make sure that it respected the architect’s requirements. Mr. Voyer explained that he considered it sufficient to measure the load-bearing capacity of the soil at first sight, that is, simply by looking at what was being dug by the hydraulic excavator for the construction of the foundations of the house, without looking at or testing what was underneath.

[59]         As for the two Petitioners’ neighbours, Mr. René Voyer admitted his error: “on a échappé les deux maisons”, he said. But he added that he did not make the same error concerning Plaintiff’s property: as the hydraulic excavator started digging the hole for the foundations, they realised that the land had been filled with material and garbage and could see from looking at older plans that a watercourse ran through the property a few years earlier. Mr. Voyer then asked the operator of the hydraulic excavator to remove all the filling soil that had been put on the property, down to the natural soil . The operator removed between 60 and 100 truckloads of material and then filled the V shape hole that was dug with sand and rock.

[60]         Was all the soil that should have been removed really removed? Assuming that all but only the filling soil was removed as per Mr. Voyer’s instructions, shouldn’t a further layer of soil, the bottom of the watercourse, also have been removed? Was the operator of the hydraulic excavator that dug out the filling soil the same than the one that dug the hole for the foundations of Plaintiffs’ two neighbours, that is, the one that mistakenly thought that the soil of these two properties was good enough to support the weight of a house, as admitted by Mr. Voyer? The operator of the hydraulic excavator that removed the earth from Plaintiff’s property did not testify during the trial. Moreover, neither Defendants nor Defendants in warranty presented the results of tests or other expertise to the Court regarding the quality of the soil underneath Petitioners’ house.

[61]         All that remains as part of the proof is the fact that the house was built over a former watercourse which had first been filled and bulldozed over with loose material, that the filling soil was removed and the hole that was dug filled with sand and rock which, according to Mr. Voyer’s testimony, was then correctly compacted. However, in the absence of proof as to how the work was done and concerning tests done right after the filling and compacting was completed, and before and after the foundation of the house was built, one is left with serious doubts as to the manner in which the work was done, and if it was sufficient or not. Mr. Voyer testified that at that point, he was an experienced builder for he had participated in the construction of over 4000 houses. Maybe so, but he also admitted that it was the first time that he built a house on the sight of a former watercourse and that he did not seek counselling from an engineer or any other type of soil expert to find out what had to be removed.

[62]         The quantity and the quality of the filling of the hole may also be put into question when one compares the width of the filling (as can be seen by looking at the picture taken by Mr. Oberman during the work [22] ) and the relatively large size of the house. Although no precise calculations were made regarding the width of the filling, one can question if it was wide enough. It appears to have been wide enough for the foundation of the house but not wide enough to fill the hole completely.

[63]         As mentioned earlier, Plaintiffs hired Le Groupe Solroc in order to confirm the findings and recommendation made in April 2011 by Alerte Fissures Inc. Le Groupe Solroc’s report was prepared by Mr. Thomas Eysseric and Raymond Laurent, the latter recognized by the Court as an expert in soil engineering.

[64]         Their report concludes that, according to the damages caused to the house and the soils encountered in three boreholes made around it, and based on the aerial pictures that the site under study was a former swampy area which had been backfilled in the 80’s for residential development, the principal cause of the cracks of the building was differential settlements in the foundation soils. It therefore recommends underpinning the whole foundation of the house, for any partial underpinning would provoke other kinds of problems to the house, as mentioned earlier.

[65]         The Defendants submit that the expert’s report is flawed, for the three boreholes were dug too far away from the foundations of the house. Said boreholes were dug at approximately 1,2m and up to 1,83m from the building so as not to damage the building or the surrounding landscape, as appears from the report as well as a second report dated May 22 ^nd , 2015. [23] Defendants also underline the fact that the experts were not told at the time they did the boreholes that part of the land had been emptied from its soft soil and filled with filling material such as sand and rock, which is true, as admitted by the expert Laurent.

[66]         According to the Defendants in warranty, the experts should have dug at least one borehole directly underneath the house in order to verify if any filling material had been put there by the contractor before putting the foundation of the house.

[67]         Again, even though the Defendants in warranty’s suggestion that a borehole should have been dug right underneath the house seems reasonable and could have allowed a better knowledge of what was right where the borehole would have been dug, it would not have put into light the sufficiency both in depth and width of the filling materials, nor the quality of its installation.

[68]         So, what then, according to defendants, was the cause of the shifting of the house? The Defendants propose the following answer to that question: Petitioners’ installation of a swimming pool in the backyard, and the digging which it required, are the cause of the problem. This hypothesis was explained By Mr. René Voyer as follows: while digging the hole necessary for the swimming pool, there would have been a migration of the waters located in the filling material mainly composed of sand. This migration of the waters would have brought with it the sand itself, making the filling material sink and causing the house to shift. Mr. Voyer concluded that hypothesis by noting that there seemed to be a correspondence in time between the digging for the swimming pool and the shifting of the house, the latter having occurred the year after the former.

[69]         As already qualified by the Court, this hypothesis is only a hypothesis: no proof was presented that the filling material underneath the house was filled with water at the time the hole was dug, and more importantly, that there was any migration or displacement of sand accompanying the migration of said water, if any.

[70]         Mr. Voyer also proposed that the sheer weight of the swimming pool, once filled with water, could have pushed downward the soil in the vicinity, a theory made more plausible (according to him) by the fact that he never removed the original filling material where the backyard now is, for only the material directly underneath the house was removed and replaced with more adequate material.

[71]         This hypothesis was again contradicted, this time by expert Laurent’s testimony. Mr. Laurent explained that the weight of the swimming pool was transmitted to the soil right underneath it and to the surrounding soil, but at an angle. He estimated that, because the bottom of the swimming pool is located at about the same depth as the concrete footing of the house, taking into account the angle of the pressure exercised by the weight of the swimming pool, it would have had a limited effect, if any, on the foundation of the house or the soil underneath it.

[72]         The Defendants presented another hypothesis that could explain why the house shifted as it did. They proposed that the paving stones located between the swimming pool and the house were installed much too close to the house. The equipment used by the person who installed the paving stones would have pounded the soil, which could have had an effect on the foundation of the house.

[73]         Again, this explanation proposed by the Defendants remains in the realm of hypotheses: no proof was presented that heavy material was used to pounder the soil to install the paving stones, or that the use of such material, if any, had such consequences on the house. Furthermore, it was not demonstrated that the pounding of the soil behind the house and the appearance of the cracks were related time-wise.

[74]         Moreover, the proof showed that some of the paving stones sunk into the soil right next to the house. This would indicate that either there was not enough gravel put underneath the paving stones, or that it was not pounded enough, or both, in which case it would contradict Defendants’ theory on this matter.

[75]         Consequently, the hypothesis proposed by the Defendants and Defendant in warranty, that the swimming pool or the paving stones located at the back of the property could have provoked the shifting of the house, remains unproven, in the absence of any further demonstration or expertise, and will not be retained by the Court.

[76]         Therefore, given the evidence, the cause of the shifting of the house is the insufficient preparation of the soil before the construction of the house. The existence of that defect at the time of the sale is more probable than improbable. As the defect was latent, serious, and existed at the time of the sale and was unknown to the buyer [24] , the sellers were bound to warrant against it.

[77]         The Court acknowledges that the additional condition prescribed by article 1726 CCQ, that the latent defect so diminished the usefulness of the goods that the buyer would not have bought it or paid so high a price had he been aware of them, is also met.

The extent of the warranty and the value of the claim

[78]         As mentioned earlier, the seller is bound to warrant the buyer that the property is free of latent defects which so diminish its usefulness that the buyer would not have bought it or paid so high a price had he been aware of them. This rule is applicable if the seller was not aware of the existence of the defect at the time of the sale. If, however, the seller knew of its existence, article 1728 CCQ prescribes the following:

Art. 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 also to make reparation for the injury suffered by the buyer.

[79]         In this case, the Defendants were not aware of the latent defect. It is true that they were told by Construction René Voyer Inc. before they themselves bought the property, that the house was going to be built on the site of a former watercourse, but they saw that some remedial work was being done and were reassured by Mr. René Voyer’s words that no problems would ever evolve from the repair work.

[80]         During the years that followed their purchase of the property, there were no problems, no cracks, and that led the Defendants to believe that Mr. René Voyer was right, until they sold the property to Plaintiffs, save for a slight movement of the backyard balcony.  Indeed, a few years after they bought the property, Defendants noticed that the balcony, made of concrete and attached to the house with metal posts, was starting slightly to break loose .

[81]         The Defendants called Mr. René Voyer who explained to them that this was caused by the fact that the balcony made of concrete was putting its heavy weight on the concrete polls that were standing underneath it, but not laying on sufficiently compacted soil, which resulted in a slight shifting of the balcony away from the house. Mr. Voyer then repaired the few bricks that had cracked because of the shifting of the balcony and filled the horizontal crack underneath it with a silicone hardener, which solved the problem to every one’s content.

[82]         Mr. De Luca also proposed that, had he been told by Mr. Oberman that the house was built on the site of a former watercourse, he would not have bought the property. This may be true, but the fact that a building is being built on the site of a former watercourse is not necessarily a latent defect nor does it automatically lead to the shifting of the house built over it. It also does not prove that the latent defect, if any, was known to the sellers.

[83]         Let us now proceed with the analysis of Plaintiffs’ specific claims.

a)         Alerte Fissures Inc.

[84]         The most important claim presented by Plaintiffs relates to the repair work done on the foundation. Mr. Jean-François Desjardins was the person in charge of that work, which was done on Plaintiff’s property by Alerte Fissures Inc. In total, 43 polls were installed all around the house, which was raised 3 ¼ inches in the back and between ½ and ¾ of an inch in the front. He explains that all the polls were necessary and calculated according to the weight of the house. Each poll was pushed into the earth until it reached the point where it could not go down any further, for example when it met a rock formation. All the calculations were made by engineers working for the company. For the work, including the preliminary inspections, level calculations and other prerequisites, they charged $82,207.13, amount that was paid by Plaintiffs. [25]

[85]         The Defendants and Defendant in warranty argue that Alerte Fissures Inc. used too many polls and that a partial polling of the house would have been sufficient.

[86]         Although it is true that Mr. Desjardins mentioned that a partial polling was sometimes done, the proof does not show that partial polling would have been the appropriate solution to the problem. Contrary to Defendants’ proposition that partial polling could have been sufficient, the expert Laurent testified (and indicated in his written report [26] ) that partial polling was to be excluded due to the nature of the soil, as it would have triggered other problems.

[87]         Mr. Desjardins also explained that in order for his employees to do the underpinning of the house, extensive preparation work had to be done around it, which involved removing all the ground material around the house for which heavy machinery was used, which itself involved the removal of 6 to 10 feet of landscape around the house. As for the paving stones in the driveway, Mr. Desjardins explained that the use of heavy machinery (among other works, the concrete slab in the two door garage had to be completely destroyed, which involved again the use of heavy machinery inside the garage) meant that the paving stones could not be protected just by using sand or putting wood over them; they had to be removed entirely. [27]

[88]         Accordingly, the amount of $82,207.13 for Alerte Fissures Inc. will be granted.

b)         Paysagistes Les Pics-bois

[89]         Plaintiffs paid a bill dated November 2 ^nd , 2013 in the amount of $15,272.37 and a second bill dated June 3rd, 2014 in the amount of $13,264.42. [28] Both bills were paid by Plaintiffs. [29] The work done by Paysagistes Les Pics-bois consisted of removing the paving stones all around the property, the window wells, a rough iron fence on the right hand side of the house, as well as, after the underpinning was done, doing all the work necessary to put the landscaping back to its former state, including the rebuilding of the paving stones all over the property, including the preparation of its foundation.

[90]         According to Defendants, some work done by Paysagistes Les Pics-bois was not necessary or added value to the property.

[91]         Firstly, they proposed that a concrete step was added to the side door of the garage, step which was not existent before the work. This may be true, but the Court is far from being convinced that the cost of this step is higher than the cost of the material that would have been needed to raise the land where the door is as was the case prior to the work, as no proof was presented to that effect.

[92]         Secondly, they proposed that the addition of some paving stones next to the house, where there were flowers and other plants, cost more than the replacement of said flowers and plants. Again, these paving stones replaced the landscaping that would have involved additional costs had this small area been arranged exactly as it was before. Because of this and because the cost of this small area of paving stones and the cost of the alternative landscaping was not proven, no amount will be removed from the claim.

[93]         Thirdly, they dispute the decisions of Plaintiffs to use machinery to remove the existing paving stones forming the driveway, to throw them away and replace them with brand new ones.

[94]         Mr. De Luca explained that he was told by the representative of Paysagistes Les Pics-bois, before giving them the contract, that removing all the paving stones one by one, cleaning each one and removing the binding sand that was affixed to it, would have involved many hours of labor and cost as much as removing and getting rid of the old stones and replacing them with brand new ones.

[95]         Mr. Yves Barrette, a representative of Paysagistes Les Pics-bois, confirmed that fact. Consequently, the Court will not subtract from the claim the cost of the new paving stones.

[96]         As for the paving stones located between the house and the swimming pool in the backyard, it was argued that, because it had begun to sink, as can be seen on one of the pictures [30] , Plaintiffs would have had to have it redone even though no latent defect had been discovered.

[97]         Defendants are right on that point. However, as no proof was presented regarding the cost of the repair on that specific section of the paving stones, the Court will arbitrate such a cost and give it a value of $500.00.

[98]         Finally, the Defendants argue that the Plaintiffs should not be compensated for the cost of the repairs made to their landscaping and paving stones located in the back of their property, as they were not existent at the time of the sale. They argue that the exercise that must be done by the Court is to determine what price the parties would have agreed upon had the latent defect be known at the time of the sale, and not to compensate for damages that the latent defect might have caused to Plaintiffs, if it is determined that the sellers had no knowledge of that latent defect at the time of the sale. Therefore, they add, because they had no knowledge of the latent defect at the time of the sale, the only compensation that could be granted should be the cost of the replacement of the grass that was present at the time of the sale, and not the damages involved in the replacement and the repair of the landscaping and paving stones.

[99]         The Court cannot agree with the approach proposed by the Defendants.

[100]      The applicable rules governing the quantum in that matter are exposed by Justice Rochon of the Court of appeal in Verville c. 9146-7308 Québec inc . [31] :

[57] Un rappel sommaire des règles applicables s'impose.

[58 ] Le droit à la réduction du prix de vente est régi par les articles 1604 et 1726 C.c.Q. qui sont ainsi rédigés :

1604. Le créancier, s'il ne se prévaut pas du droit de forcer, dans les cas qui le permettent, l'exécution en nature de l'obligation contractuelle de son débiteur, a droit à la résolution du contrat, ou à sa résiliation s'il s'agit d'un contrat à exécution successive.

Cependant, il n'y a pas droit, malgré toute stipulation contraire, lorsque le défaut du débiteur est de peu d'importance, à moins que, s'agissant d'une obligation à exécution successive, ce défaut n'ait un caractère répétitif; mais il a droit, alors, à la réduction proportionnelle de son obligation corrélative.

La réduction proportionnelle de l'obligation corrélative s'apprécie en tenant compte de toutes les circonstances appropriées; si elle ne peut avoir lieu, le créancier n'a droit qu'à des dommages-intérêts .               

[Je souligne]

1726. Le vendeur est tenu de garantir à l'acheteur que le bien et ses accessoires sont, lors de la vente, exempts de vices cachés qui le rendent impropre à l'usage auquel on le destine ou qui diminuent tellement son utilité que l'acheteur ne l'aurait pas acheté, ou n'aurait pas donné si haut prix, s'il les avait connus.

Il n'est, cependant, pas tenu de garantir le vice caché connu de l'acheteur ni le vice apparent; est apparent le vice qui peut être constaté par un acheteur prudent et diligent sans avoir besoin de recourir à un expert.

[59] Dans le cas de l'action estimatoire, le tribunal intervient dans un rapport contractuel pour modifier à la baisse le prix d'achat.  Pour le guider, le législateur lui demande de tenir compte « de toutes les circonstances appropriées » ( 1604 (3) C.c.Q.) afin de déterminer le prix que l'acheteur aurait donné s'il avait connu les vices cachés (1726 C.c.Q.).

[60] Cet exercice judiciaire fait appel au pouvoir souverain d'appréciation du juge de première instance.  Cette discrétion judiciaire s'effectue à l'aide de certains paramètres.

[61] La réduction du prix de vente doit être possible et raisonnable.  Dans la mesure où le créancier de l'obligation opte pour la réduction du prix de vente, il y a lieu de présumer que le bien vendu a certes un déficit d'usage, mais qu'il conserve une valeur autre que symbolique.  Comme je l'ai mentionné plus haut, il ne saurait être question, dans le cadre d'une action en réduction, de restituer intégralement à l'acheteur le prix d'acquisition tout en lui permettant de conserver le bien vendu.

[62] Règle générale, les tribunaux font montre de souplesse dans l'appréciation du préjudice causé au créancier.  Ils pondèrent la réduction de façon à ne pas enrichir indûment le créancier.

[101]      In the present case, balancing the total amount claimed by Plaintiffs hereafter established with the price they paid for the house, as well as the use they made of the backyard by constructing a swimming pool with all its accessories, which was certainly foreseeable at the time of the sale, the Court finds that the amount claimed is reasonable.

[102]      Accordingly, $28 036.79 of the claim will be granted.

c)         Irrigation 7 ^e Ciel

[103]      Mr. Patrick Ouellette, representing Irrigation 7 ^e Ciel, testified that the whole sprinkling system was replaced, except in the sector behind the swimming pool and the one in front of the property. The electrical panel of the system was saved, but not the valve box, which had to be replaced. Mr. Ouellette explained that it would have been as costly, even more so, to try to save the pipes, wires and sprinkling heads instead of simply removing them and replacing them with new ones.

[104]      Mr. Ouellette also mentioned that the cost of a sprinkler varies between $60 and $90 per head and that he installed 20 of them. He also mentioned that a sprinkler usually lasts between 10 and 15 years, after which time it has to be replaced.

[105]      Considering the age of the sprinkling system put in place by Plaintiffs in 2009, the Court will arbitrate the value of the depreciation at $500. Consequently, the claim will be reduced from $2471.96 to $1971.96.

d)         Fitz-Air Inc.

[106]      Fitz-Air Inc. billed Plaintiffs $617.42 to remove the heat pump and to put it back during the fall of 2013, so it would not interfere with the underpinning work. However, that bill also includes the replacement of a breaker for which $112.00 plus tax was charged. Consequently, the amount granted to Plaintiffs will be reduced to $488.62.

e)         Piscines Ouellette Inc.

[107]      Plaintiffs paid Piscines Ouellette Inc. the sum of $1278.52. [32] Mr. Claude Ouellette, representing Piscines Ouellette Inc., however testified that the bill includes the replacement of the filter ($300.00), the motor of the pump ($269.00), the light ($69.00) as well as the system to purify the water, which was modified to a system using salt ($259.00). Taking under consideration the cost of the manpower charged for the service call, the sum that will be granted to the Petitioners is lowered at $201.25.

f)         DBM Aluminium and Fer ornemental

[108]      Plaintiffs bought from DBM Aluminium and Fer Ornemental an aluminium railing, which they installed on the balcony located at the rear of the property, for which they paid $2099.99. It was argued by the Defendants that such railing was unnecessary and should be considered an improvement on the house.

[109]      It is not the case. Mr. De Luca explained that many of the bricks on the side wall of the house were cracked and had to be replaced, but no bricks of the exact same colour could be found on the market. The stonemason therefore recommended that they use the bricks that the defendants had used to build three small columns on the balcony, which they did, and that necessitated a new railing.

[110]      Consequently, $2099.00 for the new railing will be granted.

g)        Maçonnerie R. Ouellette

[111]      For the repair of all fissured bricks and joints, Maçonnerie R. Ouellette charged $4024.13, which was paid by Mr. De Luca. [33] This amount will therefore be granted to the Petitioners.

h)         Mr. De Luca’ personal damages

[112]      Mr. De Luca testified that he lost many days of work in order to help with the repairs of the house. However, no amount will be granted to compensate such damages because such a claim is precluded under article 1728 CCQ, as the latent defect was unknown to the sellers at the time of the sale. Furthermore, no proof was made that Mr. De Luca incurred any loss of revenues.

i)          Total amount granted

[113]      Consequently, the sum of $119,028.88 will be granted to Plaintiffs. This sum represents the cost of the work that was necessary to repair the latent defects that affected the house on the day of the sale [34] and to put it in the state for which the price of the sale was agreed upon by the parties in July 2008. This amount represents the reduction of the price in conformity with the warranty of quality granted by article 1726 CCQ

The proceedings in warranty against 9257-4805 Québec inc.

[114]      As mentioned earlier, the Defendants acquired their property from the original contractor 9257-4805 Québec Inc., formerly known as Construction René Voyer Inc. The latter chose not to act upon the reception of a notice to appoint a new attorney, and maintained its decision not to be represented by lawyers anymore in that file.

[115]      Consequently, as the proceedings of Plaintiffs in warranty are well founded, the Court will order the Defendant in warranty 9257-4805 Québec Inc. to discharge Plaintiffs in warranty from the obligation of paying all the sums of money that they were ordered to pay under the present judgment, according to the conclusions of their proceedings, with costs.

The proceedings in warranty against Construction Voyer inc.

[116]      Plaintiffs in warranty, Mr. Oberman and Mrs. Charland, allege that Construction Voyer Inc. should also be condemned to discharge them from the obligation of paying any sums of money they may be ordered to pay to the principal Plaintiffs, Mr. De Luca and Mrs. Barratta. They justify their claim by the fact that they are the victims of a colluded effort of Defendants in warranty, 9257-4805 Québec Inc. and Construction Voyer Inc. to deny them their legislated rights to claim from their seller the prejudice they have sustained as a consequence of the alleged defect.

[117]      As mentioned earlier, 9257-4805 Québec Inc. is the name that Construction René Voyer Inc. chose to use on January 26 ^th , 2012. Construction René Voyer Inc. was created in 1973 and, at the time of the construction of the house on […], 1840-1497 Québec Inc. was its sole shareholder, and Mr. René Voyer was its president and secretary, while all the shares of the later company were owned by Mr. René Voyer.

[118]      The company deals mainly in the construction of houses and buildings on a large scale. Mr. René Voyer himself had participated in the construction of approximately 4000 houses (mainly on the North shore of Montreal) at the turn of the millennium, under Construction René Voyer Inc. or other companies, and even personally in previous years.

[119]      Mr. Voyer has 2 sons, Pascal and Jean-François, which were working part time for their father’s company while doing post-secondary studies in fields related to the construction business when Plaintiffs in warranty’s house was being built.

[120]      The Voyer brothers and their father testified that the first two had always envisioned starting their own construction business. On February 7 ^th , 2001, Construction Voyer Inc. was thus created with René Voyer as the sole voting shareholder, and with Pascal and Jean-François Voyer and Mr. Serge Bédard, the company’s accountant, shareholders holding all participating shares without rights to vote. [35] On March 1rst, 2004, René Voyer transferred all of his voting shares in equal parts to Pascal and Jean-François. On November 17 of the same year, Serge Bédard sold all his shares, in equal parts, to two holding companies owned by the Voyer brothers. In other words, Construction Voyer Inc. was founded in February 2001 by Mr. René Voyer, the sole voting shareholder, which transferred all of his voting shares, and thus the full control of the company, to his sons in March 2004.

[121]      As for the activities of both companies, they remained distinct from one another, each one having its own construction projects, even though Construction Voyer Inc. and Construction René Voyer Inc. would use the same offices, phone numbers, administrative employees and on some occasions, the same workers and equipment.

[122]      However, even though some of the business activities of both companies appeared to be mingled, the pertinent monetary adjustments were made at the end of each year so that Construction Voyer Inc. would compensate Construction René Voyer Inc. for the use of its offices and administrative employees. As for the workers that were on Construction René Voyer inc.’s payroll and its equipment used by Construction Voyer inc., separate accountings were maintained so that, again, compensations would be paid by Construction Voyer Inc. to Construction René Voyer Inc. As for the sub-contractor hired to work on a project, they would charge directly to the company responsible for the project they worked on, so that no distinct accountings or compensations were necessary.

[123]      Also, as the activities of Construction Voyer Inc. increased from year to year, those of Construction René Voyer Inc. did not slow down, at least during the first four or five years of the former’s existence. Construction René Voyer Inc.’s total revenues increased from $9,529,913.00 in 2000 to $15,098,384.00 in 2001, to $23,344,443.00 in 2002, to $27,989,869.00 in 2003, decreased to $14,092,965.00 in 2004, remained at the same level in 2005, at $14,654,207.00, and decreased in 2006 to $10,403,994.00. [36]

[124]      As for the retained earnings of Construction René Voyer Inc., they increased from 2000 to 2004 from $3,778,497.00 to $7,160,030.00, then slowly went down to $5,672,137.00 in 2005 and $4,461,669.00 in 2006. [37]

[125]      Mr. René Voyer, who is almost 70 years old, explained to the Court that he worked very hard all his life and started thinking about retirement around 2005. He also explained that he was glad to help his two sons create their own company and that they could benefit from the Voyer name and the good reputation that was associated to this name based on many years of hard work. He added, however, that his sons did not get a free ride from him and had to work hard to make their project work. As an example, he mentioned that while Construction René Voyer Inc. lent the start up money to Construction Voyer Inc., the latter paid the former tens of thousands of dollars in interest fees and that, as mentioned earlier, none of Construction René Voyer Inc.'s employees worked for Construction Voyer Inc. for free, nor did the former use the latter's equipment free of charge.

[126]      Construction René Voyer Inc.’s bank statements also show that the company maintained, at least until the end of 2005, a balance of account in 7 figures, with over $680,000.00 still in the bank account on January 31, 2006. [38] Mr. René Voyer also explained that, as he was planning to retire, his company bought less machinery and hired less employees, while his sons’ company, Construction Voyer Inc., did the opposite as its activities became more and more important.

[127]      Plaintiffs in warranty presented another argument in support of their claim that Construction Voyer should be liable for the debts of Construction René Voyer Inc. They presented evidence that the former may have led the public to believe that it was the continuation of Construction René Voyer Inc., mainly through its web site [39] , and that it used the same or very similar designs, wordings and trademarks. [40]

[128]      For example, Construction Voyer Inc.'s web site contains indications such as "Continuant le travail amorcé voilà plus de 30 ans par Construction René Voyer, la société dirigée par les deux fils de ce réputé constructeur entend consolider son positionnement…"; "Depuis sa fondation en 1973, Construction Voyer a bâti plus de 6000 unités d'habitations"; "Les deux fils de M. Voyer, Jean-François et Pascal, constituent la relève de la compagnie…"; "Construction Voyer inc. construit des maisons depuis 1973"; " Construction Voyer construit des maisons depuis 1973. 40 ans d'expertise!"; "RBQ : 8268-7104-56 Fondateur : René Voyer Fondation : 1973 Nombre d'unités construites : plus de 5000"; "Après des années de durs labeurs, M. Voyer transfère les rênes du pouvoir à ses enfants"; "Construction René Voyer inc. est une entreprise familiale qui oeuvre dans le domaine de la construction résidentielle depuis 1973"; "Construction René Voyer se transforme graduellement en Construction Voyer et laisse une place de choix aux deux fils, Jean-François et Pascal Voyer, ainsi qu'au contrôleur de l'entreprise, Serge Bédard".

[129]      Also, Construction Voyer Inc. was awarded the Palme Diamant from the APCHQ, which can only be obtained, among other conditions, if the contractor - that is, the person behind the company, according to Mr. Voyer's explanations - has been in that business for at least 25 consecutive years, a title Construction Voyer could get only if, in its early years at least, its sole shareholder met these conditions. That, according to Jean-François Voyer, as well as the appropriate certification from the Régie du bâtiment du Québec [41] , and the protection they wanted in case of a dispute between shareholders, as it included a third party, Mr. Serge Bédard, is what explains that he, his brother and Mr Bédard were not voting shareholders, but participating shareholders, meaning that all the important decisions concerning the activities of the company could be taken by René Voyer solely but that all the profits were distributed to the participating shareholders. [42] In practice, however, all decisions were taken by the shareholders reaching a consensus, the father acting more as a counsellor than an owner, without ignoring the fact that he, as one of the principal lenders to the company, had certainly a vested interest in its success.  

[130]      Jean-François Voyer does not hide the fact that he and his brother are proud of the work accomplished by their father, and that they try to maximise the benefits attached to the names René Voyer and their family name. They obviously received their father's authorisation, at least implicitly, to use both his name and very similar trademarks [43] , and the success of their own company is as well the pride of their father, as mentioned by Mr. René Voyer during his testimony.

[131]      In other words, we are in the presence of a father who does what is necessary to help his sons flourish and be successful in their construction business, who does not intent to defraud anyone or shirk the company's legal obligations.

[132]      As for the publicity mentioned in Construction Voyer Inc.'s web site, it certainly contains some exaggerations and even false statements, especially when it says that the company has been in business for the last 30 years and has built over 5000 or 6000 houses. Not only is that a false statement but these 5000 or 6000 houses were not even all built by Construction René Voyer Inc. They were also built through the intermediary of other companies like Construction Voyer & Tremblay inc. and other companies in which Mr. René Voyer was involved, as he explained. In Construction Voyer Inc.’s web pages, it is mentioned that Construction Voyer ^TM is a trademark and that each project is managed independently. It is also mentioned which company is in charge of each project.

[133]      In other words, if the objective of the marketing strategy adopted by Construction Voyer inc. was to benefit from Construction René Voyer Inc.'s reputation and good will, it never was planned in order to make the latter shy itself from its legal obligations.

[134]      Another important element prevents the removal of the corporate veil: Neither Mr. Morty Oberman nor Mrs. Marie-Andrée Charland did business with a company that, at the time of their contract in 1999, was trying to defraud them. Mr. Oberman testified that Construction René Voyer answered all his calls and did all the repair work that was needed over the years, at least until he and his wife sold their house to Principal Plaintiffs. The defects remained latent for approximately 12 years after they themselves had bought the house from Construction René Voyer Inc., at which point Mr. René Voyer had just about retired. One must also consider the fact that Construction Voyer Inc. was incorporated a year and a half after Principal Plaintiffs had bought their house from Construction René Voyer Inc., and that the latter remained solvent for at least 10 years after that.

[135]      In summary, contrary to what Plaintiffs in warranty (as well as principal Plaintiffs) allege, no proof whatsoever was presented that would lead the Court to believe that Construction Voyer Inc. was created to act as a cover for Construction René Voyer Inc., nor that the creation of the former led in any way the latter to shy from its legal obligations or defraud anyone, and Plaintiffs in warranty in particular.

[136]      It may well be that Construction René Voyer Inc., today 9257-4805 Québec Inc., has now no more assets and no more than a few hundred dollars in its bank account, as admitted by Mr. René Voyer. However, Plaintiffs in warranty knew, when they bought their house from Construction René Voyer Inc., that they were doing business with a company, which is a limited liability vehicle by which someone may do business. Mr. Oberman is himself a businessman who has a lot of experience in financial matters, and who does his business through a limited liability company, whose shares are owned by a holding company for which he is the shareholder. At the time he bought his property, Construction Voyer Inc. had not yet been created, while Construction René Voyer Inc. was active and would be active for at least another 6 or 7 years, and is now inactive, not because of any fraudulent or illegal acts but because its sole shareholder and president decided to retire.

[137]      Consequently, the claim formulated by Plaintiffs in warranty which the principal Plaintiffs brought forward during the trial, that Construction Voyer Inc. should be liable for any legal obligations of 9257-4805 Québec Inc., is not supported by the facts. It may very well be true that from its creation in February 2001 until Mr. René Voyer, its main shareholder, transferred his shares to his sons, Construction Voyer Inc. was the alter ego of Construction René Voyer Inc. However, it does not lead the Court to believe that one should be liable for the other’s obligations. It is only if the company Construction Voyer Inc. was used for one of the reprehensible motives mentioned in article 317 of the Civil Code of Quebec that the corporate veil may be removed [44] , as underlined by the Court of Appeal of Quebec in Domaine de l’Orée Des Bois La Plaine Inc . c. Garon [45] :

[9] Même si l'appelante est l' alter ego de l'appelant et même si les activités de cette société relèvent du développement immobilier et que les engagements souscrits par l'appelant l'ont été à son profit, elle jouit néanmoins d'une personnalité juridique distincte.  En l'absence de fraude ou de l'un des motifs visés à l'art. 317 C.c.Q. , le soulèvement du voile corporatif n'est pas autorisé et les ententes ne lui sont pas opposables.

[138]      As this was not the case, the corporate identity of each company will be preserved. Consequently, the action in warranty against Construction Voyer Inc. is bound to fail.

The cross demand against Mr. Oberman and Mrs. Charland

[139]      Finally, Construction Voyer Inc. asks that Mr. Oberman and Mrs. Charland be condemned to pay it $30,000.00 for damages to its reputation caused by the legal procedures. Even though the action taken by Mr. Oberman and Mrs. Charland is ill founded, the fact that they decided to take such action does not translate into a civil fault. Furthermore, no proof of damages to Construction Voyer Inc.'s reputation was presented. Consequently, the cross demand will be rejected.

[140]      FOR THESE REASONS, THE COURT:

[141]      ORDERS Defendants Mr. Morty Oberman and Mrs. Marie-Andrée Charland to pay to Mr. Louie De Luca and Mrs. Carmen Barratta the sum of $119,028.88 plus interests and the additional indemnity of article 1619 CCQ from the date of the proceedings;

[142]      WITH COSTS , including the fees of the expert in the amount of $5,260.86;

[143]      ORDERS Defendant in warranty 9257-4805 Québec Inc. to pay Mr. Morty Oberman and Mrs. Marie-Andrée Charland the sum of $119,028.88 plus interests and the additional indemnity of article 1619 CCQ from the date of the proceedings, plus the fees of Principal Plaintiffs' expert in the amount of $5,260.86;

[144]      WITH COSTS ;

[145]      REJECTS Plaintiffs in warranty's action against Defendant in warranty Construction Voyer inc., WITH COSTS;

[146]      REJECTS Cross plaintiff's action against Mr. Morty Oberman and Mrs. Marie-Andrée Charland, WITH COSTS.

		__________________________________ STEPHANE SANSFAÇON, J.S.C.
Me Robert Brunet, c.r.
Brunet & Brunet
Attorneys for Plaintiffs
Me Edwin D. Monzon
Lazarus, Charbonneau
Attorneys for Defendants, Plaintiffs in warranty and Cross-Defendants
Me Alexandre Franco
Crochetière Pétrin
Attorneys for Defendants in warranty and Cross-Plaintiff
9257-4805 Québec Inc. Not represented
Dates of hearing:	June 15 to June 19, 2015.