BRACEBRIDGE COURT FILE NO.: CV-15-126-SR
DATE: 20200309
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ROBERT JOHN WESLEY and SHEILA WESLEY
Plaintiffs
– and –
NOEL GENEAU and MARGARET GENEAU
Defendants
David A. Morin and Peter H. Reinitzer, Counsel for the Plaintiffs
Dale Lediard, Counsel for the Defendants
HEARD: November 18-22 & 25, 2019
REASONS FOR JUDGMENT
DiTOMASO J.
INTRODUCTION
[1] The Defendants Noel Geneau and Margaret Geneau (the “Geneaus”) are spouses. They were the previous owners and vendors of a residential property municipally known as 16 Dunks Crescent, Whitestone, Ontario (the “Property”). Whitestone is a rural community located 50 to 60 kilometres north east of Parry Sound. At all material times, the Property was situated in an unorganized Township with no municipal office, no building inspector and no one to issue building permits.
[2] Mr. Geneau built a home on the Property in and around 1989. With the exception of the construction of the foundation concrete block walls, he built the home himself without a building permit. The construction of the home evolved over time. By 1997, a sunroom and garage had been added to the main structure.
[3] On June 30, 2006 the Geneaus sold the property to the Plaintiffs Robert John Wesley and Sheila Wesley (the “Wesleys”).
[4] The Wesleys used the Property for recreational purposes as their cottage. They eventually moved to the Property occupying it on a full time basis as their permanent home.
[5] On February 25, 2015, Mr. Wesley discovered that the north foundation wall had collapsed and similarly, the south foundation wall showed signs of bowing. The following weekend, the Wesleys went to the property to find visible drywall cracking in the living room.
[6] Following this discovery, the Wesleys commenced this action against the Geneaus claiming damages for negligent construction and for negligent misrepresentation.
[7] The Geneaus deny these claims, dispute damages and contend that, in any event, all claims and the action are statute-barred. As a result, the Geneaus maintain the action ought to be dismissed. After a six day trial, written submissions were received on January 29, 2020.
OVERVIEW
[8] Counsel delivered Requests to Admit and Response. At trial, they agreed that certain facts were admitted and that there was no issue as to the authenticity of documents. The admitted facts which I accept are set out in the Wesley Request to Admit dated April 2, 2019 with corresponding numbering as follows:
Construction of 16 Dunks Crescent
The Geneaus are former owners of 16 Dunks Crescent, a river front property in Whitestone, Ontario.
Noel Geneau built the home at 16 Dunks Crescent, Whitestone, Ontario in or around 1989.
At the time of the construction of 16 Dunks Crescent in 1989, it was located in an unorganized Township and the Geneaus were not required to obtain a building permit for the construction.
Noel Geneau was required to construct 16 Dunks Crescent in compliance with the 1986 Ontario Building Code.
At the time that he constructed 16 Dunks Crescent, Noel Geneau was not aware of the requirements of the Ontario Building Code.
At the time that he constructed 16 Dunks Crescent, Noel Geneau had not built a house before.
Noel Geneau completed all the construction of 16 Dunks Crescent himself, with the exception of the construction of the footings and foundation, which were completed by a Mr. Nottin, who was retained by the Geneaus.
Noel Geneau completed the installation of the perimeter drainage system and backfill around the foundation of 16 Dunks Crescent.
Noel Geneau installed a sump pit and sump pump inside the foundation of 16 Dunks Crescent.
Noel Geneau constructed a 16 foot long deck along the outside of the rear wall (river side) of 16 Dunks Crescent.
The Geneaus completed the landscaping at 16 Dunks Crescent.
Noel Geneau referred to at Reader’s Digest “Do It Yourself” manual to assist him with construction of 16 Dunks Crescent.
Noel Geneau obtained a building permit for the house he constructed in South River.
Noel Geneau contacted the municipality in South River to obtain building inspections during construction of the house in South River.
The municipality in South River approved all building inspections on the house in South River, after requiring corrections to the construction.
Discovery of Frost on the Interior Foundation Wall
In or around 1993, Noel Geneau constructed a wood framed interior wall, in front of the rear foundation wall.
In or around 1993, Noel Geneau insulated and installed vapour barrier on the newly constructed interior wall.
The wood framed interior wall, in front of the rear foundation wall constructed by Noel Geneau, was kept off the floor in one area of the basement.
In 1997, the Geneaus received an appraisal report from Robert Anderson Real Estate and Appraisal Ltd.
The 1997 Robert Anderson Appraisal confirmed that the basement at 16 Dunks Crescent had some dampness.
The Sale of 16 Dunks Crescent
In May 2006, the Geneaus listed 16 Dunks Crescent for sale for $189,000.00.
In May 2006, 16 Dunks Crescent was in good condition, looked clean and presented well.
On May 7, 2006, Noel Geneau and Margaret Geneau signed a Seller Property Information Sheet.
In the Seller Property Information Statement, the Geneaus confirmed that they were not aware of any structural problems at 16 Dunks Crescent.
In the Seller Property Information Statement, the Geneaus confirmed that 16 Dunks Crescent was not subject to flooding.
In the Seller Property Information Statement, the Geneaus confirmed that they were not aware of any moisture and/or water problems at 16 Dunks Crescent.
In the Seller Property Information Statement, the Geneaus confirmed that they were not aware of any water damage at 16 Dunks Crescent.
On May 28, 2006, John Wesley and the Geneaus entered into an Agreement of Purchase and Sale for Mr. Wesley’s purchase of 16 Dunks Crescent for $183,500.00.
The Geneaus did not advise the Wesleys that they had constructed an insulated interior wall, several inches from the rear foundation wall, because frost formed on the rear foundation wall.
Prior to purchasing 16 Dunks Crescent, the Wesleys retained a home inspector.
On June 30, 2006, the transaction closed, and the title of 16 Dunks Crescent was transferred to John Wesley and Sheila Wesley.
[9] Further investigation and removal of an interior wood stud wall in the basement along the north foundation wall disclosed that this foundation wall along the north (or rear) side of the building had failed and displaced inwardly. Also found was that there was significant and long standing water infiltration along the bottom of the north wall causing the blocks to crumble.
[10] The Wesleys’ home insurer sent an engineer to the Property to investigate the origin and cause of the wall failure. The engineer, Michael Flynn, P. Eng., concluded that the wall failed as a result of freeze/thaw activity which occurred along the exterior of the dwelling. Mr. Flynn noted that the wall had been repaired/tarred. Since the Wesleys did not make that repair, the engineer concluded that the wall had been in failure mode before they purchased the Property. He considered the failure to be catastrophic. He provided a shoring plan to stabilize the home as he was concerned about safety. At trial he testified that the backfill condition was unsafe.
[11] In response to these findings, the Wesleys commenced the within action and retained an independent engineer to conduct subsequent investigations into the structural integrity of the Property.
[12] Ron Koerth, P. Eng., confirmed that the north foundation wall failed due to lateral pressure against the wall caused by freeze/thaw cycles, the use of non free draining backfill, and excessive backfill height contrary to the Ontario Building Code. Mr. Koerth further identified that all of the foundation walls were subject to excessive backfill, that the failure was a dangerous condition, and that all of these walls required repairs or reinforcement.
[13] Mr. Koerth also noted that an insulated stud wall had been constructed against the inside of the failed north foundation wall. It was his opinion that this insulated stud wall both contributed to, and concealed signs of, the foundation’s failure.
[14] The Geneaus retained their own engineer, David Lalonde, P. Eng., to investigate the cause and origin of the foundation wall failure. Mr. Lalonde agreed that the rear north wall failed as a result of lateral pressure on the wall from the outside caused by expansion of the soils during freezing. In this report, Mr. Lalonde identified factors which contributed to this failure:
a. Proximity of the dwelling to the water table causing constant moisture in the soil;
b. The addition of insulation installed on the inside of the north wall would not have allowed the interior air from the dwelling to warm adjacent soils; and
c. Quality of the CMU foundation construction was not high.
[15] The Geneaus plead in their defence that there were no structural defects or deficiencies in the Property’s foundation and that any failure of the foundation walls was caused by the Wesleys’ own doing.
[16] The Wesleys plead that Mr. Geneau owed them a duty of care as builder of the Property to ensure that the Property was free from deficiencies which could lead to a dangerous condition that threatened the safety of its occupants.
[17] The Wesleys plead further that the Geneaus had a duty as seller of the Property to disclose latent defects about which they had knowledge. The Wesleys allege that by placing excessive and non-draining backfill behind the foundation walls, Mr. Geneau compromised those walls’ structural integrity. Further they allege that by constructing the insulated stud wall, the Geneaus concealed the north rear foundation wall and, along with it, visible manifestations of its failure, such that the failure became a latent defect about which they had knowledge but failed to disclose to the Wesleys.
[18] The Geneaus deny they concealed the north foundation wall, that there existed any latent defects, and that they negligently misrepresented anything.
WITNESSES AT TRIAL
[19] The Wesleys testified at trial about purchasing the property, discovering damage to their property, the repairs, payment for those repairs and general damages. As well, engineers Michael Flynn and Ron Koerth testified; Mr. Flynn testified as a participant expert and Ron Koerth as a qualified expert. Mr. Koerth prepared a scope of repair. Those repairs were carried out (subject to few adjustments) by Ron Dahl of First General Muskoka who also testified as to what he did following the scope of repairs. The claim for damages for the repairs and general damages is in the amount of $100,000 plus pre and post judgment interest.
[20] For the defence, Noel Geneau testified at trial along with engineer David Lalonde who was qualified to give expert evidence. Mr. Geneau testified about how he built a home on the property, construction methods and subsequent sale to the Wesleys. Evidence of the various witnesses will be specifically referred to as the evidence relates to the issues in this case.
EXHIBITS
[21] There were a number of exhibits at trial which included a Joint Document Brief (Exhibit #1) and a comprehensive Photographic Brief (Exhibit #2). Many photos were referred to during the trial depicting the property during initial construction by Mr. Geneau and during the course of repairs (interior and exterior photographs). These photos were taken by Mr. Geneau, the Wesleys, Mr. Dahl, Mr. Flynn, Mr. Koerth and Mr. Lalonde.
ISSUES
[22] The following issues are to be determined:
Are the Wesley claims statute-barred?
Is Mr. Geneau liable to the Wesleys for the negligent construction of the Property?
Are the Geneaus liable to the Wesleys for misrepresentation and concealment of the defects of the failed north foundation wall?
Are the Wesleys entitled to damages?
ISSUE 1
ARE THE WESLEY CLAIMS STATUTE-BARRED?
[23] The Geneaus plead that the Wesleys knew, or ought to have known by reasonable inspection, at the time of purchase particulars of the manner and quality of the construction of the residence including any deviation from the standards of the Ontario Building Code and any potential risks associated therefrom. The Geneaus further plead that the Wesleys’ claim is therefor statute-barred pursuant to the provisions of the Limitations Act, 2002 S.O. 2002, c. 24, Schedule B.
[24] The Geneaus argue that the Wesleys should have conducted a more diligent investigation at the home at the time of the purchase, and had they done so, the deficiencies with respect to construction and the failing north foundation wall could have been discovered or at least prior to August 31, 2013. (The Statement of Claim was issued on August 31, 2015).
[25] The Geneaus submit that there was clear evidence of the structural defects that would have led a reasonable homebuyer to make further investigations prior to August 31, 2013.
[26] The Wesleys assert that the Geneaus have not established the level of due diligence required of a purchaser when purchasing a home. However, they have led no opinion or other evidence to support a claim that the Wesleys were anything other than diligent in their investigation of the Property at the time of purchase, or that the Wesleys home inspection report should have placed them on notice of serious structural defects. Nor is there any evidence that the home inspector conducting a visual inspection without reference to building code compliance, was negligent in any way. He is not a party to these proceedings.
Limitation and Discovery
[27] For the following reasons, I find the Wesleys’ claims are not statute-barred, that they discovered their claim on February 25, 2015 or on March 6, 2015 and that they commenced this action in time on August 31, 2015.
[28] The relevant sections of the Limitations Act[^1] are set out below:
Definitions
1 In this Act, …
“claim” means a claim to remedy an injury, loss or damage that occurred as a result of an act or omission; …
Basic limitation period
4 Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
Discovery
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
Presumption
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
[29] Accordingly, a limitation period commences when the Plaintiff discovers the underlying material facts or, alternatively, when the Plaintiff ought to have discovered those facts by the exercise of reasonable diligence.[^2]
Evidence of Mr. Wesley
[30] I accept the evidence of Mr. Wesley who testified in a credible and forthright manner. He testified that he and his wife were looking for a property for recreational purposes. They came upon the subject property which was shown to him by realtor Leo Hintze. who was also the listing agent for the Geneaus. He acted for both parties. After an Agreement of Purchase and Sale[^3] (the “APS”) was negotiated with a purchase price of $183,500 and a closing date of June 30, 2006. A Seller Property Information Statement[^4] (“SPIS”) dated May 7, 2006 was signed by the Geneaus and was provided to the Wesleys. The “remarks” section contained in the MLS Listing was consistent with what Mr. Wesley saw. [^5]
[31] Leo Hintze took Mr. Wesley to see the basement while Mrs. Wesley remained outside. Mr. Wesley testified that he saw a furnace, stud wall with insulation and a mud floor area near the sump pump. The floor was partly constructed of concrete and mud. As for water penetration, he found the basement was fairly dry.
[32] On this first visit to the property, Mr. Wesley had a friendly conversation with Mr. Geneau. He testified that Mr. Geneau was very proud that he had built his dream home. Mr. Wesley was pleased that Mr. Geneau had building experience. He took from Mr. Geneau that Mr. Geneau was an experienced builder. Mr. Wesley did not know that the Township where the Property was located was unorganized and that it was unnecessary to apply for a building permit. Mr. Wesley had no experience in the building trades. He worked in the insurance industry and the Wesleys had only ever owned three homes in total including the subject Property. He had never dealt with building permit or Ontario Building Code matters. He testified such matters arose when the wall collapsed.
[33] The SPIS was provided to the Wesleys. They relied on it to make their decision to purchase the home and property. While he did not know it at the time, Mr. Wesley later learned that the home needed to be built to a certain level of construction or to Code.
[34] Mr. Wesley did not know that Mr. Geneau did not need to take out a building permit for the construction of the home. Mr. Wesley testified that Mr. Geneau said something which lead Mr. Wesley to believe Mr. Geneau was a professional builder having built the house to a particular level of contruction. In cross-examination, Mr. Wesley testified that Mr. Geneau “inferred” that he was a builder and had built before.
[35] Nevertheless, the Wesleys hired their own home inspector, Paul Beauvais, who conducted a home inspection of the Property. The inspection was not a building code or building law compliance inspection.[^6]
[36] Mr. Wesley testified that the Home Inspection Report had not disclosed any glaring problems. There was nothing to cause the Wesleys to walk away from the transaction.
[37] Mr. Beauvais explained that lot grading was not sufficient, with the property not draining properly and needed to be addressed as soon as possible. Mr. Wesley knew the grading needed to be addressed as soon as possible.
[38] Mr. Wesley described the layout of the Property residence – the main structure, attached garage to the east and sunroom addition to the west. Partially along the north side, a wooden deck was constructed with a crawl space underneath enclosed by wood lattice. He did not crawl underneath the deck to inspect.
[39] Mr. Wesley testified he added four to six inches of soil on the north side and graded it away from the house. The addition of this soil by Mr. Wesley is marked by a green line on Exhibit 3.[^7] He did this in 2007.
[40] About six years after purchase, Mr. Wesley removed the original wooden deck. He added three to three and a half inches of soil along the tar line on the north side of the house and sloped the soil away from the house structure. The addition of soil at this time is marked on Exhibit 3 with a yellow line. Mr. Wesley testified that he did not add any tar to any side of the house.
[41] Mr. Wesley testified that he observed a tar repair where the north wall met the sunroom wall, or where the sunroom joined the main structure on the exterior north side. He testified he did not make this repair and I accept his evidence.
[42] On Exhibit 3 marked in pink, Mr. Wesley marked where the wood stud wall was located running along the interior of the north foundation wall in the basement.
[43] Mr. Wesley testified that he followed the recommendations of Mr. Beauvais in grading soil away from the house. After doing so, he put down grass seed.
[44] When the Wesleys purchased the home, Mr. Wesley testified he observed no bowed walls anywhere in the basement. Nor was there any evidence of leakage in the house.
[45] He testified that in Spring, water would come up through the dirt part of the basement floor but that water would drain out to the sump pump.
[46] In cross-examination, Mr. Wesley testified that there was a basement flood in 2007 resulting in one inch of water in the basement. In 2012, the Wesleys experienced two sewage backups. He testified these problems were remedied.
Discovery of the North Wall Failure - February 25, 2015
[47] In addition to what is stated and admitted by way of OVERVIEW, the Wesleys not only found they had run out of propane, but they found that near the north wall of the basement the water pump had frozen.
[48] Mr. Wesley called a plumber (Morrows Plumbing & Heating Inc.) who attended the home and replaced the pump on or about March 6, 2015.[^8]
[49] Mr. Wesley testified that when the plumber replaced the water pump, he felt cold air and showed Mr. Wesley a “huge hole” in the north wall. Mr. Wesley observed that the north foundation wall behind the insulated wood stud wall had collapsed.
[50] The Wesleys called Ron Dahl who had previously performed repairs resulting from prior flood damage. He attended and advised Mr. Wesley that an engineer was needed to inspect the damage because the damage was described by Mr. Dahl as “catastrophic”.
[51] The Wesleys submitted a claim to their home insurer who sent Mr. Michael Flynn, an engineer, to investigate. Mr. Flynn attended the Property on April 24, 2015 and generated a report dated April 30, 2015[^9] with letter from Crawford dated May 13, 2015 enclosing said report.
[52] Mr. Flynn reported that the north foundation collapsed for a long time before the Wesleys owned the property.
[53] After Mr. Flynn submitted his report, Ron Koerth, engineer, was retained by the Plaintiffs’ Counsel. Mr. Koerth prepared an expert opinion as to the origin and cause of the north collapsed wall and prepared a scope of repair. Ron Dahl attended the property and affected repairs pursuant to Mr. Koerth’s recommendations.
[54] The Geneaus submit that the Wesleys’ claims are all statute-barred and reject these submissions. I do not agree that there was clear evidence of structural defects that would have led a reasonable home buyer in the position of the Wesleys to make further inquiries and investigations at the time of purchase and during the course of their ownership prior to August 31, 2013 – two years before they issued their Statement of Claim. There is some suggestion that the flooding or evidence of water infiltration should have prompted due diligence by the Wesleys, and they ought to have conducted further investigations. I reject this submission and find that neither their own visual inspection at the time of purchase nor their home inspection report should have placed them on notice of serious structural defects. Mr. Wesley followed Mr. Beauvais’ recommendations regarding adding soil along the exterior north wall and sloping the soil away from the house to deal with proper water drainage.
[55] At the time of purchase, up to August 31, 2013 and up until February 25, 2015 I find the Wesleys acted with due diligence and that there was nothing to put them on notice of serious structural defects – in particular, a collapsed north foundation wall.
[56] I find there is no clear evidence as asserted by the Geneaus of structural defects that would have led a reasonable home buyer to make further investigations prior to August 31, 2013. Neither can the Geneaus suggest that the Wesleys did not rely on the Geneaus’ misrepresentation, opting instead to obtain a home inspection.
[57] I find the defects to the north foundation wall were latent; the stud wall hid the efflorescence and bowing from view.
[58] While the grade height of the backfill on the exterior of the north wall would have been visible underneath the deck, Mr. Wesley testified that area was inaccessible due to lattice fencing and the fact that it could only be accessed on one’s stomach. However, even if the home inspector could have inspected beneath the deck, he would not be expected to identify the grade height as a defect. Indeed, Mr. Beauvais made it clear at the beginning of his inspection report that his inspection was limited to “the readily accessible features of the Property” and that it was “not a Building Code or By-Law compliance inspection”[^10]
[59] The Geneaus have led no evidence, expert of otherwise, to suggest that the Wesleys or their home inspector failed to exercise due diligence or inspected negligently. Indeed, Ron Koerth’s opinion in cross-examination was that there was nothing in the home inspection report that would tell him that the Wesleys should have done anything differently.
[60] For these reasons, I reject the Geneaus’ submissions and find that the Wesleys’ claims are not statute-barred. The Wesleys’ claim was discovered either on February 25, 2015 or March 6, 2015 by the Wesleys. Their Statement of Claim was issued within time on August 31, 2015.
ISSUE 2
IS MR. GENEAU LIABLE TO THE WESLEYS FOR THE NEGLIGENT CONSTRUCTION AT THE PROPERTY?
[61] For the following reasons, the answer to this question is yes.
Duty of Care
[62] I find that Mr. Geneau owed a duty of care to the Wesleys. The leading statement of law regarding a builder’s liability in negligence to an owner of a building for construction defects comes from Winnipeg Condominium Corporation No. 36 v Bird Construction Co. 1995 CanLII 146 (SCC), 1995, 1 SCR 85. In the Supreme Court’s decision, La Forest J. wrote for the majority:
I conclude that the law in Canada has now progressed to the point where it can be said that contractors (as well as subcontractors, architects and engineers) who take part in the design and construction of a building will owe a duty in tort to subsequent purchasers of the building if it can be shown that it was foreseeable that a failure to take reasonable care in constructing the building would create defects that pose a substantial danger to the health and safety of the occupants. Where negligence is established and such defects manifest themselves before any damage to persons or property occurs, they should, in my view, be liable for the reasonable cost of repairing the defects and putting the building back into a non-dangerous state.[^11]
[63] As regards the foreseeability that negligent design or construction of a home will create defects that pose a substantial danger to the health and safety of its occupants, La Forest J. wrote:
In my view, it is reasonably foreseeable to contractors that, if they design or construct a building negligently and if that building contains latent defects as a result of that negligence, subsequent purchasers of the building may suffer personal injury or damage to other property when those defects manifest themselves. A lack of contractual privity between the contractor and the inhabitants at the time the defect becomes manifest does not make the potential for injury any less foreseeable.[^12]
[64] The evidence is clear from Mr. Geneau that he conceived the Property’s design and built the home acting as his own contractor, with the exception of the construction of the footings and foundation which were completed by a Mr. Nottin, whom the Geneaus had retained. This is an admitted fact.
[65] As a result, Mr. Geneau owes a duty of care to subsequent purchasers of the Property to construct a home that does not pose a substantial danger to the health and safety of the occupants.
Standard of Care
[66] The duty of care owed by Mr. Geneau to the Wesleys is to take reasonable care in constructing the Property.[^13]
[67] What standard of care is reasonable in the circumstances? The answer can be found in relevant laws and industry standards.
[68] The Ontario Building Code sets minimum standards for building construction in Ontario. These minimum standards are in place so that owners of houses will be safe from poor construction. The standard of care is, at a minimum, the OBC’s requirements.[^14]
[69] The Geneaus have admitted that Mr. Geneau was required to construct the property in compliance with the 1986 Ontario Building Code.
[70] I accept the Wesleys’ submissions that as the building defects have caused the damages claimed in this action and all arise from breaches of the Building Code, I find these breaches are sufficient to establish a failure by Mr. Geneau to meet the standard of care required of him in the circumstances.
Breach of the Duty of Care
[71] Mr. Flynn, an engineer with many years of experience regarding structural failures in residential and commercial buildings, testified at trial. While he did not give evidence as a qualified expert, he testified as a participant expert. His evidence was credible and cogent. When he attended the Property on April 24, 2015 he had occasion to inspect, observe and evaluate the Property. He authored a report for the Wesleys’ home insurer.[^15]
[72] Mr. Flynn discovered a grade problem in and around the building. The grade along the south side of the dwelling sloped downwards back towards the building. Horizontal masonry cracks were observed along the south wall and stepping cracks were observed along the south wall west end. He testified the cracks were due to frost and ground movement, coupled with excessive backfill conditions. Foundation movement was exacerbated by recent melting snow and the freeze/thaw cycle which creates ice lensing and frost forces on the foundations.
[73] He testified that the south side of the home had an excessive backfill condition. The backfill condition was too high and exceeded the safe backfill height for an eight inch concrete foundation system. In cross-examination he testified that the south wall as constructed was unsafe.
[74] He inspected the north foundation wall and found that a catastrophic foundation wall failure occurred along the north side of the building. Mr. Koerth agreed that the foundation wall collapse was also catastrophic. Mr. Flynn determined that the point of the concrete block failure occurred along the bottom of the wall below the window. In this location the wall inward displacement was most significant. The blocks along the bottom course failed (broke into fragments) at that location which triggered the partial collapse of the wall. His report contained photos depicting the inward movement of the north foundation wall and shattered lower blocks. He also observed a decayed sole plate along the base of the wall due to water infiltration which occurred over many years. He determined that the wooden stud wall was offset approximately two inches from the foundation wall at the time of installation. Only this stud wall was framed and insulated in the basement.
[75] Mr. Flynn concluded his report dated April 30, 2015 at p. 24 where he stated:
The cause of the failure was due to an overload condition with respect to the subject foundation system. The cause of the foundation failure along the north side of the dwelling or on the deck side of the dwelling was due to a freeze/thaw activity which occurred along the exterior of the dwelling. Water has flowed back towards the foundation, the soils were frozen at the time of my inspection. The organic soils allowed water to infiltrate, frost built up in the soils which ratcheted the foundation wall inwardly. As the wall moved inwardly, more water flowed into the space, when repeated freeze/thaw cycling occurred, further displacement of the wall system resulted. The wall has been in failure for a prolonged period of time, the northwest section (corner) had been repaired/tarred which indicated the wall had been in failure mode prior to the Insured’s purchase of the dwelling. The Insured did not make the above noted foundation repair. MFAL has provided to the Insured, the attached shoring plan which should be immediately carried out to shore and stabilize the dwelling until masonry repairs can be made.
[76] Ron Koerth is a forensic engineer. He was qualified to give expert opinion evidence in forensic engineering including structural building sciences, building code compliance, building and property construction failures and cost assessment in rehabilitation and replacement following a structural failure.
[77] Mr. Koerth had many years experience regarding the structural failure and conditions of a kind reflected in this case.
[78] Mr. Koerth was retained by the Wesleys’ Counsel to investigate the loss. He authored two reports: September 2, 2015 describing the scope of work or scope of repair and September 22, 2015 outlining origin and cause of the failure. His reports are thorough and comprehensive as was his evidence at trial.
[79] Mr. Koerth’s opinion is that the Property’s foundation walls were not constructed in accordance with the 1986 Ontario Building Code applicable at the time of construction, because the foundation walls had an excessive height of non-draining soil retained against them.
[80] Mr. Koerth’s uncontroverted evidence was that the maximum height of backfill allowable at the Property was 47 inches. Mr. Koerth, Mr. Flynn and Mr. Lalonde all agreed that the south foundation wall retained too much backfill. While Mr. Flynn and Mr. Lalonde did not comment on the backfill height at the north rear wall, Mr. Koerth and Mr. Lalonde both measured the interior height of the basement (84”) and the height of the exposed north foundation wall at the westerly Sunroom end at 32 inches give or take, concluding that the backfill height was 52 inches. Mr. Koerth measured the easterly end of the north wall at 24 inches, or a backfill height of 60 inches. Mr. Koerth testified that there was no margin for error with respect to height of backfill.
[81] Mr. Wesley testified at trial that he added roughly four to six inches of sand and topsoil outside the westerly foundation walls of the addition, and the north wall by the garage the year after his purchase. He added four to six inches to the existing tar line along the north wall under the deck when it was removed in or around 2012, to replace settled soils. Mr. Wesley testified that he graded this sand and soil away from the house, as per the home inspector’s recommendation.
[82] Mr. Koerth measured the backfill height on August 14, 2015. Mr. Koerth was able to identify the probable height of the backfill prior to the Wesleys’ purchase on the basis of surrounding grade height and the line of dark damproofing/tar on the wall, which is typically at or around the grade level when a building is constructed.
[83] Mr. Koerth explained at trial that the south foundation wall originally had 74-80 inches of retained earth against it, and that the north foundation wall originally had an average of 56 inches against it (it varied from 60” at the Garage end of the north wall to 52” at the Sunroom end of the north wall). As such both the north and south foundation walls had more earth retained against them than was permissible pursuant to the Building Code.
[84] I accept Mr. Koerth’s opinion as to the origin and cause of the north foundation wall failure and his evidence in respect of excessive backfill height regarding the north and the south walls of the Property.
[85] I find that by placing more backfill behind the north and south foundation walls than was permissible pursuant to the 1986 Ontario Building Code, Mr. Geneau breached his duty of care owed to the Wesleys. I find any such soil added by Mr. Wesley after the Wesleys purchased the property was only topsoil to restore the grade to the top of the tar line in order for the grade to slope away from the Property as was required by the Building Code and as advised by their home inspector Paul Beauvais.
[86] Most telling is the evidence of Mr. Geneau. He admitted that he did not know the provisions of the Building Code when he constructed the Property. Rather, he testified that he used a Reader’s Digest book to assist him in the construction. Nevertheless, Mr. Geneau was required to construct the Property compliant with the 1986 Ontario Building Code. He was unaware of those requirements. The Ontario Building Code sets minimum standards for building construction in Ontario. These minimum standards are in place so that owners and occupants of houses will be safe from poor construction. I find the standard of care is, at a minimum, the Ontario Building Code’s requirements.
Damages Caused by the Breach
[87] I accept the submissions on behalf of the Wesleys which are supported by the evidence as follows:
Failed walls caused by excessive backfill
[88] Mr. Koerth opined at trial that the foundation problems are directly attributable to the excessive backfill height and the use of frost susceptible soils by Mr. Geneau.
[89] Mr. Koerth and Mr. Flynn both opined that excessive height, when coupled with the expansion of freezing water retained in the soils, caused excessive lateral pressure to act against the south foundation wall, causing it to bow. Mr. Flynn testified that this was unsafe.
[90] Mr. Koerth further found that the north wall also had excessive backfill height and was made up of poorly-draining materials. Mr. Flynn agreed that the north wall failure was due to an overload condition and freeze thaw activity in organic soils occurring along the exterior of the dwelling.
[91] Mr. Geneau admitted that when he constructed the home, the whole area consisted of clay soils. Although Mr. Geneau insists that he hauled away the clay from the excavation for the foundation, his photographs show excavated native soil in a pile adjacent to the foundation well into the construction, suggesting that he merely used that excavated clay soil to backfill.[^16] Mr. Geneau testified that he replaced the excavated clay soil with sand which he purchased and had transported to the Property.
[92] Mr. Dahl, who undertook the repair, confirmed that he saw clay in the backfill when the backfill was removed, and that this increased the cost to Mr. Wesley as it had to be hauled away. He directed the court to photographs showing clay soil and water pooling, consistent with clay being in the ground because the water was not disbursing at all.[^17]
[93] At trial, Mr. Lalonde confirmed that he did see some clay in the backfill soil from a test hole he dug between 10” and the 18” below grade. He admitted he did not know what soils lay below that depth.
[94] Mr. Koerth provided several reasons at trial for why the south wall merely cracked and bowed while the north wall failed catastrophically, including:
a. The soils retained behind the south wall were likely better draining than those behind the north wall and therefore subjected the south wall to less pressure from freezing water;
b. The positioning of the septic tank close to the south foundation wall would have reduced the amount of pressure to which the south wall is subjected;
c. The interior of the north wall was insulated, which would have impeded heat transfer from inside the basement, through the north foundation wall, to the backfill. The lack of insulation on the south wall would have allowed greater heat loss from the basement into the soil along the wall which would lessen the impact that freezing soil could have.
Alternative explanations for the failed walls
[95] Mr. Geneau’s engineer, Mr. Lalonde, offered alternative theories for why the north foundation wall failed.
[96] Mr. Lalonde agreed that the inward collapse of the north foundation wall was as a result of the expansion of wet soils during freezing, which applied excessive lateral pressure on the foundation. However, Mr. Lalonde suggested that the severity of the frost penetration at the time of the failure was likely exacerbated by several factors:
a. Proximity of the dwelling to the water table causing constant moisture in the soil;
b. A deck along the north wall did not allow snow to insulate the soils adjacent to the wall;
c. The addition of insulation installed on the inside of the north wall would not have allowed the interior air from the dwelling to warm adjacent soils;
d. Colder than normal weather conditions in February 2015;
e. The quality of the CMU foundation construction was not high.
[97] I find that of these factors the proximity of the dwelling to the water table, the addition of insulation installed on the inside of the north wall (the stud wall), the poor construction of the foundation are all attributable to Mr. Geneau as builder of the Property.
[98] Regarding the deck, the evidence from Mr. Geneau is that he had constructed a deck along the north wall. Mr. Wesley testified that he had replaced the deck with a slightly longer deck, to extend to the sunroom addition. Thus, the alleged lack of snow insulation outside the failed north foundation wall existed during the time of the Geneaus’ ownership of the home. In any event, the Wesleys submit that a deck should not be required to ensure a foundation wall’s structural integrity. I find is not the presence of the deck, but rather the presence of excessive, poorly-draining soils which caused impounding of water behind the wall subjecting it to freeze thaw pressure. I agree with this submission supported by the evidence of Mr. Flynn and Mr. Koerth.
[99] As for Mr. Lalonde’s opinion, he testified that the backfill height did not seem to be the problem but rather the collapse of the north wall resulted from the expansion of wet soils during freezing which applied lateral pressure on the foundation. In my view, this opinion ignores the reality of the excessive backfill and only deals with part of an interrelated problem involving poorly-drained native soils and excessive backfill.
[100] I prefer the expert evidence of Mr. Koerth to that of Mr. Lalonde regarding the origin and cause of the failure of the north foundation wall. I accept Mr. Koerth’s opinion at trial that the foundation problems are directly attributable to the excessive backfill height and the use of frost susceptible soils by Mr. Geneau. The evidence supports this conclusion set out by Mr. Koerth in his report dated September 22, 2015 at p. 25:
• The subject cottage foundation walls were not constructed in accordance with the 1986 Ontario Building Code or with good construction practice, in that there was too much soil retained against the walls.
• The failure of the foundation walls was directly attributable to the excessive height of the retained earth against them.
• It appeared that the previous owner had installed a wood stud wall beside the more substantially failed rear foundation wall, so as to reinforce the wall. Given the presence of the wood stud wall, it is our opinion that the previous owner was likely aware of the structural problems with the rear foundation wall, contrary to what was reported on the Seller Property Information Sheet.
• All of the foundation walls of the original cottage require repairs or reinforcement. The more substantially damaged rear wall requires replacement. The front wall should either be replaced or reinforced. The remaining walls could be repaired.
• If permanent repairs are not initiated as soon as possible, then temporary shoring of the rear wall and overlying structure should be initiated immediately.
Additional deficiencies
[101] Mr. Koerth testified that the east block foundation wall, which abuts the garage, is also retaining too much earth for the eight inch thickness of the concrete block.
[102] Mr. Koerth also testified that the concrete block walls that enclosed the stairway from the garage to the basement retained too much earth as well, particularly given that neither wall was laterally restrained at the top by a wood floor system. Mr. Koerth identified cracking consistent with the onset of failure of that wall.
Consequential damage
[103] Mr. Koerth testified at trial that he observed cracking in the drywall wall finish at the east end of the living room and that this cracking was probably caused by the failure of the foundation wall beneath it. Mr. Wesley also testified about observing cracked drywall.
No contributory negligence by the Wesleys
[104] The Geneaus suggest that Mr. Wesley caused or contributed to the foundation wall failures.
[105] Indeed, Mr. Wesley has admitted that he added a small amount of sand and topsoil to the grade around the Property outside the addition, by the garage, and by the north wall beneath the deck, which is where the north wall catastrophically failed, so as to create a slope allowing water to drain away from the home.
[106] The foundation walls of the addition and by the garage did not fail. The one area where Mr. Wesley added soil that did fail was the exterior of the north wall. Mr. Wesley admits to placing four to six inches of sand and dirt at that location so as to bring the backfill back up to the tar line.
[107] Mr. Lalonde opined that this may have contributed to the north wall’s failure. However, both Mr. Flynn and Mr. Koerth have each independently concluded that the north wall had failed prior to the Wesleys’ purchase of the property.
[108] Mr. Flynn based this conclusion on the following:
a. The stud wall constructed next to the inside of the north foundation wall was offset approximately two inches from the foundation wall. Mr. Flynn suggested this offset was created due to potential inward bending within the block wall system; otherwise, the framed wall system would not have appeared as being plumb.
b. The outside of the northwestern corner of the failed north foundation wall had been repaired/tarred, which the Wesleys have indicated they did not do themselves, nor did they have anyone else do that on their behalf. Mr. Flynn concluded that this indicated that the wall had been in failure mode prior to the Wesleys’ purchase of the Property[^18]
[109] Mr. Koerth agreed at trial that the positioning of the interior stud wall and the evidence of wall repairs indicate that the wall had failed prior to the Wesleys’ purchase.
[110] Mr. Koerth also pointed to the fact that Mr. Wesley, when adding sand and topsoil to the ground outside the failed north wall, was merely restoring the grade back up to the tar line, which is where the grade would have originally been prior to the failure. Mr. Koerth explained that, when the wall failed, it moved inward. This allowed soils to move inward with it, thereby lowering the grade of the earth immediately outside the wall. As such, according to Mr. Koerth, the fact that Wesley had to add soil to bring the grade back up to the tar line supports the conclusion that the wall had already failed, thereby causing the grade to fall beneath the tar line.
[111] The Wesleys submit and I agree that there is overwhelming evidence showing that the north and south walls failed due to excessive backfill and poorly-drained native soils placed by Mr. Geneau in contravention of the Ontario Building Code and not by anything done by Mr. Wesley.
The Damages are Foreseeable
[112] In Winnipeg Condominium Corporation No. 36, the Supreme Court made the following remark regarding foreseeability:
In my view, it is reasonably foreseeable to contractors that, if they design or construct a building negligently and if that building contains latent defects as a result of that negligence, subsequent purchasers of the building may suffer personal injury or damage to other property when those defects manifest themselves. A lack of contractual privity between the contractor and the inhabitants at the time the defect becomes manifest does not make the potential for injury any less foreseeable. [^19]
[113] I find that the damages claimed are directly related to Mr. Geneau’s negligence. Because the backfill against the north and south walls was too high, those walls failed. Also, I find the backfill consisted of poorly-drained clay soil which was frost susceptible. As such, I find that the damages claimed are foreseeable.
ISSUE 3
ARE THE GENEAUS LIABLE TO THE WESLEYS FOR MISREPRESENTATION AND CONCEALMENT OF THE DEFECTS OF THE FAILED NORTH FOUNDATION WALL?
[114] For the following reasons the answer to this question is yes.
[115] The leading case on negligent misrepresentation is Queen v. Cognos, wherein the Supreme Court sets out a five-part test:
There must be a duty of care based on a “special relationship” between the representor and the representee;
The representation in question must be untrue, inaccurate, or misleading;
The representor must have acted negligently in making said misrepresentation;
The representee must have relied, in a reasonable manner, on said negligent misrepresentation; and
The reliance must have been detrimental to the representee in the sense that damages resulted.[^20]
[116] This test was adopted by the Ontario Court of Appeal in the context of building defects at para. 68 of Krawchuk v. Scherbak,, 2011 ONCA 352, and I find it is the applicable test governing the Wesleys’ claim of negligent misrepresentation against the Geneaus.
• The Geneaus Owe a Duty of Care to the Wesleys
[117] In Krawchuk, Madame Justice Epstein found that a special relationship giving rise to a duty of care existed between the seller and purchaser of a home. She based this conclusion on the fact that the representations in question were made in a Seller Property Information Sheet and because that Seller Property Information Sheet was attached as a schedule to the corresponding Agreement of Purchase and Sale.[^21]
[118] Relying on Krawchuck, Madame Justice Gauthier stated in Gladu v. Robineau,
In circumstances where vendors intend that the representations they make in a SPIS be relied upon by prospective purchasers in deciding whether or not to offer to purchase the property, a special relationship is created between the vendor and the prospective purchasers that gives rise to a duty of care (for tort claim): see Krawchuk, at para. 75.[^22]
[119] I find the Geneaus provided an SPIS to the Wesleys, which created a special relationship between them giving rise to a duty of care pursuant to Krawchuk and Gladu.
• The Representations Made by the Geneaus to the Wesleys were Untrue, Inaccurate, or Misleading
Untrue, inaccurate, or misleading statements in the SPIS
[120] The SPIS contains a list of statements followed by several boxes that can be checked off. On page two of the SPIS, under “Improvements and Structural” Question 1 states “Are you aware of any structural problems?” and the corresponding “No” box is checked.[^23]
[121] Question 2(a) states “Have you made any renovations, additions or improvements to the property?” and the “No” box is checked.[^24]
[122] Question 7 states “Are you aware of any moisture and/or water problems?” Again “No” is checked.[^25]
[123] I agree with the Wesleys’ submissions that each of these representations are untrue, inaccurate or misleading, all of which are related to construction of the stud wall next to the failed north wall.
[124] Mr. Koerth and Mr. Flynn testified that the stud wall was built several inches away from the north foundation wall because the foundation wall had already begun to heave. Otherwise, the stud wall would have been constructed flush against the north foundation wall. As the foundation wall is crucial to the structural integrity of the property, I find the heaving would represent a structural problem. As such, the answer to Question 1 should have been “Yes”.
[125] There was an area of the exterior north foundation wall that had undergone a parging repair. Mr. Lalonde opined the crack was indicative of inward failure. He testified that he observed movement of the north foundation wall so that inward pressure had caused the wall to fracture. Mr. Wesley testified that this area of repair meant nothing to him and his uncontroverted evidence was that he had not performed this parging repair. Mr. Geneau initially testified that he had not made this repair. He then testified that he did not remember if he repaired the hairline crack on the north foundation wall and parged it. But when presented with the instruction letter from his lawyer to Mr. Lalonde dated November 24, 2015 (Exhibit 6) which referred to a parging repair apparently during Mr. Geneau’s ownership, Mr. Geneau’s testimony changed. He testified that he might have told his lawyer that he parged a crack on the exterior north foundation wall. I note there were no other occupants of the Property other than the Geneaus between the time the house was built until the Wesleys bought it. Therefore, it is reasonable to conclude from the evidence that the repair was effected by Mr. Geneau before the purchase of the Property. I find the repair was also a structural issue and the answer to Question 1 should have been “Yes”.
[126] As well, I find the addition of the stud wall would represent a renovation, addition or improvement such that the answer to Question 2(a) should have been “Yes”.
[127] Also, Mr. Geneau testified at trial that he built the stud wall because he had observed frost coming through the foundation wall and he built the stud wall as a measure to prevent heat loss. I find this represents a moisture and/or water problem such that the answer to Question 7 should have been “Yes”.
Construction of the stud wall amounts to an untrue, inaccurate, or misleading statement
[128] I find the construction of the stud wall by Mr. Geneau was a misrepresentation because it concealed the defective foundation wall behind it. Mr. Geneau testified that he built the stud wall off-set from both the north foundation wall and the floor to avoid moisture damage and as a measure to prevent heat loss. To this end, he installed insulation and vapour barrier. In cross-examination, Mr. Geneau admitted he could not see if whether or not the construction of the stud wall had prevented frost intrusion as he could no longer see the north foundation wall. He did not disclose any of this to the Wesleys or the realtor.
[129] Further in cross-examination, Mr. Geneau was asked if he saw ice crystals only at the top portion of the north wall, why would he not insulate the top of the north wall and leave the basement windows on the north wall uncovered. He testified that the Building Code told him to construct and insulate the entire stud wall. Questioned further, he testified he did not know alot about the Building Code and between 1989 and 1997 he was not sure if he had a copy of the Building Code. He was unable to say what sections of the Building Code he relied on to build the stud wall to the floor rather than insulate above grade.
[130] Put to Mr. Geneau were questions and answers given at his examination for discovery on September 7, 2016. He testified that he was not aware that in the Province of Ontario since 1970, there existed an Ontario Building Code.
[131] Further, Mr. Geneau testified he acquired construction experience by watching other tradesmen perform work. Plus, he went by a Reader’s Digest book. Mr. Geneau admitted that when he constructed the Property he was relying on the Reader’s Digest book and not the Ontario Building Code. Mr. Geneau admitted he was required to construct the Property in compliance with the Ontario Building Code. At the time he constructed the Property, Mr. Geneau admitted he was not aware of the requirements of the Ontario Building Code. Mr. Geneau did not disclose to the Wesleys he had constructed the home without knowledge of the Ontario Building Code.[^26] [^27]
[132] In Kelly et al v. Pires et al, Mr. Justice R.J. Harpur cited with approval the following passage from an article by Justice Paul Perell:
The most notorious member of the second class of exceptions is the exception for active concealment by the vendor. While the vendor may be entitled to rest silent, it cannot actively conceal or cover up defects. By active concealment is meant that the vendor knew that there was a defect to the property and it acted to prevent that knowledge from coming to the notice of the purchaser. The conduct is treated as if it were a false statement asserting the absence of the defect. Active non-disclosure is regarded as a form of fraud for which the vendor is liable.[^28]
[133] Mr. Geneau has admitted that he saw frost on the interior of the north wall. Furthermore, Mr. Koerth and Mr. Flynn testified that the wall had already started to heave when the stud wall was erected. As for the gap between the north foundation wall and the stud wall, the evidence of Mr. Koerth and Mr. Flynn is uncontroverted. They both testified that the stud wall was likely constructed to accommodate an already bending foundation wall. Mr. Koerth opined that the manner in which the wall was constructed would not insulate the foundation wall.
[134] I find the heaving and the frost on the wall are both signs of serious structural problems. These problems were not manifesting themselves on any wall other than the failed rear wall. As such the frost was an indication that that wall was not functioning properly. I find by erecting the stud wall, the Geneaus concealed that defect. Further, the Geneaus have admitted that they did not inform the Wesleys that they constructed the stud wall because of frost.
[135] Therefore, I find that concealment represents a misrepresentation for which the Geneaus are liable.
• The Geneaus acted negligently in making these representations
[136] The Supreme Court explained the standard to be used when determining whether or not a misrepresentation amounts to negligence:
The applicable standard of care should be the one used in every negligence case, namely the universally accepted, albeit hypothetical, “reasonable person”. … It is a duty to exercise such reasonable care as the circumstances require to ensure that representations made are accurate and not misleading.”[^29]
[137] The Supreme Court further explained this by citing Professor Klar:
An advisor does not guarantee the accuracy of the statement made, but is only required to exercise reasonable care with respect to it. As with the issue of standard of care in negligence in general, this is a question of fact which must be determined according to the circumstances of the case. Taking into account the nature of the occasion, the purpose for which the statement was made, the foreseeable use of the statement, the probable damage which will result from an inaccurate statement, the status of the advisor and the level of competence generally observed by others similarly placed, the trier of fact will determine whether the advisor was negligent.[^30]
[138] I find intent to mislead is not a requirement for a misrepresentation to be negligent; where a representation does not amount to full, frank, and accurate disclosure, negligent misrepresentation is made out.[^31]
The misrepresentations in the SPIS were made negligently
[139] The purpose of an SPIS is to provide information to prospective purchasers regarding the condition of the house. The foreseeable use of the statements contained in the SPIS would inform a prospective purchaser’s decision to purchase the property at a particular price. As such, the truth of the statements are vital to a prospective purchaser’s ability to accurately consider whether or not to purchase the house at a given price. Incorrect statements could induce a purchaser to purchase a house at a price higher than its value, or to purchase a house that has severe structural deficiencies, as is the case in the within action.
[140] The Wesleys knew that the Geneaus built, owned, and occupied the house. They expected the Geneaus to have an intimate knowledge of the house’s condition. The Wesleys expected the answers in the SPIS to reflect this knowledge. Mr. Wesley confirmed that he relied on this SPIS, and retained a home inspector to find anything else he might have missed.
[141] As previously stated, the Geneaus have admitted that they observed frost on the interior of the foundation wall.
[142] Furthermore, Mr. Koerth and Mr. Flynn testified that the north foundation wall had bowed before the Geneaus installed the stud wall. I find this bowing would have been known to the Geneaus when they were filling out the SPIS.
[143] In addition, it is reasonable to conclude that Mr. Geneau had repaired the crack in the foundation.
[144] Full, frank and accurate disclosure on the SPIS would have disclosed these facts and they could have been reviewed with the home inspector. However, I find these facts are incompatible with the statements in the SPIS.[^32]
[145] The Geneaus provided the Wesleys with the SPIS to provide information about the Property that could help the Wesleys decide whether or not to purchase the Property. Because there was incorrect information on the SPIS, I find the Wesleys purchased a Property that was in a far worse physical condition than they believed it to be.
[146] I find the “probable damage” mentioned in Cognos had, for the Wesleys, materialized into actual, severe damage – they purchased a house with a failed foundation.
[147] I find that these incorrect statements on the SPIS meet the definition of negligent misstatement as contemplated in Cognos and Gladu and that the Geneaus are liable to the Wesleys for the resulting damage.
Concealment of the foundation wall was negligent
[148] In Kelly, Mr. Justice Harper found that concealment of a known defect that makes the premises uninhabitable amounts to “active nondisclosure” for which the representor is liable.[^33]
[149] I find that had the Geneaus not constructed the stud wall, or had they at least informed the Wesleys of the bowing and the frost or efflorescence that was visible behind it, the Wesleys would have been able to take these defects into consideration when considering whether or not to make an offer on the Property. At the very least, knowing about these defects would have given them the opportunity to hire a professional to conduct a deeper investigation into the significance of those red flags.
[150] However, no such disclosure of the bowing or the efflorescence was provided. They were concealed by the stud wall which, pursuant to Kelly, amounts to a misrepresentation for which the Geneaus are liable.[^34]
• The Wesleys Reasonably Relied on the Misrepresentation
[151] The Wesleys were aware that Mr. Geneau constructed the Property. Indeed, he led them to believe that he was a good builder, and thus the home was well constructed. The Wesleys also knew that the Geneaus owned the Property continuously until they sold it to the Wesleys.
[152] As such, it is reasonable for the Wesleys to rely on the Geneaus’ statements regarding the Property’s condition. Indeed, the Geneaus would be in a better position than anyone to comment on the condition of the Property.
[153] The Geneaus might rely on the statement at the beginning of the SPIS which states “Buyers must still make their own inquiries” to suggest that they could not be made liable for misstatements made in the SPIS. However, jurisprudence has made it clear that such a statement does not absolve the Geneaus of liability for misstatements[^35]
[154] The Geneaus might also suggest that the Wesleys did not rely on the Geneaus’ misrepresentations, opting instead to obtain a home inspection.
[155] Justice Gauthier addresses this argument in Gladu stating:
A home inspection is not intended to find latent defects. At para. 76 of Lyle v. Burdess, 2008 YKSM 5, Cozens Terr. Ct. J. agreed with the comments of Killeen J. in Kaufmann v. Gibson (2007), 59 R.P.R. (4th) 293 (Ont. S.C.), stating:
In circumstances where there is no [Property Disclosure Statement] prepared, a prudent purchaser would be expected to contract for a more thorough home inspection if the buyer wished to avoid future costly surprises. Where a PDS has been prepared, however, the buyer should be able to rely on the truthfulness and accuracy of the representations in the PDS in deciding the extent to which a contractor will be instructed to conduct a home inspection.[^36]
[156] Justice Gauthier explains the distinction between patent and latent defects in the preceding paragraph:
The distinction between patent and latent defects is described in Halsbury’s Laws of England, at para. 51:
Defects of quality may be either patent or latent. Patent defects are such as are discoverable by inspection and ordinary vigilance on the part of a purchaser, and latent defects are such as would not be revealed by any inquiry which a purchaser is in a position to make before entering into the contract for purchase.[^37]
[157] I find the defects to the north foundation wall were latent; the stud wall hid the efflorescence and bowing from view.
[158] While the grade height of the backfill on the exterior of the north wall would have been visible underneath the deck, Mr. Wesley testified that area was inaccessible due to lattice fencing and the fact that it could only be accessed on one’s stomach. However, even if the home inspector could have inspected beneath the deck, he would not be expected to identify the grade height as a defect. Indeed, Mr. Beauvais made it clear at the beginning of his inspection report that his inspection was limited to “the readily accessible features of the Property” and that it was not a Building Code or By-Law compliance inspection.[^38]
[159] The Geneaus have led no evidence, expert or otherwise, to suggest that the Wesleys or their home inspector failed to exercise due diligence or inspected negligently. Indeed, Ron Koerth’s opinion in cross examination was that there was nothing in the home inspection report that would tell him that the Wesleys should have done anything differently.
[160] I find that these limitations of Mr. Beauvais’ inspection and the law as stated in Gladu make it clear that the Geneaus cannot rely on the home inspection to absolve themselves of liability for the misrepresentations they made. I find the Wesleys acted reasonably in relying on the Geneaus’ misrepresentations and are entitled to be compensated for the resulting damages.
• Reliance on the misrepresentation was detrimental to the Wesleys
[161] By relying on the Geneaus’ misrepresentations, I find the Wesleys purchased a home they believed to be structurally sound. What they actually purchased was a home with a severe structural deficiency arising from a failed foundation wall.
[162] Further, I find the extent of this detriment is manifest in the scope of repair required by Mr. Koerth, which entailed replacement of the failed foundation wall and support of the remaining foundation walls.
[163] For these reasons, I find the five-part test in Queen v. Cognos has been satisfied by the Wesleys to establish negligent misrepresentation by the Geneaus.
[164] There are a number of subsidiary issues which I have addressed as follows.
Substantial Risk of Danger
[165] The Geneaus argue that as the danger was not imminent – the collapse of the foundation would take some time before actual danger existed – they should not be responsible for the loss. Mr. Lalonde did not consider a dangerous condition existed as a result of soil pressure.
[166] La Forest J. dealt with the imminence and repair prior to actual injury in Winnipeg v Bird Construction 1995 CanLii 146 (SCC) at paragraphs 36 and 37. At paragraph 36 La Forest J. summarized the following conclusion
36 In my view, the reasonable likelihood that a defect in a building will cause injury to its inhabitants is also sufficient to ground a contractor’s duty in tort to subsequent purchasers of the building for the cost of repairing the defect if that defect is discovered prior to any injury and if it poses a real and substantial danger to the inhabitants of the building. …
[167] While Mr. Lalonde opined that foundation wall failures take time, there would be signs long before a failure. I find this is not born out by the wall collapse suffered by the Wesleys. Interestingly, while at the time of his report Mr. Lalonde opined that the collapsed north wall could merely be supported, at trial Mr. Lalonde concurred with Mr. Flynn and Mr. Koerth that it required replacement.
[168] Mr. Flynn described the wall collapse as “catastrophic”. At trial he described it as a “pretty serious failure” and a “significant collapse”. It required immediate shoring of the collapsed wall if the repair was not undertaken right away.
[169] Mr. Koerth testified that while he would not use grandiose words such as “catastrophic” it was a “dangerous condition” and he provided an immediate scope of repair as he felt there was a safety concern.
[170] Mr. Koerth also opined that there was no margin for error with respect to backfill height – excess soil exacerbates the pressure exerted by the exterior soil onto the foundation wall and this creates a risk of foundation wall failure. Indeed, in this case a foundation wall collapsed.
[171] I find that there is sufficient evidence to support a conclusion that the foundation construction and its collapse posed a substantial risk of danger.
Clay Soils and Spoliation
[172] The Geneaus argue a lack of opportunity to view the organic soils removed from around the home and that an adverse inference should be drawn.
[173] The Geneaus did not plead spoliation, nor did they amend their defence to do so, either following delivery of Mr. Dahl’s 2017 final costing which increased as a result of the need to remove the clay, or after being provided with a summary of Mr. Dahl’s evidence in this regard 5 months prior to the ultimate trial date.
[174] Mr. Geneau admitted that the whole area around the home was clay soil. There is photographic evidence to support a finding that he used those clay soils to backfill the north wall of the home. Mr. Flynn opined that the north wall failure due to an overload condition and freeze thaw activity in organic soils occurring along the exterior of the dwelling. The Wesleys plead the use of organic backfill at paragraph 9(f) of their claim. Mr. Koerth’s September 2015 report opines that it is likely that poor draining materials were used for backfill on the north wall.
[175] All of this information was available to the Geneaus’ expert Mr. Lalonde who did undertake a soils investigation at his December 2015 site visit. Mr. Lalonde’s evidence in chief was that he dug two foot test holes at each end of the north wall. In cross-examination he revised his evidence to say that in fact the test holes were 10”-18” deep. He confirmed that he found “small amounts of clay” but did not know what the soil make up was at lower depths.
[176] The Geneaus were on notice that the use of inappropriate backfill was an allegation, and had every opportunity to fully investigate this, both at the time that their expert attended, and during the repair that they were fully aware was in process of being undertaken. As such, no adverse inference is drawn.
Contributory Negligence and Failure to Mitigate
[177] At para. 157 of the Geneaus’ written closing submissions, they submit that the Wesleys did not act reasonably in trying to mitigate their damages, and/or caused or contributed to the damage by:
i. Not conducting further inspections and investigations at the time of purchase to determine the cause of the water infiltration in the basement;
ii. Not conducting further inspections and investigations at the time of purchase to determine the cause of the crack in the south foundation wall;
iii. Waiting a year to address the grading along the west wall and 5-6 years to address the grading along the north wall when their home inspector recommended it be addressed “asap”;
iv. Not referring to the Building Code and adding soil in excess of the original tar line when they did address the grading;
v. Not addressing the grading properly or on an ongoing basis as grading remained a problem along the north wall;
vi. Building a deck that was anchored to the north exterior wall and not supported properly;
vii. Not recognizing the signs of water infiltration and/or making investigations and inspections into the source of the ongoing water infiltration during the course of their ownership;
viii. Not installing temporary shoring as soon as possible after the loss.
[178] With respect to the submissions at paragraph 157 of the Geneaus’ closing submissions, the Wesleys make the following reply:
i. See submissions with respect to due diligence above.
ii. See submissions with respect to due diligence above.
iii. There is no expert evidence to support his allegation.
iv. Mr. Koerth’s opinion was that there was no evidence of soil being added above the tar line on the north or south walls – the walls retaining excessive soil.
v. Mr. Koerth opines that the poor grading visible along the north wall following collapse was due to backfill dropping to fill in the void caused by the wall collapse. There is no evidence that the grading along the north wall “remained a problem” prior to the collapse.
vi. vii. & viii There is no expert or other evidence to support a finding that these contributed in any way to the loss.
[179] I accept the submissions made on behalf of the Wesleys and specifically reject the submissions of the Geneaus that the Wesleys did not act reasonably in trying to mitigate their damages, and/or caused or contributed to the damages for the assertions made by the Geneaus. I find that the Wesleys have not caused or contributed to their damages. I also find that there is no evidence to establish that they failed to mitigate their damages.
ISSUE 4
ARE THE WESLEYS ENTITLED TO DAMAGES?
[180] The Geneaus submit that various items in the scope of repair prepared by Mr. Koerth are not associated with restoring the Property to a non-dangerous condition and should be excluded on that basis.
[181] The Wesleys submit they are entitled to damages for negligent construction which include the full scope of repair recommended by Mr. Koerth and carried out by First General Services (Mr. Dahl) as well as the costs associated with the frozen pump and pipe repairs that were performed by Morrows Plumbing and Heating.
[182] Mr. Koerth’s evidence at trial was that his scope of repair dealt exclusively with items necessary to reinforce or replace the foundations, which were identified to constitute a dangerous condition. Mr. Koerth testified that he excluded various work items performed by First General – such as work on shed barn doors, insulating the basement walls, and replacing pine ceiling paneling, precisely for this reason.
[183] Mr. Koerth’s evidence at trial was that the balance of First General’s repair items followed his scope of work which, again, was designed exclusively to rectify the dangerous condition of the failed foundation. No evidence lead at trial contradicts Mr. Koerth’s opinion on this issue.
[184] The Geneaus cite Mariani v Lemstra[^39] in support of their argument that they should be permitted to deduct various repair items from the damages for which they are responsible. In Mariani, the Court of Appeal rejected the finding of liability for misrepresentation, and as a result found that the appropriate measure of damages was the repair cost to return the building into a non-dangerous state rather than a valuation or rebuild approach. The Court of Appeal had two repair estimates in front of it and chose the lesser of the two.
[185] The appeal decision does not give any detail as to what is contained in these repair estimates and does not apply a reduction to those estimates on some notion that only part of the repair scope was recoverable. I find the Court of Appeal decision in Mariani does not support the Geneaus’ argument that only part of the repair scope is recoverable.
[186] I agree with the Wesleys’ submission that Mr. Koerth’s scope of repair and the First General Services repair estimate inform the measure of damages. The Geneaus have provided no alternative repair estimate for this court to consider.
Scope of repair
[187] Mr. Koerth testified that he prepared a scope of repair set out in his report dated September 2, 2015. In order to remedy the deficiencies, Mr. Koerth provided the following scope of repair consisting of seventeen items:
a. Remove and store all contents from the basement;
b. Install shoring to support the upper floor. Such shoring should be installed in such a fashion as to allow the masonry contractor to safely work to install the new foundation walls;
c. Remove and dispose of the windows that are located in the east block foundation wall, as they have been racked and are aged, and the cost to remove, store, rehabilitate, and reuse them likely will be equivalent;
d. Remove enough of the east exterior wood deck as is required to safely perform the wall repairs. Either allow for salvage and re-use or complete new deck, whichever is more cost-effective;
e. Disconnect all plumbing and electrical services, as required;
f. Excavate the exterior side of the block foundation walls at the north and south sides down to the existing footings and remove both the east and west foundation walls (sawcut at intersection points with east and west foundation walls). Care must be taken at the south side, as the septic system is located south of the south foundation wall;
g. Lift/jack (to unload existing failed concrete block foundation walls), support, and brace upper structure and remove the east and west concrete block walls (allow for engineering costs of temporary works). Not that the upper structure must be lifted only enough to allow for “unloading” of the block foundation, as both the addition and the garage structure will remain connected and resting on their own remaining foundations. Note also that the contractor must be confident that he or she can successfully place the new concrete block foundation walls and reconnect them to the upper structure, given that there will be very little clearance between the top of the last block course and the underside of the sill plate. Adequate cost allowance for this work must be included in the estimate;
h. Sawcut the perimeter of the concrete slab at the north and west sides to allow for the installation of wider concrete footings and block walls;
i. Remove both the north and south footings, as larger block walls will be required on top;
j. Install a 14 inch wide concrete footing on the north side and a 16 inch wide footing on the south side. Footings to be a minimum of 6 inches thick and a minimum of 15 MPa;
k. Install a new 10 inch thick concrete block north foundation wall and a 12 inch thick south foundation wall, with dowelled connections to the east and west foundation walls at every block course, using 12 inch long 15 M dowels anchored into filled block courses;
l. An alternative to the removal and replacement of the south concrete block foundation wall would be to leave it in place and reinforce it with a wood stud wall. If that approach is taken, then an interior weeping tile and foundation wall drainage system must be installed along that wall, as there likely would be ongoing moisture seepage through the cracked block wall. Specifics of such a repair are beyond this scope of work, but for pricing purposes, assume a 2 inch by 8 inch stud wall with studs a t12 inch centres, a single bottom and a double top plate. Anchor the bottom plate to the concrete slab with 3/8 inches diameter Tapcons at 12 inch centres and nail the top plates to each floor joist. The stud wall is to be installed tight to the foundation wall, recognizing that the deflected shape of the foundation wall will require shimming. The interior weeping tile must be connected to the existing sump;
m. Complete the concrete floor slab installation where it was not existing at the north portion of the original house basement, so as to properly lock the base of the concrete block foundation walls in place;
n. Replace weeping tile and gravel, parge and dampproof walls, and backfill with clear stone;
o. Grade rear of house to ensure that water from the slope is diverted around the house. Ensure that not more than 60 inches of earth is retained against the north wall and 72 inches against the south wall;
p. Install new basement windows in north foundation wall;
q. Allow for repairs to upper level finishes caused by lifting/jacking process as well as cracking caused by the north foundation wall failure. Also allow for adjustment of all doors.
[188] The Geneaus do not dispute the scope of repair proved by Mr. Koerth and have not provided any alternative scope of repair. Mr. Lalonde agreed at trial that the north foundation wall required removal and replacement.
[189] Mr. Dahl testified as to the work performed by First General Services. He gave detailed and credible evidence to the effect that he followed the scope of repair authored by Mr. Koerth. In so doing, he referred to his estimates found at Exhibit 1 Tabs 19, 23-26[^40]
[190] The Wesleys had the work completed between late 2016 and mid-2017. The work was completed by First General Services at a total cost of $96,879.61, which included $11,676.13 related to work required on the upper floor to repair damage resulting from the shifting foundation.
[191] First General Services elected to support the south foundation wall rather than replace it, as Mr. Dahl testified the existence and location of the septic system would have meant the “cost would’ve gone through the roof”.
[192] During the course of those repairs, First General Services discovered that the insulation in the ceiling did not meet current Ontario Building Code requirements and the Wesleys were required to install additional insulation at a cost of $3,069.08.
[193] To ensure that the work completed by First General Services complied with Mr. Koerth’s scope of repair, Mr. Koerth returned to review the repair.
[194] Mr. Koerth testified that the work completed by First General Services largely complied with his scope of repair, though some specified work to reinforce the stairwells had not yet been completed.
[195] Mr. Koerth opined that the insulating of the ceiling did not form part of his scope of repair as it was a change in the Ontario Building Code requirements since 1989 that led to the need to increase the level of insulation and was not connected to the construction deficiencies.
[196] Mr. Koerth confirmed at trial that the amounts that should be backed out from First General Services’ Work (approximately $5,825.00 for shed doors, some basement insulation and replacement of pine ceiling) are approximately equivalent to the costs associated with the further work required to reinforce the stairwell walls. The work to the stairs does form a part of Mr. Koerth’s scope of repair for the failed foundation.
[197] Given this offset, Mr. Koerth concluded at trial that First General Services’ costing of $96,879.61 reflects the cost of effecting his scope of repairs.[^41]
[198] The Geneaus have not provided any costing, or opinion evidence, to suggest that the charges by First General Services were excessive or unreasonable.
[199] In addition, the Wesleys suffered a frozen pump and pipes as a result of the collapsed foundation wall both in March 2015 and January 2016, retaining Morrow Plumbing to conduct repairs at a total cost of $2,422.10[^42]
[200] Mr. Wesley testified, also confirmed by the testimony of Mr. Dahl, that he paid First General Services in full in the amount of $96,879.61.
[201] Further, Mr. Wesley testified he paid in full Morrows Plumbing & Heating Inc. the sum of $2,422.10 to perform plumbing repairs supported by the Morrows’ invoices.
[202] I accept the evidence of Mr. Koerth regarding the scope of repair and the evidence of Mr. Dahl that the repairs were performed in accordance with that scope. I accept their evidence that there were certain adjustments made in quantifying the damages pursuant to scope of repair bringing the amount of those repairs to $96,879.61. I find the scope of repair and repairs performed were reasonable and necessary. I assess damages for negligent construction in the sum of $96,879.61 together with the sum of $2,422.10 for plumbing repairs. These amounts total the sum of $99,301.71. I find damages for negligent misrepresentation by the Geneaus to be in this same amount.
General damages
[203] I find the Wesleys’ use of their home (they moved there permanently in 2016) was limited during repairs and they incurred needless distress, inconvenience, and frustration associated with this loss and with the required repairs.
[204] At trial, Mr. Wesley testified that the cost of repairs was paid from their retirement funds, altering their income, and affecting their ability to enjoy their retirement as planned. The repair work, which proceeded between September 2015 (temporary shoring), and July 2017, meant a lot of noise, and heavy machinery on their property which affected their use and enjoyment. Mr. Wesley could not use his boat. As Mrs. Wesley testified, they lost 2 years. Their family did not come up to visit as it was not enjoyable with all the construction outside and there was a time when scaffolding inside limited their access to parts of the interior of their home.
[205] Mr. and Mrs. Wesley both testified as to the distress, inconvenience and frustration and loss of use of their home. Their uncontroverted evidence was that for an extended period of time their home and property was a construction site. I accept the credible evidence of both Mr. and Mrs. Wesley regarding their claims for general damages. Their testimony was not overstated. If anything, it was the opposite. In the circumstances of this case, I award general damages to Mr. and Mrs. Wesley jointly in the amount of $5000.
Damage Summary
[206] I summarize the damages for negligent construction and negligent misrepresentation as follows:
Repair cost - $96,879.61
Frozen pump and pipes - $2422.10
General damages - $5000
Total - $104,301.71
[207] As this is a simplified rules action, the Wesleys limit their recovery and seek the maximum of $100,000 in damages from the Geneaus together with prejudgment and post-judgment interest.
CONCLUSION
[208] For these reasons, judgment is awarded in favour of Robert John Wesley and Sheila Wesley against Noel Geneau and Margaret Geneau in the amount of $100,000 for negligent construction, for negligent misrepresentation and for general damages regarding 16 Dunks Crescent, Whitestone, Ontario together with prejudgment and post-judgment interest pursuant to the provisions of the Courts of Justice Act.
COSTS
[209] The parties agree that costs are to be determined by way of written submissions. If the parties cannot agree upon costs, within seven days from the date of these Reasons, the Plaintiffs shall serve and file a concise two-page summary regarding costs, together with a costs outline, Bill of Costs and any authorities. The Defendants shall have seven days thereafter to serve and file the same materials. If any reply is required, the Plaintiffs shall serve and file their reply within five days of the Defendants’ submissions. All materials are to be filed with my judicial assistant at Barrie.
Mr. Justice G.P. DiTomaso
Released: March 9, 2020
[^1]: Limitations Act, 2002, S.O. 2002, c. 24, Sched. B [^2]: Tender Choice Foods Inc. v. Versacold Logistics Canada Inc., 2013 ONSC 80 at para. 56 [^3]: Agreement of Purchase and Sale, Joint Document Brief, Exhibit 1, Tab 4 [^4]: Seller Property Information Statement, Joint Document Brief, Exhibit 1, Tab 3 [^5]: MLS Listing, Joint Document Brief, Exhibit 1, Tab 2 [^6]: Paul Beauvais’ Home Inspection Report, Joint Document Brief, Exhibit 1, Tab 8 [^7]: Basement Floor Plan, Joint Document Brief, Exhibit 3 [^8]: Morrow Plumbing & Heating Invoice, Joint Document Brief Exhibit 1, Tab 20 [^9]: Michael Flynn Report dated April 30, 2015, Joint Document Brief, Exhibit 1, Tab 18 [^10]: Home Inspection Report, Joint Document Brief, Exhibit 1, Tab 8, p. 2 [^11]: Winnipeg Condominium Corporation No. 36 v Bird Construction Co. 1995 146 (SCC), 1995, 1 SCR 85, para. 43 [^12]: Winnipeg Condominium Corporation No. 36 v Bird Construction Co. 1995 146 (SCC), 1995, 1 SCR 85, para. 35 [^13]: Winnipeg Condominium Corporation No. 36 v Bird Construction Co. 1995 146 (SCC), 1995, 1 SCR 85, para. 43 [^14]: Danyliw v. Ontario Limited et al 2006 13101 (ONSC), para. 72 [^15]: Michael Flynn Report dated April 24, 2015, Joint Document Brief, Exhibit 1, Tab 18 [^16]: Exhibit 2, Tab 1, p. 7 [^17]: Exhibit 2, Tab 5, p. 2 [^18]: MFAL Report pp. 18 & 24, Joint Document Brief, Exhibit 1, Tab 18 [^19]: Winnipeg Condominium Corporation No. 36 v Bird Construction Co. 1995 146 (SCC), 1995, 1 SCR 85, para. 35 [^20]: Queen v Cognos, 1993 146 (SCC), [1993] 1 SCR 87, p. 110 [^21]: Krawchuk v Scherbak, 2011 ONCA 352, para. 75 [^22]: Gladu v Robineau, 2017 ONSC 37, para. 296 [^23]: SPIS, Joint Document Brief, Exhibit 1, Tab 3 [^24]: SPIS, Joint Document Brief, Exhibit 1, Tab 3 [^25]: SPIS, Joint Document Brief, Exhibit 1, Tab 3 [^26]: Examination for Discovery, Noel Geneau transcript p. 24 questions 171-173 [^27]: Examination for Discover, Noel Geneau transcript p. 40 questions 282-294 [^28]: Kelly et al v Pires et al, 2015 ONSC 2871 at para. 54 [^29]: Queen v Cognos, 1993 146 (SCC), [1993] 1 SCR 87 at p. 120 [^30]: Queen v Cognos, 1993 146 (SCC), [1993] 1 SCR 87 at pp. 120-121 [^31]: Gladu, supra, at para. 283, citing Krawchuk, supra, at para. 39 [^32]: SPIS, Joint Document Brief, Exhibit 1, Tab 3 [^33]: Kelly et al v Pires et al, 2015 ONSC 2871 at para. 53 [^34]: Kelly et al v Pires et al, 2015 ONSC 2871 at para. 53 [^35]: Gladu, supra at para. 287, citing Krawchuk, supra, at para. 85 [^36]: Gladu, supra at para. 293 [^37]: Gladu, supra at para. 292 [^38]: Home Inspection Report, Joint Document Brief, Exhibit 1, Tab 8, p. 2 [^39]: Mariani v Lemstra, (2004), 50592 (ONCA) [^40]: First General Services Estimates, Joint Document Brief, Exhibit 1, Tabs 19, 23-26 [^41]: First General Services final estimate dated August 20, 2017, Invoice and Statement of Account, Joint Document Brief, Exhibit 1, Tab 24-26 [^42]: Morrows Plumbing & Heating Inc. invoices, Joint Document Brief, Exhibit 1, Tabs 20-22