Date Issued: November 25, 2019

File: SC-2019-003131

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Orchard v. Pro Pacific Hazmat Ltd., 2019 BCCRT 1320

Between:

MAUREEN ORCHARD and DONALD SANDBERG

ApplicantS

And:

PRO PACIFIC HAZMAT LTD., OCEAN PACIFIC REALTY INC., TRACY FOGTMANN, and KATHIE COLLIN

 

RespondentS

REASONS FOR DECISION
Tribunal Member:	Kate Campbell, Vice Chair

INTRODUCTION

1.      This dispute is about attic repairs following a home purchase.

2.      The applicants, Maureen Orchard and Donald Sandberg, bought a house from the respondent Kathie Collin. The respondent Tracy Fogtmann was Ms. Collin’s realtor, and Ocean Pacific Realty Inc. (Ocean Pacific) is her affiliated brokerage.

3.      The applicants submit the following:

a.    Prior to the completion of the purchase, a home inspector discovered mould in the house’s attic, caused by moisture from improperly connected roof vents.

b.    An addendum was added to the sale contract stating that Ms. Collin would remediate the attic mould, and carry out the necessary repairs to correct the underlying problem.

c.    The applicants were advised that the mould remediation was completed by the respondent Pro Pacific Hazmat Ltd. (Pro Pacific) and that the venting had been repaired.

d.    Two months later, the applicants discovered dampness in the same attic area, and learned that the vents were not properly repaired.

4.      The applicants say that Ms. Fogtmann, Ms. Collin, and Pro Pacific made false representations that the attic had been repaired, which the applicants relied on in completing the purchase. They seek $4,482.45 for mould remediation, roof repairs, and venting repairs.

5.      Ms. Collin says Pro Pacific was chosen by the applicants and their realtor, and Pro Pacific provided an estimate to do the mould remediation and vent repairs. Ms. Collin says she paid Pro Pacific for the work, which was performed in June 2018 and included reconnecting the defective vent. She says she met all her contractual obligations.

6.      Ms. Fogtmann says she made no misrepresentations about the attic repairs, which were conducted by Pro Pacific on behalf of the seller, Ms. Collin.

7.      Pro Pacific says Ms. Collin hired it to remediate visible mould in the attic, but the contract states that no repair or remediation that addresses the cause of the mould was included, and there was no warranty against future mould growth. Pro Pacific says it offered to refit an incorrectly fitted vent pipe while doing the mould remediation, but no one arranged to fix the root cause of the moisture.

8.      Ocean Pacific says it is not a proper party to this dispute.

9.      The applicants, Ms. Collin, and Ms. Fogtmann are all self-represented in this dispute. Pro Pacific and Ocean Pacific are each represented by principals or employees.

10.   For the reasons set out below, I dismiss the applicants’ claims against all respondents.

JURISDICTION AND PROCEDURE

11.   These are the formal written reasons of the Civil Resolution Tribunal (tribunal). The tribunal has jurisdiction over small claims brought under section 118 of the Civil Resolution Tribunal Act (CRTA). The tribunal’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the tribunal must apply principles of law and fairness, and recognize any relationships between parties to a dispute that will likely continue after the dispute resolution process has ended.

12.   The tribunal may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in court. The tribunal may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

13.   The tribunal has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Some of the evidence in this dispute amounts to a “she said, they said” scenario. Credibility of interested witnesses, particularly where there is conflict, cannot be determined solely by the test of whose personal demeanour in a courtroom or tribunal proceeding appears to be the most truthful. The assessment of what is the most likely account depends on its harmony with the rest of the evidence. In the circumstances here, I find that I am properly able to assess and weigh the documentary evidence and submissions before me. Further, bearing in mind the tribunal’s mandate that includes proportionality and a speedy resolution of disputes, I find that an oral hearing is not necessary. I also note that in Yas v. Pope, 2018 BCSC 282 at paragraphs 32 to 38, the BC Supreme Court recognized the tribunal’s process and found that oral hearings are not necessarily required where credibility is in issue.

14.   Under tribunal rule 9.3(2), in resolving this dispute the tribunal may do one or more of the following where permitted under section 118 of the CRTA: order a party to do or stop doing something, order a party to pay money, or order any other terms or conditions the tribunal considers appropriate.

ISSUE

15.   Must the respondents pay the applicants $4,482.45 for roof repairs, venting repairs, and mould remediation?

BACKGROUND AND EVIDENCE

16.   In a civil claim such as this, the applicants bear the burden of proof, on a balance of probabilities. I have only addressed the evidence and arguments to the extent necessary to explain my decision.

17.   In April 2018, the applicants and Ms. Collin signed a contract of purchase and sale for the purchase of Ms. Collin’s house (purchase contract). One of the conditions was an approved home inspection.

18.   The home inspection identified a moisture problem in the house’s attic. Specifically, page 27 of the report from Baker Street Home Inspection (Baker) says the ducting for the bathroom fan was poorly connected to the vent in the attic space, so warm, moist air discharged and condensed in the attic, allowing for bacterial growth and causing the sheathing to buckle. Baker recommend that a qualified contractor assess the removal of the growth, the condition of the sheathing, and reconnection of the ducting to the vent.

19.   The evidence shows that CF, the applicants’ realtor, obtained an estimate for mould remediation work from Pro Pacific. Pro Pacific’s written quote was for mould remediation only, with no reference to venting or vent repairs. CF is not a party to this dispute.

20.   On May 2, 2018, the applicants and Ms. Collin agreed to an addendum on the purchase contract (addendum). The addendum stated, in part, as follows:

The seller agrees at the seller’s expense to have the attic remediated for mould by Pro Pacific Hazmat Ltd., per the attached quote and provide clearance letter for same 14 days before completion date.

The seller agrees at the seller’s expense to repair the vent causing moisture to enter the attic and provide receipt of proof from a professional contractor 10 days before the completion date.

21.   The addendum also addressed gutter cleaning, which I find is not relevant to this dispute. Pro Pacific’s May 2, 2018 quote was attached to the purchase contract, and was initialed by all parties. There is nothing in the addendum that says the seller or Pro Pacific will take steps to prevent future mould growth, apart from repairing the vent to prevent moisture from entering the attic

22.   The evidence shows that Pro Pacific performed its mould remediation work around June 12, 2018. Ms. Collin paid Pro Pacific a total of $2,611.54 for the work. Pro Pacific provided a post-remediation clearance certificate, verifying that the remediation work encompassing the affected areas outlined in its quote and scope of work had successfully eliminated any mould growth in this area. The certificate also said no warranty about the possibility of new mould was offered, because “the residence’s indoor environment at the time of remediation and post clearance is a snapshot at the time of work being performed.”

23.   The parties exchanged correspondence about whether or not the repairs were completed. In a July 6, 2018 email to Ms. Fogtmann, Pro Pacific said that on June 29 its technician went to the house and reconnected the bathroom vent hose to the roof vent.

24.   The house sale completed in early August 2018.

25.   In October 2018, the applicants hired an electrician to install some lights and do other work. When the electrician entered the attic, he observed moisture in the insulation around the venting, so he informed the applicants.

26.   The applicants contacted Pro Pacific, who over a period of time sent 2 employees to the house. Pro Pacific says it intended to provide a second mould remediation free of charge, but then determined that they could not do so until the cause of the moisture had been addressed.

27.   The applicants then obtained a report from another remediation company, HSR. In a November 2, 2018 report, HSR said it inspected the attic and found that the roof vents for the fans were not suitable, and should be replaced with a newer style.

REASONS AND ANALYSIS

28.   The applicants say Ms. Fogtmann, Ms. Collin, and Pro Pacific made false representations that the attic had been repaired, which the applicants relied on in completing the purchase. They say that if not for these representations they would have held back money for repairs. The applicants seek $4,482.45 for mould remediation, roof repairs, and venting repairs.

29.   I find the applicants have not proven their claims, for a number of reasons.

30.   First, I find the applicants are not entitled to any reimbursement for roof repairs. According to the roofing company’s January 31, 2019 invoice for $353.85, this repair was for a “small leak by vent over kitchen exhaust fan.” There is nothing in the portions of the Baker report provided in evidence about a roof leak, and nothing in the addendum. No roof leak is mentioned in Pro Pacific’s scope of work, or in HSR’s report. Also, the vent problem identified in the Baker report, and therefore covered in the addendum, is related to a bathroom vent. For these reasons, I find the roof leak near the kitchen vent is not related to the applicants’ claim about venting problems.

31.   Second, and most importantly, I find that the vent problems identified in the HSR report are different and more extensive than those mentioned in the earlier Baker report. The Baker report says only that the ducting for the bathroom fan was poorly connected to the vent in the attic space. In contrast, the HSR report says 3 of the vents were an unsuitable type, which should be replaced with a newer style. This is not the same as the bathroom fan ductwork connection problem identified by Baker. There is no evidence that the broader problems identified by HSR were known to any of the respondents.

Liability of Pro Pacific

32.   Since the unsuitable style of the 3 vents had not been identified as a problem at the time that Pro Pacific gave its estimate and performed its work, I find Pro Pacific is not liable for failing to repair that problem.

33.   The applicants say that Pro Pacific knew or ought to have known from their initial inspection and remediation that the venting was not properly installed. I disagree. The evidence shows that Pro Pacific was never asked to assess the condition or type of the vents. Rather, Pro Pacific’s May 2, 2018 quote and scope of work clearly states that its scope of work was to remediate visible mould growth in the attic, with 4 steps to the remediation: set up risk containment, vacuum, apply anti-microbial agent, and apply encapsulating mould inhibitor. The quote also stated as follows (emphasis added):

No replacement or repair of building materials is included in this estimate.

No repair or remediation that addresses the cause of the mould growth is included in this estimate.

…

No warranty is provided against future mould growth in the remediated area of the building.

…

Estimate is for removal of identified mould only.

34.   Pro Pacific’s quote says nothing about vent replacement or repairs, and very clearly states that the scope of work only includes mould remediation.

35.   The applicants submit that says that “anyone acquainted with attic remediation would have clearly seen that none of the vents were properly installed”. I find there is no evidence before me to support that opinion. In particular I note that the purpose of the Baker report was to assess problems with the house’s structure, and it says nothing about the installation of the vents, other than one comment that the ducting for the bathroom fan was poorly connected to the vent. Since Baker did not identify the unsuitability of the vents in its inspection, I find it is unreasonable to say Pro Pacific should have done so, particularly since it was outside the written scope of work.

36.   In their submissions, the applicants place particular emphasis on Pro Pacific’s July 6, 2018 email, which says its technician reconnected the bathroom vent hose to the roof vent. Pro Pacific says it did so in response to Ms. Fogtmann’s request. That is confirmed by other emails in evidence.

37.   The applicants say that this email is a misrepresentation, as the hose connection was not done adequately or in compliance with construction standards. I find there is no evidence that the hose connection was done improperly, that it failed, or that it led to the later moisture and mould in the attic. Rather, HSR inspected the attic on October 19, 2018 and reported that the moisture was due to unsuitable roof vents for the fans, which caused warm fan exhaust to create moisture between the sheeting and the metal vents. HSR recommended replacing the vents. There is no mention in the HSR report about the bathroom fan ducting connection, or any need to repair it.

38.   Again, I find the vent suitability problem identified by HSR is entirely different than the ductwork connection problem mentioned in the Baker report, and repaired by Pro Pacific in June 2018.

39.   For these reasons, I find that Pro Pacific’s June 6, 2018 email was not a false representation, as asserted by the applicants. Rather, I find that it is correct, and that Pro Pacific did reconnect the bathroom fan ducting to the vent.

40.   I find the applicants have also not proved that Pro Pacific failed to remediate all the visible mould in June 2018. The applicants assert that HSR gave the opinion that if the attic had been properly remediated in June, the mould could not have developed to the extent seen in October even in the presence of the moisture seen by them. This assertion is not supported by the evidence from HSR. None of those documents suggests the mould remediation in June 2018 was incomplete.

41.   Rather, I find that HSR’s November 2, 2018 report supports the conclusion that there was a different source of moisture ingress (the 3 unsuitable vents), which likely led to further mould after June 2018. The fact that there was a leak in the roof, as identified in the January 2019 roofing invoice, also supports the conclusion that new mould grew after June 2018. In the absence of evidence to the contrary, I therefore accept that Pro Pacific fully remediated the mould visible in June 2018, as required in its scope of work.

42.   I also find there was no contract between Pro Pacific and the applicants, since Ms. Collin hired and paid Pro Pacific. This would likely limit Pro Pacific’s liability to the applicants. However, I make no determination about that because I find that Pro Pacific was not negligent and did not misrepresent the work performed (mould remediation and connection of bathroom fan ducting), and so is not liable in any event.

43.   For all of these reasons, I dismiss the applicants’ claims against Pro Pacific.

Liability of Ocean Pacific

44.   The applicants say that Ms. Fogtmann was acting within the course and scope of her employment with Ocean Pacific when she gave the alleged misrepresentation, so Ocean Pacific is vicariously liable. I do not agree. There is no evidence before me establishing that Ms. Fogtmann is an employee of Ocean Pacific, as opposed to an independent contractor or some other business relationship. Therefore, I find the applicants, who bear the burden of proof, have not proved that Ocean Pacific is vicariously liable. I therefore dismiss the applicants’ claim against Ocean Pacific.

45.   Even if it were proven that Ms. Fogtmann was Ocean Pacific’s employee, I would not find Ocean Pacific vicariously liable because for the reasons below I do not find Ms. Fogtmann liable.

Liability of Ms. Fogtmann and Ms. Collin

46.   The applicants say Ms. Fogtmann specifically asked Pro Pacific to prepare a document stating that the necessary repairs had been done when both she and Pro Pacific knew that was incorrect. The applicants also say Ms. Fogtmann colluded with Ms. Collin to avoid the costs of investigating and repairing the cause of the moisture in the attic. These are very serious allegations, which I find the applicants have not proven.

47.   In Anderson v. British Columbia (Securities Commission), 2004 BCCA 7 (CanLII), the BC Court of Appeal said that because fraud is a very serious allegation, which carries a stigma, it requires clear and convincing proof of the elements of fraud, including the mental element (intention). The 4 elements of civil fraud, also known as fraudulent misrepresentation, are as follows, as set out by the Supreme Court of Canada in Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, at paragraph 21:

a.    A false representation made by the respondent;

b.    Some level of knowledge of the falsehood of the representation on the part of the respondent (whether through knowledge or recklessness);

c.    The false representation caused the applicant to act; and

d.    The applicant’s actions resulted in a loss.

48.   I find the applicants have not proven the first element of fraud, which is a false representation made by the respondent. As explained above, I find that Pro Pacific’s July 6 email was factually correct, as its technician did reconnect the bathroom vent hose to the roof vent. Therefore, there was no false representation. Also, even if there were, that representation was not made by Ms. Fogtmann or Ms. Collin.

49.   I also reject the applicants’ suggestion that Ms. Fogtmann and Ms. Collin colluded to avoid the costs of investigating and repairing the cause of the moisture in the attic. Rather, I find they disclosed Pro Pacific’s scope of work and the July 6 email. These 2 documents set out all the work that was done in the attic, and there was no representation that more work was done. The applicants now say that someone, such as Pro Pacific, ought to have investigated the moisture problems further. However, it was open to the applicants to arrange such an investigation and they did not, even having full knowledge of the limited scope of work performed by Pro Pacific.

50.   None of the respondents ever promised the applicants that all possible sources of attic moisture had been investigated and repaired. The addendum says the seller agreed to “to repair the vent causing moisture to enter the attic and provide receipt of proof from a professional contractor”. Because this addendum was created in response to the Baker report, I find the vent repair in question is the bathroom fan vent with the poorly connected duct mentioned in that report. I find that this task was performed, and that the addendum did not require any respondent to investigate other vents, or other sources of attic moisture.

Disclosure of Defects

51.   The applicants say Ms. Fogtmann and Ms. Collin were aware of a venting issue present since 2015, and failed to disclose it. They rely on a July 4, 2018 email from Ms. Collin to Ms. Fogtmann and Pro Pacific, which states as follows (reproduced as written):

The problem [in the attic] appeared to be a vent that was installed back in 2015 when we had extensive renovations done upstairs and one of vent in question was never properly “installed” until 3 days before the inspector came over…

52.   Based on the evidence, I find that this vent problem described by Ms. Collin is likely the same vent problem described in the Baker report, and repaired by Pro Pacific. I find there is no evidence to suggest that it is different problem, such as that identified by HSR in October 2018.

53.   In a real estate transaction, a purchaser is expected to make reasonable enquiries and conduct a reasonable inspection of the property. Unless the seller breaches the contract, commits fraud or fails to disclose a latent defect, the purchaser assumes the risk for any defects in the condition or quality of the property. This principle is referred to as caveat emptor or “buyer beware”. See Nixon v. MacIver, 2016 BCCA 8; Paniccia v. Eckert, 2012 BCSC 1428.

54.   A latent defect is one which cannot be readily discovered through a reasonable inspection of the property, including a defect that renders the property dangerous or unfit for habitation. In contrast, a “patent” defect is one that can be discovered by conducting a reasonable inspection and making reasonable enquiries about the property: Cardwell v. Perthen, 2006 BCSC 333, aff'd 2007 BCCA 313.

55.   A seller has no duty to disclose patent defects to purchasers, although they must not actively conceal them: Cardwell; Rogalinski v. Scorey, 2011 BCSC 1050.

56.   In general, there is a significant onus on the purchaser to inspect and discover patent defects. This means that a defect which might not be readily apparent on a casual inspection can nevertheless be “patent” if it would have been discovered on a reasonable inspection by a qualified person. In some cases, a purchaser is expected to retain the appropriate expert to inspect the property. See for example Eberts v. Aitchison, 2000 BCSC 1103.

57.   For the reasons explained above, I find the respondents did not conceal any latent or patent defects. I also find that the unsuitable vents identified by HSR in October 2018 were a patent defect, since HSR was able to identify them upon inspection. Finally, I again note that since the applicants had confirmation of all the work that had been performed (mould remediation and bathroom duct connection), they could have requested another inspection to confirm that there were no more problems in the attic.

58.   For these reasons, I dismiss the applicants’ claims against Ms. Fogtmann and Ms. Collin.

59.   The applicants were unsuccessful in this dispute. In accordance with the CRTA and the tribunal’s rules I find they are not entitled to reimbursement of tribunal fees or dispute-related expenses.

ORDER

60.  I dismiss the applicants’ claims, and this dispute.