The Importance of Alleging a Deficit of Use in the Context of a Recourse for Latent Defects

This post, published on Éditions Yvon Blais' blog on latent defects on February 25, 2017 (FR), discusses the recent Superior Court judgment in Sévigné v. Prud'homme (Full Text | Fiche Quantum), in which the court granted a motion to dismiss presented by the defendants in warranty and the defendants in sub-warranty.

In this case, the buyers (plaintiffs) instituted legal proceedings for the reduction of the sale price against the sellers given the discovery of soil contamination “due to the presence of hydrocarbons exceeding the threshold permitted under the Land Protection and Rehabilitation Regulation” (hereinafter the “Regulation”). A recourse in warranty was then instituted, as well as a recourse in sub-warranty.

It is important to specify that the sales implicating the defendants in warranty and sub-warranty occurred, respectively, in 1997 and 2001, whereas the Regulation entered into effect in 2003. The Court reminds us that "we must look back to the time of the sale, not the time of the contamination’s discovery, to determine, in light of the applicable legislation, whether the property sold is affected by a latent defect” within the meaning of the legal warranty of quality (our translation).

Accordingly, the Court found in favour of the defendants in warranty and the defendants in sub-warranty, as the recourses in warranty and sub-warranty did not refer to any deficit of use at the time of the 1997 sale or the 2001 sale, and therefore dismissed said recourses. In the buyers’/plaintiffs’ proceedings, they alleged such a deficit of use, in that they could no longer lease their immovable since their expert’s report was issued, while the plaintiffs in warranty and the plaintiffs in sub-warranty only alleged the existence of the defect at the time of their acquisition of the immovable in question, in 1997 and 2001.

In this case, the Court reminds us that “to be admissible and well-founded, [recourses in warranty] must allege troubles and inconveniences dating back to the time of the concerned parties’ possession, negatively impacting the use for which the immovable was intended,” which was not the case here. Therefore, and considering the absence of an allegation of a deficit of use at the time of the sales implicating the defendants in warranty and sub-warranty, “the sole presence [of a reservoir of oil and hydrocarbons in the soil] in 1997 or in 2001 proved to be of no consequence to the use for which the buyers at the time (the plaintiffs in warranty and sub-warranty) intended the immovable to be used at the time of their respective transactions” (our translation).

Therefore, the mere presence of a defect that does not result in a deficit of use does not constitute a latent defect covered by the legal warranty of quality under section 1726 C.C.Q. It is therefore important, as of the drafting of the legal proceedings, to allege a deficit of use, to the extent that there is one, failing which, the recourse could be qualified as manifestly ill-founded.