LEVINE AND ANOTHER V. FRANK W. HORNER LTD.
Immoveable occupied for commercial purposes – Bulge in
Sale –
Indication of the possibility of a structural defect –
exterior wall –
by experts –
Solidity of the building not affected -Examination
Subsequent alterations – Action for costs of repairs to wall –
Apparent defect-1522, 1523 G.C.
Graham Nesbitt*
“La loi n’est pas faite pour les n6gligents” Tellier J. stated succinctly in a
leading case on vendor’s warranty.’ Thus while the vendor must warrant the
buyer against latent or hidden defects in the thing sold, he is not bound for
2 The courts have often held
defects the buyer “might have known of himself.’ ‘
that the inexperienced buyer of an old building should call in an expert, such
as an architect or an engineer, to examine the premises before the purchase.
If the buyer neglects to do so, he is legally presumed to know of defects which
an expert could have noticed on an examination.3
The recent decision in Levine and another v. Frank W. Homer Ltd.4 introduces
a whole new concept into the problem of warranty against latent defects. As
St. Jacques J. stated in the Court of Appeal, “Nous sommes en face d’un pro-
blme juridique qui ne me paraft pas avoir de prcedent dans nos annales
judiciaires.” 5 In this case two experts examined a building before purchase
and reported no defects; structural defects were later found when alterations
were begun; yet the courts nevertheless maintained that these defects were not
latent within the meaning of the Code. The facts of the case, which are not in
dispute, are as follows.
*of the junior Board of Editors, McGill Law Journal; second year law student.
‘Arpin v. Francoeor (1930) 48 K.B. 231 at p. 233.
2Art. 1522 C.C.: “The seller is obliged by law to warrant the buyer against such latent defects in
the thing sold, and its accessories, as render it unfit for the use for which it was intended, or so
diminish its usefulness that the buyer would not have bought it, or would not have given so large
a price, if he had known them.”
Art. 1523 C.C.: “The seller is not bound for defects which are apparent and which the buyer
might have known of himself.”
Italics are mine.
Note that the courts have held that the buyer of a new building need not hire an expert: he is
entitled to rely on the builder’s skill. Trller v. Proulx [1954] S.C. 180; Rothstein v. International
Construction Inc. [1956] S.C. 109.
3Arpin v. Francoeur, supra, note 1, at p. 231. Dallaire v. Villeneuve and Clermont Automobiles Inc.
[1956] Q.B. 6; E. and M. Holdings Inc. v. Besmor Investment Corporation [1961) Q.B. 376.
4Levine and another (Plaintiffs-Appellants) v. Frank W. Homer Limited (Defendant-Respondent)
[1961] Q.B. 108.
5L1961] Q.B. 108 at p. 113.
No. 3]
CASE AND COMMENT
Respondent Frank W. Horner Ltd. sold the building in question to appellants
for $140,000 by deed dated January 4, 1952. Appellants intended to make
extensive alterations, and accordingly before the purchase had the building
examined by the witness Bernstein, an architect, and the witness Berenstein, an
engineer. These two experts did not see anything, in their opinion, worth
reporting to appellants.
The building was originally constructed about 1916, and over the years the
northerly half and an additional storey were added and several other structural
changes were made. When appellants’ contractors began the alterations by
removing the interior wall dividing the old and new parts of the building,
they found that the concrete beam supporting the fourth floor had tilted, thus
pushing out the brickwork. In addition, they discovered that the work on a
partly bricked-over window was defective.
On the advice of the architect Bernstein and the engineer Berenstein the
front of the building was rebuilt at a total cost of $8,867.28. Appellants then
instituted an action for damages for $12,000, claiming that latent defects had
made the additional work necessary. Bernstein, Berenstein, and Frank, the
contractor, testified that the concrete beam had not been correctly anchored
and that the brickwork over the windows was of varying thickness and not
properly bonded to the pre-existing structure. There was no suggestion of bad
faith on the part of either party to the action.
In the court of first instance Ralston J. held that the defects were not latent
within art. 1522 C.C.6 He put particular emphasis on the fact that appellants’
experts had noticed a “bulge”
in the exterior brickwork near the concrete
beam. Both the experts testified that they did not think the bulge was significant
enough to mention to the buyer. But respondent’s architect, Chadwick, testified
that he would have made a further examination if he had seen such a bulge.
He felt that the location of the bulge on a face-wall where there was little
brickwork was important. It is worth noting that Chadwick did not see the
building in its original state. As he had only examined the building while the
alterations were being made, his testimony was based mainly on what he had
heard in court.
The Superior Court judgment was upheld in a 3-2 decision in the Court of
Queen’s Bench. Montgomery and Choquette JJ. dissented on the ground that
it would be placing too heavy a burden on the buyer to require him to do more
than have a normal examination made by competent professionals. 7
On appeal to the Supreme Court the appeal was dismissed with costs, with
Abbott J. speaking for the Court.8 It is unfortunate that with a point of law
as difficult and contentious as in this case the Supreme Court did little more
6[1961] Q.B. 108 at p. 110.
7Both dissenting judges held that as the seller was in good faith, the buyer should be granted the
repair expenses but not the damages.
8Supreme Court judgement pronounced January 23, 1962; as yet unreported.
McGILL LAW JOURNAL
[Vol. 8
than simply agree with the courts below. As no new grounds were advanced
by the Supreme Court, the reasoning behind the Levine case is therefore to be
found in the judgment of the Court of Appeal.
May any general principles be extracted from Levine v. Horner? Several come
to mind, all rather disturbing. No longer may a buyer feel secure that his
expert has freed him from responsibility for apparent defects: the expert’s
examination may be rejected by the courts. Even where the competence of an
expert is unquestioned (as in Levine) the courts may distinguish between normal
and meticulous examinations. The expert is also in a very tenuous position.
He cannot be satisfied that he has fulfilled his obligation by a customary
inspection of a building. If he does not take extraordinary care, he presumably
may find himself embroiled in an action in damages taken by the buyer of a
building.
As noted above, there seems to be no exact precedent for the Levine case.
But it is submitted that this decision runs contrary to the spirit of the Civil
Code, the jurisprudence, and both French and Quebec authors.
In his notes in the Levine case, St. Jacques J. in the Court of Appeal put
forward two main arguments: (1) the defect was not so hidden that an expert
could not have discovered it; and (2) the defect did not affect the solidity of
the building until the alterations had started. These arguments require detailed
analysis.
The learned judge states his first argument as follows :9
Etait-r.ce riellement an vice tellement cach6 qui n’aurait pas pu 8tre dicouvert par un
homme de ‘art, usant de son exp~rience et d’un jugement sain?
The key words are “n’aurait pas pu 8tre d~couvert par un Aomme de Part.” But
by art. 1523 C.C. the seller is not responsible for defects “dont l’acbeteur a pu
lui-m~me connaltre 1’existence”.’ 0 There is a great difference between these two
statements: if it is the buyer who could have seen the defect, then his duty will
be fulfilled if he hires an expert to do a customary examination. But if it is the
expert who could have seen the defect, then the burden on the buyer is heavier.
The expert will be required to carry out a far more stringent examination than
is normal, as otherwise anything he “could have” discovered will be considered
an apparent defect. It is submitted that the criterion of St. Jacques J. is too hard
on the buyer and runs contrary to the Civil Code and to most of the leading
authorities. Thus Baudry-Lacantinerie writes about a defect:”1
…
-trc considr6 comme apparent toutes les Lois qu’au moycn dc 1’cxamcn
attentif qu’un homme s&ieux apporte aux marches qu’il traite, I’achcteur a pu Ics remarquer.
il doit …
9[1961] Q.B. 108 at p. 113-114.
10Itjlitr are mine.
11G. Baudry-Iacantinerie, Traitl tbloriqae et pratiqee de dreir civil, 3rd cd. (1908), vol. 19, p. 425,
no. 418.
No. 3]
CASE AND COMMENT
The author makes it clear, however, that “‘examen attentif” has definite
limits:12
Le vice serait cache, s’il ne pouvait atre apergu qu’au moycn de travail qu’il n’est pas dans
l’usage de faire.
Yet in the Levine case, defendant’s architect Chadwick testified that in order
to discover the defect it would have been necessary to remove either a part of
the exterior brickwork or of the interior panelling, and that he himself would
have gone to these lengths. 3 Would not such an examination come within
“travail qu’il n’est pas dans l’usage de faire”?
Further support for this view comes from Planiol et Ripert:14
..
l’acqu~reur d’un immeuble perd le droit d’invoquer la garantie s’il n’a pas apergu un
vice qu’un architecte aurait imm&iiatement dfcouvert…
In the Levine case, the architect certainly could not have immediately seen the
defect. The bulge itself was not the defect: if it had been, the appellants would
have had a poor argument. If a defect is enclosed by panelling on one side
and brickwork on another it obviously cannot immediately be seen even bya
competent professional.
Planiol et Ripert continue: 5
L’acheteur… n’cst pas tenu de soumertrc la chose i un examen demandant des recherches
scientifiques particuliares.
Would not removing panelling or brickwork be considered “recherches scien-
tifiques particuli~res”?
Faribault agrees with the other authorities:16
* * * un vice n’est plus apparent lorsque son existence ne pet Eire constate qu’apras des
recherchs minuticuses et d’un caractare special.
Appellants’ experts saw the bulge and did not think it signified a structural
defect. It was not their duty to make :”recherches minutieuses”.
St. Jacques J. states in his notes that he was satisfied with architect Chad-
wick’s testimony: “on apercevait dans le mur extrieur ce qu’on appeHe a
bulge, une saillie indicatrice de la possibiliti d’un d~faut purement structural.”‘ 7
In the learned judge’s words, then, the bulge only showed the possibility of a
structural defect: it was not in itself a clear indication of a defect. In fact it
was such an unclear indication of a defect that the plaintiff’s two experts did
not even think it worth reporting to their client. It is submitted that even if
12Ihid., p. 427, no. 419.
13[1961] Q.B. 108 at p. 111.
1 Planiol M. and Ripert G., Traiti pratique de droit civil franfais, 2nd ed. (1956), vol. 10, p. 145,
no. 130.
11Ibid., p. 146, no. 130.
IGFaribault L., Traiti de droit civil dA Qu bec, vol. XI, p. 278, no. 308.
17[1961] Q.B. 108 at p. 114.
MrGILL LAW JOURNAL
[Vol. 8
the bulge indicated the possibility of a defect, that such a possible defect cannot
be equated with an apparent defect under 1523 C.C. Something that is only
possible is not apparent. Nowhere does the Civil Code suggest that the buyer
is responsible for “possible” defects.
At one point in his testimony architect Chadwick suggested that it is not
uncommon to find a bulge:18
. . . Generally speaking, in a building, a commercial building, a good commerical
Q.
building that has been up for twenty years or so, is it not a fact that you ocasionally find a
bulge?
A. Yes.
The existence of a bulge therefore does not necessarily imply a structural defect,
as bulges sometimes appear even in good commercial buildings. A good com-
mercial building obviously cannot have structural defects and still be considered
“good”.
Chadwick himself even says that the bulge might have led an expert to
conclude that only minor repairs would be necessary: 19
It [the concrete beam] would be displacing the brickwork. If it tilted inward or fell
inward, I would be inclined to think you would see some displacement appear, although you
might think just a repointing job was necessary…
It was thus quite possible to think that the bulge simply indicated that the
brickwork needed to be reset with mortar.
Because the defect in question could only have been seen after a very detailed
and special examination, it is therefore submitted that the defect was not
apparent.
It was also stressed in the Court of Appeal that the respondents had occupied
the premises for many years without the solidity being threatened:20
Cette saillie, apparaissant au mur de fagade, n’affectait en aucune fagon ]a solidit6 du
bitiment, tel qu’il etair exploit: par les vcndeurs et tel qu’il aurait pu l’etre par les achcteurs,
s’ils l’avaient conserv6 dans 1’6tat ot il 6tait lors de la vente, sans le transformer.
By these remarks it seems that the buyer is to be penalized simply because he
does not leave the building in the same state as it was when he bought it. If
the buyer makes alterations and structural defects are found, why should he
be held responsible? There is no parallel here between, for example, using a
recently bought small car as a tractor and then suing on the grounds of latent
defects. That use of a car is highly unorthodox, and one could reply that the
resulting damage was caused not by structural defects but by misuse. But it
is certainly not unusual to buy a building with the intention of making altera-
tions, as in the Levine case. If structural defects complicate the alterations, it
is submitted that the seller should not escape responsibility by replying that
the buyer should have left the building as it was, “sans le transformer”. Art.
“8[1961] Q.B. 108 at p. 117.
1′[1961] Q.B. 108 at p. 117.
“01961] Q.B. 108, St. Jacques J., p. 114; similarly St. Jacques J., p. 112, and Badeaux j., p. 115.
No. 3]
CASE AND COMMENT
1522 C.C. states that the seller must warrant the buyer “against such latent
defects in the thing sold .. .as render it unfit for the use for which it was
intended”. Appellants intended to use the building for their own business
purposes, and hence planned to make alterations. It is submitted that the use
for which the building was intended was not violated by simply making altera-
tions: the building was still to be used as a building. Both respondent and
appellants intended to occupy the premises as a commercial building. Altera-
tions are therefore irrelevant in this context.
This argument might be set out in another way. The original building was
solid. Major alterations were undertaken. The building, because of structural
defects, was no longer solid. Therefore these alterations must have brought
out defects which were hitherto hidden, otherwise the building would have
remained as solid as before. Therefore those defects were latent.
It is respectfully submitted that there is an incompatibility in the Levine
case between (i) the major alterations, and (ii) the existence of an apparent
defect. If the building was perfectly sound until those alterations were made,
then it is submitted that it was impossible for the defect to be apparent. 2’
But there is another element of latent defects which does not seem to have
been mentioned by the learned judges. Several leading authorities maintain that
even if the defect was noticed before the sale, but the consequences of the defect
could not have been visualized, an action would still lie under legal warranty
for latent defects. Planiol et Ripert say this situation would apply “si, par
exemple, ces consequences ne pouvaient apparaitre qu’au moyen d’expertises
spciales. . .22 These words might have been written to apply directly to the
Levine case.
Faribault supports this theory:23
I1 pcut arriver qu’un d~faut puisse &tre constat6 par l’acheteur lors de la vente, mais que
ces consiqucnces ne puissent alors etre pr~vues, en cc sens qu’i ce moment I’acheteur ne puisse
raisonnablement Ic consid6rer comme pouvant nuire A l’usage qm’il entend faire de la chose. Ce
vice ne doit pas alors Etre consid&r comme apparent.
W. S. Johnson in an article in La Revue dn & keau clearly expresses the same
idea:24
The possible result of the known or observable defect is in a degree cache in the sense that,
except in a most flagrant case, it is not wholly predictable.
Even if it is maintained that the bulge in Levine was the sign of a defect, the
consequences could not have been visualized. The consequences were “not
2 tBut notice that Choquette J. (dissenting) states that even without the alterations, the repairs
would have been necessary: “Ces travaux &aient ncessaires, mamc sans les alterations. L’architecte
de la dafenderesse nc dbnie pas cette nacessiti.”
[1961] Q.B. 108 at p. 116.
nPlaniol et Ripert, op. cit., p. 147, no. 130.
“3Faribault, op. cit., p. 278, no. 308. Italics are mine.
“Johnson, W. S., “The Redhibitory Action and Buildings –
12 Rev. du B. (1952) 322, at p. 332.
Implications of Acceptance of Work”,
McGILL LAW JOURNAL
[Vol. 8
wholly predictable”, and in this sense as well the defect was therefore hidden.
It might be wise to end this discussion with a final reference to the Civil
Code. Art, 1523 says that the seller is nor responsible for “defects which are
apparent and which the buyer might have known of himself.-” The word
“and”
is crucial – but the courts have interpreted it to mean “or”. The
grounds of the Levine case could be crudely paraphrased as follows: although
the defect was not apparent in the sense of being obvious, it might nevertheless
have been known by the buyer. In this way the courts have artificially split
the article. By the Levine decision the seller can now avoid responsibility for a
defect under art. 1523 C.C. in two distinct ways: (15 if the defect was apparent;
or (2) if the buyer could have known of the defect. This dichotomy, it is
submitted, has no basis in the Civil Code.
Perhaps the moral of the Levine case is that the buyer should insist on clauses
in the contract specifically giving warranty for any irregularities he has noticed
and which may possibly harbour a structural defect. While this might be a
solution, it nevertheless cuts down the efficacy of legal warranty and magnifies
the importance of conventional warranty. The Civil Code states that legal
warranty “is implied, by law in the contract of sale, without stipulation”
(art. 1507 C.C.). Thus the buyer should not be forced to protect himself by
stipulating warranty in every case where it is unclear if a structural defect does
in fact exist. In the Levine case the buyer was prudent enough to engage two
competent professionals; these experts examined the building with normal
thoroughness and found no defects. Buyer and experts acted as reasonable
men would in similar circumstances. It is respectfully submitted that the buyer’s
duty was thereby discharged. If even an expert’s examination fails to reveal
any defects, then the principle of caveat emptor should be satisfied.
25talics are mine.
