Barristers and Solicitors	German Spanish

   Contracts — Payment for goods delivered — Installation of air conditioner — Liability of purchaser — Vendor's duty to inform purchaser of extras prior to closing.

   Action for recovery of the cost of an air conditioning unit added to a new home.  It was not disputed that the agreement of purchase and sale between the parties did not contain any requirements for air conditioning.  The plaintiff vendor had learned of a requirement of air conditioning by the municipality, after the agreement with the defendant had been signed.  It would have been in breach of a subdivision agreement with the municipality if it did not provide the air conditioning unit. The subdivision agreement was not entered into until after the plaintiff had acquired the property in question.  The defendants were not informed of the need for air conditioning and that they were going to be liable for an additional $2,000 until one-and-a-half months before closing. They indicated that they did not want it and never agreed to pay for it.  Four months after moving in, the defendants reluctantly allowed the unit to be installed.  However, they used it in the summer. There was evidence that the unit was working satisfactorily.

   HELD:  Action allowed. The plaintiff was entitled to the cost of the air conditioning unit less $500.  The plaintiff should have raised the matter with the defendants much earlier than he did.  However, there would be an unjust enrichment for the defendants to accept the air conditioning unit and use it without paying anything. This was especially so, given that the value of the defendants' home was increased by the addition of the central air conditioning unit.
 

G. McConnell, for the Plaintiff.  J. Gardner Hodder, for the Defendant.

¶ 1   FITZPATRICK PROV. CT. J.:— Plaintiff is claiming against Defendants for an air conditioning unit added to a home built by Plaintiff and sold to Defendants.

¶ 2      Mr. Dito Chiavatti looked after the building job for Plaintiff. He has been in home building since 1961.

¶ 3      Ex. 1 is an agreement 18th June, 1986 - Plaintiff purchased lots from H & R Development including the lot in quest ion before the Court.

¶ 4      The Subdivision Agreement was not registered at this time. Mr. Fleury testified that there would have been a draft plan approving the severing off of lots.

¶ 5      Ex. 2 is the Agreement of Purchase and Sale, 1st September, 1986. Plaintiff sold to Defendants for $289,400.00 - a lot with a home to be built.

¶ 6      It is acknowledged Ex. 2 contains no requirements for air-conditioning.

¶ 7      Mr. Chiavatti stated the Plaintiff learned after Ex. 2 was executed but before closing that Markham required air-conditioning in the home being purchased by the Defendants. Evidently to reduce noise from a nearby railway.

¶ 8      Mr. Chiavatti stated all customers so affected were advised air-conditioning was required. He stated the cost would be normally $2,600.00. Plaintiff arranged a good deal for $2,000.00.

¶ 9      Some purchasers wanted to do the installation themselves. Almost everyone agreed to the $2,000.00.

¶ 10      Defendants were told it would be an additional $2,000.00 and Mr. Chiavatti stated the response was - yes/no; yes/no.

¶ 11      Defendants never said they would not pay. Defendants did say they did not want air-conditioning.

¶ 12      Defendants requested other extras and paid for them - a sliding basement door and a roughed in fire alarm.

¶ 13      Defendants were all owed to move in be fore closing. Ex. 3 is an invoice for air-conditioning unit - $1,800.00 dated 15th June, 1988.

¶ 14      The Subdivision Agreement Ex. 5 is dated 6th March 1987 and was registered 5th May, 1987.

¶ 15      Ex. 4 is an undertaking by Plaintiff given on closing - guarantees and warranties in the Agreement do not merge.

¶ 16      Mr. Chiavatti, on cross examination, stated the Defendants were told the air-conditioning must be put in.

¶ 17      Discussion with Defendants took place one and a half months before closing. Air-conditioning was discussed with Plaintiff's lawyer maybe a couple of months before closing.

¶ 18      It was Plaintiff' s custom to advise their lawyer be fore closing as to extras to be charged to purchasers. Mr. Edward Fleury - solicitor for Plaintiff and also a Plaintiff testified.

¶ 19      Parties agreed he was an expert in Real Estate Law having practised some 32 years.

¶ 20      Mr. Fleury stated the Subdivision Agreement required air-conditioning for the home and if the Plaintiff did not comply, the Plaintiff would be in breach. Plaintiff had security deposit with H & R Development which company had posted a bond with the Municipality. If air-conditioning was not installed, eventually a penalty would be extracted.

¶ 21      Ex. 6 is a letter from Plaintiff's lawyer's firm to Defendants' lawyer 27th January, 1988 enclosing Statement of Adjustments adjusted to 2nd February, 1988.

¶ 22      On day of closing Mr. Fleury testified as to conversations he heard between his secretary and conveyancer and his secretary on the telephone with Mr. Harnum's office.

¶ 23      If $2,000.00 was not paid - Plaintiff would tender. Eventually Mr. Fleury heard his secretary say - O.K. it is agreed to close - don't need to tender.

¶ 24      Mr. Fleury stated it is customary in the profession to advise the other solicitor if there is to be a tender. Mr. Harnum agreed.

¶ 25      Mr. Fleury acknowledged the actual Statement of Adjustments showing the air-conditioning was not given to Defendants' solicitor until closing.

¶ 26      The information had been telephoned to Mr. Harnum's office. The original Statement of Adjustments - Ex. 8 makes no mention of the air-conditioning.

¶ 27      Mr. Fleury did not recall seeing air-conditioning as a requirement in any other Subdivision Agreement.

¶ 28      Mr. Fleury stated that his firm became aware of the requirement for air-conditioning following a search of title and reading of the Subdivision Agreement. The Subdivision Agreement was registered 5th May, 1987 and Plaintiff had a copy within a month of registration.

¶ 29      Mr. Fleury stated that other solicitors acting for other purchasers agreed to pay the $2,000.00 for airconditioning.

¶ 30      Mrs. Wilda Dunbar - has worked in Mr. Fleury's office for 30 years and has specialized in subdivision work for 8 to 10 years.

¶ 31      She stated the builder and client usually resolve extras at the site. If items are added to the home and not paid - the builder phoned and extras are added to the Statement of Adjustments.

¶ 32      Ex. 9 is this Witness' hand written list of extras, phoned to her by the builder.

¶ 33      Mrs. Dunbar stated she phoned the extras information to Mr. Harnum's office. Ex. 10 is a note in Plaintiff's solicitor's file to Gerry Abbot to call Harnum re amended adjustments and the note indicates such was done 28th January, 1986.

¶ 34      Ex. 11 are closing documents - the amended Statement of Adjustments is included.

¶ 35      Mrs. Dunbar stated on closing day the conveyancer indicated a problem. Mrs. Dunbar phoned Harnum's office. The Defendant would not pay $2,000.00 on closing.

¶ 36      Mrs. Dunbar stated full balance must be paid and the Plaintiff would tender and if the Plaintiff were to tender it would be at Harnum's office.

¶ 37      Mrs. Dunbar said the conveyancer must go to Newmarket and finally Defendants agreed to close and said - O.K. 2:30 p.m. at Newmarket to close.

¶ 38      Mrs. Dunbar acknowledged the Defendants did not say that the air-conditioning would be paid for.

¶ 39      Mrs. Dunbar denied any knowledge of other telephone conversation with Mr. Harnum's office.

¶ 40      Mrs. Dunbar expected a non-problem closing and gave no special instruction to the Plaintiff's conveyancer.

¶ 41      Miss Elena Godden - Plaintiff's conveyancer for about 18 years testified.

¶ 42      She agreed with Mrs. Dunbar's testimony. At Newmarket Registry Office - the Defendants' conveyancer did not arrive by 2:30 p.m. and Miss Godden took a number to hold a place for registering for the Defendants.

¶ 43      Defendants' conveyancer arrived about 4:00 p.m. - took the registry no. - threw his file down and told Miss Godden to take what she wanted.

¶ 44      Miss Godden checked the amount of the cheque going to the builder but not to Fleury.

¶ 45      Miss Godden had no instruction re tender nor of a problem re $2,000.00. If she had, the situation would have been handled differently.

¶ 46      The Defendants' conveyancer Ashwani did not tell Miss Godden that the cheques were $2,000.00 short or mention tender.

¶ 47      Mr. Malcolm Harnum testified. He was called to the Bar in 1973. His practice is primarily Real Estate and Commercial.

¶ 48      He stated the first instruction to his office about the air-conditioning problem was a telephone call from Plaintiff's solicitor's office just before closing. Mr. Harnum called his client who would not purchase the airconditioning.

¶ 49      Mr. Harnum did not have any conversation himself with Mr. Fleury. He stated his office spoke to Fleury's office about the Singhs not paying for the air-conditioning. Mr. Harnum's file has no record of the telephone conversation.

¶ 50      Mr. Harnum stated it was his understanding on the day of closing that both parties would tender.

¶ 51      He denied any knowledge that Plaintiff would tender at Harnum's office.

¶ 52      Ex. 12 is Mr. Harnum's letter of requisitions 24th July, 1987 including a request for the Plaintiff to comply with the terms of the Subdivision Agreement and Municipal requirements.

¶ 53      Mr. Harnum told his conveyancer Ashwani - unless Vendor accepted $2,000.00 less, both would tender.

¶ 54      He denied any attempt to trick or deceive Plaintiff.

¶ 55      In Mr. Harnum's opinion the air-conditioning unit was not requested by Defendants and therefore cannot be classified as an extra. It was ordered by the Municipality and Plaintiff must comply with the Subdivision Agreement and supply the air-conditioning unit.

¶ 56      Mr. Harnum was cross examined on his letter of 22nd April, 1988 to Law Society attached to his Defence.

¶ 57      Paragraph 4 of that letter refers to a Memorandum of Instruction to Mr. Harnum's conveyancer - Ex. 14 is the Memorandum of Instruction prepared in anticipation of closing - there is no mention of closing cheques being $2,000.00 less.

¶ 58      The letter does indicate if the Vendor refused to accept the cheque offered then there would be tender by the Defendants.

¶ 59      Mr. Harnum did not recall instructing the conveyancer that the cheques were $2,000.00 short of the Adjustments.

¶ 60      Mrs. Singh testified. She had conversations with the builder for 2 weeks concerning the air-conditioning. Singhs moved in 2nd February, 1988.

¶ 61      Air-conditioning was installed June, 1988 against Defendants' wishes. She states it does not work well - it is too small for the home.

¶ 62      The unit had been used by Defendants during the summer of 1988.

¶ 63      Mrs. Singh stated she told Mr. Chiavatti - she would not pay the $2,000.00. She did not want the airconditioning.

¶ 64      Emma Souccimarri has been with Mr. Harnum's law office for 6 years. She searched the title and dealt with Defendants' file for closing.

¶ 65      The file has a note - Ex. 15 about a phone call from Plaintiff's lawyer for the extras - this witness acknowledged it was probably received 28th January, 1988.

¶ 66      The client Singhs had been told earlier of the amount of money to close - it did not include $2,000.00 for air-conditioning. Mrs. Singh was called and told Emma that she did not order and did not want the air-conditioning.

¶ 67      Emma called Plaintiff's lawyer's office. There was a discussion re air-conditioning. February 1, 2 or 3 with Wilda Dunbar. The matter was not resolved.

¶ 68      Emma was contacted by Plaintiff's conveyancer in the morning of closing. She explained the air-conditioning problem but was asked to set a time for closing anyway according to Emma's testimony. Emma claims 2:30 p.m. was set for closing but she was to get back to Plaintiff's conveyancer to advise if Defendants really would close.

¶ 69      Emma states she called Wilda Dunbar again and explained - the Singhs would not pay the $2,000.00 - she was ready to close except for $2,000.00 which she just did not have.

¶ 70      Plaintiff   threatened to tender - Defendants threatened to tender and they were to meet in Newmarket.

¶ 71      Emma gave the file to the conveyancer Ashwani and told him he would probably have to tender and to go through the motions and tender.

¶ 72        On cross examination Emma acknowledged that the phone memo concerning air-conditioning and extras was probably received 28th January, 1988 and not later as earlier testified.

¶ 73      She confirmed that Plaintiff never agreed to accept $2,000.00 less to close.

¶ 74      Emma did not recall that Wilda Dunbar suggested tendering at Defendants' office.

¶ 75      The file has no written documents to support conversations with the Plaintiff's law firm between 1st February to 15th February, 1988.

¶ 76      Mr. Harnum had the secretary prepare a Memo of Instruction for the conveyancer.

¶ 77      The memo Ex. 14 contains nothing about tendering or the amount of the cheques - nor does it indicate it was a problem deal.

¶ 78      Ashwani Bharbwaz - a freelance conveyancer testified. Mr. Harnum is his main client.

¶ 79      Ashwani picked up the file from Defendants' law firm and was told by Emma - there may be a problem - if the Vendor tenders - we tender. If Vendor closes - everything is O.K.

¶ 80      Ashwani states he arrived at Newmarket Registry Office 2:30 p.m. to a quarter to 3:00 p.m. His execution certificate is time stamped 3:41 p.m. - the deed was registered 3:57 p.m. He denied just dumping his file. He gave the cheques and direct ions to Plaintiff' s conveyancer and got the deed - one copy of the deed was in a folder for the registration number.

¶ 81      There was no discussion about air-conditioning problem - there was no discussion about tender.

¶ 82      On closing Ashwani did not check the amended Statement of Adjustments and he was not aware his cheques for closing were short $2,000.00 from what Plaintiff sought to close.

¶ 83      Upon a review of the evidence the Court finds that there is no evidence before the Court to support the Plaintiff's claim against Malcolm Harnum for deceit. There are some inconsistencies in the evidence before the Court and Mr. Harnums' letter of 22nd April, 1988 to the Law Society of Upper Canada in respect of the Memo of Instruct ion to the conveyancer. The Court finds the inconsistencies not to be significant. There is no evidence to support that Mr. Harnum acted in anything but a proper manner. The claim against Malcolm Harnum is dismissed.

¶ 84      The Court finds that the Plaintiff purchased the property in question prior to any Subdivision Agreement but agreeing to be bound by the requirements of a subsequent Subdivision Agreement. Plaintiff purchased the lots 18th June, 1986. The Plaintiff sold the lot in question to the Defendants Singhs 1st September, 1986. The Subdivision Agreement requiring central air conditioning in the Singhs' home is dated 6th March, 1987 and was registered 5th May, 1987.

¶ 85      There is no question that Ex. 2 the Singhs' Purchase  Agreement contains no mention of an air-conditioning unit.

¶ 86      The Court finds that the Plaintiff became aware of the requirement for air-conditioning unit in the Singhs home about one month after the Subdivision Agreement was registered - about 5th June, 1987.

¶ 87      The Court accepts that the matter of airconditioning was not brought to the attention of Defendants Singhs until at earliest one and one half months before closing.

¶ 88      The Court finds that the Plaintiff should have raised this matter much earlier and it could probably have been resolved be fore closing by a Vendor and Purchaser motion.

¶ 89      The Defendants' solicitor was not aware of the issue until shortly before closing.

¶ 90      The Court accepts that the Defendants Singhs were unwilling to pay an additional $2,000.00 for air-conditioning not having requested it nor agreed to purchase it in Ex. 2.

¶ 91      The Singhs moved in before closing. On closing - 15th February, 1988 - the Singhs' lawyer did not have the additional $2,000.00 to pay for the air-conditioning.

¶ 92      The Plaintiff's conveyancer was negligent on closing - she never checked the funds paid to her on closing to determine that the funds were $2,000.00 short of the amended Statement of Adjustments.

¶ 93      The deed was registered - the full amount requested by the Plaintiff was not paid.

¶ 94      In June of 1988 Mrs. Singh testified that she reluctantly allowed the air-conditioning unit to be installed.

The unit was used by the Defendants in the summer of 1988 and according to Mrs. Singh not very satisfactorily.

¶ 95      The Court finds that prior to closing the Defendants were aware that air-conditioning must be installed in their home and that the Vendor Plaintiff wanted an additional $2,000.00. The $2,000.00 was not paid on closing but later in June of 1988 the Defendants - even though reluctantly - allowed the air-conditioning unit to be installed in their home and used the unit.

¶ 96      The Court finds that there would be an unjust enrichment at this point for the Defendants to accept and use the unit without paying anything therefore. The Defendants would be enriched at the Plaintiff's expense - it would be unjust for the Defendants to retain the benefit without paying.

¶ 97      The Defendants' home has been increased in value by the value of central air-conditioning.

¶ 98      The Court finds that the Plaintiff has responsibility to bear for the matter not being resolved at a much earlier date. The Plaintiff's agent failed to ensure the proper funds were paid on closing.

¶ 99      The Court accepts the uncontradicted evidence of Mrs. Singh that the air-conditioning unit is not working 100% satisfactorily considering the size of the home.

¶ 100      The only evidence before the Court as to the cost of the unit is Ex. 3 - $1,800.00.

¶ 101      The Court awards the Plaintiff the cost of the air-conditioning unit $1,800.00 less a sum of $500.00.

¶ 102      Judgment for Plaintiff $1,300.00. No award of pre-judgment interest. If Counsel cannot agree on costs they can contact me and I will deal with costs.

FITZPATRICK PROV. CT. J.