Executive Summary: Key Legal and Evidentiary Issues

• Steve Lévesque bought a Richelieu River property without legal warranty, at his own risk, limiting his recourse absent proof of fraud.

• Nearly two years passed between Lévesque's discovery of the alleged settlement issue and his formal notice, raising a timeliness question under article 1739 C.c.Q.
• Daniel Lesage's alleged reassurance that the basement slab had stopped moving anchored the fraud (dol) allegation.
• The pre-purchase inspection report flagged a significant slab unevenness and recommended structural review that Lévesque never obtained.
• Denying all liability upon receiving the formal notice, Lesage was found to have implicitly waived the late-notice defense.
• Maintaining the lawsuit despite mounting evidentiary weaknesses ultimately led the court to declare Lévesque's claim an abuse of procedure.

Facts of the case

Steve Lévesque purchased a residential property bordering the Richelieu River from Daniel Lesage in 2020. Lesage had owned the property since 1993, originally an old fishing camp, and had lived there with his wife, making numerous improvements over the years. Following a major flood in 2011, Lesage and his wife grew anxious about the property each spring and decided to sell after about a decade. Lesage completed a Seller's Declaration disclosing that the building had suffered water infiltration during the 2011 flood, caused by two cracks in the foundation, which he had repaired himself with epoxy injection before installing a waterproof membrane and a foundation drain. Lévesque, seeking a waterfront property to renovate into a multigenerational home, was drawn to the property after a first visit in January 2020. On a second visit with his real estate broker, Jonathan Hudon, both noticed a visible sagging of the basement concrete slab; Lesage acknowledged some foundation movement had occurred after the floods but claimed no further movement had been observed since.

After an initial offer was refused, Lesage's January 10, 2020 counter-offer confirmed the sale would proceed without legal warranty, at the buyer's own risk, and allowed for a pre-purchase inspection. That inspection, conducted January 16, 2020 with both parties present, identified a significant unevenness in the slab among other deficiencies and recommended further review by an electrician, plumber, and structural specialist. Lévesque did not follow up on these recommendations, explaining at trial that he intended to fix many issues through his renovation project and that Lesage had reassured him the slab was no longer moving. The sale closed before a notary on March 17, 2020, with possession transferring around March 20, 2020.

In 2021, Lévesque began preparing his renovation project and hired an expert to assess soil settlement and the feasibility of pile installation. The expert's site visit occurred May 15, 2021, though the written report was not produced until September 15, 2022, at Lévesque's request, since he had already received an informal diagram in June 2021. In July and August 2022, Lévesque obtained two quotes for pile installation averaging $84,000. On March 21, 2023, roughly three years after the sale, Lévesque sent Lesage a formal notice alleging differential settlement and claiming $84,000. Lesage denied responsibility, invoking the warranty exclusion clause. Lévesque then filed suit on July 10, 2023, claiming $99,000 for the cost of the work plus $15,000 in damages; Lesage counterclaimed, asking that the suit be dismissed as abusive and seeking $60,000 in damages, an amount later updated at trial from an initial $12,000.

Policy terms and contractual clauses at issue

The sale was governed by a clause excluding the legal warranty of quality, under which Lévesque bought the property without warranty and at his own risk. Under article 1726 C.c.Q., a seller must normally guarantee that a property is free of hidden defects, but article 1732 C.c.Q. allows this warranty to be limited or excluded. Article 1733 C.c.Q. ordinarily bars a seller from excluding liability for defects the seller knew or could not have ignored, but this rule carries an exception: a non-professional seller may validly exclude liability where the buyer purchases at their own risk. Because Lesage was found to be a non-professional seller, the exclusion clause was enforceable against Lévesque unless he could establish fraud, gross fault, or intentional fault. The court also examined article 1739 C.c.Q., which requires a buyer who discovers a defect to notify the seller in writing within a reasonable time.

The court's reasoning and analysis

On the timeliness issue, the court found the 22-month gap between Lévesque learning of the settlement problem and sending formal notice was indeed unreasonable, rejecting his argument that he needed to wait for a written report and cost quotes first. However, the court held that Lesage's conduct amounted to an implicit waiver of this defense: because Lesage denied all responsibility immediately and never argued that earlier notice would have let him inspect the defect, limit its consequences, or perform cheaper repairs himself, he suffered no real prejudice from the delay, so the claim could not be dismissed on this ground alone.

On fraud, the court held that Lévesque failed to meet the demanding burden required to defeat a warranty-exclusion clause accepted by a non-professional seller: proof of a lie, a scheme, or a fraudulent reticence. The evidence did not show that Lesage knew of a differential settlement problem or deliberately concealed it; he had disclosed what he did know, the 2011 flood infiltration and his crack repairs. Lévesque's own account of Lesage's reassuring words was undermined by his admission at his pre-trial examination that he could not recall the specific explanations that supposedly persuaded him to skip further verifications. The court also found Lévesque had ignored serious red flags, including the seller's declaration, the visible slab unevenness, and his own inspector's explicit recommendation for structural review, and had made an informed choice to proceed anyway given his renovation plans. As a result, the exclusion clause was given full effect and the main claim was dismissed.

On abuse of procedure, the court found no bad faith but concluded Lévesque had acted with objective recklessness (témérité) in maintaining a claim that grew progressively weaker: he was informed early that the sale excluded legal warranty, his pre-trial examination exposed that he had no memory of the alleged reassurances, and Lesage's counterclaim further flagged these weaknesses, yet Lévesque pressed on to trial regardless. This conduct met the threshold for abuse under article 51 C.p.c.

Ruling and outcome

The court dismissed Lévesque's claim in its entirety, holding that the warranty-exclusion clause barred his recourse because he had not proven fraud, gross fault, or intentional fault on Lesage's part. The court partly allowed Lesage's counterclaim, declaring Lévesque's lawsuit abusive under article 51 C.p.c. While Lesage had sought close to $60,000 in extrajudicial fees, the court found that a full reimbursement was not automatic and that the reparation had to remain fair, reasonable, and proportionate; it ultimately ordered Lévesque to pay Lesage $5,000 in damages for abuse of procedure. The judgment also awarded court costs (frais de justice) in Lesage's favour, though no specific dollar figure for those costs is stated in the decision.