The prudent and diligent buyer

It is impossible to talk about a hidden defect without addressing the question of the prudent and diligent buyer. What does it mean to be careful and diligent when you are a buyer?

In order to take advantage of the legal guarantee provided for in article 1726 of the Civil Code of Quebec in the context of an action for a hidden defect, the buyer must demonstrate that the defect meets the following four (4) conditions¹ : it must have a certain seriousness, precede the sale, be hidden and be unknown to the buyer.

While the first two conditions (seriousness and anteriority) are generally proved by technical evidence presented by an expert, and the fourth (knowledge) is evaluated subjectively with a burden of proof belonging to the seller, the evaluation of the third condition, namely the hidden nature of the defect, is in turn an objective assessment.

As such, as stated by the Supreme Court in the ABB decision, The hidden nature of the defect is assessed according to an objective standard, that is to say by evaluating the examination carried out by the buyer according to that carried out by a prudent and diligent buyer of the same competence². As the Court indicates, the test consists in asking whether a reasonable purchaser under the same circumstances could have detected the defect at the time of sale.

Also, since Beauty is in the eye of the beholder, the Court of Appeal³ Recall on this same question that the expertise of the buyer is a relevant factor in assessing whether the defect is hidden or apparent. In short, the more the buyer knows the property he is acquiring, the more likely the defect affecting this property is to be considered apparent.

Concretely, since the question arises, what should a buyer do to be prudent and diligent? The Court of Appeal recently recalled all of the purchaser's obligations in this area in Thériault v. Martin⁴, which can be summed up as follows:

• Conduct a thorough and thorough visual examination of the building and remain on the lookout for any clue that may suggest a defect;
• Take reasonable steps to know the real condition of the building, including recourse to the services of an expert, if he suspects a defect;
• Check or have it checked what is suspicious;
• Adjust your level of vigilance according to the purpose of the building;
• Examine very carefully an old building.

It will therefore be understood that in case of doubt, the buyer has every interest in hiring the services of an inspector to deepen his checks. However, it must be understood that pre-purchase inspection is not an expertise and that it has its limits; it must be a careful and serious examination, but In the absence of a revealing clue, the buyer or inspector does not have to open the walls or dig around the foundations⁵.

Does this mean that the buyer who uses the services of an inspector is facto prudent and diligent? Not necessarily. In the event that an inspection reveals warning signs without the buyer carrying out further studies or verifications, it could be said that the buyer breached his duty of care and diligence. In short, if serious evidence is discovered, the prudent and diligent buyer must further investigate.⁶.

In conclusion, each case is a case in point, so the seller has every interest in consulting his legal advisers in the event that a claim for a hidden defect is formulated against him, in particular in order to assess whether the buyer acted prudently and diligently.

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1 Leroux v. Gravano, 2016 QCCA 79 (CanLII), para. 40.
2 ABB Inc. v. Domtar Inc., 2007 SCC 50 (CanLII), [2007] 3 SCR 461, at para. 51.
3 Marcoux v. Picard, 2008 QCCA 259 (CanLII), para. 17.
4 Thériault v. Martin, 2020 QCCA 1294 (CanLII).
5 Marcoux v. Picard, 2008 QCCA 259 (CanLII), at para. 21.
6 Leroux v. Gravano, 2016 QCCA 79 (CanLII), para. 46.

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