The Court of Appeal, composed of Chief Justice Silvio Camilleri, Mr Justice Giannino Caruana Demajo and Mr Justice Noel Cuschieri, in the case ‘Odette Grixti and Martin Camilleri who assumed the acts of the case in the name of the absent Odette Grixti, by means of a decree dated September 17, 2001, v Mario and Therese spouses Rodgers’ on February 6, 2015, held, among others things, that although a house is sold tale quale, in the absence of an express agreement between the parties stating the contrary, this does not exonerate the sellers from their responsibility for latent defects.
On September 5, 1996, Odette Grixti purchased a house in Valletta Road, Kirkop, from the defendants for the price of €69,900. The front part of the house was the old part while the back of the house was an additional construction made by the defendants.
The case concerned two rooms found in the old part of the house that had ceilings made out of slabs which were supported by wooden beams.
Before the plaintiff bought the house she visited the house and during her visits she had time to view the wooden beams. She informed the defendants that she was worried that the ceilings might collapse.
However, the defendants reassured her that there was no danger since one of the above-mentioned rooms was used as a bedroom where the defendants slept together with their daughter. They suggested that she should appoint an architect to inspect the property.
Prior to the sale, the plaintiff appointed architect Joseph Cuschieri to inspect the wooden beams. The architect took the view that there was no danger. The architect did not conduct an in-depth inspection of the beams but merely looked at them. The plaintiff then purchased the house.
In September 1997, the plaintiff showed a builder the beams and he noticed that because water was seeping into the house, the mud covering the beams was falling off and a number of cracks in the beams were exposed which meant that the beams were in a bad condition. She appointed architect Philip Grech to inspect these beams and in a report he declared that:
“The heads of beams at the supporting walls were found to have shear cracks and in an advanced state of corrosion due to insect attack. They were covered with a layer of plaster which resulted to be hollow and not contributing to the structural integrity of the beam. These defects are serious and merit immediate attention, especially the replacement of the wooden beams and their stone slab roofs. The defects have been long established and could have been determined by a professional inspection. They do constitute latent defects which should have been brought to light on the transfer of the property.”
Following the said report, the plaintiff filed a lawsuit against the defendants in the First Hall of the Civil Court on January 26, 1998, wherein she requested it to declare that:
• the house had structural defects which were not visible when she purchased the house;
• the defendants are responsible for such defects; and
• the defendants must give her a refund of part of the price she paid to purchase the house.
The expert witness, architect Albert Fenech, declared that the wooden beams appeared to be slightly damaged and these damages already existed when the house was purchased. However, the cracks in the wooden beams were not completely visible because they were concealed.
The defendants alleged that:
• the lawsuit was time-barred in terms of Article 1431 of the Civil Code; and
• as regards the merits of the case, the plaintiffs’ allegations are unjustified because the house was purchased tale quale, and that at the moment of sale, the house did not have any defects which the plaintiffs did not see or could not have seen.
The First Hall rejected the defendants’ first allegation regarding prescription because it concluded, that for the purposes of the said Article 1431, the date that must be kept in mind is September 1997.
That is the date when the plaintiff realised that the beams had serious and latent defects. However, when the First Hall considered the merits of the case, it rejected the plaintiff’s requests because it concluded that the plaintiff would have been entitled to compensation if she filed the lawsuit within a year from the date of the contract. She had obtained confirmation regarding her doubts about the condition of the ceilings in March 1997 and also because she had already began to have doubts at the time when she entered into the contract.
The defendants knew about the defects at the moment of sale but they failed to inform the plaintiff and her architect
The plaintiff was aggrieved by the decision of the First Hall, so she filed an appeal.
Article 1431 states that:
“1. The actio redhibitoria and the actio aestimatoria shall, in regard to immovables, be barred by the lapse of one year as from the day of the contract.
2. Where, however, it was not possible for the buyer to discover the latent defect of the thing, the said periods of limitation shall run only from the day on which it was possible for him to discover such defect.”
In ‘Carmelo Dimech v Francis Xuereb’, decided on December 15, 1997 [Vol. LXXI.II.968], the court held, that the prescriptive period imposed by Article 1431 does not necessarily start running from the moment when the buyer discovered that there was a defect or discovered how grave the defect was, but from the point when the defect becomes of a nature which would make a reasonable person have doubts about the quality of the property purchased and would normally give rise to a justified suspicion that the construction had a grave defect which would justify a rescission of the contract or a reduction of the price paid.
Basing itself on evidence given by notaries Grech and Fenech, the Court of Appeal observed that the condition of the beams amounted to a grave defect which already existed before the plaintiff entered into the contract and the said plaintiff would not have purchased the house at that price, had she known after a short period of time, she would have had to incur an expense of €2,097 to rectify the defects.
Before the plaintiff entered into the contract, she exercised the required diligence of a bonus pater familias to reassure herself regarding the ceilings by appointing an architect.
When the architect informed her that he did not find any structural defects, she decided to buy the house. The Court of Appeal noted that the architect could not see any defects because everything was concealed.
Consequently, the defects were not visible when the plaintiff entered into the contract. The defects only became visible when the mud fell from the beams because water was seeping into the property. Therefore, the prescriptive period had to commence running from September 1997, when the defects in the beams became visible.
The sellers were obliged to inform the buyer about the condition of the beams and the fact that they had cracks in them, since the sellers were aware of this, because they used to conduct maintenance works.
Furthermore, since the cracks in the beams were covered with mud, they were not visible, so the sellers were obliged to disclose such fact to the buyer or her architect.
Although the defendants were convinced that there was no imminent danger and they were using one of these rooms as their bedroom, they were still bound to inform the plaintiff about the hidden cracks, since they were concealed at the time when the contract was signed.
The prescriptive period commenced from September 1997 and, although the lawsuit was filed in the First Hall on January 26, 1998, the plaintiff took legal action within the time limit imposed by law.
As regards the merits, the Court of Appeal reiterated that the defects in the beams which were hidden at the moment when the contract was signed, existed prior to the contract, and the defects were so grave that the plaintiff had to incur an expense of €2,097 and, as a result, such expense had to be deducted from the price paid by the plaintiff.
The fact that the house was sold tale quale, in the absence of an express agreement between the parties stating the contrary, does not exonerate the defendants from their responsibility for latent defects. The defendants knew about these defects at the moment of sale but they failed to inform the plaintiff and architect Cuschieri.
The Court of Appeal confirmed the First Hall’s decision to reject the allegation that the case was time-barred, but unlike the First Hall, it held that the plaintiff was entitled to a refund of €2,097.
Dr Rebecca Micallef is a lawyer at Ganado Advocates.