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Judgment This case concerns a dispute between an apartment buyer and the seller over the plaintiff's (the buyer's) claims about defects in the apartment he purchased from the defendant (the seller), the seller's liability for those defects, and the liability of its manager, defendant no. 2 (hereinafter: "Chiyon"), for the defects and for compensation. A. Main contentions of the parties 1. The plaintiff purchased from the defendant an apartment at 52 Shlomo HaMelech Street in Netanya (hereinafter: "the apartment"), under a sale agreement dated 2.12.01 (hereinafter: "the agreement"). 2. According to the plaintiff, the defendant breached the agreement and/or the requirements of the law on construction quality, and the defendants acted negligently in building the apartment. He based his claim on an expert opinion by engineer Ron Arad, who documented construction defects and non-conformities in the apartment (hereinafter: "the defects") and put the cost of repairing them at 85,040 ₪. 3. He further claims that the defects and the need to repair them have caused and will cause him inconvenience, loss of enjoyment and mental anguish (hereinafter: "non-pecuniary damage"), which he set at 10,000 ₪. 4. He claims that repairing the defects involves moving expenses and/or loss of rental income, and set his claim for this item at 5,000 ₪. 5. As for Chiyon, it is claimed that as manager of the defendant, he acted carelessly and/or incompetently in building the apartment, and therefore he should be held liable to pay the plaintiff's damages. The plaintiff sought to hold the defendants jointly and severally liable to pay him a sum of 101,340 ₪, as well as court costs and attorney's fees. 6. The defendants denied most of the plaintiff's claims and any liability to pay him. The defendant maintained that it had fulfilled its obligations under the agreement, used good building materials, and built the apartment to an accepted standard of construction. 7. The defendants disputed both the content and the findings of the plaintiff's expert opinion. The defendant further argued that even if defects are found for which it is liable, it has the right to repair them itself. It noted that the plaintiff first approached it only about two years after the handover, and that it had repaired the defects he complained of, except for electrical work, because the plaintiff refused to let its professionals into the apartment. The defendant's own expert opinion put the cost of repairing the defects at only 800 ₪. 8. Chiyon denied that personal liability should be imposed on him as manager of the defendant company, and claimed that he acted as a reasonable manager of a contracting company would have acted under the circumstances. This concludes the main contentions of the parties. B. Court-appointed expert 1. In its decision dated 20.9.06, the court appointed engineer Simcha Feldman as the court-appointed expert (hereinafter: "the expert") and instructed him to examine whether there are defects in the apartment, the time required to repair them and their repair cost, and also whether it is possible to live in the apartment while the repairs are carried out. 2. The expert submitted his opinion dated 17.3.07, in which he set out the main findings as follows: 2.1 The expert rejected claims regarding defects in the safe room (mamad) relating to electrical fittings, wall cladding and the safe room door. The expert documented cracks in various parts of the apartment, as well as signs of dampness in the master bedroom. 2.2 The expert rejected the position of the plaintiff's engineer regarding defects in the flooring and cladding in the apartment, both on its merits and by denying the applicability of Israeli Standard 1555.3. 2.3 The expert found actual defects in the balcony door, in the internal gap in windows fitted with roller shutters, and in the hot water boiler. In addition, the expert documented a series of minor defects. 2.4 The expert estimated the cost of repairing the defects at 14,082 ₪, and with VAT added, 16,265 ₪, and determined that it is possible to live in the apartment during the repairs, which he estimated would take 10 days. 2.5 The expert answered clarification questions sent to him on behalf of the parties but did not see fit to change his findings or his cost estimates. The expert was cross-examined in court. D. Discussion and findings: 2. The defects in the apartment and liability for their occurrence Both parties raised objections to the expert's findings. Before addressing them, I note that case law generally favors the opinion of a court-appointed expert. As held on this point: "Once a neutral expert opinion has been received that reflects a serious attempt to grapple with the many professional issues brought before it, it should be accepted even if not everything determined is to the parties' liking, and even if errors can be pointed out or an alternative determination is possible." See: CA 2394/04 Solel Boneh v. Erez (Takdin-Elyon 96(2), 481). 2) I address the parties' objections in that light below. 2.1 The issue of the flooring and the baseboard cladding 2.1.1 The plaintiff's complaint on this item is that the defendant laid the floor tiles without grout joints of the required width. In paragraph 10 of his affidavit, he states that he protested to Chiyon about this during the work and that Chiyon promised him the flooring would be redone as he wanted. He also complained about the improper installation of the baseboards. 2.1.2 In paragraph 9(b) of his affidavit, Chiyon stated that the plaintiff's version of this promise is fabricated and does not reflect reality. 2.1.3 The plaintiff, who bears the burden of proof, did not bring any objective evidence supporting his version regarding Chiyon's alleged promise. 2.1.4 Although the technical specification stated that the apartment would be floored with ceramic tiles or an equivalent, per the sample at the company's offices, the plaintiff claims he bought new tiles and baseboards with a rounded top (ibid., p. 16). That version was not rebutted, but it does not establish his claim about defects in the flooring, which I address below. 2.1.5 The plaintiff sought to base his claim on Israeli Standard 1555, which requires grout joints 3 mm wide. He argues that the standard took effect in March 2003, the same month possession of the apartment was taken, and that its provisions therefore bound the defendant. 2.1.6 I am unable to accept the plaintiff's claim: The question of the timing of a "non-conformity" in an apartment in relation to building regulations and/or binding standards has been discussed more than once in case law and in scholarly writing. Indeed, A. Zamir states in his work on the Sale (Apartments) Law (a commentary on contract law for the book of G. Tedeschi) that: "It is not reasonable for the seller to undertake an obligation that the apartment will conform to requirements that do not yet exist at the time of construction" (ibid., p. 348). Common sense dictates that the flooring in the apartment was laid before the date of its handover (in March 2003), and therefore the seller cannot be required to install the flooring in the format required by a standard that did not yet exist. This logic applies to everyone, and indeed in CA 6092/00 Kaduri Urban Development v. Otomazgin (PD 56 (6) 687) it was stated: "It is not possible to require a contractor who completed the construction and handed over the apartment to meet requirements that had not yet been enacted" (ibid., paragraph 7 of the judgment). 2.1.7 Beyond what is required, I would add that the expert found no flaw whatsoever in the apartment's flooring. He testified: "The lines between the tiles are wonderful, the tile cutting is one hundred percent" (and p. 5 of the transcript of the hearing of 24.2.08). "The joints are totally straight" (ibid., p. 6). 2.1.8 As for the baseboards, the expert found a defect in their shape and priced it at 142 ₪, in addition to the 700 ₪ set in paragraph 3.3 of the opinion as compensation in lieu of repairing a deviation in the flooring line. I therefore reject the plaintiff's claims regarding defects in the flooring surfaces and the baseboards except for the amounts set by the expert. 3. Regarding the plaster in the safe room 3.1 The plaintiff claimed that, contrary to the regulations enacted under the Civil Defense Law, plaster was applied in the safe room. The expert, while not disputing that the plastering was done, claimed that the law does not prohibit plastering the safe room. 3.2 I have reached the conclusion that the law is with the plaintiff, and that from the combination of the provisions of the said regulations 192 and 217 it follows that plastering should not be done in the safe room. In his testimony (p. 8 of the transcript), the expert priced the cost of repair at 1,850 ₪, plus VAT, at the defendant's expense. 4. The safe room door 4.1 The plaintiff claims, relying on the opinion of the engineer on his behalf, that the safe room door installed in the apartment is warped, and as a result the door is not sealed as required. The expert found insignificant warping in the door. As for testing the seal, the expert testified that it should be examined in an approved laboratory (ibid., p. 8). However, the expert testified that he carried out his own test by closing the door and found that the door was sealed (ibid., p. 8). 4.2 In my opinion, even under the assumption most favorable to the plaintiff, according to which the door should be tested under Standard 4422 by applying liquid, opening it and slamming it shut again: it is undisputed before me that such a test was not carried out, and therefore it has not been proven before me that the door is not sealed. Moreover, the opposite conclusion is implied by the sealing test report that the defendants' counsel attached pursuant to my decision (p. 9 of the transcript). The plaintiff's counsel's arguments that the said report should not be admitted without cross-examining its author, insofar as this is correct on its merits, ignore the fact that the plaintiff's counsel did not request to cross-examine the author of the report. In summary, it has not been proven before me that the door is not sealed. 4.3 The argument of the plaintiff's counsel in his summations, that the plaintiff is entitled to compensation of 10,000 ₪ for the safe room door defects, ignores the fact that the expert stated in his testimony that the repair cost at this amount (the necessity of which has not yet been proven) includes cutting concrete in the safe room, which the Civil Defense authority will not approve carrying out (ibid., p. 10). It follows that the plaintiff did not succeed in establishing his right to replace the door, which would require partial concrete cutting in the safe room. 4.4 Despite the above, I see fit to rule in favor of the plaintiff on this item the amount set by the engineer on his behalf, in the sum of 1,550 ₪, for straightening and painting the door, as stated in paragraph 1 of the engineer's opinion. 5. The balcony railing 5.1 The plaintiff claimed in his affidavit that the railing installed by the defendant was dangerous due to a gap creating a risk of climbing and falling. According to the plaintiff, repairing the railing, which he carried out through a professional, cost 4,000 ₪, but he has no receipt for it (paragraph 18 of the affidavit). 5.2 The defendants claimed that the railing was installed in accordance with the provisions of the standard. 5.3 In the expert opinion, the expert rejected the claim regarding the defect in the railing, but from what is stated in the opinion on this issue (paragraph 7) it is apparent that the expert did not examine the original railing installed by the defendant, since the railing was no longer there (the expert's testimony, p. 11). 5.4 However, in his testimony the expert clarified that the plaintiff told him during the review of the apartment that "before he replaced the railing, the plaintiff had a railing like the neighbor's on the floor below" (ibid., p. 10). However, the expert's testimony regarding the compliance of the neighbor's railing is not coherent, since on the one hand he claimed he did not examine the neighbor's railing, and on the other hand he answered in the affirmative to the question of whether the neighbor's railing is compliant with the standard (ibid., p. 11). 5.5 In an overall assessment of the evidence before me, I am concerned that the plaintiff did not succeed in proving that the railing installed by the defendant was non-compliant, and therefore the need to replace or repair it has not been proven before me. 5.6 I see fit to dismiss this item of the claim. 6. Cracks on the balcony 6.1 The expert documented cracking in the balcony ceiling plaster in his opinion, and determined that the defendants were required to carry out plaster and paint repairs, at a total cost to the plaintiff of 1,370 ₪ plus VAT (paragraph 2.5). 6.2 The defendants objected to their liability for the said defect, claiming that the plaintiff prevented the repair from being carried out. From the plaintiff's testimony (p. 14) it is clear that he refused to allow the defendant's workers to enter the balcony to carry out the necessary repairs, out of concern that the workers would be Arab. I believe that the fact of the plaintiff's refusal to allow access does not "erase" the defect or extinguish the defendant's liability for its existence. 6.3 The Sale (Apartments) Law, 5733-1973, does not offer a clear solution to this dilemma, since section 4B of the law states: "If a non-conformity is discovered…the buyer must give the seller a proper opportunity to repair it, and the seller must repair it within a reasonable time". We are therefore dealing with a purely balancing provision, which on the one hand obligates the seller to repair and the buyer to provide an opportunity to repair. 6.4 In Zamir's work, it is stated on this matter: "The standard of a 'proper opportunity' is flexible and relative, its content is determined according to the circumstances of each case by a test of objective reasonableness. Under normal circumstances a proper opportunity to repair includes granting permission to the seller or to whoever carries out the repair on his behalf to enter the apartment afterward and to examine the non-conformities and carry out the repair work" (ibid., p. 589). On the one hand, I believe that the plaintiff here cannot be regarded as having acted with defiant refusal, and I am satisfied that his refusal stemmed from motives that cannot be dismissed out of hand. On the other hand, there is no doubt that the plaintiff's refusal to allow repair at the time when the other balconies in the other apartments in the building were repaired burdens the defendant and increases its expenses. Weighing all the circumstances, I rule that the plaintiff should be compensated for this item in the amount of only 800 ₪, plus VAT as required by law. 7. The vanity and shower cubicle 7.1 From the plaintiff's testimony (p. 14) it emerges that he purchased the vanity and shower cubicle in the bathroom with his own money and installed them at his own expense through a plumber. 7.2 I believe that under these circumstances, responsibility for the defects, namely the cracks that occurred in the wash basins, cannot be attributed to the defendant, and therefore 3,000 ₪ should be deducted from the estimate set by the expert. 8. Repair in kind or compensation 8.1 The plaintiff claimed that since the defendant failed in the work of repairing the defects and even displayed a laxity amounting to disregard for its own willingness to repair them, its request to repair the defects in kind should not be granted, and that the plaintiff is entitled to compensation. (paragraphs 13-17 of the plaintiff's affidavit). 8.2 In contrast, the defendant claimed that it was attentive to the plaintiff's complaints and that its workers came to the apartment and carried out window repairs and even repaired cracks (paragraphs 10, 11, 13 of Chiyon's affidavit). The defendant further claimed that despite the fact that the plaintiff coordinated dates with it for visiting the apartment and repairing its defects, the plaintiff was absent from the apartment, and the workers' ability to carry out the repairs was thereby denied (paragraph 17 of Chiyon's affidavit). 8.3 In his testimony before me, the plaintiff claimed that the defendant carried out "smears of paint" which did not solve the dampness problem in the apartment (ibid., p. 15). From Chiyon's testimony it emerges that his workers came to the apartment at least 6-7 times and carried out the repair work (ibid., p. 18). 8.4 On the basis of the evidence before me, I have reached the conclusion that even if I assume in the defendant's favor that it attempted to repair several defects in the apartment, these were failed attempts which left substantial defects in the apartment, including dampness defects, and these were documented in the expert's opinion. 8.5 Furthermore, the defendant's claim that the cost of repairing the defects documented by the expert on its behalf (engineer Gil Lazar) amounts to only 800 ₪ (paragraph 16 of Chiyon's affidavit) is not consistent with the defects documented in the expert's opinion, and especially not with the estimate for their repair. 8.6 On the basis of these findings I believe the law is with the plaintiff, who argued that the defendant exhausted, without success, its right to repair in kind (compare: CA 472/95 Zecharia Zlotzin v. Diur LaOleh, PD 50(2) 858. The passage of time between the date of handover and the filing of the claim, and the lack of trust between the parties, also require that the alternative of repair in kind be rejected. Compare: CA 656/99 Dr. Ada Bar Shira v. Ma'anonot U'Vinyan Ltd. (Takdin-Elyon 2003 (2) 1188. 8.7 Weighing the circumstances, I rule that the plaintiff is entitled to compensation for the cost of repairing the defects, plus 25% for hiring an ad hoc contractor. 9. Compensation for non-pecuniary damage 9.1 At the center of the plaintiff's claims on the issue of non-pecuniary damage stands his claim regarding dampness and water penetration into the bedroom. In the opinion the expert documented signs of dampness, mold and peeling in the bedroom (paragraph 2.6). 9.2 The defendants' claim that these are minor defects that do not harm the plaintiffs' quality of life is not acceptable to me since there can be no dispute about the harmful effect of dampness defects in a residential apartment and their severe impact on the well-being of its occupants. (Compare: CA 611/89 Drucker Zecharia v. Nechemias (PD 46(2), 60). Beyond that, one cannot ignore the fact that repairing the defects documented in the expert's opinion involves a certain degree of inconvenience and harm to the plaintiff's well-being. 9.3 I would add that there is no doubt that the non-pecuniary damage caused to the plaintiff is a causal result of the defendant's breaches, and that the defendant's insufficient response in properly carrying out and repairing the full range of defects is in itself a source of feelings of frustration and mental anguish. 9.4 The plaintiff set the compensation for this amount in the statement of claim at 10,000 ₪, and I see fit to award him a sum of 8,000 ₪. 10. Alternative housing The expert determined that it is possible to live in the apartment during the repairs, and therefore I do not see fit to award the plaintiff compensation for alternative housing. 11. Chiyon's alleged liability 11.1 The plaintiff claimed that personal liability for payment of the compensation should be imposed on Chiyon, both due to his negligence in building the house as detailed in the statement of claim, and in light of the personal involvement he displayed during the construction. 11.2 Chiyon denied the particulars of negligence attributed to him, claiming that he acted as a reasonable manager in a contracting company. 11.3 In his testimony Chiyon admitted that he was involved in building the building as much as possible and devoted most of his time to this construction site (ibid., p. 16). Chiyon further testified that he came to the plaintiff's apartment to "check that everything is fine and that no mess is being made in the apartment" (ibid., p. 18). On the basis of these statements the plaintiff claimed that Chiyon should be held personally liable for payment of the compensation (paragraphs 10-12 of the plaintiff's summations). 11.4 The defendant argued in his summations that it was not proven that Chiyon owed a duty of care to the plaintiff, let alone that he breached such a duty of care. 11.5 I have reached the conclusion that no factual basis has been brought before me justifying the imposition of personal liability on Chiyon, despite the natural temptation to identify the manager and shareholder of a closely-held company such as the defendant with the company itself. 11.6 In CA 407/89 Tzuk Or v. Security (PD 48(5) 661) it was held: "The test for imposing personal liability on an organ of a corporation is the ordinary test of the law of torts: the existence of the elements of liability". 11.7 It follows that the plaintiff had to prove that Chiyon was negligent in giving execution instructions to the company's employees and/or that he was negligent in selecting them. I believe these circumstances have not been proven. The fact that Chiyon visited the site frequently during construction, and even checked whether the workers were restoring order to the apartment during the repair work, does not in itself create a basis for liability for negligence, so long as it has not been proven that Chiyon personally gave his workers negligent execution instructions. 11.8 To complete the picture I would note that even the finding implied by the expert's opinion, that certain parts of the apartment were built negligently by the defendant, does not in itself allow disregarding the position underlying the Tzuk Or case, according to which a distinction must be drawn between the defendant's liability (as the one who built the apartment negligently) on the one hand, and the separate liability of an organ (Chiyon) on the other, which requires proof of particulars of personal negligence. 11.9 As stated I have reached the conclusion that the plaintiff did not succeed in establishing the existence of a personal duty of care owed to him by Chiyon, and certainly not its breach. 11.10 The claim against Chiyon is dismissed. 12. Conclusion: 12.1 I accept the claim in part and order the defendant alone to pay the plaintiff the sum of 28,114 ₪ as follows: Total cost of repairing the defects as detailed in the expert's opinion 14,082 ₪ Additional cost for repairing the safe room door 1,550 ₪ Additional cost: removing the plaster in the safe room 1,850 ₪ Less: the basins and showers item (3,000 ₪) Partial reduction of the cost of repairing the balcony cracks (550 ₪) Total cost of repairing the defects 13,932 ₪ Addition of 25% for an ad hoc contractor 17,415 ₪ Plus VAT 20,114 ₪ Compensation for non-pecuniary damage 8,000 ₪ Total 28,114 ₪ 12.2 In light of the result I have reached, meaning that the claim was accepted only in its small part, I award the plaintiff attorney's fees in the sum of 4,000 ₪ and court costs in the sum of 1,500 ₪. Notice: right of appeal. The registry will serve the judgment by registered mail. Given today, 5th of Cheshvan, 5769 (November 3, 2008), in the absence of the parties.
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The engineers of Arad Bedek Bayit, led by building engineer Ron Arad, whom courts appoint as their own expert on construction defects. The company has been inspecting apartments and buildings since 2001. Engineer Ron Arad · More about the company