Court orders particulars in proposed leaky condo class action by Mary Kimpton

Citation: Kimpton v. A.G. of Canada et al

Date:

20020121

  2002 BCSC 67

Docket:

01 1447

Registry: Victoria

IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:

MARY LOUISE KIMPTON

PLAINTIFF

AND:


ATTORNEY GENERAL OF CANADA, CANADA MORTGAGE AND HOUSING CORPORATION
AND HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA

DEFENDANTS

 

REASONS FOR JUDGMENT
OF THE
HONOURABLE MR. JUSTICE MACAULAY

 

Counsel for the Plaintiff:

P.G. Guy

Counsel for the Attorney General of Canada:

A. Louie, M. Bulmer and M. Molloy

Counsel for Canada Mortgage and Housing Corporation:

J. Sullivan

Counsel for Her Majesty the Queen:

T.H. MacLachlan, Q.C.,
L. Shendroff, and C. Owen

Date and Place of Hearing:

December 4, 2001

 

Victoria, BC

[1] The plaintiff (Kimpton) in a proposed class action owns a condominium in a building that she alleges has experienced a building envelope failure, in spite of being built according to applicable building code standards. In general terms, she contends that the two senior levels of government joined as defendants (Canada and the Province), respectively adopted building codes (the NBC and the BCBC) that failed to ensure, as a minimum requirement, "structural sufficiency, quality and durability for a reasonable time" and "safety with respect to the health of occupants" thereby breaching a duty of care owed to her and other condominium owners. Alternatively, Kimpton alleges that Canada and the Province breached duties to warn that the building codes were inadequate for the purpose described.

[2] Kimpton has delivered the materials upon which she intends to rely at the certification hearing to all named defendants. Several procedural issues arise from the following applications:

1. Kimpton seeks an order that the Province produce documents relating to the proposed common issues, including documents produced by the Province in other litigation respecting an alleged leaky condominium (the Healey action);

2. The Province seeks orders that Kimpton provide further and better particulars as well as additional materials in support of the application for certification; and

3. Canada seeks an order compelling Kimpton to provide further and better affidavit materials for the certification hearing or alternatively that she produce certain documents.

[3] The three defendants all opposed the Kimpton application. The Province says it is, at best, premature as it relates to the Healey action. The defendants all joined, as well, in support of the defendants' applications. Kimpton opposed the defendants' applications for documents on the basis that they relate to the merits of the action rather than any issues on certification. Kimpton also contended that there is no need for particulars as the defendants have each filed a statement of defence without needing them. Finally, Kimpton argues that there is no jurisdiction for the court to order her to file further evidence for the purpose of the certification hearing.

[4] Despite the Class Proceedings Act, R.S.B.C. 1996, c. 50 (the Act) being relatively new in British Columbia, with the exception of the application that Kimpton produce further evidence in support of her application for certification, the applications do not raise novel procedural issues. Because class proceedings almost invariably involve complex questions that require extensive discovery processes, similar issues to those raised here arise in most actions at the pre-certification stage. There are relatively few decisions on these points to date in this province. In my view, that indicates that lawyers are generally able to resolve such issues without requiring judicial intervention.

[5] In spite of some differences in the case law, it is now possible to state with reasonable precision the general procedural law governing applications for particulars or discovery of documents applicable to potential class actions at the pre-certification stage in British Columbia. I will endeavour to do so in order to provide a backdrop for my consideration of the particular issues raised here.

[6] Section 40 of the Act provides that, "the Rules of Court apply to class proceedings to the extent that those rules are not in conflict with this Act". There is some commonality between the stated objectives of the Act relating to procedure and the Rules. For example, s. 12 of the Act states:

The court may at any time make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination ...

While the Act defines a class proceeding as "a proceeding certified as a class proceeding" (s. 1), the sought after objective, when making procedural orders under the Act, is very similar to the underlying objective for any orders made under the Supreme Court Rules. That objective is set out in Rule 1(5), namely, "to secure the just, speedy and inexpensive determination of every proceeding on its merits".

[7] The difficulty in reconciling the Act and the Rules lies not in their objectives but in their respective limitations. This is because the Act is largely silent on the procedural issues arising at the pre-certification stage, yet the Rules were drafted without directly addressing the different needs of litigants in potential class proceedings. Accordingly, there is a lacuna that must be filled by applying a flexible interpretation to the existing rules that is consistent with the procedural and substantive objectives of both the Act and the Rules.

[8] This approach is consistent with that approved by the Supreme Court of Canada in Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46 at [34]. There, the court addressed the need for the court to exercise its inherent jurisdiction to settle the rules of practice and procedure in relation to class-action practice in Alberta, a province that does not have any legislative equivalent to the Act governing the actual practice.

[9] The Act contains little respecting any aspect of the pre-certification stage. Section 2(1) requires the plaintiff to be a member of a class of persons who are resident in British Columbia. Pursuant to subsection (2), the plaintiff must apply for an order certifying the proceeding as a class action as well as an order appointing the person a representative plaintiff. In most cases, including the present, subsection (3) requires the plaintiff, except with leave of the court, to apply for these orders within 90 days of delivery of the last statement of defence.

[10] Apart from the foregoing, the Act does not expressly address procedural issues at the pre-certification stage. On the other hand, sections 4 and 5 set out detailed requirements that must be met for successful certification. Sections 17 and 18 govern rights of discovery of parties and other class members. However, it is arguable that these sections, because of the definition of a class proceeding already referred to and their content, apply only after certification. The Act does not expressly address the right to either particulars or discovery of documents at any stage of the proceeding.

[11] The foregoing leaves s. 12 permitting the court to "make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination". In Endean v. Canadian Red Cross Society, [1997] B.C.J. No. 295, the court referred to s. 12 in the course of dealing with an application for production of documents at the pre-certification stage. This was consistent, in my view, not only with the approach I have set out, but also with the overall objectives of the legislation. Finally, it permits resolution of the practical realities faced by parties preparing for certification hearings within the relatively short time periods allowed.

[12] Rule 26 provides the right to demand discovery of documents relating to matters in question in an action, however, in Endean the court adjourned an application for restricted production of documents limited to certification issues, as premature when the application was brought before the parties had exchanged the affidavits to be relied on at the certification hearing.

[13] Smith J. also pointed out in Endean that the rule requires a listing of documents relating to matters in question based on the pleadings, although it is doubtful that the plaintiff is also obliged to plead facts going to the issue of certification. Those facts are found instead in the materials filed in support of the application to certify.

[14] In Matthews v. Servier Canada Inc. (5 February 1998) Vancouver Registry No. C973178 (B.C.S.C.), Edwards J. adopted a sensible middle ground by ordering document discovery in a potential class action limited to those necessary "to inform the certification process". He opined that requiring general document disclosure at that stage could be an unfair imposition.

[15] In Hoy v. Medtronic, Inc., 2000 BCSC 1105, Kirkpatrick J. addressed several applications at the pre-certification stage including the extent of document production required. She declined to order production of documents that were "not material to the certification application" (at [8]) but instead went to the merits of the plaintiff's claim. At the same paragraph, she also pointed out that the effect of permitting widespread discovery:

... would inevitably result in significant delay and expense in the pre-certification process. Such delay is contrary to the scheme of the Act as exemplified by the time restrictions within which certification applications must be brought.

Finally, in Samos Investments Inc. v. Pattison, 2001 BCSC 440, Bauman J. applied the reasoning in Matthews and declined to order discovery of the defendants' documents but granted liberty to the plaintiff to re-apply, "in the event that it considers that limited document discovery is necessary in order to inform the certification process". See [20].

[16] I conclude that the objectives of the Act as well as the Rules can best be achieved by ordering document production limited to those relevant to the issues at the certification hearing.

[17] While the analysis set out above respecting document production helps to inform the debate on whether particulars should be ordered at the pre-certification stage, it does not follow that a different test for ordering particulars is required in potential class actions. This results from a consideration of both the traditional purpose of particulars and the nature of the issues at the certification hearing.

[18] Counsel only directed me to one case specifically addressing entitlement to particulars at the pre-certification stage in a potential class action. The result in that case lends considerable support to the contention that particulars should only be ordered on traditional grounds.

[19] In approaching this issue, I keep in mind the defendants' assertion that the Kimpton pleadings are unnecessarily broad making it impossible to prepare for the issues at the certification hearing but, again, the rules were not drafted with consideration to the needs of parties preparing for a certification hearing. Historically, particulars of pleadings have been ordered under Rule 19 where necessary to enable the parties to know the case, but not the evidence, to be met at trial and plead to it.

[20] The limits of the historical approach are illustrated by reviewing the circumstances of the Jericho Hill School case in which the Supreme Court of Canada ultimately upheld certification of a limited number of issues. See Rumley v. British Columbia, 2001 SCC 69.

[21] Much earlier, at the pre-certification hearing stage in Rumley, a chambers judge held that it would be too onerous to order particulars of the allegations of sexual abuse perpetrated on deaf children at the Jericho Hill School. Later, following the certification hearing, Kirkpatrick J. found that the allegations as set out in the statement of claim constituted a cause of action as required by the Act and were sufficiently particularized for the purpose of determining certification. See R.(L.) at (1998) 65 B.C.L.R. (3d) 382 (S.C.), at [20]. She observed, however, that the question of particulars is significant in class actions as the court must assess the suitability of the action as a class action and went on to find that additional claims of misrepresentation were too vague and insufficiently particularized to assess suitability. For other reasons not material to this discussion, the judge declined to certify any of the causes of action.

[22] The Court of Appeal partially allowed an appeal but, in the result, only certified common issues relating to negligence and breach of fiduciary duty. On further appeal to the Supreme Court of Canada, the decision of the Court of Appeal was upheld.

[23] In the result, the decisions relating to particulars in the lower courts were never directly addressed on appeal nor implicitly overturned. If anything, they were implicitly upheld.

[24] In spite of the foregoing, there is still room within the traditional approach for ordering particulars under Rule 19, including after the close of pleadings, where a further statement of material facts may be necessary in order to prepare for trial. The function of particulars is six-fold and was set out in Cansulex Limited v. Perry, [1982] B.C.J. No. 369 at para. 15 (C.A.):

(1) to inform the other side of the nature of the case they have to meet as distinguished from the mode in which that case is to be proved;

(2) to prevent the other side from being taken by surprise at the trial;

(3) to enable the other side to know what evidence they ought to be prepared with and to prepare for trial;

(4) to limit the generality of the pleadings;

(5) to limit and decide the issues to be tried, and as to which discovery is required; and

(6) to tie the hands of the party so that he cannot without leave go into any matters not included.

[25] As pointed out at para. 16 of the decision, courts are encouraged to do anything that can be done to require the parties to bring forward the real issues for consideration so as to avoid surprise. See also G.W.L. Properties Ltd. v. W.R. Grace & Co. of Canada, [1993] B.C.J. No. 1062 at 3 (S.C.) and Nesbitt v. Wintemute, (1978) 8 B.C.L.R. 286 to similar effect. Kimpton contended that the majority judgment in the earlier Court of Appeal decision in Big Bay Timber Ltd. v. Arkinstall Logging Co. Ltd. (1978), 88 D.L.R. (3d), at p. 496, limited "necessary" to that which enabled a defendant to plead and to prevent surprise at trial but I am not persuaded that was intended. In any event, I prefer the more expansive statement of the functions of particulars found in the later decision of Cansulex. I also observe that in that case, the court described Big Bay as illustrating only that particulars are intended to delineate the issues between the parties.

[26] From the foregoing, I conclude that pre-certification applications for particulars after the close of pleadings should be limited to those circumstances set out in Cansulex. Those being where a party fails to plead material facts required to be proved at trial or sufficiently to delineate the issues. This interpretation falls short of what the defendants seek here.

[27] At the certification hearing, as required by s. 4 of the Act, Kimpton must prove additional facts but these are relevant only to the issue of certification. In my view, there is no requirement that she plead any of those facts. For example, she must establish at the hearing that there is an identifiable class of 2 or more persons and that she, or someone else, is a representative plaintiff who would fairly and accurately represent the interests of the class and finally, that her interest is not in conflict with the interests of other class members.

[28] Unnecessarily, in my view, Kimpton pleaded in paragraph 2 of the statement of claim that she:

... fairly represents that class of persons who purchased and/or own a building, suite or dwelling unit in British Columbia made with frame construction after 1985 and before 2000 in accordance with either the National Building Code and/or the BC Building Code ("Building") and that has developed or may develop problems resulting from the accumulation or condensation of water or vapour in exterior walls ("Plaintiff Class"). The Plaintiff has no interest that is in conflict with other members of the Plaintiff Class.

I do not think, that merely by pleading unnecessary facts, Kimpton opens herself up to a successful application for particulars. On the other hand, Kimpton cannot resist an otherwise legitimate demand for particulars solely on the basis that this is a potential class proceeding.

[29] I turn now to the circumstances giving rise to the applications in the present case starting with the defendants' application that the plaintiff provide further and better particulars.

[30] The application by the Province is two-fold. First, it seeks further and better particulars of the allegations and second, definitions of some of the terminology used in the statement of claim. These relate to the provisions of the BCBC allegedly in issue as well as the meaning of the following terms: "frame construction"; "exterior walls"; "building envelope"; "change in construction practices" and "changes in building materials". In addition to arguing that particulars should only be ordered to enable the defendants to file responsive pleadings, an argument that I reject for the reasons outlined above, Kimpton contends that the Province really seeks a "form of discovery" or particulars of evidence.

[31] The impugned paragraphs of the statement of claim include paragraph 2 as well as other paragraphs referring to the BCBC, namely paragraphs 34-38 and 40-43. The allegations are certainly very broad including: an alleged representation that a building constructed in accordance with the BC Building Code "would have and maintain structural sufficiency, quality and durability for reasonable lifetime" (para. 34); an alleged failure in establishing a code "unsuitable for use" and not anticipating or providing a remedy for the likely entrapment or condensation of water in exterior walls (para. 39); an alleged failure to warn that changes to the code "in or after 1985, required changes in construction practices" (para. 40) and that thereafter, buildings were not "suitable for use" due to "problems resulting from the entrapment of water vapour in exterior walls and did not maintain structural sufficiency, quality, durability, or safety with respect to the health of occupants for a reasonable time" (para. 41).

[32] In paragraph 42, Kimpton further alleges that changes in construction practices were required as a result of the problems that developed in exterior walls. Paragraph 43 provides particulars of negligence but using similar language to the above.

[33] In a letter dated October 12, 2001, counsel for Kimpton responded to the demand for particulars in large part by referring to the Rumley case and suggesting the pleadings were sufficient for the court to determine the certification issues. With respect, that response misses the point.

[34] The particulars sought are reasonable and, in my view, will assist in focussing attention on the issues to be met at trial independently of the certification process. Coincidentally, the particulars will enhance and clarify the existing pleading making it easier for the parties and the court to focus on certification issues.

[35] The building code is over 400 pages in length and is divided into 9 parts with attached appendices. The topics range from fire protection to plumbing services. I agree with the Province that not every provision can be in issue and that the Province should not have to speculate as to which particular provisions are at issue.

[36] While I recognize that complex cases evolve as the discovery process unfolds, the defendant is entitled to particulars in four broad categories as follows:

(1) the specific sections of the BC Building Code, or the NBC, that the plaintiff alleges are material;

(2) the definition of any term relating to construction where such term is not defined in the code or is intended to convey meaning other than as defined in the code;

(3) the specific amendments to the code that resulted in changed construction practices; and

(4) a description of the changed construction practices.

[37] As I understand the theory of the plaintiff, the representations referred to in the statement of claim flow from the statutory scheme rather than individual representations made to the plaintiff. I would not order particulars of the representations unless that understanding is incorrect. The particulars respecting the four categories above are to be delivered within thirty days unless otherwise agreed by counsel.

[38] The question of document discovery on the other hand cannot be satisfactorily or fully addressed until Kimpton provides particulars and all materials relied on for the certification process have been exchanged. Here the plaintiff simply applied for an order that the defendants produce lists of documents. The Federal Crown applied for an order that the plaintiff produce specific documents. Both applications are overly broad.

[39] In my view, as I set out earlier, all parties should list those documents in their possession or control relating to matters in issue at the certification hearing. The parties should then exchange copies in the usual way but it is premature to require any party to list or produce other documents. If counsel cannot agree on a schedule for exchanging lists or there is continuing disagreement over the need to produce specific documents based on the materials filed for the certification hearing, there will be liberty to re-apply.

[40] This leaves the final application by Canada for an order that the plaintiff provide more complete evidence in support of the application for certification. Essentially, the argument is that the evidence apparently to be relied on is incapable of satisfying the requirements of sections 4 and 5 of the Act. I am persuaded that it would be wrong for me to make any order in such regard therefore I do not propose to review the alleged shortcomings in the materials delivered by Kimpton. It is not for the court to direct a party to remedy alleged shortcomings in advance of the hearing. If Canada is correct and the evidence is eventually found inadequate for the reasons identified on its behalf, Kimpton bears the risk that she will be unsuccessful.

[41] Kimpton has now had the benefit of hearing the complaint that her materials are inadequate. If she agrees, she has sufficient time available to remedy the situation. If she does not agree, the adequacy of the materials will undoubtedly be an issue to be addressed after full argument at the certification hearing. In either event, I decline to make any order for production of further evidence at this time.

"M. Macaulay, J."
The Honourable Mr. Justice M. Macaulay