Richmond, Lighthouse Place: Court allows leaky condo owners to amend statement of claim

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Section 1 of the Owners, Strata Plan LMS 2643 v. Harold Developments Ltd.,

 

2007 BCSC 1095

Date: 20070723
Docket: L052627
Registry: Vancouver

Between:

Section 1 of the Owners, Strata Plan LMS 2643

Plaintiff

And

Harold Developments Ltd., James Kwan, Yvonne Kwan,
William Kwan, and others

Defendants

Before: The Honourable Mr. Justice Sigurdson

Reasons for Judgment

Counsel for the Plaintiff:

J.G. Mendes

Counsel for the Defendants, Harold Developments Ltd., James Kwan, and Yvonne Kwan:

T. Yu

Date and Place of Hearing:

April 5, 2007

 

Vancouver, B.C.

NATURE OF APPLICATION

[1]                The plaintiff, Section 1 of the Owners, Strata Plan LMS 2643, seeks damages for the alleged defective construction of a condominium called “Lighthouse Place”.  This claim involves what has become known as a leaky condo. 

[2]                In this application, the plaintiff seeks to amend its statement of claim to provide particulars of its claim for damages for negligence and a duty to warn against James Kwan and Yvonne Kwan, who are the sole directors of Harold Developments Ltd., the contractor which provided labour and materials in respect of the design and construction of the condominium.  The evidence shows that at one point, James Kwan and Yvonne Kwan owned 43 of the 106 condominium units. 

[3]                The defendants, James Kwan and Yvonne Kwan, had earlier filed an application to strike out the existing pleadings against them in the original statement of claim on the ground that they disclosed no reasonable cause of action.  They also take the position that there is no reasonable cause of action disclosed by the further proposed amendments that the plaintiff seeks to make to the statement of claim.  They also assert that the proposed amendments should not be allowed because the claim is statute-barred by reason of the Limitation Act, R.S.B.C. 1996, c. 266. 

[4]                The defendants say that in order to establish a cause of action against an employee or director of a corporation, a plaintiff must show that the individual committed a tortious act which demonstrated an identity or interest that was separate from that of the company. 

[5]                The plaintiff says that the amendments ought to be allowed because it is not plain and obvious that there cannot be personal liability for employees or directors of a company unless the alleged actions are tortious and exhibit a separate identity.  The plaintiff submits that the law in this area is unsettled and, as such, it is not plain and obvious that the claim that is proposed by the amendments cannot succeed, and argues that the amended claim should go to trial where the legal issue can be determined, not in a vacuum, but in a complete factual setting. 

[6]                Moreover, the plaintiff says that the proposed amendments are not out of time, as they simply particularize a claim in negligence that already appears in the statement of claim.  The plaintiff says that the claim of negligence in the statement of claim was simply an alteration, modification, or extension of the claim against the Kwans in the writ issued on November 2, 2005 and was permitted under Rule 20(3).  Even if the proposed amendments allege a cause of action that might be out of time, which the plaintiff disputes, the plaintiff says that the joinder of a cause of action outside the limitation period should be permitted and the limitation period is simply one factor to be considered in deciding whether to allow the amendment. 

[7]                Let me set out the pleadings from the initial writ, which was issued on November 2, 2005; the statement of claim of March 13, 2006; and further proposed amended statement of claim attached to the notice of motion dated October 27, 2006.  Further proposed revisions to the statement of claim were described in the plaintiff’s March 15, 2007 outline. 

[8]                The writ of summons names a number of defendants including the Kwans.  Insofar as the Kwans are concerned, the writ alleges a breach of a duty to warn.  The endorsement in the writ as it relates to the Kwans reads, in part:

The Plaintiff and the Owners claim general damages, special damages, interest and costs against the Defendants as a result of defects in the workmanship, materials and design of the strata lots, common property, common facilities, and other assets of the Strata Corporation (the “Construction Deficiencies”) comprising the condominium building located at 5860 Dover Crescent, Richmond, British Columbia and known as “Lighthouse Place” (the “Condominium”).

The Construction Deficiencies were caused or contributed to by the negligence of the following Defendants, who breached their duty of care to the Plaintiff and Owners:

… [a number of individual defendants are mentioned, but they do not include the Kwans]

Each of the Defendants breached its duty to the Plaintiff and Owners to warn of the Construction Deficiencies.

The Disclosure Statement contains material false statements for which Harold Developments Ltd., James Kwan, Yvonne Kwan and William Kwan are liable under section 75 of the Real Estate Act and section 22 of the Real Estate Development Marketing Act, as amended, and at common law.  …

The Strata Corporation and the Owners have suffered and continue to suffer loss, damage and resultant damage as a result of the Construction Deficiencies and the aforementioned breaches of contract, breaches of duty of care, breaches of duty to warn and material false statements.  This loss, damage and resultant damage includes:

1.         the cost of investigating and repairing the Construction Deficiencies;

2.         the cost of investigating and repairing resultant damage to the strata lots, common property, common facilities and other assets of the Plaintiff and the Owners;

3.         depreciation in the market value of the strata lots, common property, common facilities and other assets of the Plaintiff and the Owners; and

4.         increased property management costs.

[9]                The statement of claim filed March 13, 2006 contained allegations against the individual defendants, the Kwans, extended negligence claims against them and particularized the claim with respect to the disclosure obligation under the Real Estate Act, (which is not the subject of this application).  It contained the following paragraphs:

70.       At all material times, the Defendants owed the Strata Corporation and the Owners a duty of care to take all reasonable steps to ensure that the construction of the Condominium complied with the British Columbia Building Code and the City’s bylaws, that the Condominium was:

a.         designed in accordance with prudent design principles;

b.         built in a good and workmanlike manner in accordance with prudent construction practices; and

c.         built with suitable materials, and would be fit for its purpose, namely, habitation.

74.       Further, or in the alternative, the Defendants and each of them, owed the Strata Corporation and the Owners a duty to warn of the Construction Deficiencies.

75.       The Defendants breached the foregoing duties to the Strata Corporation and the Owners.

76.       The Defendants’ breaches of duty caused or contributed to the Construction Deficiencies, the Resultant Damage and the Dangerous Defects.

77.       The Defendants are jointly and severally liable for the loss and damage suffered by the Strata Corporation and the Owners, and the Strata Corporation specifically pleads and relies upon the Negligence Act, R.S.B.C. 1996, c. 333, and amendments thereto.

[10]            The application to amend the statement of claim that is before me on this application contained the following proposed amendments as underlined below. 

 


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Port Moody, San Remo Drive Subdivision: California-style houses leaking and rotting; Judge declares building scheme obsolete

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Bertamini et al v. Clark et al,

 

2007 BCSC 1090

Date: 20070720
Docket: S98935
Registry: New Westminster

Between:

Donald Frank Bertamini, Dawn Francis Bertamini,
Mable Ruth Hoyem, Flemming Fuglsang Nielsen,
Birgit Nielson, Jenny Margaret Norris,
Mark William Henry Norris, and Margaret Turley Whyte

Petitioners

And

Marcus Evan Clark, Liana Romona Clark,
Wilhelmina Josephine Martin and Silvana Pringle

Respondents

Docket: S101566

Registry: New Westminster

Between:

Marcus Evan Clark, Liana Romona Clark,
Wilhelmina Josephine Martin and Silvana Pringle

Petitioners

And

Donald Frank Bertamini, Dawn Francis Bertamini,
Mable Ruth Hoyem, Flemming Fuglsang Nielsen,
Birgit Nielson, Jenny Margaret Norris,
Mark William Henry Norris, and
Margaret Turley Whyte and others

Respondents


Before: The Honourable Mr. Justice Crawford

Reasons for Judgment

Counsel for the petitioners in action number S98935 and the respondents in action number S101566

A. Groves

Counsel for the petitioners in action number S101566 and the respondents in action number S98935

B.F. Schreiber

Date and Place of Trial/Hearing:

December 6 and7, 2006, January 11, 2007, and May 9, 2007,

 

New Westminster, B.C.

[1]                The San Remo Drive subdivision, located in Port Moody, B.C., has an internal conflict.  The houses are subject to building schemes and land use contracts, which provide various rules controlling the exterior appearance and the design and materials used on the subdivision homes.

[2]                Registration of building schemes is provided for in the Land Title Act R.S.B.C. 1996, c. 250, in s. 220 and 221.  It is recognized, however, that conditions change over time, and therefore s. 35(1) of the Property Law Act R.S.B.C. 1996, c. 337, permits applications to modify or cancel a building scheme or restrictive covenant on a number of grounds, only one of which need be established.  It is a discretionary matter.

[3]                Obsolescence is determined by consideration of the nature of the building scheme itself.  The question to ask is: “is it obsolete and is its original purpose still being served?”  A more recent turn of phrase asks: “is it still a practical benefit?”  It has been put this way as well: “has the character of the neighbourhood undergone so much change that further enforcement would impede the use of the land?”

[4]                The developer, H.A. Roberts Group, entered into a land use contract with the City in November 1976, which was eventually registered in March 1977.

[5]                On January 1, 1978 a statutory building scheme was registered.  The building scheme was registered against 39 of the 40 lots on San Remo Drive, Port Moody.  The houses in large part were built between 1977 and 1981.

[6]                The building scheme prohibits change to the exterior appearance of the buildings.

[7]                The Clarks are the group of owners who say most of the houses have been altered in their exterior appearance over the years and therefore the building scheme is no longer relevant or effective.

[8]                The Bertamini group of owners claim that the exterior appearance and design is such that it should be maintained, and there is no difficultly in doing so, therefore the building scheme is still current and not obsolete.

[9]                In November 1976, the H.A. Roberts Group subdivided the lands into 40 lots, and in 1977 construction began at the east end of the subdivision at number 535 San Remo Drive, Port Moody.

[10]            The building design can be described as having a “California character”.  Specifically, two designs were implemented called Del Largo and Catalina with wood stud construction, plywood sheathing with wood architectural features including wood scuppers, exposed timber rafters, stucco exterior, wooden balcony rails with lattice insert, balcony surfaces covered with tar membrane and wood decking, cedar shake roofing, and the like.

[11]            As one may anticipate, the California design has not faired well in the rains of British Columbia typical to the interior of the Burrard Inlet at Port Moody.  It may be shortly said that on all of the evidence it is plain that preserving the designs against water entry requires meticulous upkeep, otherwise water enters and the wood roots.

1.         The Land Use Contract

[12]            The developer entered into a land use contract with the City on November 15, 1976, which was registered in the Land Title Office on March 1, 1977.

[13]            The first land use contact provided, inter alia, as follows:

4.         The following terms and conditions shall apply to the said Development area:

(b)        Permitted Uses of Land, Buildings and Structures

            The following uses and no others shall be permitted:

Forty principal buildings as shown on Drawing Number P-1 for residential use with accessory off-street parking use.

(c)        Size, Shape, and Sitting of Buildings and Structures

All buildings and structures to be constructed on the said land shall conform to:

            Drawing Nos. P-1 and D-1 to D-10 inclusive

With respect to the size, shape and sitting of the buildings and structures.

(g)        Aesthetic Quality of Buildings and Structures

Exterior finishes shall be as shown and described on Drawing Nos. D-4, D-5, D-9, D-10, and as detailed in Schedule A-1.

(h)        Development and Landscaping of Site

(i)         Landscaping and grading details shall be constructed in conformity with Drawing Nos. L-1, L-2, L-3, and L-4, and shall be carried out and completed in accordance with the standard requirements of the Parks and Recreations Director.

(ii)        The installation of ten foot fenced walkway between properties in a location to the discretion of the City Engineer.

(iii)       The developer will be required, upon sale of lots adjacent to the walkway, to place a caveat on title that perpetual maintenance of fencing be the responsibility of the purchasers.

(iv)       That the fronts of the new lots to be created are to be landscaped to the satisfaction of the Parks and Recreation Director prior to occupancy.

(j)         maintenance of the Buildings and Structures

General maintenance of all buildings and structures shall be carried out under a regular programme to assure a continuing pleasing aesthetic appearance, and to provide for the safety of residents in a manner satisfactory to the City Building Inspector.

Should the Owner fail to maintain the said buildings and structures to the satisfaction of the City Building Inspector, the City may at its discretion, order its workmen and/or others to enter and effect such maintenance at the expense of the persons so defaulting and may further order that the charges for doing if unpaid by December 31st of the year of default, shall be added to and form part of the taxes payable in respect of these lands or real property taxes, as taxes in arrears.

(n)        Amendments

This land use contract may be amended for minor alteration to plans and specifications by mutual agreement of both parties.

[14]            It may be noted that the schedule to the land use contract contained a color schedule for the painting of the stucco, namely:

1.         Off White;

2.         Beige; and

3.         Tan.

[15]            Fascia boards and trellis members could be black stained, while infill grills and balcony railings could be mahogany, natural cedar, or another unknown color.

[16]            While the original site plans indicated 22 single family homes and 18 semi-detached single family homes, in fact 36 single family homes were built and 4 semi-detached family homes were built.  Various other changes were made during the course of construction which have not been the subject of comment, save for the point made by counsel that the land use contract was not observed in a number of different ways, i.e. by plan reversal, by change of style from Del Largo to Catalina and lack of installation of walkways.

2.         The Statutory Building Scheme

[17]            On January 6, 1978 the developer registered a statutory building scheme P1383 in the Land Title Office against 39 of the 40 lots, lot 203 being excepted.

[18]            The building scheme contained a schedule of restrictions prohibiting changes to the exterior appearance of the houses:

no principal dwelling building and no other building or structure erected on the lot shall be decorated, maintained, repaired or restored in such fashion as its exterior appearance is changed from the exterior appearance of such principal dwelling building when first completed….the use of same materials, paint and other furnishes utilized on the outside of the principal dwelling building shall be used as were originally used, or if the same are not then available, such other materials, paint and other finishes that are then available which most closely resemble the same shall be used.

3.         Changes 1977-1989

[19]            The Clarks note that there were many changes made in size and design, including a new detached Catalina style, additional windows, and the like.  In 1982 the owners of 487 obtained approval for a number of changes to the exterior of their house , including relocation of patio doors and windows, relocation of side windows and doors and a new roof deck wall and gutters, without attracting disfavour. The additional windows on the side of the house near the front permitted better views of Burrard Inlet and were approved by council.

4.         The Second Land Use Contract

[20]            Changes were made to the land use contract by letter from the City of Port Moody, on October 4, 1988.  In 1999 the City agreed with 20 of the 40 owners to amend the first land use contract.  The second land use contract was registered in 1989 against 20 of the 40 lots only.

[21]            In substance, the purpose of the second land use contract was to “regularize” all the exterior alterations that had been made since the buildings were first built and allow for construction of new property amenities.

5.         Changes 1989 – 2006

[22]            The Clark group noted the following changes occurring over this period:

1.         November 21, 1989: Number 477 put glass panels into the balcony;

2.         February 1993: Number 487 installed a garage window with new lintel;

3.         Undated: Number 491 repaired exterior walls which changed the exterior appearance;

4.         Undated: Number 471 removed a stucco parapet wall and replaced it with glass and metal railing as did the Clarks at 485;

5.         1996: Number 481 new occupants noted their garage doors, front steps, and front gate had been painted a different color, contrary to the building scheme;

6.         The original design and construction of sloped roofs used cedar shakes, but over time those were replaced by various owners with asphalt or duroid shingles or other materials which were noted in photographs of 16 of the San Remo Drive homes.

[23]            Further, by reference to the photographs filed in evidence, the Clark Group noted changes to the exterior appearance of the buildings on San Remo Drive, including

a)         Replacement of original cedar shakes on sloped roofs with asphalt or duroid shingles;

b)         Vinyl membrane over plywood sub flooring to replace tar and gravel surface on flat roofs and balcony decks;

c)         Brown metal frame windows replaced by windows with other coloured frames;

d)         Balcony doors changed from brown metal frame to different coloured frames;

e)         Balcony railings changed from wood with picket inserts or wooden stiles to glass-walled railings with metal frames;

f)          Exterior light fixtures changed with different style of lights;

g)         Doors and windows repaired or restored with flashings, awnings, or other overhang elements;

h)         Front doors on buildings replaced with doors of various styles and colours;

i)          Addition of glass overhangs and enclosures on several houses;

j)          Roof deck walls replaced with metal framed glass railings;

k)         Replacement of trim or casing around windows and doors;

l)          Removal of wood beams over balcony door or front entry;

m)        Changes to gates and stairways;

n)         Addition of windows;

o)         Addition of accessory buildings, window boxes, and doorways;

p)         Addition or expansion to principal building by addition or increase in floor area.

6.         Changes Made by the Bertamini Group

[24]            The Clark group noted the Bertamini group (who seek to retain the building scheme and land use contract provisions) have altered the appearance of a number of their own houses, namely 531, 533, 535, 539, and 481 San Remo Drive, Port Moody.  No argument was directed to me to the contrary and indeed most of the comments are borne out by the photographs filed as exhibits.  The changes are as follows:

a)         531 San Remo Drive:

i.          Installation of asphalt shingles;

ii.          Installation of marine style light at front entry with motion detector over garage;

iii.         Alteration of wood steps in natural colour cedar stain;

iv.         Glass block wall beside front door constructed to replace original wall;

v.         Parapet stucco wall on surface of deck replaced with metal sheeting.

b)         533 San Remo Drive:

i.          Installation of asphalt shingles;

ii.          Change of balcony railings from wood lattice insert to wood picket;

iii.         Change of exterior lighting by installation of marine style light over coach light balcony;

iv.         Installation of fibreglass patio overhang at rear of house;

v.         Additional window inserted in kitchen wall facing 535 San Remo Drive.

c)         535 San Remo Drive:

i.          White trim slider doors installed on both upper and main floor levels;

ii.          White trim replacement windows installed on both upper and main floor levels;

iii.         Replacement of existing exterior lights with white glass light fixtures installed on upper level balcony;

iv.         Metal glass overhang constructed over front deck area;

v.         Additional window inserted in exterior wall in kitchen facing rear yard.

d)         539 San Remo Drive:

i.          Installation of asphalt shingles;

ii.          Replacement of existing exterior lights with white glass light fixture to replace black canister style lights;

iii.         Stucco inner roof parapet walls replaced or covered with metal flashing;

iv.         Attachment of wood/fibreglass structure to rear exterior wall of home.

e)         489 San Remo Drive:

i.          Replacement of tar and gravel roof with torch-on membrane;

ii.          Balcony railings altered by replacement of wood and wood lattice insert with brown metal and glass panel;

iii.         Balcony surface covered with vinyl membrane;

iv.         White vinyl slider door replaced with brown metal frame slider door on balcony;

v.         Brown metal windows replaced by white vinyl frames on lower balcony and rear upper story;

vi.         Window trim on upper balcony painted white; 

vii.        Black canister style lights replaced with white glass fixture on balcony and motion sensor over garage;

viii.       Front entry door replaced with semi-circular window;

ix.         Wood beams removed over entryway;

x.         Burgundy striped awing over garage main door;

xi.         Wood beam overhang removed from balcony;

xii.        Metal and glass roof added to enclosed balcony space on first floor;

xiii.       Additional slider door and windows installed on balcony;

xiv.       Removal of portion of rear wall to extend window height.

7.         Clark Group Altered Exterior Appearances

[25]            The Clark group concede they have made changes to their homes exterior appearances.

[26]            Ms. Martin, who lives at 469 Sam Remo Drive, says the various owners over the years have installed three roofs on the house since it was originally built. Now she seeks to make further changes and without same the house will sustain immediate damage.  Ms. Martin has consulted with Richard Kadulski and obtained a report dated November 13, 2006: see Martin Affidavit Number 3, Exhibit A (Tab 29).

[27]            Mr. Kadulski opens with the following lines:

The house design in this group of homes is not sensitive to the climate.  Port Moody is one of the wettest regions in Greater Vancouver, with a rainfall that is almost double that on the south and west side of the GVRD (Vancouver airport precipitation is 1199 mm per year, while in Port Moody it is 1955 mm).

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Victoria, 1001 Terrace Avenue: Strata Corporation must pay legal bill incurred fighting condo owner over conversion of common attic space without permission and without Building Permit

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Crease Harman & Company v. The Owners, Strata Plan VIS770,

 

2007 BCSC 1073

Date: 20070720
Docket: 07/1608
Registry: Victoria

Between:

Crease Harman & Company

Solicitor

And:

The Owners, Strata Plan VIS770

Client


Before: District Registrar Bouck

Reasons for Decision

Counsel for the Solicitor
(also referred to as the Law Firm)

D. Houston

Appearing on behalf of the Client
(also referred to as the “Council”)

Dr. L. Chorney

Date and Place of Trial/Hearing:

June 13, 2007

 

Victoria, B.C.

Introduction

[1]                This is a client initiated review of the Law Firm’s bill pursuant to s. 70 of the Legal Profession Act, S.B.C. 1998, c. 9 (the “Act ”).

[2]                The bill in question was issued on February 1, 2007 (the “Bill”).  It relates to services provided in a dispute between the Council and one of the owners within Strata Plan VIS770.

[3]                The Bill charges fees of $18,300 and disbursements of $995.  Together with taxes, the total amount charged is $21,718.29.  The bill remains unpaid.

[4]                The Client seeks a substantial reduction in the fees allowed to the Law Firm, primarily on the basis that the Law Firm failed to follow instructions and obtained a poor result in the retainer.  The Client also suggests that the Law Firm lacked skill in the retainer.

[5]                The Law Firm says that the Client was warned of the possible result and cost of the litigation.  All of the services charged were necessary and proper to conduct the proceeding.  In short, it did nothing wrong and the fees charged are reasonable.

Background to the Retainer

[6]                The subject matter of the Bill concerns a residential building located at 1001 Terrace Avenue in Victoria.  This is an older building converted some years ago into eight strata units.

[7]                The circumstances causing the Client to retain Crease Harman are as follows:

·         Since July 2002, unit #8 has been owned by a mother and son whom I will refer to as the Kaufmanns.  The Kaufmanns are ordinarily resident in Switzerland, so the unit is vacant much of the year.

·         In February 2005, upon the inspection by a professional engineer, it was determined that unit #8 had encroached on common property as a result of renovations carried out at various times over the previous 25 years.  None of these renovations were carried out by the Kaufmanns.

·         The renovations included attic space converted to habitable areas, with resulting use as a bathroom, small bedroom and closet.  The total amount of space encroached was 354 square feet.

·         The engineer reported that as a result of these renovations:

o        the walls breached to create the habitable areas were firewalls;

o        the renovations were done without permits; and

o        the alterations do not meet current building code requirements.

·         The Council had no record of granting permission for these renovations and there had never been an alteration of the strata plan to reflect them.

·         Council communicated this discovery to the City of Victoria.  An inspector from the City recommended that the encroached areas be returned to attic space.  No further action was taken by the City regarding the renovations, including the apparent firewall breach.

·         In September 2005, the Kaufmanns undertook repairs to an enclosed balcony.  The repairs were done over the objection of Council which in turn levied a fine against the Kaufmanns.  The Kaufmanns had also installed hardwood floors without Council’s permission.

·         On November 30, 2005, a meeting of the Strata Council was held to address the encroachment/renovations issue.  The Owners rejected a resolution which would designate the encroached common property as for the exclusive use of the owners of unit #8.  Instead, a resolution was passed requiring the Kaufmanns to pay an additional $400 per month as a user fee for the occupation of the common space.

[8]                In December 2005, the Council retained the Law Firm for the purposes of rectifying the strata plan to show the actual habitable space in unit #8.  The Kaufmanns had earlier declined to consent to a resolution that would permit this change.  Mr. Tryon prepared the material and eventually spoke to a consent order.  The change in unit entitlement was confirmed by the court on March 16, 2006.  The Council was pleased with the work done by the Law Firm and paid its bill for that work promptly.

[9]                However, the dispute between the Council and the Kaufmanns was not resolved with this change of unit entitlement.

[10]            Having now retained counsel, a petition was brought by the Kaufmanns on January 28, 2006 (the “Kauffmann Petition”), seeking various relief, including an order vesting the encroached space with the owners of unit #8, return of $1,292.05 in user fees (although it appears those fees were never paid), and the cancellation of the fine relating to the balcony enclosure.

[11]            The Kaufmann Petition also sought redress for an age restriction by-law which was perceived to be solely directed at Mathias Kaufmann.

[12]            The by-law imposing the user fee of $400 per month was rescinded by Council in February 2006 on the advice of Crease Harman & Company.

The Retainer

[13]            The Council approached the Law Firm in May 2006 seeking advice on how to obtain a final remedy of the situation with unit #8.  Although the Law Firm was familiar with the dispute, the Client prepared a comprehensive letter outlining a chronology of events.

[14]            In its letter of instruction authored by Dr. Chorney, the Council states that it is seeking access to the encroached areas so that the common property “can be repossessed and restored”.  The Council had already received tacit approval from the City of Victoria for a building permit to carry out this work.

[15]            The letter also suggests that the Kaufmanns (or more accurately, Ingrid Kaufmann and her husband) “have a long history of being unreasonable”.

[16]            Nonetheless, the Council was open to settling the dispute, so long as health and safety issues are not compromised, financial ramifications are “thought through” and any agreement is “legally biding on all future owners of unit # 8”.

[17]            Finally, the letter notes that the Kaufmanns had applied for a building permit “for the trespass areas” in August 2005 but that permit was denied on the basis that the space did not conform to the building code.

[18]            A meeting was arranged between Dr. Chorney, Mr. Norm Simmons and Ms. Connie Tisdall, representing the Council, and Mr. Guy Whitman, a senior solicitor at the Law Firm, to discuss possible remedies available to the Client.

[19]            Mr. Whitman recalls reviewing the Strata Property Act and the Council’s letter of instruction in preparation for this meeting.  He also contacted the Kaufmanns’ lawyer.

[20]            Both Dr. Chorney and Mr. Simmons recall that Mr. Whitman was late for the meeting which lasted about two hours.

[21]            According to Mr. Whitman, the Council wished the Kaufmanns to contribute additional strata fees to reflect the now rectified unit entitlement.  The Kaufmanns had not paid any of the user fees imposed of $1,292.50.

[22]            Mr. Whitman recalls that the amount involved in the dispute was $3,500.  It is not clear where this figure comes from as the letter from the Council makes no reference to that amount.

[23]            After discussing the matter, Mr. Whitman advised the Council members that it would be unwise to further litigate the dispute with the Kaufmanns.  While he did not offer an opinion on the success of any lawsuit, Mr. Whitman suggested that legal fees would be at least $5,000.

[24]            Mr. Whitman perceived a different attitude among the Council members as to their willingness to incur fees in litigation.  Dr. Chorney was prepared to pursue any remedy; Mr. Tisdall and Mr. Simmons were not so committed.

[25]            It appeared to Mr. Whitman that the cost of litigation was greater than the amount involved.

[26]            In addition, Mr. Whitman opined that because the Kaufmanns were innocent purchasers and the additional space was occupied without complaint for a number of years, it was unlikely a court would order deconstruction.  Mr. Whitman also pointed out that the City of Victoria was aware of the firewall issue and had not expressed any concern.

[27]            Based on discussions with the Kaufmanns’ counsel, Mr. Whitman believed that the issue could be remedied by simply increasing the Kaufmanns’ strata fees.

[28]            The Client was not satisfied with the advice.  The removal of the firewall was perceived as a safety issue.  There was also concern that the renovations prevented adequate roof ventilation for the rest of the building.  The Client wished to pursue litigation.

[29]            The matter was referred again to Mr. Tryon, a senior litigator at the Law Firm.

[30]            On Council’s instructions, Mr. Tryon issued a petition on July 5, 2006 seeking:

1.         a declaration that all of the encroached attic space was common property;

2.         a declaration that the Kaufmanns had converted the space for their use without permission;

3.         an injunction requiring the Kaufmanns to allow access to unit #8 in order for the Council to determine the work and material required to restore the encroached space to its original condition; and

4.         an order allowing Council to restore the developed space to its original condition.

[31]            Dr. Chorney provided most of the instructions to the Law Firm.  However, because of the perceived antagonism between Dr. Chorney and the Kaufmanns, it was decided that Mr. Simmons would swear the primary affidavit in support of the petition.

[32]            The Council offered some specific instructions on facts to include in the affidavit material.  Those facts included an explanation of the calculation of the user fee issued to the Kaufmanns.

[33]            Mr. Tryon chose not to include in the affidavit material the report of the engineer which raises the firewall concern.  In Mr. Tryon’s view, this issue was not contentious.

[34]            There was some delay in the Kaufmanns responding to the petition.

[35]            There was also a dispute over whether the petitions should be consolidated for hearing.  Affidavit material was prepared, but a consent order eventually entered.

[36]            Outlines were exchanged in advance of the hearing of the petitions and forwarded to the Client for review.

[37]            The Client’s written argument was provided to Dr. Chorney on the day of the hearing.

[38]            Dr. Chorney believed that the Outline did not effectively identify the safety concerns of the Council.  She asked Mr. Tryon to postpone the hearing so that additional affidavit material could be filed.  Mr. Tryon disagreed that there were any omissions in the material and did not accept the instructions to adjourn.

[39]            Dr. Chorney says that she reminded Mr. Tryon on at least two occasions in the week before the hearing that the Kaufmanns had applied for a building permit in 2005 and that it was refused.  Mr. Tryon denies receiving this information at that time.

[40]            Both petitions were heard by Masuhara J. on December 5, 2006.

[41]            The transcript of the proceedings before Masuhara, J. shows that there was considerable dialogue between the bench and counsel, particularly when it came to formulating an order.

[42]            Mr. Tryon submitted that the Kaufmanns Petition ought to be dismissed.  However, in both oral and written argument, Mr. Tryon made the alternative suggestion that the Kaufmanns be permitted to apply for building and occupancy permits.  The time frame suggested for obtaining these permits is no more than three months.

[43]            The court asked Mr. Tryon whether such permits could be issued retroactively.  Mr. Tryon’s response was that it was uncertain but possible.

[44]            Neither Mr. Tryon, nor the Kaufmanns’ counsel, alerted the court to the fact that the Kaufmanns had unsuccessfully applied for such permits in August of 2005.

[45]            Mr. Tryon concedes that the building and occupancy permit remedy was suggested by the Law Firm, not the Client.  The Law Firm was of the opinion that the court was unlikely to order the rectification of the attic space given that the renovations have been in existence for as long as twenty-five years and the Kaufmanns are not full-time residents.  Thus, an alternative remedy should be offered to the court.

[46]            The Law Firm believed it possible that the City could issue permits based on “equivalencies” under the building code.  It appreciated that the issuance of such permits was only possible and not probable.

[47]            There are no written reasons for judgment.  The terms of the court’s order include:

1.         a declaration that the improved attic spaces are common property;

2.         the granting of a lease to the Kaufmanns over the common property for two decades with lease payments to be calculated according to unit entitlement formula;

3.         the lease being conditional upon the Kaufmanns obtaining building and occupancy permits based on the respective codes in operation at the time of construction; and

4.         if the permits are not in place within 18 months, and the court does not grant additional time on application by the Kaufmanns, the lease is terminated and the Strata Corporation may take steps necessary to recover the common property.

[48]            The Council was unhappy with this result.  It was no further ahead and, in fact, allowed the Kaufmanns an additional 18 months of occupancy while safety and ventilation issues remained.

[49]            In a lengthy email issued December 6, 2006 to the Law Firm, Dr. Chorney expressed her disappointment with both the result and Mr. Tryon’s conduct at the hearing.  She believed that despite spending thousands of dollars in legal fees, the Owners will be no further ahead at the expiry of the 18 months.

[50]            The following day, Dr. Chorney instructed Mr. Tryon not to “work on the order”.  The Client instructed Mr. Tryon to communicate with the Kaufmanns’ lawyer by telephone rather than letter.  Mr. Tryon declined to accept these instructions but did not communicate that fact to the Client.

[51]            On December 16, 2006, Dr. Chorney reiterated the Client’s instructions to cease any work related to the court’s order.

[52]            The Client also instructed the Law Firm to bring to the court’s attention the fact that the suggested building and occupancy permits were rejected by the City in August 2005.

[53]            Mr. Tryon was unsure what the Council wished to accomplish by appearing back before Masuhara J. with this information.  Nonetheless, he and the Kaufmanns’ counsel were prepared to make submissions to the court that the order as granted was not enforceable.

[54]            Mr. Tryon filed a Request to Appear Before A Specific Judge, as per the link found on the Supreme Court web-site.  Some research into this process was conducted as Mr. Tryon had never before made such a request.

[55]            The Client was advised of this step in a letter dated February 9, 2006 (sic).  That letter also enclosed the Bill.  The Client was invited to contact Mr. Tryon if it had any concerns or questions regarding the Bill.

[56]            The Client declined to pay the Bill and terminated the retainer shortly thereafter.  The Client subsequently retained another law firm to make submissions before Masuhara J.  Re-attendance before the court had not occurred by the time of this appointment.

[57]            As well, parts of the Kaufmann Petition have yet to be heard.

The Client’s Complaints

[58]            The Client’s complaints are articulated in the Outline prepared by Dr. Chorney for this proceeding.

[59]            The complaints are summarized as follows:

A.         Lack of Reasonable Care and Skill

[60]            It is suggested that Mr. Whitman’s services offered nothing of value to the Client and that he misplaced a document prior to forwarding the file to Mr. Tryon.

[61]            With respect to Mr. Tryon, it is submitted that he failed to bring various important information before the court; misrepresented some of the relevant evidence; and failed to answer the court’s questions adequately or at all.

[62]            It is further submitted that Mr. Tryon advised the Client to accept an order that was incapable of performance and thereby prolongs the resolution of the safety and health issues which precipitated the litigation.

B.        Failed to Carry Out Instructions

[63]            Not only did Mr. Tryon refuse to follow the Client’s instructions regarding work on the order, but he also chose to communicate with the Kaufmanns’ lawyer in writing with a resulting unnecessary fee.

C.        Poor Result

[64]            The Client submits that the order of the court is the result of the overall poor performance of the Law Firm and its failure to follow instructions.  The Client is no further ahead and left with an order incapable of performance.

[65]            The only thing accomplished, a declaration that the encroached areas are common property, was never in doubt.


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RECBC sues Strataco Management Ltd., J.P. Daem and Royal Bank of Canada for production of records

 

www.myleakycondo.com

* Leaks, Rot, Mould and Fraud *

 

RECBC sues Strataco Management Ltd., J.P. Daem and Royal Bank of Canada for production of records 

The Real Estate Council of British Columbia has applied to the Supreme Court of British Columbia in S-074847 (Vancouver Registry) for an order to produce

"one true and unedited copy of the bank account statements, cancelled cheques and deposit slips, for accounts no. [deleted] and [deleted]in the name of either Strataco Management Ltd. and Jean-Pierre Daem also known as J.P. Daem ... for the time period January 1, 2006 to October 31, 2006."

 An RECBC audit revealed that funds were apparently not being handled in accordance with regulations.

Some examples:

"(c)    Some of the contingency reserve and/or special levy monies maintained by the Brokerage are still registered in the name of the strata corporations, rather than in a trust account held by the Brokerage, for the benefit of the strata corporations, contrary to section 7-9(2) of the Council Rules."    

 

 "(d)    The Brokerage had collected special levy  monies from the owners of Strata Corp NW2489, but in some instances had deposited the funds into its operating trust accounts before transferring them into the contingency special levy trust account, contrary to section 7-9(3) of the Council Rules."


"(h)   When the brokerage charged strata corporations for natural gas from Direct Energy Business Services for seven of its strata corporations, it paid the accounts directly and then invoiced the strata corporation itself with a 3% administration fee, for which the council requested documentation to show that the strata corporations were aware of that charge."

The RECBC says they

" ... require the information contained in the records which it has requested be produced by the Respondents in order to fully investigate the incidents [described in  the Petition], which it is concerned give an indication that there may have been misconduct on the part of the Respondents, or conduct unbecoming a licensee.  The Petitioner is of the belief that an Order for the production and/or seizure of the Respondents' bank records will produce the evidence necessary to complete its audit and inspection in relatio to any misconduct or conduct unbecoming a licensee, if there was such conduct."

Court records show that J.P. Daem responded to the RECBC requests for records by stating in a letter dated December 12, 2006:

"For the record, the funds which are being questioned have been credited to the brokerage account on December 1, 2006 and have been re-disbursed from the brokerage to the writer, which we hope now complies with your procedural requirements.

With respect to your demands for records we reiterate and acknowledge that these funds were placed in an account which was completely separate and has no relationship to the brokerage and is the sole and personal purview of the writer as the sole signatory for Bradson Holdings.  if doing what we did was not in keeping with the procedural requirements of the Real Estate Council we apologise and acknowledge as stated above that we have amended the procedures and corrected the error by re-crediting the brokerage account and re-distributing the funds through the brokerage account. ..."

"It is our view that we provide a service of the highest professional caliber and have always entertained procedures which provide the greatest possible protection for our client's funds and the highest level of disclosure to our clients since 1971.  We will continue to do so ...."

The RECBC replied on December 13, 2006:

"You acknowledge that '... our intent was neither to hide these incomes nor to suggest that we are not willing to cooperate and ensure that our operations are in keeping with your interpretation of the Real Estate Act.'  Your commitment is appreciated and noted.  We continue to request the missing information for our review."

"You have referred to 'other ancillary incomes' in your letter.  For clarification, you should be aware that the Real Estate Services Act considers any income of the brokerage as a result of real estate services, a defined term in the Act, is required to be paid into a brokerage trust account, and this may include administrative services."

"We look forward to receiving the aforementioned requested information without delay."

On January 9, 2007 J.P. Daem of Strataco replied:

"We again reiterate that we believe your request to see certain personal records is beyond the scope of the review of the brokerage accounts and while we have admitted and corrected any procedural errors which may have been uncovered during the course of the recent review we reiterate that these funds were drawn from the Strata trust accounts to a general brokerage account subsequent to which they were re-issued."

"All transactions were duly documented and while we understand that in future these monies should be redeposited to another brokerage general account rather than directly endorsed to one of the principals, a situation we have reversed and re-issued and corrected, we fail to see how this action would in any way jeopardize our client's position and/or be a breach of any of our fiduciary obligations."

"We have already eliminated some of the services which we previously delivered to our clients in order to avoid any potential conflict in future."

On January 12, 2007 REBC wrote:

"Despite your assurances that corrective action has been taken to amend procedural errors which may have occurred, our request for documentation is based on the fact that a cheque addressed to Strataco Management Ltd. was deposited into the same bank account as a cheque addressed to yourself.  We have no evidence that the records requested are "personal records" as we have not been provided the documentation requested. ... We continue to request the documentation for review ...."

"Should you not provide the requested documentation by January 26, 2007, the matter will be forwarded to the Council's legal department to consider an application under section 38 of the Real Estate Services Act (copy enclosed), and a claim for costs of such application."

"We trust this will not be necessary by your cooperation in the matter."

On February 22, 2007, Brian K. Evans, Legal Council for RECBC wrote to Marvin Lithwick, Barrister and Solicitor, Zahn Zack Ehrlich Lithwick, acting for Strataco Management Ltd. as follows:

"In the event that we do not receive your clients' cooperation by March 8, 2007 I have been instructed to apply to Court pursuant to section 38 [search and seizure] for this information  and to seek costs of this otherwise unnecessary application."

On April 10, 2007 Brian K. Evans wrote to Mr. Lithwick:

"Re: Strataco Management Ltd. and J.P. Daem

"Further to our telephone discussion on Thursday, April 5, 2007 and my letter to you of February 22, 2007, I confirm that the Council has allowed you until close of business Friday, April 20, 2007 to provide a response.  Please refer your client to section 37(3) of the Real Estate Services Act and section 2-19 of the Council Rules."

On April 20, 2007, Mr. Lithwick replied:

"We appreciate that you have given us generous extensions of time to address thew demands you have made of our client, Strataco Management Ltd.  unfortunately, we have encountered several unexpected urgent situations to which we have had to devote the lion's share of our time over the past few weeks.  Having said that, we have now made arrangements for our client to meet with us again to confirm instructions.  We ask that you extend your patience to a further ten days and we will definitely address all outstanding matters by that time."

The RECBC petitioned the Court for a search and seizure order on July 17,  2007. 

Vancouver, Governor's Tower and Villas: Due to conflict of interest, Court rules leaky condo owners can use RDH Building Engineering as their repair consultant but not for purposes of establishing liability

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Owners, S.P. LMS 1725 v.

Pacific Place Holdings Ltd.,

 

2007 BCSC 1047

Date: 20070712
Docket: S006008
Registry: Vancouver

Between:

The Owners, Strata Plan LMS 1725

Plaintiff

And:

Pacific Place Holdings Ltd. (previously
known as Concord Pacific Holdings Ltd. and
Concord Pacific Development Ltd.) et al

 

Defendants

And:

United Metals Ltd. et al

 

Third Parties


Before: The Honourable Mr. Justice Curtis

Reasons for Judgment

Counsel for the Plaintiff

R. Lesperance

Counsel for the Defendant,

Pacific Place Holdings

 

James A. Doyle

& A. Hasan

Counsel for RDH Building Engineering Ltd.

 

T. Peters

Date and Place of Hearing:

June 15, 2007

 

Vancouver, B.C.

[1]                Pacific Place Holdings Ltd. has applied for an order that RDH Building Engineering Ltd. be enjoined from engaging in any capacity in any activity relating to a condominium project developed by Pacific Place Holdings.  The application is made on the grounds that RDH is in a position of conflict, having once advised Pacific concerning the project and being now retained by the Owners.

[2]                The Governor’s Tower and Villas Condominium Project, a strata plan project developed by Pacific, was substantially completed in November, 1994.  The Owners, Strata Plan LMS 1725, is the Strata Corporation for the project.  The project consisted of a tower and two lower units.  The buildings suffered from water penetration problems immediately following their construction.  Mr. David Ricketts, an engineer then with the firm of Morrison Hershfield, was consulted by Pacific in 1994 and 1995.  The Strata Corporation consulted Levelton Engineering Ltd. about the water ingress problems and Levelton prepared reports dated May 1998 and November 1999.

[3]                Mr. David Ricketts left the firm of Morrison Hershfield and founded the firm RDH Building Engineering Ltd., continuing to act as a consultant concerning water ingress problems on the project as evidenced by a bill for services to October 31, 2000.  The writ was filed in this action on November 8, 2000.  On December 21, 2000, Mr. Brian Hubbs, another principal of RDH, met with Mr. Mitchell, a lawyer for Pacific, and  Messrs. Wong, Hagkull, Ulinder, Roman and Negrin, all representatives of Pacific, and presented a PowerPoint critique of the 1998 and 1999 Levelton reports, following which there was a discussion of the court action commenced by the Strata Corporation.

[4]                In or about January 2006, Lyn Campbell of Vancouver Condominium Services Ltd., property manager for the Owners, contacted Warren Knowles, a professional engineer with RDH, to provide consulting services for the repair of the building envelope.  Mr. Knowles became aware that Mr. Hubbs had made the presentation to Concord on the project in 2000 and that RDH had made a proposal to Pacific to provide litigation support at that time, but had not been retained.  In or about August 29, 2006, Mr. Knowles sent the Strata Corporation a proposal and standard form agreement and on October 2, 2006, Mr. Knowles attended a meeting of the Strata Corporation to explain the rehabilitation process and what RDH could offer by way of consulting services.  In a letter dated November 16, 2006, Lyn Campbell instructed RDH “to proceed with the design development portion of your proposal”.  RDH had made a proposal to provide litigation support for the Owners in October 2006, but the Owners decided not to use RDH for those services. 

[5]                By letter of November 30, 2006, Mr. Negrin, on behalf of Pacific, wrote to the Strata Owners as follows:

It has been brought to our attention that RDH was recently retained by the Owners of Strata Plan LMS 1725 on the Governors Tower project.  RDH was previously retained by Concord Pacific, to provide expert assistance on this same project, following an action being commenced by the same Owners.  As well, your Mr. Ricketts, provided consulting services to Centreville Construction Ltd. on this project in 1994.

RDH received confidential information during the course of these retainers which confidential information is directly related to the issues in the action.

Given the previous relationship we do not see how RDH can now be involved on behalf of the Owners.  Accordingly, we ask that you contact us by Monday, December 4, 2006, setting out your position.  It is our expectation that you will be withdrawing from the project.

Our counsel will be following up with the Owner’s solicitors in terms of any information that may have passed between RDH and the Owners and or any of their representatives.  Please ensure that all files, documents and notes (whether electronic or hard copy) are preserved.

[6]                Upon being made aware of Pacific’s objection to its involvement, RDH took steps to ensure that Brian Hubbs and David Ricketts had no involvement on the project and did not discuss their previous involvement with other firm members.  The hardcopy file of RDH was sent to the corporate lawyer’s office to ensure that no one had access to it, and access to the electronic files was restricted to Mr. Hubbs.

[7]                The position of the Strata Owners is that they wish to retain RDH as a repair consultant only and not to provide an expert report for use in the litigation for the purposes of establishing liability on the part of the defendants.  Ms. Campbell, the property manager for the condominium owners has deposed that, “RDH has an unblemished record for quality project management service” and that “RDH is the leader in Western Canada for pursuing innovative and cost effective solutions for building envelope repairs of the magnitude recommended by Levelton at Governor’s Tower.”  The Strata Owners are concerned that if RDH is disqualified from acting as their repair consultant, the project will be delayed, the cost increased and that there is a significant chance that the trial set for January 7, 2008 will be delayed several more years.

[8]                The position of Pacific is that the Strata Owners did not actually retain RDH until November 16, 2006, two weeks after notice of the conflict was given.  Pacific’s position is that RDH received confidential information when acting as professional engineers on its behalf and that the injunction sought is necessary to prevent confidential information being used against Pacific in the litigation.

[9]                A separate set of confidential affidavits were presented to me in the absence of the owner’s counsel concerning which counsel for Pacific and counsel for RDH made submissions concerning what, if any, confidential information had passed  between Pacific, Pacific’s lawyer (Mr. Mitchell) and RDH.

[10]            The case of Schober v. Walker, 2004 BCCA 205, 26 B.C.L.R. (4th) 28, concerned the use of a lawyer’s opinion in the taxation of a legal bill.  The opinion was objected to on the grounds that the party against whom the evidence was tendered had consulted a partner of the lawyer giving the opinion.  Southin J.A., in delivering the Court’s decision referred to the decision of Lord Denning in the case of Harmony Shipping v. Davis, [1979] 3 All E.R. 177 (C.A.) at page 182 in which Lord Denning held:

There is no property in a witness as to fact.  There is no property in an expert witness as to the facts he has observed and his own independent opinion on them.  There being no such property in a witness, it is the duty of a witness to come to court and give his evidence in so far as he is directed by the judge to do so.

[11]            Southin J.A. accepted that statement of the law.

[12]            In the case of L.R. v. British Columbia, 2002 BCSC 405, 99 B.C.L.R. (3d) 386, an expert in the standards of care of deaf children in residential schools was permitted to give expert opinion for the plaintiffs even though that expert had been retained by the government as an expert in an earlier case involving the same school.  Humphries J. held at paras. 36, 37 and 38:

I accept that Dr. Sullivan took no part in discussions of litigation strategy or planning in respect of the six previous cases, and of course did not do so in the present action as it was not commenced for several years after she had rendered her initial reports. She is an independent expert witness.

Notwithstanding that confidential information may have passed between the defendant and Dr. Sullivan, although as I have said it is difficult to imagine what that might be, I am of the view that the potential to provide the court with useful evidence exists. Dr. Sullivan is not disqualified from preparing a report for the plaintiffs simply because she has also prepared a report for the defendant.

In preparing her report, she must not consider or discuss any confidential information she received.

[13]            Clearly, in this case, the Owners could call the RDH engineers as witnesses at trial to give evidence concerning the building.  The central point in issue in this application is not what evidence RDH could give concerning their opinion but whether RDH received confidential information from Pacific or its lawyer, and if so, should it be enjoined from acting any further because of that.


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