Artist Michael Zheng has a message for developers of leaky rotten condos

Art installation intrudes like leaky condos wrapped in tarps     

Micheal Zheng's art installation, The STOP, in Vancouver is supported by concrete donated by Ocean Cement as are many leaky rotten condo buildings.

The False Creek Elementary School in the background is one of many leaky rotten schools in British Columbia.

Artist Zheng wants us to consider the meaning of "stop", something developers of leaky condo developers in British Columbia were not interested in doing as long as they could keep making money by selling defective condominiums.

We are hopeful that Zheng's jarring intrusion upon the landscape will removed soon.

Unfortunately the owners of leaky rotten condos will be forced to pay for repairs for many more years after Zheng's message on aluminum and steel has been recycled as scrap.

red_side

Michael Zheng’s The STOP has been installed in two locations in Vancouver to kick off the 2009-2011 edition of the Vancouver Biennale!  These arresting and thought-provoking pieces can be found in Charleston Park and Vanier Park and have already attracted lots of photographers and commentary from people passing by.red_side

Vancouver, VR 1411: Court ready to order windingup liquidation of leaky rotten condos at 1023, 1027 and 1029 W. 7th Avenue

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Buchanan v. S.P. VR 1411,

2008 BCSC 977

Date: 20080723
Docket: S074006
Registry: Vancouver

Between:

Mary Isobel Buchanan

Petitioner

And:

Strata Plan VR 1411, Ranald Craig Fraser, Maurice Bradley Duteau,
Vancouver City Savings Credit Union, Royal Bank of Canada and the
Toronto Dominion Bank

Respondents

Docket: S062820
Registry: Vancouver

Between:

R. Craig Fraser

Petitioner

And:

The Owners, Strata Plan VR 1411, Maurice Duteau
and Mary Buchanan

Respondents


Before: The Honourable Mr. Justice Curtis

Reasons for Judgment

Counsel for Mary Buchanan

Frank. R. Eadie

Counsel for Ranald Craig Fraser

Andrew Davis

Maurice Bradley Duteau

Appeared on his own behalf

Counsel for Court Appointed Administrator

G. Stephen Hamilton

Date and Place of Hearing:

June 9 and 10, 2008

Vancouver, B.C.

[1]                These applications concern a three-unit strata title property at 1029 West 7th Avenue, Vancouver.  There are two buildings, one in which Ms. Buchanan’s unit is located and one in which Mr. Fraser and Mr. Duteau’s units are located.  Both buildings require costly repairs for water damage.  The three owners are unable to agree upon how to proceed.  Ms. Buchanan and Mr. Duteau allege that they cannot afford the cost of repairs which they allege could be uneconomic and want the Strata Corporation wound up.  The Court Appointed Administrator has applied for the power to repair the building which coincides with the position of Mr. Fraser, who lives in his unit and wants his building repaired.  Ms. Buchanan lives in California and Mr. Duteau lives in Shanghai, neither of them occupies their units which are rented.  If repairs are ordered and either or both Ms. Buchanan or Mr. Duteau do not pay the portion of the repairs levied against their units, their units would be subject to being sold to realize the amount assessed.

[2]                The two buildings that compromise the strata title property share a foundation and stairway.  The buildings are constructed of steel studs and floors of metal decking topped with concrete.  Strata Lot 1, now owned by Ms. Buchanan was previously owned by Vinaya Vasent Kulkarni and Manoj Gupta.  In 2002, they did repair work to their roof and presented Mr. Fraser with a set of bylaws for the corporation that divided the obligation to repair between the buildings.  Mr. Fraser agreed to the bylaws and in November of 2004, he received a report dated April 29, 2002 from Spratt Emanuel Engineering Ltd. outlining deficiencies of Strata Lot 1.  In June of 2004, Mr. Fraser hired an architectural firm to help him with proposed changes to his balcony.  He hired Spratt Emanuel Engineering Ltd. to assess the condition of his building and received from that firm a report dated June 1, 2005 which outlined problems with the building in the following terms:

BACKGROUND:

The existing top storey of this 3-unit strata complex was altered at the time of construction to comply with the City of Vancouver height restrictions.  We understand that the roof had originally been constructed at a higher elevation and was cut down to comply with the City of Vancouver zoning By-Laws which require a maximum elevation of 25 ft 0 inches.  The original over-height structure was badly reconstructed at a new lower elevation to meet the City of Vancouver zoning and development By-Laws.  The resulting existing structure does not comply with the Building By-Law at the time of construction Vancouver Building By-Law 6134, nor does it comply with the current Vancouver Building By-Law 8057, 1999.  The following deficiencies were noted:

DEFICIENCIES:

1.         A mix of combustible and non-combustible construction materials were used.  The requirement was for non-combustible structure.

2.         The reconstructed structure contains window and door headers which are not supported by load bearing members.

3.         Load bearing members, where present, do not allow adequate transfer of load to subsequent lower floors.

4.         The roof structure appears to be under capacity due to the use of 2x4 wood roof rafters placed continually.

5.         Lack of adequate Environmental Separation, Part 5 of Vancouver Building By-Law 8057, 1999 requires adequate thermal and moisture protection.  The existing structure offers no dedicated roof insulation.  Heat transfer from the exterior to the interior has resulted in condensation within the roof structure and subsequent mould, fungus and deterioration.  The existing insulation value does not comply with Vancouver Building By-Law 8057, 1999 as well as the older By-Law in place at the time of construction.

6.         Unsafe wiring is present with inadequate clearance between the framing members, wiring and wall surfaces.

7.         Deficiencies of the exterior building envelope, due to improper roofing, flashing, wall cladding assemblies, insulation and vapour barrier assemblies, window detailing, door detailing, and deck detailing have all contributed to premature building envelop failure, resulting in rainwater infiltration and condensation on building surfaces.  The resultant damage consists of heavy rust to steel structural components, wood rot, fungus and mould on wood components, and subsequent damage to interior finishes.

RECOMMENDATIONS:

We recommend that extensive building envelope remediations are required at this building.  The remediations should include new roofing, new roof structure, new wall cladding, new wall structure, new windows, new doors, additional insulation, and better measures to deal with the thermal bridging evident at the walls and ceilings of the living space. This can best be accomplished by placing insulation out-board of the walls and roof of the existing living space.  In our opinion this additional exterior wall insulation will qualify for the City of Vancouver FSR exemption.  The addition of insulation to the roof will cause encroachment beyond the current building height, which we understand is at the allowable limit.

[3]                Mr. Fraser’s architect submitted an application to the City of Vancouver to repair the roof.  After the building was inspected, the City of Vancouver issued the following Legal Notice to the three unit owners:

RE:      1023, 1027 and 1029 West 7th Avenue (1029 West 7th Avenue)

A recent inspection of the unit (1029 West 7th) on the top floor of the above noted building revealed that there are multiple indications of faulty construction as follows:

1.         the roof structure is overspanned and sagging;

2.         vertical supports for the roof are not tied in to provide a continuous load path for the roof structure;

3.         beams and lintels and top wall plates are not supported to carry the superimposed loads;

4.         the bedroom wall is buckling near the top from lack of support;

5.         there is evidence of corrosion of wall members and fasteners of exterior gypsum sheathing board;

6.         the top wall plate is comprised of non structural material (flashing and partition guage metal);

The above structural deficiencies constitute AN UNSAFE CONDITION.

Accordingly, pursuant to Article 1A.6.1.2. of the Vancouver Building By-Law, you are ordered to:

1.         make application for a building permit to re-construct the roof structure and supporting members to meet the minimum requirements of the by-law BY JUNE 27, 2005

and

2.         commence repairs immediately upon issuance of the building permit

[4]                Mr. Richard Balfour, the architect hired by Mr. Fraser wrote a report dated June 8, 2005 to Mr. Fraser particularizing his findings followed by an estimate in December 2005 in which he suggested the repair costs for Messrs. Fraser and Duteau’s building would be $517,920 and $34,920 for the shared foundation and walkway structures.  No estimate was given to repair the deficiencies to Ms. Buchanan’s building.

[5]                Mr. Fraser retained legal counsel in November 2005.  His lawyer wrote a letter in December 2005 suggesting a sharing of repair costs as follows: Ms. Buchanan, $152,180.18, Mr. Duteau, $132,311.91, Mr. Fraser $167,000.83.  This expenditure would not have repaired any of the deficiencies in Ms. Buchanan’s property.

[6]                On the 15th of February 2006, Mary Buchanan commenced an action seeking a declaration that she was not required to contribute to the remedial costs of the Fraser/Duteau building.  She did so on the basis that she was led to believe that was the case when she purchased her unit.

[7]                Mr. Fraser applied to the Court by petition in Action No. S062820 for an order for repair of the buildings financed through an assessment upon the three owners.

[8]                The matter came on for hearing before Mr. Justice Cullen August 29, 2006 and resulted in the following order:

THIS COURT ORDERS THAT:

1.         The owners of strata lots 2 and 3 will contribute to the costs of remedial work to Building B, pro rata in accordance with their respective unit entitlements.

2.         The owners of strata lots 2 and 3 are responsible to contribute to the costs of repair and maintenance of Building B, pro rata in accordance with their respective unit entitlements.

3.         The Bylaws of the Owners, Strata Plan VRl411 (herein referred to as the "Strata Corporation") registered in the Land Title Office at New Westminster, in the Province of British Columbia under number BV313905 (herein referred to as the "Existing Bylaws") are hereby revoked and registration of same on the common property record of the Strata Corporation shall be cancelled upon delivery of a certified copy of this Order to the Registrar of the said Land Title Office.

4.         The Bylaws attached as Schedule "A" to this Order (herein referred to as the "New Bylaws") shall be deemed to have been passed and adopted by all members of the Strata Corporation as of the 11th day of August, 2003,

5.         The New Bylaws shall be registered on the common property record of the Strata Corporation upon delivery of a certified copy of this Order to the Registrar of the said Land Title Office.

6.         As of August 11, 2003 the rights and obligations of the owners of strata lots 1, 2 and 3 of the Strata Corporation shall be determined in accordance with the provisions of the New Bylaws and not the Existing Bylaws to the extent those bylaws affect the rights and obligations of the said owners.

7.         Pursuant to s. 174 of the Strata Property Act, S.B.C. 1998, c. 43 as amended (the "Act"), Garth Cambrey of Stratawest Management Ltd. is hereby appointed as the Administrator for the Strata Corporation to exercise the powers and perform duties of the Strata Corporation and the Strata Council, subject always to the Act, the New Bylaws and the Rules of the Strata Corporation in connection with repairs, maintenance and remediation of Building B and the stairs and foundations, part of the common property as defined under the New Bylaws.

8.         The Administrator has the following specific responsibilities:

(a)        to determine what is necessary for the proper repair and maintenance of Building "B" (strata lots 2 and 3) of the Strata Corporation and to oversee that work;

(b)        to review the expenses incurred by the Petitioner to the date of this Order and determine which of them, or which portions of them, are expenses properly attributable to the Strata Corporation as a whole, to Building B, or to either of the individual owners of strata lots 2 and 3, as the case may be, in accordance with the New Bylaws;

(c)        to determine what is necessary for the proper repair and maintenance of the stairs and foundations of the Strata Corporation covered in section 3 of the New Bylaw and to oversee that work;

(d)        to issue any demand letters or liens that may be necessary against any strata lot owner who does not pay their share of a special levy or levies approved or imposed under this Order; and to take such steps, including action under section 116 of the Strata Property Act, as may be necessary to pay for the repairs.

9.         The Administrator's determination of the allocation of previous expenses under paragraph 8(b) of this Order is subject to further review by this Court on application by any strata lot owner;

10.       The Administrator take such steps as may be reasonable and necessary to ensure that the Strata Corporation determines the appropriate recommendation and course of action for the repair of Building "B" including, without limitation:

(a)        appoint an independent engineering firm to undertake further investigations, if the Administrator deems that necessary;

(b)        consider the recommendations made in all building envelope investigation studies and other engineering or architect reports including any existing studies (collectively the "Existing Studies");

(c)        ensure that all owners have access to the reports of the independent engineering firm and the Existing Studies at least 20 days prior to any meeting called for the purpose of presenting recommendations and voting to raise funds to repair the building envelope;

(d)        ensure that the preferred repair program satisfies the requirements of the City of Vancouver so that the various Work Orders and Stop Work Orders issued by the City can be and are removed;

(e)        recommend what work if any, should be done to repair the building envelope of Building "B" and the estimated cost of any such work;

(f)         present the owners of Strata Lots 2 and 3 with the findings of the building envelope inspection, the evaluation of the Existing Studies and the suggested repair program for Building "B"; and

(g)        draft a resolution incorporating the preferred repair plan, the estimated cost, the name of the engineering firm to be hired to supervise the work and put that resolution to a ¾ vote of the Owners for their approval and acceptance, at a meeting called for such purpose by no later than January 30, 2007

(h)        if the owners fail to approve the ¾ vote resolution, to apply to Court on five clear days notice for an order determining that the recommended work is necessary and imposing a special levy on the owners in accordance with the New Bylaw.

11.       The Administrator take such steps as may be reasonable and necessary to ensure that the Strata Corporation determines the appropriate recommendation and course of action for the repair of the stairs and foundation, (which are areas that remain the responsibility of the Strata Corporation under the New Bylaw) including, without limitation:

(as in paragraph 10).

12.       The Petitioner, Mary Buchanan and Maurice Duteau and their successors in title to Strata Lots 1, 2 and 3 provide access to all information, records and documents requested by the Administrator, and provide such authorizations as are requested by the Administrator to obtain information, records and documents held by third parties which relate to the Strata Corporation.

13.       The Administrator may retain professionals, including legal counsel, for opinion, advice and services in respect of his duties pursuant to this appointment.

14.       The Administrator's fees of $150.00 per hour plus disbursements shall be rendered monthly, and shall be payable by the Strata Corporation, provided that at the request of any party, the Administrator shall pass his accounts before the Registrar of the Supreme Court of British Columbia.

15.       The Administrator shall allocate his time and disbursements, insofar as it is possible, between Building B and the stair and foundation issues referred to in paragraph 11 of this Order, which are the responsibility of the Strata Corporation in accordance with the New Bylaw, and the owners are responsible for their pro rata share of the Administrator's fees in accordance with the breakdown set out in the New Bylaw.

16.       The Petitioner shall take reasonable steps to add the Administrator as a named insured on its errors and omissions insurance policy, at the expense of the Petitioner.

17.       In the alternative, the Administrator may purchase liability insurance coverage for the work performed as the Administrator under this Order and all expenses associated in obtaining the insurance coverage shall be charged to the Petitioner as an expense of the Administrator.

18.       The Administrator shall report to the Court as soon as possible after February 1, 2007, or such other date as determined by this Honourable Court, with respect to the steps taken under this Order, the costs incurred as a consequence of his appointment as Administrator, and whether his appointment as Administrator should continue.

19.       The Administrator may apply to the Court for directions to assist and permit him to discharge his duties as Administrator hereunder.

20.       The Administrator and/or any party may apply to the Court to substitute another Administrator for the one appointed, extend the term of an Administrator for any subsequent term or terms, or to expand or reduce the scope of an Administrator's powers, as the Court deems appropriate.

21.       If any ¾ vote resolution(s) or majority vote resolution(s) of the owners are required to give effect to any of the Orders set out herein, and if such resolution(s) do not pass at a general meeting of the owners, the Administrator and/or any party shall have leave to apply to the Court for an Order approving the resolution(s).

22.       No person shall issue any legal process against Mr. Cambrey, Stratawest Management Ltd. or any employee or representative of Stratawest Management Ltd. related to this appointment without leave of the British Columbia Supreme Court.

23.       The issue of costs is adjourned generally and may be dealt with by way of a separate order.

24.       The Respondent, Maurice Duteau, has liberty to apply to this Court to make submissions with respect to this Order on five clear days notice to counsel for the Petitioner and the Respondent, Mary Buchanan.

The order made by Cullen J. makes no provisions for repairs to Strata Lot 1 owned by Ms. Buchanan. 

[9]                The order of Cullen J. was not settled by the parties until November 8, 2006.  As a result of this delay, the Administrator was unable to meet the deadlines set out in the order which were extended by the order of Groberman J. January 30, 2007.  A further order of Satanove J. extended the time to July 23, 2007.

[10]            In October 2006, on the instructions of Mr. Fraser, an action was started against parties responsible for the construction of the buildings, but there is no suggestion significant recovery is likely.  The Administrator deposes in his affidavit of February 27, 2008, “As far as I am aware, Mr. Fraser commenced the Leaky Condo Action unilaterally without the approval of the Strata Corporation.”

[11]            On June 12, 2007, Mary Buchanan filed Petition No. S074006 seeking an order to wind up the Strata Corporation.

[12]            Mr. J. Garth Cambrey, the Administrator appointed by the order of Cullen J., submitted a report dated July 12, 2007.  The Administrator called a meeting for April 16, 2007 at which resolutions were proposed to raise $20,000 by Special Levy to retain an engineering firm to prepare design and specification documents for building envelope repair for the Fraser/Duteau building, to raise $20,000 by Special Levy to prepare design specification documents for stair and foundation repair and to pay the Administrator’s fees, and to raise $5,000 by Special Levy for Administrator expenses to review Mr. Fraser’s claims for monies spent on the property.  None of the proposed resolutions was considered or discussed.  Mr. Duteau and Ms. Buchanan took the position that the repair costs were uneconomic and that the Strata Corporation should be wound up and the property sold.  The Administrator stated in his report, “It is my opinion that the Strata Corporation should proceed with obtaining cost estimates on the building envelope repairs of building “B”….”

[13]            The Administrator’s report also gave his assessment of the proper allocation of expenses incurred by Mr. Fraser.  The Administrator assigned the already incurred costs as follows: Strata Lot 1 Ms. Buchanan $4,352, Strata Lot 2 Mr Duteau $38,633.07, Strata Lot 3 Mr. Fraser $69,555.01.

[14]            The Administrator also reported as follows:

Governance of the Strata Corporation is also of concern to me as I have not seen any evidence to support that the Strata Corporation is operated within the guidelines of the Strata Property Act.  For example, the Strata Corporation does not collect Strata Fees for common expenses, does not hold strata council or Annual General Meetings to approve budgets or elect a Strata Council and, as mentioned earlier, does not have an insurance appraisal completed in order to ensure the property carries property insurance to the full replacement value as required by the Section 149(4) of the Strata Property Act.  The Strata Corporation does have a bank account that was set up for the purposes of raising funds to investigate the walkway/foundation issues.

The Strata Corporation is currently in the position of not being able to pass a ¾ Vote Resolution required to raise funds to complete the repairs to Building “B” nor the foundation/walkway repairs.  As a result, the governance of the Strata Corporation has failed in that the Strata Corporation is unable to meet its statutory obligation to repair and maintain the common property pursuant to Section 72 of the Strata Property Act.

It is my opinion that proper governance of the Strata Corporation could assist in alleviating some of the issues at hand as it would force the Strata Corporation and owners to meet at least annually to discuss the property.  To date, the Owners have been embroiled in legal battles over the condition of the property and have been unable to focus on resolving the matters at hand.  If the Owners are not willing to operate the Strata Corporation consistent with the Strata Property Act, consideration should be given to retaining a licensed strata manager who would be capable of ensuring the Strata Corporation operates within the requirements of the Strata Property Act.

[15]            In the result, the Administrator recommended “… that my appointment continue and that I be required to report to the Court on or before September 30, 2007 with respect to the results of the preparation of the design and specification and cost estimates based on such design and specification documents in order that the Strata Corporation may decide if repairs are warranted or, alternatively, consider winding up of the Strata Corporation….”

[16]            The Administrator’s Report was brought before Rice J. July 23, 2007 as a result of which the following order was made:

THE APPLICATION of Mr. J. Garth Cambrey, the Court-appointed Administrator coming on for hearing at Vancouver, British Columbia on July 23, 2007, and on hearing G. Stephen Hamilton, counsel for the Administrator, Frank R. Eadie, counsel for Mary Buchanan and Messrs. Maurice Duteau and R. Craig Fraser appearing on their own behalf, and on reading the materials filed:

THIS COURT ORDERS that:

1.         a special levy in the sum of $20,000.00 be assessed against the owners of strata lots 2 and 3 in Strata Plan VR 1411 for the purpose of preparing a design and specifications for building envelope repairs to the strata corporation's building (the "Design and Specifications Work"), to be paid immediately in accordance with unit entitlement;

2.         before Mr. Cambrey authorizes the commencement of the Design and Specifications Work, he shall:

(i)         provide to the parties the fee quotes he receives from engineers respecting the Design and Specifications Work;

(ii)        allow the parties 15 days from the receipt of the fee quotes to ask questions or provide comments in relation to the fee quotes;

(iii)       by no later than 7 days following the 15 day period referred to in paragraph 2 (ii) of this Order, confirm in writing the fee quote he intends to accept for the Design and Specifications Work;

3.         the parties will have no more than 7 days following receipt of Mr. Cambrey's written confirmation that he intends to accept a fee quote for the Design and Specifications Work, to apply to Court to seek relief in relation to Mr. Cambrey's intention to accept a fee quote, and if no application to the Court is made by any party, Mr. Cambrey may accept the fee quote without further notice to the parties;

4.         a special levy in the sum of $10,000.00 be assessed against the owners of strata lots 1, 2 and 3 in Strata Plan VR 1411 for the purpose of funding the consulting fees related to the investigation and design work for the repair of the Strata Corporation's walkways and foundation (the "Walkways and Foundation Work"), to be paid immediately in accordance with unit entitlement;

5.         before Mr. Cambrey authorizes the commencement of the Walkways and Foundation Work, he shall

(i)         provide to the parties the fee quotes he receives from engineers respecting the Work, he shall:

(ii)        allow the parties 15 days from the receipt of the fee quotes to ask questions or provide comments in relation to the fee quotes;

(iii)       by no later than 7 days following the 15 day period referred to in paragraph 5 (ii) of this Order, confirm in writing the fee quote he intends to accept for the Walkways and Foundation Work;

6.         the parties will have no more than 7 days following receipt of Mr. Cambrey's written confirmation that he intends to accept a fee quote for the Walkways and Foundation Work, to apply to Court to seek relief in relation to Mr. Cambrey's intention to accept a fee quote, and if no application to the Court is made by any party, Mr. Cambrey may accept the fee quote without further notice to the parties;

7.         a special levy in the sum of $3,648.81 be assessed against the owner of strata lot 1 for the purpose of funding the Administrator's expenses, but such assessment is subject to review by the Registrar both as to the quantum of the Administrator's fees and expenses and distribution of same between the three members of the Strata Corporation;

8.         a special levy in the sum of$13,308.67 be assessed against the owners of strata lots 2 and 3 for the purpose of funding the Administrator's expenses, to be paid immediately in accordance with unit entitlement;

9.         the parties may make reasonable inquiries of the Administrator respecting his expenses within 14 days of the date of this Order, and the Administrator shall respond to the inquiries within 14 days;

10.       the parties may review the Administrator's expenses before a Registrar of the Supreme Court provided that an appointment for a review is brought within 14 days of Mr. Cambrey responding to any reasonable inquiries received from the parties;

11.       Mr. J. Garth Cambrey may cause the Strata Corporation to obtain an insurance valuation report on the Strata Corporation's property to establish replacement value for insurance purposes and to amend the Strata Corporation insurance policy to reflect the value established by the insurance appraisal and that the cost of the insurance appraisal and any increase in premium required as a result of the appraisal be paid from the funds contained in the Strata Corporation account located at VanCity Credit Union;

12.       Mr. J. Garth Cambrey may sign a Form “I” on behalf of the Strata Corporation with respect to the new Bylaws established by the Cullen J. Order and attend to the proper registration of the bylaws at the Land Title Office;

13.       Mr. J. Garth Cambrey will report to the Court by no later than October 1, 2007; and

14.       the signatures of the Petitioner, R. Craig Fraser, and the Respondent, Maurice Duteau, are not required to approve the form of this Order.

[17]            The Administrator’s second report is dated September 21, 2007.  He reported that his total fees and disbursements from November 1, 2006 to August 31, 2007 amounted to $36,524.10.  He felt that he had not obtained sufficient information to determine whether it would be beneficial to the Strata Corporation to repair the building or alternatively wind it up and sought an extension of his appointment and recommended he report to the Court as soon as possible after February 29, 2008.  This report came before Master Tokarek October 1, 2007 who ordered the Administrator to report to the court by February 29, 2008.

[18]            A further Administrator’s Report was filed February 20, 2008.  He noted his fees and disbursements to January 31, 2008 totalled $46,454.09 being $18,329.59 for Administrator’s Fees and $21,055.90 for legal fees.  The Administrator’s recommendations in that report were as follows:

Although in the report of February 5, 2008 McArthur Vantell sets out budget repair figures, these figures still remain estimates.  A more accurate repair cost of building “B” will not be known until the design is completed and the specifications are tendered.  I expect the bids pursuant to the tender to be received before May 31, 2008.  McArthur Vantell is proceeding with this work as authorized in the Rice J. Order

At the time the bids are received for the building repair of building “B” a decision will be required to either proceed with the repairs or wind up the Strata Corporation under the terms of the Strata Property Act.  It is highly unlikely that the Owners would be able to follow through with the necessary building envelope repair and roof repair of building “B” or the walkway and foundation repairs as recommended by McArthur Vantell without the assistance of an Administrator.  It is equally unlikely that the Owners would be able to make a decision on the winding-up of the Strata Corporation without the assistance of the Court or an Administrator.

The attitude of the individuals that make up the Strata Corporation are so diverse and polarized that I do not believe the Strata Corporation could govern itself through a building envelope repair or a winding up the Strata Corporation.  Ms. Buchanan and Mr. Duteau remain of a similar mind and philosophy which is contrary to that of Mr. Fraser.  As a result, I recommend that my appointment continue until the building repair work of building “B” has been rendered.

I have not been requested by the court to comment on the possibility of winding up the Strata Corporation and seek judicial direction in this regard.

I noted in my July 12, 2007 report my concerns with respect to the governance of the Strata Corporation and the fact that it does not comply with the requirements of the Strata Property Act as it does not hold Annual General Meetings, approve budgets, elect strata council members, collect strata fees or adhere to many of the procedures and requirements of the Strata Property Act.

Although the legal operation of the Strata Corporation is not the most pressing issue of the Owners, the Strata Corporation does have a statutory obligation to operate its affairs consistent with the Strata Property Act.

There has not been cooperation of Owners, even in the simplest of matters, such as payment of the insurance premium.  It is my opinion that with the current ownership, the Strata Corporation is not able to govern its own affairs and I recommend that my appointment as administrator be expanded to include the powers and duties of the strata council and strata corporation as required under the Strata Property Act and bylaws of the Strata Corporation.  In addition, I recommend that the current bank account held by the Strata Corporation at Vancity Credit Union be closed and all remaining funds transferred to me in trust.

 (More)

Vancouver, Pendrell Place, Case Study: Leaky condo for sale; MLS Information incomplete; realtor asked to provide full disclosure of contingent liabilities

www.myleakycondo.com

* Leaks, Rot, Mould and Fraud *

 

February 27, 2008

 

Dear Mr. David Crawford aka Mr. Downtown:

 

Re:  MLS Information: Pendrell Place, 403 – 1819 Pendrell St., Vancouver BC

 

Your MLS Information is reproduced below for ease of reference.

 

You failed to mention the following:

 

>Pendrell Place is a leaky rotten condo complex.

 

>The present owners are facing significant contingent liabilities.

 

>Hundreds of thousands of dollars will be required to rehabilitate the defective common property.

 

>Tens of thousands of dollars will be required to rehabilitate the uninhabitable interior of Mr. Oldaker’s penthouse (Strata Lot 22).  Mr. Oldaker has been deprived of the use of his condominium at Pendrell Place because of leaks, rot and mould for eight years.

 

>Furthermore, depending on the results of several unresolved legal proceedings, some of the present-owners, and some of the past-owners, and perhaps others, may have to pay thousands of dollars in damages and court-ordered legal costs.

 

For more information about Pendrell Place: Vancouver, Pendrell Place, VR 1008, 1819 Pendrell Street

 

Please provide full disclosure to potential purchasers.

 

Yours truly,

 

James Balderson

  

 

 

Further Property Details

West End, Vancouver West

V683665
Price $429,900.00
Pendrell Place a spacious 2 bedroom suite. Located just steps to Denman street shopping, restaurants. Enjoy a stroll around English Bay and Stanley Park. This suite features 869 sq ft with newer carpets & paint 2 years ago, and new appliances. A solid concrete building. Enjoy a mountain view from your large North and West facing balcony. Great tenants who would like to stay.



# 403 1819 PENDRELL ST MLS® STYLE BEDRMS BATHS LOT SIZE V683665 NA  2 1 NA

REALTOR®: Crawford, David J RE/MAX Masters Realty, (604) 418-7653

 

 

 

 

 

 

 

Vancouver, Shon Yee Place, VR 2275: Architects claim CMHC responsible for leaks and rot; Court declares CMHC did not owe a duty of care to architects but did owe a duty of care to BC Housing Management Commission

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Strata Plan VR 2275 v. Davidson,

 

2008 BCSC 77

Date: 20080118
Docket: S77473
Registry: New Westminster

Between:

The Owners, Strata Plan VR 2275, Shon Yee Housing Society
and British Columbia Housing Management Commission

Plaintiffs

And:

John B. Davidson, David H. Simpson, Ronald Yuen,
Davidson/Yuen Partners, Northmark Projects Inc.,
Northmark Construction Ltd., 334888 B.C. Ltd. formerly
known as Northmark Construction Ltd., Concost Properties
Inc., DNG Services Inc., Robertson, Kolbeins, Teevan &
Gallaher Ltd. doing business as Robertson Kolbeins Teevan
Gallaher Associates and Robertson, Kolbeins, Teevan & Gallaher
Ltd., NDC Construction Ltd. and David Nairne & Associates Ltd.

Defendants

And:

Canada Mortgage and Housing Corporation

Third Party


Before: The Honourable Mr. Justice Butler

Reasons for Judgment

Counsel for the Plaintiffs

Scott MacKenzie

Counsel for the Defendants, John B. Davidson, David H. Simpson, Ronald Yuen and Davidson/Yuen Partners

Craig A. Wallace

Counsel for the Third Party

D. Ross Clark, Q.C.
Ryan Garrett

Date and Place of Hearing:

December 19 and 20, 2007

 

Vancouver, B.C.

[1]                In this action the plaintiffs make allegations of water ingress defects and deficiencies in a social housing project called Shon Yee Place (the “Development”).  The plaintiffs are the Shon Yee Housing Society (the “Society”), which administers and has a leasehold interest in the Development; the numbered strata corporation (“VR 2275”), which is owner of the real property the Development is built on; and the British Columbia Housing Management Commission (“B.C. Housing”).  The plaintiffs have claimed against, among others, the defendants John B. Davidson, David H. Simpson, Ronald Yuen and Davidson/Yuen Partners (collectively, the “Architects”) for damages caused by deficiencies in the Development.

[2]                The Architects have brought a third party claim against the Canada Mortgage and Housing Corporation (“CMHC”).  This claim is founded on the Architects’ assertion that CMHC owed a duty to the plaintiffs and to the Architects to disclose to them knowledge it allegedly possessed, or should have obtained, about the inadequacy of the design principles, construction methods and inspection procedures employed at the Development.

[3]                CMHC has brought this Rule 18A application seeking to dismiss the third party claims.  While the Statement of Claim was first filed in December 2002, the Third Party Notice against CMHC was not filed until August 2007.  Examinations for discovery of CMHC have been substantially completed by the Architects and document discovery has been substantially completed by these parties.  This application was heard on December 19 and 20, 2007.  The trial of the action is scheduled to commence on February 4, 2008.  Accordingly, the 18A application was heard one or two days more than 45 days before the date set for trial as required by Rule 18A (1.1).

Facts

[4]                The Development is a social housing project run by the Society to provide low cost accommodation to seniors.  The Development is a seven-storey building located at 628 East Hastings Street in Vancouver, B.C.  The building exterior uses a number of building envelope design types to protect the interior spaces from water ingress including an exterior insulation finish system (“EIFS”), a face-seal water penetration control strategy.  The building was designed in late 1987 and was substantially completed in October of 1988.  The Architects were retained by the developer, NDC Construction Ltd., to be the architects for the Development.

[5]                CMHC’s involvement in social housing arises as a result of an agreement entered into on April 23, 1986 between the Government of Canada (“Canada”) and the Government of British Columbia (the “Province”) for the administration and cost sharing of social housing programs (the “Global Agreement”).  On July 7, 1986, CMHC and the Province, as represented by the Minister of Lands, Parks and Housing, entered into an agreement to carry into effect the principles set out in the Global Agreement (the “Operating Agreement”).

[6]                Social housing programs funded under the Global and Operating Agreements were designed to assist needy households to obtain affordable accommodation.  The intent of the Global and Operating Agreements was to direct social housing funds to households in need, to implement an arrangement for cost sharing and to transfer responsibility for housing program delivery and administration to the Province.

[7]                Under the Global Agreement, Canada and the Province agreed, among other things:

(a)        that the Province would be responsible for the delivery and administration of social housing programs;

(b)        to undertake a joint planning process, which included the assessment of needs, income and priority groups in different geographic areas in the province and the creation of three-year plans based on the needs assessment;

(c)        to establish a Planning and Monitoring Committee (the “PMC”); and

(d)        to share the costs associated with certain social housing programs.

[8]                Under the Operating Agreement, CMHC and the Province agreed:

(a)        that the Province, through its agent B.C. Housing, would be the Active Party.  The Active Party was responsible for the delivery and administration of social housing programs.  Delivery and administration were defined to include all activity associated with any program including direct dealings with clients or sponsors as well as loan, project and agreement administration.

(b)        that two social housing programs would be sponsored:  the Non-Profit Housing Program, under which the Development was constructed, and the Rent Supplement Program.

(c)        that, as the Active Party, the Province would undertake the assessment of project feasibility, project selection, project development, inspection, client selection, development of occupancy guidelines, approval of project annual operating budgets, calculation of eligible project costs, and loan, subsidy and project administration.

[9]                Under the Operating Agreement, Canada’s responsibilities through CMHC were more limited.  CMHC was responsible for insuring loans made by approved lenders for capital financing for housing projects under Part I of the National Housing Act, R.S.C. 1985, c. N-11, for making loans under s. 37.1 of the National Housing Act for proposal development funding, and for making contributions pursuant to s. 56.1 of the National Housing Act to eligible contribution recipients to enable them to meet the costs of rental accommodation.

[10]            CMHC and the Province also agreed that they would jointly chair the PMC, which would meet to:

(a)        conduct a joint planning process to develop and monitor the implementation of the current three-year plan which identified the most cost-effective and appropriate social housing strategy to meet the objectives of the Global and Operating Agreements;

(b)        propose modifications to the social housing programs and program guidelines, including adjustments to market rents and Maximum Unit Prices (“MUP”);

(c)        provide a forum for the sharing of information resulting from research, studies, surveys and other activities; and

(d)        monitor compliance with the Global and Operating Agreements.

[11]            While Canada agreed to provide mortgage loan insurance through CMHC, under the Operating Agreement the Province was responsible for the underwriting process including site and plans examination, determination of loan amount and approval of financing terms and conditions.  The Province was also responsible for authorizing all loan advances and undertaking inspections to ensure compliance with the plans and specifications and to determine the value of the work in place.

[12]            The Province developed three-year plans under the auspices of the PMC.  The PMC also discussed and approved adjustments to MUPs.  MUP was an estimate of construction costs of modest housing, including land purchase, and was used to forecast the number of units which could be subsidized under the housing programs.

[13]            The quarterly PMC meetings were used so that the Province could keep CMHC informed of the progress of the current three-year plan.  The Province, as the Active Party, carried out the activities required to take a given housing project from concept through to completion including distribution of housing units by area within the province, allocation of funding, formal commitment of subsidies to housing sponsor groups, advancement of funds, inspection and project administration.

[14]            In British Columbia, CMHC did not take a direct role in the delivery or administration of any housing project during the relevant time period under the Non-Profit Housing Program.  The only information CMHC typically received about any particular project was when funding was committed by the Province on that project and when CMHC received undertakings to insure mortgage loans.

[15]            The Shon Yee Housing Association, which is a non-profit organization related to the Society, applied to the Province under the Non-Profit Housing Program for funding to build the Development.  As the Active Party, the Province had direct contact with those organizations throughout the planning and construction of the Development.  B.C. Housing approved the Development under the 1987 Non-Profit Housing Program.  The Province informed the Society of this in December 1987, and also informed the Society at that time that B.C. Housing would arrange for mortgage loan insurance and would act as overall administrator for the project.

[16]            The Development was constructed and occupied.  In March 1998, approximately ten years after occupancy, a consultant retained by the Society reported water damage, fungal growth, cracks in stucco finishing and concrete, roofing membrane failure and sealant failure in certain areas in the building.  Subsequent studies have been done and rehabilitation work with a cost of approximately $1.5 million has been recommended or performed.

[17]            The gist of the plaintiffs’ claims is that the Architects’ designs, plans and specifications were not adequate to prevent water ingress, that they failed to test or inspect the materials to ascertain if they were reasonably fit for the purpose intended, that they failed to ensure that the design conformed with applicable bylaws and other enactments, and that they failed to warn the plaintiffs of maintenance and inspection requirements of the building envelope system.  A significant part of the allegation rests on the assertion that there were significant shortcomings to the face-seal design that were known or should have been known by the Architects.

[18]            The Architects deny the plaintiffs’ claims but say that if they are at fault, CMHC, as a result of its extensive involvement in building envelope studies in British Columbia, also knew or should have known of the problems associated with a face-seal strategy and that it failed in its duty to let B.C. Housing and others know of these problems.

Position of the Parties

[19]            CMHC says that it does not owe a duty of care either to the plaintiffs or to the Architects. (More)

Vancouver, Governor's Tower: Appeal Court confirms Star Masonry as defendant in leaky condo case

COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Owners, Strata Plan LMS 1725 v. Star Masonry Ltd.,

 

2007 BCCA 611

Date: 20071204

Docket: CA034486

Between:

Owners, Strata Plan LMS 1725

Respondent

(Plaintiff)

And

Star Masonry Ltd.

Appellant

(Defendant)

Before:

The Honourable Madam Justice Rowles

The Honourable Mr. Justice Hall

The Honourable Madam Justice Levine

Oral Reasons for Judgment

S.G. Cordell

Counsel for the Appellant

J.G. Mendes

Counsel for the Respondent

Place and Date of Hearing:

Vancouver, British Columbia

30 November 2007

Place and Date of Judgment:                                                         Vancouver, British Columbia

4 December 2007

[1]                LEVINE, J.A.: This is a “leaky condo” case.  The appellant Star Masonry Ltd., was added as a defendant by the order of a Supreme Court chambers judge made in September 2006, 11 years after completion of the condominiums.  It appeals, claiming the chambers judge erred in finding that the commencement of the limitation period was postponed to May 2005, when the respondent owners received a second report from their engineering consultants (the first report having been received in April 1998), and in exercising his discretion in deciding that it was just and convenient to join the appellant as a defendant on the assumption that the limitation period had expired.  The chambers judge’s reasons for judgment may be found at 2006 BCSC 1358.

[2]                For the reasons that follow, I am of the view that the chambers judge erred in deciding that the commencement of the limitation period was postponed, but that he did not err in exercising his discretion to add the appellant as a defendant on the assumption that the limitation period had expired.  I would therefore dismiss the appeal.

Background Facts

[3]                The condominiums were built between 1993 and 1995.  The appellant entered into an agreement for the installation of brick masonry work on May 12, 1994.  Its work was completed in 1994.

[4]                Water problems were noticed from the time the condominiums were completed in 1995.  In October 1997, Levelton Consultants Ltd. (the “Consultants”) were retained by the respondent to investigate the leakage problems.  In April 1998, the Consultants issued a report (the “1998 Report”) which identified several possible problems with the construction, including several deficiencies in the masonry work.  The focus of the 1998 Report, however, was the “Exterior Insulation Finish System” (“EIFS”).

[5]                The respondent authorized a more detailed investigation into the nature of the leaks.  In a November 1999 report, the Consultants concluded that problems of the EIFS were secondary causes of leakage, and that there was a “more significant problem elsewhere in the assembly” (chambers judge’s reasons for judgment, para. 9).

[6]                The respondent commenced this action by issuing a writ on November 8, 2000.  A statement of claim was filed in November 2002, which included claims relating to masonry deficiencies identified in the 1998 Report.

[7]                From 2001 to 2003, the respondent performed a mixture of maintenance and repair work, but despite this work, leaks continued.  Pierre-Michel Busque, a professional engineer employed by the Consultants, first became involved in the respondent’s problems in 2001.  He deposed that until January 2005, he was “of the opinion that the brick veneer did not require replacement”.  In January 2005, he visited a unit which had a brick veneer exterior, and “concluded that the water ingress observed might be indicative of serious problems with the brick walls and not just a window problem”.  In May 2005, the Consultants performed further tests on the brick walls, and reported their findings to the respondent in June 2005.  In their report issued in August 2005 (the “2005 Report”), the Consultants concluded that the brick walls had to be removed, the deficiencies corrected and brick veneer replaced.

[8]                In September 2005, while reviewing documents, the respondent’s solicitor found the masonry contract between the appellant and the developer of the condominiums.

[9]                The respondent applied to join the appellant as a defendant, under Rule 15(1)(a)(iii) of the Supreme Court Rules, in November 2005.  The application was heard in August 2006.  In the meantime, in April 2006, the respondent started a second action against the appellant.

Applicable Principles

[10]            Section 4(1) of the Limitation Act, R.S.B.C. 1996, c. 266, permits a defendant to be joined to an action under any “applicable law”, despite the expiry of a limitation period:

If an action to which this or any other Act applies has been commenced, the lapse of time for bringing an action is no bar to

(d)        adding or substituting a new party as plaintiff or defendant,

under any applicable law, with respect to any claims relating to or connected with the subject matter of the original action.

[11]            Rule 15(5)(a)(iii) is an “applicable law” under section 4.  It provides:

At any stage of a proceeding, the court on application by any person may

(iii)       order that a person be added as a party where there may exist, between the person and any party to the proceeding, a question or issue relating to or connected

            (A)       with any relief claimed in the proceeding, or

            (B)       with the subject matter of the proceeding,

which in the opinion of the court it would be just and convenient to determine as between the person and that party.

[12]            The summary of the applicable principles set out by Master Joyce (as he then was) in Brito (Guardian ad litem of) v. Wooley (1997), 15 C.P.C. (4th) 255, [1997] B.C.J. No. 2847 at paras. 10 and 11 (S.C.)(Q.L) is helpful:

I will begin my analysis with a summary of the applicable legal principles:

1.         The addition of a party to an action under Rule 15(5) eliminates any limitation defence which might otherwise be available to the defendant if separate proceedings were brought: see Lui v. West Granville Manor Ltd. et al. (1987) 11 B.C.L.R. (2d) 273 (C.A.) ("Lui No. 2") at 295;

2.         The court may add a new party to an action notwithstanding that its effect will be to eliminate a limitation defence if it is just and convenient in all the circumstances to do so.  The existence of a limitation defence is a factor for the court to consider in determining whether it is just to add a party but is not determinative: see Lui No. 2, supra, at 302;

3.         The degree of interrelationship between the claim that is sought to be brought through the addition of the party and the existing claim is a factor to be considered as is the delay in making the application and any reasons which are advanced to explain the delay: see Cementation Co. (Can) Ltd. v. Amer. Home Assur. Co. (1989), 37 B.C.L.R. (2d) 172 (C.A.);

4.         If a limitation period has expired, then it may be that prejudice to the defendant is to be presumed.  However, prejudice to the defendant, whether presumed or demonstrated, is only a factor; it is not necessarily fatal to the application.  In the end, the court has a broad discretion to do what is just: see Teal Cedar Products (1977) Ltd. v. Dale Intermediaries Ltd. (1996), 19 B.C.L.R. (3d) 282 (C.A.) per Finch J.A.  In Tri-Line Expressways v. Ansari (1997), 143 D.L.R. (4th) 100 (B.C.C.A.) Lambert J.A. said that any presumption of prejudice (which was first mentioned in Lui v. West Granville Manor Ltd. (1985), 61 B.C.L.R. 315 (C.A.) ("Lui No. 1")) "should be confined to the sort of context in which it was first mentioned, namely the context of third party proceedings against a new party on an entirely new cause of action”.

In my view, the proper approach to applications such as this is as follows:

1.         If it is conceded that there is no accrued limitation defence or if the court can determine that fact on the interlocutory application, then the question is really limited to one of convenience since the party can always commence a separate action in which there will be no limitation issue.  The question is whether it is more convenient to have one action or two?

2.         If it is conceded that there is an accrued limitation defence or if the court can determine that fact on the interlocutory application, then the question is whether or not it would be just and convenient to add the party notwithstanding that by doing so the defendant will lose the benefit of the limitation defence.  If the answer to that question is yes, then the order should be made.  If the answer is no, then the order should not be made. 

3.         If the defendant alleges that there is an accrued limitation defence and the plaintiff denies that fact and the court cannot determine that issue on the interlocutory application, then the court should proceed by asking this question: assuming that there is a limitation defence, would it nonetheless be just and convenient to add the party even though by doing so the defence is taken away? If the answer to that question is yes then the order should be made.  In that event it does not matter whether or not, in fact, a limitation period has expired because in either case it would be just and convenient to add the party and any limitation defence will be gone. 

Chambers Judge’s Reasons for Judgment

[13]            There was no dispute that in this case, the required connection between the subject matter of the action and the appellant’s work on the condominiums was established. 

[14]            Similarly, there is no dispute with the chambers judge’s finding that the applicable limitation period is six years. 

[15]            The chambers judge first considered whether the limitation period had expired, by addressing whether its commencement was postponed.  He concluded, relying on the decision in Strata Plan No. VR 1720 v. Bart Developments Ltd. (1998), 53 B.C.L.R. (3d) 289 (S.C.) (“first reasons”), additional reasons at (1998), 53 B.C.L.R. (3d) 304; affirmed 1999 BCCA 585, (1999), 49 C.L.R. (2d) 161, that the limitation period had not expired because it did not begin to run until the Consultants reported to the respondent in June 2005 that the brick walls required replacement (at paras. 19-22).

[16]            The chambers judge then considered whether, in the event he was wrong that the limitation period had not expired, he should exercise his discretion to add the appellant as a defendant after the expiry of the limitation period (at para. 23).  He summarized the factors to be considered:

…the extent of the delay, the reasons for the delay, any explanation put forward, the degree of prejudice caused by the delay, and the extent of connection between the existing claims and the new cause of action: Letvad v. Finley (2000), 82 B.C.L.R. (3d) 296 (C.A.).

[17]            The chambers judge concluded that the appellant would not suffer any significant prejudice other than the “possible loss of a limitation defence” (at para. 25); that there was no delay in bringing the application to join the appellant once it was determined that deficiencies in the brick wall caused or contributed to the water damage, and any delay was “reasonable and excusable given the complexity of the action, the sheer volume of documents to be reviewed, and the evolving nature of the understanding of the plaintiff of the causes and extent of the deficiencies in the condominium” (at para. 26); that any loss of documents or witnesses would be offset by the appellant’s access to the masonry walls, which are intact and available for inspection (at para. 27), and by the availability of the documents of other parties (at para. 30); and that any actual prejudice to the appellant occurred before “the expiry of the limitation period that may have expired as early as 2004” (at para. 31).  He concluded (at para. 34):

On the assumption that a limitation period has expired, I am still of the view that it would be just and convenient that Star be added as a Defendant to this Action…

Postponement

[18]            The appellant claims that the chambers judge erred in deciding the question of postponement on this application to add it as a defendant.  It points out that the onus was on the respondent to prove that the limitation period was postponed (Perron v. R.J.R. Macdonald Inc. (1990), 43 B.C.L.R. (2d) 178 at 187 (C.A.)), by providing the evidence of the “facts within [its] means of knowledge” (Limitation Act, s. 6(4)), which are (as described in Levitt v. Carr (1992), 66 B.C.L.R. (2d) 58 at para. 38 (C.A.), leave to appeal refused (1992), 70 B.C.L.R. (2d) xxxiii (note) (S.C.C.)):

…firstly, those actually known, and secondly, those which would become known if he took such steps as would have been reasonable for him to take in the circumstances.

[19]            The appellant argues that the failure of the respondent to provide any direct evidence of its actual knowledge relating to the water leaks, or the steps taken by it to determine the causes and identify the proposed defendants, from the time when the water leaks were first noticed to the date of the application to add the appellant as a defendant, was fatal to its position that the limitation period was postponed.  The appellant was refused access to the minutes of the Strata Council and Strata Corporation, and was not entitled to any discovery of documents or parties.

[20]            The chambers judge based his decision on the postponement on the date of the 2005 Report, citing Bart Developments for the proposition that it is reasonable for a strata corporation to require expert opinion before deciding it has a cause of action with a reasonable prospect of success.  In my opinion, he erred in so limiting his enquiry.

[21]            The context of the finding of postponement in Bart Developments was a summary trial under Rule 18A.  The chambers judge in that case had a body of evidence outlining the steps the plaintiff strata corporation had taken in connection with water leaks in its building.  She concluded that the plaintiff had the “means of knowledge” with respect to certain of those leaks when they received an expert report.  She made no finding of postponement with respect to the other claimed deficiencies on the basis that the matter could only be decided at trial.  The conclusion that reliance on an expert report is reasonable can only be made in the context of evidence of the owners’ “actual knowledge”, and the steps taken by it to determine its legal position.  There was no such evidence in this case.

[22]            The cases are replete with observations of chambers judges that the determination of whether a limitation period has been postponed is difficult, and may be unjust, in the absence of a factual matrix that in many cases may only become evident following at least examinations for discovery and perhaps a trial: see for example, Perron at 188; Moore v. Castlegar & District Hospital (1995), 13 B.C.L.R. (3d) 31 at 40 (C.A.); Strata Plan LMS 343 v. Coquitlam (City) (2005), 45 B.C.L.R. (4th) 373 at para. 19, 2005 BCSC 1150; Doe v. Canadian Red Cross Society (1995), 5 B.C.L.R. (3d) 158 at para. 23 (S.C.); Strata Plan VR 2124 v. Rositch (2004), 40 C.L.R. (3d) 275 at paras. 14 and 15, 2004 BCSC 1662.

[23]            It was not necessary for the chambers judge to determine the issue of postponement on the application to add the appellant as a party.  In my opinion, it was an error, on the state of the evidence before him, to do so.

Just and Convenient

[24]            The appellant claims further that the chambers judge erred in exercising his discretion in finding that it was just and convenient to add it as a defendant.  It acknowledges that an appellate court is justified in interfering with the exercise of discretion by a chambers judge only if the chambers judge “misdirects himself, acts on a wrong principle or on irrelevant considerations, or if his decision is so clearly wrong as to amount to an injustice”: see Ward v. Kostiew (1989), 42 B.C.L.R. (2d) 121 at 127 (C.A.).

[25]            The appellant maintains that the chambers judge erred in three ways in applying the legal principles for determining whether joinder was just and convenient:

(a)        Although the chambers judge stated that he was assuming the limitation period had expired, the appellant says that on his analysis of the evidence, he assumed only “the possible loss of a limitation defence” (at para. 25).

(b)        The appellant argues that in assessing delay and prejudice, the chambers judge assumed that the commencement of the limitation period had been postponed to 1998, rather than commencing at the completion of the buildings in 1995 or earlier (at paras. 26 and 31).

(c)        The appellant says that in assessing the prejudice to the appellant, the chambers judge considered prejudice only after 2005, and should have considered all prejudice accruing between the date of the actionable wrong (1995 or earlier) and the application to add it as a defendant: see Strata Plan LMS 343 v. Coquitlam (City) at para. 32, distinguishing McIntosh v. Nilsson Bros. Inc. (2005), 48 B.C.L.R. (4th) 124 at para. 8, 2005 BCCA 297.

[26]            The appellant does not take issue with the chambers judge’s statements of the applicable legal principles, but with their application.  Some of the chambers judge’s comments, such as the reference to the “possible loss of limitation defence” and the apparent assumption that the commencement of the limitation period was postponed to 1998, betray some inconsistency in reasoning.  On consideration of all of his reasons for judgment, however, I would not interfere with the exercise of his discretion in concluding that adding the appellant as a defendant to the existing action, in all the circumstances, was just and convenient. 

[27]            We were advised on the appeal that the appellant took the position before the chambers judge that the limitation period commenced no later than 1998, although it could have commenced earlier.  Thus, the chambers judge’s assessment of the circumstances based on the limitation period expiring in 2004 was not a misdirection or a consideration of an irrelevant consideration, it was a response to the submissions of counsel.

[28]            As for the reference to the “possible loss of the limitation period”, in his conclusion (at para. 34), he stated that it was just and convenient that the appellant be added as a defendant “on the assumption that a limitation period had expired”, demonstrating that he had considered the matter on the proper principle. 

[29]            The principles applicable to the addition of parties make it clear that the discretion of the chambers judge is “completely unfettered and subject only to the general rule that all such discretion is to be exercised judicially, in accordance with the evidence adduced and such guidelines as may appear from the authorities”: see Teal Cedar Products (1977) Ltd. v. Dale Intermediaries Ltd. (1996), 19 B.C.L.R. (3d) 282 at para. 45 (C.A.), per Finch J.A.

[30]            While the evidence in this case would not support a finding of postponement, considerations of prejudice and delay do not require evidence of the plaintiff’s “actual knowledge” or due diligence: see Teal Cedar Products at paras. 56-59.  There are many other “leaky condo” cases that provide guidelines to considering prejudice and delay in the circumstances of the complexity of these actions, the volume and availability of documents, and the evolving nature of the understanding of condominium owners of the causes and extent of the deficiencies.  It is in this context that the chambers judge’s decision must be assessed.

[31]            On the whole of the evidence and the circumstances in this case, I would not interfere with the decision of the chambers judge.

[32]            It follows that I would dismiss the appeal.

[33]            ROWLES, J.A.: I agree.

[34]            HALL, J.A.: I agree.

[35]            ROWLES, J.A.: The appeal is dismissed.

“The Honourable Madam Justice Levine”

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