Coquitlam, The Madison: A Michael Audain / Polygon leaky rotten condo development

* * * * * caveat emptor * * * * *

The Madison (Coquitlam): Court rules leaky condo owners waited too long to sue window manufacturer




The Owners, Strata Plan LMS1212

v. City of Coquitlam et al





2005 BCSC 245



Registry:  Vancouver


Oral Reasons for Judgment
Master Barber
January 26, 2005






formerly Polygon Group Limited, POLYGON TOWN CENTRE
DEVELOPMENT LIMITED, formerly Polygon Development VII





Counsel for Plaintiff

V.P. Franco

Counsel for Proposed Defendant

J. Doyle

[1]                 THE COURT:  This is an application by the plaintiff to add NAP Building Producers, who was a window supplier for this building which comprises of 71 residential units in Coquitlam. 

[2]                 The building was built and completed between ’93 and March of ’94.  It is conceded that the company provided windows for the building.  Leaks were noticed almost immediately in the building in other areas other than the windows.  And there was some remedial work done by Polygon.  At any rate, by September of 1998 there was some concern about the windows, which concern was evidenced in the report that was done at that time by Morris & Hirschfield Limited.  It is in the material found at Exhibit B to the affidavit of C. Friesen sworn April 27th, 2004.  The comment with respect to the windows, doors and other wall penetrations is found at page 16 and following.  And there on page 17 it says,


The Madison (Coquitlam): Michael Audain loses in court; Winchester Investments added as defendant in leaky condo suit against Polygon companies



The Owners, Strata Plan LMS 1212 v. Winchester Investments Ltd.,


2004 BCCA 500

Date: 20041001

Docket: CA032139


The Owners, Strata Plan LMS 1212




Winchester Investments Ltd.






The Honourable Mr. Justice Smith

(In Chambers)


R.L. Basham, Q.C.

Counsel for the Appellant

V.P. Franco

Counsel for the Respondent

Place and Date of Hearing:

Vancouver, British Columbia

9 September 2004

Place and Date of Judgment:

Vancouver, British Columbia

1 October 2004


Reasons for Judgment of the Honourable Mr. Justice Smith:

[1]            This is an application for leave to appeal from an interlocutory order by which the Chambers judge added the appellant as a defendant pursuant to Rule 15(5)(a)(iii) of the Rules of Court.

[2]            I observe at the outset that the impugned order was discretionary and that leave to appeal such an order will be granted only where the order is clearly wrong, a serious injustice will occur, or the discretion was not exercised judicially or was exercised on a wrong principle: Strata Plan LMS 2019 v. Green, [2001] B.C.J. No. 741 at para. 6 (QL), 2001 BCCA 286, Proudfoot J.A. (In Chambers); Yang v. Yang, [2000] B.C.J. No. 1765 at para. 3 (QL), 2000 BCCA 486, Saunders J.A. (In Chambers).

[3]            The appellant has the burden of establishing the necessary conditions for leave.  They are described by Saunders J.A. in Goldman, Sachs & Co. v. Sessions, [2000] B.C.J. No. 998 at para. 10 (QL); 2000 BCCA 326 (In Chambers):

[10]  The criteria for leave to appeal are well known.  As stated in Power Consolidated (China) Pulp Inc. v. B.C. Resources Investment Corp. (1988), 19 C.P.C. (3d) 396 (C.A.) they include:

(1)  whether the point on appeal is of significance to  the practice;

(2)  whether the point raised is of significance to the action itself;

(3)  whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and

(4)  whether the appeal will unduly hinder the progress of the action.

[4]            In the appellant’s memorandum of argument, it states the point in issue in this way:

The learned Chambers Judge erred in law and was clearly wrong in deciding that there was some evidence to establish a possible partnership between Winchester Investments Ltd. (the “Appellant”) and Polygon Town Centre Development Ltd. and Polygon Construction Ltd. sufficient to add the Appellant as a Defendant to the proceedings.

[5]            Before discussing that issue, I will deal with a second issue raised during oral submissions by counsel for the appellant that she urged should be considered on the basis of its general importance.  The question is whether an application to add a party under Rule 15(5)(a)(iii) may be granted on the basis of pleaded allegations alone, or whether the applicant has the burden of establishing by affidavit evidence that a real issue exists between it and the proposed new party.  Counsel for the appellant submits that there are conflicting decisions on the point in the Supreme Court.  She wishes to argue that the cases holding that no affidavit evidence is required have been decided incorrectly.

[6]            However, as counsel for the respondent points out, the Chambers judge did not grant the application in this case on the basis of the allegations in the proposed amended pleading; rather, she relied on filed affidavits to reach her decision.  She said:

[14]  There is evidence before me through affidavits as to the existence, or not, of an issue between the parties.  As a result, I do not find it necessary to delve into the legal debate as to whether evidence is required on an application under Rule 15(5)(a)(iii).  I am satisfied that the plaintiff has put forth some evidence to take this matter beyond a bare assertion contained in the pleadings, as alleged by Winchester.

[7]            Thus, the issue identified by the appellant does not arise in this case and, for that reason, I refuse leave to appeal on this issue.  However, as counsel for the appellant stressed the general importance of the question, I add, as a matter of interest, that leave to appeal has been granted on this issue in The Owners, Strata Plan LMS 1816 v. Acastina Investments Ltd. and Marjon Investments Ltd. (16 July 2004), Vancouver Registry, CA032029 (C.A.), a case in which the chambers judge added a party on the basis of pleaded allegations alone and rejected the submission that affidavit evidence was necessary.  The appeal is set for hearing next month.

[8]            I turn now to the issue as framed in the appellant’s memorandum of argument.

[9]            The action may be described as a “leaky condo” case.  The owners of a building known as "The Madison" claim damages for breach of contract and negligence; they allege that construction deficiencies resulted in water damage to The Madison.  The action, as it was initially constituted, included as defendants Polygon Town Centre Development Limited (previously known as Polygon Development VII Limited) and Polygon Construction Ltd.  The plaintiff claimed against the Polygon companies as "the developer and general contractor for The Madison". 


The Madison (Coquitlam): This is another Polygon leaky condo case; court orders Winchester Investments Ltd. added as a defendant



The Owners, Strata Plan LMS 1212 v. Coquitlam (City of) et al.,


2004 BCSC 852

Date: 20040625
Docket: L013696
Registry: Vancouver


The Owners, Strata Plan LMS 1212



City of Coquitlam, Polygon Town Centre
Development Limited (previously known as
Polygon Development VII Limited),
Polygon Construction Ltd., Graham F. Crockart,
Graham F. Crockart, Architect Inc. and
John Doe One through John Doe Nine


Before: The Honourable Madam Justice Dillon

Reasons for Judgment

Counsel for the Plaintiff

V.P. Franco

Counsel for the Defendants

R. Basham, Q.C.

Date and Place of Trial/Hearing:

June 17, 2004


Vancouver, B.C.


[1]            The plaintiff seeks to add two parties to this action, John Doe Ten, and Winchester Investments Ltd., formerly known as Polygon Group Limited.  The application to add John Doe Ten is allowed as there was an error in the numbering on the writ of summons.

[2]            The application to add Winchester Investments Ltd. (hereafter “Winchester”) is based on Rule 15(5)(a)(iii) of the Rules of Court.  The plaintiff seeks to add Winchester to plead that Winchester acted as developer and general contractor of “The Madison”, a 71 residential unit condominium owned by the plaintiff and located at 2990 Princess Crescent, Coquitlam, B.C.  The plaintiff also seeks to plead that Winchester, as one of the “Polygon defendants”, “was at all material times a partner together with the other Polygon Defendants in a partnership and their businesses were inextricably interwoven together as a partnership, in that each of the Polygon Defendants carried on the business of real estate development and construction, including, without limitation, the design, development and construction of The Madison, in common with each other with a view to a profit, under the name of “Polygon” and maintained for that purpose a common office at 1800 Spyglass Place, Vancouver, British Columbia, V5Z 4K8.”

[3]            The plaintiff claims against all Polygon Defendants for breach of contract, negligence, breach of duty of care, negligent misrepresentation, breach of warranty and breach of duty to warn.

[4]            Winchester opposes the application and says that there is only a bald assertion of a partnership between Winchester and the Polygon Defendants, so that the plaintiff has failed to establish a cause of action against Winchester.  Winchester further says that if there exists a real issue or question to be tried, it is not just and convenient in all of the circumstances for Winchester to be joined.

Background Facts

[5]            The plaintiff is a Strata Corporation commonly known as Harbour House and located at 2990 Princess Crescent, Coquitlam, British Columbia (the “Madison”).  The Madison consists of 71 residential units and was constructed between July 1993 and March 1994.  Complaints of leaks were noted as early as April 26, 1994.  Throughout 1994, 1995, 1996, and early 1997, the Strata Corporation relied upon the Polygon Weather Shield Warranty to deal with the water leaks that had appeared.  Because the efforts of the developer and general contractor failed to adequately address the water leakage problems that were occurring at the Madison, the Strata Corporation retained Morrison Hershfield (“MH”) in the spring of 1998 to review the condition of the building envelope.  On September 14, 1998, MH provided its Building Envelope Report, which suggested significant problems with water ingress and associated deterioration.  MH suggested further investigations and widespread repairs.  The results of MH’s further investigations were noted in their report dated December 30, 1998 and entitled “Further Assessment of the Balconies:  The Madison”.  This report confirmed MH’s advice that the face sealed stucco cladding on all of the balconies required replacement with a rainscreen or drained cavity system.

[6]            Polygon Town Centre Development Limited (“Polygon Development”) and Polygon Construction Ltd. (“Polygon Construction”) were given copies of the MH Building Envelope Report and invited to address the water ingress problems.  They offered to conduct their own alternate building envelope remediation which was contrary to MH’s recommendations.  The Strata Corporation did not take them up on their offer.  The Strata Corporation retained MH to prepare specifications to remediate the building envelope as per their specifications.  Phase I of the repairs were undertaken between October 1999 and August 2000.  Phase II of the repairs were undertaken between March 2001 and January 2002.  The total cost of the remediation to the building envelope was approximately $900,000.

[7]            The plaintiff argued that the earliest the Strata Corporation could have discovered that there was a cause of action with respect to construction deficiencies and resultant damage was with the receipt of the September 14, 1998 MH Building Envelope Report, which revealed the systemic failure of the Madison building envelope.  The defendant says that the deficiencies were first apparent in April 1994.