Court sends mould case back to arbitrator; Port Coquitlam "premises not suitable for occupation"; "an entirely hideous experience"

 

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Erickson & Turner v. The Attorney General of British Columbia et al.,

 

2007 BCSC 353

Date: 20070313
Docket: S102450
Registry: New Westminster

Between:

Mary Erickson & Glenn Turner

Petitioners

And

The Attorney General of British Columbia, The Residential
Tenancy Board & Noreen Smith

Respondents


Before: The Honourable Madam Justice Bruce

Reasons for Judgment

Counsel for the Petitioners

Appeared on their own behalf

Counsel for the Respondent, Ms. Smith

C. Treop

Date and Place of Trial/Hearing:

January 30, February 23, 2007

 

New Westminster, B.C.

INTRODUCTION

[1]                This is an application by the Petitioners pursuant to the Judicial Review Procedure Act R.S.B.C. 1996 c. 241 for review of a decision of an arbitrator acting under Section 58 of the Residential Tenancy Act  S.B.C. 2002 c. 78. The arbitrator’s decision, recorded under Burnaby File No. 186657, concerned the Petitioners’ claim for damages arising out of the Respondent landlord’s failure to take remedial steps to eliminate the mould found in the premises the Petitioners had rented, which premises were located at 320 Prairie Avenue, Port Coquitlam, BC (the “Premises”).

[2]                As a preliminary matter, I found the Petitioners could not proceed without first serving the Attorney General of British Columbia and the Residential Tenancy Board as they are proper parties to the application for review. The application was adjourned to allow the Petitioners to serve all the interested parties, including Ms. Smith who was the landlord. At the resumption of the hearing, Ms. Smith appeared represented by counsel. Neither the Attorney General nor the Residential Tenancy Board appeared, although duly served.

[3]                The Petitioners’ application alleges the arbitrator committed a jurisdictional error by concluding he lacked the statutory authority to order certain relief sought, by failing to take into account relevant evidence of the damages claimed, and by taking into account irrelevant factors in refusing the damages sought. Further, the Petitioners allege they were denied a fair hearing because the arbitrator refused to consider evidence that they presented at the hearing.

[4]                At the conclusion of the hearing, counsel for Ms. Smith consented to the Petitioners’ application being referred back to the Residential Tenancy Board for a rehearing on the merits based upon a patently unreasonable error of law and a denial of a fair hearing.

OVERVIEW AND CHRONOLOGY

[5]                The Petitioners rented the Premises from the Respondent from October 13, 2003 to August 31, 2004. In the early spring of 2004 the Petitioners and their daughter began to experience respiratory problems and decided to have the Premises inspected for the presence of mould. In May 2004 representatives of Aztech Environmental Consulting Services Ltd. examined the Premises and identified several problems, including water ingress throughout the crawl space, water ingress in the attic due to a compromised roof, visible mould on the underside of the floor overtop the crawl space and no vapour barrier, liquid effluent ponding in the rear yard near a dry well and a sewage disposal system, a rodent infestation in and about the dwelling, poor ventilation in the house and crawl space, and a musty, dank smell, coupled with a chemical odour, throughout the dwelling.

[6]                The testing conducted by the consultants led to the following conclusions and recommendations:

The combination of sampling conducted and the on-site inspection of the above-mentioned premises has revealed that there could be a health hazard associated with residing in these premises. The airborne concentrations of mould quantitatively are low however the types of mould present (Aspergillus) is reason for concern given the sensitivity of the occupants and young age of the child.

In addition from a public health perspective there are additional concerns pertaining to both the extent of the rodent infestation, and the onsite sewage disposal system and the potential for disease transmission.

Proper remediation should be carried out to ensure the living environment inside this home is improved and any possibility of disease transmission is eliminated from the potential sources mentioned above.

It is our recommendation that the occupants of the home should find alternative accommodation until such time as the health related issues identified above have been resolved.

[7]                On June 4, 2004 an Environmental Health Officer employed by the Fraser Health Authority conducted an on-site inspection of the Premises. Mr. Yeung observed extensive mould growth in the attic and water leaking through the roof; water spots on the ceiling of the master bedroom; stains and filth built up on the sun room glass roof. In addition, Mr. Yeung recommended the following remedial steps be taken:

I would recommend the house be professionally cleaned up by a restoration company. Affected items should be sanitized before use in order to get rid of any potential mould growth. Water damaged walls should be checked by certified housing inspector to ensure building is structurally sound. …

[8]                The Petitioners consulted with their family doctor after receiving the Aztech Report and his recommendation was to leave the Premises until the mould had been cleaned up. As a consequence, the Petitioners and their three year old daughter moved into a motel in or about June 2004. A further medical report was received from Dr. Julio Montaner, who is a specialist in Internal Medicine. The Petitioners were in the care of Dr. Montaner because they are HIV positive. His report dated July 2, 2004 says:

… I have known them [Petitioners] for some time in relationship to the HIV infection.  Recently they developed respiratory symptoms that were quite concerning. They were assessed by Dr. Wong who is a clinical immunologist and allergist. He confirmed a relationship between their symptoms and the house environment. He has recommended, as I have done in the past, that they should not move back to their rental home and that the remaining clothing be dry cleaned and furniture washed. …

Mr. and Mrs. Erickson are advised not to move back into that facility and not to enter the facility until proper sanitation takes place along the lines of the recommendation of the environmental health officer …

[9]                On July 2, 2004 the Petitioners appeared before an arbitrator appointed pursuant to the Residential Tenancy Act seeking orders against the Respondent in regard to the repairs necessary to remove the mould from their rental premises, a reduction in their rent, and the costs incurred for the environmental testing by Aztec. Based upon the evidence before him, Arbitrator Wotherspoon concluded the premises were not fit to be occupied:

The evidence before me satisfies me that the premises, at this time, do not comply with the requirements of section 32 [Residential Tenancy Act] in that they are not suitable for occupation by a tenant. I come to this conclusion based on the evidence of mould contamination in the premises and in particular the presence of the mould species Aspergillus which is a known pathogen. … (Decision dated July 7, 2004 at para. 12)

[10]            Arbitrator Wotherspoon ordered the Respondent to remove all traces of mould throughout the premises. In addition, he ordered that the work be done by a professional restoration company and that the premises be inspected to ensure they were structurally sound and the roof was weather tight. All work recommended by the inspector also had to be carried out. Finally, Arbitrator Wotherspoon ordered the Respondent to begin this work forthwith and complete it within 30 days of the order.

[11]            The Petitioners’ rent was reduced retroactively as of June 1, 2004 and was to remain at the lower rate until all the required work had been completed. The Respondent was also ordered to pay the cost of the Aztec report and the Petitioners’ costs.

[12]            The Respondent failed to carry out the repairs ordered by Arbitrator Wotherspoon and, as a consequence, the Petitioners applied to this Court for an order of contempt. The parties appeared before Mr. Justice Williams on August 30, 2004. During these proceedings, the Respondent advised the Court that the premises had been sold and that the Petitioners’ tenancy would be terminated effective August 31, 2004. However, the Respondent also assured the Court that she was going to carry out the repairs notwithstanding the change in ownership. While Mr. Justice Williams did not find the Respondent in contempt of the arbitrator’s order, he adjourned the matter for thirty days to determine whether the work was in fact completed and awarded costs to the Petitioners. In addition, Mr. Justice Williams made the following comments about the Petitioners’ experience:

I am not in any way critical of Ms. Erickson for being here because based on the material it is quite apparent to me that this has been an entirely hideous experience that she has gone through and that is most regrettable. (Oral Reasons August 30, 2004 New Westminster Reg. No. L087735 at para. 8.)

[13]            The Respondent notified the Petitioners that the Premises were to be sold and their tenancy terminated because the new owners were going to occupy the Premises themselves and had no intention of immediately renting it. However, the Petitioners discovered that the new owners were intending to rent out the Premises immediately after the change in ownership as a result of a rental advertisement they noticed in the Province newspaper on August 28, 2004. The intention of the new owners was confirmed by the Respondent in the proceedings before Mr. Justice Williams on August 30, 2004. As a consequence of this discovery, the Petitioners again applied to the Residential Tenancy Board for a remedy against the new owners for wrongfully terminating their tenancy.

[14]            The Petitioners’ application under s. 67 of the Residential Tenancy Act took some time to be heard; however, on May 2, 2005 Arbitrator Wotherspoon concluded that the termination had been wrongful. He ordered the new owners to pay damages to the Petitioners in the amount of $3,050, which included their $50 filing fee. The new owners applied for a review of this order, but were not successful.

[15]            The Petitioners continued to reside in a motel until the end of August 2004 when it became apparent that they would not be able to return to the Premises due to the change in ownership and the Respondent’s assertion that the new owners would not be renting out the space. They left the motel and moved into a camper where they lived rather uncomfortably until finding alternate accommodation on October 1, 2004.

[16]            As alluded to by Mr. Justice Williams in the judgment of August 30, 2004, the Petitioners intended to purse a claim against the Respondent for the expenses incurred while living in the motel. Because they could not live in the Premises due to the presence of the mould, the Petitioners believed the Respondent should be responsible for the additional expenses incurred as a result of her failure to make the necessary repairs.

[17]            After their dispute with the new owners was resolved in May 2005, the Petitioners sought legal advice in respect of an action against the Respondent for damages. The Petitioners first sought assistance from the Law Students Legal Advice Program at UBC; however, by letter dated November 18, 2005, the Clinic informed the Petitioners that their proposed action was outside the scope of their program. The Petitioners next sought representation by legal counsel, but they could only afford to retain counsel on a contingency fee. Stuart Gray of Harrop & Co. considered their proposal for some time, but finally refused to act on behalf of the Petitioners based on a contingency fee arrangement. His refusal was confirmed to the Petitioners, along with the return of their documents, by letter dated May 9, 2006.

[18]            The Petitioners decided to apply for a remedy under the Residential Tenancy Act without the assistance of legal counsel and ordered a copy of the transcript of proceedings and the oral judgment of Mr. Justice Williams for the purpose of their application. They did not receive these documents until August 4, 2006.

[19]            On August 22, 2006 the Petitioners filed their application for damages against the Respondent and sought a hearing before an arbitrator appointed under the Residential Tenancy Act. Their application sets out a claim for $25,000 in damages as follows:

$6,800.43 for hotel expenses

$1,655.24 for food while at the motel

$480.88 for the replacement of their bed damaged by mould

$220.12 for removal of contaminated items from the Premises

$89.97 for transcripts of the proceedings before Mr. Justice Williams

$321.00 for environmental testing

$394.64 for replacement of food in their pantry in the Premises

$15,000 for aggravated damages related to their health concerns

[20]            Apart from the claim for aggravated damages, the Petitioners attached receipts for the specific items listed in their claim.

[21]            The hearing before the arbitrator took place on October 31, 2006 and a written decision from Arbitrator Coulson of the same date awarded the Petitioners $1,500 damages without costs of the application. The arbitrator’s decision does not contain a recitation of the evidence he took into account in coming to his decision. Nor does the decision outline the evidence presented by the Petitioners with respect to their claim for damages. After briefly reviewing the history of the dispute, Arbitrator Coulson came to the following conclusions with respect to all claims apart from the hotel and food expenses:

The application includes a claim for aggravated damages of $15,000. I am mindful of the comments by the court in its decision of August 30, 2006. There is no evidence to support such an award and it was dismissed at the hearing. The remainder of the claim is for damages alleged to arise from the condition of the rental unit and costs of the litigation. I have no jurisdiction to award costs of the litigation other than a filing fee and the claims for transcripts, photocopying and environmental testing must be denied. The claims for a new bed and removal of contaminated items … were not proven to be attributable to the mould problem or any breach by the respondent, are too remote and are denied.

[22]            In regard to the Petitioners’ claim for hotel and food expenses, Arbitrator Coulson held:

The applicants claim for hotel costs of $6,800.43, being the alleged cost of a hotel from May 25, 2004, when the applicants decided the rental unit was uninhabitable and vacated, to August 31, 2004. The applicants also claim for food of $1,655.24 over the same period. The respondent says that, if the applicants have a claim for breach of the tenancy agreement, which is denied, then the applicants have a duty to mitigate and cannot claim for the entire period. The respondent says that, accepting the date the applicants decided to vacate, a reasonable period is until the end of the next following month, June 30, when the tenancy could otherwise have been ended.

The respondents did receive some recompense from Arbitrator Wotherspoon for the presence of the mould. Arbitrator Wotherspoon on July 7, 2004 ordered a 75% abatement in the rent of $1,500 per month to $350 from June 1, 2004.

The failure to repair in a timely manner is a breach by the respondent. However, I am mindful that this application was filed shortly prior to the expiry of the applicable two year limitation period in the Act. No acceptable excuse was provided for the delay. The fact this action is started just within the time provided under the Limitation Act without providing valid reasons for the delay does suggest the relatively low degree of importance that the claimant has towards seeking compensation: Parks v. The Board of School Trustees 2003 BCPC 0003 at para. 53. The position of the respondent is reasonable and I award $1,500 for the month of June to the applicants as compensation for alternate accommodation. The claim for food is denied as an expense to be incurred in any event.

…The claim for the filing fee is denied reflecting the degree of success.

[23]            The Petitioners presented Arbitrator Coulson with two decisions of Arbitrator Wotherspoon addressing the Respondent’s attempts to terminate their tenancy agreement. The Respondent served a notice to end the tenancy on the Petitioners on June 17, 2004 effective June 30, 2004 on the ground that the Petitioners “On numerous occasions you interfered with the Real Estate Agents showing the house, in a negative way. You interfered and influenced our ability to sell the property.” By a decision dated July 2, 2004 Arbitrator Wotherspoon set aside the notice and awarded costs to the Petitioners. He also noted that the property now had been sold and that the Petitioners had been given two months notice with respect to the premises.

[24]            The Respondent also gave the Petitioners notice to terminate their tenancy on June 29, 2004 for late payment of rent. Arbitrator Wotherspoon, in a decision dated July 16, 2004 set aside the notice and commented, “I understand that this tenancy will be ending in any event at the end of August as the premises have been sold.”

ARGUMENT

[25]            The Petitioners argue the decision of Arbitrator Coulson should be set aside and the matter remitted to the Residential Tenancy Branch for reconsideration generally. The Petitioners maintain they were denied a fair hearing by the arbitrator because he failed to give any weight to the evidence submitted in respect of their claim. Further, the arbitrator decided the case on an irrelevant ground; that is, the delay in bringing the application. The Petitioners, as self represented litigants, say they were not informed that delay was an issue to be addressed. Had the arbitrator disclosed this concern, evidence would have been provided that explained the reasons for the delay.

[26]            The Petitioners also argue the arbitrator’s decision that he had no jurisdiction to award the costs of the environmental testing is patently unreasonable as similar costs were awarded in the earlier decision of Arbitrator Wotherspoon.

[27]            Finally, the Petitioners argue the decision of the arbitrator is patently unreasonable because it ignored evidence submitted by Petitioners including photographs of the Premises showing the damage, photographs of the mould damage to the bed, the failed attempts of the Respondent to terminate their tenancy prematurely, and the decision of Arbitrator Wotherspoon that the termination of their tenancy effective August 31, 2004 was wrongful.

DECISION

[28]            The Respondent has consented to the Petitioners’ application being referred to the Residential Tenancy Board for a rehearing on the merits. The Court has agreed to provide some guidance to the Board in respect of that rehearing.

[29]            In my view, Arbitrator Coulson committed two reviewable errors. First, he failed to give the Petitioners an opportunity to lead evidence explaining the lengthy delay in filing their application with the Residential Tenancy Board. In doing so, the Arbitrator denied the Petitioners a fair hearing.

[30]            Second, Arbitrator Coulson’s decision to reduce the damages otherwise payable to the Petitioners for hotel and meal expenses based upon the delay in bringing their application was patently unreasonable. Provided the Petitioners acted within the time limits set out in the Act, the date they filed their application with the Board was irrelevant to a claim for damages flowing from the landlord’s failure to keep the Premises in proper repair. There was no evidence of any prejudice to the Respondents arising out of the delay.

[31]            The decision of Arbitrator Coulson is thus quashed and the Petitioners’ application is referred back to the Residential Tenancy Board for a rehearing on the merits.

[32]            The Petitioners were awarded costs for their appearance on January 30, 2007 in the amount of $250 due to the Respondent’s failure to attend on that date. These costs were ordered to be paid within seven days of February 23, 2007.

[33]            The Petitioners shall be entitled to the return of their original documents marked as exhibits in this proceedings upon application to the Registry.

“C. Bruce, J.”
The Honourable Madam Justice C. Bruce

Leaky condo purchaser wins suit against realtor

canada, canadian search engine, free email, canada news
 
Leaky condo costs realtor $20,000
Judge holds agent to promise of no soggy suite in Port Moody complex
 
Jack Keating
The Province

CREDIT: Jason Payne, The Province
Former MP and journalist Simma Holt won a lawsuit against her real-estate agent for 'negligently misrepresenting' the water-damaged state of a Port Moody condo.

A realtor who sold former Liberal MP Simma Holt a leaky condo after promising she wouldn't has been ordered to pay Holt almost $20,000.

"She really seduced me into buying this," Holt said yesterday. "And I trusted her implicitly. Never trust anybody."

The realtor, Ada Van Leeuwen, was working for Royal LePage when she sold Holt the Port Moody condo in May 1999.

"I find Ada Van Leeuwen negligently misrepresented to Simma Holt the state of the condominium being purchased, and that her interests were properly protected when they were not," wrote B.C. Supreme Court Justice Victor Curtis.

"She told her she would not sell her a leaky condo and that is exactly what happened in circumstances in which Ada Van Leeuwen either knew or ought to have known the condominium had significant water ingress problems."

Curtis noted that Van Leeuwen in her evidence said: "I assured her I would not sell her a leaky condo."

He also noted that Holt was "reasonably relying on the advice of Ada Van Leeuwen, who had encouraged her to do so."

The judge found Van Leeuwen negligent and ordered her to pay Holt $14,527 of the repair assessment Holt did not recover by other means, plus $5,000 in damages.

Mere days after the purchase, Holt was outraged to find that she was liable for close to $30,000 in damages.

"I was furious," Holt said yesterday. "And I went immediately to a lawyer because this had been foisted on me. And she knew that the place was rotten.

"I took possession and moved in two days later. Six days after I moved in, I had an assessment for $29,000 for a leaky condo. It was rotten. And I didn't know it.

"I mean, it was downright fraud as far as I was concerned.

"I mean, six days and I'm responsible for a leaky condo."

Holt, who had a witness to the realtor's assurances, said the matter dragged on for years. It finally went to trial last month and the written decision was handed down last week.

"They stalled for eight years," said Holt. "I think they were trying to get me to die before [this went to court]. I'm 84.

"I suppose it sets a precedent. Certainly, I saw it to the end. They wanted to settle for just costs. They wanted to give me $1, which offended me so much that I said I'm going to court even if I have to spend the last cent.

"But I was taken. I was then 77 years old.

"I'd lost half of my life savings. I lost my career [as a writer] for eight years. I wanted to finish my writing. That's why I bought the place. All I wanted was a place to write. I had about eight books on my computer I wanted to finish."

The Condo Homeowners Association was pleased by the decision.

"It's an indication that real-estate agents are accountable," said executive director Tony Gioventu.

He advised buyers to get agreements on transactions and purchases in writing to "make sure that you can actually verify the information you've got."

"It's positive news for consumers that you can hold the parties to account," said Gioventu. "To do that, you're going to need to have some witnesses and evidentiary material, though. Get it in writing."

Holt, the Vancouver-Kingsway MP from 1974 to 1979 and a former Vancouver Sun reporter, moved out of the Maude Road condo in June 2004 and now lives in downtown Vancouver.

Van Leeuwen could not be reached for comment last night.

jkeating@png.canwest.com

© The Vancouver Province 2006




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Port Coquitlam, Chancellor Court LMS 989: BC Court of Appeal grants leave to appeal in Redekop leaky condo case

COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

The Owners, Strata Plan LMS 989 v. Redekop et al.,

 

2003 BCCA 613

Date: 20031114


Docket: CA031293

Between:

The Owners, Strata Plan LMS 989

Respondent

(Plaintiff)

And

John Redekop d.b.a. John Redekop Construction
and Premier Pacific Developments Ltd.

Appellants

(Defendants)

 


 

Before:

The Honourable Mr. Justice Smith

(In Chambers)

 

D. Letkemann

Counsel for the Appellant

M.G. Bawolska

Counsel for the Respondent

Place and Date of Hearing:

Vancouver, British Columbia

31 October 2003

Place and Date of Judgment:

Vancouver, British Columbia

14 November 2003

 


Reasons for Judgment of the Honourable Mr. Justice Smith:

[1]         The appellants seek directions as to whether leave is required to appeal from an order of the Supreme Court adding them as defendants in the action.

[2]         The action is of the type known colloquially as “leaky condo cases.”  The respondents are the owners of a condominium that suffers from water damage allegedly caused by the fault of the defendants.  They commenced action against a number of defendants involved in the project.

[3]         The appellants were, allegedly, members of a joint venture that developed the condominium project.  The respondents brought application to add them as defendants pursuant to Rule 15(5)(a)(iii) of the Supreme Court Rules, which permits the addition of a party if the Chambers judge is satisfied that it would be just and convenient to determine an issue as between the proposed party and an existing party.  The respondents allege breach of contract and negligence in the construction, inspection, and design of the project.

[4]         The appellants opposed the application on the ground that it would not be just and convenient to add them for several reasons, including that the six-year limitation under s. 3(5) of the Limitation Act, R.S.B.C. 1996, c. 266, had expired.  They submitted that the postponement provisions in s. 6(3) of the Act were not applicable in the circumstances.  The Chambers judge concluded:

[20] ...However, it is not necessary for me to determine the precise limitation period as against the Proposed Defendants for the purposes of this application.  I need not go beyond finding – as I do – that even by adopting the position most favourable to the Proposed Defendants, the six year limitation period has not yet elapsed.

In the result, she found that the requirements of Rule 15(5)(a)(iii) had been satisfied and ordered the appellants added as defendants in the action.

[5]         The appellants submit that their addition as a party eliminates any limitation defence that might have been available to it had the respondents sued them in a separate action, relying on Lui v. West Granville Manor Ltd. (1987), 11 B.C.L.R. (2d) 273 at 295 (C.A.).  It follows, in their submission, that the order finally disposes of the rights between the appellants and respondents and is therefore a final order for which leave is not required to appeal.

[6]         Had the application been dismissed, it would have finally disposed of the rights between the parties. However, although the impugned order finally disposes of a right between the parties (the potential limitation defence), it does not finally dispose of the rights between the parties.  The respondents' allegations of breach of contract and negligence remain to be resolved.  Thus, the order is what has been described as a dual nature order.

[7]         The proper approach to such orders has been described recently in Zanetti v. Bonniehon Enterprise Ltd. 2002 BCCA 555 (Ryan J.A., in Chambers):

[9]  Until relatively recently, the “application approach” was favoured.  The application approach dictates that no matter how a dual nature order is determined, it is interlocutory in nature and leave is required.  More recently, the “order approach” has been favoured.   Under the order approach the effect of the order is examined.  If the effect is to finally dispose of the rights of the parties, the order will be held to be a final order, and leave will not be required.  If the order does not finally dispose of the rights between the parties, the order will be considered interlocutory, and leave is required.

[8]         As this order is of the latter class, leave to appeal is required and I so direct.

“The Honourable Mr. Justice Smith”

Chancellor Court (Port Coquitlam): Court approves adding Redekop, Fortress Financial and Premier Pacific Developments as defendants

 

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

The Owners, Strata Plan LMS 989 v. Port Coquitlam (City of), et al ,

 

2003 BCSC 1398

Date: 20030911

Docket: SO10156

Registry: Vancouver

Between:

The Owners, Strata Plan LMS 989

Plaintiff

And

The City of Port Coquitlam, 426256 B.C. Ltd.,

Reddale Enterprises Ltd., David Mark Tyrell, Shane Friars,
Lang Structural Engineering Inc., R.K. Roofing Ltd., Westcoast Stucco Inc.,
Phoenix Commercial (1986) Ltd., Stucco Doctor Corporation, Stucco Doctor Plus Ltd.,
Wismer & Mathieson Projects Ltd., CSA Building Sciences Western Ltd.,
Pro-Tech Stucco Corporation, Ronald Bennewith and Leslie Bennewith
Carrying on Business as Stucco Doctor

Defendants

 

 

 

Before: The Honourable Madam Justice Ballance

Reasons for Judgment

Counsel for the Plaintiff:

J.L. Conkie and

J.P. Millbank

Counsel for the Proposed Defendants: Premier Pacific Developments Ltd. and John Redekop (dba John Redekop Construction):

 

D.J. Letkemann

Date and Place of Hearing:

June 6, 2003

 

Vancouver, B.C.

 

[1]            The plaintiffs, who are the owners of Strata Plan LMS 989 (the “Owners”), have brought this application to add John Redekop dba John Redekop Construction (“Redekop”), Fortress Financial Corporation and Premier Pacific Developments Ltd. (“Premier”) (collectively, the “Proposed Defendants”) as defendants to the within action.  They also seek leave to amend their Statement of Claim to incorporate the Proposed Defendants as parties and to set out the allegations against them.

BACKGROUND

 

[2]            Chancellor Court is a residential condominium development located in Port Coquitlam, British Columbia.  Its construction was completed in late 1993 or early 1994.  As is the case with many similar developments in the lower mainland, Chancellor Court is embroiled in what is commonly referred to as “leaky condo” litigation against several parties allegedly involved in its construction including the City of Port Coquitlam, roofing and stucco firms, architects, engineers and remediators.

[3]            The Owners claim that significant water ingress problems began almost immediately upon the occupation of their units, resulting in rot through the exterior building envelope and the interior structure.  The Owners made numerous attempts to address the water ingress problems over the ensuing years.  Ultimately in 2000, they hired a building envelope remediation firm, which subsequently determined that Chancellor Court had systematic envelope problems requiring comprehensive remediation.

[4]            The amended Statement of Claim reveals several focal points for the Owners’ complaints concerning the construction of Chancellor Court.  These include, but are not limited to, inadequate exterior cladding, inadequate drainage capacity, failure to install watertight joint seals, seam connections and caulking and improperly installed windows and waterproof membranes.  The thrust of the claim against the defendants collectively is that they failed to exercise reasonable skill, care or diligence with regard to the construction, inspection and design of Chancellor Court.

[5]            In this application, the Owners contend that the Proposed Defendants ought to be added as parties to the action by virtue of their independent involvement in a joint venture or partnership to develop Chancellor Court, facilitated through an existing defendant, 426256 B.C. Ltd., which purportedly acted as a bare trustee.

[6]            Redekop and Premier oppose the application.  They argue that not only is the claim against them statute barred, but that there has also been an unexplained and unjustified delay between the plaintiffs’ discovery of the identity of the Proposed Defendants and the bringing of this application.  They argue that it would not be just and convenient to add them as parties.

ANALYSIS

 

[7]            An application to add a defendant is governed by Rule 15(5)(a)(iii) of the Rules of Court.  It provides:

15 (5) (a)  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.

[8]            The power conferred on the court is discretionary and is to be exercised judicially.

[9]            In considering an application under Rule 15(5)(a)(iii), the Court must address the following two criteria.  First, the Court must find that there exists a question or issue between the party sought to be added and an existing party which relates to the relief, remedy or subject matter of the action.  Second, if the Court finds that such an interrelationship exists, it must next decide whether it would be just and convenient to determine that question or issue in the existing proceeding.  (The Owners, Strata Plan LMS 837 v. Abbotsford (City), [2003] B.C.J. No. 889, 2003 BCSC 590; Lawrence Construction Ltd. v. Fong (2001), 18 C.P.C. (5th) 377. 

[10]        To satisfy the interrelationship requirement, the Owners need only show that there may exist an issue or question between an existing party and the Proposed Defendants; they do not have to demonstrate a likelihood that the allegations can be proven against the Proposed Defendants.  The threshold is a low one.  The court need only be satisfied that the claim is not entirely frivolous.  (MacMillan Bloedel Limited et al. v. Binstead et al. (1981), 58 B.C.L.R. 173 (C.A.)).

[11]        In their Amended Statement of Claim, the Owners allege that the Proposed Defendants were participants in a joint venture relationship with the other named defendants in relation to the design and construction of Chancellor Court.  They contend that the core elements required to constitute a joint venture relationship, as enumerated by the Court of Appeal in Canlan Investment Corp. v. Gettling (1997), 37 B.C.L.R. (3d) 140 (C.A.), are present in the case at bar.  The Owners allege breach of contract, negligence and failure to warn against the Proposed Defendants.  These causes of action are well-founded in law.

[12]        I am readily satisfied on this mere threshold issue that there exists a possible issue to be tried between existing parties and the Proposed Defendants, which relates to the same subject matter and seeks similar relief in damages.

[13]        The applicable limitation period is six years (section 3(5) of the Limitation Act, R.S.B.C. 1996, c. 266, and see Strata Plan NW 3341 v. Delta (Corp.) (2002), 5 B.C.L.R. (4th) 250 (C.A.).

[14]        Redekop and Premier point out that the Owners were aware of the water ingress upon taking occupancy of the strata units in late 1993 or early 1994.  They adopt the extreme position that the six year limitation period was triggered at that time and therefore the limitation period expired in January, 2000, or perhaps even earlier in October, 1999.  In this context, I note that the Owners did not know the extent and consequences of the water ingress until the receipt of the building remediation firm’s report on September 29, 2000.  In any event, for the purposes of this application, I am concerned with the limitation period as it relates to the Proposed Defendants.  In my view, that period is impacted by the application of the postponement provisions of the Limitation Act which provide as follows:

 

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