Vancouver, Galleria II: Court rules duty of care to be decided at trial in Molnar leaky condo case

Citation:

The Owners, Strata Plan No. VR 1720 v. Jeck

Date: 20000202

 

2000 BCCA 100

Docket:

CA025700

Registry: Vancouver

COURT OF APPEAL FOR BRITISH COLUMBIA

ORAL REASONS FOR JUDGMENT

Before:

The Honourable Mr. Justice Cumming

February 2, 2000

The Honourable Mr. Justice Finch

 

The Honourable Mr. Justice Mackenzie

 
 

Vancouver, B.C.

 

BETWEEN:

THE OWNERS, STRATA PLAN NO. VR 1720

PLAINTIFF
(RESPONDENT)

AND:

BART DEVELOPMENTS LTD., GALLERIA II DEVELOPMENTS LTD.
PARTNERSHIP, MOLNAR CONSTRUCTION LTD., SPACEWORKS
ARCHITECTS (A PARTNERSHIP), PETER REESE, THADDEUS
YOUNG, GORDON SPRATT & ASSOCIATES LTD., TAMM/TACY
AND ASSOCIATES LTD., SCOTT CALVERT, SPECTRUM
INDUSTRIES LTD. (FORMERLY WESTERN WATERPROOFING &
MEMBRANES LTD.), CSA BUILDING SCIENCES LTD., CSA
BUILDING SCIENCES WESTERN LTD., RALPH JECK, MURRAY
FRANK and CHRISTIAN SKENE

DEFENDANTS

AND:

RALPH JECK, MURRAY FRANK and CHRISTIAN SKENE

DEFENDANTS
(APPELLANTS)

C.A.B. Ferris

appearing for the Appellant

D.P. Church and I.G. Schildt

appearing for the Respondent


[1] FINCH, J.A.: The appellants Jeck, Frank and Skene appeal the dismissal of their application under Rule 18A for summary dismissal of the plaintiff's action against them. The appellants are all employees of CSA Building Sciences Ltd. ("CSA") and Mr. Skene, a professional engineer, is the president of that company. In 1989 the plaintiff contracted with CSA to conduct a condition survey of their building, a so-called "leaky condo". The plaintiff's claim against the appellants is for damages for negligence in carrying out the survey. It says they failed to identify deficiencies in the building which were not found until other engineers made an inspection in 1995. It says the cost of repairs was then significantly higher than it would have been in 1989.

[2] The appellants' action for dismissal of the action against them was based on the proposition that they owed no duty of care to the plaintiff. They say there is no evidence that the plaintiff relied on any appellant to conduct the survey and that there is no allegation of or particulars of reliance in the pleadings. They say the learned summary trial judge erred in holding that reliance by the plaintiff on the individual appellants could be inferred in the circumstances.

[3] The learned summary trial judge referred to Edgeworth Construction Ltd. v. N.D. Lea & Associates Ltd. (1993), 83 B.C.L.R. (2d) 145, British Columbia Ltd. v. RBO Architecture Inc. (1994), 94 B.C.L.R. (2d) 96, and Boss Developments Ltd. v. Quality Air Maintenance Ltd. (1995), 5 B.C.L.R. (3d) 209. He then dealt with the issues of reliance and duty in this way:

[12] While it is true that the plaintiffs did not engage CSA because they intended to rely on the skill of any individual they could identify by name, it is equally true that CSA held itself out as a firm of "consulting engineers", with "engineers, architects and technologists ...[who] focus their interests exclusively upon resolving" the very problem, building deficiencies, the plaintiffs contracted with CSA to address.
[13] There is no question that all three of the personal defendants had a degree of experience and technical skill nor that each was actively involved in the survey and preparation or presentation of the report to the plaintiffs. The personal defendants must have known the plaintiffs would rely on their report. The extent of their involvement, distinguishes them from the engineers in Edgewater, who merely affixed a seal "without more".
[14] This case is indistinguishable from Boss. It cannot be plausibly argued that a limited company purporting to offer professional services of "consulting engineers" and indicating that its employees have special skill and experience is not inducing its clients to rely on those individuals' expertise. It is immaterial whether the client can identify that expertise with individual employees of the firm.
[15] Limited companies cannot exercise professional functions except through qualified individual employees. Those employees must realize it is their skill and experience the clients are engaging and will rely on. They therefore owe a concomitant duty of care to those clients and are potentially liable in tort if they fail [to] meet that duty.
 

[4] The order entered in the court below says simply "that the application be dismissed". Counsel for the plaintiff submitted, however, that the judge's reasons effectively find that all three appellants did owe a duty of care to the plaintiff, and that in future proceedings that issue will be res judicata.

[5] On a careful reading of the reasons given in the court below, I am not convinced that the judge did conclude that all three appellants owed a duty of care to the plaintiff. He did not say so expressly and I think the reasons may be read as saying only that he was not able to conclude that the appellants or any of them did not owe a duty of care.

[6] Whatever the correct interpretation of the reasons may be, I have concluded that it would be unfair to decide the issue of the appellants' duty on the present incomplete record. In London Drugs Ltd. v. Kuehne & Nagel International Ltd. (1992), 73 B.C.L.R. (2d) 1 (S.C.C.), Iacobucci, J. speaking for the majority of the court said at p. 22:

... It is now well established that the question of whether a duty of care arises will depend on the circumstances of each particular case, not on predetermined categories and blanket rules as to who is, and who is not, under a duty to exercise reasonable care. There may well be cases where, having regards to the particular circumstances involved, an employee will not owe a duty of care to his or her employer's customer. ...
... At best, these decisions simply confirm that the question of whether a duty of care arises between an employee and his or her employer's customer depends on the circumstances of each particular case. The mere fact that the employee is performing the "very essence" of a contract between the plaintiff and his or her employer does not, in itself, necessarily preclude a conclusion that a duty of care was present.
 

On the material before us, I do not think the circumstances of the case have been sufficiently developed to be able to say whether a duty of care on any of the three appellants has been established. As I said at the outset, this was an application under Rule 18A, founded on affidavit material, for dismissal of the action against the three appellants on summary trial. I note that it was not an application to strike out pleadings.

[7] In my view, whether any appellant did in fact owe a duty of care is an open question properly to be decided at trial when the parties have adduced all such evidence as they may think relevant.

[8] I would dismiss the appeal. I would order that the costs of the appeal follow the disposition of the action in the court below.

[9] CUMMING, J.A. I agree.

[10] MACKENZIE, J.A. I agree.

[11] CUMMING, J.A. There will be an order accordingly.

"The Honourable Mr. Justice Finch"

Galleria II (Vancouver): Court rules that architects who designed Molnar leaky condo complex can be sued

Citation:  The Owners, Strata Plan No. VR 1720   Date: 19991007
v. Spaceworks Architects et al Docket: CA024327
1999 BCCA 585 Registry: Vancouver


COURT OF APPEAL FOR BRITISH COLUMBIA



ORAL REASONS FOR JUDGMENT:


Before:

THE HONOURABLE MR. JUSTICE ESSON October 7, 1999
THE HONOURABLE MADAM JUSTICE PROWSE
THE HONOURABLE MR. JUSTICE MACKENZIE Vancouver, B.C.



BETWEEN:


THE OWNERS, STRATA PLAN NO. VR 1720

PLAINTIFF
(RESPONDENT/APPELLANT)

AND:

SPACEWORKS ARCHITECTS (A PARTNERSHIP), PETER REESE,
THADDEUS YOUNG, GORDON SPRATT & ASSOCIATES LTD.

DEFENDANTS
(APPELLANTS/RESPONDENTS)

AND:

BART DEVELOPMENTS LTD., GALLERIA II DEVELOPMENTS LTD.,
PARTNERSHIP, MOLNAR CONSTRUCTION LTD., GORDON SPRATT &
ASSOCIATES LTD., SCOTT CALVERT, TAMM/TACY AND ASSOCIATES LTD.,
SPECTRUM INDUSTRIES LTD. (FORMERLY WESTERN WATERPROOFING &
MEMBRANES LTD.), CSA BUILDING SCIENCES LTD.,
CSA BUILDING SCIENCES WESTERN LTD.,
RALPH JECK, MURRAY FRANK and CHRISTIAN SKENE

DEFENDANTS


C.A. Wallace appearing for the Appellants/Respondents
Spaceworks Architects (a partnership)
Peter Reese, and Thaddeus Young

D.A. Garner appearing for the Appellant/Respondent
Gordon Spratt & Associates Ltd.

D.P. Church appearing for the Respondent/Appellant
and I.G. Schildt


[1] ESSON, J.A.: This is an action in which the plaintiffs,
who are owners of a substantial condominium structure, seek
damages arising from a serious case of the leaky condo
syndrome. The defendants include the developers, contractors,
and a consultant consulted by the owners before the action was
brought. For present purposes, I need refer only to the
appellants who are respectively the architects and an
engineering firm which was involved in some aspects at least of
the design of the building and in inspection during
construction. The architects were the overall designers.

[2] Those defendants applied under Rule 18A for a ruling that
the action as against them was barred by limitation. The
building was completed in 1986. The writ was issued in
December 1995. It is clear then that the action can be held to
be brought within time only by invoking the postponement
provisions set out in s. 6(4) of the Limitations Act.

[3] The application under Rule 18A was heard by Madam Justice
Humphries who reserved her decision and ultimately gave a
ruling which is somewhat unusual. She found that two discrete
aspects of the plaintiff's claim, one dealing with the roof of
the building and one with the stucco surface, were indeed
barred, i.e., that the plaintiffs were unable to establish that
they could meet all of the conditions of s. 6(4), and
particularly the provision regarding their means of knowledge.

[4] With respect to the balance of the claim, which is the
bulk of the overall claim, the summary trial judge found that
it would be unfair or unjust to rule on the basis of the
evidence which she had heard. She therefore referred those
aspects of the limitation issue to the trial judge for
determination. That ruling of course was an exercise of the
discretion conferred upon her by the plain words of Rule 18A.
The judge gave extensive reasons for that decision. In spite
of the vigourous submissions of counsel for the appellants, I
am satisfied that was an appropriate exercise of the discretion
and that there is no basis upon which this Court can interfere.

[5] That brings me to the cross-appeal by the plaintiffs. It
is directed to the ruling that two aspects of the claim are
statute-barred. The submission essentially is that, if the
plaintiffs had sought legal advice in November 1989, they would
not have been advised that there was a reasonable prospect of
success in an action in negligence for repairs to a defective
building. On this point, the judge held that the cost of
replacement, which is the basis for those two aspects of the
claim, was not one for pure economic loss but rather, as she
put it, were actual repair costs resulting from physical
damage. In this Court, the defendants have not sought to
uphold that basis of decision, but nevertheless contend that
the decision was correct in substance. In their factum, the
plaintiffs put the matter this way:

In light of these cases, the reasonably
competent notional legal advisor in November 1989
would not have provided a favourable opinion
concerning the prospects of a successful legal
action. Indeed, this would likely have remained the
gist of any legal advice provided to the Respondent
prior to the decision of the Supreme Court of Canada
in Winnipeg Condominium (1995), 121 D.L.R. (4th) 193
(S.C.C.) in which the Supreme Court of Canada held
that the cost of remedying such defects would be
recoverable if the defects were such that they caused
a reasonable apprehension of danger. That is the
Respondent's allegation in this action. In this
respect, it should be noted that Manitoba Court of
Appeal in Winnipeg Condominium dismissed the
plaintiff's claim largely on the basis of the
decision in D&F Estates.

[6] Accepting that the claim is one for pure economic loss, I
do not accept that a reasonably prudent legal advisor in 1989
would have advised against joining the architect and engineer.
The argument based on Winnipeg Condominium is essentially based
on the contention that the law was settled in 1973 in Rivtow
Marine Ltd. v. Washington Iron Works et al (1973), 40 D.L.R.
(3d) 530 (S.C.C.) and that a prudent lawyer would not have
considered it to have been changed until the decision of the
Supreme Court in Winnipeg Condominium was known. That argument
essentially ignores the general thrust of Canadian tort law in
the years since Rivtow was decided. I need only refer to
Kamloops v. Nielsen, [1984] 2 S.C.R. 2 (S.C.C.) as an example
of the case authorities and writings which any prudent advisor
would have had in mind in 1989. As a matter of interest, I
note that the Winnipeg Condominium case itself was begun in
1989 considerably earlier in the year than the relevant date in
this case. I do not suggest that is an important circumstance,
but is part of the picture.

[7] I would therefore dismiss the appeal and the cross-appeal.

[8] PROWSE, J.A. I agree.

[9] MACKENZIE, J.A. I agree.

[10] ESSON, J.A. The appeal and cross-appeal are
dismissed.

"The Honourable Mr. Justice Esson"

Vancouver, Galleria II: Court decides leave to appeal not required by defendants; orders appeal books prepared

                                                 Date: 19990416
Docket: CA025700
Registry: Vancouver


COURT OF APPEAL FOR BRITISH COLUMBIA




ORAL REASONS FOR JUDGMENT:


BEFORE THE HONOURABLE April 16, 1999

MR. JUSTICE HALL

IN CHAMBERS Vancouver, B.C.



BETWEEN:


THE OWNERS (STRATA PLAN VR 1720)

PLAINTIFF
(RESPONDENTS)

AND:

BART DEVELOPMENTS LTD., GALLERIA II DEVELOPMENTS LTD.
PARTNERSHIP, MOLNAR CONSTRUCTION LTD., SPACEWORKS
ARCHITECTS, PETER REESE, THADDEUS YOUNG, GORDON
SPRATT & ASSOCIATES LTD., TAMM/TACY AND ASSOCIATES
LTD., SCOTT CALVERT, SPECTRUM INDUSTRIES LTD.
(FORMERLY WESTERN WATERPROOFING & MEMBRANES LTD.),
CSA BUILDING SCIENCES LTD., CSA BUILDING SCIENCES
WESTERN LTD., RALPH JECK, MURRAY FRANK AND
CHRISTIAN SKENE


DEFENDANTS

AND:

RALPH JECK, MURRAY FRANK AND CHRISTIAN SKENE

APPELLANTS

C. Ferris appearing for the Appellants
I. Schildt appearing for the Respondents


(Application for Directions)


[1] HALL, J.A.: This is an application wherein essentially
two disparate heads of relief are sought. Firstly, the
proposed appellants, Ralph Jeck, Murray Frank and Christian
Skene, apply for a determination that leave to appeal is not
required, or alternatively if it is, that leave ought to be
granted to appeal from the Order of Mr. Justice E.R.A. Edwards
pronounced February 22, 1999 dismissing an application brought
on behalf of the named Defendants for the dismissal of an
action brought against them in negligence. As well there are
in the action possible contractual claims against a related
company.

[2] The case, without going into matters in any great detail,
engages cases such as the well known Hedley Byrne case and a
case in this court of recent vintage, Boss Developments Ltd. v.
Quality Air Maintenance Ltd. (1995), 5 B.C.L.R. (3d) 209
(C.A.). Reference should also be made to Edgeworth
Construction Ltd. v. N.D. Lea & Associates Ltd. (1993) 83
B.C.L.R. (2d) 145 (S.C.C.).

[3] Mr. Justice Edwards held that in light of the Boss case,
the argument of the defendants was not well founded, and
accordingly, he dismissed their application seeking exemption
from liability.

[4] It is not entirely easy, as I have observed to counsel in
the course of argument this morning, to draw a clear line as to
the circumstances when leave will or will not be required in
these cases. Perhaps it may be justly observed that the advent
of Rule 18A has made these questions even more difficult
because of the nature of these proceedings themselves which in
some cases do not purport to dispose of all issues. As Mr.
Schildt in his argument mentioned there are also situations
where orders have a dual quality in which it may transpire that
in certain circumstances one side will have an absolute right
of appeal depending on the disposition, and the other side may
be forced to seek leave. I make that observation in no
critical sense but simply as an observation that Rule 18A,
which is a very useful Rule, can create some uncertainty in
this class of proceeding that we are dealing with this morning.

[5] The relevant authorities that I have now had a chance to
review again in light of Mr. Schildt's argument are Stony Creek
Indian Band v. Alcan Aluminum Limited, a judgment of this court
of March 3, 1999 under Docket No. CA025273 and two other
decisions, being the case of Dow v. Briggs (1994), 98 B.C.L.R.
(2d) 372 (C.A.), and British Columbia (Minister of Forests) v.
Bugbusters Pest Management Inc. (1997), 86 B.C.A.C. 84. In the
instant case, the result of the motion was that the action
remains on foot and there remain negligence issues to be still
litigated as the case presently stands. However, had the
application been successful before Mr. Justice Edwards, the
action would then have been concluded against the individual
defendants and thus the order sought would finally have
disposed of matters as against them.

[6] Justice Taylor in Dow v. Briggs at page 377 after
reviewing some of the earlier cases said this:

The words which I have italicized make it plain that
what was sought to be achieved was not so much a
determination under s. 6.1(2) of the Court of Appeal
Act whether appeal would be permitted at all against
a finally-determinative decision contained in a dual-
character order - although that, of course, was the
result - but rather to make it possible for the court
to decide whether the appeal against those portions
of the order which were in the nature of final
determination of issue should be heard before, rather
than after, final resolution in the trial court of
all of the remaining issues raised in the action.

I do not pretend that this explanation resolves
the matter because those cases say that a notice of
appeal from a dual-character order, where no leave is
obtained, will be a nullity, and I do not understand
how any appeal against such an order could thereafter
be brought except with benefit of an order extending
time for appeal. That, too, would have the result of
depriving the unsuccessful litigant appeal as of
right with respect to the final resolution of some of
the issues in the action. I think we must lean
against anything having that result.

[7] It seems to me that in that passage, his Lordship was
saying that in this class of case the court should not be
overly quick to deny persons a right to appeal in an unfettered
way matters that can be finally dispositive of an action.
Those remarks of course must read in light of the comments of
Madam Justice Rowles in Alcan Aluminum Limited which comments
are found at paragraph 30, page 15:

[30] Under Bugbusters, if a litigant wishes to appeal
an order made on a summary trial which finally
determines an issue but that issue does not dispose
of the action as a whole the litigant must seek leave
to appeal. As I am inclined to the same view of the
matter as Mr. Justice Esson, for the reasons he
stated in Bugbusters, I hold that leave to appeal is
required.

and at paragraph 21, page 11:

In Bugbusters, the judgment the defendant sought
leave to appeal is described by Esson J.A. as
follows, at 84:

The defendant applies for leave, if leave
is required, to appeal against a decision of a
chambers judge under Rule 18A finding against
the defendant on an issue of issue estoppel.

The action is one for damages arising out
of a very large forest fire which is alleged to
have been started by the negligence of the
defendant and to have been allowed to continue
by its negligence in carrying out its fire
fighting duties. The issue estoppel applies
only to the question whether the defendant's
negligence caused the fire. So even if there
were to be an appeal and the defendant were to
succeed on it, the action would still go to
trial on the issue whether it was negligent in
allowing the fire to continue.
[Emphasis added.]

In the present case, the issues determined by Lysyk
J., if reversed on appeal, would not dispose of the
whole of the action because the limitation defences
do not apply to the entire period for which damages
for trespass are claimed.

[8] As I analyze both Bugbusters and Alcan, it seems to me
that there remained in these cases issues that would have been
unresolved whichever way the hearing went, the result of which
was sought to be appealed from. To that extent, I think they
are distinguishable from the case at bar.

[9] Mr. Schildt has referred to certain earlier related
proceedings in the case of The Owners (Strata Plan VR 1720) v.
Bart Developments Ltd. et al, CA025700, concerning what
happened when the case went on for hearing on another matter on
March 4, 1999, the day after Alcan had been handed down. At
that time the court, of its motion, suggested that leave was
required, and in fact, leave as it happened was granted by me
subsequently. Presumably now that matter will come on for
hearing.

[10] As I read the decision of Madam Justice Humphries that was
sought to be appealed from those in that proceeding, there
remained in the case issues that had to be decided at the trial
level. To that extent it may be that what was at issue in that
case is distinguishable from what I see as the pattern or
factual setting of this case. In this case it seems to me that
the order which was sought was finally dispositive in the event
the order had been granted. But on the other side of the coin,
the order has also a finality to it in the sense that there is
a res judicata aspect to it, and I revert back to what Mr.
Justice Taylor referred to generally in his analysis in the
case of Dow v. Briggs.

[11] It seems to me in this case that it would be appropriate
for me to determine that this is a case in which the proposed
appellants have an appeal as of right, and accordingly, it is
not a case in which leave to appeal is required. That being
so, I am not therefore required to pass on to the question of
whether leave ought or ought not to be granted, and I simply
make the finding that this is a case in which leave is not
required.

[12] I direct that appeal books shall be filed by April 30,
1999.

"The Honourable Mr. Justice Hall"

Vancouver, Galleria II: Court rules owners can sue personal defendants in Molnar leaky condo case

                                                Date:  19990222
Docket: C956420
Registry: Vancouver




IN THE SUPREME COURT OF BRITISH COLUMBIA



BETWEEN:

THE OWNERS, STRATA PLAN NO. VR 1720


PLAINTIFFS


AND:

BART DEVELOPMENTS LTD., GALLERIA II DEVELOPMENTS LTD.
PARTNERSHIP, MOLNAR CONSTRUCTION LTD., SPACEWORKS
ARCHITECTS (A PARTNERSHIP), PETER REESE, THADDEUS
YOUNG, GORDON SPRATT & ASSOCIATES LTD., TAMM/TACY
AND ASSOCIATES LTD., SCOTT CALVERT, SPECTRUM
INDUSTRIES LTD. (FORMERLY WESTERN WATERPROOFING &
MEMBRANES LTD.), CSA BUILDING SCIENCES LTD., CSA
BUILDING SCIENCES WESTERN LTD., RALPH JECK, MURRAY
FRANK and CHRISTIAN SKENE

DEFENDANTS



REASONS FOR JUDGMENT

OF THE

HONOURABLE MR. JUSTICE E.R.A. EDWARDS



Counsel for the Plaintiff: Ian G. Schildt


Counsel for the Defendants
Ralph Jeck, Murray Frank & Christian Skene: Craig A.B. Ferris


Place and Date of Hearing: Vancouver, B.C.
February 18, 1999


[1] Messrs. Jeck, Frank and Skene, "the personal defendants',
apply for summary dismissal of the action against them on the
basis they owed no duty of care to the defendants.

[2] Mr. Skene, a professional engineer, is the principal of
the defendant CSA ["Christian Skene Associates'] Building
Sciences Ltd. ("CSA"). He and the other two personal
defendants are employees of CSA.

[3] The plaintiffs contracted with CSA to conduct a condition
survey of their building, in response to CSA's proposal which
bore the letterhead "CSA Building Sciences Ltd. Consulting
Engineers' and contained the statement "The engineers,
architects and technologists staffing this firm and the
associated firm of Christian Skene Associates, Ltd. Architects
and Engineers, focus their interests and efforts exclusively
upon resolving the problems affecting existing buildings as
opposed to engaging in the design of new buildings' [original
emphasis].

[4] The building was a "leaky condo" complex which this
proposal characterized as "plagued with problems ranging from
extreme window condensation, moisture penetration through
concrete, odour transfer, electrical and fire system failures,
etc."

[5] The condition survey reported problems, primarily with the
roof, which the plaintiffs took steps to rectify. A later
condition survey by another firm "JNA" disclosed much more
significant and widespread problems with the fabric of
building.

[6] The plaintiffs allege that CSA and the personal defendants
were negligent in failing to discover and report these
additional problems and that as a consequence the cost of
repairs was needlessly exaggerated.

[7] Relevant portions of the Statement of Claim are these:

28. In or about July 1989, the defendant CSA
undertook a condition survey of Galleria II (the
"Survey"). The defendant Skene was the professional
engineer responsible for the survey. In undertaking
the Survey, the defendants CSA and/or Skene were
under a professional duty to review Galleria II and
properly identify the deficiencies which were the
cause of the leakage problems. The Survey identified
the deficiencies in the roof system, but failed to
identify the majority of the building defects.

29. As a result of the Survey, the Strata
Corporation undertook the repair of the roofing
system during the course of 1991, but failed to
address the other major building defects present at
that time.

33. As a result of the defects and By-law violations
set out above, all of which were caused or
contributed to by the breach of warranty and/or
negligence of the defendants, Galleria II has
suffered significant damage, primarily due to the
water leaks and premature deterioration of the
external walkway. The resulting damage has resulted
in a reasonable apprehension of harm to the life and
safety of the occupants of Galleria II, including the
danger of collapse of the external walkway.

34. The plaintiff claims against the defendants CSA
and its successor CSA Western, Jeck, Frank and Skene
for damages for breach of contract and professional
negligence arising out of the failure to undertake a
proper survey and/or inspection of Galleria II in or
about July 1989. As a result of the negligence of
the defendants CSA, Jeck, Frank and Skene, the
deficiencies were not identified until the review
undertaken by JNA in 1995. The cost of identifying
and repairing the defects is significantly higher
than it would have been had the deficiencies been
properly identified in 1989.

[8] The personal defendants' position that they owed no duty
of care to the plaintiffs rests on what might be described as
Mr. Justice LaForest's concurring "explanation" of the
unanimous judgment of the Supreme Court of Canada in Edgewater
Construction Ltd. v. N.D. Lea & Associates (1993), 83 B.C.L.R.
(2d) 145 at 154, paragraphs 23 and 25. I need not quote those
passages.

[9] The Court of Appeal considered the Supreme Court of
Canada's Edgewater decision in British Columbia v. R.B.O.
Architecture Inc. (1994) 94 B.C.L.R. (2d) 96 and in Boss
Developments Ltd. v. Quality Air Maintenance Ltd. (1995), 5
B.C.L.R.(3d) 209. In the latter case Gibbs J.A. distinguished
Edgewater and found an engineer could be personally liable to
an aircraft purchaser for signing a report indicating an
aircraft was properly maintained when it was not, although his
employer, not he, had a contractual relationship with the
vendor to inspect the aircraft.

[10] In Boss, as in this case, there was nothing in the
relevant contract purporting to limit the tort duty of the
defendant or its employees.

[11] With respect to the individual employee, Gibbs J.A. noted
in Boss that the he was liable because "Only an individual can
be qualified as an aircraft maintenance engineer in this field
of special skill and knowledge ... it follows that it is the
individual mechanic who certifies whose skill is being relied
upon."

[12] While it is true that the plaintiffs did not engage CSA
because they intended to rely on the skill of any individual
they could identify by name, it is equally true that CSA held
itself out as a firm of "consulting engineers', with
"engineers, architects and technologists ...[who] focus their
interests exclusively upon resolving" the very problem,
building deficiencies, the plaintiffs contracted with CSA to
address.

[13] There is no question that all three of the personal
defendants had a degree of experience and technical skill nor
that each was actively involved in the survey and preparation
or presentation of the report to the plaintiffs. The personal
defendants must have known the plaintiffs would rely on their
report. The extent of their involvement distinguishes them
from the engineers in Edgewater, who merely affixed a seal
"without more".

[14] This case is indistinguishable from Boss. It cannot be
plausibly argued that a limited company purporting to offer
professional services of "consulting engineers' and indicating
that its employees have special skill and experience is not
inducing its clients to rely on those individuals' expertise.
It is immaterial whether the client can identify that expertise
with individual employees of the firm.

[15] Limited companies cannot exercise professional functions
except through qualified individual employees. Those employees
must realize it is their skill and experience the clients are
engaging and will rely on. They therefore owe a concomitant
duty of care to those clients and are potentially liable in
tort if they fail meet that duty.

[16] As Macfarlane J.A. pointed out in R.B.O at paragraph 42,
it is open to a limited company to limit its and its employees'
exposure in tort by appropriate contract language. No such
language was brought to my attention here.

[17] The application is dismissed with costs on Scale 3.



"E.R.A. Edwards, J."
__________________________
Mr. Justice E.R.A. Edwards

Vancouver, Galleria II: Court case reveals details of leaky condo complex developed by Molnar

                                        Date:  19980203
Docket: C956420
Registry: Vancouver

IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:

THE OWNERS, STRATA PLAN NO. VR 1720


PLAINTIFF
AND:

BART DEVELOPMENTS LTD., GALLERIA II DEVELOPMENTS LTD.
PARTNERSHIP, MOLNAR CONSTRUCTION LTD., SPACEWORKS
ARCHITECTS (A PARTNERSHIP), PETER REESE, THADDEUS YOUNG,
GORDON SPRATT & ASSOCIATES LTD., TAMM/TACY AND ASSOCIATES
LTD., SCOTT CALVERT, SPECTRUM INDUSTRIES LTD. (FORMERLY
WESTER WATERPROOFING & MEMBRANES LTD.), CSA BUILDING
SCIENCES LTD., CSA BUILDING SCIENCES WESTERN LTD., RALPH
JECK, MURRAY FRANK AND CHRISTIAN SKENE

DEFENDANTS


REASONS FOR JUDGMENT

OF THE

HONOURABLE MADAM JUSTICE HUMPHRIES

(IN CHAMBERS)


Counsel for the Plaintiff: D.P. Church & I.G. Schildt


Counsel for the Defendants: C.A. Wallace
Spaceworks Architects (A Partnership), M. Leung,
Peter Reese and Thaddeus Young Articled Student


Counsel for the Defendant: D.A. Garner
Gordon Spratt & Associates Ltd. W. Woloshyn,
Articled Student


Counsel for the Defendants: L.B. Gerow
Bart Developments Ltd., Galleria
II Developments Ltd. Partnership,
Molnar Construction Ltd.


Date and Place of Hearing: December 15 & 16, 1997
Vancouver, B.C.

[1] The defendants appearing on this application bring a
motion pursuant to Rule 18A for dismissal of the action as
being out of time. For the purposes of this application, they
accept as proven the allegations contained in the Statement of
Claim, and although the issue is postponement of the
commencement of a period of limitation all parties agree that
the issue is capable of determination under Rule 18A. During
the hearing, I raised with counsel for the plaintiff the
possibility that I might find facts at trial which could differ
from the allegations in the Statement of Claim, but all have
agreed I could hear and determine this application pursuant to
Rule 18A, and could proceed on the basis that the allegations
in the Statement of Claim were true for the purposes of this
application. I have since become aware of cases saying that
questions of postponement should be dealt with at trial, and
not on an interlocutory motion. Of course, an application
pursuant to Rule 18A is a trial, not an interlocutory motion,
even one such as this which is proceeding on assumed facts. As
a trial involves finding facts, and not assuming them, I had
further concerns, but refer to the Court of Appeal decision in
Steyns v. Manitoba Public Insurance Corporation et al., [1995] 7 W.W.R.
507 (B.C.C.A.), which recognizes the ability to proceed on
assumed facts when limitations is the issue, and to Cominco v.
Canadian General Electric (1983), 45 B.C.L.R. 35 (C.A.) which
suggests that it is possible to proceed on consent when the
issue is postponement of limitations. In any event, on the
factual issues addressed before me, I am of the view that the
matter can fairly be decided on this application, at least in
part.

[2] This action involves a condominium project named "Galleria
II" on West 8th Avenue in Vancouver, B.C. which was constructed
in 1985 and 1986, and which developed severe problems with
leakage and siding. The land upon which it was built was owned
by Bart Developments Ltd. (BDL), and development and
construction of the project was undertaken by Galleria II
Developments, (a limited partnership of which BDL was the
general partner), and Molnar Construction Ltd (MCL).
Spaceworks, Reese and Thaddeus were the architects, and were
also involved in inspections during construction; Gordon Spratt
Associates were the consulting engineers involved in the
roofing applications and inspections.

[3] The construction of the complex was finished in 1986 and
strata lots were sold throughout 1986 and 1987. There are 77
owners in the building, four of them commercial, the rest
residential. Their property management entity is Essential
Property Management Ltd. (EPM).

[4] The Writ in this action was filed on November 7, 1995,
nine years after the project was completed. Professional
negligence and breach of warranty is alleged against all of the
defendants. The defendants say the action was commenced
outside the general six year limitation period provided for in
section 3(5) of the Limitation Act, R.S.B.C. 1996, c. 266 and the
plaintiff has not proven that the commencement of the period
should be postponed. The plaintiff says time should not begin
to run before November 6, 1989 at the earliest (a date which
has no significance apart from being six years before the writ
was filed), and it is therefore within time to bring the
action.

FACTS

[5] The strata council minutes and documents reveal the
following:

1. The possession date of the condominium units was October -
December of 1986.

2. In a letter of October 9, 1987 from EPM to BDL, EPM
questioned BDL's decision to remove the warranty on the
roof, pointed out that West Waterproofing refused to cover
the warranty on the roof due to its improper construction,
and referred to problems "arising from the developer's
design or lack of it."

3. On November 18, 1987, serious water damage was noted in
two suites.

4. On January 2, 1988, EPM wrote to BDL about the serious
leakage and requested an immediate response by January 6,
1989 (sic) or the matter would be turned over to their
lawyers.

5. At the Annual General Meeting on March 23, 1988, the
issues of the roof warranty and the slope of the walkway
on the third floor were discussed.

6. At an Extraordinary General Meeting on April 27, 1988,
problems with water in the walkways were discussed and the
owners were encouraged to bring common area concerns to
the strata council and EPM.

7. On November 9, 1988, EPM wrote to BDL about the serious
leakage problem at Galleria II, advising that Peterson's
Waterproofing had been contracted to repair the leaks.

8. On November 23, 1988, EPM wrote to BDL about the serious
water leak problems at Galleria II, advising them that
Peterson's Waterproofing was of the opinion that the water
was leaking into the suites because the stucco was
defective, not because of problems with the flooring or
planter walls, as the BDL repairers had thought.

9. On November 10, 1988, EPM advised the New Home Warranty
Program of the serious leaks that had been experienced
since construction three years before, saying the
developer had tried to fix it four times. They also noted
cracks in the parkade.

10. On November 17, 1988, the New Home Warranty Program
replied that the one-year workmanship and material
warranty had expired on December 2, 1984, and the Major
Structural Defects Warranty continued for five years, and
asking EPM to complete a questionnaire if they felt the
complex had major structural defects, although they said
water seepage would not be considered to be such a defect.

11. At a strata council meeting on December 13, 1988, the
council reiterated concerns about leakage in the parkade,
and discussed having a second estimate done respecting
water leaks generally, with followup to be done with BDL.

12. On December 15, 1988, EPM wrote to BDL thanking them for
their continued efforts to fix the leaks, and confirming
their undertaking to try again.

13. On January 24, 1989, the strata council discussed what
would be done about leaks that were not going to be
handled by BDL because they had been discovered after the
warranty period. The stucco problem was also discussed.

14. On January 25, 1989, the strata owners filled out a Major
Structural Defect questionnaire alleging cracking and
separation in the foundation due to the size of planters
and trees.

15. On February 13, 1989, EPM sent the New Home Warranty
Program copies of its correspondence with BDL regarding
the leaks and the general deficiencies.

16. On March 21, 1989, the strata council instructed EPM to
ask their repairers, M&C Enterprises, to explain the
nature of the repairs and what caused them to be
necessary. Repairs for leakage were discussed.

17. On April 19, 1989 the strata council discussed possible
civil action against BDL, and one member was to research
the legal field for an experienced lawyer. An ongoing
building inspection was mentioned.

18. At an Extraordinary General Meeting on June 6, 1989, a
representative from CSA Building Sciences Ltd. attended.
He was prepared to complete an independent building survey
of Galleria II for $5,400. He was asked if the document
"would stand up in court." The CSA report was to provide
"an in-depth evaluation of the 'as-built' condition of the
components of construction utilized in La Galleria II"
with a view to corrective and preventive building
maintenance.

19. CSA submitted its report in July of 1989. The roof was
found to be seriously inadequate and replacement of it and
the large balcony decks was recommended, at a cost of
$112,750.00. The stucco was deficient and repairs
recommended at a cost of $18,360.00. Many other defects
were noted, and upgrading to the ventilation, roof
drainage system and sprinkler systems was recommended at a
cost of $77,600.

20. At a strata council meeting on August 2, 1989, the strata
council decided to ask a representative of CSA to come to
their next meeting on August 30, and they also scheduled
an Extraordinary General Meeting for September 7, 1989 to
discuss the survey.

21. On August 30, 1989, the CSA representative explained the
difficulties with the roof and suggested it be replaced as
soon as funding could be obtained.

22. On September 14, 1989 the owners resolved to implement the
recommendations in the CSA report and to obtain the
appropriate estimates.

23. On September 29, 1989, the council received a second
opinion from a consulting engineer at the Council of
Forest Industries of British Columbia indicating agreement
with the CSA assessment.

24. On September 25, 1990, lawyers for the strata corporation
wrote a letter to Spaceworks Architects demanding
replacement of the roof and threatening legal proceedings.

25. On November 7, 1995, the plaintiffs filed their Writ,
followed by the Statement of Claim on May 21, 1996. The
Statement of Claim contains particulars of damage as
follows:

a) failure to provide a properly constructed
roof system in accordance with the plans and
specifications;

b) failure to provide a properly constructed
building sufficient to prevent water leakage;

c) failure to provide a properly constructed
building sufficient to allow proper drainage of
water;

d) failure to provide a properly constructed
foundation to the building;

e) failure to provide a properly constructed
building free of structural defects (south wall
insufficiently supported);

f) failure to provide a properly constructed
building with adequate application and
installation of stucco;

g) failure to install: adequate gypsum board,
proper guards and barriers along the south
walkway, balcony handrails, proper sprinkler
lines, properly constructed fountain which
caused leakage, and proper emergency lighting.


[6] Mrs. Marion Robson, who filed an affidavit on behalf of
the plaintiff, deposes that by March 1989, she was aware of
water problems, but her impression was that the strata
corporation had been approaching the leakage incidents as
separate discrete problems and was dealing with BDL on that
basis. Some of the leakage problems were dealt with
individually.

[7] Mrs. Robson was elected to the strata council in March of
1989 and, being of the view that the council needed a fresh
objective appraisal of the building, took steps to hire CSA.
Although one of the members of the strata council was to
investigate the possibility of obtaining a lawyer, she says
legal action was just one of a number of possibilities they
wished to contemplate.

[8] Mrs. Robson says the council was shocked at the CSA
survey. They perceived the main problems to be with the roof
and the stucco and focussed on installation of a new roof,
stucco repair and repainting the building. She says this
perception was confirmed by Mr. Frank, the CSA representative
at the August 30, 1989 council meeting, who said that, apart
from the roof system, the workmanship and materials in Galleria
II was generally above average. Mr. Frank told her personally
that the building was "as solid as the rock of Gibraltar" and
she conveyed this to the other members.

[9] Mrs. Robson says that on September 7, 1989, at the
Extraordinary General Meeting, the membership resolved to
remedy the deficiencies identified in the survey, and their
immediate efforts included maintenance to prevent further
deterioration while the necessary funds were raised.

[10] Mrs. Robson says they first contacted a lawyer in February
or March of 1990. The stucco repair work took place in the
summer of 1990. The roof and deck system were replaced in
1992. Leakage lessened but has not been eliminated.

[11] Mrs. Robson deposes that in April of 1995, the strata
corporation retained James Neill & Associates to investigate
the walkway. Deficiencies and extensive deterioration was
identified, and the replacement of the entire walkway was
recommended. This has been largely completed, at a cost of
$800,000. In May of 1997, a further survey of the entire
building was done, with more defects and deterioration
identified, with costs estimated at $2.1 to $2.7 million,
according to Mrs. Robson's affidavit, although during argument
counsel raised that estimate to between $3 and $4 million.
The Neill report has not yet been produced so I am not aware of
the nature of the defects that would give rise to those costs.
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