Vancouver, Barclay Street, VR 2124: Leaky condo complex constructed in 1987-1988 started leaking in 1988; court rules owners waited too long before suing National Door

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

The Owners, Strata Plan VR 2124 v. Rositch et al

 

2004 BCSC 1662

Date: 20041214
Docket: C974955
Registry: Vancouver

Between:

The Owners, Strata Plan VR 2124

Plaintiff

 

And

E. Bryce Rositch, carrying on business as Rositch Hemphill and Associates Architects or Bryce Rositch Architects Inc. or Keith S. Hemphill Architect Inc. and the said Rositch Hemphill and Associates Architects Inc., Viam Holdings Ltd., Newcorp Construction Ltd., Newcorp Properties Ltd., Coast to Coast Management Ltd., Gordon Spratt & Associates Ltd., East and West Alum Craft Ltd., W. Te Bokkel, G.L.A. Enterprises Ltd., Humphrey Aluminum (1977) Ltd., Sertex Plumbing B.C. Ltd., SFC Steelfab Canada Ltd., Westcoast Stucco Inc., Western Cladding Ltd., Bogdonov Pao Associates Ltd., and National Door and Hardware Ltd.

 

Defendants

 

And

E. Bryce Rositch, Rositch Hemphill and Associates Architects (a firm), Bryce Rositch Architect Inc. (formerly Bryce Rositch Architects Inc.), Keith S. Hemphill, Architect Inc., 67219 B.C. Ltd. (formerly Gordon Spratt & Associates Ltd.), East and West Alum Craft Ltd., W. Te Bokkel, G.L.A. Enterprises Ltd., Humphrey Aluminum (1977) Ltd., Sertex Plumbing B.C. Ltd., SFC Steelfab Canada Ltd., Westcoast Stucco Inc., Western Cladding Ltd., National Door and Hardware Ltd., City of Vancouver, Allan Milligan Engineering Ltd., Indal Limited, M & M Insulation Ltd., Cam Glass Inc. and Evans Ventures Ltd.

Third Parties

 


Before: The Honourable Mr. Justice Rogers

 

Reasons for Judgment

In Chambers

Counsel for the plaintiff:

D.C. Creighton

Counsel for the defendant,
National Door and Hardware Ltd.:

R.M. Young

Date and Place of Hearing:

December 3, 2004

 

Vancouver, B.C.

Introduction

[1]                In April 2003 the plaintiff obtained an order adding National Door and Hardware Ltd. as a defendant.  This is National Door’s application to vacate that order and to have the matter reheard and dismissed.

[2]                The application turns on whether there is a connection between National Door and the plaintiff such that the former ought to be added to the latter’s suit; and whether it is just and convenient that National Door should be a defendant.  National Door argued that a potential limitation defence and the prejudice it suffers from the plaintiff’s long delay make it unjust and inconvenient to be added to the action.

The Facts

[3]                This is a leaky-condo case.

[4]                In the course of this hearing I considered the following affidavit evidence from the Chambers Record filed by the plaintiff:

TAB

DOCUMENT

 

 

12

Affidavit #1 of Earl Parton sworn March 29, 2004

13

Affidavit #1 of Mary Kovacs sworn April 5, 2004

14

Affidavit #2 of Colm Place sworn April 30, 2004

15

Affidavit #1 of Karina Park sworn May 7, 2004

16

Affidavit #1 of Pierre E. Gallant sworn May 12, 2004

17

Affidavit #1 of Robert Parton sworn June 16, 2004

18

Affidavit #2 of Earl Parton sworn June 16, 2004

19

Affidavit #2 of Karina Park sworn June 25, 2004

20

Affidavit #3 of Pierre E. Gallant sworn June 25, 2004

21

Affidavit #2 of Mary Kovacs sworn July 5, 2004

22

Affidavit #2 of Robert Parton sworn August 11, 2004

23

Affidavit #3 of Karina Park sworn August 30, 2004

24

Affidavit #1 of Thomas Marquardt sworn October 22, 2004

25

Affidavit #1 of Corina Stockli sworn November 12, 2004

26

Affidavit #5 of Derek C. Creighton sworn November 22, 2004

27

Affidavit #5 of Karina Park swornNovember 29, 2004

 

[5]                For the purpose of this application I find that the plaintiff is the owner of 48 condominiums comprising of a seven story building on Barclay Street in Vancouver, B.C.  The building was constructed in 1987-1988.  National Door supplied five exterior doors to the project.  These doors gave access onto the patios in four of the condominiums.  It is unclear on the evidence and I make no finding of fact that National Door supplied door slabs only or pre-hung doors with jambs and sills.

[6]                Sometime in 1988 water related repairs were done to the exteriors of seven condominiums, the social room, and the garage.  G.L.A. Enterprises did this work.  The work involved fixing leaks, installing flashing, gutter and downpipe systems, and putting hoods up over doors.  G.L.A. also applied caulking to seams on the existing flashings.  Despite this work water problems continued at the building.  In March 1993 the owners sent a delegation to a lawyer in Vancouver to get advice on their options and course of action.  The lawyer wrote a letter to the owners after that meeting.  The lawyer confirmed that the owners had told him the building had experienced major water leakage since its construction back in 1988.  Remediation efforts had not been successful.  The leaks and damage continued to plague the owners.  The lawyer advised the owners to change their strategy by contracting the repairs on their own rather than relying on the owners to affect those repairs.  Oddly, despite mentioning the possibility of taking legal action, the lawyer did not give his client advice about the risk of expiring limitation periods.

[7]                Leaks and damage continued to accrue at the building.  The owners commissioned an expert report for repairs.  They received that report in 1997.  They started action against some of the defendants in that year.  In 2000 the owners had considerable remediation work done.  The five doors were replaced.  The original doors were removed and destroyed.

[8]                In 2003 the plaintiff decided that National Door should be added to their suit for recovery of damage.  This was on the theory that the doors National Door supplied were defective and that defect allowed water to enter the building causing it damage.

[9]                In the years between 1988 and 2003 National Door innocently destroyed their records concerning the plaintiff’s building.  Some of National Door’s personnel who had to do with the original transaction have left the company and are no longer available as witnesses.  G.L.A., the company that did remediation work in 1988, cannot supply meaningful illumination of the single invoice that describes the work it did on the building.  The repair work in 2000 changed not only the original doors, but also much of the wall systems in and around the doors.  The plaintiff did not preserve the original door and wall material.  Neither did the plaintiff compile recordings or samples of the original materials so that forensics might be carried out on them.

Hearing DE Novo

[10]            The original order adding National Door was made ex parte.  The parties agreed that the 2003 order should be vacated and the application to add National Door should be heard by me de novo.  I need not, therefore, concern myself with whether the Rules require that a prospective defendant be served with an application to add it to the suit.  Nor do I need to concern myself with whether the principles of full and frank disclosure apply to such an application if it proceeds without notice to the person affected.

Rule 15(5) Considerations

[11]            An application to add a party under Rule 15(5) engages two main principles and four sub-principles.  They are:

1.    There must be interrelationship between an existing party and the person to be added that relates to the subject matter of the suit or the relief sought;

2.    if that interrelationship exists, adding the person must be just and convenient, the measure of which is determined by the following factors:

(a)    the extent of delay in making the application;

(b)    any explanation for that delay;

(c)    the prejudice caused by that delay; and

(d)   the degree of connection between the existing claims and the claim against the proposed defendant.

1.     Interrelationship

[12]            Although I cannot find as a fact what kind of door or door assembly National Door supplied to the building, the evidence strongly suggests that it did sell some kind of door to the building’s constructor.  The water repair work done in 1988 and 2000 clearly implicated the exterior doors, some of which probably came from National Door.  Accordingly, there is some evidence to connect National Door to the subject of the plaintiff’s suit.

2.     Just and Convenient

2(a) Extent of Delay & 2(b) Explanation for Delay

[13]            It is convenient to collapse extent and explanation into a single discussion.  That is because delay is relevant to two separate considerations.  The first consideration is lapse of a limitation period; the second is practical consequences of delay.

[14]            In this case the limitation issue requires consideration of a large amount of relatively complex evidence.  The central issue is: when did the plaintiff’s cause of action against National Door arise; and was the running of time postponed by factors contemplated by the Limitation Act.  The answers to those questions are by no means clear.  The evidence adduced in this Rule 15(5) application is not up to the task of resolving the limitation question.

[15]            In circumstances like this the proper thing to do is assign the limitation issue to the trial judge (Lui v. West Granville Manor Ltd. (1987) 11 B.C.L.R. (2d) 273). Accordingly, although I have a strong intuition about that issue, it plays no persuasive role in this proceeding.  Whether National Door has a limitation defence may be decided by a trial judge; it will not be decided by me.

[16]            The second consideration is the practical consequence of the plaintiff’s delay.  The evidence on the application made it clear that as long as 16 years ago the plaintiff appreciated that their building was leaky and that the doors were implicated in that problem.  The problem continued through 1993 and was still extant when the plaintiff sued in 1997.  The plaintiff did not act against National Door until 2003.  That is some 15 years after the leaks became apparent.  By any measure that is a considerable delay.

[17]            The plaintiff says that they could not have known that the doors caused the leaks until the building’s exterior was deconstructed during the big repair effort in 2000.  They say they could not have known who supplied the doors until they were alerted that the doors were problematic and they had an opportunity to extract door supply invoices from the building’s constructor.  They say that did not culminate until shortly before they applied to add National Door in 2003.

[18]            Leaving aside questions surrounding limitations, I find the plaintiff’s explanation for delay wanting.  They were aware as early as 1988 that the building leaked and that the exterior portals were a potential locale for aqueous incursion (alas, the Bench admits it is not immune to jargon).  By 1997, when the plaintiff received the report on which their suit and repair efforts were based, they were certainly aware that the doors were part of the problem.  They may not have known precisely what role the doors played in the building’s sieve-like nature, but their expert advisor clearly told them then that the doors needed replacement at a cost of something like $24,000.

[19]            I am not convinced by the plaintiff’s explanation for delay.  I am in no way persuaded that the plaintiff’s delay between 1997 when they had advice the doors were faulty, and 2003 when they applied to add the doors’ supplier, was reasonable.

2(c)   Prejudice from Delay

[20]            National Door has suffered a number of prejudices as a consequence of the plaintiff’s delay, and several as a consequence of the plaintiff’s deliberate actions during that delay.  National Door has destroyed any documents it might have had relating to the doors in question and to its dealings with the building’s constructor.  National Door kept those documents for 10 years.  Had the plaintiff moved against National Door in 1997, National Door might have been alerted to the need to preserve those documents for its defence.  Further, certain personnel who formerly worked for National Door and who might have been able to give evidence about the doors in question are no longer available.  These factors prejudice National Door’s ability to present a defence to the plaintiff’s claims.

[21]            The doors were likely modified sometime between leaving National Door’s warehouse and 1997.  I draw that conclusion because the plaintiff’s expert says he saw some rubber stripping on the doors and National Door says it never supplied or assembled such stripping on any door it ever sold.  It appears impossible to determine now who modified the doors or when.  G.L.A. might have done that modification, but National Door cannot prove it because, due to the passage of time, G.L.A.’s people cannot supply that evidence.

[22]            The plaintiff, despite being embroiled in a lawsuit over the very subject of the repair work underway in 2000, allowed the doors in dispute to be removed and destroyed.  The plaintiff similarly allowed remedial work to go on in and around the door portals, thus removing material that might have supplied some evidence regarding the source, volume, direction, and consequence of leaking water.  National Door asserts that it did not supply the door jambs and sills for these doors.  The doors, jambs, and sills are now gone, and along with them went any realistic opportunity National Door might have had to examine those items and use the product of that examination in its defence.

[23]            The plaintiff says that National Door can examine some photographs of the doors taken in situ and can rely on the plaintiff’s expert’s assessment of the nature and quality of the doors.  National Door is understandably reluctant to base its defence upon photos and reports prepared by the plaintiff at the same time the plaintiff was prosecuting a lawsuit in the hope of blaming someone else for its building’s problems.  

[24]            Given the plaintiff’s actions and the immense gulf of time between supply and suit, I find that National Door has suffered such prejudice as to be unable to mount a meaningful defence to the plaintiff’s claims. This situation exists because the plaintiff dallied too long and because they destroyed the very items they say give rise to National Door’s liability.  This amounts to substantial practical prejudice to National Door.  This prejudice stands apart from any prejudice it might suffer as a consequence of being deprived of a technical defence based on an expired limitation period.

2(d)   Degree of Connection

[25]            The evidence on this application suggested that if the doors National Door supplied were defective then water damage of some sort might have occurred.  National Door made much of its position that it supplied only five doors to only four suites and that in the overall scheme of things any contribution made by those doors to the overall damage must have been small.

[26]            I would not dismiss the application to make National Door a defendant on the ground that there is a minimal connection between the damage claimed and National Doors alleged negligence.  The evidence was not so clear-cut as to lead to the inescapable conclusion that the plaintiff’s claims against National Door are de minimus or are disconnected from other elements of the plaintiff’s claims.  To conclude that they are would be to go too far on too little evidence.

Other Considerations

[27]            The plaintiff argued that because one defendant has issued a third party notice against National Door, it will be part of the suit in any event.  Therefore, so says the plaintiff, National Door will suffer no additional prejudice by being made a defendant too.  There are, of course, significant differences between being a third party answering whatever claims a defendant may have against you and being a defendant answering whatever claims a plaintiff may have.  The plaintiff’s argument on this score must fail.

Conclusion

[28]        The April 2003 order adding National Door as a defendant will be vacated by consent.  The plaintiff’s de novo application to add National Door as a defendant is dismissed with costs on scale 3.

“P. Rogers, J.”
The Honourable Mr. Justice P. Rogers

Vancouver, Barclay Street, VR 2124: Leaky condo owners can appeal without leave decision to exclude Indal as defendant

COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Strata Plan VR2124 v.
Indal Ltd.,

 

2004 BCCA 611

Date: 20041206


Docket: CA032354

Between:

The Owners, Strata Plan VR2124

Appellant

(Plaintiff)

And

Indal Limited

Respondent

(Defendant)

 


 

Before:

The Honourable Mr. Justice Donald

(In Chambers)

 

D.C. Creighton

Counsel for the Appellant

D.L. Miachika

Counsel for the Respondent

Place and Date of Hearing:

Vancouver, British Columbia

4 November 2004

Place and Date of Judgment:

Vancouver, British Columbia

6 December 2004

 


Reasons for Judgment of the Honourable Mr. Justice Donald:

[1]            This matter came before me as a motion for directions as to whether leave was required to appeal the order of Mr. Justice Masuhara pronounced 24 September 2004.

[2]            The plaintiff, here the applicant and proposed appellant, moved ex parte to add Indal Limited ("Indal") as a defendant.  Indal manufactured the windows and doors used in the construction of what has become a leaky condominium.  Madam Justice Gill granted the order.

[3]            Indal applied to set aside the order.  The plaintiff brought a cross motion to add Indal in the event Indal's application succeeded.

[4]            Mr. Justice Masuhara set aside the ex parte order on the ground that the plaintiff failed to make complete disclosure of material facts, in particular, expiry of the limitation period and potential prejudice caused to Indal by the delay in adding Indal as a defendant in 2003 to a suit brought in 1997.  He found on the evidence that the limitation defence had accrued before the ex parte motion.  He determined that the plaintiff received an expert report on 3 June 1997 giving notice of the alleged defects in the windows and doors and the time began to run for two years from that date at the latest.

[5]            In dealing with the plaintiff's cross application pursuant to Rule 15(5)(a)(iii), Masuhara J. found it was not just and convenient to add Indal because: (1) the application was brought after expiry of the limitation period; (2) Indal disposed of documents and lost contact with potential witnesses; and (3) Indal lost the opportunity to inspect the windows and doors after they were replaced.

[6]            Accordingly he ordered that:

1.    The Order of the Honourable Madam Justice Gill pronounced July 3, 2003 adding Indal Limited as a Defendants [sic] to this action be vacated and set aside as against Indal Limited;

2.    A Declaration that Indal Limited is not a party or Defendant to this action;

3.    The style of cause and style of proceeding in this action be amended to delete all references with respect to Indal Limited as a Defendant; and

4.    Costs incurred by Indal Limited connected with this action be paid by the Plaintiff at Scale 3 to Indal Limited forthwith after assessment.

[7]            Is this an order requiring leave to appeal?  I have decided that the plaintiff has an appeal as of right from the order because it finally disposed of the rights of these parties in the action.  Although the proceedings below appear to be interlocutory on the surface, it is my view that the order in question has a final dispositive effect because of the determination of the limitation issue.

[8]            This case is unlike The Owners, Strata Plan LMS 1212 v. Winchester Investments Ltd., 2004 BCCA 500 per Smith J.A., where leave to appeal an order refusing to add a party was dismissed because the plaintiff could simply start a separate action and move to consolidate: see para. 11.  Here, although the plaintiff has started a separate action out of an abundance of caution, the plaintiff cannot escape the limitation finding if it stands up.

[9]            This is a dual effect case, i.e. if the issue is decided one way the rights of the party are determined and if decided the other way the action carries on.  Earlier jurisprudence of this Court would suggest that the question of whether leave is required can be answered by reference to the nature of the process and therefore dual effect cases should have leave.  I think the more contemporary focus is on the effect of the order rather than the nature of the process from which the order emerged: see Zanetti v. Bonniehon Enterprises Ltd. (2002), 177 B.C.A.C. 165, 2002 BCCA 555 per Ryan J.A. in chambers.  See also the thorough review of this vexed question in Lions Gate Marketing Co. Ltd. v. Used Car Dealers Assn. of Ontario (2004), 242 D.L.R. (4th) 332, 2004 BCCA 354 per Finch C.J.B.C. in chambers, in particular his adoption of the finality test formulated by Lambert J.A. in Topgro Greenhouses Ltd. v. Houweling (2002), 171 B.C.A.C. 209, 2002 BCCA 387.

[10]        In Strata Plan LMS 989 v. Redekop (2003), 193 B.C.A.C. 4, 2003 BCCA 613, Smith J.A. in chambers directed that leave was required from an order adding defendants to an action in circumstances where the chambers judge refused to give effect to a limitation defence.  However in obiter dicta Smith J.A. said at para. 6:

Had the application been dismissed, it would have finally disposed of the rights between the parties.

[11]        In the present matter the order leaves nothing in the action between these two parties and accordingly I determine that it has a final effect.  The plaintiff has an appeal as of right.

“The Honourable Mr. Justice Donald”