Victoria, Swan Lake Estates: Court finds it just and convenient to add Almetco as a defendant in Meadowlark leaky condo development

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Strata Plan No. VIS 3540 v. Oak Meadows Estates Ltd.,

 

2007 BCSC 750

Date: 20070530
Docket: 00-3554
Registry: Victoria

Between:

The Owners, Strata Plan No. VIS 3540

Plaintiff

And:

Oak Meadows Estates Ltd., Meadowlark Developments Ltd., Kellyoak Enterprises Ltd. (formerly known as Seawest Properties Ltd.), Kelvin D. Armstrong (also known as Kelly Armstrong), David Franklin Vidalin, The Corporation of the District of Saanich, Vic Davies Architect Ltd., Yoneda & Associates Consultants Ltd., Ron Leier Construction Ltd., Ken Poskitt Roofing Ltd., Great West Stucco Ltd., Victoria Deck Limited, Irwin Industries (1988) Ltd., A.C.T. Concrete Placing and Finishing Ltd., National Labour Pool Ltd., Bluewater Fireplace Corp., John Doe and John Doe Limited

Defendants

And:

Almetco Building Products Ltd., Great West Stucco Ltd., Yoneda & Associates Consultants Ltd., Ken E. Smith, Vic Davies Architect Ltd., Hayward Wells & Associates Ltd., Ron Leier Construction Ltd., The Corporation of the District of Saanich, Victoria Deck Limited, Bluewater Fireplace Corp., Rod Noble (doing business as Noble Sheet Metal), Ken Poskitt Roofing Ltd., A.C.T. Concrete Placing and Finishing Ltd., Irwin Industries Ltd. and 461734 B.C. Ltd. (formerly Diversified Construction Services Ltd.)

Third Parties


Before: The Honourable Mr. Justice Frankel

Reasons for Judgment

Counsel for the Plaintiff

Vince G. Critchley

Counsel for Almetco Building Products Ltd.

Brian D. Rhodes

Date and Place of Hearing:

March 30, 2007

 

Vancouver, B.C.


Introduction

[1]                The plaintiff, The Owners, Strata Plan No. VIS 3540, (the “Owners”), are the owners of 18 strata lots which make up The Swan Lake Estates, (“Swan Lake”), a building located at 971 McKenzie Avenue, Victoria. B.C.  It has commenced what colloquially can be called a “leaky condo” action against the developer of the property, and numerous other parties.  On this application it seeks to add Almetco Building Products Ltd. (“Almetco”) as a defendant, pursuant to Rule 15(5)(a)(iii) of the Rules of Court.  Almetco supplied the windows and sliding glass doors for the project.

[2]                For the reasons that follow this application is allowed.

Background

[3]                This matter has a long history.  I will not rehearse every step taken along the path leading to this motion.  Rather, I will recite only those events necessary to provide a context for this decision.

History of Construction, Remediation, and Litigation

[4]                A development permit for the building was issued to Meadowlark Developments Ltd. (“Meadowlark”) on April 18, 1994.  The building permit was issued on August 23, 1994, and the occupancy permit on December 23, 1994.  Almetco supplied the windows and glass doors sometime in 1994.

[5]                There were some isolated reports of water leaks in one or two units in May of 1996, July of 1997, and December of 1998.  The Strata Council attempted to have the developers and contractors effect the necessary repairs.

[6]                At the request of the Strata Council, building inspectors for the District of Saanich (“Saanich”) inspected the building on January 18, 1999.  They advised a member of the Council that damage had been caused by structural defects, and that it was Meadowlark’s responsibility to effect repairs.  The Strata Council wrote to Meadowlark the following day, advising it of the results of the inspection.

[7]                Meadowlark attempted to effect repairs to the building.  Despite these efforts the problems persisted.  On April 12, 1999 the Strata Council filed a report with the New Home Warranty Program, seeking coverage for water penetration.

[8]                The New Home Warranty Program advised the Strata Council that they should consider hiring a building envelope engineer.  This led to Chatwin Engineering Ltd. (“Chatwin”), being retained in early June of 1999.

[9]                Chatwin delivered its preliminary report on August 5, 1999.  It confirmed water penetration was occurring at several locations, including at “Window to stucco/cedar siding intersections”.  It recommended further investigation be undertaken “in order to identify all building envelope deficiencies as well as to produce a detailed scope of repairs . . . ”

[10]            On August 17, 1999 the Strata Council authorized Chatwin to proceed with a building envelope assessment, and to determine the cost of emergency repairs.

[11]            That same day the Strata Council sent a letter to the Owners which included the following:

The “Preliminary Site Investigation Report” indicates that there are deficiencies in the construction of the building, which involve primarily the roof flashing, ventilation of the ‘attic’ space, and probable water intrusion where structures penetrate the building envelope (vents, windows, etc.). . . .

[12]            Prior to September 8, 1999, a representative of the Strata Council discussed the possibility of commencing an action against those responsible for the defects in Swan Lake with a lawyer.

[13]            On October 13, 1999, Chatwin delivered a report entitled, “Phase 1 Building Envelope Condition Survey & Investigation Emergency Repairs”.  On the first page it describes one of the deficiencies as “Water ingress into the cladding system related to inadequate waterproofed flashing located on the roof and deck parapets”.  Under the heading “Building Envelope Inspection Results” the report states:  “Water travelling along the pitched roof to wall intersection is entering the cladding system at the stucco termination molding [sic] to roof interface”.

[14]            The cost estimate for emergency remedial work in the report included a quote for “the removal and replacement of existing skylights and the installation of new gaskets”.

[15]            The minutes of the Owners Annual General Meeting of November 29, 1999 indicate that the Phase 1 Report was discussed, and that a further inspection dealing with cladding and hydrology was pending.  It also states that:

The Corporation was notified that it is the intention of the Council to seek legal advice regarding any possible recourse to recover the cost of the repairs, and what legal action it may take should any of the owners be delinquent in repaying the strata.

[16]            Chatwin’s second report, “Phase 2 Hydrology and Building Envelope Condition Survey and Investigation”, was delivered on February 1, 2000.  It contains the following statement:

5.3       Windows / Sliding Doors

Aluminum [sic] framed windows and sliding doors are used in this project.  These types of windows and doors are known to leak at the mitred frame corners as the frame corners are mechanically fastened and sealed with caulking which, over time, breaks down and allows water to enter the wall assembly directly.  During our review it was noted that the lower frame corner of unit #302s [sic] sliding door had come apart allowing water to penetrate into the wood components in the above noted fashion.  See photo #29 in Appendix 3.

[17]            In the spring of 2000, the Strata Council had some discussions with a lawyer in regard to commencing legal action against the parties responsible for the deficiencies in the construction of Swan Lake.

[18]            In late June of 2000, the Strata Council retained Glen A. Crawford, “to provide legal services relating to the remediation of the Building and to commence action against the parties responsible for the faulty construction of Swan Lake”.  On June 23, 2000, Mr. Crawford wrote to the District of Saanich to provide notice of his clients’ potential claim in negligence against it, i.e., “for failure to ensure the proper inspection of the building, and to ensure that it was properly constructed”.

[19]            Shortly after being retained, Mr. Crawford received a Trades List from Saanich listing Almetco as the supplier of windows for Swan Lake.

[20]            On June 29, 2000, Mr. Crawford wrote to the two architects, and the structural engineer involved in the building of Swan Lake, putting them on notice that the Owners would be taking legal action against them for negligence in the design and construction of the building, and for the costs of remediation to the building envelope.

[21]            On July 10, 2000, Mr. Crawford filed a Writ of Summons in the Victoria Registry, naming Oak Meadows Estates Ltd., Meadowlark, Saanich, and “John Doe Limited” as defendants.  A Notice of Discontinuance was filed on August 2, 2000, and a new writ filed the same day.  The second writ was necessary because the Owners did not pass a special resolution authorizing litigation until July 27, 2000.

[22]            Mr. Crawford deposes that he did not name any other defendants as he was unsure as to which trades had been negligent.  He did not want to miss any limitation period relating to the action against Saanich.

[23]            Between August, 2000 and March, 2001, Mr. Crawford took no steps to locate or add additional defendants.  He deposes that he did not think there was a limitation problem, as his understanding was that the six year period started to run when the Owners received Chatwin’s Phase 2 Report (on February 1, 2000).

[24]            During March or April of 2001, a para-legal employed by Mr. Crawford prepared a praecipe to obtain a desk order adding defendants to the action.  It was not filed as Mr. Crawford wished to conduct additional research to discover all potential defendants.  However, due to illness, Mr. Crawford did not do this research.

[25]            The writ was served in July of 2001.  Mr. Crawford states that he did not take steps to have it served earlier, as he was expecting that additional parties would be identified by Chatwin, and added.  He says Chatwin did not provide him with the requested information.

[26]            The remediation work on Swan Lake commenced on August 31, 2001.

[27]            On September 27, 2001, Mr. Crawford filed a Notice of Motion seeking to add a number of defendants, including Almetco, to the action.  This application was never brought on for hearing.

[28]            Mr. Crawford’s medical condition worsened in the winter of 2001, and he hired M. Bruce Wardhaugh, a lawyer, to assist him with his leaky condominium files.  On January 11, 2002, Mr. Wardhaugh became an associate of Mr. Crawford’s firm, and assumed conduct of the Swan Lake file.

[29]            The remediation work on Swan Lake was substantially completed by January 22, 2002.

[30]            On June 30, 2003, Mr. Wardhaugh received a letter from counsel for Saanich stating that unless a Statement of Claim was filed within two weeks, he would seek to have the action dismissed.  As a result, Mr. Wardhaugh filed a Statement of Claim on July 9, 2003.  Although Almetco was one of a number of new defendants named in the style of cause, no order had been granted adding them.  This Statement of Claim was served on Saanich, but not on any of the other named defendants.

[31]            On October 14, 2003, Mr. Crawford hired another associate, Justin Hodkinson, to assume conduct of his firm’s leaky condominium files.  Mr. Wardhaugh’s employment with Mr. Crawford’s office ended in mid-December, 2003.

[32]            In December, 2003, Mr. Hodkinson noticed that no order had been obtained adding Almetco, and a number of other parties, to the Statement of Claim filed on July 9, 2003.  This led to his asking Chatwin for its opinion on whether certain parties should be added.  Almetco was not mentioned in this letter.

[33]            In early January, 2004, Mr. Hodkinson advised the Strata Council that he would need a report from Chatwin before moving forward with the litigation, and that it might be necessary to add other parties.

[34]            In July of 2004, Mr. Hodkinson was aware of the proper procedure to be followed in seeking to have parties added as defendants.  However, it was his practice to attempt to identify all potential defendants before filing such an application.

[35]            In early August, 2004, Mr. Hodkinson provided the Strata Council with an update.  He advised he had identified a number of parties that he intended to add as defendants by the end of September, once he received confirmation from Chatwin.  Almetco was one of the parties mentioned.

[36]            Both Mr. Crawford and Mr. Hodkinson attended the Owners Annual General Meeting of September 23, 2004.  They acknowledged responsibility for the delay in advancing the action (i.e., procrastination), and said that they would move quickly to add parties, including Almetco.

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