Richmond, Lighthouse Place: Court allows leaky condo owners to amend statement of claim

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Section 1 of the Owners, Strata Plan LMS 2643 v. Harold Developments Ltd.,

 

2007 BCSC 1095

Date: 20070723
Docket: L052627
Registry: Vancouver

Between:

Section 1 of the Owners, Strata Plan LMS 2643

Plaintiff

And

Harold Developments Ltd., James Kwan, Yvonne Kwan,
William Kwan, and others

Defendants

Before: The Honourable Mr. Justice Sigurdson

Reasons for Judgment

Counsel for the Plaintiff:

J.G. Mendes

Counsel for the Defendants, Harold Developments Ltd., James Kwan, and Yvonne Kwan:

T. Yu

Date and Place of Hearing:

April 5, 2007

 

Vancouver, B.C.

NATURE OF APPLICATION

[1]                The plaintiff, Section 1 of the Owners, Strata Plan LMS 2643, seeks damages for the alleged defective construction of a condominium called “Lighthouse Place”.  This claim involves what has become known as a leaky condo. 

[2]                In this application, the plaintiff seeks to amend its statement of claim to provide particulars of its claim for damages for negligence and a duty to warn against James Kwan and Yvonne Kwan, who are the sole directors of Harold Developments Ltd., the contractor which provided labour and materials in respect of the design and construction of the condominium.  The evidence shows that at one point, James Kwan and Yvonne Kwan owned 43 of the 106 condominium units. 

[3]                The defendants, James Kwan and Yvonne Kwan, had earlier filed an application to strike out the existing pleadings against them in the original statement of claim on the ground that they disclosed no reasonable cause of action.  They also take the position that there is no reasonable cause of action disclosed by the further proposed amendments that the plaintiff seeks to make to the statement of claim.  They also assert that the proposed amendments should not be allowed because the claim is statute-barred by reason of the Limitation Act, R.S.B.C. 1996, c. 266. 

[4]                The defendants say that in order to establish a cause of action against an employee or director of a corporation, a plaintiff must show that the individual committed a tortious act which demonstrated an identity or interest that was separate from that of the company. 

[5]                The plaintiff says that the amendments ought to be allowed because it is not plain and obvious that there cannot be personal liability for employees or directors of a company unless the alleged actions are tortious and exhibit a separate identity.  The plaintiff submits that the law in this area is unsettled and, as such, it is not plain and obvious that the claim that is proposed by the amendments cannot succeed, and argues that the amended claim should go to trial where the legal issue can be determined, not in a vacuum, but in a complete factual setting. 

[6]                Moreover, the plaintiff says that the proposed amendments are not out of time, as they simply particularize a claim in negligence that already appears in the statement of claim.  The plaintiff says that the claim of negligence in the statement of claim was simply an alteration, modification, or extension of the claim against the Kwans in the writ issued on November 2, 2005 and was permitted under Rule 20(3).  Even if the proposed amendments allege a cause of action that might be out of time, which the plaintiff disputes, the plaintiff says that the joinder of a cause of action outside the limitation period should be permitted and the limitation period is simply one factor to be considered in deciding whether to allow the amendment. 

[7]                Let me set out the pleadings from the initial writ, which was issued on November 2, 2005; the statement of claim of March 13, 2006; and further proposed amended statement of claim attached to the notice of motion dated October 27, 2006.  Further proposed revisions to the statement of claim were described in the plaintiff’s March 15, 2007 outline. 

[8]                The writ of summons names a number of defendants including the Kwans.  Insofar as the Kwans are concerned, the writ alleges a breach of a duty to warn.  The endorsement in the writ as it relates to the Kwans reads, in part:

The Plaintiff and the Owners claim general damages, special damages, interest and costs against the Defendants as a result of defects in the workmanship, materials and design of the strata lots, common property, common facilities, and other assets of the Strata Corporation (the “Construction Deficiencies”) comprising the condominium building located at 5860 Dover Crescent, Richmond, British Columbia and known as “Lighthouse Place” (the “Condominium”).

The Construction Deficiencies were caused or contributed to by the negligence of the following Defendants, who breached their duty of care to the Plaintiff and Owners:

… [a number of individual defendants are mentioned, but they do not include the Kwans]

Each of the Defendants breached its duty to the Plaintiff and Owners to warn of the Construction Deficiencies.

The Disclosure Statement contains material false statements for which Harold Developments Ltd., James Kwan, Yvonne Kwan and William Kwan are liable under section 75 of the Real Estate Act and section 22 of the Real Estate Development Marketing Act, as amended, and at common law.  …

The Strata Corporation and the Owners have suffered and continue to suffer loss, damage and resultant damage as a result of the Construction Deficiencies and the aforementioned breaches of contract, breaches of duty of care, breaches of duty to warn and material false statements.  This loss, damage and resultant damage includes:

1.         the cost of investigating and repairing the Construction Deficiencies;

2.         the cost of investigating and repairing resultant damage to the strata lots, common property, common facilities and other assets of the Plaintiff and the Owners;

3.         depreciation in the market value of the strata lots, common property, common facilities and other assets of the Plaintiff and the Owners; and

4.         increased property management costs.

[9]                The statement of claim filed March 13, 2006 contained allegations against the individual defendants, the Kwans, extended negligence claims against them and particularized the claim with respect to the disclosure obligation under the Real Estate Act, (which is not the subject of this application).  It contained the following paragraphs:

70.       At all material times, the Defendants owed the Strata Corporation and the Owners a duty of care to take all reasonable steps to ensure that the construction of the Condominium complied with the British Columbia Building Code and the City’s bylaws, that the Condominium was:

a.         designed in accordance with prudent design principles;

b.         built in a good and workmanlike manner in accordance with prudent construction practices; and

c.         built with suitable materials, and would be fit for its purpose, namely, habitation.

74.       Further, or in the alternative, the Defendants and each of them, owed the Strata Corporation and the Owners a duty to warn of the Construction Deficiencies.

75.       The Defendants breached the foregoing duties to the Strata Corporation and the Owners.

76.       The Defendants’ breaches of duty caused or contributed to the Construction Deficiencies, the Resultant Damage and the Dangerous Defects.

77.       The Defendants are jointly and severally liable for the loss and damage suffered by the Strata Corporation and the Owners, and the Strata Corporation specifically pleads and relies upon the Negligence Act, R.S.B.C. 1996, c. 333, and amendments thereto.

[10]            The application to amend the statement of claim that is before me on this application contained the following proposed amendments as underlined below. 

 


 (More)