Court of Appeal dismisses proposed leaky condo class action case; lawmaking beyond review by court

Court of Appeal for British Columbia

Citation:

Kimpton v. Canada (A.G.) and British Columbia (HMTQ)

 

2004 BCCA 72

Date: 20040203


Docket: CA30432

Between:

Mary Louise Kimpton

Appellant

(Plaintiff)

And

Attorney General of Canada and Her Majesty the Queen in Right of the Province of British Columbia

Respondents

(Defendants)

 


 

Before:

The Honourable Madam Justice Huddart

The Honourable Mr. Justice Mackenzie

The Honourable Madam Justice Thackray

Oral Reasons for Judgment

P.G. Guy

Counsel for the Appellant

A.D. Louie and D.B. Prosser

 

 

T.H. MacLachlan, Q.C.

and C. Owen

Counsel for the Federal Crown Respondent

 

Counsel for the Provincial Crown Respondent

 

Place and Date:

Victoria, British Columbia

February 3, 2004

 


[1]            HUDDART J.A.: This appeal from the dismissal of an application for certification as a class proceeding asks whether British Columbia or Canada owes a private law duty of care to owners of residential strata units in a condominium complex constructed in 1990 in Saanich, known as "The Willows".  The building in which the applicant’s unit is situated suffered building envelope failure, allegedly because it was constructed in compliance with the National Building Code requirement that the exterior walls be sealed by two vapour proof barriers.  The alleged effect of this requirement on buildings in coastal British Columbia was to trap moisture between the barriers with consequential structural damage and health hazard.

[2]            The applicant alleges the National Research Council (NRC) was negligent and failed in its duty to warn when it drafted and published, as the agent of Canada, the National Building Code of Canada (NBC) containing that requirement, and that British Columbia was negligent in its implementation of the Legislature’s policy decision to enact by regulation a building code with the effect of a municipal bylaw.

[3]            The applicant’s building was required to be constructed in compliance with the British Columbia Building Code, 1987 (BCBC 1987).  That code was established by regulation made under the authority of s. 692(1) of the Local Government Act, R.S.B.C. 1996, c.323.  It adopted by reference the NBC, as it existed on December 30, 1985, with changes the designated minister considered necessary.  The BCBC, 1987 applied throughout British Columbia and had the same force and effect as a validly enacted municipal bylaw until it was replaced with a revised code in 1992.

[4]            The chambers judge, for reasons reported at (2002), 9 B.C.L.R. (4th) 139, 2002 BCSC 1645, found it was plain and obvious the action could not succeed against either Canada or British Columbia because the pleadings did not establish a private law duty of care on either government, nor could they be amended to do so.  Applying the test developed in Anns v. Merton London Borough Council, [1978] A.C. 728 as applied in Cooper v. Hobart, [2001] 3 S.C.R. 537, he concluded the applicant could not demonstrate sufficient proximity to establish a prima facie duty of care on either British Columbia or Canada.  He noted that neither claim fell within a category of cases where a private law duty of care had been recognized, and concluded in both cases that policy considerations negated the recognition of a new duty of care, even were a prima facie duty of care to be established.

[5]            The appellant submits the approach of the chambers judge to the determination of the certification issue was “essentially sound,” but that he erred in result.  In her factum these issues were identified:

1. Did the trial judge err in dismissing the plaintiff’s application for certification in finding that there were considerations that ought to or did negative or reduce or limit the scope of the duty that British Columbia owed to the proposed class, or the damages to which a breach of it may give rise?

2. Did the trial judge err in holding that there was a valid policy consideration that ought to negative the duty of care that British Columbia owed the proposed class because the BCBC was a policy decision and not its operative implementation and that any negligence in creating the BCBC is not actionable?

3. Did the trial judge err in holding that there was a valid policy consideration that ought to negative the duty of care that British Columbia owed the proposed class because the spectre of indeterminate liability negates the prima facie duty of care owed by British Columbia to the proposed class?

4. Did the trial judge err in holding that there was a valid policy consideration that ought to negative the duty of care that British Columbia owed the proposed class because the fact that the Local Government Act does not set any limit on the type and amount of claims that might be advanced against British Columbia negates the prima facie duty of care owed by British Columbia to the proposed class?

5. Did the trial judge err in holding that there was no relationship of sufficient proximity between Canada and the Plaintiff or members of the proposed class so as to create a duty of care?

6. Did the trial judge err in holding that there was a valid policy consideration that ought to negative the duty of care that Canada might owe the plaintiff and the proposed class because the spectre of indeterminate liability negates any prima facie duty of care?

[6]            As I view the case against British Columbia, there is only one issue.  In my view the chambers judge correctly found the creation and establishment of the BCBC to be an act of lawmaking.  See Welbridge Holdings Ltd. v. Metropolitan Corporation of Greater Winnipeg, [1971] S.C.R. 957.  Immunity from the application of tort law flows from that fact.  As the chambers judge noted at paragraph 63 of his reasons for judgment, “[t]o the extent a government negligently governs, the voting public may impose a political consequence at an election.”  It follows I would not accede to the grounds of appeal that apply to British Columbia.

[7]            Nor would I accede to the grounds of appeal with regard to the claim against Canada.  I am not persuaded the chambers judge erred when he held that the National Research Council was not in a relationship of sufficient proximity with the appellant to give rise to a private law duty of care.  The appellant presented no authority establishing a duty of care on any advisor to a legislative body.  And that is the role of the National Research Council with regard to the NBC.  The National Research Council is a creature of statute.  Parliament created it to have “charge of such matters affecting scientific and industrial research as the Governor in Council may assign to it” National Research Council Act, R.S., c. N-14, s. 4.  Included in such matters was the development of a model building code to assist municipalities in enacting building bylaws and the construction industry by having uniform national building standards.

[8]            To the extent the appellant and others in her very unhappy situation may have been injured by the alleged negligence in the preparation or dissemination of the NBC, their reliance can only be on British Columbia, whose Legislature authorized the making of the regulation adopting the NBC by reference, with the effect of a municipal building bylaw, an act of lawmaking, as I have said, beyond review by a court in the conduct of tort law.

[9]            I would dismiss the appeal.

[10]        MACKENZIE J.A.: I agree.

[11]        THACKRAY J.A.: I agree.

[12]        HUDDART J.A.: The appeal is dismissed.

“The Honourable Madam Justice Huddart“

 

Court denies certification of proposed leaky condo class action; no cause of action

Citation:

Kimpton v. Canada (Attorney General) et al

Date:

20021128

 

2002 BCSC 1645

Docket:

01/1447

Registry:  Victoria

IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:

MARY LOUISE KIMPTON

PLAINTIFF

AND:

 

ATTORNEY GENERAL OF CANADA,

CANADA MORTGAGE AND HOUSING CORPORATION AND

HER MAJESTY THE QUEEN IN RIGHT OF THE

PROVINCE OF BRITISH COLUMBIA

 

DEFENDANTS

 

 

REASONS FOR JUDGMENT

 

OF THE

 

HONOURABLE MR. JUSTICE MACAULAY

 

 

Counsel for the Plaintiff:

P. Guy

Counsel for the Defendant:

  Attorney General of Canada

A.D. Louie and

D.P. Prosser

 

Counsel for the Defendant:

  Her Majesty the Queen in Right of the Province of British Columbia

 

T.H. MacLachlan, Q.C. and

C. Owen

Counsel for the Defendant:

  Canada Mortgage and Housing Corporation

 

J. Sullivan

Date and Place of Hearing:

September 3-6, 2002 and

September 9-13, 2002

 

Victoria, BC

 

[1]            The plaintiff, Ms. Kimpton, owns a residential strata unit in a condominium complex known as the Willows, constructed in Saanich in 1990.  She seeks an order certifying this action as a class proceeding pursuant to sections 2 and 4 of the Class Proceedings Act, R.S.B.C. 1996, c. 50 (the "Act").

[2]            In the action, Ms. Kimpton seeks to raise the question of whether the defendants, the Attorney General of Canada ("Canada") and Her Majesty the Queen in right of the Province of British Columbia (the "Province") were negligent in drafting the National Building Code (the "NBC") and the British Columbia Building Code (the "BCBC”), respectively (collectively, the “codes").  As to the remaining defendant, the Canada Mortgage and Housing Corporation ("CMHC"), Ms. Kimpton raises the question of whether CMHC, by granting mortgage insurance for construction and conventional loans in Canada, made misrepresentations as to the suitability of the NBC.

[3]            I will set out the particular causes of action alleged by Ms. Kimpton when I address what I consider to be a fundamental flaw in her application, namely the failure to plead underlying causes of action as required by s. 4(1)(a) of the Act.  In short, I have concluded that it is plain and obvious that all the causes of action, or claims, as set out in the pleadings, are bound to fail.  It is not the novelty of the claims that prevents them from proceeding; it is because it is plain and obvious that they cannot succeed.  I reach this conclusion in spite of the plaintiff’s attempts to shoehorn them into ordinarily recognizable categories of claim such as negligence, negligent misrepresentation and failure to warn.

[4]            My reasons for denying certification follow.

SECTION 4(1)(A) OF THE ACT

[5]            Section 4 of the Act requires the Court to certify a proceeding as a class proceeding where all of the requirements of the section are met.  Section 4(1)(a) requires that the pleadings disclose a cause of action.

[6]            The threshold is low.  Ms. Kimpton is not required to pass a preliminary merits test.  While some cases have suggested that the plaintiff bears a burden to show a cause of action, that is potentially misleading, as burdens are generally evidentiary in nature.  I prefer to say that the plaintiff must demonstrate on the pleadings, or the pleadings as they might reasonably be amended, that there is a cause of action.  I should only refuse to certify where Ms. Kimpton plainly and obviously cannot succeed.

[7]            I agree with counsel for Ms. Kimpton that the correct approach to the issue is set out in a number of cases, including Hollick v. Toronto (City), [2001] S.C.J. No. 67 (Q.L.) (S.C.C.) at para. 16.  In Endean v. Canadian Red Cross Society (1998), 48 B.C.L.R. (3d) 90 at 92-93, Braidwood J.A. said:

Any challenge by a defendant that a plaintiff has not presented a cause of action as required by s. 4(1)(a) of the Class Proceedings Act is, in essence, an application under R. 19(24) of the British Columbia Rules of Court that the pleading discloses no reasonable cause of action.

 

The test for determining such an issue in this Court is clearly expressed in the case of Hunt v. T & N plc, [1990] 2 S.C.R. 959, 49 B.C.L.R. (2d) 273 (S.C.C.), at 980 [S.C.R.], where Wilson J., writing for the Court, set out the test as follows:

 

            Thus, the test in Canada governing the application of provisions like R. 19(24)(a) of the British Columbia Rules of Court is the same as in one that governs an application under R.S.C.O. 18, r. 19:  assuming that the facts as stated in the Statement of Claim can be proved, is it "plain and obvious” that the plaintiff’s statement of claim discloses no reasonable cause of action?  As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be “driven from the judgement seat".  Neither the length and complexity of the issues, the novelty of the cause of the action, nor the potential for the defendant to present a strong defence, should prevent the plaintiff from proceeding with his or her case.  Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court, should the relevant provisions of the Plaintiff’s Statement of Claim be struck out under Rule 19(24)(a).

 

      The question to be decided, then, is whether it is "plain and obvious" that the plaintiff’s statement of claim discloses no reasonable cause of action.  Is there some radical defect which would amount to an abuse of process of the court such that the claim should be struck?  The fact that the point is a novel one would not prevent the issue proceeding to trial.

 

At this stage, I have followed the same practice as I did in Collette v. Great Pacific Management Co., [2001] B.C.J. No. 253 (Q.L.)(S.C.) at paras. 52, 57 and 59, of reading the statement of claim as generously as possible with a view to accommodating any inadequacies due solely to drafting deficiencies.

[8]            The Province argued, in part, that the test under s. 4(1)(a) is not predicated on the assumption that the pleadings may be amended.  I disagree.  I am not aware of any authority to support a more restrictive approach than traditionally taken when analysing pleadings under Rule 19(24).

[9]            While the threshold is low, it does not follow that it is sufficient for the plaintiff to merely label her claim as one in negligence.  While not in the context of a class proceeding, the comments of Taylor J.A. in Kripps v. Touche Ross & Co. (1992), 69 B.C.L.R. (2d) 62 (C.A.) at para. 86, regarding the Court's role in a Rule 19(24) application, are instructive:

A court may be tempted, at the present point in the development of the Canadian law of negligence, to permit every negligence claim to proceed to trial.  But that would lead to a long and costly period of uncertainty, one particularly costly in the commercial world where certainty in the law is of considerable importance.  It seems to me that the courts would fail in their duty to community were they to decline to exercise jurisdiction under R. 19(24) simply because of the current state of the jurisprudence in this area of the law.  It is, I think, important in some cases that the court make a decision at this stage concerning the extent to which recovery in negligence can be enlarged, and I believe this to be such a case.

 

Those principles are equally applicable to the s. 4(1)(a) analysis.

[10]        As pointed out by the Province, and as set out below, there is a growing body of judicial authority for refusing to certify proceedings as class proceedings on the basis that the plaintiff has failed to demonstrate that a cause of action is set out in the pleadings before the Court:

Cooper v. Hobart, [2001] S.C.J. No. 76 (Q.L.);

Halvorson v. British Columbia (Medical Services Commission) (2001), 88 B.C.L.R. (3d) 319 (S.C.);

Price v. British Columbia, [2001] B.C.J. No. 2284 (Q.L.) (S.C.); and

F.G.M. Holdings Ltd. v. British Columbia (Workers’ Compensation Board) (2000), 79 B.C.L.R. (3d) 271 (S.C.).

THE PLEADINGS

[11]        In this section of my reasons, I set out the relevant paragraphs in the statement of claim as they relate to the causes of action against each defendant:

Against The Province:

9.    At material times the Province, through the Ministry of Municipal Affairs, Building Standards Branch, exercised its statutory discretion pursuant to the Municipal Act and established a Provincial Building Code for British Columbia ("the BC Building Code").  The Province did so by adopting the NBC with the amendments that the Province considered necessary.

 

10.   The Province holds itself out as having the necessary skill, qualification and competence to create the BC Building Code to establish minimum standards for the construction of buildings suitable for the different climactic areas and conditions in British Columbia and that would ensure that buildings constructed in accordance with those provisions would have and maintain structural sufficiency, quality, durability, and safety with respect to the health of occupants for the reasonable lifetime of the building.

 

11.   In and after 1985, the Province established BC Building Codes to set minimum provisions respecting standards for the construction of buildings suitable for the different climactic areas and conditions in British Columbia, and to ensure that buildings constructed in accordance with those provisions would have and maintain structural sufficiency, quality, durability and safety with respect to the health of occupants for the reasonable lifetime of the building.

 

12.   The Municipal Act, R.S. [sic] 1979, c. 290, as amended from time to time, provided that the BC Building Code applied to all Municipalities in British Columbia and had the same force and effect as a validly enacted bylaw of a Municipality.  Municipalities in British Columbia were required to, and did, enforce the minimum provisions contained in the B.C. Building Code.

 

...

 

31.   The Province was in a relationship of sufficient proximity to the Plaintiff Class that it owed them a statutory duty and a duty to take care to ensure that the BC Building Code was suitable for use in all climactic areas of British Columbia, and to warn if it was not.

 

32.   The Province also owed the Plaintiff Class a duty to warn if changes in the BC Building Code necessitated changes in common construction practices and that Buildings built in accordance with the BC Building Code would not have structural sufficiency, quality and durability for a reasonable lifetime and/or safety with respect to the health of occupants if practices used in construction of Buildings were not changed.

 

33.   The Province owed the Plaintiff Class the statutory duty, and a duty of care to ensure that the minimum requirements of the NBC would be such that all Buildings constructed in accordance with the BC Building Code would have and maintain structural sufficiency, quality and durability for a reasonable lifetime, and that they would also have and maintain safety with respect to the health of occupants, and to warn if they would not.

 

34.   The Province represented to the Plaintiff Class that a Building constructed in accordance with the BC Building Code would have and maintain structural sufficiency, quality and durability for [sic] reasonable lifetime, and that the Building would have and maintain safety with respect to the health of occupants.

 

35.   The Province owed the Plaintiff Class a duty to take care in the making of the said representations.

 

36.   The Province knew or ought to have known that the Plaintiff Class would rely and did rely on its representations and would thereby be induced to purchase Buildings.

 

37.   Acting on the faith of the said representations of the Province and induced thereby, members of the Plaintiff Class purchased Buildings.

 

38.   In breach of its duty, the Province was guilty of negligence in making the said representations, and failing to warn, thereby causing the Plaintiff Class loss and damage.

 

39.   In breach of all of its said duties, the Province was guilty of negligence in establishing the BC Building Code and implementing it in British Columbia.  It was unsuitable for use in British Columbia and did not anticipate or provide a remedy for the likely entrapment or condensation of water in exterior walls and/or the problems that result.

 

40.   In further breach of its duties, the Province failed to warn that changes to the BC Building Code, in or after 1985, required changes in construction practices and failed to warn that Buildings constructed in accordance with the BC Building Code thereafter would not maintain structural sufficiency, quality, durability or safety with respect to the health of occupants for the reasonable lifetime of the Building.

 

41.   Buildings were not suitable for use in British Columbia.  They developed problems resulting from the entrapment or condensation of water vapour in exterior walls and did not maintain structural sufficiency, quality, durability, or safety with respect to the health of occupants for a reasonable time.

 

42.   The said problems that developed in exterior walls have required changes in construction practices and both the problems and required changes were reasonably foreseeable as the result of amendments to the BC Building Code in or after 1985 and maintained thereafter.

 

43.   Particulars of the negligence of the Province include:

 

      a)    failing to ensure that after 1985, the BC Building Code was suitable for use throughout British Columbia, and failing to warn that it was not and/or that it required changes in construction practices, and

 

      b)    failing to ensure that all Buildings would maintain structural sufficiency, quality, durability and safety with respect to the health of occupants for a reasonable time, and

 

      c)    failing to ensure that changes to the NBC relating to reduction of vapour diffusion and increased airtightness of Buildings would not, when adopted in British Columbia, lead to a decrease in or failure of structural sufficiency, quality or durability in Buildings, and/or the loss of safety in respect to the health of occupants, and

 

      d)    failing to acknowledge or investigate experience in other jurisdictions, scientific knowledge, opinions and advice of members of the Building Standards Branch and/or others that warned against the adoption in British Columbia of the provisions of the NBC that related to reduction of vapour diffusion, and increased insulation and airtightness of Buildings, and

 

      e)    failing to amend the NBC as adopted in British Columbia so that the provisions therein that related to reduction of vapour diffusion and increased insulation and airtightness of Buildings would not cause a decrease in or failure of structural sufficiency, quality and durability in Buildings, and/or the loss of safety in respect to the health of occupants, and

 

      f)    failing to ensure that the BC Building Code adequately dealt with problems that would result from condensation or entrapment of water vapour in exterior walls, and

 

      g)    failure to warn that Buildings would suffer premature depreciation, obsolescence and failure, and

 

      h)    failure to warn that after the said amendments to the BC Building Code, Buildings would henceforth be intolerant of moisture within exterior walls, while previously exterior walls had been tolerant of such moisture, and

 

      i)    failure to consider the effect on a Building if water or moisture did leak into or condense in exterior walls that were required by the BC Building Code to be airtight, and to provide a remedy for that potential problem as part of the minimum standards of the BC Building Code, and

 

      j)    failure to warn that common construction practices had to change.

 

Against Canada:

6.    Through the National Research Council ("NRC"), Her Majesty the Queen in Right of Canada is responsible for the creation of the National Building Code for Canada ("NBC").  The NBC is a set of minimum provisions respecting the safety, quality and durability of buildings to protect public health and maintain structural sufficiency.  Her Majesty the Queen in Right of Canada intended that the NBC be adopted as a building code by all jurisdictional authorities in Canada, without amendment.

 

7.    The NRC holds itself out as having the necessary skill, qualification and competence to fulfill its responsibility to create the NBC so that it would be suitable for adoption as a building code by any authority in Canada.

 

8.    Pursuant to its said responsibility, the NRC created, copyrighted and published the NBC from time to time.

 

...

 

13.   Her Majesty the Queen in Right of Canada was in a relationship of sufficient proximity to the Plaintiff Class that it owed them a duty of care to ensure that all of the provisions of the NBC, if adopted, were suitable for use in British Columbia, and/or to warn if they were not.

 

14.   Her Majesty the Queen in Right of Canada also owed the Plaintiff Class a duty to warn if changes in the NBC necessitated changes in common construction practices, and/or if buildings built in accordance with the NBC would not have structural sufficiency, quality and durability for a reasonable lifetime, and/or if those Buildings would not have safety with respect to the health of occupants if the practices used in construction of Buildings were not changed.

 

15.   Her Majesty the Queen in Right of Canada owned the Plaintiff Class a duty of care to ensure that the minimum requirements of the NBC would be such that all Buildings constructed in accordance with the NBC in British Columbia would have and maintain structural sufficiency, quality and durability for a reasonable lifetime, and that such Buildings would have and maintain safety with respect to the health of occupants, and to warn if they would not.

 

16.   By creating the NBC and holding it out as suitable for use in all parts of Canada, Her Majesty the Queen in Right of Canada represented to the Plaintiff Class that a Building would have and maintain structural sufficiency, quality and durability for a reasonable lifetime, and that it would also have and maintain safety with respect to the health of occupants.

 

17.   Her Majesty the Queen in Right of Canada owed the Plaintiff Class a duty to take care in the making of its said representations.

 

18.   Her Majesty the Queen in Right of Canada knew or ought to have known that the Plaintiff Class would rely on its said representation and would thereby be induced to purchase Buildings.

 

19.   Acting on the faith of the said representations of Her Majesty the Queen in Right of Canada, and induced thereby, members of the Plaintiff Class purchased Buildings that were constructed, and that were required to be constructed, in accordance with the NBC.

 

20.   In breach of its said duties, Her Majesty the Queen in Right of Canada was guilty of negligence in making its said representations and in failing to warn, thereby causing the Plaintiffs loss and damage.

 

21.   Further and in the alternative, in breach of all of its duties, Her Majesty the Queen in Right of Canada was guilty of negligence in writing, publishing and holding the NBC out as suitable for adoption in all parts of Canada.  The NBC did not anticipate or provide a remedy for the likely entrapment or condensation of water in exterior walls constructed in accordance with the NBC and/or the resulting problems.

 

22.   In further breach of its duties, Her Majesty the Queen in Right of Canada failed to warn that changes to the NBC in about 1985 required changes in construction practices and failed to warn that buildings built in accordance with the NBC thereafter would not maintain structural sufficiency, quality or durability, or safety with respect to the health of occupants for a reasonable lifetime of the Building.

 

23.   Buildings were not suitable for use in British Columbia.  They developed problems resulting from the entrapment or condensation of water in exterior walls and did not maintain structural sufficiency, quality, durability, or safety with respect to the health of occupants for a reasonable time, thereby causing the Plaintiff Class loss and damage.

 

24.   The said problems that developed in exterior walls have required changes in construction practices and both those problems and the required changes were reasonably foreseeable as the result of amendments to the NBC made in or about 1985, and maintained thereafter.

 

25.   Particulars of the negligence of Her Majesty the Queen in Right of Canada include:

 

      a)    failing to ensure that after 1985, the NBC was suitable for adoption in all parts of British Columbia, and failing to warn that it was not, and/or that the NBC required changes in construction practices, and

 

      b)    failing to ensure that Buildings would maintain structural sufficiency, quality, durability and safety with respect to the health of occupants for a reasonable lifetime, and

 

      c)    failing to ensure that changes to the NBC relating to reduction of vapour diffusion and increased airtightness of Buildings would not, if adopted in British Columbia, lead to a decrease in, or failure of, structural sufficiency, quality and durability in Buildings, and/or the failure of safety in respect to the health of occupants, and

 

      d)    failing to obtain or investigate or adequately investigate experience in other jurisdictions, scientific knowledge, opinions or advice of members of the NRC and/or Building Standards Branch, and/or others, that warned against the adoption in British Columbia of the NBC that related to reduction of vapour diffusion and increased insulation and airtightness of Buildings, and

 

      e)    failing to recommend that the NBC as adopted in British Columbia should be amended so that the provisions therein that related to reduction of vapour diffusion and increased insulation and airtightness of Buildings would not cause a decrease in or failure of structural sufficiency, quality or durability of Buildings and/or the failure of safety in respect to the health of occupants, and

 

      f)    failing to ensure that the NBC adequately dealt with problems that would result from condensation or entrapment of water in exterior walls of Buildings, and

 

      g)    failure to warn that Buildings built in accordance with the NBC would suffer premature depreciation, obsolescence and failure, and

 

      h)    failure to warn that after the said amendments to the NBC, Buildings would henceforth be intolerant of moisture within exterior walls, while exterior walls previously had been tolerant of such moisture, and

 

      i)    failure to consider the effect on a Building if water or moisture did leak into or condense in exterior walls that the NBC required to be airtight, and to provide a remedy for that problem as part of the minimum standards of the NBC, and

 

      j)    failure to warn that common construction practices had to change.

 

Against CMHC:

26.   For a fee, CMHC acts as an insurer of construction and conventional mortgage loans made in Canada.

 

27.   CMHC requires that any new property against which a mortgage insured by CMHC is to be registered must be built in accordance with the NBC.  At times material to this action CMHC approved plans for Buildings prior to construction commencing.

 

28.   By its requirements and by implication CMHC represented that a Building would have and maintain structural sufficiency, quality and durability for a reasonable lifetime and/or the term of the insured mortgage, and that it would also have and maintain safety with respect to the health of occupants.

 

29.   CMHC was in a position of sufficient proximity to members of the Plaintiff Class that it owed them a duty to take care in making the said representation.

 

30.   CMHC was negligent in making the said representation in that Buildings for which CMHC granted mortgage insurance did not maintain structural sufficiency, quality or durability for a reasonable lifetime or the term of the insured mortgage, nor did those Buildings maintain safety with respect to the health of occupants, thereby causing the Plaintiffs loss and damage.

 

In paragraph 44 of the statement of claim, it is alleged as against all defendants:

44.   By reason of the said breaches of duties of care and statutory duties and by reason of the said negligent misrepresentations members of the Plaintiff Class have suffered loss and damage, including:

 

      a)    the cost of repairs to their Building, and

 

      b)    the cost of alternative accommodation, and

 

      c)    diminution in the value of their Building, and

 

      d)    loss of use and enjoyment of their Building, and

 

      e)    further and other loss and damage as shall be advised.

 

DUTY OF CARE

[12]        Ms. Kimpton contends that her pleadings disclose causes of action in negligence, breach of duty to warn and negligent misrepresentation.  In law, each of those causes of action requires proof that the particular defendant owed a duty of care to the plaintiff that was breached.  Accordingly, the underlying issue in each instance is whether the particular defendant owed a duty of care to Ms. Kimpton.  If no duty was owed, the particular claim is bound to fail.

[13]        Ms. Kimpton also suggests, albeit not forcibly, that whether a duty of care exists is, itself, a triable issue that might be certified as a common issue in a class proceeding.  A similar approach was urged on the court at the certification hearing in Campbell v. Flexwatt Corp. (1996), 25 B.C.L.R. (3d) 329 (S.C.), a case decided very early in the history of class proceedings in this province.  That approach, however, does not sufficiently take into account the passage from Kripps set out above.

[14]        Kripps makes it clear that a court is not bound to refuse relief under Rule 19(24) simply because the relevant area of the common law is uncertain.  As set out at para. 9 of the decision:

It would be wrong that those against whom action is brought in an area of law which happens to be in an active state of development should for that reason alone be required to bear the cost of inquiry into the facts before the court will decide whether the claim is one which calls for an answer.

 

I turn now to the analytical framework for determining whether a duty of care exists.

 (More)

Court orders particulars in proposed leaky condo class action by Mary Kimpton

Citation: Kimpton v. A.G. of Canada et al

Date:

20020121

  2002 BCSC 67

Docket:

01 1447

Registry: Victoria

IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:

MARY LOUISE KIMPTON

PLAINTIFF

AND:


ATTORNEY GENERAL OF CANADA, CANADA MORTGAGE AND HOUSING CORPORATION
AND HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA

DEFENDANTS

 

REASONS FOR JUDGMENT
OF THE
HONOURABLE MR. JUSTICE MACAULAY

 

Counsel for the Plaintiff:

P.G. Guy

Counsel for the Attorney General of Canada:

A. Louie, M. Bulmer and M. Molloy

Counsel for Canada Mortgage and Housing Corporation:

J. Sullivan

Counsel for Her Majesty the Queen:

T.H. MacLachlan, Q.C.,
L. Shendroff, and C. Owen

Date and Place of Hearing:

December 4, 2001

 

Victoria, BC

[1] The plaintiff (Kimpton) in a proposed class action owns a condominium in a building that she alleges has experienced a building envelope failure, in spite of being built according to applicable building code standards. In general terms, she contends that the two senior levels of government joined as defendants (Canada and the Province), respectively adopted building codes (the NBC and the BCBC) that failed to ensure, as a minimum requirement, "structural sufficiency, quality and durability for a reasonable time" and "safety with respect to the health of occupants" thereby breaching a duty of care owed to her and other condominium owners. Alternatively, Kimpton alleges that Canada and the Province breached duties to warn that the building codes were inadequate for the purpose described.

[2] Kimpton has delivered the materials upon which she intends to rely at the certification hearing to all named defendants. Several procedural issues arise from the following applications:

1. Kimpton seeks an order that the Province produce documents relating to the proposed common issues, including documents produced by the Province in other litigation respecting an alleged leaky condominium (the Healey action);

2. The Province seeks orders that Kimpton provide further and better particulars as well as additional materials in support of the application for certification; and

3. Canada seeks an order compelling Kimpton to provide further and better affidavit materials for the certification hearing or alternatively that she produce certain documents.

[3] The three defendants all opposed the Kimpton application. The Province says it is, at best, premature as it relates to the Healey action. The defendants all joined, as well, in support of the defendants' applications. Kimpton opposed the defendants' applications for documents on the basis that they relate to the merits of the action rather than any issues on certification. Kimpton also contended that there is no need for particulars as the defendants have each filed a statement of defence without needing them. Finally, Kimpton argues that there is no jurisdiction for the court to order her to file further evidence for the purpose of the certification hearing.

[4] Despite the Class Proceedings Act, R.S.B.C. 1996, c. 50 (the Act) being relatively new in British Columbia, with the exception of the application that Kimpton produce further evidence in support of her application for certification, the applications do not raise novel procedural issues. Because class proceedings almost invariably involve complex questions that require extensive discovery processes, similar issues to those raised here arise in most actions at the pre-certification stage. There are relatively few decisions on these points to date in this province. In my view, that indicates that lawyers are generally able to resolve such issues without requiring judicial intervention.

[5] In spite of some differences in the case law, it is now possible to state with reasonable precision the general procedural law governing applications for particulars or discovery of documents applicable to potential class actions at the pre-certification stage in British Columbia. I will endeavour to do so in order to provide a backdrop for my consideration of the particular issues raised here.

[6] Section 40 of the Act provides that, "the Rules of Court apply to class proceedings to the extent that those rules are not in conflict with this Act". There is some commonality between the stated objectives of the Act relating to procedure and the Rules. For example, s. 12 of the Act states:

The court may at any time make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination ...

While the Act defines a class proceeding as "a proceeding certified as a class proceeding" (s. 1), the sought after objective, when making procedural orders under the Act, is very similar to the underlying objective for any orders made under the Supreme Court Rules. That objective is set out in Rule 1(5), namely, "to secure the just, speedy and inexpensive determination of every proceeding on its merits".

[7] The difficulty in reconciling the Act and the Rules lies not in their objectives but in their respective limitations. This is because the Act is largely silent on the procedural issues arising at the pre-certification stage, yet the Rules were drafted without directly addressing the different needs of litigants in potential class proceedings. Accordingly, there is a lacuna that must be filled by applying a flexible interpretation to the existing rules that is consistent with the procedural and substantive objectives of both the Act and the Rules.

[8] This approach is consistent with that approved by the Supreme Court of Canada in Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46 at [34]. There, the court addressed the need for the court to exercise its inherent jurisdiction to settle the rules of practice and procedure in relation to class-action practice in Alberta, a province that does not have any legislative equivalent to the Act governing the actual practice.

[9] The Act contains little respecting any aspect of the pre-certification stage. Section 2(1) requires the plaintiff to be a member of a class of persons who are resident in British Columbia. Pursuant to subsection (2), the plaintiff must apply for an order certifying the proceeding as a class action as well as an order appointing the person a representative plaintiff. In most cases, including the present, subsection (3) requires the plaintiff, except with leave of the court, to apply for these orders within 90 days of delivery of the last statement of defence.

[10] Apart from the foregoing, the Act does not expressly address procedural issues at the pre-certification stage. On the other hand, sections 4 and 5 set out detailed requirements that must be met for successful certification. Sections 17 and 18 govern rights of discovery of parties and other class members. However, it is arguable that these sections, because of the definition of a class proceeding already referred to and their content, apply only after certification. The Act does not expressly address the right to either particulars or discovery of documents at any stage of the proceeding.

[11] The foregoing leaves s. 12 permitting the court to "make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination". In Endean v. Canadian Red Cross Society, [1997] B.C.J. No. 295, the court referred to s. 12 in the course of dealing with an application for production of documents at the pre-certification stage. This was consistent, in my view, not only with the approach I have set out, but also with the overall objectives of the legislation. Finally, it permits resolution of the practical realities faced by parties preparing for certification hearings within the relatively short time periods allowed.

[12] Rule 26 provides the right to demand discovery of documents relating to matters in question in an action, however, in Endean the court adjourned an application for restricted production of documents limited to certification issues, as premature when the application was brought before the parties had exchanged the affidavits to be relied on at the certification hearing.

[13] Smith J. also pointed out in Endean that the rule requires a listing of documents relating to matters in question based on the pleadings, although it is doubtful that the plaintiff is also obliged to plead facts going to the issue of certification. Those facts are found instead in the materials filed in support of the application to certify.

[14] In Matthews v. Servier Canada Inc. (5 February 1998) Vancouver Registry No. C973178 (B.C.S.C.), Edwards J. adopted a sensible middle ground by ordering document discovery in a potential class action limited to those necessary "to inform the certification process". He opined that requiring general document disclosure at that stage could be an unfair imposition.

[15] In Hoy v. Medtronic, Inc., 2000 BCSC 1105, Kirkpatrick J. addressed several applications at the pre-certification stage including the extent of document production required. She declined to order production of documents that were "not material to the certification application" (at [8]) but instead went to the merits of the plaintiff's claim. At the same paragraph, she also pointed out that the effect of permitting widespread discovery:

... would inevitably result in significant delay and expense in the pre-certification process. Such delay is contrary to the scheme of the Act as exemplified by the time restrictions within which certification applications must be brought.

Finally, in Samos Investments Inc. v. Pattison, 2001 BCSC 440, Bauman J. applied the reasoning in Matthews and declined to order discovery of the defendants' documents but granted liberty to the plaintiff to re-apply, "in the event that it considers that limited document discovery is necessary in order to inform the certification process". See [20].

[16] I conclude that the objectives of the Act as well as the Rules can best be achieved by ordering document production limited to those relevant to the issues at the certification hearing.

[17] While the analysis set out above respecting document production helps to inform the debate on whether particulars should be ordered at the pre-certification stage, it does not follow that a different test for ordering particulars is required in potential class actions. This results from a consideration of both the traditional purpose of particulars and the nature of the issues at the certification hearing.

[18] Counsel only directed me to one case specifically addressing entitlement to particulars at the pre-certification stage in a potential class action. The result in that case lends considerable support to the contention that particulars should only be ordered on traditional grounds.

[19] In approaching this issue, I keep in mind the defendants' assertion that the Kimpton pleadings are unnecessarily broad making it impossible to prepare for the issues at the certification hearing but, again, the rules were not drafted with consideration to the needs of parties preparing for a certification hearing. Historically, particulars of pleadings have been ordered under Rule 19 where necessary to enable the parties to know the case, but not the evidence, to be met at trial and plead to it.

[20] The limits of the historical approach are illustrated by reviewing the circumstances of the Jericho Hill School case in which the Supreme Court of Canada ultimately upheld certification of a limited number of issues. See Rumley v. British Columbia, 2001 SCC 69.

[21] Much earlier, at the pre-certification hearing stage in Rumley, a chambers judge held that it would be too onerous to order particulars of the allegations of sexual abuse perpetrated on deaf children at the Jericho Hill School. Later, following the certification hearing, Kirkpatrick J. found that the allegations as set out in the statement of claim constituted a cause of action as required by the Act and were sufficiently particularized for the purpose of determining certification. See R.(L.) at (1998) 65 B.C.L.R. (3d) 382 (S.C.), at [20]. She observed, however, that the question of particulars is significant in class actions as the court must assess the suitability of the action as a class action and went on to find that additional claims of misrepresentation were too vague and insufficiently particularized to assess suitability. For other reasons not material to this discussion, the judge declined to certify any of the causes of action.

[22] The Court of Appeal partially allowed an appeal but, in the result, only certified common issues relating to negligence and breach of fiduciary duty. On further appeal to the Supreme Court of Canada, the decision of the Court of Appeal was upheld.

[23] In the result, the decisions relating to particulars in the lower courts were never directly addressed on appeal nor implicitly overturned. If anything, they were implicitly upheld.

[24] In spite of the foregoing, there is still room within the traditional approach for ordering particulars under Rule 19, including after the close of pleadings, where a further statement of material facts may be necessary in order to prepare for trial. The function of particulars is six-fold and was set out in Cansulex Limited v. Perry, [1982] B.C.J. No. 369 at para. 15 (C.A.):

(1) to inform the other side of the nature of the case they have to meet as distinguished from the mode in which that case is to be proved;

(2) to prevent the other side from being taken by surprise at the trial;

(3) to enable the other side to know what evidence they ought to be prepared with and to prepare for trial;

(4) to limit the generality of the pleadings;

(5) to limit and decide the issues to be tried, and as to which discovery is required; and

(6) to tie the hands of the party so that he cannot without leave go into any matters not included.

[25] As pointed out at para. 16 of the decision, courts are encouraged to do anything that can be done to require the parties to bring forward the real issues for consideration so as to avoid surprise. See also G.W.L. Properties Ltd. v. W.R. Grace & Co. of Canada, [1993] B.C.J. No. 1062 at 3 (S.C.) and Nesbitt v. Wintemute, (1978) 8 B.C.L.R. 286 to similar effect. Kimpton contended that the majority judgment in the earlier Court of Appeal decision in Big Bay Timber Ltd. v. Arkinstall Logging Co. Ltd. (1978), 88 D.L.R. (3d), at p. 496, limited "necessary" to that which enabled a defendant to plead and to prevent surprise at trial but I am not persuaded that was intended. In any event, I prefer the more expansive statement of the functions of particulars found in the later decision of Cansulex. I also observe that in that case, the court described Big Bay as illustrating only that particulars are intended to delineate the issues between the parties.

[26] From the foregoing, I conclude that pre-certification applications for particulars after the close of pleadings should be limited to those circumstances set out in Cansulex. Those being where a party fails to plead material facts required to be proved at trial or sufficiently to delineate the issues. This interpretation falls short of what the defendants seek here.

[27] At the certification hearing, as required by s. 4 of the Act, Kimpton must prove additional facts but these are relevant only to the issue of certification. In my view, there is no requirement that she plead any of those facts. For example, she must establish at the hearing that there is an identifiable class of 2 or more persons and that she, or someone else, is a representative plaintiff who would fairly and accurately represent the interests of the class and finally, that her interest is not in conflict with the interests of other class members.

[28] Unnecessarily, in my view, Kimpton pleaded in paragraph 2 of the statement of claim that she:

... fairly represents that class of persons who purchased and/or own a building, suite or dwelling unit in British Columbia made with frame construction after 1985 and before 2000 in accordance with either the National Building Code and/or the BC Building Code ("Building") and that has developed or may develop problems resulting from the accumulation or condensation of water or vapour in exterior walls ("Plaintiff Class"). The Plaintiff has no interest that is in conflict with other members of the Plaintiff Class.

I do not think, that merely by pleading unnecessary facts, Kimpton opens herself up to a successful application for particulars. On the other hand, Kimpton cannot resist an otherwise legitimate demand for particulars solely on the basis that this is a potential class proceeding.

[29] I turn now to the circumstances giving rise to the applications in the present case starting with the defendants' application that the plaintiff provide further and better particulars.

[30] The application by the Province is two-fold. First, it seeks further and better particulars of the allegations and second, definitions of some of the terminology used in the statement of claim. These relate to the provisions of the BCBC allegedly in issue as well as the meaning of the following terms: "frame construction"; "exterior walls"; "building envelope"; "change in construction practices" and "changes in building materials". In addition to arguing that particulars should only be ordered to enable the defendants to file responsive pleadings, an argument that I reject for the reasons outlined above, Kimpton contends that the Province really seeks a "form of discovery" or particulars of evidence.

[31] The impugned paragraphs of the statement of claim include paragraph 2 as well as other paragraphs referring to the BCBC, namely paragraphs 34-38 and 40-43. The allegations are certainly very broad including: an alleged representation that a building constructed in accordance with the BC Building Code "would have and maintain structural sufficiency, quality and durability for reasonable lifetime" (para. 34); an alleged failure in establishing a code "unsuitable for use" and not anticipating or providing a remedy for the likely entrapment or condensation of water in exterior walls (para. 39); an alleged failure to warn that changes to the code "in or after 1985, required changes in construction practices" (para. 40) and that thereafter, buildings were not "suitable for use" due to "problems resulting from the entrapment of water vapour in exterior walls and did not maintain structural sufficiency, quality, durability, or safety with respect to the health of occupants for a reasonable time" (para. 41).

[32] In paragraph 42, Kimpton further alleges that changes in construction practices were required as a result of the problems that developed in exterior walls. Paragraph 43 provides particulars of negligence but using similar language to the above.

[33] In a letter dated October 12, 2001, counsel for Kimpton responded to the demand for particulars in large part by referring to the Rumley case and suggesting the pleadings were sufficient for the court to determine the certification issues. With respect, that response misses the point.

[34] The particulars sought are reasonable and, in my view, will assist in focussing attention on the issues to be met at trial independently of the certification process. Coincidentally, the particulars will enhance and clarify the existing pleading making it easier for the parties and the court to focus on certification issues.

[35] The building code is over 400 pages in length and is divided into 9 parts with attached appendices. The topics range from fire protection to plumbing services. I agree with the Province that not every provision can be in issue and that the Province should not have to speculate as to which particular provisions are at issue.

[36] While I recognize that complex cases evolve as the discovery process unfolds, the defendant is entitled to particulars in four broad categories as follows:

(1) the specific sections of the BC Building Code, or the NBC, that the plaintiff alleges are material;

(2) the definition of any term relating to construction where such term is not defined in the code or is intended to convey meaning other than as defined in the code;

(3) the specific amendments to the code that resulted in changed construction practices; and

(4) a description of the changed construction practices.

[37] As I understand the theory of the plaintiff, the representations referred to in the statement of claim flow from the statutory scheme rather than individual representations made to the plaintiff. I would not order particulars of the representations unless that understanding is incorrect. The particulars respecting the four categories above are to be delivered within thirty days unless otherwise agreed by counsel.

[38] The question of document discovery on the other hand cannot be satisfactorily or fully addressed until Kimpton provides particulars and all materials relied on for the certification process have been exchanged. Here the plaintiff simply applied for an order that the defendants produce lists of documents. The Federal Crown applied for an order that the plaintiff produce specific documents. Both applications are overly broad.

[39] In my view, as I set out earlier, all parties should list those documents in their possession or control relating to matters in issue at the certification hearing. The parties should then exchange copies in the usual way but it is premature to require any party to list or produce other documents. If counsel cannot agree on a schedule for exchanging lists or there is continuing disagreement over the need to produce specific documents based on the materials filed for the certification hearing, there will be liberty to re-apply.

[40] This leaves the final application by Canada for an order that the plaintiff provide more complete evidence in support of the application for certification. Essentially, the argument is that the evidence apparently to be relied on is incapable of satisfying the requirements of sections 4 and 5 of the Act. I am persuaded that it would be wrong for me to make any order in such regard therefore I do not propose to review the alleged shortcomings in the materials delivered by Kimpton. It is not for the court to direct a party to remedy alleged shortcomings in advance of the hearing. If Canada is correct and the evidence is eventually found inadequate for the reasons identified on its behalf, Kimpton bears the risk that she will be unsuccessful.

[41] Kimpton has now had the benefit of hearing the complaint that her materials are inadequate. If she agrees, she has sufficient time available to remedy the situation. If she does not agree, the adequacy of the materials will undoubtedly be an issue to be addressed after full argument at the certification hearing. In either event, I decline to make any order for production of further evidence at this time.

"M. Macaulay, J."
The Honourable Mr. Justice M. Macaulay