Vancouver, Governor's Tower and Villas: Due to conflict of interest, Court rules leaky condo owners can use RDH Building Engineering as their repair consultant but not for purposes of establishing liability

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Owners, S.P. LMS 1725 v.

Pacific Place Holdings Ltd.,

 

2007 BCSC 1047

Date: 20070712
Docket: S006008
Registry: Vancouver

Between:

The Owners, Strata Plan LMS 1725

Plaintiff

And:

Pacific Place Holdings Ltd. (previously
known as Concord Pacific Holdings Ltd. and
Concord Pacific Development Ltd.) et al

 

Defendants

And:

United Metals Ltd. et al

 

Third Parties


Before: The Honourable Mr. Justice Curtis

Reasons for Judgment

Counsel for the Plaintiff

R. Lesperance

Counsel for the Defendant,

Pacific Place Holdings

 

James A. Doyle

& A. Hasan

Counsel for RDH Building Engineering Ltd.

 

T. Peters

Date and Place of Hearing:

June 15, 2007

 

Vancouver, B.C.

[1]                Pacific Place Holdings Ltd. has applied for an order that RDH Building Engineering Ltd. be enjoined from engaging in any capacity in any activity relating to a condominium project developed by Pacific Place Holdings.  The application is made on the grounds that RDH is in a position of conflict, having once advised Pacific concerning the project and being now retained by the Owners.

[2]                The Governor’s Tower and Villas Condominium Project, a strata plan project developed by Pacific, was substantially completed in November, 1994.  The Owners, Strata Plan LMS 1725, is the Strata Corporation for the project.  The project consisted of a tower and two lower units.  The buildings suffered from water penetration problems immediately following their construction.  Mr. David Ricketts, an engineer then with the firm of Morrison Hershfield, was consulted by Pacific in 1994 and 1995.  The Strata Corporation consulted Levelton Engineering Ltd. about the water ingress problems and Levelton prepared reports dated May 1998 and November 1999.

[3]                Mr. David Ricketts left the firm of Morrison Hershfield and founded the firm RDH Building Engineering Ltd., continuing to act as a consultant concerning water ingress problems on the project as evidenced by a bill for services to October 31, 2000.  The writ was filed in this action on November 8, 2000.  On December 21, 2000, Mr. Brian Hubbs, another principal of RDH, met with Mr. Mitchell, a lawyer for Pacific, and  Messrs. Wong, Hagkull, Ulinder, Roman and Negrin, all representatives of Pacific, and presented a PowerPoint critique of the 1998 and 1999 Levelton reports, following which there was a discussion of the court action commenced by the Strata Corporation.

[4]                In or about January 2006, Lyn Campbell of Vancouver Condominium Services Ltd., property manager for the Owners, contacted Warren Knowles, a professional engineer with RDH, to provide consulting services for the repair of the building envelope.  Mr. Knowles became aware that Mr. Hubbs had made the presentation to Concord on the project in 2000 and that RDH had made a proposal to Pacific to provide litigation support at that time, but had not been retained.  In or about August 29, 2006, Mr. Knowles sent the Strata Corporation a proposal and standard form agreement and on October 2, 2006, Mr. Knowles attended a meeting of the Strata Corporation to explain the rehabilitation process and what RDH could offer by way of consulting services.  In a letter dated November 16, 2006, Lyn Campbell instructed RDH “to proceed with the design development portion of your proposal”.  RDH had made a proposal to provide litigation support for the Owners in October 2006, but the Owners decided not to use RDH for those services. 

[5]                By letter of November 30, 2006, Mr. Negrin, on behalf of Pacific, wrote to the Strata Owners as follows:

It has been brought to our attention that RDH was recently retained by the Owners of Strata Plan LMS 1725 on the Governors Tower project.  RDH was previously retained by Concord Pacific, to provide expert assistance on this same project, following an action being commenced by the same Owners.  As well, your Mr. Ricketts, provided consulting services to Centreville Construction Ltd. on this project in 1994.

RDH received confidential information during the course of these retainers which confidential information is directly related to the issues in the action.

Given the previous relationship we do not see how RDH can now be involved on behalf of the Owners.  Accordingly, we ask that you contact us by Monday, December 4, 2006, setting out your position.  It is our expectation that you will be withdrawing from the project.

Our counsel will be following up with the Owner’s solicitors in terms of any information that may have passed between RDH and the Owners and or any of their representatives.  Please ensure that all files, documents and notes (whether electronic or hard copy) are preserved.

[6]                Upon being made aware of Pacific’s objection to its involvement, RDH took steps to ensure that Brian Hubbs and David Ricketts had no involvement on the project and did not discuss their previous involvement with other firm members.  The hardcopy file of RDH was sent to the corporate lawyer’s office to ensure that no one had access to it, and access to the electronic files was restricted to Mr. Hubbs.

[7]                The position of the Strata Owners is that they wish to retain RDH as a repair consultant only and not to provide an expert report for use in the litigation for the purposes of establishing liability on the part of the defendants.  Ms. Campbell, the property manager for the condominium owners has deposed that, “RDH has an unblemished record for quality project management service” and that “RDH is the leader in Western Canada for pursuing innovative and cost effective solutions for building envelope repairs of the magnitude recommended by Levelton at Governor’s Tower.”  The Strata Owners are concerned that if RDH is disqualified from acting as their repair consultant, the project will be delayed, the cost increased and that there is a significant chance that the trial set for January 7, 2008 will be delayed several more years.

[8]                The position of Pacific is that the Strata Owners did not actually retain RDH until November 16, 2006, two weeks after notice of the conflict was given.  Pacific’s position is that RDH received confidential information when acting as professional engineers on its behalf and that the injunction sought is necessary to prevent confidential information being used against Pacific in the litigation.

[9]                A separate set of confidential affidavits were presented to me in the absence of the owner’s counsel concerning which counsel for Pacific and counsel for RDH made submissions concerning what, if any, confidential information had passed  between Pacific, Pacific’s lawyer (Mr. Mitchell) and RDH.

[10]            The case of Schober v. Walker, 2004 BCCA 205, 26 B.C.L.R. (4th) 28, concerned the use of a lawyer’s opinion in the taxation of a legal bill.  The opinion was objected to on the grounds that the party against whom the evidence was tendered had consulted a partner of the lawyer giving the opinion.  Southin J.A., in delivering the Court’s decision referred to the decision of Lord Denning in the case of Harmony Shipping v. Davis, [1979] 3 All E.R. 177 (C.A.) at page 182 in which Lord Denning held:

There is no property in a witness as to fact.  There is no property in an expert witness as to the facts he has observed and his own independent opinion on them.  There being no such property in a witness, it is the duty of a witness to come to court and give his evidence in so far as he is directed by the judge to do so.

[11]            Southin J.A. accepted that statement of the law.

[12]            In the case of L.R. v. British Columbia, 2002 BCSC 405, 99 B.C.L.R. (3d) 386, an expert in the standards of care of deaf children in residential schools was permitted to give expert opinion for the plaintiffs even though that expert had been retained by the government as an expert in an earlier case involving the same school.  Humphries J. held at paras. 36, 37 and 38:

I accept that Dr. Sullivan took no part in discussions of litigation strategy or planning in respect of the six previous cases, and of course did not do so in the present action as it was not commenced for several years after she had rendered her initial reports. She is an independent expert witness.

Notwithstanding that confidential information may have passed between the defendant and Dr. Sullivan, although as I have said it is difficult to imagine what that might be, I am of the view that the potential to provide the court with useful evidence exists. Dr. Sullivan is not disqualified from preparing a report for the plaintiffs simply because she has also prepared a report for the defendant.

In preparing her report, she must not consider or discuss any confidential information she received.

[13]            Clearly, in this case, the Owners could call the RDH engineers as witnesses at trial to give evidence concerning the building.  The central point in issue in this application is not what evidence RDH could give concerning their opinion but whether RDH received confidential information from Pacific or its lawyer, and if so, should it be enjoined from acting any further because of that.


 (More)

GCAN Insurance loses battle with Concord Pacific over duty to defend in leaky condo cases

Parkview Gardens, Concord Pacific, Vancouver, BC.

Parkview Tower, Concord Pacific, Vancouver, BC

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

GCAN Insurance Company v. Concord Pacific Group Inc. et al,

 

2007 BCSC 241

Date: 20070222
Docket: S063402
Registry:
Vancouver

Between:

GCAN Insurance Company

Petitioner

And

Concord Pacific Group Inc. formerly known as
Concord Pacific Developments Ltd.,
Parkview Towers (No. 1) Limited, and
Centreville Construction Ltd.

Respondents

-And –

Docket: S063274
Registry:
Vancouver

Between:

GCAN Insurance Company

Petitioner

And

Pacific Place Holdings Ltd.,
Governor’s Tower Limited, and
Centreville Construction Ltd.

Respondents

Before: The Honourable Madam Justice Nicole Garson

Reasons for Judgment

Counsel for Petitioner

G.S. Miller

Counsel for Respondents in both actions

A. De Jong and M. Lam

Date and Place of Hearing:

February 5, 6 and 7, 2007

 

Vancouver, B.C.

[1]                In these petitions, the insurer, GCAN Insurance Company (“GCAN”), applies for a declaration that it has no duty to defend the Respondents pursuant to policies of liability insurance with respect to claims against those Respondents brought in actions by two strata corporations for defective workmanship and resultant damage.

[2]                The petitions raise the issue of whether the particular wording of the policies extends coverage to the general contractor, construction manager, owner, and developer for damage caused to a building by its own faulty workmanship or that of its subcontractors.  The Petitioners contend that this court’s decision in Swagger Construction Ltd. v. ING Insurance Co. of Canada, 2005 BCSC 1269 is determinative of the issue, and is binding on me; consequently, they are entitled to a declaration that the insurer has no duty to defend the underlying actions. 

[3]                The Respondents argue that the Swagger decision is distinguishable.  They claim that although the insuring clause in the policies before me and the one in the policies before the court in Swagger are essentially the same, the exclusion clauses differ.  Based on the principle that it is the wording of the whole of the policy, and not the general principles of interpretation that govern, the Respondents argue that to find that the insuring clause does not cover damage to the building arising from the insured’s own faulty workmanship is inconsistent with the exclusion clauses.  The exclusion clauses in the policies at issue in this case would be redundant, according to the Respondents, if coverage for their own work is not covered by the insuring clause.

[4]                The Respondents also argue that the totality of the jurisprudence suggests that Swagger is an aberration that ought not to be followed since its reasoning departs from well-established lines of authority on the issue of the interpretation of the policies.  The Respondents argue that this case falls within the exceptions to the rule in  Re Hansard Spruce Mills Ltd., [1954] 4 D.L.R. 590 (B.C.S.C.), on the grounds that there was binding authority that was not considered by the chambers judge, and also on the ground that subsequent decisions have affected the validity of the judgment.

Facts

[5]                I rely on these facts for the purposes of determining the issues before me, but they are not findings of fact for any other purpose. This outline of the relevant facts is based on the pleadings as well as the affidavit evidence before me. The pleadings in the underlying actions and the affidavits provided by the Respondents are inconsistent in respect to the roles of the various Respondents in the construction of the two projects. Below, I will address the problem that arises from this inconsistency.

[6]                The claims against the Respondents in the underlying actions are brought by two strata corporations.  They are what has become known as “leaky condo” actions.  The underlying actions are styled as follows:  Owners Strata Plan LMS 990 v. Parkview Towers (No. 1) Limited et al., B.C.S.C. Action No. S035605, Vancouver Registry (the “Parkview Tower Action”), and Owners Strata Plan LMS 1725 v. Governor’s Tower Limited et al., B.C.S.C. Action No. S006008, Vancouver Registry (the “Governor’s Tower Action”) (collectively, the “underlying actions”).

[7]                The Parkview Tower Action is the subject of petition No. S063402 (the “Parkview Tower Petition”).  The Respondents in the Parkview Tower Petition, Parkview Towers (No. 1) Limited and Centreville Construction Ltd. are named as defendants in the Parkview Tower Action.

[8]                The Governor’s Tower Action is the subject of petition No. S063274 (the “Governor’s Tower Petition”).  The Respondents in the Governor’s Tower Petition, Pacific Place Holdings Ltd., Governor’s Tower Limited, and Centreville Construction Ltd., are named as defendants in the Governor’s Tower Action.

 

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Vancouver, Governor's Tower, LMS 1725

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

The Owners, Strata Plan LMS 1725 v. Pacific Place Holdings Ltd. et al.


2006 BCSC 1358

Date: 20060907
Docket: S006008
Registry: Vancouver

Between:

THE OWNERS, STRATA PLAN LMS 1725

Plaintiff

And:

PACIFIC PLACE HOLDINGS LTD. (previously known as Concord Pacific Holdings Ltd. and Concord Pacific Developments Ltd.), GOVERNOR%u2019S TOWER LIMITED, CENTREVILLE CONSTRUCTION LTD., DAVIDSON YUEN PARTNERS (a firm), JOHN B. DAVIDSON, DAVID H. SIMPSON, DAVIDSON YUEN SIMPSON ARCHITECTS (a firm), DAVID SIMPSON ARCHITECT INC., JOHN B. DAVIDSON ARCHITECT INC., RONALD YUEN, RALPH P. MELLEMA, RALPH P. MELLEMA doing business as RALPH P. MELLEMA ENGINEERING LTD., NDL CONSULTANTS LTD., GREENLAND INDUSTRIES LTD. formerly known as POON, WONG & ASSOCIATES INC. also formerly known as J. POON & ASSOCIATES, J. POON, CHARLES A. MENUN, JONES KWONG KISHI (a firm), W.R. SHIELDS CONTRACTORS LTD., FREDERICK W. WELSH, FRED WELSH LTD., VICTOR TZAR KUO LI, FRANK JOHN SIXT, PERRY LOGAN doing business as ENERSEAL WINDOWS, RICHARD RYAN doing business as INTERTECH GLAZING, ADVANCED GLAZING SYSTEMS LIMITED, TALCO GLASS (a firm), SPECIALIZED ENGINEERED PRODUCTS LTD., doing business as SPECIAL EQUIPMENT PRODUCTS LTD., JOHN DOE#1, JOHN DOE #2, CITY OF VANCOUVER, C.M.C. CONSULTANTS LTD., ELTEX ENTERPRISES (1990) LTD., 191766 HOLDINGS LTD. previously known as SEYMOUR BUILDING SYSTEMS LTD., STEVEN MOSKALYK, AVALAR CAULKING SERVICES LTD., GEO. THIRD & SON LTD., KIBAR CONTRACTORS LTD., CALVIN CARNEGIE, ROBIN HALL, RAYMOND MURRAY, MILAN NOVACEK, PAUL SCHOUW, BERKELEY ENGINEERING LTD., GARY W. BERKELEY, JMB CONSULTANTS (a firm), JORGE BEJA doing business as JMB CONSULTANTS, PETER ROSS LIMITED, and PETER ROSS

Defendants

And:

Avalar Caulking Services Ltd. and Intertek Testing
services NA Ltd./
Services D%u2019Essais Intertek An Ltee.

Third Parties


Before: The Honourable Mr. Justice Burnyeat

Reasons for Judgment
(from Chambers)

Counsel for the Plaintiff

R.J. Lesperance

Counsel for the proposed Defendant,

Star Masonry Ltd.

S.G. Cordell

Date and Place of Hearing:

August 17, 2006


Vancouver, B.C.

[1] The Plaintiff applies for an Order that Star Masonry Ltd. (%u201CStar%u201D) be added as a Defendant to this Action and that the Plaintiff be granted leave to amend the Fifth Amended Writ of Summons and Third Further Amended Statement of Claim in order to allege that Star supplied and installed the masonry work for the condominium property which is the subject matter of this Action (%u201CCondominium%u201D), that Star owed a duty of care to the Plaintiff, that Star breached that duty of care, and that the breaches of Star caused or contributed to the %u201CConstruction Deficiencies%u201D which are set out in paragraph 29 of the Statement of Claim. In the Third Further Amended Statement of Claim, the following %u201CParticulars%u201D of the Construction Deficiencies%u201D at the Condominium are said to include the following regarding the %u201CMASONRY%u201D: %u201Cinstallation of brick window sills without a slope; poor finishing at the interface between the windows and the surrounding brick walls; failure to properly install the waterproof membrane behind the porous concrete block, stone and brick façade; lack of mortared joints at the concrete block; failure to install drip groove in masonry above windows, resulting in rusting of lintels%u201D.

[2] The amendments to the Statement of Claim do not include amendments relating to the alleged construction deficiencies relating to the masonry. It is only stated in the amendments sought that: %u201CStar%u2019s breaches of duty caused or contributed to the Construction Deficiencies set out %u2026.%u201D so that Star and all of the Defendants are jointly and severally liable for the loss and damage suffered by the Plaintiffs.

BACKGROUND

[3] The construction of the Condominium occurred between 1993 and 1995. The Defendant, Governor%u2019s Tower Ltd. (%u201CGovernor%u2019s%u201D) was the general partner of a partnership with Governor%u2019s Tower Ltd. Partnership (%u201CLimited Partnership%u201D). The Limited Partnership and Upper Nice Properties Ltd. were the developers of the Condominium (%u201CDevelopers%u201D). The Defendant, Centreville Construction Ltd. was retained by the Developers as the builder and construction manager for the construction of the Condominium.

[4] On May 12, 1993, Star entered into an agreement with Governor%u2019s for the installation of brick masonry work at the Condominium.

[5] In late October, 1997, Levelton Consultants (%u201CLevelton%u201D) was retained by the Plaintiff to investigate what the Plaintiff describes as %u201Cisolated leakage%u201D problems at the Condominium. In its April 30, 1998 Report, Levelton stated that the %u201Coverall intention of the investigation was to make a representative assessment of the building envelope, with a view to establishing maintenance or remediation requirements as they might be required. It was said that the investigation had as its objectives in order of priority the following: (a) %u201CTo develop a solution to the ongoing problems of water ingress. Such a solution to be founded on good building science construction practices rather than temporary %u2018band aids%u2019%u201D; (b) %u201CTo plan a maintenance and possible remediation program%u201D; and (c) %u201CTo prepare for the potential of litigation to cover costs of the remedial work, if any.%u201D

[6] Levelton undertook initial building envelope condition assessments and recommended targeted repairs of the problems discovered at the time. In particular, the report of Levelton identified %u201Ca number of areas of existing or potential water ingress%u201D which required the %u201Cimplementation of both a short and long-term remediation plan.%u201D The %u201Cmaintenance program%u201D and the %u201Cmanagement plan%u201D that was recommended by Levelton in 1998 were as follows:

A maintenance program for Governors should have two aspects.

1. Firstly, an immediate effort to address the numerous relatively small defects identified in the Observations is essential. This effort would have to, by necessity, consist of additional application of caulking. Much of the previous remedial caulking would have to be removed and replaced with proper materials and workmanship.

This would significantly reduce the amount of water ingress and slow the internal deterioration and corrosion processes that are expected to be occurring.

2. Secondly, it is necessary to prepare a long term plan for future maintenance.

A face seal system based on caulking means, by definition, that periodic extensive maintenance in terms of replacement of caulking will be required. Good caulking can be expected to last approximately 10 years.

However, it is anticipated that the long term maintenance program will also involve some rebuilding of the present water management system. The degree to which is required, and the methods for doing such rebuilding have yet to be determined.

A management plan should be formulated after further research and fact finding of the extent of the problem.

Immediate Implementation Stop further water from entering the wall.

Conduct further intense investigation of the as built assembly of the window wall, enclosed balconies and vent grilles. Locate and review all window drawings, shop drawing and available notes from the period of construction.

Mid Term Implementation Plan and review remedial strategies. Construct a test area(s) of possible strategies.

Long Term Implementation Undertake the remedial work on a priority basis. Undertake the scheduled maintenance of the areas that do not require major work.

[7] In 1998, Levelton had observed efflorescence and other possible problems with respect to the brick wall at the Condominium. While the brick wall was identified as a potential source of water penetration, the primary focus of the investigation and the later remediation was the window walls and the %u201CExterior Insulation Finish System%u201D (%u201CEIFS%u201D).

[8] In its April 30, 1998 %u201CBuilding Envelope Investigation Report%u201D, Levelton refers to several possible problems with respect to the brick walls: (a) some mortar was cracking, which would only be a problem if the waterproof membrane behind and below the cracked areas did not redirect the water back to the outside of the wall; (b) split face blocks allowed for some capillary action water ingress, causing darkening and moss growth; (c) supporting metal shelf angles for the brick and block were getting wet, causing rust and staining; (d) the brick window sills were installed very flat and could possibly contribute to the slow migration of water into the wall cavity; (e) efflorescence on the brick, block and mortar, indicating the possible presence of water; and (f) the finishing where the brick met the windows was poor.

[9] In 1998, Levelton was authorized to conduct a more detailed investigation into the nature of the leaks. Findings of this detailed investigation were contained in a November 15, 1999 Report. The investigation concluded that deficiencies in the caulking joints in the EIFS panels were a secondary cause of leakage due to the large volume of water ingress observed during testing. Levelton concluded that that there was %u201Ca more significant problem elsewhere in the assembly%u201D.

[10] From 2001 to 2003, the Plaintiff performed a mixture of repair and maintenance work on the buildings constituting the Condominium, consisted mostly of replacing caulking at EIFS panel joints and installing membrane at the vent duct penetrations through the window wall. Despite the maintenance and repair work performed, leaks into some units persisted.

[11] In September 2004, Mr. Busque of Levelton reviewed some repairs that were being done on one of the units at the Condominium and observed extensive deterioration of the building envelope. In January, 2005, Mr. Busque visited a different unit at the Condominium and observed further evidence of water ingress through the windows. At that time, Mr. Busque concluded that the water ingress might be indicative of problems with the brick walls. On January 18, 2005, Mr. Busque reported to the Plaintiffs that there were potential serious problems with the brick walls and recommended that Levelton conduct test openings in the brick walls.

[12] On May 11, 2005, Levelton performed test openings at the sloped sill and at the head of the windows on one of the units, at the brick clad column adjacent to that unit, and to the west side of the ground floor of the Condominium. Levelton found that there was a lack of an upturn of the waterproofing membrane at the window jamb which allowed water to migrate laterally into the wall system and, as well, found:

Mortar in the brick cavity blocked drainage of water that may have penetrated the though the joints in the brick to the cavity. A well-vented and properly drained cavity is essential to the good performance of brick veneer walls. This cavity was blocked by mortar. This is an error in the construction of the brickwall and does not meet the requirements of the Code or of the Architect%u2019s design.

[13] As a result of these test openings in the brick walls, Mr. Busque concluded that the brick walls had to be removed, the deficiencies corrected, and the brick veneer replaced. On June 20, 2005, Mr. Busque reported these findings to the Plaintiffs. It was the opinion of Levelton that: %u201C%u2026 leakage and corrosion problems at the brick walls cannot be solved without removal of the brick.%u201D

[14] On September 14, 2005, the contract between Star and Centreville was located by the Plaintiffs during a document review conducted by counsel. This application was brought on November 18, 2005 as a result of the documents discovered in the September, 2005 document review. For various reasons, this application has not come on for earlier hearing.

RULE 15(5)(a) OF THE RULES OF COURT

[15] Rule 15(5)(a) provides that the Court may order that a party be added where there exists between the proposed party and any party to the proceedings %u201C%u2026 a question or issue related to or connected (A) with any relief claimed in the proceeding, or (B) with the subject matter of the proceeding, which in the opinion of the court it would be just and convenient to determine as between the person and that party.%u201D

[16] Star concedes that there is the necessary connection and, even if that concession had not been made, I would have found that the work undertaken by Star is necessarily connected with the Plaintiff and the work undertaken on behalf of the Plaintiff at the Condominium which is the subject matter of this Action.

[17] It is clear that the question of the alleged negligence of Star undertaking the masonry work is closely connected with the subject matter of this Action and the relief claimed. As it is only necessary to establish a possible cause of action or that there may exist a question or issue between the Plaintiff and Star, I find that the Plaintiff has met the low threshold of taking the matter above a frivolous claim: Strata Plan LMS 1212 v. Coquitlam (City) (2004), 31 B.C.L.R. (4th) 356 (B.C.S.C.). Accordingly, the question is whether it would be just and convenient to add Star.

HAS A LIMITATION PERIOD EXPIRED?

[18] In considering whether it is just and convenient that Star be added as a Defendant, all relevant factors are to be considered and no one single factor is necessarily determinative. The lapse of a limitation period for bringing an action is not necessarily a bar to adding a defendant: Teal Cedar Products Ltd. (1997) Ltd. v. Dale Intermediaries Ltd. et al. (1996), 19 B.C.L.R. (3d) 282 (B.C.C.A.) at para. 41; Cementation Co. (Canada) Ltd. v. America Home Insurance Co. (1989), 37 B.C.L.R. (2d) 172 (B.C.C.A.) at para. 8; Yablonski v. Cranbrook (City), [2002] B.C.J. (Q.L.) No. 3214 (B.C.S.C.) at paras. 21-2; and Sun v. Sun, [2000] B.C.J. (Q.L.) No. 1813 (B.C.S.C.) at para. 10.

[19] The applicable limitation period for construction deficiency actions is six years: Workers%u2019 Compensation Board of British Columbia v. Genstar Corporation (1988), 24 B.C.L.R. (2d) 157 (B.C.C.A.). The time begins to run when a plaintiff ought to have reasonably known of the facts and taken advice on those facts so as to conclude that an action would have a reasonable chance of success: Strata Plan No. VR 1720 v. Bart Developments Ltd. (1998), 53 B.C.L.R. (3d) 304 (B.C.S.C.), aff%u2019d (1999) 49 C.L.R. (2d) 161 (B.C.C.A.). In Bart, the Court held that, once a report from a consultant regarding an assessment of deficiencies in the construction had been received, a reasonable person such as strata owners would have concluded a good cause of action lay against the developers, consultants, architects and various trades as identified in the report.

[20] In Bart, supra, a July, 1989 report identified major structural defects including adequate roofing, deficient stucco, and other defects in ventilation, drainage and balcony construction and a legal action was not commenced until November, 1995. In dealing with the question of whether the conduct of that plaintiff had been reasonable between the completion of construction and the ultimate issuance of the action, the Court in Bart reviewed the decisions in Karsanjii Estate v. Roque (1990), 43 B.C.L.R. (2d) 234 (B.C.C.A.); Levitt v. Carr (1992), 66 B.C.L.R. (2d) 58 (B.C.C.A.); and 355022 BC Ltd. v. CCS Properties Inc. (1995), 14 B.C.L.R. (3d) 107 (B.C.C.A.) and stated that the phrase %u201Cfacts within his means of knowledge%u201D meant:

%u2026facts which either were known or ought to reasonably have been known to the claimant, that is facts which would have become known to him if he had taken such steps as would have been reasonable for him to take in his circumstances. Therefore they determined when the plaintiff ought reasonably to have known of facts, and ought reasonably to have taken the appropriate advice on those facts so as to be able to conclude that an action would have a reasonable prospect of success. (at para. 23)

[21] Humphries J. in Bart then concluded that the plaintiff had followed a reasonable course of action:

In my view, the plaintiff followed a reasonable course of action throughout 1988 and 1989 until the receipt of the CSA report. They were seeking practical solutions to ever mounting problems, which, with the advantage of hindsight now appear to be symptoms and signs of large underlying deficiencies, but at the time were being dealt with by the developer and EPM/s own repairers.

There are some cases%u2026 where no expert opinion is necessary to come to a conclusion that one has a cause of action. However, in the circumstances before me it would, in my view, be reasonable to expect the plaintiff to need expert advice to determine if these matters were%u2026 discrete and individual leakage problems or if they were defects arising from negligent design or construction%u201D (at paras. 31-2)

[22] The Plaintiff here ought to have reasonably known of the facts and taken advice from those facts from its solicitors so as to conclude that an action would have a reasonable chance of success against Star after receiving the Levelton Report on June 20, 2005. Accordingly, I am satisfied that there has been no expiry of the six-year limitation period. I am satisfied that the limitation period did not begin to run until May or June, 2005. I find that it is just and convenient that Star be joined as a Defendant as that is more convenient to all of the parties than a new action naming Star as a Defendant and then a later motion to consolidate this Action and that action for all purposes.

[23] On the assumption that I am incorrect in coming to the conclusion that there was a postponement of the running of the limitation period so that it has not expired, the question is whether I should exercise my discretion after the expiry of the limitation period and, in this regard, consider the extent of the delay, the reasons for the delay, any explanation put forward, the degree of prejudice caused by the delay, and the extent of connection between the existing claims and the new cause of action: Letvad v. Finley (2000), 82 B.C.L.R. (3d) 296 (B.C.C.A.).

[24] In considering the issue of prejudice, it is necessary to undertake a review of the balance of prejudice. It will clearly be a significant prejudice to the Plaintiff if Star is not added as a Defendant. The Plaintiff will suffer an irreplaceable loss of a cause in circumstances where contributory negligence has been advanced as a defence as is the case here.

[25] Star will not suffer any prejudice if it is added as a Defendant other than the possible loss of a limitation defence. In the circumstances, the loss of a cause of action far outweighs such a prejudice: Takenaka v. Stanley (2000), 91 B.C.L.R. (3d) 179 (B.C.S.C.) at para. 41; and Yablonski, supra, at paras. 39-42.

[26] I find that there was no delay in bringing the application to join Star once it was determined that deficiencies in the brick masonry wall caused or partially caused water ingress and damage to the Condominium. Any delay was reasonable and excusable given the complexity of the action, the sheer volume of documents to be reviewed, and the evolving nature of the understanding of the Plaintiff of the causes and extent of the deficiencies in the Condominium.

[27] As well, all of the evidence is intact. The brick walls are still in place at the Condominium as they have not been replaced or repaired in such a way that evidence concerning the original construction is obscured or obliterated. Star still has access to the best evidence available as to the alleged failure and alleged poor performance of the work it undertook and of the product it produced. Even if I had found that remedial work had already been undertaken so that Star could not examine the alleged deficiencies, I would come to the same conclusion as was found in Owners Strata Plan LMS 989 v. Port Coquitlam (City) (2003), 18 B.C.L.R. (4th) 358 (B.C.S.C.), where Ballance J. stated:

Redekop and Premier also argue that the remediation work on Chancellor Court has begun and may already be completed. As such, they say they have been denied an opportunity to examine the alleged deficiencies, which, in turn, will prejudice their defence. Evidently, the remediation on Chancellor Court began in 1997, continued throughout 1998 and 1999 and were on-going at the time of the hearing of this application. Therefore, even if the Proposed Defendants had been named as defendants in the initial pleading filed January 9, 2001, at least part of the remedial work would have long been under way. In my view, Redekop and Premier, as with the other named developer defendants, will have an adequate opportunity to study the same documents, reports and evidence pertaining to the deficiencies and will not be prejudiced by not having had a first-hand view of the alleged damage. (at para. 24)

[28] Star is in no different position than any other defendant who has to defend against the allegations of construction deficiencies in the masonry work performed. The Trial is not scheduled to commence until January, 2008 so Star will have ample opportunity to obtain evidence including expert evidence to defend these claims.

[29] A director and officer of Star states that there are no documents available at the offices of Star relating to the role of Star in the construction of the Condominium. In this regard, he indicates that it was the policy of Star to destroy documents that are more than seven years old and that the documents relating to their role in the construction of the Condominium were destroyed some time in 2003 in accordance with that policy. In the absence of these documents, it is said that it would be almost impossible to determine who was employed by Star at the time and, more particularly, which of its employees worked on the Condominium. He also states that Star engages subcontractors and that the absence of the documents will likely make it impossible to determine which subcontractors were engaged by Star in respect of the Condominium and the scope of their contractual obligations to Star. While the foreman at the project has been determined and while the foreman would have been responsible for many of the dealings with the owners, architects and others involved in a supervisory capacity and able to make changes in the scope of the work to be undertaken by Star and the manner in which the work was to be performed, that foreman is no longer available to Star as he died in either 2003 or 2004. Star states that none of the current employees of Star were employed by it during the period when the Condominium was constructed. As well, the liability insurer of Star added a %u201Cwater ingress exclusion%u201D to its coverage as of July 31, 2003 and it is the understanding of Star that, because a claim was not reported before this exclusion clause came into effect, there may be no insurance coverage for Star in respect of the allegations made in the Statement of Claim as the insurer has reserved its right to deny coverage.

[30] In response to the claim by Star that documents relating to their role in the construction of the Condominium have been lost or destroyed since 2003, there are tens of thousands of pages of documents produced by existing Defendants and the Plaintiff and these documents are available for the review of Star. There should be little difficulty in identifying the relevant documents and witnesses to be produced on behalf of Star given the relationship with existing defendants and the documents available: The Owners Strata Plan VR 2402 v. R. 118 Developments Inc. et al (2004), 35 C.L.R. (3d) 20 (B.C.S.C.) at para. 38.

[31] I find that the ability of Star to investigate the circumstances relating to the claim has not been hampered. I also find that the ability to investigate the circumstances or defend the claim would not have been any better one day before the expiry of the limitation period that may have expired as early as 2004 than it is presently: Endale v. Peters (1997), 47 C.C.L.I. (2d) 307 (B.C.S.C.) at para. 16; Sun, supra, at para. 26; Takenaka, supra, at paras. 18-20; and Bel Mar Developments Inc. v. North Shore Credit Union, [2001] B.C.J. (Q.L.) No. 512 (B.C.S.C.).

[32] While the foreman on the job for Star is no longer available, it is undoubtedly the case that any change orders provided by the architect or Centreville on behalf of the Plaintiffs will be available as part of the many documents which will be in evidence and which will be available for Star. Accordingly, it appears that the untimely death of the foreman will not prejudice Star particularly. As well, even if the limitation period ran from 1998 when the first Levelton report was made available to the Plaintiff so that the limitation period would have only expired in 2004, the foreman on the job would still not have been available for Star.

[33] Star submits that there are no requested changes in the %u201CMasonry%u201D part of the Statement of Claim and that this should be taken as being an indicator that the Plaintiff had all of the necessary information available to it to join Star as a Defendant much earlier. Relying on the following statement made in Bart, supra, I am satisfied that I cannot accede to this submission on behalf of Star that the amendment should not be allowed on this basis:

I do not accept that because the Statement of Claim alleges defects in construction that ought to have been knowable to the defendants, that the plaintiff themselves must have had them within their means of knowledge from the beginning. Certainly the plaintiff could have ripped the building apart at the time the first leak was discovered, but that would not be reasonable.

In my view, the plaintiff followed a reasonable course of action throughout 1988 and 1989 until the receipt of the CSA report. They were seeking practical solutions to ever mounting problems, which, with the advantage of hindsight now appear to be symptoms and signs of large underlying deficiencies, but at the time were being dealt with by the developer and EPM's own repairers. (at paras. 30-1).

CONCLUSION

[34] On the assumption that no limitation period has expired, I am satisfied that it is just and convenient that Star Masonry Ltd. be added as a Defendant in this Action. The Plaintiff is at liberty to amend the Fifth Amended Writ of Summons and the Third Further Amended Statement of Claim. On the assumption that a limitation period has expired, I am still of the view that it would be just and convenient that Star be added as a Defendant to this Action and that the Plaintiff be granted leave to amend the Fifth Amended Writ of Summons and the Third Further Amended Statement of Claim.

[35] The costs of this application will be within the discretion of the learned Trial Judge.

%u201CG.D. Burnyeat, J.%u201D
The Honourable Mr. Justice G.D. Burnyeat