Tuesday, May 19, 1998

The Palladain/Palladium (Vancouver): Court rules leaky condo case against architects and constuction company can proceed; new owners taken to have the knowledge of previous owners

 

                                                Date:  19980519
Docket: C946094
Registry: Vancouver

IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:

THE OWNERS, STRATA PLAN VR 2000

PLAINTIFF
AND:

STEPHEN DOUGLAS SHAW, ERIC CAMPBELL, GEORGE REIFEL,
1705 NELSON HOLDINGS LTD., ALLAN MILLIGAN ENGINEERING LTD.,
THADDEUS YOUNG carrying on business as SPACEWORKS ARCHITECTS,
and the said SPACEWORKS ARCHITECTS, MIERAU CONSTRUCTION LTD.,
and PACIFIC NEW HOME SERVICES, INC. carrying on business as
NEW HOME WARRANTY PROGRAM OF BRITISH COLUMBIA AND THE YUKON,
and the said NEW HOME WARRANTY PROGRAM OF BRITISH COLUMBIA
AND THE YUKON

DEFENDANTS


REASONS FOR JUDGMENT

OF THE

HONOURABLE MADAM JUSTICE LEVINE


Counsel for the Plaintiff: D.F. Sutherland


Counsel for the Defendant: S. Coyle
Allan Milligan Engineering Ltd.

Counsel for the Defendants: M. Prohl
Pacific New Home Services Inc.
coba New Home Warranty Program of
B.C. and the Yukon ats New Home
Warranty Program of B.C. and the Yukon

Counsel for the Defendants: K.A. Short
Thaddeus Young coba Spaceworks
Architects ats Spaceworks Architects

Counsel for the Defendant: R.A. Wattie
Mierau Construction Ltd.

Date and Place of Hearing: March 26 & 27, 1998
Vancouver, B.C.

Written Submissions Received: April 20, May 1, 4, 6
& 11, 1998




I. INTRODUCTION

[1] On November 10, 1994, the plaintiff commenced this action
for damages with respect to alleged construction deficiencies
in the condominium development known as the Palladian, located
in Vancouver, B.C. The condominium development was constructed
starting in March 1987 and was declared substantially complete
on December 4, 1987. The defendant contractor, Mierau
Construction Ltd., and the defendant architects, Spaceworks
Architects, plead in their defence that the action is statute-
barred and rely upon the provisions of the Limitation Act,
R.S.B.C. 1996, c. 266.

[2] The plaintiff applies under Rule 34 of the Rules of Court
for the determination of two points of law arising from the
pleadings. These are:
(a) Do the "postponement provisions" in sections 6(3) to
(6) of the Limitation Act apply to this action?
(b) Is the commencement of the limitation period
determined in relation to the strata corporation or
the individual owners of strata units?

[3] Rule 34 provides for the determination of a point of law
before trial with the consent of all parties or by order of the
court. In this case, all of the parties have not formally
consented, but none objected to the procedure. I was invited by
plaintiff's counsel to make an appropriate order after hearing
argument. Having heard the arguments on behalf of the
plaintiff, the architects and the contractor and reviewed
written submissions from these parties and the defendant,
Pacific New Home Services, Inc. (the other defendants not
making submissions), I order that these points of law be heard
and disposed of before trial.

II. POSTPONEMENT
A. The Limitation Act

[4] The provisions of the Act which are relevant to the first
question, whether the postponement provisions apply to this
action, are sections 3(2)(a), 3(5) and 6(3)(b):


3.(2) After the expiration of 2 years after the
date on which the right to do so arose a person may
not bring any of the following actions:

(a) subject to subsection (4)(k), for damages
in respect of injury to person or property,
including economic loss arising from the
injury, whether based on contract, tort, or
statutory duty;

. . .

3.(5) Any other action not specifically provided
for in this Act or any other Act may not be brought
after the expiration of 6 years after the date on
which the right to do so arose.

6.(3) The running of time with respect to the
limitation periods set by this Act for any of the
following actions is postponed as provided in
subsection (4):

. . .

(b) for damage to property;

. . .

[5] Counsel for the defendant architects submits that the
plaintiff's claim against them qualifies for postponement under
section 6(3)(c) of the Act as an action for "professional
negligence". Counsel for the architects submits that section
6(3)(c) also applies to the defendant contractor, which the
contractor disputes. The plaintiff made no submissions with
respect to the application of section 6(3)(c) of the Act to
the architects or the contractor; his submissions were directed
solely to the application of section 6(3)(b). I will limit my
decision to the point raised by the plaintiff: the application
of section 6(3)(b) to this action.

B. The Issue

[6] The question for determination is whether an action for
"damages for injury to...property" is an action for "damage to
property". If it is, there is no postponement available. If it
is not, postponement is available.

[7] Whether the limitation period is two years (under section
3(2)(a)) or six years (under section 3(5)) is not before me on
this application. If no postponement is available under section
6(3)(b), the plaintiff is out of time under both provisions in
respect of those of its claims which are for "damage to
property".

C. Case Law

[8] There is a body of authority in British Columbia that
establishes that "injury to property"


refers to the situation where property is damaged by
some extrinsic act, and not to the situation where a
claim is made for damage occasioned by defects in the
property itself.


(W.C.B. (B.C.) v. Genstar Corp. (1986), 24 B.C.L.R. (2d) 157 at
161-2 (C.A.), citing Alberni Dist. Credit Union v. Cambridge
Properties Ltd. (1985), 65 B.C.L.R. 297 (C.A.)). This reasoning
was adopted in Zurbrugg v. Bowie (1992), 68 B.C.L.R. (2d) 322
(C.A.); Ridley Terminals Inc. v. Mitsubishi Canada Ltd., [1993]
B.C.J. No. 443 (S.C.) (QL); and Privest Properties Ltd. v.
Foundation Co. of Canada, [1995] 10 W.W.R. 385 at 431-3
(B.C.S.C.).

[9] The effect of these decisions is that where the claim does
not relate to direct damage from an extrinsic act or an
identifiable external event, it is not a claim for "injury to
property". The claim does not fall within the two-year
limitation period in section 3(2)(a), but within the six-year
limitation period in section 3(5).

[10] I understand that the plaintiff's claims with respect to
"damage to property" arise not from an external event but from
inherent defects in the construction of the condominium and
will assume that to be the case for the purposes of this
application.

[11] If a claim is not for "injury to property", can it be a
claim for "damage to property" in order to qualify for
postponement under section 6(3)(b)? In Ridley, Holmes J.
considered this question and found at para 27 that "section
6(3) does not apply to inherent defect; only to "damage to
property." That is, he equated "injury to property" to "damage
to property".

[12] The court also considered the question in Privest. Drost
J. concluded at p. 436 that on the facts of that case:


Whatever the different meanings intended by the use
of the phrase "damage to property" (in s. 6) as
opposed to that of "injury to property" (in s. 3), I
am satisfied that this claim is one for the recovery
of pure economic loss, and accordingly, does not fall
within the ambit of either of the two phrases.

[13] Plaintiff's counsel encourages me to distinguish Privest
and reconsider Ridley.

[14] Plaintiff's counsel distinguishes Privest on the basis
that this case is not a claim for pure economic loss. He claims
that the plaintiff's claims for damages in respect of economic
loss resulting from the defects in the condominium are
recoverable because the defects are so serious as to constitute
a potentially dangerous situation (Winnipeg Condominium Corp.
No. 36 v. Bird Construction Co. (1995), 121 D.L.R. (4th) 193
(S.C.C.)).

[15] Plaintiff's counsel argues that in Ridley, Holmes J. did
not consider whether "injury" and "damage" to property are the
same, but assumed that to be so. In Ridley, Holmes J. said (at
para 27) that:


I have previously found the damage to be caused from
inherent defect and rejected it occurred as a result
of "damage to property".


Plaintiff's counsel points out that in the previous decision
referred to (Ridley Terminal Inc. v. Mitsubishi Canada Ltd.,
[1993] B.C.J. No. 443 (S.C.) (QL)), Holmes J. had decided that
the claim in respect of inherent defect was not in respect of
"injury to property", within the meaning of section 3(2)(a)
(then section 3(1)) of the Act. He did not expressly decide
that it was not the result of "damage to property".

[16] Plaintiff's counsel argues that as a matter of statutory
construction, different words used in the same statute should
be given different meanings. He says that Holmes J. failed to
recognize that the test for "injury" is narrower than that for
"damage" to property, as stated by McLachlin J. in W.C.B. at p.
162:


Whether the action is brought in contract or tort,
damage is an essential element of it. The question in
each case in whether that damage comes within the
phrase "injury to property".

[17] Plaintiff's counsel argues further that if Ridley is
correct, if the limitation period runs from the date the
contract for the delivery of property is complete and there is
no knowledge of an inherent defect in the property for six
years, no action can be brought. He submits that this runs
counter to the policy considerations enunciated by McLachlin J.
in W.C.B. at p. 162:


Policy considerations support the conclusion that
"injury to property" refers to damage caused by an
identifiable external event. A short limitation
period of two years is appropriate where the claim is
based on an event which causes direct injury to
property. Such a short limitation period may not be
appropriate for a claim based on defects in the
property which may not manifest themselves clearly
for some time, even though with the benefit of
hindsight one may be able to say that their onset was
revealed at an earlier date.



[18] It is anomalous and inappropriate, according to
plaintiff's counsel, that the decisions interpreting section
3(2)(a) of the Act, which have the effect of lengthening the
limitation period for actions in respect of inherent defects
from two to six years, should be applied to limit the
limitation period by excluding the postponement provisions.

[19] Plaintiff's counsel points out that in W.C.B., the Court
of Appeal agreed with the chambers judge that the issue of
postponement was to be decided at trial, and argues that, by
implication, this supports his position that postponement is
available for an action in respect of inherent defects although
the action is not for "injury to property".

[20] "Damage" and "injury" are defined in Black's Law
Dictionary, Fourth Edition, as follows (at p. 466):


DAMAGE. Loss, injury, or deterioration, caused by the
negligence, design, or accident of one person to
another, in respect of the latter's person or
property. The word is to be distinguished from its
plural,--"damages,"--which means a compensation in
money for a loss or damage. An injury produces a
right in them who have suffered any damage by it to
demand reparation of such damage from the authors of
the injury. By damage, we understand every loss or
diminution of what is a man's own, occasioned by the
fault of another....The harm, detriment, or loss
sustained by reason of an injury.

INJURY. Any wrong or damage done to another, either
in his person, rights, reputation or property....An
act which damages, harms, or hurts.

[21] There is an obvious overlap between the definitions of the
two words. They may be and often are used synonymously. But I
can see no logical reason why that should be assumed to be the
case here. From the definitions quoted above, it appears that
"injury" is used to connote an act, something that is done to
another. Certainly that is the judicial interpretation: "injury
to property" means damage caused by an extrinsic act. The
damage is the result of the injury -- loss, deterioration, or
diminution. The specific type of damage may or may not be
recoverable at law. In Privest the court found that it was not.
Arguably, that is also the explanation for the result in
Ridley, though Holmes J. did not express his conclusion in that
manner. McLachlin J. recognizes this distinction when she says
in W.C.B., at p. 162, that "the question is "whether the damage
comes within the phrase 'injury to property'".

[22] The effect of the authorities is that the limitation
period for an action that is not an action for damages for
"injury to property" is six years and the postponement
provisions available for actions for "damage to property" do
not apply. I am bound to follow the decisions of other judges
of this court unless I find that subsequent decisions have
affected the validity of their decisions, they did not consider
binding authority or the judgment was unconsidered (Re Hansard
Spruce Mills Ltd. (1954), 13 W.W.R. (NS) 285 (B.C.S.C.)).

[23] On my reading of the courts' reasons in Privest and
Ridley, neither court addressed the question of whether there
is a distinction in meaning between "injury" and "damage" to
property in the context of sections 3(2)(a) and 6(3)(b) of the
Act. Nor did either court provide any reason or justification
for the postponement provisions not to apply to actions in
respect of inherent defects in property.

[24] It may be argued that allowing the postponement provisions
to apply to claims in respect of inherent defects will allow
actions to be brought against builders for a time long after
their involvement with the project has ended and result in
uncertainty as to their liability. The legislature has dealt
with this concern under section 8 of the Act by providing an
ultimate limitation period of 30 years. In Bera v. Marr (1986),
1 B.C.L.R. (2d) 1 at 27 (C.A.), Esson J.A. pointed out:


Sections 6 and 8 are obviously designed to work
together with s. 3(1) to provide relief against the
injustice which can be created by hidden facts and,
on the other hand, to provide reasonable protection
against stale claims.

[25] Similar arguments were made in Winnipeg Condominium.
Although that case did not deal with the limitation period, the
Supreme Court of Canada dealt with the argument that allowing
recovery for economic loss for a contractor's negligence for
dangerous construction defects "will subject a defendant
to...'liability in an indeterminate amount for an indeterminate
time to an indeterminate class'." (at p. 217). The Court said
at pp. 219-18:


...no serious risk of indeterminate liability arises
with respect to this tort duty. In the first place,
there is no risk of liability to an indeterminate
class because the potential class of claimants is
limited to the very persons for whom the building is
constructed: the inhabitants of the building....

Secondly, there is no risk of liability in an
indeterminate amount because the risk of liability
will always be limited by the reasonable cost of
repairing the dangerous defect in the building and
restoring that building to a non-dangerous state.

Finally, there is little risk of liability for an
indeterminate time because the contractor will only
be liable for the cost of repair of dangerous defects
during the useful life of the building.

[26] In light of the policy reasons enunciated by the Supreme
Court of Canada in Winnipeg Condominium for allowing recovery
for economic loss for dangerous defects, it would be anomalous
if an action in respect of a defect which the plaintiff alleges
is dangerous was statute-barred before the plaintiff had
knowledge of it, on the grounds that the defect is not "damage
to property".

 

[27] In Privest, the court rejected the plaintiff's claims
because on the facts there was no injury or damage to the
property which was not non-recoverable economic loss. If the
underlying rationale in Ridley for deciding that the
postponement provisions did not apply was that the "damage" was
unrecoverable economic loss, in my view, that rationale is
inappropriately applied in this case.

D. Conclusion

[28] The answer to the first question is that the postponement
provisions in sections 6(3) to (6) of the Limitation Act apply
to this action.

III. THE STRATA CORPORATION AND THE OWNERS

[29] The question of whether the limitation period is
determined in relation to the strata corporation or the
individual owners relates to the postponement provisions of the
Limitation Act.

A. The Limitation Act

[30] The postponement provisions, sections 6(4) to (6) of the
Limitation Act, provide as follows:


6.(4) Time does not begin to run against a
plaintiff with respect to an action referred to in
subsection (3) until the identity of the defendant is
known to the plaintiff and those facts within the
plaintiff's means of knowledge are such that a
reasonable person, knowing those facts and having
taken the appropriate advice a reasonable person
would seek on those facts, would regard those facts
as showing that

(a) an action on the cause of action would,
apart from the effect of the expiration of a
limitation period, have a reasonable prospect of
success, and

(b) the person whose means of knowledge is in
question ought, in the person's own interests
and taking the person's circumstances into
account, to be able to bring an action.

(5) For the purpose of subsection (4),

(a) "appropriate advice", in relation to facts,
means the advice of competent persons, qualified
in their respective fields, to advise on the
medical, legal and other aspects of the facts,
as the case may require,

(b) "facts" include

(i) the existence of a duty owed to the
plaintiff by the defendant, and

(ii) that a breach of duty caused injury,
damage or loss to the plaintiff,

(c) if a person claims through a
predecessor in right, title or interest,
the knowledge or means of knowledge of the
predecessor before the right, title or
interest passed is that of the first
mentioned person, and

(d) [not applicable].

(6) The burden of proving that the running of
time has been postponed under subsection (3) and (4)
is on the person claiming the benefit of the
postponement.

B. The Condominium Act

[31] The plaintiff Strata Corporation is a corporation created
pursuant to section 13(2) of the Condominium Act, R.S.B.C.
1996, c. 64:


13.(2) The owners of the strata lots included in a
strata plan and their successors, on deposit of the
strata plan in a land title office, constitute and
are members of a corporation under the name "The
Owners, Strata Plan No. ...." (the registration
number of the strata plan).

[32] This action is brought by the Strata Corporation pursuant
to the provisions of section 15(7) of the Condominium Act:


15.(7) A strata corporation may sue on its own
behalf and

(a) on behalf of an owner about matters
affecting the common property, common facilities
and other assets of the strata corporation, and

(b) if authorized by special resolution of the
strata corporation, on behalf of those owners
who consent in writing to the strata corporation
so doing, about matters affecting individual
strata lots even though the strata corporation,
in the case of a contractual claim, was not a
party to the contract about which the proceeding
is brought.

C. The Issue

[33] The question at issue is this: when the strata corporation
sues on behalf of the individual owners pursuant to section
15(7)(b) of the Condominium Act, is it the "knowledge" of the
strata corporation or the individual owners that determines
when the limitation period starts to run for the purposes of
the postponement provisions of the Limitation Act? (I use the
term "knowledge" to refer to the matters described in sections
6(4) and (5) of the Limitation Act which are relevant in
determining when time begins to run.)
[34] Plaintiff's counsel submits that the knowledge relevant to
determining when the limitation period starts to run under
sections 6(3) and (4) of the Limitation Act is that of the
individual owners. Relying on the principles of statutory
interpretation, plaintiff's counsel argues that section 15(7)
of the Condominium Act draws a distinction between claims
brought on behalf of the strata corporation and claims brought
on behalf of the individual owners. He further points out that
the permissive language of section 15(7) does not deem the
individual owners to take on the legal personality of the
strata corporation. According to plaintiff's counsel,
therefore, the language of section 15(7) indicates that it is a
procedural section which affects the owners' rights to proceed
under the name of the strata corporation, but does not affect
their individual rights to bring an action.

[35] Counsel for the defendants contend that it is the
knowledge of the strata corporation that determines when time
starts to run for the purposes of section 6(4) of the
Limitation Act. They argue that interpreting the knowledge
referred to in section 6(4) as being that of the strata
corporation, rather than that of the individual owners, will
lend greater certainty to proceedings commenced under section
15(7) of the Condominium Act. If the knowledge referred to is
that of the individual owners, they say, this means that a new
cause of action will arise every time a strata unit is sold to
a new purchaser. They argue that such a perpetual renewal of
the cause of action would prevent prospective defendants from
knowing how long they must wait before the running of time
expires.

[36] In the alternative, counsel for the defendants submit that
if it is the knowledge of the individual owners that is
relevant to the start of the limitation period, then for the
purposes of section 6(4) of the Limitation Act, the knowledge
referred to is either that of the strata corporation or of
those owners who held title at the time the knowledge was first
acquired.

D. Analysis

[37] In Strata Plan No. NW 651 v. Beck's Mechanical Ltd.,
[1980] B.C.J. No. 46 (S.C.) (QL), Esson J. (as he then was)
indicates that when a strata corporation brings an action on
behalf of the owners under section 9(10a)(b) of the Strata
Titles Act, S.B.C. 1974, c. 89, as amended (now s. 15(7)(b) of
the Condominium Act), the action is that of the individual
owners and not that of the strata corporation.

[38] Beck's Mechanical involved a subrogated action brought by
insurers in the name of the strata corporation to recover the
loss paid out by them to the strata corporation. Since a
portion of the loss had been sustained by the individual strata
lot owners, the Court had to determine whether the action had
been properly constituted as a claim for the loss of those
owners. In holding that the action had not been properly
brought on behalf of the owners, Esson J. reasoned that the
strata corporation had failed both to authorize the action by
special resolution and to obtain the written consent of the
owners as required by section 9(10a)(b) of the Act. He went on
to state, however, that the procedural deficiencies in the
action did not mean that the claim on behalf of the owners was
a nullity. He said, at para. 26:


The condition precedent of a special resolution and
consent is entirely procedural. Failure to comply
with it affects the right to proceed in the name of
the Strata Corporation for damages suffered by
individual owners; but failure to meet the condition
precedent does not affect the cause of action.


[39] According to Esson J., the cause of action under section
15(7) of the Condominium Act is that of the individual strata
lot owners and not that of the strata corporation. Since the
owners' individual rights to sue were not barred by the
procedural deficiencies in the action, the strata corporation
could bring the action on behalf of the owners once it obtained
the requisite consent and special resolution.

[40] Strata Plan No. VR 368 v. Marathon Realty, [1982] B.C.J.
No. 30 (C.A.) (QL) is further authority that an action
commenced under section 15(7)(b) of the Condominium Act is that
of the individual owners, rather than that of the strata
corporation. In Marathon, Seaton J.A. held that each of the
individual owners on whose behalf the strata corporation was
suing could be examined for discovery. In that case, the
strata corporation brought the action under section 15(7)(a) of
the Act with respect to contractual claims made against the
developer by individual owners. Seaton J.A. made the following
useful comments about the policy behind section 15(7) at para
14:


But insofar as the action is based on the contract of
purchase, I see no basis for finding that the
corporation is given the cause of action. It is the
individual owners with their individual contracts
that hold the claim with which we are now concerned.
The contracts may well differ from owner to owner.
If it were not for s. 15(7), each owner would have to
be a plaintiff in an action. The difficulties of a
class action are fully canvassed in the articles I
have already mentioned. To overcome some of the
problems, the corporation was empowered to sue on
behalf of the individual owners. But that is as far
as the legislation goes.

[41] These comments were made by Mr. Justice Seaton in the
context of an action commenced under section 15(7)(a) of the
Act. Section 15(7)(a) empowers a strata corporation to bring a
representative action only in relation to "matters affecting
the common property, common facilities and other assets of the
strata corporation". This explains why Seaton J.A. limited his
reasoning to the claims based on contracts entered into by the
individual owners.

[42] Under section 15(7)(b), the strata corporation is
authorized to sue on behalf of owners in relation to "matters
affecting individual strata lots". Since it is the individual
owners who will suffer any loss from damage to their individual
strata lots, Seaton J.A.'s comments are logically extended to
apply to actions commenced under section 15(7)(b). Just as the
contracts in issue in Marathon may have differed from owner to
owner, so may the damage to individual strata lots in issue in
this case differ from owner to owner. If it were not for
section 15(7)(b), each owner whose strata lot was damaged would
have to bring a separate action. Section 15(7)(b) enables a
strata corporation to sue on behalf of all those owners who
consent in writing to have the strata corporation represent
them, thereby avoiding the cost and difficulties of litigating
numerous separate actions.

[43] Later in his judgment, Seaton J.A. examined the use of the
words "on behalf of" in section 15(7). He stated, at para 16:


If you sue on behalf of someone, it seems to me, you
sue for his benefit not your own. If the intention
had been to assign the benefit of the action to the
corporation or the owners as a whole, different
language than "on behalf of" would have been
employed. In this legislation, "on behalf of" an
owner means "for the benefit of" that owner.

[44] Applying the reasoning in Marathon to the case at bar, it
is those owners whose units are damaged who hold the claim
being advanced before this Court. Although the strata
corporation is empowered to sue on behalf of the owners that
comprise it, the cause of action belongs to the individual
owners for whose benefit the lawsuit is being brought.

[45] Seaton J.A.'s finding in Marathon that an action brought
on behalf of the individual owners under section 15(7) is an
action brought for the benefit of those individual owners
prompted him to conclude that the appellant was entitled to
examine for discovery the individual owners on whose behalf the
corporation was suing. His conclusion indicates that the
individual knowledge of each strata lot owner is relevant to a
representative action brought under section 15(7). By analogy,
therefore, it would seem that the knowledge of each individual
owner is equally relevant to determining the commencement of
the limitation period under sections 6 (3) and (4) of the
Limitation Act. Since the cause of action under section
15(7)(b) of the Condominium Act belongs to the individual
strata lot owners, it follows that the phrase "the plaintiff's
means of knowledge" in section 6(4) of the Limitation Act
refers to the means of knowledge of each individual owner.

[46] Support for this proposition may also be found in cases
decided under the Class Proceedings Act, R.S.B.C. 1996, c. 50.
In Bittner v. Louisiana-Pacific Corp., [1997] B.C.J. No. 2281
(S.C) (QL), for example, Kirkpatrick J. briefly discussed the
application of the postponement provisions in the Limitation
Act to proceedings brought under the Class Proceedings Act.
She stated at para 56:


The Class Proceedings Act does not stop the running
of the limitation period until certification.
Therefore, the postponement provisions of British
Columbia's Limitation Act...will have to be
considered in many cases. The postponement
provisions are obviously very sensitive to each
individual situation.

[47] Section 2 of the Class Proceedings Act provides that one
member of a class of persons residing in British Columbia may
commence a proceeding "on behalf of" the other members of that
class. This is similar to section 15(7) of the Condominium
Act, which provides that a strata corporation may sue on its
own behalf and "on behalf of" the individual strata lot owners.
That is, both statutes empower a representative plaintiff to
bring an action for his or her own benefit, as well as for the
benefit of other persons with a similar cause of action. If,
as Kirkpatrick J. points out, the postponement provisions are
very sensitive to each individual situation under the Class
Proceedings Act, then it follows that they must also be
sensitive to the individual situation of each owner on whose
behalf an action is brought under section 15(7) of the
Condominium Act. As a result, the knowledge relevant to
determining when the limitation period starts to run for the
purposes of the postponement provisions of the Limitation Act
is that of the individual owners and not that of the strata
corporation.

[48] Counsel for the defendant architects argues that if the
knowledge relevant to the commencement of the limitation period
is that of the individual owners, this will result in
uncertainty for all defendants who are sued under section 15(7)
of the Condominium Act. He contends that if the limitation
period begins to run each time a strata unit is sold to a new
owner and the new owner becomes aware of the defects in the
unit, this will lead to a perpetual renewal of the cause of
action and result in a multiplicity of proceedings, stale
claims and prohibitive costs for the defendants.

[49] Although it is the knowledge of the individual owners
which is relevant to determining the start of the limitation
period under sections 6(3) and (4) of the Limitation Act, that
is not to say that the limitation period starts to run each
time a new owner purchases a unit and at the time of purchase
or subsequently becomes aware of the defects in the unit.
Under section 6(5)(c) of the Limitation Act, each owner of a
strata unit must be taken to have the knowledge or the means of
knowledge of the previous owner and of the strata corporation,
at the time the previous owner or the strata corporation had
the requisite knowledge.

[50] Section 6(5)(c) states that for the purposes of section
6(4):

if a person claims through a predecessor in right,
title or interest, the knowledge or means of
knowledge of the predecessor before the right, title
or interest passed is that of the first mentioned
person.

[51] In Kamloops v. Nielsen (1984), 10 D.L.R. (4th) 641
(S.C.C.), Wilson J. indicated, at p. 686, that the purpose of
section 6(4)(c) of the Limitation Act (now section 6(5)(c)) is
to attribute the knowledge or means of knowledge of a
predecessor in title to subsequent owners so as to prevent the
perpetual renewal of the limitation period through successive
purchasers. She declined to attribute the knowledge of the
previous owners to the plaintiff purchaser in the case before
her. Noting that the previous owners' response to the stop
work order issued by the defendant city had been to encourage
the city to drop the matter, she reasoned that it would do
violence to the facts in the case to say that the plaintiff was
a person "claiming through" his predecessors in title.

[52] Following the reasoning of Wilson J. in Kamloops, section
6(5)(c) of the Limitation Act can be applied to impute the
knowledge or means of knowledge of the previous owner of a
strata unit to the subsequent owner of that unit, unless it
would "do violence", in the sense that expression is used by
Wilson J. in Kamloops, on the facts of the particular case, to
say that the new owner was claiming through his or her
predecessor in title.

[53] Under section 13(2) of the Condominium Act, "The owners of
the strata lots included in a strata plan and their successors,
on deposit of the strata plan in a land title office,
constitute and are members of a corporation under the name "The
Owners, Strata Plan No. ...'". Since all of the individual
owners of the strata lots constitute and are members of the
strata corporation, it follows that any knowledge of the strata
corporation in relation to an individual strata lot must also
be the knowledge of the individual owner. When a strata lot is
sold to a new owner, the knowledge of the strata corporation,
which is also that of the predecessor owner in title, will be
imputed to the new owner under section 6(5)(c) of the
Limitation Act.

[54] The situation may differ if a previous owner knew about
damage to his or her strata lot, but did not disclose this
information to the strata corporation or to the new owner. It
may be that the new owner cannot be said to "claim through" his
or her predecessor in title, as was held in Kamloops. There
may be other issues relating to what cause of action the new
owner has and against whom (see Marathon at paras 9 and 15),
but those are not issues that I need to address here.

[55] Attributing the knowledge of the previous owner and the
strata corporation to the new owner of a strata unit under
section 6(5)(c) accords with the policy reasons behind the
enactment of the Limitation Act. In Bera, Esson J.A. described
the Limitation Act as a "balanced legislative scheme." He
pointed out that the postponement provisions and the maximum
limitation period outlined in section 8 of the Act were
obviously designed to work together with the two year
limitation period in section 3(1) (now section 3(2)) "to
provide relief against the injustice which can be created by
hidden facts and, on the other hand, to provide reasonable
protection against stale claims."

[56] The rationale for applying section 6(5)(c) of the
Limitation Act to limit the time for postponing the limitation
periods set by the Act is that once a person has the knowledge
needed to start the limitation period running under section
6(3), the limitation period should not be further postponed if
that person fails to bring an action and transfers his or her
interest in the strata unit to a new owner. The Limitation
Act, according Esson J.A. in Bera, seeks to balance the rights
of plaintiffs and defendants. Allowing each new owner to
commence a new limitation period upon his or her personal
discovery of the defects in his or her strata lot, if those
defects were known by the previous owner or the strata
corporation, would tip the balance in favour of the plaintiff
and increase the uncertainty of exposure to liability of the
defendants.

[57] By applying section 6(5)(c) to impute the knowledge of the
strata corporation and the previous owner to the new owner, the
balance between the rights of plaintiffs and defendants is
preserved. The plaintiff will be protected from the injustice
of hidden claims by relying on the postponement provisions of
the Act, and the defendants will be protected from the
uncertainty that can result from litigation that is commenced
long after the damage occurred.

D. Conclusion

[58] The answer to the second question is that it is the
knowledge of the individual owners which determines when the
limitation period starts to run for the purposes of the
postponement provisions of the Limitation Act. This does not
mean, however, that the limitation period starts to run each
time a new owner purchases a unit and becomes aware of the
defects in the unit. Under section 6(5)(c) of the Act, the newowner will be taken to have the knowledge of the previous owner
and of the strata corporation at the time they acquired it.


"Levine, J."