Negligent Construction and Winnipeg Condo
As I’ve previously written, the Winnipeg Condominium Corporation No. 36 v. Bird Construction, 1995 CanLII 146 (SCC),  1 S.C.R. 85 (“Winnipeg Condo”) decision is an authority by which a party may seek to recover against negligent builders and contractors where there may otherwise be no right to recover either because of the expiration of the ordinary applicable limitation period or because there is otherwise no contractual or proximate relationship between the parties giving right to claim in contract or tort (negligence).
While Winnipeg Condo may support a right to sue that might not otherwise exist, the case is applied narrowly. This narrow application was underscored in the recent decision of The Owners, Strata Plan KAS 3575 v Renascence Enterprises (Shannon Lake) Corp., 2017 BCSC 1336 (CanLII) (“Strata Plan KAS 3575”).
In Strata Plan KAS 3575, the strata, their insurer and National Home Warranty sued a number of parties involved in the construction of a residential condominium development. It was alleged that Feta Engineering Consultants Ltd. (“Feta”) acted as a structural engineer and, in that role, had negligently overseen the installation of the common property parking area. It was alleged that there were a number of deficiencies with the design and installation of the parking area and that the strata was required to repair such deficiencies.
Crucially, the plaintiffs did not allege that Feta’s work had or may have posed a substantial danger or threat of danger to the health or safety of the strata’s occupants or those visiting the strata. Feta submitted that there was no basis to recover against it for pure economic loss; that is, simply the costs to remedy the allegedly deficient parking area.
The court held that the law is clear that there is no recovery for pure economic loss for deficiencies or shoddy work were such work does not pose a danger or threat to the health or safety of persons (para. 38).
In arriving at its decision, the court cited M. Hasegawa & Co. Ltd. v. Pepsi Bottling (Canada), 2002 BCCA 324 (CanLII) which held the duty of care manufactures have is to ensure their product do not cause personal injury or physical danger to property; it does not extend so far as to allow recovery for defective or shoddy products. The court also cited Kayne v. Strata Plan LMS 2374, 2013 BCSC 51 (CanLII) where it was held at para. 167 that:
“…[I]n cases such as this involving allegedly defective construction of a residence (i.e. no damage to anything other than the thing itself), the Supreme Court of Canada has made it clear that the builder does not owe a duty of care to a subsequent purchaser unless the alleged defect is more than just shoddy construction. Rather, it must pose a “real and substantial danger” to persons or property.”
In short, plaintiffs who are dealing with negligent construction continue to ordinarily only be able to recover against the parties they contracted directly with and, it is only if the construction poses a danger or threat that such plaintiffs could seek to recover from the parties originally designing and/or installing such dangerous and threatening features.
If you have any questions about any negligent construction, please do not hesitate to contact me, Jeremy Burgess, via 1-800-558-1155, 250-869-1156 or at email@example.com. You may also contact anyone in our litigation group.
The foregoing is for informational purposes only and is not legal advice, nor should be construed as such.