Condominium Corp. No. 9813678 et al. v. Statesman Corp. et al., (2009) 472 A.R. 33 (QB)

• Judge: J.D.B. McDonald, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 08, 2009
• Citations: (2009), 472 A.R. 33 (QB);2009 ABQB 493

Condo. Corp. 9813678 v. Statesman Corp. (2009), 472 A.R. 33 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. SE.013

Condominium Corporation No. 9813678, Condominium Corporation No. 0013062, Condominium Corporation No. 9911158, Condominium Corporation No. 9911560, Condominium Corporation No. 0112632, Mary Vanderogt, Catherine Sliwa, Trevor MacFarlane, Kirk McFee, Terry S. Shibley, Rob Watson, Charles Gray, Norma Gray, Lloyd B. MacDonald, Scott James Francis, Harry Radomsky, Danielle Marchant, Michael Klassen, Douglas A. Pounder, Pierre Schrifee, Paul Foley, Leo Bouckhout, Richard Dyjack, James Smith, Pamela Smith, Stephanie Bischsel, Bernie Rabwowich, Susan Rabwowich, Ryan Birmingham, Alberta Wireless 2002 Inc., John Boehm, David MacMartin, Jack Clayton, Audrey Clayton, Tom Pearson, Kathleen Millard, Jason Salmon, Michael Morrison, Michael Johnson-Stewart, Tanya Johnson-Stewart, Raymond Daniels, Andrew Course, Cathy O'Bright and Brian David Hassett (plaintiffs) v. Statesman Corporation, 893137 Alberta Ltd. formerly known as Statesman Construction Corporation and the said Statesman Construction Corporation, the City of Calgary, Burgener Kilpatrick Design International also known as BKDI Architects and formerly known as BLK Architects and the said BKDI Architects and BLK Architects, Peter G. Burgener, Graham Harmsworth Lai & Associates, Ltd., David Graham, The Advanced Group Calgary Ltd., Advanced Waterproofing Inc. carrying on business under the trade name of and/or style of the Advanced Group Calgary and the said Advanced Waterproofing Inc., Michael Adams carrying on business under the trade name and/or style of the Advanced Group Calgary, Michael Adams carrying on business under the trade name and/or style of Delta-Protech Membrane Installations, Calvin Schieve carrying on business under the trade name and/or style of Delta-Protech Membrane Installations, Dean Sziva carrying on business under the trade name and/or style of Cactus Waterproofing & Roofing, and Karl Swan (defendants)

(0401 05018; 2009 ABQB 493)

Indexed As: Condominium Corp. No. 9813678 et al. v. Statesman Corp. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

J.D.B. McDonald, J.

August 24, 2009.

Summary:

Statesman Corp. was the developer and general contractor of four condominium properties, three of which were completed. A fire in the fourth during construction caused extensive damage (over $25 million). The fire was allegedly caused by Swan, a waterproofer who was using a propane torch near the wood exterior of the fourth building. Statesman had retained Advanced Group to do the waterproofing. Advanced Group subcontracted some of the work to Sziva, who employed Swan. The plaintiffs were a number of condominium corporations and individuals affected by the fire.

The Alberta Court of Queen's Bench held that Swan was negligent and his negligence caused the fire and resultant damages. Sziva, as Swan's employer, was vicariously liable for Swan's negligence. Advanced Group was liable for the negligence of the employee of its sub-contractor on the basis that it retained Sziva to perform the inherently dangerous activity that it had contracted with Statesman to perform itself. Statesman was also liable on the basis of a non-delegable duty of care. All of the plaintiffs were entitled to a judgment against Swan, Sziva and Advanced Group jointly and severally to the extent of their respective damages. All of the plaintiffs (except two of the condominium corporations according to a related decision regarding subrogation) were entitled to a judgment against Statesman. Statesman was entitled to indemnity from Advanced Group, Sziva and Swan for any liability imposed on it arising from Swan's negligence. Advanced Group was entitled to indemnity from Sziva and Swan. Sziva was entitled to indemnity from Swan. The plaintiffs' claim against the city was dismissed.

Editor's Note: There are a number of reported decisions related to this action. These can be located by searching "Condominium Corp. No. 9813678 et al. v. Statesman Corp. et al." on Maritime Law Book's website: www.mlb.nb.ca.

Building Contracts - Topic 3325

Liability of builder - Vicarious liability - Independent contractor - Statesman Corp. was the developer and general contractor of four condominium properties, three of which were completed - A fire in the fourth during construction caused extensive damage (over $25 million) - The fire was allegedly caused by Swan, a waterproofer who was using a propane torch near the wood exterior of the fourth building - Statesman had retained Advanced Group to do the waterproofing - Advanced Group subcontracted some of the work to Sziva, who employed Swan - The plaintiffs were a number of condominium corporations and individuals affected by the fire - They asserted that "torch-on waterproofing" was an inherently dangerous activity such that Statesman could not delegate its responsibility by hiring an independent contractor - The Alberta Court of Queen's Bench held that the use of a propane torch in close proximity to a combustible wood frame was an inherently dangerous activity and one that had been mandated by Statesman - The duty of care was nondelegable by Statesman - It was not negligence on the part of Statesman to have specified the torch-on waterproofing method - However, having specified it, Statesman could not avoid liability for the negligence of the applicator retained to do the actual work - See paragraphs 151 to 171.

Building Contracts - Topic 3325

Liability of builder - Vicarious liability - Independent contractor - Statesman Corp. was the developer and general contractor of four condominium properties, three of which were completed - A fire in the fourth during construction caused extensive damage (over $25 million) - The fire was allegedly caused by Swan, a waterproofer who was using a propane torch near the wood exterior of the fourth building - Statesman had retained Advanced Group to do the waterproofing - Advanced Group subcontracted some of the work to Sziva, who employed Swan - The plaintiffs were a number of condominium corporations and individuals affected by the fire - The Alberta Court of Queen's Bench held that Swan was negligent and his negligence caused the fire and resultant damages - Sziva, as Swan's employer, was vicariously liable for Swan's negligence - Advanced Group was liable for the negligence of the employee of its sub-contractor on the basis that it had retained Sziva to perform the inherently dangerous activity that it had contracted with Statesman to perform itself - Statesman was also liable on the basis of a non-delegable duty of care - All of the plaintiffs were entitled to a judgment against Swan, Sziva and Advanced Group jointly and severally to the extent of their respective damages - All of the plaintiffs (except two of the condominium corporations according to a related decision) were entitled to a judgment against Statesman - Statesman was entitled to indemnity from Advanced Group, Sziva and Swan for any liability imposed on it arising from Swan's negligence - Advanced Group was entitled to indemnity from Sziva and Swan - Sziva was entitled to indemnity from Swan - See paragraphs 172 to 203.

Land Regulation - Topic 3424

Land use control - Building inspectors - Negligence - [See Municipal Law - Topic 1704 , Municipal Law - Topic 1801.1 and Municipal Law - Topic 1812 ].

Municipal Law - Topic 1704

Liability of municipalities - General and definitions - Bad faith - Statesman Corp. was the developer and general contractor of four condominium properties, three of which were completed - A fire in the fourth during construction caused extensive damage (over $25 million) - The fire was allegedly caused by a waterproofer who was using a propane torch near the wood exterior of the fourth building - The plaintiffs were a number of condominium corporations and individuals affected by the fire - The Alberta Court of Queen's Bench held that the plaintiffs' claim against the city failed - Having determined that the city did owe the plaintiffs, as adjacent property owners, a duty of care to ensure that the fourth building was constructed safely, the question became whether the city, through the actions of some of its employees, had acted in bad faith - Section 12 of the Safety Codes Act exempted the city from liability related to the system of inspections, examinations, evaluations and investigations where it was acting in good faith - The plaintiffs alleged that bad faith arose from the actions of Sykora, the chief building inspector, during the building permit approval process who, when an impasse arose between the city and Statesman, worked on a design to resolve the issues - The court rejected the plaintiffs' assertion that a safety codes officer was required to rule on applications for building permit approvals as a judge and jury and was not to act as a proponent or advocate - Unless expressly proscribed by legislation, a collaborative approach between developers and planning officials was to be encouraged as opposed to the strict, almost adversarial, approach advocated by the plaintiffs - Further, this appeared to be the practice that was often followed in Canada - The actions of the city, including Sykora, fell far short of constituting bad faith - See paragraphs 235 to 284.

Municipal Law - Topic 1801.1

Liability of municipalities - Negligence - Duty of care - Statesman Corp. was the developer and general contractor of four condominium properties, three of which were completed - A fire in the fourth during construction caused extensive damage (over $25 million) - The fire was allegedly caused by a waterproofer who was using a propane torch near the wood exterior of the fourth building - The plaintiffs were a number of condominium corporations and individuals affected by the fire - The Alberta Court of Queen's Bench held that the city owed a duty of care to the plaintiffs to ensure that the fourth building was constructed safely - The court applied the Anns (1978 U.K.H.L.) test - As a matter of policy, the city assumed responsibility for the issuance of building permits and the inspection and enforcement thereof - This established a relationship of sufficient proximity such that a duty of care arose, satisfying the first stage of the Anns test - The court found that there were no reasons under the second stage of the Anns test not to impose tort liability on the city - Specifically, the court rejected the city's argument that the liability exemption in s. 12 of the Safety Codes Act negated the duty of care - See paragraphs 204 to 234 - The effect of s. 12 was that, in order to succeed in their action, the plaintiffs had to establish that the duty of care was owed to them by the city and that, in discharging the duty, the city was not acting in good faith - See paragraph 239.

Municipal Law - Topic 1804.2

Liability of municipalities - Negligence - Standard of care - Building construction approval - [See Municipal Law - Topic 1704 ].

Municipal Law - Topic 1812

Liability of municipalities - Negligence - Negligent issue of permits - Statesman Corp. was the developer and general contractor of four condominium properties, three of which were completed - A fire in the fourth during construction caused extensive damage (over $25 million) - The fire was allegedly caused by a waterproofer who was using a propane torch near the wood exterior of the fourth building - The plaintiffs were a number of condominium corporations and individuals affected by the fire - They alleged that "but for" the decision of Sykora, the chief building inspector, to permit the building construction to proceed as wood frame, the fire would not have occurred - The Alberta Court of Queen's Bench held that the fire was caused solely by the waterproofer's negligence - Regarding the claim against the city, neither the "but for" nor the "material contribution" tests established causation - Regarding the "but for" test, even if Sykora had acted as the plaintiffs asserted that he should have (i.e. referring the matter to the Code Review Committee to perform a proper variance), it was highly likely that the same type of structure would have been constructed - Given that the source of ignition was an exterior wood wall, the outcome would not have been different - For the "material contribution" test to apply, first, it had to be impossible for the plaintiffs to prove that the city's breach of duty caused the injury using the "but for" test and the impossibility had to be due to factors beyond the plaintiffs' control - Second, the city had to have breached a duty of care owed to the plaintiffs, thereby exposing them to an unreasonable risk of injury - Having found that the "but for" test did not apply and, earlier in its decision, that the city was not in breach of any duty owed to the plaintiffs, the court indicated that the plaintiffs had failed to establish a causal connection between any alleged wrong-doing by the city and the resultant damage - See paragraphs 285 to 309.

Municipal Law - Topic 1818

Liability of municipalities - Negligence - Defences - Statutory authority, immunity or exemption - [See Municipal Law - Topic 1704 and Municipal Law - Topic 1801.1 ].

Torts - Topic 54

Negligence - Causation - Test for (incl. "but for" test and "material contribution" test) - [See Municipal Law - Topic 1812 ].

Torts - Topic 61

Negligence - Causation - Causal connection - [See Municipal Law - Topic 1812 ].

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - [See Municipal Law - Topic 1801.1 ].

Torts - Topic 2530

Vicarious liability - Master and servant - Employer - Liability for acts of employees - [See second Building Contracts - Topic 3325 ].

Torts - Topic 2551

Vicarious liability - For independent contractors - Nondelegable duties - [See first Building Contracts - Topic 3325 ].

Torts - Topic 2554

Vicarious liability - For independent contractors - Building contractors - [See both Building Contracts - Topic 3325 ].

Torts - Topic 4504

Dangerous activities - General principles - Duty of care - [See first Building Contracts - Topic 3325 ].

Torts - Topic 4506

Dangerous activities - General principles - Inherently dangerous methods - [See both Building Contracts - Topic 3325 ].

Torts - Topic 4585

Dangerous activities - Fire - Use of a torch - [See first Building Contracts - Topic 3325 ].

Torts - Topic 7381

Joint and concurrent tortfeasors - Contribution between tortfeasors - Indemnity between tortfeasors - [See second Building Contracts - Topic 3325 ].

Torts - Topic 9155

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Municipal authorities - [See Municipal Law - Topic 1801.1 ].

Torts - Topic 9157.1

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Building inspectors - [See Municipal Law - Topic 1801.1 ].

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Lamont Health Care Centre et al. v. Delnor Construction Ltd. et al. (2003), 349 A.R. 309; 2003 ABQB 998, consd. [para. 22].

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Fontaine v. Loewen Estate, [1998] 1 S.C.R. 424; 223 N.R. 161; 103 B.C.A.C. 118; 169 W.A.C. 118, refd to. [para. 22].

Fontaine v. British Columbia - see Fontaine v. Loewen Estate

671122 Ontario Ltd. v. Sagaz Industries Canada Inc. et al., [2001] 2 S.C.R. 983; 274 N.R. 366; 150 O.A.C. 12; 2001 SCC 59, refd to. [para. 22].

Hardisty v. 851791 NWT Ltd. et al., [2004] Northwest Terr. Cases 70; 2004 NWTSC 70, refd to. [para. 22].

P.A.B. v. Children's Foundation et al., [1999] 2 S.C.R. 534; 241 N.R. 266; 124 B.C.A.C. 119; 203 W.A.C. 119; 174 D.L.R.(4th) 45, refd to. [para. 22].

P.A.B. v. Curry - see P.A.B. v. Children's Foundation et al.

Hoefling v. Driving Force Inc. et al. (2005), 388 A.R. 323; 2005 CarswellAlta 1585; 2005 ABQB 802, refd to. [para. 22].

Saint John (City) v. Donald, [1926] S.C.R. 371, refd to. [para. 22].

Savage v. Wilby, [1954] S.C.R. 376, refd to. [para. 22].

Lewis et al. v. British Columbia, [1997] 3 S.C.R. 1145; 220 N.R. 81; 98 B.C.A.C. 168; 161 W.A.C. 168, refd to. [para. 22].

Jaman et al. v. Hussain et al. (2001), 161 Man.R.(2d) 41; 2001 MBQB 320, refd to. [para. 22].

M.B. v. British Columbia (2001), 151 B.C.A.C. 70; 249 W.A.C. 70; 87 B.C.L.R.(3d) 12; 2001 BCCA 227, revd. (2003), 309 N.R. 375; 187 B.C.A.C. 161; 307 W.A.C. 161; 2003 SCC 53, refd to. [para. 22].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 22].

Bowes v. Edmonton (City) et al. (2005), 386 A.R. 1; 2005 ABQB 502, refd to. [para. 22].

Bowes v. Edmonton (City) et al. (2007), 425 A.R. 123; 418 W.A.C. 123; 42 M.P.L.R.(4th) 192; 2007 ABCA 347, refd to. [para. 22].

Manolakos v. Vernon (City) et al., [1989] 2 S.C.R. 1259; 102 N.R. 249, refd to. [para. 22].

Manolakos v. Gohmann - see Manolakos v. Vernon (City) et al.

Roncarelli v. Duplessis, [1959] S.C.R. 121, refd to. [para. 22].

McCullock-Finney v. Barreau du Québec, [2004] 2 S.C.R. 17; 321 N.R. 361; 2004 SCC 36, consd. [para. 22].

Enterprises Sibeca Inc. v. Frelighsburg (Municipalité), [2004] 3 S.C.R. 304; 325 N.R. 345; 2004 SCC 61, refd to. [para. 22].

Troisin et al. v. Sikora et al. (2005), 376 A.R. 173; 360 W.A.C. 173; 2005 ABCA 410, refd to. [para. 22].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), appld. [para. 22].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, refd to. [para. 22].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Childs v. Desormeaux et al., [2006] 1 S.C.R. 643; 347 N.R. 328; 210 O.A.C. 315; 2006 SCC 18, refd to. [para. 22].

Holtslag v. Alberta (2004), 350 A.R. 161; 2004 ABQB 268, affd. (2006), 380 A.R. 133; 363 W.A.C. 133; 2006 ABCA 51, refd to. [para. 22].

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Cooper v. Registrar of Mortgage Brokers (B.C.) et al. (2000), 135 B.C.A.C. 266; 221 W.A.C. 266; 2000 BCCA 151, refd to. [para. 23].

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Vancouver Board of Variance & Parking v. Vancouver (City) - see Martin et al. v. Vancouver (City).

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Moffat v. Edmonton (City) (1979), 15 A.R. 530; 99 D.L.R.(3d) 101 (C.A.), refd to. [para. 23].

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Milina v. Bartsch (1985), 49 B.C.L.R.(2d) 33 (S.C.), refd to. [para. 24].

Stamper v. Finnigan, Via Rail Canada Inc. et al. (1988), 85 N.B.R.(2d) 404; 217 A.P.R. 404; 49 D.L.R.(4th) 343 (C.A.), refd to. [para. 24].

Sao Paulo Light S.A. v. Eastern Canada Stevedoring Co. (1961), 46 M.P.R. 199 (N.S.S.C.), refd to. [para. 24].

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Pioneer Grain Co. et al. v. Saskatchewan Power Corp. et al. (1992), 98 Sask.R. 279 (Q.B.), refd to. [para. 26].

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Authors and Works Noticed:

Black, Vaughn, and Cheifetz, David, Through the Looking Glass, Darkly: Resurfice Corp. v. Hanke (2007), 45 Alta. L. Rev. 241, generally [para. 22].

Black, Vaughn, The Transformation of Causation in the Supreme Court: Dilution and "Policyization", Annual Review of Civil Litigation (2002), p. 187 [para. 22].

Boghosian, David G., and Davidson, J. Murray, The Law of Municipal Liability in Canada (1999) (2006 Looseleaf Update), generally [para. 13].

Cheifetz, David, The Snell Inference and Material Contribution: Defining the Indefinable and Hunting the Causative Snark (2005), 30 Adv. Q. 1, generally [para. 41].

Fleming, John G., The Law of Torts (9th Ed.1998), generally [para. 25].

Fridman, Gerald Henry Louis, The Law of Torts in Canada (2nd Ed. 2002), pp. 277 to 279, 311, 312 [para. 22].

Klar, Lewis N., Tort Law (4th Ed. 2008), pp. 429, 430, 438, 439 [para. 22].

Osborne, Philip H., The Law of Torts (3rd Ed. 2007), c. 5 [para. 22].

Sopinka, John, Lederman, Sidney N., and Bryant, Alan W., The Law of Evidence In Canada (2nd Ed. 1999), generally [para. 26].

Counsel:

Donald Chernichen, Q.C. (Burnet, Duckworth & Palmer) and James W. Rose, Q.C. (Fraser Milner Casgrain LLP), for the plaintiffs;

Lise Olsen and Colleen Sinclair, for the City of Calgary;

Norman K. Machida, Q.C. (Machida Mack Shewchuk LLP), for the defendant, Statesman;

Paul J. Stein and Megan L. McMahon (Gowling LaFleur Henderson LLP), for the defendant, Advanced Group;

John M. McDougall (Scott Hall LLP), for the defendants, Sziva and Swan.

This action was heard between January 12 and May 8, 2009, by J.D.B. McDonald, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on August 24, 2009.