Swift v. Eleven Eleven Architecture Inc., 2012 ABQB 764

Court of Queen ’ s Bench of Alberta Citation: Swift v. Eleven Eleven Architecture Inc., 2012 ABQB 764 Date: 20121214 Docket: 0801 08299 Registry: Calgary Between: Philip Swift and Cindy McInnis Swift Plaintiffs - and - Eleven Eleven Architecture Inc. and McKinley Dang Burkart Design Group Inc.

Defendants - and - Tomecek Roney Little & Associates Ltd. and Brian Tomecek Third Party Defendants Editorial Notice: On behalf of the Government of Alberta personal data identifiers have been removed from this unofficial electronic version of the judgment. _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Bruce A. Millar _______________________________________________________ I. Introduction

[ 1 ] This case concerns a dispute over the construction of what was intended to be a family’s dream home on Vancouver Island. II. Facts [ 2 ] In 2004, the Plaintiffs, Philip Swift (“Mr. Swift”) and Cindy McInnis-Swift (“Mrs. Swift”) purchased land in Saanich, British Columbia municipally described as 8[...] Lawrence Road and legally described as Lot [...],

Section 1, Range 3 West, South Saanich District, Plan 2689 (the “Property”). The Swifts own the Property as joint tenants. [ 3 ] The Property was purchased for the purpose of building a new family home. Ultimately, this home (the “Residence”) consisted of five separate structures: (

i) a 5807 square foot L-shaped two-story main residence; (ii) a guest house; (iii) a meditation room; (iv) a library; and (

v) a garage. [ 4 ] In 2005, Mr. Swift engaged the Defendants, Eleven Eleven Architecture Inc. (“Eleven Eleven”) and McKinley Dang Burkart Design Group Inc. (“MDB”) (collectively, the “Architects”) to design the Residence. Mr. Swift had previously engaged the Architects to design renovations to the Swifts’ houses in Maui, Hawaii and in Calgary. [ 5 ] On April 29, 2005, Mr. Swift entered into an agreement (the “Architect Agreement”) with Eleven Eleven. Mrs.

Swift is not a signatory to the Architect Agreement. [ 6 ] The Architect Agreement contains a limitation of liability clause (the “Limitation Clause”), which reads as follows: 3.8.1 With respect to the provision of services by the Designer to the Client under this Agreement, the Client agrees that any and all claims which the Client has or hereafter may have against the Designer which arise solely and directly out of the Designer’s duties and responsibilities pursuant to this Agreement (hereinafter referred to in this

Article 3 as “claims”), whether such claims sound in contract or in tort, shall be limited to the amount of $500,000.00.

The Designer in this paragraph includes officers, directors, his or her employees, representatives and consultants. 3.8.2 The Prime Consultant/Designer agrees to enlist the services of a registered Professional Engineer (whose fees for services are included within the contract amount of this agreement) whose professional stamp will be included on all relevant drawings and who shall certify to the structural soundness of the design. [ 7 ] The Architect Agreement defines “Prime Consultant/Designer” as Eleven Eleven and the “Client” as Mr. Swift. [ 8 ] Mr.

Swift acknowledges that he received legal advice with respect to this clause and that there were negotiations as to the amount of the limitation. The Architects initially asked for $100,000; Mr. Swift’s counsel recommended $1,000,000. [ 9 ] The Architects engaged the Defendant Tomecek Roney Little & Associates Ltd. (“TRL”) and its principal, the Defendant, Brian Tomecek, (collectively, the “TRL Defendants”) to do the structural engineering. There was no written agreement between the Swifts and the TRL Defendants.

The arrangement between the Architects and TRL appears to have been made through letter agreements. [ 10 ] The structural design was performed by TRL by or under the direction of Mr. Tomecek. Based on that design, a building permit was granted by the Central Saanich building authority on October 3, 2005. Construction began at some point thereafter. [ 11 ] Since the Residence is located in Saanich, British Columbia, it is that Province’s building code regime that applies, specifically the 1998 version of the British Columbia Building Code (“BCBC”). The BCBC was revised in 2006, but the 1998 version

applies to the Residence. [ 12 ] The BCBC recognizes two categories of buildings. Buildings to which

Part 9 of the BCBC applies are subject to permissive requirements respecting their size, materials and structural dimensions. Provided these criteria are met, no specific engineering design is required and such buildings can even be designed by non-professionals, such as contractors. As a starting proposition, buildings to which

Part 9 applies are residential structures less than 600 m 2 in area and no more than 3 stories in height. [ 13 ] Where a building falls outside these

Part 9 criteria,

Part 3 of the BCBC provides that structural engineering design is required, as specified in

Part 4 of the BCBC.

Part 4 provides, inter alia , for certain seismic design requirements. These requirements are based on the maximum estimated loads at the base of the building (the “base shear”) that may occur in the event of the most significant seismic event anticipated in a specified “return period”. Such an event was referred to at trial as a “design seismic event” or a “code level earthquake”. A return period is the predicted period between such events.

The intent in designing in anticipation of such an event is not to prevent damage to the building, which is inevitable, but to increase the chance that the occupants of the building will have sufficient time to vacate it before it collapses. [ 14 ] Seismic activity creates horizontal load on a structure, causing movement of the heavier horizontal elements of the building, such as floors and roof systems. Seismic engineering involves designing vertical lateral load resisting elements, such as plywood or concrete walls and steel beams, intended to resist this horizontal movement before permanently deforming.

When the load becomes too great, these elements will deform, thus absorbing the energy of the horizontal movement and reducing the possibility of structure collapse. The TRL Defendants describe these elements as similar to a fuse in an electrical system that will “trip” if overloaded, thus saving the system. [ 15 ] Budget and

schedule problems in respect of the construction of the Residence became of concern very quickly. In 2007, a consultant was hired to advise on budget overruns, to see if cost reductions could be obtained and to give independent input about the schedule. [ 16 ] In the summer of 2006, Mr. Brad Johnson, the contractor working on the Residence site, expressed concern about possible seismic issues. Mr. James Galloway, himself a structural engineer, was engaged to review the Residence design and on September 5, 2006, he wrote a letter detailing his concerns about the seismic stability of the Residence.

On September 7, 2006, Mr. Roy Thomassen, the Chief Building Inspector under the BCBC, sent a letter to TRL indicating his opinion that the Residence was a complex single family dwelling “needing to be

Part 4" under the BCBC. This would require a structure engineered to

Part 4 rather than the initial design to

Part 9 of the BCBC. Walter McKinley of MDB then advised Mr. Swift that there was a seismic issue that was being investigated by the structural engineers. [ 17 ] Mr. Tomecek met with a representative of the Architects shortly thereafter. He understood from that meeting that there was a concern about the seismic design of the Residence. Mr. Tomecek admitted that, prior to this point, he had not considered seismic issues with respect to the Residence, having concluded that it was under

Part 9 of the BCBC. [ 18 ] In September 2006, Mr. Tomecek spent several days doing a full

Part 4 analysis on the design of the Residence. [ 19 ] The Swifts moved from Calgary to Victoria in August 2007 for the purpose of enrolling their children in school there for the 2007-2008 school year. They had been advised by the contractor that the Residence would be ready for occupancy by the end of 2007. A second

schedule given to the Swifts by the contractor on July 10, 2007 indicated that the projected occupancy date for the Residence was March 31, 2008. By that time, the Swifts had rented a house in Victoria until December 31, 2008. However, they did not sell their house in Calgary until July 2008. The occupancy permit for the Residence was issued on July 18, 2008. III. Issues [ 20 ] Mr. Swift makes claims in both contract and tort; Mrs. Swift claims only in tort. The issues before me may be enumerated as follows.

A. The Contract Claims (

i) Did Eleven Eleven breach the Architect Agreement? (ii) Was there a second contract between the Architects and Mr. Swift? If so, did the Architects breach that contract? (iii) Was there a contract between TRL and Mr. Swift? If so, did TRL breach that contract? (iv) Did TRL breach its contract with the Architects? (

v) If there was a breach of the Architect Agreement and/or of a second contract between the Architects and Mr. Swift, does the Limitation Clause apply? (vi) Is Mrs. Swift bound by the provisions of the Architect Agreement, particularly the Limitation Clause? B. The Tort Claims (

i) Were the TRL Defendants negligent in carrying out the structural engineering of the Residence? (ii) Are there defects in the structure of the Residence arising from negligence by the TRL Defendants that create a real and substantial danger to the occupants of the Residence? If so, must that danger be imminent and, if so, is it? (iii) Does the Limitation Clause apply to limit the tort claims of Mr. Swift and/or Mrs. Swift? (iv) Are Mrs. Swift’s tort claims barred by the Limitations Act , RSA 2000, c. L-12? C. Damages (

i) What repairs are required to the Residence and what will be the cost of those repairs? (ii) Are Mr. and/or Mrs. Swift entitled to non-pecuniary damages for mental distress? (iii) Are Mr. and Mrs. Swift entitled to damages for delayed occupancy of the Residence? D. Indemnity (

i) Are the Architects entitled to indemnity from the TRL Defendants? [ 21 ] Determination of these claims necessarily will require consideration of the provisions of the BCBC. Specifically, I will need to consider whether

Part 4 or

Part 9 of the BCBC, or some combination of both, applies to the Residence.

IV. Analysis A. The Contract Claims 1. Did Eleven Eleven breach the Architect Agreement? [ 22 ] The Architect Agreement sets out Eleven Eleven’s obligations as follows: [The] Design for the new construction of a single-family detached residence of approximately 6375 sq. ft. as well as design of the complete renovation of the approximately 800 sq. ft. existing beach house, both located at Lot 6,

Section One, Range Three, South Saanich District (plan 2689) (The Project). Design of the residence is to meet with community, municipal, and building code standards as well as to satisfy functional requirements as developed with the client. Construction Budget for the Project is approximately 2 412 500.00.

Scope of work includes complete design services including architectural, structural, mechanical, and electrical engineering. [ 23 ] The Plaintiffs argue that the Architects were also subject to certain implied terms: - that the structural engineering would be performed in accordance with the standard of the structural engineering profession; - that the Residence would be in compliance with the regulations and industry standard and would not present a danger to its occupants; and - that the Residence would be reasonably fit for its intended purpose, including conforming with the aesthetic qualities desired by the Plaintiffs. [ 24 ] The Plaintiffs assert that the Architects breached the express and implied terms of the Architect Agreement in the following respects: (

a) failing to provide a design for the Residence that met with community, municipal and building code standards; (

b) failing to provide structural engineering in relation to the Residence that met the standard of the profession of structural engineers; and (

c) creating a house that was both unsafe and unsuitable for its intended purpose and function. [ 25 ] The Architects acknowledge that they were obligated under the Architect Agreement to provide structural drawings that met both the requirements of the BCBC and the Swifts’ functional requirements. Therefore, they acknowledge that, to the extent that the structural engineering design provided by the TRL Defendants is deficient, they are in breach of their contractual obligations.

However, as discussed further below, they assert that they have no independent fault and, therefore, no independent liability. [ 26 ] I agree with the position of the Architects on the first point. I find that their obligations under the terms of the Architect Agreement included providing a suitable structural design for the Residence and that they are in breach of that obligation if the design provided by the TRL Defendants was deficient. Whether and to what extent the Architects are entitled to indemnification by the TRL Defendants will be discussed further herein.

2. Was there a second contract between the Architects and Mr. Swift? If so, did the Architects breach that contract? [ 27 ] It is clear that there was no other written agreement between Mr. Swift and the Architects. Nevertheless, Mr. Swift asserts that he entered into a second, separate contract with the Architects in the fall of 2006 pursuant to which the Architects agreed to ensure that the Residence was built in accordance with

Part 4 of the BCBC and that the TRL Defendants brought the structural engineering design up to that level. [ 28 ] Mr. Swift asserts that the second contract was both subsequent to and separate from the Architect Agreement and was not a variation of or amendment to the Architect Agreement. He argues that it comprises additional obligations the Architects agreed to undertake based on concerns raised by an independent engineer and the Chief Building Inspector about the structural design of the Residence. He also argues that additional consideration was paid for the Second Contract.

He points out that in approximately December 2006, Mr. McKinley sought to have Mr. Swift pay an additional fee that was not contemplated under the Architect Agreement. Mr. McKinley justified the additional fee on the basis of, inter alia , problems with the structural engineer and additional expense being incurred by the Architects as a result of the structural engineer’s mistakes. [ 29 ] Mr. Swift’s position is that the Architects breached the second contract in that the Residence was not built in accordance with

Part 4 of the BCBC. [ 30 ] The TRL Defendants assert that there was only one contract between the Plaintiffs and the Architects. They point to the “entire agreement” clause contained in the Architect Agreement: 3.5.1 This Agreement represents the entire and integrated agreement between the Client and the Prime Consultant/Designer and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only by written instruments signed by the Client and the Prime Consultant/Designer. [ 31 ] The TRL Defendants further assert that the additional payment made by Mr.

Swift did not amount to consideration for a separate agreement. They note that the terms of the Architect Agreement provide for adjustment to the fee payable based on increases to the size of the premises or the duration of the project. In this case, both were increased significantly. They also take the position that no part of the increased fee paid to the Architects was on account of the seismic issues. [ 32 ] I find that there was only one contract between Mr. Swift and the Architects.

The courts have stated consistently that collateral contracts are to be viewed with suspicion; see, for example, Troika Land Development Corp. v. West Jasper Properties Inc. , 2009 ABQB 590 and G.H.L. Fridman, The Law of Contract , 5 th ed. (Toronto: Carswell, 2006). Therefore, I conclude that a collateral contract should not be found where, as in this case, the conduct of the parties is consistent with the original contract. The evidence is clear that the project had expanded beyond its original scope; both that occurrence and the additional payment made by Mr. Swift are contemplated by the Architect Agreement.

Therefore, it was not necessary for the parties to come to a second, separate agreement and I find that this was not their intent. [ 33 ] There being no second contract between the Architects and Mr. Swift, there can have been no breach of such a contract. 3. Was there a contract between TRL and Mr. Swift? If so, did TRL breach that contract? [ 34 ] In September 2006, in response to concerns raised by Mr. Galloway and by the Chief Building Inspector about the seismic stability of the Residence, Mr. Taylor of Eleven Eleven requested that the TRL Defendants revise the structural design to comply with

Part 4 of the BCBC. Mr. Tomecek testified that he asked Mr. Taylor to confirm with Mr. Swift that he wanted the structural engineering for the Residence to be done to the

Part 4 standard; Mr. Taylor obtained that confirmation and testified that Mr. Tomecek promised to bring the structural engineering up to

Part 4. The Plaintiffs submit that Mr. Tomecek acknowledged the importance of doing the

Part 4 design before the Residence was “closed in”.

[ 35 ] The Plaintiffs take the position that, in securing Mr. Tomecek’s agreement to redesign the Residence to comply with

Part 4 of the BCBC, Mr. Taylor and Eleven Eleven were acting as agents for Mr. Swift, thus creating a contract between Mr. Swift and the TRL Defendants. They argue that this contract is separate and distinct from the Architect Agreement and from the agreement between the Architects and the TRL Defendants. [ 36 ] The Plaintiffs argue that the “entire agreement” clause contained in the Architect Agreement does not preclude this alleged contract between Mr. Swift and the TRL Defendants because that clause binds only the parties to the Architect Agreement, namely Mr.

Swift and Eleven Eleven. [ 37 ] The TRL Defendants argue that the changes to the structural design were made gratuitously and that, therefore, there was no consideration to support such a contract. The Plaintiffs, however, assert that there was consideration in that the TRL Defendants charged additional amounts for the redesign, including amounts for two Stantec site visits in relation to the

Part 4 work and expenses for Mr. Tomecek’s site visit to discuss the

Part 4 work with the contractor. Though the Plaintiffs acknowledge that this consideration did not flow directly from Mr. Swift to the TRL Defendants, they assert that it is sufficient that the TRL Defendants received some payment. The Plaintiffs also argue that consideration may be found in their forbearance to sue the TRL Defendants for not having performed the structural engineering to the

Part 4 standard at the outset. [ 38 ] The TRL Defendants also argue that any and all structural engineering work they did on the Residence was done pursuant to their agreement with the Architects. They argue that “it would be an absurdity to suggest new agreements were made each time an issue arose and was resolved during the course of work”. [ 39 ] Assuming that there was a contract between Mr. Swift and the TRL Defendants, Mr. Swift argues that it was breached because the TRL Defendants failed to bring the structural design of the Residence up to the

Part 4 standard as agreed. He also argues that the TRL Defendants breached an implied term requiring them to perform the structural engineering work with the reasonable skill, care and diligence expected of a professional engineer. [ 40 ] I find that there was no contract between Mr. Swift and the TRL Defendants. Mr. Tomecek did both his original work and the redesign pursuant to the agreement between the Architects and TRL and I find that there was no intent to create a contractual relationship between TRL and Mr. Swift. While Mr. Tomecek sought Mr. Swift’s confirmation that he wanted the

Part 4 redesign done, this is not inconsistent with the original contractual arrangements among the parties. The Architect Agreement specifically contemplates the Architects hiring subcontractors, including structural engineers. It is not logical to assume that changes to the original work plans create new, separate contracts. Mr. Tomecek wanted to ensure that the additional work was desired before undertaking it. This, in my view, is not inconsistent with his original contract with the Architects. [ 41 ] As with the alleged second contract between the Architects and Mr.

Swift, since I have found that there was no contract between Mr. Swift and the TRL Defendants, it follows that any default on the part of the TRL Defendants does not give rise to breach of such a contract. 4. Did TRL breach its contract with the Architects? [ 42 ] The Architect Agreement obliges the Architects to supply structural drawings and specifications that “satisfy functional requirements as developed with the Client”. The Architects argue that this included not only meeting the requirements of the BCBC, but also satisfying the Swifts’ functional and aesthetic requirements.

Since it is common ground that the Architects do not have the expertise necessary to do the structural engineering work, it is clear that they could meet this obligation only by subcontracting the structural design to a qualified engineer. As discussed above, to the extent that the structural engineering work done by its subcontractor was deficient, the Architects are in breach of their obligations to the Plaintiffs.

Accordingly, the agreement between the Architects and the TRL Defendants obliges the latter to provide a structural engineering design that meets the necessary requirements. [ 43 ] None of this is contentious. The issues are what standard this obligation required the TRL Defendants to meet and whether they did so. These questions are identical to those discussed herein in respect of the alleged negligence of the TRL Defendants and determination of this issue depends upon much the same analysis as does the Plaintiffs’ tort claim. That discussion appears infra at

section IV.B.

5. If there was a breach of the Architect Agreement and/or of a second contract between the Architects and Mr. Swift, does theLimitation Clause apply? [44] The TRL Defendants assert that the Plaintiffs’ claims are limited by the Limitation Clause. Naturally, the Plaintiffs argue thatthe Limitation Clause is inapplicable and, interestingly, the Architects take the same position. This is perhaps not surprising given thatthe Plaintiffs and the Architects have entered into a settlement agreement.

That settlement agreement was dealt with in my previousreasons given orally on March 13, 2012. [45] The Plaintiffs argue, first, that the Limitation Clause does not apply to their claims. They rely on Syncrude Canada Ltd. v.Hunter Engineering Co., (SCC), [1989] 1 SCR 426 and on Tercon Contractors Ltd. v. Her Majesty the Queen inRight of the Province of British Columbia et al., 2010 SCC 4 for the proposition that limitation or exclusion clauses are to be strictlyconstrued against the party seeking to enforce them.

Both the Plaintiffs and the Architects point out that, while the Architect Agreementidentifies Eleven Eleven as the “Prime Consultant/Designer” and refers to it as such in several clauses, the Limitation Clause refers onlyto the “Designer”. These parties take the position that the Limitation Clause therefore limits Eleven Eleven’s liability to claims arising“solely and directly” out of its responsibilities as Designer and not as Prime Consultant.

They assert that Eleven Eleven’s responsibilitiesqua Designer do not include any structural engineering work or engaging third parties to do such work and, therefore, that claims arisingfrom that work are not subject to the Limitation Clause. [46] The Plaintiffs’ position with respect to the TRL Defendants is, first, that the Limitation Clause does not protect them becausethey are not privy to the Architect Agreement. The Plaintiffs refer to Fraser River Pile & Dredge Ltd. v.

Can-Dive Services Ltd., (SCC), [1999] 3 SCR 108 for the proposition that the Limitation Clause will apply to the TRL Defendants only if the partiesto the Architect Agreement intended to extend the benefit of that clause to third parties and the third parties were performing the verywork contemplated by the parties. The Plaintiffs’ position is that neither of these prerequisites is satisfied. [47] The Plaintiffs further argue that no limitation is applicable because the structural engineering work in question was performedpursuant to the alleged second contract between Mr.

Swift and Eleven Eleven and/or the contract between Mr. Swift and TRL, neither ofwhich contains a limitation clause. They point out that the Limitation Clause is limited to claims “which arise solely and directly out ofthe Designer’s duties and responsibilities pursuant to this Agreement”, being the Architect Agreement. [48] Finally, the Architects assert that, even if the Limitation Clause is applicable, the $500,000 limit applies to each individualclaim and there is no aggregate limit. Therefore, they take the position that the Plaintiffs could claim up to $500,000 for each of thefollowing: (

i) Mr. Swift’s claim for negligence in the original structural design; (ii) Mr. Swift’s claim for negligence in the original andretrofit designs leading to the need for reconstruction of the Residence; (iii) Mr. Swift’s claim for negligence in the design of the separatemeditation centre; (iv) Mr. Swift’s claim for negligence for the failure properly to review of the shop drawings for the roof trusses; and(

v) Mrs. Swift’s “discreet [sic] but overlapping claims for each of the several claims” of Mr. Swift. [49] For their part, the TRL Defendants also point to Hunter v. Syncrude and to Tercon as authority for the proposition that thecourts should interfere with parties’ agreements only where the contract is unconscionable or there is a public policy reason to notenforce the provision in question. [50] They argue that the Limitation Clause is not unconscionable and point out that Mr.

Swift is an experienced businessman, thathe had independent legal advice with respect to the Limitation Clause and that the Limitation Clause was the product of negotiation.They also state that there is no public policy reason not to enforce the Limitation Clause because the evidence establishes thatinformation about the need for seismic upgrades was not withheld from Mr. Swift. [51] The TRL Defendants argue that the alleged distinction between “Prime Consultant” and “Designer” is irrelevant becauseEleven Eleven acted in both capacities.

They point out that the list of tasks enumerated in the Architect Agreement does not distinguishbetween the two roles. They also assert that this

interpretation would render the Limitation Clause effectively meaningless as “Noliability can flow from a less than satisfactory fusion of Asian structure with a west coast palette of materials”. [52] Further, they take the position that the Limitation Clause extends to them because they acted as a consultant and theLimitation Clause expressly applies to consultants. They note that “design” is defined in the Architect Agreement to include structural

engineering. The Plaintiffs’ response to this is that the TRL Defendants’ liability arises not from breach of their obligations as consultantsunder the Architect Agreement, but from breach of either their second contract with the Architects or of their contract with Mr. Swift,neither of which contains a limitation clause. [53] Finally, the TRL Defendants assert that the Limitation Clause limits the liability of the Architects and any consultants to$500,000 in toto. They argue that this is clearly what is meant by the reference in the Limitation Clause to “any and all claims” and statethat there is no basis for the Plaintiffs’

interpretation. [54] I find that the Limitation Clause does apply to limit the TRL Defendants’ liability for Mr. Swift’s claims. Following theanalysis in Fraser River Pile, I find that the TRL Defendants were in the contemplation of the parties to the Architect Agreement andthat they were performing precisely the work so contemplated. As discussed above, it was clear from the outset that the Architects wouldsubcontract the structural engineering work as they lacked the necessary expertise to perform it themselves.

I reject the position of thePlaintiffs and the Architects that the distinction, if indeed there is one, between “Prime Consultant” and “Designer” restricts theapplication of the Limitation Clause. I agree with the TRL Defendants that such an

interpretation would render the Limitation Clausemeaningless. [55] As I have already rejected the Plaintiffs’ argument that there was an additional contract between Mr. Swift and the Architectsand/or between Mr. Swift and the TRL Defendants, it follows that the Plaintiffs’ argument that the Limitation Clause does not apply toany such contract also fails. [56] Finally, I find that the Limitation Clause operates to limit Mr. Swift’s claims to $500,000 in toto, rather than limiting each ofnumerous claims to that amount. Again, the Plaintiffs’

interpretation of the Limitation Clause would render it largely meaningless.Parties negotiate these clauses to give themselves certainty with respect to their exposure to liability. Treating the limitation amount asanything other than aggregate would obviate that certainty. There is nothing unconscionable in this

interpretation. As the TRLDefendants point out, Mr. Swift is a sophisticated, experienced businessman well versed in the concepts of liability and risk whonegotiated this limitation amount with the benefit of counsel. 6. Is Mrs. Swift bound by the provisions of the Architect Agreement, particularly the Limitation Clause? [57] The TRL Defendants take the position that Mr. Swift executed the Architect Agreement both on his own behalf and as agentfor Mrs. Swift. They argue therefore that Mrs.

Swift is bound by the terms of the Architect Agreement, including the Limitation Clause.While they acknowledge that there is no express agency agreement, they note that Mr. and Mrs. Swift were joint owners of the Propertyand that it was always intended that both of them would live in the Residence, along with their children.

They assert that an agencyrelationship can be found where the agent’s authority is apparent to a third party, where the principal permits the agent to act on his orher behalf, where the principal takes the benefit of the contract made by the agent and where the principal acquiesces to or fails torepudiate the contract made by the agent. See Rockland Industries, Inc. v. Ameranda Minerals Corp. of Canada, (SCC), [1980] 2 SCR 2; Canadian Laboratory Supplies Ltd. v. Engelhard Industries of Canada Ltd., (SCC), [1979] 2SCR 787; and John Ziner Lumber Ltd. v.

Kotov, (ON CA), [2000] OJ No. 3797. [58] The TRL Defendants also point to several Canadian decisions in which the courts have found an agency relationship betweenspouses who are joint owners of property. See Ryan v. Kaukab, 2011 ONSC 6826; Century 21 Maritime Realty Ltd. v. LeClerc, (NB KB), [1994] 144 NBR (2d) 87 (QB); Re Moore, 2006 NSSC 216; and Hadley v. Venetian Blind Service Centre, 2000BCSC 1321. [59] The TRL Defendants take the position that it was common practice in the Swift family for Mr. Swift to attend to businesstransactions and to enter into contracts on behalf of both spouses.

They point to other documents signed solely by Mr. Swift, includingthe building permit authorization, the acknowledgement prescribed by the District of Central Saanich, the construction contract with thecontractor and the listing agreement for the Swifts’ home in Calgary. [60] The TRL Defendants summarize their position by saying that when one spouse gives the other responsibility for work doneon property jointly owned by them, contracts entered into by that spouse are binding on both.

[ 61 ] The Plaintiffs assert that Mrs. Swift did not consent to Mr. Swift acting as her agent for the purpose of engaging an architect or any consultants and did not give him authority to enter into any agreement on her behalf. [ 62 ] Mr. Swift testified that the Residence was his vision and that Mrs. Swift had no involvement in discussions or negotiations respecting the Architect Agreement. He acknowledged that Mrs. Swift participated in some meetings, but stated that the Architects took their instructions only from him. [ 63 ] As noted above, it is common ground that Mrs.

Swift did not sign the Architect Agreement. She gave evidence that, while she knew Mr. Swift had engaged an architect to design the Residence, she was unaware that he had entered into a written agreement. However, Mr. Swift’s signature on the Architect Agreement was witnessed by Mrs. Swift. Therefore, her testimony must be considered suspect in this regard. [ 64 ] The Plaintiffs also argue that the Limitation Clause cannot apply to Mrs. Swift by virtue of the Supreme Court of Canada’s decision in Tercon .

The Plaintiffs assert that the effect of an exclusion clause must be determined in accordance with these three criteria: (1) whether, as a matter of

interpretation, the exclusion clause applies to the circumstances at issue; (2) whether the exclusion clause is unconscionable and was therefore invalid at the time the contract was made; and (3) whether the court should refuse to enforce the exclusion clause because of an overriding public policy. [ 65 ] In

summary, the Plaintiffs argue, first, that the Limitation Clause does not apply because Mrs. Swift is not a party to the Architect Agreement. Further, they argue that enforcement of the Limitation Clause against Mrs. Swift would be unconscionable and against public policy on the grounds that Mr. Swift signed the Architect Agreement without her authority and that she did not have an opportunity to review it and to seek independent legal advice. [ 66 ] In my view, the evidence is sufficient to establish that Mr. Swift, in executing the Architect Agreement, was acting both on his own behalf and on behalf of Mrs.

Swift. The case law indicates that such an agency can be found between spouses in appropriate circumstances and I am satisfied that such circumstances exist in this case. While the Residence may have been Mr. Swift’s “vision”, it is apparent from all of the evidence that Mrs. Swift was “on board” with it. This was to be their family home and was to be built on land of which she was the joint owner. It was to be designed by architects they previously had engaged in respect of family properties. While Mr.

Swift clearly took the lead in the process, that was typical of their family arrangements and the evidence shows that Mrs. Swift did have some input in the design process. Mr. Swift testified that the move to the Residence was intended to be “a joyous, happy event”. Had Mrs. Swift been opposed to the project, I consider it unlikely that Mr. Swift would have proceeded with it in the face of that opposition. I find that this was, in effect, their joint project. [ 67 ] The fact that Mrs. Swift was not a signatory to the Architect Agreement is of no moment.

Again, this was typical of the Swifts’ family arrangements and Mrs. Swift’s signature on the document as witness indicates that she was aware that Mr. Swift was engaging the Architects; indeed, she testified that she was aware of that. The Plaintiffs point out that she did not have independent legal advice in respect of the Architect Agreement. That, however, is also true of other documents Mr. Swift signed without her, including the listing agreement for their Calgary home. I find that Mrs. Swift was aware of the Architect Agreement.

Had she wished to seek legal advice in respect of it, there is nothing in the evidence that indicates she could not have done so. Instead, I find that she simply relied on her husband as she had often done. There is nothing untoward in that, but it does not permit Mrs. Swift to escape the legal consequences of agreements entered into by Mr. Swift on her behalf. [ 68 ] Therefore, I conclude that the Limitation Clause applies equally to Mrs. Swift. B. The Tort Claims 1. Were the TRL Defendants negligent in carrying out the structural engineering of the Residence?

[69] This issue is the crux of this dispute and was the focus of extensive expert evidence. The primary experts upon whosetestimony this issue will be determined are Mr. James Galloway of Genivar for the Plaintiffs and Mr. Patrick Lam of CWMM for theTRL Defendants. Both of them have extensive structural engineering experience and both were qualified to give expert evidence. Inaddition, Mr. Tomecek gave evidence as a party and Mr. Thomassen gave evidence in his capacity as the Chief Building Inspector forthe District of Central Saanich. a.

Duty of Care [70] The Plaintiffs begin by referring to Winnipeg Condominium Corporation No. 36 v.

Bird Construction Co., (SCC), [1995] 1 SCR 85 for the proposition that engineers who participate in the design or construction of a building owe a duty of careto the occupants of that building if it is forseeable that failure to take reasonable care could give rise to defects that pose a real andsubstantial danger to the health and safety of those occupants. [71] The TRL Defendants devoted little argument to this issue, either in their brief or in oral submissions, and they appear to haveconceded the point. [72] In my view, this is properly so as there seems to me to be little doubt that a duty of care was owed by the TRL Defendants inthe circumstances of this case. b.

Standard of Care [73] With respect to the applicable standard of care, the Plaintiffs set forth the following general principles: a. The general principles applicable to the standard of care and skill of professionals are the same whether the professional is aphysician, lawyer, accountant or engineer; see Trizec Equities v. Ellis-Don Management Services Ltd., 1998 ABQB 1133 at para. 420. b. Like other professionals, an engineer “is required to bring reasonable care, skill and knowledge to the performance of theprofessional service which he has undertaken”; see Dinevski v. Snowdon, 2010 ONSC 2715 at para. 65. c.

Where a design involves an element of risk, or where one design involves a greater risk compared to another, the engineer, inexercising reasonable skill and care, may be required to inform his client of that risk and/or to advise on the superior safety of thealternate design; see Lewis Klar et al., Remedies in Tort, vol. 4, loose-leaf [2001 - Release 8] (Toronto: Thomson Reuters CanadaLimited, 1987) at paras. 207 and 214, citing Brantford v. Kemp, (ON CA), [1960] 23 DLR (2d) 640 (Ont CA) at para.38. [74] The TRL Defendants do not appear to take issue with these general propositions.

Consequently, the real point of conflictbetween the parties is not with respect to the general approach, but with respect to the proper standard to be applied in this case andwhether the conduct of the TRL Defendants fell below that standard. The experts for both sides gave evidence as to these points. [75] The crux of the TRL Defendants’ theory of this case is that their design determinations were made in the reasonable exerciseof engineering judgment.

They assert that the structural design of the Residence reflected a reasonable exercise of engineering judgmentand thus is sufficient to meet the standard of care. In response, the Plaintiffs, citing Rogers v. Grypma, 2001 ABQB 958 at paras. 294-298, argue that the defence of error of judgment is available to a professional only if the error was made while exercising reasonablecare. They assert that acts of unskillfulness or carelessness and errors due to lack of knowledge do not arise from the honest andintelligent exercise of judgment and are not relieved by the defence of error of judgment.

As they assert that the TRL Defendants did notexercise reasonable care in preparing the structural design of the Residence, their position is that the standard of care was not met andthat the defence of error in judgment does not assist the TRL Defendants.

[ 76 ] The parties also made arguments in respect of the “respectable minority principle”, which provides that a professional may be relieved of liability for an error of judgment if the practice he followed is that of at least a respectable minority of others in his field. The Plaintiffs’ position is that the courts have recognized that not every conflict in the expert evidence will give rise to the application of this principle because such conflicts will almost always arise in cases involving the exercise of professional judgment.

They further assert that a finding that a professional has not exercised the degree of skill and care that would be expected from the majority of professionals in his field is “strong evidence of negligence”; see John A. Campion and Diana W. Dimmer, Professional Liability in Canada , vol. 1, loose-leaf [2012 - Release 1] (Toronto: Carswell, 1994). [ 77 ] Not surprisingly, the application of the BCBC is critical in this case to the determination of the applicable standard and the question of whether that standard was breached.

However, the Plaintiffs also take the position that an engineer may be liable in negligence for failure to exercise reasonable care in the circumstances even if his design meets the standards set out in a regulation. [ 78 ] The TRL Defendants described seismic design as more of an art than a science. They argue that given the complexity of the factors involved in a seismic event, it is impossible to predict with precision how a given structure will respond. Their position is that design to the standard of

Part 4 of the BCBC does not forestall the possibility of collapse. Therefore, they dispute the Plaintiffs’ contention that the standard of care required the Residence to be designed to

Part 4. (

i) Mr. Roy Thomassen [ 79 ] Mr. Thomassen, the Chief Building Inspector, testified that the following factors brought to his attention that the structural design of the Residence exceeded the scope of

Part 9 of the BCBC: (

a) The glazed walls on the west side elevation of the building, the roof structure was an engineered structure, the floor structures were engineered structures, the majority of the post and beams were structurally engineered and the foundation was also required to be engineered, all under

Part 4; (

b) When there is a lot of glazing on a wall, it is of particular concern because of the high seismic activity in the area and the lack of lateral stability on that type of wall; and (

c) The floor systems were comprised of TGI joists, which are actually engineered “I” joists. [ 80 ] Mr. Thomassen testified that, due to the number of engineered components in the Residence and to the complexity of the mechanical and electrical systems therein, he viewed the Residence as a “fairly complex single family dwelling”. [ 81 ] Mr. Thomassen referred to a number of sections of the BCBC and indicated that, in his view, pursuant to those provisions, the Residence needed to be designed to

Part 4. [ 82 ] He confirmed that he sent the September 7, 2006 letter which read, in part, “Please have the structural engineer confirm

Part 4 design has been met and provide the revised structural drawings to show the required changes.” He also confirmed that he received neither any response to nor any appeal of his direction. [ 83 ] Finally, Mr. Thomassen testified that, while he visited the Residence approximately 6 - 10 times in 2006, he is not himself an engineer, he is not qualified to do any engineering analysis and he must rely upon professionals to carry out any directions he gives in his capacity as Chief Building Inspector.

(ii) Mr. James Galloway [ 84 ] The Plaintiffs claim that there are two aspects to the standard of care and its application: the gravity load resisting system and the seismic (or lateral) load resisting system. Mr. Galloway gave extensive evidence on both of these. (

A) Gravity Load Issues [ 85 ] In respect of the gravity loads, Mr. Galloway identified four issues: (ii) the trusses bearing on the perimeter exterior walls of the upper floor as well as on the exterior porch beams; (ii) B3-F beams on GL B and G between GL8 and GL9+; (

c) the exterior lintel beams in the garage; and (

d) the hip beam to column connection in the Meditation Room. He testified that the TRL Defendants did not meet the standard of the profession in respect of any of these four issues. [ 86 ] First, in respect of the roof trusses, the Plaintiffs assert that there does not appear to be any dispute that corrective work is required. They state that the work required is outlined in a report prepared by Mr. David Mann, which report was introduced without Mr. Mann being called as a witness. [ 87 ] Mr.

Galloway’s evidence was that the weight of the roof trusses bears at points that were not intended under the structural drawings prepared by the TRL Defendants and that the truss shop drawings clearly show these incorrect bearing points. Mr. Galloway stated that Mr.

Tomecek, as engineer of record, was responsible to review the shop drawings from the truss manufacturer to ensure that they conformed to the requirements and design intent of both the structural and architectural drawings of the Residence, as well as to ensure that the shop drawings received were designed in conformance with his specifications and bearing requirements. Mr.

Galloway went on to state that, as engineer of record, and under its obligation to review the truss shop drawings, the TRL Defendants should have caught the fact that the truss shop drawings show bearing locations that do not conform to the structural drawings and should have stamped them “Rejected”, indicated what the problems were and returned them to the truss shop for redesign. In Mr. Galloway’s opinion, by not ensuring that the trusses for the Residence did not have bearing points other than as intended in the structural drawings, Mr.

Tomecek and TRL did not meet the standard of the profession. [ 88 ] With respect to the second gravity load issue, Mr. Galloway and the TRL Defendants’ expert, Mr. Lam, agreed that certain beams in the Residence lack the required capacity. Mr. Galloway originally recommended that these beams be exposed and reinforced; however, he is now prepared to adopt the corrective work proposed by Mr. Lam. [ 89 ] With respect to the third gravity load issue identified above, Mr. Galloway testified that the exterior lintel beams in the garage have only approximately 50% of the required capacity.

He proposes that these beams be exposed and, if necessary, that corrective work be done. [ 90 ] Finally, with respect to the fourth gravity load issue identified above, Mr. Galloway testified that the hip beams and columns in the Meditation Room are inadequate to resist the lateral thrust developed by the hip beams under gravity loads. He testified that this issue will be resolved if his proposed seismic upgrades for the Meditation Room are implemented. (

B) Seismic Load Issues [ 91 ] Mr. Galloway also gave extensive evidence as to the seismic load resisting system of the Residence.

He described the Residence as a complex structure with a footprint of almost 6000 square feet and several complicating characteristics, including: open walls on the west side; complex framing involving various materials; extensive use of glass; four satellite structures, three of which are connected to the main structure; large open interior spaces in the north/south direction that result in limited lateral stability; an unusually heavy structure, particularly the second floor; and two massive chimneys, which create unusual load issues. [ 92 ] Mr.

Galloway testified that these factors led him to the conclusion that the Residence was beyond the prescriptive requirements of

Part 9 of the BCBC and should be designed in accordance with

Part 4. He said that he also took into account the number of individual components in the Residence that required

Part 4 design, including the roof trusses, the LVL beams and the manufactured joist system. Mr. Galloway stated that this had been his position in 2005 and 2006, when the firm with which he was employed at the

time bid on the structural engineering job and he saw the architectural drawings. [ 93 ] Mr. Galloway explained that

Part 9 of the BCBC is intended to apply to the construction of conventional houses, not unusual structures like the Residence. He emphasized that adherence to the BCBC is not co-extensive with meeting the standard of the profession and said that, to meet the latter test, the design must be in accordance not only with the BCBC, but with sound engineering practice. Mr. Galloway’s view is that

Part 9 of the BCBC is inadequate with respect to seismic design. [ 94 ] He testified that the “hybrid”

Part 9/Part 4 approach used by Mr. Lam, as described below, was not appropriate and not something he had previously seen. He stated that this approach might be adopted for renovation of an existing older building, but not for a new structure such as the Residence. [ 95 ] Mr. Galloway testified that his opinion as to the Residence’s seismic load resisting system is as follows: (

a) The Residence does not have adequate inherent lateral stability and should be designed as a

Part 4 building with explicitly quantified lateral loads. The original designs for the main house and the Meditation Room do not meet the standard of the profession; (

b) The revised seismic design does not include calculations of the lateral loads for the main house in compliance with

Part 4 of the BCBC and, therefore, also does not meet the standard of the profession; (

c) Further, the revised seismic design did not meet the standard of the profession for these reasons: (

i) the upper floor shear walls are not adequately supported and are not adequate to support the applied loads; (ii) the floor and roof diaphragms are not adequate to transfer the loads to the lateral load resisting elements; (iii) the cantilevered steel columns do not have the capacity to support the applied loads and their connection details are likely to lead to instability under seismic loads; (

v) the seismic redesign drawings do not provide adequate nailing details; and (vi) the drag strut connections are not adequate to support the applied loads. [ 96 ] In addition, a great deal of evidence was given with respect to “minimum lateral seismic force” or “base shear”. This has to do with the extent to which the structure can resist lateral forces at its base. Mr. Galloway testified that his calculations of these forces were approximately twice what TRL calculated in the north/south direction and approximately 20-25% higher than TRL’s calculations in the east/west direction. He testified that these differences are due to three elements: (

i) the calculation of the seismic weight of the building; (ii) the calculation of the fundamental period, being the time in which a building will sway from one side to the other and back again in an earthquake situation; and (iii) the R factor, being the measure of ductility of the seismic force resisting system to absorb and dissipate energy. With respect to this latter point, Mr. Galloway testified that the 1998 version of the BCBC did not permit the use of different R factors for the upper and lower floors of a structure.

He stated that an engineer working to the standard of the profession would use the lowest R value applicable to the structure for making these calculations. [ 97 ] Mr. Galloway accounted for the difference in fundamental periods used by him and by Mr. Lam by stating that, for the north/south direction of the Residence, he had used the entire length of the building. He stated that this value has to do with the stiffness of a seismic force resisting element and explained that he had used the entire north/south length of the building because of the combination of materials used in that direction.

In his view, to use only the length of the concrete shear wall, as Mr. Lam did, does not make sense because concrete is so much stiffer than the other materials. [ 98 ] Mr. Galloway did an initial set of these base shear calculations for purposes of his expert report. He then performed a revised set of calculations, taking into account criticisms made by the TRL Defendants’ expert, Mr. Lam. While the revised calculations were closer to those made by Mr. Lam, they were still significantly different from the numbers used by the TRL Defendants. [ 99 ] The TRL Defendants assert that Mr.

Galloway lacks the expertise of both Mr. Lam and Mr. Tomecek in seismic design. They also asserted that he took inconsistent approaches to various aspects of his evidence and that he acted more as an advocate than as an independent expert.

[ 100 ] In any event, regardless of the differences in these calculations, Mr. Galloway testified that both he and Mr. Lam are of the view that there are deficiencies in the seismic design of the Residence and that corrective work is needed. Mr. Galloway testified that the design of the main house is such that collapse of the west side is possible in an earthquake. He acknowledged, however, that the changes he proposes are far more substantial than those proposed by Mr. Lam. [ 101 ] Mr. Galloway pointed out that the TRL Defendants did no seismic calculations with respect to the Meditation Room.

His opinion is that the design of that structure is such that there is a danger of collapse even in a smaller earthquake. [ 102 ] Mr. Galloway also testified with respect to Mr. Thomassen’s letter of September 7, 2006. He stated that, in his view, that letter requires the Residence to be designed in accordance with

Part 4 of the BCBC. [ 103 ] Finally, Mr. Galloway indicated that the lack of detail in the structural drawings and the lack of proper calculations to support the design of the seismic resisting system gives him concern that the Residence may not have been properly framed. He says he noticed this when he visited the site in August 2006, at which point the Residence had been rough framed. Some inadequate framing details may be hidden by the finishing work, meaning that more thorough upgrading is required to identify and resolve deficiencies. [ 104 ] He testified that the remedial measures proposed by Mr.

Lam will result in only a small portion of the necessary resistance. He also took issue with Mr. Lam’s statement that his proposed remedial measures would provide the life safety level intended by the BCBC in the event of an earthquake. In Mr. Galloway’s opinion, this assessment cannot be made without carrying out a full

Part 4 analysis and design. [ 105 ] With respect to the TRL Defendants’ arguments about engineering judgment and the respectable minority principle, Mr. Galloway testified that the standard of the profession would require designing the Residence to meet

Part 4 of the BCBC and that the number of engineers who would apply

Part 9 to such a structure would be very limited or non-existent. Mr. Galloway acknowledged that there will always be a spectrum of views, but stated that he does not know any qualified engineer in the Victoria area who would apply

Part 9 in this case. (iii) Mr. Patrick Lam [ 106 ] Like Mr. Galloway, Mr. Lam, the TRL Defendants’ expert, testified about both gravity load issues and seismic load issues. (

A) Gravity Load Issues [ 107 ] With respect to the alleged gravity load resisting system errors, Mr. Galloway testified that there are deficiencies in four areas: (

a) the roof trusses for the main house, which bear on the exterior walls as well as on the exterior porch beams; (

b) the B3-F beams on GL B and G between GL8 and GL9+; (

c) the exterior lintel beams in the garage; and (

d) the hip beam to column connection in the meditation room. The Plaintiffs assert that the first three items are not disputed by Mr. Lam. They also assert that Mr. Lam does not dispute Mr. Galloway’s conclusion that the roof trusses, as presently installed, create a danger of roof collapse. [ 108 ] With respect to gravity load issues, Mr. Lam referred to the same B3-F beams discussed by Mr. Galloway. He agreed that those beams are underdesigned and proposed to reinforce them by adding a new steel beam underneath the existing beam.

He indicated that this could be done through the ceiling space and that this work was unrelated to his proposals with respect to the seismic issues. [ 109 ] Second, Mr. Lam testified that work was required on the exterior garage lintel beam. He stated that it was not clear from the structural drawing exactly which beam was supporting the garage roof truss, but that there was insufficient support in any event. Mr. Lam recommended opening up the finishing on the exterior of the garage to expose the lintel beam and adding more beams to strengthen it. [ 110 ] Third, Mr. Lam testified as to Mr.

Galloway’s concerns about the hip beams in the Meditation Room. Mr. Lam’s view is that

this portion of the structural design is adequate in that the four interior columns provide sufficient support. [ 111 ] Finally, Mr. Lam agreed that the shop drawings for the roof trusses for the main part of the Residence show the trusses bearing on the exterior walls of the Residence in a manner not intended under the structural design. He did not dispute Mr. Galloway’s contention that the TRL Defendants should have reviewed the shop drawings. (

B) Seismic Load Issues [ 112 ] The bulk of Mr. Lam’s testimony pertained to the seismic issues. In his report, he noted several aspects of the Residence’s architectural design that make seismic issues relevant: - “...the N-W corner of the main building and west elevation of the building between the second floor and main floor are quite open with no positive structural bracing walls and no redundancies in the N-S direction.

Therefore, positive lateral stability systems should be provided in the N-S direction in these areas.” - “There are no brace walls available in the Meditation Room for lateral resistance.” - “...the main building and the Meditation Room ... lack sufficient bracing walls and redundancies, particularly for the N-W projection of the main building and the west elevation of the main building between the second floor and the main floor. ... Additional

Part 4 lateral load design considerations would be appropriate.” [ 113 ] Mr. Lam’s testimony was that it was appropriate to design the Residence based on a “hybrid” of Parts 4 and 9 of the BCBC. The TRL Defendants point out that the following appears in Appendix A to the BCBC at p. 511:

Section 9.4 establishes the principle that the design of structural members of

Part 9 buildings must either be based on the specific requirements in

Part 9, such as the span tables, or be in accordance with

Part 4. Usually a combination of the two approaches is used. For example, even if the snow load on a wood roof truss is based on Subsection 9.4.2, the joists must be designed in accordance with

Part 4. The only explicit treatment of structural loads in

Section 9.4 is for gravity loads; wind and earthquake loads are dealt with implicitly in the body of

Part 9 and are not used as inputs in any of the span tables. There may therefore be a tendency to assume that wind and earthquake loads do not need to be considered in the design of

Part 9 buildings. In most cases this is true; the majority of low rise, wood frame buildings have a great deal of structural redundancy and continuity and have more than enough capacity to resist lateral loads due to wind and earthquake. [Emphasis in TRL Defendants’ brief.] [ 114 ] The TRL Defendants submit that the extent to which

Part 4 elements should be incorporated into what would otherwise be a

Part 9 structure is a matter of engineering judgment. They note that Mr. Galloway acknowledged being involved in previous projects in which partial

Part 4 upgrades were incorporated. They also note that the 2006 version of the BCBC expressly permits partial

Part 4 designs. [ 115 ] The Plaintiffs counter by saying that the BCBC does not permit such a “hybrid” approach and that this approach does not meet the standard of care. They also assert that Mr. Lam did not make clear in his evidence where he had used

Part 9 and where he had used

Part 4. [ 116 ] Mr. Lam also performed base shear calculations with results that differed significantly from those obtained by Mr. Galloway. Mr. Lam indicated in his report that he used a “two tiered R factor system along the height of the building for the seismic force resisting system in the N-S direction.”

[ 117 ] The Plaintiffs argued that this approach is inappropriate and was not permitted under the 1998 version of the BCBC. They asserted that Mr. Lam’s use of an erroneously high R factor for the upper floor of the Residence gave rise to an artificially low base shear calculation. [ 118 ] Mr. Lam also determined the fundamental period for the Residence in both the north-south and east-west directions, arriving at a figure similar to that used by Mr. Tomecek in the north-south direction. In the east-west direction, Mr. Lam used a larger fundamental period than did Mr.

Tomecek, with the result that his assessment of the base shear in that direction was lower than what Mr. Tomecek had found. [ 119 ] The Plaintiffs took issue with Mr. Lam’s fundamental period assessments, particularly in the north-south direction, saying that he failed to take into account that the concrete wall on the main floor of the Residence is significantly stiffer than a plywood wall of the same size, such as he used in his calculations. [ 120 ] The Plaintiffs also took issue with Mr. Lam’s base shear calculations on the basis that he used a building weight that was significantly too low.

By contrast, the TRL Defendants assert that Mr. Galloway’s estimated building weight is too high. On cross- examination, both experts made adjustments to their weight estimates to allow for certain specified items. [ 121 ] Notwithstanding his differences of opinion with Mr. Galloway, Mr. Lam testified to several remedial measures that are required to correct what he called “obviously deficient” work by the TRL Defendants.

The Plaintiffs pointed to these examples: - “...the drag on GL8 at the second floor is inadequate and our finding indicates that the drag is only 30% of the required force demand.: - “...blocking in the floor diaphragm is needed on the second floor to transfer to the shear from the upper wall to the lower walls on grids C & D.” - “For the wall on Grid C- ... with the reduced wall length, its capacity is about 60% of the required capacity.” - “...for the shear wall extension from the top of the original existing shear wall to the underside of the roof, there are no nailing details provided and the sketches should have shown additional nailing or shear transfer framing anchors at the connection of the extension to the existing walls.” - “...the bolting capacity shown on A1/S8.2 and 6/S8.2 along GL8 is inadequate, with the capacity of only 30% of the required capacity.” - “...we concur with Genivar that ‘details should have also been provided to show blocking and nailing details at the floor to ensure that the lateral loads are transferred from the floor framing between levels’ using the

Part 4 approach.” - “[the cantilevered steel columns] are inadequate in stiffness and therefore would deflect excessively. ... These columns are too slender or flexible such that deflections of these columns under seismic loads would be excessive and exceed the deflection limit specified by the [BCBC].” [ 122 ] The Plaintiffs, however, assert that Mr. Lam’s erroneous calculations and hybrid approach do not allow for confidence that his proposed remedial measures will create the necessary level of safety. The Plaintiffs point to numerous criticisms Mr. Galloway made of Mr. Lam’s proposal. They also note that Mr.

Lam conceded that the lateral load resisting system proposed by Mr. Galloway is generally in accordance with

Part 4 of the BCBC.

(iv) Mr. Brian Tomecek [ 123 ] Mr. Tomecek testified with respect to both the gravitational and the seismic load issues. However, it must be borne in mind that he testified as a party litigant, not as an expert. Therefore, he was permitted to testify as to his own experience, observations and decisions, but was not permitted to give opinion evidence except to the extent that his opinions at the time he did the structural engineering work on the Residence were relevant to that work. [ 124 ] Mr.

Tomecek stated that design of the roof truss system, including determination of the appropriate bearing points for those trusses, was part of his structural engineering work. The actual design of the trusses themselves, however, was carried out by the truss manufacturer. He testified that the process would unfold as follows: Well, a shop drawing review is exactly that. We – the normal process is that the contractor procures the shop drawings from the vendor, whoever that may be. For projects like this, it would be pre-engineered roof trusses. It would be the engineered floor system and their connections.

And they submit those typically through the architect as the gatekeeper of information, and then they would distribute them to the subconsultants. So for those type of components, we would get those shop drawings. We would review those for general conformance with design intent if there was anything identified that needed changes. We’d be looking at general arrangement of members, load – are they meeting the load requirements, are they meeting performance requirements in terms of deflections.

And then we would stamp those with a shop drawing stamp, and it would either be reviewed, reviewed as noted, if we had some markup on that. And if it was drastically incorrect, which can happen, then we would have them resubmit. [ 125 ] Mr. Tomecek testified as follows with respect to the

Part 9 /

Part 4 dichotomy: ... the building is a

Part 9 building, so it’s in substantial conformance with

Part 9. And in terms of the seismic lateral force resisting it’s been designed and detailed in conformance with

Part 4 of the BC Building Code requirements. [ 126 ] Mr. Tomecek indicated that he did not do a

Part 4 analysis for the meditation room because the agreed scope of the work was for the main house and because the meditation room was a

Part 9 building using post-and-beam construction that did not lend itself to

Part 4 design. [ 127 ] Mr. Tomecek testified that a

Part 4 analysis ignores the redundancies inherent in a

Part 9 building: The simple fact of the matter is that

Part 9 buildings, which are allowed under the British Columbia Building Code and which is the vast majority of houses are built, not only in British Columbia, but everywhere in Canada, in some cases, in areas of high seismic or high wind, if you explicitly do a

Part 4 analysis on that home, in other words, exactly what Mr. Gallagher was suggesting, take out all the redundancies because you have to under

Part 4, and check only what’s left to

Part 4 requirements, you would find there would be lots of problems. It would not conform. This is common knowledge. So the solution is to remedy the situation and make it conform with

Part 9. [ 128 ] Mr. Tomecek testified that, although the Residence fell under

Part 9 of the BCBC, he recognized the need to consider seismic stability. He stated that he identified a series of structural elements in the east/west direction that provided adequate lateral load. He testified that he recognized certain areas of the Residence lacking lateral redundancies in the north/south direction and that his plan was to add elements of suitable strength, including the fireplaces, to those areas. He indicated that he discussed this intention with the Mr. Stefan Cieslik, the draftsman who prepared the detailed working drawings. [ 129 ] The Plaintiffs, however, assert that Mr.

Tomecek’s testimony in this regard is inconsistent with Mr. Cieslik’s evidence and that Mr. Tomecek’s recollection of dates does not accord with a change of employment by Mr. Cieslik. Further, the Plaintiffs argue that even if Mr. Tomecek initially intended to use the fireplaces in this manner, he abandoned this intent when he was advised that the fireplaces

had already been built. [ 130 ] The Plaintiffs also contend that Mr. Tomecek’s testimony that he recognized the need to consider seismic issues is inconsistent with his position that the Residence required only conformance with

Part 9. However, given Mr. Lam’s position that a hybrid of Parts 4 and 9 is acceptable in certain circumstances, I do not consider Mr. Tomecek’s testimony inconsistent in this respect. I do, however, find Mr. Tomecek’s lack of any notes or calculations respecting the chimneys and fireplaces somewhat disquieting. c. Conclusion re: Expert Evidence [ 131 ] As noted above, the TRL Defendants rely for their defence on engineering judgment, stating as follows in their brief: The allegations regarding TRL’s

Part 4 design are not concerned with a failure to utilize proper formulas, a calculation error or a misapprehension of the physical evidence. All three engineers involved with this matter (Tomecek, Lam and Galloway) have taken the same approach to the seismic design process, although using their engineering judgment in different ways. There is no evidence of an error in the process or calculation. The allegations in this case are based entirely on challenges to the engineering judgment exercised by Mr.

Tomecek in the design process. [ 132 ] Further, the TRL Defendants take the position that, if there was an error in judgment, they nevertheless will not be liable if a reasonable minority of structural engineers would have done what they did. [ 133 ] While both sides expended a great deal of energy addressing the question of whether the Residence was a

Part 4 structure or a

Part 9 structure under the terms of the BCBC, it is important to bear in mind that the real question in respect of the standard of care is what is the standard to which a reasonably competent structural engineer would design the Residence? The question of which part of the BCBC applies informs this standard, but is not co-extensive with it. [ 134 ] Having said that, I find on all of the evidence before me that, given its architectural design and the risk of a seismic event, the Residence should have been built to satisfy

Part 4 of the BCBC. With respect to the seismic load issues, I prefer the evidence of Mr. Galloway to that of Mr. Lam. In my view, Mr. Lam attempted to walk too fine a line and I am satisfied that his hybrid approach is not appropriate in this case. [ 135 ] Further, I find that Mr. Tomecek’s September 2006 redesign was insufficient to address the seismic issues. Even Mr.

Lam acknowledges that there are “obvious deficiencies” in the Residence as it currently stands. [ 136 ] With respect to the gravitational issues, the Plaintiffs claim that, as structural engineers of record, the TRL Defendants had an obligation to review the shop drawings for the roof trusses to ensure that they had been designed correctly. The Plaintiffs state that the TRL Defendants should have stamped the shop drawings “rejected” and returned them to the manufacturer for redesign. This was the view expressed by Mr. Galloway and it was not contradicted by Mr. Lam. Even Mr.

Tomecek, though he stated that they “never approve shop drawings”, testified that the “normal process” would be for the engineers to get the shop drawings and “review” them. Mr. Tomecek testified that “if [the shop drawings were] drastically incorrect, then we would have them resubmit.” [ 137 ] The TRL Defendants acknowledge that the roof trusses fail to distribute the gravitational loads to the load bearing structures identified in the structural engineering drawings.

I find that, as engineer of record, the TRL Defendants had a responsibility to review the truss shop drawings and to address the deficiencies in them. [ 138 ] Mr. Tomecek testified that the TRL Defendants never received the truss shop drawings prior to installation of the trusses. This, in my view, does not obviate their responsibility. The TRL Defendants should have followed up with the truss manufacturer and/or the contractor as needed to ensure proper review of the drawings.

[139] The TRL Defendants also take the position that any liability for improper design of the roof trusses rests with the contractorand its subcontractors, who were responsible for their design, manufacture and installation. The contractor, Coastal, engaged PacificTruss to manufacture and supply the roof trusses, which prepared the shop drawings and sent them to Mann Engineering for review andapproval.

Mann Engineering certified that “Point loads and reactions from the roof trusses have been conducted down to and propertysupported by the foundation” and that “the installation of the Trusses is adequate and acceptable as constructed and complies with the[BCBC] with respect to structure and strength.” [140] It may be that there was negligence on the part of other parties involved in the design, manufacture and installation of the rooftrusses. It may be that the TRL Defendants will be entitled to contribution from one or more of those other parties pursuant to the Tort-Feasors Act, RSA 2000, c. T-5.

That, however, is not before me and does not change my conclusion that the TRL Defendants werenegligent in this regard. [141] Finally, the TRL Defendants argue that remediation of the trusses is not necessary as they create no structural issue. They statethat the result of the improper weight bearing is “merely a risk of excessive deflection, not failure”. This, however, does not accord withthe evidence of Mr. Galloway, which I prefer over that of Mr.

Lam. [142] Accordingly, I find that the TRL Defendants were negligent in the performance of their obligation to provide a suitablestructural design for the Residence. They are also liable for breach of their contract with the Architects to provide such a design. 2. Are there defects in the structure of the Residence arising from negligence by the TRL Defendants that create a real andsubstantial danger to the occupants of the Residence?

If so, must that danger be imminent and, if so, is it? [143] As there has been to this point no damage to the Residence and no personal injury to the Plaintiffs, this claim is for pureeconomic loss. There appears to be no dispute that, for the TRL Defendants to be liable in respect of this claim, the alleged deficienciesin the structural engineering of the Residence must be such as to create a real and substantial danger to the occupants thereof.

The TRLDefendants, however, assert that the danger must also be imminent. [144] The necessity for a real and substantial danger was articulated in the Winnipeg Condo case referred to above. In that case, theissue before the Supreme Court of Canada was whether a general contractor responsible for the construction of a building could be heldliable in negligence to a subsequent purchaser of the building, who was not privy to the contract with the general contractor, for the costof repairs. LaForest J. found that the loss in question was not property damages, but a form of economic loss.

He held that where thedefects in construction appear and negligence is established before any damage to persons or property occurs, the defendant may beliable for the cost of repairs necessary to put the structure back into a non-dangerous state. However, for the costs of repair to berecoverable, the negligence must have created a real and substantial danger to the health and safety of the occupants of the building. [145] This analysis was followed in North Sydney Associates v. United Dominion Industries Ltd., 2006 NSCA 68, 268 DLR (4th) 491, in Mariani v.

Lemstra (ON CA), [2004] 246 DLR (4th) 489 (Ont CA) and by Hawco J. in Vargo v. Canmore(Town), 2011 ABQB 649. [146] The TRL Defendants take the position that the danger arising from negligent design or construction must be not only real andsubstantial, but also imminent. In support of this proposition, they cite the decision of our Court of Appeal in Blacklaws v. 470433Alberta Ltd., 2000 ABCA 175, 261 AR 28 and the judgments of the Courts of Appeal in Cardwell v. Perthen, 2007 BCCA 313 andSentinel Self Storage Corp. v.

Dyregrov, 2003 MBCA 136. [147] The TRL Defendants assert that any danger to the Plaintiffs clearly is not “imminent” as they have lived in the Residencewithout incident since 2008 and have taken no steps to implement temporary measures to guard against such danger. [148] The Plaintiffs, however, cite several cases in which the courts have held that there is no requirement for “imminent risk” of physical harm before the economic loss may be recovered. See, for example, Roy v. Thiessen, 2005 SKCA 45, 252 DLR (4th) 475,Mariani and Vargo. They submit that this Court held in Condominium Plan No. 9421710 v.

Christenson, 2001 ABQB 180, 5 CCLT(3d) 135 at para. 15 that Fraser CJA’s comments in Blacklaws with respect to a requirement of imminency were purely obiter.

[ 149 ] They also point to Mr. Swift’s evidence to the effect that, due to cost overruns in the construction of the Residence, he is presently financially unable to undertake any remedial work. [ 150 ] I find that the danger upon which this tort claim rests must be real and substantial, but need not also be imminent. I agree with other judges of this Court who have held that Fraser CJA’s reference to “imminent risk” in Blacklaws was merely obiter .

To the extent that the Courts of Appeal of other jurisdictions have held that the danger must be imminent, those judgments, while entitled to respect, are not binding upon this Court. [ 151 ] In my view, a requirement that the danger be imminent as well as real and substantial, is not consistent with the Supreme Court of Canada’s judgment in Winnipeg Condo .

The Supreme Court held in that case at paras. 36 - 37: In my view, the reasonable likelihood that a defect in a building will cause injury to its inhabitants is also sufficient to ground a contractor’s duty in tort to subsequent purchasers of the building for the cost of repairing the defect if that defect is discovered prior to any injury and if it poses a real and substantial danger to the inhabitants of the building. In coming to this conclusion, I adopt the reasoning of Laskin J. in Rivtow , which I find highly persuasive.

If a contractor can be held liable in tort where he or she constructs a building negligently and, as a result of that negligence, the building causes damage to persons or property, it follows that the contractor shou

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