Wood Buffalo Housing & Development Corporation v Alves Construction Ltd, 2016 ABQB 249

Court of Queen ’ s Bench of Alberta Citation: Wood Buffalo Housing & Development Corporation v Alves Construction Ltd, 2016 ABQB 249 Date: 20160503 Docket: 1103 08874 Registry: Edmonton Between: Wood Buffalo Housing & Development Corporation Plaintiff - and - Alves Construction Ltd., David Hamilton Architect Ltd., David Hamilton, and A.D. Williams Engineering Inc. Defendants Corrected judgment: A corrigendum was issued on May 4, 2016; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of R.P.

Wacowich , Master in Chambers _______________________________________________________ Introduction [ 1 ] This matter involves an application by the Defendants, David Hamilton Architect Ltd. and David Hamilton (the Hamiltons) for a

Summary Judgment dismissing the claim of Wood Buffalo Housing & Development Corporation (WB) claiming breach of contract and negligence by the Hamiltons and others. [ 2 ] The action relates to a social housing condominium complex in the Regional Municipality of Wood Buffalo. The condominium complex, known as Edgewater Court, is owned by WB. A portion of it, known as Building A, was damaged by fire on April 17, 2007.

This action relates to the restoration and rebuild of Building A. [ 3 ] On November 14, 2001, the Regional Municipality of Wood Buffalo, as “Owner”, retained Liam Construction Ltd. (Liam Construction) as the “Design Builder” to facilitate the design and construction of a multi-unit apartment building project commonly known as “Edgewater Court” (the Project). [ 4 ] On the same day the Contract was signed, the Regional Municipality of Wood Buffalo assigned “the contract and all rights and titles therein befalling to the Owner” to WB. [ 5 ] The Hamiltons were named as “Consultant” under the Contract and created the original architectural drawings (the “Original Drawings”) that were used to construct the Project.

[ 6 ] In April 2006, WB entered into a written contract with David Hamilton Architect Ltd. to provide architectural services for another housing project known as “Breakwater”. David Hamilton Architect Ltd. acted as both the Coordinating Registered Professional and as the Architect of Record for the Breakwater project. In that instance, a detailed written contract entitled “Agreement between Client and Architect” was entered into.

This will become relevant later. [ 7 ] As a result of the April 17, 2007, fire damage, emergency repairs were required after which the damaged portions needed to be rebuilt or restored (the Rebuild). [ 8 ] On or around April 26, 2007, the Fire Chief for the Regional Municipality of Wood Buffalo Fire Department, requested that a general contractor, Liam Construction, provide copies of the Original Drawings for the Project.

Liam Construction then made a request of the Hamiltons, who provided Original Drawing A1, a site plan of Edgewater Court. [ 9 ] On or around July 11, 2007, the Hamiltons were contacted by Ray Tornack of Alves Construction Ltd. (Alves), who also requested copies of the Original Drawings. The Hamiltons supplied Alves with the Original Drawings for the original construction of the Project in 2001. [ 10 ] On August 16, 2007, and in response to a further request by Mr.

Tornack, David Hamilton affixed his professional architect’s stamp to two copies of the Original Drawings, one for the owner and one for the Authority having Jurisdiction. Around the same time, David Hamilton spoke with Bryan Lutes, President of WB, about the possibility of the Hamiltons acting in some capacity in relation to the Rebuild. [ 11 ] David Hamilton, on behalf of David Hamilton Architect Ltd., signed Building Code Schedules A-1, A-2, B-1 and B-2 (collectively the schedules) on August 21, 2007.

David Hamilton did not sign personally and no action exists against him. [ 12 ] WB has alleged that Alves undertook in August 2007 to perform certain construction work which was made necessary as a result of the fire damage to Building A. The building permit for the Alves work could not have been obtained without the Schedules being signed by the Hamiltons. [ 13 ] On August 22, 2007, Mr. Tornack of Alves picked up 6 copies of he Original Drawings, two of which had been stamped by David Hamilton, and the signed Schedules from the Hamiltons. Mr. Lutes then signed the Schedules.

When he did so, he inserted words into the Schedules that were not previously there when the Schedules were signed by David Hamilton. The words he inserted on

Schedule A-1 and A-2 respectively are those italicized below: The owner on behalf + at the sole cost of SCM Adjuster Canada + Zurich Insurance has retained a coordinating registered professional to coordinate the design work and field review of the registered professionals of records required for this project. The owner on behalf of + at the sole cost of SCM Adjusters Canada + Zurich Insurance has retained a registered professional of record for ....... [ 14 ] Mr.

Lutes deposed in an affidavit that when he wrote the words “on behalf + at the sole cost of SCM Adjuster Canada + Zurich Insurance” on the schedules his intent was to ensure that he was signing on behalf of SCM Adjusters Canada and/or Zurich Insurance. [ 15 ] On March 30, 2016, Mr.

Lutes deposed that despite the allegation of a contract made on behalf of the Plaintiff by its insurer, the contract was really between WB and the Hamiltons and the only reason he inserted the handwritten notations on the Schedules was to make it clear that the Hamiltons would be paid by SCM Adjusters and Zurich Insurance Company for any cost of providing the drawings and Schedules. WB now wishes to amend the Statement of Claim to indicate that WB signed the drawings as owner. [ 16 ] The Hamiltons’ application for

Summary Judgment was filed on October 9, 2015. The Defence of Hamiltons stated, among other things, that there was no contract entered into between Hamiltons and WB in April 2007 concerning the Hamiltons doing any work in relation to the fire damage Rebuild. [ 17 ] When questioned on his initial Affidavit filed in response to the

Summary Judgment Application of the Hamiltons, Mr. Lutes confirmed that he did not have authority from either SCM Adjusters or Zurich, and in fact had not even sought such authority, to enter into contracts on their behalf. [ 18 ] From the time the Hamiltons signed the Schedules in August 2007 until the lawsuit was filed in June 2011, the Hamiltons had no communication with WB, SCM Adjusters or Zurich concerning the Rebuild.

They had no involvement in the Rebuild. [ 19 ] The Hamiltons were never informed whether Alves used the Original Drawings to support a Building Permit application for the Rebuild and if so, whether Alves was successful in its application. The Hamiltons were never informed that WB had signed the Schedules and the Hamiltons were not provided with fully executed copies of the Schedules. The Hamiltons first became aware that they had been signed by WB after the commencement of this litigation.

At no time were the Hamiltons provided with the name and contact information of the successful contractor or contractors for the Rebuild, the names and contact information of the other consultants in relation to the Rebuild or the construction

schedule for the Rebuild. [ 20 ] As indicated, the Hamiltons did not hear from WB about the Rebuild at any time before the commencement of this litigation. As a result of the foregoing, the Hamiltons did no work in relation to the Rebuild and did not render any invoice as no services were provided, other than simply providing the drawings and Schedules. The Hamiltons never received any compensation from anyone in relation to the Schedules and drawings they provided in April and August, 2007. [ 21 ] Mr.

Lutes had no knowledge of any discussions that WB or the insurers had with the Hamiltons regarding a fee proposal for the Hamiltons. Nor did he inform the Hamiltons who the selected contractor was with respect to the remediation work due to fire damage nor did he inform the Hamiltons who the other contractors on site would be.

[ 22 ] In fact, W.F. Sinhur Engineering Inc. signed

Schedule A-1, Coordinating Registered Professional of Record in April 2009, in relation to the “reconstruction” or “restoration” of Edgewater Court. Further, a C-2

Schedule Assurance of Professional Field Review and Compliance in relation to “Field Review of Construction of ... Edgewater Court Apartments, Fire Restoration” was executed under seal by an architect by the name of Jan B.

Tereszenko on July 25, 2012. [ 23 ] The Respondent WB points out that according to the sworn evidence of David Hamilton: • In July or August 2007 he was contacted by Bryan Lutes of WB about acting in some capacity in relation to the rebuild or restoration of Edgewater Court. • At the request of Bryan Lutes, the Hamiltons prepared, signed, and sealed the Alberta Building Code Schedules A1, A2, B1 and B2. • Mr. Hamilton was also contacted in relation to the project by Ray Tornack of Alves Construction Ltd (Alves): Mr.

Hamilton understood that Alves was either bidding on, or had successfully bid on, some aspect of the rebuild or restoration of Edgewater Court. • Mr. Hamilton had two or three discussions with Mr. Tornack relating to the supply of architectural drawings. On August 22, 2007 the Hamiltons provided stamped architectural drawings to Mr. Tornack, which the Hamiltons knew were expected to be submitted to Alberta Permit Pro, the Authority having Jurisdiction for the issuance of building permits. • The Hamiltons delivered the signed and sealed Building Code Schedules to Mr.

Tornack at the same time. • When the Schedules were signed, sealed and delivered, the Hamiltons were aware that the stamped architectural drawings and the Schedules were intended to be submitted to the Authority having Jurisdiction on behalf of the owner, WB. • Mr. Hamilton testified that his work in supplying stamped drawings and Building Code Schedules was done for WB, not for Alves. • Although Mr. Hamilton was not sure concerning discussions for pricing for the work to be done, he expected that some payment would be made in due course.

He did not enquire whether any payment would be forthcoming. [ 24 ] The Alberta Building Code Schedules as signed under seal by David Hamilton on his own behalf, and on behalf of David Hamilton Architect Ltd., included the following:

Schedule A-1 Letter of Commitment by the Owner and Coordinating Registered Professional The owner has retained a coordinating registered professional to coordinate the design work and field review of the registered professionals of record required for this project. The coordinating registered professional shall coordinate the design work and field review of the other registered professionals required for the project in order to ensure the design will comply with the Alberta Building Code (ABC) and that construction will substantially comply with the ABC.

The owner and the coordinating registered professional acknowledge their responsibility to each notify the authority having jurisdiction should the coordinating professional cease to be retained by the owner. (emphasis added) [ 25 ] The Alves scope of work included reconstruction of the truss system over portions of the roof of the building. The work was completed in late 2007. On June 12, 2009, it came to the attention of WB that a structural engineer’s sign-off may not have been obtained for the work done by Alves in 2007.

Further investigation determined that there had been no review of truss shop drawings or field review of Alves’ work, by a structural engineer. [ 26 ] The statement of Claim alleges that: • The Hamiltons agreed to coordinate the design and field review of the work and ensure it met with all building standards and codes. • The Defendant, A.D.

Williams Engineering (ADW), is a corporate professional engineering firm who by May 2007 contract agreed to co-ordinate the design and the structural engineering portion of the work to ensure it would comply with all building standards and codes. • Alves failed to perform work in accordance with the applicable building standards and codes, particularly with regard to the trusses. • The Hamiltons and ADW failed to ensure that the design and construction of the trusses complied with all building standards and codes. Issues 1.

Do the facts support granting an order to WB to amend their Statement of Claim to indicate the contract with the Hamiltons was

also with WB? 2. Does the evidence establish that there is no merit to WB’s claim in contract or negligence? 3. Is there any issue of merit that genuinely requires a trial: is the evidence so compelling that the action should be dismissed summarily? Analysis: A. Amendment [ 27 ] Dealing first with the application for a further amendment of the Statement of Claim, the law in this area is relatively straight forward. [ 28 ] Rule 3.65 provides the Court with discretion to amend a pleading.

The classic rule is that an amendment should be allowed, no matter how careless or late, unless there is prejudice to the other side, and even that is no obstacle if it is repaired by costs or otherwise. [ 29 ] The power to allow amendments is discretionary. The discretion should be exercised generously rather than restrictively. The Court should allow an amendment even if it raises a doubtful plea, as long as it is arguable.

Stolk v 382779 Alberta Inc , 2005 ABQB 440 , 2005 CarswellAlta 828 at paras 13 and 18 . [ 30 ] Where a proposed amendment does not constitute a new “claim”, The Limitations Act is not invoked. [ 31 ] If the proposed amendment adds a new claim, the Defendant is not entitled to immunity from liability in respect of the added claim if it “… does not add or substitute a claimant or defendant, or change the capacity in which a claimant sues or a defendant is sued …” Stolk , supra, para 11 . [ 32 ] The Statement of Defence of the Hamiltons included a denial that any contract was entered into by them with either WB or its insurer.

This was an existing issue under the original Statement of Claim and this amendment is for clarification only. It does not invoke any limitation issue nor does it prejudice the Hamiltons. The only reason an amendment would not be allowed would be if the amendment would be hopeless. It would be hopeless if I agree with the application for

Summary Judgment. B.

Summary Judgement [ 33 ] The issue then is whether

Summary Judgment should be granted dismissing this claim based on the facts before me. An application for

Summary Dismissal is governed by Rules 7.2 and 7.3 of the Alberta Rules of Court . [ 34 ] There have been numerous cases in the area of

Summary Judgment since the seminal case of Hryniak v Mauldin , 2014 SCC 7 . This case has been welcomed by Canadian courts and commented on in a host of cases. Our Court of Appeal has considered it in Windsor v Canadian Pacific Railway Ltd , 2014 ABCA 108 , W P v Alberta , 2014 ABCA 404 and 776826 Alberta Ltd v Ostrowercha , 2015 ABCA 49 to name only a few of the cases of our Court of Appeal on this issue. [ 35 ] Ostrowercha summarizes the key points to be considered:

a) From the process perspective,

summary judgment can be given if a disposition that is fair and just to both parties can be made on the existing record:

b) From the substantive perspective,

summary judgment can be granted if, in light of what the fair and just process reveals, there is no merit to the claim;

c) No “merit’ means that, even assuming the accuracy of the position of the non-moving party, as to any material and potentially decisive matters – matters which would usually require ordinary forensic testing through a trial procedure with viva voce evidence and which could not be resolved through the fair and just alternative (being

summary judgment) - the non-moving party’s position has no merit in law or in fact;

d) Stated another way, in order for the non-moving party’s case to have merit, there must be a genuine issue of a potentially decisive material fact in the case which cannot be summarily found against the non-moving party on the record revealed by the “fair and just process”;

e) The mere assertion of a position by the non-moving party in a pleading or otherwise, or the mere hope of the non-moving party that something will turn up at a trial , does not suffice;

f) The key is whether the circumstances require viva voce evidence in order to properly resolve the case;

g) The question is whether there is in fact any issue of “merit’ that genuinely requires a trial or conversely, whether the claim or defence is so compelling that the likelihood it will succeed is very high such that it should be determined summarily. [ 36 ] This case, for the most part, concerns basic contract law. That is, is there an intention to create contractual obligations, a clear offer and acceptance, certainty of terms and consideration for the agreement. All of these must exist in order for there to be a legally binding contract.

[ 37 ] G.H.L. Fridman states the following as contract requirements: (

a) A contract can only arise if there is animus contrahendi between the parties. The intent to create contractual relations is a fundamental criterion of contract information. (

b) Agreement is the basis of any legally enforceable contract and there must be consensus ad idem. (

c) The mechanism of the agreement is contained in the notions of offer and acceptance. Without either of these, there is no contract. (

d) Acceptance is the signification by the offeree of his willingness to enter into a contract with the offeror on the terms offered to him by the latter. (

e) The general theory of offer and acceptance is that, the parties’ behaviour must be viewed objectively, in terms of how the reasonable man, if he were a bystander, would describe the effect of what he had seen or heard. Fridman, G.H.L., The Law of Contract in Canada , 6 th ed. (Toronto, Carswell, 2011 at pg’s 27, 13, 25, 45, 47, 84 and 91) [ 38 ] A further requirement for contract formation is ‘consideration’. Consideration means something which is of some value in the eyes of the law. It must be real.

WB has not provided any evidence to show it offered anything of value in return for the Hamiltons entering into the alleged contract. There is simply an absence of consideration or even communication on the point. [ 39 ] WB submits that a promise to pay for services performed constitutes sufficient consideration. WB’s position is that: “The Hamiltons were not working for nothing. As the evidence clearly shows, they expected to be paid.” In answer to that, could the Hamiltons have sued to obtain payment for providing the Schedules and Drawings?

There was no promise to pay and no contract. [ 40 ] What was the consideration? No money, or even the promise of remuneration, was ever extended to the Hamiltons. There was no consideration nor any evidence of communication between the parties on the topic of consideration. WB submits that the Hamiltons providing the David Hamilton Architect Ltd. architectural seal constituted consideration.

But a seal is provided for by s 2 of the Architects Act, RSA 2000, c A-44 and there is no evidence that it was provided as a corporate seal meant as consideration. [ 41 ] While not a legal authority, it is worth nothing that the Practice Note of the Alberta Association of Architects, PB-15, Document Authentication states: An authorized entity’s professional seal should not be confused with a corporate business seal issued through the Alberta Corporate Registry, which is intended for entirely different purposes such as Client/Architect Agreements, letters or other contracts executed under ‘corporate’ seal. [ 42 ] Acceptance must be communicated.

As a general rule it is not enough for one to whom an offer is made to assent inwardly: the offeree must communicate acceptance to the offeror, or to someone authorized by the offeror to receive it. Woronuk v Woronuk , 2015 ABQB 116 . [ 43 ] The question of certainty is commented on in Mitsui & Co. (Point Aconi) Ltd v Jones Power Co , 2000 NSCA 95 at para 74 : A contract must contain all essential terms. If any are absent, there is no completed, binding agreement. The terms of a contract must also be sufficiently certain.

The question of whether terms are certain asks whether the court can give reasonably definite meaning to what the parties have said. [ 44 ] In this case it appears that the Hamiltons provided the schedules from the original build in order to allow WB to proceed to bring about the repair of the damaged building. The Hamiltons were being helpful as a sign of goodwill and in the hope that they might be retained on the repair project. For whatever reason, they were not retained. [ 45 ] There is no suggestion in my view that the Hamiltons intended that the provision of these Schedules created a contract with WB.

They had previously had working agreements with WB which required numerous detailed legal documents (the 2001 contract for the Project and the 2006 Breakwater project – para 6 herein). [ 46 ] As indicated, they never heard from WB after providing the Schedules until being served with this Statement of Claim. Providing the Schedules did not constitute an offer and Mr. Lutes signing it, whether on behalf of the insurers alone or also for the owner WB, did not constitute an acceptance of any sort. What was accepted? Were they asking the Hamiltons to somehow indemnify their previous work?

What were they expecting the Hamiltons to have agreed to? The Hamiltons certainly didn’t know what they were alleged to have agreed to. Mr. Lutes did not even inform the Hamiltons that he had signed the Schedules on anyone’s behalf. The required element of communication of acceptance is lacking. [ 47 ] There are many elements of a binding contract which are missing in this case. The terms of a contract must be sufficiently certain.

In order to answer the question of whether the terms of any alleged contract are certain, the court must be able to give reasonably definitive meaning to what the parties have said. [ 48 ] The Applicant Hamiltons indicate that: further compelling evidence is available as to not only the lack of intention to contract on the basis of the Schedules but also the lack of certainty of terms and incomplete materials terms in the Schedules. One only needs to compare the Schedules with the contract entered into between the Plaintiff and the Hamilton Defendants one year earlier on the

Breakwater project and also on the 2001 Project. Specifically, the Schedules do not contain information as to the following: (

a) The Owners responsibilities (the other party to the alleged contract); (

b) Where and how the parties are to communicate and how often; (

c) Terms and breakdown of payment; and (

d) How the field reviews will be conducted for example, at the request of the Owner, at the initiation of the Coordinating Registered Professional or by another method. [ 49 ] There was an absence of discussion and confirmation with the Hamiltons and either WB, SCM Adjusters or Zurich regarding: (

a) A fee proposal; (

b) Who the selected contractor was with respect to the remediation work due to fire damage; or (

c) Who the other contractors on site would be. [ 50 ] As indicated by the Applicants, the Schedules provide that the “Coordinating Registered Professional shall “coordinate the design work and field review of the other registered professionals”. How could the Hamiltons comply with this task without receiving any information about who the contractor was and who the other registered professionals were.

This information was an essential term as it contains the required information for the Coordinating Registered Professional to complete its responsibilities. [ 51 ] WB also alleges negligence on the part of the Hamiltons. There is no contract between the parties and there is no duty of care arising from any facts presented. The Respondents’ position that the completion of the Schedules by the Hamiltons was an agreement is unacceptable. They seek to rely solely on the provision of the drawings and Schedules which were from the initial construction of the building.

They argue that the undertaking is the Hamiltons’ legal obligation to perform the services described and that they failed to perform their duties as Coordinating Professionals causing damage. I see nothing to support this or any claim for negligence. [ 52 ] The parties did not agree on the essential terms of their obligations. The alleged contract is invalid by reason of uncertainty, an absence of intention to create legal obligations, no consensus ad idem or acceptance by the offeree, and a lack of consideration. The alleged contract fails on all criteria.

Conclusion [ 53 ] There is no point in sending this matter to trial. A fair and just determination is granting

Summary Judgment dismissing this claim as against the Hamiltons. [ 54 ] Consequently, there is no action to amend and the application to amend is denied. The Hamiltons shall have their costs. Heard on the 26 th day of April, 2016. Dated at the City of Edmonton, Alberta this 3 rd day of May, 2016. R.P. Wacowich M.C.C.Q.B.A. Appearances: Daniel Hagg, Q.C. for Wood Buffalo Housing & Development Corporation Donald J. McGarvey, Q.C.

for David Hamilton Architect Ltd. And David Hamilton _______________________________________________________ Corrigendum of the Reasons for Judgment of R.P. Wacowich, Master in Chambers _______________________________________________________ The Appearances were amended to include the Q.C. designation for Mr. McGarvey.