Condominium Corporation No, 2016 ABQB 477

Court of Queen’s Bench of Alberta Citation: Condominium Corporation No 0213028 v Pasera Corporation, 2016 ABQB 477 Date: 20160830 Docket: 0801 12997 Registry: Calgary Between: Condominium Corporation No. 0213028, also known as The Solarium Condominium Corporation Plaintiff - and - Pasera Corporation, Pasera Solarium Properties Inc., Pasera Group Inc., Form 3 Designs

(2004) Ltd., G.A.L. Plastering Ltd., G.A.L. Plastering & Sons Inc., Wiebe Forest Engineering Ltd., ABC Corporation, ABC1 Corporation, ABC2 Corporation, ABC3 Corporation, ABC4 Corporation, ABC5 Corporation and ABC6 Corporation Defendants Corrected judgment: A corrigendum was issued on January 26, 2017 in accordance with a judgment reported at 2017 ABQB 51 ; the corrections have been made to the text of this judgment and the corrigendum is appended. _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J. Strekaf _______________________________________________________ I. Introduction

[ 1 ] The Plaintiff in this action, Condominium Corporation No. 0213028, also known as The Solarium Corporation, is applying to amend the Amended Statement of Claim to add HCI Architecture Inc. (“HCI”), Form 3 Designs Ltd. (“Form 3”), Excell Drywall & Insulation Inc. (“Excell Inc.”) and Mr. Excell Drywall Doe aka Excell Drywall Partnership (“Excell Partnership”) as Defendants. The Plaintiff also seeks to add particulars to the claim in relation to the added defendants.

The proposed amendments are opposed by HCI, Excell Inc. and Excell Drywall & Insulation but not by Form 3 or any of the already named defendants in the action. [ 2 ] The evidence on the application comprised the affidavits of Robert Ruff (President of the Plaintiff), Amir Lai Hemani (Principal of HCI), George Puhl (one of the partners in Excell Drywall & Insulation) and Michael Puhl (President of Excell Inc.) as well as transcripts from questioning on those affidavits. II.

Relevant Facts [ 3 ] The claim arises from the construction of a 49 unit condominium building known as “The Solarium” (“the Project”) that took place between 2001 - 2003. In or about September 2006, the Plaintiff sought advice from Madden Matthews Engineering (“Madden Matthews”) due to concerns about apparent water ingress into the building.

In a report dated September 28, 2006, Madden Matthews confirmed moisture ingress and recommended the Plaintiff retain Morrison Hershfield Limited (“MH”), a consultant familiar with Exterior Insulation Finish System (“EIFS”) construction and mold remediation, to conduct further investigation. The Plaintiff retained MH who provided a report on November 16, 2007 which confirmed water penetration into the exterior sheathing of the west elevation of the condominium with resultant deterioration.

They recommended complete replacement of the west elevation wall system “due to the overall poor design of the wall system” at a cost of $1.7 million and that a review of the other elevations be completed to determine if similar issues existed. [ 4 ] The minutes of the Plaintiff’s Board of Directors meeting held on December 19, 2007 state in part: West wall. Reviewed legal and engineering meetings. Proposed plan of action is to get quote from engineering firm and provide full scope of repair to legal team before action is taken. Architectural (Firm: HCI Architectural) drawings are needed for engineering.

Ming to procure copy of drawings. Amanda moves to get quote for additional engineering report, approve $10,000 retainer fee for lawyer and copy of architectural drawings ($100 access fee = $200 copy fee). Eric seconded movement. [ 5 ] On January 24, 2008, Ms. Ming of MCM Property Management Ltd. advised the Plaintiff’s then counsel that the architects were Form 3

(2004) Ltd. (“Form 3 2004”), identified the engineer and stucco contractor and indicated that they were unaware of the trades who built the building. [ 6 ] On August 27, 2008, MH provided a further report that identified a number of problems with the as-built construction of the walls and recommended replacing the wall cladding systems on each of the other elevations as well, for a total probable cost of $6.8 million. [ 7 ] The Statement of Claim in this action was filed on October 22, 2008 pursuant to which the Plaintiff sued Pasera Corporation, Pasera Solarium Properties Inc., and Pasera Group Inc. (collectively “Pasera”) who were alleged to be the developers of the Condominium, Form 3 2004 who was alleged to have provided architectural services, three other named entities who were alleged to have provided stucco and engineering services and a number of ABC Corporations who were alleged to have been involved in the construction but whose identities were not currently known.

The Statement of Claim was amended on January 7, 2009 and served on the named defendants. [ 8 ] Mr. Ruff stated in his affidavit that the Plaintiff did not have a listing of all of the trades involved in the construction and identified and named those parties who they were aware of. The Plaintiff states that there was difficulty obtaining disclosure and scheduling questioning of Pasera.

The Plaintiff filed a Freedom of Information and Privacy (“FOIP”) request with the City of Calgary in August, 2010 and obtained documents from the City relating to the construction of the condominium between August 17, 2010 and March 4, 2011. The Plaintiff conducted questioning of Selina Leung, Pasera’s selected officer, on January 14, 2011 and of Paul Lee, a former Pasera employee, on April 13, 2011. [ 9 ] Based on the documents received from the FOIP request and information provided by Paul Lee, Mr.

Ruff states that the Plaintiff became aware that HCI may have been the architect responsible for the design and field review and that Form 3 was also involved in the design and permitting for the Solarium Project. [ 10 ] Based upon the questioning of Paul Lee, Mr.

Ruff concluded that an entity known as Excell Drywall was responsible for the exterior wall framing for the Project. [ 11 ] A letter from the Plaintiff’s counsel was delivered to Amir Ali Hemani, the principal of HCI, on October 21, 2011 advising that the Plaintiff was seeking to add HCI as a Defendant in the action, which enclosed a copy of the Amended Statement of Claim and the proposed Amended Amended Statement of Claim and requested his consent. Mr.

Hemani states in his affidavit that this was HCI’s first knowledge of the litigation. [ 12 ] Shortly after October 21, 2011, Excell Inc. received a similar letter from the Plaintiff’s counsel advising that the Plaintiff was seeking to add Excell Inc. and Excell Partnership as Defendants in the action, which enclosed a copy of the Amended Statement of Claim and the proposed Amended Amended Statement of Claim and requested consent. That was their first knowledge of the claim. [ 13 ] This application (to amend the Amended Statement of Claim) was filed on March 1, 2013 and heard on May 24, 2016. III. The Law

[ 14 ] Rule 3.74 deals with adding parties after the close of pleadings. It states: After close of pleadings, no person may be added, removed or substituted as a party to an action started by statement of claim except in accordance with this rule.

(2) On application, the Court may order that a person be added, removed or substituted as a party to an action if (

a) in the case of a person to be added or substituted as plaintiff, plaintiff by-counterclaim or third party plaintiff, the application is made by a person or party and the consent of the person proposed to be added or substituted as a party is filed with the application; (

b) in the case of an application to add or substitute any other party, or to remove or to correct the name of a party, the application is made by a party and the Court is satisfied the order should be made.

(3) The Court may not make an order under this rule if prejudice would result for a party that could not be remedied by a costs award, an adjournment or the imposition of terms. [ 15 ] The general rule is that pleadings can be amended at any time, however careless or late, subject to four exceptions, as outlined by Chief Justice Wittman in Dow Chemical Canada Inc v Nova Chemicals Corp , 2010 ABQB 524 , at paras 20 – 2 [ Dow ]: Generally, any pleading can be amended no matter how careless or late is the party seeking to amend: Balm v. 3512061 Canada Ltd ., 2003 ABCA 98 , 327 A.R. 149 at para. 43 .

This is referred to in Balm as the "classic rule". The classic rule is subject to four major exceptions: Canadian Deposit Insurance Corp. v. Canadian Commercial Bank , 2000 ABQB 440 , 269 A.R. 49 at para. 11 ; Foda v. Capital Health Region , 2007 ABCA 207 at para. 10 ; see also C.H.S. v. Alberta (Director of Child Welfare) , 2006 ABQB 528 , 403 A.R. 103 at para. 11 , aff"d 2006 ABCA 355 , 401 A.R. 215.

Those exceptions are as follows: 1. the amendment would cause serious prejudice to the opposing party, not compensable in costs; 2. the amendment requested is "hopeless" (an amendment that, if were in the original pleadings, would have been struck); 3. unless permitted by statute, the amendment seeks to add a new party or a new cause of action after the expiry of a limitation period; and 4. there is an element of bad faith associated with the failure to plead the amendment in the first instance.

Therefore, if no exception applies, the pleadings can generally be amended. [ 16 ] The applicable limitation periods are determined by section 3(1) of the Limitations Act, RSA 200, c L-12, [ LA ] which states: Subject to subsections (1.1) and (1.2) and

section 11, if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. [ 17 ]

Section 6 of the Limitations Act deals with the addition of parties in circumstances where limitations issues have arisen. It states in part: (1 ) Notwithstanding the expiration of the relevant limitation period, when a claim is added to a proceeding previously commenced, either through a new pleading or an amendment to pleadings, the defendant is not entitled to immunity from liability in respect of the added claim if the requirements of subsection (2), (3) or (4) are satisfied. ...

(4) When the added claim adds or substitutes a defendant, or changes the capacity in which a defendant is sued, (

a) the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, and (

b) the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on the merits.

(5) Under this section, (

a) the claimant has the burden of proving

(

i) that the added claim is related to the conduct, transaction or events described in the original pleading in the proceeding, and (ii) that the requirement of subsection (3)(c), if in issue, has been satisfied, and (

b) the defendant has the burden of proving that the requirement of subsection (3)(

b) or (4)(b), if in issue, was not satisfied. [ 18 ] The Court in Dow outlined the options available to the court when an amendment is sought where there are limitations issues (para 64): Traditionally, when there is an issue of limitations and an amendment is sought, a court may: 1. Determine the limitation period has not expired and allow the amendment. 2. Rule the limitation period has expired and therefore consider s.6 of the Limitations Act which provides for when an amendment can be made beyond the limitation period. 3.

Find that because of uncertainty in the evidence, the amendments should be allowed subject to the determination of the limitation issue at trial: Hill v. Hill , [2007] A.J. No. 1515 (Q.B.) at para. 22 , aff'd 2007 ABCA 293 at para. 10 . A variation of the last option is to determine whether s. 6(2)(

b) of the Limitations Act saves a claim otherwise barred by the statute. IV. Analysis [ 19 ] I will now consider each of the four proposed new defendants who are sought to be added on this application. A. Form 3 [ 20 ] The Plaintiff seeks to add Form 3 as a Defendant in the action in place of Form 3 2004. Form 3 2004 was served with the Amended Statement of Claim on February 10, 2009.

After being advised that Form 3 2004 was not in existence at the time that the condominium was constructed, the Plaintiff discontinued the action against Form 3 2004 on November 20, 2009. [ 21 ] Form 3 filed no materials, was not represented or in attendance and did not oppose the application. [ 22 ] The claim against Form 3 is clearly outside the limitation period as the Plaintiff intended to and did sue Form 3 2004 within the limitation period, but it appears that they named the wrong entity. The issue then becomes whether they can nonetheless be added as a defendant pursuant to

section 6 of the Limitations Act . [ 23 ] I am satisfied that it is appropriate to add Form 3 as a Defendant in this action. As the added claim essentially replaces Form 3 2004 with Form 3, it relates “to the conduct, transaction or events described in the original pleading”, thereby satisfying the requirements of section 6(4)(

a) of the Limitations Act . [ 24 ] The requirement in section 6(4)(

b) that Form 3 has received “sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence on the merits” is satisfied as Form 3 received effective notice of the claim on February 10, 2009 when the claim was served on Form 3 2004. The corporate searches attached to Mr. Ruff’s affidavit indicate that Form 3 and Form 3 2004 had the same officers and directors, being Mike Drewniak, Frank Drewniak and Mike Hindmarsh.

Various courts have held that the court can impute sufficient knowledge of an added claim on a corporation or individual where a related corporation received notice within the limitation period.

This occurred in Poff v Great Northern Data Supplies (AB) Ltd , 2015 ABQB 173 where the two corporations had a common director (para 78) and in 513320 Alberta Inc v Jean , 2015 ABQB 826 where the knowledge of the corporation was imputed to its director, officer and voting shareholder (para 90). [ 25 ] The Plaintiff’s application to amend the Amended Statement of Claim by adding Form 3 as a defendant and any related particulars is granted. B.

HCI [ 26 ] HCI concedes that the added claim is sufficiently related to the conduct alleged in the Amended Statement of Claim that the Plaintiff has met the requirements of section 6(4)(

a) of the Limitations Act . However, HCI submits that the Plaintiff’s application to add it as defendant in the action should be dismissed because it can demonstrate that it did not receive any knowledge of the claim within the limitations period plus the time for service, being a period of 3 years. [ 27 ] By virtue of section 6(5) of the Limitations Act , HCI bears the burden of demonstrating that it did not receive sufficient notice as contemplated in section 6(4)(b).

This will depend upon the answers to two questions: (1) when did the limitation period expire as against HCI? and (2) when did HCI receive notice of the claim? [ 28 ] Dealing with the first question, HCI submits that the two year limitation period in section 3(1) of the Limitations Act began to run December 19, 2007 when the Board decided to pursue legal action following receipt of the MH November 16, 2007 letter which recommended complete replacement of the west elevation wall system “due to the overall poor design” at a cost of $1.1 million.

By this point, the Plaintiff knew, or ought to have known, that an injury had occurred due to the conduct of the architect which warranted bringing a proceeding. HCI points out that the Plaintiff knew, or ought to have known, that HCI was the architect as HCI’s stamp was on the architectural drawings for the condominium, the Plaintiff’s Reserve Fund Study dated March 2004 (Final Version Following Board

Review) referred to the original architectural drawing, produced by HCI Architecture Inc. and the minutes of the December 19, 2007meeting state in part “Architectural (Firm:HCI Architectural) drawings are needed for engineering”. [29] The Plaintiff submits that the limitation period did not commence running against HCI until it “knew or ought to have known”about HCI’s involvement when it received information from the City of Calgary in response to its FOIP requests between August 17,2010 and March 4, 2011 and had examined Paul Lee, formerly of Pasera, on April 13, 2011.

As HCI acknowledges receiving notice onOctober 21, 2011, the Plaintiff submits that the claim is within the limitation period. [30] Section 3(1) LA contemplates that the limitation period commenced when the Plaintiff “first knew, or in the circumstancesought to have known” that it had suffered an injury that warranted bringing a proceeding against HCI. When the Plaintiff issued itsoriginal Statement of Claim on October 22, 2008, it sued Form 3 2004 alleging that it provided architectural services and describing it inthe Statement of Claim as the Architect.

By that date, the Plaintiff clearly knew that it had suffered an injury that warranted bringing aproceeding against the architect of the Project. [31] The issue is when the Plaintiff knew, or should have known, that it had a claim against the architects that designed thebuilding that warranted proceeding and that HCI was an architect that was involved with the Project.

I am satisfied that the Plaintiffknew that it had a claim against the architects of the Project by the time that is received the second MH report on August 27, 2008 whichestimated the repair costs to be $6.5 million, at the latest, and possibly as early as November 16, 2007 when it received the first MHReport that estimated the repair costs to be $1.7 million “due to the overall poor design of the wall system”. The question then becomeswhen the Plaintiff should have known about HCI’s involvement in the Project. [32] A similar issue was considered in another case on an application for

summary judgment to dismiss an action on the basis thatit was statute barred: Owners: Condominium Plan 9421549 v Main Street Development Ltd, (AB KB), 2004ABQB 962. The Plaintiffs were the owners of two residential condominium buildings that were constructed in 1994 and 1996. After aresident had concerns that the floor was heaving, an inspection was done on September 9, 1998 that led to the discovery of standingwater in the crawl space and that the crawl space was not vented. Further inspections were undertaken and a claim was brought againstthe National New Home Warranty Program on November 17, 1998.

The investigations continued and requests were made to the builderto remediate the problems. In November 1999 the builder’s workmen uncovered rotting and mouldy floor trusses, which is when thePlaintiff submitted that it became aware of the extent of the problem and learned that it may have resulted from improperly locatedweeping tile. The action was commenced on May 25, 2001. The issue was whether the limitation period had begun prior to May 25,1999.

Justice Clackson noted at paragraphs 55 – 56 that perfect knowledge of an injury is not required to trigger a limitation period: I am satisfied that these facts establish, beyond a reasonable doubt, that the Plaintiff knew that the buildings suffered from moistureproblems and knew of the potential sequella if the problems were not rectified. This knowledge existed well before May 25, 1999. WhileI accept that it is possible the Plaintiff did not have perfect knowledge of the injury, that level of knowledge is not required: Peixeiro v.Haberman, (SCC), [1997] 3 S.C.R. 549; Hill v.

Alberta (South Alberta Land Registration District), (1993) 1993ABCA 75 , 135 A.R. 266 (C.A.), leave to appeal to S.C.C. refused [1994] 1 S.C.R. viii; Ward v. Taubner,2004 ABQB 565, 9E.T.R. (3d) 275 (Q.B.). What was obvious was that there was a problem and that there was damage or at least the real potential for damage if the problem wasnot addressed. In my view, that is enough. The injuries alleged by the Plaintiff are all the result of water in the crawl space. ThePlaintiff's claim is based on that simple fact.

The presence of water in the crawl space was known by the 17th of November, 1998. [33] Justice Clackson went on to discuss the discoverability of the responsible parties at paragraph 74: I am of the view that the Applicants are correct in their suggestion that, with the exercise of reasonable diligence, the present parties tothis action were readily discoverable well before May 25, 1999. Multi-party litigation is complicated, but becoming more and morecommon.

The Plaintiff here was represented and certainly counsel could have assisted in the timely discovery of prospective defendants.Knowing that there was water in the crawl space of the two buildings, it would have been reasonable to name any party that might beresponsible, including the architect, the engineer, the contractor, the party that excavated the crawl space and the party that wasresponsible for the construction.

The names of these parties would have been readily available to the Plaintiff. [34] The Plaintiff submits that it should be subject to a lesser standard of due diligence because it is a condominium corporationmanaged and operated by a volunteer board of directors.

The cases relied upon in support of this proposition are in different contexts anddifferent considerations are applicable when dealing with a situation where the condominium corporation has sought legal advice. [35] I am satisfied that the Plaintiff knew it had a claim against the architect by August 27, 2008 and that by that date it ought tohave known or discovered that HCI was the architect or involved in the design of the building for several reasons: (

a) The Plaintiff, through its property manager MCM Property Management Ltd., had commissioned a Reserve Fund Study, datedMarch 2004 by Madden Matthews, which stated that one of the items made available to assist in the preparation of its report was “a setof original architectural drawings, produced by H.C.I. Architecture Inc., dated August 2001”; (

b) The minutes of the December 19, 2007 meeting of the Plaintiff’s Board of Directors identified the “Proposed plan of action is to geta quote from engineering firm and provide full scope of repair to legal team before action is taken. Architectural (Firm:HCIArchitectural) drawings are needed for engineering.”; and (

c) HCI was the entity identified in the City of Calgary Alberta Building Code documents as the Registered Professional of Recordproviding assurances regarding the design of the architectural components on plans. [36] As a result, I am satisfied that the Plaintiff could have identified the involvement of HCI in the design of the condominiumhad it exercised reasonable diligence by August 27, 2008, rather than apparently relying on the incorrect information contained in theJanuary 24, 2008 email from its property manager. The limitation period began running against HCI by August 27, 2008, at the latest.

[ 37 ] The second question is whether HCI received notice of the claim within three years of the commencement of the limitation period. The uncontradicted evidence of Mr. Hemani is that the first knowledge that HCI had of the litigation was when he received the October 21, 2011 letter. The Plaintiff submits that knowledge should be imputed to HCI when notice of the claim was delivered to Form 3 2004 because of the nature of their relationship or that there is ambiguity about the relationship between HCI and Form 3 that creates a triable issue. I disagree.

While there was a contractual relationship between HCI and Form 3 and they worked together to address architectural and design issues on the Project, there is no evidence of any relationship between HCI and Form 3 2004 that would merit this imputation of knowledge. Form 3 2004 is a different entity than Form 3 which is the entity HCI was dealing with.

Moreover, even if effective notice of the claim had been given to Form 3, the cases where the Court was prepared to impute knowledge of a claim to a third party involved far closer relationships between the entities involved than existed between HCI and Form 3, such as overlapping directors or being the director and shareholder of the corporation. [ 38 ] The Plaintiff’s application to add HCI as a defendant is dismissed. C. Excell Inc. [ 39 ] Excell Inc. was incorporated on January 11, 2006, more than three years after construction of the condominium was completed.

As a result, there is no basis to add it as a defendant in this action and the Plaintiff’s application to do so is dismissed. D. Excell Partnership/Excell Drywall & Insulation [ 40 ] A preliminary issue arose at the hearing of the application with respect to the claim against the Excell Partnership. The application and draft Amended Amended Statement of Claim sought to add Mr. Excell Drywall Doe, aka Excell Drywall Partnership, however, that appears to be a misnomer as there is no evidence that any partnership with that name exists.

It appears that the actual entity which the Plaintiff is seeking to add as a defendant is Excell Drywall & Insulation, which is a partnership registered with Corporate Registry, the partners of which are George Puhl and his wife. The Plaintiff’s counsel sought leave to amend its Application and the Amended Amended Statement of Claim to substitute Excell Drywall & Insulation for Excell Drywall Partnership for the purpose of the application.

This was opposed by counsel for Excell Drywall & Insulation, who had filed a brief and was appearing to oppose the application notwithstanding that the application sought to add Excell Partnership not Excell Drywall & Insulation. She noted that the failure to correctly describe the Excell Partnership indicated a further lack of attention on the part of the Plaintiff, but identified no substantive prejudice that would be suffered as a result.

I am prepared to allow the amendment pursuant to Rule 1.5 of the Rules of Court as I am satisfied that there is no irreparable harm that would be suffered as Excell Drywall & Insulation was clearly the entity that was sought to be added and that entity had retained counsel and was in attendance opposing the application on substantive grounds. [ 41 ] Excell Drywall & Insulation opposes being added on the basis that the claim was brought outside the limitation period, that no notice was provided during the period contemplated in section 6(4) LA and that the claim should not be added in any event because the claim is hopeless and that they would suffer serious prejudice not compensable by costs. [ 42 ] Whether the limitation period expired in relation to Excell Drywall & Insulation raises some different issues than arose with respect to HCI.

The evidence indicates that the Plaintiff had no information in its possession about the participation of an Excell entity in the construction of the condominium prior to Paul Lee’s questioning in April 2011.

In such circumstances, did the limitation period begin running at that time, or did it arise earlier when the Plaintiff became aware that the injury it suffered - being the substantial damage to the building - merited bringing proceedings against the parties involved in the design and construction of the building in relation to the EIFS system and trades who performed work relating to waterproofing on the basis that the Plaintiff “ought to have known” or discovered Excell’s role for the purposes of section 3(1) LA at an earlier date? [ 43 ] Once a party becomes aware that it has suffered damage that merits bringing proceedings, then it is incumbent on that party to take reasonable steps to identify the parties responsible for that damage.

While the Plaintiff claims that it didn’t hear about Excell until Mr. Lee’s examination, I am not satisfied that they proceeded as diligently as they could have.

However, I need not decide whether the limitation period began to run against them prior to October 21, 2008, because I am satisfied that the Excell Drywall & Insulation should not be added as the claim against them is hopeless and they would be seriously prejudiced in defending the claim at this time. [ 44 ] George Puhl, one of the partners in Excell Drywall & Insulation, stated that Excel Drywall & Insulation was retained by Pasera to perform interior drywall and insulation work on the Project. He acted as the supervisor and his son Michael Puhl performed the work and oversaw various contract laborers.

The work was performed in 2001 or 2002. Following completion of the work, Excell Drywall & Insulation was paid and he heard nothing from Pasera or anyone else in relation to the work until he received the October 31, 2011 letter from Plaintiff’s counsel. He no longer has any records relating to the Project as it had been at least nine years after the work was done that he became aware of the claim in October 2011; it was his usual practice to shred records 7 – 8 years after a project was completed.

He denies that the Excell Drywall & Insulation did any work on any exterior or outer walls, or that they were involved in any drainage or waterproofing as they only performed interior drywall work at that time. Michael Puhl’s evidence is that between 2001 and 2006 he worked with his father installing interior drywall and interior insulation. [ 45 ] In his affidavit, Mr.

Ruff states that he believes that Excell Drywall was responsible for the exterior wall framing for the Project based upon the April 13, 2011 questioning of Paul Lee in which he stated that he thought that the outer wall framing and exterior drywall was done by Excell. In the same transcript he confirms that the cladding systems used on the building was an EIFS system and that Excell wasn’t looking after the EIFS system and just looked after the exterior drywall stage. When Mr.

Lee’s evidence and that of Michael and George Puhl is read together, it indicates that Excell was not involved in the EIFS system and the external sheathing of the building, but rather in the interior drywall, both on interior and exterior walls located within the sheathed building. [ 46 ] I am satisfied that the amendment to add Excell Drywall & Insulation should be denied as the claim against them is hopeless as the Plaintiff has not provided any plausible explanation how an entity that was involved in interior drywall, even if it does framing and installs insulation on the interior of an exterior wall of a building that is clad with an EIFS system, could be responsible for the type of water damage that is the subject of the claim.

I also accept that Excell Drywall & Insulation would be prejudiced in defending this claim because they no longer had any records relating to the Project when they first learned about the claim in October 2011, at least nine

years after the Project was completed. [ 47 ] The Plaintiff’s application to add Excell Drywall & Insulation as a defendant is dismissed. V. Conclusion [ 48 ] The Plaintiff’s application to amend the Amended Statement of Claim by adding Form 3 as a defendant and any related particulars is granted. The Plaintiff’s applications to add HCI, Excell Inc. and Excell Drywall & Insulation as defendants are dismissed. [ 49 ] If the parties are unable to agree on the costs of this application, they may each provide written submissions within 45 days. Heard on the 24 th day of May, 2016.

Dated at the City of Calgary, Alberta this 30 th day of August, 2016. J. Strekaf J.C.Q.B.A. Appearances: G. Brent Cooper and D. Cumming, McLeod Law LLP for the Plaintiff Erika A. Carrasco, Field LLP for the Proposed Defendants, Excell Drywall & Insulation Inc. and Excell Drywall & Insulation Donald J. McGarvey, Q.C., McLennan Ross LLP For the Proposed Defendant, HCI Architecture Inc. _______________________________________________________ Corrigendum of the Memorandum of Decision of The Honourable Madam Justice J. Strekaf _______________________________________________________

Paragraph 28: Date corrected from December 19, 2008 to December 19, 2007; Date corrected from November 6, 2007 to November 16, 2007. Paragraph 29: Corrected “an” to “and”. Paragraph 30: Removed “the issue is whether the Plaintiff ought to have known at that time about HCI’s involvement in the design.” Inserted the content of paragraph 31.

Paragraph 32 (was paragraph 31): Wording was added to the beginning of the sentence “A similar issue was considered in another case on (a)n” and after the words “statute barred” the following text was removed “was granted in a case that involved somewhat similar circumstances.” Paragraph 35 (was paragraph 33): Corrected dates by removing “sometime prior to October 8” and replacing it with “August 27”, and removing “when it issued the Statement of Claim.” Paragraph 36 (was paragraph 34): Corrected dates by removing “prior to the issuance of the Statement of Claim on October 8” with “by August 27”; removed “sometime between November 16, 2007 and October 8, 2008” with “by August 27, 2008, at the latest.” Paragraph 37 (was paragraph 375: Removed “that is by October 8, 2011” and replaced it with “of the commencement of the limitation period.”