Steer v Mawji, 2017 ABQB 762

Court of Queen’s Bench of Alberta Citation: Steer v Mawji, 2017 ABQB 762 Date: 20171208 Docket: 1601 00681 Registry: Calgary Between: Wayne Steer and Antoinette (Toni) Samaha-Steer Plaintiffs - and - Sameer Mawji and Triple One Properties Ltd. Defendants - and - Kanas Holdings Corporation doing business as Kanas Corporation, BGB Realty Inc. doing business as RE/MAX Realty Professionals, Douglas Koop, and Akbar Nimji doing business as Nimji Real Estate Advisors Third Party Defendants _______________________________________________________ Reasons for Judgment of J.T. Prowse ,Q.C., Master in Chambers

_______________________________________________________ [ 1 ] In May 2015, the plaintiffs (the “Steers”) purchased a house (one half of a side by side duplex) in Calgary for $1.0 million. [ 2 ] The Steers say it will cost them approximately $350,000 to repair the unit due to water intrusion issues. [ 3 ] They have sued the defendants, who constructed and sold the unit to them, and now bring this application for

summary judgment. [ 4 ] I am dismissing the Steers’ application for

summary judgment because they have not met the threshold test (having a claim which is highly likely to succeed) which is required before

summary judgment can issue. The facts [ 5 ] Following is a brief history of events leading up to the Steers’ claim: • Throughout 2013 and 2014, the defendants constructed the dwelling as a new build. The plan was for the defendant Mr. Mawji to live in one side and either rent out or sell the other side. • Once the duplex was completed, Mr. Mawji sold one side to the Steers. • The Steers took possession of the unit on April 30, 2015.

Water infiltration issues began shortly thereafter. • At the request of the Steers, and in the context of an ongoing dispute with the defendants over outstanding deficiencies, a safety codes officer inspected the property and noted issues with water pooling and water penetration into the interior of the unit. • On January 14, 2016, the Steers commenced this action against the defendants. • The new home warranty program paid the limits of its policy to the Steers, but that amount was quite modest and most if not all of those funds related to issues not related to water intrusion. • On June 21, 2016, the City of Calgary issued a safety codes order requiring the Steers to carry out work “to correct the ingress of precipitation into the interior of the property and ensure that work was carried out in accordance with the Alberta Building Code 2014 ”. • The deadlines to comply with the SCA Order have been extended by the City of Calgary as the Steers are still completing the remedial work required.

The cause of action in contract [ 6 ] The Steers did not vigorously pursue their claim for breach of contract on this

summary judgment application, with one exception that I will mention shortly. [ 7 ] Presumably this is because, in the purchase contract between the Steers and Mr. Mawji, the only express representations and warranties are set out in clause 6.1. This clause includes warranties that Mr. Mawji had legal title and that the current use of the land complied with the municipal land-use bylaw. The only relevant provision is clause 6.1 (h): The Seller represents and warrants to the Buyer that: (

h) except as otherwise disclosed, the Seller is not aware of any defects that are not visible and that may render the Property dangerous or potentially dangerous to occupants or unfit for habitation. [ 8 ] The purchase contract contains this entire agreement clause at clause 6.4: The Seller and the Buyer each acknowledge that, except as otherwise described in this Contract, there are no other warranties, representations or collateral agreements made by or with the other party, the Seller's brokerage and the Buyer's brokerage about the Property,[ ... ] and this transaction, including ... the existence or non-existence of any environmental condition or problem. [ 9 ] At trial the Steers can challenge Mr.Mawji’s assertion that he was unaware of any water intrusion issues in the unit, but they cannot do so on a

summary judgment application where the factual assertions of the respondent Mr. Mawji are assumed (for the purpose of the application only) to be true. See Richcrooks Enterprises

(2000) Ltd. v Arres Capital Inc. , 2017 ABQB 412 at para 17 . [ 10 ] The one exception, for which the Steers did pursue

summary judgment, was the representation made that the unit had 4 bedrooms, three upstairs and one in the basement. The plaintiff’s complain that the window in the basement room cannot fully open and therefore it does not qualify as a bedroom. The Steers seek

summary judgment to recover the cost of necessary modifications to the window. [ 11 ] The difficulty is that this representation, if made, may well be excluded by

section 6.4, quoted above. If the Steers assert that the unmodified basement window created a dangerous condition, they are met with the argument that the defect was ‘visible’ and therefor does not fit under

section 6.1(h), quoted above. The cause of action in negligent construction [ 12 ] The Ontario Court of Appeal decision in Mariani v Lemstra , 2004 CarswellOnt 5126 establishes that a claim in negligent

construction can be brought notwithstanding that the vendor/builder and the purchaser are parties to a purchase contract. In other words,the existence of a contractual relationship does not negate a claim in negligent construction. [13] The defendants owed a duty of care to the Steers. The defendants would not have known the identity of the ultimatepurchasers when they were constructing the unit, but the defendants were building the unit to be owned or lived in by others, and theyowed a duty to make sure that it was not built in a way to be dangerous to the health or safety of the ultimate occupants.

See WinnipegCondominium Corp. No. 36 v Bird Construction Co., (SCC), 1995 CarswellMan 19, 1995 CarswellMan 249, [1995] 1S.C.R. 85, [1995] 3 W.W.R. 85. [14] Can the Steers obtain

summary judgment against the defendants for negligent construction? [15] I will begin my analysis by assuming, without deciding, that serious water infiltration occurred, and that it was the result ofconstruction errors. [16] The weaknesses in the Steers’ claim in negligent construction are the following: • Overcoming the defendants’ evidence that the defendants used consultants and sub-contractors who indicated to him that thedesign and construction were well done, thereby discharging the defendants’ duty of care • The lack of evidence that a competent general contractor (which was the function being fulfilled by the defendants) would haveinspected the project during the course of construction and thereby prevented the construction errors. • The lack of direct (non-hearsay) evidence that the water infiltration either caused or was likely to cause conditions dangerous to thehealth of occupants.

Reliance on consultants and sub-contractors [17] The Steers assert that the defendants cannot off-load their responsibility for non-dangerous construction onto their sub-contractors or consultants. [18] That may be true in the case of a claim in contract, but it may be inaccurate in the case of a claim in negligence. [19] The defendants submit that the law is as stated in Allen M.

Linder & Bruce Feldthusen, Canadian Tort Law, 9th ed.(Markham: LexisNexis, 2011) at 152: Normally, however, an actor will be relieved of responsibility if following professional advice or if hiring an expert to perform thesetasks, because it is eminently reasonable to rely upon others, especially when they are professionals or other skilled persons. [20] The defendants adduce evidence that their subcontractors and consultants told them that everything was in order. This ishearsay, and not evidence of the truth of those assertions, but may well be good evidence of lack of negligence on the part of thedefendants.

These are all issues for a trial. The lack of evidence that a competent general contractor would have prevented the errors made by the sub-contractors [21] The Steers assert that Mr. Mawji was negligent in the supervision of the work done by his subcontractors. They point toanswers from the cross-examination of Mr. Mawji, which show this to be the first construction job which Mr. Mawji undertook as ageneral contractor. Mr. Mawji’s answers also disclose that he did not have any experience in construction supervision. [22] This leads to what I consider to be an evidentiary shortcoming in the plaintiffs’ case.

I think the Steers require evidence froman expert in construction supervision who can say that, in the normal course of construction supervision, by a supervisor of reasonablecompetence, construction flaws such as those observed in the Williams’ reports would have been caught. [23] Without that evidence I cannot conclude that the defendants were negligent in not catching and halting the construction errorswhich led to the water intrusion.

The lack of direct (non-hearsay) evidence that the water infiltration either caused or was likely to cause conditions dangerous tothe health of occupants [24] The Steers did not provide evidence that the type of water infiltration observed by Williams Engineering (the Steers’ expertwitness) would likely lead to development of mold dangerous to human health. [25] The Steers attempted to provide evidence that in fact the water infiltration did lead to the development of dangerous mold.The difficulty with this evidence is that it was hearsay evidence, which is not allowable under Rule 13.18(3), which states: If an affidavit is used in support of an application that may dispose of all or part of a claim, the affidavit must be sworn on the basis ofthe personal knowledge of the person swearing the affidavit. [26] Specifically, the lab report which identified the type of mold retrieved from the unit was simply attached as an exhibit to Mr.Steer’s affidavit. [27] It was suggested that this report was a business record provided in the ordinary course of business, but the business recordexception cannot be used as a basis to submit expert evidence without an affidavit from the expert. [28] Further, the physician’s report attesting to health concerns arising from the presence of mold, was likewise simply attached asan exhibit to Mr.

Steer’s affidavit, and was likewise inadmissible under Rule 13.18(3).

Conclusion regarding negligent construction [ 29 ] Given the three issues discussed above it is my conclusion that the plaintiffs have not achieved the level of proof necessary to obtain a

summary judgment based on negligent construction. Conclusion [ 30 ] For the reasons I have just given, I dismiss the plaintiffs’ application for

summary judgment. Costs [ 31 ] If the parties cannot agree on costs they may seek a ruling from me in that regard. Heard on the 23 rd day of November and the 7 th day of December, 2017. Dated at the City of Calgary, Alberta this 8 th day of December, 2017. J.T. Prowse, Q.C. M.C.C.Q.B.A. Appearances: Michael D. Aasen and Tanner Oscapella McLennan Ross LLP for the Plaintiffs Daniel B.R. Johnson and Evan Nuttall Jay Dyck (Student-at-Law) Borden Ladner Gervais LLP for the Defendants Scott C. Chimuk Scott Venturo Rudakoff LLP For Kanas Holdings Corporation