Rick Balbi Architect Ltd v Condominium Corporation No, 2024 ABCA 37

In the Court of Appeal of Alberta Citation: Rick Balbi Architect Ltd v Condominium Corporation No 0824320, 2024 ABCA 37 Date: 20240131 Docket: 2301-0122AC Registry: Calgary Between: Rick Balbi Architect Ltd. Appellant - and - Condominium Corporation No. 0824320 also known as The Brava Respondent _______________________________________________________ The Court: The Honourable Justice Jolaine Antonio The Honourable Justice William T. de Wit The Honourable Justice April Grosse _______________________________________________________ Memorandum of Judgment Appeal from the Decision by The Honourable Justice Colin C.J.

Feasby Dated the 25th day of April, 2023 Filed the 5 th day of June, 2023 ( 2023 ABKB 241 , Docket: 1601 13021)

_______________________________________________________ Memorandum of Judgment _______________________________________________________ The Court: I. Introduction [ 1 ] The appellant, Rick Balbi Architect Ltd. (RBA), appeals a decision of the Court of King’s Bench upholding the decision of an applications judge dismissing its application for

summary dismissal. RBA maintains that service of the amended statement of claim in this matter, which added it as a defendant, was done outside the applicable limitation period. II. Facts [ 2 ] The property of the respondent, Condominium Corporation No. 0824320 ( Brava ), is located in Red Deer Alberta. Residents started to notice water leakage difficulties in November 2014.

Brava received an expert report on September 20, 2015, indicating structural deficiencies and non-compliance with the Alberta Building Code, and a further expert report on October 4, 2015, recommending that Brava retain legal counsel and proceed with litigation in relation to the deficiencies. [ 3 ] Brava filed a statement of claim September 30, 2016, against a number of parties but not RBA. An amended statement of claim, which added RBA as a defendant, was filed October 23, 2018, and served November 7, 2018.

In the original statement of claim, Brava had included the engineer of record, Bearden Engineering Consultants Ltd (Bearden), as a defendant. Brava says it had no knowledge that RBA had an unwritten joint venture with Bearden to assist with designing the plans for the condominium. It says it did not learn of RBA’s possible involvement until February 3, 2018, when it was informed of certain marketing materials by a daughter of a deceased condo owner. That information was then confirmed by a condominium owner who was also a member of the condominium board.

These marketing materials identified RBA as being involved with the development. [ 4 ] RBA applied for

summary dismissal, arguing the claim against it was statute barred by operation of sections 3(1) and 6(3) of the Limitations Act , RSA 2000, c L-12 , as Brava knew or ought to have known of the claim against it, at the latest, by October 4, 2015, when the second expert report was delivered. RBA argued it needed to have been given notice of the added claim within three years from that date, October 4, 2018. III.

Decisions Below [ 5 ] The chambers judge dismissed the application, stating he agreed with the applications judge who stated, “I do not think the limitation period starts to run necessarily with receipt of the report.

It starts to run with the receipt of the report plus at least a little bit of time to sort out who the architect is, and so in my view that issue needs to be determined at trial”: Rick Balbi Architect Ltd v Condominium Corporation No 0824320 , 2023 ABKB 241 at para 8 . [ 6 ] The chambers judge further held, “It is not clear to me at this stage of the proceeding that Condo Corp acting with reasonable diligence should have identified RBA as the architect by November 7, 2015 – just over a month after the second report . . . as would be required to grant RBA

summary dismissal”: Rick Balbi Architect at para 25. IV. Grounds of Appeal [ 7 ] RBA argues the chambers judge erred by not finding the limitation period commenced October 2015, specifically, he erred (

a) in not finding Brava had the actual knowledge or (

b) constructive knowledge; and (

c) finding that whether Brava exercised reasonable diligence in determining RBA’s identity was a triable issue. As a result, the appellant argues the chambers judge erred by not granting

summary dismissal. V. Standard of Review [ 8 ] The chambers judge’s assessment of the facts, the application of the law to those facts, and the ultimate determination on

whether

summary resolution is appropriate are all entitled to deference: Weir-Jones Technical Services Incorporated v Purolator Courier Ltd , 2019 ABCA 49 at para 10 . Whether a limitation period has expired is a question requiring the application of findings of fact to a legal standard. Absent an error about the legal standard, this Court’s intervention is only warranted if a palpable and overriding error is demonstrated: Nammo v Canada (Justice and Attorney General) , 2015 ABCA 389 at para 8 ; Milota v Momentive Specialty Chemicals , 2020 ABCA 413 at para 19 . VI.

Analysis [ 9 ] The parties agree the chambers judge correctly determined that under section 6(3) of the Limitations Act , Brava had until three years after the section 3(1) (

a) discoverability-based limitation was triggered to provide RBA notice of the added claim against it. They also agree on the general test for determining when a limitation period begins to run.

The time begins to run when the material facts upon which to base a plausible inference of liability have been discovered or ought to have been discovered by the plaintiff through the exercise of reasonable diligence: Grant Thornton LLP v New Brunswick , 2021 SCC 31 at paras 29 , 40, 48; Aseniwuche Winewak Nation of Canada v Ackroyd LLP , 2023 ABCA 60 at para 13 . [ 10 ] In this case, the limitation period started to run on the date Brava knew or ought to have known, through the exercise of reasonable diligence, three things: (

i) that the injury due to design deficiencies had occurred; (ii) that the injury was attributable to the conduct of RBA; and (iii) that the injury, assuming liability on the part of the defendant, warranted bringing a proceeding: Limitations Act , s 3(1)(a). This test has both a subjective and objective component, as dictated by the words “ought to have known”: Milota at paras 20-22 .

At issue before the chambers judge was the second element: whether Brava knew or ought to have known that the injury was attributable to the conduct of RBA. [ 11 ] RBA submits the chambers judge erred in failing to determine that Brava knew or ought to have known of the claim against it on or before October 4, 2015, when Brava received the expert report setting out the structural and design problems that had caused the water leakage and advising to proceed with legal action.

Brava takes the position that the limitation period regarding RBA began on February 3, 2018, when a daughter of a condominium owner and condominium board member discovered marketing materials which included RBA’s logo. Actual Knowledge [ 12 ] Brava was aware of the structural design problems as a result of the report received on October 4, 2015. It then took steps to determine the identity of the architect of the building as it did not have the original design drawings.

Brava eventually obtained those drawings from the City of Red Deer which listed Bearden as the provider of architectural services and the principal of Bearden was Terry Bearden, the only professional who stamped the drawings. As a result, Brava included Bearden as a defendant. There was no evidence before the chambers judge that anyone at Brava had actual knowledge that another firm, RBA, was also involved in the architectural drawings. [ 13 ] RBA argues Brava knew of its involvement in October 2015 because section 25(2) (

a) of the Condominium Property Act , RSA 2000, c C-22 , defines a condominium corporation as consisting of “all those persons . . . who are owners of units in the parcel to which the condominium plan applies” and, therefore, the knowledge of its unit owners is to be imputed to it. But this

section does not deal with “knowledge” in the context of owners of condominium units and how that knowledge should be imputed to the condominium corporation.

RBA concedes this is a factual assessment that must be made by taking into consideration all of the relevant circumstances. [ 14 ] RBA relies on the case of Owners: Condominium Plan No 0125764 v Amber Equities Inc , 2015 ABQB 235 at para 126 , quoting Motkoski Holdings Ltd v Yellowhead (County) , 2010 ABCA 72 at para 88 , for the proposition that “knowledge in the mind of any one representative of a corporation will be attributed to the corporation as a whole”. However, that proposition is prefaced with the words “[i]n some situations”.

In Amber Equities , all the unit holders, collectively, knew of the relevant facts, being the failure to complete an internal roadway. That type of collective knowledge is much different than what is alleged by RBA here. We note, as did the chambers judge, that the Ontario Court of Appeal in Orr v Metropolitan Toronto Condominium Corporation No 1056 , 2014 ONCA 855 , declined to impute the knowledge of a single board member to a condominium corporation in the circumstances of that case. [ 15 ] Before the chambers judge and on appeal, RBA argues three individuals had the requisite knowledge: Mr.

Hafso, the principal of the project proponent Hafso Developments Ltd., and until early 2015, a unit owner and board member; the daughter of a deceased unit owner who in 2018 discovered RBA’s name on original marketing materials for the development; and Mr. Lennie, a unit owner and board member, who upon being advised of the daughter’s discovery, also confirmed he had copies of the same marketing material. [ 16 ] The chambers judge noted that while Brava did not ask Mr. Hafso about the identity of the architect, Mr.

Hafso attended a February 2016 AGM for Brava and indicated that Bearden was responsible for the original design of the condominium; he did not identify RBA. The chambers judge further found while it cannot be known whether Mr. Hafso would have identified RBA if asked, the evidence suggested Mr.

Hafso was working at cross-purposes with Brava as he continually dismissed the expert reports and minimized the defects of the building. [ 17 ] With respect to the two people who had in their possession the marketing materials, the chambers judge found there was nothing to suggest that either had knowledge of the reference to RBA in those materials prior to 2018. On the contrary, Mr. Lennie stated that he had previously reviewed the marketing materials and had not noticed the reference to RBA. He did not provide the materials to Brava for the purposes of the claim because he believed they were not relevant.

It was only after he was informed of the marketing materials discovered by the daughter of the deceased unit owner that he noticed the reference. [ 18 ] RBA has not shown the chambers judge erred in failing to conclude on the existing record that section 25(2) (

a) of the Condominium Property Act deemed Brava to have knowledge of any information found in any documentation in the possession of any of

its unit owners. [ 19 ] RBA further argues that a plaintiff need not have “perfect or exact knowledge of the exact identity of each tortfeasor” to start a limitation period running. But the chambers judge did not suggest any such requirement. What is required is knowledge of “material facts upon which a plausible inference of liability on the defendant’s

part can be drawn”: Grant Thornton at para 42. This standard “ensures that the degree of knowledge needed . . . is more than mere suspicion or speculation” but “does not rise so high as to require certainty of liability”: Grant Thornton at para 46. [ 20 ] In our view, the chambers judge did not commit any reviewable error in refusing to find RBA had discharged its burden of establishing that there was no genuine issue of actual knowledge requiring a trial.

Constructive Knowledge [ 21 ] A plaintiff will have constructive knowledge when the evidence shows it ought to have discovered the material facts by exercising reasonable diligence: Grant Thornton at para 44.

The test is largely objective and looks at what a reasonable person in the same circumstances would either have known or discovered with reasonable diligence: Saito v Lester Estate , 2021 ABCA 179 at para 21 . [ 22 ] RBA argues there were steps Brava could have taken that would have identified its involvement sooner, including better review of the records in the possession of its unit holders and making inquiries with the initial defendants regarding potential other parties involved.

Contrary to RBA’s suggestion, the question is not whether a plaintiff acted with reasonable diligence in a general way throughout the period leading to the naming of RBA; the question is whether through reasonable diligence it should have identified RBA prior to November 8, 2015 (three years prior to service of the claim on RBA).

The limitation period starts when the material facts (in this case, the identity of RBA) ought to have been discovered by the exercise of reasonable diligence: see, Grant Thornton at para 44, Milota at para 22. [ 23 ] The burden to establish a triable issue on due diligence is not high: Canadian Natural Resources Limited v Husky Oil Operations Limited , 2020 ABCA 386 at para 32 .

Statements, actions or omissions by a defendant can affect the plaintiff’s state of knowledge and duty to inquire: Milota at para 22 ; Canadian Natural Resources v Husky at paras 34-36. [ 24 ] RBA relies on Condominium Corporation No 0610078 v Pointe of View Condominiums (Prestwick) Inc , 2016 ABQB 609 , and Condominium Corporation No 0213028 v Pasera Corporation , 2016 ABQB 477 , to argue there was constructive knowledge. [ 25 ] The chambers judge referred to and reviewed both Pointe of View and Pasera .

After reviewing the facts and arguments, including RBA’s submissions on steps Brava could have taken, the chambers judge concluded that Brava was in a better position than the plaintiffs in those cases. The evidence before the chambers judge was that Brava made efforts to obtain plans, permits, and other records to identify the relevant parties. Brava took more steps than the plaintiffs in Pointe of View . None of the documents obtained by Brava identified RBA. This is much different than Pasera , where the plaintiff was in possession of numerous documents identifying the architect.

In this case, all the documents identified only Bearden as the architect except the materials the chambers judge described as “fortuitously” discovered. The chambers judge concluded there was “no reason for [ Brava ] to believe that there was another firm not disclosed on the design drawings providing architectural services” (para 17). He supported his conclusion by reference to Mr.

Hafso’s actions in only identifying Bearden and that marketing documents were not obviously related to a case about a design failure and might fall outside the scope of the record gathering and review process. [ 26 ] The chambers judge recognized that other steps could have been taken by Brava , such as inquiring with counsel for other parties, however, he noted those steps may not have been possible right away (at para 25): [I]t should be noted that such steps might not have been possible until after parties defended the claim which would have been some time after the commencement of the claim in 2016. [ 27 ] The chambers judge did not make any palpable and overriding error in concluding it was not clear “at this stage of the proceeding that [ Brava ] acting with reasonable diligence should have identified RBA as the architect by November 7, 2015”, as would be required to grant it

summary dismissal. [ 28 ] To the extent RBA suggests the chambers judge erred in articulating or applying the law on

summary dismissal, we disagree. The trial judge excerpted a

summary of the applicable principles at paragraph 6 of his decision. He was not satisfied RBA had met the burden of establishing its limitations defence and concluded that the question of constructive knowledge was a triable issue. Therefore, he properly dismissed the appeal of the application for

summary dismissal. VII. Conclusion [ 29 ] For the foregoing reasons, the appeal is dismissed. Appeal heard on January 16, 2024 Memorandum filed at Calgary, Alberta this 31st day of January, 2024

Antonio J.A. de Wit J.A. Authorized to sign for : Grosse J.A. Appearances: J. Ellergodt M.D. James for the Appellant R. Merchant (no appearance) R. Mitchell E. Jovanovic for the Respondent