Wetteland v. Csanyi Date:, 2017 BCPC 186

Citation: Wetteland v. Csanyi Date: 20170614 2017 BCPC 186 File No: 51508 Registry: Vernon IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Small Claims BETWEEN: MELISSA WETTELAND CLAIMANT AND: ALISON CSANYI DEFENDANT AND: GORDON SCOTT AND FOOTHILLS DEVELOPMENT LTD. THIRD PARTIES REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE D.M. MCKIMM Appearing for the Claimant: In Person Appearing for the Defendant: In Person Appearing for Third Parties : In Person

Place of Hearing: Vernon , B.C. Date of Hearing: February 1, 2017 Date of Judgment: June 14, 2017 Decision of the Court [ 1 ] Following two settlement conferences, the parties agreed that this matter could proceed to judgment based on affidavit evidence. There is no significant disagreement with respect to the underlying facts and I agree that the case is an appropriate case to be decided in this cost-effective way.

Having considered carefully the arguments of the claimant, defendant and both third parties and having reviewed the documents and affidavits filed, there will be judgment in favour of the claimant against the third party Scott Gordon and the third party Foothills Development Ltd. in the amount of $12,465.25. The claim against Alison Csanyi is dismissed. Facts [ 2 ] The claimant and defendant are neighbours in a residential subdivision in the city of Vernon.

Their properties are on a gently sloping grade with the claimant’s property being the lower of the two properties by approximately a meter to a meter and a half. The two third parties are Scott Gordon, the builder of the defendant's home on her uphill property, and Foothills Development Ltd. is the developer of the entire subdivision. [ 3 ] The third party Scott Gordon (hereinafter “Gordon”) is a professional homebuilder who builds homes for resale. Gordon purchased the defendant’s lot from the original developer Foothills Development LTD.

When he purchased that lot he signed a contract in which he agreed that he would build on the defendant’s lot in accordance with the Declaration of Building Scheme which is registered against the property. Nothing in that building scheme deals with the requirement to build the retaining wall in question. At the time of the acquisition of the lot from the developer Gordon executed a Compliance Deposit Agreement in which he agreed to construct any buildings and develop the property in accordance with the Design Guidelines and the building scheme.

He deposited $3000 with the developer which was held as security to ensure his compliance with the building scheme and the Design Guidelines. The agreement provided that the compliance deposit amount would be returned to Gordon following an inspection of the property to ensure that it complied with the building scheme and the Design Guidelines. [ 4 ] He proceeded to build the defendant's home completing construction in late summer 2014. During the course of the construction he levelled the defendant’s lot in order to create both the building platform as well as a level rear yard.

In order to do so he removed some of the fill from the defendant’s property and deposited the fill on the lower property. At the time of construction Gordon and the claimant jointly owned and intended to develop the lower adjoining lot. [ 5 ] He sold the completed residence and landscaped lot to the defendant in October 2014. Prior to the claimant commencing construction of her residence and development of her building lot, she and Mr. Gordon stopped being business partners and the claimant went on to develop the lower property on her own. [ 6 ] In August 2015 the claimant began to develop her property.

She commenced the construction project by levelling her lot thereby creating a distinct drop between the defendant’s lot and her own. The difference is between 1.2 and 1.4 meters. [ 7 ] As indicated above, every property in the subdivision is bound by a building scheme registered on title at the land title office pursuant to

section 220 [1] of the Land Title Act. Nothing in that building scheme provides for who will be responsible to pay for the construction of retaining walls between adjoining properties. That question is answered by reference to the Design Guidelines created by the developer. [ 8 ] The Design Guidelines provide as follows: No yard retaining wall shall be constructed on any lot other than yard retaining walls constructed with Allan Block, concrete exposed aggregate or Rumble Rock walls, the exposed height of which must not exceed 1.2 m.

In situations with grade changes between lots requiring retaining walls to control or take up the changes in elevations, each owner’s builder will be responsible for retaining the downhill side of the lot prior to the landscaping. With some lots, the owner may also be required to retain the upside of the lot. In the event of a dispute, grade conditions will be reviewed by the approving body on a site by site basis.

The approving body will have final authority regarding which buyer is responsible for retaining. [ 9 ] Following completion of the defendant's home and development of her landscaped lot Gordon applied to the developer, through the developer’s agent, for the return of his compliance deposit. In accordance with the agreement the developer's agent, an architect, inspected the property and noted some deficiencies which she required to be repaired as a condition of the return of the compliance deposit monies.

None of those deficiencies make any reference to the failure of Gordon to build the necessary retaining wall between his lot and the lower lot.

It is important to note that the compliance deposit agreement specifically requires Gordon, as builder, to file with the developer's agent his landscaping plan which, no doubt, would have included reference to the positioning of any retaining walls on the property. [ 10 ] When the claimant wished to build the retaining wall, she made contact with the defendant and asked to discuss with her the cost of the construction of the retaining wall which, in the claimant’s view, was the sole responsibility of the defendant.

Having reviewed the correspondence I am satisfied that the defendant failed to meaningfully engage in any way in a dialogue with the claimant regarding the cost of construction. Rather she took the view that no part of that retaining wall was her responsibility. [ 11 ] I also note that the defendant specifically deposed that at the time she purchased her property she was well aware of the Design Guidelines and purchased the property because they existed and she could therefore feel comfortable that the development would be

undertaken in a way that would best protect the value of her investment. This thinking, of course, is the principal reason why buyerspurchase in areas subject to Design Guidelines and building schemes. [12] It would have been apparent to her as well that at the time she purchased her home that the downhill adjoining property wasundeveloped and that the required retaining wall had not been installed. That makes perfect sense because there is no way in which anuphill lot could install the retaining wall for the downhill lot until the commencement of the development of the downhill lot.

Prior tothat time there would be no way to know what or how much of a wall would be necessary in the construction and development of thedownhill property. She also deposes that at no time during the course of her purchase of the property off Gordon did he mention hisfailure to comply with the Design Guidelines and in his responding material Gordon does not deny that accusation. [13] It would also be reasonable to assume that the Design Guidelines anticipate that the uphill landowners will use their ownproperty to develop the retaining wall for the downhill property.

In this case the defendant has enjoyed a significant advantage in thatthe entire thickness of the retaining wall developed by the plaintiffs was placed on the plaintiff’s property preserving the entirety of thedefendant’s property for her own use. [14] During the course of the claimant and defendant's conversations with respect to responsibility for constructing the retaining wallthe defendant turned to the developer for a decision with respect to who was responsible for the retaining wall.

The developer declinedto render a formal decision with respect to that question. [15] The retaining wall was constructed in a fashion consistent with the Design Guidelines. The claimant obtained reasonable quotesfrom different individuals and constructed the wall at a reasonable cost. No party takes significant issue that the costs incurred by theclaimant are reasonable and I’m satisfied on the balance of probabilities that the cost were reasonably incurred. Discussion [16] Gordon constructed a home in a residential subdivision. He is a professional builder who makes his living building homes forresale.

There is no question that at the time that he began the construction of the defendant’s home that he was well aware of hisresponsibility to construct the retaining wall for the downhill property. He was certainly well positioned to do so given that at the timeof the construction he owned both properties.

Prior to commencing construction he deposited with the developer funds as security forthe developer to ensure that the construction and development of the lot in question was carried out in accordance with the DesignGuidelines and the registered building scheme. [17] The Design Guidelines specifically provide that it is the owner builder who is responsible for retaining the downhill property.

Even though the defendant agrees that she was well aware of all of the requirements of the Design Guidelines and even that she relied onthose Design Guidelines to protect her investment that does not create a contractual obligation between her as a subsequent purchaser andher downhill neighbour. [18] No arguments were advanced suggesting that she was bound by any covenant that ran with the land because most certainly thatcovenant would be a positive restrictive covenant which would not be binding on subsequent purchasers. See: Aquadel Golf CourseLimited v. Lindell Beach Holiday Resort Ltd., 2009 BCCA 5.

There is no agreement between the claimant and defendant compelling thedefendant to construct the retaining wall the claimant. The only contractual obligation was between the owner builder and FoothillsDevelopment Ltd. [19] Mr. Gordon in his scant affidavit does not dispute that it was his obligation to construct the retaining wall nor does he disputethe fact that the construction compliance deposit should not have been returned to him until he had met his obligations under the DesignGuidelines to construct the retaining wall for the benefit of the claimant’s adjoining downhill property.

He specifically agreed to bebound by the Design Guidelines in the contract of purchase and sale between himself and third-party Foothills Developments Ltd. [20] There being no contractual obligation between the claimant and Gordon, question arises as to on what basis Gordon or thedeveloper would be liable for his failure to comply with the Design Guidelines.

I find that both Gordon and the developer are liable tothe claimant in negligence for their failure to perform under the contract. [21] The law of negligence applies when parties have acted in breach of their duty in a way that causes harm to another person orlegal entity. In Donohue vs. Stevenson, (FOREP), [1932] A.C. 562 (H.L.) the House of Lords revolutionized the common law byreplacing the old categories of tort recovery with a single comprehensive principal – – the negligence principal.

Henceforward, liabilitywould lie for negligence in circumstances where a reasonable person would have viewed the harm as foreseeable. However,foreseeability alone was not enough; there must also be a close and direct relationship of proximity or neighbourhood. Cooper vs. Hobart 2001 SCC 79 , [2001] S.C.J. 76 @ para 22 In this case the harm caused to the claimant was that she was required to construct her own retaining wall with no recourse to theindividual ultimately responsible for that retaining wall.

There is a direct relationship between the failure of the builder Gordon tocomplete the construction and landscaping in accordance with the Design Guidelines and the claimant. The damages sustained by theclaimant are reasonably foreseeable by Gordon. This proximity and reasonable foreseeability are sufficient to establish a prima faciecase of negligence.

There are no policy considerations that I can conceive of which would preclude an extension of liability to Mr.Gordon as the owner builder. [22] In my view the fact that the Foothills Developments Ltd. paid out the compliance deposit amounts, even though the ownerbuilder had not in fact complied does not relieve the owner builder Gordon of his responsibilities under the contract in favour of theDeveloper.

On the other hand, the developer had established an effective scheme by which they could enforce their own DesignGuidelines and building scheme for the benefit of all subsequent purchasers and owners within that development. The claimant alsoenjoys a close relationship with the developer in that she is the individual who is likely to be harmed if the developer fails to meet his

obligations under the Compliance Agreement. [ 23 ] The developer argues that he is relieved of responsibility because the building scheme specifically provides; (25.) Nothing herein contained shall be construed as imposed [sic] on the developer any obligation to enforce the provisions of this

schedule of restrictions. Affidavit of George Nakashima, page 17. That waiver of liability is specifically limited to the developer’s obligations under the

Schedule of Restrictions which are the terms of the building scheme but do not refer to the Design Guidelines. It is reasonably foreseeable that the developer's failure to enforce their own processes to ensure compliance with the Design Guidelines will cause damage to the claimant for which she will have no redress. In my view the facts establish a prima facie case for negligence as against the developer. [ 24 ] I have considered any policy reasons for which negligence ought to be excused for the developer and can find none.

It might be argued that opening up liability for the developer in these instances creates to greater risk for indiscernible damages or indefinite damages. This is not the case. There is a close and proximate relationship between the claimant and the developer. The purchaser of a lot in a residential development of this nature needs to rely that the developer, who is profiting from the development, will make all reasonable efforts to ensure that construction in the development complies with the Design Guidelines.

It is these very Design Guidelines which, as the defendant quite properly notes, which allow purchasers and subsequent homeowners to take comfort that their investment will be protected and, no doubt, allows the developer to charge a premium for the sale of lots in the development. If the developer fails to take reasonable steps to ensure compliance the damages will necessarily be suffered by individuals like the claimant and it is reasonable that the developer be held liable for those damages. The developer has the ability and has developed the processes to ensure that occurs and failed in its duty to do so.

Order [ 25 ] There will be judgment in favour of the claimant Melissa Wetteland in the sum of $12,465.25 against the third-party Gordon and the third-party Foothills Development Ltd. The action against the defendant Allison Csanyi is dismissed. ________________________________ The Honourable Judge D.M. McKimm Provincial Court of British Columbia