Haime v. Krumm, 2021 BCPC 227

Citation: Haime v. Krumm 2021 BCPC 227 Date: 20210924 File No: 5668 Registry: Duncan IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: COLIN HAIME and DENISE HAIME CLAIMANTS AND: STEWART KRUMM and SK SEPTICS LTD. DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE GOUGE Appearing in person: Mr. and Ms. Haime Counsel for the Defendant: A.D. Taylor Place of Hearing: Duncan , B.C. Date of Hearing: September 22 - 24, 2021

Date of Judgment: September 24, 2021 The Facts [ 1 ] In May, 2016, Mr. & Ms. Haime agreed to purchase a waterfront lot in Ladysmith, British Columbia. Mr. and Ms. Haime acquired title to the lot on June 7, 2016. [ 2 ] On May 26, 2016, Mr. & Ms. Haime entered into a contract with Gordon Gonske and Kenneth Broadway for the construction of a house on the lot. The house is described in the contract as “… a 3600 square foot home … (1830 of main level fully finished + 1830 square feet of unfinished walkout basement + 750 square ft garage c/w suite above of 650 +/- square feet) …”.

The house required a septic tank and field, and associated pumps and fixtures, all to be provided and installed by Gonske and Broadway under the terms of the contract. [ 3 ] Gonske and Broadway subcontracted the design and installation of the septic tank and field to SK Septics Ltd, of which Mr. Krumm is the principal. [ 4 ] On September 17, 2016, Mr. & Ms.

Haime agreed with Gonske and Broadway that, in consideration of an increase of $128,300 in the contract price, the following changes would be made: a. “… the overall square footage of the main dwelling is to be increased to between 2040 and 2080 per floor …:; b. “The basement will no longer be considered unfinished, but rather will be fully finished with wet bar, 2 bathrooms and various living, exercise, bedroom and storage facilities …”. [ 5 ] The house was constructed, in accordance with the agreement of September 17, 2016, between December 2016 and May, 2019. [ 6 ] Installation of the septic tank and field commenced in June, 2017 and was completed in November, 2017. [ 7 ] All parties agree that the system designed by Mr.

Krumm and installed under his supervision was adequate and appropriate for a house as described in paragraph 2. [ 8 ] The Defendants accept the evidence of the Claimants’ expert on the following points: a. “While the [septic] system as installed can support the activities of a 4-bedroom home, it is not compliant [with regulatory standards] for usage as a 6-bedroom home.” b. As a result, Mr. & Ms. Haime will incur increased annual pumping and maintenance costs. c. The cost to upgrade the septic system to render it suitable for the house, as constructed, will be$18,500 to $22,200 plus GST.

Some electrical work will also be required, at a cost of about $1000 plus GST. [ 9 ] As at the date of trial, the only modification to the septic system installed by the Claimants is a larger filter. The Claimants have been obliged to: (

i) limit the number of their visitors; and (ii) have the tank pumped more frequently than they would have done had the system been designed for a larger house, as described in paragraph 4. Legal Principles [ 10 ] The question is whether the Defendants owed a duty of care to the Claimants. The pertinent authorities were reviewed by Justice Gerow in Strata Plan KAS 3575 v Renascence Enterprises (Shannon Lake) Corp 2017 BCSC 1336 ; [2017] BCJ No. 1504 . Justice Gerow quoted two passages from the judgment of the Court of Appeal in M.

Hasegawa v Pepsi Bottling Canada Ltd 2002 BCCA 324 ; [2002] BCJ No. 1125; 1 BCLR (4 th ) 209; 213 DLR (4 th ) 663, which are particularly pertinent to this case: The Supreme Court of Canada has, however, decided that the kind of harm which may potentially be suffered does indeed determine the existence of the duty of care. It has held that the product manufacturer's duty is to take reasonable care to avoid causing either personal injury or physical danger to property. But the duty does not extend to putting into circulation products which are merely defective or shoddy, if they are not dangerous.

There can be no doubt that on the law as presently understood, the potential nature of the harm determines the existence of the prima facie duty of care. * * * The plaintiff contends that, under the second part of the Anns test, there is no valid policy reason why liability for pure economic loss should be denied in this case. With respect, I disagree. A legal rule which imposed liability for the manufacture or supply of defective, but non-dangerous, goods would create an implied warranty of product quality for the sale of commercial products, in the absence of contract.

Such a rule would be an enormous change in the law, and would indeed create "liability in an indeterminate amount for an indeterminate time to an indeterminate class". [ 11 ] In the context of those legal principles, I think it important to note that the negotiation of a contract affords the contracting parties the opportunity to apportion risks and responsibilities among themselves. So, for example, the construction contract negotiated between Mr. & Ms. Haime, on the one hand, and Gonske and Broadway, on the other, could have included: (

i) an express warranty of the fitness of the septic system for the house to be constructed; or (ii) a term limiting or excluding the responsibility of Gonske and Broadway for such matters. Because the Defendants were not parties to that negotiation or the ensuing contract, the Defendants had no opportunity to negotiate such terms. Where, as in this case, the claim is essentially one for breach of an implied warranty of the quality of the system, it should be governed by the law of contract. In other cases, where the problem is not the performance of the system, but rather physical

injury to persons or property caused by its deficiencies, the resulting claim may properly be governed by the law of negligence. [12] This is not a claim for damages for injury to a person or property. The septic system, as installed, does not create a risk of suchinjury because Mr. & Ms. Haime have restricted their use of the system to conform to its capacity. In this action, they seek to recover thecost increasing that capacity to enhance their enjoyment of their property.

That is a claim for “pure economic loss”, and is precluded bythe legal principles described in paragraph 10. [13] The Claimants also say that Mr. Krumm failed to perform duties imposed upon him by the Sewerage System Regulation BC Reg.#326/2004, and that damages should be awarded for breach of those statutory duties. [14] It is certainly within the competence of a legislature to create a statutory cause of action in circumstances where the common lawimposes no duty of care. See, for example,

Part 23 of the Securities Act RSO 1990, c S.5. However, the British Columbia Legislaturehas not done so in relation to the standards imposed by the Sewerage System Regulation. [15] There is no general right of action for breach of statutory duty. Such claims are subsumed in the common-law tort of negligence: Gordona Ltd. v St.

John’s (City) [1986] NJ No. 143; (NL SC), 30 DLR (4th) 720. [16] The requirements of the Sewerage System Regulation would be relevant to the issue of standard of care in a case in which a dutyof care is imposed by statute or common law: Ryan v Victoria (SCC), [1999] 1 SCR 201 @ paragraph 29. Absent alegally-enforceable duty of care (which is negatived by the authorities mentioned above), standard of care is a moot issue. Application of the Principles in This Case [17] Because the Defendants did not owe a duty of care to the Claimants, it is unnecessary to consider whether Mr.

Krumm isresponsible for the deficiencies in the system. Disposition [18] The action is dismissed. ___________________________ T. Gouge, PCJ