Morry et al v Janzen et al, 2015 MBCA 86

Citation: Morry et al v Janzen et al, 2015 MBCA 86 Date: 20150909 Docket: AI15-30-08340 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Holly C. Beard Madam Justice Diana M. Cameron Mr. Justice William J. Burnett BETWEEN : ) T. E. Bock ) for the Appellants HOWARD MORRY AND HOPE MORRY ) ) R. A. McFadyen (Applicants) Appellants ) for the Respondents, ) G. Janzen, Vega Realty Ltd. - and - ) (c.o.b.) as Janzen Builders, ) the said Janzen Builders GEORGE JANZEN, VEGA REALTY ) LTD. (C.O.B.) AS JANZEN BUILDERS, ) D. I. Marr THE SAID JANZEN BUILDERS, LLOYD ) for the Respondents, SECTER, AND SECTER ASSOCIATES ) L.

Secter and Secter LIMITED ) Associates Limited ) (Respondents) Respondents ) Appeal heard and ) Decision pronounced: ) September 9, 2015 BURNETT JA (for the Court): [ 1 ] The applicants appeal the dismissal of their application to extend the time to commence an action against the builder and the designer of their home pursuant to section 14(1) of The Limitation of Actions Act , CCSM, c L150 (the Act ). [ 2 ] Section 14(1) of the Act provides: Extension of time in certain cases 14(1) Notwithstanding any provision of this Act or of any other Act of the Legislature limiting the time for beginning an action, the court, on application, may grant leave to the applicant to begin or continue an action if it is satisfied on evidence adduced by or on behalf of the applicant that not more than 12 months have elapsed between (

a) the date on which the applicant first knew, or, in all the circumstances of the case, ought to have known, of all material facts of a decisive character upon which the action is based; and (

b) the date on which the application was made to the court for leave. [ 3 ] The standard of review for appeals of this nature was recently set out by this Court in McIntyre v Frohlich et al , 2013 MBCA 20 , 288 ManR (2d) 291 (at para 49 ):

This appeal concerns discretionary decisions under [The Limitation of Actions] Act and the Queen’s Bench Rules. Therefore, thestandard of review for appellate intervention is one of deference. Unless there is an error in principle or a misapprehension of the facts,the decisions should not be overturned unless they are so clearly wrong as to amount to an injustice. An error in principle is an error inlaw, which calls for the standard of review of correctness. This court may intervene when there is a misapprehension of the facts that is apalpable and overriding error. See Elsom v.

Elsom, (SCC), [1989] 1 S.C.R. 1367; 96 N.R. 165; Zhang v. Chik et al.(2012), 2012 MBCA 28 , 280 Man.R.(2d) 26; 548 W.A.C. 26; 2012 MBCA 28; Timmerman v. Selkirk and District PlanningArea Board et al. (2008), 2008 MBCA 52 , 228 Man.R.(2d) 77; 427 W.A.C. 77; 2008 MBCA 52; and Homestead Properties(Canada) Ltd. v.

Sekhri et al. (2007), 2007 MBCA 61 , 214 Man.R.(2d) 148; 395 W.A.C. 148; 2007 MBCA 61. [4] The applicants raise two grounds of appeal: 1. the application judge erred in concluding that the applicants had filed their application more than 12 months from the date whenthey first knew, or ought to have known, of all material facts of a decisive character upon which their proposed action is based; and 2. the application judge erred in principle by conflating the concept of material facts of a decisive character proving the element ofdamage with the concept of material facts of a decisive character proving the element of causation. [5] Regarding the first ground of appeal, simply stated, the applicants say that they did not possess “all material facts of adecisive character” until July 24, 2009, and that they filed their application for leave on July 21, 2010, thereby satisfying therequirements of section 14(1) of the Act.

For their part, the respondents say that the applicants knew, or ought to have known, thematerial facts on or before March 22, 2009, and the application for leave was therefore out of time. [6] The applicants argue that the essential elements of their cause of action are a duty, a breach of that duty, damage and acausal connection between the breach of duty and the damage.

While the applicants concede that material facts supporting a duty anddamage were easily identifiable by January 2009, they say it was only after further investigation on July 24, 2009, that Brian Sych, theircontractor for the remediation work (the remediation contractor), told the male applicant that the cause of the problems in his home wasfaulty workmanship.

They argue that the cause of the damage, as opposed to the nature or extent of that damage, was a distinct materialfact which the male applicant neither knew nor ought to have known prior to July 24, 2009. [7] The respondents point out that the application judge specifically considered this argument and rejected it. Hedetermined that, after realizing the extent of the damage to the residence and the obvious problems with the vapour barrier, theapplicants knew, or ought to have known, that the parties that designed and built the home less than 20 years earlier could be liable forthat damage.

Given the nature and the extent of the damage to the residence observed and known to the male applicant by March 2009,the respondents submit that it was (or ought to have been) obvious to him that one or both of the respondents might be liable for thatdamage at that time. [8] As Beard JA observed in Andison v Katz, 2012 MBCA 107, 288 ManR (2d) 53 (at para 33): [M]aterial facts of a decisive character do not require certainty or near certainty regarding either the prospect of success or of the amountof the damages that would flow in the event that the cause of action is ultimately proved.

All that is required is that the would-beplaintiff knew or ought to have known of facts that indicate a “reasonable prospect of (the action) succeeding” and that the action wouldresult in damages “sufficient to justify the bringing of the actions”. [9] In this case, the applicants contracted with the respondents to build them a high-end, custom built home. The homewas completed in 1994, and, within 15 years, they were experiencing significant moisture problems in the interior of the house.

Part ofan interior wall and the ceiling of a bedroom were removed in January 2009, to reveal wood rot on the wall studs and ceiling joistswhich was shown to the male applicant and described to him as being a structural problem. It was also pointed out to the male applicantthat the vapour barrier had become detached.

Similar problems were found during an inspection of the crawl space in late February andearly March 2009. [10] An engineer was retained, and, after conducting a thermographic survey of the entire house, he advised the applicantson March 22, 2009, that there was a fair amount of deterioration within the walls, such that remediation work should be undertaken inthe upcoming construction season. [11] Between July 20 and 24, 2009, the exterior walls were removed and the damage was examined.

It was at that point thatthe remediation contractor told the male applicant that the cause of the moisture infiltration and consequent damage was the faultyinstallation of the vapour barrier. [12] The application judge concluded that, upon receiving the results of the thermographic survey, “[g]iven their lifeexperience and education, the applicants ought to have known, at that time, that a link to this significant damage to the house could betraced to the actions of the parties they hired to design and build a high grade residence for them, less than 20 years earlier.” [13] In addition to the detached vapour barrier that had been observed in the bedroom and crawl space, there was adiscussion with the engineer in March 2009 about investigating the roofing and the HVAC system as possible causes of the problem.

These were, however, all investigations to determine the particulars of the cause of the moisture problem. Unlike the situation in Cahill v Mustapha Designs Inc et al , 2014 MBQB 217 , 311 ManR (2d) 138 , in this case, there was no suggestion of a cause that was not related to the construction, inspection and/or design of the house.

The details of the cause of the moisture problem are particulars of the claim against the respondents, but they are not separate causes of action. (See Swan River Valley Hospital District No 1 et al v MMP Architects et al , 2002 MBCA 99 at paras 21-31 , 166 ManR (2d) 129 .) [ 14 ] In our view, the application judge was entitled to conclude, on the evidence before him, that the applicants ought to have known of all material facts of a decisive character upon which their proposed action was based by March 22, 2009, and that they filed their application more than 12 months after that date.

In particular, it was not necessary for the applicants to have actual knowledge that defective workmanship caused the damage.

On March 22, 2009, the male applicant knew that there was structural damage and that significant remedial work was required, and the applicants ought to have known that they had a reasonable prospect of an action against the respondents succeeding and that the action would result in damages sufficient to justify the bringing of the action. [ 15 ] The applicants also argue that the application judge erred when he found that “[t]here was no dispute that the male applicant saw the wood rot and improperly attached vapour barrier in the guest bedroom in January.” The error, they say, is that there was no indication at that time that the vapour barrier was improperly attached, only that it had become detached. [ 16 ] In our view, the use of the phrase “improperly attached” meant that the vapour barrier had come away or that it was not properly attached when they were looking at it in January, not that it had been defectively attached at an earlier date.

It should be noted that, earlier in his decision, the application judge quoted the testimony of the male applicant on that specific point, so he was clear as to what the male applicant had been told in January, including that he was not told that the detached vapour barrier was attributed to poor installation.

Thus, while the application judge’s wording could have been clearer, we would find that there was no error in this regard. [ 17 ] Regarding the second ground of appeal, we are of the view that the application judge did not conflate the material facts proving damage with the material facts proving causation. [ 18 ] As there was no error in principle or misapprehension of fact, and as it cannot be said that the decision is so clearly wrong so as to amount to an injustice, the appeal must be dismissed. [ 19 ] The respondents shall have their costs on the appeal. JA JA JA