r v MJ Roofing, 2016 MBCA 77

Citation: Vickar v MJ Roofing & Supply Ltd, Date: 20160725 2016 MBCA 77 Docket: AI15-30-08428 IN THE COURT OF APPEAL OF MANITOBA Coram: Mr. Justice Alan D. MacInnes Mr. Justice Marc M. Monnin Madam Justice Janice L. leMaistre BETWEEN : ERIC LORNE VICKAR and SUSAN ) D. G. Hill MIRIAM VICKAR ) for the Appellants ) ) T. Spyracopoulos and (Plaintiffs) Appellants ) E. A. P. Haughey ) for the Respondent ) - and - ) ) Appeal heard: M. J.

ROOFING & SUPPLY LTD. ) January 11, 2016 ) ) Judgment delivered: (Defendant) Respondent ) July 25, 2016 MACINNES JA [ 1 ] The plaintiffs are owners of a home in Winnipeg and the defendant is a roofing contractor retained by them, from time to time, to inspect and maintain the home’s roof. The plaintiffs claim that, as a result of the defendant’s faulty work and failure to warn them of the deteriorating condition of the roof, substantial water damage was caused to their home. Their claim for damages against the defendant in both contract and negligence was dismissed by the trial judge (the judge).

The plaintiffs now appeal the dismissal of their claim. [ 2 ] The issues on this appeal are:

a) whether the judge erred in finding that there was no liability, either in contract or in tort, to the plaintiffs arising from the defendant’s inspections and maintenance of the roof; and

b) whether the plaintiffs failed to prove that they had suffered damages from the defendant’s actions or omissions. The Facts [ 3 ] The plaintiffs took possession of the home in question in August 2005. No home inspection was performed, nor were any inquiries made of the vendors as to any defects in the home. The home was large, with a flat-roof structure, consisting of five separate roofs (the roof). [ 4 ] Shortly after taking possession of the home, the plaintiffs retained the services of the defendant to inspect the roof.

The defendant had performed the same service for the previous owners over the last number of years. An inspection was completed, and the roof was reported to be in good condition other than the normal maintenance issues that a flat roof requires. [ 5 ] A severe storm occurred seven days after that inspection. Water penetrated the home around two windows, and dampness formed in the ceiling in the daughter’s bedroom, as well as in the ceiling in the front foyer. The defendant was asked to return to inspect the roof. It discovered that two of the five scuppers (or drains) within the roof required immediate repair.

The repairs were undertaken by the defendant. The plaintiffs were again advised by the defendant’s representative that the roof was in good condition, and that the majority of the moisture penetration was due to the windows. [ 6 ] In July 2007, after another period of heavy rain, water penetrated again. At the defendant’s suggestion, the plaintiffs obtained an opinion from another roofer in the fall of 2007.

It found there were a couple of areas of wet insulation on the roof, that the stripping felts at the hi/lo wall were fractured and that the scuppers’ seals were completely deteriorated and open and appeared to allow water into the roof system.

[ 7 ] Repairs to the roof were contracted to the defendant, who began the work in April 2008. It opened the roof, tore out some rotting insulation and repaired the two south scuppers. The plaintiffs decided at that time to retain the services of D. K. Bennett & Associates Ltd. (D. K. Bennett), a roofing expert, and stopped the defendants’ performance of the work. [ 8 ] The plaintiffs retained the services of Civic Roofing Inc. to perform the repairs, with D. K. Bennett acting as the plaintiffs’ consultant to review the work as it was done. In consultation with D. K.

Bennett and others, the plaintiffs were advised to, and did, replace the entire roof of the house. The demolition and replacement of the roof was supervised by Mr. Baitson of D. K. Bennett and Mr.

Bennett himself. [ 9 ] As well as the work on the roof, more work was required, including replacement of all of the windows, re-stuccoing of the exterior of the house and repair or replacement of internal furnishings, drywall, vapour barrier and insulation in some of the rooms of the home. [ 10 ] The plaintiffs made a claim to their insurer, Chubb Insurance Company of Canada, which engaged the adjusting firm of James Dubé Spraggs Adjusters Ltd.

The adjusters advised the plaintiffs in July 2009 that the insurer “accepts the cost to undertake the investigation to determine the extent of concealed/internal wall and ceiling damages” and would cover “the costs of conducting final repairs once the extent of damages are determined”. [ 11 ] On August 17, 2010, the adjuster wrote the plaintiffs, commenting further upon that which would be covered under the insurance policy respecting roof leakage but advising that “any damage conditions relating to rot and gradual deterioration arising from ongoing and repeated moisture exposure is not covered” and “[i]n addition, resultant damages arising specifically from penetration of water at window locations unrelated to the roof leakage are excluded from coverage and unclaimable.” [ 12 ] The plaintiffs also retained environmental engineers to assess the existence of mould as a result of the presence of water, and consulted with structural engineers to advise on the ultimate rebuilding of the roof, walls and windows. [ 13 ] Ultimately, the plaintiffs received $324,172.28 from the insurer, which chose not to advance a subrogated claim for its payment. [ 14 ] The plaintiffs’ testified that they spent a total of $576,412.08 to replace the roof and to perform repairs to the exterior and the interior of the house, including replacement of the windows.

At trial, the plaintiffs amended that amount to indicate that there was a $25,000 credit with respect to windows that had been omitted, leaving an amount of $551,412.08. After deducting the amount received from the insurer, a claim for the balance of $227,239.80 was advanced. Expert Evidence [ 15 ] Four expert witnesses provided reports and testified at trial. Their expertise was admitted. [ 16 ] The plaintiffs called two experts. The first, Mr. Baitson, had done the quality control inspections on the installation of the new roof. Mr. Baitson prepared 22 of the 25 reports written by D. K.

Bennett between September 30, 2008, and November 12, 2008, covering observations of the demolition, repairs and installation of the roof. As well, Mr. Baitson prepared a report which was filed at trial, outlining D. K. Bennett’s findings and recommendations. It concluded that: The most likely cause for the damage to the roofs [ sic ] insulation and to the water damage on the interior of the house would be from the scuppers on the roof. The leaks over time allowed water into the system and the insulation soaked up the water allowing the water to travel and leak into the building. [ 17 ] At trial, Mr.

Baitson confirmed his opinion that the cause of the leaks was the scuppers. As to the defendant’s performance, he testified that the defendant failed to perform a proper repair of the scuppers in August of 2005 (i.e., following the significant rain event which occurred seven days after its initial inspection). In a further report dated November 21, 2008, Mr. Baitson stated that: It is my opinion that the damage to the insulation and the interior damage to the wall could have been avoided with the proper care and maintenance by the roofer. M.J.

Roofing Ltd performed cut tests on the roof above your southwest bedroom and stated that the roof was fine and in good shape. They found holes at the scuppers that were leaking and only applied plastic cement to the holes to seal them, which is a temporary measure at best. . . . If a proper investigation had taken place M. J. Roofing Ltd would have noted, as Accord Roofing did, that the stripping felts at the hi/lo wall were fractured and could have implemented a repair and dramatically reduced the damage caused to the plywood on the south and west walls of your southwest bedroom.

[ 18 ] In cross-examination, Mr. Baitson admitted that leakage at the windows of the home could have been caused by wind- driven rain, and that his inspections found a number of reasons why there may have been condensation occurring at locations underneath the roof, one in particular being, that the vapour barrier was not applied correctly. As well, he noted that the only areas that were found with condensation were in the perimeter parapets, reiterating that, in his view, the problem was with the scuppers. [ 19 ] The plaintiffs also called Mr. Bennett of D. K. Bennett.

His opinion was that the cause of moisture infiltration was from the existing scuppers as detailed by Mr. Baitson. He testified that, while originally not of the opinion that the roof required replacement, he came to that conclusion based upon conditions that were found—the existing vapour barrier, air leakage and the general condition of the roof. [ 20 ] The defendant called two expert witnesses. The first was Mr. Rodger of NRG Management (NRG). Mr. Rodger is the owner and president of NRG, a firm specializing in the retrofitting of the mechanical and electrical aspects of a building.

He did not have the opportunity of inspecting the roof but, upon reviewing the reports prepared by Mr. Baitson and photographs, concluded that the deterioration was directly related to a failed vapour barrier and insulation, rather than issues related to the roof. In his view, the damage caused by a failed scupper would be more localized near the scupper or in the wall below it. [ 21 ] The defendant also called Mr. Oliver, an architect, who also did not have the opportunity of seeing the roof before or while it was rebuilt. He reviewed the reports of Mr.

Baitson, as well as photographs and original working drawings of the home to prepare his opinion. He concluded that there were deficiencies in the initial construction of the home, particularly with respect to the installation of the vapour barrier. He noted that in the reconstruction of the roof, additional scuppers were added, suggesting that the initial design of the roof was deficient. He opined that, while there may have been some damage caused by the scupper failure, it would have been localized, and not to the extent of the problems which occurred.

In his view, the major concern was with the failure of the vapour barrier. [ 22 ] On cross-examination, he did concede that finding wet insulation on the roof was a roofing problem, which could become a wall problem. As well, he agreed that an area of wet insulation on the roof was a demonstrated problem that required investigation and possibly destructive testing to understand the source. The Trial Judgment [ 23 ] The judge commented on the fact that there were competing experts on both sides. However, he discounted their reports, saying that nothing turned on them and relied on their viva voce testimony.

Applying the “but for” test, he concluded that the damages to the roof were not the result of the actions of the defendant in performing its inspection and maintenance duty, but rather due to the inadequate design, and original poor construction techniques, including the faulty installation of the vapour barrier and sealing issues around the windows. [ 24 ] He accepted the defendant’s evidence that the windows, and not the roof, were the cause of the water penetration through the walls of the home, as demonstrated by a seal test performed by the defendant for the original owners and prior to the plaintiffs taking possession of the home.

He noted that there was clear evidence that the five scuppers were not doing the job. [ 25 ] As to the contractual claim, he agreed that, by arranging for the inspection, the plaintiffs were entitled to rely upon the representations made by the defendant in its report. Representations as to the problems with the windows had been provided by the defendant to the plaintiffs. There was no negligent misrepresentation as the poor design and original construction of the roof, including faulty installation of the vapour barrier and insulation material, could not have been known to the defendant.

It therefore, had no responsibility to the plaintiffs. [ 26 ] As to damages, the judge concluded the plaintiffs had suffered no loss. He found that the plaintiffs did not introduce evidence that met the burden of proving their loss on a balance of probabilities. He took issue with the failure of the plaintiffs to provide evidence from the insurance adjuster, particularly his file material, to describe what damages had been covered by insurance.

In his view, the evidence of the plaintiffs fell short of proving that they had suffered damages caused by the negligence or breach of contract of the defendant over and above the amounts which had been reimbursed by insurance. Issue No. 1—Is the Defendant Liable in Tort of Contract ? [ 27 ] The plaintiffs raised numerous grounds of appeal (17) which have been synthesized in the above issue.

Their position is that the judge relied upon irrelevant findings relating to the plaintiffs’ relationship with the previous owner, and their imprudence in failing to obtain a home inspection report prior to the purchase as forming part of his reasons for finding against them. In their view, he discounted the expert evidence of the plaintiffs without articulating why he did so, and improperly summarized their view on other parts of the evidence.

He made palpable and overriding errors in his finding of facts on the evidence presented, which led him to apply the required “but for” test improperly. [ 28 ] In response, the defendant says that, while the judge may have erred in his assessment of the evidence in certain unimportant facts, such as to whether the plaintiffs had a close relationship with the vendors and the extent to which the plaintiffs’ expert, Mr.

Baitson, agreed that the vapour barrier was deficient, it says that this did not amount to overriding errors affecting the reasoning which led him to conclude that the problem was not one of roof maintenance, but rather of poor design and original construction. Analysis [ 29 ] There was certainly evidence before the judge that design issues and original construction techniques, including the failure to provide a proper vapour barrier, were contributing factors to the damage to the home.

The fact that a seal test was performed successfully prior to the plaintiffs taking possession led him to conclude that this was not a roofing matter, although he indicated that there was evidence at the time that the scuppers were not performing properly. He concluded that the problems with respect to windows were the cause for water penetration through the walls, given the seal test. He indicated that the plaintiffs were aware of advice from the

defendant that the windows had to be looked at. [ 30 ] There was, however, evidence of Mr. Willman from the defendant that, while he told the previous owners of his belief that the windows were the cause of water entering the house, this could not explain the water damage indicated on the roof itself. Indeed, he acknowledged that in 2007 there was evidence of a scupper problem that caused damage, and that evidence of wet insulation and dry rot in the area of the scuppers was evidence of the fact that something was happening that should not be happening. Mr.

Willman also admitted that the defendant came out to fix the scuppers but did no investigation as to damage.

Nor, I note, did it recommend any follow-up investigation. [ 31 ] In my view, the judge erred when he focussed on the design and construction problems of the house as the explanation for the damage to the roof, without considering the role played by the defendant in the performance of its contractual obligations to the appellants. [ 32 ] The issue before the judge was whether the defendant, in performing its contractual obligations to inspect and maintain the roof, failed in its duty to do so to the standard expected of a roofer with experience and expertise in roof inspection and maintenance, as a result of which some or all of the damages occurred.

Whether or not the original cause of the water presence was design and construction issues, the question remained to be determined as to whether the defendant should have noted a problem when it performed its roof inspections in August 2005, and thereafter, including whether, in light of its findings, it should have recommended further exploratory work to determine the ultimate cause of the water presence in the roof structure.

If it failed to perform its services in accordance with its contractual obligations, and damages to the roof occurred or were exacerbated from that period on, liability for negligence or a contractual breach would lie. [ 33 ] In that scenario, the evidence of the expert roofers, with respect to what would have been expected of the defendant in performing its inspection and maintenance obligations, is relevant. Mr. Baitson, the expert for the plaintiffs, placed the cause of the water damage respecting both the roof and the interior of the house to be from the improper repairs to the scuppers.

The defendant’s experts did not deny that there was damage surrounding and potentially caused by the defective scuppers, but suggested that such damage should have been localized, as opposed to the wider damage on other parts of the roof and house. [ 34 ] By failing to consider, in assessing the defendant’s potential liability, the role played by the defendant’s lack of proper inspection and reporting in August 2005 and subsequently, the judge committed a palpable and overriding error.

The seal test performed years prior had no bearing on the damages caused by the failure to perform the appropriate inspection and repairs to the scuppers in the summer of 2005 and thereafter. [ 35 ] After reviewing the evidence provided by the experts for the plaintiff (the reports as supplemented by the viva voce evidence), I am led to the conclusion that the work performed by the defendant in the summer of 2005 and thereafter was not to the standard expected of a roofer competent in the trade. The evidence of Mr.

Baitson, uncontradicted by the defendant’s experts, was that the scuppers were deficient and should have been attended to, as well as further testing done. There was a breach of duty and a failure to meet its contractual obligation by the defendant. What damages flow from that breach become the problem. Issue No. 2—What, if Any, Damages are the Plaintiffs Entitled To? [ 36 ] The judge concluded that even if there was liability, in his view, the plaintiffs had suffered no loss, as they had been compensated by their insurance company in the amount of $324,000. [ 37 ] In answer to the question from his counsel, Dr.

Vickar, one of the plaintiffs, testified as follows: Q And he [referring to the insurance adjuster Mr. MacKenzie] looked through your house? A Yes. Q Trying to determine what water damage was caused by the roof? A Correct. Q And in the end, they found apparently that $324,000 was caused by the roof because that’s what they paid you? A Yes. [ 38 ] The judge was perturbed that the adjuster’s reports were not tendered into evidence, nor was the adjuster called as a witness by the plaintiffs. He said that the evidence before him was that the reports of the adjuster were either lost or destroyed.

[ 39 ] As well, he was perturbed that the plaintiff acknowledged at trial that he was now crediting the amount of $25,000 towards the cost of replacing the windows: But I remain troubled by the acknowledgement of the mysterious $25,000 payment received by the plaintiffs, only discovered on the eve of the trial. Given that explanation, together with the loss of the insured’s file and, and this late discovery, seems unfathomable to me. Without those records it is impossible for me to say with any certainty what damages may have been suffered by the plaintiffs. [ 40 ] The judge then concluded: The fact that Dr.

Vickar stated in re-examination that he had been reimbursed for all the damage caused by problems with the roof, and then taken together with the issues of the records that are not present before me, I am not satisfied that the plaintiffs have met their burden. And then, and what I do find, is that on a balance of probabilities, that there has not been any damage suffered by the plaintiffs as a result of Dr. Vickar’s evidence, that he received full payment. [ 41 ] In my opinion, the judge misapprehended the evidence as to the plaintiffs being fully paid by their insurer for all of the roof damage.

Firstly, the adjuster made clear in his correspondence tendered at trial, what items the insurer considered as compensable under the policy, namely:

a) costs to undertake investigation and to determine the extent of concealed/internal wall and ceiling damages;

b) costs of conducting final repairs once the extent of damages was determined;

c) removal and replacement of stucco cladding on the entire perimeter of the residence; and

d) interior resultant damages, including drywall/insulation removal and replacement, as well as redecoration of the affected areas. However, the adjuster also wrote that “any damage conditions relating to rot and gradual deterioration arising from ongoing and repeated moisture exposure” was not covered, nor were “resultant damages arising specifically from penetration of water at window locations unrelated to the roof leakage”. [ 42 ] In my view, placing the evidence in context, Dr. Vickar did not admit that payment of $324,172.28 paid the plaintiffs in full for all the roof damage.

Rather, he was acknowledging only that the plaintiffs were paid $324,172.28 for the damage that the insurer concluded was the value of the loss for which it was prepared to provide compensation, but excluding damage “relating to rot and gradual deterioration arising from the ongoing and repeated moisture exposure” as well as “resultant damages arising specifically from penetration of water at window locations unrelated to roof leakage”. [ 43 ] The judge went on to discuss the issue of double recovery by the plaintiffs, but, in fact, the plaintiffs never claimed double recovery. [ 44 ] They asserted their loss at $576,412.08, but they acknowledged receipt of $324,172.28 from their insurer in payment of the roof damage, for which coverage was provided, plus a credit of $25,000 towards the cost of replacing the windows. [ 45 ] The plaintiffs accepted that they could not seek recovery (double recovery) of $324,172.28, albeit that the insurer chose not to advance a subrogated claim against the defendant for that amount. [ 46 ] In the end, after deducting the amount received from their insurer and the credit of $25,000, which they received towards the cost of replacing the windows, their claim was advanced for $227,239.80. [ 47 ] There is no question that the plaintiffs are entitled to claim damages beyond that for which they have been reimbursed by their insurer in compensation for items deemed compensable by the insurer.

However, such damages must be proved by the plaintiffs on the balance of probabilities, as having been caused by the negligence or breach of contract of the defendant, and, as well, as to amount. In this case, there is abundant evidence that the roof structure was flawed from the outset, both as to design and original construction. [ 48 ] As well, there is clear evidence that the windows of the house were either unsuitable as to quality and/or that they were installed deficiently, and that significant water penetration resulted on several occasions.

Ultimately, the plaintiffs chose to replace all of the windows at considerable cost. How this could be attributable to the defendant, whose responsibility was roof inspection and maintenance, is not apparent. [ 49 ] Moreover, the plaintiffs’ evidence as to damages, both as to causation by the defendant and as to amount generally, is seriously deficient. While it is clear that the plaintiffs received $324,178.28 from their insurer, there is no evidence as to precisely what items of damage that payment covered.

It is therefore easy to deduct the total amount from the overall damage claim, but it is impossible to ascribe that amount to specific particulars or items of the plaintiffs’ claim. [ 50 ] The same holds true for the remainder of the claim, that is, there are amounts claimed for, but no evidence from the persons who supplied the materials or performed the work, or from the plaintiffs, sufficient to identify and connect the amounts paid to damages caused or contributed to by the negligence or breach of contract of the defendant.

[51] What is clear, however, is that there was damage caused by rot and gradual deterioration arising from ongoing andrepeated moisture exposure in the roof structure. This was excluded from payment by the insurer. Mr. Willman’s evidence was thatthere was a scupper problem and that evidence of dry rot and wet insulation in the area of the scuppers indicated that they were notworking properly. Still, it is impossible to determine with any degree of specificity the exact amount of the damages that arose as aresult of the defendant’s breach.

Moreover, we are not helped in attempting to quantify such damage, due to the lack of evidencedetailing the repairs and to which portions of the home they were performed. [52] While the calculation and the assessment of the damage may be difficult, a trial judge must do the best he can in thecircumstances. As stated by Seaton JA in British Columbia Hydro and Power Authority v Marathon Realty Co Ltd et al (1992), (BC CA), 11 BCAC 185 (at paras 30-31): In my view, what we have here is a case in which it is quite impossible to calculate the loss with great precision. Nor can we calculatethe cost of each item.

It might not be impossible but it would be unreasonable to spend the court’s time valuing each letter, each phonecall, each intervention by a Hydro person. This is not a case of there not being proof of a loss. There is proof of a loss but it is one that is difficult to quantify.

The court has anobligation to do so, keeping in mind that the onus is on the plaintiff. [53] Cromwell JA (as he then was) wrote in BMG v Nova Scotia (Attorney General), 2007 NSCA 120, 260 NSR (2d) 257 (atpara 172): The principles concerning certainty of damages deal with the quantification of a loss proven to have been caused by the wrongdoer’sacts. If the plaintiff establishes that a loss has probably been suffered, the difficulty of determining the amount of it does not excuse thewrong-doer [sic] from paying damages which can be proved.

Even though the amount is difficult to estimate, the court must simply doits best on the evidence available: S.M. Waddams, The Law of Damages, 2nd Ed. Looseleaf (Toronto: Canada Law Book Ltd., 1991),at para. 13.30. This is often summed up by saying that difficulty of assessing damages is no bar to their recovery. [54] In the circumstances, the best that can be done is an arbitrary determination.

I would assess an amount of $25,000,beyond that paid by the insurer, as an approximation of damages occurring to the roof and home as a result of the failure of the defendantto perform the inspection and the necessary repairs and provide appropriate recommendations in the fall of 2005 and thereafter. [55] In the result, I would allow the plaintiffs’ appeal and order payment of damages in the sum of $25,000. [56] As a result of my decision on liability, I would deny the defendant’s counterclaim. I would allow party and party costsin the Court below and in this Court to the plaintiffs.

This is assuming that Manitoba, Court of Queen Bench Rules, Man Reg 553/88 r 49is not in play. JA I agree: JA I agree: JA