The Owners, Strata Plan No. VIS3578 v. Canan Investment Group Ltd., 2009 BCSC 39

IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: The Owners, Strata Plan No. VIS3578 v.
Canan Investment Group Ltd.,
2009 BCSC 39
Date: 20090119
Docket: S087063
Registry: Vancouver
Between:
The Owners, Strata Plan No. VIS3578
Plaintiff
And
Canan Investment Group Ltd.,
Degelder Construction Co. Ltd.,
City of Victoria,
John Doe and Joe Doe Limited
Defendants
Before: The Honourable Mr. Justice Burnyeat
Reasons for Judgment
(from Chambers)
Counsel for The Owners, Strata Plan No.
VIS3578
J.G. Mendes
J.L. Whately
Counsel for N.A.P. Building Products, a
division of John Doe #4 (alternatively referred
to as N.A.P. Building Products, a division of
Aluminart Products Ltd.) and N.A.P.
Commercial Limited (alternatively referred to
as John Doe #4, a dissolved company formerly
known as N.A.P. Commercial Limited)
J.A. Doyle
Counsel for Plaza 88 Developments Ltd. I.G. Schildt
Counsel for Jeffrey Popham M.J. Hargreaves
Counsel for Major Mechanical Ltd., Maurice
Tearle and Ken Morris
M.J. Lawless
2009BCSC39(CanLII)

The Owners, Strata Plan No. VIS3578 v.
Canan Investment Group Ltd. Page 2
Counsel for John A. Neilson Architects Inc. and
John A. Neilson
R. Warburton
Counsel for Myles Sterling Holdings Ltd. and
Myles Sterling
K.A. Short
Date and Place of Hearing: November 5, 6 and 10, 2008
Vancouver, B.C.
2009BCSC39(CanLII)

[1] Pursuant to Rules 15(5), 15(6), 24(4), 24(6), 44(10 through 18) and 64(13) of the
Rules of Court, the Plaintiff applies for an order that certain persons and entities be
added as Defendants to this Action, that the style of proceeding be amended
accordingly, and that it be granted leave to amend the Writ of Summons and file the
Statement of Claim that is attached as a schedule to its Motion.
BACKGROUND
[2] This action deals with a “leaky condo” project. The Plaintiff claims damages
against the existing Defendants involved in the construction of a condominium building
located at 835 View Street, Victoria known as “The Metropolitan” (“Condominium”). The
contract to build the Condominium was with Plaza 88 Developments Ltd. (“Plaza 88”).
However, because Plaza was not registered under the New Home Warranty Program
(“New Home Warranty”), the actual work was undertaken by the Defendant, Degelder
Construction Co. Ltd. (“Degelder”), a company related to Plaza 88.
[3] On November 26, 1993, a building permit was issued for the construction of The
Metropolitan. On January 25, 1995, an occupancy permit was issued. The owner of
one strata lot had early concerns about the stucco of the Condominium and expressed
those concerns to the developer, Canan Investment Group Ltd. (“Canan”), to the City of
Victoria and to the strata council (“Council”). On January 25, 1995, Canan wrote to that
owner regarding “her concerns with the stucco work”. The letter enclosed a January 18,
1995 report from Gordon Spratt & Associates (“Gordon Spratt”) regarding the quality of
the stucco and its compliance with the Building Code (“Spratt Report”). The Spratt
Report noted some deficiencies in the application of the stucco and concluded: “It is our
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opinion that, in substance, the stucco application satisfies the project specifications. In
certain instances, the building deficiencies noted above have been pointed out to the
contractor, Degelder Construction Co. Ltd. and will be rectified.”
[4] The January 25, 1995 letter assured the owner that the problems noted in the
Spratt Report would be repaired:
This report has been forwarded to the City of Victoria and any items which
have been identified as deficient will have to be corrected by the General
Contractor prior to us releasing any holdback monies. In this regard, the
City of Victoria has also requested a bond to cover any deficiencies and
the Contractor’s obligation under their Construction Contract. Our
Contractor is bonded and we will insist that the job has been completed to
satisfy all requirements....
PROBLEMS FIRST DELINIATED
[5] On April 12, 1995, the Plaintiff asked the Northwest Wall and Ceiling Bureau
(“Northwest”) to “confirm that our building does indeed meet all currently applicable
standards … in the following category: the exterior stucco system complete with vapour
barrier and all necessary grounds, skreeds, lathe, and wire mesh”. On June 2, 1995
Robert Drury of Northwest delivered a report (“Northwest Wall Report”) that advised:
I was not able to investigate if the water resistant paper or the
reinforcing lath were properly installed. They were covered with stucco. If
the paper was not put on according to industry standards the building
could be faced with water penetration problems. If the lath was not
properly mechanically fastened to the framing members. or if it was not
properly lathed, it could effect the stucco membrane regarding cracking.
The construction documents for this project called for ¾” of portland
cement plaster. The documents refer to the stucco work to be done per
the building code, which calls for ¾” of stucco. They also refer to the
Association of Wall & Ceiling Contractors of B.C. specifications for stucco,
which calls for ¾” thick. The stucco membrane on this project is ½” thick,
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not ¾”. There are ½” #66 casing beads as grounds, and not ¾”. The
standards for vertical stucco application over self furred reinforced lath
requires a minimum thickness of ¾”. This thickness is important in order to
receive the correct physical properties of the membrane. ¾” thickness is
required for correct curing, and to help reduce cracking.
A conventional portland cement plaster (stucco) cladding system is ¾”
thick, not ½” thick.
The construction documents show metal lath and plaster for the
horizontal cornice. The cornice work on this project is sheet metal with an
acrylic finish applied directly to it. There are vertical cracks where the
sheet metal abuts one another. These cracks can be attributed to
movement of the metal during temperature changes.
The acrylic finish coat is not recommended to be sprayed directly over
sheet metal.
The soffit which runs directly under the sheet metal cornice is
gypsum board. There are signs of deterioration of the joint compound
materials that were used in conjunction with the board. It appears that
moisture is reimulsifying the joint compound and effecting the durability of
the gypsum board.
It is my opinion that the wrong type of building materials were used for the
soffit, and it lacks proper design regarding a drip.
The horizontal reveals, in some locations on the south elevation, do
not completely go to the corners of the building. There are also locations
where the reveals are open at the ends, thus would allow water to enter.
Soffits in the parking and drive through area have open gaps of ½”
wide. It appears that they were designed to have control joints installed.
The southeast corner outside of Unit 1202, where the stucco meets
the soffit, has not been properly done. There is a large gap where the
stucco did not run up all the way to the soffit and/or there is no caulking.
This is definitely an area where water will enter.
There are other areas on the exterior building where additional caulking is
required. There are also areas, such as at the mechanical penthouse,
where lack of flashing will contribute to water entering that space.
It is my opinion that caulking, flashing, and proper drips should all be
addressed on this building in order to prevent water penetration or
damage.
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The finish surface on the walls are dished in locations, and there
are a few horizontal cracks on the west elevation at the penthouse area.
[6] Canan acknowledged receipt of the Northwest Wall Report on June 23, 1995 and
advised the Plaintiff that a copy of the report had been forwarded to the architect, the
builder and the project manager “for their immediate attention” adding: “[We] have
requested written assurances regarding the stucco ... from all involved parties. We are
anxious to have any deficiencies resolved as soon as possible.”
[7] By a September 13, 1995 letter, Canan further assured the Plaintiff that any
problems with the stucco had been or would be repaired:
… we would like to assure you that we have not taken the stucco issue
lightly.
In order to deal with questions regarding the stucco system, the architect,
in addition to his own site inspection, engaged an independent third party
engineer to review the stucco. Based on the Architect’s report, the
independent engineer’s letter and the City’s own inspections, an
occupancy permit was issued on January 25, 1995. To the best of our
knowledge any deficiencies have been, or are in the process of being,
corrected.
In addition, there is a one year warranty, along with a contractor bond in
place until January 25, 1996. Any problems that may arise, will be dealt
with prior to the warranty period ending.
CLAIM UNDER THE NEW HOME WARRANTY PROGRAM
[8] The Plaintiff sought to have the defects identified in the Northwest Wall Report
repaired under the warranty provided by the New Home Warranty which covered
defects in workmanship and materials for a period of one year and major structural
defects for five years. The Plaintiff applied to New Home Warranty for “conciliation” of
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its dispute with Plaza 88. The April 29, 1996 New Home Warranty conciliation award
found that: (a) Plaza 88 was required to rectify water leaks in the sunroom at unit 1202;
(b) a complaint of leakage at the southwest and southeast corners of the building was
withdrawn as it had been repaired by Plaza 88; (c) no defects were observed in the
caulking, which was an ongoing maintenance responsibility of the Plaintiff; (d) Plaza 88
was required to rectify the application of stucco directly on the metal cornices; (e) Plaza
88 was required to rectify a high drain in the balcony of unit 1202; (f) no further action
was required in relation to flashing / weatherstripping of a window in the attic; (g) leaking
into the stairwell to the attic had been repaired by Plaza 88 and no further action was
required; and (h) a leak into the P2 level of the parkade had been repaired by Plaza 88
and no further action was required.
[9] On June 12, 1996, the Plaintiff received a further conciliation award from New
Home Warranty regarding the stucco cladding. The award advised that no further action
was required under the warranty because of the assurances of Code compliance
provided by Hamilton Doyle Architects (“Hamilton Doyle”) and Gordon Spratt:
As Part 9 of the Code is not applicable in this situation, the issue of the
adequacy of the stucco falls under Parts 5 and 2. Specifically, the cladding
system should not allow water leakage into the building and the
“Registered Professional” providing the “Assurance of Professional
Review and Compliance” has the authority to accept a lesser standard
than that which is outlined in Part 9. The authority is based on the design
judgment of the authorized Professional. Reliance as to the adequacy of
the system is then placed on this Professional.
In light of the assurances provided by Gordon Spratt & Associates’
correspondence dated January 18, 1995 and Hamilton Doyle’s
correspondence dated May 9, 1996 New Home Warranty does not require
remedial repairs to be undertaken to the stucco cladding to have the
system comply with Part 9 of the British Columbia Building Code,
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[10] As a result of this ruling, “no further steps were taken by the strata council to
investigate or consider any further action with respect to the exterior of stucco at the
Condominium”.
[11] In a February, 1997 letter, the Plaintiff wrote to New Home Warranty disputing
some of the conclusions set out in the conciliation award and identified ongoing
instances of water penetration at various locations in the building. In a March 20, 1997
letter, the New Home Warranty representative addressed the issues raised in the
February, 1997 letter and, for a number of items, indicated that further information or re-
inspection was required. There is nothing further in evidence as to whether that further
information was provided or whether the re-inspections occurred.
[12] New Home Warranty arranged for contractors to repair the deficiencies set out in
its conciliation award. The January 12, 1998 Council meeting minutes record that this
work was completed at about that time: “New Home Warranty has sent Cottage Grove
Industries in to finish the last outstanding item from our common area deficiency list.
This should end our claims under the first year clause.”
WINDOW WARRANTY OF N.A.P.
[13] The Plaintiff also made a claim under a window warranty provided by the
proposed Defendant, N.A.P. Building Products, a division of Aluminart Products Ltd.
and/or N.A.P. Commercial Limited, a company now dissolved (N.A.P.). At the March 4,
1999 Annual General Meeting of the Plaintiff, Mr. Popham advised that the “warranty
was valid until the end of April and a claim has been made by Cornerstone Properties”
2009BCSC39(CanLII)

[the property manager employed by the Plaintiff] (“Cornerstone”). Mr. Popham further
advised that “the manufacturer was very difficult to deal with, but Bill Middleton finally
had success in getting them to accept the claim”.
[14] The status of the N.A.P. warranty claim was described as follows in the minutes
of the August 30, 1999 Council Meeting: “While NAP has acknowledged that the
warranty claims presented by Cornerstone Properties Ltd. on behalf of the Metropolitan
are valid, NAP is claiming a discrepancy as to what type of glass is required (regular v.
Safety glass).” On November 4, 1999, Cornerstone reported that the installation of the
replacement windows under warranty from N.A.P. was proceeding.
FURTHER STUDY AND REVIEW
[15] At the November 4, 1999 Council meeting, one Council member suggested that
the Plaintiff be “proactive” and obtain a report on the condition of its building envelope
because such reports were being requested by realtors:
It was suggested by Fiona Nay that the Council explore having a Building
Envelope Inspection performed. She wanted it on the record that this is
not being brought forward as a result of any waterproofing difficulties, but
rather to be proactive, as many realtors are now asking for this for their
potential buyers. This could be an item for consideration at the Annual
General Meeting next year. Bill Middleton was asked to obtain a quote for
a Building Envelope Inspection. [original emphasis]
[16] At its January 20, 2000 meeting, the Council resolved to hire a building envelope
consultant as part of its maintenance of the Condominium: “Building Envelope
Inspection was discussed. There are no major leaks in the building to date; however, to
2009BCSC39(CanLII)

insure that The Met maintains a positive market value, the Council feels that a cost of
$8000 per unit to have an inspection conducted would be beneficial.”
[17] The Plaintiff received a draft building envelope condition assessment report from
RDH Building Engineering Ltd. (“RDH”) in July 2001. The final version of this report
(“RDH Report”) was received in August 2001. The RDH Report found that defects in
walls, windows, doors, balconies and roofs were permitting water ingress into the
exterior walls and strata lots. It found that this water ingress would continue to corrode
steel studs and fasteners and damage sheathing, giving rise to a risk of detachment of
portions of the stucco walls:
This report documents the current condition of elements of the building
envelope. It may also provide information related to the specific sources of
moisture or other physical factors which have resulted in the observed
conditions. The report is not intended to provide our opinions regarding
the actions or services provided by individuals or organizations which may
have contributed to or caused the observed conditions.
[18] Mr. Sipos is a principal of Canan. He attended a September 25, 2001 meeting of
Council concerning the condition of the building and recommended that a second
opinion be obtained from another engineering firm. Council resolved to seek a second
opinion and took steps in the fall and winter to find a consultant to provide a second
opinion.
LEGAL ACTION
[19] Council retained a solicitor, Glen Crawford, in June 2000. On August 16, 2001,
Mr. Crawford delivered a notice of claim to the City of Victoria pursuant to s. 286 of the
Local Government Act, R.S.B.C. 1996, c. 323, to the City of Victoria. The Writ of
2009BCSC39(CanLII)

Summons in this Action was filed on February 8, 2002. The Writ named Canan,
Degelder, the City of Victoria, “John Doe”, and “John Doe Limited” as Defendants. By
this time, Degelder had not actively carried on business for approximately six years. Mr.
Crawford advised the Plaintiff that other defendants who might be responsible for its
damages could be added to the Action at a later date but it is stated on behalf of the
Plaintiff that it “was not advised by Mr. Crawford as to when those steps needed to be
taken”.
[20] Owing to the poor health of Mr. Crawford, the Plaintiff retained Mr. Di Bella in
August 2002. In an October 10, 2002 letter, Mr. Di Bella advised that it would not be
possible to determine who was liable for the defects in the Condominium until it was
repaired:
From my reading of the RDH Report, that Report does not set out who is
at fault for the premature building envelope failure. This report does not
set out the scope of deficiencies in the strata corporation sufficient, in my
view, to have issued a writ of summons. In my view, until the strata
corporation goes through the process of remediating its common property
by opening the “skin” of the building and visually determining what went
wrong as the building was built, and pointing out who was likely at fault in
creating these noted deficiencies, as the remediation takes place, it is not
possible to properly advance a claim the strata corporation has against
various possible defendants.
[21] Mr. Di Bella further stated:
I anticipate that my acting for the strata corporation will require some or all
of the steps described below ….
a. further investigation, with your cooperation and participation, to
identify events and documents on which the action will be founded;
b. preliminary review of legal issues arising from the forgoing [sic]
review of factual matters;
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c. commencement, if instructed, of court proceedings by preparing
and filing court documents and delivering them to the opposing
party; …
l. investigation of the status of the various defendants to determine, if
possible, if the action is worth pursuing.
You hereby authorize me to perform such of the services above as I may
judge appropriate in the circumstances. You further authorize me to
engage such agents, consultants and experts as I may consider
necessary.
[22] Mr. Di Bella served the Writ of Summons on Canan, Degelder and the City in or
around January 31, 2003.
[23] On November 10, 2003 Mr. Di Bella received a trades list from Cornerstone.
This trades list included the contact persons for many of the trades listed. Included
within this list were the proposed defendants, Messrs. Neilsen, Morris, Tearle, and
Sterling.
[24] In or around September 2005 Mr. Di Bella was asked by Cornerstone whether
the “Architect Society” was a defendant or could be added to the Action. Mr. Di Bella’s
September 12, 2005 reply made various observations about the addition of parties:
Mr. Di Bella had examined “some of the filings at the City of Victoria” since
being retained.
RDH had concluded that the Condominium suffered from “premature
building envelope failure” attributable to “inappropriate design, detail, and
implementation or installation of the original building envelope, and the
use of inappropriate materials”. RDH observed that the evidence
“justifie[d] continuing litigation with a view to mediating a settlement from
the various parties who contributed to the premature building envelope
failure of the Metropolitan”.
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[25] Mr. Di Bella concluded that he was “prepared to recommend to the Council and
to all owners in The Metropolitan that The Metropolitan continue the Action”. He sought
the following instructions: (a) “Complete the investigation of which contractors and
subcontractors to add to the Action including the Architect”; and (b) Review the
anticipated report by [RDH] when received and then file a Notice of Motion to add the
additional parties to the Action.
[26] Mr. Di Bella requested a report from RDH in March 2006. Mr. Di Bella received
an incomplete draft of RDH’s report in July 2006. During a review of the documents of
the City on December 8, 2006, Mr. Di Bella’s colleague discovered a conflict of interest.
Mr. Di Bella advised the Plaintiff of this conflict shortly thereafter and his retainer
terminated in December 2006.
[27] Mr. Di Bella has deposed that he advised the Plaintiff that it would be necessary
to add more parties to this action but that an application to add these parties should only
be brought after the repair of the condominium was complete:
As was my practice at the time when dealing with “leaky condo” litigation, I
advised the Plaintiff on more than one occasion during my retainer that
likely additional parties would need to be added as defendants in the
Action. However, I advised the Plaintiff throughout my retainer that it was
my view that it was appropriate to complete the remediation process and
during the course of the remediation of the building envelope for the
Condominium to have an engineer visually determine, after opening up
the building envelope, what went wrong with the building envelope and
who was likely at fault for the deficiencies before attempting to identify
potential liable parties, and before pursuing an application to add
defendants.
Throughout my retainer it was my advice to the Plaintiff that before having
an engineer’s report in hand that confirmed which potential parties were
liable and the basis for a claim against them, it was not prudent to
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advance a claim against various potential defendants. In essence, I was of
the view, and advised the Plaintiff accordingly, that before knowing if there
was a viable cause of action to pursue against a potential defendant, it did
not make sense to proceed with an application to add defendants.
Consequently, I did not at any time during my retainer advise the Plaintiff
to pursue an application to add parties to the Action, nor did I take any
steps to predetermine who might potentially be a defendant in the Action
except to have the Condominium retain RDH to prepare the tender
documents for the remediation of the premature building envelope failure,
supervise the remediation of the premature building envelope for the
Condominium and provide me with a Scott Schedule setting out who was
potentially at fault for the Condominium premature building envelope
failure.
[28] Mr. Di Bella’s belief that it was necessary to have a report from an engineer on
liability was based on his understanding of the law:
During my retainer in this matter, I believed that I required the information
from an engineer as described above before proceeding with an
application to add defendants to the Action. It was my understanding of
the law that it was necessary to have such evidence in order to
successfully add a proposed defendant to the Action.
[29] At no time was Mr. Di Bella instructed by the Plaintiff to delay the joinder of
additional defendants:
At no time during my retainer was I instructed by the Plaintiff to delay the
joinder of additional defendants. I did not advise them at any time during
my retainer that it was necessary to pursue an application to add
defendants prior to the receipt of the final engineer’s report and Scott
Schedule.
[30] Mr. Di Bella was unaware of the Northwest Wall Report until June 5, 2007, when
he was advised of its existence after the termination of his retainer. The Plaintiff
retained Lesperance Mendes in February 2007.
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[31] On May 1, 2007, the Plaintiff filed a “parallel writ” naming all of the present
Defendants and proposed defendants in this Action as defendants in that action
(“Second Action”). That writ was served on April 21, 2008 because of the one year
deadline for service. The cover letter advised that the writ had been filed in keeping
with the practice in Strata Plan LMS 343 v. Haseman (2007), 70 B.C.L.R. (4th
) 37
(B.C.C.A.), that an Appearance and Statement of Defence was not required, and that
the Plaintiff would not proceed against any party joined in the Second Action if that party
was “ultimately joined” in this Action. In this regard, the Plaintiff states that it was
merely taking prudent steps to ensure that its claim was not defeated by the further
passage of time should the Court conclude that the joinder was not just and convenient.
The concept of a “parallel action” was stated to be “a cautious step” by Garson J. in
Strata Plan LMS 2262 v. Ericson Window Corporation (2005), 44 C.L.R. (3d) 257 at
para. 23. I agree with that assessment.
[32] The application of the Plaintiff to join various parties in this Action was originally
set to be heard on July 17, 2007 but was adjourned by consent. Plaza 88 agreed that it
would not rely upon any delay after July 3, 2007 in opposition to this application. No
other parties reached such an agreement.
[33] On August 23, 2007, the Plaintiff filed a Statement of Claim in this Action and on
September 26, 2008, the Plaintiff delivered a Motion seeking production of documents
from various non-parties including Mr. Degelder and Plaza 88. That application was
heard and dismissed on October 15, 2008.
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REMEDIAL WORK
[34] At a June 16, 2003 Special General Meeting, the owners of the Plaintiff
considered a special levy of $5,336,000.00 payable on January 15, 2004 to repair the
building and fund management, legal and engineering costs associated with any legal
action to recover all or part of the costs of remediation. 57 of the 93 owners present at
the meeting voted in favour of the resolution (61%), but the resolution failed to obtain
the required 75% approval so the motion was defeated. Mr. Di Bella was asked to
report on the status of the litigation at this meeting. He replied that a Writ had been filed
and served and added: “Until you actually know exactly what is wrong with the building,
you cannot go any further with the lawsuit, as it would be very difficult to determine the
fault.”
[35] A notice of meeting delivered by the Plaintiff to its owners in October 2003
underscored that the Scott Schedule to be prepared by RDH might cast doubt on the
viability of the Action: “The Scott Schedule, a detailed engineering report as to the
reasons for failure of the building envelope, should be completed well before June 1,
2005. It is possible that the Scott Schedule will not be favourable to The Metropolitan.”
[36] The remediation of the Condominium commenced in June 2005. Remediation of
the Condominium was completed in January 2006, at a cost of approximately
$4,400,000.00.
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IS THIS APPLICATION AN ABUSE OF PROCESS?
[37] The Plaintiff commenced the Second Action in May 2007, seeking substantially
the same relief relating to the same causes of action raised in this Action. The Second
Action was served on all of the Defendants named in the Second Action, appearances
were filed but no further steps have been taken.
[38] What is raised on behalf of the proposed defendants in this Action is that it would
be an abuse of process to add the additional defendants in this Action when all of them
have already been named as Defendants in the Second Action and where exactly the
same relief is sought in the Second Action. It is submitted that, to the extent that the
Plaintiff intends to prosecute its claim against the proposed Defendants, it should do so
in the Second Action. This application should not proceed until the pleadings are closed
in the Second Action, the parties have had access to discovery, and those Defendants
have had the opportunity to raise the question of whether they have an absolute
defence arising as a result of the expiry of applicable limitation periods.
[39] There is an inherent jurisdiction of the Court to prevent an abuse of its process:
Guilford Industries Ltd. v. Hankinson Management Services Ltd., [1974] 1 W.W.R.
141 (B.C.S.C.); Bodrogi v. Vulcan Industries Ltd., [1975] 3 W.W.R. 764 (B.C.S.C.);
Crowston v. Cove Developments Ltd. (1978), 10 C.P.C. 87 (B.C.S.C.). The power of
a court to order a stay of proceedings flows not only from the provisions of s. 8 of the
Law and Equity Act , R.S.B.C. 1996, c. 253, which preserves the inherent jurisdiction
of the Court but also from a long line of decisions which hold that the Court has inherent
jurisdiction to control its own proceedings. Where two actions are brought arising out of
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the same circumstances, one may be stayed pending the trial of the other: Breakes v.
Bowell McLean Motor Co. (1953), 10 W.W.R. (n.s.) 192 (B.C.S.C.).
[40] I am satisfied that what is proposed by the Plaintiff in this application is an abuse
of the process of the Court. First, the exact claims against the proposed defendants in
this Action are already raised in the Second Action. Second, if the proposed defendants
are added as Defendants in this Action because it is found to be just and convenient to
do so, they will have lost the ability to defend the Second Action on the basis that the
limitation period has expired because it is the intention of the Plaintiff in the Second
Action to then discontinue that Action against those Defendants. The ability to raise an
absolute defence in the Second Action is preferable to the proposed defendants rather
than having to deal with the question of the possible expiry of the limitation period in the
context of not being able to decide whether the limitation period has expired but there
ultimately being a finding that it is just and convenient that the proposed defendants be
added as Defendants in this Action.
[41] The Plaintiff relies on the decision in Haseman, supra, to support its submission
that this application does not amount to an abuse of process. I am satisfied that the
decision in Haseman does not apply in the circumstances raised by this Action and the
Second Action. In Haseman, the court dealt with an application to join certain parties in
an existing action, the dismissal of that application on the basis that it was not just and
convenient that those parties be joined, a subsequent action naming the same parties
as defendants, an application that the second action was an abuse of process, a
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dismissal of that application, and the decision of the Court of Appeal that the second
action did not constitute an abuse of process.
[42] Here, the Second Action was commenced long before this application to join as
defendants in this Action those who were already Defendants in the Second Action. In
this Action, there has been no finding that it is not just and convenient to join the
proposed defendants. Accordingly, the consideration of this application must be viewed
in the context that what is claimed against the proposed defendants exactly parallels
what is already claimed against the Defendants in the Second Action. In the
circumstances, I am satisfied that it is open to me to find that this application is an
abuse of process and I make that finding.
[43] I am also satisfied that the Second Action is the most appropriate forum for this
issue to be determined as it is only in the Second Action that those defendants will have
the opportunity to test the question of whether the time began to run or not after they
have had access to discovery of documents and to the examination of a representative
of the Plaintiff.
[44] Subject to the matters set out below, the application of the Plaintiff in this Action
is adjourned generally. I will be seized of any further hearing of this application but will
hear that application only after there has been a determination in the Second Action of
the question of whether any Defendants in that Second Action have an absolute
defence by virtue of the expiry of any limitation periods which may be in effect.
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[45] On the assumption that I am found to be incorrect in exercising my inherent
jurisdiction to find that it would be an abuse of process to allow the Plaintiff to proceed
with this application, I will deal with the application of the Plaintiff as it relates to the
proposed defendants in this Action in order to consider whether there is an issue
between the Plaintiff and the proposed party relating to or connected with the claims
advanced to date and, if so, whether it would be just and convenient for the proposed
defendant to be joined as a Defendant in this Action whether or not I can come to the
conclusion that a limitation period has expired.
STATUTORY PROVISIONS, CASE AUTHORITIES AND DISCUSSION
[46] Section 4 of the Limitation Act, R.S.B.C. 1996, c. 266, permits a defendant to
be joined to an action under any “applicable law”, despite the expiry of a limitation
period:
4(1) If an action to which this or any other Act applies has been
commenced, the lapse of time limited for bringing an action is no bar to …
(d) adding or substituting a new party as plaintiff or defendant,
under any applicable law, with respect to any claims relating to or
connected with the subject matter of the original action.
[47] There will be a postponement of the running of the limitation period if the
provisions of s. 6(4) of the Limitation Act apply:
6(4) Time does not begin to run against a plaintiff with respect to an
action referred to in subsection (3) until the identity of the defendant is
known to the plaintiff and those facts within the plaintiff's means of
knowledge are such that a reasonable person, knowing those facts and
having taken the appropriate advice a reasonable person would seek on
those facts, would regard those facts as showing that
2009BCSC39(CanLII)

(a) an action on the cause of action would, apart from the effect of
the expiration of a limitation period, have a reasonable prospect of
success, and
(b) the person whose means of knowledge is in question ought, in
the person's own interests and taking the person's circumstances
into account, to be able to bring an action.
[48] Rule 15(5)(a)(iii) of the Rules of Court is an “applicable law” under s. 4. It
provides:
15(5)(a) At any stage of a proceeding the court on application by any
person may
(iii) order that a person be added as a party where there may exist,
between the person and any party to the proceeding, a question or
issue relating to or connected
(A) with any relief claimed in the proceeding, or
(B) with the subject matter of the proceeding,
which in the opinion of the court it would be just and convenient to
determine as between the person and that party.
[49] In applying Rule 15(5)(a)(iii), a court must consider whether there may exist,
between the plaintiff and the proposed party an issue relating to or connected with the
proceedings and the application of the Limitation Act. If the court is able to conclude
on the evidence that the limitation period for suing the proposed defendant has not
expired, the application will be allowed unless it is more convenient to have two actions
instead of one: Strata Plan LMS 1725 v. Star Masonry Ltd. (2007), 73 B.C.L.R. (4th
)
154 (B.C.C.A.) at para. 12, citing Brito (Guardian ad litem of) v. Wooley (1997), 15
C.P.C. (4th
) 255 (B.C.S.C.) at para. 11.
2009BCSC39(CanLII)

[50] If it is conceded or can be determined that the limitation period has expired, the
Court may join a party where it is just and convenient to do so. If the Court cannot
determine whether the limitation period has expired, it must assume that it has, and may
add a party where it is just and convenient to do so: Star Masonry Ltd., supra, at.
para. 12, citing Brito, supra, at para. 11.
[51] The discretion to permit joinder on the basis that it is just and convenient is
“completely unfettered”, and subject only to the following guidelines set out in Letvad v.
Fenwick (2000), 82 B.C.L.R. (3d) 296 (B.C.C.A.) at para. 29: (a) the extent of the
delay; (b) the reasons for the delay; (c) any explanation put forward to account for the
delay; (d) the degree of prejudice caused by delay; and (e) the extent of the connection,
if any, between the existing claims and the proposed new cause of action. However, no
one single factor is necessarily determinative.
[52] In Strata Plan LMS 1816 v. Acastina Investments Ltd. (2004), 33 B.C.L.R. (4th
)
69 (B.C.C.A.), the Court established that “evidence is not required for joinder under
Rule 15(5)(a)(iii) where the material facts as pleaded establish a real issue between the
parties” (at paras. 3 and 14); see also Strata Plan LMS 1899 v. A.C.G. Developments
Ltd. (2005), 43 B.C.L.R. (4th
) 194 (B.C.S.C.) at para. 16; and Owners Strata Plan 989
v. Port Coquitlam (City) (2003), 18 B.C.L.R. (4th
) 358 (B.C.S.C.).
[53] Because the court must examine a plaintiff’s pleadings before it has had an
opportunity to exercise its rights of discovery, the threshold for pleading a case against
a proposed party is low. In Strata Plan LMS 1212 v. Coquitlam (City) (2004), 31
B.C.L.R. (4th
) 356 (B.C.S.C.), the Court followed the decision in Adbusters Media
2009BCSC39(CanLII)

Foundation v. Canadian Broadcasting Corp., [2008] B.C.J. (Q.L.) No. 246 (B.C.S.C.),
describing this threshold as follows:
For Rule 15(5)(a)(iii) to apply, the plaintiff must show that an issue or
question may exist between the person to be added and the party
applying to add that person, relating to a matter at issue in the existing
proceeding.... To put it another way, the plaintiff need only establish that
there is a possible cause of action between it and Winchester (MacMillan
Bloedel Ltd. v. Morgan, [1981] B.C.J. No. 1611; Robson Bulldozing Ltd. v.
Royal Bank of Canada (1985), 62 B.C.L.R. 267; Lawrence Construction v.
Fong, supra; The Owners, Strata Plan VR 2603 v. PK Property
Management Inc., et al., [2003] B.C.J. No. 818, 2003 BCSC 561 at para.
8). It is not necessary to demonstrate that the plaintiff would be able to
prove the allegations to any other degree beyond showing that there may
exist such a question or issue (MacMillan Bloedel v. Binstead (1981), 58
B.C.L.R. 173; Lawrence Construction v. Fong, supra at para. 21). This is a
low threshold. The court should be satisfied that the claim is not entirely
frivolous (The Owners, Strata Plan LMS 989 v. Port Coquitlam (City of) et
al., [2003] B.C.J. No. 2216, 2003 BCSC 1398 at para. 10). (at para. 15)
GENERAL STATEMENTS MADE IN THE PROPOSED
FURTHER AMENDED STATEMENT OF CLAIM
[54] The proposed statement of claim attempts to establish a number of connections
between the proposed defendants, Jeffrey Popham, John A. Neilson, John A. Neilson
Architects Inc., Major Mechanical Ltd., Ken Morris, Maurice Tearle, Myles Sterling
Holdings Ltd., Myles Sterling, Plaza 88 Developments Ltd., N.A.P. Building Products, a
division of John Doe #4, and N.A.P. Commercial Limited and claims set out in the
Action:
a. Paragraph 16 sets out the roles of the proposed defendants, including Mr.
Popham (developer along with Canan), Plaza 88 (contractor or
construction manager), John A. Neilson Architects Inc. and its principal,
John A. Neilson (architect), Major Mechanical Ltd. and its employees
2009BCSC39(CanLII)

Maurice Tearle and Ken Morris (contractor, manufacturer or supplier),
Myles Sterling Holdings Ltd. and its principal, Myles Sterling (provider of
mechanical engineering and other services), and N.A.P. Building
Products, a division of Aluminart Products Ltd.) and N.A.P. Commercial
Limited (contractor, manufacturer or supplier).
b. Paragraph 18 sets out deficiencies in the Condominium’s walls, roofs,
decks, balconies and windows. It further alleges that the remedial work
undertaken by the developers was defective.
c. Paragraphs 19 - 24 allege that Canan, Plaza 88 and Degelder breached
warranties offered through New Home Warranty, warranties in the
contracts of sale or original purchasers, and an implied warranty of
habitability.
d. Paragraph 24 alleges that all defendants owed the Plaintiff a duty to
ensure that the work and materials of contractors, suppliers, consultants
and workers under their direction and control complied with all codes and
industry standards.
e. Paragraphs 24.1 - 24.4 allege that N.A.P. breached a window warranty
and an implied warranty of habitability.
f. Paragraphs 25 - 32 include Mr. Popham as one of the directors liable for
alleged misrepresentations in Canan’s disclosure statements, pursuant to
2009BCSC39(CanLII)

the Real Estate Act , R.S.B.C. 1996, c. 397, and the Real Estate
Development and Marketing Act, S.B.C. 2004, c. 41.
g. Paragraph 33 alleges that all defendants owed a duty of care to ensure
that the Condominium would be designed and built in a good and
workmanlike manner, built with suitable materials, constructed in
accordance with codes and industry standards, constructed to adequately
protect against water ingress and defects, adequately inspected and
suitable for its purpose of habitation.
h. Paragraph 38 alleges that all defendants should have known that their
services, work or products would give rise to defects that would give rise
to structural hazards and toxic mould.
i. Paragraph 39 alleges that the defendants owed a duty to warn of these
hazards.
j. Paragraph 40 alleges that all defendants breached their duty of care and
their duty to warn.
k. Paragraph 41 alleges that all defendants are liable for all of the
construction deficiencies alleged in paragraph 18. It also provides
particulars of the deficiencies caused by the following proposed
defendants: (i) Major Mechanical (wall penetrations at exhaust vents,
electrical fixtures and scuppers were improperly designed, detailed and
installed); (ii) Sterling (wall penetrations at exhaust vents, electrical
2009BCSC39(CanLII)

fixtures and scuppers were improperly designed, detailed and installed);
(iii) N.A.P. (windows and doors were defective);
l. Paragraph 42 alleges that the construction deficiencies have caused
dangerous defects;
HAS THE LIMITATION PERIOD EXPIRED?
[55] I cannot conclude that the limitation period has not expired so that it would be
more appropriate to join the proposed defendants as it is less convenient than having
two actions ongoing. For the purposes of this application only, I will assume that a
number of limitation periods have expired. The question which then arises is whether it
is just and convenient to join the proposed defendants.
JEFFREY POPHAM
[56] The first notice that Mr. Popham had of any attempt on the part of the Plaintiff to
advance a claim against him came in July, 2007 when this application was served on
him. It is submitted on behalf of Mr. Popham that the Court must be satisfied that a real
and not frivolous issue exists between the Plaintiff and Mr. Popham: Strata Plan
LMS1816 v. Acstina Investments Ltd. (2004), 33 B.C.L.R. (4th
) 69 (B.C.C.A.). This
includes a requirement that allegations of a general nature made in a blanket form will
not need this threshold: Forde v. Interior Health Authority, [2007] B.C.J. (Q.L.) 2526
(B.C.S.C.). The proposed pleadings contain no assertion that Mr. Popham did or did
not do any particular activity or did not discharge any particular duty. In the proposed
paragraph 16, Canan and Mr. Popham are collectively referred to as the “Developers”.
2009BCSC39(CanLII)

However, the August, 2007 Statement of Claim states that Canan was “The Developer”
and that it was Canan that “built” the Condominium.
[57] While Mr. Popham concedes that there is authority for the proposition that an
officer or a director of a developer can be added as a party to litigation of this nature,
Mr. Popham nevertheless submits that the pleadings must allege facts indicating that
the individual acted in a tortious manner or in a manner that exhibited a separate and
independent identity or interest from that of the developer: Glenayre Manufacturing
Ltd. v. Pilot Pacific Properties Inc. (2003), 26 C.L.R. (3d) 112 (B.C.S.C.); and The
Owners, Strata Plan LMS2643 v. Harold Developments Ltd. (2007), 62 C.L.R. (3d)
282 (B.C.S.C.). For example, the proposed pleadings contain no assertion that Mr.
Popham was the directing mind of Canan or that he played any role in the retention or
instruction of any of the consultants, contractors, sub-contractors, and trades.
[58] In the evidence adduced by Mr. Popham regarding the role he played in the
matters underlying the litigation, Mr. Popham has deposed that he played no “significant
role” in the selection of or negotiation of contracts with any of the consultants,
contractors, or trades, that he played no role in the inspection of any of the work, and
that he played no role in the design approval process relating to the Condominium.
[59] I find that the Plaintiff has pleaded no material facts upon which it could be
assumed that Mr. Popham played a role other than being a director or employee of
Canan and a member of the Council. I can find no real issue has been raised between
the Plaintiff and Mr. Popham. I find that the Plaintiff has not met the low threshold to
show that Mr. Popham should be named as a Defendant as one of the “Developers”.
2009BCSC39(CanLII)

The suggestion that he was one of the Developers is entirely frivolous. Accordingly, the
amendment requested relating to Mr. Popham as set out in paragraph 16 is not allowed
and Mr. Popham will not become a Defendant on the basis of the allegation that he was
a “Developer”. In dismissing this part of the application of the Plaintiff, I have not, as
yet, dealt with the question of whether Mr. Popham should be joined as a Defendant
because he was a signatory to the September, 1993 Disclosure Statement and the
February, 1994 Amended Disclosure Statement and the allegation that those
Statements contain material false statements.
KEN MORRIS AND MAURICE TEARLE
[60] In paragraph 16, it is alleged that the “Developers” retained: “Major Mechanical,
Maurice Tearle and Ken Morris as contractors, manufacturers or suppliers that provided
services, labour, or materials in respect of the design and the construction of the
Condominium”. The proposed Statement of Claim makes no allegation of independent
conduct by Messrs. Tearle and Morris. The documents in evidence all indicate that
Degelder dealt with Major Mechanical. Regarding Messrs. Morris and Tearle, the only
reference in the evidence is to them being listed as individuals on the “list of trades” as
the contacts for Major Mechanical.
[61] In his November 4, 2008 Affidavit, Ken Morris states:
I confirm that at no time was I retained in any personal capacity, nor was
the co-director of Major Mechanical, Maurice Tearle, ever personally
involved in the construction for work done at The Metropolitan. At all
times, I acted as a point of contact for Major Mechanical with respect to
the project being completed at The Metropolitan.
2009BCSC39(CanLII)

I have reviewed a binder of documents related to this project and again
confirm that neither myself nor Maurice Tearle ever acted in an individual
or personal capacity related to this project. We were simply listed as the
personal contacts of Major Mechanical for the purposes of the
coordination of sub trade work.
[62] I am satisfied that the pleadings must allege facts indicating that an individual
acted in a manner that exhibited a separate and independent identity or interest from
that of his or her principal, must allege facts indicating that there was a contractual
relationship with the individuals sought to be joined as defendants, or must allege a duty
of care owed by individuals sought to be joined as defendants. I can find no issue has
been raised between the Plaintiff and Messrs. Morris and Tearle. The Plaintiff has not
met the low threshold to show that Messrs. Morris and Tearle should be joined as
Defendants. I dismiss that part of the application of the Plaintiff to amend the pleadings
and join Messrs. Morris and Tearle as defendants in this Action.
MYLES STERLING
[63] Myles Sterling Holdings Ltd. and Myles Sterling are described as being
“consultants that provided mechanical engineering and other services in respect of the
design and construction of the Condominium”. The Plaintiff alleges in paragraph 41(k)
that the alleged breaches of Myles Sterling Holdings Ltd. and Mr. Sterling caused or
contributed to all of the “Construction Deficiencies”. One of the “Construction
Deficiencies” is set out in paragraph 18(a)(vii) as follows: “The wall assemblies were
defective, thereby permitting water to enter the building. Particulars of these defects
include: …vii. the wall penetrations at exhaust vents, electrical fixtures, and scuppers
were improperly designed, detailed and installed.”
2009BCSC39(CanLII)

[64] From what is in the pleadings and in the evidence, it appears that Myles Sterling
was the contact person for Myles Sterling Holdings Ltd. There is no allegation that Mr.
Sterling had a personal role in what was done or not done or that Mr. Sterling had a
contractual relationship with any party or proposed party.
[65] The Plaintiff has not pled the material facts that establish a connection between
Mr. Sterling and the negligence or breaches of contract which are alleged. All that is
alleged are “boilerplate” allegations that are identical to the allegations against the other
Defendants and proposed defendants. The pleadings must be specific enough to show
on what grounds the proposed party is being sued: Forde, supra, at para. 15. The
standard or “boilerplate” allegations in a statement of claim will not satisfy the
requirement under the first stage of the Rule 15(5)(a)(iii) test: Forde, supra, at para. 16.
I find that the Plaintiff has not met the low threshold to show that Mr. Sterling should be
joined as a Defendant in these proceedings. The application of the Plaintiff to amend
the pleadings and to join Myles Sterling as a Defendant is dismissed.
DECISION: APPLICATIONS TO JOIN MESSRS. POPHAM, MORRIS,
TEARLE AND STERLING
[66] Whether or not I am found to be incorrect in concluding that all of the applications
of the Plaintiff amount to an abuse of process, I nevertheless dismiss that part of the
application of the Plaintiff to join Messrs. Popham, Morris, Tearle and Sterling as
Defendants in this Action. Messrs. Popham and Sterling will be entitled to their costs
payable forthwith. Messrs. Morris and Tearle will be entitled to one set of costs. In
order to avoid the cost of proceeding with an assessment of those costs, I will assess
2009BCSC39(CanLII)

those costs pursuant to Rule 57(13.1) of the Rules of Court inclusive of fees,
disbursements and government taxes at $675.00.
[67] If I am found to be incorrect in concluding that Messrs. Popham, Morris, Tearle
and Sterling should not be added as Defendants in this Action and if I am found to be
incorrect in concluding that the application of the Plaintiff is an abuse of the process of
the Court, I would not be prepared to grant the application requested by the Plaintiff.
Rather, I am satisfied that the appropriate course of action is that an order should be
made allowing the amendments sought “without prejudice” to the ability of all of these
parties who would then be defendants to raise any available limitation defence in this
Action: Strata Plan No. VR 2000 v. Shaw (1998), 39 C.L.R. (2d) 87 (B.C.S.C.) and
Stone Venepal (Celgar) Pulp Inc. (Trustee of) v. IMO Industries (Canada) Inc.,
[2008] 9 W.W.R. 385 (B.C.C.A.).
[68] In Shaw, Levine J., as she then was, stated:
Applying the principles set out in the cases, I order that the statement of
claim be amended to include the new causes of action of negligent
misrepresentation and failure to warn against New Home Warranty
Program, on terms that New Home Warranty Program be at liberty to raise
as a defence that the limitation period in respect of these causes of action
had expired at the date of the commencement of the action. (at para. 31)
[69] In Stone Venepal, supra, Bauman J.A. on behalf of the Court stated:
Accordingly, I conclude that a chambers judge faced with an application to
amend (which is otherwise proper), under Rule 24(1), and the possible
expiration of a limitation period in respect of the cause of action raised in
the new pleading in circumstances where it would be inappropriate to
decide that issue summarily, should ask herself this question:
2009BCSC39(CanLII)

Assuming that the limitation period has expired, in the exercise
of my discretion under s. 4(4) of the Limitation Act would I
nevertheless permit the amendment?
If the answer is "yes", the proposed amendment should be allowed,
pursuant to the reasoning in Brito, supra. If the answer is "no" (i.e. the loss
of a limitation defence would cause such prejudice as would not permit the
exercise of the s. 4(4) discretion in favour of the amendment) then the
amendment should be allowed without prejudice to the defendant raising
the limitation defence at trial. Such was the order in 287993 B.C. Ltd. v.
Nanaimo (Regional District), 2006 BCSC 1231, and Strata Plan VR2000 v.
Shaw (1998), 39 C.L.R. (2d) 87 (B.C.S.C.).
This process protects the interests of both parties in a case where it is not
possible to resolve the limitations issue on the Rule 24 application.
I say this in the context of a Rule 24(1) application which is otherwise
proper because, of course, if the application should fail on an exercise of
the discretion regardless of the expiration of the limitation period, the
application should be dismissed. (at paras. 47-50)
[70] I reach the same conclusion as was reached in Shaw. While the question in
Stone Venepal involved a limitations period issue relating to an application under Rule
24(1) of the Rules of Court, I am of the view that the solution approved should be
followed regarding this application by the Plaintiff. I am satisfied that it would be
impossible and inappropriate to decide the limitation issues raised by the proposed
defendants summarily. A trial of the limitation issues is required in this Action, perhaps
in the context of an application pursuant to Rule 18A of the Rules of Court or in the
context of a full trial.
[71] Accordingly, it is only if I am found to be incorrect in the matters set out above
that I would order that all of the proposed defendants be added as Defendants in this
Action and that the Plaintiff would be at liberty to amend the style of proceeding and to
amend the Writ of Summons and Statement of Claim with those orders being made
2009BCSC39(CanLII)

without prejudice to the ability of the new Defendants to raise in their Defences that
limitation periods have expired.
“The Honourable Mr. Justice Burnyeat”
2009BCSC39(CanLII)

The Owners, Strata Plan No. VIS3578 v. Canan Investment Group Ltd., 2009 BCSC 39

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