IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20150703

Docket: S122821

Registry:
Vancouver

Between:

Shelley Meghan
Lopez a.k.a. Shelley Ion

Plaintiff

And

The Owners, Strata
Plan LMS3851, OHR Grand Management Ltd.

O’Neill Hotels
& Resorts Ltd., Summit Strata Management Ltd.,

Pioneer
Consultants Ltd. and John Doe

Defendants

And

Pioneer
Consultants Ltd., The Owners, Strata Plan LMS3851
OHR Grand Management Ltd., O’Neill Hotels & Resorts Ltd.
Summit Strata Management Ltd.

Third Parties

Before:
Master Muir

Reasons for Judgment

I.                
introduction

[1]            
These are companion applications.

[2]            
The first is by OHR Grand Management Ltd. (“OHR”) and O’Neill Hotels and
Resorts Ltd. (“O’Neill”) for an order that they be granted leave to file and
serve a third party notice against Lawrence Doyle Young & Wright
Architects, a sole proprietorship, Cressey Development Corporation, Cressey
Projects Corporation, and 407668 British Columbia Ltd., formerly Trilogy
Development Corporation.

[3]            
The second is by The Owners, Strata Plan LMS3851 (the “Strata”) and
Summit Strata Management Ltd. (“Summit”) for an order that they be granted
leave to file and serve a third party notice against Lawrence Doyle Young &
Wright Architects Inc., formerly Lawrence Doyle Architects Inc., Lawrence Doyle
Young & Wright Architects, a sole proprietorship, Cressey Development
Corporation, Cressey Projects Corporation, and 407668 British Columbia Ltd.,
formerly Trilogy Development Corporation.

[4]            
OHR, O’Neill, the Strata and Summit will be collectively referred to as
the “applicants” in these reasons for judgment.

II.              
Background

[5]            
This action arises from the claim made by the plaintiff that she was
injured on June 11, 2010 as a result of falling down a flight of stairs in
the Westin Grand Hotel (the “Hotel”).

[6]            
The notice of civil claim was filed on April 23, 2012.

[7]            
At the relevant time, the Strata were the owners of the Hotel and the
property manager was Summit. The plaintiff alleges that OHR and O’Neill were
also owners and/or managers of the Hotel.

[8]            
The plaintiff claims against the Strata, Summit, OHR and O’Neill under
the Occupiers Liability Act, R.S.B.C. 1996, c. 337 and in negligence.

[9]            
On or about July 14, 2014, counsel for the plaintiff served an
expert report dated June 12, 2013, prepared by Granville Airton, P.Eng.
(the “Airton Report”). The Airton Report finds that the stairs on which the
plaintiff allegedly fell were not in compliance with the Vancouver Building
By-laws, having an improper rise and run and no handrail. Mr. Airton
identified this as a likely cause of the alleged accident.

[10]        
The applicants say that, despite what they call a boilerplate plea in
the notice of civil claim of a failure to properly design and construct the
stairs in question, that prior to obtaining the Airton Report, there was no
evidence that the stairs were improperly designed or constructed.

[11]        
As a result of receiving the Airton Report, the Strata and Summit say
they then tried to identify who was responsible for the construction of the Hotel
and sought the building permit file from the City of Vancouver.

[12]        
On about August 8, 2014, counsel for the Strata and Summit received
the building permit file from the City of Vancouver, which identified Pioneer
Consultants Ltd. (“Pioneer”) as having an involvement in the construction.

[13]        
On September 5, 2014, the plaintiff filed a further amended notice
of civil claim adding Pioneer as a defendant in this action. The Strata and
Summit followed with a third party notice against Pioneer on September 22,
2014.

[14]        
Mr. Chow, who was the sole director and officer of Pioneer, acted
as the Certified Professional for the development of the Hotel. Unfortunately, Mr. Chow
died on November 19, 2014. At least partly as a result, the original trial
of this matter scheduled for February 23, 2015 for 10 days was ordered
adjourned after an application before me on December 18, 2014.

[15]        
The trial has now been rescheduled for July 4, 2016 for 15 days.

[16]        
Pioneer produced a list of documents dated February 2, 2015.

[17]        
The applicants say that documents from Pioneer’s list of documents
identified the proposed third parties as being involved in the construction of
the Hotel.

III.            
The Law

[18]        
The applicable law is not in issue. The history of the third party rule,
its purpose and the factors to be considered on an exercise of discretion to
permit the late issuance of a third party notice were extensively considered by
Mr. Justice Goepel (as he then was) in Tyson Creek Hydro Corporation v. Kerr
Wood Leidal Associates Limited, 2013 BCSC 1741 [Tyson Creek].

[19]        
Goepel J. in Tyson Creek cites MacNaughton v. Baker
(1988), 25 B.C.L.R. (2d) 17 at 21, where McLachin J.A. (as she then was)
explained the purpose of third party proceedings:

…The object of permitting third
party proceedings to be tried with the main action is to provide a single
I procedure for the resolution of related questions, issues or remedies,
in order I to avoid multiple actions and inconsistent findings, to provide
a mechanism I for the third party to defend the plaintiffs claim, and to
ensure the third party claim is decided before a defendant is called upon to
pay the full amount of any judgment. The avoidance of a multiplicity of
proceedings is fundamental to our rules of civil procedure.

[20]        
The court in Tyson Creek then set out several different judicial
statements regarding the exercise of discretion:

[41] In Lui, Lambert J.A. noted that the court is
given a wide discretion under Rule 22(4), to strike out third party
proceedings. He indicated at 328 that there were a number of factors that
should be considered including:

… What is the fair thing to do?
Who suffers prejudice if the discretion is exercised? How much prejudice? Who
suffers prejudice if the discretion is not exercised? How much prejudice? Have
the parties acted properly and reasonably in their own interests? If a party
has not acted properly and reasonably, should he be relieved from the
consequences of his own behaviour? Is there another course available to one or
other of the parties? Where does the balance of convenience lie? This list is
illustrative, but not exhaustive, of the questions that should be asked with
respect to the parties before the court. But part of the purpose of the Rule is
to avoid multiplicity of proceedings for the benefit of other litigants, so
that congestion in the courts is avoided. So it is proper to ask questions in
that area as well.

[42] In Clayton Systems 2001 Ltd. v. Quizno’s Canada Corp.,
2003 BCSC 1573 at para. 9
, 27 B.C.L.R. (4th) 247 [Clayton Systems], which was decided under the
Amended Rule, Allan J. held that in determining the application the court
should consider the following factors in determining whether or not to exercise
its discretion to grant leave:

(a) prejudice to the parties;

(b) expiration of limitation
period;

(c) the merits of the proposed
claim;

(d) any delay in proceedings; and

(e) the timeliness of the
application.

[43] In Scott Management at para. 90, the court
framed the question on an application for leave to file a third notice in this
fashion:

[90] The fundamental question on the applications should
have been whether greater injustice and inconvenience would arise from allowing
the contribution claim to continue as a third party proceeding, or from
striking it and leaving it to be pursued in a separate future action. The
chambers judge erred in failing to address that question. Had he done so, in my
view he would have been compelled to exercise his discretion in favour of the
former course, as the better of two unpalatable options.

[21]        
The decision of Goepel J. in Tyson Creek was affirmed by the
Court of Appeal: Tyson Creek Hydro Corporation v. Kerr Wood Leidal
Associates Limited, 2014 BCCA 17. Further, in its decision, the Court of Appeal
commented at para. 17 that the statements of the law by Goepel J. were
accurate and complete.

IV.           
Position of the Parties

A.             
The Applicants

[22]        
The applicants’ positions are the same. I will therefore not
differentiate between the two applications.

[23]        
The applicants say that both the balance of convenience and prejudice
favours adding the third parties so that all matters can be determined in one
proceeding.

[24]        
The applicants further say that it is likely that the existing trial
date can be maintained, but even if it cannot, they have brought this
application promptly after receiving evidence that there was a problem with the
design or construction of the stairs and ascertaining who the parties
responsible were.

[25]        
 They say, as the former Limitation Act, R.S.B.C. 1996, c. 266 applies,
there is no limitation concern. The limitation period to bring a claim would
not begin to accrue until there is a judgment against the claiming party.

[26]        
The applicants say that the Airton Report was a triggering event that
raised significant concerns regarding the design and construction of the
stairs, and they only identified those responsible when the Pioneer documents
were obtained.

[27]        
The applicants say that it is appropriate to look at the triggering
event, not the basic pleading, and that it was reasonable for them not to
inquire into the design and construction of the stairs until there was some
evidence of a problem. They say it is appropriate now to join those parties
responsible and to have all matters determined at once.

B.             
The Proposed Third Parties

1.              
Cressey

[28]        
Cressey Development Corporation (“Cressey Development”) and Cressey
Projects Corporation (“Cressey Projects”), which I will refer to jointly
as “Cressey”, oppose the application.

[29]        
Cressey says that Cressey Development was the construction manager and
development marketing manager for the Hotel, but that they have not been able
to determine if Cressey Projects had any involvement in the construction.

[30]        
As the Hotel was completed in 1999, Cressey has limited documents
remaining regarding the construction.

[31]        
Cressey says that the applicants have not proceeded promptly and that
there is no explanation for what has been a significant delay in bringing these
applications.

[32]        
Counsel for Cressey pointed out that the notice of civil claim raises
the issues of faulty design and construction, failure to comply with the
applicable standards for design and construction, and pleads reliance on the
British Columbia Building Code and the National Building Code.

[33]        
Further, Cressey says that the involvement of Cressey Development in the
construction of the Hotel was well known to the applicants, or should have been.
The Hotel website identifies that the Hotel was “Built by Cressey Development
Corp. Architect: Lawrence Doyle Architect Inc. …”  At the base of the webpage
the copyright is identified:  © 2009 – 2015 O’Neill Hotels and Resorts, Ltd. …”

[34]        
In addition, the Strata and Cressey have been involved in litigation
together going back many years. Further, the disclosure statement that was
provided when the strata units were purchased identified Cressey Development.

[35]        
Cressey submits that should have been sufficient for the applicants to
investigate the circumstances and decide whether to bring third party
proceedings within the time limited by the Rules.

[36]        
Alternatively, Cressey says that the applicants have not given any
sufficient explanation as to their delay since receiving the Airton Report. They
say that, given the ease with which the involvement of Cressey Development
could have been ascertained, a decision should have been made at that time, at
the latest, as to whether to bring these applications.

[37]        
Cressey says the applicants have failed to act with reasonable
diligence.

[38]        
Further, Cressey submits that this is an occupier’s liability case, not
a construction defect case. The issue as between the plaintiff and defendants
will be whether the stairs were in compliance with the relevant building code
and whether that caused or contributed to the plaintiff’s alleged injuries. None
of the proposed third parties will be necessary to determine whether there was
code compliance.

[39]        
Assuming it is found that the stairs are not in compliance, at the trial
of the plaintiff’s case it will not be necessary to investigate who was
responsible for that failure. Cressey submits that is a separate issue that can
easily be determined on a summary trial basis after the plaintiff’s claim has
been decided.

[40]        
Cressey submits that there will be significant prejudice to it if these
companies are joined as third parties. As noted, many of their relevant documents
have been destroyed. They would be forced to be involved in a lengthy trial
when their involvement is completely unnecessary. Further, their counsel is not
available for the trial dates that have been set in 2016. They submit that to
allow the third party claim will of necessity require an adjournment and will
prolong the trial.

2.              
The Architects

[41]        
Lawrence Doyle Young & Wright Architects Inc. says it was formerly
known as Lawrence Doyle Architects Inc. and that it was the architect for the
construction of the Hotel. I will refer to them as the “Architects”.

[42]        
 The evidence is that Lawrence Doyle Young & Wright Architects, a
sole proprietorship, is a separate entity and was not involved in the design or
construction of the Hotel.

[43]        
The Architects raise similar issues to those raised by Cressey, and
I will not repeat those.

[44]        
The Architects have a system of destroying project files after 15 years.
As a result, they do not have the project file for the Hotel.

[45]        
The Architects also point out that the plaintiff, in her notice of civil
claim, made the following allegation:

The defendant ABC#2 and the
defendant Doe, their employees, servants and/or agents were engineers,
architects, designers, professionals, and professional firms involved in the
design and construction of the premises.

[46]        
The Architects therefore submit that the applicants should have been
aware that there were allegations around the design of the stairs and that the
architect of the Hotel was contemplated as a party when they were served with
the notice of civil claim.

[47]        
Further, the Architects submit that the applicants knew or could easily
have learned at the time they filed their responses to civil claim in November 2012
that Lawrence Doyle Architects Inc. was the architect for the Hotel.

[48]        
The Architects submit that they have suffered real prejudice from the
delay in bringing this application, that is, if the applicants had proceeded
when they should have, the Architects would still have the project file for the
Hotel, which was destroyed in 2013.

[49]        
The Architects say as the applicants are of the view that there is no
limitation issue, there is no prejudice to them in refusing their applications
and requiring them to bring a separate proceeding.

[50]        
Further, should the Architects be joined in this proceeding, it will
lengthen the time required.  Among other things, they will have to provide
expert evidence of the standard of care for an architect in the circumstances.
In addition, their counsel is not available on the scheduled trial date.

C.             
The Plaintiff

[51]        
The plaintiff opposes the orders sought. She points out that it will
have been six years since her accident if this matter goes to trial in July 2016.
She submits that if the applications are allowed, there will be a complication
of the claim, an expansion of the trial time and likely another adjournment.

[52]        
She points out that the additional trial time required would be relevant
only to the issues between the applicants and the proposed third parties, as
the claims made by the plaintiff are primarily under occupier’s liability.

[53]        
She too submits that the applicants will not be prejudiced if the
applications are refused and they are required to bring a separate action.

V.             
Analysis

[54]        
I am satisfied that it should have been obvious to the applicants on a
review of the notice of civil claim that the plaintiff was saying that the
stairs were improperly designed and constructed. The applicants took the risk
of dismissing the plea advanced as “boilerplate”.

[55]        
Further, it is clear from the evidence brought by the proposed third parties
that their involvement in the design and construction of the Hotel was known or
could have been readily ascertained by the applicants when they filed their respective
responses to civil claim.

[56]        
In my view, the Rules set time limits on the ability to bring a
third party claim for the very reason these applications are resisted by the
plaintiff and proposed third parties. There have been documents lost or
destroyed, the late application will result in a longer trial than has been set,
counsel for the third parties are not available on the scheduled dates, it is
likely an adjournment of the trial will be necessary, pre-trial procedures have
been conducted without the participation of the proposed third parties, and
duplication or delay may result from that as well.

[57]        
Where, as here, the issues are clear from the pleading, parties should
turn their minds early to potential third party claims.

[58]        
There is no adequate explanation for the failure to do so, other than
the suggestion that the applicants should not have to consider the potential
for third party claims until there is evidence that there is a basis for such
claims. If that were the case, a third party notice would never be issued
within the time permitted by the Rules.

[59]        
Although there are some factual and legal issues that will likely have
to be revisited in a new action against the third parties, I am satisfied
that there will be much greater harm caused if the applications are allowed.

[60]        
As a result, both applications are dismissed. The proposed third parties
will have their costs on the applications against them payable forthwith. The
plaintiff will have her costs in the cause.

“Master Muir”