A leaky-condo first: Municipality ordered to pay

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(You may want to note in this article, that the judge deemed the building

code was not met and appearded to dismiss that the building code may have

been flawed. )

Saturday 25 August 2001

A leaky-condo first: Municipality ordered to pay

Vancouver Sun

Chad Skelton, Petti Fong and Sandler Vancouver Sun

Steve Bosch, Vancouver Sun / Owners of leaky condos celebrate a landmark

court victory on Friday. From left, Betty Prior, Ken Burt, Jack Boyd and

Chernenko toast a ruling that holds the municipality of Delta partly

responsible for a settlement of more than $3 million.

Balderson, a lobbyist for owners of leaky condos, says that the

decision sends a clear signal the owners are not liable.

Delta could be on the hook for more than $3 million after a B.C. Supreme

Court judge ruled Friday the municipality's lax enforcement of provincial

building codes was partly responsible for water damage at a condominium

complex.

And a senior civil lawyer said the precedent-setting decision could be

bad news for other Lower Mainland taxpayers, who could now face hundreds of

millions of dollars in claims.

" The total damages involved are in the many millions of dollars, " said

Kieran Bridge, Vancouver chairman of the Canadian Bar Association's civil

litigation section. " I would be concerned about it if I was a municipality.

This could have quite significant ramifications ... everyone was watching

this case to see if it would succeed. In my view, this is a test case. "

Justice Grist awarded residents of the Riverwest condominium

complex in Ladner $3.2 million in damages against Delta, Van Maren

Construction Co. Ltd. and architects Elbe, Lock, Walls & Associates.

In his judgment, Grist said Delta should be liable for only 20 per

cent of the award.

But Darrell , lawyer for the Riverwest owners, said both Van

Maren and Elbe do not appear to have the assets or insurance to cover the

damages -- which raises the possibility that Delta could be forced to pay

the full amount.

" I can get it all against Delta, " he said.

said Friday's decision was an important one for all leaky

condo owners.

" This tells people it is possible to recover a judgment in a leaky

condo case and it is possible -- in certain circumstances -- to get a

judgment against a municipality, " he said.

Karl Preuss, Delta's director of finance, said the municipality's

legal department will meet with the mayor and councillors next week to

discuss whether to appeal the decision.

" Every municipality that has leaky condos will want to look at this

very carefully, " Preuss said.

Union of B.C. Municipality president Jim Abrams said local governments

have in the past sought protection from such legal action from the

provincial government.

" We've been concerned about liability to municipalities and we've

wanted the provincial government to provide us with some protection, " Abrams

said. " The courts are now saying we're not protected, so we need to talk

very soon to the provincial government to get some assurances we won't be

forced into huge payouts. "

The ruling has already caused anxiety among other municipalities,

Abrams said, and the UBCM will look into funding any appeals if Delta goes

before the courts to overturn the judgment.

Balderson, who has been at the forefront of lobbying the

governments for compensation and is the co-founder of the Coalition of Leaky

Condo Owners, said the decision sends a clear signal that owners are not

liable.

" Owners have known that somebody has been negligent all along, " he

said. " This case confirms that leaky, rotten condos were not built in

accordance with building codes and somebody is negligent, whether it's the

municipality or the architect. "

Balderson said dozens of court cases are in the system and he predicts

the decision will force all of them into mandatory mediation for settlement.

Grist's ruling did not specifically address whether his ruling could

apply to other municipalities.

But he did note that one of the key design flaws that led to water

damage at Riverwest -- applying stucco directly to the exterior wall -- " was

commonly employed in construction of frame apartments " across the province.

Delta argued it should not be held liable for problems at Riverwest

because its behaviour was no different than other cities in the Lower

Mainland -- pointing out that Burnaby also failed to enforce sections of the

building code dealing with water penetration.

But Grist said that was no excuse.

" There was a clear obligation to enforce all parts of the code and it

will not do for a regulating authority to say that it, like others, did not

deal with the responsibility, " he wrote.

Grist's decision relied on a well-established legal precedent that

courts cannot hold governments responsible for bad " policy " decisions taken

for political or budgetary reasons, but can hold them liable for how they

implement those policies.

In this case, Grist found that while Delta had adopted the provincial

building code as a matter of policy, in practice it did not enforce most

sections of the code dealing with water penetration.

Had those sections been properly enforced, Grist found, Riverwest

likely would not have had the problems it did with water damage.

" In my view Delta should have anticipated the obvious, " Grist wrote.

" The public would reasonably expect that a municipality would put some

effort into its responsibility to administer and enforce these Provincial

Code provisions. I think it would surprise most Delta residents, for

example, to find that no attention was to be paid to ... the very basic

requirement that a roof shed or drain water. "

The failure of its staff to properly enforce the code was negligent,

he found.

" To abandon inspection of design objectives leaves the public little

protection where arguably it needs it most, in the design of larger, more

sophisticated buildings, " the decision states.

The judge was also dismissive of Delta's argument that it didn't make

sense for it to enforce regulations concerning water penetration because

there had never been problems with leaky condos in the past.

" The fact that a wood structure would suffer damage if water

persistently entered the interior of a frame wall ... was, in my view,

reasonably foreseeable, " he wrote. " Like a defective retaining wall, the

situation shouldn't have required a history of failure before the provisions

were enforced. ... It is not news that the climate in the Lower Mainland

often features wind-driven rain. "

And while Delta argued that the building code sections dealing with

water penetration " were inherently difficult to inspect, " Grist in fact

found the opposite -- that most parts of the code dealt with objective

criteria, such as the slope of a roof, that were relatively easy to enforce.

He notes that a private inspector hired by residents of Riverwest

shortly after problems started to emerge was able to identify dozens of

problems with the complex's construction.

Grist also concluded that the municipality had alternatives if it

didn't have the expertise or staff to inspect buildings properly. The

municipality could have required " professional certification " for

developments, which would have required condo builders to hire a licensed

expert to approve its designs and construction.

His decision notes that most municipalities, including Delta, have

since begun to enforce building code regulations concerning water

penetration.

Grist's decision at times read like a construction handbook as he laid

out the complexities of different types of house design and ways of sealing

house frames from water penetration.

But his legal conclusion was simple: that Delta should have taken more

care to review the architectural plans for Riverwest and conducted more

on-site inspections once construction began.

Van Maren, the head of Langley-based Van Maren Construction, said

his company is being unfairly blamed for problems that were really the

responsibility of the architects.

" I feel strongly the architect in this case, who was responsible for

the design, and the developer should be responsible for the lion's share of

the settlement, " he said. " Our responsibility is to build it in accordance

to the plans and the judge said this particular design was just

inappropriate. ... it was impossible for us to build a leak-proof building

with this design. "

On Friday, residents of Riverwest greeted the decision with a mixture

of joy and relief.

Betty Prior, a resident since 1993, had been anxiously waiting for

news since the case wrapped up in January.

" Since then we haven't heard anything, " she said. " Today was just like

fantastic. To get news, and the fact that it was good news ... . There's

still a possibility of appeal by the corporation of Delta, but that is

something we'll deal with. At this point we feel elated that we finally got

a decision and the decision was in our favour. "

Prior didn't know exactly how much money she'd get from the

settlement, but said taking into account redecorating and other costs

associated with the repairs that weren't included in the suit, it would not

be everything she spent.

" You can never recoup 100 per cent of something like this, " she said.

" With all of the changes and renovations, you had to do a lot of extra work

yourself. You wouldn't fully recover, but it will be fairly close. "

Prior didn't know what impact her condo group's case would have on

similar actions around the province, but advised them to battle through if

they can.

" I sympathize with everybody, " she said. " Every time I see a tarp go

up on another building, I think, 'You poor souls. You're going to have to go

through what we went through.' It's a dreadful thing. "

Retired oil worker Doug Ozey, 74, said if the award comes through and

pays back the $35,000-$40,000 he spent on repairs, it will make a huge

difference to the quality of life he and his wife Sylvia will be able to

enjoy.

" It means that maybe we're going to be able to do some of the things

that we had planned to do when I retired, " he said. " Things that we had to

put on hold to repair our home. Maybe take the odd holiday now and again and

maybe not to have to scrimp on the bucks when you want to go out for dinner

and a little bit of entertainment and fun. It's going to mean a lot. "

Ozey also hoped this would be the start of a wave of settlements in

favour of leaky condo owners.

" Some of them have given up everything to go through this and I think

it's time contractors, towns and cities live up to what they've contracted

to do for the people, " he said. " Somebody has got to answer for all the

mistakes that were made. "

The retiree didn't know exactly how much money he was going to get,

but he said a block party may be in order.

" After it's finalized and we know exactly what's going to happen, it

wouldn't be a surprise if we get together and a little bubbly flows here and

there. "

cskelton@...

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