The British Columbia Court of Appeal (BCCA) recently held that structural consultants have a prima facie duty of care to the owner of a building to ensure that the building does not contain defects that pose a foreseeable danger to the health and safety of its occupants.
In 2017, 113407 B.C. Ltd. retained DB Services of Victoria Inc. (DB) to design and construct an 11-storey residential apartment building in Langford, British Columbia (BC). DB Services then retained Sorenson Trilogy Engineering Ltd. (STE) to act as structural engineers on the project. The court noted that although STE was not competent to provide structural engineering services due to a lack of expertise for this size of building, they undertook to do so anyway.
After completion of the building, several serious structural deficiencies were discovered, and the city of Langford revoked the building’s occupancy permit. By this time, the holding corporation that owned the building had been sold to Centurion Apartment Properties (Centurion). Centurion commenced an action against DB and STE for negligence and breach of contract, seeking to recover the losses they incurred from the necessary repairs to the building.
The British Columbia Supreme Court ultimately decided that “any relationship of proximity … was negated by virtue of the multipartite contractual arrangement between and among [the relevant parties]” and the engineer did not owe the owner a duty of care. Centurion appealed this decision.
Subsequent to the filing of the Appeal, DB made an assignment in bankruptcy and all claims against it were stayed. The key issue before the Court of Appeal was whether or not there was a sufficiently proximate relationship between STE and Centurion to create a prima facie duty of care enabling the Centurion to make a claim for negligence.
The Court of Appeal looked to the Anns test to answer this question. The Anns test is a fundamental legal test for determining whether a duty of care exists between two parties enabling one party to be compensated for the negligent actions of the other. Under this test, a duty of care will arise where there is a sufficiently proximate relationship between the parties.
The Court of Appeal ultimately determined that a proximate relationship may exist between the owners of a building and structural consultants where the actions of the consultants may give rise to a "significant risk of harm" to the health and safety of the residents of the building. In this case, Centurion and STE were in a relationship of proximity such that, in the reasonable contemplation of STE, carelessness on its part was likely to cause damage to Centurion. Therefore, a duty of care existed between them. This conclusion is consistent with the Supreme Court of Canada's decision in Winnipeg Condominium.1
The Court came to this conclusion despite the fact there was no contractual relationship between the parties. Since STE was contracted by DB, there was no direct contractual link between STE and Centurion. The Court explained, however, that this lack of contractual privity could not shield STE from liability because "the builder’s duty in tort to take reasonable care arises independently of any duty in contract" (para 95).
The Court of Appeal further clarified that this duty transcends contractual provisions that seek to limit risk. The contracts between STE and DB, and between DB and Centurion, contained provisions that allocated risk and limited liability. However, the Court explained that "the duty to construct a building according to reasonable standards and without dangerous defects arises independently of any contractual stipulation" (para 88).
This decision confirms that consultants and contractors owe a duty of care to owners, whether or not they have directly contracted with the owner or have sought to contractually limit their risk. This is particularly true where the consultant's actions create a real and substantial risk of harm. However, the extent to which contractual provisions limiting liability and capping damages were effective needed to be further addressed at trial.
As of the date of publishing, STE has appealed this decision to the Supreme Court of Canada. We will update the status of this case as new information arises.
For further information about this case or advice relating to construction contracts, please contact a member of our Construction group.
1 Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 SCR 85.