



COURT OF APPEAL FOR ONTARIO

CITATION: O'Dowda v. Halpenny, 2015 ONCA 22

DATE: 20150119

DOCKET: C59091

Weiler, Feldman and Benotto JJ.A.

BETWEEN

Robert ODowda and Miriam ODowda

Plaintiffs (Appellants)

and

Donald Halpenny, Elizabeth Halpenny, Paul
    Desalaiz, Derek Dier, Sutton Group Select Realty Inc., The Corporation of the
    City of London,
Gordon
    Stanley Morton, 592987 Ontario Limited
, G.S. Morton &
    Associates Ltd., The Estate of the Late Gordon Dale Maddock, Basil George
    Tambakis, Harris-Troy Design Build Limited, London Roof Truss Inc., Thorndale
    Roof Systems Inc., Universal Forest Products, Inc., Courtney Roofing Ltd. and
    Farncomb Kirkpatrick & Stirling Surveying Ltd.

Defendants (
Respondents
)

Sean Dewart, for the appellants

Jennifer Stirton, for the respondents

Heard: December 11, 2014

On appeal from the judgment of Justice Andrew J. Goodman of
    the Superior Court of Justice dated June 20, 2014.

ENDORSEMENT

[1]

The issue on this appeal is whether the motion judge erred in granting
    summary judgment dismissing the appellants claim against the respondents
    Morton and the numbered company on the basis it was barred by the 2-year
    limitation period under the
Limitations Act, 2002
, S.O. 2002, c. 24,
    Sched. B.

[2]

The appellants purchased a house from the Halpennys in 2003 and
    discovered structural problems shortly thereafter. They retained experts in the
    fall of 2003 to examine the problems and prepare a report. The Phase 1 report
    was delivered in May 2004. It identified some problems and recommended further
    investigation. One of the problems was with the load-bearing ability of the
    roof.

[3]

Following the Phase 1 report, the appellants commenced an action against
    the vendors of the house, their realtor, two real estate agents and the city of
    London. They also asked the experts to do the recommended further
    investigation. The Phase II report is dated February 28, 2005. The Phase II
    report identified further problems and raised safety concerns about the roof.

[4]

At examinations for discovery held in March 2006, Donald Halpenny, one
    of the defendants in this litigation, testified that the respondents on this
    appeal had designed the house and prepared the working drawings. On December 19,
    2006, the appellants moved to amend their claim to add the respondents as
    defendants for negligent design of the house causing it to be a danger to
    safety.

[5]

The respondents moved for summary judgment dismissing the action against
    them on the basis that it was statute-barred because they were added more than
    two years after the cause of action arose. The motion judge granted summary
    judgment, concluding that 1) the appellants knew or should have known that the
    negligent design of the house created a condition of danger to safety upon
    reviewing the Phase 1 report, as it identified structural deficiencies that
    could be dangerous, even though the words danger and safety were not used; and
    2) the appellants knew or should have known that the respondents had designed
    the home when the appellants received the plans stamped with the name G.S.
    Morton and Associates shortly after taking possession of the house in May 2003.

[6]

On this appeal, the appellants submit, first, the motion judge erred in
    his two findings, and second, based on the record before him, both matters
    raised genuine issues requiring a trial: see
Hyrniak v. Mauldin,
2014
    SCC 7, [2014] 1 S.C.R. 87
.
The appellants also requested that this
    court substitute its own determination of discoverability.

[7]

The first issue turns on the application of the law as set out by the
    Supreme Court of Canada in
Winnipeg Condominium Corporation No. 36 v. Bird
    Construction Co
.,

[1995]
    1 S.C.R. 85, at para. 43, as follows:

I conclude that the law in Canada has now progressed to the
    point where it can be said that contractors (as well as subcontractors,
    architects and engineers) who take part in the design and construction of a
    building will owe a duty in tort to subsequent purchasers of the building if it
    can be shown that it was foreseeable that a failure to take reasonable care in
    constructing the building would create defects that pose a substantial danger
    to the health and safety of the occupants.  Where negligence is
    established and such defects manifest themselves before any damage to persons
    or property occurs, they should, in my view, be liable for the reasonable cost
    of repairing the defects and putting the building back into a non-dangerous
    state.

[8]

In other words, a subsequent purchaser of a building has an action in
    tort against the designers and constructors of the building for defects that
    pose a substantial danger to health and safety. Because of this requirement, before
    the limitation period begins to run, a plaintiff must have known or ought to
    have known that the construction problems or defects with the building at issue
    pose a substantial danger to health and safety.

[9]

The motion judge determined, based on his own reading of the Phase 1
    Report, that the appellants should have known that the defects identified
    created such a danger. However, in reaching that conclusion, the motion judge
    failed to avert to the sworn evidence filed on the motion. The appellants
    lawyer (not appeal counsel) swore an affidavit dated April 1, 2014. Her
    affidavit was not challenged and she was not cross-examined. She swore, at
    para. 22, that the Phase II report was her first information that the house
    may be dangerous by design:

I was aware of the law with respect to negligence in the design
    and construction of the buildings, in general, based on the Supreme Court of
    Canadas decision in
Winnipeg Condominium Corporation No. 36
v
. Bird Construction Co
.,
[1995] 1 [S.C.R.] 85, and I knew that a
    cause of action by a third party owner in negligence with respect to alleged
    building defects was only complete if the breach of the standard of care left
    the building in a
dangerous condition
. There could be
    no recovery for pure economic loss. The Phase II Investigation Report indicated
    that the roof was seriously overstressed and that a competent designer should
    have recognized the need to consider greater snow accumulations in the valleys
    than what was used in the original building. This was the first information I
    had that the house may be dangerous by design. [Emphasis in original.]

[10]

It
    was an error of law for the motion judge to ignore the uncontested sworn
    evidence on the central matter in issue without giving any reasons for so
    doing. While the judge is entitled to reject such evidence, he would have to
    give clear reasons for making such a finding. In this case, because the motion
    judge did not refer to the lawyers affidavit, his reasons for implicitly rejecting
    the lawyers evidence are not apparent.

[11]

Given
    this error, the order for summary judgment dismissing the claim as statute-barred
    must be set aside. On the record before the motion judge, the parties could
    have asked him to conduct further fact-finding procedures to determine the
    issue of when the dangerousness of the structure was known or could have been
    known. As that was not done, the most appropriate order at this point is to
    leave the limitation issue as a genuine issue for trial.

[12]

The
    appeal is allowed and the summary judgment is set aside.

[13]

Costs
    were agreed as follows: costs of the appeal fixed at $8500 inclusive and costs
    of the motion fixed at $12,000 inclusive, payable within 60 days to the
    appellants.

K.M. Weiler J.A.

K. Feldman J.A.

M.L. Benotto J.A.


