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Timestamp: 2019-04-22 20:46:05+00:00

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CO. LTD. and VAN MAREN CONSTRUCTION (#8701) LTD.
 ESSON, J.A.: The defendant Corporation of Delta appeals certain aspects of a judgment of Mr. Justice Grist holding Delta liable for damages in excess of $3,000,000 which arose out of defective design and construction of a condominium development.
 The action was launched in October 1996 by the strata corporation on behalf of the owners of the units situate in three separate buildings which formed the overall project. The claim was for repair and remediation of the three buildings which was made necessary because of wood rot in the exterior wall, the studs, and the beams. The other defendants to the action were the developer, a firm of architects, a firm of building designers and the contractor. The firm of architects was dropped from the action because there was no basis for any liability against it. The trial involved only the liability of Delta. Prior to the trial the developer Canlan was dismissed from the action by consent following upon a settlement. The building design firm and the contractor remained as parties but took no part in the trial.
 The trial judge found the developer, the building designer, and the contractor jointly and severally liable along with Delta for the damages and, after delivering judgment, made an order under s.4 of the Negligence Act allocating the degrees of liability as required by that section. There is a cross appeal by the plaintiffs with respect to that aspect of the judgment.
 The basis of liability against Delta was essentially that it breached its duty to inspect and supervise the construction and particularly to enforce the provisions of the Building Code. Delta has not appealed against the findings of liability and quantum. The basis for the appeal is firstly, that the action was commenced out of time and secondly, that the learned trial judge erred in failing to find contributory negligence on the part of the plaintiffs.
 The trial judge held that that section did not apply. At the time the appeal was launched, there were a number of conflicting decisions of trial judges on the applicability of s.285 to actions such as this. That issue was resolved by a decision of this Court delivered while this appeal was proceeding. That decision, holding that s.285 does not apply, is Gringmuth v. North Vancouver (District) 98 B.C.L.R. (3d) 116, 26 M.P.L.R. (3d) 54,  3 W.W.R. 612.
 Faced with the reality that the Gringmuth decision would be binding on this Court on the hearing of this appeal, counsel for Delta applied some time ago to the Chief Justice requesting that he direct that five judges sit who would then be in a position to overrule that decision. In rejecting that application, the Chief Justice left open the possibility that the panel hearing the appeal would see fit to determine that the Gringmuth decision should be reconsidered.
 Having heard the full submissions of the appellant, I am of the view that there are no grounds which would justify reconsideration, certainly at this time, of the fully considered and very recent decision of this Court in Grinmuth. It follows that, in my view, we are bound by that decision and that the first ground of appeal must fail.
3 (1) In subsections (4) and (6), "debtor" means a person who owes payment or other performance of an obligation secured, whether or not the person owns or has rights in the collateral.
 At the opening of this appeal, Mr. Roberts made a preliminary objection to that ground of appeal being heard. His objection was based on the fact that the section was not raised at trial. In its statement of defence, Delta had pleaded that the action was barred by efluxion of time and had made specific reference to the Limitation Act although without referring to a particular section. No particulars were requested and it would appear that, from that point on, no further reference was made to the Limitation Act. Certainly, it was not raised at trial.
 We declined to deal with Mr. Robert’s objection as a preliminary one. Having heard the appellant’s submission, it is unnecessary to decide the question because the appellant’s submission fails on the merits.
(5) Any other action not specifically provided for in this Act or any other Act may not be brought after the expiration of 6 years after the date on which the right to do so arose.
I cannot accept Genstar's contention that the action against it is for damages for "injury to property". I am persuaded by the authorities that "injury to property" refers to the situation where property is damaged by an extrinsic act, and not to the situation where a claim is made for damage occasioned by defects in the property itself. In Alberni District Credit Union and ADCU Development Ltd. v. Cambridge Properties Ltd. et al. (1985), 65 B.C.L.R. 297 (B.C.C.A.), the issue, as in the case at bar, was whether the limitation period applicable to a claim for defects in the building was the two-year limitation period provided by s. 3(1)(a) of the Limitation Act, or the six-year limitation period provided by s. 3(4). Esson J.A., speaking for the Court, held that the action was not one in respect of "injury to property", as the "building simply has not, in plain language, been injured". Accordingly, the six-year limitation period was held to apply. Counsel for Genstar seeks to distinguish the Alberni case on the grounds that the claim there was for breach of contract rather than in tort. In my opinion, that distinction cannot be sustained. Whether the action is brought in contract or tort, damage is an essential element of it. The question in each case is whether that damage comes within the phrase "injury to property".
Other authorities support the same view. In British Columbia Hydro & Power Authority v. Homco International Ltd. (1980), 25 B.C.L.R. 181 (C.A.), this Court held that the phrase "injury to property" did not apply to a claim for damages arising from defective gas fitting tees that fractured during testing procedures. The court stated that to fall within the ambit of the phrase "injury to property", an action must be one for physical injury or for direct damage to property.
Policy considerations support the conclusion that "injury to property" refers to damage caused by an identifiable external event. A short limitation period of two years is appropriate where the claim is based on an event which causes direct injury to property. Such a short limitation period may not be appropriate for a claim based on defects in the property which may not manifest themselves clearly for some time, even though with the benefit of hindsight one may be able to say that their onset was revealed at an earlier date.
It is that paragraph which, in my view, has particular application to the facts of this case. This was very much an instance of a case where the claim was based on defects which to some extend manifested themselves very early in the day but where the true magnitude only became clear with the passage of time and increased damage. I should say that, in this case, the appellant concedes that the action was commenced within the six year limitation period in s.3(5).
 In this Court it was submitted that the frequent rainfalls which are a fact of life in the Lower Mainland qualify as an identifiable external event within the meaning of the passage which I have quoted from the W.C.B. case. With respect, I cannot accept that submission.
b. Frank warned the Plaintiffs that the attempt to solve the flashing problems by caulking the joints with sealant would never be effective. The learned trial Judge found that the Plaintiff attempted no other method of repair. At paragraph 73 of his reasons for judgment, the learned trial Judge found the flashing problem to be the most important cause of the structural damage at Riverwest.
c. Frank recommended that the fascias at the metal reveal band be replaced: Appeal Book, Vol 2, page 218. The Plaintiffs did not follow that advice. The learned trial Judge found that the failure to replace the fascias was fourth in order of importance among the causes of the leaks at Riverwest: Appeal Book, Vol. 1, page 162; Vol 4, page 652.
 Delta argues that the Strata Council contributed by negligence in failing to properly maintain the buildings that comprise Riverwest. Contributory negligence would have the effect of restricting damages against the Municipality to the proportion corresponding to its fault. The fact is, however, that this Strata Corporation acted with a high degree of diligence in pursuing problems with these three buildings.
 The degree of organization exhibited by the Strata Council would, in my view, be difficult to sustain with most residential Strata Councils. Their initial efforts were to have the developer correct deficiencies. These were maintained with diligence for so long as the developer was responsive. They continued with efforts to deal with leaks into the various suites and to correct the decks in accordance with advice given them. Ultimately they took the appropriate action in receiving expert advice and undertaking the remediation. I find no substance in this claim that the Strata Council was negligent.
 The essence of the trial judge’s decision on this issue is that he had regard to the context in which the plaintiffs had to decide, at an early stage, how to respond to the very difficult problems which were created for them by the defective state of the buildings in which they lived. The trial judge, after hearing many days of evidence and in delivering a very careful and extensive set of reasons for judgment, concluded that it was reasonable for the plaintiffs, having received the advice they did from Mr. Frank, which as I have said was given at a stage when the issue was what was going to be done under warranty, to continue for a time to rely on the developer to remedy the situation. In retrospect and with the wisdom of hindsight, that was not the best course. But I cannot say that the trial judge’s assessment of the issue was an error which would permit this Court to interfere with his decision.
The standard of review on pure questions of law was one of correctness, but appellate courts should not reverse findings of fact unless the trial judge had made a “palpable and overriding error”. The same degree of deference should be paid to inferences of fact. If there was no palpable and overriding error with respect to the underlying facts that the trial judge relied upon to draw the inference, then it was only where the inference-drawing process itself was palpably in error that an appellate court should interfere. Questions of mixed fact and law involved the application of a legal standard to a set of facts. Appellate courts should defer the findings of negligence in the absence of a legal or palpable and overriding error. A determination regarding the standard of care was a question of mixed fact and law, and was subject to a standard of palpable and overriding error, unless the trial judge made some extricable error in principle with respect to the characterization of the standard or its application, in which case this might amount to an error of law, subject to a standard of correctness.
 In my view, the decision in this case did not demonstrate error of the kind and degree which would be necessary. I do not intend to imply that there was any error in the conclusion. It clearly was one based on the whole of the evidence which involved a long and tortuous history of events.
 I would, therefore, dismiss the appeal. I turn then to the cross appeal with respect to the allocation of fault amongst the four defendants pursuant to s.4 of the Negligence Act. The trial judge determined that allocation to be 30% against the developer, 25% against each of the design firm and the contractor and 20% against Delta. The matter is of significance to the plaintiffs at this stage, notwithstanding that the defendants are jointly and severally liable, because the settlement with Canlan renders it in the interests of the plaintiffs to increase the percentage allocated to Delta and reduce that of the developer.
 The principles which apply to this issue are essentially the same as those which apply to the contributory negligence issue. The distinction if any is that, with all respect to Mr. Roberts’ submissions, the grounds for interfering are even weaker than with the contributory negligence. Accordingly, I would dismiss the cross appeal.
 ESSON, J.A.: The appeal is dismissed. The cross appeal is dismissed.
VAN MAREN CONSTRUCTION (#8701) LTD.
Counsel for the Defendants & Third Parties Van Maren Construction Co. Ltd. and Van Maren Construction (#8701) Ltd.
J. Novacek & Associates Ltd.
Counsel for the Defendants & Third Parties Elbe, Lock, Walls & Associates Inc.
 The plaintiff Strata Corporation claims damages for repairs to the three buildings comprising Riverwest Estates made necessary by wood rot in the exterior wall sheathing, studs and beams. The deterioration of the wood framing at Riverwest is similar to that found in many other contemporary buildings in the lower mainland. Many buildings have required extensive repairs of the wood frame members, replacement of the sheathing and exterior wall surfaces. The repairs are costly and Strata Corporations have difficulty functioning under the stress. The individual owners have ultimately had to carry most or all of the very substantial costs of these repairs.
 Riverwest is situated on the south arm of the Fraser River in the Municipality of Delta. In total there are eighty-five units. The buildings were constructed in 1990 and fully occupied by the fall of 1991. Two of the buildings are identical in design and the third is similar. The design incorporates terraced decks on the east and west ends of the buildings, balconies on the north and south sides, a flat roof, stucco walls and tall half-round windows on the top floor, extending above ceiling height and covered by peaked metal roofing. The buildings are wood frame construction and suites have exterior windows and doors opening onto the decks and balconies. The suites have gas fireplaces vented to the roof through frame chimney chases annexed to the exterior walls. The exterior walls extend above the roof to parapet tops. There are no roof overhangs.
 The project was owned and developed by the defendant Canlan Ice Sports Corp. The defendant, Van Maren Construction (#8701) Ltd. was the general contractor.
 This action lists the developer and the contractor, the structural engineer, and a building design company as defendants, but the case at trial involved only the Strata Corporation and the Municipality of Delta. The plaintiffs' action alleges negligent approval of the application for the building permit, negligent inspection of construction, and negligence in the final act of issuance of the occupancy permit.
 In 1989 the Riverwest project was presented to the Municipality for rezoning along with architectural drawings indicating the outward appearance of the buildings. At this stage the appearance of the buildings was quite different from what became the final design. Mr. Dumbleton, an architect, prepared these drawings. Council approved the proposal and the project went to the building permit stage. At this point the defendant, Elbe, Lock, Walls & Associates Inc. became involved, preparing the plans that accompanied the permit application. The final configuration of the buildings and some of the construction details were determined by these plans.
 The structural design of the buildings was presented in plans drawn by the defendant, J. Novacek & Associates Ltd., structural engineers.
 The plans prepared by the defendants, Elbe, Lock, Walls were not drawn by a professional architect. The legend affixed to the plans had Mr. Dumbleton's name block affixed to them, but he did not act in their preparation nor authorize his name to be used. The plans met with the approval of the Building Department and a permit was issued on February 26, 1990.
 During the course of construction, the Municipality conducted inspections at three of the five stages indicated in the bylaw. The two other inspections required by the building bylaw, to occur on completion of the foundation footings and after framing was complete, were noted on the municipal record as being the responsibility of the structural engineer who provided the structural design.
 The buildings were completed in succession. Owners began to take occupancy of suites in the first building in August 1990, and virtually all of the suites in the three buildings were occupied by the end of 1991. The occupancy permit for all three buildings was issued the 27th day of November 1991.
 Shortly after units were occupied owners began to complain about the construction of the decks and balconies. The developer had stipulated that the design of these features should include minimum slopes for the horizontal deck and balcony surfaces and the lowest threshold height achievable at the intersection with the patio doors. The plans approved for issuance of the building permit detailed a slope of 1:96, which indicates a fall of about one-eighth of an inch along each foot travelled toward the outside edge. The evidence given at this trial indicated this was less than the building code requirement of approximately one-quarter inch to the foot. As constructed, many surfaces apparently had no consistent slope at all, resulting in water pooling on these surfaces.
 Mr. Frank, an engineer consulted by the strata counsel to advise on deficiencies prior to expiry of the one-year warranty offered by the developer, inspected some of the deck repairs in October 1992. His report noted the inappropriate slope and his comment was that the efforts being made at that time to improve the slope were unlikely to produce favourable results. His recommendation was that the decks should be completely stripped and reconstructed.
 Despite Mr. Frank's comments improvements to the decks and balconies were attempted by building new deck surfaces over the old, increasing the slope back from the outside edge by using supporting cross strips of increasing thickness. This had the result of raising the deck below the patio doors and creating a seam between the waterproof vinyl surface of the deck and the stucco surface of the walls. Originally the vinyl membrane covering the decks and balconies was run up the adjoining walls for a distance with the stucco applied over top of the membrane. In the construction of the replacement deck surfaces, the vinyl was brought into contact with the stucco surface and a watertight joint attempted by using a sealant.
 The efforts to improve the decks and balconies continued for a number of years after substantial completion of the project and were a continuing concern of the owners and the Strata Corporation. These remedial efforts were undertaken by the developer and the construction company until further efforts were refused in January 1995. By this time some of the decks had been resurfaced twice.
 The attempts to improve the decks and balconies deserve mention in the history of this case because the original construction and remediation of these features contributed to what became the greater problem of moisture entering the walls. But also because balcony repairs eventually led to the discovery of the significant rot found in the structural framing.
 Starting during the first year of occupancy, the Strata Council also dealt with water leaks into the interior of many of the units. These leaks followed periods of rain and wind and were noticed above and below windows and patio doors and through ceilings of certain units. The worst leaks followed heavy rains and were usually seasonal occurrences. They were dealt with by application of sealants at likely points of entry into the exterior walls.
 Mr. Frank's January 1992 report dealt in part with deficiencies he noted in the application of flashings along the parapet tops, at intersections with roof membrane, and where flashings met stucco. He also noted that he could not observe the metal beads and drip moulds that were supposed to be incorporated in the fascia built into the top perimeter of the buildings, a defect that would allow moisture to enter into the wall. He commented that flashings would have to be re-detailed to achieve outward slope and needed to continue up behind the stucco. Further, that the flashings applied to the building, "require extensive and continued application of sealants in order to remain somewhat waterproof." He also noted that the complex was not protected by overhanging soffits and was located beside the Fraser River and subject to substantial wind effects on moisture and precipitation.
 Mr. Frank's comments were forwarded to the developer who assured that all details were pre-approved by "the architect", and that the flashings were inspected by the roofing contractor. Nothing more was done to attempt repairs beyond the application of sealant in response to leaks into the apartments.
 Discovery of rot in the framing began with events in 1996. On one occasion an owner brought to the Strata Council's attention a piece of trim at the base of an interior wall. The painted wood trim had rotted to the point that the moulding would give way to hand pressure, revealing the interior of the wall cavity. In July 1996 rot was found in a beam, part of the structure supporting the roof of one of the buildings, during a repair to a deck of a third floor suite. Removal of the deck revealed the beam rotted to the extent that pieces of the laminated beam could be pulled away by hand.
 The Strata Corporation commissioned a report from MHP Consultants, an engineering firm, to advise on the beam repair, followed by a further report dealing with the need to assess the extent of rot in the three building complex. In September 1996, the Strata Corporation took legal advice. Written notice of a potential claim was given to Delta on October 2nd, and this action was filled on October 16 1996.
Wall, window and patio deck construction at Riverwest is similar to many timber-frame, stucco-clad condominium buildings in the Lower Mainland. Water entry problems at Riverwest and other buildings derive from a reliance on exterior surfaces, joints and junctions to remain watertight during the service-life of the buildings. This enclosure type is often referred to as "face-sealed". Leakage into exterior walls and patio decks occurs when even minor openings in exterior seals allow water in. In some instances, water entry has resulted in wood rot of timber structural elements.
Wind-driven rain is a particularly difficult source of moisture to control using face-sealed details and many architectural features of the buildings result in joints and junctions that are difficult to seal. Recurring water entry problems at some suites is an indication of the difficulty of obtaining serviceable face-sealed assemblies. Up-grading of walls, windows and decks is needed to obtain assemblies that do not rely on the integrity of exterior seals. This work would involve all three main enclosure components included in the recent investigation: 1) Patio deck waterproofing including adjacent windows and sliding doorways. 2) stucco and metal wall cladding including metal flashings particularly with East and South exposures, and 3) window and patio door installations.
 This report was followed by more extensive investigation of the buildings and moisture probing conducted by Mr. Frank, who was at this time employed by Morrison Hershfield, a further consulting firm hired by the Strata corporation. The testing confirmed water entry into the buildings and also recommended extensive rebuilding of the exterior walls and balconies.
 In early 1998 the Strata corporation hired RDH Building Engineering to provide advice, and to design and manage the repair program. The project was tendered and a bid selected. The buildings were stripped of stucco and sheathing, structural framing was replaced where required and the sheathing, building paper and exterior surface replaced. The replacement was primarily with stucco of similar composition to that originally applied, but applied onto wooden strips which allowed drainage and ventilation so that moisture that might penetrate into the wall behind the stucco would drain or dry, rather than being retained in the wall itself. Remediation also included addition of overhanging canopies over upper storey windows and doors and reconstruction of the decks. The total price paid was in the order of $3 million, or roughly $40,000 to $60,000 per unit.
 During the process of stripping the exterior, deficiencies in the structural design of the buildings were uncovered and repaired. The supporting joists below balconies and decks were not adequate to support these features over the distance spanned. Joists were not fixed into beams with adequate support and the deck structures were tied into chimney chases, which did not rest on foundation footings. These structural defects were improved as part of the overall project. The cost of these repairs was not isolated, but estimated to have increased the total cost by approximately $50,000 to $75,000.
 The law imposing liability for negligence requires that a defendant must owe the claimant a duty of care. Proof must then be given that the defendant failed to exercise a reasonable standard of care and that this failure was a material cause of the damage the plaintiff suffered.
 The duty of care of a government regulatory body to individuals among the public it serves is now well established by case law. In Anns v. London Borough of Merton,  A.C. 728, a local government body was found liable to a private claimant for negligence in enforcing building standards. The two-step test established in Anns required, first an analysis of whether there was a sufficiently close or proximate relationship between the public body and the private claimant to be able to reasonably forecast that negligence by the regulatory body would cause damage to the claimant. The second consideration is whether there are any competing, often policy based, reasons why the public body should not be made liable.
I do not believe that to permit recovery in this case is to expose public authorities to the indeterminate liability referred to Ultramares. In order to obtain recovery for economic loss the statute has to create a private law duty to the plaintiff along side the public law duty. The plaintiff has to belong to the limited class of owners or occupiers of the property at the time the damage manifests itself. Loss caused as a result of policy decisions made by the public authority in the bona fide exercise of discretion will not be compensable. Loss caused in the implementation of policy decisions will not be compensable if the operational decision includes a policy element. Loss caused in the implementation of policy decisions, i.e., operational negligence will be compensable. Loss will also be compensable if the implementation involves policy considerations and the discretion exercised by the public authority is not exercised in good faith. Finally, and perhaps this merits some emphasis, economic loss will only be recoverable if as a matter of statutory interpretation it is a type of loss the statute intended to guard against.
It seems to me that recovery for economic loss on the foregoing basis accomplishes a number of worthy objectives. It avoids undue interference by the courts in the affairs of public authorities. It gives a remedy where the legislature has impliably sanctioned it and justice clearly requires it. It imposes enough of a burden on public authorities to act as a check on the arbitrary and negligent discharge of statutory duties. For these reasons I would permit recovery of the economic loss in this case.
 Kamloops was a case where the Municipality failed to take any effective action to require a property owner to replace an unstable retaining wall. The city inspector had discovered the defect and placed a stop work order on the site, but the city took no further action to resolve the problem. The city was found liable to a subsequent purchaser who bought the property without notice of the defect and suffered loss when the wall failed, removing support for the foundation of the home situate on the property. The failure founding negligence was therefore the failure to enforce compliance with building standards.
The inspection of plans and the supervision of construction increases the costs of a construction for everyone. But I think that most rate payers, were they to give the matter any thought, would justify the increased expense as an investment in peace of mind; faulty construction, after all, is a danger to life and limb and may result in future expense and liability.
 In each of these cases the duty to exercise proper care originated in the public law responsibility imposed by statute or adopted under permissive statutory authority by the local authority. In each case there was foreseeable loss to the plaintiff if the process of regulation was done badly or not undertaken at all.
 In assessing policy based reasons for avoidance of liability the court in Kamloops recognized that if the failure to act were based on a good faith employment of discretion in the allocation of resources, liability should not be imposed. The distinction was made between operational negligence and implementation of policy decisions. In any individual case, however, the difficulty often lies in properly labelling the failure in question. Was it an operational failure to implement a policy or a forgivable policy based economy of resources? The further, or perhaps initial, requirement of good faith in determining policy adds another level of analysis.
The duty of care should apply to a public authority unless there is a valid basis for its exclusion. A true policy decision undertaken by a government agency constitutes such a valid basis for exclusion. What constitutes a policy decision may vary infinitely and may be made at different levels although usually at a high level.
The decisions in Anns v. Merton London Borough Council and City of Kamloops v. Nielsen, supra, indicate that a government agency in reaching a decision pertaining to inspection must act in a reasonable manner which constitutes a bona fide exercise of discretion. To do so they must specifically consider whether to inspect and if so, the system of inspection must be a reasonable one in all the circumstances.
True policy decisions involve social, political and economic factors. In such decisions, the authority attempts to strike a balance between efficiency and thrift, in the context of planning and predetermining the boundaries of its undertakings and of their actual performance. True policy decisions will usually be dictated by financial, economic, social and political factors or constraints.
The operational area is concerned with the practical implementation of the formulated policies, it mainly covers the performance or carrying out of a policy. Operational decisions will usually be made on the basis of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness.
In my view, inaction for no reason or inaction for an improper reason cannot be a policy decision taken in the bona fide exercise of discretion. Where the question whether the requisite action should be taken has not even been considered by the public authority, or at least has not been considered in good faith, it seems clear that for that very reason the authority has not acted with reasonable care.
To determine whether an inspection scheme by a local authority will be subject to a private law duty of care, the court must determine whether the scheme represents a policy decision on the part of the authority, or whether it represents the implementation of a policy decision, at the operational level. True policy decisions are exempt from civil liability to ensure that governments are not restricted in making decisions based upon political or economic factors. It is clear, however, that once a government agency makes a policy decision to inspect, in certain circumstances, it owes a duty of care to all who may be injured by the negligent implementation of that policy; see, for example, Just v. British Columbia,  2 S.C.R. 1228, at p. 1243, per Cory J.; Rothfield v. Manolakos, supra, at p. 1266, per La Forest J.
While I have stated above that a government agency will not be liable for those decisions made at the policy level, I must emphasize that, where inspection is provided for by statute, a government agency cannot immunize itself from liability by simply making a policy decision never to inspect. The decisions in Anns v. Merton London Borough Council, supra, and Kamloops v. Nielsen, supra, establish that in reaching a policy decision pertaining to inspection, the government agency must act in a reasonable manner which constitutes a bona fide exercise of discretion. In the context of a municipal inspection scheme, we must bear in mind that municipalities are creatures of statute, which have clear responsibilities for health and safety in their area. A policy decision as to whether or not to inspect must accord with this statutory purpose; see, for example, Kamloops v. Nielsen, at p. 10.
Once it is determined that an inspection has occurred at the operational level, and thus that the public actor owes a duty of care to all who might be injured by a negligent inspection, a traditional negligence analysis will be applied. To avoid liability, the government agency must exercise the standard of care in its inspection that would be expected of an ordinary, reasonable and prudent person in the same circumstances. Recently, in Ryan v. Victoria, supra, at para. 28, Major J. reaffirmed that the measure of what is reasonable in the circumstances will depend on a variety of factors, including the likelihood of a known or foreseeable harm, the gravity of that harm and the burden or cost which would be incurred to prevent the injury. The same standard of care applies to a municipality, which conducts an inspection of a construction project. While the municipal inspector will not be expected to discover every latent defect in a project, or every derogation from the building code standards, it will be liable for those defects that it could reasonably be expected to have detected and to have ordered remedied; see, for example, Rothfield v. Manolakos, supra, at pp. 1268-69.
 It is difficult to conceive of an act or omission of a regulatory body that would be the direct or principal cause of faulty construction, but such an act or omission could be a cause of the loss, in conjunction with the other causal factors, if the negligence of the regulatory body materially contributed to the loss. This, for example, was the finding in Manolakos where the deficient construction was predominantly the fault of the contractor. The city's failing in not conducting a proper inspection, however, was judged to have contributed to the loss, which might otherwise have been avoided.
 Barring contributory negligence by the plaintiff, defendants mutually contributing to the loss will be jointly and severally liable to the plaintiff. In cases where the participants most contributing to the loss are those responsible for construction, these defendants may be separately incorporated for the individual project and accordingly may not be viable entities when latent defects become apparent. This leaves the other enduring entities associated with the loss exposed to the full force of the judgment.
insurance imposes a duty to defend the action.
initially owned and developed by Canlan Investment Corporation.
to provide agreed facilities and amenities.
habitation of the Plaintiff, Rosemary Fleming.
the member or members of Strata Council Mr.
time from the "bodily injury".
any of these at any time.
that is not physically injured.
liability coverage would provide costs of defending the action.
defence on the petitioners' behalf on June 1, 1994.
conversely excluded by the endorsement.
both a duty to indemnify and a duty to defend.
right to deny a duty to defend.  They do not rely upon estoppel.
that purpose by the insurer.
of any claim under the contract.
s.13(1) in order to establish an effective waiver.
authorized to waive the issue of the respondent's duty to defend.
wherein this right is waived.
move to the question, is there a duty to defend?
IS THERE A DUTY TO DEFEND?
than the duty to indemnify.
pleadings in the lawsuit to be compared to the insurance policy.
Home Assurance Co. Ltd. (1990), 68 D.L.R. (4th) 321 (S.C.C.).
inducing breach of the resale contract.
owners of the strata lots.
it's [sic] Directors or Officers.
liability under this portion of the policy.
the claims made by Mr. and Mrs. Fleming for failure to repair.
and that failure to repair rendered the strata lot unfit for Mrs.
allegation is one of lost usage of the property, not bodily injury.
there is no duty to defend on this aspect of the claim.
Liability portion of the policy.
Registry to make submissions on costs, in writing.

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