0790482 B.C. Ltd. v. KBK No. 11 Ventures  
2022 BCSC 1002  
Date: 20220614  
Docket: S1510418  
Registry: Vancouver  
0790482 B.C. Ltd.  
KBK No. 11 Ventures Ltd., 1100 Georgia Partnership, Peterson Investment  
(Georgia) Limited Partnership, Abbey Adelaide Holdings Inc.,  
LJV Georgia Investments Inc. and No. 274 Cathedral Ventures Ltd.  
Brought under the Class Proceedings Act, R.S.B.C. 1996, c. 50  
Before: The Honourable Mr. Justice Walker  
Reasons for Judgment  
Counsel for the Plaintiff:  
M. Hunt  
E. Christian  
Counsel for the Defendants/Applicants:  
S.D. Coblin  
M. Hashmi  
Counsel for the Proposed Third-Party  
Respondents, IGA/AGS Joint Ventures Inc.  
and IGA/AGS Joint Venture Inc.:  
D. Lehrer  
Place and Dates of Hearing:  
Place and Date of Judgment:  
Vancouver, B.C.  
April 20-21 and May 17-18, 2022  
Vancouver, B.C.  
June 14, 2022  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 2  
Table of Contents  
INTRODUCTION ....................................................................................................... 3  
APPLICANTS’ POSITION......................................................................................... 7  
IGA’S POSITION....................................................................................................... 8  
Warranty Actions.................................................................................................... 9  
Class Action ........................................................................................................... 9  
ISSUES...................................................................................................................... 9  
CLAIM FOR PURE ECONOMIC LOSS................................................................... 10  
Introductory Remarks........................................................................................... 10  
Winnipeg Condominium ....................................................................................... 11  
Maple Leaf Foods................................................................................................. 12  
Other Case Authorities......................................................................................... 19  
Conclusion............................................................................................................ 23  
Characterizing the Applicants’ Proposed Third-Party Tort Claim.......................... 23  
Disposition............................................................................................................ 27  
LIMITATION DEFENCE IN CLASS PROCEEDING................................................ 27  
SHOULD LEAVE BE GRANTED IN THE CLASS ACTION?.................................. 36  
SUMMARY .............................................................................................................. 38  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 3  
KBK No. 11 Ventures Ltd. (“KBK”), 1100 Georgia Partnership, and their  
related entities apply for leave to file third-party proceedings against IGA/AGS Joint  
Ventures Inc. (collectively, “IGA”) in three of five related actions, VA S1510418, VA  
S117480, and VA S117461. The subject matter of those and two other related  
actions, VA S1510419 and VA S1510431, concerns alleged defects in the curtain-  
wall window system of the Shangri-La Hotel building located on the corner of  
Georgia and Alberni Streets in Vancouver, B.C. (“Building”). For ease of reference, I  
will refer to all five related actions collectively as the “Related Actions”.  
The Building is a high-end, multi-use glazed tower, consisting of three air  
space parcels: the Shangri-La Hotel itself which occupies floors 115; live-work  
strata units on certain portions of floors 5 and 6 and on floors 1643; and residential  
strata units on floors 4462. The strata corporation responsible for the common  
property in the live-work units is the Owners, Strata Plan 3165 (“SP 3165”) and for  
the residential units, the Owners, Strata Plan 3206 (“SP 3206”). I refer to them  
collectively in these reasons as the “strata corporations”.  
The Building is composed of a curtain-wall system consisting of pre-fabricated  
panels constructed as distinct, four-sided insulated glass units (IGUs) which are  
said to be integral to the proper functioning of the Building and separate the exterior  
and interior environments. IGUs include inner and outer glass (which are called  
“lites”) separated by a metal spacer bar. The outer and inner lites have different  
structural attributes. The outer lite is heat-strengthened glass while the inner lite is  
tempered glass. The inner lite is twice as stiff as the outer lite and unlike the outer  
lite, it is supposed to break into small pieces when shattered. Both glass lites are  
sealed to the spacer using two types of sealant which are meant to provide an air-  
and vapour-tight cavity between the glass panes. A chemical known as a  
“desiccant”, designed to absorb moisture in the air between the two lites, is  
contained inside of the spacer bar.  
The curtain-wall system, including the IGUs, is common property.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
[5] Further Information concerning the lengthy and complex history of the  
Page 4  
Related Actions may be gleaned from reasons for judgment indexed at 2021 BCSC  
1761 and 2022 BCSC 226. In those reasons, the applicants are referred to  
collectively as the “developer defendants”.  
The Related Actions are to be tried at the same time. The trial is scheduled to  
commence on October 3, 2022, and estimated to take approximately 130 days.  
The applicants comprise the legal owner of the land, KBK, the developer,  
1100 Georgia Partnership (a general partnership), and the latter’s four partners,  
Peterson Investment (Georgia) Limited Partnership, Abbey Adelaide Holdings Inc.,  
LJV Georgia Investments Inc., and No. 274 Cathedral Ventures Ltd.  
In two of the five Related Actions, SP 3165 (VA S1510431) and SP 3206 (VA  
S1510419) have sued multiple defendants, including the applicants, grounding their  
claims in negligence. The parties refer to those actions collectively as the “IGU  
At the heart of the IGU Actions is the strata corporations’ assertion of  
systemic dangerous defects in the IGUs which require repair or replacement. The  
strata corporations claim that the systemic defects, resulting from negligent design,  
manufacture, assembly, and installation, are manifesting in a number of inner and  
outer lites fogging, leaking water, spontaneously breaking, cracking, and/or failing,  
which have caused the IGUs and Building to be unsafe and hazardous. The strata  
corporations allege that the systemic dangerous defects pose a substantial risk of  
physical danger, including to the health and safety of any person in the vicinity of the  
[10] In the IGU Actions, the strata corporations seek recovery of economic loss,  
i.e., the cost to abate the dangerous defects in common property through repair or  
replacement, based on the decisions of the Supreme Court of Canada in Winnipeg  
Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85 and  
1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 5  
[11] Two of the other five Related Actions, VA S117461 and VA S117480, are  
brought by the strata corporations against warranty insurers, National Home  
Warranty Group Inc. and Aviva Insurance Company of Canada (collectively,  
Warranty Actions”), for recovery of losses they maintain are covered by warranty  
insurance policies. In turn, those insurers have issued third-party claims against two  
of the applicants, KBK and 1100 Georgia Partnership.  
[12] The fifth action, VA S1510418, is a class action brought on behalf of  
individual unit owners who stood in privity with the applicants. The numbered  
company 0790482 B.C. Ltd. is the representative plaintiff. The claims in the class  
proceeding are on account of breach of contract and breach of implied warranty of  
fitness, and are advanced on behalf of current and former unit owners who stood in  
privity with the applicants. The claims are in respect of all defects and are not  
restricted to proof of loss arising from dangerous defects. Recovery is sought in  
respect of individual losses (as opposed to common property), such as damage to  
individual units, diminution in value, and loss of amenities.  
[13] Prior to certification of this class action, and in addition to advancing claims  
concerning common property, the strata corporations advanced representative  
claims on behalf of individual unit holders in the IGU Actions. The defendants and  
third parties in the IGU Actions challenged the strata corporations’ standing to  
pursue such claims. As a result of amendments to pleadings in the IGU Actions and  
the class action, claims for individual losses on behalf of current and former owners  
who stood in privity with the applicants are now being pursued in the class action.  
[14] The proposed third party, IGA, is a trade contractor alleged to be responsible  
for the design, supply, and installation of the curtain-wall system, including the IGUs.  
In their proposed third-party notice, the applicants seek to advance claims against  
IGA for contribution and indemnity as well as an independent claim for damages  
premised on KBK’s contractual relationship with IGA. Their initial written  
submissions described the essence of their claim this way:  
In the proposed Third-Party Notice, these Defendants advance a  
contractual claim and a claim in negligence against IGA.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 6  
It is alleged therein that IGA owed the Applicants a duty in contract  
and tort to design, supply and install a “Curtain Wall” system that functioned  
without defect and was fit for its intended purpose.  
It is pleaded that the IGA breached its duties to the Applicants by,  
among other things, failing to perform the services it contracted to perform in  
a good and workmanlike manner.  
[15] The applicants made similar allegations in third-party notices they previously  
filed in the IGU Actions. In the IGU Action brought by SP 3206 (VA S1510419), the  
applicants obtained leave from Master Muir on August 11, 2017 (unopposed by IGA)  
to file a third-party notice against, inter alia, IGA and filed their third-party notice on  
August 18, 2017. The applicants filed their third-party notice against IGA in the IGU  
Action brought by SP 3165 (VA S1510431), with leave from Master Taylor and  
unopposed by IGA, on December 10, 2018.  
[16] It is in the Warranty Actions and the class action that the applicants seek  
leave to file their respective third-party notices seeking contribution and indemnity for  
any amounts they are ordered to pay. The applicants’ proposed third-party notices  
also advance independent contractual and tort claims for damages.  
[17] In the class action, it is all of the applicants who seek leave to file a third-party  
notice as all of them are named as defendants. In the Warranty Actions, it is only  
KBK and 1100 Georgia Partnership who apply for leave as they, as opposed to their  
related entities, are named as third parties.  
[18] Through the course of the hearing, the applicants obtained leave (which was  
unopposed) to submit redrafted proposed third-party notices to clarify the nature of  
their claim and the relief sought. As it now stands, the proposed third-party claim  
against IGA advances a breach of contract claim, asserting that IGA breached its  
contractual obligations to KBK, and a claim in tort. The applicants characterize their  
tort claim as grounded in misrepresentation and negligent performance of a service  
for which, they submit, there is no limit on the scope of their recovery for economic  
loss. The allegations in the three proposed third-party notices differ slightly, to  
capture the differing nature of the claims made against the applicants, but not in any  
substantive way.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 7  
Applicants’ Position  
[19] The applicants’ position is that the allegations in their proposed third-party  
notices essentially mirror those advanced in third-party notices they filed in the IGU  
Actions. They contend that their proposed third-party notices advance valid causes  
of action premised on misrepresentation and negligent performance of a service, are  
not barred by any limitation period, their claims as pleaded if assumed to be true are  
not bound to fail, and that there is no surprise or prejudice to IGA, such that leave  
should be granted to avoid a multiplicity of proceedings.  
[20] They also contend that, similar to those they advanced unopposed in the IGU  
Actions, they would be prejudiced if they were denied the right to advance third-party  
claims against IGA in the class action as a result of the change in which claims for  
individual losses are being pursued, particularly those consequent upon  
amendments to the notice of civil claim in the class action filed in December 2021.  
[21] The applicants submit that they have not delayed in seeking leave and  
further, that in all respects, they meet the prerequisites in R. 3-5(1)(b) and (c) of the  
Supreme Court Civil Rules [Rules]. They contend that the merits of their application  
fall squarely within the holdings in the following case authorities (which I discuss or  
refer to below): McNaughton v. Baker, [1988] 4 W.W.R. 742 at paras. 18, 21, 2830  
(B.C.C.A.); Health Sciences Association of British Columbia v. Hewitt Associates  
Corp., 2019 BCSC 208; The Owners, Strata Plan EPS 677 v. ASPAC Developments  
Ltd., 2021 BCSC 2294 at paras. 16, 23; Steveston Seafood Auction Inc. v. Bahi,  
2013 BCSC 1072 at para. 19; Tyson Creek Hydro Corporation v. Kerr Wood Leidal  
Associates Limited, 2014 BCCA 17 at paras. 1, 16, 24; Lui v. West Granville Manor  
Ltd. (1985), 18 D.L.R. (4th) 391 at para. 41 (B.C.C.A.); Canfor Pulp Limited  
Partnership v. Siemens Building Technologies Ltd., 2016 BCSC 2089 at para. 49.  
[22] A claim for contribution or indemnity may be brought by a separate action or a  
third-party notice per R. 3-5(1), which sets out when a claim for contribution or  
indemnity may be brought by a third-party notice:  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 8  
Making a third party claim  
(1) A party against whom relief is sought in an action may, if that party is not  
a plaintiff in the action, pursue a third party claim against any person if the  
party alleges that  
(a) the party is entitled to contribution or indemnity from the person in  
relation to any relief that is being sought against the party in the  
(b) the party is entitled to relief against the person and that relief  
relates to or is connected with the subject matter of the action, or  
(c) a question or issue between the party and the person  
(i) is substantially the same as a question or issue that relates  
to or is connected with  
(A) relief claimed in the action, or  
(B) the subject matter of the action, and  
(ii) should properly be determined in the action.  
[23] Rule 3-5(4), brought into force on April 4, 2022, requires a third-party notice to  
be brought within 42 days of a defendant’s response pleading being filed, otherwise  
leave of the court is required. The applicants are beyond that time and hence,  
require leave.  
[24] The same principles governing R. 9-5, which concerns dismissal of a claim on  
the basis that no cause of action is alleged, apply to the analysis for granting leave  
or striking third-party claims. The party advancing or seeking to advance a third-  
party claim is not required to adduce evidence in support of the application. The  
facts pleaded are presumed to be true. The third-party notice or the application  
seeking leave will only be struck or dismissed (as the case may be) if it is plain and  
obvious that the pleading fails to disclose a reasonable claim that is not bound to fail:  
McNaughton at paras. 2830; Health Sciences; ASPAC at para. 16; Steveston  
Seafood at para. 19.  
IGA’s Position  
[25] IGA does not contend that the proposed third-party notices fall outside the  
scope of R. 3-5. Their defence to the application focuses on whether the applicants’  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 9  
claims for economic loss engage a valid cause of action and also, in respect of the  
class action, whether the claim is time-barred.  
Warranty Actions  
[26] IGA acknowledges that the claims in the proposed third-party notices in the  
Warranty Actions are not barred by any limitation period. It does not oppose the filing  
of third-party notices in the Warranty Actions so long as the relief sought is grounded  
on a contractual claim.  
[27] In respect of the claim for contribution and indemnity based in negligence,  
IGA’s original position on the application was that there is no basis in law on which  
the applicants can seek recovery in tort because their claim is to recover pure  
economic loss. However, in oral submissions, IGA confirmed that it was not  
vigorously contending that it did not owe a duty of care in tort to the applicants. Its  
primary defence is that there is no basis in law on which the applicants can recover  
economic loss beyond any cost to abate dangerous defects.  
Class Action  
[28] For the class action, IGA’s position is that leave should be denied because  
the limitation period has expired. In addition, and similar to its revised position in the  
Warranty Actions, IGA opposes the tort claim in the proposed third-party notice for  
pure economic losses not falling within the exception for dangerous defects outlined  
in Winnipeg Condominium and Maple Leaf Foods. IGA acknowledges that in theory,  
claims for recovery of economic loss predicated on dangerous defects arising in  
individual units from the defects in the IGUs might be made. On that basis, IGA  
acknowledges that in addition to the contractual claim, it cannot oppose a tort claim  
confined to recovery for economic loss in respect of dangerous defects to individual  
strata units arising from defects in common property, as the claim cannot be said to  
be bound to fail.  
[29] The submissions of the applicants and IGA raise the following issues.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 10  
[30] Are the proposed third-party tort claims in respect of losses not arising from  
dangerous defects bound to fail as they disclose no reasonable cause of action?  
This issue involves the characterization of the nature of the claim (i.e., a claim for  
misrepresentation and negligent performance of services or for negligent supply of a  
defective product) and whether the holding in Winnipeg Condominium nonetheless  
limits recovery for economic loss in respect of any claim concerning building defects  
to the cost to abate dangerous defects.  
[31] Is the proposed third-party claim in the class proceeding time-barred?  
Determination of that issue depends in part on the merits of the applicants’  
submission that IGA is precluded from a limitation defence on account of a tolling  
agreement or is estopped on account of its conduct.  
[32] If the applicants are not time-barred, should they be permitted to issue the  
third-party notice in the class action since they are beyond the 42-day time period  
(provided for in R. 3-5(4)) to do so without leave?  
Claim for Pure Economic Loss  
Introductory Remarks  
[33] The parties’ dispute concerns whether, as IGA contends, claims for pure  
economic loss arising in building defect cases are restricted to the cost to repair or  
replace dangerous defects. IGA says the leading authority concerning the scope of  
recovery in building defect cases remains the Supreme Court of Canada’s decision  
in Winnipeg Condominium. While not specifically contesting the applicants’  
submission that as a matter of law, IGA owed a duty of care to the applicants in  
relation to the curtain-wall system, IGA’s submissions focus on whether the potential  
scope of recovery is limited to the cost to abate dangerous defects.  
[34] The applicants contend that IGA’s position overlooks the most recent  
discussion of the law set out in the Court’s decision in Maple Leaf Foods and  
subsequent authorities. According to the applicants, its claim against IGA is  
effectively a claim for misrepresentation and negligent provision of services, which,  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 11  
they submit, is not fettered by proof of dangerous defects as shown in Maple Leaf  
Winnipeg Condominium  
[35] Winnipeg Condominium concerned a claim for pure economic loss, i.e., the  
cost of repair or replacement of defects alleged to be dangerous, by an indirect  
purchaser of units in a building based in negligence. In carving out an exception to  
the general bar on claims in negligence for pure economic loss, the Court said that  
any such claim in the building defect context is restricted to the cost to abate  
dangerous defects and must be founded upon accepted relationships of proximity.  
[36] The Court’s reasoning in allowing the claim is distilled in the passages  
excerpted below:  
Turning to the first concern, a duty on the part of contractors to take  
reasonable care in the construction of buildings can, in my view, be  
conceptualized in the absence of contract and will not result in indeterminate  
liability to the contractor. As I mentioned earlier, this Court has recognized  
that a tort duty can arise concurrently with a contractual duty, so long as that  
tort duty arises independently of the contractual duty; see Rafuse, supra;  
Edgeworth, supra. As I see it, the duty to construct a building according to  
reasonable standards and without dangerous defects arises independently of  
the contractual stipulations between the original owner and the contractor  
because it arises from a duty to create the building safely and not merely  
according to contractual standards of quality. It must be remembered that we  
are speaking here of a duty to construct the building according to reasonable  
standards of safety in such a manner that it does not contain dangerous  
defects. As this duty arises independently of any contract, there is no logical  
reason for allowing the contractor to rely upon a contract made with the  
original owner to shield him or her from liability to subsequent purchasers  
arising from a dangerously constructed building. This point was forcefully  
made by Richmond P. in Bowen, supra, at p. 407: …  
The tort duty to construct a building safely is thus a circumscribed  
duty that is not parasitic upon any contractual duties between the contractor  
and the original owner. Seen in this way, no serious risk of indeterminate  
liability arises with respect to this tort duty. In the first place, there is no risk  
of liability to an indeterminate class because the potential class of claimants  
is limited to the very persons for whom the building is constructed: the  
inhabitants of the building. The fact that the class of claimants may include  
successors in title who have no contractual relationship with the contractors  
does not, in my view, render the class of potential claimants indeterminate.  
As noted by the New Jersey Supreme Court in Aronsohn v. Mandara, 484  
A.2d 675 (1984), at p. 680, "[t]he contractor should not be relieved of liability  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 12  
for unworkmanlike construction simply because of the fortuity that the  
property on which he did the construction has changed hands".  
My conclusion that a subsequent purchaser is not the best placed to  
bear the risk of the emergence of latent defects is borne out by the facts of  
this case. It is significant that, when cracking first appeared in the mortar of  
the building in 1982, the Condominium Corporation actually hired Smith  
Carter, the original architect of the building, along with a firm of structural  
engineers, to assess the condition of the mortar work and exterior  
cladding. These experts failed to detect the latent defects that appear to  
have caused the cladding to fall in 1989. Thus, although it is clear that the  
Condominium Corporation acted with diligence in seeking to detect hidden  
defects in the building, they were nonetheless unable to detect the defects or  
to foresee the collapse of the cladding in 1989. This, in my view, illustrates  
the unreality of the assumption that the purchaser is better placed to detect  
and bear the risk of hidden defects. For this Court to apply the doctrine  
of caveat emptor to negate Bird's duty in tort would be to apply a rule that has  
become completely divorced, in this context at least, from its underlying  
[Emphasis in original]  
Maple Leaf Foods  
[37] Maple Leaf Foods was not a building defect case. It was a claim by  
franchisees for recovery of economic loss due to tainted meat, which they alleged to  
be dangerous to human health and had been voluntarily recalled by the defendant  
manufacturer. The claim engaged two separate categories of recovery for pure  
economic loss: negligent performance of a service and negligent supply of shoddy  
goods or structures.  
[38] With respect to the first categorynegligent performance of a servicethe  
Court dismissed the claim on the basis that the plaintiff failed to establish the  
requisite elements of undertaking and reliance. For a claim of negligent performance  
of a service, a relationship of proximity is created when, and only when, the  
defendant undertakes responsibility which invites reasonable and detrimental  
reliance by the plaintiff upon the defendant for that purpose. The plaintiff’s reliance  
must fall within the scope of the defendant’s undertaking: Maple Leaf Foods at  
paras. 32, 35. The Court in Maple Leaf Foods found that the only responsibility the  
defendant had undertaken was to provide meats fit for human consumption, the  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 13  
purpose of which is to ensure that the ultimate consumers of their meats would not  
become ill or die as a result of eating the product. The Court found that the  
undertaking was not made in reference to the plaintiff’s business interests and  
therefore even if there was any merit to the claim of reasonable and detrimental  
reliance, which was not found to exist in any event, it fell outside the purpose of the  
[39] Under a separate subheading in its reasons, the Court analyzed whether the  
plaintiff was entitled to recover pure economic loss consequent upon the delivery of  
a defective product.  
[40] Applying the Anns/Cooper framework, the Court first held the plaintiff could  
not analogize its claim to Winnipeg Condominium, as unlike the latter, the allegedly  
contaminated meats had been voluntarily recalled by the defendant and thus posed  
no danger to the ultimate consumers: Maple Leaf Foods at paras. 47-48.  
[41] Given the dispute between the parties concerning the effect of the reasoning  
in Maple Leaf Foods upon the holding in Winnipeg Condominium, I have excerpted a  
greater number of passages from the reasons in Maple Leaf Foods.  
[42] The applicants rely on the passages from Maple Leaf Foods excerpted below  
concerning misrepresentation and negligent performance of a service, to support  
their contention that their claims are not limited to the cost to abate dangerous  
defects, and instead that recovery for economic loss is unlimited where a claimant  
can establish a relationship of proximity (not necessarily arising from a contractual  
Negligent Misrepresentation or Performance of a Service  
In Livent, this Court restated the analytical framework governing  
cases of negligent misrepresentation or performance of a service. In doing  
so, it brought the analytical approach in such cases into accord with the  
refined Anns/Cooper framework laid out in Cooper. Previously, the duty  
analysis had been stated in Hercules Managements Ltd. v. Ernst & Young,  
[1997] 2 S.C.R. 165, which grounded a prima facie duty of care on mere  
foreseeability of injury. Cooper, however, “signalled a shift from th[at] test”  
(Livent, at para. 22; see also para. 23).  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 14  
Under the Anns/Cooper framework, a prima facie duty of care is  
established by the conjunction of proximity of relationship and foreseeability  
of injury. As this Court affirmed, “foreseeability alone” is insufficient to ground  
the existence of a duty of care. Rather, a duty arises only where a  
relationship of “proximity” obtains (Cooper, at paras. 22 and 30-32; see  
also Livent, at para. 23). Whether a proximate relationship exists between  
two parties at large, or inheres only for particular purposes or in relation to  
particular actions, will depend on the nature of the relationships at issue  
(Livent, at para. 27). It may also depend on the nature of the particular kind of  
pure economic loss alleged.  
A party may seek “to base a finding of proximity upon a previously  
established or analogous category” (Livent, at para. 28). But where no  
established proximate relationship can be identified, courts must undertake a  
full proximity analysis in order to determine whether the close and  
direct relationship which this Court has repeatedly affirmed to be the  
hallmark of the common law duty of care exists in the circumstances of the  
case (ibid., at para. 29; Saadati, at para. 24; Cooper, at para. 32).  
In cases of negligent misrepresentation or performance of a service,  
two factors are determinative of whether proximity is established: the  
defendant’s undertaking, and the plaintiff’s reliance (Livent, at para. 30).  
Specifically, “[w]here the defendant undertakes to provide a representation or  
service in circumstances that invite the plaintiff’s reasonable reliance, the  
defendant becomes obligated to take reasonable care”, and “the plaintiff has  
a right to rely on the defendant’s undertaking to do so” (ibid.). “These  
corollary rights and obligations”, the Court added, “create a relationship of  
proximity” (ibid.). In other words, the proximate relationship is formed when  
the defendant undertakes responsibility which invites reasonable and  
detrimental reliance by the plaintiff upon the defendant for that purpose  
(P. Benson, “Should White v Jones Represent Canadian Law: A Return to  
First Principles”, in J. W. Neyers, E. Chamberlain and S. G. A. Pitel,  
eds., Emerging Issues in Tort Law (2007), 141, at p. 166).  
Taking Cooper and Livent together, then, this Court has emphasized  
the requirement of proximity within the duty analysis, and has tied that  
requirement in cases of negligent misrepresentation or performance of a  
service to the defendant’s undertaking of responsibility and its inducement of  
reasonable and detrimental reliance in the plaintiff. Framing the analysis in  
this manner also illuminates the legal interest being protected and, therefore,  
the right sought to be vindicated by such claims. When a defendant  
undertakes to represent a state of affairs or to otherwise do something, it  
assumes the task of doing so reasonably, thereby manifesting an intention to  
induce the plaintiff’s reliance upon the defendant’s exercise of reasonable  
care in carrying out the task. And where the inducement has that intended  
effect that is, where the plaintiff reasonably relies, it alters its position,  
possibly foregoing alternative and more beneficial courses of action that were  
available at the time of the inducement. That is, the plaintiff may show that  
the defendant’s inducement caused the plaintiff to relinquish its pre-reliance  
position and suffer economic detriment as a consequence.  
In other words, it is the intended effect of the defendant’s undertaking  
upon the plaintiff’s autonomy that brings the defendant into a relationship of  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 15  
proximity, and therefore of duty, with the plaintiff. Where that effect works to  
the plaintiff’s detriment, it is a wrong to the plaintiff. Having deliberately  
solicited the plaintiff’s reliance as a reasonable response, the defendant  
cannot in justice disclaim responsibility for any economic loss that the plaintiff  
can show was caused by such reliance. The plaintiff’s pre-reliance  
circumstance has become “an entitlement that runs against the defendant”  
(Weinrib, at p. 230).  
That entitlement, however, operates only so far as the undertaking  
goes. As this Court cautioned in Livent, “[r]ights, like duties, are . . . not  
limitless. Any reliance on the part of the plaintiff which falls outside of the  
scope of the defendant’s undertaking of responsibility that is, of the  
purpose for which the representation was made or the service was  
undertaken necessarily falls outside the scope of the proximate  
relationship and, therefore, of the defendant’s duty of care” (para. 31, citing  
Weinrib and A. Beever, Rediscovering the Law of Negligence (2007), at  
pp. 293-94). This “end and aim” rule precludes imposing liability upon a  
defendant for loss arising where the plaintiff’s reliance falls outside the  
purpose of the defendant’s undertaking. Livent makes clear, then, that  
considerations of undertaking and reliance furnish not only a principled basis  
for drawing the line in cases of negligent misrepresentation or performance of  
a service between duty and no-duty, but also for delineating the scope of the  
duty in particular cases, based upon the purpose for which the defendant  
undertakes responsibility. Reliance that exceeds the purpose of the  
defendant’s undertaking is not reasonable, and therefore not foreseeable  
(para. 35).  
[Emphasis added]  
[43] I agree with the applicants that the Court’s reasons do not limit recovery for  
pure economic loss to the cost to abate dangerous defects for claims grounded in  
misrepresentation and negligent performance of a service. The Court in Maple Leaf  
Foods clearly states at para. 34 that such claims derive their rationale from the  
plaintiff’s reliance induced by the defendant’s undertaking, and seeks to rectify the  
harm caused to the plaintiff who relied on the defendant’s undertaking of  
responsibility to its detriment.  
[44] As mentioned, in their written submissions, the applicants characterize the  
entirety of their proposed third-party claims as founded on misrepresentation and  
negligent performance of a service, predicated on their relationship of proximity with  
IGA (a relationship that IGA does not dispute). Their written submissions excerpted  
below highlight the point:  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 16  
40. Thus, in cases of negligent misrepresentation or negligent performance of  
a service, the aggrieved party can advance a claim in respect of what would  
otherwise be termed “pure economic loss.”  
41. In the present case, the pleadings allege that IGA entered into a Contract  
to provide services. It is further alleged that the intended effect of that  
undertaking invited the Applicants reasonable reliance, and thus IGA owed a  
duty of care to the Applicants to design, supply and install a Curtain Wall with  
reasonable skill, care and diligence and in a proper and workmanlike, inter  
42. It is finally alleged that IGA breached that duty, which had the effect of  
causing losses on the part of the Applicants for which IGA is responsible.  
43. It follows that the reliance interest in this case, and the damages resulting  
therefrom, falls within the scope and purpose of the services providedthat  
is, within the scope of the undertaking. The Applicants are therefore entitled,  
on the pleadings, to all those damages that would put the Applicants into its  
pre-reliance state. These damages are not limited to the cost of repairing any  
allegedly dangerous defect with the Curtain Wall, and include the individual  
losses for which the Plaintiff herein is seeking an award of damages.  
44. These pleadings quite clearly ground a viable cause of action in negligent  
performance of a service. This claim is not duplicative of any claim in any of  
the Related Actions (which as amended, concern the cost to repair allegedly  
dangerous defects under the framework articulated by the Court in Winnipeg  
Condominium), and is not an abuse of process.  
[Emphasis in original; footnotes omitted]  
[45] However, if as IGA contends, the claim is essentially a claim for delivery of a  
defective product, recovery would, in light of the reasons in Maple Leaf Foods, be  
limited to the cost to abate dangerous defects.  
[46] In Maple Leaf Foods, the Court said, when revisiting its decision in Winnipeg  
Condominium, that recovery for such a claim is restricted to the cost to abate  
dangerous defects:  
Negligent Supply of Shoddy Goods or Structures  
The Correlative Right and Duty of Care in Winnipeg Condominium  
Until this appeal, the sole occasion on which this Court has  
considered a claim for pure economic loss arising from the negligent supply  
of shoddy goods or structures is its judgment in Winnipeg Condominium. It is  
therefore worth carefully reviewing the liability rule that it established, with  
attention to the nature of the legal right and correlative duty of care on which  
it is founded. Further, and as we will explain, subsequent developments to  
the law of negligence in Cooper and Livent signify that claims under Winnipeg  
Condominium must now account for the requisite element of proximity.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 17  
In Winnipeg Condominium, the plaintiff condominium corporation sued  
the defendant builder for the cost of repairing exterior four-inch thick stone  
cladding on its 15-storey building. Approximately eight years after  
construction, the board of directors of the condominium corporation observed  
that some of the cladding had broken away and that cracks were developing  
in the remaining cladding. They retained engineers, who recommended minor  
remedial work, which was done. Seven years later, a storey-high section of  
the cladding fell from the ninth-storey level of the building to the ground  
below. Again, engineers were retained and they recommended removal and  
replacement of the cladding at substantial cost, for which the condominium  
corporation sued the builder. Not being in privity, the claim was brought in  
tort, raising the issue of whether the builder owed a duty to the condominium  
owners, as “subsequent purchasers” (meaning that they came after the  
original purchaser on the distributive chain).  
On that question, and for the Court, La Forest J. recognized a duty of  
care based on the reasonable foreseeability of injury to “other persons and  
property in the community” (para. 21). In doing so, he posited that the  
presence of danger was the linchpin of the analysis. As he emphasized, the  
building structure in this case was “not merely shoddy; it was dangerous”  
(para. 12 (emphasis added)). Further, he added that “the degree of danger to  
persons and other property” created by the negligent construction is “a  
cornerstone” of the analysis that must be undertaken in determining whether  
the cost of repair is recoverable in tort (ibid. (emphasis added)). As opposed  
to merely substandard construction, only those defects that posed “a real and  
substantial danger to the occupants of the building” and had “the capacity to  
cause serious damage to other persons and property in the community” were  
actionable (para. 21). Returning to this point later in his reasons, he  
[T]he facts of the present case . . . fall squarely within the category of  
what I would define as a “real and substantial danger”. It is clear from  
the available facts that the masonry work . . . was in a sufficiently poor  
state to constitute a real and substantial danger to inhabitants of the  
building and to passers-by. The piece of cladding that fell from the  
building was a storey high, was made of 4” thick Tyndall stone, and  
dropped nine storeys. Had this cladding landed on a person or on  
other property, it would unquestionably have caused serious injury or  
damage. [Emphasis added; para. 38.]  
Given the “reasonable likelihood that a defect in a building will cause injury to  
its inhabitants . . . if it poses a real and substantial danger”, the Court held  
that a builder owed a duty to take reasonable care in the design or  
construction of building structures to avoid creating a real and substantial  
danger to health and safety (para. 36).  
At first glance, the liability rule in Winnipeg Condominium may appear  
curious, since it appears as though liability is imposed not in respect of  
damage that has occurred to the plaintiff’s rights, but in respect of a real and  
substantial danger thereto. As a general principle, there is no liability for  
negligence “in the air”, for “[t]here is no right to be free from the prospect of  
damage” but “only a right not to suffer damage that results from exposure to  
unreasonable risk” (Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19, at  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 18  
para. 33 (emphasis in original); Clements v. Clements, 2012 SCC 32, [2012]  
2 S.C.R. 181, at para. 16; Ratych v. Bloomer, [1990] 1 S.C.R. 940, at p. 964).  
[45] We maintain, however, that, properly understood, the liability rule  
in Winnipeg Condominium is consonant with that principle. In that case, the  
Court was clear about the source of the right to which the duty of care  
corresponds: the plaintiff’s rights in person or property (paras. 21, 36 and 42).  
Where a design or construction defect poses a real and substantial  
danger that is, what Fraser C.J.A. and Côté J.A. described in Blacklaws v.  
470433 Alberta Ltd., 2000 ABCA 175, 261 A.R. 28, at para. 62, as “imminent  
risk” of “physical harm to the plaintiffs or their chattels” or property and the  
danger “would unquestionably have caused serious injury or damage” if  
realized, given the “reasonable likelihood that a defect . . . will cause injury to  
its inhabitants”, it makes little difference whether the plaintiff recovers for an  
injury actually suffered or for expenditures incurred in preventing the injury  
from occurring (Winnipeg Condominium, at paras. 36 and 38; see  
also Morrison Steamship Co. v. Greystoke Castle (Cargo Owners), [1947]  
A.C. 265 (H.L.), at p. 280; Murphy v. Brentwood District Council, [1991] 1  
A.C. 398 (H.L.), at p. 488, per Lord Oliver of Aylmerton). Thus, the economic  
loss incurred to avert the danger “is analogized to physical injury to the  
plaintiff’s person or property” (P. Benson, “The Basis for Excluding Liability for  
Economic Loss in Tort Law”, in D. G. Owen, ed., Philosophical Foundations  
of Tort Law (1995), 427, at p. 429). The point is that the law views the plaintiff  
as having sustained actual injury to its right in person or property because of  
the necessity of taking measures to put itself or its other property “outside the  
ambit of perceived danger” (ibid, at p. 440; see also Aktieselskabet Cuzco v.  
The Sucarseco, 294 U.S. 394 (1935), at p. 404).  
As we see it, then, recovery for the economic loss sustained  
in Winnipeg Condominium was founded upon the idea that, in the eyes of the  
law, the defendant negligently interfered with rights in person or property. We  
see this as having been La Forest J.’s point in Winnipeg Condominium where  
he explained:  
If a contractor can be held liable in tort where he or she constructs a  
building negligently and, as a result of that negligence, the building  
causes damage to persons or property, it follows that the contractor  
should also be held liable in cases where the dangerous defect is  
discovered and the owner of the building wishes to mitigate the  
danger . . . . In both cases, the duty in tort serves to protect the bodily  
integrity and property interests of the inhabitants of the building.  
[Emphasis added; para. 36.]  
In our view, this normative basis for the duty’s recognition that it protects a  
right to be free from injury to one’s person or property also delimits its  
scope. This is because this basis vanishes where the defect presents no  
imminent threat.  
[Emphasis in original]  
[47] In Maple Leaf Foods, the Court also said that recovery for dangerous defects  
extends to all products, not just those concerning building defects, but refused to  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 19  
extend its holding in Winnipeg Condominium to non-dangerous defects: Maple Leaf  
Foods at paras. 4749.  
Other Case Authorities  
[48] Lower court decisions issued prior to and following Maple Leaf Foods have  
applied the proximity test for recovery of economic loss separately for negligent  
performance of a service and negligent supply of shoddy goods. See e.g., Clark  
Builders and Stantec Consulting Ltd. v. GO Community Centre, 2019 ABQB 706;  
Ahamed v. The Great Canadian Landscaping Company Ltd., 2021 BCSC 197;  
Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corporation,  
2021 ONCA 25, leave to appeal ref’d 2021 61401 (S.C.C.); Rieger v. Plains  
Midstream Canada ULC, 2022 ABCA 28; Westsea Construction Ltd. v. 0759553  
B.C. Ltd., 2012 BCSC 564.  
[49] When considering the merits of claims for negligent performance of a service,  
courts have considered whether the plaintiff has established that it reasonably and  
detrimentally relied on the defendant’s undertaking (if any), without imposing any  
restriction on the scope of recovery to only dangerous defects caused by negligent  
performance: Ahamed at paras. 5557; Subway Franchise at paras. 8994, 100–  
103; Rieger at para. 50.  
[50] For example, in Subway Franchise, Justice Zarnett referred to para. 30 of  
Maple Leaf Foods when explaining that it is the presence of an undertaking and  
reliance that illuminates the plaintiff’s right and justifies the correlative duty in a  
negligent performance of a service case, as opposed to a case in the defective  
goods category which is concerned with the plaintiff’s right in person or property:  
Subway Franchise at paras. 88, 103.  
[51] Clark Builders is an example of a building construction case where the claim  
for pure economic loss was not restricted to dangerous defects because the claim  
was seen as one for negligent performance of a service. In that case, Go  
Community Centre (“GCC”), a non-profit corporation, acting on behalf of the  
University of Alberta (consequent on their relationship that culminated in a venture  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 20  
agreement), undertook primary responsibility for the construction of a sports  
complex. With the assistance of Stantec Consulting Ltd. (“Stantec”), GCC put out a  
request for a design-build proposal and ultimately entered into a contract with Clark  
Builders based on Stantec’s design (GCC had no contractual relationship with  
Stantec; however, Clark Builders and Stantec entered into a contractual  
relationship). Following construction, performance issues relating to the heating,  
ventilation, and air condition (HVAC) system arose. GCC filed its claim against Clark  
Builders and Stantec alleging negligence in design and installation of the HVAC  
system. It sought recovery for economic loss for the cost of repairs. Although the  
action was dismissed because GCC had not suffered injury (as the Court found  
GCC had no beneficial interest nor proprietary or possessory rights in the sports  
complex), Justice Renke commented on GCC’s claim for pure economic loss. After  
considering the nature of the claim for the remediation or replacement of (or portions  
of) the HVAC system, Renke J. said the claim was not precluded by Winnipeg  
Condominium, even though it was a building construction case and did not involve a  
dangerous defect.  
[52] Justice Renke viewed Winnipeg Condominium as an “awkward fit” for the  
relationship between the parties in Clark Builders and instead thought it more closely  
aligned with misrepresentation and negligent provision of a service doctrines: Clark  
Builders at para. 168.  
[53] As well, Renke J. rejected the notion of subsumption by Winnipeg  
(d) Negligent Misrepresentation and  
Negligent Performance of a Service  
[165] Keeping in mind Prof. Feldthusen’s warning about the varying  
provenance and purpose of distinct “economic loss” doctrines, complaints of  
negligent misrepresentation and negligent performance of a service can arise  
in similar contexts, as in this case. See, e.g., Livent at para 1; Edgeworth  
Construction; Brown, Pure Economic Loss at 381; Osborne, Law of Torts at  
[166] The uncontested facts were that, before the Design Contract was  
signed, Clark Builders and Stantec interacted with GCC respecting HVAC  
system design. It was true as well that the University was also involved in this  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 21  
interaction. GCC, a community organization, did not face two large industry  
players alone. The details of the four-way interaction were not exposed on  
the record and would require trial or at least additional evidence to sort out.  
[167] Regardless, GCC worked with Clark Builders and Stantec. Clark  
Builders and Stantec were aware of the purposes for which the GO Centre  
was to be used. Clark Builders and Stantec knew or must have known that  
GCC would remain involved with the GO Centre after construction was  
completed. It was not as if GCC were an independent construction-related  
firm retained by the University to hire contractors to get the GO Centre built.  
[168] While Bird Construction was an awkward fit for the relationship  
between GCC and the Defendants, negligent misrepresentation and  
negligent provision of a service doctrines would appear to have a closer  
alignment with GCC’s circumstances.  
(i) Subsumption by Bird Construction?  
[169] There was a suggestion in argument that because a building had  
actually been constructed, the negligent provision of a service route to liability  
was unavailable to GCC. The argument for the Defendants’ liability had to be  
made on Bird Construction lines, requiring proof of dangerousness.  
[170] I discern no such subsumption or merger rule in the authorities. This  
sort of argument did not come up, for example, in Edgeworth Construction.  
GCC, moreover, is not in the position of a subsequent purchaser, as in the  
usual Bird Construction case. In GCC’s circumstances, the dangerousness  
requirement is not required to limit the class of potential plaintiffs.  
[171] I shall proceed on the basis that the negligent misrepresentation and  
negligent provision of services routes to liability are not closed to GCC.  
[Emphasis in original]  
[54] In Westsea Construction, Justice Harris (as he then was) pointed out that the  
existence of a relationship of proximity and consequent duty in tort does not depend  
on the existence of a contractual relationship. A contract, however, may inform the  
nature of the duty, limit the scope of recovery, or oust obligations beyond those set  
out in the contract altogether:  
The law recognizes that concurrent duties may exist in contract and  
tort and that proximity may arise from a nexus between parties created by  
contract. The starting point of the analysis remains BG Checo International  
Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12. In  
that case, an obligation in tort (negligent misstatement) was identical to the  
contractual obligation. The issue was whether the duties in negligence and  
contract could exist concurrently. The majority of the Supreme Court  
concluded they could. The basic rule was stated as follows at para. 15:  
... where a given wrong prima facie supports an action in contract and  
in tort, the party may sue in either or both, except where the contract  
indicates that the parties intended to limit or negative the right to sue  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
in tort. ... The mere fact that the parties have dealt with a matter  
Page 22  
expressly in their contract does not mean that they intended to  
exclude the right to sue in tort. It all depends on how they have dealt  
with it.  
The majority makes it clear that the critical question in deciding  
whether a tort claim can be maintained in the face of a contract addressing  
the same subject matter is whether the parties have contradicted,  
extinguished, modified or left untouched the tort duties in the contract. Thus,  
the principle of the primacy of private ordering is respected at para. 16.  
Moreover, there is no necessary inference to be drawn from the fact that the  
contractual obligation may perfectly correspond to the duty in negligence that  
the parties thereby intended to oust their tort obligations at para. 25; see also  
the discussion of the authorities beginning at para. 29.  
In order, however, for a concurrent duty to arise in tort, that duty must  
exist “even in the absence of the specific contractual term which created the  
corresponding contractual obligation” at para. 34.  
I take the following from the majority discussions of concurrency of  
tort and contract in BG Checo. First, one must be able to identify a tort duty  
that exists independently of the specific contractual duty in the sense that the  
tort and the contract duties co-exist, in principle, concurrently. In other words,  
the existence of the alleged tort duty cannot arise solely and exclusively out  
of the contract. Secondly, the existence of the contract may be a source of  
the proximity between the parties that gives rise to the alleged duty in tort.  
Thirdly, the existence of the tort duty will need to be justified in accordance  
with the ordinary rules in negligence for recognition of duties. In other words,  
to establish potential concurrency of duties a plaintiff (or in this case, the  
defendants) will need to point to an established category where a tort duty  
has been recognised or justify a “novel” claim in accordance with the Anns  
test. Fourthly, if potential concurrency exists, in order to avoid a duty in tort,  
the defendant (or in this case, the plaintiffs) would have to show that the  
parties have structured their relationship through the contract in such a way  
that the existence of the tort duty is eliminated or modified. It must be shown  
that the parties intended to extinguish tort liability through the contract.  
Generally, this will require express language, although it may arise by  
necessary implication. It is not to be assumed that the existence of  
contractual obligations, even if they correspond exactly to the tort duties,  
evidences an intention to extinguish the tort duties.  
In the context of the issue before me, these questions need to be  
analysed first through the lens of the “plain and obvious” test. Hence,  
specifically, the question is whether it is plain and obvious that the plaintiffs  
could not owe the majority defendants duties in negligence given that they  
maintain the buildings and given that the defendants allege they have not  
done so “properly” and their failure to do so has led to damage to the  
structure of the building, including damage giving rise to safety and health  
concerns. Accordingly, the second critical question is, could these, admittedly  
broadly characterised circumstances give rise to a duty in negligence? The  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 23  
third question is whether, in the context of a summary judgment application,  
there is any evidence capable of raising a genuine issue for trial.  
[Italics in original]  
[55] Specifically, in respect of the ambit of the holding in Winnipeg Condominium,  
Harris J. said:  
One final observation should be made. The Winnipeg Condominium  
line of cases deals with recovery of the cost of repairs. It does not deal with  
the loss of the economic value of the building. I have serious reservations  
about the characterization of the damage to the majority defendants being a  
loss of value of the units. Whether that loss may be recoverable as a result of  
relational economic loss or negligent performance of the service may be  
another matter. That question, however, may be left to trial.  
[Italics in original; underlining added]  
[56] Westsea Construction was decided prior to Maple Leaf Foods, and as such  
Harris J. did not have the benefit of the Court’s reasoning in para. 34 that where the  
defendant “deliberately solicited the plaintiff’s reliance as a reasonable response, the  
defendant cannot in justice disclaim responsibility for any economic loss the plaintiff  
can show was caused by such reliance” [emphasis added].  
[57] From these authorities, I conclude that a claim for pure economic loss for  
negligent provision of a service and misrepresentation is not subsumed within the  
holding in Winnipeg Condominium such that recovery for a tort claim involving  
construction of a building is always limited to the cost to abate dangerous defects.  
Assuming the tort duty can be established, claims for pure economic loss for  
negligent performance of a service and misrepresentation are not so confined. Much  
depends on the nature of the claim and relationship between the parties, which may  
be informed by the terms of any contractual relationship between them and the  
scope of the undertaking and the reliance placed upon it.  
Characterizing the Applicants’ Proposed Third-Party Tort Claim  
[58] With those principles in mind, I turn now to consider the nature of the  
proposed third-party tort claim as pleaded.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 24  
[59] A useful illustration of the claim is drawn from the applicants’ proposed third-  
party claim in the class action.  
[60] After identifying the applicants’ relationship to the land and the development,  
the applicants allege that they caused KBK to enter into a contract with IGA on  
account of IGA’s representations and undertakings:  
5. On account of IGA’s representations and undertakings, as are more  
particularly elaborated upon below, these Defendants caused KBK to enter  
into a contract with IGA dated May 4, 2005, wherein IGA agreed to design,  
supply and install insulated glazing units (“IGUs”) for the curtain wall system  
at Shangri-La Vancouver (the “Contract”).  
[Bold in original]  
[61] The undertakings and representations giving rise to the alleged duty owed by  
IGA to the applicants are pleaded in the facts and legal basis sections as follows:  
13. Both prior to and after May 4, 2005, IGA undertook and represented to  
these Defendants that it had the requisite knowledge and experience to  
properly design, manufacture and install the curtain wall specified for the  
Shangri La in accordance with all applicable engineering and industry  
standards and that it understood all applicable architectural, engineering and  
construction standards, regulations and requirements, and that it would  
design, construct and install the curtain wall system at the Shangri-La using  
all reasonable care, skill and diligence and competence, in conformity with all  
applicable architectural, engineering and construction standards and  
regulations, and without deficiencies or defects.  
14. These representations and undertakings were provided in circumstances  
that invited these Defendants reasonable reliance upon them and as such,  
IGA owed a duty of care to these Defendants.  
4. IGA made various representations and undertakings to provide services  
which representations and undertakings invited these Defendants reasonable  
reliance. IGA therefore owed these Defendants a duty of care which arose  
and exists independently from contractual duties owed to KBK under the  
Contract. IGA breached that duty and failed to meet the applicable standard  
of care. As such, IGA was negligent in the design, supply and installation of  
IGUs and the curtain wall system and as a result is liable in damages for  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 25  
negligence to these Defendants, including in respect of all losses suffered by  
the Plaintiff for which these Defendants are found liable.  
[62] The particulars of IGA’s duty of care and its purported breaches are alleged  
as follows:  
15. Particulars of the duty of care owed by IGA include, but are not limited to,  
a duty to perform its services: As such, IGA owed a duty of care to these  
Defendants to design, supply and install a curtain wall system as follows: (a)  
with reasonable skill, care and diligence; (b) in a safe, proper and  
workmanlike manner; (c) with suitable materials and fit for their intended use;  
(d) free from any defects, latent or patent; and (e) in compliance with all  
drawings, specifications, construction and engineering standards,  
manufactures’ instructions, building codes and statutory requirements.  
16. These duties arose and exist independently from any contractual duties  
IGA owed to KBK pursuant to the Contract.  
17. To the extent there are design, construction, assembly, manufacture  
and/or installation defects or deficiencies with the IGUs, IGA was negligent in  
that it breached the above stated duties of care that it owed to these  
18. Particulars of IGA’s breaches of the duty of care owed to these  
Defendants include, but are not limited to: (a) failing to employ properly  
trained, licensed or competent workers, including engineers; (b) failing to  
comply with accepted design, engineering and construction standards; (c)  
failing to use materials of a good or merchantable quality; (d) failing to adhere  
to the plans and specifications in the design, supply and installation of the  
curtain wall system; (e) failing to properly inspect and test the curtain wall  
system and its constituent components; (f) failing to remedy any defects in  
the curtain wall system and damage once it ought reasonably to have known  
of the damage that the Plaintiff and the Class would suffer; (g) using the IGUs  
when it knew or ought to have known that they were defective;  
(h) failing to warn, or adequately warn, these Defendants of defects with the  
IGUs; and (i) such further and other particulars as may become known to  
these Defendants or are proven at trial.  
19. IGA knew or ought to have known that their failure to take reasonable  
care in designing, constructing, and installing the curtain wall system would  
result in defects, whether dangerous or otherwise.  
20. IGA’s negligence has caused these Defendants losses, including, but not  
limited to, those losses for which the Plaintiff seek recovery in this action.  
[63] In terms of the existence of a relationship of proximity and consequent duty, I  
must also assume the facts as pleaded are true. Neither the proposed third-party  
notice, the notice of application, nor the application response plead or refer to any  
terms of the contract between KBK and IGA (nor has the contract been produced in  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 26  
the application materials). The question therefore, is whether the facts in the  
proposed claim as pleaded, assumed to be true, engage a relationship of proximity  
between the parties that falls within an established category of proximity. As pointed  
out, IGA does not specifically contend that no tort duty can be established on the  
proposed pleading and that the claim in this respect was bound to fail. I have  
reached the same conclusion.  
[64] The key substantive issue raised by IGA is whether the proposed claim is in  
essence a claim for the delivery of a defective product as IGA contends, limiting the  
scope of recovery, or as the applicants contend, for the negligent performance of a  
service (adding in their oral submissions that the proposed amended claim should  
also be taken to include a claim for misrepresentation).  
[65] I view the claim as one that on its face comprises the applicants’ reliance on  
representations and undertakings concerning IGA’s knowledge and experience,  
compliance with certain standards, and provision of a service. Part of the claim could  
be read to include the delivery of a defective product. However, whether the essence  
of the whole of the claim concerns delivery of a defective product such that recovery  
is precluded to cost to abate a dangerous defect, or whether, for example, the case  
is akin to Clark Builders, should be left for factual determinations to be made at trial,  
as will be the issue of proof of the existence of a duty in tort, its scope, and any  
potential limiting aspects arising from the contract between KBK and IGA.  
[66] I disagree with IGA that the essence of the whole of the claim can be said at  
the pleadings stage to be one on account of a defective product falling entirely within  
the ambit of Winnipeg Condominium. I would not accede to IGA’s request to look  
behind the pleading in an attempt to define the claim as, according to IGA, was done  
in Heinicke v. Cooper Rankin Ltd., 2006 MBQB 273 (which was a decision rendered  
following trial and not at the pleadings stage). To do so would be inconsistent with  
the Rules and with the well-established line of authorities cited in the decision of the  
majority of the Manitoba Court of Appeal in Sentinel Self-Storage Corp. v. Dyregrov,  
2003 MBCA 136 at paras. 1418.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 27  
[67] The applicants only need to show that their pleading discloses a reasonable  
cause of action, and in order to strike out a pleading on the ground it discloses no  
reasonable cause of action, the case must be “perfectly clear”: McNaughton at  
para. 29.  
[68] The applicants have demonstrated that their claim as pleaded, if assumed to  
be true, for recovery of pure economic loss consequent upon their purported reliance  
on IGA’s alleged misrepresentations and negligent performance of a service is  
grounded on a valid cause of action and not bound to fail. They have established  
that their claim for all economic loss arising from those claims is not, at the pleadings  
stage, bound to fail.  
Limitation Defence in Class Proceeding  
[69] The parties’ submissions dealt with a myriad of complex legal and factual  
issues concerning the limitation defence raised by IGA in response to the proposed  
third-party notice in the class proceeding. I have set those issues out below with  
references to some of the case authorities cited by the parties:  
(a) whether, by virtue of the discoverability provisions of s. 16(a) of the Limitation  
Act, S.B.C. 2012, c. 13, and the recent decisions of the Court of Appeal in  
Sohal v. Lezama, 2021 BCCA 40 at paras. 2830, 70, 88, 109, 111, and of  
this Court in 0782484 B.C. Ltd. v. E-Pro Enterprises Inc., 2021 BCSC 1509  
and Sharma v. Mohammad, 2022 BCSC 270 at paras. 37, 3940, 4344, the  
applicable limitation period only began to run when the plaintiff filed its  
amended notice of civil claim in December 2021;  
(b) whether the limitation period was tolled by an explicit, valid, and enforceable  
agreement: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at  
paras. 4648; Berthin v. Berthin, 2016 BCCA 104; Litt v. Gill, 2016 BCCA 288  
at para. 15; Canada Square Corp. v. VS Services Ltd. (1982), 34 O.R. (2d)  
250 (C.A.); Hunt River Camps/Air Northland Ltd. v. Canamera Geological Ltd.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 28  
(1998), 168 Nfld. & P.E.I.R. 207 at paras. 27-28 (C.A.); Wade v. Duck, 2018  
BCCA 176 at para. 28; Aubrey v. Teck Highland Valley Copper Partnership,  
2017 BCCA 144 at para. 48; Rudyak v. Bekturova, 2018 BCCA 414 at  
para. 24;  
(c) whether IGA is estopped by convention or representation: Canadian Superior  
Oil Ltd. v. Paddon-Hughes Development Co., [1970] S.C.R. 932 at 939-940;  
Ryan v. Moore, 2005 SCC 38 at paras. 5, 59, 164; Michel v. Saskatchewan,  
2021 SKCA 126 at para. 206; and  
(d) whether I should exercise my discretion to allow the third-party notice to be  
filed: Lui at para. 41; Tyson Creek at paras. 1, 16; McNaughton at para. 21;  
Canfor at para. 49; ASPAC at para. 23; Dhanda v. Gill, 2019 BCSC 1500 at  
para. 63.  
[70] Nonetheless, and in spite of the partiesdiverse positions concerning the  
effect of those legal authorities, and in particular the effect of the decision in Sohal,  
the issue is squarely determined by my findings that the parties entered into a valid  
and enforceable tolling agreement on February 16, 2017 and that there is no  
prejudice to IGA arising from the proposed third-party notice in the class proceeding.  
[71] The tolling agreement is evidenced in email communications between  
counsel for the applicants and IGA.  
[72] The original notice of civil claim filed by SP 3206 in the IGU Action (which  
included the claims for individual owners) and the notice of civil claim in the class  
action were served on the applicants on approximately December 9, 2016. Counsel  
for the applicants then wrote to then counsel for IGA and counsel for other parties in  
the Related Actions, asking for their agreement to toll the limitation period applicable  
to third-party notices until defences were requested by the plaintiffs.  
[73] In his correspondence, counsel for the applicants wrote at 2:06 p.m.:  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 29  
As you know, we were served with two claims by the Residential Estates  
Strata (“Estates”) in respect of fogging windows (one being a proposed class  
action and the other an action in the name of the strata corporation). These  
claim names only our clients. Like the claim delivered by the Live/Work Strata  
[brought by SP 3165], counsel for the Estates has told us not to take any  
steps to defend the matter until further notice. In an effort to avoid advancing  
third party proceedings prior to delivering a defence, I am writing to ask for  
your agreement that we toll the time periods for our clients to advance third  
party claims, if any, against IGS/AGS [sic] Joint Venture Inc., Advanced  
Glazing Systems Ltd. and Garibaldi Glass Industries Inc., such that they don’t  
start to run until Defences are required by the Estates.  
[Emphasis added]  
[74] Counsel for Garibaldi Glass responded at 2:07 p.m. advising that he could not  
agree to any form of tolling agreement as it was unclear whether he would be  
counsel acting in respect of those claims.  
[75] However, at 2:09 p.m., counsel for IGA/AGS responded, confirming his  
client’s agreement to the tolling agreement:  
Shane, you have my client’s consent.  
[76] In Sattva, the Supreme Court of Canada outlined the modern approach to  
discerning the parties’ objective intention at contract formation:  
The shift away from the historical approach in Canada appears to be  
based on two developments. The first is the adoption of an approach to  
contractual interpretation which directs courts to have regard for the  
surrounding circumstances of the contract often referred to as the factual  
matrix when interpreting a written contract (Hall, at pp. 13, 21-25 and 127;  
and J. D. McCamus, The Law of Contracts (2nd ed. 2012), at pp. 749-51).  
The second is the explanation of the difference between questions of law and  
questions of mixed fact and law provided in Canada (Director of Investigation  
and Research) v. Southam Inc., [1997] 1 S.C.R. 748, at para. 35, and  
Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 26 and  
Regarding the first development, the interpretation of contracts has  
evolved towards a practical, common-sense approach not dominated by  
technical rules of construction. The overriding concern is to determine “the  
intent of the parties and the scope of their understanding” (Jesuit Fathers of  
Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, [2006] 1  
S.C.R. 744, at para. 27, per LeBel J.; see also Tercon Contractors Ltd. v.  
British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1  
S.C.R. 69, at paras. 64-65, per Cromwell J.). To do so, a decision-maker  
must read the contract as a whole, giving the words used their ordinary and  
grammatical meaning, consistent with the surrounding circumstances known  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 30  
to the parties at the time of formation of the contract. Consideration of the  
surrounding circumstances recognizes that ascertaining contractual intention  
can be difficult when looking at words on their own, because words alone do  
not have an immutable or absolute meaning:  
No contracts are made in a vacuum: there is always a setting  
in which they have to be placed. ... In a commercial contract it  
is certainly right that the court should know the commercial  
purpose of the contract and this in turn presupposes  
knowledge of the genesis of the transaction, the background,  
the context, the market in which the parties are operating.  
(Reardon Smith Line, at p. 574, per Lord Wilberforce)  
The meaning of words is often derived from a number of contextual  
factors, including the purpose of the agreement and the nature of the  
relationship created by the agreement (see Moore Realty Inc. v. Manitoba  
Motor League, 2003 MBCA 71, 173 Man. R. (2d) 300, at para. 15 per  
Hamilton J.A.; see also Hall, at p. 22; and McCamus, at pp. 749-50). As  
stated by Lord Hoffmann in Investors Compensation Scheme Ltd. v. West  
Bromwich Building Society, [1998] 1 All E.R. 98 (H.L.):  
The meaning which a document (or any other utterance) would  
convey to a reasonable man is not the same thing as the meaning of  
its words. The meaning of words is a matter of dictionaries and  
grammars; the meaning of the document is what the parties using  
those words against the relevant background would reasonably have  
been understood to mean.  
[77] Where possible, courts should take a broad view of the dealings between the  
parties in order to advance rather than frustrate their intent, taking into account, from  
an objective determination, their reasonable expectations: Hunt River at para. 28,  
citing Canada Square at 218.  
[78] In Berthin at paras. 46-47, the Court of Appeal explained that the validity of a  
contract depends on whether the contracting parties have indicated to the outside  
world, in the form of the objective reasonable bystander, their intention to contract  
and the terms of such contract. An enforceable agreement requires a consensus  
between the parties on all of the essential terms of their agreement and such terms  
must be expressed with sufficient certainty. IGA contends the tolling agreement must  
fail for lack of certainty. I disagree.  
[79] Construing the agreement contextually and objectively from the perspective of  
the reasonable bystander, there is no lack of clarity in the communications between  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 31  
counsel who acted and continue to act as their agents throughout. The email  
communication is clear that the request is in respect of each of the SP 3206’s IGU  
Action and the class action: the limitation period applicable to the issuance of third-  
party notices is tolled for each of those actions until defences are requested. The  
proposed terms are readily comprehensible and reasonable, as they sought to avoid  
the applicants having to issue third-party proceedings before their response  
pleadings were required to be filed. As such, I disagree with IGA that the terms of  
the agreement are ambiguous. I also reject IGA’s submission that the terms of the  
tolling agreement were conditional upon the acceptance by all parties to the actions.  
[80] I agree with the applicants’ written submission, excerpted below, concerning  
the contextual background for their counsel’s use of the word “Estates” in his  
82. IGA adopts a reading of the Tolling Agreement that cannot be supported  
by its ordinary and grammatical meaning, the context in which the Tolling  
Agreement was entered into, and its purpose. Instead its arguments rest  
entirely on the fact that the Applicants elected to define the two respective  
plaintiffs, in the two actions which were the subject matter of that agreement,  
as the “Estates”. In so doing, IGA ignores what the parties using those words  
reasonably understood those words to mean, against the relevant  
background as was reasonably understood.  
83. The first sentence of the Tolling Agreements notifies IGA that the  
Applicants had received two Notices of Civil Claim: one filed by the  
Residential Estate Strata in the IGU Defect Actions, and another filed by the  
Representative Plaintiff in the Class Action.  
84. These two claims, and the plaintiffs therein, were then defined as the  
“Estates”. The reason was simple.  
85. The representative Plaintiff in the Class Action is 0790482 B.C. Ltd, a  
numbered company which took assignment of a pre-sale contract in respect  
of strata lot 64 in the Residential Estate Strata.  
86. The numbered company is owned and controlled by Amos Michelson.  
Mr. Michelson is also the president of the Residential Estate Strata (and has  
been since its first AGM), and he has been directing the litigation on its behalf  
since the commencement of this proceeding.  
87. Thus, for all intents and purposes, the party directing both the Residential  
Estate Strata and the representative Plaintiff was Amos Michelson.  
88. In the Tolling Agreement, these two entities were referred to by the single  
moniker, the “Estates”.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 32  
89. In the next sentence, counsel for the Applicants noted that the “Estates”  
being both the Residential Estate Strata and the representative Plaintiff, filed  
and delivered Notices of Civil Claim in two separate actions.  
90. The only plaintiff in the Class Action is the representative Plaintiff, and so  
quite obviously the term “Estates” was understood to capture that entity.  
91. The remaining sentences asks for IGA’s agreement that the limitation  
period applicable to Third Party claims against IGA be tolled until such time  
as the “Estates” (being the Residential Estate Strata and the representative  
Plaintiff) ask for a defence in their respective actions.  
[Footnotes omitted]  
[81] In the same vein, IGA’s alternative submission that the tolling agreement  
(assuming it was enforceable) was terminated for all purposes in April 2017, when  
SP 3206 asked the applicants for their response pleading in its IGU Action,  
overlooks the reality of the status of the class actionfor quite some time, all parties  
understood from submissions of counsel for the putative representative plaintiff that  
he expected to obtain instructions to discontinue the action. It made sense to avoid  
the necessity of filing third-party notices in an action that may be discontinued.  
[82] The parties’ subsequent conduct also accords with a valid tolling agreement  
containing separate as opposed to a singular trigger for expiration as IGA contends.  
[83] On April 19, 2017, counsel for the applicants advised counsel for IGA that SP  
3206 required them to deliver a response pleading in its IGU Action:  
Further to the below, I got a call from Ken McEwan today. The Estates strata  
has asked us to deliver a Response within the next few weeks.  
[84] The applicants delivered their response pleading in SP 3206’s IGU Action as  
requested. As they were beyond the time limit in the Rules to file third-party notices  
without leave, they filed a notice of application on July 18, 2017, seeking to issue  
third-party proceedings against IGA and others, and obtained leave from Master  
Muir on August 11, 2017. The application was not opposed by IGA.  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 33  
[85] However, the class action proceeding remained in limbo until the proposed  
representative class plaintiff advised in 2020 that it intended to apply for a  
certification order. The certification application was heard in June and July 2021, but  
was adjourned to allow the proposed representative plaintiff to reframe some  
aspects of its clam and to file additional materials. The certification hearing resumed  
in January 2022.  
[86] The applicants point out in their written submissions that before the  
certification hearing took place, counsel for the representative plaintiff wrote to  
counsel for the applicants “on or around February 2021” requesting their response  
pleading, at which point, they say, the tolling of the limitation period began since the  
tolling agreement was no longer in effect. The applicants also point out that the two-  
year limitation period was suspended shortly thereafter, during the COVID-19  
pandemic, on March 26, 2020, until March 25, 2021. The applicants filed their  
response pleading on March 3, 2021. The applicants brought their notice of  
application seeking leave to issue their third-party notice against IGA on  
February 18, 2022, which they assert was well within the applicable limitation period.  
[87] The applicants’ statement of fact in their written submissions concerning  
receipt of the letter from counsel for the representative plaintiff was confirmed by  
their counsel in oral submissions, although it is not supported with evidence. The  
letter from representative plaintiff’s counsel is not in evidence, nor is the date of the  
letter and the date it was received by the applicants. However, IGA and the  
applicants jointly advised in writing of their agreement that “it can be accepted as a  
fact that the Plaintiff asked for a defence in the Class Action on or around February  
5, 2021.”  
[88] I turn now to IGA’s contention that an important consideration is its  
submission that its current counsel was unaware of the tolling agreement until  
recently. Respectfully, all parties were aware of the existence of the tolling  
agreement during the certification hearing at least by June 2021. The certification  
application materials contained a copy of the tolling agreement. Further, at one point  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 34  
during the hearing, counsel for the proposed representative plaintiff referred to it in  
oral argument, as excerpted below from the transcript of proceedings from June 15,  
In the tort action commenced by the residential strata it was essentially a  
contractual claim. In July of 2017, the defendants filed an application seeking  
leave to file a third party notice to advance a contractual claim against IGA  
and claims for negligence against IGA and Garibaldi. In the notice of  
application, and in the affidavit filed by the defendants in support of the  
application, it appended correspondence between counsel for the defendants  
IGA and Garibaldi, giving notice that the defendants were served with the  
action filed by The Owners, BCS 3206 and the class proceeding. That  
correspondence also demonstrates the agreement that the defendants may  
pursue third party claims, and discussions about a tolling agreement between  
them. Both IGA and Garibaldi filed application responses taking no position.  
Subsequently, the defendants filed a third party notice on August 18th', 2017.  
Now, let me pause and tell you why I’m telling you some of that. As I  
understand it, there’s a suggestion - and - and it’s not - it’s one that is easily  
overcome by Your Lordship giving leave, that-the developer may be  
prejudiced in respect of third party notices against Garibaldi and IGA. I - - I  
can’t imagine why that would be an issue in these circumstances, but it does  
appear they have a tolling agreement that my friend may not have  
[Emphasis added]  
[89] IGA was represented at the certification hearing by counsel.  
[90] I accept the unchallenged evidence adduced on behalf of the applicants that  
at no time during the certification hearing did anyone on behalf of IGA object to the  
admission of the tolling agreement or advise or suggest that it was not a valid and  
binding agreement applicable to the class action proceeding.  
[91] IGA did not tender any evidence from its counsel involved in the  
communications with applicants’ counsel concerning the tolling agreement. For that  
matter, it did not tender any evidence to challenge the evidence adduced by the  
[92] The evidence adduced on behalf of the applicants, which is unchallenged and  
which I accept, establishes that at no time during conference calls between counsel  
for the applicants and IGA, where the tolling agreement came up, did IGA advise  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 35  
that it was not aware of its existence, not bound by it, or that it expired when the  
response pleading was requested in SP 3206’s IGU Action. Affidavit #3 of Mr. Lucas  
(one of the counsel acting for the applicants) sworn April 4, 2022, deposes:  
3. In or about 2017, I began assisting Mr. Coblin with respect to the Shangri-  
Law windows litigation. Since that time, I have participated in numerous  
telephone conference calls with Mr. Coblin, Steven Abramson, counsel for  
Garibaldi Glass Industries Inc. (“Garibaldi”), and Tim Peters and Devon  
Lehrer, counsel for IGA/AGS Joint Venture Inc. (“IGA”).  
4. During those conference calls, the existence of the tolling agreement  
between the Defendants and IGA (the “Tolling Agreement”) was discussed at  
various times. At no time, did Mr. Peters or Mr. Lehrer ever take the position  
that they were not aware of the Tolling Agreement nor did they ever indicate  
that their client was not bound by the Tolling Agreement. Furthermore, neither  
Mr. Peters nor Mr. Lehrer ever took the position that the Tolling Agreement  
did not differentiate between the tolling of the limitation periods in the action  
commenced by the residential estates strata corporation and the class action  
commenced by the representative plaintiff.  
[93] It was only after the applicants confirmed their intention to issue a third-party  
notice against IGA and others at a judicial management conference in February  
2022 that IGA informed them of its objection and of its position that the tolling  
agreement was not a valid and enforceable agreement.  
[94] It is clear, I find, that the applicants and IGA conveyed (through their counsel)  
and confirmed through their subsequent conduct their intention to enter into an  
unambiguous, valid, and binding tolling agreement: Sattva at paras. 46-47; Hunt  
River at para. 28; Wade at para. 28.  
[95] Even assuming there was a lack of clarity in the tolling agreement as IGA  
contends, a submission which I specifically reject, IGA is estopped by its conduct  
from asserting a limitation defence. In Ryan, at para. 59, the Supreme Court of  
Canada discussed the test for the doctrine of estoppel by convention, which, I find, is  
engaged on the facts of this case:  
This Court is not bound by any of the above analytical frameworks.  
After having reviewed the jurisprudence in the United Kingdom and Canada  
as well as academic comments on the subject, I am of the view that the  
following criteria form the basis of the doctrine of estoppel by convention:  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 36  
The parties’ dealings must have been based on a shared assumption  
of fact or law: estoppel requires manifest representation by statement or  
conduct creating a mutual assumption. Nevertheless, estoppel can arise out  
of silence (impliedly).  
A party must have conducted itself, i.e. acted, in reliance on such  
shared assumption, its actions resulting in a change of its legal position.  
(3) It must also be unjust or unfair to allow one of the parties to resile or  
depart from the common assumption. The party seeking to establish estoppel  
therefore has to prove that detriment will be suffered if the other party is  
allowed to resile from the assumption since there has been a change from  
the presumed position.  
See Wilken, at pp. 227-28; Canacemal Investment Inc. v. PCI Realty Corp.,  
[1999] B.C.J. No. 2029 (QL) (S.C.), at para. 35; Capro Investments Ltd. v.  
Tartan Development Corp., [1998] O.J. No. 1763 (QL) (Gen. Div.), at para.  
[Italics in original]  
[96] I find that the evidence establishes a shared assumption of the existence of  
an enforceable tolling agreement and the applicants reasonably relied on its  
existence and the post-acceptance conduct of IGA throughout, including its silence.  
In the factual circumstances outlined in these reasons, it would be manifestly unfair  
for IGA to be allowed to resile from their shared assumption.  
[97] Having found the doctrine of estoppel by convention applies to the case at  
bar, it is not necessary for me to determine whether the doctrine of estoppel by  
representation would also apply.  
Should Leave Be Granted in the Class Action?  
[98] Leave must be sought to issue a third-party notice outside the 42-day time  
limit provided for in R. 3-5(4). Factors to consider in deciding whether to grant leave  
are discussed in Lui at para. 41:  
My third general point is that there are a number of factors that should always  
be considered in the exercise of a discretion. 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  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 37  
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.  
[99] The applicants are not required to adduce evidence supporting its application.  
Rather, as pointed out in these reasons, the court is to presume the facts as  
pleaded, or as may be reasonably pleaded by amendment, are true and ask whether  
it is plain and obvious that the pleading fails to state a reasonable claim. IGA must  
establish beyond doubt that the pleadings disclosed no cause of action. Leave will  
be denied where the proposed claims are “bound to lose” or there is no bona fide  
triable issue: McNaughton at paras. 2830; Health Sciences at para. 60; ASPAC at  
para. 16; Steveston Seafood at para. 19.  
[100] As I have said, I have determined above that the claims advanced in the  
proposed third-party notices against IGA are grounded on valid causes of action and  
are not bound to fail. The applications were also brought within the applicable two-  
year limitation period. The proposed third-party notices also fall within the ambit of  
R. 3-5(1). However, I must still consider the relative prejudice to the parties, the  
merits of the proposed claim, any delay in proceedings, and the timeliness of the  
application: Tyson Creek at para. 16.  
[101] I have no hesitation in granting leave to the applicants. They will suffer  
irremediable prejudice if leave is not granted since they will be precluded from  
advancing claims for breach of contract and negligence they previously advanced in  
SP 3206’s IGU Action when it was structured as a representative action.  
[102] I also find that the applicants did not engage in delay in seeking leave to third  
party IGA in this proceeding once it knew that the action had been certified as a  
class action.  
[103] Moreover, no prejudice to IGA has been shown if leave is granted. There is  
no evidence, let alone allegation, that IGA will not have access to witnesses or  
documents it requires to defend the claim. Discoveries have not been conducted in  
the class action. IGA is already a party in the IGU Actions and faces allegations in  
0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.  
Page 38  
those actions that it breached its duties in contract and tort and in this respect, IGA  
must be taken to be engaged in preparation of its defence. The difference between  
the class action and the other Related Actions concerns the damages, i.e., individual  
losses suffered by class members, which are to be assessed at a later stage in the  
class action and only if the representative plaintiff is successful in proving defects.  
[104] IGA did not raise lack of merits as a basis to refuse leave and, I find, none  
has been shown. On its face, the merits of the applicants’ claims against IGA are  
appropriately grounded on the claims of SP 3165, SP 3206, and the representative  
plaintiff, in conjunction with IGA’s alleged role in the design, supply, and installation  
of the curtain-wall system and IGUs.  
[105] The objective of third-party proceedings is to provide a single procedure for  
the resolution of related issues, questions, or remedies, avoiding multiple actions  
and inconsistent findings (which is particularly important in long and complex cases);  
to provide a mechanism for the third party to defend the plaintiff’s claim; and to  
ensure the third-party claim is decided before a defendant is called upon to pay the  
full amount of any judgment: McNaughton at 14; Canfor at para. 49. In light of these  
goals, it would be appropriate to exercise the Court’s discretion to grant leave to file  
third-party notices against IGA.  
[106] The applicants have leave to file their proposed amended third-party notices  
against IGA in the Warranty Actions and in the class action.  
Walker J.”  

© 2019 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission