In complex Canadian construction deficiency disputes, it is generally understood that design professionals including engineering and architecture consultants could face exposure in negligence to the ultimate end owner or users of a project. The British Columbia Court of Appeal recently provided clarification on when claims of negligence may be successful when the end owner or users of a construction development do not have a contractual relationship with the design professionals involved in the project.
Background
Centurion Apartment Properties Limited Partnership v. Sorenson Trilogy Engineering Ltd., 2024 BCCA 25, arises out of the construction of an 11-storey residential apartment project. The developer contracted with DB Services to design and construct the project. DB Services in turn retained Sorenson Trilogy Engineering to complete the structural engineering design services for the project. Upon completion of the project, the developer sold the completed apartment complex to the Plaintiff, Centurion Apartment Properties.
Shortly after Centurion purchased the completed development, major structural deficiencies were discovered and the building was evacuated. Centurion claimed the deficiencies resulted from negligent designs completed by Sorenson Trilogy Engineering. As Centurion did not have a contractual relationship with Sorenson, its only option to claim against Sorenson directly was in negligence, and not in contract.
Lower Court Findings
At the trial level Supreme Court of British Columbia, Sorenson applied for summary determination of the claim against it on the basis that there was not a necessary relationship of proximity between Centurion and Sorenson. In particular, Sorenson argued that there was a complex web of contractual relationships between various parties involved in the development, design and construction, and the Court ought to require the parties to rely on their own contractual claims to allocate risk. Somewhat surprisingly, the Chambers Judge agreed that design professionals and the end owner or users of a development are not in a sufficiently proximate relationship to permit a finding of negligence. Accordingly, the Chambers Judge dismissed Centurion's negligence claim against Sorenson.
Court of Appeal Decision
On appeal, the British Columbia Court of Appeal disagreed with the lower Court's findings. The Court of Appeal determined that the complex contractual web of parties involved in the development of the 11-storey apartment complex did not eliminate Sorensen's duty to design a structurally sound building. The Court emphasised that even if no direct contractual relationship exists between design consultants and the end users of a project, design professionals are nonetheless obligated to create safe designs. The Court of Appeal held that a relationship of proximity was an available finding, and several factors weighed in favour of a finding of proximity. In particular, Sorenson ought to have reasonably contemplated that carelessness in its designs may cause foreseeable harm to the future owners or inhabitants of the subject apartment complex during the building's useful life. The Court of Appeal overturned the lower court decision and permitted Centurion's claim in negligence against Sorenson to proceed.
In reaching its decision, the Court of Appeal considered the well-established history of findings of negligence against design professionals in Canadian construction deficiency disputes. The Court of Appeal's decision reiterates that design professionals owe duties to subsequent owners and users of construction developments, and may be found liable in negligence if designs fall below the requisite standard of a competent design professional.
Key takeaways
This ruling reinforces that engineers, architects and other design professionals in Canada cannot avoid liability for poor designs simply because they don’t have a direct contractual relationship with a building's end owner and users. This is particularly important in confirming that when a developer transfers ownership of a completed project to the final owner, design professionals cannot avoid liability based solely on the absence of a contractual relationship with the subsequent purchaser or user.
For further information contact Gordon Becher or Xaviere Schneider – Whitelaw Twining