Rothfield v. Manolakos

Rothfield v. Manolakos
Collection
Supreme Court Judgments
Date
1989-12-07
Report
[1989] 2 SCR 1259
Case number
20740
Judges
Dickson, Robert George Brian; Lamer, Antonio; Wilson, Bertha; La Forest, Gérard V.; L'Heureux-Dubé, Claire; Gonthier, Charles Doherty; Cory, Peter deCarteret
On appeal from
British Columbia
Subjects
Torts
Notes
SCC Case Information: 20740
Decision Content
Rothfield v. Manolakos, [1989] 2 S.C.R. 1259
The Corporation of The City
of Vernon and William Phillips Appellants
v.
Peter Manolakos and Voula Manolakos Respondents
and
Ralph Gohmann and Barry Barber Respondents
and
B & L Landscaping & Maintenance Ltd.
and Morris Reade, a.k.a. William Morris Defendants
and
Woodcraft Ventures Ltd. Third Party
and between
The Corporation of The City
of Vernon and William Phillips Appellants
v.
Peter Manolakos and Voula Manolakos Respondents
and
Ralph Gohmann and Barry Barber Respondents
and
William Rothfield and Charles Burtch Plaintiffs
and
B & L Landscaping & Maintenance Ltd.
and Morris Reade, a.k.a. William Morris Third Parties
indexed as: rothfield v. manolakos
File No.: 20740.
1989: March 21; 1989: December 7.
Present: Dickson C.J. and Lamer, Wilson, La Forest, L'Heureux-Dubé, Gonthier and Cory JJ.
on appeal from the court of appeal for british columbia
Torts -- Negligence -- Municipality -- Duty of care -- Building permit issued notwithstanding flawed design -- Owners and contractors failing to inform municipality that project at point where inspection required ‑‑ Whether or not duty of care on part of municipality to owners -- Whether or not municipality absolved of responsibility because of owners' failure to inform.
Respondent owners contracted with Gohmann, who in turn subcontracted with Barber, for the construction of a backyard retaining wall. Neither were engineers but both professed to have considerable experience in this type of construction work. The contractors, after the owners on their own initiative learned that a building permit was necessary, applied for a permit and presented the City's Chief Building Inspector (Phillips) with a rough sketch of the project. Phillips exercised his discretion, based on their experience and the relatively low cost of the wall, and granted a permit. Neither the owners nor the contractors advised the City as required by the by‑law that the project had come to a stage where an inspection was required. The footings had been put in place, the concrete had been poured and the backfilling had been partially completed. The city inspector was not able to carry out the standard inspection which, if reasonably performed, would have revealed the flaws in design and construction.
The owners contacted the City when a large crack appeared in the wall. The city building inspectors attended and advised that further backfilling be delayed until the wall could be monitored in order to determine if there was any movement. The contractor finished the backfilling when he found that the wall had not moved in a twenty‑day period. Some months later the wall collapsed.
In a first action, respondents brought suit against the contractor, the subcontractor, the city inspectors and the City. The neighbouring owners, Rothfield and Burtch, brought a second action against the respondent owners who in turn took third party proceedings against the parties they had sued. The trial judge found that the rudimentary sketch was an inadequate basis for issuing a building permit and that the City, through its building inspectors, was negligent in issuing one. In the first action, the trial judge found the defendants jointly and severally liable to the respondents for all of the damages, but as between them he attributed 60% of the responsibility to the contractor and subcontractor, and 40% to the City and its inspector. In the second action, the trial judge found the respondent owners liable for the damages suffered by the neighbours, but held the third parties jointly and severally liable to indemnify them, but as between themselves liability was apportioned in the same manner as in the first action. An appeal to the Court of Appeal was dismissed.
Held (Lamer and Cory JJ. dissenting in part; Wilson and L'Heureux‑Dubé JJ. dissenting in part): The appeal should be allowed. The judgments of the trial judge should be varied. As between themselves, the City and its inspectors should be liable for 70% of the damages and the respondents for 30%.
Per Dickson C.J. and La Forest and Gonthier JJ.: The City, once it made the policy decision to inspect building plans and construction, owed a duty of care to all who it is reasonable to conclude might be injured by the negligent exercise of those powers. This duty was subject to those limitations arising from the statute bearing on the powers of the building inspector.
It was not unreasonable for the building inspector to exercise his discretion not to require plans by a professional engineer and to rely on on‑site inspections to ensure compliance with the standards of the by‑law in cases like the present. The City, nevertheless, must at least examine the specifications and sketches. A building permit might issue if the plans are inadequate in the sense of insufficiency but not if inadequate in the sense of an obvious departure from the standards required by the by‑law.
Appellants' negligence must be assessed in the context of the legislative scheme. The owners are by the by-law required to give timely notice to permit the appellants to conduct an on‑site inspection. Failure to do so constituted negligence on their part but not so as to totally absolve the appellants from liability. Every negligent act of an owner builder will not relieve the municipality of its duty to show reasonable care in approving building plans and inspecting construction. It is only in the narrowest of circumstances that no duty is owed because the owner is the source of his own loss.
Despite the negligence of the owners, the inspector was in a position to take reasonable care to ensure that all building was done in accordance with the applicable standards of the by‑law. A due exercise by the inspector of his powers, even though he was summoned late, could have avoided the danger. He should have ordered the cessation of the work and whatever corrective measures were necessary to enable him to ensure that the structure was up to standard. Nothing in the nature of the owner's breach would support the view that they should not be entitled to rely on the building inspector to acquit the City of its responsibility to ensure that the project was up to standard.
A vital distinction exists between this case and instances where an owner builder determines to flout the building by‑law, or is completely indifferent to the responsibilities that the by‑law places on him. Such deliberate action places the owner builder outside the scope of the duty owed by the public authority. The duty of building inspectors should not be taken to extend to requiring them to ferret out those who are aware or indifferent as to whether work is being done illegally, and who persist in that course of action.
The City and its inspector and the respondent owners were contributorily negligent and liability should be apportioned at 70% and 30% respectively.
Per Lamer and Cory JJ. (dissenting in part): The City and its inspector should bear no liability for damages to the owner. The Chief Building Inspector, if he had been acting in a private practice, would have been liable in negligence. He was not, however, acting in a private capacity but as a municipal official. Nonetheless there was still such a close relationship that he could foresee that carelessness on his part might cause damage to the plaintiffs.
Considerations existed which would negate or limit (a) the scope of the duty, and (b) the persons to whom it is owed.
The granting of a building permit did not and could not relieve the respondent owners of their responsibility to have the work on the retaining wall carried out in accordance with the City's by‑laws. Willingness to allow this relatively small and inexpensive project to proceed without requiring the respondents to incur the cost of a professional engineer did relieve the respondents of that responsibility. The Chief Building Inspector was neither dispensing advice to the respondents nor guaranteeing the success of the retaining wall. The respondents had hired a contractor to take care of their interests in this regard.
It is impossible for a municipality to constantly monitor all the building projects proceeding within its limits at any given time. The owners have a responsibility to advise the City as to when the required inspections could be made. The City has a concomitant obligation to reasonably and properly inspect the work in progress once it has received a notification. The owners' breach of their obligation to the City made it impossible for the City to fulfill its duty to inspect. The City was entitled to assume that the owner and contractors would comply with the provisions of the by-law and give timely notice that the work could be inspected. The failure to comply superceded any act of negligence of the City and so absolved the municipality from any liability. Such owners are the source of their own loss.
The issuance of the building permit could not reasonably be taken as an indication that the wall was sound. That responsibility, as a matter of policy, must remain with the owners who engaged contractors to undertake and be responsible for the design and construction of the project on their behalf. The municipality, if the policy were otherwise, would be unreasonably and unfairly burdened with insuring an owner as to the compliance with its by‑laws and in that way insure the proper design and workmanship of projects undertaken by an owner.
It is clearly reasonable for the neighbours, who were completely blameless, who did not choose the contractors and who could not ensure that the required notice of inspection be given to the City, to rely upon the municipality to ensure that the construction was carried out in a way that would not threaten their health or safety. It was appropriate, with regard to the neighbours' claims, to accept the trial judge's finding that the City was negligent in granting a building permit based on the inadequate information submitted to the Chief Building Inspector by the contractor and sub‑contractor.
Per Wilson and L'Heureux‑Dubé JJ. (dissenting in part): Failure on the part of the owners to discharge their responsibilities under the by‑law did not disentitle them from recovering for the whole of the damages against the City. The owners were not "negligent" or "the source of their own loss" and therefore outside the scope of the City's private law duty of care. Negligence means more than a failure to comply with the notice requirements of the by-law in circumstances where the City issued a permit notwithstanding obvious deficiencies in design and did not notify the plaintiffs to this effect. As a result of this omission, the owners could reasonably assume that all was in order when the permit was issued and follow the normal practice of relying on the contractors to give the required notices on their behalf. The City, when it issued the permit notwithstanding the design deficiencies, assumed the risk that it could remedy the deficiencies as construction progressed. Had the owners been made aware that the permit was issued on defective plans it would have appreciated the importance of the notices and seen to them personally. Their damage was the result of the combined negligence of the City and the contractors.
Cases Cited
By La Forest J.
Applied: Anns v. Merton London Borough Council, [1978] A.C. 728; distinguished: City of Kamloops v. Nielsen, [1984] 2 S.C.R. 2; referred to: Acrecrest Ltd. v. W. S. Hattrell & Partners (a firm), [1983] 1 All E.R. 17; McCrea v. White Rock, [1975] 2 W.W.R. 593; Curran v. Northern Ireland Co‑Ownership Housing Association Ltd., [1987] A.C. 718.
By Cory J. (dissenting in part)
City of Kamloops v. Nielsen, [1984] 2 S.C.R. 2; Anns v. Merton London Borough Council, [1978] A.C. 728; Governors of the Peabody Donation Fund v. Sir Lindsay Parkinson & Co., [1985] 1 A.C. 210; Sutherland Shire Council v. Heyman (1985), 60 A.L.R. 5; Yuen Kun Yeu v. Attorney‑General of Hong Kong, [1988] A.C. 175; Donoghue v. Stevenson, [1932] A.C. 562; B.D.C. Ltd. v. Hofstrand Farms Ltd., [1986] 1 S.C.R. 228; Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465.
By Wilson J. (dissenting in part)
City of Kamloops v. Nielsen, [1984] 2 S.C.R. 2; Anns v. Merton London Borough Council, [1978] A.C. 728; Dennis v. Charnwood Borough Council, [1982] 3 All E.R. 486; Governors of the Peabody Donation Fund v. Sir Lindsay Parkinson & Co., [1985] A.C. 210.
Statutes and Regulations Cited
Building and Plumbing By‑law of The Corporation of The City of Vernon, Number 2450, 1976, ss. 101, 300, 600, 700, 800, 800(4), 1000, 1000(1), 1001(e).
Municipal Act, R.S.B.C., c. 290, Division (5), ss. 734, 740.
APPEAL from judgments of the British Columbia Court of Appeal, Rothfield v. Manolakos (1987), 20 B.C.L.R. (2d) 85, dismissing appeals from judgments of Arkell Co. Ct. J., [1986] B.C.W.L.D. 425. Appeal allowed, Lamer and Cory JJ. dissenting in part; Wilson and L'Heureux-Dubé JJ. dissenting in part.
R. B. T. Goepel, for the appellants.
Greg Reif, for the respondents.
//La Forest J.//
The judgment of Dickson C.J. and La Forest and Gonthier JJ. was delivered by
LA FOREST J. -- I have had the advantage of reading the judgment of my colleague, Justice Cory, but I am respectfully unable to agree with his proposed disposition of this case for the reasons that follow.
Factual Background
The facts of this appeal are generally sufficiently set out in the reasons of Cory J., and I need not repeat them. I think it important, however, to stress some matters concerning the specifications and the rudimentary sketch submitted by the subcontractors when they attended at the municipal offices to obtain a permit for the retaining wall they had been hired to construct for the respondent owners. The trial judge found as a fact that Phillips, the chief building inspector, had seen the specifications and the sketch, but it seems fair to assume in the light of Phillips' testimony that he had not examined them with the care necessary to permit him to ascertain whether they could reasonably serve in the construction of the project. It is undisputed that the sketch was only a rough and ready drawing, and that the project, if built in accordance with the specifications, would be seriously deficient. The building inspector himself testified that the proposed steel reinforcement was wholly inadequate to support the structure, and that if he had seen the sketch, he would not have issued the permit. The footings described on the sketch were also inadequate. Despite the manifest inadequacy of the plan, however, the city issued a permit for the construction of the retaining wall. This was in accord with its usual practice. In construction projects of this kind, the city relied on on-site inspections to ensure that the requisite standards had been met.
The city by-law placed responsibility on the owner to summon the building inspector for this on-site inspection. Here, of course, the owner failed to give notice in good time, and it is the significance to be accorded to this failure that is at the heart of this appeal.
The Scope of the Duty Owed by the City
The city adopted the relevant building by-law "for the health, safety and protection of persons and property" pursuant to s. 734 of the Municipal Act, R.S.B.C., c. 290, as amended. By application of the test formulated by Lord Wilberforce in Anns v. Merton London Borough Council, [1978] A.C. 728, and adopted by this Court in City of Kamloops v. Nielsen, [1984] 2 S.C.R. 2, the city, once it made the policy decision to inspect building plans and construction, owed a duty of care to all who it is reasonable to conclude might be injured by the negligent exercise of those powers. This duty is, of course, subject to such limitations as may arise from statutes bearing on the powers of the building inspector.
In City of Kamloops v. Nielsen, this Court did not deal with an owner builder, but I see no reason why such a person would not fall within the scope of the duty of care owed by a municipality. There is, admittedly, an important distinction between the reliance of third parties on a municipal building inspector and the reliance of an owner builder. Third parties, such as neighbours and subsequent purchasers or occupiers of a building, obviously have no say in the actual construction of a building that proves defective. It is therefore reasonable that they should be entitled to rely on the municipality to show reasonable care in inspecting the progress of the construction. Owner builders, by contrast, are in a position to ensure that the building is built in accordance with the relevant building regulations, and from this it may be argued that they are not entitled to rely on the municipality. This would appear to be the view of Cory J. who states that it is the owner who should ensure through his contractors that the building is safe and structurally sound, and complies with the municipal by-law.
I am unable to accept this position. As a preliminary matter, it is not clear to me how owner builders, unless possessed of a high degree of technical knowledge, are supposed to see to it that their contractors comply with the technical aspects of building by-laws. Doubtless owner builders can choose their contractors, and it is incumbent on them to hire reputable tradesmen. But I fail to see how, having done that, they are in a position to ensure that construction actually proceeds according to standard. Owner builders can hardly be expected to serve as their own inspectors. It can, I think, safely be assumed that the great majority of those who engage building contractors to undertake a project must rely on the disinterested expertise of a building inspector to ensure that it is properly done. In that respect, owner builders are in a position similar to third parties who may be affected by the construction. Like them, they are, in my respectful opinion, entitled to rely on the municipality to properly inspect construction to see that it conforms to the standards set out in the municipality's building by-laws.
Moreover, in my view, the distinction sought to be made between owner builders and third parties overlooks the fact that both are ratepayers for whose safety the by-law was passed. The inspection of plans and the supervision of construction increases the costs of construction for everyone. But I think that most ratepayers, were they to give the matter any thought, would justify the increased expense as an investment in peace of mind: faulty construction, after all, is a danger to life and limb and may result in future expense and liability. This applies equally to owner builders and third parties. Both are justified in saying: "I pay for the provision of an inspection service, and so long as I act in good faith, I should be entitled to rely on the city to exercise reasonable care to ensure that all construction is built according to the standards set out in the by-laws."
Finally, I do not share the view that applying the law to owner builders in this way would make the municipality an insurer in respect of compliance by the owner with applicable building standards. It must be borne in mind that a municipality, once it has made the policy decision to inspect construction, is not bound to discover every latent defect in a given project, nor every derogation from applicable standards. That would be to hold the municipality to an impossible standard. Rather a municipality is only called upon to show reasonable care in the exercise of its powers of inspection. Accordingly, a municipality, whether the duty of care is owed to an owner builder or a third party, will only incur liability for such defects as it could reasonably be expected to have detected and to have ordered remedied. This is implicit in the decision of this Court in City of Kamloops v. Nielsen.
In summary, I cannot subscribe to the view that considerations of policy militate against viewing both owner builders and third parties as entitled to place reasonable reliance on the city to ensure that construction does not pose a threat to their health or safety.
The City's Duty Respecting the Specifications
As Cory J. has noted, the building inspector exercised his discretion in this case not to require plans by a professional engineer, and in such cases it was the practice to rely on on-site inspections to ensure compliance with the standards of the by-law. I am prepared to accept that as a general proposition this is not an unreasonable thing to do. The many small projects that come to the city must be processed with a reasonable measure of flexibility and efficiency, and undoubtedly many of the rudimentary specifications and sketches that are submitted to the inspector do not contain all the information necessary to enable the city to fully assess whether a project is up to standard. It would be unrealistic for the city to insist that owners submit fully adequate plans for such projects. By the same token, however, it would be unreasonable to impose on the city the burden of perfecting all such plans.
It seems to me, however, that it is incumbent on the city to at least examine the specifications and sketches. If an examination of these reveals that they may reasonably serve in the construction of a project, it would appear sensible to issue a permit. The inspector is functioning within the parameters of a legislative scheme in which it is normal to ensure that a project fully meets the standards of the by-law at the on-site inspection stage. It would tend to defeat the discretion not to require professional plans if a more exacting standard were imposed on the city inspector. The city's duty, after all, is only to exercise reasonable care.
Inadequacy in the sense of insufficiency is one thing, however; inadequacy in the sense of an obvious departure from the standards required by the by-law is another. In the present case, it was clear from the specifications that the project was inadequately designed. The building inspector's testimony itself draws attention to the fact that the retaining wall would not hold if built with the amount of steel reinforcement described in the specifications.
Under these circumstances, I have no difficulty in holding that the appellants were negligent in this case, and barring other considerations, that they are liable for the loss resulting from that negligence. The appellants' negligence must, however, be assessed in the context described above and, in particular, of the legislative scheme in which they were operating. That scheme provides for on-site inspections at which time inadequacies can be corrected during the course of construction. These inspections are under the scheme triggered by notification from the owner. The by-law squarely imposes this duty on the owner at particular stages of construction. I should perhaps advert to the fact that the by-law includes a contractor in the definition of owner, but I emphasize that it is an inclusive provision; it can scarcely be read as excluding the owner upon whom the duty is originally imposed. Relying on these provisions, the appellants argued that the failure of the owners in the present case to give timely notice to permit the appellants to conduct an on-site inspection absolved the latter from liability.
The Negligent Owner Builder
I turn then to a consideration of the consequences to be ascribed to the failure of the owners and their contractors to give timely notice for the on-site building inspection. I agree with Cory J. that this failure constituted negligence, but I do not share his view that this failure must completely absolve the municipality from liability. In my respectful view, Lord Wilberforce's dictum that no duty is owed "to a negligent building owner, the source of his own loss" does not apply to the facts of this case.
I do not think Lord Wilberforce's pronouncement was meant to extend to every failure by an owner builder, or his contractors, to comply with the applicable building regulations. It is to be expected that contractors, in the normal course of events, will fail to observe certain aspects of the building by-laws. That is why municipalities employ building inspectors. Their role is to detect such negligent omissions before they translate into dangers to health and safety. If, as I believe, owner builders are within the ambit of the duty of care owed by the building inspector, it would simply make no sense to proceed on the assumption that every negligent act of an owner builder relieved the municipality of its duty to show reasonable care in approving building plans and inspecting construction.
These considerations suggest that it is only in the narrowest of circumstances that Lord Wilberforce's dictum will find application. By way of example, I think that the negligent owner would be viewed as the sole source of his own loss where he knowingly flouted the applicable building regulations or the directives of the building inspector; see the observations of Stephenson L.J., Donaldson L.J., and Sir David Cairns in Acrecrest Ltd. v. W. S. Hattrell & Partners (a firm), [1983] 1 All E.R. 17 (C.A.), at pp. 25, 30 and 33, respectively. Again owner builders may totally fail to acquit themselves of responsibilities that properly rest on them; see the decision of the British Columbia Court of Appeal in McCrea v. White Rock, [1975] 2 W.W.R. 593, where a builder unreasonably relied on the city to take the initiative in inspecting the progress of construction.
The common thread in the examples cited above is that they involve circumstances in which it is reasonable to conclude that an owner builder had, by his actions, excluded himself from the scope of the municipality's duty of care. Sir David Cairns puts the matter well when he observes in Acrecrest Ltd. v. W. S. Hattrell & Partners (a firm), supra, at p. 33, that the "local authority's function . . . is not that of restraining a wrongdoer from persisting in his wrongdoing". In my view, however, on the facts of this case it is not open to the city to advance a similar argument and say that the action of the owners was such that they were no longer owed a duty of care. And I say this, even apart from the initial negligence of the appellants to which I shall refer later.
As I noted above, the city issued the building permit on the assumption that an on-site pre-pour inspection would enable it to determine whether the design met applicable standards. The pre-pour inspection is a key part of the inspection process because it permits the inspector to determine if the foundations of a project are up to standard. Lord Wilberforce touches upon this very point in Anns v. Merton London Borough Council, supra, at p. 753:
One of the particular matters within the area of local authority supervision is the foundations of buildings ‑- clearly a matter of vital importance, particularly because this part of the building comes to be covered up as building proceeds. Thus any weakness or inadequacy will create a hidden defect which whoever acquires the building has no means of discovering: in legal parlance there is no opportunity for intermediate inspection.
Inasmuch as inadequately inspected foundations will always pose a threat to the health and safety of the public, building by-laws contain measures aimed at preventing the occurrence of such "hidden defects". Thus, the City of Vernon building by-law sets out definite standards for foundation work and, as my colleague Cory J. points out, Division 700 of the by-law confers on the building inspector a broad spectrum of powers designed to enable him to ensure that these standards are respected. The building inspector is empowered to order the correction of any work which has been improperly done, and similarly may order the cessation of any work that is proceeding in contravention of the by-law. As I will go on to explain, these powers of the inspector to insist on any correction necessary to bring the work up to standard take on a particular importance in this case.
It cannot be disputed that the owners were negligent in failing to give timely notice for the pre-pour inspection. The by-law places this obligation squarely on every property owner. But the fact remains that when the inspector did attend at the site he was confronted with a situation in which it must have been at once clear to him that the retaining wall was potentially substandard. As I have just pointed out, there is no mystery to the fact that uninspected foundations may give rise to hidden defects. This will always be the case, and here two additional facts heightened this possibility. First, it must be remembered that the city had issued the permit on the basis of inadequate plans which themselves afforded no basis for a preliminary evaluation of the soundness of the foundations. In this case, moreover, an assessment of the plans would have revealed that the steel reinforcements and the footings were inadequate. Secondly, there was the telling fact that a crack had already appeared in the wall.
My colleague takes the view that the failure of the owners to give timely notice made it "impossible for the city to fulfill its duty to inspect". In my respectful view, however, it is necessary to take a broader view of the question and not simply focus on the fact that the negligence of the owners made it difficult to conduct one particular inspection. The key question, it seems to me, is whether it is reasonable to conclude that despite the negligence of the owners, the inspector was still in a position to acquit himself of the responsibility that the by-law placed on him, i.e., to take reasonable care to ensure that all building was done in accordance with the applicable standards of the by-law. In other words, is it reasonable, in the circumstances to conclude that a due exercise by the inspector of his powers, even though he was summoned late, could have avoided the danger? See the formulation of Lord Bridge of Harwich in Curran v. Northern Ireland Co-Ownership Housing Association Ltd., [1987] A.C. 718, at pp. 727-28.
When the question is framed in this way, I think that the answer must be in the affirmative. The inspector could not and did not rely on the plan submitted to him; it was inadequate. He chose instead to rely solely on the on-site inspection. And when he attended at the site, he was confronted with a situation which, if left unremedied, manifestly stood to pose a threat to the health and safety of the public, including the neighbours and the owner builder. Of course, the cause of the problem would have been evident if the inspector had been asked to come at the proper time. But this does not absolve the inspector of his duties. It must be remembered that the inspector was, at the time, armed with all the powers necessary to remedy the situation. As I see the matter, it was incumbent on the building inspector, in view of the responsibility that rested on him, to order the cessation of the work, and the taking of whatever corrective measures were necessary to enable him to ensure that the structure was up to standard.
Instead, the inspector stipulated that the situation be monitored for a certain time and that construction proceed if no further damage occurred. In my view, this was negligence. When a building inspector authorizes a given project to proceed this must be taken as an indication that the inspector has satisfied himself that the project conforms to applicable standards. On what other basis could the building inspector, acting prudently, authorize construction to proceed? Here, on the facts, I do not see how the building inspector, using reasonable care, could have satisfied himself that this was the case. Even leaving aside the fact that the project was already showing signs of damage, the inspector, never having inspected the structure, simply did not have at his disposal any information on which to base a conclusion that the project was up to standard. Indeed, had the inspector simply turned to the city's records or enquired about the manner in which the structure was built or about the materials used in the construction, he would have discovered from the specifications what he ought to be taken to know in any event, that the structure was deficient in a number of important aspects.
To return, then, to my initial proposition that it would be unreasonable to hold the owners to be the "sole authors of their loss", I see a vital distinction between this case and instances where an owner builder determines to flout the building by-law, or is completely indifferent to the responsibilities that the by-law places on him. In such circumstances, owner builders cannot reasonably allege that any damage they suffer is a result of the failure of the building inspector to take reasonable care to ensure that a given construction project is built in conformity with the by-laws. They have, by their actions, placed themselves outside the scope of the duty owed by the public authority. In effect, their breach of the regulations is such as to justify the conclusion that they can have no reasonable expectation that they are entitled to rely on the due exercise of the inspection power to forestall dangers to their health and safety. In summary, the duty of building inspectors should not be taken to extend to requiring them to ferret out those who are aware or indifferent as to whether work is being done illegally, and who persist in that course of action.
Here, the situation is entirely different. Admittedly, the owners had breached the applicable by-laws. One could indeed characterize the breach as serious, even though they had instructed the contractors to obtain the requisite permits. But the key point, as I view the matter, is that nothing in the nature of the breach would support the view that the owners should not be entitled to rely on the building inspector to acquit themselves of their responsibility to ensure that the project was up to standard. The very by-law contemplated that breaches of the sort committed here would occur. That is the reason the powers of the building inspector extend to allowing him to halt construction, and to order the correction of work improperly done when such breaches come to his attention.
In short, I am unable to share the view of Cory J. that the negligent breach of the by-laws by the owners was such as make them the sole authors of their own loss. To return to the formulation of Lord Bridge, supra, I remain of the view that in the circumstances of this case the due exercise by the building inspector of the powers at his disposal would have avoided the danger caused by the negligent behaviour of the owners. In failing to exercise these powers the building inspector was again in breach of his duty to take reasonable care to see that the by-laws were complied with.
But if I cannot agree with my colleague that the responsibility of the building inspector to discover and correct breaches of the building by-law was completely negated by the respondents' oversight, I am of the view that they should bear some responsibility for any loss they incurred because of their failure to summon the inspector in good time. The damage could have been avoided if notice had been given at the proper time. The by-law, I repeat, places responsibility for giving notice to the inspector squarely on the owner. It could not really function without this requirement and, in the case of small projects, we saw, there are additional reasons making on-site inspection critical if the by-law is to function with reasonable flexibility and efficiency. These are not technical matters for which the average person must rely on an experienced contractor. People generally should know that a building permit is required and that inspections cannot be done when the work is covered up. Of course, owners generally rely on a contractor to give notice at the appropriate time, but the responsibility is ultimately the owner's, not the city's. Failure to give timely notice places an unenviable burden on the inspector to decide whether the expensive task of digging up the area should be undertaken. All concrete cracks, and his failure to act, though negligent, may in some measure reasonably be attributed to the negligence of the owner in placing him in that position.
Nonetheless, it is clear that the lion's share of responsibility in the present case lies upon the appellants. I would, therefore, find the appellants (the city and its inspectors) and the respondent owners contributorily negligent and would accordingly apportion liability between them. In my view, a just apportionment would be in the order of 70% for the appellants and 30% for the owners, for which, pursuant to the trial judge's orders, the appellants are jointly and severally liable. As between the owners and the contractors, it must be remembered that the latter had contracted to construct the project and were thus under an obligation to do so with reasonable care and skill. Indeed, not only did they construct the work in an improper manner, it was really their fault, rather than the owners', that the building inspector was not notified at the appropriate time. Accordingly, the owners, pursuant to the trial judge's orders, are entitled to recover jointly and severally against the contractors for all the loss sustained by them. The trial judge also ordered (and the appellants did not dispute this) an apportionment of liability as between the contractors and the appellants of 60% and 40% respectively. These orders were not contested and I have not disturbed them.
Disposition
Accordingly, I would allow the appeal and set aside the judgment of the Court of Appeal. The judgments of the trial judge should be varied as follows. In Action 241/81 Vernon, the plaintiffs are held to be contributorily negligent to the extent of 30% and judgment against the appellants is reduced accordingly. In Action 228/82 Kelowna, the defendants, Peter and Voula Manolakos, are held contributorily negligent to the extent of 30% and damages against the appellants are reduced accordingly. In all other respects, the judgments of the trial judge are confirmed.
I would apportion costs between the appellants and respondent owners in this Court and in the Court of Appeal on the basis of 30% to the appellants and 70% to the respondent owners. The owners and the appellants are entitled to recover these costs against the contractors, the former fully, the latter on the basis of the contribution to the liability apportioned between the contractors and the appellants by the trial judge.
The reasons of Lamer and Cory JJ. were delivered by
CORY J. (dissenting in part) -- The issue to be resolved on this appeal is what if any duty was owed by the municipal authorities of the City of Vernon to the respondents who were having a retaining wall built on their land.
Factual Background
The respondents, Peter and Voula Manolakos owned a house situated on a steeply sloping lot in the municipality of Vernon. Before they could have and enjoy a backyard, a retaining wall had to be built. They entered into a contract with Ralph Gohmann to build one, to erect a fence on top of it and to do some landscaping. Mr. Gohmann in turn subcontracted with Barry Barber for the construction of the retaining wall. Mr. Barber prepared a brief written proposal together with a rough sketch of the wall which was to be 74 feet long, 8 feet high and 8 inches wide. Although neither Mr. Gohm