Negligence, Duty Owed to Buyers by Engineer, Health and Building Inspectors and Developer #286

By Gerry Neely
B.A., LL.B.

A recent decision, whose release coincided with the increasing attention being paid to the problem of leaky condominiums, discussed the duties owed by municipal and public health inspectors and engineers to the buyers of a lot on Bowen Island who found they could not use the property because it contained sewage and water systems that were unlawful and unsanitary.

The lot was worthless because there was no way to remedy these problems. The developer was aware of this and lied to the municipal building inspector about the source of the water to obtain an occupancy permit. He also lied to the buyers to induce them to complete their purchase when he told them that there was no problem with the water quality.

The engineer, who had been hired to design and build the sewage system, was negligent for submitting plans to the health inspectors which did not conform to the statutory requirements. The disposal field failed in part because it was too small an area and the depth of fill was too shallow to meet the demands placed upon it. In addition, the engineer failed to supervise the construction of the system yet gave to the health inspectors a certificate confirming that it had been constructed in accordance with the permit and the design.

Even though the engineer had been hired by the contractor and there was no contractual relationship between the engineer and the buyers, he owed a duty to them for the reasons set forth in a 1995 Supreme Court of Canada decision, a portion of which bears repeating.

"I conclude that the law in Canada has now progressed to the point where it can be said that contractors (as well as subcontractors, architects and engineers) who take part in the design and construction of a building will owe a duty in tort to subsequent purchasers of the building if it can be shown that it was foreseeable that a failure to take reasonable care in constructing the building would create defects that pose a substantial danger to the health and safety of the occupants. Where negligence is established and such defects manifest themselves before any damage to persons or property occurs, they should, in my view, be liable for the reasonable cost of repairing the defects and putting the building back into a non-dangerous state." ¹

The public health inspectors were negligent for several reasons, the first of which was the issuance of a permit for the sewage disposal system when the plans neither conformed to the Ministry’s specifications nor to the provisions of the sewage disposal regulations. Secondly, they failed to inspect the construction of the work before they gave it final approval.

Finally, while no formal application had been made for approval of a waterworks system based upon a well to be dug on the adjoining lot, the public health officials were aware that this was intended. The judge held that, since the inspector’s duties included the assessment of unapproved water systems and testing of water for potability, they had a duty to investigate the potential violation of the Health Act and enforce its provisions by insisting that the well and system complied with the Act.

This decision was based upon earlier cases which decided that when a government has made a policy decision to inspect building plans and construction, a duty of care is owed to all who might be injured if those powers are exercised negligently. This duty of care would also be owed by the building inspector.

The buyers had paid $175,000 for the lot and were given an award of damages of $165,000, based upon a nominal residual value of the lot at $10,000. Punitive damages of $10,000 each were awarded against the developer and the engineer. The health authorities were directed to pay 70% of the damages, the engineer 15% and the developer 15%. Actions against the real estate agent and the building inspector for the regional district were settled prior to the trial by a payment of $10,000 each. ²

	1.	Winnipeg Condominium Corp. No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85, 121 D.L.R. (4th) 193 (S.C.C.) p. 121.
	2.	Cook v. Bowen Island Realty Ltd, 39 B.C.L.R. (3d) p. 15.

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