ontario building officials association leadership day 2015 avoiding litigation april 10,2015
TRANSCRIPT
Ontario Building Officials Association
Leadership Day 2015
Avoiding LitigationApril 10,2015
Potential for Liability
Claims Brought By: Owners Developers Subsequent Purchasers Guests of Owners 3rd Party Insurance Companies
• Actions• Inactions
• A Significant Event• Owner as Contractor• Death of Principal During Construction
No one knows how far into the future a claim can surface.
Claims Can Occur From:
• Joint & Several – (Deep Pocket)
• Replacement Cost for an older home/building
Costs Impacted By
Significance
• Passage of time
• Bodily Injury to a Guest
• Landlord Underinsured
Mortimer v. Cameron et al
• 1963 - Building Permit obtained by the owner to build
• wooden staircase outside exterior brick wall.
• 1971 – Building Permit obtained to cover the
• staircase with roof. Never acted upon.
• 1972 – 3rd Building Permit obtained to enclose
• staircase.
Work carried out
Inspected and approved by City’s Building Inspector
Forms basis of claim against City
Mortimer v. Cameron et al
Mortimer v. Cameron et al
• On July 17, 1987 while at a party, Mortimer and his classmate Cameron engaged in good natured horseplay, stumbled against a plywood barrier on a stair landing about 10 ft above the ground, and fell through. Cameron was unhurt, but Mortimer’s spine was severed from the fall, rendering him a quadriplegic.
Case Study:Mortimer V. Cameron et al
• The Court awarded $5 million in damages to Mortimer, for which it found the owner of the building (Landlord) 20% liable and City of London 80% liable; no liability was assessed against Mortimer, Cameron, or the tenant who was hosting the party.
Mortimer V. Cameron et al
• Upon appeal, the Ontario Court of Appeal reduced the City of London’s liability to 40%, and increased the Landlord’s liability to 60%.
• This was appealed again to the Supreme Court of Canada, who refused to hear the case, and so the judgment became final.
Mortimer V. Cameron et al
• A Defendant who is held just 1% liable for a Plaintiff’s injuries or damages may also have to
pay the share of any other defendant who cannot afford to pay
Joint & Several Liability
• Fire• Collapse• Discovery of Mould• Bankruptcy of Contractor/Developer
Significant Event Can Lead to a Claim
FACTS
1. Tenant buys the barbecue
2. Tenant buys a refurbished propane gas cylinder
3. Connects the cylinder to the barbecue & notices that the regulator hose assembly is leaking
4. Removes the regulator assembly and returns it
FACTS
5. Retail staff open a new box for the same model barbecue and make the exchange
6. Same day, tenant lights the barbecue and goes into his apartment to find a can that can be used to catch the grease
7. Fire erupts
CAUSE OF FIRE
• Propane barbecue leaked gas, which likely ignited the burners and in turn ignited the structure.
OFFICE OF THE FIRE MARSHALL
• Propane cylinders shall not be used or stored on balconies because this creates a fire or explosion hazard
PROPANE STORAGE & HANDLING CODECAN/CSA-B149.2-00, section 5.7.1 states,
• “Each cylinder shall be set upon a firm level weatherproof base located on consolidated ground at grade level…
This section prohibits the use or storage of tanks above grade level.
MANUFACTURER OF BARBECUE
a) Use outdoors in a well ventilated area preferably 3 metres from
any outbuildings
b) Not to be operated under any overhead or unprotected
construction
c) Not to be left unattended while in operation
MARKETING BROCHURE FOR THE OWNER
1)Encourages residents to use barbecues on
their decks and balconies
2) Has photographs showing barbecues on the
front decks
BUILDING OWNER SUES THE TENANT
Tenant Third Parties the following:
• Manufacturer of the Barbecue
• Retailer that sold the Barbecue
• Supplier of Propane Tank Cylinders
• Recertification Centre for Propane Tanks that supplied the propane tanks to above supplier
• Municipality
Building Inspection Department
Fire Department
• Builder created a horizontal concealed space
across the fire separations. (Plan Change)
• This should have been apparent at the framing
inspection when the framing & fire separations
were being reviewed.
LIABILITY
a) Failing to properly inspect the apartment building to ensure
that it complied with all applicable by- laws, regulations,
codes, standards and policies with respect to new
construction;
b) Failing to ensure that the Building was built in accordance
with the building permit issued by the City;
LIABILITY
c) Failing to ensure that the Building was built in
accordance with the building plans approved by the
City;
d) Failing to enforce all applicable by-laws, codes,
regulations, standards and policies with respect to
the construction of the Building;
Owner as ContractorClaims Scenario
• No or limited construction experience• Asks you for advice• Limited budget• Inspector allows minor deficiencies• Something goes wrong – owner sues inspector
for allowing deficient construction
Home Built on High Water Table• Home constructed by a private person in a rural
area and was sold after completion• Water found in basement• Water infiltration caused house to shift • Footings were not inspected properly to ensure
they were not too low • Footings were also too narrow and provided
poor lateral support
Cont’d
• Municipality Brought into action• Damages claimed over $500K• Allegation against Municipality:
Site Drainage Plan not reviewed carefully Footings inadequate• Municipality exposed to liability• Builder had no insurance
House Chimney Fire
• House constructed in 1992, 15 years later it catches fire
• Fire consumes the entire house – total loss• Fire Marshall Report – Cause was build up of
creosote in the fire place chimney• Further inspection found there was inadequate
clearance to combustible framing around the fire place insert
Cont’d
• Municipality Brought into action• Damages claimed over $300K• During construction the builder was told by building
inspector to have the chimney inspected by a proper expert (WETT Certified)
• Building Inspector failed to follow up on that inspection and the inspection never happened
• Municipality exposed to liability
A Guest Falls from a Raised Deck
• A guest at a newly constructed house exited the kitchen door onto a raised deck, stepped through the caution tape and fell 12 feet fracturing both heel bones and had a compression fracture of his L1 vertebrae
• Boards that had covered the door had been removed by deck contractor and not put back on
• Deck was not completed at time of the fall
Cont’d• Plaintiff sued the Builder, Deck Contractor and the Municipality • Allegations against Municipality - issued Occupancy Permit when
it was not appropriate and failure to inspect• Building Inspector had inspected this house prior to deck being
built • Building Inspector remembered the patio doors boarded off
during final inspection and a deadbolt put in• Municipality was not notified of the deck being built– Building
Records did not mention the deck• Matter went to pretrial – Judge agreed Municipality did not have
exposure• Municipality’s Insurers were able to get out of this action without
any contribution to a settlement
Red Flags
• New Builder/Part-time Builder
• Incomplete building permit
• Builder is Owner – limited budget
• Builder/Owner asks for your advice
• Long construction delays
• Builder outside of usual expertise
• Work covered over when you arrive to inspect
Red Flags
• No calls for inspections• Owner calls building dept. to complain about builder• Deficiencies at framing inspection• Construction begins before permit issued• Lack of reports from architects & engineers• Developer goes bankrupt
Defence Challenges
• Allowing construction before permit issued• Poor documentation of inspections• Multiple inspectors – no communication• Construction doesn’t reflect drawings submitted• Records destroyed – Retention By-law• No record of corrected deficiencies• Taking the contractor’s word for it during inspection
Documentation is the key to a sound defence
Mitigating the Risk with Good Documentation Practices
Creating Your Documents
• Your inspection documents have to stand on their own and pass the “test of time”
• They may be called on at a later date
• Plaintiff’s lawyers spend a significant amount of time understanding and reconciling documentary evidence
Implementing Documentation Practices
• Completing documents should be part of staff training
• Instructions should be included in all manuals• Train Staff on:
The importance of these documents
How they are to be completed
When they are to be completed
Implementing Documentation Practices (contd.)
• Documentation should be considered part of the job.
• The job is completed when the records are completed.
• If it’s seen as a “chore” there’s a risk the documents will fall short.
Can Documentation Ever be a Bad Thing?
• NO!
• Claims are not like wine…they do NOT get better with age…
In the world of litigation:
It’s not what you did
It’s what you can PROVE you did
In Closing
• Documentation is crucial to the defence of the municipality
• Memories fade over time• Provides a basis to refresh memories to the
events of a particular day• Evidence often more credible if it is corroborated
by a documentary record
Frank Cowan Risk Management Services
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• What• Risk management info on current topics and emerging trends • content provided by risk management, legal and claims professionals
• Why• One stop• Easy to use• interactive
The Risk Management Centre of Excellence
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