2018 BCCA 285 Lewis v. Fraser-Fort George (Regional District)

COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:	Lewis v. Fraser-Fort George (Regional District),
	2018 BCCA 285

Date: 20180713

Docket: CA44377

Between:

Katherine Joann Lewis, John Inman Orlowsky, Sarah Betty Urquhart,
Rick Kenneth Urquhart and John Berkley Ball

Appellants

(Plaintiffs)

And

Regional District of Fraser-Fort George

Respondent

(Defendant)

Before:

The Honourable Madam Justice Newbury

The Honourable Mr. Justice Groberman

The Honourable Madam Justice Fisher

On appeal from: An order of the Supreme Court of British Columbia, dated
March 21, 2017 (Lewis v. Fraser-Fort George (Regional District), 2017 BCSC 449,
Prince George Registry Docket S0934704).

Counsel for the Appellants:	T.P. Matte
Counsel for the Respondent:	S.H. Haakonson L. Leung
Place and Date of Hearing:	Vancouver, British Columbia June 5, 2018
Place and Date of Judgment:	Vancouver, British Columbia July 13, 2018

Written Reasons by:

The Honourable Madam Justice Newbury

Concurred in by:

The Honourable Mr. Justice Groberman

The Honourable Madam Justice Fisher

Summary:

Trial judge had not erred in ruling that action against Regional District for negligence in failing to warn property owners of erosion dangers was statute-barred under former Limitation Act.

Reasons for Judgment of the Honourable Madam Justice Newbury:

[1] The plaintiffs all own properties on Island Park Drive near Prince George, British Columbia. The properties are located in the Regional District of Fraser-Fort George on the banks of and near a bend in the Nechako River. The plaintiff Mr. Ball purchased his property (“Lot 6”) in 1994 from a Mr. and Mrs. Johns. It already had a house on it which had been built in 1989. The plaintiffs Mr. and Mrs. Urquhart bought their property (“Lot 2”) in 1985 and began building on it June 1990; and the plaintiffs Dr. Lewis and Mr. Orlowsky purchased their property (“Lot 3”) in July 1991 and built on it in 1992–3. Building permits were issued by the defendant Regional District for the construction of the houses, and all setback requirements were observed.

[2] Unbeknownst to the plaintiffs, following a major “erosion event” in 1976, the defendant Regional District had been told by the provincial Ministry of the Environment that the area in which the plaintiffs’ properties were located was prone to significant erosion of the river bank. One homeowner in the area, Mr. Freeman, wrote at that time to the Water Investigation Branch of the Ministry seeking financial assistance to prevent further erosion of the bank near his home, but he was turned down. However, he did obtain permission to install bank armouring or rip rap along the bank adjacent to his property in the summer of 1978. (See para. 14 of the trial judge’s reasons.)

[3] The Water Investigation Branch sent a copy of its correspondence with Mr. Freeman, to the Regional District together with a summary of the findings of an investigation it had carried out. In a letter to the District in January, 1977, the Branch advised:

This matter is being drawn to your attention in the hope that you may be able to prevent further compounding of this undesirable situation, there being a considerable number of undeveloped lots along this erosion prone bank. [At para. 11.]

[4] The Board of Directors of the Regional District considered the matter at at least two meetings in early 1977. On April 14, 1977 the Board passed a resolution as follows:

Moved Director Moffat, seconded Director Taggart that Building Permits be withheld from lots in D.L. 4204, Plan 18805, unless the applicant provides us with a letter indicating that he has been informed of the hazards of erosion at that location and accepts responsibility for any [resulting] damages.

I will refer to this as the “1977 Resolution”.

[5] Strangely, the passing of the 1977 Resolution seems to have gone largely forgotten by the Regional District, although one Island Park resident, a Mr. Juelffs, was required to sign a waiver of claims concerning erosion when he applied for a building permit. (When he built is not disclosed in the evidence.) Importantly for our purposes, the Regional District did not inform the plaintiffs of the 1977 Resolution when they (or in Mr. Ball’s case, his predecessor in title) obtained their respective building permits, did not require them to sign waivers or acknowledgements, and did not warn them they were building in an area prone to significant erosion.

[6] In 1986, the Regional District also adopted a zoning bylaw that prohibited the location of any building or structure within 30 metres of the “natural boundary” of the Nechako River. The zoning bylaw stated:

The purpose of these conditions is to reduce the risk of injury, loss of life and property damage due to flooding and erosion. However, the Regional District does not represent to the owner or any other person that any building constructed or mobile home or unit located in accordance with the following conditions will not be damaged by flooding or erosion.

At the end of the bylaw, under the heading “Notes”, the following appears:

These flood damage and erosion protection provisions are provided to the Regional District by the Water Management Branch of the Ministry of Environment, who may be contacted for further advice.

The 1997 Erosion Event

[7] In 1997, another significant “erosion event” occurred along the bend of the Nechako River near the plaintiffs’ houses. The Urquharts’ property was one of the worst affected: approximately eight metres of their bank was eroded away. Dr. Lewis and Mr. Orlowsky lost between two and four metres; Mr. Ball lost one metre.

[8] The following year, the Provincial Ministry of Environment, Lands and Parks commissioned an engineering report from GeoNorth Engineering Ltd. (“GeoNorth”). As the summary trial judge observed, the firm was tasked with assessing the risk to individual structures within three selected areas along the Nechako River, including the subject portion of Island Park Drive. The engineering firm analyzed historic and recent river flows, noting that between 1977 and 1995, flow conditions had been “relatively low”, but that the high flows in the summer of 1997 were “not unprecedented, not statistically unusual and were last exceeded in 1976.” In May and June 1997, there had been 17 days in which the flow had exceeded 1000 cubic metres per second and 72 other days over 800 cubic metres per second. As measured by the Water Survey of Canada at nearby Isle Pierre, these flows had been exceeded four times since 1950, including in 1976. GeoNorth noted that a flow of 1000 metres per second had a return of about 20 years.

[9] Under the heading “Risk to Houses”, GeoNorth reported:

Technically, building foundations could be constructed on the river bank provided the toe of the slope was not undermined. In practice, structures are typically set back from the crest to allow tor some erosion at the toe and to avoid special design and construction issues associated with foundations on a slope.

The cross sections on Drawings 371-2, 4 and 6, show that several houses are close to the crest of the slope. None of the houses are presently undermined; all are safe for habitation at the time of this report. An erosion event similar to those of 1996/97 could make houses on the following building lots unsafe:

. . .

Lots 2, 3 and 5, Plan 18805, Block A, D.L. 4204, Island Park Drive;

. . .

We can not predict when erosion equal to that resulting from the 1996/97 events will recur. [Emphasis added.]

GeoNorth recommended that houses on Island Park Drive be located at least 35 metres back from the crest of the slope, observing that a setback distance measured from the seasonal high water mark “might not be appropriate, since this method does not take into account the horizontal distance made up by the slope.” The report indicated that Lots 2, 3 and 5 were at “high risk” and predicted that all five of the houses in the reach of Island Park Drive would be “undermined within 50 years at current erosion rates”.

[10] GeoNorth estimated that the cost of moving all five houses would be approximately $210,000, while other methods would be significantly more expensive. The report ended with the following summary:

The mechanism of bank failure at all three sites is one of shallow movement or ravelling of sand and gravel down the slope as the toe is eroded. The rate of erosion is dependent on the river elevation and velocity, and on the state of the natural cobble pavement or other revetment. Given several years of attenuated flows with peaks not exceeding 600 m³/s it is probable that erosion will not be perceptible on an annual basis. In any event, the slope crest at each location will not regress faster than the toe erosion and will therefore provide ample warning to residents. That is to say, we do not expect sudden, deep seated, catastrophic landslides in these materials. Given this, however, the sustained high flows of 1997 and instances of severe ice jam related velocities are unpredictable events and could recur in any given year.

The estimated erosion rates, based on the previous 50 year period, may not be appropriate for structures intended for more than 50 years. The long-term erosion rate is unknown, and likely fluctuates with changes in climate. The estimated erosion rates could increase if flows on the Nechako River increase.

. . .

The home owners most at risk along Island Park Drive and Bergman Road do have space in which to relocate. This action is less expensive than revetting the river bank and is therefore recommended. [Emphasis added.]

[11] Dr. Lewis and Mr. Orlowsky obtained a copy of the 1998 GeoNorth report in the summer of 1998. In fact, Dr. Lewis and Mr. Ball attended a meeting of several homeowners with an official of the Ministry of the Environment to discuss the report that summer. They sought assistance from the provincial government to move their home from its existing location to a site further back from the river bank, but like others in the area, were told funds were not available. The cost of undertaking such a move was, the trial judge noted, prohibitively expensive for them to bear alone. (At para. 25.) They also began efforts to improve the stability of the river bank adjacent to their property.

[12] Mr. and Mrs. Urquhart also received a copy of the 1998 GeoNorth report and sought, unsuccessfully, government assistance to move their home in accordance with the recommendations. As well, they took steps to stabilize the bank by placing logs at its base and planting grass and trees such that between 1998 and 2007, the “river bank portion of the Urquhart property appeared to be very stable”. (At para. 42.)

The 2007 Erosion Event

[13] Unfortunately, another major erosion event occurred in 2007. This event was even more serious than that in 1997 and lasted several weeks. All the plaintiffs again suffered serious erosion to their river banks. Not surprisingly, this again set off various discussions among the Island Park Road property owners. In the course of those discussions, Mr. Ball spoke with his neighbour, Mr. Juelffs, who told him that when he had sought a building permit, he had been required to sign a waiver of claims with respect to erosion.

[14] Mr. Ball decided to retain GeoNorth to advise on how best to protect his property from future erosion events. GeoNorth prepared a new report, dated August 23, 2007, that naturally focussed on his property, Lot 6. The author estimated that the most recent event had resulted in the loss of between 6 and 9 metres of bank width adjacent to Lot 6. The report continued:

The variation is attributed to the distance downstream of the existing revetment, changes in the bank soil type and the divergence of the Nechako River thalweg from the high bank. The high bank abruptly turns northerly, from a northwest alignment, near your residence due to a past cycle of river migration. At the time of the second review [August 20, 2007], the high bank area had eroded to about two-thirds the height of the crest. I expect the final slope erosion back of the crest, by raveling of sand and gravel of the lower portions of the slope, followed by collapse of the upper silt, to reflect the lateral erosion that occurred at river level this year. This will cause the collapse of a treed strip between 9 and 13 m width at the top of the high bank and all of the slope between crest and river’s edge over the next few months to few years. If the bank is not stabilized, the raveled material will be removed by Nechako River, including all of the benefits of the partially vegetated slope presently remaining. [Emphasis added.]

[15] Noting its understanding that federal and provincial agencies would “permit bank stabilization provided a long-term design is provided”, GeoNorth described a scheme to construct a concrete rip rap revetment and related measures in order to ensure long-term protection against erosion. Near the end of the letter, GeoNorth added:

The freshet of 2007 was an unprecedented event in the recorded history of Nechako River and the extended duration of high flows, over seven weeks at volumes in excess of 1,000 m cubic/s, resulted in between 25 and 30 m width of bank loss in the area of greatest erosion and between about 9 and 15 m width in areas of least erosion along this reach of Nechako River. Erosion-protection revetments constructed along stream banks require varying degrees of maintenance depending on the intensity and duration of exposure to aggressive stream flows. Some maintenance might be required following high flow events when they occur in the future.

The report did not recommend the relocation of Mr. Ball’s house.

[16] In June 2007, the plaintiffs other than Mr. Ball began the long and expensive process of moving their respective houses farther away from the river bank. They were at last given hope of receiving some emergency funding from the Province for relocating their houses. The Regional District’s co-operation was apparently required to gain access to such funding, which was capped at $60,000 per home. The Province advised the District in July, 2007 that:

The province agrees to provide an interim payment of $90,000 to the RDFFG, with the understanding interim payments will be provided to the property owners. The remainder of the funds will be provided upon receipt of a letter from the RDFFG accompanied by proof of payment made to the property owners to the maximum noted above. [Emphasis added.]

The Urquharts, Dr. Lewis and Mr. Orlowsky received the necessary permits from the District to lay the new foundations for their houses and were given funds to assist in relocating them. These plaintiffs and their families endured very difficult circumstances for some months, living in campers, tents and the houses of friends. The District’s staff were actively involved in monitoring their work and acted as the intermediary between the plaintiffs and the Province’s Emergency Program.

[17] For his part, following his receipt of the second GeoNorth report in August 2007, Mr. Ball began seeking the necessary governmental approvals to install rip rap on the edge of the river bank below his property as recommended by GeoNorth. These approvals were granted in November 2007 and his installation of rip rap continued over the next year, finishing in November 2008. (At para. 53.) Later, in 2009, Dr. Lewis and Mr. Orlowsky began to seek funding in order to install rip rap below the ‘empty lot’, which they were told was “essential to stabilization efforts below their own property.” (At para. 28.)

[18] During discussions with Dr. Lewis in early 2009, Mr. Ball mentioned the information he had learned from Mr. Juelffs regarding the District’s requirement that anyone applying for a permit to build in the Island Park area sign a waiver in favour of the District. Also around this time, Dr. Lewis spoke with Mr. Freeman and asked to see his permit for the installation of rip rap he had carried out. The trial judge described what then transpired:

Dr. Lewis received a number of documents from Mr. Freeman, including a copy of the 1977 Resolution and the 1977 Department of Environment Letter and became aware for the first time of the warning of the Department of the Environment to the Defendant regarding future development of the “erosion prone bank”.

Also included in the documents of Mr. Freeman was the Memorandum from the Water Investigation Branch dated December 22, 1976 which noted that the Freeman house was approximately 30 feet from the top of the bank and was too close to prevent eventual loss of the house into the river, unless it was moved at least 200 feet from the top of the bank.

Dr. Lewis deposed that, upon reading these documents provided by Mr. Freeman, she realized for the first time that the defendant knew of the risk of erosion in 1977 and had passed a motion to refuse to issue a building permit for properties in that subdivision without obtaining a release from applicants (affidavit #1 of K.J. Lewis, para. 44(f)).

After reading these documents, Dr. Lewis consulted with Mr. Orlowsky and their neighbors, Betty and Rick Urquhart and John Ball and they collectively decided to seek legal advice about a possible claim against the defendant. [At paras. 29–32; emphasis added.]

This Proceeding

[19] The plaintiffs commenced this action on June 2, 2009, although they did not serve the writ on the District until March 29, 2010. Their amended notice of claim described the “Authorizations” the respective plaintiffs had received from the Regional District in the form of building permits, inspection approvals during construction, and occupancy permits. The pleading continued:

21. The Defendant made the Urquhart Home Authorization, the Ball Home Authorization and the Lewis/Orlowsky Home Authorization negligently, in breach of the Duty of Care, particulars of which are as follows:

a. Exposing the Plaintiffs, and each of them, to the risk that their properties would be subject to severe erosion;

b. Failing to take any care or, in the alternative, any reasonable care to prevent injury and damage to the Plaintiffs from the unusual damage of severe erosion of the Plaintiffs’ Properties;

c. Failing to take any measures or, in the alternative, any reasonable measures to ensure that the Plaintiffs’ Properties were in a reasonably safe condition and suitable for building sites for the Plaintiffs’ homes;

d. Failing to give the Plaintiffs, or any of them, any warning or any adequate warning of the risk of severe erosion to their properties, of the Environment Ministry Warning and of the Resolution;

e. issuing building permits for the Plaintiffs’ Properties without complying with the Resolution;

f. Failing to discharge the duty imposed by the Resolution;

(collectively, the “Defendant’s Negligence”).

[20] The plaintiffs deposed that they would not have built on their lots (and Mr. Ball that he would not have purchased his lot) if they had been warned about the risk of erosion and informed of the requirement to waive future claims as a condition of obtaining their building permits. (At para. 44.) They sought damages for their own labour in relocating and shoring up the bank; the cost of rip rap installed by them along the bank; the (net) costs of relocating their houses; loss of land, view and privacy; and compensation for the “stigma” their properties had suffered – presumably, the decline in value of their lots on the market. The Urquharts sought a total of $271,936.26; Dr. Lewis and Mr. Orlowsky sought a total of $230,678.82; and Mr. Ball (who had not had to move his house) a total of $164,825.67.

The Trial Judge’s Reasons

Summary Trial

[21] Both the plaintiffs and the defendant sought summary judgment in the Supreme Court of British Columbia. The Court summarized the issues for determination for the Court as set out in the defendant’s motion for summary judgment as follows:

1. When did the plaintiffs’ cause of action accrue?

2. Was the running of time postponed pursuant to the provisions of section 6 of the Limitation Act and, if so, when did time being to run?

3. Did the plaintiffs commence this action within the applicable limitation period under the Limitation Act?

4. Is the plaintiffs’ action statute-barred due to their failure to comply with the notice provisions under section 286 of the Local Government Act?

The issues for determination as set out in the plaintiffs’ notice were as follows:

1. Was the defendant negligent in failing to warn the plaintiffs of the risk of erosion to their properties and issuing building permits without that warning?

2. If so, did the negligence of the defendant cause the plaintiffs’ loss?

3. If so, what is the correct calculation of damages?

The plaintiffs contended that the issues in both notices of application were suitable for summary determination. The defendant agreed that the issues in its notice of application were suitable, but argued that there were too many gaps or conflicts in the evidence on key issues for the plaintiffs’ issues to be determined summarily. (At para. 71 .)

[22] After reviewing the relevant case law and finding that there were relatively few conflicts in the evidence, the judge concluded that she was able to find the necessary facts to resolve any conflicts in the evidence, and that both applications were suitable for summary determination. (At para. 84 .) No challenge is made on appeal to this conclusion .

[23] The summary trial was held over seven days in the summer of 2016, and the Court issued its reasons on March 21, 2017 dismissing the plaintiffs’ claims as statute-barred.

Limitation Act

[24] Before turning to the summary trial judge’s analysis, it may be useful to set out the relevant provisions of the Limitation Act, R.S.B.C. 1996, c. 266 (the “Act”), that lie at the heart of this appeal. The Act has of course now been repealed and replaced by a new limitations statute, S.B.C. 2012, c. 13; but by virtue of s. 30(3) of that statute, the (former) Act as it stood immediately prior to repeal applies to the facts of this case.

[25] Section 3(2)(a) of the Act provides that a two-year limitation measured from “the date on which the right to [bring an action] arose” applies (inter alia) to actions for damages in respect of “injury to person or property, including economic loss arising from the injury, whether based on contract, tort or statutory duty”. Section 3(5) then states:

(5) Any other action not specifically provided for in this Act or any other Act may not be brought after the expiration of 6 years after the date on which the right to do so arose.

[26] These limitation periods are of course subject to postponement under s. 6, the material provisions of which are as follows:

(4) Time does not begin to run against a plaintiff or claimant with respect to an action referred to in subsection (3) until the identity of the defendant or respondent is known to the plaintiff or claimant and those facts within the plaintiff’s or claimant’s means of knowledge are such that a reasonable person knowing those facts and having taken the appropriate advice a reasonable person would seek on those facts, would regard those facts as showing that

(a) an action on the cause of action would, apart from the effect of the expiration of a limitation period, have a reasonable prospect of success, and

(b) the person whose means of knowledge is in question ought, in the person’s own interests and taking the person’s circumstances into account, to be able to bring an action.

(5) For the purpose of subsection (4),

(a) “appropriate advice”, in relation to facts, means the advice of competent persons, qualified in their respective fields, to advise on the medical, legal and other aspects of the facts, as the case may require,

(b) “facts” include

(i) the existence of a duty owed to the plaintiff or claimant by the defendant or respondent, and

(ii) that a breach of a duty caused injury, damage or loss to the plaintiff or claimant,

Sub-section 6(6) confirms that the person claiming the benefit of a postponement has the burden of proof that the running of time has been postponed.

Notification

[27] The plaintiffs were also required by s. 286 of the Local Government Act, R.S.B.C. 1996, c. 323 to notify the District of their claims. Section 286 provides:

286 (1) A municipality is in no case liable for damages unless notice in writing, setting out the time, place and manner in which the damage has been sustained, is delivered to the municipality within 2 months from the date on which the damage was sustained.

(2) In case of the death of a person injured, the failure to give notice required by this section is not a bar to the maintenance of the action.

(3) Failure to give the notice or its insufficiency is not a bar to the maintenance of an action if the court before whom it is tried, or, in case of appeal, the Court of Appeal, believes

(a) there was reasonable excuse, and

(b) the defendant has not been prejudiced in its defence by the failure or insufficiency.

Arguably, the plaintiffs sustained the damage when the District issued building permits for their respective homes (and indeed, as will be seen below, the judge found that their causes of action accrued at that time for limitation purposes; see para. 119 of her reasons and para. 33 below.) If this is correct, the plaintiffs could never have complied with s. 286, since they were not aware they had ‘sustained damage’ until 2009. The Local Government Act does not provide for any postponement on the basis of discoverability, but does create an exception to the notice requirement where a “reasonable excuse” is shown.

[28] As it happened, however, at the time they became aware of their claim against the Regional District, the plaintiffs were in the position of needing its co-operation in obtaining financial help from the Province in connection with the installation of rip rap along the empty lot at the toe of the river bend. The plaintiffs feared the District would withdraw its co-operation if it became aware of their lawsuit, thus jeopardizing funding and placing their properties at further risk. (At para. 138.) In any event, they argued, the District had not been prejudiced by the plaintiffs’ failure to give notice, since the District was obviously aware of the erosion problem and had been actively involved in supervising the plaintiffs’ efforts to avoid future damage.

The Trial Judge’s Analysis

[29] Addressing the defendant’s first question – when did the plaintiffs’ cause of action accrue? – the summary trial judge noted that the parties were in agreement that the applicable limitation period was six years from the date the cause of action accrued . The plaintiffs argued that their cause of action had not accrued until early 2009 when they became aware of the existence of the 1977 Resolution and thus of the fact the Regional District had failed to comply with its terms when it issued building permits in respect of the subject properties . The District on the other hand argued that the cause of action accrued on the respective date s the building permit s were issue d, i.e., between April 27, 1989 and August 6, 1992. Thus in their submission, each of the plaintiffs’ claims had expired long before – subject to any postponement in accordance with s. 6 of the Act.

[30] The parties did not challenge the conclusion that the six-year limitation applied, and I will therefore proceed on the basis that that is correct. It would appear to be consistent with this court’s decision in Armstrong v. West Vancouver (District) 2003 BCCA 73, in which Mr. Justice Mackenzie stated for the Court:

It is trite law that an action in negligence requires three elements: a legal duty of the defendant to the plaintiff, the breach of that duty and resulting damage. This appeal is concerned only with the damage element. Damage to a building caused by a defect in the building itself or its foundations is characterized as “pure” or non-consequential economic loss in order to distinguish such damage from economic loss resulting from physical damage caused by an external event. Pure economic loss includes the cost to repair the defect as well as any manifestations of the defect, such as settling or cracking. Thus “damage” in the context of a claim for pure economic loss begins with the defect itself. The ambit of liability for pure economic loss is limited: see Winnipeg Condominium Corp. No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85. The line between recoverable and non-recoverable pure economic loss does not concern us on this appeal.

It is now settled that a claim for pure economic loss is not “injury to property” within s. 3(2)(a) of the Limitation Act: see Alberni District Credit Union v. Cambridge Properties Ltd. (1985), 65 B.C.L.R. 297(C.A.); Workers’ Compensation Bd. (British Columbia) v. Genstar Corp. (1986), 24 B.C.L.R. (2d) 157 (C.A.). The applicable limitation provision is therefore s. 3(5) which sets a basic limitation period of 6 years from the date the right to bring the action arose. [At paras. 9–10; emphasis added.]

See also 410727 B.C. Ltd. v. Dayhu Investments Ltd. 2004 BCCA 379 at paras. 23–5, lve to app to SCC dism’d [2004] S.C.C.A. No. 422.

[31] After quoting from ss. 3 and 6 of the Act, the summary trial judge briefly reviewed various British Columbia cases, including Ounjian v. St. Paul’s Hospital 2002 BCSC 104 , Landels v. Interior Health Authority 2005 BCSC 1182, this court’s decisions in Karsanjii Estate v. Roque [1980] 3 W.W.R. 612 and Levitt v. Carr [1992] 4 W.W.R. 160, and Sun-Rype Products Ltd. v. Archer Daniels Midland Co. 2007 BCSC 640, (aff’d 2008 BCCA 278, lve. to app. ref’d [2008] S.C.C.A. No. 416). In Ounjian, Tysoe, J., as he then was, had considered the reasons of Mr. Justice Lambert in Vance v. Peglar (1996) 22 B.C.L.R. (3rd) 251 (C.A.) and added a fourth element to the three previously suggested, to describe the point at which time begins running under s. 6. The elements were :

1. The identity of the defendant is known to the plaintiff.

2. The plaintiff has certain facts (including the facts set out in s. 6(5)(b)) within her means of knowledge.

3. A reasonable person, knowing those facts and having taken the appropriate advice a reasonable person would seek on those facts, would regard the facts as showing that an action would have a reasonable prospect of success.

4. A reasonable person, knowing those facts and having taken the appropriate advice a reasonable person would seek on those facts, would regard the facts as showing that the plaintiff ought, in her own interests and taking her circumstances into account, to be able to bring an action.

All four of these components must be satisfied before the running of time with respect to the limitation period begins running. Thus if a plaintiff is able to demonstrate that any one of the four components have not been satisfied before two years prior to the commencement of the action (in the case of a two -year limitation period ), the action will not be statute-barred . [At para. 21.]

(See also the discussion of Vance v. Peglar in Novak v. Bond [1999] 1 S.C.R. 808 at paras. 60 ff.)

[32] The judge described the parties’ respective positions on the issue of postponement at paras. 108–118 of her reasons; I need not recount them here. She began her analysis at para. 119, agreeing with the District’s submission that unless the running of time was postponed, the plaintiffs’ cause of action had accrued when the Regional District issued building permits for the plaintiffs’ homes “without complying with the 1977 Resolution and specifically, without warning them of the risk of toe erosion on each of their properties.” With respect to Mr. Ball’s property, the Court found that although there was no direct evidence from Mr. Johns, the lack of any letter in evidence signed by him accepting responsibility for any damage caused by erosion permitted the inference that the Regional District had also failed to comply with the 1977 Resolution when it issued Mr. Johns’ building permit in April 1989. (At para. 124.)

[33] The judge agreed with the District that its duty of care had arisen on January 24, 1977 when it had received the letter described earlier from the Water Investigation Branch . She continued:

The defendant owed a duty of care to the plaintiffs to warn them of the risk of erosion and not to issue building permits for the construction of their home without providing that warning. As per the principles set out in the case of Kamloops v. Nielsen, [1984] 2 SCR 2, and applied in Grewal v. The Corporation of the District of Saanich, 1989 CarswellBC 129, the defendant owed a private law duty to the plaintiffs to warn or prevent construction where it knew there was a significant risk of erosion. This duty was owed directly to the Lewis/Orlowsky plaintiffs and the Urquhart plaintiffs as applicants for building permits in 1992 and 1990. This duty was also owed to Mr. Ball as a subsequent purchaser, because the relationship between the defendant and Mr. Ball was sufficiently close that the defendant ought reasonably to have had him in contemplation.

There is uncontroverted evidence that the defendant failed to warn the Lewis/Orlowsky plaintiffs and the Urquhart plaintiffs of the hazards of significant erosion of their properties when it issued them their building permits in 1992 and 1990 respectively.

In each of the plaintiffs ’ cases, then, the cause of action had accrued when building permits had been issued – to Mr. Ball’s predecessor in title in April 1989; to the Urquharts in June 1990; and to Dr. Lewis and Mr. Orlowsky in 1992.

[34] Turning next to s. 6 of the Act, the judge concluded that at the se points in time, the facts within the plaintiffs’ knowledge had not been such that a reasonable person, knowing those facts and having taken appropriate advice on them, would regard them as showing that an action on the cause of action would have a reasonable prospect of success . At that time, the existence of a duty owed by the District to the plaintiffs was not a fact within their means of knowledge; accordingly, time had not begun to run against the plaintiffs at that point. (At paras. 127–8 .)

[35] The situation had changed, however, in 1998 when each of the plaintiffs had received and considered GeoNorth’s first report . The plaintiffs deposed that after carefully reviewing that report, they had concluded that the 1997 erosion event “would not be repeated because … there had been a very unusual series of conditions … that year ”, but the trial judge did not agree. She found that such a conclusion was “quite simply unreasonable”. In her words:

The report very clearly describes the 1997 erosion event as “not unprecedented” and “not statistically unusual” and the peak flows of 1997 had been exceeded on four previous occasions. The report concluded that the sustained high flows of 1997 could recur in any given year and that all five houses on Island Park Drive would be undermined within 50 years. The author of the report recommended that all houses at risk be moved away from the river bank and that the recommended setback be 35m from the crest of the slope rather than 30m from the natural boundary.

The plaintiffs do not dispute that the 1977 Resolution was at all times available to the public upon request but they submit that they had no reason to make enquiries of the defendant until after the 2007 erosion event.

In my view, the information contained in the 1998 GeoNorth Report was such that the plaintiffs would have had reason to make enquiries of the defendant and could have discovered the existence of the 1977 Resolution. The identity of the defendant was always known to the plaintiffs and the plaintiffs had within their means of knowledge facts that, with appropriate advice, would show that an action against the defendant would have a reasonable prospect of success. [At paras. 130–2; emphasis by underlining added.]

[36] If the plaintiffs had exercised due diligence on reading the 1998 report, the judge found, they could have discovered the information they later “stumbled upon” in 2009 following discussions with Mr. Freeman . (At para. 133.) The judge was satisfied on the evidence that the “interests and circumstances” of the plaintiffs in 1998 were such that they ought to have been able to bring an action against the District at that time. In her analysis, although there was evidence that they were in the process of attempting to secure provincial funding , the plaintiffs had had the “practical ability” to bring an action against the District and there were no “serious, substantial or compelling” reasons to prevent the commencement of such action . (At para. 134.)

[37] Accordingly, the commencement of the applicable limitation period had been postponed until the summer of 1998 and expired six years later, in the summer of 2004. The plaintiffs’ action, commenced in 2009, was out of time.

Notification

[38] Although the trial judge’s ruling on the limitation period was sufficient to dispose of the action, she went on to consider s. 286 of the Local Government Act. As mentioned, the plaintiffs submitted that they had had a reasonable excuse for choosing not to notify the District of their claims once they became aware of them in 2009 – they required its continued co-operation to obtain financial assistance from the Province for the relocation of their homes (and later for the installation of rip rap along the bank of the empty lot.) The plaintiffs contended that the District had not suffered prejudice as a result of the plaintiffs’ failure to give notice, since it had obviously been aware of the plaintiffs’ circumstances during both “erosion events” and indeed had had staff on hand in 2007 and when the Urquhart and Lewis/Orlowsky homes were being moved.

[39] In obiter, the judge acceded to the plaintiffs’ arguments with respect to s. 286 and thus would not have regarded their claims as barred as a result of their failure to provide the notice within the two-month period.

Causation and Damages

[40] Also in obiter, the trial judge went on to consider the questions raised by the plaintiffs’ application for summary judgment, which would become relevant only if she were wrong in concluding that the action was statute-barred. She found that causation had been clearly established, accepting the evidence of the Lewis/Orlowsky plaintiffs and the Urquharts that if they had been warned of the risks of significant erosion when applying for their building permits they would not have built their homes at all (at para. 152); and Mr. Ball’s evidence that he would not have bought his property had he also been warned. (At para. 164.) The judge also calculated the damages she would have allowed in each case for the plaintiffs’ costs of moving their homes, rip rap and associated labour, and in Mr. Ball’s case, loss of land. She would not have allowed any amount for “stigma” to land or related heads of damage, on which there was no, or insufficient, evidence.

[41] In the end, however, the Court dismissed the action, with costs to the defendant. The Court made the following “Order Made after Application”, which was filed on May 26, 2017:

THIS COURT DECLARES that:

1. this action is not statute-barred pursuant to the provisions of s. 286 of the Local Government Act, RSBC 1996, c. 323; and

2. this action is statute-barred pursuant to the provisions of s. 3(5) of the Limitation Act, RSBC 1996, c. 266.

THIS COURT ORDERS that:

3. the Plaintiffs’ claims are dismissed; and

4. the Defendant shall have its costs of these proceedings pursuant to Rule 14-1, subject to either party wishing to make submissions on the issue of costs.

It will be noted that the first two points were styled as declarations, when declaratory relief had not been sought in the defendant’s pleading and would not have been appropriate. This apparently led the District to launch a cross appeal from the ruling on s. 286 of the Local Government Act. With respect, the order should simply have stated that the plaintiffs’ claims were dismissed. It would have been open to the District, in its response to the appeal, to challenge the ruling under s. 286.

On Appeal

[42] In their factum, the plaintiffs asserted the following grounds of appeal:

A. The Trial Judge erred in concluding that the limitation period for the commencement of the Appellants’ action had not been postponed until January, 2009.

B. The Trial Judge erred in failing to assess damages for stigma to the Appellants’ properties.

[43] Subject to the existence of extricable issues of law, I am of the view that the general question of whether the trial judge erred in concluding that the limitation period in this case had begun to run in mid-1998 is a question of mixed fact and law in that it involves the application of a legal standard to the facts. The plaintiffs must therefore show that the trial judge’s conclusion regarding postponement is clearly and palpably wrong. (This was the standard applied by this court in Shah v. Governor and Company of Adventurers Trading into Hudson’s Bay 2008 BCCA 114 at para. 15.)

[44] A good starting-point with respect to postponement under s. 6 of the Act is the Supreme Court of Canada’s decision in Novak v. Bond. The plaintiff in that instance sued her former doctor for malpractice in failing to diagnose her breast cancer. She had not sued when she was first diagnosed, because she wished to focus on her treatment and recovery. She was cancer-free for four years, at the end of which her cancer reappeared, leading her to make the decision to commence proceedings. A Supreme Court judge in chambers ruled that she was out of time, but this court reversed, and the Supreme Court of Canada agreed.

[45] Speaking for the majority, then Chief Justice McLachlin reviewed various ‘approaches’ to the interpretation of the test set out in s. 6(4)(b) and in particular, the phrase “ought … to be able to bring an action”. The majority adopted an approach that in its opinion combined subjective and objective factors, avoided the distortion of the ‘troublesome phrase’ and avoided any misuse of s. 6(4) for tactical purposes. (At para. 81.) In the Chief Justice’s words:

On this approach, s. 6(4)(b) may be read as denoting a time at which a reasonable person would consider that someone in the plaintiff’s position, acting reasonably in light of his or her own circumstances and interests, could – not necessarily should – bring an action. This approach is neither purely subjective nor purely objective. The question becomes: “in light of his or her own circumstances and interests, at what point could the plaintiff reasonably have brought an action?” The reasonable person would only consider that the plaintiff could not have brought an action at the time the right to do so first arose if the plaintiff’s own interests and circumstances were serious, significant, and compelling. Purely tactical considerations have no place in this analysis. In my view, this approach best accords with the purposes of modern limitations statutes, gives a sensible meaning to the terms of s. 6(4)(b), and is most likely to result in clear and fair results in the majority of cases.

. . .

The proposed interpretation resolves this apparent conundrum by relying on the fact that there are different kinds of “ability”. “[O]ught ... to be able to bring an action” can certainly be interpreted narrowly in the sense of legal capacity. But it also may be interpreted more broadly, in the sense of a practical ability to choose a particular course in light of the factual circumstances in which a person finds himself or herself. We speak of not being “able” to do something not only when we lack the legal or physical capacity to do it, but also when our circumstances are such that we cannot reasonably contemplate doing the thing.

Interpreting “ought ... to be able to bring an action” in the second sense permits full weight to be given to all the words of s. 6(4)(b). The running of the limitation period is therefore postponed when the plaintiff shows that practical considerations arising from his or her “circumstances” and “own interests” render him or her unable, as a reasonable person, to bring an action at the earlier prescribed date. “[O]ught ... to be able to bring an action”, interpreted thus, is very different from the normative “should bring an action”. “Should” connotes subjective choice; “could” connotes practical ability. On the interpretation I have proposed, the court’s central task is to identify the point at which the reasonable person who animates s. 6(4) would consider that the plaintiff, in light of his or her own interests and circumstances, could reasonably have brought an action. Section 6(4)(b) therefore refers to a time at which, in light of the plaintiff’s particular situation, the bringing of a suit is reasonably possible, not when it would be ideal from the plaintiff’s perspective to do so.

What “interests and circumstances” should be considered at this stage? … Practically speaking, the reasonable person would only consider that the plaintiff could not have brought an action at the time the right to do so first arose if the plaintiff’s own interests and circumstances were serious, significant, and compelling. ... This approach makes good policy sense. To force a plaintiff to sue without having regard to his or her own circumstances may be unfair to the plaintiff and may also disserve the defendant by forcing him or her to meet an action pressed into court prematurely: see generally B. Legate, “Limitation Periods in Medical Negligence Actions Post-Peixeiro” (1998), 20 Advocates’ Q. 326, at p. 334.

Whether a particular circumstance or interest has the practical effect of preventing the plaintiff from being able to commence the action must be assessed in each individual case. Section 6(4)(b) requires that the circumstances and interests of the individual plaintiff be taken into account. What is a serious, substantial, and compelling interest in one case may not be so in another case. [At paras. 81, 83–6; emphasis added.]

[46] Applying this partly subjective and partly objective approach, then, the issue for this court is whether the summary trial judge made a clear and palpable error in finding that the identity of the District was known to the plaintiffs and that the facts known to them or within their means of knowledge were such that, having taken the appropriate advice, they ought, in their own “interests and circumstances”, to have been able to bring an action against the District in 1998.

[47] The plaintiffs focussed their argument in this court on the factual issue of what they would have found if they had made inquiries in 1998 into the specification of the setback requirements applicable to their properties. Such an inquiry would, they contend, have led to a review of the zoning bylaw adopted by the District in 1986. (See para. 6 above.) They say the bylaw would have led them to believe the District had no possible liability for the setbacks, since the bylaw stated they had been established by the Province. In their submission, they would not have learned of the “duty to warn” that was reflected in the 1977 Resolution because they would not have known to search for that resolution: the District itself appeared to have “forgotten” its existence. Thus even with due diligence in 1998, the plaintiffs submit that reasonable persons in their position would not have learned of their potential claims against the District; would not have had facts that indicated that a duty of care was owed to them by the District; and would not have had “appropriate advice” to the effect that they would have a reasonable action against the District. The trial judge’s factual inferences to the contrary, they say, are only speculation and are “contrary to the established facts”.

[48] Although I disagree slightly with the trial judge’s reasoning, in my opinion she did not err in finding that from the summer of 1998, the existence of a reasonable cause of action against the District was within the plaintiffs’ means of knowledge. Once the plaintiffs had the 1998 GeoNorth report, they knew that high flows like those of 1997 were “not unprecedented, and not statistically unusual”; that the houses on Lots 2 and 3 were at “high risk”; that the previous setback requirements, measured to the natural boundary, were insufficient; and that the relocation of their houses was “recommended”. While the report said all five houses on Island Park Drive would be “undermined within 50 years at current erosion rates”, it also warned that erosion rates could not be predicted with certainty and that another event like that in 1997 “could make” the houses on lots 2, 3 and 5 “unsafe.”

[49] The trial judge stated, without more, that the District’s identity “was always known to the plaintiffs”. (At para. 132.) I would agree to the extent that by 1998, the existence of a cause of action against the District, and thus its identity as a potential defendant, was within the plaintiffs’ means of knowledge. In my opinion, this is so regardless of whether the plaintiffs on making inquiries would have discovered the existence of the 1977 Resolution in 1998. As mentioned earlier, and as counsel agreed, the Resolution did not create the ‘duty to warn’ on which the plaintiffs rely; the Resolution reflected that duty. That duty arose when the District took on the responsibility of specifying setbacks for structures built on the plaintiffs’ properties and issuing building permits for such structures.

[50] Even if a reasonably competent solicitor might not have located the obscure 1977 Resolution in 1998, he or she would have considered that it was the Regional District that established the setback requirements (albeit relying on the Province) and issued building permits for their houses. The competent solicitor in 1998 would also have been aware of the private law duty of care confirmed by the Supreme Court of Canada in Kamloops v. Nielsen [1984] 2 S.C.R. 2 with respect to municipal bodies that are empowered to regulate construction. As stated by Wilson J. for the majority in Kamloops:

It seems to me that, applying the principle in Anns [v. Merton London Borough Council, [1978] A.C. 728], it is fair to say that the City of Kamloops had a statutory power to regulate construction by bylaw. It did not have to do so. It was within its discretion whether to do so or not. It was, in other words, a “policy” decision. However, not only did it make the policy decision in favour of regulating construction by by-law, it also imposed on the city’s building inspector a duty to enforce the provisions of the By-law. This would be Lord Wilberforce’s “operational” duty. Is the City not then in the position where in discharging its operational duty it must take care not to injure persons such as the plaintiff whose relationship with the City was sufficiently close that the City ought reasonably to have had him in contemplation? [At 12–13; emphasis added.]

Kamloops also confirmed the recoverability against municipal bodies of pure economic loss without the necessity of physical damage. (See the discussion at pp. 26–35.) Several other cases applying Kamloops or the principles adopted therein were decided prior to 1998: see, e.g., this court’s decisions in Millstream Enterprises Ltd. v. New Westminster (City) (1993) 87 B.C.L.R. (2d) 303 (C.A.), Grewal v. District of Saanich (1989) 60 D.L.R. (4th) 593, Manolakos v. Gohmann [1988] B.C.W.L.D. 319, varied [1989] 2 S.C.R. 1259, Kranz v. Nelson (City) (1996) 141 D.L.R. (4^th) 301 and Wirth v. Vancouver (City) [1990] 6 W.W.R. 225 (B.C.C.A.).

[51] Thus in my opinion there were by mid-1998 such facts known to the plaintiffs or within their means of knowledge that a person in the circumstances and having the interests of the plaintiffs and having taken the “appropriate advice” a reasonable person would seek on those facts, would regard as indicating an action against the District that would have a reasonable chance of success. Nor am I persuaded the trial judge erred in finding that during the six-year period beginning in mid-1998, there was no “serious, substantial or compelling reason” for the plaintiffs to delay commencing an action against the District. The case might have been different on this point had the provincial Emergency Program been instituted in, say, 1996 rather than in 2007. In that event, it might have been arguable in 1998 that there was a serious or compelling reason to delay until funding had been secured. (It will be recalled the trial judge regarded this reason as providing the plaintiffs with a “reasonable excuse” for not giving the notice required by s. 286 of the Local Government Act.) In 1998, however, no such compelling factor arose.

Disposition

[52] Notwithstanding my sympathy for the plaintiffs’ situation, I therefore conclude that the appeal must be dismissed. It is not necessary for me to deal with the second ground of appeal, the assessment of damages or the District’s cross appeal.

“The Honourable Madam Justice Newbury”

I AGREE:

“The Honourable Mr. Justice Groberman”

I AGREE:

“The Honourable Madam Justice Fisher”