2005 BCSC 1733 Parsons v. Finch and City of Richmond et al

Before: The Honourable Mr. Justice Ralph

Reasons for Judgment

The plaintiffs Lynda Parsons and Don Parsons appearing in person
The defendant Trevor Finch (deceased) and no one appearing for the estate
Counsel for the defendant City of Richmond	David T. McKnight and S.H.S. Stephenson
Date and Place of Trial/Hearing:	June 27-30 and July 4-7, 2005
	Vancouver, B.C.

Introduction

[1] In March 1993 Mr. and Mrs. Parsons purchased a lot at 2491 No. 8 Road in Richmond. After obtaining building permits and over the next number of months they proceeded to build a home and workshop on the property. They moved into their new home in May 1994. Much of the construction was done by Mr. Parsons who is a qualified and experienced carpenter.

[2] In the course of seeking to do some upgrades to the finishing of their home in 1998, Mr. and Mrs. Parsons discovered that their home was settling unevenly on the property. A survey carried out in June 1998 indicated that there was a difference in elevation of .17 metres between the northeast and southeast corners of the home. The subsoil of the property contains substantial volumes of peat and its inadequate preparation prior to construction has been identified as the cause of the settling. Without repair, the settling of the home will continue and the home may become uninhabitable. Because repair of the condition requires substantial alteration to the subsoil and the placing of pilings under the home, estimates of the cost of repairing the home are in the range of $300,000.

[3] Central to the action is Mr. and Mrs. Parsons’ claim that the City of Richmond (“the City”) was negligent in failing to carry out proper inspections of the property, in relying on the certification of an independent engineer, Mr. Finch, and in not ensuring compliance with the building code and related statutes and by-laws.

[4] The defendant, Mr. Finch, is now deceased. There was no evidence of a representative of his estate having been appointed in the action and the trial as against Mr. Finch was adjourned generally.

Background

[5] Mr. and Mrs. Parsons’ property is located in an area of Richmond which is identified on a Surficial Geology Map used as a reference by the City to determine sites that may contain peat or peat in combination with other soil types which may make it poor for foundations. The City requires that owners seeking permits to build dwellings in such areas provide the Building Approvals Department with a geotechnical engineering analysis of the soil conditions and other assurances set out in the City’s Bylaw No. 5882 and the British Columbia Building Code.

[6] Utilizing his experience as a carpenter, Mr. Parsons drew the plans for the house but he knew that an engineer would be required to sign and seal them as a prerequisite to obtaining a building permit. He also knew that a geotechnical engineer was required to identify the types of soil on the property and to prepare a report for the City which would provide a plan for the preparation of the soil and a design for the foundation.

[7] In applying for a building permit, Mr. and Mrs. Parsons completed a “Schedule I” provided for under Bylaw No. 5882. Schedule I contains a statement in which Mr. and Mrs. Parsons confirmed that they had been advised in writing by the City that it relied exclusively on the Letter of Assurance of “Professional Design and Commitment for Field Review” prepared by Mr. Finch.

[8] Mr. Parsons was acquainted with Mr. Walter Manning whom he had met on several jobs on which they both worked. Mr. Manning, who is now deceased, worked for Digs Consultants Corporation. It seems clear from the evidence that Mr. Manning was not a qualified engineer but Mr. Finch was an engineer and a member of the firm of Digs Consultants. Mr. Parsons asked Mr. Manning to carry out the structural and geotechnical engineering services that were required.

[9] On March 27, 1993, Digs Consultants Corporation issued a three-page letter/report headed “Geotechnical Investigation for Proposed Residence at 2491 No. 8 Road, Richmond B.C” (the “soils report”). The report attached test hole logs dated March 13, 1993. Mr. Parsons had seen Mr. Manning at the property taking the samples on that date. The soils report was signed by Mr. Finch and had his professional engineer’s seal attached. It contained details of the field investigation findings including the location of the ground water table. It also contained recommendations for the removal of peat and other steps to be taken in relation to the excavation and preparation of the site. It was sent to the City on April 20, 1993. Mr. Finch also signed and sealed the plans on March 31, 1993, having made modifications to the foundation plan prepared by Mr. Parsons.

[10] On April 5, 1993, three letters of assurance signed and sealed by Mr. Finch were filed with the City. One was a Schedule B-1 under the Building Code dated March 31, 1993 in which Mr. Finch gave an assurance that the structural and geotechnical components of the plans and supporting documents complied with the B.C. Building Code and undertook to be responsible for “field reviews” of the components during construction.

[11] The second was a Schedule B-2 setting out a summary of the design and field review requirements. The applicable items were identified as the structural capacity of the structural components of the building and a geotechnical review of the bearing capacity of the soil and the compaction of engineered fill.

[12] The third document was a Schedule G Assurance of Subsurface Investigation also dated March 31, 1993 and required under the bylaw, in which Mr. Finch gave assurances that he had carried out a subsurface investigation and field reviews and that the soils affected by the building or structure had been prepared in accordance with the recommendations in the soils report of March 27, 1993.

[13] The excavation and soils preparation had been carried out by Mr. Parsons and a friend who owned excavating equipment. Mr. Parsons agreed that this was the first excavation of property he had undertaken. He also agreed that although in parts of the excavation area mixed clay and peat went to a depth of six feet, he did not excavate beyond a depth of three feet. Mr. Parsons resiled from this statement in cross examination. Mr. Parsons stated that when he had completed the excavation on a Sunday evening he left a telephone message on Mr. Manning’s answering machine asking him to come and inspect the site. Mr. Parsons said Mr. Manning returned the call saying he had inspected the excavation and it “looks fine” or “carry on” or similar words.

[14] Mr. Parsons testified that Mr. Manning was present when a “pre-load” of sand was subsequently placed on the excavated area. After approximately four months some of the sand was removed and the remaining soil was compacted. Mr. Parsons testified that after he had completed the tamping of the soil Mr. Manning attended at the site and carried out compaction tests. The building permit for the dwelling was issued June 25, 1993. On August 16, 1993 Mr. Finch signed and sealed a Schedule C letter of assurance under the B.C. Building Code and a Schedule G Assurance of Subsurface Investigation under the City Bylaw No.5882. The Schedule G was required to be submitted in accordance with the soils report but before the forms inspection was made by a building inspector. Mr. Finch gave an assurance in the schedule that he had carried out a subsurface investigation of the property in accordance with Part 4 pf the B.C. Building Code and gave assurance that the soils had been prepared in accordance with the recommendations in the soils report.

[15] On August 17, 1993, a building inspector attended at the site and gave approval of the formwork for the foundation subject to the bracing of the foundation walls. This was the first on-site attendance of an inspector in relation to the construction of the home.

[16] On February 24, 1994, Mr. Finch signed and sealed a final Schedule C under the B.C. Building Code that was required before the final inspection would be carried out by the City. Mr. Finch gave an assurance that he had fulfilled his obligations for field review and that the structural and geotechnical components of the project complied with the B.C. Building Code and the plans and supporting documents submitted in support of the application for the building permit.

[17] A number of witnesses were called by the City to give evidence of the procedures it follows in cases where proposed buildings are to be built on unstable soils containing fill or a high degree of peat.

[18] Mr. Rick Bortolussi became the manager of inspection services for the City in 1990 and was its chief building official from 1997 to 2004. In 1993 the building inspection group had 10 inspectors, one of whom was the supervisor. There were nine inspectors in the permits division who carried out review of both commercial and residential building permit applications. There were also nine plan checkers. In 1993 the City issued 2,764 building permits of which 991 were for single family dwellings having a total construction value of $356,380,633.

[19] When the Building Code and the bylaw require the use of a registered professional the plan checker’s responsibility is to see that the requirements of what must be filed by the professional have been met. The City has never employed a geotechnical engineer to do inspections and independent geotechnical analysis and does not have such expertise on staff.

[20] Mr. Bortolussi said that the City also employs a building code engineer. The code engineer’s responsibility is to review permit applications for their compliance with bylaws and, where registered professionals are involved, to ensure that documentation, including letters of assurance, is in order. He denied that the City simply looks for the presence of the seal of the professional. Mr. Bortolussi referred to a Permits Division policy dealing with “Fill/Peat: Building On” dated July 25, 1990, and in place in 1993. He said that the policy was consistently and uniformly applied by staff. The policy includes excerpts from the 1985 Building Code which set out what information must be provided by the design professionals to show that proposed work would conform to the Building Code. Section 2.3 of the Code sets out specifications and calculations that would be required on structural and foundation drawings. Section 4 sets out the requirement of a subsurface investigation and of a subsequent review by a design professional to ensure that the subsurface conditions are consistent with the design.

[21] Mr. Gavin Woo is the only code engineer employed by the City. He has held that position since 1990. He is a professional engineer but is not a geotechnical engineer. He carried out a “structural review” of the Parsons’ building plans on April 16, 1993. He said that the scope of this review was to ensure that the drawings were designed by an engineer and that design criteria such as size were set out. He said that he also looks for the “load path” to ensure that all the vertical load has been picked up by the foundation.

[22] The plans for the structure had been passed to Mr. Woo from a plan checker, Mr. Peter Gee. Mr. Gee had endorsed on the plans that he had carried out a “Use and Occupancy Review only”. This review dealt with matters such as the presence of smoke detectors, window sizes, and the set-back of the building from the lot boundaries.

[23] Mr. Woo also stated that on property such as the Parsons’ land a geotechnical engineer must be retained by the owners. Mr. Woo’s function as the code engineer is to ensure that a soils investigation report is prepared by an engineer, that there has been a subsurface review at the building location, that there are recommendations for site preparation work and that the report estimates the total and differential settlement. Mr. Woo had noted on April 16, 1993 that a soils investigation report had not been submitted and he requested the owners to produce it. On April 20 he reviewed the soils investigation report and its recommendations and the presence of the information required to be provided. He also reviewed the Letters of Assurance. He noted that the report and the foundation plan set out that the foundation design had 1000 pounds per square foot allowable soil bearing capacity and contained an estimate of the expected settlement of the soil. Mr. Woo said that he did not make any independent assessment of the report because he is not a geotechnical engineer and it is the City’s policy to require an independent geotechnical engineer to do so.

[24] Mr. Woo estimated that, of the 991 building permits for single family dwellings in 1993, he would review about 80% of them, taking about 15 minutes to one-half hour on each application. He estimated that, if the City were to carry out its own geotechnical review of properties including taking sample, it would take two or three days for each review. A geotechnical engineer would have to be hired by the City to conduct the reviews.

[25] Mr. Andrew Nazareth is the Director of Finance for the City. He reviewed the City’s budget process and the resolution of the City Council adopting the City’s budget for 1993. He stated that the City does not employ a geotechnical engineer and that if additional operational resources were required to employ one the matter would be required to come before the council.

[26] Mr. George Humphrey has been the Chief Building Inspector for the City of Burnaby since 1993 and its Deputy Building Inspector prior to that. He is the current President of the Building Officials Association of B.C. and a member of its certification committee. He is also the Chair of the Provincial Building Code Appeal Board. He gave evidence on the standard of care on plan checking and building inspection at the municipal level. At page 7 of his report he stated:

In my opinion, it is accepted procedure for the plan checker or Building Official to identify whether or not the particular building site may give rise to possible soil concerns, convey this information to the applicant and make it a condition of issuing a building permit that the applicant retain an expert to provide geotechnical investigation and report as outlined in Section 5.12.4 of the [Richmond] Bylaw. It is the normal and accepted procedure throughout local governments in the Lower Mainland that the Building Official also ensure that the applicant provide sealed drawings and Letters of Assurance for the structural and geotechnical design before a building permit is issued.

From my experience, it is a normal practice for local governments throughout the Province of British Columbia to rely entirely upon the reports of the geotechnical specialists. It is unusual, if it happens at all, that the local government would employ a geotechnical engineer on staff. In my opinion, based on my experience, it is the practice of local governments not to undertake an independent investigation or analysis of subsurface conditions where the owners have been required to obtain his or her own Registered Professional.

[27] Mr. Matthew Kokan is a geotechnical engineer whose firm was retained by Mr. and Mrs. Parsons in 2005 to carry out an investigation of ground conditions in the vicinity of the Parsons’ residence and to examine the factors that contributed to the settlement of the home. His report also provided repair options. In Mr. Kokan’s opinion the degree of settlement is far in excess of what would be considered tolerable for a wood framed structure. He noted that, from the test holes that his firm drilled, it appeared that the extent of peat removal was variable, with there being no peat at the west side of the home and up to five feet of peat at the north side. In his opinion the presence of peat at the north side appears to correlate with the differential ground settlement that had been observed. At page 2 of his report he states:

The post construction settlement is a direct result of inadequate site preparation prior to the construction of the residence. Both the initial investigation and the review undertaken during construction by the geotechnical engineer of record is considered inadequate given the known poor subsurface conditions in the area.

[28] In the course of presenting their evidence, Mr. and Mrs. Parsons pointed to the professional standing of Mr. Finch at particular times relating to his work on their property. Following an August 1993 disciplinary hearing concerning Mr. Finch a disciplinary panel of the Association of Professional Engineers and Geoscientists of the Province of British Columbia ordered that Mr. Finch’s membership in the Association be revoked effective November 1, 1993. Mr. Finch filed an appeal and the court stayed the revocation order until the appeal was heard. Pending the hearing of the appeal, Mr. Finch was entitled to continue to provide professional services on projects which were initiated prior to October 1993. In April 1994 Mr. Finch’s appeal was allowed and the decision of the discipline panel was quashed.

The law

[29] In 1993, s. 734 of the Municipal Act, R.S.B.C. 1979, c. 290 (now the Local Government Act, S.B.C. 1996, c. 323) provided for a municipal council by bylaw to regulate the construction of buildings and structures. Section 734.2 provided:

A council may by bylaw, do the following:

(a) require applicants for building permits, in circumstances as specified in the bylaw that relate to site conditions or to the size of complexity of developments or aspects of developments, to provide the municipality with a certification by a professional engineer or architect that the plans submitted with the application for the permit, or specified aspects of those plans, comply with the then current Provincial building code or other applicable enactments respecting safety;

(b) authorize building inspectors for the municipality to require applicants for building permits to provide the municipality with the certification referred to in paragraph (a) where a building inspector considers the site conditions or the size or the complexity of the development or an aspect of the development to which the permit relates warrants this.

[30] Pursuant to that authority the City adopted Building Bylaw No. 5882 on June 22, 1992. Under the bylaw no building is permitted to be constructed except in conformity with the B.C. Building Code and the bylaw. Under Part 3 the Building Inspector is given a number of powers. For example, the inspector may refuse to issue a permit or may make correction orders where he finds contraventions of the Building Code. Under Part 3.4 the inspector may revoke a permit:

where in his opinion the results of tests on materials, devices, construction methods, structural assemblies or foundation conditions contravene the building code or the provisions of this bylaw …

[31] Under Part 5.12 of the bylaw, however, the building inspector “shall require professional design and a field review” in respect of a building permit for structural components that fall within the scope of Part 4 of the Building Code. Part 4 includes provisions where a subsurface investigation is required. The Building Code defines “subsurface investigation” as:

the appraisal of the general subsurface conditions at a building site by analysis of information gained by such methods as geological surveys, in situ testing, sampling, visual inspection, laboratory testing of samples of the subsurface materials and groundwater observations and measurements.

[32] Part 5.12.1, in referring to Part 4 of the Building Code, also states “as amplified in Appendix A of the Building Code”. Section A-2.6 of Appendix A deals with professional design and review. It states in part:

This Section provides for the use of what are generally called Letters of Assurance. The letters themselves, known as Schedules A, B-1, B-2 and C and located at the end of Part 2, are intended to put on paper the responsibilities of the various key players in a construction project. The Letters of Assurance do no not add any new responsibilities to the professionals nor do they relieve the authorities having jurisdiction from their responsibilities.

[33] “Professional design” must be carried out by licensed architects or professional engineers who are registered with their professional governing bodies.

[34] Part 5.12.2 requires that owners submit “Letters of Assurance” incorporating the assurances of the registered professional that the plans and supporting documents submitted with the building permit application substantially comply with the Building Code and other applicable enactments regarding safety.

[35] Part 5.12.3 requires owners prior to occupancy of a building to submit Letters of Assurance which incorporate the assurances of the registered professional that the construction substantially conforms with the plans and supporting documents for which the building permit was issued.

[36] Part 5.12.4 permits a building inspector to require the owner to submit a Letter of Assurance which incorporates the assurance of the registered professional that he or she has carried out a subsurface investigation of the site in accordance with the building code.

[37] Part 5.12.5 requires the owner to submit a Letter of Assurance that the registered professional possesses insurance which includes errors and omissions and the particulars of such coverage.

[38] Part 11.1 sets out an “Inspection Schedule” in which the owner is required to give at least 24 hours notice to the building inspector in order to obtain his inspection of the construction. The first inspection set out in Part 11.1 must take place “after forms for the footings are complete, but prior to the placing of concrete.”

[39] The bylaw and the Building Code define a “Registered professional” as:

(a) a person who is registered or licensed to practise as an architect under the Architects Act, or

(b) a person who is registered or licensed to practise as a professional engineer under the Engineers and Geoscientists Act,

and set out a number of professional obligations of registered professionals.

[40] In City of Kamloops v. Nielsen, [1984] 2 S.C.R. 2, 10 D.L.R. (4^th) 641 [Kamloops] Wilson J. identified at pp.10-11 two questions which must be asked in order to determine whether a private law duty of care exists:

(1) is there a sufficiently close relationship between the parties (the local authority and the person who has suffered the damage) so that, in the reasonable contemplation of the authority, carelessness on its part might cause damage to that person? If so,

(2) are there any considerations which ought to negative or limit (a) the scope of the duty and (b) the class of persons to whom it is owed or (c) the damages to which a breach of it may give rise.

[41] In the present case the City concedes that the test of proximity raised in the first question is easily met. In responding to the second question, however, the City says that it is exempt from a private law duty of care to the plaintiffs because its decision not to conduct its own inquiry of the subsoil conditions or the foundation plans is a true policy decision which is not subject to review by a court so long as the policy constitutes a bona fide exercise of the City’s authority. In Brown v. British Columbia, [1994] 4 W.W.R. 194, 112 D.L.R. (4^th) 1 (S.C.C.) Cory J. stated at ¶38:

True policy decisions involve social, political and economical factors. In such decisions, the authority attempts to strike a balance between efficiency and thrift, in the context of planning and predetermining the boundaries of its undertakings and of their actual performance. True policy decisions will usually be dictated by financial, economic, social and political factors or constraints.

[42] In Ingles v. Tutkaluk Construction Ltd., [2000] 1 S.C.R. 2980, 183 D.L.R. (4^th) 183, Bastarache J. observed that the consideration of inspection schemes falls within the second question posed in Kamloops as noted above. At p.311 he stated:

To determine whether an inspection scheme by a local authority will be subject to a private law duty of care, the court must determine whether the scheme represents a policy decision on the part of the authority, or whether it represents the implementation of a policy decision, at the operational level. True policy decisions are exempt from civil liability to ensure that governments are not restricted in making decisions based upon political or economic factors.

…

Once it is determined that an inspection has occurred at the operational level, and thus that the public actor owes a duty of care to all who might be injured by a negligent inspection, a traditional negligence analysis will be applied.

[43] In Dha v. Ozdoba, [1990] B.C.J. No. 768 (S.C.), (1990) 39 C.L.R. 248 (B.C.S.C.) [Dha] the plaintiffs brought an action for damages when their home settled differentially on soils that contained substantial amounts of peat. The engineer who had drawn the foundation plans was found negligent in failing to discharge duties that included satisfying himself that the foundation drawings he certified were appropriate for the soil conditions on the land on which the house was to be constructed. The court also held the City of Richmond was contributorily negligent. At p. 18 Finch J. (as he then was) said of the building inspector under the then bylaw of the municipality:

He was, however, under a duty not to approve plans which clearly did not conform to the Building By-law or the Building Code, or where it was readily apparent that the plans contained insufficient information upon which to decide whether they conformed to the Building By-law or the Building Code. Here, the building inspector knew that the Plaintiffs’ home was to be constructed in an area of the municipality where peat was to be found. He knew that the foundation had to be designed by a professional engineer; but he found no information on the plan or elsewhere, upon which he could say whether the design was adequate or appropriate for soil conditions at the Plaintiff’s building site.

The position of the parties

[44] Mr. and Mrs. Parsons say that the plans for construction did not meet the requirements of the Building Code and that the City breached its duty of care to them in:

(1) not ensuring compliance with the building code and other statutes;

(2) not carrying out proper inspections at the subsoil preparation stage of construction;

(3) wrongly relying on the certification of an independent engineer when it had no statutory allowance to do so;

(4) relying on a subsurface investigation that was not based on the requirements of the Building Code for such investigations;

(5) relying on the engineer’s report without having reduced the fee for the building permit as required under s. 734(7) of the Municipal Act;

(6) negligently providing them with inaccurate information as to the floodplain elevation which resulted in the foundation being placed at an elevation that could otherwise have been higher, thereby reducing the risk of future flooding.

They seek damages in the amount required to repair their house and workshop and in addition they seek punitive damages and damages for mental distress.

[45] The City says that it is exempt from a private law duty of care to the plaintiffs as the decision to utilize the professional design provisions is a true policy decision and the City followed its policy. If a duty of care was owed to the plaintiffs, the City submits that it met the required standard. The City also says that the plaintiffs have not proved on a balance of probabilities that the Finch design would not have worked if properly implemented and that there is no evidence before the court that Mr. Finch’s methodology was geotechnically unsound. The City submits further that the plaintiffs were wholly or contributorily negligent with respect to their loss by substantially departing from the excavation requirements set forth in the soils report.

[46] The City says that, should it be found liable, it should be released from that liability by reason of waiver clauses contained in Schedule I and Building Permits B9302230 and B9304547 or alternatively by the authority of s.755.4 of the Municipal Act. As to the claim for damages, if the court determines that the City is responsible for the subsidence of the plaintiffs’ house and workshop, the City does not take issue with respect to the quantum of general damages in the amount of $310,738. The City says that the claims for damages for mental distress and punitive damages should not succeed.

Analysis

[47] In issuing building permits, the City owes a duty of care to those who are constructing or purchasing buildings. The duty extends to the reasonable inspection of plans and building sites to provide “for the health, safety and protection of persons and property” (Municipal Act, R.S.B.C. 1979, c.290, s. 734). In my view, the decision of the City to utilize a “professional design” process expressed in Bylaw No. 5882 when structural components of buildings fall within Part 4 of the Building Code and where the building inspector determines that a subsurface investigation is warranted was a true policy decision. Because utilization of the “professional design” scheme constituted a true policy decision, the City is therefore immune from negligence liability in failing to inspect the soils preparation.

[48] In the preamble to the bylaw, the City Council deemed the bylaw “necessary to provide for the administration of the building code”. Although under the bylaw on site inspection of construction does not begin until the stage of “forms approval”, the policy contained in the bylaw recognizes the special concerns and the complex considerations that may arise in the construction of buildings on land where the state of the subsurface conditions may be unstable.

[49] The bylaw adopts a professional design procedure rather than an on-site inspection process as the means of addressing these special concerns. At the permit application stage it requires evidence of a detailed inspection of subsurface conditions. Setting particular design specifications within the City’s own operations would raise both cost concerns and concerns about the level of expertise required at the staff level.

[50] I cannot say that the elements of professional design policy contained in the bylaw are unreasonable or made in bad faith. The professional design is limited to a defined category of construction and to sites where the subsurface conditions warrant investigation. The professionals who are authorized to carry out a design are a limited group who must have both professional qualifications and registration with one of two professional governing bodies that have disciplinary authority. The professionals must also submit confirmation that they possess insurance which includes errors and omissions coverage.

[51] In addition, the professionals are required to provide not only assurance that their submitted designs conform with the building code but must also provide letters of assurance that they have completed field reviews to confirm that the work done in fact conforms with the design.

[52] At the operational implementation level of this policy, I conclude that an appropriate standard of care was met by the City. In the present case, Mr. Woo, while not a geotechnical engineer, ensured that a soils report was prepared and provided, that information concerning the bearing capacity of the footings was present on the drawings and that the necessary letters of assurance of work being carried out, including field reviews, were provided by Mr. Finch in conformity with the building bylaw. While cursory, Mr. Woo’s review in many respects sought to ensure compliance with the bylaw’s requirements. In addition, the standard of care applied by the City reviewing the plans was in line with that in place in other local governments in British Columbia.

[53] In my view, this case is distinguishable from the circumstances present in Dha, supra, not only because of provisions set out in Bylaw No. 5882 that were not part of the earlier bylaws but also in the requirement for investigation reports and the written assurances that are required from the design professionals as part of the permit process.

[54] In Dha the court also found that the defendant engineer failed in his duty to satisfy himself that the foundation drawings he certified were appropriate for the soil conditions on the property there in issue. The court stated that the engineer approved the foundation design in ignorance of the soil and fill conditions which existed on the site.

[55] In the present case, Mr. Kokan’s report does not suggest that the foundation design or the foundation drawings are defective. His brief reference to the cause of the settlement attributes it to inadequate site preparation prior to construction of the residence. He notes that while some peat removal was undertaken during site preparation, the extent of peat removal was variable. He states that the initial investigation and the review undertaken during construction are “considered inadequate”. No detail of the inadequacies is given and no comment is made on the content of the soils report or the letters of assurance provided by Mr. Finch. In my view, it is significant that to assist him to inspect the subsurface conditions on Mr. and Mrs. Parsons’ property, Mr. Kokan found it necessary to requisition the drilling of two cone penetration tests and two auger test holes, arguably a procedure the City would need to consider if it undertook inspection of soils preparation.

[56] Mr. and Mrs. Parsons also say that the City negligently relied on a subsurface investigation that was not based on the requirements of the Building Code for such investigations. As I understand it, this submission arises from the definition of “subsurface investigation” in the Building Code which includes reference to “laboratory testing of samples of the subsurface materials”. While laboratory testing of samples is one of the identified means of appraising subsurface conditions along with in situ testing, geological surveys and groundwater observations and measurements, it is not a mandatory component of such investigation. As a result, this allegation of negligence cannot succeed.

[57] An additional submission made by Mr. and Mrs. Parsons is that the City was not entitled to claim to have relied on the certification of compliance of Mr. Finch because the pre-requisite of a reduced building permit cost had not been met by the City as required under s.734(7) of the Municipal Act. Section 734(7) provided that where a municipality, in issuing a building permit, indicates that it is relying on a certification of compliance with the Building Code the municipality must reduce the fee for the permit “to reflect the costs of the work that would otherwise be done by a building inspector to determine whether the plan that were certified to comply do in fact comply with” the Building Code or other applicable enactments. Section 734(7) only applies where the certificate replaces “work that would otherwise be done by a building inspector”. The geotechnical work carried out by Mr. Finch was not work that would otherwise have been done by a building inspector. In my view this submission does not assist Mr. and Mrs. Parson’s case.

[58] At paragraph 31 of their Statement of Claim Mr. and Mrs. Parson alleged that:

The City negligently misrepresented key facts and information critical to the assessment of the subsoil.

The misrepresentation alleged is that the City advised the plaintiffs that the elevation of the foundation for their home should be at 0.90 metres geodetic datum or 50 millimetres above the elevation of the centre of the road where their property was situated. In September 1989 the City Council had adopted a policy, Policy 7000, that contained a commitment to complete and adopt a Floodplain Management Plan. A component of such a plan would provide for a building floor elevation of 3.0 metres Geodetic Datum. In essence, Mr. and Mrs. Parsons say that the City failed to inform them of this policy and, had they been informed, they would have constructed their foundations to accord with this policy.

[59] Mr. and Mrs. Parsons say they that the advice given them by the City was a negligent misrepresentation and the plaintiffs reliance on that advice was detrimental to them. As part of their claim, therefore, they seek additional damages that would enable them in repairing and rebuilding their home to raise the building floor to the higher elevation.

[60] At the time the building permit was issued to Mr. and Mrs. Parsons, however, the City’s Bylaw No. 3720 set the applicable elevation requirements at 0.90 metres geodetic datum. The policy objective of Policy 7000 relating to building floor elevations was not and is still not a legal requirement and the information provided by the City to Mr. and Mrs Parsons was not untrue or inaccurate. While the City owed a duty of care to Mr. and Mrs. Parsons, virtually no evidence was led to demonstrate that the City acted negligently in failing to inform Mr. and Mrs. Parsons about Policy 7000 and there is insufficient proof of damages resulting to Mr. and Mrs. Parsons from the City’s failure to inform them of the implications of the Policy 7000 (see Queen v. Cognos Inc., [1993] 1 S.C.R. 87). I am not satisfied that this claim has been proven.

[61] Having reached the conclusions set out above, it is not necessary to determine whether the statutory and other waivers or releases of the City’s liability referred to by the City are applicable.

Conclusion

[62] For the reasons set out above, I conclude that Mr. and Mrs. Parsons have not proven their claims against the City and therefore their action must be dismissed. Submissions were not made with respect to costs. I am not aware of any reason why costs should not follow the event and why the City should not be entitled to its costs on scale 3. If the parties are unable to agree, however, they may arrange with the registry to speak to this matter.

“Bryan F. Ralph, J. “
The Honourable Mr. Justice Bryan F. Ralph

December 14, 2005 – Revised Judgment

Corrigendum to the Reasons for Judgment issued advising that defence counsel’s name was inadvertently misspelled and should read:

“David T. McKnight”

Citation:	*Parsons v. Finch and City of Richmond et al.,*
	2005 BCSC 1733