In Centurion Apartment Properties Limited Partnership v. Sorensen Trilogy Engineering Ltd,[1] the Court of Appeal for British Columbia confirmed that an owner may pursue a negligence claim against an engineer despite the existence an indirect contractual relationship between the parties. The Court determined that the existence of an indirect contractual relationship or “matrix” between the engineers, Sorensen Trilogy Engineering Ltd. (Sorensen) and the building owners, did not negate the duty that Sorensen owed the owners to take reasonable care to design the building without dangerous defects.[2] The decision was later appealed to the Supreme Court of Canada and leave to appeal was dismissed.[3]
Background
This action originated in the Supreme Court of British Columbia[4] and related to an 11-story residential apartment building in Langford, British Columbia.[5] The owner of the building retained DB Services of Victoria Inc. (DB Services) to design and build the building and DB Services contracted with Sorensen to provide structural engineering services for the building.[6]
After construction was completed using Sorensen’s design, the building was purchased, resulting in Centurion Apartment Properties (Danbrook One) Inc. holding legal title to the building in trust for its parent company, Centurion Apartment Properties Limited Partnership, who acquired the beneficial interest (collectively, Centurion).[7] There was no contract between either Centurion company and Sorensen.[8] Shortly after the purchase of the building, issues with the structural design of the building were disclosed, leading to its complete evacuation in December 2019.[9]
Supreme Court of British Columbia
Centurion commenced proceedings against Sorensen and other defendants, claiming that Sorensen was negligent, among other claims.[10] The chambers judge dismissed Centurion’s claim against Sorensen in negligence, primarily[11] for lack of proximity “on the basis that the multipartite contractual arrangements between and among [Centurion], DB Services and [Sorensen] negated any relationship of proximity, so there could be no duty of care.”[12] The decision was appealed.
Court of Appeal for British Columbia
The primary issue for determination before the Court was whether Sorensen owed a prima facie duty of care to the building’s current owner, Centurion, such that they could advance a claim against Sorensen under the tort of negligence.[13] To establish that a duty of care is owed, a sufficiently proximate relationship must exist between Centurion and Sorensen.[14]
The Court carefully reviewed the current state of the law of negligence,[15] the various contracts between the parties involved[16] and the issue of proximity[17]—including whether an analogous relationship and circumstances existed.
The Court’s review focussed on the first question of the two-part test for negligence, which asks: “(1) was the harm that occurred the reasonably foreseeable consequence of the defendant’s act? and (2) are there reasons, notwithstanding the proximity between the parties established in the first part of this test, that tort liability should not be recognized here?”[18] Proximity is assessed at the first stage of this test and “focuses on factors arising from the relationship between the plaintiff and the defendant.”[19] Proximity is identified using categories[20] and therefore, if the nature of the relationship in question falls into “an analogous category of proximate relationship,”[21] then proximity is made out.
The Court highlighted, in its deliberation, the issue of negligence that creates a “real and substantial danger.”[22] Given that Sorensen’s structural design led to major structural concerns, including the possibility of “sudden failure of the gravity system design,”[23] the Court found that the design issues and the danger they created, culminating in the prompt evacuation of the building, posed “at least as real and substantial a danger as existed in Winnipeg Condominium.”[24]
Having noted the risk of a real and substantial danger, the Court found that an analogous relationship and circumstances existed to establish proximity between Sorensen and Centurion, given the similarities between the Centurion case and Winnipeg Condominium.[25] Specifically, the Court noted that both cases concerned a defective building that was deemed dangerous; had a contractual matrix where the plaintiff did not have a contract with the defendant; the same duty of care existed; and similar policy considerations existed that justified imposing liability.[26] The Court also noted that “[i]n both cases, the duty to construct a building according to reasonable standards and without dangerous defects arises independently of any contractual stipulation because it arises from a duty to create the building safely and not merely according to contractual standards of quality.”[27] Accordingly, the Court concluded that the chambers judge erred when he dismissed Centurion’s claim against Sorensen and that a prima facie duty of care existed.[28]
Takeaways
This Court’s decision in Centurion Apartment Properties Limited Partnership v. Sorenson Trilogy Engineering Ltd confirms that designers cannot escape liability for negligent design because of a lack of contractual privity, or the existence of an indirect contractual link. If a building owner can establish a real and substantial risk of danger, sufficient proximity may be established to support a case in negligence.
For more information on this case or any questions related to the legal implications of this decision on your business, please contact Morgan Burris or Michael Sestito. Thank you to our articling student Amanda Lehmann for her contribution to this blog.
[1] 2024 BCCA 25 [Centurion].
[2] Ibid at paras. 88–89, 109.
[3] See Sorensen Trilogy Engineering Ltd, Brian McClure, Theodore Tracy Sorensen and Brian Douglas Lange, et al v Centurion Apartment Properties Limited Partnership and Centurion Apartment Properties (Danbrook One) Inc, et al, 2024 CanLII 88323 (SCC).
[4] See Centurion Apartment Properties Limited Partnership v Loco Investments Inc, 2022 BCSC 2273.
[5] Centurion, supra note 1 at para. 1.
[6] Ibid.
[7] Ibid at paras. 8–9.
[8] Ibid at paras. 31, 47.
[9] Ibid at paras. 22–23.
[10] Ibid at para. 31.
[11] The judge also dismissed Centurion Apartment Properties Limited Partnership’s claim in negligence against Sorensen due to lack of standing, an issue which is not discussed here. For the Court of Appeal’s discussion of this issue, see Centurion, supra note 1 at paras. 34–35, 112–32.
[12] Centurion, supra note 1 at para 34. Note, there was also a ruling made with respect to the limitation of liability provision, which is not canvassed in this blog.
[13] Centurion, supra note 1 at para 3. The limitation of liability issue was also appealed and dispensed with by the Court of Appeal for different reasons.
[14] Centurion, supra note 1 at para 3.
[15] See ibid at paras 38–49.
[16] See ibid at paras 50–56.
[17] See ibid at paras 57–104.
[18] Ibid at para 41, citing Cooper v Hobart, 2001 SCC 79 at para 30 [Cooper] [emphasis omitted].
[19] Cooper, supra note 18 at para 30.
[20] Ibid at para 31.
[21] Centurion, supra note 1 at para 45, citing 1688782 Ontario Inc v Maple Leaf Foods Inc, 2020 SCC 35 at para 62 [emphasis omitted].
[22] Centurion, supra note 1 at para 67, citing Winnipeg Condominium Corporation No 36 v Bird Construction Co, 1995 CanLII 146 (SCC) at para 36 [Winnipeg Condominium] [emphasis omitted].
[23] Centurion, supra note 1 at para 80.
[24] Ibid [emphasis added].
[25] Ibid at para 88.
[26] Ibid.
[27] Ibid, citing Winnipeg Condominium, supra note 22 at para 47 [emphasis in original].
[28] Centurion, supra note 1 at paras 109, 160.
