Nothdurft v. CanRoof Corporation., 2013 ONSC 7309

CITATION: Nothdurft v. CanRoof Corporation., 2013 ONSC 7309

COURT FILE NO.: 1950

DATE: 2013/01/10

ONTARIO

SUPERIOR COURT OF JUSTICE

(DIVISIONAL COURT)

B E T W E E N:

RAY NOTHDURFT

Matthew Orchard, for the Plaintiff

PLAINITFF/RESPONDENT

• and -

CANROOF CORPORATION INC.

Ted A. Kalnins, for the Defendant

DEFENDANT/APPELLANT

Heard: October 30, 2012

Haines J.

Introduction

1This is an appeal from a judgment of the Small Claims Court in Stratford, dated January 18, 2012. The plaintiff (respondent) was awarded $12,177.06 in damages for the replacement of defective shingles that were manufactured by the defendant (appellant) Canroof Corporation Inc. (CRC).

2The appellant has advanced several grounds of appeal, claiming that the trial judge erred in finding that:

i) the action was not statute barred by operation of the Limitations Act, 2002, S.O. 2002, c.24.,Sch. B;

ii) the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A and the Sale of Goods Act, R.S.O., 1990, c. S.1, were applicable to this action; and

iii) the shingles were manufactured negligently when negligence was not pleaded.

For the reasons that follow I have concluded that the action was statute barred and would accordingly allow the appeal.

Background

3The respondent has been a professional engineer for 25 years, and for the past 15 years has been the Deputy Director of Engineering and Public Works for the city of Stratford. Prior to that he had some experience in commercial building construction where, as part of his responsibilites, he installed and project-managed the installation of shingled roofs.

4In 1998, the respondent hired Ivan Knight Construction Limited to build him a custom home in Stratford. The building contract specified 25 year shingles and the respondent accepted the builder’s recommendation of “Renaissance XL” shingles which came with a warranty from the appellant.

5The CRC Renaissance shingles in question were purchased by the building contractor from Tri-County Brick Company and delivered to the building site between June 25, 1998 and July 6, 1998. Sometime subsequent to completion of the respondent’s home the contractor went out of business.

6The respondent testifed that he first noticed a problem with shingles coming off the roof in the spring of 2008. He monitored the situation through the summer and on September 9, 2008, had a local contractor inspect the roof. That contractor advised the respondent to get replacement shingles and repair the damaged areas. Contact with the supplier, Tri- County Brick Company, confirmed that those particular shingles were no longer available in the area.

7The respondent contacted his home insurer, TD Meloche Monnex. The insurer appointed Crawford and Company to adjust the claim and a second local contractor was sent to inspect the roof. In a letter dated October 20, 2008, the adjuster reported the following to the respondent:

Loss Determination

We have reviewed a report provided by Roof Management Consultants Ltd., who advised that the damage to your residence was as a result of the shingles prematurely deteriotating and falling off the roof. There was no damage reported to the interior of your property due to the roof damage.

In our conversation of Monday, September 15, 2008, you indicated that the problem with the roof has been on going since the spring of 2008. Our site scene investigator revealed the shingle roof system is a high texture, architectural shingle system reported to be CRC “Renaissance” shingles.

There are several areas, particularly a rear slope, where the shingles have delaminated and broken free from the shingle base. Curling and other signs of typical aging are minor. Inspection of a piece of shingle that has broken free from the roof reveals a multiple fracture line at the point of breakage. The shingle material is also extrememly stiff and brittle.

Roof Management Consultants Ltd. further reports that the roof condition does not appear to be related to normal aging or deterioration or deterioration by ambient conditions. Rather the shingle failure appears to be the result of material failure of the shingles themselves. The failure mode appears to be extreme brittleness which responds to movement or stress by breaking away from the base shingle. This appears to be a process which will continue, particularly with the coming winter conditions.

Research Note: As part of the investigation we have spoken with several sources who indicate that the “Renaissance” shingle has been associated with this type of failure in the past. It is possible that a defective manufacturing process or materials is/has contributed to this condition/failure mode.

Finally, there is no coverage for damage caused by deterioration or faulty material under the policy...

As such, TD Meloche Monnex will not pay to repair or replace the damages being claimed.

The respondent testified that he recieved this correspondence in “late October or early November” 2008.

8The respondent arranged for interim repairs to be undertaken in December 2008 to prevent any leaking over the winter and, in July 2009, sent an email to the Product Concerns Department of IKO Industries Limited (IKO). Notwithstanding the information he had received from the adjuster, the respondent testified that he believed IKO was the manufacturer of the shingles because they were the manufacturer of most shingles he had encountered.

9CRC and IKO are sister companies with common ownership. IKO was founded in the 1950’s and purchased CRC in 1989. Although they are separate legal entities, the warranty of each company is the same and the warranty claims for both are processed in an identical manner. Derek Fee, a witness for the appellant at trial, is the Warranty Claims Manager for CRC and the Manager of Corporate Communications for IKO.

10Several communications were exchanged between the respondent and IKO from August through November 2009 including the delivery of samples of the damaged shingles to IKO in September.

11On August 21, 2009, during the course of his communications with IKO, the respondent contracted with Sears Stratford to replace his roof. That installation was completed October 29, 2009.

12When IKO examined the damaged shingles it determined they were marketed by CRC. CRC examined the evidence the respondent had submitted, determined that the warranty coverage should apply and, on November 10, 2009, tendered an offer to the respondent based on the terms of the warranty.

13CRC received no response to its offer and heard nothing further from the respondent until it was served with the statement of claim that was issued November 30, 2010, naming CRC and IKO as defendants. When the matter came to trial it was agreed that the subject shingles were manufactured by CRC and, on consent, the action was dismissed against IKO.

The Limitations Act, 2002

14The relevant sections of the Limitations Act, 2002 read as follows:

Basic limitation period

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

Discovery

5. (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury , loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

The Decision at Trial

15The trial judge found the following with respect to the requirements under s. 5(1)(a) of the Limitations Act, 2002:

i) the respondent discovered that the loss or damage had occurred in the spring or early summer of 2008;

ii) the respondent was in a position to conclude that the loss or damage was caused by or contributed to by an act or omission when he received the letter from the adjusters, Crawford and Company, dated October 20, 2008 (i.e. late October or early November 2008); and

iii) the identity of the person against whom the claim is made was addressed but not resolved with the October 20, 2008 letter which identified the defective product on the roof of the respondent’s home as CRC “Renaissance” shingles.

No finding was made on the requirement in s. 5(1)(a)(iv), but there is no evidence that suggests the respondent did not know that a proceeding would be an appropriate means to seek to remedy his loss.

16The trial judge then concluded that the claim was not discovered prior to November 30, 2008.

17The trial judge appears to have reached his conclusion based on the uncertainty that arose from the respondent’s communications with IKO Industries about his claim and the respondent’s position at trial that he did not understand the relationship or distinction between IKO and CRC. Given the respondent’s uncertainty about which company manufactured the defective shingles, the trial judge concluded that it could not be said that the respondent knew that the act or omission that gave rise to his claim was the act or omission of IKO or CRC and, therefore, s. 5(1)(a)(iii) was not satisfied. The actual finding of the trial judge is stated at para. 37 of his reasons for judgment:

At trial, Mr. Nothdurft stated in his evidence he did not and still did not understand the relationship or the distinction between IKO and Canroof. Given all of the circumstances and the communications between the parties, I cannot conclude that a reasonable person (Mr. Nothdurft) even with his abilities but in the circumstances ought to have known of the matters referred to in Section 5(1)(a) of the Limitations Act before November 30, 2008.

Discussion

18The underlying rationales for statutes of limitations are set out in M.(A.) v. M.(H.), 1992 31 (SCC), [1992] 3 S.C.R. 6 at pp. 29-30 where LaForest, J. stated:

Statutes of limitations have long been said to be statutes of repose. The reasoning is straightforward enough. There comes a time, it is said, when a potential defendant should be secure in his reasonable expectation that he will not be held to account for ancient obligations.

The second rationale is evidentiary and concerns the desire to foreclose claims based on stale evidence. Once the limitation period has lapsed, the potential defendant should no longer be concerned about the preservation of evidence relevant to the claim.

Finally, plaintiffs are expected to act diligently and not “sleep on their rights”; statutes of limitation are an incentive for plaintiffs to bring suit in a timely fashion.

19The common law discoverability rule requires a plaintiff to exercise reasonable diligence in identifying the defendant. This requirement is incorporated into the Limitations Act, 2002, by virtue of s. 5(1)(b), which requires a determination of “the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).”

20With the finding that the respondent did not and ought not to have known the name of the proper defendant before November 30, 2008, the trial judge concluded this action was not statute barred. In my opinion this conclusion is not sustainable on the evidence and constitutes an error in law.

21Exhibt 5 is a copy of a document titled “CRC Architectural Colour Guide”. It was sent from the respondent’s fax number on July 23, 2009; the date the respondent submitted his claim to IKO. That document features the name CRC Canroof Corporation Inc. beside the various samples and the Renaissance XL taupe slate sample is circled. “EASTERN CANADA ’98” is printed on the top right corner of the document. 1998 is the year the shingles were installed. The respondent acknowledged that the handwriting on the document is his but, initially, could not recall if he had that document when the shingles were installed and indicated that he was not sure where the document came from. It was pointed out that the document was one of his productions to the appellant and later in his cross-examination, when asked if the contractor had provided him with any documentation relating to the shingles, the respondent stated the following at p. 42, lines 9 and 10 of the transcript:

A. Other than what you’ve shown me there in terms of a chip – I don’t recall receving anything from him, no.

The only document that appellant’s counsel had shown him was the colour guide marked as Exhibit 5. The respondent’s answer would, therefore, appear to confirm that he did receive that colour guide from his contractor and had ultimately produced it as a relevant document to support his claim. Accordingly, as of late October or early November 2008, the respondent had confirmation of the name of the shingles from his insurer and apparent access to a colour guide that identified the shingles as a product of CRC Canroof Corporation Inc.

22The test is not when the respondent actually became aware of the appellant’s identity but at what point in time he could, with the exercise of reasonable diligence, have been expected to discover the appellant’s identity. He may have believed that IKO was the manufacturer because at the time most shingles that he encountered were manufactured by IKO, but this belief was not consistent with the information on the colour guide or the report from Crawford and Company. Any uncertainty or confusion could have been resolved by reasonable inquiry. The respondent knew Tri-County Brick had supplied the shingles and knew they had been contacted in September 2008 for replacements. A further inquiry of that supplier, which would have been within the scope of the exercise of reasonable diligence, could have confirmed CRC as the manufacturer of the subject product. It is arguable that the respondent was in a position to identify CRC as a proper defendant before he received the correspondence from Crawford and Company, but certainly as of that time he knew or, with the exercise of reasonable diligence, ought to have known all of the matters referred to in s. 5(1)(a) of the Limitations Act,2002.

Disposition

23This claim was accordingly statute barred when the statement of claim was issued on November 30, 2010. The appeal is allowed and the action dismissed. Counsel may make submissions with respect to costs within 30 days.