COURT FILE NO.: CV-16-0333-00 DATE: 2024-02-20
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
Scott Saxberg and Rachel Saxberg, Plaintiffs / Respondents R. Kennaley, for the Plaintiffs / Respondents
- and -
Seargeant Picard Incorporated, Defendant / Applicant A. Demeo, for the Defendant / Applicant
HEARD: January 23 - 24, 2024, at Thunder Bay, Ontario Regional Senior Justice W. D. Newton
Decision On Motion
Overview
[1] The defendant Seargeant Picard Incorporated (“SP”) moves for summary judgment on the grounds that the Plaintiffs’, Scott and Rachel Saxberg (the “Saxbergs”), action against SP should be dismissed because the claim was not commenced within two years of the discovery of the claim and is therefore barred by s. 4 of the Limitations Act, 2002.
[2] In 2007 the Saxbergs contracted with SP to construct a $5,000,000 summer home on Lake Shebandowan near Thunder Bay. Construction was substantially completed in January 2011.
[3] On July 25, 2016, the Saxbergs commenced this action for damages alleging that “the cost to rectify the breach of contract including repair of deficient chimneys and moisture damage is $750,000.”
[4] Material filed on this motion consisted of over 3500 pages of documents.
Evidence on the Motion
[5] In addition to the affidavits set out below, transcripts were filed from the examinations for discovery of Scott Saxberg, Brian Seargeant of SP and Martti Granholm who performed repairs to the cottage in 2015, and from cross-examinations of Rachel Saxberg, Pat Kok, Martti Granholm, and Katy Murdoch who prepared affidavits on behalf of the Saxbergs and Neil Sproule and Brian Seargeant who prepared affidavits on behalf of SP.
SP Motion Record
[6] SP initially relied upon affidavits from Neil Sproule and a litigation clerk, and then, in a supplementary motion record delivered in July 2023, included an affidavit from Brian Seargeant.
Neil Sproule – sworn May 19, 2021
[7] Mr. Sproule, now president of SP, deposed that he worked on the construction of the cottage from the fall of 2007.
[8] The main house had three chimneys with stone cladding. Two of the chimneys had roofing “saddles” or “crickets”, an angled ridge installed on the upslope of a chimney that works to direct any rain or snow away from and around the chimney stack. The main house master bedroom chimney did not have a saddle. Mr. Sproule described the saddle as an “essential waterproofing element for roof and chimney construction.”
[9] He deposed that the roofing contractor constructed the saddles for the chimneys and for the stair tower before the exterior stone cladding was installed, and that the result of the subsequent cladding caused the chimneys and stair tower to be wider than the saddles. He said that this caused runoff to pool at the edges of the cladding and roof/chimney joints. He also stated that the masonry subcontractor installed the cladding to sit on top of the roof shingles which posed a problem for water diversion and waterproofing.
[10] Beginning in August 2011, the Saxbergs complained of water leaks.
[11] In August 2012, the Saxbergs retained an architectural firm, PBK Architects (“PBK”) to investigate moisture infiltration and other building envelope issues. PBK’s representative was Pat Kok. Mr. Sproule attended an inspection meeting with Mr. Kok and deposed that he remembered discussing the narrow and missing roof saddles, the stone cladding resting on top of the shingles, and a crack in the cladding of one chimney. Testing was done on the main house roof for leaks by running water onto the roof valleys. Two valleys were leaking at spots about 20 feet from the great room chimney. That chimney had a significant crack in the stone cladding.
[12] Mr. Kok prepared an inspection report dated October 12, 2012. PBK identified a number of problems: roof valleys, the primary sources of reported leaks; the absence of underlayment under shingles; exterior stone cladding meeting asphalt roof surfaces; crack in the great room chimney related to lack of structural support; a foundation leak; and some notations with respect to the chimneys. With respect to the chimneys the relevant portion of the inspection report is reproduced below:
2.5 Chimneys, General
There are five chimneys on the 3-building house complex. The chimneys display some inconsistency in their saddle construction (also known as crickets). The Sunroom chimney is the only chimney that has base flashing raised above the roof. The Main House Master Bedroom chimney is the only chimney without a saddle.
The width of the saddles generally appears to be too narrow, with the valleys intersecting the backs of the chimneys short of the corners. A similar narrow saddle detail is also found at the back of the Stair Tower. It appears that the roofing and flashing were completed, and the saddles formed without accounting for the thickness of the stone veneer cladding. Illustrated details in the CRCA manual and other trade documents indicate saddles to be installed the full width of chimneys. Note that saddles are not required by the OBC when chimneys are less than 30" wide.
Long term performance of the roof and chimneys should not be affected by the narrow saddles, provided the saddles are flashed properly. Long term performance of the stone veneer could be affected by these details. We suggest that SP have DDH (Discovery Dream Homes provided the architectural drawings.) review photos and comment on the as-built chimney details.
[13] Following circulation of the PBK report, the Saxbergs, Mr. Kok, and Mr. Sproule and Mr. Seargeant of SP discussed these issues in a conference call.
[14] According to Mr. Sproule, Mr. Kok raised three priority repairs: 1) the crack in the main house great room chimney due to a lack of structural support; 2) resealing the great room roofing valleys where water infiltration had occurred; and 3) rectifying water infiltration in the guesthouse mechanical room due to an overwhelming downspout and weeping tile system. He also deposed that Mr. Kok recommended upgrading and enhancing the four existing roof saddles, installing a saddle on the main house master bedroom chimney, and expressed concern about stone cladding resting on top of roof shingles. He said that SP declined to do this additional work without being paid to do so.
[15] The actual wording of the comments regarding these areas from the PBK report is:
Master Bedroom Chimney: a. Consider constructing roof saddle (cricket) at the base of the chimney as typically indicated for chimneys on all buildings, noting the saddle width should match the finished width of the chimney.
Stone Cladding Details at Wall/Roof and Wall/Grade Intersections: a. SP to provide data to support the as-built details are acceptable to, and warranted by, the stone cladding manufacturer, and are acceptable to DDH.
[16] Mr. Sproule deposed that the three recommended repairs were completed by May 2013 and that SP had no contact with the Saxbergs until SP received an email on September 11, 2015, advising that the Saxbergs had hired Martti Granholm to repair the chimneys and that extensive water damage had been discovered. Mr. Sproule stated that he attended at the cottage on or about September 18, 2015, and saw that work was being done on the main house great room chimney. His next contact with the Saxbergs was the commencement of this lawsuit.
[17] On cross-examination on his affidavit, Mr. Sproule advised that:
- during the October 2012 conference call, he never pointed out to the Saxbergs or Mr. Kok that a roofing saddle is an essential waterproofing element for roof and chimney construction;
- SP was not going to install, at their own cost, a saddle on the main house master bedroom chimney because it was not required by Code;
- no one in October 2012 raised an issue that the stone cladding might absorb water;
- after SP completed their repairs in May 2013, he was not aware of any outstanding issues that needed to be addressed.
Ann Forsyth – sworn May 19, 2021
[18] Ms. Forsyth is a litigation clerk in the firm representing SP. She deposed that the Saxbergs discovered mould in the cottage in 2010 and settled their mould damage claim with SP on November 8, 2011, for $162,563.91
Saxberg Responding Motion Record
Scott Saxberg – affidavit sworn September 20, 2022
[19] Mr. Saxberg resides in Calgary Alberta. He described the cottage as “spectacular” and said that they “spared little expense in having it built”.
[20] He explained that his primary contact with SP was Brian Seargeant and that SP had a “lead hand” for most of the project with project supervisor Wade Wilson, but who was replaced by Neil Sproule very late on.
[21] He deposed that the construction took over four years and that whatever issues arose during construction were addressed to their satisfaction. They took possession of the cottage in January 2011 and the construction was completed in the fall of that year. In August 2011 a deficiency list was sent to SP. He also retained a third party, Pat Kok of PBK, to review the status of the construction and to recommend how certain leaks they discovered should be addressed.
[22] Mr. Saxberg deposed that Mr. Kok prepared an inspection report of an attendance on August 23, 2012. Mr. Sproule and others from SP were present for this inspection. Mr. Kok also prepared a report dated October 12, 2012. A copy of that report was provided to SP. Following circulation of that report, a conference call was held between the Saxbergs, their personal assistant, Ms. Murdoch, Mr. Kok and Mr. Seargeant, and Mr. Sproule of SP. Mr. Saxberg deposed the following with respect to that conference call:
p) during the Conference Call, Mr. Seargeant told us that Seargeant would not replace or widen the crickets at Sergeant’s cost because they were not required by the Ontario Building Code. I recall that Mr. Seargeant indicated that he was proud of Seargeant's work and that no further work other was required, other than what was needed to correct the deficiencies they had agreed to correct in that October Call (the "Deficiencies"). I recall him firmly saying that he would not replace or enlarge the crickets at his cost, because they were not needed. It was not a confrontational conversation, however. Mr. Seargeant expressed his view that the work in question was not necessary, and we took him at his word. We had confidence in Mr. Seargeant based on our experience with him and based on his referrals. In addition, Mr. Kok did not disagree with his assessment.
[23] Mr. Saxberg specifically denies that Mr. Sproule or any other representative of SP told him that crickets or saddles were “an essential waterproofing element for roof and chimney construction” or that having the stone cladding laid on top of the shingles was a problem.
[24] In the fall of 2014, the Saxbergs decided to go ahead and do the “upgrade” work as set out in the 2012 PBK report. That upgrade work was having a saddle installed on the master bedroom chimney, upgrading the existing saddles by widening them, and removing a few inches of stone from the base of the chimneys to allow easy access if shingles had to be replaced. He deposed that he called Mr. Seargeant to ask SP to do the work but that Mr. Seargeant declined, indicating that he was travelling and that he had recently sold SP to Mr. Sproule.
[25] Martti Granholm was hired to do the upgrade work. Mr. Saxberg deposed that Mr. Granholm pointed out discolouration to the chimney which Mr. Granholm thought was most likely attributable to water behind the stone. Pat Kok was also asked to review Mr. Granholm’s work. Mr. Saxberg set out his understanding of what was discovered as follows:
i. that very few problems (if any) were found and repaired as part of Martti's work on the first chimney; ii. that when Martti moved on to the second chimney, the problems Martti uncovered were a lot worse. The scale of the problems were, I recall, a surprise to all of us. There was a lot of mould and a lot of rectification work to perform; iii. that similar, and very bad, issues were found at the remaining chimneys and at the stair tower; iv. that we instructed Martti and Mr. Kok to conduct investigations in other areas of the house. "Thermal imaging" and "moisture testing" was recommended, and we agreed that that should be done, as it would show us if there was water behind the exterior walls at other locations; v. that we were told that the testing revealed further serious water damage, which we had to repair; and vi. that, all told, the repairs cost Rachel and I approximately $750,000;
[26] With respect to the prior mould problems, Mr. Saxberg deposed that the mould problems in 2009 or 2010 were not caused by a leak but rather were caused by SP installing some interior components prior to closing the roof in, which caused some drywall to get wet.
Rachel Saxberg – affidavit sworn August 12, 2022
[27] Ms. Saxberg deposed that her recollections of the matters raised by Mr. Saxberg in his affidavit are consistent with her own.
[28] She stated that the deficiency lists that she gave to SP related to the interior of the property and not to the exterior or to the roof. She recalled that a water leak through pot lights in the main cottage was caused by a problem in the roof valley and that this problem was eventually fixed by SP in accordance with Mr. Kok’s instructions.
[29] She deposed that she was shocked when she learned from Mr. Granholm that there were problems on the roof, and that she was not aware that there were any problems in the roof until that discussion with Mr Granholm.
Martti Granholm – affidavit sworn August 5, 2022
[30] Mr. Granholm is the owner/operator of Martti Granholm Construction. He deposed that he was contacted in the fall or winter of 2014/15 by Mr. Kok to do some work at the Saxberg property. He could not attend until the spring, once the weather allowed, and he first attended the cottage most likely in April 2015.
[31] Initially, he was advised that this scope of work was “very small” involving installing a roof saddle on a chimney, widening saddles on other chimneys, and removing some chimney stone which was sitting on the roof shingles.
[32] He deposed, however, that when he attended to inspect the work to be undertaken, he noticed that there were cracks on the stone on the chimneys and that moss was growing on the stone in places. He said that this led him to believe that there might be a water problem behind the wall. Because the extent of damage was unknown, he advised the Saxberg’s assistant that he would only work on a “time and material basis”. He sent a proposal by email on May 10, 2015, which stated:
We will do the first chimney roof flashing alterations on a time and material basis. We do not know what we will find out when we open it up. There could be moisture on the wood that needs replacing. We will do the repair as Pat Kok instructs us.
[33] With respect to Mr. Saxberg’s statement that Mr. Granholm advised him of discolouration of the stone, Mr. Granholm deposed that it is possible that he said that but that he does not recall given the passage of time.
[34] He stated that the first chimney was not “much of a problem” but that he found significant water damage behind the stone of the second chimney. He determined that the problem was caused because the flashing behind the chimney directed it into a small opening in the wall where the fascia, the flashing, and the brick meet. He was surprised by the amount of damage. His email of June 17, 2015, to Ms. Murdoch described what he discovered:
It has water damage behind the stone. It appears that the water got in behind the stone because the flashing behind the chimney directed it into a small opening in the wall where the fascia, flashing and brick meet. The wall behind the stone has water damaged and has rotted the OSB sheathing. We will fix what we can so that it’s completed by Friday. We can fix the rest of the chimney in September once the Saxberg's have finished enjoying their place for the summer. The repair we are doing now has fixed and addressed the problem area. We will have the chimney and stones looking good for when they arrive. The rest can be repaired later. Yes, it was a surprise for all of us. We have flashed the chimney properly now and are reinstalling the stones. The initial work was attempted to be sealed with silicone in an area you would never see from the ground. The chimney was never flashed and sealed properly to begin with.
[35] As other areas were opened up for repair, more damage was discovered. Mr. Kok recommended thermal imaging to attempt to locate water damage. Mr. Granholm stated that he had no idea, when he first saw a few cracks and a little moss, that the problem could have been as bad as it was.
[36] The damaged work that he had to repair was all behind the walls and beneath the roof. He stated that it was not visible from the ground and was not discernible until the walls and roof were opened up.
[37] He does not believe that he was told there was a leak when he was first brought in to work on the saddles and stone. He confirmed that it was only when he went to the site when he saw the cracks and moss that he realized there might be a water problem. On that visit, he saw no water leak.
Katy Murdoch – affidavit sworn September 26, 2022
[38] Ms. Murdoch is a certified financial analyst and, for a number of years, managed the Saxberg’s personal assets and financial affairs which included overseeing the operation of the cottage during and after the 2012 – 2015 timeframe.
[39] She read Mr. Saxberg’s affidavit and confirmed that what he stated is consistent with her current recollection and knowledge. With respect to the October 2012 conference call between the Saxbergs, Mr. Kok and Mr. Seargeant and Mr. Sproule of SP, she stated:
d) it may be that, during the conference call, Mr. Seargeant told us that Seargeant would not replace or widen the crickets at Seargeant's cost because they were not required by Code and not necessary. I don't have a specific recollection in that regard; e) I do recall in a general way, however, that in the meeting it was agreed that Seargeant would do the work that Pat said needed to be done, but that Seargeant would not do the work that Pat had only said it would be nice to have done, as an upgrade. h) I circulated a recap of the conference call to all participants by email on October 22, 2012, a copy of which is attached to Scott's Affidavit as Exhibit "F". There is no reference to crickets or the stone on the asphalt in the recap.
[40] With respect to her involvement with Mr. Granholm she stated:
q) I only went to the Cottage property (from Calgary) when it was necessary for me to do so - ie. when there was something important to address. Generally, I took pictures at the Cottage when I travelled to the Cottage. Those pictures are dated. I believe, based on a review of a picture I took of the Cottage on September 26, 2014, that a meeting with Martti would probably have occurred or around that date.
Pat Kok – affidavit sworn September 28, 2022
[41] Mr. Kok has a Bachelor of Environmental Studies and, in 2012, was employed by PBK Architects which was taken over by Architecture 49 (“A49”) in 2015.
[42] He inspected the Saxberg cottage in 2012 and prepared the 2012 report. He deposed that John Bradica, an architect, reviewed his work and was the co-author of the 2012 report. In the 2012 report, PBK made recommendations for both repairs and upgrades. By “upgrade” PBK meant something that was either not necessary from an engineering/architectural construction perspective or an improvement that exceeded a minimum building code requirement.
[43] PBK did not recommend that the stone sitting on the shingles was required to be removed. Mr. Kok confirmed that this was not a deficiency in need of repair but would simplify future access to shingles if required.
[44] Similarly, PBK was of the view that installation or widening of a saddle would be an upgrade and not a repair as saddles were not required by the Ontario Building Code. As noted, their October 2012 report stated:
Long-term performance of the roofing chimneys should not be affected by the narrow saddles, provided the saddles are flashed properly.
[45] Mr. Kok deposed that he attended the conference call with the Saxbergs and the SP representatives regarding the October 2012 report. He recalled that Mr. Seargeant advised that he would not install the missing cricket or widen the crickets or address the stone on shingle issue unless he was paid for that work given that this work was not required.
[46] Once SP completed the required repair work on deficiencies, Mr. Kok re-attended to inspect the repairs. With respect to the crack in the great room chimney, he said that at that time, there was no indication of any water penetration into, or water damage to, the interior of the roof/building.
[47] Later, in 2015, A49 was retained by the Saxbergs to report on the problems discovered in 2015. Investigations, including thermal scans and moisture probe testing, disclosed other building envelope issues which included deficiencies at deck to wall and roof to wall connections. Mr. Kok confirmed that these deficiencies and connections were distinct from, and unrelated to, the chimney and chimney stone issues which he had recommended be performed as upgrades in the 2012 report.
[48] On his cross-examination on his affidavit, Mr. Kok was directed to a December 9, 2015, A49 report commenting on causes of moisture infiltration on the main house master bedroom chimney. The report stated:
SUSPECTED CAUSES In our opinion there are two primary causes of the water damage to the Master Bedroom Chimney and adjacent walls. First, the chimney did not have a roof cricket (or saddle) to direct water away; second and more importantly, the exterior roof fascia sloped directly into the stone veneer cladding, allowing water coming down the roof and fascia to be continuously directed onto the stone cladding. Other contributing factors include: poor flashing behind the chimney, cracked stone veneer, lack of a rain screen, uninsulated chimney "ceiling", the height and exposure of the chimney structure, and the leak at the adjacent lower roof.
[49] A subsequent A49 report dated February 19, 2016, commented on the chimney repair recommendations and the stone cladding or veneer as follows:
The chimney repair recommendations made by A49 generally involved having the stone veneer raised off the shingled roof surfaces. The intent of this repair is to improve the lifespan of the stone veneer, which in turn would allow water to run more freely past the cricket/saddle valleys that intersected the chimney faces; additionally, the new condition will improve the wall assembly's ability to drain moisture. This recommendation coincides with architectural details available (on-line) from the stone veneer manufacturer, Boulder Creek. Refer to report attachments.
Fred Stanley – affidavits sworn October 3, 2022, and March 3, 2023
[50] Mr. Stanley is an engineer with Walter’s Forensic Engineering Inc. in Toronto. He prepared a report (the “Walter’s Report”) at the request of counsel for the Saxbergs. He has signed an Acknowledgement of Expert’s Duty. His C. V. lists his specialized professional competence as:
- Civil Engineering projects Failure analysis
- Investigation of Residential Building problems
- Construction Dispute analysis
- Review of Construction Compliance with the Ontario Building Code
[51] His report was based on his review of the examination for discovery transcripts of Mr. Saxberg, Mr. Seargeant and Mr. Granholm, Mr. Granholm’s affidavit and photographs, and the reports of PBK and A49. He did not do any personal inspections of the Saxberg cottage.
[52] Based on his review of this documentation, he concluded that the absence of a chimney saddle on the master bedroom chimney, the presence of stone cladding sitting on shingles, and the narrow saddles on the other chimneys, were not responsible for the moisture damage discovered and repaired by Mr. Granholm. In his opinion, the damage was caused by cracks in the stone and stucco cladding which allowed water into the chimneys and that related damage is seen “well above the roof level”. At the joint between the eavestrough and the walls (roof to wall connections) the leaks were caused by the flashing detail, and not the stone cladding.
Rachel Saxberg - supplementary affidavit sworn July 25, 2023
[53] This Affidavit includes information that was apparently cut off from the prior affidavit. It relates to the October 2012 conference call, that had the Saxbergs been aware that there were deficiencies, other than what SP fixed, they would have had insisted that SP perform the work or would have retained someone else to do it.
SP Supplementary Motion Record
Brian Seargeant – sworn May 2, 2023
[54] Mr. Seargeant deposed that he was the owner of SP while the Saxberg cottage was being constructed. He described the build as “one of our more complicated construction projects.” In contrast to Mr. Saxberg’s comment that he was “happy” with SP, he said that the Saxbergs were difficult and demanding to work for.
[55] He described Ms. Saxberg as his primary contact for the build and that her main focus was aesthetics. He said that it was Ms. Saxberg who wanted the chimney cladding placed all the way down to the shingles’ level because it looked better.
[56] He deposed that the shingles used were of the “highest quality” and with a “lifetime warranty for 80 years” and therefore, any concerns about removing chimney cladding was not a realistic issue.
[57] He described the contact with Mr. Saxberg as “more limited”, “mainly involving disputes about invoicing, discounts and delays in payment.”
[58] Another dispute with the Saxbergs was regarding the construction of the sauna on the restricted shoreline allowance. As a result, SP had to pay the Saxbergs $40,000.
[59] In the fall of 2010 moisture infiltration and mould contamination problems were noted. The settlement of $162,563.91 included cleanup and expert reports to remedy the mould problem.
[60] With respect to the PBK report and the meetings with the Saxbergs and Mr. Kok on October 15, 2012, after review of the October 12, 2012, PBK report, Mr. Seargeant deposed that Mr. Saxberg wanted every one of PBK’s recommendations done at SP’s cost. Mr. Seargeant stated that they were told to fix the roof saddles and chimney cladding and that SP was prepared to do so if they were paid. Mr. Saxberg was unwilling to pay SP.
[61] Mr. Seargeant deposed that the roof valley repairs were done in the fall of 2012 despite the fact that neither SP nor the roofer felt that the valley should be repaired until the weather was warmer because this could result in a poor job. He said that all repairs were completed by May 2013.
[62] He had no recollection of being contacted by the Saxbergs to undertake the upgrade work in 2014.
[63] On his examination for discovery, Mr. Seargeant confirmed that SP would not add a saddle to the chimney at SP’s cost because it was not required, and he confirmed that the performance of the roof and chimney would not be affected by the narrow sidings.
[64] When cross-examined on his affidavit, Mr. Seargeant confirmed that:
- the issue with the cladding touching the shingles related to replacement of the shingles and that, since it was an 80-year shingle, he didn’t think this would be an issue;
- stone on shingles was not a potential problem in relation to water penetration;
- the manufacturer did not reject the shingle installation; and
- he was not aware of any outstanding problems that needed to be corrected to avoid potential water penetration after SP completed the repair work in May 2013.
Positions of the Parties
[65] The Statement of Claim was issued on July 25, 2016.
[66] Both parties submit that the limitation period issue is appropriate for determination by summary judgement if this court finds that there are no credibility issues requiring a trial for resolution.
[67] SP acknowledges that a “boomerang” order (See 1062484 Ontario Inc. v. Williams McEnery, 2020 ONSC 825, aff’d 2021 ONCA 129, at paras. 36-40. No need for cross-motion by plaintiff.) is appropriate in this case for final determination of the limitation issue.
SP
[68] As set out in SP’s factum the key issue is whether the Saxbergs knew or should have known a proceeding was appropriate:
On October 15, 2012, when SP refused to do the recommended chimney repairs; or In June of 2015, when the Martti Granholm hired to do those repairs discovered substantial water damage to the chimney structures.
[69] SP states that the Saxbergs knew or ought to have known on October 15, 2012, that the Consultant's recommended chimney repairs needed to be done. SP argues that once the Saxbergs knew that SP would not do certain repairs at SP’s cost, then the Saxbergs suffered damages, specifically, the cost to do these repairs. As the claim was not commenced within two years from October 15, 2012, SP argues that the action is barred by Section 4 of the Limitations Act and should be dismissed.
1. Required Repairs
[70] SP argues that the following three required repairs were intended to prevent moisture infiltration at the chimneys and stair tower:
a. installing one missing chimney saddle, b. widening the existing saddles on three chimneys and the stair tower, and c. raising chimney stone/cladding up off of the shingles on the stair tower and four chimneys.
2. Causation
[71] SP argues that the missing saddle was a primary cause of the water damage to the master bedroom chimney relying on the December 9, 2015, A49 report and that the original drawings should have been reviewed prior to 2015 when A49 did review the drawings. SP argues that this represents a lack of due diligence by the Saxbergs.
[72] In disputing the Walter’s Report authored by Mr. Stanley, SP argues that the engineer never visited the site and did not acknowledge, as did A49, that the water damage was contributed to by the original construction of the chimney saddles and cladding.
3. Limitation Periods and Discoverability
[73] SP acknowledges that SP has the burden of establishing that the Saxbergs’ claim was commenced after the presumptive expiry of the limitation period. Once that is established, the Saxbergs need only prove that the actual discovery of the claim was not on the date of the events giving rise to the claim. Once the presumption is rebutted, the burden remains on SP to prove that the Saxbergs knew or ought reasonably to have known that the elements of section 5(1)(a) of the Limitations Act, more than two years had preceded the commencement of the proceeding (AssessNet Inc. v. Taylor Leibow Inc., 2023 ONCA 577 at para. 35 (“AssessNet”)).
[74] SP argues that from October 15, 2012, when the Saxbergs insisted that SP perform all recommendations made by Mr. Kok and SP refused to do so at SP’s cost, the Saxbergs knew that SP had breached its contract and was negligent, and knew that the Saxbergs had already suffered damage, specifically the cost to make those repairs.
[75] SP argues that these facts satisfy the “plausible inference of liability requirement” (Grant Thornton LLP v. New Brunswick, 2021 SCC 31, at paras. 45–46) and that the Saxbergs were then able to draw a plausible inference of liability on the part of SP.
[76] As the Statement of Claim was not issued with two years from October 15, 2012, SP submits that the Saxbergs’ claim is barred by the Limitations Act.
The Saxbergs
1. Not Required Repairs – Upgrades
[77] The Saxbergs submit that all of the evidence on this issue leads to the conclusion that what SP describes as required repairs were upgrades. The Saxbergs rely on the evidence of Mr. Kok and of everyone who participated in the October 2012 conference call. That SP would not perform this work without payment confirms that SP concluded that this work was not required. Further, both Mr. Sproule and Mr. Seargeant of SP confirmed that neither of them was aware of any outstanding issues that needed to be addressed after the initial repair work was completed in May 2013.
2. Causation
[78] The Saxbergs submit that the only evidence about causation comes from Mr. Granholm and Mr. Stanley. SP led no evidence about causation and only relied upon the December 2015 A49 report which only addressed causes of water damage to the master bedroom chimney. In any event, the Saxbergs submit that anything said by Mr. Kok after July 25, 2014 (The statement of claim was issued on July 25, 2016, so SP would have to assert that the claim was discoverable prior to July 25, 2014.) cannot impact what the Saxbergs knew before July 25, 2014.
3. Limitation Periods and Discoverability
[79] The Saxbergs submit that they were not aware of the water damage before July 25, 2014, and that they only became aware after Mr. Granholm commenced work on the upgrades in June of 2015. Further, it was the undisputed evidence of Mr. Granholm that the damage was not discernable until the walls and roof were opened up.
Analysis and Disposition
The Limitations Act
[80] The Limitations Act states:
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).
Presumption
5 (2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
[81] Determining whether an action is statute-barred, or declaring when a claim was discovered, requires the court to make specific findings of fact about each element set out in s. 5(1) of the Limitations Act (AssessNet Inc. v. Taylor Leibow Inc., 2023 ONCA 577, at para. 36; Presley v. Van Dusen, 2019 ONCA 66, at para. 14 (“Presley”)). Consideration of when a proceeding was an appropriate means to remedy a claim is an essential element in the discovery analysis (Presley, at para. 15). If the court cannot make these findings then a genuine issue requiring a trial may exist (Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725, at paras. 34–39 (“Nasr”)).
[82] The finding of facts necessary for the determination of the limitation period issue includes the characterization of the PBK recommendations made in October 2012, the cause of the water damage, and the point in time when the Saxbergs, or a reasonable person in these circumstances, first knew the facts as set out in s. 5(1)(a). I conclude that there are no credibility issues requiring a trial to determine these facts.
1. Repairs or Upgrades
[83] I am satisfied that what SP describes as required repairs are properly characterized as upgrades even though one saddle was missing.
[84] I base this finding on the following:
a. I accept Mr. Kok’s evidence that saddles were not required under the Ontario Building Code and that he advised the Saxbergs to “consider” the addition of a saddle to the master bedroom chimney; b. I accept Mr. Kok’s evidence that “long-term performance of the roof in chimneys should not be affected by the narrow saddles, provided that saddles are flashed properly”; c. Stone cladding on the shingles was an issue for future shingle replacement and not related to any water infiltration issue; d. By refusing to do this work including the construction of a saddle at the master bedroom chimney, at SP’s cost, SP regarded this work as an “upgrade” and not required; e. The Saxbergs accepted SP assurances that this work was not required. There was no reference to saddles or stone on the shingles in Ms. Murdoch’s recap of the October 2012 conference call.
2. Causation
[85] There is no evidence disputing Mr. Granholm’s observations that “it appears that the water got in behind the stone because the flashing behind the chimney directed it into a small opening in the wall where the fascia, flashing and brick meet” and “the chimney was never flashed and sealed properly to begin with.”
[86] Similarly, there is no evidence disputing Mr. Stanley’s conclusion that the absence of a chimney saddle on the master bedroom chimney, the presence of stone cladding sitting on the shingles, and the narrow saddles on the other chimneys, were not responsible for the moisture damage discovered and repaired by Mr. Granholm.
[87] With respect to the A49 report relied upon by SP, that report must be read in conjunction with all the other evidence. That report related only to the master bedroom chimney and while the lack of a saddle to direct water away is listed as a primary cause, the report continues:
second and more importantly, the exterior roof fascia sloped directly into the stone veneer cladding, allowing water coming down the roof and fascia to be continuously directed onto the stone cladding. Other contributing factors include: poor flashing behind the chimney, cracked stone veneer, lack of a rain screen, uninsulated chimney “ceiling”, the height and exposure of the chimney structure and the leak at the adjacent lower roof. [Underline added.]
[88] The lack of a saddle at this location does not account for water damage to the other parts of the building and is best described as a contributing cause.
3. Discoverability
[89] Both Mr. Sproule and Mr. Seargeant of SP stated that they were not aware of any outstanding issues that needed to be addressed after SP completed their repairs in May 2013.
[90] When Mr. Kok re-attended the premises after these repairs, he found no indication of any water penetration into or water damage to the interior of the roof/building at that time.
[91] When Mr. Granholm first attended, he did not believe that he was told there was a leak, and he confirmed that it was only when he went to the site that he realized there might be a water problem when he saw the cracks and moss. On that visit he saw no water leak. He described what he subsequently discovered as a “surprise for all of us”. The damaged areas work he had to repair were all behind walls and beneath the roof and was not visible from the ground and not discernible until the walls and roof were opened up.
The section 5(1)(a) Analysis
[92] I am satisfied that the Saxbergs first knew:
i. that injury, loss or damage had occurred after May 10, 2015, when Mr. Granholm began work; ii. that the injury, loss or damage was caused by or contributed to by an act or omission – the construction defects as noted by Mr. Granholm in June 2015; iii. that the act or omission was that of the general contractor, SP, against whom the claim is made – based on the construction defects as noted by Mr. Granholm in June 2015; 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 – based on the construction defects as noted by Mr. Granholm in June 2015.
[93] Alternatively, if the absence of the chimney saddle on the master bedroom was an omission that contributed to the damages, I conclude that the assurances of SP that a chimney saddle was not required led the Saxbergs to have a reasonable belief that this was not an issue that required recourse to the courts. I accept and adopt the analysis as set out by the Court of Appeal in Presley, at paras. 17-26. I conclude that the absence of a chimney saddle was not, in these circumstances, something that would lead the Saxbergs to conclude, given SP assurances that the saddle was not necessary or required by the Ontario Building Code, that a proceeding would be an appropriate means to seek to remedy it without yet having discovered the damage caused by the omission of the saddle.
[94] There is nothing in the evidence or argument presented to me to suggest that a reasonable person, with the abilities and in the circumstances of the Saxbergs, ought to have known of these facts earlier than the Saxbergs.
[95] As the statement of claim was commenced on June 25, 2016, less than two years from the discovery of the claim, the action is not barred by s. 4 of the Limitations Act. SP’s motion for summary judgement is dismissed.
The “Boomerang” Order
[96] I agree with counsel for both parties that a “boomerang” order is appropriate in this case. Both parties were required to “put the best foot forward” and have done so. Accordingly, I find that the action was commenced within the applicable limitation period.
Costs
[97] Any party seeking costs shall file their written cost submissions within 30 days. Those written submissions shall be limited to seven pages plus costs outline plus any authorities or offers. The responding party shall deliver their cost submissions within 20 days thereafter. The responding party’s submissions are subject to the same submission limits. If cost submissions are not received within 30 days, then costs will be deemed settled.
Released: February 20, 2024
