Metropolitan Toronto Condominium Corporation No. 1100 v. A. & G. Shanks Plumbing & Heating Limited, 2017 ONSC 7237

CITATION: Metropolitan Toronto Condominium Corporation No. 1100 v. A. & G. Shanks Plumbing & Heating Limited, 2017 ONSC 7237

COURT FILE NOS.: CV-11-00438120 & CV-11-00438240

DATE: 20171204

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 1100

Plaintiff

– and –

A. A. & G. SHANKS PLUMBING & HEATING LIMITED, 1586208 ONTARIO LIMITED, carrying on business as SHANKS PLUMBING AND HEATING and ADDISON HEATING AND COOLING LTD.

Defendants

Amelia Leckey, for the Plaintiff

Peter K. Boeckle, Joel Cormier & Chris Morrison, for the Defendant,

A. G. SHANKS PLUMBING & HEATING LIMITED

AND

BETWEEN:

DAVID BRUCE FINGOLD

Plaintiff

– and –

A. A. & G. SHANKS PLUMBING & HEATING LIMITED, 1586208 ONTARIO LIMITED, carrying on business as SHANKS PLUMBING AND HEATING and ADDISON HEATING AND COOLING LTD.

Defendants

Adam Grant & Irina Sfranciog, for the Plaintiff

Peter K. Boeckle, Joel Cormier & Chris Morrison, for the Defendant,

A. G. SHANKS PLUMBING & HEATING LIMITED

HEARD: Jan 30 - Feb 1, 2017, Feb 6 – 10, 2017, Feb 13 – 16, 2017 and Feb 21, 2017

hood j.

REASONS FOR DECISION

introduction

1. On the afternoon of October 30, 2009 there was a fire at 3 Chedington Place, Toronto, Ontario. 3 Chedington Place, a fully detached Tudor-style mansion, was owned by the plaintiff, David Fingold. That property was part of the plaintiff condominium corporation, MTCC 1100, which also consisted of two towers, one with 35 units and the other with 34 units.

2. On the day of the fire Mr. Abrey, a plumber employed by the defendant A & G Shanks Plumbing & Heating Limited (“A & G Shanks”), attended at 3 Chedington Place on a service call. The fire started soon after Mr. Abrey completed the service call. By the time of the trial, A & G Shanks was the only remaining defendant.

3. 3 Chedington Place was badly damaged in the fire. Almost four years later the building was demolished.

4. MTCC 1100’s insurer, Novex Insurance, incurred expenses of $3,857,967 resulting from the fire. Mr. Fingold’s insurer, Chubb, paid Mr. Fingold $1,136,727 for the contents of 3 Chedington Place. Novex and Chubb made further substantial payments to MTCC 1100 and Mr. Fingold. This is, for the most part, a subrogated claim brought by Novex and Chubb.

5. The condominium corporation MTCC 1100 and Mr. Fingold jointly sue A & G Shanks for $3,859,967 for the expenses incurred by MTCC 1100 resulting from the fire. They also sue for $5,445,000 for the loss of the value of 3 Chedington Place.

6. Mr. Fingold also sues A & G Shanks for $1,136,727 for the building’s contents and $399,642 for uninsured losses.

7. In the condominium corporation’s opening, counsel stated that there was a dispute about what Mr. Abrey did between 2:45 p.m. (when he completed the repair) and 3:20 p.m. (when he left the property) and whether what he did, in repairing the pipe and thereafter, met the requisite standard of care for a plumber using an open flame torch. In Mr. Fingold’s opening counsel stated that no expert on a plumber’s standard of care would give evidence as it was obvious that Mr. Abrey fell below the necessary standard of care.

8. The defendant in its opening submitted that there was no proof of negligence on Mr. Abrey’s part. The defendant also submitted that Mr. Fingold had mitigated his damage prior to any insurance payment so he had suffered no loss, and that the condominium corporation had behaved unreasonably and did not suffer a loss from the fire.

9. For the following reasons I conclude that the claims must be dismissed as the plaintiffs have not proven that Mr. Abrey was negligent.

Facts

10. I have found the following facts from the evidence given at trial and from Exhibit 1, being an agreed statement of facts with attached documents (AF). In my reasons I have indicated which facts were taken from Exhibit 1. The agreed statement of facts contained a number of obvious typographical errors which I have corrected for these reasons.

The History of The House and The Condominium Development

11. The house that became 3 Chedington Place was built in or about 1929. (AF-4)

12. Sam Fingold, the father of the plaintiff David Fingold, purchased the house in 1945. The Fingold family initially lived in the house. When Sam Fingold passed away the house passed to his widow, Sidney Fingold. (AF-5)

13. On or about November 13, 1989 the house and surrounding land was sold by Sidney Fingold to a real estate development company, namely 835065 Ontario Limited for $20,000,000. 835065 Ontario Limited later became Edifice Estates. The owner of 835065 Ontario Limited, and later Edifice Estates, was Kenneth Field. (AF-6)

14. The agreement of purchase and sale between 835065 Ontario Limited and Sidney Fingold provided that the house would be leased back to Sidney Fingold. A lease was entered into by Sidney Fingold and 835065 Ontario Limited on or about November 13, 1989. (AF-7)

15. Sidney Fingold passed away on November 29, 1990. Upon her death her interest in the house passed to her sons, the plaintiff, David Fingold, and his brother, John Fingold. (AF-8)

16. In 1994 the house was designated as having historical and architectural significance. (AF-9) When the developer applied for the building permit for the condominium development, the City of North York took the position that the house required a historical designation as a condition of development. The City, in their designation, focused on the outside of the house and not the inside. Mr. Field went along with the City’s request as he felt the presence of the house elevated the value of the entire property and gave the development a certain tone.

17. The developer constructed the two 9-storey condominium towers on the property. In 1995 a Declaration under the Condominium Act was filed with respect to Metro Toronto Condominium Plan No. 1100. Under the Declaration the house became Unit 5, level 1, which assumed the municipal address of 3 Chedington Place. (AF-10) Under the Declaration the Fingolds had the use of the pool and gym in the highrise and had to pay some of the common expenses such as snow removal, landscaping and the gatehouse expense, which were common expenses not exclusive to the highrise units, such as the highrise concierges. While each owner had to have their own insurance, the condominium corporation also had insurance which covered everything, including the house.

18. At the time of the fire MTCC 1100 had an insurance policy with IngNovex (“Novex”). The policy covered the house and all of the other units for their replacement cost, if damaged. MTCC 1100 paid for this so that there was no cap on the amount any owner would receive and so that if damaged a unit would be returned to its original condition.

19. Under the Declaration MTCC 1100 had the power to have any unit repaired whether or not the owner wanted the repairs done. As Mr. Field explained, all of the owners lived together and if some unit was not repaired it would have the effect of harming the value of the other units.

20. The 1989 lease included an option for the Fingold family to repurchase 3 Chedington Place as a condominium unit at a fixed price of $2.57M. (AF-11) No one could remember how this figure was arrived at.

21. On February 9, 1996 David and Paul Fingold exercised the repurchase. 3 Chedington Place was transferred to David and John Fingold as tenants in common for $2.57M. (AF-12)

22. John Fingold and his wife occupied the basement and portions of the first and second floors of 3 Chedington Place. When John Fingold passed way his interest in 3 Chedington Place passed to his wife, Malka. (AF-13)

23. On or about July 7, 2009 David Fingold purchased Malka's interest in 3 Chedington Place for $1.67M. David Fingold became the sole registered owner of 3 Chedington Place, that being Unit 5, Level 1. At or about that time David Fingold obtained a mortgage on 3 Chedington Place of $3M through HSBC. (AF-14)

24. In 2009 David Fingold and his associates operated various investment portfolios, including real estate development and stock market trading ("the Chedington Companies"). The Chedington Companies operated from and occupied various offices on the third floor of 3 Chedington Place, and approximately half of the second floor of 3 Chedington Place. (AF-15)

25. At the time of the fire, nobody resided at 3 Chedington Place. (AF-16)

26. Under the Declaration, Fingold had the right to convert the house into three condominium units. The zoning was in place for this and it was Fingold’s intention to carry this out at some point. Prior to the fire he went so far as to have a developer look at the house and draw up a design for the three units. He also ran some ads in August and September, 2009 in order to gauge the interest in carrying out such a conversion.

Addison Heating and Cooling Ltd.

27. Addison Heating and Cooling Ltd. ("Addison") was a company in the business of providing heating and cooling services. At all material times Philip St. Jules was president of Addison. (AF-17)

28. Prior to October 2009 Mr. St. Jules had attended at 3 Chedington Place on various occasions. (AF-18)

29. On October 30, 2009 Mr. St. Jules was at 3 Chedington Place doing work on the boiler system. (AF-19)

The Leak

30. Approximately a week prior to October 30, 2009 David Fingold noticed a leak coming from the suspended ceiling over a pool table in the basement ceiling in the recreation room ("the Leak"). (AF-20)

31. David Fingold removed some tiles from the suspended ceiling to investigate the Leak. He observed that the Leak was coming from a half-inch cooper pipe. (AF-21)

32. Mr. Fingold contacted Mr. St. Jules and asked him to take a look at the Leak. He was not sure whether it was a plumbing leak or a leak from the heating system. Mr. St. Jules drove to the house and met Mr. Fingold in the basement recreational room. He climbed a ladder, confirmed that it was a leak from the plumbing and told Mr. Fingold that he needed a plumber to fix it. Although he had no reason to look for it, he acknowledged that when he was up the ladder and looking at the Leak, he did not observe the presence of any horse hair pipe insulation.

33. David Fingold asked Mr. St. Jules for assistance in having a plumber attend to address the Leak. (AF-22)

34. David Fingold gave Mr. St. Jules a key for the house to allow Mr. St. Jules access to the house to finish work on the boilers, and in order for Mr. St. Jules to be able to provide access to a plumber to fix the Leak. (AF-23)

35. David Fingold also provided Mr. St. Jules with a credit card number to pay a plumber to repair the Leak. (AF-24)

A & G Shanks Plumbing & Heating Limited

36. At all material times A & G Shanks Plumbing and Heating Limited ("A & G Shanks") was a company in the business of providing plumbing services. A & G Shanks has been in the plumbing business since 1948. (AF-25)

37. At all material times Neil Sellick was part-owner, service manager, dispatcher, treasurer, and secretary of A & G Shanks. (AF-26)

38. At all material times Neil Sellick was also a licensed plumber in the Province of Ontario. (AF-27)

39. At all material times Mr. Jarrett Abrey was a plumber employed by A & G Shanks. (AF-28)

40. At all material times Mr. Abrey was a licensed plumber in the Province of Ontario. (AF-29)

41. At no time prior to October 30, 2009 had A & G Shanks or Mr. Abrey done any work for David Fingold. (AF-30)

42. At no time prior to October 30, 2009 had anyone from A & G Shanks attended at 3 Chedington. (AF-31)

43. At no time prior to October 30, 2009 had Mr. Abrey attended at 3 Chedington Place. (AF-32)

44. Mr. St. Jules, on behalf of Mr. Fingold, contacted A & G Shanks and asked that they send a plumber to look at and repair the Leak. (AF-33) They agreed to send a plumber Friday afternoon, October 30, 2009.

October 30, 2009 - The Day of the Fire

45. As part of the plaintiffs’ case they read in some discovery evidence from Mr. Sellick. Mr Sellick said:

a) Most plumbers know how to operate safely. They are taught from very early in their apprenticeship how to operate open flames.

b) He was not aware of any CSA standards or any other standards in the plumbing industry governing the use of an open flame torch by a plumber. The use of a torch was a matter of common sense, you operated it safely.

c) He was aware before October 30, 2009 that buildings from the 1920s and 1930s might contain horse hair pipe insulation and that if he was aware that a building did contain horse hair pipe insulation he would instruct any employee working in any such building to be extremely careful because horse hair pipe insulation is very flammable. There was nothing that a plumber was to do differently in working where there was the possibility of horse hair pipe insulation. They just had to exercise extreme caution.

46. There was however no evidence that he, or anyone else for that matter, was aware of there being any horse hair pipe insulation in the house. Nor was there any evidence that Mr. Abrey actually was warned about there being any horse hair pipe insulation prior to or during his attendance at the house.

47. On October 30, 2009 there was a power outage at 3 Chedington Place between 10:00 a.m. and 12:00 p.m. The power outage has no relation to the fire. (AF-34)

48. David Fingold left 3 Chedington Place at 11:00 a.m. Other people who were working in the office at the house left early as well. (AF-35)

49. Mr. St. Jules arrived at 3 Chedington Place at approximately 12:45 p.m. (AF-36)

50. A&G Shanks dispatched Mr. Abrey to 3 Chedington Place at approximately 2:03 p.m. The Work Order indicates Mr. Abrey arrived at the site at 2:20 p.m. (AF-37)

51. The Chedington Security Log indicates Mr. Abrey arrived at the property at 2:24 p.m. (AF-38)

52. Mr. Abrey was the only employee of A&G Shanks that attended at the property on October 30, 2009. (AF-39)

53. Mr. St. Jules took Mr. Abrey into the basement of 3 Chedington Place, and to the recreation room where the Leak was located. The following diagram is a layout of the basement of 3 Chedington Place. (AF-40)

54. Mr. Abrey observed the Leak was over a pool table in the Recreation Room. He observed there was a T-bar suspended ceiling and that some of the ceiling tiles has been removed in the area over the pool table. (AF-41)

55. After pointing out the Leak to Mr. Abrey, Mr. St. Jules returned to the Utility Room (see diagram above) to continue his work on the boiler system. (AF-42)

56. There was a ladder in the Recreation Room. Mr. Abrey used the ladder to climb up and look into the ceiling. Mr. Abrey noted the leaking pipe was a half-inch diameter copper pipe at a 90-degee elbow joint. (AF-43) Mr. Abrey estimated that approximately 30 to 40 solders had previously been done in the immediate area of the Leak. He also noted that much of the pipe was copper which meant that this work was more recent than the age of the house.

57. In addition to the T-bar suspended ceiling, there was a cementitious ceiling above the T-bar ceiling. (AF-44)

58. The Leak was in the copper pipe located between the T-bar suspended ceiling and the cementitious ceiling. (AF-45)

59. The leaking copper pipe exited the cementitious ceiling through a hole that was approximately 12-inches in diameter. (AF-46) Mr. Abrey testified that the leaking pipe was 6 inches below the cementitious ceiling and was 18 inches to two feet above the ceiling tiles and the drop ceiling. The leaking section of copper pipe was 4 inches long.

60. There were numerous photographs taken, after the fire, of the area where Mr. Abrey worked. One photograph was marked as Exhibit 19A. The leaking pipe was marked as “A”, and the wooden joist in the area Mr. Abrey ended up working was marked as “D”. Mr. Abrey testified that when he carried out his work there was more of the cementitious ceiling present than what was shown in the photographs taken after the fire and that the hole in the cementitious ceiling was located above the leaking pipe and not in the area where the pipe marked as “B” was located.

61. Mr. Abrey testified that the Leak in the pipe was a pinhole leak and the water was spraying up and out of the hole in a fan shape. As a result, when he inspected the work area, all of the area was wet, including the cementitious ceiling, the other pipes in the area, the wood framing and the wooden joist. The water was spraying onto the ceiling and was dripping down.

62. Mr. Abrey was challenged over this testimony. In a statement written soon after the fire, he mentioned that the floor was wet but failed to mention that the ceiling space was wet. He explained that he was upset when writing his statement and simply forgot to mention the wet ceiling space.

63. I accept Mr. Abrey’s explanation. At the time of the trial he owned his own plumbing company and no longer worked for A & G Shanks. He gave his evidence in a matter-of-fact fashion. In cross-examination his answers were responsive and direct. He was not argumentative and readily agreed with propositions that were put to him if they were reasonable and warranted. I find Mr. Abrey to be both credible and reliable. He also gave evidence that prior to the job in question on October 30, 2009, he had done thousands of jobs soldering copper pipes. He knew from both his training and experience that the work area had to be properly wetted down. He testified that in this case it was not needed as the area was already soaking wet when he got there.

64. Mr. St. Jules and Mr. Abrey returned to the garage where Mr. Abrey collected his tools from his truck. Mr. St. Jules then returned to the Utility Room, and Mr. Abrey returned to the Recreation Room. (AF-47)

65. Mr. Aubrey plugged in his halogen light, climbed the ladder, and used a pipe cutter to manually cut the damaged pipe. (AF-48) He cut out a four-inch section of pipe.

66. After the damaged pipe was cut there was a fair bit of water escaping from the cut section of the pipe. (AF-49)

67. Mr. Abrey went down the ladder and went to the Utility Room. Mr. Abrey asked Mr. St. Jules to go upstairs and open some taps so the water could drain out of the system. (AF-50)

68. Mr. St. Jules went upstairs, turned on some taps, and then returned to the Utility Room. (AF-51)

69. Mr. Abrey used a bucket to catch the water from the cut pipe as he waited for the water to drain out. (AF-52)

70. Mr. Abrey placed a fire extinguisher on the ground by the ladder. He used a BernzOmatic propane torch and solder to solder two elbow joints to the four-inch section of copper pipe. He did this work while standing on the floor in the Recreation Room. He did the work over a bucket of water. It took him about two minutes to do this work. (AF-53) He set the flame on the torch to a two-inch length to carry out this work

71. Mr. Abrey then wiped off the soldered joints and turned off the torch. He took the four­inch piece of copper pipe and two elbows, the propane torch plus the solder and climbed the ladder to the area where the Leak had been. Mr. Abrey put the two ends of the new pipe section in place so they married up with the cut ends of the existing pipe where the Leak had been located. (AF-54)

72. Mr. Abrey knew when soldering with an open flame that he had to be aware of flammable material, the area had to be wetted down, a fire extinguisher had to be readily available and if at all possible a fire shield, such as a small fire resistant blanket, was to be used. On this job he was not able to use the blanket as he was soldering above and the blanket would not stay in position. In his view it was not practicable to use it. He had such a blanket but he left it in his truck. It was suggested to him in cross-examination that he could have used a rigid fire shield which would have remained in place above his head. He testified that he was unaware of the existence of such a rigid fire shield or their use. No evidence was presented to prove that rigid fire shields existed or that one could have been used in this situation and been effective. It was also suggested to him that he could have used a heat barrier spray. He testified that he has never used such a product and again there was no evidence presented that such a product existed or that it would have been effective.

73. Mr. Abrey looked for flammable or combustible material in the workspace. He did not see any sawdust, kraft paper, or any horse hair insulation, which he knew was often found in older houses and which he knew was highly flammable. He did not see anything which was combustible. While the wooden framing and joist were combustible they were wet from the Leak. He knew that it was his duty to inspect for combustible material and it was not enough to simply inquire of the home owner or someone like Mr. St. Jules as to their knowledge of the presence of combustible material. The space was awkward to work in and he knew he had to be careful. Although there was a hole in the cementitious ceiling, which was above the pipe he was going to solder into place, he was unable to fit his head or hand through the hole. He did not check and could not check what if anything was above the cementitious ceiling without breaking it. While the parties agreed that the leaking copper pipe exited the cementitious ceiling through a hole that was approximately 12 inches in diameter he was never questioned or challenged in cross-examination over his inability to fit his head or hand through the hole. There was no evidence presented that he could have done so.

74. Mr. Abrey had the torch in his left hand, and the solder in his right. He is right handed. He held the torch above the piping and pointed it downwards towards the ground. He had a bucket hanging on a hose bib to catch any flux (melting solder). It took him about a minute to solder the two joints to the existing piping. He then turned off the torch, used a damp cloth to wipe the joints, and let the solder set for about 15-30 seconds. (AF-55)

75. When soldering the piece back on he again set the flame on the torch to a two-inch length. He turned it on while on the ladder at stomach level and then raised it, all the while pointing the flame downwards in order to do the soldering. When soldering with an open flame the flame wraps itself around the pipe and the solder is applied to the bottom of the pipe. As the solder melts it also wraps itself around the pipe travelling upwards. Because of this the flame does not have to be pointed upwards. The flame only contacted the pipe and solder. There was no evidence that the flame contacted anything combustible. Mr. Abrey did acknowledge that despite the flame being directed downwards there was some heat above the pipe. He was also aware that copper pipe conducts heat.

76. Mr. Abrey completed the repair at 2:45 p.m. (AF-56)

77. He remained on the ladder for two minutes with his head in the joist space. There was no sign of fire. There was no smoke other than the smoke coming from the hot solder which he had just wiped down with the damp cloth. He wet down the work area.

78. Mr. Abrey was aware that he was to remain on site for 30 minutes in order to insure there was no fire. To him this meant that he had to remain on the premises for 30 minutes, not that he had to stand on the ladder for 30 minutes staring at the soldering job and the work area.

79. The water was then turned on. Mr. Abrey started to clean up the area. He went to the boiler room to tell Mr. St. Jules that the job was done and the pipe repaired. Mr. St. Jules walked to the recreation room and inspected the work from the floor. Mr. Abrey did not see, hear or smell any fire when Mr. Jules was there. He packed up all of his tools. He went up the ladder one last time to check the work. He unplugged his halogen light. He left the recreation room at 3:15 p.m. It took him 5 minutes to pack up his truck and fill out his work order, get paid and leave.

80. At no time did Mr. Abrey observe any sign of fire. (AF-57) If he had he would have used the fire extinguisher.

81. Mr. Abrey left the property at 3:20 pm. (AF-58)

82. The time between when the repair was completed and when Mr. Abrey left the property was 35 minutes. It is agreed he completed the repair at 2:45 p.m. and it is agreed he left the property at 3:20 p.m.

83. Mr. St. Jules’ evidence was that it took 15 minutes for Mr. Abrey to pack up, prepare the work order, get paid and leave. This would mean that his fire watch ended at 3:05 p.m. after 20 minutes. I do not find Mr. St. Jules’ evidence on this to be reliable. He was not sure whether he arrived at the property on October 30, 2009 at 12:00 noon or 12:30 p.m. The parties agreed it was actually at approximately 12:45 p.m. He thought Mr. Abrey arrived at 2:00 p.m. or perhaps 2:30 p.m. He actually arrived at 2:24 p.m. Mr. St. Jules thought he left the property at 3:30 p.m. or 3:40 p.m. He actually left at 3:47 p.m. When he inspected Mr. Abrey’s work he could not recall whether he did so from the ground or whether he climbed the ladder. His evidence changed. I find his evidence as to timing to be similarly unreliable.

84. The suggestion was also made to Mr. Abrey that he in fact left the recreation room at 3:10 p.m., or 25 minutes after starting his fire watch, not 3:15 p.m., again based upon his statement written after the fire. For the reasons already given as to Mr. Abrey’s credibility and reliability, I accept that he stayed to 3:15 p.m. Moreover, Mr. Abrey was adamant that based upon his training he had to conduct a 30-minute fire watch. I do not find it plausible that being aware of the 30-minute requirement he would cut it short by 5 minutes. I find as a fact that he carried out a 30-minute fire watch in the recreation room.

85. Mr. St. Jules left the property at 3:47 p.m. (AF-59)

86. At no time did Mr. St. Jules observe any sign of fire. (AF-60)

87. At 3:51 pm, a 911 call was made reporting a fire at the property. (AF-61)

88. The fire department arrived at 3 Chedington at 3:57 pm. (AF-62)

89. The fire was substantial. Numerous fire trucks were present and water was poured onto and into the house for hours in order to put the fire out. Large portions of the roof burned away or collapsed. The interior, especially the third floor, was severely damaged. The contents were either destroyed or severely damaged by both smoke and water. The structural integrity of the entire house was uncertain.

Fire Investigation

90. The Fire Marshal determined the origin of the fire was the basement ceiling space where Mr. Abrey had used a torch and solder to conduct the pipe repair. (AF-63) The actual fire started in the joist space where the photograph, Exhibit 19A, shows a copper pipe travelling from the basement to the main floor. This is the joist space beside the joist space where Mr. Abrey actually carried out his work.

91. Two experts were called by MTCC 1100 to give opinion evidence on the origin and cause of the fire.

92. Chubb Insurance, Mr. Fingold’s insurer, retained Steve Probst. He attended the site on November 3, 2009 and was let into the premises by the Ontario Fire Marshall. He investigated the basement, the main floor and the second floor. He could not go to the third floor as it was not safe. He observed that the fire had not burnt into the rooms or halls but had been contained within the house structure. In his opinion the interior of the walls had acted as an avenue for the fire and the fire would have quickly moved up through the walls and house looking for oxygen and combustibles.

93. He looked for the lowest burn point in the house, believing that would be the probable area of the fire’s origin and located it in the ceiling of the basement recreation room. Exhibit 19A was taken from Mr. Probst’s report. Mr. Probst concluded that the fire started in the joist space immediately above the pipe marked as “B” underside the area where the bottom of the flooring was burnt. He noted that the joist space to the left and right were untouched by fire. This was consistent with the Fire Marshall’s conclusion.

94. Mr. Probst eliminated the electrical system, smoking or arson as causes of the fire. When he was advised that soldering work had been carried out he concluded that an open flame from a torch, which was the most reasonable way to solder, had ignited some combustible materials in the burnt joist area. He concluded that the pipe which had been soldered was a 3/4 inch pipe (erroneously stated by him as being a 1/2 inch pipe) and that an open flame directed upwards towards the elbow joints of this pipe, located within the area of the burnt joist space, could have impacted the dry wood flooring or joist or some hidden paper or horse hair insulation or any number of things that were combustible within the joist space and started a fire.

95. Steven Silver was retained by Novex Insurance, MTCC 1100’s insurer. He attended the site on November 6, 2009 and was let into the premises by the Ontario Fire Marshall. He went through the house with the exception of the third floor. He concluded that the fire was an internal fire within the house and not an external fire which had entered the house. He also concluded that the fire had originated within the wall cavities and that any damage to the rooms had occurred when the fire had exited from the cavities into the rooms themselves. He concluded that the fire had commenced in the basement, which was the lowest point in the house, and had then risen upwards through the wall cavities.

96. As to the cause he eliminated the electrical system, the heating system, a lightning strike, smoking, spontaneous combustion or arson. When informed by the Fire Marshall’s Office that a plumber had been in the recreation room prior to the fire to fix a leaking pipe and had soldered the connections, Mr. Silver concluded that it was most likely that this had caused an ignition in the joist cavity, that led to the fire, as it was standard practice to solder with an open flame torch. He concluded that it could have been horse hair, sawdust, wood or some loose combustible debris which had initially ignited.

97. In his opinion these materials were above the cementitious ceiling and must have been ignited by the open flame coming into contact with them. He was unable to say whether the materials then began to flame or underwent a smoldering combustion, where it could take time, depending upon the availability of fuel and oxygen, before turning into flaming combustion.

98. Over the weekend, Solid Restoration, contractors retained by Novex’s adjusters, Novex being the insurer for MTCC 1100, put up fencing around the site and started the site clean-up.

99. On November 2, 2009 the City of Toronto issued an Order to Remedy Unsafe Building. The November 2, 2009 Order required that the following be done,

a. Provide a professional engineer’s report on the procedure to stabilize the structure immediately,

b. Provide a professional engineer’s report on the plan to repair the damaged structure. Obtain a building permit for approved repair work, and

c. Provide an environmental consultant’s report on environmental hazards on the site and a remediation plan for any hazards.

100. On November 2, 2009 Jeff Shurtleff, the head adjuster appointed by Novex, was on the scene. He was aware of the Order to Remedy from the City and knew he had to work on this Order. He also knew that the site had to be made secure, that he required structural engineers, as the house looked like it might collapse, and that remediation work needed to be done on the condominium towers.

101. On November 2, 2009 Angelo Luongo, a senior claims adjuster for Chubb, the insurer for Mr. Fingold, was also on the scene. Chubb, as Mr. Fingold’s insurer, was solely responsible for any contents loss. Mr. Luongo also thought, at the outset, that Chubb was responsible for the entire house including any reconstruction because Chubb’s policy was a replacement policy. Being aware of the Order to Remedy from the City he retained a structural engineer, Robert De Berardis, to carry out a structural investigation to assess the extent of the damage and how to comply with the City’s Order. Only later did he become aware that Novex, as the insurer for MTCC 1100, actually covered the house.

102. Soon thereafter another contractor, ServiceMaster, was brought in by Chubb, to replace Solid Restoration and they took over control of the site.

103. As the house was a designated historical house, and having worked on other fire damaged heritage properties, Mr. De Berardis was aware that every effort had to be made to restore and return the house to its original condition. He reported this to Mr. Luongo on November 12, 2009.

104. Mr. De Berardis also reported that the house required shoring and bracing in order to be stabilized. He also retained an environmental consultant as required by the City’s Order.

105. By November 19, 2009 Maple Environmental Inc. prepared a report with respect to a survey it conducted with respect to hazardous materials at 3 Chedington. As detailed in its report, Maple Environmental found asbestos in various locations at the House. (AF-65) Maple Environmental also found mould in the house.

106. On December 17, 2009 the Ministry of Labour issued a Safe at Work Order Building. The Order required, that the owner of the property have a report prepared with respect to (a) the presence of asbestos at the property, and (b) the stabilization of the damaged structure. (AF-66)

107. The Ministry Order halted all work at the house. By December, 2009 Novex had incurred expenses of $112,723. The Order led to further consultants being retained to prepare bracing and shoring plans, which were done by early January, 2010.

108. As early as January, 2010 MTCC 1100 wanted the house demolished. As Mr. Field explained, most of the residents of the condominium towers considered the burnt out house to be an eyesore. There was also great concern over the delays and the inconvenience caused by the remediation work. However, due to the historical designation, demolition was not possible, the City was insisting upon the house being rebuilt.

109. Mr. Fingold also wanted the house to be rebuilt. He wanted to have the house rebuilt so that he could convert the interior into 3 units. But to build the 3 units he had to make the third floor higher. To do this he required the historical board and MTCC 1100 to be onside with his plans.

110. As of January 27, 2010 the Ministry of Labour lifted the stop work Order at the House. (AF-67)

111. On March 30, 2010 the City of Toronto issued a Building Permit. (AF-68) However, the permit given was only for the installation of a temporary roof in order to try to protect the remaining house structure. The permit also required compliance with the bracing and shoring plans that had been prepared by the consultants.

April 2010 to September 2010

112. No work was done on the house from April 1, 2010 to September 9, 2010. (AF-69) Despite there being no work on the temporary roof, Chubb continued to incur expenses with its various consultants and ServiceMaster. As well, Novex had to pay MTCC 1100 for common area expenses that were to have been paid by Mr. Fingold. During this time MTCC 1100 was still trying to assess whether it should proceed with a rebuild of the house and retained further consultants to provide their views. Nal Engineering recommended demolition. Mr. De Berardis remained of the view that the house could be restored and repaired which was what Mr. Fingold basically wanted.

113. On September 9, 2010 the City of Toronto issued an Order to Comply. The Order noted, inter alia, the requirement for any repairs to be done in accordance with Heritage Property Standards. (AF-70)

114. The September 9, 2010 Order to Comply was appealed by Mr. Fingold on September 24, 2010. (AF-71) He appealed, as the ordered work could not be done within the 20 days as required by the Order.

115. In response to the September 9, 2010 Order to Comply, De Berardis prepared an updated report. (AF-72) Mr. De Berardis remained of the view that the house could be restored to its previous condition. However, certain steps had to be taken to protect the house and to stabilize it. He reported this to the City.

116. On October 20, 2010 the City of Toronto issued an Order to Remedy Unsafe Building. The October 20, 2010 Order required, inter alia, that shoring be installed to eliminate the unsafe building condition and prevent further deterioration. In addition the October 2010 Order noted, again, that any repairs must be conducted in a manner that would preserve the designated heritage structure of the building. (AF-73) This basically followed Mr. De Berardis’ updated report.

117. Mr. Fingold’s appeal of the September 2010 Order to Repair was referred to the City of Toronto Property Standards Committee. The Committee met on November 24, 2010. (AF-74)

118. On November 25, 2010 the Committee ordered that steps had to be taken to protect the house.

119. As of November 29, 2010 Maple Environmental had prepared procedures for the abatement of asbestos and mold. (AF-75)

120. On February 23, 2011, while it considered the appeal, the City gave an extension of time to comply with the September 9, 2010 Order to Comply, confirming that the house had to be repaired and restored to its original historical designation. By December, 2010 Novex had incurred further expenses of $139,094.

121. As a result of the confirmation of the Order to Comply restoration and repair work continued throughout 2011 and into early 2012. By February, 2012 Novex had incurred further expenses of $2,126,034.

122. Asbestos abatement at the house was completed by November 23, 2011. (AF-76)

123. By February, 2012 MTCC 1100 had completed the temporary roof, had completed the bracing and shoring, had carried out much of the protective work and was hoping to start with the construction of the permanent roof, exterior brick repair and interior work, including wood framing repairs, in April, 2012.

124. At this point a dispute arose between Mr. Fingold and MTCC 1100 as to who was going to control the repair and rebuilding of the house.

125. As mentioned previously, Mr. Fingold and MTCC 1100 had had a different view as to what was to be done with the house, whether it was to be restored or demolished and if restored how this was to be done taking into account Mr. Fingold’s entitlement and apparent desire to create three condominium units within the house. In addition, Chubb and Novex had differing views as to who was responsible for what costs. As well, Mr. Fingold and his insurer, Chubb, had differing views over what Chubb’s obligations were under its policy. On top of this, there were the various orders from the City and the Ministry of Labour and the ongoing issues as to what was to be done, when and how it was to be done. Mr. Fingold understood from the adjusters involved that they, despite all their years of experience, had never seen a file as complicated as this one.

126. On July 19, 2012, Justice McEwen heard the application between Mr. Fingold and Chubb on the one hand, although Chubb took no position with respect to the relief sought by any of the parties, and MTCC 1100 and Novex on the other. On July 31, 2012 he released an endorsement and on September 12, 2012 released his reasons.

127. Justice McEwen found that MTCC 1100 was entitled to direct the installation of the permanent roof, the repair and rebuilding of the exterior of the house, and that Mr. Fingold was entitled to repair and renovate the interior of the house.

128. Novex’s expenses relating to the property continued to grow. Between February 1, 2012 and April 1, 2012 Novex incurred further expenses of $147,522. Between then and July, 2012 Novex incurred further expenses of $222,478.

129. In late 2012 Mr. Field met a City Councillor named Jaye Robinson at an event. Robinson was Councillor for the area where the house was located. He arranged to meet her again and at that subsequent meeting went through the history of the matter, and explained to her that MTCC 1100 wanted to demolish the house but could not do so due to its historical designation. She suggested to him that despite the designation demolition was a strong possibility.

130. With demolition as a possibility MTCC 1100 and Mr. Fingold began to discuss demolition rather than rebuilding, which had been the focus up to that point. At the same time E.R.A. Architects was retained to prepare an application to obtain a permit to demolish 3 Chedington Place.

131. On February 20, 2013 a standstill agreement was entered into between MTCC 1100, Mr. Fingold, Chubb and Novex. The agreement provided, among other things, that the parties would refrain from taking any reconstruction steps or legal proceedings pending the issuance of a demolition permit. If the permit was issued Novex and Chubb were to pay $725,000 to MTCC 1100, $8,875,000 to Mr. Fingold and $183,507.24 to MTCC 1100 for the cost of removing the scaffolding and concrete pads and in return MTCC 1100 and Mr. Fingold would release Novex and Chubb. Mr. Fingold considered the payment to him to be a compromise number and not what he would actually lose if he gave up his development rights.

132. The application to obtain a permit to demolish 3 Chedington Place was submitted to the City by E.R.A. Architects in February 2013. (AF-77) The application was dated February 20, 2013 and was submitted with a letter dated February 21, 2013.

133. The City of Toronto reviewed the application in May 2013 and recommended approval of the request to demolish, subject to various conditions. (AF-78)

134. On May 31, 2013 the Toronto Preservation Board recommended the demolition of 3 Chedington Place. (AF-79)

135. The North York Community Council approved the demolition of the House on June 18, 2013. (AF-80)

136. The Chief Building Official and Executive Director of the City of Toronto Building Department submitted a report to City Counsel on July 5, 2013 recommending the demolition of the House. (AF-81)

137. MTCC 1100 and David Fingold applied for a demolition permit on July 8, 2013. (AF-82)

138. The City of Toronto formally approved the application for a demolition permit on July 16, 2013. (AF-83)

139. The work to demolish the House commenced on August 1, 2013, and was completed by August 31, 2013. (AF-84) Novex incurred expenses of $937,651.85 from August 1, 2013 to August 31, 2013 to stabilize the House, obtain the permit, demolish the House and landscape. This included expenses with Service Master, E.R.A. Architects, other consultants and legal fees.

140. Once the demolition started Novex and Chubb made payment pursuant to the standstill agreement as directed by MTCC 1100 and Mr. Fingold.

141. Once the demolition permit was obtained Mr. Fingold’s interest in MTCC 1100 was deleted by court order amending the condominium declaration. Eventually a garden was built where 3 Chedington Place had once stood.

Negligence

142. The plaintiffs sue in negligence. There are two issues, both of which turn on the facts: causation and standard of care.

Causation

143. All of the expert evidence as to the cause of the fire concluded that the fire started in the basement ceiling space immediately beside the location where Mr. Abrey had actually carried out his soldering work.

144. Both Mr. Probst and Mr. Silver concluded that combustible materials must have been ignited by an open flame from a torch. Mr. Probst concluded that an open flame directed upwards towards the pipe below the pipe marked as “B” on Exhibit 19A must have ignited some wood or paper or horse hair pipe insulation or other combustible leading to the fire. Mr. Silver concluded that combustible material above the cementitious ceiling must have been ignited by an open flame coming into contact with the material.

145. The difficulty with their opinions is that on the agreed facts the torch was pointed downward towards the ground when Mr. Abrey did the soldering. Mr. Abrey also testified and I accept his testimony that he lit the torch at stomach level and then raised it, all the while pointing the flame downwards in order to do the soldering.

146. The additional difficulty with Mr. Probst’s evidence is that he assumed that Mr. Abrey had soldered the pipe located below the pipe marked “B” on Exhibit 19A when the work was actually done on the pipe located at “A” on Exhibit 19A. This assumption by him fit in with his theory that an upward flame used near location “B” had started the fire.

147. No explanation or opinion was given as to how the fire had started in the joist area beside the joist area where the soldering work was actually done, especially where the open flame, which both experts concluded had come in contact with a combustible to start the fire was always pointed downwards.

148. While Mr. Abrey acknowledged that copper pipe conducts heat and that even with the flame pointed downwards there was heat above the pipe, no expert concluded that heat from the pipe or heat from the flame, could cause the fire without direct contact from the flame.

149. While the evidence is somewhat problematic, in that Mr. Abrey was the only one working in the immediate vicinity of the location where the fire originated, and in that soon after his work a fire started, there was no evidence that anything he did caused the fire. The plaintiffs argue that there was no explanation needed for the fire other than the fact that he used an open flame torch and that materials do not spontaneously combust without some heat being applied to them. To the plaintiffs it was not important what caused the initial combustibles to ignite or how they ignited. They conclude that it must have been the flame from Mr. Abrey’s torch that started the fire. As I have indicated however, there was no evidence of this. They both agreed that at all times the flame from his torch was directed downwards and the evidence was that any combustibles were above the work and therefore the flame.

Standard of Care

150. Even if I could conclude that Mr. Abrey caused the fire I would still have to find that he breached the standard of care owed by plumbers in Mr. Abrey’s position for the plaintiffs to be successful. That Mr. Abrey owed a duty of care was not in dispute. Whether he breached the appropriate standard of care is disputed. The plaintiffs put forward no expert evidence as to the appropriate standard of care of a plumber doing soldering work.

151. The plaintiffs bear the burden of proving on a balance of probabilities that the defendant breached the applicable standard of care. The plaintiffs have framed the appropriate standard of care broadly, as that owed by plumbers conducting hot work with an open flame. The defendant has framed it more narrowly, as that owed by a plumber soldering two joints on half-inch copper pipe.

152. The plaintiffs seek to frame it broadly in order to try to encompass the National Fire Code of Canada 2005 and those cases where welding activity led to a fire. The defendant’s framing is unduly narrow. In my view the question is: what is the standard of care for a reasonably prudent plumber performing soldering work?

153. The plaintiffs argue that no expert evidence as to the appropriate standard of care for a reasonably prudent plumber performing soldering work was required and the applicable standard of care is set out in the National Fire Code of Canada 2005, published by the National Research Council of Canada, certain CSA provisions, and the Ontario Fire Code.

154. The Ontario Fire Code in 2009, when the work was done, and specifically s.5.17, only applied to welding and cutting. It cannot be interpreted to also apply to soldering. The section was amended years after the fire to specifically add soldering, along with a number of other activities that use open flames.

155. Because of this the plaintiffs relied primarily upon the National Fire Code of Canada 2005 but there was no expert evidence that the National Fire Code of Canada 2005 formed part of the standard of care for plumbers in Ontario when doing soldering work in 2009.

156. The general rule is that expert evidence is required to establish the particular standard of care in a professional negligence case. There are two exceptions to the general rule. First, there is no need for expert evidence on “nontechnical matters or those of which an ordinary person may be expected to have knowledge”. Second, there is no need for expert evidence for “egregious” conduct where it is “obvious” that the defendant’s conduct has fallen short of the standard: 495793 Ontario Ltd. v. Barclay, 2016 ONCA 656, 132 O.R. (3d) 241, at paras. 53, 55 and 57.

157. The first exception does not apply. I find that soldering is not a nontechnical matter of which an ordinary person may be expected to have knowledge. The very fact that the plaintiffs rely upon the National Fire Code of Canada 2005, the Ontario Fire Code and CSA standards belie their argument that soldering is nontechnical.

158. Nor, in my view, does the second exception apply in this case. Mr. Abrey took precautions including wetting the area of work, being aware of combustibles, shielding them as practicable, having a fire extinguisher and conducting a 30 minute fire watch. There was nothing egregious about his conduct.

159. The plaintiffs suggested to Mr. Abrey that he could have used a rigid fire shield or a heat barrier spray. Mr. Abrey testified that he was unaware of the former and had never used the latter. Leaving aside the fact that there was no evidence that either would have been effective in the circumstances, if they actually existed in 2009, this further points to the need for expert evidence as to the standard of care. As Justice Epstein stated in Krawchuk v. Scherbak, 2011 ONCA 352, 106 O.R. (3d) 598 at para. 125 :

External indicators of reasonable conduct, such as custom, industry practice, and statutory or regulatory standard, may inform the standard. Where a debate arises as to how a reasonable agent would have conducted himself or herself, recourse should generally be made to expert evidence.

160. There was a debate not only as to what regulatory standards applied in 2009 but also as to how those standards should have been applied by Mr. Abrey. In my view it was incumbent upon the plaintiffs to lead expert evidence to establish the appropriate standard of care in order for the court to find that it had been breached. They did not do so and because of this their claims must be dismissed.

Damages

161. If I am wrong as to liability and the plaintiffs have proven negligence the defendant also defends on the basis that the plaintiffs have not suffered any loss, in that Mr. Fingold sold his interest to MTCC 1100 for more than it was worth, immediately prior to the fire and that MTCC 1100 got the benefit of a garden where the house had once stood so that it too did not suffer any loss. The defendant also argues that the expenses incurred subsequent to the fire were excessive and caused by the delay in demolishing the house, for which it cannot be held responsible, that Mr. Fingold was overpaid for his house contents and that the house itself was not as valuable as claimed by the plaintiffs.

Expenses

162. MTCC 1100 and Chubb incurred expenses following the fire totaling $3,859,867.76. The plaintiffs claim this amount from the defendant. The defendant did not seriously challenge that these expenses were actually incurred or that the amounts were not reflective of what was done. Rather, its position was that if the house had been immediately demolished that the cost of doing so would have been substantially less, more in the range of $477,000.00, as opined by Mr. Cochrane, its expert on demolition costs.

163. However, due to the historical designation of the house, the plaintiffs had no alternative but to comply with the orders from the City and the Province, regarding what was to be done with the house and how it was to be done.

164. I do not think that the plaintiffs can be faulted for not immediately seeking a demolition permit for the house. They reasonably believed understood that the house had to be rebuilt, at least on its exterior, to the condition it was prior to the fire. To do so was expensive and time consuming. The property had to be protected, the house stabilized, shoring and scaffolding erected, a temporary roof built, environmental contamination removed, plans developed and multiple consultants and companies retained. In addition, MTCC 1100 had to be paid for its lost common area expenses.

165. No evidence was led by the defendant to suggest that the City would have been prepared to allow the demolition in late 2009 or early 2010 or that the plaintiffs were unreasonable in thinking that the City meant what it said when it issued the Order to Remedy immediately after the fire. The plaintiffs and their insurers behaved reasonably and responsibly following the fire. They retained experts to advise them on how to comply with the various orders and the required rebuild of the house. The City continued to be adamant that the rebuild had to take place.

166. While work on the property stopped between April, 2012 and July, 2012 when the plaintiffs had their dispute over who was going to control the repair and rebuilding of the house there was no evidence led to suggest that the $222,478.21 spent in this time period could have been avoided or that the dispute itself caused these expenses. These were ongoing expenses that would have been incurred with or without the dispute.

167. The eventual obtaining of the demolition permit was an unforeseen event resulting from a chance meeting between Mr. Field and a local politician. There was no suggestion and certainly no evidence that Mr. Field should have sought out this politician or another politician at any earlier date to obtain a demolition permit or that if he had he would have been successful in obtaining a permit.

168. As well, up until the fall of 2012, Mr. Fingold wanted to proceed with the rebuild as he saw this as an opportunity to build and sell three valuable condominium units. However, by the fall of 2012 he had changed his mind and was prepared to give up his rights to rebuild if a payout figure for his interest could be agreed upon. By then he was uncertain of the market for three units, he was unclear as to the cost to build the units and did not know whether he would be able to raise the roof and put in different windows because of the historical designation on the house. As well, he testified that the 70 condominium owners in the towers, many of whom he knew, blamed him for the ongoing uncertainty and mess of the construction and refurbishment. He was also concerned that without MTCC 1100’s complete cooperation in any reconstruction, any rebuild might be impossible or at least prohibitively expensive. As he saw it, getting paid, if the house could be demolished, was a compromise for everyone and a practical solution.

169. Mr. Fingold had had this change of heart by the fall of 2012. Until he did, MTCC 1100 had to proceed with the rebuild and had to incur all of the associated costs. Accordingly, damages of $3,859,867.76 are appropriate.

Contents

170. Mr. Fingold was paid $1,157,943.13 plus tax for his personal property, destroyed or damaged beyond repair in the fire. This consisted of art work, furniture, rugs and window coverings. None of the house contents were replaced or restored.

171. Mr. Luongo, the adjuster for Chubb retained a number of companies to provide estimates for the repair or replacement of the known contents, which were mainly on the main floor and the second floor and basement. There was a certain amount of guesswork as to the third floor contents as the third floor had been destroyed. He concluded that Mr. Fingold should be paid $211,943 as the replacement costs for the items destroyed and damaged in the fire, consisting primarily of rugs, artwork and furniture.

172. Mr. Fingold was unhappy with this amount and felt it did not reflect the value of everything that had been lost in the fire. As a result he got an interior designer, Brian Gluckstein, who apparently had some familiarity with the house and its contents to negotiate the replacement costs with Mr. Luongo.

173. Mr. Gluckstein put together a four-page document, listing the rooms in the house, what was in each room, whether drapery, furniture or carpeting and put a price to each item. His total for everything including accessories and light fixtures came to $1,394,080. Mr. Luongo deleted accessories and lighting costs of $393,000. He also said in his testimony that he deleted all of the wall-to-wall carpet costs on Mr. Gluckstein’s list as this would be considered part of the building and not part of a contents claim. He concluded that based upon the Gluckstein letter that an additional $946,000 should be added to his initial assessment of $211,943 for a payout of $1,157,943 plus tax for a total of $1,303,856.

174. It was unclear to me how removing the wall-to-wall carpet estimates, which in the Gluckstein letter, totaled $115,000, from the figure of $1,001,000, also from the Gluckstein letter, achieved a total of $946,000.

175. Mr. Gluckstein was not called as a witness. There was no documentation provided to back up the bald figures in his four-page list. Nor was there any evidence that all of the items listed by him actually existed. There was no evidence from Mr. Gluckstein on this. There was no evidence from Mr. Fingold that the items actually existed.

176. While Mr. Luongo, on behalf of Chubb, was entitled. if he wished, to accept the letter from Mr. Gluckstein and to pay out what Chubb wanted to Mr. Fingold, the defendant is not automatically liable for this amount. Mr. Fingold is still required to prove his loss. In fact, based upon the evidence of Ms. Donnelly who was called by the defendant and who I accepted as an expert in personal property, antiques, fine arts, furniture and fabrics, it was highly questionable whether many of the items listed by Mr. Gluckstein as being on the third floor of the house, were there, particularly when one compares what he listed as being on the second floor against what the photos, taken after the fire, showed as actually being in the rooms. As one example, Mr. Gluckstein listed a boardroom table and 12 chairs as being in the second floor boardroom. The photo showed perhaps a total of 5 chairs and a small table.

177. I prefer Ms. Donnelly’s evidence over Mr. Luongo’s as to the value of the contents. She went through the various reports and appraisals used by Mr. Luongo and various photographs from the house after the fire and the Gluckstein list. She also valued the individual items of furniture shown in the photographs and matched them up against what had been listed in the reports given to Mr. Luongo. She investigated the replacement cost of the items with antique dealers and used furniture vendors she was familiar with.

178. She concluded that Mr. Gluckstein’s list and values bore little resemblance to what had actually been in the house just before the fire from her observations of the post fire photographs. By extrapolation she concluded that the values for the third floor contents were also exaggerated. She also concluded that some of the replacement costs given to Mr. Luongo were inflated.

179. The Gluckstein list does not prove anything. If Ms. Donnelly had not given evidence I would have been left with the figure of $211,943, Mr. Luongo’s original valuation, as being the loss associated with the contents. Ms. Donnelly concluded that the replacement cost for the contents amounted to $495,793. I am prepared to accept this figure. Her assessment of what was on the third floor, based upon the unreliability of what was on the second floor was reasonable. She did not exclude the possibility of there being anything on the third floor. She estimated there to be $136,900 worth of drapery and furniture on the third floor which, in the circumstances, is a reasonable figure. She analyzed the floor plans and elevations to try to determine the drapery costs. She allowed for 4 furnished rooms on the third floor based upon Mr. Fingold saying on discovery that there were 5 to 7 furnished rooms on the second and third floors and the photos which disclosed three furnished rooms on the second floor. In this she was generous. She tried to estimate a furnishing cost based upon how the other rooms were furnished.

180. The defendant argued that I should accept Ms. Donnelly’s cash value figure of $264,747, which takes into account depreciation of the replacement costs figure.

181. I see no reason for applying depreciation in the circumstances of this case. Furniture and drapes, especially antique furniture are not like roofs. The replacement of a used roof with a new roof results in betterment which needs to be adjusted for. The replacement of used furniture with identical or similar used furniture does not result in any betterment which would lead to depreciation. Ms. Donnelly’s figures were true replacement cost figures. While arguably the used drapes were to be replaced with new drapes I am not prepared to find that betterment comes into play. The lifespan of a set of drapes is more a function of fashion and style than a question of longevity. As well, there was no evidence given as to what an appropriate depreciation rate for drapery would be. Moreover, Mr. Luongo did not apply any depreciation in coming to his assessment of replacement costs.

182. All in all I consider $495,793 plus tax to be an appropriate amount to pay for the contents claim.

Loss of the House

183. Mr. Fingold retained Ms. Hicks to value the condominium unit, owned by him, on October 30, 2009, just prior to the fire. She valued 3 Chedington Place at $5,445,000.

184. The defendant retained Mr. Bender to value 3 Chedington Place, on October 30, 2009, just prior to the fire. He valued it within a range of $1,900,000 and $2,500,000.

185. Both Ms. Hicks and Mr. Bender were accepted by me as experts in real estate appraisal. Both experts were of the view that 3 Chedington Place was a very unique property and that as a result the standard valuation process of using comparables was problematic. They took different approaches to value the property.

186. Ms. Hicks valued the property by trying to compare it to sales of other upscale condominium units, which were part of converted heritage homes. Mr. Bender valued the property by trying to compare it to comparable freehold houses and then subtracting the land value from the overall value to arrive at a value for the equivalent of a condominium unit.

187. Ms. Hicks calculated the price per square foot for what she considered to be comparable direct sales. The prices ranged from $400/square foot to $580/square foot. She also looked at sales within the towers at MTCC 1100 and calculated that the two units looked at sold for $515 and $737/square foot. She also looked at condominium sales in a luxury high rise building and concluded that for a luxury building the larger the unit the higher the square foot valuation. She also reviewed the report prepared by Mr. Bender. She concluded that $500/square foot was an appropriate valuation so that 3 Chedington Place was worth $5,445,000 or 10,890 square feet x $500/square foot.

188. Mr. Bender concluded that the best way to value the property was to consider direct comparable sales in the Bridle Path and Rosedale areas of Toronto and then separate the cost of the land from the comparable sales in order to arrive at a figure for the cost of the building, which would then be the same as valuing a condominium unit. In his view, as a condominium unit is separate from the land, which is owned by the condominium corporation, this was the only way to value the building itself.

189. In order to carry out this calculation he took what he considered to be comparable properties, determined the lot size, multiplied the lot size by the land value per square foot, and subtracted this number from the sale price to come up with the value for the building structure itself. He then divided this number by the square footage of the building to arrive at cost per square foot for the building itself. On his comparables these ranged from a low of $127 per square foot to a high of $576 per square foot. He deducted the two highest figures, as he considered them to be outliers, and averaged the remaining four figures which came to $200 per square foot, which when multiplied by 10,890 square feet resulted in $2,178,000.

190. Against this number he then looked at actual sales in the two high rise towers at MTCC 1100 as a check and concluded that their average sale price per square foot was in the same range as his calculation.

191. There were problems with each of their approaches.

192. Ms. Hicks was unable to find any upscale condominium unit in a heritage property of comparable size. 3 Chedington Place was 10,890 square feet. The other heritage condominium units were from 3,249 square feet to 5,835 square feet. None were in the vicinity of the subject property but were in Rosedale and the Annex areas of Toronto. She acknowledged in cross-examination that there were no true comparable sales, as none were close to its size. She also acknowledged that being a heritage house it would have old wiring and plumbing and that there would be a limit as to what could be done with the building structure and that this, along with there being no central air conditioning would have an impact upon its selling price. She did stress however that there were some advantages in living in a condominium unit rather than a free-standing home in that everything outside the house is taken care of, there was no landscape maintenance, security was supplied and there were amenities such as pools and gyms that do not require maintenance by the condominium owner. She also acknowledged that there was no real market for a 10,000 square foot condominium unit such as this and that this was what made the property difficult to value.

193. Mr. Bender arbitrarily used numbers of $50, $100 and $150 per square foot for the market value of the lots depending upon their size, with $50 being used for a large site, $100 for a medium site and $150 for a small site. No basis was given as to how these numbers were arrived at. Yet they impacted greatly on the ultimate valuation calculation. He did provide some actual data on the sale of vacant land. These sales suggested that vacant land was $44 per square foot yet he did not use this number. His removal of the outliers, being the two higher values for the building cost per square foot, was based upon his professional judgment. He did not consider it appropriate to include the higher figures and to simply average them. In Ms. Hicks’ view, in her critique of Mr. Bender’s report, there was no reason to discard the higher numbers for the cost per square foot of the building. She also was critical of Mr. Bender’s valuation in that it ignored that the property had been assessed in 2008 at $2,831,000 and in 2009 at $2,807,750 and a first mortgage in the amount of $3,000,000 had been registered against the unit by HSBC in July, 2009. It also ignored the fact that Mr. Fingold bought out his sister-in-law’s half interest in the property for $1,670,000 prior to registering the mortgage. She was also critical of the entire approach used by Mr. Bender of trying to remove the value of land from freehold homes. As Ms. Hicks saw it this was not needed as a condominium unit does not own the underlying land in any event and that if one was going to value a condominium unit one should compare it to other condominium units. She preferred to look at real sales of real condominiums rather than a calculation that ignores market values.

194. In my view the methodology used by Ms. Hicks is preferable to that used by Mr. Bender. Mr. Bender’s analysis relied upon the sale of freehold properties as opposed to condominium properties. Ms. Hicks’ approach also relied upon market data in arriving at a value as opposed to a mathematical calculation based upon a variety of assumptions and judgment calls.

195. Mr. Bender’s valuation also relied upon land value figures that were unsupported in the evidence that was given. The best evidence of underlying land values was $44 per square foot yet this was rejected by Mr. Bender. No satisfactory reason that I could make out was provided for it being rejected. In assessing Mr. Bender’s evidence as a whole it seemed to me that his calculations and use of professional judgment were designed to achieve the desired result. Moreover, his eventual result ignored without any explanation the appraised values for the property, the registered mortgage which greatly exceeded his valuation and the purchase of 50% of the property for $1,670,000 just prior to his valuation date.

196. Ms. Hicks’ valuation was not without its faults. There were no properties of comparable size and the true market for this property was limited in size. She too picked a value per square foot with no real analysis as to why she chose $500 as opposed to some other number.

197. I am left with two drastically different valuations. Neither the plaintiffs or defendant suggested that I could make my own determination of value. Rather they argued that I had to choose one value of the two offered. Having found Ms. Hicks’ methodology to be preferable I value the property at $5,445,000 on October 30, 2009, just prior to the fire.

Uninsured Losses

198. Mr. Fingold also sues the defendant for uninsured losses totaling $399,642.02.

199. The defendant during the trial seemed to argue that these losses could not be put forward because no claim outside of the subrogated claims had been put forward by Mr. Fingold. The defendant in its submissions at the conclusion of the trial did not take this position. If it had, it was clear from the exchange on the discovery of Mr. Fingold that such a claim was being made.

200. The defendant argues that the amounts claimed for property tax, utility costs, costs related to the removal of an oil tank discovered on the property and legal fees incurred by Mr. Fingold were unforeseeable and remote. No issue is taken by the defendant as to the quantum of the amounts sought.

201. I find that the property taxes, utility costs and legal fees are recoverable and flow entirely from the fire. While the defendant may not have been able to foresee the various legal issues that arose following the fire, that required the retention of lawyers by Mr. Fingold, it should have known that if it caused the house to burn down serious legal issues would arise.

202. However, the finding of an abandoned underground oil tank and the costs associated with its removal are not something that the defendant should have foreseen as a consequence of the house burning down. As a result, $20,792.98 is to be removed from Mr. Fingold’s uninsured losses, resulting in total losses of $378,849.04.

Other Defences

203. The defendant has raised other defences. It argues that there was a sale of the property by Mr. Fingold to MTCC 1100 for more than its value, so that he suffered no loss and that as a result there can be no subrogated claim as he fully mitigated his loss. The defendant also argues that MTCC 1100 suffered no loss as it ended up with a garden and no diminution in value to its property from the fire. It also argues that this was not a true subrogated claim as the payments made by the insurers were non-indemnifying.

204. These are legal defences that I need not deal with having found there to be no liability because causation by and negligence of the defendant was not proven.

Summary

205. For the foregoing reasons the damages of MTCC 1100 are $3,859,867.76 for expenses incurred and $5,445,000 for the loss of the house for a total of $9,304,867.76. The damages of Mr. Fingold are the same amount for the loss of the house, $495,793 for the contents and $378,849.04 for uninsured losses. However, the claims are dismissed.

206. I would expect that the parties will be able to agree as to costs. If unable to do so the defendant, A & G Shanks, will provide me with costs submissions of no more than 3 typed pages, double spaced, along with a bill of costs, any applicable offers to settle and any appropriate case law within 3 weeks of today’s date. The plaintiffs will supply their responding costs submissions subject to the same directions within 3 weeks from delivery of the defendant’s submissions. There shall be no reply submissions.

HOOD J.

Released: December 4, 2017