Court File and Parties

COURT FILE NO.: CV-16-565285 DATE: 20190418 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: JASON DEZWIREK, Plaintiff

– and –

WAYNE SWADRON, WAYNE SWADRON ARCHITECT LIMITED, and HLD CORPORATION, Defendants

Counsel

Patrick Corney and Eliot N. Kolers, for the Plaintiff Eric S. Baum, for the Defendants, Wayne Swadron and Wayne Swadron Architect Limited Nadine Nasr, for the Defendant, HLD Corporation

Heard

March 14, 2019

Judge

G. DOW, J.

Reasons for Decision

[1] The defendants are the architectural and project manager entities. The architects are the defendants, Wayne Swadron and Wayne Swadron Architect Limited (“Swadron”). The project manager was HLD Corporation (“HLD”). They contracted with the plaintiff to build his dream luxury home in Muskoka in or about September, 2009. At the plaintiff’s request, it included floor to ceiling glass windows with aluminum frames used in commercial buildings to minimize the borders around the glass and to maximize the view. Some of the windows were known as and described as “Orillia windows”.

[2] The residence was completed, at a cost in excess of $10 million, and occupied before the winter of 2012 – 2013. The plaintiff deposed the property is generally occupied only seven to eight months a year. It was unoccupied more in the winter months. Following the completion of the building, the plaintiff (“DeZwirek”) began to encounter condensation and ice forming inside the residence around some of the windows during the winter months. In addition, custom black walnut interior finishes were fading.

[3] In his dealings with the defendants, both the architect and project manager, regular contact with their representatives occurred. For Wayne Swadron Architect Limited thus included Wayne Swadron himself and Peter Caudle. The principal contacts on behalf of HLD were Arron Stone, Bryce Davidson and Kris House.

[4] The initial investigation focused on ventilation issues. The problem worsened in the winter of 2013 – 2014.

[5] This led to an exchange of emails upon which both parties relied in January 2014.

[6] On January 11, the plaintiff forwarded pictures to Kris House, Bryce Davidson and Arron Stone showing the extent of the condensation and his awareness that his “neighbours just rebuilt their house and used floor to ceiling aluminum frames and do not have this problem even when it is/was 40 below. I also have aluminum frames in my office and I have never had the problem”.

[7] Arron Stone of HLD responds and the plaintiff relies on Arron Stone acknowledging the “magnitude of the problem” but noted the architect “was adamant we use them”. The windows installed were “the only option to obtain the desired look”. The problem could be fixed by first having an HVAC expert address the air flow and circulation in the building.

[8] The defendants rely on Arron Stone also advising of his agreement that the windows used were “inferior to the door studio windows. They are the standard in commercial applications, and never intended for residential application, a fact that was discussed on more than one occasion with Peter from Swadrons”.

[9] The defendants rely on the plaintiff’s response later that day advising his agreement that the HVAC had been investigated for over a year and stating “the problem is the windows”.

[10] Mr. DeZwirek forwards the email on January 12 to Wayne Swadron raising an issue that the “windows are useless in our climate without a thermal break”. The response by Wayne Swadron is that he is out of town but will forward the concerns to Arron Stone and Peter Caudle because he was sure that one or both would have a “clear recollection of the window specification and selection process”.

[11] On January 12 Kris House emails the plaintiff advising his agreement with Arron Stone that the air flow and humidity should be examined by a geothermal expert and “before we do anything window wise we need to get the mechanical right”. Mr. DeZwirek responds that he is agreeable with hiring an HVAC expert but noted that this “was not new”.

[12] On January 13, Dave from “Orillia Glass” advised Bryce Davidson he had emailed the plaintiff of their belief that it was a “humidity/Airflow issue” and that the windows had thermal breaks in them and was “the best glass available”.

[13] The defendants rely on DeZwirek’s response on January 14, “I don’t want to go into next winter, the 3rd, with this problem. Keep trying”.

[14] On January 27, Peter Caudle emails DeZwirek advising they had “used the same windows specs in other seasonal projects and not had any issues”. He had contact with the mechanical engineer who designed the project and it “sounds like HLD has been working on resolving this via the mechanical system already”.

[15] Moving forward to March 30, 2014, the plaintiff emails Kris House that “we need to know exactly why these things are happening, no guesses; so that we can truly know what to do about it. Are some of the windows faulty? Were they installed incorrectly? Speced incorrectly? What in the specs is the issue? What is the U-value of the windows and is it effecting both the interior wood and efficiency of the windows? Etc, etc, etc,”

[16] The parties next focus is on the exp Services Inc. report dated July 31, 2014 received by the plaintiff on August 8, 2014. The report describes its retainer as “cursory” which was defined as not involving the removal of interior or exterior finishes or disassembly of any of the windows. The purpose is to establish the cause of the condensation and ice buildup of interior surfaces around the affected windows during sub-zero outdoor temperatures. They were also tasked with developing a remediation strategy. The defendants rely on the comments in the “Conclusions and Recommendations” portion of the report. At page 15 the report states condensation and icing problems “are attributable to a number of compounding variables including: installing window and door framing and glazing assemblies that employ inappropriate materials and designs for the application”.

[17] The plaintiff relies on comments included in the report (at page 13) that “the following potential remedial options for consideration” are “presented as conceptual at this stage and would ultimately have to be further investigated and specified before implementation”. In addition, exp Services recommended (at page 15) a “more in-depth determination of the most appropriate remedial options to be carried out”. It should be noted the report outlined three proactive options with estimated costs in excess of $200,000.00 - $650,000.00.

[18] Mr. DeZwirek pursued the matter further with exp Services and the defendants rely on the engagement letter of August 28, 2014 which sets out three areas to be reviewed:

1. the design documentation and mechanical performance specifications;
2. a thorough onsite review of mechanical HVAC system; and
3. how indoor temperature and humidity was controlled with what remedial work was required.

[19] The plaintiff relies on his own lack of knowledge and expertise in the area and the fact the response by exp Services to this assignment is not until December 19, 2014. It contains a variety of recommendations such as reducing indoor humidity, improving the air circulation, relocating thermostats and monitoring the results. This report did not identify that the existing design or materials were substandard or negligently selected or installed. The date of this report was within the two years prior to the issuance of the December 2, 2016 Notice of Action.

[20] Throughout 2015 and 2016, DeZwirek moved forward with plans to refinish the fading black walnut and modify the windows and ventilation. Swadron and HLD remained involved and provided input.

[21] What spurs DeZwirek to seek legal advice occurs in July, 2016. He was advised by A. Gilles Morin of MQ Windows Inc., a company specializing in luxury residential properties that the windows being proposed to replace the original windows on the property were available for purchase and installation when the defendant, Swadron selected and the defendant, HLD Corporation oversaw, the installation of the existing windows.

[22] As indicated, the Notice of Action was issued December 2, 2016. It should be noted, for reasons identified below, that these defendants have third partied, four other business involved in the design and construction of the property: (Lori Morris Design, Orillia Glass & Mirrors Limited, BK Consulting Inc. and Door Studio North America/Beate Vuellers). Two of those third parties have defended the main action which included service of a Jury Notice.

Analysis

[23] The parties raised two issues. The first concerns the application of Section 5 of the Limitations Act, 2002, S.O. 2002, c. 24. The second raised whether the service of a Jury Notice by the third parties in the defence of the main action modified the conventional analysis.

[24] The parties agreed the first issue was one which was appropriate to determine as part of the summary judgment motion. That is, was there a genuine issue for trial in accordance with paragraph 49 of Hryniak v. Mauldin, 2014 SCC 7. As indicated by the events described above, the issue is whether, as stated in Section 5(1)(b) of the Limitations Act, supra, the claim ought to have been discovered more than two years before December 2, 2016.

[25] The test requires the evaluation of when a “reasonable person” in the circumstances ought to have known of the requisite elements of an action, being, to paraphrase Section 5(1)(a) of the Limitations Act, supra, that;

1. loss or damage had occurred;
2. the loss or damage was caused by the act or omission of someone other than themselves; and
3. having regard to the loss or damage, a proceeding would be an appropriate means to seek a remedy.

[26] It is clear DeZwirek was well aware before December 2, 2014 that loss and damage had occurred. I would also conclude in a broad sense that DeZwirek was aware that the defendant architect and defendant project manager were the entities he had contracted with to create the floor to ceiling glass windows and ventilation system which was resulting in the interior winter condensation and ice problem. Thus, they were the potential defendants.

[27] What is at issue is whether DeZwirek’s action were reasonable in all of the circumstances and whether a proceeding was an appropriate means to seek a remedy. Mr. DeZwirek relies on the following in support of this position: a) the luxury nature of the building supports the belief, if not the presumption, that the products and services provided were of the highest quality; b) the plaintiff’s own lack of expertise and the design and construction of a luxury property and, conversely, reliance on the expertise of the defendants in this regard; and c) the absence of any knowledge of the existence and availability of an alternative product which would remedy the problem.

[28] Both parties relied on the comments of the Court of Appeal in Lawless v. Anderson, 2011 ONCA 102 where this issue was reviewed. The defendants relied on the court noting discoverability, on an objective basis, includes the “exercise of reasonable diligence by the plaintiff” (at paragraph 22). Further, the court stated a plaintiff “need only have in her possession sufficient facts upon which she could allege negligence. Additional information will support the claim and help to assess the risk of the proceeding, but is not needed to discover the claim” (at paragraph 36).

[29] The plaintiff relies on the statement in this decision that determination of whether “a person has discovered a claim is a fact based analysis” (at paragraph 23). In this regard, the plaintiff submitted that to have commenced an action before July of 2016, the plaintiff would have been required to make allegations that he did not believe to be true. I agree. In the Lawless v. Anderson matter, the plaintiff had breast augmentation surgery in June, 2003 and was advised following that by the defendant that a second surgery was required to correct the first. She sees another plastic surgeon in November, 2003 who identified specific problems with how the surgery was inadequately performed. However, the plaintiff did not issue her Statement of Claim until receipt of a written opinion in June, 2005. This was more than one year before the one year limitation period the parties agreed applied at that time.

[30] The Lawless v. Anderson, supra decision was considered by the Court of Appeal in Brown v. Wahl, 2015 ONCA 778 and reaffirmed the discoverability test. That is, the court is required to address whether “the prospective plaintiff knows enough facts on which to base an allegation of negligence against the defendant” (at paragraph 8). As submitted by the defendants, it “does not require the prospective plaintiff know the exact extent or type of harm he or she has suffered, or the precise cause of his or her injury, in order for a limitation period to run” (at paragraph 15). However, applied to the facts of this matter, what is essential is the “precise cause” of the damage which is in issue. Alternatively, could DeZwirek’s luxury residence been designed, manufactured and installed in the manner intended, with the floor to ceiling windows, without the subsequent accumulation of condensation and ice forming in sub-zero outside weather? Mr. DeZwirek did not have a reason to believe that until July, 2016.

[31] I was also directed to two more recent decisions of the Court of Appeal. The first, Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., 2019 ONCA 47 paralleled the situation at hand. In that case, the plaintiffs retained the defendant to install an extensive ventilation or HVAC system in their home. It was completed in late 2006 and developed problems immediately after its installation. The difficulty continued through to May, 2009 when the plaintiff’s maintenance contract ended and was not renewed. The Statement of Claim was not issued until February, 2012. It was not until late in 2010 that the plaintiff received independent reports which identified deficiencies in the installation in the HVAC system. The action was dismissed by the motion’s judge and the dismissal was upheld on appeal.

[32] The defendants in this matter rely on the comments of the majority reasons of the Court of Appeal that knowledge of the “precise cause” (at paragraph 42) for the damage is not required and how the injury or damage happened “will be revealed through the legal proceeding and need not be known in advance for limitation purposes” (at paragraph 43). However, the plaintiff relies on the distinguishing nature of the facts, particularly Mr. Zeppa’s evidence that he was telling the representatives of the defendant in the summer of 2009 of his belief that the problem was not one of maintenance and that they had been lying to him from the outset. This differs significantly from the information, available to Mr. DeZwirek and what he believed.

[33] The Court of Appeal also noted and the plaintiff relies on the principle contained in the decision initially set out in Presidential MSH Corporation v. Marr Foster & Co. LLP., 2017 ONCA 325 that resorting to legal action might be “inappropriate in cases where the plaintiff relied on the superior knowledge and expertise of the defendant, especially where the defendant undertook efforts to ameliorate the loss” (at paragraph 48 of the Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., supra). The evidence of DeZwirek that such reliance occurred was not challenged in his cross-examination or in the evidence tendered by the defendants.

[34] Finally, in Presley v. Van Dusen, 2019 ONCA 66, a septic system installed for the plaintiff by the defendant, Van Dusen in 2010 had problems which required attention and repair in 2011, 2012 and 2013. The system was condemned in the spring of 2015 and the action commenced in August, 2015. The trial judge and Divisional Court failed to consider Section 5(1)(a)(iv) of the Limitation Act, supra. The Court of Appeal held to do so was an error in law and proceeded to address same. As part of its analysis, the court asked if it was appropriate to delay bringing an action and concluded the plaintiff’s reliance on the defendant’s superior expertise had occurred and it was appropriate to postpone the commencement of limitation “beyond the date on which the constitutive of elements were discovered” (at paragraph 17). Were it necessary to do so, I conclude this is what has occurred in this matter.

[35] The Court of Appeal also addressed the presumption under Section 5(2) that the claim arises “on the day the act or omission on which the claim is based took place, unless the contrary is proved” noting the threshold to displace the presumption is relatively low (at paragraph 24).

[36] I conclude it is insufficient for the defendants to rely on DeZwirek being aware of his neighbours having rebuilt their cottage with floor to glass aluminum windows without interior condensation ice given the custom design and construction of his residence. I also find it was reasonable for DeZwirek to conclude the commercial use of windows such as the ones installed in his luxury residence meant they were superior to regular residential windows rather than inferior. I find the initial report of exp Services failed to give DeZwirek sufficient information upon which to conclude he had an actionable claim against the defendants. This is because of the tentative nature of the comments contained the report about “potential or remedial options”, such options being “conceptual at this stage” and the need for a more “in-depth determination of the most appropriate remedial options”. Further, it was reasonable for DeZwirek, who was not trained or experienced in luxury residential building design and construction to rely on the skill and expertise of the defendants.

[37] In addition, their ongoing efforts to investigate and ameliorate the problem fits within the Court of Appeal statement in Presidential MSH Corporation v. Marr Foster & Co. LLP., supra as cited in Zeppa v. Woodbridge Heating & Air-Conditioning Ltd., supra (at paragraph 48).

[38] Regarding whether the existence of a jury notice somehow alters the above analysis, the first statement to make clear is that Rule 47 and the case law impliedly provides that any party (to quote the Rule) “may require that the issues of fact to be tried or the damages be assessed, or both, by a jury”. After a jury notice is served by any party, the action proceeds as a jury matter unless the jury notice is struck out. There is no property in a jury notice. Once served, the other parties abide by it unless it is struck out. Until it is struck out, any party may rely on it. It is not a relevant submission either positively or negatively in requesting the court strike out a jury notice to attempt to attribute or disown any ownership of the jury notice.

[39] As I understand it, the question raised before me was, given the existence of the jury notice, was there a higher threshold for granting summary judgment? The basis for this position is the clear and repeated statement by the Court of Appeal that the “right to trial by jury is a statutory right and a substantial one” (Hunt (Guardian of) v. Sutton Group Incentive Realty Inc., at paragraph 52). However in actions based in negligence, the test for liability uses the reasonable person standard, a task well suited for a jury to decide. It also serves to keep the bench, as triers of fact and assessors of damages, in touch with the community on issues of liability and the appropriate quantum for non-pecuniary damages.

[40] The submission becomes summary judgment should not occur unless no jury, properly instructed, could find for the party either facing summary judgment or dismissal of its claim. The mischief this presents is a party being able to raise the legal test or analysis necessary to obtain summary judgment simply by filing a jury notice.

[41] I was referred to Wallace v. Ralph-Edwards, 2019 ONCA 899 where this issue was addressed at paragraphs 43 to 51. I do not agree with the bald statement beginning at paragraph 49 that “there is no right to trial either with or without a jury under the Rules” (at paragraph 49) given my understanding of the law as stated above. I repeat, the right to trial by a jury is a statutory right and a substantial one. However, I agree with what I understand to be the meaning of the entire paragraph which concluded stating “that just because a jury may be well suited to determining an issue does not mean that a jury must determine the issue”.

[42] I also agree with paragraph 50 of that decision that the “summary judgment process is an adjudicative process that exists separate and apart from the trial process and which, in appropriate cases serves as an acceptable surrogate”. Further, if “the just and proportionate result in a case does not require a trial, it matters not that the trier of fact would have been a jury”.

[43] Most importantly, I agree with the statement contained in paragraph 51 of that decision that “while the filing of a jury notice may not change the test on summary judgment, it may be a factor to consider in assessing whether resort to the enhanced forensic powers under Rule 20.04(2.1) and (2.2) is appropriate”.

Conclusion

[44] Given my conclusion that this claim was not discovered more than two years before the Notice of Action was issued, the defendants’ motions are dismissed. It is unnecessary to further address what role, if any, a jury notice has in determining summary judgment motions. I agree with the parties that summary judgment motions are appropriate where the defence to the claim is it was not issued within the applicable limitation period is raised.

[45] The defendant Swadron provided a Costs Outline setting out partial indemnity fees, HST and disbursements of approximately $17,000.00. Within the Bill of Costs provided by the defendant HLD, the claim for partial indemnity fees, HST and disbursements for this motion was about $32,500.00. The plaintiff’s Costs Outline sought partial indemnity fees, HST and disbursements of almost $40,000.00. It should be noted that counsel for the defendant HLD made the majority of the submissions on the part of the defendants on a joint basis and that counsel for Swadron sensibly was able to incur less time in adequately preparing for the motion and making submissions. There does not appear to be any basis to award beyond partial indemnity costs.

[46] I appreciate plaintiff’s counsel being required to take all necessary steps to avoid dismissal of the action. The only concern I have is the use of actual rates by plaintiff’s counsel (upon which the partial indemnity rate at 60% was calculated) being $900.00 to $950.00 per hour for senior counsel (with 23 years’ experience) and $550.00 to $570.00 per hour for associate (with five years’ experience). While not wishing to restrict what a client may agree to pay their counsel, it does effect the cost to the other party when percentages of that hourly rate are used to claim costs.

[47] I am mindful of the direction given by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634 “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding rather than an amount fixed by the actual costs incurred by the successful litigant” (at paragraph 26). Thus, I fix the costs of the plaintiff at $35,000.00, inclusive of fees, HST, and disbursements payable by the defendants forthwith.

Mr. Justice G. Dow Released: April 18, 2019