2019 ONSC 709
COURT FILE NO.: 10270/15
DATE: 2019/02/07
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Hume Investments Ltd.
Duncan M. Macfarlane, Q.C., for the Plaintiff
Plaintiff
- and -
Aviva Insurance Company of Canada
Steven Stieber, Emily Stock, for the Respondent
Defendant
HEARD at Welland, Ontario: November 13-16, 19, 20, 22, 2018
The Honourable Justice D. L. Edwards
J U D G M E N T
Introduction
[1] The plaintiff brings this action against its insurer for indemnity under an insurance policy, alleging that its 59 unit apartment building located in Brantford, Ontario (“Hume Building”) was damaged by an earthquake, which had its epicentre in Ladysmith, Quebec (“Ladysmith Earthquake”), and that this type of damage was an insured peril under the insurance policy with the defendant.
[2] The defendant asserts that the Ladysmith Earthquake did not cause the damage to the Hume Building.
[3] For the following reasons, I dismiss the plaintiff’s claim.
Admitted Facts
[4] As a result of a Request to Admit and a Response, the plaintiff was deemed to admit the truth of the following facts (“Admitted Facts”):
a. The plaintiff is the owner of an apartment building at 55 North Park St. in Brantford, Ontario (the “Building”).
b. The plaintiff is the named insured pursuant to a policy of insurance for the buildings, including a building at 55 N. Park St., Brantford, Ontario issued by the defendant under policy No. REA 81579893 (hereinafter “the Policy”). The Policy was effective September 1, 2012, and renewed annually.
c. The Policy provided coverage, inter alia, for direct physical loss of or damage to the insured property caused by an insured peril. The Policy has an Earthquake Shock Endorsement to extend coverage to include the perils of an earthquake.
d. If the cause of the damages is not earthquake, then one or more of the following exclusions apply:
i. Settlement, expansion, contraction, moving, shifting or cracking are excluded perils under the Policy;
B. Perils Excluded
Coverage A Section I does not insure against loss of damage caused directly or indirectly:
(o) by settling, expansion, contraction, moving, shifting or cracking. This exclusion does not apply to loss or damage caused directly and concurrently by a peril not otherwise excluded in this form.
ii. Wear and tear and gradual deterioration are excluded losses under the Policy, faulty or improper workmanship is excluded under the Policy and faulty or improper design is excluded under the Policy.
G. OTHER EXCLUDED LOSSES
This form does not insure:
(a) (i) wear and tear;
(ii) rust and corrosion;
(ii) gradual deterioration, hidden or latent defects or inequality in property that causes it to damage or destroy itself.
This exclusion does not apply to loss or damage caused directly or by a resultant peril not otherwise excluded by this form;
(b) The cost of making good:
(i) Faulty or improper material;
(ii) Faulty or improper workmanship;
(iii) Faulty or proper design.
This exclusion does not apply to loss or damage caused directly by a resultant peril not otherwise excluded in this form.
e. The plaintiff does not claim in this action that there was a wind event causing damage.
The Building and Discovery of the Damage
f. The plaintiff purchased the Building in or about 2000 for approximately $2.8 million.
g. The Building was constructed circa 1976.
h. The Building is six stories with 59 apartments.
i. The structural systems of the Building consist of 200 mm (8”) precast concrete hollow-core floor slabs supported on 190 mm (8”) unreinforced load-bearing concrete block walls.
j. The Building was constructed lacking steel ties in the structure such that the floors were not tied to the bearing walls, thus reducing the overall lateral force resistance system.
k. Delta Elevator Co. Ltd. (“Delta”) was the elevator repair company that provided maintenance and responded to issues with the elevators at the Building.
l. Delta attended this Building on March 17, 2014, in response to a call respecting problems with the elevator.
m. During the course of this inspection, Delta noted vibrations while it was inside the east elevator. Delta reported going into the elevator shaft where it detected movement between the elevator and its guide rails. Delta noticed cracking in the concrete block masonry at the northeast corner of the elevator shaft. The elevator was taken out of service on or about March 19, 2014.
n. March 17, 2014, was the first time that the vibrations were reported. Delta did not report observing any other such vibrations on its previous visits.
o. March 17, 2014, was the first time that the cracks were observed in the masonry wall in the elevator shaft. Delta did not previously observe any such cracks, although it had attended the building to conduct preventative maintenance on August 22, 2013, December 2, 2013, and February 13, 2014.
p. The City of Brantford performed an inspection on March 25, 2014, and issued an Unsafe Order on March 27, 2014, which that required the building be reviewed, and a scope of required repairs be prepared by a professional engineer.
q. The plaintiff issued a Property Loss Notice March 27, 2014, and reported that there was cracking in the building (in an elevator shaft), and that they were investigating for structural damage.
r. The plaintiff retained CCI Group Inc. to address structural issues. On June 11, 2014, it issued a report with their initial findings and opinions.
s. The City inspected the building again on September 30, 2014, and issued an Order Prohibiting the Use or Occupancy of an Unsafe Building on October 2, 2014. The structural concerns from their previous order had not been addressed to their satisfaction.
t. The plaintiff retained Khatri International Inc., of Pasadena California, who produced a report dated December 15, 2014, entitled “Phase 1 Summary Report” in response to the City’s Order.
u. Dr. Khatri deemed the building “unsafe” and “un-repairable”.
Earthquakes and Ladysmith Earthquake
v. The location of the epicenter and the soil type beneath the building are contributing factors to the impact of the seismic event upon the building.
w. The Ladysmith Earthquake occurred on May 17, 2013, with an epicenter at Ladysmith, Québec, which is located at approximately 80 km NE Ottawa and approximately 427 km from the Building. The Ladysmith Earthquake was located at a depth of 14 km and had a moment magnitude (“M”) of 4.5. The maximum reported intensity was 6 to 7.
x. All geotechnical experts agree that the earthquake induced settlement is negligible and less than 0.01 cm.
Damage
y. The parties proceeded by way of Appraisal under the Insurance Act with respect to quantum of damages. The Appraisal Award provides that the:
value of the building repairs or reconstruction are at or in excess of the policy limits with respect to both Actual Cash Value and Replacement Costs, leaving aside any liability or coverage issues which are still the subject matter of the ongoing litigation.
z. The limit for the building is $7,277,485.00.
aa. The quantum of damages thus has already been established and it is not an issue for the trial.
Overview
[5] The sole question for me to determine is whether the Ladysmith Earthquake caused or contributed to the structural damage (which everyone agrees the Hume Building sustained at some point).
[6] The trial consisted of a judge alone trial lasting seven days. There were five fact witnesses for the plaintiff: Edward Hume, a principal of the plaintiff; Linda Hume, a general supervisor of the plaintiff at the relevant time; Robert Maxwell, the plaintiff’s superintendent of the Hume Building; Zoltan Lakatos, a professional engineer who the plaintiff first retained in March 2014; and David LeBlanc, who acted as the plaintiff’s adjuster in the insurance claim. In addition, Drs. Kharti and Ariannia both testified on the plaintiff’s behalf and were qualified to give opinion evidence.
[7] The defendant’s witnesses were Drs. Chidiac, Atkinson, and Southward, all of whom were qualified to give opinion evidence.
[8] Mr. and Mrs. Hume testified about the due diligence that they did when the plaintiff purchased the Hume Building around 2000. They both said that they did not observe any cracks at that time, but they did acknowledge that a professional engineer was not retained to examine the Hume Building.
[9] Mr. Hume, Ms. Hume, and Mr. Maxwell all testified about the maintenance program that the plaintiff had for the Hume Building. They all said that no cracks were observed in the building structure until the elevator incident in the middle of March 2014.
[10] They testified that there was an elevator maintenance contract with Delta Elevator Co. Ltd., and that Delta serviced the elevators, at a minimum, monthly. Each time, the service person would have been inside the elevator shaft. They also said that the Ontario government had mandated guardrails to be installed on top of an elevator cab so that a worker would not fall off the cab into the adjacent shaft. This work was completed in October 2013. To complete this work, Delta’s workers would have been inside the elevator shaft.
[11] They agreed that the wooden parquet floors in the Hume Building had been repaired from time to time, but they attributed the damage to water damage, either from condensation from windows or overflow from bathtubs. They denied the floors were repaired due to cracking or settlement of the building.
[12] Mr. Zoltan Lakatos, who is a professional engineer, testified that the plaintiff initially retained him to examine the building, but quickly determined that the problem was beyond the ability of his firm to deal with.
[13] David LeBlanc testified about his role as acting on the plaintiff’s behalf to assist it in negotiating its insurance claim.
[14] The expert witnesses on behalf of both parties gave opinions regarding the seismological, geotechnical, and structural engineering aspects of this matter.
[15] Significantly the experts all agreed that the force the Ladysmith Earthquake exerted upon the Hume Building was negligible. Where they disagreed was how the Hume Building would react to this negligible force. The testimony of the experts is critical to this analysis and, therefore, I will review that testimony in great detail.
Dr. Khatri
[16] After a voir dire, I qualified Dr. Khatri to give opinion evidence. He holds a Ph.D. in structural engineering, and his thesis involved concrete and its reaction to earthquakes. He practices primarily in the United States, with a focus in California. He has no prior experience in Ontario, but at the time of the trial held a Certificate of Authorization authorizing him to provide the services of a professional engineer in Ontario.
[17] Much of his initial evidence dealt with the construction of the Hume Building. It was an unreinforced masonry building. The load-bearing walls were constructed of concrete blocks. The floors (also called diaphragms by the engineers) are pre-stressed, pre-cast hollow concrete planks that are not tied to the concrete block walls, but rather are friction fit.
[18] He confirmed that there was no rebar in the Hume Building and that the building plans provided for 75% solid 8” concrete blocks for the walls of the first three floors and hollow 8” concrete blocks above. In his examination-in-chief, he said that 75% solid meant that three of the four holes in the concrete block were filled by the mason on site. In cross-examination, he corrected himself and acknowledged that 75% solid meant that the block arrived from the factory with 75% of the block being solid concrete and the remainder being open space. No site work was required to bring these blocks up to 75% solid.
[19] In his view, as built, the Hume Building was structurally very weak. In his examination-in-chief, he stated that when built, it complied with the applicable building code. However, in cross-examination, he said that he did not know if it was fully code compliant when it was built. His view was that the Hume Building’s capacity to resist forces was very low.
[20] He said that when he first visited the site, he thought that the problem was soil compression or settling. He ordered a survey of the level of the floors to be completed to determine whether the cracking was caused by differential settlement of the soil.
[21] He testified that this survey showed a 2.5” drop over the length of the Hume Building of 228 feet from west to east, and that the building also sloped from south to north.
[22] He described, in detail, the cracking that he observed, which was full separation vertical cracking of the load-bearing concrete block walls with separation occurring between the wall and planks at the connection point of the concrete block walls.
[23] He testified that the observed cracks were continuous vertical cracks with full separation running through several stories. He said that the cracks outside of the elevator shaft were observed once drywall was removed and that they were fresh cracks, with the lower floors having significantly wider cracks compared to the upper floors.
[24] He spoke about concrete shrinkage, and he said that 90% would have happened in the first 10 to 15 years and that there would have been no shrinkage in the concrete plank flooring as they were pre-stressed.
[25] In his examination-in-chief, he said that he did not observe any cracks on the Hume Building’s exterior. In cross-examination, he reviewed photographs of the exterior of the Hume Building and agreed that there was evidence of crack repairs in the exterior masonry walls.
[26] For the purpose of his calculations, he utilized Drs. Ariannia and Atkinson’s calculations that the Peak Ground Acceleration at the site of the Hume Building from the Ladysmith Earthquake was between .003 g. and .005 g., which he acknowledged is very low and would have a minor impact upon the Hume Building.
[27] He calculated the modulus of rupture which shows when an unreinforced masonry wall, which is subject to a lateral load, will deflect and crack. In his opinion, this is what he observed in the Hume Building.
[28] He said that the important thing was to calculate the capacity of the Hume Building to resist forces and compare that to the actual force exerted upon the Hume Building.
[29] He utilized a finite element model to calculate the Hume Building’s load capacity and nodal capacity, which he determined was between 500 to 1200 lbs per node. He acknowledged that this was an approximation for several reasons.
[30] He agreed that when the Hume Building was built, the building code directed that only if the ground motion at a building site exceeded 0.12 g was it necessary to undertake a seismic building design. However, he did not believe that the Hume Building could sustain ground movement of 0.12 g without cracking.
[31] In cross-examination, Dr. Khatri acknowledged that at the time the Hume Building was built, the building code permitted it to be built as designed. He had no experience in Ontario, so he could not comment upon how common that type of building was.
[32] He agreed that it was very unusual that the Hume Building, which was 427 km away from the epicentre of the Ladysmith Earthquake, was the only building damaged by that earthquake. However, he said that it is not unusual for damage from earthquakes to remain hidden for a period of time.
[33] He agreed that it was tough to link the cracks to a specific event. He could not comment upon what previous earthquakes may have done to the Hume Building. He said that he had not investigated to determine whether prior earthquakes may have exerted force upon the Hume Building but said that if such events had occurred, one could not distinguish which earthquake may have damaged the Hume Building. He was unaware of the seismic history of Brantford.
[34] Dr. Khatri agreed that there was no factual evidence as to when the cracks actually occurred.
[35] He agreed that Peak Ground Velocity is used to measure the impact of an earthquake upon a structure and that the threshold for cosmetic damage to a building is 2.0 inches per second. Also, the Peak Ground Displacement (“PGD”) is the maximum displacement measured at the base of a structure caused by an earthquake and the threshold PGD for cosmetic damage to a building is .075 inches. He agreed that this threshold was 20 times more than the PGD measured from the Ladysmith Earthquake, which was .00328 inches.
[36] Dr. Khatri agreed that Base Shear is a calculation by engineers who design a building to determine the lateral force events from wind or earthquakes which a building must be designed to withstand. He testified that one calculates the lateral force for both, and then utilizes the larger number to determine the Base Shear to which the building must be designed. He agreed that for design purposes the building code treats wind lateral force and earthquake lateral force the same.
[37] He stated that he did not study whether the wind lateral forces that the Hume Building sustained in the past had exceeded the lateral forces from the Ladysmith Earthquake. He had no reason to doubt the evidence that on at least five occasions the Hume Building sustained gusts exceeding 70 mph.
[38] During his evidence, Dr. Khatri acknowledged that his report was in error when it stated that the Base Shear load experienced by the Hume Building after the Ladysmith Earthquake was greater than the building would have experienced during a wind event of 70 mph. In fact, he agreed that such wind events would have put a Base Shear load upon the Hume Building which was 2.5 times greater than the Ladysmith Earthquake load.
[39] However, he testified that the Hume Building would react differently to an earthquake than a wind event. He said that whether one utilized a Peak Ground Acceleration of .003 g or .005 g., the walls would still crack.
[40] In summary, his opinion was that wind could not have caused the damage that he observed. He agreed that the Base Shear for a wind event of 70 mph at the Hume Building would be about 2.5 times greater than the lateral force created by the Ladysmith Earthquake but said that the wind Base Shear was a calculation based upon the building code, whereas the Ladysmith Earthquake Base Shear was based upon actual ground acceleration. He suggested that the building code had safety factors built in so that a building would be over-designed. He agreed that the building code allows one to treat Base Shear from wind and earthquakes the same, but he said that they impact a building differently.
Dr. Ariannia
[41] I qualified Dr. Ariannia to give opinion evidence on all elements involving issues of settlement of the building. He is a licenced professional engineer in California and worked in Ontario under Dr. Khatri’s Certificate of Authorization.
[42] The plaintiff retained him to consider the seismic impact upon the soil under the Hume Building. He analyzed the soil to determine its capacity and characteristics. He undertook certain bore holes as well as test pits to examine the soil.
[43] He said that he was attempting to determine the differential settlement of the soil under the Hume Building and to classify the site. This classification would assist in the calculation of the force that the Ladysmith Earthquake exerted upon the Hume Building as the type of soil between bedrock and the surface could increase or dampen that force. Based upon his measurements, he concluded that the site was a Class D. He said that the soil was softer under the west side of the Hume Building and stiffer under the east side. He found minor settlement of the Hume Building. He agreed that most of the settlement occurred in the western third of the Hume Building. In his opinion, 70% of the settlement would have occurred during or by the time of completion of construction of the building. He concluded that 1.8 inches of settlement would have occurred by the completion of construction and a further 1.77 inches from that time to present.
[44] He found no settlement from seismic activity.
[45] He acknowledged that he produced two reports: one dated August 15, 2016, and one dated August 22, 2016.
[46] The second report was undertaken because he felt that he should do supplemental calculations to deal with events unrelated to the Ladysmith Earthquake.
[47] He concluded that the Ladysmith Earthquake would have caused minimal soil settling at the Hume Building and agreed that there was no real difference between his conclusion and Dr. Atkinson’s conclusions.
[48] He agreed that the Ladysmith Earthquake would not have caused soil liquefaction at the site of the Hume Building.
Dr. Chidiac
[49] Dr. Chidiac testified on the defendant’s behalf, and I qualified him to give opinion evidence on structural engineering issues, including seismic issues and the impact if any, of the Ladysmith Earthquake upon the Hume Building.
[50] He said that when he examined the damage to the Hume Building, he examined the cracks and concluded that the type of cracks in the Hume Building was not the type which an earthquake could create. He testified that cracks from earthquake damage are criss-cross cracks between openings, whereas the damage that he observed at the Hume Building were vertical cracks.
[51] He said that criss-cross cracks are created because of the back and forth action of the force from an earthquake. He said that it is rare for there to be vertical cracks in the absence of diagonal cracks. He did not observe a single criss-cross crack in the Hume Building.
[52] He said that he also observed old cracks on the exterior of the Hume Building, some of which showed signs of having been repaired.
[53] He commented upon the impact of the type of structure to resist an earthquake. The stiffer the building, the more brittle it is. An unreinforced masonry building has less ability to absorb the energy of an earthquake as compared to buildings constructed from other material.
[54] He explained that the building code for a simple building such as the Hume Building, requires that one quantify the wind lateral load and the earthquake lateral load at the base of the building (“Base Shear”). Once quantified the building code does not differentiate between these types of loads. The engineer selects the higher number and designs the building to that standard. He said that is because a building reacts the same to both loads.
[55] He explained his approach to examining the cause of the damage to the Hume Building. He said that a seismologist was retained to calculate the energy of the Ladysmith Earthquake at the site of the Hume Building. He said that both defence and plaintiff experts agreed that the Peak Ground Acceleration at the Hume Building was between .003 g and .005 g. and that this was a mild earthquake which normally it would not cause any damage.
[56] He said that he also ordered a geotechnical study of the soil under the foundation of the Hume Building. Based upon this analysis, he concluded that the site was classified as a Class D site, which would result in the energy of the earthquake at bedrock being amplified by 40% up to the top of the soil.
[57] He calculated the two lateral loads (wind and earthquake) and demonstrated on his graph that the wind load at 70 mph was 2.5 times greater than the lateral load from the Ladysmith Earthquake. Because of this, he initially did not do any further analysis until he was instructed to do so by the defendant.
[58] He noted that the National Building Code does not distinguish between well-constructed and poorly constructed buildings. Further, if the spectral-acceleration value at a period of 0.2 seconds, as defined and calculated in accordance with that Code, is less than or equal to 0.12 g, then one need not consider the deflections and specified loading due to earthquake motions in designing a building. He testified that the design spectral acceleration for the Ladysmith Earthquake at the Hume Building was in the range of 0.0054 g, which is 4.5% of the threshold amount of 0.12 g.
[59] He calculated the maximum Peak Ground Acceleration of the Ladysmith Earthquake was .002 g, and the Peak Ground Velocity was .08 cm/s, which corresponds to an MMI of 3 to 4. He utilized the Base Shear calculation and increased it by a factor of 5 as per the most conservative figure provided by Dr. Atkinson.
[60] Dr. Chidiac testified that these findings were consistent with Dr. Khatri’s findings. He, however, disagreed with Dr. Khatri’s conclusion that this force could damage the Hume Building. Dr. Chidiac said that these results were below the threshold where damage to buildings could occur.
[61] He disagreed with Dr. Khatri’s evidence that because the Hume Building was heavy, that would give it a larger capacity to resist wind but a lower capacity to resist earthquakes. He said that the weight of the Hume Building is part of the calculation of the earthquake Base Shear calculation.
[62] He also disagreed with Dr. Khatri’s conclusion that there had not been horizontal movement of the slab floors from lateral forces. He said that unless there were expansion joints in place, cracks develop. There were no expansion joints in the Hume Building.
[63] Dr. Chidiac also disagreed with the model that Dr. Khatri employed in his analysis. He said that one cannot use the finite element model in the way Dr. Khatri did for masonry. He said that Dr. Khatri failed to properly calibrate the model. Further, he testified that the building code provides set numbers to be inserted in the model if one does not measure certain elements of the building. Even though Dr. Khatri did not measure the Hume Building, he did not employ those figures in his calculations.
[64] Dr. Chidiac said Dr. Khatri made several other errors while using the finite element model, including failing to apply the weight of the walls downward. He said that if Dr. Khatri’s calculations were correct, then the Hume Building would not have been standing prior to the Ladysmith Earthquake.
[65] He felt that the stick model was appropriate to this building. He calculated the lump mass per floor and added to it rotation and height to calculate the result.
[66] He said that the Base Shear from the wind lateral load at 70 mph was 2.5 times larger than the Base Shear from the Ladysmith Earthquake.
[67] He also reviewed the drift or displacement as well as the stresses from weight and concluded there were no issues.
[68] He noted that from 1980 to 2013 there were prior earthquakes with at least the same magnitude as the Ladysmith Earthquake at the Hume Building. He also noted that there have been at least five events between 1978 and 2000 at the Hamilton airport where wind gust exceeding 70 mph have been recorded, which would place a lateral force on the Hume Building which was 2.5 times greater than the force from the Ladysmith Earthquake.
[69] He said that if the load from the Ladysmith Earthquake was causing the Hume Building distress, the load from those wind events should have caused the Hume Building to collapse a long time ago.
[70] His opinion was that it was impossible for the Ladysmith Earthquake to have caused any damage to the Hume Building.
[71] He felt that Dr. Khatri’s Shear Force contour plot at page 272, tab 4.0-5 was misleading and wrong. The model was not properly calibrated. The contour plot was appropriate for a steel building, not a masonry building. Dr. Khatri assumed that the Hume Building was rigidly connected, which it is not, and made other assumptions with which Dr. Chidiac did not agree.
[72] He also said that Dr. Khatri’s sketch at page 219 of tab 3.4-1 was wrong as all of the arrows should be pointed in the same direction.
Dr. Gail Atkinson
[73] I qualified Dr. Atkinson as an expert in engineering seismology to give evidence about the ground motion at the site of the Hume Building and potential damage to buildings therefrom.
[74] She testified that prior to being retained for this matter, as a research project, she had undertaken a detailed study of the Ladysmith Earthquake and had published a peer-reviewed paper with respect to that work.
[75] In that paper, she plotted the observed ground motion of the Ladysmith Earthquake from many recording stations. At its epicentre, it had a magnitude of 4.5.
[76] She said that for that paper, she also obtained the reports of individuals as to their perception of the Ladysmith Earthquake. In total, there were approximately 5,800 responses. Those responses concurred with the instrumental observations of the earthquake’s magnitude. At the epicentre, the intensity was up to 5, and in southern Ontario, the intensity was between 2 to 3 (all measured on the Modified Mercalli Intensity scale).
[77] She said that the National Building Code states that an earthquake with a magnitude of less than 4.75 has no potential to cause damage. She said that there had been an M6 earthquake in Eastern Canada which caused damage as far away as 300 km, but most damage was found within 100 km of the epicentre.
[78] She is unaware of any damage to a building from ground motion with an intensity in the 2 to 3 range. Cosmetic damage to buildings generally occurs at an intensity of 6, and potentially weak buildings will sustain structural damage at intensities between 6 and 7.
[79] She calculated the Peak Ground Acceleration and Peak Ground Velocity of the Ladysmith Earthquake at the bedrock at the Hume Building and amplified them to take into consideration the type of soil between the bedrock and the Hume Building. She concluded the resulting calculation was more than a factor of 30 below the typical damage threshold.
[80] She also calculated peak spectral acceleration as a third measure of the force of the earthquake.
[81] In her opinion, there was less than 0.1% possibility that the movements from the Ladysmith Earthquake were strong enough to meet the typical damage threshold.
[82] She said that TYNO is a recording station that is 30 km away from Brantford. She did not use those numbers because she wanted to be more accurate by taking into consideration the effect of the soil under the Hume Building. She said that the results from TYNO would not have affected her conclusion.
[83] She calculated the expected intensity at Brantford to be 3, which she said was similar to the vibration from a passing truck.
[84] Dr. Atkinson testified that there have been seven previous earthquakes from the 1970s to present that would have produced a force of similar intensity as the Ladysmith Earthquake on the Hume Building.
Dr. Ralph Southward
[85] Dr. Southward is a consulting professional engineer who for many years has focused his practice on forensic engineering. He was qualified to provide opinion evidence regarding structural engineering and give an opinion on the cause of the structural damage to the Hume Building.
[86] He provided two reports on this matter, dated December 3, 2015, and November 11, 2016.
[87] When he was first retained, he reviewed the building drawing for the Hume Building and personally attended on the site four to five times, once for two days.
[88] He said that in 1975, the relevant building code was the 1970 municipal code that Brantford had adopted, which was basically the National Building Code.
[89] He said that the building code required the Hume Building to be designed to meet specified criteria for dead and live loads. The wind load was based upon the statistical chance of a wind load which might occur every 30 years; whereas the earthquake standard required to be met was based upon the probability of one occurring every 100 years. He said that the materials actually used have more capacity than the one used to design to meet the building code, meaning the standards contained in the building code are very conservative.
[90] He described the Hume Building’s design. The mortar specified was “M”, which is high strength. The concrete blocks for bearing walls were 8” hollow for floors 4, 5, and 6, and 75% solid concrete 8” blocks were required for the lower three floors. The strength of the hollow blocks was 1000 lbs per square inch, and the 75% solid block strength was 1800 lbs per square inch.
[91] Six inch blocks were specified for the corridors and partitions as these were not bearing walls.
[92] The east and west walls, which are composed of 8” architectural blocks, are the end walls and the slabs rest on the walls. The pre-cast concrete slab floors span parallel to the north and south exterior walls. Those walls partial weight bear the slabs adjacent to the north and south walls which rest approximately 4” on those walls, as well as the end walls.
[93] During his inspection he found different types of cracks. In the elevator shaft, which was a non-load-bearing wall, the cracks were vertical. Also, he noticed step cracking which follows the mortar joints in a step-like fashion. These are depicted in figure 8 of his report, being Exhibit 43.
[94] In his opinion, the step cracking is consistent with movements of the Hume Building caused by differential settlement in the northwest corner.
[95] During Dr. Southward’s testimony, he referred to figure 3a of Exhibit 43 which divided the building up by column lines, and throughout his testimony, he utilized column lines as a reference point. He noted that step cracking was found in the elevator shaft, but that the cracking at column line 6, which is the middle of the Hume Building, was different.
[96] At column line 6, as shown in figures 20 and 21 of Exhibit 43, is the doorway near the centre of the Hume Building. The block is split open, and the crack continues for two or three courses and then stops. Figure 21 shows that the crack goes up from the bottom and stops, but it does not carry on.
[97] He said that the entire east third to 40% of the Hume Building did not contain any cracks.
[98] Dr. Southward testified that on the ground floor in the west end of the Hume Building, the blocks never had drywall on them, so one could easily observe the concrete blocks. In his opinion, it was clear that the observed cracks there were old and had been painted over.
[99] He said that his review of the exterior showed cracking in the northwest corner of the Hume Building as he noted on figures 32, 33, and 34 of Exhibit 43. There were lots of vertical cracks and some diagonal on the rear wall at the west end all the way down to the foundation. The cracks started at column line 4 or 5 and ran to the west end of the Hume Building. There was evidence of prior repairs, and he thought from the colour of the mortar, that the repairs had occurred on more than one occasion.
[100] He said that he ran a survey line down the corridor and concluded that the east end of the Hume Building is higher than the west end of the Hume Building by almost 5 inches.
[101] Dr. Khatri’s laser survey showed the exact opposite, as he said the west end was higher than the east end. Dr. Southward said that in addition to his survey, he hired an Ontario land surveyor to survey the Hume Building. As well, a company was retained to do a 3D photo of the Hume Building. Both of these investigations confirmed his analysis that the west end of the building was lower than the east end.
[102] Dr. Southward testified that the Ontario land surveyor surveyed the entire Hume Building. He did complete shots on some floors and partial shots on other floors. Figures 75 and 76 reflect the changes in elevation that he observed. He said that the survey confirmed that the west end is in general lower than the east end of the Hume Building.
[103] Dr. Southward also said that when considered from a north-south basis, there are places in the Hume Building where the Hume Building is out of level, and if one could walk north to south one would find a hump in the centre of the Hume Building. He noted that this was demonstrated in figure 80 of Exhibit 43.
[104] He said that the 3D photographs showed, via figure 94 of Exhibit 43, that the Northwest corner leans to the east by about 1.25”, and then to the west, and the southwest corner has the 6th floor leaning toward the street by about 0.75”.
[105] He said that the predominance of cracking could be found on the west end of the Hume Building, rather than the east end, and this was consistent with the differential settlement.
[106] He ordered a soil investigation, and this showed that the site was generally sandy soil, but loose sandy material was found from column line 4 to the west end of the Hume Building. This soil under the west end of the building was determined to be 12 feet of fill. Dr. Southward said that he would expect the soil at the west end of the Hume Building to have settled more than the soil under the east end of the Hume Building.
[107] Dr. Southward testified that this was consistent with the fact that the Hume Building demonstrated more cracking in the west end, beginning at column line 4 and continuing toward the west end of the Hume Building.
[108] He said that most of the differential settlement would have occurred within days, weeks, or months of construction. Therefore, it did not surprise him that there was evidence of old crack repairs, or that today there were no issues regarding windows or doors being out of alignment, as the owners had 40 years to correct those issues.
[109] He discussed the impact of differential settlement of foundations. He said that a drop of one inch over 250 inches causes damage by the slab going down and putting pressure on the block wall above and below. This causes the web of the bearing wall block to crack. He demonstrated this by figure 1B on Tab 9 of Exhibit 43. In figures 14 and 15 of Exhibit 43, he noted the block facing had spalled off, which is caused by significant compression or bending beyond what the block is designed to carry.
[110] He said that in the Hume Building, the concrete plank floors were approximately 20 feet or 240 inches long. As well, there was evidence of more than one inch of settlement, which would be enough to cause the observed structural damage to the bearing walls. For example, at the west end, the settlement was 1.65 inches.
[111] In Dr. Southward’s opinion the cracking in the west end of the Hume Building was the result of settlement, and the settlement was consistent with the soil conditions under the west end of the Hume Building.
[112] He said that the building plans provided for rebar, but that he only located rebar on the 6th floor and could not confirm whether the entire Hume Building was reinforced. Initially, he intended to get this information after the demolition, as he was advised that the building was to be demolished. However, the demolition never occurred.
[113] He disagreed with Dr. Khatri’s opinion that mortar type “N” was used in the Hume Building. He said that type “N” mortar is a lower strength than type “M” mortar, and that type “M” mortar was typically used in this type of construction and was called for on the building plans. He thought that possibly type “S” mortar, (which is of even higher strength), might have been used in the Hume Building.
[114] Dr. Southward confirmed that 75% solid block means that the block is manufactured with it being 75% solid and 25% hollow. He disagreed with Dr. Khatri’s initial testimony that 75% solid meant that three of the four holes in the block had to be filled with mortar on site.
[115] He noted that the building plans specified that the 75% solid block must be able to carry 1800 psi, as it supported the upper floors. As the upper three floors had less weight to support, they could be hollow and were only required to support 1000 psi.
[116] He described the location where two concrete slabs rested on a wall. The building plans required a 3.5” masonite bearing pad, which he said was standard practice. The masons would build the first-floor wall and then a crane would lift the concrete slab onto the walls. There are 12 weight bearing walls in total. Where two concrete slabs met at the centre of the building, typically there would be 3” of bearing on the wall for each slab. The slabs are 20 feet long, plus 3” for bearing on each wall meant that the slab would be 20’6” long. This resulted in about a 2” gap between the slabs, which was filled with grout so that the flooring above—in this case, wooden parquet—could have a continuous surface upon which to be affixed.
[117] In his opinion, there was adequate bearing of the slabs on the walls as he has never heard of a bearing failure by the slab moving 3”.
[118] He described the situation at the doorways. There, the concrete slab floors met and were supported by two L-shaped metal lintels approximately 4” by 4”. There was cracking observed in the grout. These gaps gradually increased from column 11 to column line 6 and then decreased from there. The gaps increased from east to west. This was consistent with the settlement in the west end. He felt that the ends walls of the Hume Building were restraining the building as it shrunk between those two ends, which put a load on the centre of the building.
[119] Dr. Southward stated that this lateral movement would have caused the cracking in the parquet flooring.
[120] The lintels were shown on the design drawings as bolted together, but his observation was that they were loose, just butted up against each other. In figures 56 and 49, a gap is shown between the lintels.
[121] He commented upon Dr. Khatri’s seismic analysis at Exhibit 19, which Dr. Khatri called the modus of rupture. Dr. Southward stated that there were errors in this calculation. They include:
a. The detail was not a typical bearing wall detail. It was the detail for a corridor of a non-load-bearing wall.
b. Dr. Khatri referred to 6” or 8” blocks; however, the plans clearly specify 8” blocks.
c. Dr. Khatri made calculation errors, the largest being that he added the weight of 6 floors to the calculation, but since the ground floor rested on the concrete slab at ground level, there was only the weight of 5 floors to be added to the calculation.
d. Dr. Khatri used logic from an American code that is never used in Ontario.
e. The height of the walls is wrong.
f. Dr. Southward had no idea what the measurement 6.75 reflected.
g. The mortar called for by the building’s drawings is type “N”, whereas Dr. Khatri assumed “S”, which is a lower strength mortar.
h. Dr. Khatri made a fundamental error by taking the lowest bearing wall to determine what will trigger cracking, as he omits the fact that this wall is under compression. Dr. Southward said that as weight is your friend, it must be taken into consideration and as a result, the tension from flexing does not overcome the compression strength.
[122] Dr. Southward’s opinion is that the wall would not go into tension and crack as the walls will remain under compression.
[123] After the Hume Building was vacated and the heat turned off, when Dr. Southward returned, he noticed numerous cracks in the drywall that told him that the Hume Building was susceptible to changes in temperature. He concluded that the Hume Building had issues regarding movement from the change in temperature and humidity, and the lack of expansion joints exacerbated this issue.
Onus of Proof
[124] The defendant has admitted that an insurance policy with earthquake coverage under which the plaintiff is claiming was effective September 1, 2012, and was in force at the date of the Ladysmith Earthquake. The parties have agreed that the Hume Building from at least March 17, 2014 onward, had structural damage and agreed upon the quantum of damages at the policy limit of $7,277,485.00. They simply disagree upon the cause of the damage to the Hume Building.
[125] The plaintiff submits that the Ladysmith Earthquake caused or contributed to the structural damage, and it has the onus of proving that.
Standard of Proof
[126] As the Supreme Court stated in F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, at para. 49, “in civil cases there is only one standard of proof and that is proof on a balance of probabilities. In all civil cases, the trial judge must scrutinize the relevant evidence with care to determine whether it is more likely than not that an alleged event occurred”.
Analysis
[127] As there are very few, if any, factual disputes, the core of this analysis involves a consideration of the expert evidence, some of which was very technical. I, therefore, begin with the one expert witness whose testimony was not contradicted, Dr. Atkinson.
[128] Dr. Atkinson was an extremely impressive witness and, as I have noted, her evidence is uncontradicted. As well, her research and peer-reviewed published article regarding the Ladysmith Earthquake, its intensity, and its impact upon buildings ranging from the epicentre outwards had all been undertaken prior to being retained by the defendant. That reinforces my view as to her objectivity.
[129] I accept her testimony and find, as a fact, that:
a. Generally, no damage results from an earthquake that has an intensity between 2 and 3; cosmetic damage can occur at the level of 6, with structural damage occurring between 6 to 7;
b. Her opinion was that the force of the Ladysmith Earthquake at the Hume Building was in the 2 to 3 range;
c. The vibration felt by the Hume Building from the Ladysmith Earthquake would be similar to the vibration that a truck driving by the building would generate;
d. Since 1970, there have been seven earthquakes that have produced a level of ground motion at the Hume Building comparable to the Ladysmith Earthquake, five of which were after the Hume Building was constructed and prior to the issuance of the insurance policy by the defendant;
e. The only reported damage arising from the Ladysmith Earthquake occurred close to the epicentre and involved minor plaster cracking in an 1890 stone church; and
f. There was less than a 0.1% likelihood that the force from the Ladysmith Earthquake was strong enough to reach typical damage thresholds at the Hume Building.
[130] Dr. Ariannia agreed that his evidence, as it relates to the impact of Ladysmith Earthquake upon the Hume Building, does not depart from Dr. Atkinson’s evidence to any real degree.
[131] The evidence of Drs. Ariannia and Southward regarding the nature and location of settlement is consistent, in that they both agree that the soil under the west end of the Hume Building had settled. Dr. Ariannia testified that soil under the west end of the Hume Building had settled a total of 2.57 inches, whereas Dr. Southward’s evidence was the total settlement of the Hume Building at the west end was 5 inches. They both agreed that the majority of settlement would have occurred during or shortly after the completion of construction.
[132] Turning to the other experts, I have concluded that I prefer the evidence of Drs. Chidiac and Southward over that of Dr. Khatri for several reasons. Often, the reason for accepting the evidence of Drs. Chidiac and Southward is the same reason for rejecting the evidence of Dr. Khatri.
[133] First, I find that there were factual errors in Dr. Khatri’s evidence.
[134] During Dr. Khatri’s examination-in-chief, he said that a 75% solid block had three of the four holes in the block filled with mortar on site. In his cross-examination, he admitted his error, and that in fact 75% solid meant that the block arrived from the factory being 75% solid concrete; no field work was required on site to bring it up to that classification. Dr. Southward’s evidence confirmed that the block arrived on site being 75% solid concrete.
[135] As well, Dr. Khatri testified that the mortar used in the Hume Building was a weaker type of mortar than the building plans specified. He gave this opinion without having made investigations to confirm this. As well, he had admitted that he had no experience in Ontario to support that conclusion. Dr. Southward testified that not only was the higher strength mortar called for in the building plans, but that in the mid-1970s, typically that is the type of mortar that would actually be used. He said that there was no evidence to suggest that this mortar had not been used in the Hume Building’s construction.
[136] Second, I find that there are basic errors in Dr. Khatri’s various calculations. I accept Dr. Southward’s evidence that Dr. Khatri has made numerous errors in his calculations at Exhibit 19. For example, he utilized the weight from six floors in his calculation. However, since the ground floor is sitting on the concrete ground slab, there clearly are only five floors for the walls to support. Dr. Southward testified that an American table (which is never used in Canada, since there is a Canadian table) was utilized in these calculations. Further, the building’s design drawings clearly note that the load-bearing walls are 8” blocks, whereas Dr. Khatri employed 6” blocks for his calculations. Finally, Dr. Southward testified that due to the weight that the walls are supporting, they are under constant compression and that the torsion effect would never exceed the compression. Therefore, the walls would not crack.
[137] Dr. Southward’s correction of these points was uncontradicted.
[138] Third, in his examination-in-chief, Dr. Khatri testified that there were no cracks on the exterior of the building. Dr. Southward and Dr. Chidiac both testified that there were cracks on the exterior. The photographs marked as figures 32 through 39 in Exhibit 43, clearly show those cracks and corroborate Drs. Southward and Chidiac’s testimony.
[139] Fourth, there is the issue of the direction of the slope of the building.
[140] Dr. Southward’s evidence is that the building slopes downward from east to west. His measurements are consistent with the Ontario land surveyor’s measurements, as well as the measurements derived from a 3D rendering of the building. They all indicate that the Hume Building slopes downward from east to west, with the east end of the building being approximately five inches higher than the east end. They are also consistent with Dr. Ariannia’s evidence to the extent that he testified that the soil under the west end of the building had settled by 2.75 inches.
[141] On the contrary, Dr. Khatri’s evidence is that the building sloped in the opposite direction—downward from west to east. I reject that evidence and find that the Hume Building slopes downward from east to west.
[142] It is an admitted fact that that the earthquake-induced settlement from the Ladysmith Earthquake is negligible and less than 0.01 cm. Therefore, I find that the Ladysmith Earthquake did not cause the east to west settlement of the Hume Building.
[143] Fifth, it was not until trial that Dr. Khatri corrected certain errors in his report, which had been produced two years prior. Most significantly, he stated in his report something which was factually the opposite and a very significant factor in this trial. He stated that the “Wind Load profiles are superseded by the Earthquake Loads. The Earthquake lateral forces (Ladysmith Earthquake) are higher than the Wind Forces (using a peak velocity of 100 mph).” In fact, the Wind Forces with a peak velocity of 70 mph were 2.5 times greater than the Ladysmith Earthquake load.
[144] Sixth, Dr. Khatri’s decision to select a site classification of “E” for his calculations of the soil amplification and shear wave velocity is concerning to me. This was contrary to all of the geotechnical reports put forward at trial and his own expert’s testimony who all stated that the appropriate classification was “D”. As the plaintiff’s own expert, Dr. Ariannia, testified the selection of “E” would result in a higher amplification at the site. In other words, the lateral force of the Ladysmith Earthquake would be overstated. This, as well as a number of his other errors, such his selection of a weaker mortar type for his calculations notwithstanding that the building plans called for a stronger mortar and that he had undertaken no analysis of the mortar actually in place, either demonstrates a level of incompetence or bias. Either is a reason to discount his evidence.
[145] In addition to errors in his testimony, aspects of Dr. Khatri’s evidence reinforced the evidence that the plaintiff was unable to prove on a balance of probabilities that the Ladysmith Earthquake caused or contributed to the structural damage to the Hume Building.
[146] For example, he testified that he had not examined whether there were prior earthquakes that might have exerted similar or greater force upon the Hume Building. He did not take issue with Dr. Atkinson’s evidence that there had been five earthquakes which occurred after the construction of the Hume Building, but prior to the issuance of the insurance policy, that would have exerted similar forces upon the Hume Building. He acknowledged that one could not distinguish between those events to determine which event may have caused or contributed to the damage to the Hume Building.
[147] Further, he agreed that the normal Peak Ground Displacement standard where the movement from an earthquake will cause damage to a building is 20 times the Peak Ground Displacement experienced at the Hume Building following the Ladysmith Earthquake.
[148] Finally, I do not accept his evidence that the Hume Building will react differently to lateral loads from wind events and earthquakes. Dr. Khatri agrees that the building code treats these loads for design purposes identically, and yet, submits that because of the Hume Building’s design, the building is better suited to withstand wind lateral forces than earthquake generated forces. This evidence is contrary to the evidence of Drs. Chidiac and Southward, and whose evidence for the reasons stated above I prefer. As well, it simply is illogical that the building code would treat the forces for design purposes identically, but that the Hume Building, which Dr. Khatri believes was constructed in accordance with the building code, would not react the same way.
[149] I accept Drs. Chidiac and Southward’s evidence that the reason that the building code requires one to calculate the lateral load for a wind event and an earthquake and for design purposes utilize the higher number, is that buildings generally withstand those lateral forces similarly.
[150] The evidence is clear that the Hume Building was constructed in accordance with the building code in place at the time of construction. Further, I have already accepted Dr. Atkinson’s evidence that the force of the Ladysmith Earthquake at the Hume Building would be the equivalent of a truck passing by. I accept Dr. Chidiac’s evidence that the damage sustained by the Hume Building was not consistent with damage from an earthquake, as the cracks did not resemble the types of cracks created by the earthquake’s movement. I also accept his evidence that the force from the Ladysmith Earthquake at the Hume Building was insufficient to cause structural damage.
[151] Edward Hume and Linda Hume testified that they did not observe any cracks in the building until the March 2014 elevator incident. However, I find their evidence to be unreliable. The photographs of the exterior clearly show different coloured mortar in certain cracks in the northwest end of the building going down to the foundation. Dr. Southward testified that these were old repaired cracks, which clearly demonstrate that the cracks in the exterior walls are not new. Further, Dr. Southward produced photographs of the interior wall at the west end of the building that had not been covered with drywall that also showed older crack repairs.
[152] I find that there were cracks in the walls of the Hume Building prior to the Ladysmith Earthquake.
[153] I have previously accepted Dr. Atkinson’s evidence that, since the construction of the Hume Building and prior to the issuance of the insurance policy by the defendant, there have been five earthquakes that would have produced forces at the Hume Building of similar intensity to the Ladysmith Earthquake.
[154] If an earthquake truly was the cause of the damage to the Hume Building (which I do not accept), it is equally possible that such damage was caused by an earthquake that occurred prior to the commencement of the insurance policy issued by the defendant.
[155] The plaintiff has failed to prove on a balance of probabilities that, if an earthquake was the cause of the structural damage, the Ladysmith Earthquake was the event that caused or contributed to the structural damage.
[156] It is an Admitted Fact that the plaintiff is not claiming that there was a wind event that caused the damage to the Hume Building.
[157] For the reasons stated above, I have accepted Drs. Chidiac and Southward’s evidence that, regardless as to whether the lateral load is generated from wind or an earthquake, that lateral load impacts a building the same way.
[158] During the period commencing at the time of construction of the Hume Building and ending with the issuance of the insurance policy by the defendant, there have been at least five occasions where the wind gusts experienced at the Hume Building met or exceeded 70 mph. This would have created lateral loads upon the Hume Building which greatly exceeded the lateral load created by the Ladysmith Earthquake.
[159] If one accepts that this level of lateral load could damage the building (which I do not), then, outside of the currency of the insurance policy, the Hume Building experienced wind events of similar or greater lateral force to the force created by the Ladysmith Earthquake which could have damaged the building.
[160] Dr. Khatri acknowledged that he had not undertaken any study of these wind events.
[161] These previous wind events are further support for the position that the plaintiff has failed to prove on a balance of probabilities that the Ladysmith Earthquake caused or contributed to the structural damage to the Hume Building.
[162] I also find that the observations of the cracking are not linked to the Ladysmith Earthquake temporally. March 17, 2014, was the first time that the cracks were observed in the masonry wall in the elevator shaft. That was approximately ten months after the Ladysmith Earthquake. Delta Elevator Maintenance employees were working in the shaft installing guardrails on top of the elevators approximately five months after the Ladysmith Earthquake during October 2013, and they did not report any cracking.
[163] Also, I would note that there was no evidence of any other damage or movement of any kind caused by Ladysmith Earthquake at the Hume Building, such as pictures hanging on walls falling or simply moving or things falling off tables etc.
[164] In my view, it is very improbable that a force which caused no other observable damage or movement at the Hume Building was of sufficient force to structurally damage the building.
[165] Finally, I would note that the defendant did not have the onus of proving the actual cause of the damage. It was the plaintiff’s burden to prove that the Ladysmith Earthquake caused or contributed to the damage.
[166] I have accepted Dr. Southward’s evidence that the Hume Building settled downward from east to the west. I find that this settlement, together with the lateral movement caused by a lack of movement joints, was sufficient to cause the cracking observed. The experts agree that most of the settlement would have occurred during or shortly after construction. We do not know precisely the impact that the settlement had on the building in terms of crooked windows or doors. However, I accept Dr. Southward’s evidence that there have been years for those issues to be resolved, perhaps before the plaintiff acquired the building. I also prefer his evidence that the cracking of the parquet flooring in doorways, which the plaintiff’s witnesses agreed did occur, was as a result of this settlement and lateral movement and not water damage.
[167] I find that the parquet flooring issues were not caused by water, but rather by the settlement and lateral movement of the building.
[168] Based upon the evidence, I find, as a fact, that the differential settlement of the soil caused the major structural damage to the Hume Building. The evidence is clear that the building has settled at the west end, where the 12’ of loose fill is located.
[169] For all of the foregoing reasons, I find that the plaintiff has failed to prove on a balance of probabilities that the Hume Building sustained damage from the Ladysmith Earthquake.
[170] I dismiss the plaintiff’s action.
[171] If the parties cannot agree upon costs, the following timetable shall apply:
a. the defendant shall serve and file its cost submissions within 14 days;
b. the plaintiff shall serve and file its costs submissions 10 days thereafter;
c. a reply, if any, shall be served and filed five days thereafter.
[172] Cost submissions shall be limited to three pages.
D.L. Edwards J.
DATE: February 7, 2019
2019 ONSC 709
COURT FILE NO.: 10270/15
DATE: 2019/02/07
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Hume Investments Ltd.
Plaintiff
- and –
Aviva Insurance Company of Canada
Defendant
JUDGMENT
D. L. Edwards J.
Released: February 7, 2019