Brunswick Construction Ltée v. Nowlan, [1975] 2 SCR 523

Supreme Court of Canada

Brunswick Construction Ltée v. Nowlan, [1975] 2 S.C.R. 523

Date: 1974-04-29

Brunswick Construction Limitée Appellant;

and

Bernard E. Nowlan

and

Louise D. Nowlan Respondents.

1973: October 4, 5; 1974: April 29.

Present: Judson, Ritchie, Spence, Laskin and Dickson JJ.

ON APPEAL FROM THE SUPREME COURT OF NEW BRUNSWICK, APPEAL DIVISION

Contract—Building contract—Breach of contract—Duty of contractor—Architect’s plan defective—Liability of contractor for negligence.

The architect retained by Bernard Nowlan in 1962 to prepare a plan for the construction of a house after completing the plans recommended the appellant as contractor. In August, 1962 the appellant entered a written contract with Bernard Nowlan for construction of the house for the sum of $22,477 excluding plumbing, heating, painting and electrical work. The contractor was to furnish all material and perform all the work shown on the drawings and described in the specifications prepared by the architect. The respondents moved into the new house in late November, 1962 and shortly thereafter found that the roof was leaking. Further and more extensive leaks occurred and in 1964 it was necessary to repair the north side of the roof and the flashings around the joints. The leaking persisted and by 1966 major repairs were done at a cost of $1,100 but these still failed to correct the lack of ventilation which was found to be the cause of the problem.

Held (Dickson J. dissenting): The appeal should be dismissed with costs.

Per Judson, Ritchie, Spence and Laskin JJ.: The appellant carried out the work of building the house without the supervision of any engineer or the assistance of the architect and must be taken to have accepted the fact that the respondents were relying entirely on its skill and attention as a contractor. It should have recognized the defects in the plans and warned the respondents of the danger inherent in executing them having particular regard to the absence of any adequate provision for ventilation.

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Per Dickson J. (dissenting): There is nothing in the contract which imposes a duty on the contractor to detect faults in the design plans prepared by the owner’s architects or which imposes a duty to inform the owners that the plans are faulty in design.

[Steel Co. of Canada Ltd. v. Willand Management Ltd., [1966] S.C.R. 746 applied]

APPEAL from a judgment of the Supreme Court of New Brunswick, Appeal Division[1] allowing an appeal from a judgment of Barry J. at trial. Appeal dismissed with costs, Dickson J. dissenting.

Robert C. Rice, Q.C., and Jean-Claude Angers, for the appellant.

Adrian B. Gilbert, Q.C., for the respondents.

The judgment of Judson, Ritchie, Spence and Laskin JJ. was delivered by

RITCHIE J.—This is an appeal from a judgement of the Appeal Division of the Supreme Court of New Brunswick setting aside the judgement rendered at trial by Barry J. whereby he had dismissed the respondents’ claim for damages resulting from faulty workmanship and construction of a house which the appellant had agreed to build and which subsequently turned out to be virtually uninhabitable. The Appeal Division directed that the respondents should have judgement against the, appellant in the amount of $36,068.48 which was the amount provisionally fixed by the trial judge.

Early in the year 1962 the respondent Dr. Nowlan retained an architect, one Romeo Savoie of the firm of Savoie and Carrière Architects to prepare a plan for the construction of a house which was to be built on land owned by Mrs. Nowlan. After the plans had been completed, Savoie recommended the appellant, Brunswick Construction Limitée as contractors for the building of the house, and on August 15, 1962, this company entered into a written contract under seal with Bernard Nowlan for construction of the house for the sum of $22,477,

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excluding plumbing, heating, painting and electrical work. Under the contract the contractor was to furnish all material and perform all the work shown on the drawings and described in the specifications prepared by Savoie. No architect’s name was inserted in the Nowlan’s copy of the contract but the name Savoie and Carrière appears on the company’s copy as the “engineer”. It is not disputed that the house was to be built according to the plan prepared by Savoie and it was to be substantially completed by October 1, 1962, “as certified by the engineer”.

Article 9 of the “General Conditions of the Contract” provides that “the engineer shall have general supervision and direction of the work, but the contractor shall have complete control, subject to Article 11, of his organization” and the last sentence of Article 11 reads: “The contractor shall give efficient supervision to the work using his best skill and attention.” In fact no representative of Savoie and Carrier acted as engineer to supervise and direct the work and no one else was appointed in that capacity, with the result that the contractor assumed full responsibility for carrying out the work, and I agree with Mr. Justice Bugold when he says, in the course of the reasons for judgment which he delivered in the Appeal Division:

It is clear from the evidence, that the Owners did not engage the architects to supervise the construction. They relied entirely upon the experience, judgment and skill of the Contractor in this respect.

Although the Savoie plan was to be followed in building the house, it is noteworthy that it was not accompanied by any adequate specifications which were in fact limited to a few pencilled notes scratched on the face of the plan.

The respondents moved into the new house in late November, 1962, and shortly thereafter found that the roof was leaking and upon com-

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plaints being made to the appellant, that company engaged a roofing and sheet metal expert, named Angotti, to remedy the defects, but further and more extensive leaks occurred and in 1964 the same roofing expert was retained by the appellant to repair the north side of the roof and the flashings around the joints. The leaking, however, persisted and by 1966 such a serious condition existed that Angotti was called in by the appellant to make extensive major repairs at a cost of $1,100, but even this work did not correct the lack of ventilation which appears to have been the root cause of the trouble. In this latter regard the learned trial judge found:

I conclude that the plans of the roof and walls contained no provision for ventilation or ‘Venting’ as it is called and that such lack was a prime factor in the deterioration of the roof structure and the walls. The plans lacked adequate provision for ‘strapping’ which would have created air spaces. Condensation and humidity in insulated wooden buildings containing heat without air circulation are price(sic) causes of deterioration.

In 1970, Dr. Nowlan decided to make an addition to the house and for this purpose engaged a carpenter named Bernier whose task involved opening up the west wall of the original building where a very serious rotting condition was found around the windows, the posts supporting the beams of the ceiling and the outside plate of the rafters. Other openings were made around the structure which disclosed that the rotting condition was very extensive. As a result of Bernier’s discoveries, the respondent retained an architect named Arnoud who conducted a thorough examination of the building and the gist of whose evidence at the trial is described by the learned trial judge as follows:

I would not have rebuilt it according to those plans because according to experience I know it was a bad construction and we have the proof there. We have examples of rotten wood and redwood boards all cracked and warped… If we rebuilt the walls according to the Savoie plans, we would arrive at the conditions that happened… The humidity

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would stay or retain in the walls rotting not only by reason of lack of ventilation…I am an architect and I respect the codes of the country and I know perfectly that is was a bad type of construction and I would not have not have used it. There was no strapping to permit the drying of the wall… We would not use the Savoie windows—they were badly designed…I would not use the roof plans of Savoie for the same reasons—there was no ventilation of the roof—the inside wood of the roof could not do otherwise but rot rapidly.

In the result, Mr. Arnoud prepared new plans and specifications. The original building was completely reconstructed, not as to floor plan but as to method, and with a completely different type of windows.

The trial judge found that the major responsibility for the condition of the house rested upon the architect whose plans were obviously defective, but he also found that there was evidence of bad workmanship on the part of the appellant. The architect was not sued and Mr. Justice Barry took the view that the contractor was in no way responsible for damages resulting from the implementation of the defective plans. He does, however, appear to have thought that the respondents had a claim for poor workmanship which he dismissed on the ground that there was not enough evidence to enable him to make a separate assessment which would reflect the amount of damage attributable to that cause. In this regard, Barry J. said:

The fact remains that the plaintiffs did have a claim for poor workmanship, but I have already stated that I have no evidence of the cost of such repairs and I cannot even estimate them in any manner I am able to think of at the moment. It would be pure conjecture on the part of the court to endeavour to assess any damages under this heading…Apparently the claim was asserted on practically an ‘all or nothing’ basis. No distinction was made between damages caused by poor design and that caused by faulty workmanship.

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The trial judge, however, found himself able to make a provisional assessment of the damages resulting from the defective building and other incidental expenses at $36,068.48 which figure was not challenged in the Appeal Division or in this Court.

Mr. Justice Limerick, in delivering the majority opinion of the Appeal Division, with which Mr. Justice Hughes agreed, took the view that the contractor and the architect were jointly and severally liable as concurrent wrongdoers and said, in allowing the appeal:

If the design had provided proper ventilation there would have been no dry rot even though leaks occurred due to poor workmanship. Even though the design was poor there would have been no dry rot if the roof had been impervious to water and a proper drain installed and proper vapor barriers and insulation installed and windows had been properly constructed according to the plan.

Where there are concurrent torts, concurrent breaches of contract or a breach of contract and a concurrent tort both contributing to the same damage, whether or not the damage would have occurred in the absence of either cause, the liability is a joint and several liability and either party causing or contributing to the damage is liable for the whole damage to the person aggrieved.

The defendant is a concurrent wrongdoer and the fact that the damage might not have occurred but for the poor design of the building does not excuse him from the liability arising out of his poor workmanship and inadequate material supplied by him.

Mr. Justice Bugold, who gave separate reasons for judgment, reached the same conclusion and, while agreeing that poor workmanship on the part of the appellant contributed to the unsatisfactory condition of the house, his judgment appears to be founded on the appellant’s breach of an implied warranty in the contract that the house would be reasonably fit for the purpose for which it was required, namely, human habitation.

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In the present case, as I have indicated, the appellant carried out the work of building the house without the supervision of any engineer or the assistance of the architect and I think the appellant must therefore be taken to have accepted the fact that the respondents were relying entirely on its skill and attention as a contractor and this is particularly so having regard to the provisions of Article 11 of the Conditions of the Contract to which I have already referred.

In the course of his reasons for judgment, Mr. Justice Bugold described the president of the appellant company in the following terms:

Mr. Durette was president and general manager of the construction company at the time. He had 22 to 24 years experience in the construction business. His company built an average of 100 to 200 houses a year as well as having been engaged in building schools, churches and any type of building. With his vast building experience there can be no doubt that he would be very proficient in the study and interpretation of plans and specifications. Since the design of the house was bad this fact should or ought to have been detected by him and, in that event, was he duty bound to advise the Owners that the plans prepared by the architects were not suitable for the intended permanent work.

In my opinion a contractor of this experience should have recognized the defects in the plans which were so obvious to the architect, Arnoud, subsequently employed by the respondents, and, knowing of the reliance which was being placed upon it, I think the appellant was under a duty to warn the respondents of the danger inherent in executing the architect’s plans, having particular regard to the absence therein of any adequate provision for ventilation. Like Mr. Justice Bugold, I take the following excerpt from Hudson’s Building and Engineering Contracts, 10th ed. at p. 291, which was adopted by this Court in Steel Company of Canada Limited v. Willand Management Limited[2] at pp. 753 and 754, as having direct application to this case:

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So a contractor will sometimes expressly undertake to carry out work which will perform a certain duty or function, in conformity with plans and specifications, and it turns out that the works constructed in accordance with the plans and specifications will not perform that duty or function. It would appear that generally the express obligation to construct a work capable of carrying out the duty in question overrides the obligation to comply with the plans and specifications, and the contractor will be liable for the failure of the work notwithstanding that it is carried out in accordance with the plans and specifications. Nor will he be entitled to extra payment for amending the work so that it will perform the stipulated duty.

In the result, I agree with Mr. Justice Bugold that the contractor was in breach of its contract and liable for the failure of the work. I would therefore dismiss this appeal with costs and affirm the judgment of the Appeal Division of the Supreme Court of New Brunswick.

DICKSON J. (dissenting)—The facts in this appeal have been outlined in the reasons of my brother Ritchie and I would not propose to repeat them. This is a building case in which both the architects and the building contractor breached their respective duties to the owners, with resultant damage. The architects have not been sued and the question is whether the building contractor must bear the entire substantial cost of making good the damage. The fault of the architects lay in failure to provide for ventilation in the house design. Lack of ventilation caused dry rot. The fault of the building contractor lay in failure to bring to the task a proper standard of workmanship and, possibly, materials. That failure caused leaking.

The findings of fact by the trial judge, Barry J., on evidence which fully supported the findings, are of the utmost importance:

1. …I conclude that the plans of the roof and walls contained no provision for ventilation or “venting” as it is called and that such lack was a prime factor in

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the deterioration of the roof structure and walls. The plans lacked adequate provision for “strapping” which would have created air spaces. Condensation and humidity in insulated wooden buildings containing heat without air circulation are prime causes of deterioration.

2. …the basic cause of by far the greater portion of the damage was caused by faulty design.

3. I repeat and find that there was evidence of poor workmanship in places, but little or no evidence of the use of poor materials, aside from poor design.

4. …it was Savoie’s (the architect) lack of reasonable skill and judgment in the preparation of the plans which was the basic cause of most of the damage, particularly in failing to provide for the circulation of air in the walls and roof.

The judge was not satisfied that the cause of the damage was the conduct of the building contractor. He said:

It (the Court) must be satisfied by a preponderance of evidence that the cause of the damage was the conduct of the defendant. I am not so satisfied by any means, but rather otherwise….

and dismissed the owners’ action but without costs, because of evidence of poor workmanship on the part of the building contractor.

The majority of the Appeal Division (Limerick J.A., with Hughes J.A. concurring) differed from the trial judge in the result but were of opinion that:

While structural design particularly in lack of ventilation contributed greatly to the damage occasioned to the building, the poor workmanship of the defendant and poor quality of materials used also contributed….

and

If the design had provided proper ventilation there would have been no dry rot even though leaks occurred due to poor workmanship.

Bugold J.A. said:

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It is clear from the evidence that the source of all the Owners’ trouble was faulty design by the architects and poor workmanship by the contractor.

Although there may be some difference in emphasis, I do not read the judgments in the Appeal Division as in any way a challenge to the findings of the trial judge that the design fault was the “basic cause” of most of the damage.

The majority in the Appeal Division regarded the building contractor as a concurrent wrongdoer and therefore liable for the whole of the damage to the persons aggrieved. Limerick J.A. said:

Where there are concurrent torts, concurrent breaches of contract or a breach of contract and a concurrent tort both contributing to the same damage, whether or not the damage would have occurred in the absence of either cause, the liability is a joint and several liability and either party causing or contributing to the damage is liable for the whole damage to the person aggrieved. See Thompson v. The London County Council [1899] 1 Q.B. 840 C.A. and see Glanville Williams on Joint Torts and Contributory Negligence 1951, page 2.

The defendant is a concurrent wrongdoer and the fact that the damage might not have occurred but for the poor design of the building does not excuse him from the liability arising out of his poor workmanship and inadequate material supplied by him.

It is not entirely clear from the words quoted whether the learned judge considered the case to be one of concurrent torts, concurrent breaches of contract or a breach of contract and a concurrent tort; however, if the owners are to succeed they must, I think, having regard to the Limitations of Actions Act, R.S.N.B. 1952, c. 133, take the position that their claim against the building contractor sounds in contract, indeed in a specialty contract, if a twenty-year period of limitation and not a six-year period of limitation is to apply. With respect to the breach of duty alleged against the architects for faulty

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design, where there is, as here, a contract, though oral, between owner and architect, the action arises out of a duty undertaken by contract and, in my opinion, sounds in contract and not in tort. On the evidence there were two separate causes of action, one against the architects Savoie & Carrière for breach of a contractual obligation to prepare and supply plans for a house that would be fit for human habitation and another against the building contractor for breach of a contractual obligation to perform the work in a good and workmanlike manner. The contracts are different, the obligations are different and the damage caused by each is different. It is true that, broadly speaking, each contributed to the final unhappy state of affairs, but I think the nature and quantum of damage caused by each can be identified and quantified. At trial the plaintiffs did not seek to segregate the claim for poor workmanship. The trial judge said:

Apparently the claim was asserted on practically an “all or nothing” basis. No distinction was made between damages caused by poor design and that caused by faulty workmanship.

During argument before this Court, however, counsel for Dr. and Mrs. Nowlan was asked whether there was any evidence to indicate the damages caused by design as contrasted with the damages caused by bad workmanship and materials. In response, counsel has furnished the Court with the Factum on behalf of Appellants in the Appeal Division of the Supreme Court of New Brunswick in which alternative methods of apportionment are advanced, with supporting references to the evidence, should the building contractor not be liable for the whole damage. Damages due to poor workmanship were assessed by one of those methods at $24,176 and by the other method at $20,392.

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In my view, as I have indicated, we are not concerned with concurrent breaches of contract but rather with separate and distinct breaches of contract and we are not concerned with “same damage” but with two different types of damage.

I have studied the authorities cited by the majority of the Appeal Division and I do not think that Thompson v. London County Council[3], assists us. The matter there was in tort, the main question was whether the plaintiff could add another party as defendant under Order XVI and the finding was one of no joint tortfeasance. The headnote reads:

The plaintiffs brought an action against the defendants for negligently excavating near the plaintiffs’ house, and thereby damaging it. The defendants in their defence denied liability, and attributed the damage wholly or in part to the negligence of a water company in leaving their water-main insufficiently stopped. On an application by the plaintiffs to add the water company as defendants:—

Held, that the causes of action against the defendants and the water company being in respect of separate torts, though the resulting damage might be the same in each case, the water company could not be joined as defendants.

I should have thought that, if anything, the case runs against the proposition for which it is cited in the Appeal Division. Collins L.J. had this to say at p. 344:

…but an argument was presented to us which, it appears to me, was based upon a fallacy—that was that because the plaintiffs had claimed only one damage that therefore their cause of action was necessarily one also, however many persons they chose to put on the writ as bringing about that one damage. It seems to me that that is no test at all. The damage is one thing, and the injuria is another. What constitutes the cause of action is the injuria, the wrong done by a separate tortfeasor; and when we analyze this case (the facts are not in dispute) we find

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we are dealing with it upon the assumption that the two acts which were done, the one by the London County Council and the other by the New River Company, are entirely disconnected torts—each of them a separate injuria—if it be injuria at all—quite distinct one from the other. The one was done recently by the county council by excavation, and the other at a much earlier date by the water company allowing water from its mains to weaken the soil in front of the plaintiffs’ property, and the joint result of those two independent torts has been that the plaintiffs’ house has come down. The damage is one, but the causes of action which have led to that damage are two, committed by two distinct personalities.

A decision of our Court, City of Prince Albert v. Underwood McLellan & Associates Ltd.[4], must be mentioned. In that case the appellant City employed the respondent firm of engineers to prepare plans for and to supervise the construction of a reservoir. A contract of construction was entered into between the City and a firm of contractors. Several months after work was begun the structure collapsed during the process of backfilling. At trial it was held that the failure of respondent properly to supervise the backfilling operation was the prime factor in the collapse of the reservoir. The judgment at trial was upheld in this Court. Hall J. for a majority of the Court said, p. 317:

While, as Maguire J.A. says, this does not absolve the contractors, it does not in any way constitute a finding of negligence against them but even if it did, the collateral liability, if any, of the contractors to the appellant under a separate and distinct contract cannot be used to defeat the appellant’s right to judgment against the respondent, Campbell Flour Mills Co. Ltd. v. Bowes; Campbell Flour Mills Co. Ltd. v. Ellis, (1914) 32 O.L.R. 270; Truth & Sportsman Ltd. v. Kethel, (1932) 32 N.S.W.S.R. 421 at 427, and Mayne & McGregor on Damages, 12th ed., p. 162, nor could the liability of the contractors be determined in the present action as constituted, they

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not being parties. Mayne on Damages, 10th ed. at p. 127.

In that case the damage was one and indivisible, the collapse of a reservoir, and as I read the judgment Hall J. was of the opinion that the possible liability of the contractors to the City under contract 1 did not preclude recovery by the City from the engineers under contract 2. This is by no means at odds with the view that each contractor is liable for damage caused by him in breach of his contract, but not for damage caused by someone else under a separate contract respecting the same work. In my opinion in the case at bar the building contractor was not a concurrent wrongdoer and, with respect, I do not agree with the conclusion of the majority of the Appeal Division.

Bugold J.A. considered that the president and general manager of the defendant contractor with his building experience would be proficient in the study and interpretation of plans, the design of the house was bad, this ought to have been detected by him and he had a duty to inform the owners that the plans were faulty in design. The obligations of the building contractor to the owners are contained within the four corners of the contract and nowhere else. The contractor undertook and agreed to provide all the materials and perform, by the date specified, all the work shown on the drawings and described in the specifications prepared by Savoie & Carrière and agreed to give efficient supervision to the work, using its best skill and judgment. That is the extent of the contractual obligation. There is nothing in the contract which imposes a duty on the contractor to detect faults in the design plans prepared by the owners’ architects or imposes a duty to inform the owners that the plans are faulty in design. Nor do I find anything in the evidence to support the conclusion that a building contractor of reasonable experience and competence, studying the detailed plans prepared by the architects, Savoie & Carrière, for the construction of the

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house, would detect design fault. If that conclusion is to be reached it should be on the basis of expert evidence, and there was none. It was not a simple matter of failing to include in the plans some form of outside vent. It is understandable that dry rot can be caused by lack of ventilation. From the testimony I conclude that the architects should have provided for ventilation within the house but on the evidence I am quite unable to say that the building contractor could have detected and should have detected the design errors which, according to Mr. Arnoud of the architectural firm of Lagace & Massicotte, were to be found in the roof, the walls and the windows.

Bugold J.A. also considered there was a warranty implied in the contract that the house be reasonably fit for the purpose for which it was required: namely, human habitation. On this point the law is, I think, otherwise and is properly expressed in Hudson’s Building and Engineering Contracts, 10th Ed., p. 51:

Where the employer does not employ an architect or other adviser, so that he is relying on the skill and judgment of the contractor, and the latter provides the design or specification, there is an implied term not only that the work will be carried out in a proper and workmanlike manner and with proper materials, but also that the work, when completed, will be fit for its purpose (for instance, in the case of a dwelling-house, fit for human habitation).

But no such term for fitness will be implied if what the contractor undertakes is to build a house in accordance with the employer’s plans and specification, a fortiori if also to the satisfaction of the employer’s architect or engineer.

The same principle is in these words in Corpus Juris Secundum, Vol. 17A at p. 295:

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However where the work is to be undertaken under the direction of certain plans and specifications furnished by the other party, no warranty of fitness for intended use will be implied.

In the result, I would allow the appeal with costs, set aside the judgment of the Appeal Division and remit the case to the trial judge for an assessment of the damages caused by the defendant (appellant) due to faulty workmanship or materials with leave to either party to adduce further evidence on the assessment.

Appeal dismissed with costs, DICKSON J. dissenting.

Solicitors for the appellant: Rice & Auger, Edmunston.

Solicitor for the respondent: Gilbert, McGloan, Gillis, Jones & Church, Saint John.