Case Bites for August 2, 2022

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Steven Graham

Dunn v Condo Corp No. 042 0105 – 2022 ABQB 516
Nuisance | Mitigation | Pierrenger Agreement

The Plaintiff succeeded at trial in an action against the Defendant for nuisance. The Plaintiff claimed a loss of rental income which he incurred as a result of an extended roofing replacement to the condominium building in which he owned a unit. The Plaintiff successfully argued that the noise experienced by his tenant, along with the boarding of the windows and inability to access the balcony resulted in an unreasonable interference to the property, for which the Plaintiff was forced to collect a reduced rent. The Court determined that the Plaintiff was able to recover in nuisance for some of the reduced rent, though it would be subject to some set-off by amounts paid to the Plaintiff by one of the other Defendants who had settled with the Plaintiff before trial by way of a Pierrenger Agreement prior to trial.

The Court set out the well-established test for nuisance from the Supreme Court of Canada decision Antrim (2013 SCC 13), which requires interference with property that is both substantial and unreasonable:

[13]           In undertaking this balancing assessment, courts have considered numerous factors including: the severity of the interference, the character of the neighbourhood, the sensitivity of the Plaintiff, and the frequency and duration of the interference. However, the Supreme Court is clear that I am not bound to, or limited by, any specific list of factors. I must consider the substance of the balancing exercise in light of the factors relevant in the particular case.

The Court was satisfied that the interference to the Plaintiff’s property and the enjoyment of it by his tenant was substantial and more than a slight annoyance, therefore satisfying the first part of the test.

As to whether the interference was unreasonable, the Court noted the following are factors to consider:

[22]           In Antrim, the Supreme Court provides the following guidance to assess whether the interference is unreasonable.

•         I must assess whether the interference is unreasonable by balancing the gravity of the harm against the utility of the defendant’s conduct in all the circumstances.

•         In relation to the gravity of the harm I may consider the severity of the interference, the character of the neighbourhood, and the sensitivity of the plaintiff. Frequency and duration of the interference may be relevant.

•         The focus is on whether the interference suffered by the claimant is unreasonable, not on whether the nature of the defendant’s conduct is unreasonable. While the nature of the defendant’s conduct is not an irrelevant consideration, a finding of reasonable conduct will not necessarily preclude a finding of liability.

•         The duration of the interference is a relevant consideration. Some forms of temporary interferences, such as necessary construction, may not support a claim in nuisance in some circumstances. Interferences that persist for a prolonged period of time will be more likely to attract a remedy.

•         While nuisance focuses mainly on the harm and not on the blameworthiness of the defendant’s conduct, the fact that work for the common good is carried out with all reasonable regard and care for those persons affected, is properly part of the reasonableness analysis.

•         The ultimate question, after considering all of the circumstances, is whether it is unreasonable to expect the claimant to bear the interference without compensation.

The Defendants called a witness from the engineering company who was the project manager for the roofing replacement. His evidence was that the roof replacement was necessary to preserver the structural integrity of the building, and there were no cost-effective ways to eliminate the noise of construction. He also explained why the roof replacement took longer than initially contemplated. The blocking of windows and the Plaintiff’s balcony were all described as necessary in order to safely and completely replace the roof.

While the Court accepted that the replacement of the roof was necessary, there were no safe or cost-effective measures to address the complaints, and the Plaintiff must accept some interference for necessary construction benefiting all owners, the Court ultimately concluded that it was unreasonable for the Plaintiff to bear the noise, loss of heat, boarded windows, and loss of balcony without compensation.

With respect to the noise, the Court emphasized the following:

[30]           […] The test is whether the nature and severity of the noise in question is such that it would not be reasonable to expect an ordinary person occupying the same premises to tolerate it. […] While all units were impacted by the construction, the impact on the other units was nothing like the penthouse suite. Mr. Alazar testified that he was at the site and that he observed typical construction noise: drills, cutting, roof anchors, torquing. “It was a busy site”. Mr. Alazar confirmed that the construction crew began preparing around 7 a.m. most of the time.  The occupants of the penthouse suite were most affected.

[31]           In summary, based on the evidence of the Tenant and the Defendants’ witnesses, I find as a fact that for over a year, there was daily banging, sawing and foot noise on the roof beginning at 7 a.m. most days. The noise was particularly loud for the Plaintiff’s Tenant who was right below the roof. I am satisfied that the Plaintiff has proven on a balance of probabilities that the noise was such that it would not be reasonable to expect an ordinary person occupying the same premises to tolerate it for over a year.

Regarding the loss of heat, the tenant’s evidence was that the temperature was low due to the lack of roof insulation and he had to rely on space heaters. The Court concluded there was a period of one month where the unit was low temperature, constituting an unreasonable interference.

Regarding the windows being boarded up while construction was ongoing, the Court confirmed that case law does not support a cause of action in nuisance for a changed or altered view. However, the Court distinguished this case, as the complaint was not an altered view but a loss of view and access to the windows for light and fresh air entirely:

[42]           I agree with the Defendants that there are cases finding that where the Plaintiff consents or acquiesces in the nuisance, there is no liability. The Defendants argue that it was the Tenant who requested the boarding of the windows. I find as a fact that the Tenant did not request that the windows be boarded. The Tenant requested a tarp to prevent the workers from looking in through his windows. Furthermore, I conclude that there is no true consent where the request for the tarp is to mitigate other issues caused by the construction.

The Defendants argued that they were protected from liability by section 37(2) of the Condominium Property Act which placed a duty upon them to keep the property in a state of good repair. The Court rejected any statutory immunity, finding no evidence that it was practically impossible to avoid the nuisance:

[46]           I am not satisfied that the Defendants have met the burden of establishing that it was practically impossible to avoid the nuisance. The evidence is that the job of replacing the work was to take 4 months and to be completed before the cold winter months. No evidence was led that it was practically impossible to complete the job in 4 months or to complete the job in warmer months to minimize heat loss. While several reasons were given for why it took longer than expected, no evidence was led that some of those reasons, for example missing the right materials at the beginning and the 14 change orders, were practically inevitable. Further, the Defendants’ witnesses did not testify that nothing could be done to address the nuisance. Their evidence was that there was no cost-effective way to address some of the complainants. I am not satisfied that the Defendants’ evidence meets the burden of establishing that the nuisance was inevitable.

The Court also rejected the Defendant’s argument that the provision in the bylaws that the Corporation would not be responsible for damage caused by or to the person of property of any owner, tenant, or occupier shielded them from liability:

[49]         […] That clause provides protection to the Corporation where an owner or tenant sues for damage or loss to the person or property of an owner or tenant. The claim in this case is for nuisance which is different than damage to property or the person. Nuisance is a claim for interference with the owner’s use or enjoyment of land. Clause 4.11.1 does not shield the Corporation from claims in nuisance. This interpretation is consistent with the decision of the Board of Directors to compensate unit holders for the loss of use of their parking stalls during the construction.

The Court also considered the fact that the Plaintiff’s claim against the contractor hired to replace the roof had been resolved by a Pierrenger agreement. The Defendant argued that one of the clauses in the Pierrenger agreement precluded the action against it. The Court rejected this argument for several reasons:

[54]           There are five reasons why I do not accept the Defendants’ interpretation of Clause 3:

a.      The first is that it is clearly contrary to the intent of the parties and the purpose for entering into a Pierringer Agreement. The purpose of this Agreement is to allow one party to settle and preserve the rights of the Plaintiff to proceed against the non-settling Defendants. The settling Defendant wants some assurance it will not be brought back into the dispute. Interpreting the Agreement as precluding the Plaintiff from proceeding against the non-settling Defendants because the non-settling Defendants may sue for a different cause of action is contrary to the purpose for entering into the Agreement and the intent of the parties;

b.      As stated by the Court of Appeal in Bedard v Amin2010 ABCA 3, there is a public interest in encouraging settlement of multi-party litigation through Pierringer Agreements. Interpreting the Agreement as the Defendants argue would defeat this public interest;

c.      The third reason is that the language of the clause does not support the interpretation the Defendants advance. The language speaks of claims made by the Plaintiff in this Action or proceedings advance by the Defendants against Flynn in this Action. I conclude that Clause 3 is confined to proceedings against Flynn in this Action. There are no current proceedings against Flynn in this action. Nor may the Plaintiff or the Defendants take proceedings against Flynn in this Action.

d.      The fourth reason is that the Defendants’ interpretation is contrary to other clauses in the Agreement that clearly state that under the Agreement all claims against Flynn for contribution and indemnity are resolved. Accordingly, there is no possibility that Flynn might be found liable for contribution or indemnity in any proceedings; and

e.      Lastly, even if I am wrong and the clause covers proceedings that the Plaintiff may bring against Flynn in other actions, the time period for bringing any proceedings against Flynn have long expired. Therefore, neither the Plaintiff nor the Defendants may bring any actions against Flynn.

The Court therefore concluded that the Condo Corporation was liable to the Plaintiff in nuisance. The claim was dismissed against the property manager, as it did not own the land from which the nuisance emanated. The Court then considered the damages to which the Plaintiff was entitled.

The Defendant argued that the Plaintiff failed to mitigate his loss. The Court rejected the Defendant’s contention that the months which the Plaintiff reduced or did not collect rent were unreasonable:

[64]           As the Defendant argues, the Tenant was under a month to month and could have left at any time. I find that the Plaintiff was trying to keep the Tenant from leaving. There is no evidence that the Plaintiff did not negotiate with the Tenant to get the best rent he could. There is no evidence that anyone else was willing to rent the condo for more than the Tenant was willing to pay. In the absence of any evidence that the Plaintiff could have rented the condo for more than the Tenant was willing to pay, I am not satisfied that the Plaintiff failed to mitigate his loss by agreeing to the rent reductions he did.

The Court further rejected the Defendant’s argument that the Plaintiff should have sued the tenant for the months which no rent was collected, as the Court was not satisfied that the Plaintiff would have been successful in recovering rent for the periods during which it was not paid.

The Defendant also argued that any amounts paid by the roofing contractor pursuant to the Pierrenger Agreement should be deducted from any judgment. The Court agreed that the amount paid must be considered to prevent double-recovery, but confirmed that the amount to be deducted is the amount of the settlement net of costs incurred against the settling defendant. The Court directed that if the parties could not agree on the quantum, it would have to be argued on further application.