Fault in construction claims is rarely black or white.
Claims usually begin with multiple defendants and, as the
litigation progresses, the existing parties often discover that
additional potentially at-fault entities should be added.
In British Columbia, the proper way to add a party is by the
issuance of a Third Party Notice ("TPN"). Prior to
the coming into force of the 2010 Supreme Court Civil
Rules (or, as they are commonly referred to, the "New
Rules"), a party could issue a TPN without leave, at any time
before a Notice of Trial was delivered or, if a Notice of Trial had
been delivered, at least 120 days before the trial date. It
would not have been unusual for an action to be active for a year
or more before a party filed a Notice of Trial, so this protracted
period would have provided more than adequate time to consider
whether a TPN was warranted.
Under the New Rules, however, a party must act quickly if it
wants to avoid the expense of seeking leave to file a TPN.
Rule 3-5(4) of the New Rules provides that a party has only 42 days
after being served with a Notice of Civil Claim or Counterclaim to
file a TPN. Practically speaking, this creates a problem, as
the facts and circumstances relating to the underlying claim often
do not become available to defence counsel until after this 42-day
window has expired.
It is not surprising, therefore, that the court has had to
address the issue of parties attempting to circumvent the problem
by applying alternative methods in order to try to avoid seeking
and obtaining leave to issue a TPN.
In the case of Faulkner v. The City of Duncan, 2015
BCSC 825 ("Faulkner"), a construction case, the
plaintiff sued multiple parties for damages. The defendants
issued TPNs against various contractors and engineering
consultants, seeking contribution or indemnity, but well past the
42-day deadline. Rather than seek leave of the court to issue
the late TPNs, the defendants sought an order at an informal Case
Planning Conference ("CPC"), which was granted.
One of the third parties applied to have the TPNs set aside,
referring the court to the requirement of the New Rules that
potential third parties had to be given notice of an intention to
seek leave to file a TPN, as well as the opportunity to
respond. The third party also emphasized that the right to
notice and the opportunity to be heard were important, and should
not have been "swept aside" in the name of
The defendants, on the other hand, took the position that the
lack of leave was simply a technical irregularity that could be
cured, and that it would be inefficient and expensive to go through
the process of a court application when surely leave to issue TPNs
would ultimately be granted.
The court held that a Case Planning Order could not properly
override the requirement for seeking leave and giving proper
notice, and that Case Planning judges did not have the authority to
do away with those requirements. In that regard, Justice
The right to notice and the right to be heard are thoroughly
fundamental and in my view justify the conclusion in this case that
the failure to observe those rights results in a nullity.
Though Justice Thompson was urged to invoke a cure for the
nullity, he refused to do so, stating that to do so would
"result in the abrogation of the third parties' right to
be heard on the question of leave".
The Faulkner decision is a reminder to insurers and
counsel that, in British Columbia at least, there is no longer the
luxury of time when it comes to filing a TPN. Upon receipt of
a Notice of Civil Claim, it is important to try to identify all
potentially at-fault parties, and take the necessary steps to file
TPNs within the 42-day window. This imperative would require
that defence counsel be assigned, and be provided with all
available information and materials relating to the claim, as soon
as possible. If the deadline has expired, counsel should
start drafting an application rather than simply hope that a
technical proceeding like a CPC can be utilized to quickly fix the
Despite the tight deadline under the New Rules, however, counsel
should be careful not to use a 'scatter-gun' approach to
issuing TPNs: there ought to be a solid factual basis for
commencing third party proceedings.
When a party wants to claim contribution or indemnity against
existing parties, a CPC would be the proper venue
to seek such an order, as parties can rely on their allegations in
their existing Responses, rather than having to issue TPNs.
This type of order would save costs and time for all parties
involved, and is almost always obtained by way of consent of the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Ontario Court of Appeal confirmed that courts will generally support and uphold decisions of condominium directors because they are better positioned than judges to make decisions pertaining to their buildings.
According to the city bylaws in Calgary, the grading of lots for new buildings must be done properly so that the water never flows toward the new building or any other nearby properties, but away from those buildings.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).