Canada: Liability Issues For Architects Revisited: An Analysis Of Vermilion & District Housing Foundation V Binder Construction Limited

Last Updated: January 5 2018
Article by Mark Alexander

In the June 6, 2017 decision of Vermilion & District Housing Foundation v Binder Construction Limited, 2017 ABQB 365, the Alberta Court of Queen's Bench considered claims by a building owner against multiple parties arising from alleged defects with the vinyl flooring installed as part of the expansion and modernization of a senior's lodge in Vermilion, Alberta.  In particular, the owner advanced claims against the contractor, its surety, and the project architect to recover the costs incurred to remedy the defects encountered, as well as claims for loss of income while the defects were being rectified.

Pursuant to a contract dated March 26, 2003, the owner retained Group2 Architecture Engineering Ltd. to provide architectural and structural engineering services in relation to the design and construction of the project.

Shortly after contract award, the architect met with representatives of the owner to discuss the nature of the facility and to gain insight and direction as to the owner's vision for the project.  From those meetings, a number of design principles were developed relating to the nature of the expansion of the facility, which involved the construction of four new separate care units, each with a designated outdoor space, that would be connected to, and form part of, the overall complex.

Although the existing facility was at a higher elevation and was constructed with either a basement or crawlspaces, based upon the principles developed with the owner, the architect designed the foundation system for the new units to consist of a concrete pad, overtop of which a concrete pier system was to be installed.  A continuous grade beam would then be constructed on the piers to support the superstructure of the new buildings.

Construction of the project commenced in March of 2004 and was substantially completed approximately one year later.  Inspections conducted while construction was ongoing and into the summer of 2005 identified issues with the vinyl flooring at numerous locations, described as "bubbling" or "rippling", which was particularly notable in areas subject to cart or wheelchair traffic.  In addition, adhesive material from underneath the vinyl flooring was observed to be oozing between the seams.

Further investigations subsequently determined that excessive moisture from groundwater or a high water table and hydrostatic pressure appeared to have forced moisture through the concrete slab, which was then trapped underneath the vinyl flooring, causing the adhesive to break down.

An engineering firm retained by the owner to investigate the flooring issues and to make recommendations as to an appropriate remediation strategy concluded as follows:

  1. The vinyl flooring had failed as a result of the failure of the adhesive;
  2. The failure of the adhesive was due to moisture levels exceeding the capacity of the adhesive;
  3. The excessive moisture arose as a result of moisture migrating upwards through the concrete slab and becoming trapped underneath the flooring;
  4. Replacement of the flooring could not be accomplished until the moisture problem was addressed; and
  5. The installation of a vapour barrier underneath the slab would have significantly reduced the risk of adverse effects from increased moisture levels.

Based upon the recommendations it received from the engineer, the owner arranged for installation of a weeping tile system underneath the concrete slab to prevent water from migrating horizontally under the slab, and for replacement of the vinyl flooring.  The owner sought to recover those expenses from the defendants, as well as the rental income it had lost while a number of rooms in the new care units were vacated to facilitate the investigations and performance of the necessary remediation work.

At trial, the owner alleged breaches of the architectural contract and of the duty of care owed by the architect in failing to draft plans and specifications properly, and to inspect, supervise and approve the work properly.  In particular, the owner alleged that the architect had failed to ensure the design for the project adequately addressed the potential for moisture migration through the concrete slab, and to inspect properly the work of the contractor and to provide a proper site grading plan.

In response, the architect submitted that it had designed the project in accordance with the duties imposed upon it and in compliance with the Alberta Building Code.  The architect further stated that the defects were caused either by the use of the wrong adhesive underneath the vinyl flooring, or a failure to properly install the adhesive and the flooring materials.  Alternatively, the architect argued that any defects arising from moisture migration through the concrete slab arose as a result of the failure of the contractor to construct the foundation system as designed, and to follow the site grading plan.

The Court concluded that the failure of the adhesive arose as a result of excessive moisture which had caused the adhesive to take on a watery and soupy consistency and prevented the vinyl flooring from adhering properly.  The Court also found that the source of the water was surface water on the project site that had migrated through the concrete slab on grade and was trapped by the vinyl flooring.

After determining the cause of the defects encountered, the Court proceeded to consider the liability of the various defendants and, in doing so, provided a useful overview of the legal principles applicable to the duties owed by an architectural firm to its clients.  The Court began this analysis by noting that unless otherwise expressly stated in the contract for professional services, an architect owes a duty to exercise the skill, care and diligence that may reasonably be expected of a person of ordinary competence to ensure that the building is constructed in compliance with the plans and specifications, measured by the professional standards prevailing at the time.  The Court further observed that architects do not guarantee their work will be successful, and that if reasonable judgment, competence and diligence were exercised when completing the work, the fact that the work ultimately proves unsatisfactory will not render an architect liable for breach of contract or negligence.

With respect to any supervisory responsibilities owed by an architect, the Court held that unless the governing contract provides otherwise, the architect must supervise the work and inspect it enough to ensure that the project is constructed in accordance with the plans and specifications and the contractor's contractual obligations.  An architect does not, however, guarantee that every departure from the design will be noted and corrected and is only responsible for noting any such departures that would be disclosed through reasonable supervision.  The more extreme the consequences and the greater the risk, the higher the duty of care owed.  Therefore, the architect should inspect important aspects of the work before they are hidden from view and may be expected to direct such work be revealed for inspection, where that task can reasonably occur.  Moreover, the duty to inspect is not limited to mere visual inspections but extends to making such enquiries as are required in order to determine whether or not the work has been properly performed.

Finally, the Court noted that a contract between an owner and an architect contains an implied term that the architect possesses a reasonable level of professional skill and will use reasonable care and diligence in carrying out its work.  Therefore, if an architect's scope of work includes supervision of a construction project, the architect has an implied duty to ensure that the building is properly constructed by carrying out inspections to ensure compliance with the project specifications.

Ultimately, the Court concluded that the architect had satisfied its contractual and common law duties with respect to the design of the foundation system for the new units and any precautions required to prevent moisture migration through the concrete slab.  However, the Court found that the architect had failed to design the project with adequate site grading to sufficiently address water management issues on the project site.  In addition, after finding that the contractor had committed numerous breaches during construction that related directly to the cause of the vinyl flooring issues, the Court proceeded to consider whether the architect had discharged its contractual and common law supervisory duties relating to construction of the project.  In doing so, the Court concluded that the architect had breached its obligation to review the work performed by the contractor in relation to site grading given the foundation system and site grading away from the new structures were integral parts of the system to manage the surface water on the project site.  The architect was also found to have breached its supervisory duties by failing to ensure that moisture testing of the concrete slab was performed and submitted for its review prior to installation of the flooring given such testing was provided for in the project documents.  Since the architect would have been aware that testing results had not been received by the time construction had advanced to the flooring stage, it should have required the testing to be performed even after the installation had begun or after it was completed and, at a minimum, should have alerted the owner that testing had not been performed.

Accordingly, the Court found that in addition to breaches relating to the design for site grading at the project, the architect had breached its obligations relating to site reviews by failing to determine that the contractor was not constructing the project in general conformance with the project documents and had, therefore, failed to identify obvious deficiencies that would have been detected in the course of performing the level of site review contemplated as part of its contractual duties.  Following an assessment and apportionment of damages, the Court held the architect responsible for 35% of the damages awarded to the owner.

While it is certainly true that the analysis of an architect's liability in a given case is driven by the specific factual circumstances at hand, including an assessment of any written architectural agreement in place, this decision provides a useful overview of the legal principles applicable to architects and the duties owed for both the design and planning of a project, as well as any supervisory duties owed to ensure that construction proceeds in accordance with the project plans and specifications.

Careful consideration of the supervisory component of an architect's scope of work is particularly important during the claims investigation stage as the failure to reasonably discharge those obligations may give rise to exposure to liability even in cases where the losses are grounded in workmanship issues as opposed to any design shortcomings.

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.

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