Executive Summary – Key Legal & Evidentiary Issues

• Alleged construction deficiencies include improper EIFS installation and lack of moisture barriers, potentially breaching building codes.

• Summary judgment was sought based on expired limitation periods under The Limitations of Actions Act.

• Pre-Con’s third-party claims for contribution and indemnity challenged due to the plaintiff’s release of Cooper and Winnipeg.

• Cooper and Winnipeg argued estoppel, claiming Pre-Con's inaction deprived them of a limitation defence.

• Pre-Con contested the impact of the release, citing lack of specific wording barring third-party claims.

• The court ruled no genuine issue required a trial, dismissing Pre-Con’s claims and upholding the releases and statutory protections.

Facts of the Case

In this case, the Winnipeg Condominium Corporation No. 913, on its own behalf and on behalf of unit owners, initiated a legal action arising from alleged construction deficiencies in a condominium complex located in Winnipeg. The defendants included:

• Creek Bend Project Inc. (original owner and developer),

• Pre-Con Builders Ltd. (general contractor),

• Neil Cooper Architect Inc. and Neil Cooper (architects),

• City of Winnipeg, and other subcontractors and material suppliers.

The dispute stemmed from a fire in 2021, after which the plaintiffs claimed to have discovered a series of construction deficiencies. These included:

• Improper installation of the Exterior Insulation and Finish System (EIFS) over Insulated Concrete Form (ICF) walls.

• Missing air and/or moisture barriers around windows and doors.

• Deficient window flashing installations, which did not comply with national and local building codes or manufacturer instructions.

The plaintiff condominium corporation alleged these defects led to property damage and sought damages for negligence, breach of contract, and breach of fiduciary duty.

In 2022, the plaintiffs applied for an extension under s. 14 of The Limitations of Actions Act (Manitoba) to pursue claims outside the ordinary limitation period. The court later granted this extension only against Pre-Con and Creek Bend, after the plaintiffs abandoned their application against Cooper and the City of Winnipeg, effectively releasing them from liability.

Pre-Con then filed third-party claims against Cooper and Winnipeg, seeking contribution and indemnity, arguing they were jointly responsible for the deficiencies.

Arguments and Court’s Analysis

Limitation Periods and Estoppel

Cooper and Winnipeg sought summary judgment to dismiss the third-party claims, arguing that:

• The plaintiff’s release of Cooper and Winnipeg barred Pre-Con’s third-party claims for contribution or indemnity.

• Pre-Con’s failure to contest the limitation period deprived them of the ability to raise the same defence.

• It would be inequitable to allow Pre-Con to shift liability after waiving the limitation defence.

The court agreed, emphasizing that Pre-Con had raised the limitation issue in its defence but failed to assert it during the plaintiff’s application. That inaction effectively barred Cooper and Winnipeg from defending themselves on limitation grounds, and the court found that to be an inequitable outcome.

No Actionable Claim for Contribution or Indemnity

The court also reviewed whether Pre-Con’s third-party claim could survive in the absence of direct liability between Cooper/Winnipeg and the plaintiff. The judge held that since both Cooper and Winnipeg were released from liability by the plaintiff, they no longer had joint liability with Pre-Con, and therefore no right to contribution existed under The Tortfeasors and Contributory Negligence Act.

Pre-Con argued that the release lacked specific language barring third-party claims, but the court rejected this argument, referencing case law that emphasized equitable principles and the need for defendants to pursue all available defences before seeking indemnity.

No Breach of Duty by the City

In addition to the limitation and procedural arguments, Pre-Con also claimed the City of Winnipeg had been negligent in approving building plans and conducting inspections. The court analyzed these claims under The City of Winnipeg Charter, which provides broad immunity for inspections unless gross negligence is shown.

The court found that Winnipeg had complied with its regulatory duties, had not undertaken responsibilities beyond what the law required, and that inspectors were entitled to rely on the certifications of qualified professionals like architects. Therefore, there was no evidence of a breach of duty that would justify a trial.

Outcome

The Court of King’s Bench granted summary judgment in favour of both Neil Cooper Architect Inc. and the City of Winnipeg, dismissing the third-party claims by Pre-Con Builders Ltd. on the following grounds:

• No genuine issue required a trial.

• Pre-Con’s failure to assert the limitation defence estopped it from seeking contribution.

• Both parties were properly released from liability by the plaintiffs.

• The City was not negligent in its inspections or approvals.

The court awarded costs to Cooper and Winnipeg, concluding that Pre-Con had deprived both of an opportunity to avoid litigation through its procedural choices.