There has been much publicity regarding the incidents of falling glass from condo balconies in Toronto over the past year. Of particular concern is the fact that these incidents continue to appear in the news.
As a result of the defects arising from the use of glass as a primary building envelope, condominium corporations are forced to initiate “…remediation and replacement of the buildings’ window walls in a proactive manner. Remediation or replacement costs can be a substantial expense for the corporation [and] is borne by the owners in the form of high maintenance fees and/or special assessments.”5 A question that remains to be answered includes what is the reasonable life expectancy of a primary building envelope principally made of glass?
While there is limited case law directly on point, it is clear that the law regarding developers’ liability for falling glass will be developed in the coming years. Indeed, as a result of the Toronto incidents involving the Murano Towers and the Festival Towers, respectively, two class actions have been commenced against the developers,manufacturer/installer of the glass railings and the architects for each project.6
Each lawsuit is claiming general damages in the amount of $15,000,000 and punitive damages in the amount of $1,000,000. In addition to seeking a declaration that the builders were negligent in the design, installation and manufacturing of the glass panels, the owner plaintiffs are seeking a declaration that the builders are in breach of their statutory warranties under the Ontario New Home Warranties Plan Act7. Specifically, the actions seek to compensate the owners and tenants of the faulty condominium units for the loss and enjoyment of their balconies which access was prohibited to following the incidents of falling glass, and for the diminished loss in value and in rental income of their units.
Many owners of new condo units are protected by the Ontario New Home Warranties Plan Act8 (the “Act”), which imposes mandatory 7‐year warranties for major structural defects on new homes in Ontario. The Act is administered by Tarion Warranty Corporation (“Tarion”). The Tarion condominium coverage can been described as follows:
One Year, Two Year, and Major Structural Defect warranties are in effect, where the aggregate maximum warranty coverage for new homes and condominium units is $300,000. The maximum coverage for condominium common elements is $50,000 times the number of units, to a maximum of $2.5 million…Normally, by the end of the total warranty coverage period, isolated performance problems begin to occur within the window wallassemblies, mostly visible as water leakage.9
Given the fact that Tarion imposes a maximum claim for warranty coverage, the next pocket that condo owners look to cover their expenses is generally those of the developers.
The Decided Cases
When claiming against a developer for negligent design/construction, the claimant must show that the defendant developer owed the claimant a duty of care. Further, it must be shown that the defendant developer failed to exercise a reasonable standard of care and that this failure was a material cause of the damage the plaintiff suffered.10
In Condominium Plan No. 9223676 v. McJane Developments Ltd.11, the condominium corporation brought an action against the developer‐contractor for negligence after it had to complete extensive repairs to the building post‐construction. The claim was also made against the structural engineer, the architect and the designer, manufacturer and supplier of materials used in the building, together with the developer‐contractor.
In turning its mind to the negligence claim, the Court affirmed that to be found liable for negligence depends on the existence of a duty of care, breach of that duty and resulting damages. In McJane Developments, the nature of the damages was for pure economic loss given that there was no injury to persons or damage to property apart from the defective building itself. The Court further affirmed the seminal case of
Winnipeg Condominium Corp. No. 36 v. Bird Construction Co., where at para. 43, La Forest J. stated:
…contractors (as well as subcontractors, architects and engineers) who take part in the design and construction of a building will owe a duty to subsequent purchasers of the building if it can be shown that it was foreseeable that a failure to take reasonable care in constructing the building would create defects that pose a substantial danger to the health and safety of the occupants.12 [Emphasis added.]
The Court noted that Winnipeg Condo further distinguished between shoddy and dangerous defects, holding that the duty of care in a construction context does not extend to putting into circulation products which are merely defective or shoddy, if they are not dangerous.13 Therefore, in considering whether any of the defects in the building which warranted repair constituted a substantial risk or danger to the persons including the occupants of the building or the property of the plaintiff corporation, other than the building itself (“dangerous defects”), the Court held that none of the defects alleged by the plaintiff corporation were dangerous defects and dismissed the claim for negligence.14
When determining the standard of care to apply to a claim for negligence, the Court in Carleton Condominium Corp. No. 21 v. Minto Construction Ltd.15 confirmed that building by‐laws and building codes help to define the standard of care in a particular fact scenario. Further, the Court stated that while a minor discrepancy between the building by‐laws and codes and the actual construction of the building might result in such a small reduction of a safety margin that it would be insignificant in a legal sense, the defects in Minto Construction were significant deviations from the building by‐law requirements and justified a finding in negligence.16
This point is notable considering the glass condominiums in Toronto actually do adhere to building by‐laws and codes, and on the analysis offered in Minto Construction, it would appear that developers actually do meet the standard of care set out. On the other hand, the glass manufacturers would not meet the standard of care to the extent that the supplied glass contained defects arising from the use of substandard materials in the manufacturing process.
It is interesting to note that the Court, in finding liability as against Minto, noted that nothing dramatic had happened to the building and that the wall at issue had been standing for 22 to 23 years when the repair work was undertaken. The wall had not collapsed nor was it displaying any minor failures that would herald possible future disasters. Nevertheless, the Court determined that, based on the evidence adduced, the defects required remedial action for reasons of safety and that the builder owed a duty of care to take reasonable care in constructing the building to ensure it would “not contain defects that would pose foreseeable and substantial danger to health and safety of occupants”.
It has been suggested that the proper reaction of developers of faulty condos is to be proactive. For example, with respect to the Festival Towers’ incident, mentioned above, prior to building code amendments being suggested by Toronto’s city council, Lanterra Developments (the developer for the Festival Tower) had already announced plans to replace the faulty glass on its balconies with safer laminated glass.17
Given the proliferation of information available on the Internet today, including reports of complaints made by purchasers of condominium units, there are incentives for developers to be proactive to ensure that their reputation as solid and reliable builders is maintained. As with any construction project, there will be deficiencies and issues; however, the good builders will take steps to deal with these issues in a proactive manner before Tarion or the Courts award compensation to purchasers for the negligent design and/or construction of condominiums by developers and their contractors, architects and/or engineers.