Introduction
In Murray v Windsor Brunello Ltd, 2024 ABKB 281 (“Murray“), the Alberta Court of King’s Bench ruled that the home owners’ decision to hold off on beginning remediation work to their residence until liability was determined, was reasonable in the circumstances.[1] In determining whether the owner failed to mitigate its damages in the context of remediation work, the courts will consider the nature, significance, and timing of the remediation work. If the nature of the remediation work is significant, complex, and time consuming, a strong case can be made that there was no failure to mitigate on the owner’s part and their damages award should not be reduced.
Background
The Plaintiffs, Donald and Linda Murray (the “Plaintiffs”) hired the Defendant, Windsor Brunello Ltd. (“WBL”) to build a large two-storey home between 2011 and 2014 (the “Murray Residence”).
The Plaintiffs claimed that there were significant defects in the structure of the Murray Residence that affected the windows and doors. The Plaintiffs also made a myriad of claims in negligence, breach of contract, breach of statutory obligations under the Sale of Goods Act, RSA 2000, c S-2, and failure to warn, against various Defendants that had assisted in building the home.
The Plaintiffs sought $1,650,293.46 in damages on a joint and several basis. The only successful claim was the Plaintiffs’ claim for breach of contract against WBL. The Court awarded the Plaintiffs damages in the amount of $914,946.59, plus pre-judgment interest.
The Duty to Mitigate in the Context of Remediation Work
At the time of trial, the Plaintiffs had not taken any steps to remediate their damages. The Plaintiffs were waiting for the lawsuit to be resolved before beginning any remediation work. WBL argued that the Plaintiffs failed to mitigate their damages by not performing any remediation work and such failure should warrant a reduction in the damages awarded to the Plaintiffs. WBL provided evidence that indicated a failure to conduct various repairs when the defects were first discovered led to further defects developing that otherwise would not have occurred. WBL also argued that the delay in remediation caused the repairs to be more expensive as the defects got worse over time.
The Court noted that where reasonable alternatives to remediate the windows and doors were available, the Plaintiffs had attempted such alternatives but were unsuccessful in their efforts. The Court agreed that the defective elements of the windows and doors caused a sort of chain reaction which further impacted other elements of the windows and doors, such that partial remediation could not reasonably be completed. The Court ruled that the Plaintiffs acted reasonably in the circumstances by not undertaking remediation work until liability was determined because of the significant and complex nature of the defects and the complexity of the issues the Plaintiffs faced.
The Court in Murray emphasized that what constitutes “reasonable” in the context of a plaintiff owner’s duty to mitigate regarding remediation work, depends on the circumstances and what constitutes “reasonable” in one context may not be reasonable in another.
Key Takeaways
The key takeaway from Murray is the Court’s determination that it was reasonable for the Plaintiffs to wait to begin remediation work until liability was determined at trial even though the delay caused further damages. Although the full extent of the damages and the required remediation was fully known by the Plaintiffs before trial, in all the circumstances it was reasonable for the Plaintiffs to wait to begin repairs until after the litigation concluded.
This decision is currently under appeal with the appeal set to be heard in December 2025.
Written by Jeremy Ellergodt with contribution from articling student, Tayla Basawa.
[1] Murray v Windsor Brunello Ltd, 2024 ABKB 281 at para 526.
