In Centurion Apartment Properties Limited Partnership v Sorensen Trilogy Engineering Ltd., 2024 BCCA 25 (“Centurion”), the British Columbia Court of Appeal ruled that an owner could pursue a negligence claim against an engineer, even without a direct contractual relationship between them. The Court found that despite the “contractual matrix” not directly linking Sorensen (the engineer) and the building owner, Sorensen still had a duty to the owner to exercise reasonable care in creating a design free from dangerous defects.[1] Later, the Supreme Court of Canada denied leave to appeal this decision.
Background
This case originated in the British Columbia Supreme Court and involved an 11-story residential building in Langford, BC.[2] The Plaintiff, the owner of the builder, Centurion Apartment Properties, had acquired the building from DB Services of Victoria Inc., who originally hired Sorensen to provide structural engineering services. Centurion had no direct contract with Sorensen. Soon after Centurion took ownership, structural issues emerged, leading to a full evacuation of the building in December 2019.
British Columbia Supreme Court’s Decision
Centurion sued Sorensen and other defendants, alleging negligence. However, the Chambers Judge dismissed Centurion’s claim against Sorensen, concluding that the indirect contractual relationships among Centurion, DB Services, and Sorensen eliminated any close relationship needed to establish a duty of care. Centurion appealed this decision.
British Columbia Court of Appeal’s Findings
The appeal focused on whether Sorensen owed a duty of care to Centurion, which would allow Centurion to proceed with a negligence claim against Sorenson. The Court reviewed the principles of negligence law, the contractual arrangements among the parties, and the degree of proximity required for a duty of care.
To determine proximity, the Court examined whether the harm from Sorensen’s design was a foreseeable outcome and if any factors should prevent tort liability despite the relationship between the parties.[3] Proximity, as the Court explained, is often found in relationships that fall into recognized categories.
The Court emphasized the presence of a “real and substantial danger,” noting the significant structural concerns and potential for sudden failure associated with Sorensen’s design. Ultimately, the Court found that despite no direct contractual link between the parties, Sorenson still owed a duty of care to subsequent purchasers of the building and could be held liable for negligently designing it.[4]
Influence of Centurion in Alberta
In Alberta, courts have also been grappling with questions surrounding liability for negligent design in situations without direct contractual privity. The Centurion decision has begun to influence Alberta caselaw, prompting courts to consider whether an indirect contractual relationship or “contractual matrix” should impact the duty of care owed by design professionals to building owners.
ATCO Energy Solutions Ltd v Energy Dynamics Ltd
In ATCO Energy Solutions Ltd v Energy Dynamics Ltd, 2024 ABKB 162, the plaintiffs, ATCO, experienced an engine shutdown due to a fractured piston. ATCO filed a claim against NGC, who supplied and installed the piston, and the Energy Dynamics, who manufactured the piston. Prior to trial, ATCO settled with NGC but continued its claim against Energy Dynamics.
Regarding the duty of care, the Alberta Court of King’s Bench applied Centurion in its consideration of whether there was a proximate relationship between ATCO and Energy Dynamics.[5] The relationship between ATCO and Energy Dynamics involves Energy Dynamics acting as the manufacturer of pistons, and ATCO as the end user of the pistons in their engine. Their relationship is not direct, as NGC was an intermediary, but neither is it remote.[6]
Ultimately, the Court held that there was a sufficient relationship of proximity to impose a duty of care on Energy Dynamics to ATCO, the “end user” of the pistons, since the pistons were negligently manufactured with defects that posed a real and substantial danger of physical harm.[7] The Court turned to paragraph 38 of Centurion to explain that there was “little doubt” that the relationship between ATCO and Energy Dynamics met the first step of the Anns test for whether a duty of care arose.[8] As a result, ATCO was entitled to judgment against Energy Dynamics.[9]
Takeaways
Centurion clearly sets out that parties can pursue a claim in negligence in situations where no direct contractual privity exists, provided the defect involves an inherently dangerous product. In particular, the Court’s decision in Centurion establishes that design professionals cannot avoid liability for negligent design merely due to a lack of contractual privity. The Alberta decision of ATCO Energy Solutions Ltd v Energy Dynamics addresses a similar issue and upholds the Court’s findings in Centurion. These cases demonstrate that proximity can exist where negligent construction leaves a building in a state of real and substantial danger of causing physical harm to its occupants or property. Ultimately, demonstrating a real and substantial risk of danger may establish sufficient proximity for a building owner to pursue a negligence claim.
Written by Xaviere Schneider and Jeremy Ellergodt
[1] Centurion Apartment Properties Limited Partnership v Sorensen Trilogy Engineering Ltd., 2024 BCCA 25 at para 109.
[2] Ibid at para 16.
[3] Centurion Apartment Properties Limited Partnership v Sorensen Trilogy Engineering Ltd., 2024 BCCA 25 at para 102.
[4] Ibid at para 103.
[5] ATCO Energy Solutions Ltd v Energy Dynamics Ltd, 2024 ABKB 162 at para 95.
[6] Ibid at para 113.
[7] Ibid at para 117.
[8] Ibid at para 119.
[9] Ibid at para 300.
