Engineers, contractors, and other businesses must be mindful of and knowledgeable of their legal obligations when performing their occupation or supplying a product. Negligence in the design or construction of a product that results in damage or bodily harm, or could result in damage or bodily harm, can result in liability for economic loss under Canadian Tort law. Engineers, architects, and contractors need to be respectful of their duty of care to ensure their product is precisely produced with no danger of negligence.
In 1972, Bird Construction Company Limited entered into a contract with Tuxedo Properties Company Limited of Winnipeg. Bird Construction was the general contractor responsible for building a 15-storey apartment building using the plans designed by Smith Carter Partners, the architects who also had a contractual agreement with Tuxedo Properties (Herschorn, 1996, p. 109). Bird Construction then subcontracted the masonry work to Kornovski & Keller Masonry Limited. The project was completed in 1974. Subsequently, in 1978, Winnipeg Condominium Corporation assumed title of the building and converted the apartments to condominiums (see Figure 1).
In 1982, Winnipeg Condominium discovered issues with the Tyndal stone on the outside of the building. After consultation, they did some remedial work in an attempt to correct the problem. However, in 1989 a large section of the stone fell off the building from the ninth storey. Winnipeg Condominium then replaced the entire exterior at a cost of over $1.5 million (Herschorn, 1996, p. 110). In 1990, Winnipeg Condominium proceeded to take legal action against Bird Construction, the general contractor; Smith Carter Partners, the architects; and the masonry firm of Kornovski & Keller, seeking restitution for the cost of removing and refinishing the exterior of the building.
As the case proceeded through Manitoba courts, the defendants argued that they were not contractually liable because Bird Construction did not enter into a contract arrangement with Winnipeg Condominium. Bird Construction also argued that it was not liable under tort law because, since there was no damage to property or person that resulted from the fall of the stone, Winnipeg Condominium’s costs were pure economic loss, not recoverable under tort law (Godfrey, 2014, p.4). In other words, because there was no harm to property or person, the $1.5 million spent by Winnipeg Condominium to repair the facade of the building was their responsibility and not the responsibility of the general contractor.
As the case continued to proceed, the Manitoba Appeals Court decision was to dismiss the claim because there was no contractual agreement and felt there could, therefore, be no liability in tort so the case was dismissed. Winnipeg Condominium then moved to the Supreme Court of Canada. The Supreme Court felt that the Manitoba Appeals Court erred in their decision based on D & F Estates Ltd. versus Church Commissioners...