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[Vol. 20
Woe Unto the Building Inspector (and the Municipality):
A Comment on McCrea v. City of White Rock
In McCrea v. City of White Rock,’ the roof of the building in
which Mr and Mrs McCrea had operated an IGA grocery store for
three years collapsed in 1968, damaging stock and equipment and
hastening the demise of their business. Seeking reparation, the
McCreas brought suit initially against the owner of the premises,
a builder who had performed renovations to the building in 1961,
a building inspector who had approved the renovations, and the
City of White Rock. The death of the builder and the expiry of the
limitation period (thus barring action against the municipality)
reduced the number of defendants to two: the owner of the building
and the inspector. In a potentially far-reaching decision, BergerJ.
in the British Columbia Supreme Court absolved the owner but
awarded damages in the amount of $7,500 against the building
inspector.
The law governing liability for defective premises has been in
an unhappy state for many years, primarily because the courts have
been unwilling to apply broad negligence principles to what has been
regarded as an area more properly within the province of property
or contract law. Dangerous or defective buildings have not been
analogized to faulty chattels and thus have remained largely un-
affected by developing concepts of products liability. Visitors may
obtain compensation in tort for injuries suffered while making a
business or social call, but redress, if any, will lie only against the
occupier. Meanwhile, the tenant or purchaser who suffers damage
has usually been left to the less than tender mercies of the law of
property, where caveat emptor and caveat lessee are sentinels which
augur ill for most claimants.2 The law of contract will provide a
remedy only when express undertakings are breached, and then
only to those who are parties to the agreement. No warranty of
reasonable fitness is implied when real property is sold or leased.
This has led to unconscionable results as in the case of Otto v.
Bolton,3 in which compensation was awarded on the basis of an
express contractual warranty to the purchaser of a newly con-
‘ McCrea v. City of White Rock (1972), 34 D.L.R. (3d) 227 (B.C.S.C.).
2 Fleming, The Law of Torts 4th ed. (1971), 413ff.
3 [1936] 2 K.B. 46.
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COMMENTS – COMMENTAIRES
structed. house for expenses incurred when the ceiling collapsed six
months after its purchase, but denied to the purchaser’s mother,
who shared the house and was injured by the same collapse.
Similarly inequitable was the decision in Cavalier v. Pope,’ in which
recovery was denied to a plaintiff who fell through a defective floor
in premises she occupied with her husband, but who unfortunately
(but not atypically) was not a party to the tenancy agreement.
The harshness of such doctrine has prompted criticism from
courts and commentators alike,’ but its foundations remain intact.’
in 1972, however, the English Court of Appeal handed down a judg-
ment which may well lead to a re-appraisal of the whole area of
liability for defective premises. In Dutton v. Bognor Regis United
Building Co.,7 liability to a subsequent purchaser was imposed on an
urban district council whose building inspector had, after a careless
inspection, approved the use of foundations which were inadequate
to support a house erected upon them. The Dutton case was the
direct inspiration for Berger,J.’s decision in McCrea v. City of White
Rock, which will now be examined.
The Owner of the Premises
In 1961 Mr Stang decided to expand the grocery business which
he operated in one half of a building owned by him. Expansion
necessitated removal of a dividing wall, which also acted as a roof
support, and its replacement with a beam supported by steel col-
umns. Stang hired a builder, Hughes, to perform the work. Hughes
drew up a plan which was approved by Everall, White Rock’s build-
ing inspector. Unknown to Stang and undetected by Everall, who
was only called to inspect earlier stages of the renovation, Hughes
departed from the approved plan by suspending the roof trusses from
the side of the beam instead of resting them on it. The unsafe method
of construction thus adopted led to the collapse of the roof in 1968,
by which time the grocery store business was owned by the plain-
tiffs.
4 [1906] A.C. 428 (H.L.). See also Bottomley v. Bannister, [1932] 1 K.B. 458;
Malone v. Laskey, [1907] 2 K.B. 141.
5 E.g. Fleming, supra, f.n.2, 418, and cases cited thereat.
6 There have been judicial attempts to alleviate the severity of this area of
the law. A notable example was a decision by Richardson,J. in the Ontario
Supreme Court, holding the builder and vendor of a house liable” to a visitor
who was struck on the head by a kitchen cupboard which fell off the wall:
Lock v. Stibor (1962), 34 D.L.R. (2d) 704.
7 [1972] 1 All E.R. 462 (C.A.).
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At the time of the remodelling in 1961, the owner had failed
to comply with s.15 of the building by-law, under which he was
required to notify the inspector to come and inspect the roof beam.
His failure td do this was an omission that contributed to the
collapse of the roof and, together with the negligence of the con-
tractor and inspector, was categorized as an effective cause of the
roof’s collapse and the damage suffered by the plaintiffs.8 However,
it was held that, in contrast to the position of the inspector, no civil
right of action against the owner was conferred by the by-law.
Instead, his liability depended upon the general law of negligenceY
While Bergerj. acknowledged the force of criticisms of the Cavalier
v. Pope doctrine, he was not prepared to disregard those Canadian
decisions which continued to limit the liability of the owner of
premises through application of the privity of contract rule.10 The
present situation was not one of privity, as the McCreas (although
owners of the business) occupied the building on a sub-lease from
a firm of wholesalers. Accordingly, the Court was not prepared to
hold that a duty of care was owed by the owner of the building (the
lessor) to the plaintiffs (the sub-lessees). Bergerj. held that even
if Donoghue v. Stevenson were applicable, the owner had discharged
any duty he owed by hiring a contractor whom he thought competent.
By comparison with the vendors of other products, the person
who disposes of an interest in real property is treated with notable
benevolence by the law. He continues to benefit from the often
dubious proposition that defects in realty are ordinarily discover-
able if the purchaser or lessee exercises due diligence on his own
behalf. The doctrine of caveat emptor is clearly anachronistic in this
context, and to require that an owner should exercise reasonable
care to ensure an adequate standard of safety in his premises
would seem both desirable and not unduly burdensome, particularly
if, as Bergerj. suggests, he may discharge his duty by hiring a
contractor whom he reasonably believes to be competent.
The Builder
In McCrea the builder had died before the trial, so the question
of his liability was not directly in issue. Nonetheless, Bergerj. felt
constrained to indicate that, since Dutton, a negligent contractor
8Supra, f.n.1, 240.
0 Ibid., 241.
10 Ibid., 242-243.
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COMMENTS – COMMENTAIRES
would be liable to subsequent occupiers.”1 In fact, it is clear that
the supposed immunity of the builder had been eroded before
Dutton.2 It was the residual question of whether the builder who
also happened to own the property would continue, by virtue of his
ownership, to fall outside the mainstream of tort liability which was
there answered in the negative. Accordingly, the conclusion reached
by Berger,J. in McCrea can be regarded as unexceptional. As one
Canadian court had earlier concluded,13 there seems no valid reason
why a workman whose dubious skills are applied to realty should
be in a different position from his colleagues who direct their efforts
towards the wide array of personal property.
The Building Inspector and the Municipality
Prior to McCrea there appears to be no Canadian authority to
support the proposition that a building inspector and the munici-
pality which employs him are subject to tort liability for inadequate
performance of the inspection function; in fact, as recently as 1967
an Ontario court had explicitly rejected a similar contention. 4
Nonetheless, the plaintiffs successfully asserted that a duty of care,
for the breach of which they could sue, was owed to them by the
inspector.
The City of White Rock had established a building code in the
form of. a by-law which required authorization through the grant
of a permit by the city’s building inspector before construction work
could be undertaken. The role of the inspector in the implementation
of the building code was therefore a key one. Although the by-law
did not on its face require him to inspect all construction, it imposed
upon him an express duty to enforce the by-law and gave him broad
powers to enter any building in the performance of his duties. This
combination of factors led the court to conclude that there could
be no meaningful enforcement without a positive duty of inspec-
tion.’5
“1 Ibid., 240. In Dutton, the plaintiff, doubting a favourable outcome in the
face of a line of cases which seemed to confirm a broad immunity for building
contractors, had settled her claim against the builder. In the event, the Court
of Appeal gave short shrift to these authorities, expressly disapproving such
decisions as Bottomley v. Bannister (supra, f.n. 4) and Otto v. Bolton (supra,
f.n.3): see supra, f.n.7, 472.
12 See, for example, Sharpe v. Sweeting and Son Ltd., [1963] 2 All E.R. 455.
13 Richardson,l. in Lock v. Stibor, supra, f.n.6.
‘4 Neabel v. Town of Ingersoll, [1967] 2 Q.R. 343. The decision is not referred
to in McCrea.
15 Supra, f.n.1, 233.
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Having recognized a statutory duty to inspect, the Court next
considered whether failure to discharge the duty could give rise to
a private right of action. It would have been relatively simple to deny
the plaintiffs’ claim by drawing a negative inference, as judges in
the past have done, from the failure to include in the by-law any
reference to a private right. Instead, the judge emphasized that a
primary aim of the by-law was the establishment of a building code
for the protection of occupants. He found that the right to claim in
tort for damage incurred through inadequate enforcement was a
necessary corollary of the statutory duty to inspect.
At no stage in this reasoning is there any acknowledgment by
Berger,J. that he is in fact breaking new ground and opening up a
potentially fruitful source of litigation for the not insignificant
number of persons who are the victims of inadequate building
construction or repairs. The building inspector knew, said the judge,
that if the bearing wall was not replaced with adequate means of
support, those occupying or coming on the premises might be
injured, and damage might result. Consequently, “he ought to have
done what was reasonable to see that the building was remodelled
safely”.’
Having decided that a right of action existed, the next question
to be considered was the nature of the duty owed by the inspector. It
had been the practice of the city (and, presumably, of other muni-
cipalities) to inspect on call. The inspector relied upon the owners
to notify him at certain specified stages in the construction, as
required under the by-law.’7 This approach to enforcement did not
satisfy BergerJ., who was of the view that the practice of the
municipality did not live up to the purpose and requirements of its
own by-law.’ He acknowledged the implications of this conclusion:
I realize this may mean that White Rock will have to employ additional
staff to ensure that inspections are carried out wherever it is necessary
to ensure the safety of a structure. But the legislation is there. The by-law
is there. By the passage of the by-law the municipality assumed a duty of
inspection… . That duty had to be discharged with reasonable care. It
was not. 10
10 Ibid., 237.
7 Building By-Law of City of White Rock:
s.15 Duties and Responsibility of the Owner.
The owner of the property shall,…
(c) Notify the Building Inspector
(iii) when ready for lathing,
(Section 15(c)(iii) was construed to require notification before the beam was
covered.)
18Supra, f.n.1, 236.
10 Ibid., 237.
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COMMENTS – COMMENTAIRES
There remains some uncertainty as to precisely -what steps are
necessary for the city and the inspector to adequately discharge
their duty. Clearly they are not free to set up the failure of the owner
to notify the inspector as a justification for not making an on-site
inspection, at least at important stages in the work. In McCrea,
this duty dictated inspection of the installation of the beam upon
which the safety of the building and its occupants depended.20
The judgment in McCrea emphasizes, however, that the-inspector
need only exercise a standard of reasonable care, and is not in the
position of an insurer.2′ The possibility is left open that the reputa-
tion of the builder (of which there was no evidence in the present
case) could have a bearing upon the duty to inspect. The apparent
implication is that a lesser degree of supervision might suffice where
the work is undertaken by a builder of established repute.22 However,
if there are certain crucial stages in construction where the positive
duty to inspect is of particular importance (as the by-law seems to
indicate), there would appear to be little justification for modifying
the duty in some instances but not in others.
In imposing liability on the building inspector, BergerJ. couched
his judgment in the traditional terms of duty and foreseeability of
damage. In so doing he effectively ensured the success of the
plaintiff’s claim. A finding that the inspector should have foreseen
damage of the type which occurred as a likely consequence of his
failure to inspect, though unhexceptional on the facts, would have
been equally supportable ten or thirty years ago, at which time
liability clearly did not sound. Hence, as the judge himself
acknowledged, the result reached in the present case must be
explained in terms of policy considerations. In this regard, Berger,J.
reiterated the views expressed by Lord Denning in Dutton v.
Bognor Regis2 s on the supposed incentive to better’ enforcement
which would result from tort liability. This is a restatement of the
oft-asserted deterrence argument, which is likely to prove-of limited
2 1 It should perhaps be noted that Farwell, the building inspector, had paid
three visits to the site -when notified by the owner at certain earlier stages
of the construction.
21Supra, fan.l, 237.
22Ibid., “In some cases it might be reasonable for the building department
to take into account the reputation of the builder, and not to inspect except on
call.”
2 3 Supra, f.n.7, 476; cited supra, f.n.1, 236. The Dutton case involved an in-
spection performed by a municipal surveyor which led him to approve the
foundations of a house being constructed on land fill. The foundation proved
inadequate to withstand subsidence which occurred soon after completion.
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value in cases where the defendant is a municipality or insurance
company.
Of ‘greater significance for the broader issues presented by
the McCrea case is another passage from Lord Denning’s judgment
in Dutton, which was not referred to in McCrea. After proclaiming
the expanding role in tort law of policy in general and loss distribu-
tion in particular, the Master of the Rolls considered the claim
before him:
First, Mrs. Dutton has suffered a grievous loss. The house fell down
without any fault of hers. She is in no position herself to bear the loss.
Who ought in justice to bear it? I should think those who were responsible.
Who are they? In the first place, the builder was responsible. It was he
who laid the foundations so badly that the house fell down. In the second
place, the council’s inspector was responsible. It was his job to examine
the foundations to see if they would take the load of the house. He failed
to do it properly. In the third place, the council should answer for his
failure. They were entrusted by Parliament with the task of seeing that
houses were properly built. They received public funds for the purpose.
The very object was to protect purchasers and occupiers of houses. Yet,
they failed to protect them. Their shoulders are broad enough to bear the
loss. 2 4
As a general proposition, any improvement in the inadequate
legal protection afforded those who suffer damage or injury as a
result of defective building construction is to be welcomed. We may
also agree with Lord Denning that the legitimacy of the loss distribu-
tion function in the law of torts has gained increasing, if sometimes
tacit, recognition in recent years. Nevertheless, the judgment of
Berger,J. in McCrea v. City of White Rock leaves certain residual
questions unanswered.
A preliminary caveat needs to be entered concerning the loss dis-
tribution rationale. It is true that a municipality will usually be in
a better position than injured individuals to absorb and spread
losses resulting from sub-standard construction. If the McCrea case
gains wide acceptance in Canada, cities and townships will be faced
with the choice of employing additional inspection staff (a move
which may not be feasible for smaller municipalities) or insuring
themselves to meet possible- liability, either through commercial
underwriters or by self-insurance. However, loss distribution or deep
pocket arguments are not applicable to a situation (as in McCrea)
where action against the municipality is statute-barred, leaving the
building inspector to assume full liability. In such a case, the loss
incurred will be shifted but, in the likely absence of personal liability
insurance, will not be distributed.
24 Supra, f.n.7, 475.
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COMMENTS – COMMENTAIRES
More significant than the particular immunity afforded the city
by a short limitation period is the general question of the time factor
in actions involving real property. In many instances defecti- e
workmanship will not manifest itself until a considerable period has
elapsed. However, in most jurisdictions the limitation period for
tort actions is six years.25 Consequently it may be of crucial import-
ance to determine the moment at which the cause of action accrues.
In Dutton this point was not directly in issue as the damage occurred
only two years after construction, but Denning, M.R. suggested obiter
that the limitation period began to run at the time the work was done
rather than when the effects of the inadequate construction became
manifest.2 His colleague Sachs,L.J. significantly preferred to express
no opinion “as the point may be susceptible of argument”. 7 The
point would indeed seem open to argument in light of the result
reached in McCrea.
A bedrock principle in applying statutes of limitation has been
that the period runs from the accrual of the cause of action, i.e. from
the earliest time at which an action could theoretically have been
brought.28 For an action to lie in negligence some damage must
occur. If we adopt the reasoning of Denning,M.R. in Dutton, the
owner of the premises subsequently leased to the McCreas suffered
damage in 1961 when he was left with an unsafe roof, although he
was not aware of its dangerous condition. Consequently, his right of
action against the building inspector (and the city) accrued at that
time and expired six years later in 1967. The McCreas did not take a
lease on the premises until 1965, so that any right of action enjoyed
by them could not have accrued until that year and would then
presumably run for a six year period, expiring in 1971. Arguments
advanced by the defendants in Dutton (though apparently not by the
building inspector in McCrea) can therefore be seen to express far
from groundless-fears of a potentially open-ended liability. Such in-
deed would seem to be the situation if the limitation period were to
be revived by each subsequent sale or lease of the property, bringing
into the picture new plaintiffs with fresh rights of action. 29
25 See Williams, Limitation of Actions in Canada (1972), 57.
236Supra, f.n.7, 474.
21 Ibid., 482. The third judge in the Court of Appeal, Stamp,L.J., did not
deal with the question of the limitation period.
28 Williams, supra, fn.25, 7.
29The liability of the builder would appear to be even more elastic if he
has covered up his own bad work. He might then be guilty of concealed fraud,
in which event the limitation period would not begin to run until the fraud
was discovered. See Denning,M.R. in Dutton, supra, fn.7, 475. See also
Williams, supra, f.n25, 207.
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Furthermore, McCrea v. City of White Rock does not draw
parameters around the class of persons who may claim, except to
indicate, less than helpfully, that the duty owed by the building
inspector and the municipality is limited “to those who may be
injured if there is a negligent failure to inspect the repairs”.30 The
McCreas sued as owners of the grocery business and tenants of the
building, but there is a clear suggestion by Berger,J. that liability
would extend to all persons coming on the premises “whether as
occupiers or customers” 1. 3 Certainly, from the foreseeability stand-
point there seems to be no basis for distinguishing between the shop-
keeper and his customers, any one of whom might expect to suffer
injury if the roof of the store should collapse.32
But again the limitation question arises: will customers and
other visitors be able to claim against the municipality ten or
twenty (or more) years after the initial careless inspection, provided
they bring suit within six years of the date on which they were
injured? Such would appear to be the import of the Limitations Acts
as they have been applied to other areas of the law. In fact, the
practical problems involved in proving instances of inadequate in-
spection which occurred in the distant past will almost certainly
limit the time span of the municipality’s liability.
In McCrea the failure to inspect, while not the immediate cause
of the damage suffered by the plaintiffs, was regarded as sufficiently
proximate for the purpose of affixing liability. The causation hurdle
had proven insurmountable in at least one earlier Canadian decision
involving negligent inspection,33 and we may expect further argument
to be directed to the question of proximate cause. The defendant’s
conduct would appear to satisfy the so-called “but-for” test,34 but
future claims could be imperilled if the Canadian courts decide to
trot out the “last opportunity” warhorse. It is hard to see any
justification for such an approach, and it is hoped that reliance will
not be placed upon discredited doctrine to camouflage necessary
policy choices.
McCrea v. City of White Rock breaks new ground in Canada.
Emboldened by the Dutton decision in England, Bergerj. has opened
30 Supra, f.n.1, 238.
“‘ Ibid., 236.
3 2 In Dutton the council apparently conceded that it might be liable if the
ceiling fell down and injured a visitor, while arguing (unsuccessfully) that it
was not liable to the plaintiff for the economic loss he had suffered through
diminution in value of his house: supra, f.n.7, 474.
.3 Neabel v. Town of Ingersoll, supra, f.n.14, 349.
34 See Linden, Canadian Negligence Law (1972), 254.
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COMMENTS – COMMENTAIRES
up a potentially rewarding avenue for the victims of inferior cons-
truction work and inadequately enforced building codes. Undoubted-
ly, the builder himself will and should remain the primary source for
redress. 35 However, liability based upon careless inspection can be
seen to fall comfortably within general negligence principles. It is
consistent with traditional fault concepts and is likely as well to
further the emerging goal of loss distribution. Its deterrent effect
upon careless building inspectors may be less than anticipated, but
any significant incidence of municipal liability could lead local
authorities to conclude that their own interests as well as those of
their residents would be well served by keeping a closer eye on the
operations of building contractors.
In many ways the judgment in McCrea is an example of tort
law’s capacity to encompass new fields without doing violence to
previous patterns of decision. However, concepts such as duty of
care and foreseeability do not provide answers to a number of
questions arising out of the case. What is needed is a further
decision, hopefully at the appellate level, which will canvass fully
the policy issues at stake and provide a sound conceptual base for
future development.
John Hucker*
5Municipalities would clearly be entitled to recoup some and probably all
amounts paid out in satisfaction of judgments against them, provided the
contractor directly responsible is still in business and is not otherwise exempt
from judgment.
* Associate Professor of Law, Queens University; Consultant 1974-75, Depart-
3
ment of Justice, Ottawa.
