PUBLICATION: Vancouver Sun
DATE: 2006.05.11
SECTION: WestCoast News
PAGE: B2 COLUMN: The Daily Special
BYLINE: William Boei
SOURCE: Vancouver Sun
ILLUSTRATION: Colour Photo: Glenn Baglo, Vancouver Sun / A judicial inquiry is urged into the extent of federal liability in the disaster that hit such condos as Surrey's Odyssey Tower.; Colour Photo: Glenn Baglo, Vancouver Sun / Pierre Gallant an architect with Morrison Hershfield and an expert on building envelopes stands outside Odyssey Tower in Surrey. He says leaky condos are not the result of a faulty building code.

Tory MP loads smoking gun: John Cummins offers an ammo belt full of new documents pointing to a federal coverup in the disaster. He wants a judicial inquiry into Ottawa's liability

Whose fault is it that B.C. condos leaked and rotted, and who should pay to fix them? Those are easily the most vexing questions raised in B.C.'s leaky condo disaster. And they are about to be asked again, as some British Columbians look to the federal government to shoulder some of the blame and pay some of the costs. Vancouver lawyer John Singleton is seeking to have a class action lawsuit certified against Canada Mortgage and Housing Corp., claiming it knew 25 years ago that the building design and construction practices then being used were doomed to fail. CMHC should have done something, the suit contends. John Cummins, Conservative MP for Delta-Richmond East, is going one step further. He wants the federal government to call an inquiry to assess Ottawa's share of the blame, and volunteer to pay its share of the bills. Between them, Singleton and Cummins are bound to tear the scabs off some old wounds. Both suggest, directly or indirectly, that the federal government helped cause the problem. And that means the fat is in the fire, again.

- - -  

Former B.C. premier Dave Barrett headed two provincial commissions of inquiry into leaky condos in the late 1990s.

The core of his findings was that hundreds of buildings leaked "as a result of poor or inappropriate design and shoddy workmanship."

"Not one example was brought forward where such buildings had been built to code," Barrett's final report said. "Instead, code violations were the reason for the failure of the buildings."

It went on: "If the building code is followed -- with requisite understanding of building science -- the building envelope systems will work."

Barrett's findings have been accepted as accurate and fair by most sectors of the industry, but have never sat well with home builders. Some still ask, how could the same people who built perfectly serviceable buildings in the 1970s suddenly lose it in the 1980s?

"The only thing they were doing differently was following the new order because they were told to," said Peter Simpson, chief executive of the Greater Vancouver Home Builders' Association.

"The new order" refers to changes in the building code in the late 1970s to mandate airtight walls in order to conserve energy -- in essence, to make sure that when you heat your home, the warm air doesn't constantly leak out through the walls.

"There was this blind pursuit of energy efficiency," Simpson said.

In his view, airtight walls meant that when water got in -- as it inevitably would, sooner or later -- it couldn't get out again. It was trapped in the walls, and the walls would rot.

The condo crisis generally occurred for buildings built between the early 1980s to the late '90s. Since then, condo design and construction has improved dramatically.

Buildings that continue to have issues with leaking have, for the most part, either taken time to show problems or have strata councils that have not taken appropriate action.

In general, the assessed value of problematic condos decreased significantly until the repairs were carried out. Remediated condos in the present local real estate market quickly catch up to market value.

The view that it was the code's fault has not been embraced by the courts.

In the hundreds of lawsuits filed by leaky condo owners, liability has stuck to builders, developers, architects, engineers, contractors, manufacturers and municipal governments to varying degrees. But no court has yet blamed either the provincial or the federal government.

An earlier class action suit against the B.C. government and CMHC was rejected by the Supreme Court of B.C. The suit claimed that by requiring the National Building Code to be adhered to when it insured mortgage loans, CMHC was promising the buildings would be structurally sound. The province shared blame because it was negligent in enacting the B.C. Building Code, which is based largely on the federal code.

Not so, the court ruled. CMHC was off the hook because mortgage loan insurance could not be interpreted as a warranty on the building. And the province had no special obligation to the plaintiffs.

- - -

Now, Cummins figures he has found the smoking gun that will finally convict the building code.

Cummins said he got involved because his riding had its share of leaky condos.

"Some of the stories you heard were pretty tragic," he recalls. Seniors looking forward to a carefree retirement lost their savings. Young families buying their first homes had to walk away from their mortgages.

He started asking questions and talking to condo owners who were convinced the federal government and its agencies were behind the problem.

"It seems at least part of the issue was the National Building Code," Cummins said.

He agreed there were design problems -- California design styles were popular, but didn't function well in the rainforest -- and shoddy construction.

"But underlying a lot of it was the National Building Code and the wet wall syndrome that could be associated with it."

Cummins started writing letters, asking questions in the House of Commons, filing freedom of information requests. What did the federal government and its agencies know about building problems, and what did they do about it?

"You dig away, dig away, dig away, and all of a sudden you come up with a gem."

Cummins found a series of memos, meeting minutes and letters, most of them dated 1981, focused on some CMHC-insured homes in Newfoundland whose walls were rotting, apparently due to condensation.

By August 1981, CMHC was taking a national survey to find out how widespread the problem was and whether building codes and standards needed to be changed, Cummins' research shows.

"Today's building energy standards which require tight air/vapour barriers," said one of the CMHC memos, "can result in higher relative humidity within the houses and a reversal of air flow through the exterior walls. In many houses, the outward flow of warm, wet air is condensing within the exterior walls.

"This condition demands early action by builders and homeowners, otherwise, early deterioration by rot of woodframe houses in Newfoundland, and most likely in other parts of Canada, will reach major proportions."

Letters were sent to the federal deputy energy minister and to provincial housing ministers. The topic was raised at a National Building Code committee meeting in Charlottetown. One of those present was B.C. government building official James Currie.

"Mr. Currie said that there are problems of condensation on the West Coast," the meeting minutes say. "He believed the problem was related to the need for adequate air supply" in the walls.

And then Cummins found his gem. "That's the deputy minister of energy telling a guy at CMHC, you've got this problem. But the government's position is that they have a commitment to the National Energy Program, and that's the priority. We're not interested in finding any fault with that program."

Soon after, the discussion dwindled away. "They just said, stifle it," Cummins said. "We don't want to hear any more. And that was the end of it."

CMHC should have admitted then that there was a problem and fixed the code, he said. Instead, "the problem got bigger. Out here, it was just an unmitigated disaster."

Cummins says this is all information that wasn't available to the Barrett commission.

James Currie emerged in the 1990s as a disgruntled former B.C. government employee who went public to say he had predicted the leaky condo disaster but had been ignored. At the height of the crisis, his letters dwindled away. "They just said, stifle it," Cummins said. "We don't want to hear any more. And that was the end of it."

CMHC should have admitted then that there was a problem and fixed the code, he said. Instead, "the problem got bigger. Out here, it was just an unmitigated disaster."

Cummins says this is all information that wasn't available to the Barrett commission.

James Currie emerged in the 1990s as a disgruntled former B.C. government employee who went public to say he had predicted the leaky condo disaster but had been ignored.

At the height of the crisis, his letters were circulated by the Home Builders' Association to back the contention that the code was part of the problem.

Currie refused to testify at the Barrett commission, but the commission heard expert testimony on his claims -- the testimony fills more than 100 pages in the commission's final report -- and dismissed them.

Cummins asked Conservative leader Stephen Harper during the last federal election campaign to call for a federal inquiry into leaky condos, and Harper publicly agreed to undertake "a review" but did not commit to any details.

Now that the Conservatives are in power, Cummins has asked Housing Minister Diane Finley to establish a judicial inquiry that would report back in nine months and determine "the extent of federal government liability and the nature of restitution and relief to homeowners."

He hasn't heard back from Finley yet. But he figures that if the government doesn't step up, the courts will eventually order it to do so.

"You might as well get ahead of the game and give these people some satisfaction before that happens."

- - -

The class action suit "is based on CMHC's involvement in the investigation of leaky buildings in Canada from 1981 to the present time," says Singleton, of the Vancouver law firm Singleton Urquhart, "and is based upon knowledge they gained in that time period, up to and particularly the late '80s, early '90s, and what they did and did not do with the information they had."

Singleton argues CMHC was negligent in failing to tell the industry what it knew -- "that this sort of design, particularly on the west coast of Canada, and this type of construction was going to fail and cause significant structural damage. That's our case."

He anticipates the Supreme Court of B.C. will hold a certification hearing in the fall. If it certifies the suit, hundreds if not thousands of condo owners are expected to join the action.

Singleton said the suit does not involve the building code. It is about "what CMHC knew or didn't know," and that was never presented to the Barrett commission, he added.

If the suit goes forward and he wins, any leaky condo owners who haven't settled their claims and agreed not to sue anyone else "would be able to then recover from CMHC their determined pro rata share of responsibility for the problem. And we don't know yet what that may be."

- - -

Not everyone agrees Cummins and Singleton are on the right track.

For one thing, the documents Cummins found point to condensation within the walls from moist indoor air as the source of the problem.

Pierre Gallant, an architect with building engineers Morrison Hershfield and a leading expert on building envelopes, notes the amount of water that can get into walls by condensation from indoor air is so small it is measured in grams.

What got into B.C.'s leaky buildings wasn't condensation but rainwater, in quantities measurable in kilograms, through numerous imperfections in the "face-sealed" outer walls.

It did not get in because of a faulty building code, Gallant said.

"Those who advocate this just don't get it. It's scapegoatism to blame the government."

What went wrong, Gallant said, was industry-wide.

"The designs were faulty because they did not conform to the minimum standards of the building code.

"The authorities having jurisdiction did not enforce the code because arguably they did not understand it as well they ought to.

"The developers and contractors did not build as per code because the designers did not design as per code.

"There was a gradual erosion of good construction practices because of the pressures of the economy. Land costs were so high, we wished to construct at a lower cost in order to provide a product to the eventual owners, and shortcuts were taken.

"Windows started to leak, so the manufacturing was inadequate.

"So you can see it's an industry-wide problem. Every player in the industry from the installer to the manufacturer to the designer to the developer to the funders to the authorities in jurisdiction, had a role to play."

The sealed walls were supposed to keep water out, Gallant said. "Recognizing that nothing is perfect, whatever gets by the outer cladding must be intercepted and allowed to weep out. Our building code since its earliest beginning described just that."

Gallant said the code is widely misunderstood. It is not the law of the land, but a model code that describes how buildings are built in Canada. It does not prescribe how buildings should be built. "It is reactive, not proactive."

For example, virtually all B.C. condo buildings are now built with rain screens. But the national code didn't call for rain screens until last year, and the B.C. Building Code won't require rain screens until next year.

Gallant wasn't aware of the details of Cummins' documents or Singleton's suit, but he said CMHC is generally open with its research results.

"I have never seen an attempt [by CMHC] at hiding information," he said. "But let the courts decide."

- - -


Leaky condo loan approvals show late 1980s to mid 1990s was the worst period for leaky condo construction.

Year of con- Number of Percent struction buildings of total

1997 6 0.96%

1996 15 2.39%

1995 32 5.10%

1994 90 14.35%

1993 78 12.44%

1992 60 9.57%

1991 42 6.70%

1990 52 8.29%

1989 47 7.50%

1988 40 6.38%

1987 27 4.31%

1986 27 4.31%

1985 28 4.47%

1984 18 2.87%

Before 1984 65 10.37%

Total 627