Executive Summary: Key Legal and Evidentiary Issues

• Whether Dow Silicones Corporation, as a fourth party, could lawfully bring a further (fifth-party) claim for contribution and indemnity against Oldcastle Building Envelope Canada Inc. under Rule 3-5 and the Negligence Act.

• Interpretation of s. 4(2)(a)–(b) of the Negligence Act regarding joint and several liability of defendants to the plaintiff versus several liability among third and further parties for contribution and indemnity.

• Whether Cascade Aqua-Tech Ltd.’s amended third party notice against Dow Silicones Corporation pleads sufficient material facts to disclose causes of action in negligence, breach of contract, and breach of implied warranties under the Sale of Goods Act.

• The application of the “plain and obvious” test under Rule 9-5(1)(a) for striking pleadings that allegedly disclose no reasonable cause of action.

• The role and purpose of pleadings, including the requirement to plead material facts (who, when, where, how, and what) rather than bare legal conclusions, in complex construction defect litigation.

• The effect, if any, of Associate Judge Harper’s 2025 decision on Dow’s later attempt to strike Cascade’s amended third party notice, and whether that earlier ruling precluded Cascade’s present claim.

Background of the litigation

The proceedings arise from alleged deficiencies in the design, development, and construction of a strata complex located at 277 Thurlow Street in Vancouver, British Columbia. In action S178251, The Owners, Strata Plan EPS 677, as plaintiff, sues ASPAC Developments Ltd., Hillsboro Investments Ltd. or Hillsboro Investment Ltd., Ledcor Construction Limited, IBI/HB Architects, Oldcastle Building Envelope Canada Inc., Morrison Hershfield Limited, Jones Kwong Kishi Consulting Engineers, Creo Stone Inc., Solarfective Products Limited, and others, including multiple third parties, for matters described as alleged construction deficiencies. In action S192884, The Owners, Strata Plan EPS 677 sues Travelers Insurance Company of Canada and Hillsboro Investment Ltd., with a number of third parties including Dow Silicones Corporation. The second action is described as a companion action that involves claims under the Homeowner Warranty Policy, and the plaintiff is the same Strata Corporation in both actions.

Allegations concerning caulking and roles of Oldcastle, Cascade, and Dow

In the construction deficiency action, the plaintiff alleges problems that include caulking-related issues. As it relates to caulking products, the plaintiff alleges various problems, including deficient caulking in glass pane corners, failure of caulking in curtain wall joints, windows, and doors, delaminating interior caulking, and systemic failures in the curtain wall, including exterior caulking. The amended notice of civil claim is not particularized as to specific caulking products in issue or how any caulking was defective or unsuitable, and some of the allegations appear to relate to negligent installation as opposed to product defects. Oldcastle filed third party notices, including one against Cascade Aqua-Tech Ltd., seeking contribution and indemnity under the Negligence Act. Oldcastle’s third party notice alleges that Cascade supplied Oldcastle with caulking products and makes standard allegations that Cascade failed to complete its supply of caulking products in a good and workmanlike manner without defect and in accordance with relevant industry standards. Cascade’s third party notices against Dow allege that if the caulking products were defective, they were designed, made, and supplied by Dow. Cascade alleges that Dow designed, made, and provided to Cascade the same caulking products that Cascade had alleged to have supplied, that Dow was or ought to have been aware of the use to which the caulking products would be put, that Dow owed duties of care to Cascade in respect of the design and manufacture of the caulking products, and that Dow breached those duties. Cascade further alleges that Dow and Cascade contracted for the distribution of the caulking products, defined as the “Distribution Contract,” that express and/or implied terms of the Distribution Contract and implied warranties under the Sale of Goods Act applied, and that Dow breached the Distribution Contract and those implied warranties so that Cascade is entitled to damages from Dow. In its responses to the third party notices, Dow admits that it supplied certain caulking products to Cascade pursuant to distribution agreements, but Dow denies that its products were used by the plaintiff in the construction and asserts that its caulking products are free of defects or deficiencies.

Procedural context and Dow’s status as a fourth party

Dow is not a defendant in the main construction action. Dow was brought into the proceeding as a fourth party by a third party notice filed by Cascade. Cascade’s claim against Dow, in the earlier form considered by Associate Judge Harper, contained no claim other than a claim for contribution and indemnity under the Negligence Act. Dow complained that it had been brought into the action based on bald and unparticularized pleadings of fault and that, in the absence of the plaintiff’s expert opinion evidence, it remained in the dark as to its exposure. The plaintiff’s counsel had written to all parties on August 15, 2024 stating that the relevance of the various roles of the parties would “hopefully acquire greater clarity once we produce the plaintiff’s expert opinion evidence later in September,” meaning September 2024, but that expert opinion had not yet been provided when Associate Judge Harper heard Dow’s application.

The 2025 decision: Dow’s attempt to bring Oldcastle in as an additional party

In 2025 BCSC 511, Associate Judge Harper heard Dow’s application for leave to file a third party notice against Oldcastle, relying on Rule 3-5(4) and the criteria for third party claims under Rule 3-5(1). Dow’s proposed third party notice against Oldcastle was, in substance, an attempt to commence fifth party proceedings, because Dow itself had been joined only as a fourth party through Cascade’s third party notice. Dow’s proposed third party notice denied that its caulking products were used in the construction of the strata complex and denied any defects, but alleged that if Dow were found liable to the plaintiff, then it would be entitled to contribution and indemnity from Oldcastle. Dow said that on the current pleadings it was exposed to joint and several liability pursuant to the Negligence Act and that there was a risk it might be required to pay more than its proportionate share of damages. It relied on that alleged risk to justify a contribution and indemnity claim over against Oldcastle.

Associate Judge Harper’s analysis of the Negligence Act and contribution

Associate Judge Harper held that the issue on Dow’s application was whether the proposed third party notice disclosed a reasonable cause of action, which she treated as a question of law. She noted that Dow was only a fourth party because of Cascade’s third party notice, that Cascade’s claim sought only contribution and indemnity under the Negligence Act, and that Dow was not a defendant and therefore would not be held liable directly to the plaintiff. She then analyzed the structure of liability under s. 4(2) of the Negligence Act. She stated that s. 4-2(a) provides the basis for defendants to be held jointly and severally liable to a plaintiff, absent contributory negligence on the part of the plaintiff that would engage s. 1(1). She further stated that s. 4(2)(b) provides the basis for claims for contribution or indemnity among multiple at-fault parties, and that, as between themselves, they can only seek contribution to the extent of their relative degree of fault. She concluded that parties from whom contribution or indemnity is sought are only exposed to contribute or indemnify to their respective degree of fault, and that they therefore face only several liability. She summarized that a defendant can be held jointly and severally liable to compensate a plaintiff, while a third party is only severally liable to contribute to the joint and several liability of the defendant. Applying that analysis, she held that Dow could never be required to pay more than its proportionate share as determined by the liability findings of the trial judge and thus could have no claim over against Oldcastle for contribution and indemnity. She therefore found that Dow’s proposed third party notice disclosed no reasonable cause of action and had no reasonable prospect of success. On that basis, she dismissed Dow’s application. On costs, she ordered that costs would be in the cause.

Cascade’s amended third party notice and Dow’s strike application

After Dow’s unsuccessful attempt to issue its own third party notice against Oldcastle, Dow applied to strike Cascade’s third party notice against it. Dow primarily relied on Associate Judge Harper’s decision and argued that because Cascade, like Dow, was a third party against whom contribution and indemnity was sought under the Negligence Act, Cascade could have no claim for contribution and indemnity against Dow. Dow also argued before the associate judge who heard the strike application that Cascade’s third party notice, even as amended, failed to plead sufficient material facts to disclose a cause of action against Dow and instead rested on bald conclusory statements of fault. Cascade responded by filing an amended third party notice. Dow argued on appeal that the amendments purported to remove Cascade’s explicit claim for contribution and indemnity under the Negligence Act and substitute it with independent claims for damages in negligence, breach of contract, and breach of implied warranties under the Sale of Goods Act, but without adding necessary material facts, such as identifying the caulking products alleged to be used in the construction of the strata complex, the specific manufacturing or design defects alleged, or any specific contract. Cascade maintained that its original third party notice had already identified an independent claim and that the amendments were made to clarify that claim if clarification was necessary.

The associate judge’s refusal to strike Cascade’s amended pleading

The associate judge who heard Dow’s strike application characterized Cascade’s amended third party notice as “in effect, a claim brought pursuant to the Sale of Goods Act.” He found that this distinguished it from Dow’s proposed third party notice that had been before Associate Judge Harper. He concluded that this was not a situation where Cascade would necessarily be precluded from claiming over against Dow by operation of law. He also found that, although the amended third party notice was not a “work of art,” the allegations were sufficiently set out to bring to Dow’s attention what was being alleged and the basis for those allegations. He stated that, to the extent Dow was of the view that the third party notices lacked sufficient particulars, it was open to Dow to demand particulars, and he remarked that he suspected this step had not been taken because, notwithstanding the somewhat imprecise nature of the allegations, Dow was fully apprised and well aware of the claim it was being called upon to meet. He declined to strike the amended third party notice.

The 2026 appeal: legal principles on striking pleadings

In 2026 BCSC 502, Justice J. Walker heard Dow’s appeal from the associate judge’s order refusing to strike Cascade’s amended third party notice. The issue on appeal was whether the associate judge erred in law or principle in not striking the amended third party notice pursuant to Rule 9-5(1)(a) or, alternatively, Rule 3-5(8). Justice Walker noted that the question of whether a pleading discloses a cause of action is a question of law reviewed on a correctness standard. He set out the principles governing applications under Rule 9-5(1)(a), including that the rule empowers the court to strike out all or part of a pleading if it is “plain and obvious” that it discloses no reasonable cause of action, taking the facts pleaded as true, and that the court should read pleadings generously and overlook minor drafting defects where the pleadings are functionally adequate. He cited authorities describing the purpose and role of pleadings: that pleadings are foundational, guide the litigation process, give effect to the policy objectives of the Rules, provide notice of the case to be met, and define the issues of fact and law for determination. He summarized that material facts—those essential to formulate a claim and necessary to prove in order to support the claim—must be pleaded, and that bald assertions or mere conclusory statements of law, without material facts, are not sufficient.

Arguments on appeal about the sufficiency of Cascade’s pleading

Dow argued on appeal that Cascade’s amended third party notice was fatally deficient because it merely recited the elements of the causes of action and relied on bald allegations of fault. It contended that Cascade appeared to allege multiple types of negligence but had not separately pleaded each type with its own material facts. It argued that Cascade’s claim of negligent manufacture relied on omnibus definitions, bare assertions, and legal conclusions, without identifying which caulking products were used in the construction, which were alleged to be defective, or how or why they were defective. It argued that negligent design was not adequately pleaded because Cascade made only a bare allegation that Dow failed to design the caulking products in compliance with applicable Codes, regulations, and industry standards, without pleading any design defect, foreseeable risks, or a feasible safer alternative design. Dow further argued that the failure-to-warn claim was inadequately pleaded because Cascade alleged only that Dow was negligent in failing to warn the plaintiff and Cascade that the caulking products were defective, without facts describing any warnings, why they were inadequate, or how they could be improved. Dow also submitted that the breach of contract and breach of implied warranties claims were inadequately pleaded, because the amended third party notice did not allege any specific contract or when it was entered into and simply recited the elements of implied warranties such as those found in s. 18 of the Sale of Goods Act. Dow maintained that requesting further particulars could not cure a claim that failed to plead material facts.

Cascade emphasized in response that Dow bore the onus of showing that the amended third party notice was bound to fail and that striking a pleading is appropriate only in the clearest of cases. Cascade argued that the amended third party notice provided Dow with notice of the case it had to meet, and that sometimes pleading the elements of a cause of action, together with contextual facts, can suffice to plead material facts. Cascade relied on the description in the amended third party notice of Dow’s role as designer, manufacturer, and supplier of the caulking products Cascade supplied, the alleged duties and contractual terms, and the allegations that Cascade would be entitled to damages from Dow if those products caused or contributed to the plaintiff’s loss.

Justice Walker’s reasons and conclusion on the appeal

Justice Walker accepted that the argument about sufficiency of material facts had been advanced before the associate judge and was not a new argument on appeal, although it was more developed on appeal. He held that the context of the action was an important factor in assessing the adequacy of the pleading. He referred to the associate judge’s reasons, which described Cascade as a distributor of a product manufactured by Dow and summarized the allegations that Dow contracted with Cascade to distribute caulking products, that this contract (defined as the “distribution contract”) included express and/or implied terms—corresponding to commonly cited implied contractual terms under the Sale of Goods Act—that the caulking products would be reasonably fit for their intended purpose, durable for a reasonable period of time, of merchantable quality, and made of materials suitable for their intended purpose. The associate judge had also stated that, if Cascade supplied products that caused or contributed to the plaintiff’s loss because they were unfit for their intended purposes or failed to be of reasonably durable quality, that could be a basis for Cascade’s liability to the plaintiff and also a basis for Cascade to seek damages or indemnity from Dow. Justice Walker stated that he could not discern any legal error in this conclusion or analysis. He agreed that, in the context of this action, Cascade’s amended third party notice adequately pleaded material facts and that, insofar as Dow alleged insufficiency, those concerns could be addressed by a demand for further particulars.

Justice Walker also agreed with the associate judge that Associate Judge Harper’s earlier decision did not go so far as to preclude Cascade’s third party notices from being sustained in their present form. He held that it was not plain and obvious that Cascade’s claims were bound to fail and that Cascade had a legitimate basis on which to seek damages or indemnity from Dow as the alleged ultimate manufacturer of the products. He therefore dismissed Dow’s appeal and ordered costs to the respondent, Cascade. The amount of costs or any other monetary award is not specified in the decision, and the total amount ordered or awarded in favour of any successful party cannot be determined from these decisions.