Executive Summary: Key Legal and Evidentiary Issues

• Whether the motion judge committed material errors of fact in characterizing Pre-Con as having pleaded and then abandoned a valid limitation defence framed the factual challenge on appeal.

• At the core of the appeal was whether a defendant may issue a statutory third party claim for contribution before it has successfully defended the main action.

• The motion judge's exclusive reliance on the "common sense proposition" from a brief, non-binding Saskatchewan decision raised the question of whether that reasoning had any legal or equitable foundation.

• A central issue was the proper relationship between the court's inherent jurisdiction and the express statutory scheme of the Tortfeasors and Contributory Negligence Act.

• Whether Pre-Con owed Cooper any duty to disclose its intention to advance a third party claim, including whether estoppel by convention applied, formed the final question.

• The deferential standard of review applicable to a discretionary summary judgment decision shaped how the alleged errors were assessed.

Facts of the case

The underlying litigation concerns the construction of a condominium complex completed in 2014. Pre-Con Builders Ltd. ("Pre-Con") was the general contractor, and it engaged Neil Cooper Architect Inc. and Neil Cooper (together, "Cooper") to provide architectural design services. On March 29, 2021, a fire on a unit balcony led to demolition and repair work, during which staining and mould were discovered behind certain exterior walls. More intrusive investigation of the building envelope revealed what the plaintiffs described as latent and dangerous deficiencies contrary to exterior insulated finish systems industry standards.

On April 5, 2022, the plaintiffs filed a Part II application under The Limitation of Actions Act (the LOAA) seeking leave to extend the limitation period, naming both Pre-Con and Cooper as respondents. Cooper opposed the application and took active steps to do so; Pre-Con took no position, and both parties were aware of each other's stance throughout. In July 2022 the plaintiffs agreed to settle with Cooper, releasing Cooper in exchange for a waiver of costs, and on October 14, 2022 executed a release and confidentiality agreement abandoning the Part II application against Cooper. That release contained no provision requiring the plaintiffs to indemnify Cooper if Cooper were later found liable in tort. The plaintiffs filed a notice of abandonment against Cooper on January 12, 2023. On January 18, 2023, the order extending the limitation period was granted, giving the plaintiffs fourteen days to file their claim. They filed a statement of claim naming Pre-Con (but not Cooper) as a defendant on January 19, 2023. Pre-Con filed its statement of defence and crossclaim on February 28, 2023, and an amended third party claim against Cooper on September 21, 2023. Cooper moved for summary judgment to dismiss that third party claim, and on March 27, 2025 the motion judge granted the motion and dismissed the third party claim.

Statutory provisions and legal principles at issue

The dispute turned on Pre-Con's statutory cause of action for contribution among joint tortfeasors under section 2(1)(c) of The Tortfeasors and Contributory Negligence Act (the TCNA), which permits a tortfeasor to recover contribution from another tortfeasor who is, or would if sued have been, liable for the same damage. The governing limitation provisions were sections 2(2) and 17(1) of the LOAA, under which the limitation period for a contribution claim between tortfeasors does not begin to run until a settlement or judgment is issued on the plaintiffs' claim. Also central were the principles of inherent jurisdiction, as described by the Supreme Court of Canada in Endean v British Columbia, 2016 SCC 42, and the equitable doctrine of estoppel by convention as set out in Ryan v Moore, 2005 SCC 38. The motion judge had relied on a "common sense proposition" drawn from the Saskatchewan decision B (I) v Canada (Attorney General), 2001 SKQB 243.

The court's reasoning and analysis

Applying the deferential standard for discretionary summary judgment decisions, with correctness review for purely legal questions (citing Business Development Bank of Canada v Cohen, 2021 MBCA 41, and Hryniak v Mauldin, 2014 SCC 7), the Court of Appeal identified material errors of both fact and law. On the facts, the motion judge had treated Pre-Con as having pleaded and then abandoned a valid limitation defence, but the Court found this incorrect: at the time the plaintiffs abandoned the Part II application, no statement of defence - indeed no statement of claim - had been filed, and Pre-Con had not consented to the abandonment in Cooper's favour. These errors coloured the judge's view of Pre-Con's silence and caused him to misperceive the similarity between this case and B (I).

On the law, the Court held that the TCNA gave Pre-Con a statutory cause of action for contribution that could be issued before it successfully defended the main action, and that the applicable limitation period had not yet begun to run. The motion judge had never addressed this statutory right, relying exclusively on the B (I) "common sense proposition" - reasoning the Court declined to endorse because it rested on no legal or equitable foundation and effectively created a new requirement that a defendant must first exhaust all possible defences before seeking contribution. The Court further held that the court's inherent jurisdiction is a residual power that cannot be used to bypass or contradict a statute (citing College of Registered Nurses of Manitoba v Hancock, 2023 MBCA 70), and that since the TCNA expressly governed the issue, there was no room to invoke inherent jurisdiction; nor was there any breach of due process, vexation, oppression, or abuse of process to justify it. Finally, the Court rejected the argument that Pre-Con had a duty to warn Cooper that it would be sued. Any estoppel by convention claim failed at the first requirement, as there was no evidence of a mutual assumption on which Cooper was entitled to rely, and no authority requires a non-settling party to disclose its litigation strategy or intentions to a settling party.

Ruling and outcome

The Court of Appeal found material errors of fact and law and concluded that the third party claim should not have been dismissed. The appeal was allowed, the third party claim against Cooper was restored, and costs were awarded to Pre-Con, the successful appellant.