T-1647-71
Crown Diamond Paint Co. Ltd. (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Dubé J.—Ottawa, May 7, 8 and
12, 1980.
Crown — Torts — Negligence — Claims by plaintiff
regarding damages caused by flooding and fire in building
occupied by plaintiff and owned by the N.C.C. — Whether
defendant liable for damages — Whether exculpatory clause
contained in the lease affords protection.
The plaintiff, a wholesaler of paint doing business in a
building owned by the National Capital Commission, brought
this action by way of a petition of right addressed to the
Exchequer Court of Canada in 1971. Plaintiff's claims against
the defendant seek to recover damages resulting (1) from the
flooding of the premises it occupied directly below those
occupied by the N.C.C. and (2) from a fire which gutted the
building. The evidence shows that the flooding was caused by
water emanating from the defective sprinkler system located
immediately above plaintiff's premises. With respect to the fire,
it was established that the mechanical inspector for the N.C.C.
instructed his two sons to dismantle some coils and convert
them to his personal use without authorization from his supe
riors. In their operation on the day of the fire, the two used an
oxy-acetylene torch.
Held, (1) plaintiffs claim regarding the flooding is dis
missed; (2) its claim for damages caused by the fire is allowed.
(1) Where the landlord remains in occupation of premises
above the premises of his tenant, he must so maintain his area
of the premises so as not to cause damage to the tenant below.
However, a lease containing an exculpatory clause affords
protection to the landlord since the principal thrust of such a
clause is against liability for negligence. The lease in the
present matter contains such a clause and the term "plumbing
apparatus" which it uses includes the whole sprinkler system.
(2) The landlord cannot escape his responsibility merely
because the servant was temporarily pursuing a personal end,
going "on a frolic of his own". The question is whether the
activity is reasonably incidental to the performance of the
servant's authorized duties, or involves so substantial a depar
ture that the servant must be regarded as a stranger vis-à-vis
his master: that is a question of fact. Here, the mechanical
inspector did fraudulently and negligently what he had been
employed to do honestly and diligently. Furthermore, the excul-
patory clause contained in the lease does not protect the
defendant against damage caused by fire and surely not by fire
resulting from the negligence and the wrongful act of its own
servant.
Carstairs v. Taylor (1870-71) L.R. 6 Ex. 217, agreed with.
Cockburn v. Smith [1924] 2 K.B. 119, agreed with.
Elfassy v. Sylben Investments Ltd. (1979) 21 O.R. (2d)
609, agreed with. Morris v. C. W. Martin and Sons Ltd.
[1966] 1 Q.B. 716, agreed with.
ACTION.
COUNSEL:
D. Casey for plaintiff.
E. M. Thomas, Q.C. and M. Senzilet for
defendant.
SOLICITORS:
Gowling & Henderson, Ottawa, for plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
DUBÉ J.: This action was commenced by way of
a petition of right addressed to the Exchequer
Court of Canada in 1971 by the then suppliant
("Crown"), a wholesaler of paint and paint prod
ucts doing business at 24 York Street, Ottawa, in a
building owned by the National Capital Commis
sion ("N.C.C.").
On April 1, 1970 it was discovered in the early
hours of the morning that water was flowing from
the premises in the upper floors, occupied by the
N.C.C., into the premises directly below occupied
by Crown, causing damage to the latter's
stock-in-trade.
On November 26, 1970, in the evening, a fire
raged throughout the building causing further
damage to the plaintiff and to the property of four
other plaintiffs who have filed claims in separate
actions. These reasons for judgment will apply
mutatis mutandis to all actions. All plaintiffs have
agreed that, should the defendant be held liable,
the quantum of damages will be agreed to by the
parties. Should they not come to an agreement,
they will be given leave to apply for a hearing.
I shall deal first with the claim of Crown for
damages resulting from the April 1, 1970 flooding
of its premises.
In its petition Crown alleges that "water flowed
into its premises, to a depth of between twelve and
sixteen inches, because of the `splitting' of parts of
the sprinkler system caused by the escape there
from of air during the course of the winter, which
had allowed water to seep into the system, which
water eventually froze and subsequently thawed".
The York Street property is a three-story and
basement building built in the 1860's and con
structed of stone blocks, concrete and wood
timber. It is adjoined on both sides by other build
ings also owned by the N.C.C. A portion of the
second floor was occupied by the N.C.C. for the
storage of furniture and bedding materials. The
remainder of the floor and the third floor were
unoccupied.
The ancient sprinkler system which dates back
to 1926 had become obsolete in 1969. In the
course of that year replacement was made of two
valves and fittings at the cost of $3,200. Subse
quent repairs were effected in 1970, before and
after the flooding of April 1.
The sprinkler system in that building is known
as a "dry system". It is fed by the city water main.
When one of the sprinkler heads is activated by
heat a flapper valve opens allowing the water from
the city main to flood the system. Until activated,
the system remains "dry" or filled with air, not
water. But if the system is defective and allows
water into the pipes during the winter months the
pipes may freeze. And more specially on the
second floor which was formerly a refrigeration
area for a cheese factory. On previous occasions,
because of faulty valves, water had leaked from
the sprinkler system into the premises below.
The system is also linked to a bell or "gong"
located on the wall outside the building which
becomes activated and sounds a loud alarm when
the system is turned on.
The system was deemed by the N.C.C. to be
adequate for the time as it was intended to strip
the inside of the building in order to renovate it
and to preserve it as an historic building, possibly
to house a modern restaurant. The temporary ten-
ants were paying very low rental (some $0.63 per
square foot per year).
It is obvious from the evidence that the flooding
of Crown's premises was caused by water emanat
ing from the defective sprinkler system located
immediately above its premises. No other cause
was advanced by the defendant to otherwise
explain the situation.
Of course, at law, a tenant must take an unfur
nished tenement as he finds it, but there is an
obligation on the part of the landlord in occupation
to take reasonable care to prevent that portion of
the premises under his control from causing
damage to the tenant. The former is expected to
remedy defective conditions which have come to
his attention. Where the landlord remains in occu
pation of premises above the premises of his
tenant, he must so maintain his area of the prem
ises so as not to cause damage to the tenant
below.'
In Elfassy v. Sylben Investments Ltd. 2 a tenant
sustained damage to his premises when the build
ing sprinkler system activated by a fire two floors
above flooded the tenement below. Reid J. of the
Ontario High Court said that the doctrine of
Rylands v. Fletcher 3 did not apply because it must
be established that there was on the premises an
inherently dangerous thing and that a water sprin
kler is not dangerous per se. The lease, however,
included an exculpatory clause which provided [at
page 613] that the ". .. Lessor shall not be liable
for any damage . .. arising from gas, steam, water,
rain or snow, which may leak into, issue or flow
from any part of the said building". The learned
Judge held that the landlord was negligent, but
that he was shielded by the exculpatory clause. He
said that "surely the principal thrust of such a
clause is against liability for negligence".
' Vide Carstairs v. Taylor (1870-71) L.R. 6 Ex. pages 217-
223 and Cockburn v. Smith [1924] 2 K.B. 119, at pp. 128 and
134.
2 Elfassy v. Sylben Investments Ltd. (1979) 21 O.R. (2d),
pages 609-621.
3 Rylands v. Fletcher (1868) L.R. 3 H.L. 330, affirming
(1865-66) L.R. 1 Ex. 265.
The lease in the instant matter includes the
following clause which reads:
9. Provided that the Lessor shall not be liable for any damage
caused by water from the breakage of or leakage from plumb
ing or heating apparatus in any part of the said premises or any
other premises in the same building, and shall not be liable for
any damage that may be caused by the other occupants of the
same building.
Clause 9 does not specifically mention the sprin
kler system, but in my view the term "plumbing
apparatus" would include the whole sprinkler
system and its connections to the city main. The
word "plumbing" is defined in The Living Webster
as "the assemblage of pipes and fixtures used to
convey water and waste". The word "apparatus" is
defined therein as "a collection or combination of
articles or materials for the accomplishment of
some purpose, operation, or experiment". A sprin
kler is a plumbing apparatus whose main function
is to deliver water, when activated by excessive
heat. Clause 9 affords more protection to the
N.C.C. than the clause referred to in the Elfassy
case (supra) which does not even include the word
"plumbing".
In my view, therefore, that first part of plain
tiffs claim must fail.
I now turn to the second claim, for damages
caused by the fire of November 26, 1970.
The evidence establishes that the mechanical
inspector of the N.C.C., Francis Crangham,
turned off the sprinkler valve, thus rendering the
system inoperable the day before the fire. He did
so because of repeated problems with fuses which
he had to replace constantly. He did not notify
anyone before the fire that he had shut down the
system.
On the day of the fire the same Crangham
instructed his two sons to dismantle metal refriger
ation coils from the former refrigerator on the
second floor of the building. He intended to use
them personally as picket fences. That was done
without any authorization from his superiors.
In their operation the two young men were using
an oxyacetylene cutting torch. A few hours after
they had left the premises, fire was raging from
that very section of the building where they
worked, eventually spreading upwards to the roof
which collapsed, and downwards all the way to the
basement, destroying all floors and gutting the
building entirely, except for the four walls. Of
course, neither the sprinkler system nor the alarm
gong outside the building was activated. When the
firemen arrived it was already too late.
Learned counsel for the defendant claimed that
a master is not responsible for damage by his
servant when the latter is not acting within the
scope of duty but "on a frolic of his own". She
quoted a number of authorities on the subject. As I
pointed out to her at the hearing, it used to be that
a bailee was not responsible for the loss of property
by the theft of his own servant, unless the bailee
had given occasion for the theft by his own negli
gence, or by that of some other of his servants
employed to take care of the property. However,
the Court of Appeal has now held in Morris v. C.
W. Martin and Sons Ltd.' that the responsibility
of the bailee must depend on whether the servant
by whom the theft is committed is one to whom
the charge or custody of the thing stolen has been
entrusted by his master. In other words, if such a
servant steals the thing entrusted to him, he is
acting nevertheless in the course of his employ
ment. He is doing fraudulently what he is
employed to do honestly.' In Morris v. C. W.
Martin and Sons Ltd. a firm of cleaners to whom
a furrier had sent the plaintiff's mink stole were
found liable for the theft of the stole by an
employee whose duty it was to clean it.
It is a question of fact whether the employment
merely provided an opportunity for the theft, or
was part of the task on which the servant was
engaged.
A master will not get off his liability merely
because his servant was temporarily going on a
frolic of his own. The question is whether the
activity was reasonably incidental to the perform
ance of his authorized duties, or involved so sub
stantial a departure that the servant must be
4 Morris v. C. W. Martin and Sons Ltd. [1966] 1 Q.B. 716,
at p. 737.
5 Vide Salmond on the Law of Torts, 7th ed., p. 471.
regarded as a stranger vis-à-vis his master. 6
Crangham was the mechanical inspector in charge
of the sprinkler system of the building and respon
sible for the safety of the premises. He had free
access to the building. He presumably decided on
his own that since the coils were to be dismantled
he might as well convert them to his personal use.
After the fire he pleaded guilty to having "unlaw-
fully attempted to steal a quantity of refrigeration
pipes of the value of less than $50". He was given
a suspended sentence and fired by the N.C.C.
Crangham was entrusted with the operation of
the sprinkler system. He attempted wrongfully to
remove the coil pipes. He caused two inex
perienced young men, his own sons, to carry out
the misdeed. He had them do it with an acetylene
torch. He did more than that, he disconnected the
sprinkler system and thus the alarm gong that goes
with it, without notice to anyone. He did fraudu
lently and negligently what he had been employed
to do honestly and diligently. In my view, the
landlord cannot get off his responsibility merely
because the servant was temporarily pursuing a
personal end. Neither can the defendant be excul
pated by the aforementioned clause 9 of the lease
which protects the lessor against damage caused
by water, but not against damage caused by fire,
and surely not by fire resulting from the negli
gence and the wrongful act of its own servant.
In my view, therefore, the defendant is liable for
damage caused to the plaintiff (and to the other
four plaintiffs in their respective actions) by the
fire of November 26, 1970. Costs of this action to
the plaintiff (and to the other four plaintiffs in
their respective actions).
6 Vide Fleming, The Law of Torts, 4th ed., p. 325.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.