A BC court has tossed an architect's attempt to halt a Victoria condominium defect lawsuit, ruling an insurer's deal didn't require immediate disclosure.
The Supreme Court of British Columbia, in reasons released May 14, 2026, dismissed an application by Low Hammond Rowe Architects and Sid Chow seeking to stay or dismiss a sprawling construction defect action brought by the owners of Strata Plan EPS1544. The architects argued that the strata, along with insurer Royal & Sun Alliance Insurance Company of Canada and warranty provider WBI Home Warranty Ltd., should have promptly disclosed a January 2023 deal known as the Receivership Funds Agreement - and that the failure to do so amounted to an abuse of process.
Justice J.K. Gibson disagreed, and the decision provides useful guidance on when arrangements between strata corporations and warranty providers must be disclosed to other defendants.
The dispute traces back to a condominium complex in Victoria. The strata sued more than two dozen parties - the developer, builders, trades, the city, and the architects - alleging defects in the parkade, exterior, windows, doors, balconies, walls and roof. It also sued RSA and WBI for breach of a 2-5-10 home warranty issued under the Homeowner Protection Act, which provides two years on materials and labor, five on the building envelope, and ten on structural defects.
The warranty contained a standard subrogation clause. Once the warranty provider paid out or assumed liability, it stepped into the strata's shoes against anyone whose work contributed to the defect, with the strata required to cooperate.
The developer, 1011 Limited Partnership, went into receivership back in September 2015, with Glover-Drennan Inc. appointed receiver. By early 2023, with the receiver pushing for discharge, the strata and the insurers worked out how to handle the remaining receiver funds. Under the resulting agreement, $350,000 was directed to RSA and WBI's counsel in trust, and the insurers agreed to carry out a slate of warrantable repairs at no charge to the strata, using receiver funds or their own.
The architects argued this fundamentally rewired the litigation - that the strata and the insurers were no longer truly adverse, and that the deal should have been disclosed immediately.
The court wasn't buying it. Justice Gibson found the agreement did "little more than to re-state" what was already on the record. The receivership, the subrogation right, the insurers' obligation to fund warrantable repairs, the cooperation requirement - all of it was already in the pleadings or the warranty policy itself. The agreement even expressly stated it did not modify the terms of any previous warranty.
Importantly, the agreement didn't cover every defect. Window defects, corroded exterior door handles, and poorly finished brick mortar remained in dispute, meaning the strata and the insurers stayed adverse on parts of the case.
Citing the Ontario Court of Appeal's reasoning in Kingdom Construction Ltd. v. Perma Pipe Inc., Justice Gibson noted that whether claims are advanced by the insured or by the insurer through subrogation, the defendants face the same claims. The application was dismissed, with costs to the strata.
