A. At Special General Meeting on March 23, 2016, the three proceedings titled in our resolutions as Litigation L1, L2 and L3
were authorized and ratified unanimously by the members of the Shangri-La Live/Work strata corporation. Resolutions are
appended to this Resolution L.4 as Addendum 1 and it is on the strength of these resolutions that Strata Council has
instructed legal counsel to pursue the claims;
B. Litigation L3 pertains to the claims against Masco Canada/Hansgrohe and GML for defective shower integral valve stops.
This litigation settled on January 9, 2020 with the payment of $725,000.00 from the Defendants to Shangri-La Live/Work;
C. Litigations L1 and L2 pertain to legal proceedings commenced by Shangri-La Live/Work [the “Legal Proceedings”] in 2011
[Notice of Civil Claim [found online via link outlined in covering notice to this SGM] against the Warranty Provider and in 2015
[found online via link outlined in covering notice to this SGM] against the Owner-Developer and a number of other
Defendants [the “Owner-Developer Group”] arising from a number of construction deficiencies pertaining to the Shangri-La
Tower, including but not limited to those concerning the Insulated Glass Units [“IGUs”];
D. These issues concerning the IGUs in particular, as pleaded in their respective Notices of Civil Claim, have been the subject of
extensive engineering investigation since 2012 and have culminated in preliminary engineering reports in 2013, 2014 and
2015 (not including reports commissioned by the Defendants), followed by a without prejudice presentation to the key
Defendants of the engineering findings in October of 2016. The engineering and legal investigations continue unabated to
present day and is anticipated to result in a further report before September-end 2020;
E. On February 14, 2018, Shangri-La Live/Work amended its Notice of Civil Claim [found online via link outlined in covering
notice to this SGM] in the L2 Action against the Warranty Provider to streamline its claim and to incorporate a number of
material facts which had become discovered in the interim both in the extensive engineering investigation and associated
investigations conducted by the team of Shangrila Live/Work;
F. A further amendment to the Notice of Civil Claim [“FANOCC”] in the L2 Action against the Owner-Developer Group was
distributed to all defendants and third parties on July 3, 2020 and has been the result of discovery of further material facts
in the document disclosure which began on August 22, 2019 and followed, as of January 28, 2020, on the heels of a transfer
of conduct of the Legal Proceedings to new legal counsel (see J. below). A copy of the FANOCC is available online for Owners
to download at the
www.awmalliance.com website, under the Owner’s Login section -> “Resource Center” tab -> “Legal”
folder -> File name “3165 – Further Amended Notice of Civil Claim - IGU - 07-03-2020.pdf”;
G. In summary, the curtainwall system of Shangri-La Live/Work, being common property, is confronted with
a. the failure of up to 70% of the IGUs confirmed as at 2016 (and likely much more today and continuing to fail well into
the future) with failures occurring prematurely by decades and reaching just a fraction of their expected lifespan of
forty (40) years and ranging in character of deficiency from:
i. IGU’s tested by engineers and showing a proven propensity to fog although such fogging may not have yet
manifested itself;
ii. to IGU’s already manifesting fogging;
iii. to IGU’s manifesting not just fogging but also staining; and
iv. to IGU’s in some instances suffering from complete obscuring of the IGU cavity with biological growth;
and with no telling whether all or most IGUs are destined to eventually acquire the characteristics of the fourth
category; and
b. the real and unacceptable risk that the inner lites (i.e. the inner glass panes which make up the IGU) suffer from a nickel
sulfide inclusion and/or from other manufacturing defects which can cause these lites to spontaneously shatter. The
shattered inner lites have resulted in IGUs taken from strata lot units from the following floors:
21st Floor (2011 and 2013)
24th Floor (2013 and 2019)
27th Floor (2011 and 2013)
29th Floor (2011)
38th Floor (2011)
30th Floor (2013)
40th Floor (2019)
42nd Floor (2013)
43rd Floor (February and June 2013)
In addition, the outer lites have experienced thermal stress fractures which, if left unattended, imposes an obligation on
Shangrila Live/Work to consider and continuously monitor the degree of risks to safety, including the probability that
sections of the cracked glass on the IGU could propagate along a path of least resistance and eventually become separated
from the main assembly and fall to the areas surrounding the curtainwall, thus constituting a source of risk for danger to the
life and health of pedestrian traffic walking anywhere near the base of the building, the swimming pool area as reported by
OSP 3206 (the Estates), as well as to occupants of other units;
H. In the interest of ensuring safety, Shangri-La Live/Work has an obligation to continue steps to continue to investigate and
implement a reconstruction of the curtain wall and a replacement of all of the IGUs on an urgent basis and fund such work
in increments which are expected to reach an aggregate magnitude estimated at $65 million for the two strata’s (Live/Work
& Estates) (subject to actual costing from a tested and certified design). The choices facing the members are straightforward
– either:
a) pursue the early incremental steps in the remediation while at the same time pursuing civil remedies against those
entities who are responsible for this egregious construction failure and who ought to be held to account and pay for most
if not all of the remediation,
b) simply capitulate and accept that the entirety of the estimated cost of remediation will need to be absorbed by the
members of the two strata corporations, with Shangri-La Live/Work absorbing its respective share, or
c) disregard the risks to safety and absorb all associated costs as presented (not recommended).
Whichever option it chooses, Shangri-La Live/Work bears the risks that accompany delaying remedial action on the curtain
wall and the IGUs and the members must consider beginning to absorb at least the first funding increments of the
remediation, but it can choose to seek financial redress at the same time from other parties who are responsible and thus
mitigate, if not obviate, future funding demands associated with the remediation;
J. It is on the premise of points, such as those noted above, that it would be unthinkable to have all strata lot owners absorb
any significant part of the cost to remedy the egregious and actionable construction failures caused by the OwnerDeveloper/Builder group that Shangri-La Live/Work has led the prosecution of the Legal Proceedings against the OwnerDeveloper Group as follows: the engineering and legal facets of the IGU claim have been spearheaded by OSP BCS 3165 with
limited assistance from the strata corporation known as OSP BCS 3206 (also known as the Estates);
a. the progress of the Legal Proceedings has culminated in the replacement of Michael D. Tatchell (at his urging) and his
law firm of DuMoulin Boskovich LLP with Stuart Hankinson, QC and his law firm Bennett Jones LLP with a view to
prosecuting the Legal Proceedings through to mediation in March of 2021 and to trial in October of 2021 if necessary;
b. an overview of the Legal Proceedings and the investigations associated with the Legal Proceedings is found in the
Preamble submitted with this SGM package and members should refer to that document;
K. The Notice of Civil Claim and amendments up to and including FANOCC [the “Pleadings”] plead that Shangri-La Live/Work
claims on behalf of itself and representatively on behalf of the Individual Owners pursuant to section 171(1)(b) of the Strata
Property Act for matters relating to the common property, common assets and facilities of the Strata Corporation. It is also
contemplated within the Pleadings that Shangri-La Live/Work is suing and will continue to sue as representative of all owners
not only about the use or enjoyment of a strata lot under s. 171(1)(c) but, to the extent that the deficiencies or resultant
damages which are claimed within the Legal Proceedings may not be a common asset or within common property but rather
a matter affecting specific and likely each and every Strata Lot, Shangri-La Live/Work proceeds representatively on behalf
of the Strata Lot owners under s. 172(1) of the Strata Property Act on the following basis:
a. the Strata Corporation may sue on behalf of a Strata Lot Owner pursuant to s. 172(1)(a) of the Strata Property Act;
b. pursuant to s. 173.1 of the Strata Property Act, the Strata Lot Owners may make their authorization to the Strata
Corporation under s. 172(1)(a) as retroactive to the date of the filing of the Notice of Civil Claim and amendments or
the date on which a Strata Lot Owner acquired title to any Strata Lot;
c. owners will in due course be required to provide their written consent to participate and contribute to the incremental
cost of suing under s. 172(1)(a) – all members of the strata corporation already contributing to claims contained within
the Legal Proceedings and prosecuted under s. 171 of the Strata Property Act.
L. The Strata Council shall seek to create a legal committee of three (3) eligible members of the strata corporation to act as an
advisory to/for the strata council. Two (2) members of the strata council shall participate and chair the committee in addition
to the 3 members at large that will be appointed by the strata council pursuant to a selection process.
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