Kenneth William Watts

Homeowners pursued a cross-claim against a modular home builder alleging numerous construction deficiencies following completion of a custom home under an Agreement of Purchase and Sale and subsequent amending agreements.

The court assessed allegations relating to stair staining, concrete drainage, HVAC zoning and dampers, hot water systems, UV water treatment units, flashing, roof workmanship, and contractual obligations under a Homeowner Ultimate Guarantee (HUG) certificate.

Most alleged deficiencies were dismissed due to lack of expert evidence or contractual support.

However, the court found a concrete slope deficiency and incomplete copper flashing and interpreted the HUG certificate as guaranteeing completion of listed items within a specified timeframe.

Damages were limited due to the homeowners’ duty to mitigate, resulting in reduced penalty compensation.

Following dismissal of a motion seeking to exclude an expert engineering report and related remedial work evidence, the successful parties sought substantial indemnity costs of over $24,000.

The court considered whether the unsuccessful moving party’s conduct justified substantial indemnity costs and applied the discretionary factors under Rule 57.01(1) of the Rules of Civil Procedure.

While the motion was unsuccessful, the court found the conduct did not rise to the level warranting substantial indemnity costs.

Applying the overarching principle of reasonableness and guidance from appellate jurisprudence, the court fixed partial indemnity costs at a fair and reasonable amount.

Costs of $12,500 inclusive were awarded, payable within 30 days.

The plaintiff contractor brought a motion on the eve of trial seeking leave under Rule 48.04 of the Rules of Civil Procedure to bring a motion to exclude an engineering report and related evidence relied on by the defendants in their counterclaim concerning alleged construction deficiencies.

The moving party argued the report had been delivered late and that remedial work was completed before it had an opportunity to obtain its own expert inspection.

The court held that leave was not warranted because the action had already been set down for trial and the moving party failed to demonstrate a substantial or unexpected change in circumstances making the motion necessary in the interests of justice.

The evidence showed the moving party had long been aware of the report and remedial work, had opportunities to conduct inspections and obtain its own expert evidence, and delayed bringing the motion until shortly before trial.

In any event, the court held the relief sought would not be justified because the evidence could be addressed through cross‑examination and exclusion would cause greater prejudice to the opposing party.