COURT OF APPEAL FOR ONTARIO
LASKIN, SHARPE and SIMMONS JJ.A.
B E T W E E N:
ANA POZIOS
Respondent (Plaintiff)
- and -
776575 ONTARIO LIMITED, JOHN RODGERS DEVELOPMENTS LTD. and ELLIS-DON CONSTRUCTION LTD.
Appellants (Defendants)
Paul M. Ledroit and Carolyn Brandow for the respondent
Ian F. Leach For the appellant
HEARD: May 1, 2001
On appeal from the judgment of Justice McGarry dated July 16, 1998 ([1998] O.J. No. 3243) and the judgment of Justice Jenkins dated July 23, 1999 ([1999] O.J. No. 3492).
1In December 1991, one of the appellants, 776575 Ontario Limited, began construction of an office condominium on Oxford Street in London, Ontario. Before construction 776575 and the respondent Ana Pozios, an adjoining property owner, entered into an agreement under which 776575 agreed that if its construction damaged the apartment building and coach house on Ms. Pozios' property, it would repair the buildings to their pre-construction condition. The other appellants, John Rodgers Developments Ltd. and Ellis-Don Construction Ltd., guaranteed the agreement.
2After a seven day trial McGarry J. found that the appellants breached their agreement with Ms. Pozios because vibrations from the construction activity during the period December 16 to December 20, 1991 damaged Ms. Pozios' coach house. He assessed damages for the cost of the repairs to the coach house at $97,099.29. He also awarded other damages in the amount of $7,550 and ordered further damages relating to the cladding of the east wall of the coach house.
3The trial judge subsequently became ill and Jenkins J. dealt with several outstanding issues including pre-judgment interest. He awarded Ms. Pozios an additional $9,200 in damages (in accord with McGarry J.'s judgment) and pre-judgment interest on the damages to the coach house from December 16, 1991, the date the cause of action arose.
4The appellants appeal only the damage award for the coach house. They make four submissions:
The trial judge made a palpable and overriding error in concluding that the method of construction changed after December 20, 1991;
The trial judge erred in concluding that the construction activity caused the damage to the coach house;
The damage award should be reduced; and
Jenkins J. erred in awarding pre-judgment interest.
1. The Construction Methods
2. The Cause of Damage to the Coach House
5The first two grounds of appeal, on the issue of liability, are related. The trial judge found that the appellants' contractor, Drillco, changed its method of construction after December 20, 1991 and then concluded that the method used by Drillco between December 16^th^ and December 20^th^ caused the damage to Ms. Pozios' coach house. The appellants submit that the trial judge's finding of a change in the method of construction is not supported either by the oral or documentary evidence. They submit that the construction methods did not change. They then point to the unchallenged seismographic evidence that the vibrations after December 20^th^ could not have damaged the coach house. The appellants therefore argue that the trial judge's conclusions on causation cannot stand.
6The appellants' submissions turn on whether the trial judge's finding of a change in construction methods is reasonably supported by the evidence. In our view it is. Although some evidence in the record favours the appellants' position, evidence from two sources supports the trial judge's finding.
7First, the evidence of Ms. Pozios supports the finding of a change in construction methods. She testified that on December 16, 1991 the pounding to break the boulders and consequent vibrations occurred every two to four seconds between 1:00 p.m. and 5:00 p.m. On December 17^th^ the vibrations were not as bad but still jarred the coach house, which was a mere three metres from 776575's development. Ms. Pozios said that these vibrations stopped after December 19^th^, following her complaint and threat to sue. The appellants argue that Ms. Pozios' evidence about what occurred to the coach house on December 16^th^ and 17^th^ cannot be relied on because the trial judge rejected her evidence on other points. However, it is open to any trier of fact to accept all or part of a witness's evidence.
8The second source of evidence supporting the trial judge's finding is the testimony of Daryl Warren, the on-site supervisor for Drillco. On cross-examination Mr. Warren conceded that after December 17^th^, Drillco used larger and longer liners which enabled it to avoid the bigger boulders and therefore avoid cave-ins. Because Drillco did not have to pound these bigger boulders, the vibrations were reduced. Therefore, the evidence given by both Ms. Pozios and Mr. Warren reasonably supports the trial judge's finding of a change in construction methods. The remaining liability question is whether the construction activity actually damaged the coach house.
9The trial judge's conclusion that the construction between December 16^th^ and 20^th^ caused damage to the coach house is amply supported by his own visit to the site, by the photographic evidence and by the report prepared by Mr. Cooper, Ms. Pozios' expert. We therefore do not give effect to the appellant's first two grounds of appeal.
3. The Amount of Damages
10Section 2 of the agreement specified that the appellants would make any needed repairs if Ms. Pozios' coach house was damaged during construction. However, no doubt because of the animosity between the parties, the trial judge sensibly awarded damages for the cost of repairs rather than order the appellants to do the work. The remedy provided for in section 2 of the agreement was not binding on the trial judge and we think that the remedy he did choose – damages – was appropriate.
11The appellants submit that even if damages were appropriate the award should be reduced for two reasons:
(i) to take into account the significantly lower cost to the appellants if they had made the repairs; and
(ii) to take into account that some of the repairs would inevitably fix cracks and defects caused not by the construction but by the natural deterioration of the building.
12We think that the appellants' submission has merit. The evidence on an appropriate reduction is, however, somewhat unsatisfactory. The expert on whose estimate the trial judge relied testified that even if some of the cracks in the coach house were not attributable to the construction, savings from not repairing these cracks would amount to no more than $2,000 (for the coach house and the main building). Giving effect to that evidence and allowing a modest reduction for savings if the appellants did the work themselves, we reduce the overall damage award by 10 per cent. We recognize that this is one-half of the reduction ordered by Jenkins J. for the brick veneer. However, we are not persuaded that a 20 per cent reduction is warranted.
4. Pre-judgment Interest
13The agreement required the appellant to repair the coach house to its pre-construction condition. The trial judge awarded damages for the cost of repairs rather than ordering the appellants to do the work. The appellants submit that once the trial judge awarded what amounted to equitable damages instead of specific performance, Jenkins J. should not also have awarded pre-judgment interest. The appellants submit that an award of pre-judgment interest on the damages award over-compensates Ms. Pozios and gives her a windfall recovery. She, on the other hand, contends that she is entitled to an award of pre-judgment interest under s. 128(1) of the Courts of Justice Act.1
14We agree with the appellants' submission. Ms. Pozios had not repaired the coach house so this is not a case where the work was done earlier than the trial. The damages assessed reflected the cost of repairs at the date of trial. To give Ms. Pozios pre-judgment interest on these damages would over-compensate her. We therefore exercise our discretion under s. 130(1)(a) of the Courts of Justice Act and disallow pre-judgment interest on the damages to the coach house. Accordingly, we vary paragraph two of the judgment at trial by setting aside the award of pre-judgment interest on the damages for the cost of repairs to the coach house.
Costs of the Appeal
15Success on the appeal was divided. We therefore order no costs of the appeal.
"J.I. Laskin J.A."
"Robert J. Sharpe J.A."
"J. Simmons J.A."
Released: May 24, 2001