CITATION: R.N.D. v. Mulroney, 2013 ONSC 2748
COURT FILE NO.: 12-DC-1838
DATE: 2013-05-13
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
R.N.D. CONSTRUCTION LIMITED
Plaintiff (Respondent)
– and –
PETER MULRONEY and ASHLEY MULRONEY
Defendants (Appellants)
Marc R. Labrosse, for the Plaintiff (Respondent)
Self-represented
HEARD: May 8, 2013
decision on appeal
McNamara J.
[1] The Appellants, Peter Mulroney and Ashley Mulroney, appeal from the decision of Deputy Judge R. Houlahan of the Small Claims Court Division of the Superior Court of Justice at Ottawa dated May 1st, 2012, and wherein the Respondent/Plaintiff R.N.D. Construction Limited, was grand judgment in the amount of $9,705.15 plus interests and costs.
General Factual Background
[2] The Appellants are husband and wife who purchased a vacant lot on Bedford Crescent in the City of Ottawa in 2008 with plans to erect a custom home. The Appellants hired a design architect who prepared plans and recommended a number of reliable general contractors, including the Respondent, who he felt were capable of building the home.
[3] In August of 2008 the Appellants chose the Respondent from amongst the recommended builders to work with them to determine the cost of constructing the home. From the outset the evidence would suggest it was the Appellants’ position that the cost of the project should not exceed $800,000.00.
[4] The evidence indicates that the Respondent set about costing the construction of the home, including meeting with all the various potential subcontractors to get their prices, with a view to preparing a budget. A preliminary budget was in fact ready early in January of 2009, and at that time there was an exchange of correspondents between the parties that was put in evidence. The first is a letter from the Respondent to the Appellants dated January 9th, 2009. It provides, in part, as follows:
This letter is to confirm that you intend to enter into a CCDC2 contract agreement with RND Construction Ltd. for the construction of your new home. You will find attached a copy of our preliminary budget as per plans and specifications by Vert Design dated November 14, 2008, and changes done as per e-mails and discussions with yourselves and Vert Design. We will continue working with you to make changes in order to meet a reasonable and acceptable budget, while maintaining the integrity and intent of your home.
Also, please note that we have incurred approximately $6,000.00 of labour costs to-date in preparing this preliminary budget. Should you decide not to proceed with RND Construction Ltd., we will request compensation for this work.
[5] The letter goes on to leave a space for the Appellants to sign if they agree with the contents of the letter.
[6] That letter is responded to by e-mail on January 13th, 2009. It provides, in part, as follows:
As we discussed today our commitment to you and the project remains firm. We are not looking for another builder and we have no intention of doing so. I don’t think it can be any clearer than that. We would be happy to sign your letter of intent with the exclusion of any dollar value. Having said that our preference would be to enter into a contract using form (???) to build the house with a dollar value of (let’s say) $600K that will be revised as final pricing and agreement come in. We understand that there is a cost of you continuing to work on our project and slot it into your spring building schedule and we are happy to date with the work but also understand that this cost will be incorporated into your fee for the build. …
[7] Over the next number of months the Respondent prepared a series of other proposals and budgets for the Appellants’ consideration, but all were rejected. The evidence would also suggest that between January of 2009 and April of 2009 the Respondent carried out some work for the Appellants with respect to obtaining demolition clearances, drawings, and other tasks necessary in order for the Appellants to obtain a building permit. In April/May 2009 the relationship between the parties deteriorated and was terminated at the end of May. On May 29th, the Respondent rendered two accounts, the first in the amount of $6,300.00 inclusive of GST and purporting to be for the supply of construction consulting, estimating, and budget preparations etc. between November 18, 2008 and March 23, 2009. The second invoice was in the all inclusive in the amount of $3,405.15 and was related to the services provided for purposes of obtaining demolition and building permits.
[8] As indicated, the matter was tried in front of Deputy Judge Houlahan over the course of two days with Reasons for Judgment being delivered on May 1st, 2012.
Grounds of Appeal
[9] Ashley Mulroney who argued the appeal on behalf of the Appellants submits there are four issues.
[10] Firstly it is the Appellants’ position that the trial judge erred in concluding as he did because what went on here was nothing more than a negotiation between a builder and a potential client and they never agreed to pay for anything. To the contrary she submits they made it clear that they would only pay the Respondent if a construction contract was entered into.
[11] Her second submission goes hand in hand with the first. It is the Appellants’ position that a contractor cannot render an account after the client has expressly indicated there would be no payment unless a contract was entered into. In ruling as he did it is their submission that the trial judge was being unfair and unreasonable to the consumer. Ms. Mulroney submitted that the type of cost associated with the $6,300.00 invoice is nothing more than a “cost of doing business” in the construction field.
[12] Next she argues that the trial judge erred in allowing the amounts claimed on the second invoice because there was no evidentiary basis justifying the quantum set out therein. She concedes that while there was some value related to the demolition work encompassed by that account, since that component was not specifically quantified the entire amount ought to be disallowed.
[13] Finally she argues that the trial judge made an error in law in that he misapplied the principle of quantum meruit. Specifically she argues that the trial judge incorrectly concluded that there was an enrichment to them as there was no evidentiary base upon which the trial judge could come to that conclusion.
Analysis
[14] The first three arguments advanced by the Appellants are, in essence, that the trial judge made errors in his factual findings. The standard of review with respect to findings of fact or factual inferences is that the findings are not to be overturned unless it is established the judge made a palpable and overriding factual error.
[15] Essential to their argument on the first two grounds argued is that the trial judge erred in finding that the Mulroney’s never made it clear to the Respondent that they would not pay for his services unless and until a building contract was entered into.
[16] I disagree with their submission.
[17] The letter of January 2nd, 2009, to which the trial judge specifically refers in his Reasons, indicates, quite clearly, that it is the position of the Respondent that should the Appellants decide not to proceed in using the Respondent during the construction phase of the project, compensation for the work done will be requested. The response to that correspondence does not appear to quibble with that notion, although there is an indication there may have to be some discussion of any dollar value, and it further indicates that the Appellants understand there is cost to the Respondent in working on the project. In my view on the basis of the viva voce evidence in the context of that exchange of correspondence, it was open to the trial judge to find as he did. It is well established that considerable deference should be afforded a trial judge in his or her findings of fact and the inferences to be drawn from those facts. A review of the transcripts of the trial as a whole make it clear that the trial judge was alive to this issue, interacted with the witnesses on a number of occasions to seek clarification, and made findings of credibility that are referenced in his Reasons. The conclusions he came to were open to him to make, and are entitled to deference.
[18] The same rationale applies to the third point argued by the Appellants and relating to the smaller of the two invoices. A review of the evidence discloses that testimony was given by the Respondent using time sheets to support the hours spent and the work done throughout the project. Again specific to the second invoice there was evidence from the architect to the effect that the work outlined in the invoices was not his responsibility, and that it had to be done. The trial judge found in his Reasons that “these invoices were not seriously challenged by the Defendants at trial.” Again, that was a conclusion that was open for him to reach on the evidence before him, and is entitled to deference.
[19] That leaves the final ground of appeal, that the trial judge erred in providing compensation to the Respondents on the basis of quantum meruit.
[20] The standard of review where it is alleged that there has been an error with respect to the legal test to be applied, is correctness.
[21] In order to award compensation on the basis of quantum meruit, three requirements must be satisfied:
there must be an enrichment;
a corresponding deprivation;
an absence of any juristic reason for the enrichment.
[22] In dealing with the quantum meruit issue the trial judge in his Reasons indicated as follows:
Quantum merit [sic, meruit] is an equitable doctrine which allows the provider of goods or services in the absence of a formal contract for payment, to recover the value of those goods and services based on the fact that the party sought to be charged, was justly enriched by the fruits of the claimant’s labour.
In the instant case, I have considered the principles giving rise to the compensation on the basis of quantum merit [sic, meruit] and am satisfied that the doctrine applies fully to the Plaintiff’s Claim. There is no doubt the Plaintiff provided valuable services to the Defendants in the absence of a formal contract for payment. I further find that the Plaintiff never intended to provide these services at no charge to the Defendants and the Defendants were well aware of this fact. Finally, I find that the Defendants substantially benefitted from the Plaintiff’s services.
[23] The Appellants argued forcefully that in their submission there was no evidence at trial that they were enriched as a result of the efforts of the Respondent.
[24] There was evidence led at the trial through the principal of the Respondent that the services rendered included making suggestions to the architect to reduce the cost of construction, and that as a result of those suggestions the cost for the building came down as the various budgets were prepared. Further, the evidence suggests the Respondent did work to obtain clearances required for the demolition permit, that the Respondent prepared or obtained floor joist drawings, roof truss drawings, ventilation plans, etc. The trial judge concluded and found the Respondent provided valuable services to the Defendant. That conclusion was open to him to reach on the evidence before him.
[25] The same applies to the second branch of the test. There was evidence given viva voce and supported by time sheets etc., that employees were paid to assist on the project at a cost as claimed by the Respondent. Finally it was not argued by anyone, nor was there an evidentiary basis, for concluding that there was a juristic reason for the enrichment.
[26] While the trial judge did not enunciate the test in exactly the manner I have, it is clear he was aware of the legal requirements, and indicates quite clearly in his Reasons that “I have consider the principles giving rise to the compensation on the basis of quantum merit [sic, meruit] and I am satisfied that the doctrine applies fully to the Plaintiff’s claim.”
[27] I see no reversible error in the conclusions reached by the trial judge and the appeal is dismissed.
[28] There were no submissions as to costs at the appeal hearing. If the parties are unable to agree they may make brief written submissions (two pages) in this regard.
McNamara J
Released: May 13, 2013
CITATION: R.N.D. v. Mulroney, 2013 ONSC 2748
COURT FILE NO.: 12-DC-1838
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
R.N.D. CONSTRUCTION LIMITED
Plaintiff (Respondent)
– and –
PETER MULRONEY and ASHLEY MULRONEY
Defendants (Appellants)
DECISION ON APPEAL
McNamara J.
Released: May 13, 2017