CITATION: 2319583 Ontario Inc. v. Berzinch, 2015 ONSC 5758
COURT FILE NO.: 30336/08
DATE: 2015 09 16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
WOOLLCOMBE J.
BETWEEN:
2319583 Ontario Inc, Appellant
Appellant
– and –
Igor Berzinch
Respondent
S. Foster, Counsel for the Appellant
A. Tiltins, Counsel for the Respondent
HEARD: June 26, 2015
A. Overview
[1] This is an appeal from the decision of a Small Claims Court trial judge after trial.
[2] In April 2013, the respondent, Igor Berzinch, hired the appellant company, known as Lemco Transport, to repair the clutch on his 2007 commercial truck. Although the clutch was repaired, a problem then emerged with the truck’s transmission. This necessitated additional repair work and further costs to Mr. Berzinch.
[3] As a result of the transmission work that was required, Mr. Berzinch did not pay Lemco when it issued an invoice for its repairs. Lemco then had his vehicle seized pursuant to a repairer’s lien, resulting in him losing income. He made a claim against Lemco for the cost of the work done on the truck transmission and for his loss of income resulting from the seizure of his vehicle. Lemco made a claim against him for payment for their work
[4] Both parties called evidence at trial. A significant issue in dispute was whether the difficulties with the transmission that emerged after the clutch was repaired resulted from the work done on the clutch or not. The trial judge found that Lemco lacked the proper equipment to do the necessary re-programming of the transmission following the clutch repair and that this caused the transmission problem.
[5] A second significant issue was whether Lemco was entitled to a repairer’s lien. The trial judge held that Lemco did not have a properly signed acknowledgment of indebtedness and so it could not engage The Repair and Storage Liens Act (“R.S.L.A”).
[6] As a result, the trial judge concluded that Lemco owed Mr. Berzinch a total of $2,681.62. This figure was reached by adding the values for the transmission repairs ($2,256.62) and the lost income from the truck seizure ($1,600.00). and then deducting from this “other repair work” done by Lemco and owed by Mr. Berzinch ($1,175.00).
B. The Issues on the Appeal
[7] The appellant raises two main issues:
a. Did the trial judge err in failing to compensate the appellant for repairs to the clutch and other repairs that were not disputed?
b. Did the trial judge err in finding that Lemco did not have a legitimate lien?
C. Brief Factual Summary
[8] Igor Berzinch owned a 2007 Volvo commercial truck. In the fall of 2012, he learned that his truck needed the clutch replaced. He wanted to identify a business that would be able to complete the repairs over a weekend so that his work time would not be disrupted. In February 2013, he selected Lemco Transport as a potential repairer. Stefan Gluch, on behalf of Lemco, obtained for him two quotes for the work. Mr. Berzinch testified that he needed time to raise the money before the repairs could be done.
[9] Ultimately, Mr. Gluch arranged for David Howes, of Big Wheels Trucking Ltd., to repair Mr. Berzinch’s truck over a weekend in April 2013.
[10] Mr. Gluch and Mr. Howes picked up the truck at the Globetrotter parking lot and took it to Mr. Howes’ shop to effect the repairs. Mr. Berzinch testified that he was in the United States for work at this time.
[11] It was Mr. Gluch’s evidence that Mr. Berzinch attended at Big Wheels Shop and garage on the Saturday and that he “overlooked the parts and components to be replaced”. Mr. Gluch said that other work was to be done after the clutch was repaired. He said that Mr. Berzinch met with him and David Howes, and reviewed the written estimate. Mr. Gluch testified that Mr. Berzinch was not asked at that time to sign anything as he said that he never had such estimates signed.
[12] Mr. Howes testified that he repaired the clutch. He said that when he took the truck for a test drive, he noticed that it would not shift from low gear into the higher gears. He advised Mr. Gluch, who contacted Mr. Berzinch.
[13] Mr. Gluch said that when Mr. Berzinch’s driver, Sergei, came to pick up the truck on the Monday evening at 8:00 p.m., he had the driver sign an authorization for the work done by Lemco, including both brake work and the replacement of the clutch. He knew by that point that the transmission was not working properly and said that this was why he had the driver sign the estimate. He agreed that he had Sergei signed the estimate after the clutch work had been done.
[14] Mr. Berzinch testified that he was telephoned in the United States on the Monday and was told that the truck was not shifting into gears higher than fourth or fifth. He agreed that the truck should go to Volvo for a diagnostic. It was taken to a Volvo dealership called Performance Equipment and the transmission was repaired. At trial, he was surprised by the suggestion, apparently made for the first time when he was testifying, that his driver had signed an authorization for the brake and clutch work.
[15] There was conflicting expert evidence about why the transmission problem occurred after the clutch was replaced. The trial judge preferred the expert called by the respondent, Harbinder Kang. He testified that in order to repair the clutch, the transmission had to be removed. Once the transmission is disconnected, special upgraded software programming must be done for the transmission to work properly. It was his opinion that the failure to upgrade the software program at the time the clutch was repaired resulted in the problems.
[16] Following the transmission work done by Performance Equipment, Mr. Gluch did further work on the truck. This included work on the brakes and other work. An invoice from Lemco to Mr. Berzinch (dated April 20, 2013, but given to Mr. Berzinch on May 7, 2013) was for $4,494.01.
[17] Mr. Berzinch did not pay Lemco for the repairs, and instead commenced an action against them to recover the costs of the repairs done by Performance Equipment. That action was dismissed on August 7, 2013 as a result of a motion brought by Lemco to which Mr. Berzinch failed to respond. The dismissal was without prejudice for Mr. Berzinch to assert his claim in the context of the R.S.L.A. proceeding, which he did.
[18] Once Mr. Berzinch’s claim was dismissed, Lemco acted on a lien it had registered under the R.S.L.A. and provided a warrant to the bailiff to seize the respondent’s truck. This occurred on September 9, 2013.
[19] It took Mr. Berzinch eight days to raise the $7,701.01 required to pay into court to get his truck back. Mr. Berzinch claimed $1,600.00 for losses in work revenue during this time.
D. Analysis
a. Did the trial judge err in failing to compensate the appellant for repairs to the clutch and other repairs that were not disputed?
[20] The trial judge was entitled, on the evidence before him, to find as a fact that the repairs to the transmission were necessitated because of Lemco’s failure to properly re-program the transmission after repairing the clutch. I have carefully reviewed the evidence of both experts. There is no basis upon which to interfere with the trial judge’s decision to prefer the expert evidence of Mr. Kang over that of Mr. Howes.
[21] The real question before me seems to be whether the trial judge used the correct numbers in giving effect to his factual conclusion that Lemco’s failure to repair the clutch properly resulted in the need for work on the transmission.
[22] The trial judge found that Mr. Berzinch should be reimbursed by Lemco for all of the work done by Performance on the transmission. The work done by Performance cost a total of $2,256.62. Lemco says that the trial judge ought to have deducted from this the money that Mr. Berzinch owed to it for the clutch repair and the brake work.
[23] The trial judge did deduct from the amount owed to Mr. Berzinch a sum of $1,175.00 owed by him to Lemco for “some of its other repair work”. It is not clear the basis upon which this value was reached.
The “non-clutch” repair costs
[24] Mr. Berzinch was invoiced by Lemco for $4,494.01. As I understand the evidence, this sum includes an amount for “non-clutch” repairs of labour of $920.00 ($420+350+150) and parts of $512 (107+19+84+206+96) for a total of $1,432.00, plus HST, or $1,618.16.
[25] As I have indicated, the trial judge did not explain the basis upon he reached the amount for “other repair work”. As I have not been provided with the submissions made at trial, I do not know whether there were submissions made about departing from the $1,618.16 amount I have identified as the correct amount for the repairs unrelated to the clutch.
[26] I have not been able to identify any basis for the trial judge to have found the “other repair work” value that he did. I think he erred in calculating the “other repair work” as he did. On the evidence of Mr. Gluch and Mr. Berzinch, the amount should have been higher. I would vary the amount to deduct for “other repair work” from $1,175.00 to $1,618.16.
The clutch repair costs
[27] The appellant says that there should be an additional amount deducted from the amount payable to Mr. Berzinch representing the value of the work on the clutch.
[28] The costs of the clutch repair on the invoice includes, at least, the cost of the clutch at $1350.00 and the cost of labour at $840.00 for a total of $2190.00 plus HST.
[29] On the one hand, it is possible that the trial judge deliberately chose to find that Mr. Berzinch was not responsible for any costs for the clutch replacement. If this was his view, he did not say so and I cannot infer from his reasons that this was his thinking.
[30] On the other hand, the issue of the clutch repair costs may never have been squarely raised during submissions before the trial judge, and he may have overlooked them. I cannot tell.
[31] I think the trial judge was in error in failing to address the costs of the clutch repair at all and in failing to offset Mr. Berzinch’s award by an amount he owed for the clutch. The clutch was repaired and Mr. Berzinch should pay for at least some of the costs of that repair. As I understand the position of the respondent, it is accepted that the trial judge ought to have offset the amount owed to Mr. Berzinch by $1,700.00 to account for the clutch.
[32] Given this concession and because I am of the view that Mr. Berzinch should pay for part, but not all of the costs of the clutch repair (as this repair work was not done properly), I will reduce by $1,700.00 the amount owed to Mr. Berzinch. This is roughly what the estimate for the work was and is thus what Mr. Berzinch could have expected to pay for this work.
The variation
[33] As a result, a total amount of $3,318.16 ($1618.16 + $1,700.00) should be deducted from the amount owed by Lemco to Mr. Berzinch. This reflects deductions for the non-clutch and clutch repairs.
b. Did the trial judge err in finding that Lemco did not have a legitimate lien?
[34] The appellant brought a counter-claim for the sum of $7,771.00 that was paid into court by Mr. Berzinch in order to recover his truck after the appellant arranged to have it seized pursuant to a lien registered under the R.L.S.A.. The amount was for the outstanding repair bill due to the defendant and the bailiff charges. As the trial judge concluded that the repair work was improperly done, he recognized that he did not need to deal with the defendant’s counter-claim. However, he did so and concluded that there was no proper acknowledgement that could engage the RLSA.
[35] One of the exhibits before the trial judge was an invoice with an estimate for the costs of repairs that were to be done by Lemco on Mr. Berzinch’s truck. At the bottom of this document is a section for authorization for repair work. The signature of the person who authorized the work was found by the trial judge to be illegible. I agree that the signature is illegible. Where the name of the person is to be printed, there appears to be the name “Serge”.
[36] On appeal, Lemco says that the trial judge made palpable and overriding error in finding that the signature on the authorization was not that of the respondent’s driver, erred in law in restricting the appellant to the statement in its pleading about the identity of the person who signed the authorization, and erred in failing the determine that the driver could bind the vehicle owner on an authorization of indebtedness.
[37] The trial judge found as a fact that neither Mr. Berzinch nor his driver signed the authorization. The trial judge seems to have justified this on the basis that the signature was illegible, and that the appellant’s position that the driver was the person who signed the authorization was a significant shift from the statement of defence. I find that the trial judge’s factual finding was reasonable, although for slightly different reasons.
[38] The appellant’s evidence about the driver signing the authorization is concerning. Mr. Gluch was the only person to testify that Sergei signed the authorization. He claimed that he had a fulsome discussion about the repairs to be done with Mr. Berzinch on the Saturday before the clutch was repaired, yet chose not the ask Mr. Berzinch, the owner of the vehicle and a person he knew, to sign an authorization for the work. He did not have a particularly sensible explanation for this, other than to say that they never had these estimates signed.
[39] Having not asked Mr. Berzinch to sign an authorization, Mr. Gluch said that it was when realized that there was a problem with the repairs, and that further work would be needed, that he chose to ask Mr. Berzinch’s driver, who came to pick up the truck on the Monday night after the work had been done, to sign an authorization. I find the circumstances and timing offered for Sergei having signed the authorization to be implausible and unlikely.
[40] Further, it seems odd to me that if Sergei signed the authorization, he would not have printed his first and last name on the form. Having only his first name on that form could suggest that a person who did now know his last name filled it in
[41] In addition, I agree with the trial judge that it is concerning for the appellant to have dramatically shifted positions from an assertion that Mr. Berzinch signed the authorization to an assertion that the driver did so.
[42] On all of the evidence that was before the trial judge, including the odd circumstances said to give rise to Sergei signing, the fundamental change in position that appeared to have arisen on the part of Lemco, the fact that there was an illegible signature, and the fact that only a first name appears where the authorizing individual was supposed to print his or her name, I am not prepared to find unreasonable his conclusion that neither Mr. Berzinch nor his driver signed the authorization.
[43] Once this issue is decided against the appellant, I need not deal with whether Sergei had the authority to sign the authorization.
E. Order
[44] The appeal is allowed only to the extent that the order of the trial judge should be varied in accordance with these reasons. A sum of $3,318.16 is to be deducted from the total of $3,856.62 that the trial judge found was owed by Lemco to Mr. Berzinch. The award to the respondent is, therefore, reduced from $2,681.62 to $538,46.
Woollcombe J.
Date: September 16, 2015
CITATION: 2319583 Ontario Inc. v. Berzinch, 2015 ONSC 5758
COURT FILE NO.: 30336/08
DATE: 2015 09 16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
WOOLLCOMBE J.
BETWEEN:
2319583 Ontario Inc, Appellant
Appellant
– and –
Igor Berzinch
Respondent
endorsement
Released: September 16, 2015