CITATION: Jhajj v. Ha, 2015 ONSC 7326
COURT FILE NO.: DC-14-0101-00
DATE: 2015 11 24
ONTARIO
SUPERIOR COURT OF JUSTICE
Divisional Court
B E T W E E N:
TEJINDER SINGH JHAJJ
David Conway, for the Plaintiff/ Respondent
Plaintiff/Respondent
- and -
CANH QUANG HA, aka Tommy Ha, and HANDYMAN HA INC.
Roger A. Gosbee and Theresa Gosbee, for the Defendant / Appellant
Defendant/ Appellant
HEARD: November 20, 2015
REASONS FOR DECISION
Justice D. Edwards
[1] The applicant appeals the judgment of Deputy Justice Brian McNulty rendered on September 9, 2014, in which the defendants were ordered to pay to the plaintiff:
a) damages in the amount of $10,628.07 jointly and severally; and
b) costs of the action fixed at $1500.
[2] The dispute involves an engineered hardwood floor installed in the plaintiff's basement. After installation the floor began to buckle because the edges had been glued to the concrete or ceramic flooring. This did not permit the floating floor to expand and contract. The central issue in this matter was who contractually bore that risk.
[3] The Deputy Justice found that the corporate defendant and the individual defendant were both liable for the damages that ensued.
[4] On appeal the appellants raise four issues:
a) the Deputy Justice erred in law in relying upon the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A;
b) the Deputy Justice erred in law in applying the principles set forth in Nakonechny v. RMJ Contracting Ltd., 2006 ABPC 27;
c) the Deputy Justice erred in law in his interpretation of the evidence of the plaintiff's expert witness, Chad Frenette; and
d) the Deputy Justice erred in law in lifting of the corporate veil.
[5] For the following reasons the appeal dismissed:
Standard of Review
[6] The standard of review of a deputy justice’s decision is correctness on questions of law. Findings of fact are not to be reversed absent palpable and overriding error. Palpable errors include findings that are clearly wrong, unreasonable or unsupported by the evidence. Questions of mixed fact and law lie along a continuum: Housen v. Nikolaisen [2002] 2 S.C.R.
[7] In Maple Ridge Community Management Ltd. v. Peel Condominium Corporation No. 231, 2015 ONCA 520 the Court of Appeal stated:
The Supreme Court of Canada has recognized that access to justice is a significant and ongoing challenge to the justice system with the potential to threaten the rule of law. In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 1, the court held:
Ensuring access to justice is the greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive and protracted. Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial. Without an effective and accessible means of enforcing rights, the rule of law is threatened. Without public adjudication of civil cases, the development of the common law is stunted.
The Small Claims Court is mandated under s. 25 of the Courts of Justice Act, R.S.O. 1990, c. C.43, to “hear and determine in a summary way all questions of law and fact and may make such order as is considered just and agreeable to good conscience.” The Small Claims Court plays a vital role in the administration of justice in the province by ensuring meaningful and cost effective access to justice for cases involving relatively modest claims for damages. In order to meet its mandate, the Small Claims Court’s process and procedures are designed to ensure that it can handle a large volume of cases in an efficient and economical manner.
[8] Rule 1.03(1) of the Rules of the Small Claims Court state that:
...[the] Rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every proceeding on its merits in accordance with section 25 of the courts of Justice Act.
[9] Finally, Rule 2.01 states:
A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity, and the court may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in dispute.
Background
[10] The parties agree that a contract was entered into for the renovation of the plaintiff’s basement. The total price was “$40,000 cash deal no invoice, add 13% HST in addition to total Project Price if invoice is required.” Part of the renovations included installing “engineered hardwood flooring selected from contractor standard sample throughout except in the tile area…” The corporate defendant’s name and address are at the top of the contract. The plaintiff signed as “Client”. The individual defendant signed and under his signature is “Tommy Ha, Contractor”.
[11] All of the payments were made by cheque and the payee was Ha-Canh Quang who was also known as Tommy Ha (“Ha”), pursuant to his direction.
[12] There was no express warranty in the contract.
[13] If not installed correctly engineered flooring had a potential to expand and buckle due to moisture. One way to address the expansion issue is to install T-moldings that create an expansion space between the edge of the floor and the adjourning structure.
[14] The Deputy Justice found as a fact that Ha had discussed with the plaintiff prior to commencing work, the flooring type and materials, including the T-moldings, and there was no discussion that T-moldings not be used.
[15] The Deputy Judge further found that after Ha had commenced work the “plaintiff stormed in insisting that T-moulds not be used; and that this work be torn up, and re-installed in accordance with his direction.”
[16] The plaintiff (“Jhajj”) testified that he wanted the floor to be installed without T-moldings and that he wanted the floorboards flush with the baseboard. Ha testified that he advised Jhajj that this would will result in floor buckling and that Jhajj insisted that Ha glue the floor at the edges to hold the entire floor in place.
[17] Ha testified that he presented a waiver for Jhajj to sign before he would proceed. By that waiver Jhajj would assume responsibility for any subsequent buckling of the floor. Jhajj stated that this did not occur.
[18] The Deputy Justice found that “Ha’s failure here was not a failure in appreciating the potential problems of what was being demanded of him by the plaintiff, but in failing to reject those demands.”
Analysis
[19] I will now examine each issue raised by the appellant.
Application of the Consumer Protection Act
[20] In the Deputy Justice’s reasons, he states that the Consumer Protection Act (“Act”) had not been specifically pleaded. However, he took judicial notice of the Act; found that the plaintiff was entitled to the protection of the Act; and found that the services supplied by the defendants to the plaintiff under the contract were not of reasonably acceptable quality as required by the Act.
[21] The appellants submit that, as this issue was not pleaded or argued at the time of the hearing, they did not have an opportunity to address this issue at trial.
[22] However, in their factum they acknowledge that, after considering the issue, they agree that the Act does apply to the contract, but direct me to section 13(5) of the Act. The appellants did not raise this section in oral argument.
[23] I am satisfied that this section applies to unsolicited goods or services, and is not applicable in the circumstances.
[24] The application of the law by the Deputy Justice is an appropriate function of the judge. This is distinct from taking judicial notice. However, it would have been preferable for the Deputy Justice to have brought the Act to the attention of the parties and permitted argument on that issue, prior to ruling on this issue.
[25] Nevertheless, I see no prejudice to the appellants by the application of the Act, and the Deputy Justice’s conclusion that the Act imposed an implied warranty with respect to the services supplied to the plaintiff, notwithstanding the absence of an express warranty in the contract.
The application of the principles set forth in Nakonechny v. RMJ Contracting Ltd.
[26] The appellants submit that the Deputy Justice erred at law in applying the principle of Nakonechny to our case.
[27] In Nakonechny the Court found that the plaintiff did not have sufficient knowledge to know what was required to repair the leak in the roof and had relied upon the defendant’s expertise. Accordingly, the defendant was liable in that case.
[28] Although argued as an error of law, there is no suggestion that the Deputy Justice misconstrued the legal principle described in Nakonechny. Instead, the appellants wish to distinguish the facts of the instant case from Nakonechny.
[29] Rather than an error of law, the appellants actually are questioning findings of fact. Findings of fact are not to be reversed absent palpable and overriding error
[30] The appellants submit that, unlike Nakonechny, the Deputy Justice found that the plaintiff was aware of the potential risks of proceeding without T-moldings, but specifically instructed the appellants to proceed. Therefore, they submit that the plaintiff should bear the risk of the floor buckling.
[31] The respondent disagrees.
[32] His counsel submits that, although the respondent did not want T-molding used to prevent expansion, he continued to rely upon the expertise of the appellants to install the flooring in a good and workmanlike manner.
[33] Ha testified that he approached the plaintiff to sign a waiver placing the risk of the floor buckling upon the plaintiff. Ha stated that the respondent refused to sign the waiver. However, due to a threat of non-payment of money owing for the balance of the renovation, Ha proceeded to install the floor in accordance with Jhajj’s instructions.
[34] Although the respondent denies that a waiver was presented to him, his counsel asserts that Ha’s testimony on this issue demonstrates that Ha was aware that contractually he was warranting the floor installation. Counsel asks rhetorically, “Why ask for a waiver”, and answers, “In order to transfer the legal risk of the floor buckling.”
[35] The respondent asserts that because the waiver was not signed, by installing the flooring, that appellants retained that risk.
[36] The Deputy Justice did not find as a fact that a waiver was presented to the plaintiff. Indeed, he states: “I question whether a form of waiver was presented to the plaintiff”. The waiver was not put into evidence. The plaintiff denied that a waiver had been presented to him.
[37] It was open to the Deputy Justice to decide to not make a finding that the wavier had been presented.
[38] It was open to the Deputy Justice to conclude that the plaintiff had not been made aware of the extent of the risk of the floor buckling, or that Ha had taken all appropriate steps to prevent this from occurring.
[39] For example, Chad Frenette was clear in his testimony that the level of moisture in a basement was a relevant factor. There is no evidence that Ha advised Jhajj that the moisture level could heighten the risk of buckling, or that he suggested that the level be tested prior to installation of the floor. It was only after the floor began to buckle that Ha suggested a dehumidifier.
[40] There was evidence to support the Deputy Justice’s conclusion that the plaintiff was not the expert and continued to rely upon the expertise of the defendants.
[41] Based upon his reasons it is clear that the Deputy Justice did not accept that the plaintiff agreed to assume the risk of buckling. That conclusion was available to him based upon the evidence.
[42] Another might have weighed the evidence differently, made different findings of fact, and concluded that by his conduct the plaintiff had contractually assumed the risk of the floor buckling. However, the Deputy Justice’s findings of fact on this issue do not demonstrate a palpable or overriding error.
The Plaintiff's expert witness, Chad Frenette
[43] The appellants submit that the Deputy Justice erred in his interpretation of the evidence of this witness. They submit that he erred in relying upon the witness’ evidence as to alternatives to the use of T-moldings because the witness admitted that in all of his years of experience he had never used anything but T-moldings.
[44] This is not a question of law, but one of findings of fact; as such will not be reversed, absent a palpable and overriding error.
[45] The evidence of the witness was that in his business because of the risk of buckling, he forced his customers to use T-moldings and that he would not install a floor without leaving an expansion gap and putting in a T-cap. However, “if a customer insists we would probably look for other alternatives”, but that this had never happened to him.
[46] The witness listed options that include:
a) expansion gaps filled with rubber or silicon filler;
b) low-profile metals which are considered less of a trip hazard and less visually objectionable; and
c) direct glue product rather than a floating product with a subfloor could be installed.
[47] The respondent asserts that the fact that the witness had not used these alternative techniques did not detract from the value of his testimony. He had been properly qualified as an expert to give opinion evidence.
[48] I am satisfied that there are no palpable or overriding errors to support a reversal on these findings of fact. I am also satisfied that the question of the alternatives to T-molding did not factor significantly in the Deputy Justice’s conclusions.
Lifting the Corporate Veil
[49] The appellants submit that the Deputy Justice erred in law by lifting the corporate veil. They submit that the corporate veil can only be lifted where there are findings of fraud, deceit, dishonesty or want of authority. Scotia McLeod Inc. v. People's Jewellers Ltd. (1995) 1995 1301 (ON CA), 26 O.R. (3d) 481, paragraph 25
[50] The respondent counters that the Deputy Justice found that the individual defendant entered into the contract with the plaintiff in his personal capacity, and therefore did not lift the corporate veil.
[51] Although the Deputy Justice initially refers to “lifting the corporate veil”, his subsequent analysis is directed at determining who were the parties to the contract.
[52] He makes the following findings of fact:
a) Handyman Ha Inc. is mentioned at the heading of the contract, but not in the body of the contract;
b) Ha is referred to as the contractor in the contract;
c) Ha’s personal email is listed on the contract;
d) Ha signed the contract in his personal capacity, and not on behalf of Handyman Ha Inc.;
e) No Articles of Incorporation or enabling resolutions were produced as evidence;
f) the funds were paid to Ha-Canh Quang (the individual defendant) at his request; and
g) Handyman Ha Inc. received no benefit under the contract.
[53] The Deputy Justice relied upon these findings of fact to support his conclusion that Ha personally was a party to the contract.
[54] The conclusion that Ha was a party to the contract is a question of mixed law and fact.
[55] The Deputy Justice makes no error regarding the principles of contract law for a determination of who is a party to a contract. As well, there are no palpable or overriding errors in the findings of fact that the Deputy Justice makes, and upon which he relies to conclude that Ha entered into the contract personally.
[56] In oral argument the appellants assert that the plaintiff did not plead that the corporate veil should be lifted, or that Ha was a party to the contract. In their counsel’s view, the Deputy Justice therefore erred at law in finding Ha personally liable.
[57] Counsel for the respondent submits that this was raised for the first time in oral argument before me.
[58] In the Statement of Claim the plaintiff pleaded that the contract was entered into between himself and Handyman Ha Inc., but that he paid Ha personally, and that Ha had guaranteed the work. Ha was named a defendant.
[59] From the Record it was clear that the plaintiff sought to obtain a judgment against Ha personally. The questions asked, and the answers given, during the trial make it clear that the plaintiff was asserting that Ha was a party to the contract.
[60] It would have been preferable for the Deputy Justice to bring this issue to the attention of the parties to allow them to address the issue, and then he could have exercised his right under the Rules to make any necessary amendments to the pleadings.
[61] However, I am satisfied that Ha was not surprised or prejudiced by a finding that he was personally liable under the contract.
[62] Bearing in mind the Rules of the Small Claims Court, the direction from the Court of Appeal and the Record, I order that the necessary amendments to the Statement of Claim be made, and I confirm the finding of the Deputy Justice that Ha entered into the contract personally.
[63] The issue of the liability of Handyman Ha Inc. was not raised on appeal, and therefore I will not address it.
Conclusion
[64] I dismiss the appeal.
[65] If the parties cannot agree upon costs, the plaintiff shall provide costs submissions within 14 days and the defendants shall provide their submissions within 10 days thereafter. Costs submissions shall not exceed 3 pages.
Justice D. Edwards
Released: November 24, 2015
CITATION: Jhajj v. Ha, 2015 ONSC 7326
COURT FILE NO.: DC-14-0101-00
DATE: 2015 11 24
ONTARIO
SUPERIOR COURT OF JUSTICE
Divisional Court
B E T W E E N:
TEJINDER SINGH JHAJJ
Plaintiff/Respondent
- and –
CANH QUANG HA, aka Tommy Ha, and HANDYMAN HA INC.
Defendant/Appellant
REASONS FOR DECISION
Justice D. Edwards
Released: November 24, 2015