CITATION: Beatriz Leonardo v. DLC Pools, 2015 ONSC 798

DIVISIONAL COURT FILE NO.: DC-14-00000326

DATE: 2015-02-10

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Beatriz leonardo and jason leonardo, Appellants (Plaintiffs)

AND:

DLC pools, a division of 1391039 ontario inc., and daniel vanderpost, Respondent (Defendant)

BEFORE: Regional Senior Justice G.B. Morawetz

COUNSEL: James W. Srebrolow, for the Plaintiffs/Appellants

Domenic Commisso, for the Defendant/Respondent

HEARD at Toronto: February 3, 2015

ENDORSEMENT

INTRODUCTION

[1] The Plaintiffs/Appellants, Beatriz Leonardo and Jason Leonardo (the “Leonardos”) appeal from the Judgment of Deputy Judge Richardson, dated June 20, 2014, dismissing their claim and ordering costs in favour of the Defendant/Respondent, DLC Pools, a Division of 1391039 Ontario Inc. (“DLC”).

[2] The Leonardos were the purchasers of an in-ground pool and DLC was the supplier. The claim was not pursued at trial against Mr. Daniel Vanderpost in his personal capacity. Mr. Vanderpost is the owner/proprietor of DLC.

[3] The case revolves around the extent of DLC’s obligation to provide guidance, information and assistance on seasonal closing and winterization of the pool. DLC was not available when the pool needed to be closed. The Leonardos closed the pool by themselves. The pool was damaged. The issue was whether DLC was in breach of its contractual responsibilities to the Leonardos and, if so, whether that breach resulted in damage to the pool. The Leonardos also brought this action in tort, alleging that DLC was negligent.

[4] It is the position of the Leonardos that the judgment of the Deputy Judge should be overturned and substituted with a judgment in their favour, or that, alternatively, a new trial should be ordered.

[5] The Leonardos submit that the Deputy Judge erred by:

a. failing to follow his earlier ruling that DLC breached its contractual duty to the Leonardos, which he previously “ruled” and had identified as a pivotal issue in the trial;

b. failing to find that DLC was negligent by failing to warn the Leonardos of the dangers of improper winterization procedure or to discuss pool closing/winterization when the pool was first installed, despite the expert evidence that confirmed such failure was a breach of the standard of care;

c. ruling that DLC’s actions did not cause the damage to the pool and/or that the damages were too remote without applying the appropriate legal tests on causation/remoteness and without considering the evidence of both parties’ experts that customers should be warned of these dangers and that damage to the pool due to improper winterization was a foreseeable consequence; and

d. ruling that damage to the pool due to improper winterization was too remote as to not be within the contemplation of the parties when the contract was signed.

facts

[6] The Leonardos contracted to have a pool installed by DLC. The first page of the contract includes the phrase “Pool Training Included”. It was acknowledged at trial that the term formed part of the contract. The Deputy Judge commented with respect to this clause, during the cross-examination of Mr. Vanderpost. He stated:

“If I saw some clause in a contract that said you would assist them in pool training, it would suggest to me that it doesn’t just mean during the summer time, that it means all year round, that’s what pool training is. Have I got that wrong? … I am suggesting, to me, the words “pool training” means pool service or pool maintenance mean a 12-month operation. … I don’t see anything that limits it to the summer time. Pool training, to me, is everything related to the pool. …”

[7] During the cross-examination of Mr. Jason Leonardo, the Deputy Judge, summarized the evidence in issues before him as follows:

“There was a written contract, the pool was installed and paid for. A term of the contract, which is not disputed, is that Dan was to provide guidance and instruction as to closing or winterizing the pool or whatever the correct language was. In September or October of that year, the plaintiffs attempted to contact Dan and for reasons which I’ll hear later from Dan, I am sure, he was not available for a while. And during his unavailability, if that’s the correct word, the plaintiffs, in frustration or in their urgency to get it done or for whatever reason, they sought other advice and followed it and the evidence which I think I’ve heard from, up to date, was that other advice was really the cause of the damage. And the issue that I think I have to decide is not whether the steps taken by the plaintiff were correct or not, but whether Dan was responsible for breach of that provision in the contract. … And I think the issue is the contractual obligation between the plaintiff and the defendant and whether it was breached.

[8] Mr. Vanderpost confirmed that neither he nor anyone else was available on behalf of the company for a time period in October.

[9] The Deputy Judge stated during the examination of Mr. Vanderpost:

“I make a finding in your favour that the defendant or any of his staff did not respond to any request made by the plaintiffs.

[10] Mr. Vanderpost stated that the plaintiffs inquired about pool closing/winterization following the pool installation and he refused to provide any guidance at that time. Mr. Vanderpost testified as follows:

“… and they asked about closing. I said “when it’s time to close, we’ll talk about it at a later date. There’s no point in explaining it right now because you won’t remember.”

[11] The Leonardos contend that the majority of the blame rested with DLC for not providing the winterization/closing training and guidance, as referenced in the contract.

[12] Mr. Andrew Strecker testified as an expert on behalf of the Leonardos. Mr. Strecker testified that he always goes over the steps of closing a pool with a client when he signs off on the installation. He also testified that he warns clients that if they do not follow the correct procedure they will “pop [their] pool and void their warranty”. He further testified that if an installer did not do this it would be “below the standard” of what he thought would be reasonable.

[13] In his decision, the Deputy Judge stated:

I do not view the clause added to the contract as one which requires the defendant to be on-call daily to respond to the plaintiff with respect to closing the pool. The contract, as presented to me, even if I were to give it the most liberal interpretation, cannot, in my view, be possibly construed to place liability on the defendant for the plaintiff seeking faulty advice from an unqualified third party and then undertaking the project himself. I find the damages totally remote and unconnected to the clause in the contract. I find that there is no causal connection whatsoever between the defendant’s obligation and the resulting damage I find that in tort, the negligence was caused by the plaintiff and the plaintiff alone.

[14] The Leonardos submit that this portion of the decision of the Deputy Judge goes against the rulings made by the Deputy Judge such that the Leonardos seek to overturn the judgment.

analysis

[15] The parties are in agreement that the standard of review for an appeal of a trial judgment is correctness on issues of law, “palpable and overriding error” on issues of fact and “palpable and overriding error” on mixed issues of fact and law, except where it involves an error of legal principle (in which case the standard is correctness) (see: Housen v. Nikolaisen 2002 SCC 33).

[16] The Leonardos take the position that the Deputy Judge’s decision does not correctly reflect his judicial findings and rulings throughout the trial. As well, the Deputy Judge failed to sufficiently address and/or provide sufficient reasons on a number of key issues, namely (i) was DLC negligent in not warning the Leonardos; and (ii) did DLC breach its contractual obligation to the Leonardos by not being able to provide pool training. The Leonardos contend that the Deputy Judge appeared to have moved directly to a finding that the damages were not caused by DLC without applying the applicable “but for” test of causation and “reasonably foreseeable risk of harm” test of remoteness.

[17] For the purposes of disposing of this appeal, it is sufficient to consider only the first issue raised by the Leonardos, namely that the decision of the Deputy Judge does not correctly reflect his findings and rulings throughout the trial.

[18] The Leonardos have made a number of references to “rulings” and “findings” made by the Deputy Judge. The comments of the Deputy Judge referenced at paragraphs [6], [7], [9], and [13] were made during the course of examinations and cross-examinations of various witnesses. It seems to me that the Deputy Judge arrived at certain conclusions without considering the evidence in total. Although the argument could be made that the statements of the Deputy Judge were not “rulings” or “findings” in the strict sense of these words, it appears that the Deputy Judge reached certain conclusions on certain issues prior to hearing all of the evidence.

[19] Although DLC may be technically correct that the comments of the Deputy Judge were nothing more than verbalized thoughts made during the course of the trial and do not amount to formed rulings, the comments were made during the course of the evidentiary portion of the trial and give rise to a concern that the Deputy Judge arrived at certain conclusions prior to hearing all of the evidence.

[20] In addition, the Deputy Judge’s findings may very well have impacted on his conclusions with respect to damages.

[21] The making of findings of fact and reaching conclusions prior to hearing all of the evidence tainted the remainder of the evidence and constitutes a “palpable and overriding error” on behalf of the Deputy Judge.

[22] The Leonardos requested that the dismissal of the action be set aside and judgment be granted in favour of them. This would require me to make certain assessments based on the transcript. There is no principled way in which I could make such an assessment. Therefore, I am not in a position to grant judgment in favour of the Leonardos. Rather, the dismissal of the action is set aside and a new trial is ordered.

[23] In addition, a number of questions were raised with respect to the Deputy Judge’s assessment of the evidence. Brief comment is warranted as it gives support to my conclusions that the error of the Deputy Judge referred to above may have impacted on subsequent findings of fact prior to hearing all of the evidence. Each side had an expert testify on the subject of winterization of the pool.

[24] The Deputy Judge commented on the issues raised by the experts, but he did go on to assess the evidence or to give any indication as to whether he prefers one or the other. Rather, the Deputy Judge immediately went on to address the issue as to whether the Defendant was or was not in breach of contract or was negligent. The Deputy Judge concluded that he found the damages to be totally remote and unconnected to the clause in the contract. Unfortunately, it seems to me that the “rulings” and “findings” made by the Deputy Judge during the course of the evidentiary hearing may have tainted his view of the subsequent evidence. In addition, the failure to properly consider the expert evidence also taints the conclusions reached by the Deputy Judge.

[25] Further, DLC submits that the Deputy Judge was correct in finding that DLC did not breach its obligation out of the contract. In his Reasons for Judgment, the trial judge stated:

While there was no definition of the added term, I do accept the defendants’ interpretation as more reasonable. He agreed that he would give the plaintiff proper instruction during the summer months and the evidence supports that, indeed, he fulfilled that obligation. With respect to the closing and winterizing of the pool, I also accept the Defendant’s interpretation of the clause. He agreed that he would attend and provide instruction, but if he was asked to do the actual work, maintenance and labour himself, that would be an additional charge.

[26] I am unable to reconcile this statement with the Deputy Judge’s previous statement during the cross-examination of Mr. Vanderpost referenced at paragraph [6].

[27] This inconsistency calls into question the Deputy Judge’s assessment of the facts and again leads to the conclusion that there has been a “palpable and overriding error” made by the Deputy Judge.

DISPOSITION

[28] In the result, the appeal is allowed and the decision of the Deputy Judge is set aside and a new trial is ordered. The costs of the appeal and the first trial are reserved to the judge hearing the second trial.

[29] I would ask that the parties contact my office in order to schedule a case conference with me in order to review the next steps in these proceedings. The case conference will be held at the Court House, 361 University Avenue, on a date and time to be mutually agreed upon. Counsel should have their clients in attendance at the case conference.

Morawetz, R.S. J.

Date: February 10, 2015