Essa Carpentry Inc. v. Falconwin Holdings Limited, 2016 ONSC 1793

CITATION: Essa Carpentry Inc. v. Falconwin Holdings Limited, 2016 ONSC 1793

DIVISIONAL COURT FILE NO.: 376/15 DATE: 20160311

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

J. WILSON, STEWART AND CONLAN JJ.

BETWEEN:

ESSA CARPENTRY INC. Plaintiff (Respondent)

– and –

FALCONWIN HOLDINGS LIMITED Defendant (Appellant)

Salvatore Mannella, for the Plaintiff (Respondent) Allen C. Gerstl, for the Defendant (Appellant)

HEARD at Toronto: March 11, 2016

STEWART J. (ORALLY)

[1] The appellant, Falconwin Holdings Ltd., appeals from the order of Whitaker J. dated March 6, 2015 dismissing its motion opposing confirmation of the Report of Master Albert dated May 14, 2014 and confirming same.

[2] The appellant owns two high rise buildings in Toronto which have a shared garage. The respondent Essa Carpentry Inc. claimed a balance owing from repairs performed on the garage roof slab on the appellant’s property. The lien it had registered against the property had expired. Accordingly, the parties agreed to proceed by way of a summary trial before the Master on a reference in accordance with the procedural rules applying to references and Rule 76 of the Rules of Civil Procedure.

[3] At the conclusion of the proceedings before her, Master Albert found that the respondent was entitled to be paid the balance of its unpaid account of $63,876.62, less $2,000 on account of the cost of repairing drains due to the deficiency of the respondent’s work in this single respect, for a total of $61,876.62.

[4] Master Albert also awarded costs of $45,379.99, inclusive of disbursements and taxes, to the respondent.

[5] On March 6, 2015, Whitaker J. dismissed the motion to oppose confirmation of the Master’s report. In doing so, he stated:

The parties agreed the standard of review is palpable and overriding error. In my view the moving party consented to the process used by the Master and so now cannot argue that the process of hearing was unfair or inappropriate. With respect to the findings of the Master which we discussed here, there was evidence before the Court which can support the Master’s conclusions of fact. The standard of review is a high one and I should defer to the Master in the circumstances of the case.

…The method of hearing was proportional to the issues in dispute on the report.

[6] The appellant asks this Court to reverse the judgment awarded to the respondent or, in the alternative, to refer the matter back for a new reference.

Jurisdiction

[7] Section 71 of the Construction Lien Act, R.S.O. 1990, c. C.30 governs this appeal:

71(1) Subject to subsection (3), an appeal lies to the Divisional Court from a judgment or an order on a motion to oppose confirmation of a report under this Act.

Standard of Review

[8] The standard of review on an appeal from a judge’s decision is found in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235:

On a pure question of law, the basic rule with respect to the review of a trial judge’s findings is that an appellate court is free to replace the opinion of the trial judge with its own. Thus the standard of review on a question of law is that of correctness. (para. 8)

The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a “palpable and overriding error.” (para. 10)

Where the trier of fact has considered all the evidence that the law requires him or her to consider and still comes to the wrong conclusion, then this amounts to an error of mixed law and fact and is subject to a more stringent standard of review [than for findings of fact]. (para. 28)

[9] These principles apply to matters under the Construction Lien Act: see RSG Mechanical Inc. v. 1398796 Ontario Inc., 2015 ONSC 2070, 41 C.L.R. (4th) 124 (Div. Ct.), at paras. 22-23.

Issues

[10] The appellant’s Notice of Appeal and Supplementary Notice of Appeal raise five issues, but the appellant’s factum and argument before this Court deals exclusively with the two issues only which are being advanced on this appeal:

A. Did the Master err in holding the appellant liable to the respondent under a fixed price contract rather than quantum meruit?

B. Did the Master err in finding privity of contract between the appellant and the respondent?

[11] We will deal with these issues in turn.

A. Did the Master Err in Holding the Appellant Liable to the Respondent Under a Fixed Price Contract Rather than Quantum Meruit?

[12] The appellant argues that the Master erred in finding there was a fixed price contract between the parties in view of her acceptance that some of the invoices submitted by the respondent did not pertain to the project and were therefore deducted from the amount owing, which ought to have converted this into a quantum meruit claim.

[13] We disagree. Notwithstanding that this argument was not made before either the Master or Whitaker J., we consider that there was evidence before the Master to support a conclusion that a fixed price contract had been entered into by the parties. Of note, the appellant unilaterally terminated the fixed price contract before its completion and the respondent sent invoices for work completed to date. The fact that three invoices dealing with other work unrelated to this fixed price contract had been submitted in error does not change the fact that a fixed price contract had been entered into by the parties.

[14] Accordingly we find the conclusions of the Master, including her calculations and her determination that there was no need to consider quantum meruit, were entirely reasonable and supported by the evidence. We find there is no merit to this ground of appeal.

B. Did the Master in Finding Privity of Contract Between the Appellant and the Respondent?

[15] The Master, at para. 22 of her Reasons for Decision, found as follows:

The contracting parties are Essa and Falconwin. To the extent that Falconwin Property Management, an unincorporated and unregistered entity, negotiated and participated in the formation and implementation of the contract, it acted as agent for the owner, Falconwin Holdings Limited. The two Falconwins are related through the Weinstock family.

[16] The appellant argues that there was no evidence of privity of contract before the Master between Essa and Falconwin Holdings Ltd. to justify this conclusion. We disagree.

[17] In the affidavit evidence before the Master, the principal of the respondent, Mr. Monteleone, stated as follows at (para. 20):

At all material times, I was instructed to perform work either by Weinstock or Berrada as his authorized agent on behalf of the owner of the Property. Weinstock represented to me on many occasions that he was the “owner” of the Property, and I had no reason to believe otherwise. I was instructed by Weinstock to make all invoices out to “Falconwin Property Management”. I complied with Weinstock’s direction and made out the invoices to Falconwin Property Management. I always understood Essa was performing the work for the benefit of the owner of the Property, not a third party. At the time of my initial discussions with Weinstock I did not know the actual owner of the Property, other than what Weinstock told me. I subsequently learned through my lawyer that the registered owner of the Property was Falconwin Holdings Limited, the defendant named in these proceedings.

[18] On this understanding and these instructions, invoices were sent to Falconwin Property Management and some payments were made.

[19] It is acknowledged that Weinstock, the person with whom Mr. Monteleone was dealing is the principal of both entities. We also note that the appellant counter-claimed against the respondent on the basis of the existence of privity to a contract which it now disputes. Its counter-claim was struck before trial for breach of procedural orders made by the Master.

[20] In any event, as counsel for the respondent has pointed out, at the relevant time registration of the management company had lapsed and it was not a legal entity. Therefore, the negotiations took place with Weinstock personally, who is a principal of the respondent.

[21] For these reasons, there is no merit to this ground of appeal.

[22] The appeal is therefore dismissed.

J. WILSON J.

COSTS

[23] I have endorsed the Appeal Book, “For oral reasons provided by Stewart J., this appeal is dismissed. Costs fixed payable by the appellant to the respondent in the amount of $8,423.32, inclusive of HST and disbursements.”

___________________________ STEWART J.

J. WILSON J.

CONLAN J.

Date of Reasons for Judgment: March 11, 2016 Date of Release: April 8, 2016

CITATION: Essa Carpentry Inc. v. Falconwin Holdings Limited, 2016 ONSC 1793 DIVISIONAL COURT FILE NO.: 376/15 DATE: 20160311

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

J. WILSON, STEWART AND CONLAN JJ.

BETWEEN:

ESSA CARPENTRY INC. Plaintiff (Respondent)

– and –

FALCONWIN HOLDINGS LIMITED Defendant (Appellant)

ORAL REASONS FOR JUDGMENT

STEWART J.

Date of Reasons for Judgment: March 11, 2016 Date of Release: April 8, 2016