ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Vincenzo Aliberti and Evelyn Aliberti
Plaintiffs (Respondents in Appeal)
– and –
Suliman Idris and Quality Concrete Control
Defendants (Appellants in Appeal)
Gregory D. Wrigglesworth, for the Plaintiffs (Respondents in Appeal)
Robert Tomas, for the Defendants (Appellants in Appeal)
HEARD: November 9, 2016
On appeal from the judgment of Deputy Judge Schwartz of the Windsor Small Claims Court dated May 8, 2015.
decision on appeal
thomas j.:
1This is an appeal from the judgment of Deputy Judge Schwartz dated May 8, 2015. The trial judge assessed that the defendants (appellants) owed the plaintiffs (respondents) $26,200 in damages together with $3,845 in costs. He reduced the sum awarded to $25,000 to meet the monetary jurisdiction of the Small Claims Court.
2The appellants seek an order setting aside the judgment and ordering a new trial.
Background
3The appellants are in the business of installing concrete driveways, sidewalks and patios for residential properties located in the County of Essex. The respondents reside at 594 Sarah Court in the City of Windsor.
4The appellants had seen a driveway in their neighbourhood that they found attractive in both design and colour and were directed to the appellant contractor by those homeowners.
5In or about September 2012, the respondents contracted the appellants to provide a quotation for laying a stamped concrete driveway and sidewalk at their residence. The appellants completed the agreed upon work on or about September 19, 2012.
6Subsequent to the installation of the driveway and sidewalk, the respondents complained of defects related to the colour and stamp impressions on both the driveway and the sidewalk and the cracking of the sidewalk.
7The respondents refused to pay any further sums for the work done and sued for the return of the $9,000 and damages to allow for the removal of the driveway and sidewalk and the replacement of both.
8The appellants maintained at trial that the original quote was for $10,500 plus HST and an additional sum of $600 for stone. The respondents’ position was $10,500 all inclusive. The appellants were paid $9,000 prior to commencement of the work.
The Trial Judgment
9The trial judge heard evidence from the parties regarding the alleged defective workmanship and, in addition, the plaintiffs provided evidence from another concrete contractor as to the nature of the defects.
10The trial judge determined that there was no expectation by the parties that there would be a written contract and found he was unable to ascertain a contract price.
11The appellants’ witness at trial conceded the sidewalk was defective and needed to be replaced but maintained the driveway contained only normal cosmetic defects.
12The trial judge made a number of specific findings of fact wherein he agreed with the respondent homeowner’s complaints of defects. He confirmed that the appellant himself agreed the sidewalk had to be replaced.
13At paras. 27, 28 and 30 of his judgment, he reached the following conclusions:
The Alibertis did not just want a concrete driveway. They wanted and contracted with Idris for a concrete driveway of a certain colour with a stamped design which in Mrs. Aliberti’s opinion matched the design of her home and that it was the design that attracted her and Mr. Aliberti to stop at the aforesaid house in a Windsor neighbourhood to obtain the contact information for the person who constructed the driveway at that house. I find that the design of the stamp and the colour of the concrete were foremost in the minds of the Alibertis and when Idris failed to provide same, that such failure was a breach of his contract giving rise to damages.
It was argued by Idris’ counsel that the Alibertis received a functional concrete driveway and have used it since its construction. The driveway may have been functional as a driveway but it was not a stamped concrete coloured driveway contracted for by the Alibertis. I find that the Alibertis would not have contracted for a driveway and sidewalk with Idris in the absence of the stamping design and colour they chose which to them was the focal point of the driveway.
I find that Idris breached his verbal agreement with the Alibertis when he failed to deliver a properly and fully stamped coloured concrete driveway and sidewalk. Construction of only a half of a driveway properly stamped with the other half of a driveway and the entire sidewalk not being properly stamped or stamped at all is a breach of his contract. I further find that removing the half of the driveway which was not properly stamped or not stamped at all and replacing it would not remediate the deficiency as to the colour of the replacement concrete which would probably not match the colour of the remaining half. All parties agreed that the back yard sidewalk had to be removed and replaced.
14The trial judge went on to conclude that the expectancy principle of damages provided the appropriate means to assess damages for the breach. He concluded in applying that principle that the respondents’ $9,000 needed to be returned and that damages of $17,200 were to be awarded for the removal of the driveway and sidewalk and their appropriate replacement (using an estimate tendered by the respondents). This, he concluded, would place them “…in the same situation, with respect to damages, as if the contract had been performed.” (Trial judgment, para. 32.)
Arguments on Appeal
15Counsel for the appellants argues that an error was made by the trial judge in assessing the damages for breach of contract on the “cost to cure” basis as opposed to the “difference in value.”
16He suggests in deciding how to assess the damages the trial judge was obliged to determine the cost to cure the defects as weighed against the determined loss of value to the respondents in having their defective driveway. He argues that if the costs to cure exceeds the loss in value (which was likely the case here), the law requires the Court to consider the following factors in its decision on which measure of damages to use:
(a) the purpose of the contract and of the work to be performed;
(b) the plaintiffs’ intention to actually carry out the repairs and remediation; and
(c) the reasonableness of the cost of cure.
17Counsel suggests that it was necessary for the respondents (plaintiffs at trial) to lead evidence about their loss of value. There was no evidence led on that point and the trial judge did not embark upon a consideration of these two measures of damages. It is argued as a result he made an error of law and the standard of review being correctness it would mean the matters should be returned for a new trial.
18Counsel for the respondents maintains this is an appeal which engages findings of fact and, at best, the issues in dispute are a matter of mixed fact and law. If that is the case, it is the respondents’ position that the appeal engages issues of fact more than law and, as such, the standard of review is one of “palpable and overriding error”. (Allison v. Street Imports Ltd., [2009] O.J. No. 1979 (Ont. Sup. Ct. (Div. Ct.)), at para. 12; Carreau v. Turpie (2006), 152 A.C.W.S. (3d) 164 (Ont. Sup. Ct. (Div. Ct.)), at para. 8.)
19Counsel for the respondent reasons that the trial judge found as a fact that the colour and design on the driveway and sidewalk were essential elements in the performance of the contract and that that finding was integral to his selection of the measure of damages. As such, it is argued to provide the appellants with relief, I must find a palpable and overriding error.
20He concedes, however, that the trial judge’s determination that the defendants must return the $9,000 already paid would amount to a windfall for his clients. He offers that I allow the appeal and reduce the judgment to $17,200, plus the ordered costs and interest.
Analysis
21It is clear the trial judge determined that the appellants were entitled to have pavement with their selected colour and texture and that this was a significant term. As a result, he applied the “expectancy principle of damages.” He determined he needed to put the plaintiffs, “…so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.” (Trial judgment, para. 32; Robinson v. Harman (1848) Exch. 850.)
22Harvin D. Pitch and Ronald M. Snyder discussed the issue of the measure of damages in construction cases at pages 2-5 to 2-8 of their text Damages for Breach of Contract (2nd Ed.), Carswell 1989:
The “Cost of Performance” is the prima facie test applied in measuring damages in building contract cases in England and in Canada. This rule requires that the defendant pay the cost of completing the contract or putting the defect right.
The breaching defendant may deliver an improperly constructed home not in accordance with the plans and specifications, or may leave the job unfinished, or both. In these circumstances the plaintiff may argue that he or she is entitled to engage a new contractor to remedy the defects and complete the work according to the plans and specifications all at the defendant’s expense. If evidence establishes the following two conditions, that the cost is reasonable and that the plaintiff genuinely intends to carry out the work, the court will be sympathetic to an award of damages based upon the cost of performance. The plaintiff who has purchased the services of the defendant builder is entitled, as far as possible, to receive the product bargained for.
In many cases, however, the cost of rectifying the building is out of all proportion to the value that rectification adds to the price of the home. In some extreme cases, the cost of performance may exceed the value of the property. In this situation the court will be extremely reluctant to grant damages based on the cost of performance test and may instead grant damages based upon the diminution of value test. If the court adopts the diminution of value test, the plaintiff may be awarded only nominal damages, representing the decrease in the value of the home due to the defendant’s default, which would not enable the plaintiff to remedy the defects.
23In Madhot v. Schussler (Court File No. 05-SC-14839), at para. 37, Gates J. considered the assessment of damages regarding the defective installation of a driveway patio and sidewalk:
In this case, there was no evidence before the court that the driveway could not and was not used or accessed by the Defendant. Furthermore, the addition of the driveway, patio and sidewalk would no doubt have the effect of aesthetically improving the premises. Thus, the trial judge’s findings of fact here cannot be supported based on the evidence before the court.
24He determined that the product of the construction was functional and that a palpable and overriding error had occurred and sent the matter back for a new trial.
25Different considerations confronted Rosborough P.J. in Thorburn v. McDiarmid Homes Ltd., 2009 ABPC 259, at paras. 6 and 7:
The standard of good and workmanlike condition is not limited to the ultimate utility of any work undertaken. In other words, the fact that the object constructed is functional may not satisfy the terms of a building agreement when both utility and aesthetics were contemplated by the parties. In this latter situation, the contractor must exercise skill and care not only with respect to function but with respect to appearance as well.
The degree to which a contractor must exercise care and skill in relation to aesthetic considerations must be determined on a case-by-case basis. The general rule applies as much to contracts for the construction of buildings as it does to other contracts. The degree of attention to aesthetics required when constructing a residential dwelling house is likely to be materially different that the degree of attention to aesthetics required when constructing a barn to house a manure-spreader.
26The trial judge in this matter made a finding of fact as to the importance to the respondents of the colour and texture of their pavement. On the record before him, he was entitled to do so and his finding deserves deference. This finding was fundamental to his determination of damages and to the measure chosen. In my view, the matters in issue here are questions of mixed fact and law requiring a standard of review of palpable and overriding error.
27The only evidence at trial was that the respondents intended to remove and replace the driveway. Both parties concede the sidewalk needed to be replaced.
28Having found the respondents were entitled to pavement of their choosing, considerations of “loss of value” or as some cases put it “diminution of value” became of less importance, particularly considering the fact that the trial judge found the $17,200 estimate to remove and replace the pavement to be reasonable.
29Any concerns raised by the appellants regarding the respondents achieving a windfall are addressed by the concession that the $9,000 paid should not form part of the ordered damages.
Conclusions
30In the final result, I cannot find that the trial judge made a palpable and overriding error in choosing the measure of damages he did based on his findings of fact.
31The proposed reduction of damages by the $9,000 already paid works to address some of the concerns raised by the appellants regarding functionality and betterment. I will exercise my discretion on appeal at the urgings of the respondents’ counsel to reduce the damages to $17,200, plus interest and the costs previously determined by the trial judge. If the parties are unable to resolve the costs of this appeal, I will receive their written submission of no more than five (5) typed pages within 30 days of the release of these reasons. If no submissions are received, there will be no order as to costs.
32I would add at this point that had I determined the standard of review to be correctness, I would have found no error in law on the record before me.
33The appeal is allowed to the extent that the damages are reduced as directed above.
Original signed by Bruce Thomas
Bruce Thomas
Justice
Released: November 16, 2016
CITATION: Aliberti v. Idris, 2016 ONSC 7025
COURT FILE NO.: DC-15-00000099
DATE: 20161116
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Vincenzo Aliberti and Evelyn Aliberti
Plaintiffs (Respondents in Appeal)
– and –
Suliman Idris and Quality Concrete Control
Defendants (Appellants in Appeal)
decision on appeal
Thomas J.
Released: November 16, 2016