CITATION: Briarwood Estates (Tottenham) Ltd. v. Gordon et al., 2017 ONSC 6330

DIVISIONAL COURT FILE NO.: DC-17-539, Small Claims Court # SC-16-1582

DATE: 20171023

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

BRIARWOOD ESTATES (TOTTENHAM) LTD.

Appellant (Plaintiff)

– and –

CARLY GORDON AND SHAUN HANSEN

Respondents (Defendants)

S. Juzkiw, for the Appellant/Plaintiff

W. Thomson, for the Respondents/Defendants

HEARD: October 19, 2017

REASONS FOR DECISION

DiTOMASO J.

THE APPEAL

[1] The Appellant (Plaintiff) Briarwood Estates (Tottenham) Ltd. (“Briarwood”) appeals the decision of Deputy Judge Kowalsky of the Small Claims Court on February 21, 2017 concerning a motion brought by the Respondents (Defendants) Carly Gordon (“Gordon”) and Shaun Hansen (“Hansen”) to strike Briarwood’s claim in accordance with Rule 12.02 of the Rules of the Small Claims Court. On March 6, 2017, for written reasons, the motion judge dismissed Briarwood’s claim.

OVERVIEW

[2] Gordon and Hansen are common law spouses who own a property municipally known as 84 Sydie Lane in Tottenham, Ontario (“the property”) which was built by Briarwood. Briarwood is an Ontario corporation in the business of developing lands and building residential homes in and around Tottenham, Ontario.

[3] Gordon and Hansen purchased the property from Briarwood pursuant to an assignment of the Agreement of Purchase and Sale executed on or around June 16, 2013.

[4] In the Small Claims Court action, Briarwood sued for damages on the basis of an alleged obligation by Gordon and Hansen to pay Briarwood for a small deck (5’ x 6’) built onto the subject property. Briarwood claims damages in the amount of $11,300 for the preparatory work and additional costs involved in building the deck.

[5] Gordon and Hansen at all times understood the purchase price was in the amount of $338,962 which specifically included the cost of constructing the deck based on a plain reading of the agreement.

[6] Briarwood asserts that the deck was not an included item and the purchase price was subject to adjustment dependent upon the municipality’s final approval of grading and engineering plans. Briarwood contends that Gordon and Hansen agreed to pay the additional cost in respect of the construction of the deck which was not included in the purchase price.

[7] In his reasons, the motion judge found that there was a fundamental ambiguity in the contract with respect to the deck and whether or not it was included in the purchase price. His finding was the basis for applying the doctrine of contra proferentem in favour of Gordon and Hansen’s motion to strike.

ISSUES

[8] There are several issues on this appeal:

(a) Did the motion judge err in finding that there was an ambiguity in the contract?

(b) Did the motion judge err in finding that the deck constructed was included in the purchase price?

(c) Did the motion judge err in finding that there was no basis for the claim for an increased lot charge in the contract as claimed?

(d) Did the motion judge err in finding no rational basis for an adjustment based upon the contract?

(e) Did the motion judge err in dismissing Briarwood’s claim?

[9] The fundamental issue is whether the motion judge erred in finding there was an ambiguity in the contract and misapplied the doctrine of contra proferentem.

POSITION OF THE PARTIES

Position of Briarwood

[10] Briarwood takes the position that the motion judge erred by finding there was an ambiguity in the contract, by misapplying the doctrine of contra proferentem and by ultimately concluding that the deck was included in the purchase price and that Briarwood’s claim should be dismissed. Briarwood’s position is that the deck was not included in the purchase price. The construction of the deck was an additional charge once the final municipal approval process was completed and once the builder knew what was to be built and how much it would cost. At all times, Briarwood submits that Gordon and Hansen were well aware from the contract provisions that they would be responsible for those preparatory and construction costs. The deck was built by Briarwood and Briarwood claims that it is owed the sum of $11,300.

Position of Gordon and Hansen

[11] Gordon and Hansen submit that the construction of the 5’x 6’ walkout deck was included in the Agreement of Purchase and Sale on a plain reading of certain provisions in the contract. They further assert that there are conflicting provisions in the contract and where an ambiguity is presented, in respect of certain contractual terms in this case, then the doctrine of contra proferentem properly applies in their favour. They contend that the motion judge properly found that there was an ambiguity, that the doctrine of contra proferentem applied in their favour and that Briarwood’s claim was dismissed. They further assert that the motion judge committed no palpable or overriding error and that his decision was correct. They submit that the appeal ought to be dismissed.

STANDARD OF REVIEW

[12] The standard of review for decisions in the Small Claims Court is determined by the principles outlined by the Supreme Court of Canada in Housen v. Nikolaisen, 2002 SCC 33…. on a pure question of law, the standard of review is that of correctness. The standard of review for findings of fact or mixed fact and law are reviewable only for palpable and overriding error.

[13] With respect to findings of fact, the Supreme Court noted in H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 SCR 401 at para. 4 an appellate court “may substitute its own view of the evidence and draw its own inferences of fact where the trial judge is shown to have committed a palpable and overriding error or made findings of fact that are clearly wrong, unreasonable or unsupported by the evidence”.

ANALYSIS

FRESH EVIDENCE

[14] On appeal, Briarwood sought to tender the evidence of an employee Joe Tuzi by way of affidavit not before the motion judge.

[15] I have considered all four branches set out in Palmer v. The Queen, [1980] 1 S.C.R. 759. I find that this is not a proper case for the admission of fresh evidence. I find the so-called fresh evidence does not pass the Palmer “due diligence” test nor does it bear upon a decisive issue or could it reasonably be expected to have affected the result. The proposed evidence was entirely available prior to the hearing of the motion. However, Briarwood did not tender the evidence when it could have done so.

[16] Accordingly, Briarwood’s leave to adduce fresh evidence on the appeal is denied.

REASONS OF THE MOTIONS JUDGE

[17] The motion judge identified in his reasons that at issue was the written contract and the interpretation of that contract. More specifically, he identified whether this matter should or should not be permitted to proceed to trial, whether the claim disclosed a cause of action or was frivolous and a waste of time of the court. The claim was for the cost of providing a deck at additional cost to Gordon and Hansen, and for an upgraded lot fee.

[18] Gordon and Hansen contended the deck was included in the “purchase price” which was a “defined term” and therefore included in the purchase price under “Schedule B” of the contract. The motion judge found that there was no disagreement between the parties that the deck was constructed and that Gordon and Hansen did not pay for it. There was no dispute in respect of the deck constructed as being the deck being referred to in “Schedule B” and that its dimensions were 5’x 6’.

[19] The motion judge identified the issue as whether section 27 of the agreement was inconsistent with section 28 and Schedule B of the agreement. Section 27 of the agreement provided for a deck to be constructed at additional cost to the purchaser in certain circumstances. However, upon the reading section 28 and Schedule B, in issue was whether the deck was included in the purchase price.

[20] The motion judge saw no way to reconcile the operation of both clauses. He applied the doctrine of contra proferentem in favour of Gordon and Hansen.

[21] The motion judge found that the matter was driven exclusively by documentation, all of which was before him. He was of the view that the trial judge would be in no better position to interpret the contract.

[22] The motion judge held:

I find that there is an ambiguity in the contract where section 27 and 28 appear to produce different results. On the basis of the doctrine of contra proferentem, resolution must favour the defendant. I therefore find that the deck constructed is included in the purchase price. I also find that there is no basis for the claim for an increased lot charge in the contract as claimed.

[23] He dismissed Briarwood’s claim.

Did the motion judge err in finding that there was an ambiguity in the contract?

[24] I find that the motion judge was correct and did not commit any palpable or overriding error in determining that there was an ambiguity on the face of the contract. He was correct when he held that there was a fundamental contradiction or ambiguity in the agreement. Section 27 of the agreement in reference to the deck states: “the purchaser agrees further to pay the Vendor the additional cost involved in constructing such walkout to basement or walkout deck”. Section 28 of the agreement provides “the purchase price shall include only those items, furnishings, and chattels enumerated in Schedule “B” attached hereto”. Schedule B provides “where a deck is required at rear patio door due to grade conditions, the builder supplies standard 5’x 6’ deck on townhouse and semi-detached home designs and 5’x 6’ deck on single home designs as per plan”.

[25] The evidence before the motion judge was that the agreement simultaneously provided for the purchaser to pay for the deck and at the same time that same deck would be provided as part of the purchase price.

[26] Briarwood has attempted to argue that, in fact, it is claiming for the “costs of grading the land and constructing and/or installing such a 5’x 6’ walk-out deck and not for the cost of providing the 5’x 6’ walk-out deck as understood by the motion judge at the time of his decision”.

[27] This submission is not supported by a plain reading of the agreement.

[28] I find on a plain reading of the agreement the motion judge was correct in finding an ambiguity on the face of the contractual terms. The motion judge assessed the competing clauses of the agreement being sections 27 and 28 including Schedule B and in doing so, he found there was an irreconcilable ambiguity in the contract. He did not commit a palpable and overriding error in so finding.

Did the motion judge err in finding that the deck constructed is included in the purchase price?

[29] This issue is closely related to the preceding issue. Again, Briarwood argues that the cost was for land services rather than the deck itself. I disagree. The motion judge held that “the deck constructed is included in the purchase price”. His finding was made with reference to the contract terms and application of the doctrine of contra proferentem which he was entitled to do on the evidence before him.

[30] As such, his finding was of mixed fact and law and is subject to review on a spectrum between correctness and palpable and overriding error. I find the motion judge was correct and made no palpable and overriding error in determining that the deck was included in the purchase price.

[31] Briarwood submits that the purchase price was not defined and is subject to adjustments. Briarwood refers to section 14 of the agreement which identifies the adjustments on closing. However, section 14 does not mention anything about an adjustment for a deck on closing.

[32] Again, on the plain reading of Schedule B, the agreement provides that “where a deck is required”, the “builder supplies”.

Did the motion judge err in finding there was no basis for the claim for an increased lot charge in the contract as claimed?

[33] In his reasons, the motion judge noted that Briarwood’s counsel provided no argument based on the contract which would give it any relief for the additional fee for an upgraded lot. Further, the motion judge saw no basis for that relief in the contract. The claim was dismissed for an increased Lot charge as no argument was made before the motion judge in that respect. This ground of appeal fails as the motion judge made no palpable and overriding error in this regard.

Did the motion judge err in finding no rational basis for an adjustment based up on the contract?

[34] The motion judge did not err on his reading of the contractual terms in finding no rational basis that the deck costs would constitute an adjustment to the purchase price as he properly found the cost of the deck was included.

Did the motion judge err in dismissing Briarwood’s claim?

[35] The motion judge was alive to Rule 12.02 on the motion and considered same within the context of the “summary nature of the Small Claims Court”.

[36] In this regard, the motion judge held:

…I am reluctant to making any final pronouncements on the rights of the parties. However, this matter is driven exclusively by the documentation, all of which is before me, and which would be also put before a trial judge. The trial judge would be in no better position than this court to interpret the contract.

[37] Briarwood submits that the motion judge should have given Briarwood a further opportunity to provide extrinsic evidence to explain any ambiguity. The motion judge held that all the evidence was before him and made a ruling accordingly. Briarwood failed to tender evidence at the motion which would or could “explain any ambiguity”, despite having the opportunity to do so.

[38] On all of the evidence before the motion judge, I find he was correct in dismissing Briarwood’s claim and made no palpable and overriding error in doing so.

DISPOSTION

[39] For these reasons, the appeal must fail. The appeal is therefore dismissed.

COSTS

[40] Submissions were heard in respect of costs. In all of the circumstances, the Respondents were successful on the appeal. Their costs are fixed in the amount of $2,000 all inclusive. It is ordered that Briarwood Estates (Tottenham) Ltd. shall pay Carly Gordon and Shaun Hansen the sum of $2,000 all inclusive of fees, disbursements and HST.

G.P. DiTomaso J.

Released: October 23, 2017

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ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

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BETWEEN:

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REASONS FOR JUDGMENT

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