Kos-Con Inc. v. Kanada Glass and Window Inc., 2017 ONSC 7153
DIVISIONAL COURT FILE NO.: 503/16 DATE: 2017/11/29
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
KOS-CON INC.
Eduard Kosciuch, acting in person
Appellant
– and –
KANADA GLASS AND WINDOW INC.
Alexandra Wilkins, for the Respondent
Respondent
HEARD at Toronto: November 29, 2017
KITELEY J. (Orally)
Background
1Kos-Con appeals from the judgment of Deputy Judge Papageorgiou dated August 31, 2016 in which the Deputy Judge dismissed the plaintiff’s claim for damages for breach of contract in the amount of $19,858.39. The Deputy Judge granted judgment on the counterclaim for damages for breach of contract and negligence in the amount of $16,356.00.
2Kos-Con was a subcontractor of Kanada in a project overseen by Ark Group. In that contract, Kos-Con was required to erect a structural steel framework tower on top of a building that would be used to support signage for a new restaurant.
3The appellant raised five issues:
(1) Since the respondent did not sign nor agree to a CCA1-2008 contractual agreement, is the appellant liable regarding the terms of the CCA1-2008?
(2) Does the failure of the respondent to mitigate the damage effect the liability of the appellant?
(3) Do the settlement terms between Ark Group and the respondent affect the liability of the appellant?
(4) Does the on-going water leak provide reasonable grounds to believe the appellant is not liable for the damage caused by the leak?
(5) Did the Deputy Judge err in awarding damages to the respondent after the respondent failed to provide the court any rulings supporting that they had a right to a counter-claim for damages?
4Pursuant to Housen v Nikolaisen, 2002 SCC 33, the standard of review is as follows:
On a question of law, the standard of review is that of correctness. The standard of review for findings of fact and mixed fact and law are reviewable only for palpable and overriding error.
Analysis
5I start with the relevance of the CCA1-2008. The Deputy Judge referred to s. 9.1.1 and to the evidence of Mr. Kosciuch. She did not say that CCA1-2008 was part of the contractual agreement between the parties. At para. 21 she made a finding that the contract that was partly oral and partly written required Kos-Con to seal any holes it made in the roof taking into account four factors and at para. 22 she made a finding that any other interpretation made no commercial sense. Those findings by the Deputy Judge were in the nature of mixed fact and law and are supported by the evidence. I see no palpable and overriding error.
Mitigation
6The second is the question of mitigation. The appellant takes the position that the respondent “failed” to mitigate. The decision of the Deputy Judge does not specifically address the question of mitigation. However, the evidence was that Mr. Yun (on behalf of Kanada) contacted Mr. Kosciuch about the leaks and that Mr. Yun relied on Mr. Kosciuch to do something about the leaks. Indeed, he did do something, specifically apply a seal as was reflected in an invoice. Mr. Yun said repeatedly he did not take steps independently of that. The Deputy Judge was entitled to rely on that evidence particularly since, at para. 24, the Deputy Judge explained why she preferred the evidence on behalf of the respondent. The Deputy Judge made no palpable and overriding error in her treatment of the issue of mitigation.
Settlement Agreement
7The third issue relates to the terms of the agreement between Ark Group and the respondent. Aside from the claim in the Small Claims Court, Ark Group and Kanada were involved in litigation in the Superior Court. In that context, they had reached an agreement which the appellant thought was relevant on the issue of double-recovery. The Deputy Judge ruled that the respondent was required to provide information as to parts of the confidential settlement agreement between Ark Group and Kanada. The appellant was not satisfied and took the position here that the respondent should have been ordered to produce the entire agreement. The ruling made by the Deputy Judge was a question of mixed fact and law that required the Deputy Judge to apply the principles of relevance to the facts of the case. I see no palpable and overriding error in that decision.
Causation of the Leak
8The fourth issue was whether the ongoing water leak provided reasonable grounds to believe the Appellant was not liable for the damage caused by the leak. At para. 30, the Deputy Judge referred to the “Flynn reports” which are more accurately described as Flynn invoices. Representatives of Flynn attended on three occasions in December 2014 and on each occasion described where the leakage was on the roof. On the first occasion, Flynn concluded that “the leak was caused by two sections of roof that were cut open by an alternate contractor”. On the second occasion, the invoice indicated “We determined the leak was caused by unsealed steel posts in the corners” and “a section of capsheet approx. 60’ that was cut and left open by an alternate contractor”. The invoice from the third inspection said: “We determined the leak was caused by multiple unsealed steel posts that were installed into the roof [that] were not flashed in. We also found 2 pitch plans with deteriorated sealant that were no longer sealed”. The Deputy Judge was alert to the possibility of multiple causes but at para. 30 she concluded that the “major cause of the leaks was the holes in the roof made by Kos-Con even if the consultant also discovered other problems with the roof.” That finding of major causation was available on the evidence. It is one with which the appellant vigorously disagrees. But disagreement does not suffice. There is no palpable and overriding error.
Damages
9The final issue raised by Kos-Con was that the award of damages was made without any “court rulings”. During the trial, the Deputy Judge did indicate to counsel that she would require authorities on the subject of damages. However, on my reading of the transcript, that was on the subject of the respondent’s claim for prospective damages for loss of profit arising from the allegation that, because of the appellant’s work, the commercial relationship between Kanada and Ark Group had broken down. In closing submissions, Kanada abandoned that argument. So the respondent did not have to provide any authorities on the subject. Furthermore, this is a case where authorities as to the calculation of damages were not required. There is no error of law or palpable and overriding error.
Conclusion and Disposition
10It follows that the appeal must be dismissed.
11During submissions, I raised with counsel for the respondent how the Deputy Judge arrived at the judgment of $16,356.00. There appears to be no explanation for the difference between that and the amount claimed by the respondent. Counsel agreed that I should correct that error and reduce the judgment accordingly.
12I have endorsed the Appeal Book and Compendium as follows: “Appeal from decision of Deputy Judge Papageorgiou dated August 31, 2016 dismissed for oral reasons given. Calculation error corrected and judgment in favour of the Respondent Kanada Glass is $15,914.87 not $16,356.00. Appellant shall pay to respondent costs of the appeal fixed at $5,000 for fees and HST and $500 for disbursements and HST. Respondent may have this order signed and entered without approval of Appellant. Eduard Kosciuch is authorized to act for corporate appellant in this appeal.”
___________________________ KITELEY J.
Date of Reasons for Judgment: November 29, 2017
Date of Release: December 4, 2017
CITATION: Kos-Con Inc. v. Kanada Glass and Window Inc., 2017 ONSC 7153
DIVISIONAL COURT FILE NO.: 503/16 DATE: 2017/11/29
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
KOS-CON INC.
Appellant
– and –
KANADA GLASS AND WINDOW INC.
Respondent
ORAL REASONS FOR JUDGMENT
KITELEY J.
Date of Reasons for Judgment: November 29, 2017
Date of Release: December 4, 2017