CITATION: MA Fire & Safety Protection v. Satsang, 2018 ONSC 1916

DIVISIONAL COURT FILE NO.: 407/16 DATE: 20180320

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

MA FIRE & SAFETY PROTECTION

Abba Chima, for the Appellant

Appellant (Plaintiff)

– and –

AYUBE MOHAMED o/a MA FIRE & SAFETY PROTECTION

Appellant (Defendant by Defendant’s Claim)

– and –

SHREE SWAMINARAYAN SATSANG

Melivin I. Rotman, for the Respondent

Respondent (Plaintiff by Defendant’s Claim)

HEARD at Toronto: March 20, 2018

c. HORKINS J. (Orally)

[1] The Plaintiff/Appellant, MA Fire & Safety Protection (the “Plaintiff”) appeals the decision of Deputy Judge L.B. Wheatley of the Toronto Small Claims Court dated July 22, 2016.

[2] After a multi-day trial with evidence from the parties, six witnesses and 27 exhibits, the Deputy Judge dismissed the Plaintiff’s claim and granted judgment in favour of the Defendant/Respondent (the “Defendant”) that asserted its own claim against Ayube Mohamed also known as MA Fire & Safety Protection.

[3] The Deputy Judge issued detailed reasons for her decision. The reasons review the extensive evidence, provide numerous findings of fact, analyze the issues and explain the basis for the decision.

[4] The standard of review of a judge’s decision is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. The standard of review on questions of law is correctness. The standard of review on questions of fact, is palpable and overriding error. On questions of mixed fact and law, there is a spectrum. Where there is an extricable legal principle, the standard of review is correctness. However, with respect to the application of the correct legal principles to the evidence, the standard is palpable and overriding error.

[5] The Plaintiff’s notice of appeal lists numerous grounds of appeal. In essence, the Plaintiff says that the Deputy Judge “erred in law” because the evidence according to the Plaintiff did not support the Deputy Judge’s findings of fact.

[6] Counsel for the Plaintiff has refined his client’s position on this appeal. He now advances three grounds of appeal that are listed as follows:

(1) That the Deputy Judge erred in finding what was agreed to in the contract.

(2) That the Deputy Judge erred in failing to apply quantum meruit to the Plaintiff’s claim. If the Deputy Judge had applied quantum meruit, it is the Plaintiff’s position that he would have been awarded damages equal to the value of the work that he did before leaving the site. It is his position that the Respondent benefited from that work.

(3) That the Deputy Judge erred because she did not consider and apply the principle of mutual mistake.

overview of the reasons for decisions

[7] I will start with an overview of the Reasons for Decisions. This will assist in explaining why the appeal fails.

[8] The case involved a contract for the installation of a fire suppression system and commercial kitchen exhaust system, referred to as “CKE System”. It was to be located in a commercial kitchen and the premises of the Defendant/Respondent, Shree Swaminarayan Satsang which is a Hindu temple (the “temple”).

[9] The Plaintiff sued for payment of $7,591.40 for unpaid services rendered under the contract.

[10] The temple advanced its own claim in Small Claims Court for $25,000.00. This represented the cost of services that it paid to a third party to complete the installation of the CKE System and remedy the deficiencies left behind by the Plaintiff.

[11] The Defendant alleged the Plaintiff breached the contract and failed to complete the work. As a result, it had to retain another company to properly install the CKE System. The Plaintiff said that the Defendant was at fault for why the Plaintiff did not complete the contract.

[12] The Deputy Judge provided a brief chronology and at page 3 of the decision, this chronology is set out:

A brief chronology is of assistance and understanding the facts of the case:

January 27, 2013 – the contract between MA Fire and the temple is executed.

February 2013 – MA Fire purchases the equipment for the temple kitchen (Exhibit 13).

Between March 2013 and November 2013, MA Fire performs work on the installation. The City of Toronto performs inspections of the work as it progresses.

November 2013 – City of Toronto performs a smoke test, which is passed (Exhibit 1).

December 16, 2013 – the inspection by 3M Canada is failed. A major problem is that there is not enough room for the required two layers of wrap around the duct. The hole in the floor through which the duct must pass is too small.

February 14, 2014 – the temple sends a “last chance” email to MA Fire asking that the work be completed. MA Fire does not respond, as it believes that the work cannot be finished without further action by the temple.

March 3, 2014 – MapleTherm Engineering Inc. (MapleTherm) is retained by the temple.

April 2014 – 360 Mechanical Engineering Group Ltd. (360 Mechanical) is hired by the temple to take over the project.

September 24, 2014 – Quotation and Agreement between 360 Mechanical and the temple.

Between September 2014 and December 2014 work is done on the joist in the floor to make the opening in the floor bigger.

May 11, 2015 – work completed and City of Toronto permit closed.

[13] The Deputy Judge reviewed the contract and found at page 4 of the decision as follows:

Ayube is the owner of MA Fire. MA Fire entered into a contract with the temple to install a CKE for the temple’s commercial kitchen. Exhibit 7 is the proposal of MA Fire, which became the contract. The contract includes a job detail setting out all labour and equipment necessary. The items are listed, numbered 1 through 9. The contract also states what has been included and what has not been included. Roof cutting is specifically included. Electrical work is specifically not included. The total costs was $15,000.00 plus HST. The temple paid a deposit of $7,500.00 and a second payment of $5,000.00 for a total of $12,500.00. These payments are not in dispute.

[14] Dealing with the Plaintiff’s claim for $7,591.40, the Deputy Judge reviewed the contract terms and found that the contract amount to complete the installation of the CKE System was $15,000.00. It was not disputed that the Defendant paid $12,500 and this left a balance of $4,450. The Plaintiff also claimed for extras for a total claim of $7,591.40.

[15] Dealing with the extras, the Deputy Judge dismissed this claim because there was no reliable evidence to prove on a balance of probabilities that the Defendant had agreed to the extras. These findings of fact are supported by the Deputy Judge’s consideration of the evidence. The Deputy Judge dismissed the Plaintiff’s claim for payment of the balance of the contract price $4,450.

[16] In great detail, the Deputy Judge explained the basis for the dismissal. She found that there were several fundamental breaches of the contract by the Plaintiff.

[17] The Deputy Judge focused on two main breaches:

(1) That the Plaintiff had installed an inadequate electrical duct heater in the system contrary to the electrical drawings. The drawings required the Plaintiff to install a gas heater. Ayub Mohamed, the owner of MA Fire admitted that the electrical duct heater was not fit for the purpose for which it was installed.

(2) That the Plaintiff had an obligation to install the 3M wrap and failed to do so.

[18] The evidence of the witness called by the Plaintiff confirmed that two layers of the 3M wrap were required and without the second layer, the CKE System would not pass final inspection. Mr. Naraine, the Plaintiff’s technician installed the 3M wrap but could not complete the job because there was insufficient room for the second layer of 3M wrap. He did not know that two layers were required. The obligation to install 3M wrap for protection was the Plaintiff’s obligation in the contract.

[19] A dispute developed between the Plaintiff and the Defendant as to whose responsibility it was to complete the job given the inability to apply a second 3M layer.

[20] At page 9 of the judgment, the Deputy Judge stated:

After inspection by Heaps of 3M Canada failed, Ayube stated that he told representatives of the temple that they needed more room for the two layers of 3M wrapping. The joists needed to be opened. Ayube, on behalf of MA Fire, was adamant that this was not the responsibility of MA Fire. MA Fire could not just cut the floor. Ayube said he told the representatives of the temple that they had to get revised engineering drawings and enlarge the opening in the floor for the ductwork at their own cost.

[21] The Defendant retained Mr. Acharya an engineer whose report was evidence at the trial. This report listed 15 deficiencies in the Plaintiff’s work.

[22] Dealing with the 3M wrap, Mr. Acharya’s evidence was relied upon at page 12 of the Deputy Judge’s reasons as follows:

Acharya testified on behalf of the temple that a prudent contractor would have measured the joist knowing the duct size and the thickness of the 3M wrap. Acharya said a contractor would need to know that to prepare a quote.

[23] It was also Mr. Acharya’s evidence that the decision to install an electrical rather than a gas fire heater was a major deficiency.

[24] While the Plaintiff blamed the Defendant for not carrying out the structural changes to the floor that would have allowed him to apply the second layer of wrap, the Deputy Judge rejected the Plaintiff’s evidence. At page 15, the Deputy Judge explained her decision as follows:

In determining who breached the contract in this case, a key is determining which party was responsible for structural changes to the mezzanine floor under the contract. The contract with the temple included installing the 3M wrap (Exhibit 7, Item #9). It is true that the contract specifically includes roof cutting and does not specifically include structural changes to the floor. However, I find that MA Fire was obligated to install the two layers of 3M wrap that was required to pass inspection. And I find that to fulfill the obligation to install the 3M wrap, MA Fire should have ensured that there was room for the ductwork and 3M wrap. Ayube reviewed the engineering drawings before preparing the proposal to the temple. Ayube knew what the CKE installation entailed. It was incumbent on MA Fire to ensure that the work could be done when assessing the job. MA Fire should have discovered that there was not enough room for the 3M wrap before submitting its proposal. Then, MA Fire and the temple could have discussed how to deal with the issue. MA Fire could have arranged to have the structural work done, with an increased cost in the contract, or the temple could have independently had the structural work done. Therefore, MA Fire breached the contract by failing to be responsible for the structural changes to the mezzanine floor.

[25] In addition to these breaches, the Deputy Judge found that the Plaintiff’s emails and evidence on cross-examination showed that he exhibited unprofessional behavior in performing the contract. The contract was seriously underbid. The Plaintiff blamed the Defendant, the engineer and unknown general contractor. He was unwilling to assume any responsibility.

[26] Due to the Plaintiff’s fundamental breach of the contract, the Deputy Judge found that the Plaintiff was not entitled to recover the balance owing under the contract and dismissed the claim.

[27] The Defendant advanced its own claim for $25,000.00. This is what it paid to a third party to complete the installation. The Deputy Judge allowed damages of $12,500 specifically, the amount that the Defendant had paid the Plaintiff under the contract that the Plaintiff fundamentally breached.

[28] The Deputy Judge correctly noted that damages for breach of contract should place the innocent party in the position it would have been in had the contract been carried out. At page 17 of the reasons, the Deputy Judge explained the basis for the $12,500 damage award as follows:

In this case, MA Fire submitted a proposal for a job that could not be done for the amount quoted. The MA Fire contract included an electric duct heater that was inadequate and MA Fire did not take into account structural changes that were necessary. Therefore, MA Fire was able to quote $15,000.00 for a job that would cost twice that much. If MA Fire had completed the contract as written, it is unlikely that the temple would have had a properly installed CKE. In this case, it would be just and agreeable to good conscience, in considering the fundamental breach of the contract to award the temple a 100% refund of the amount paid of $12,500.00. This puts the temple in the position of starting again with a new competent contractor who properly bid on the CKE installation with the cost of a gas heater and the structural changes included.

[29] The Defendant’s claim was advanced against Ayube Mohamed also known as MA Fire & Safety Protection. The Deputy Judge found that Ayube Mohamed was the proper defendant to the Temple’s claim and therefore, Ayube Mohamed was personally liable.

[30] The findings of fact showed that the Defendant did not know it was dealing with a corporation. None of the business documents of MA Fire set out the registered business name or the corporation name and this was in violation of the Business Corporations Act, R.S.O. 1990 B.16.

[31] Based on my review of the Deputy Judge’s decision, I reject the Plaintiff’s grounds of appeal. The Deputy Judge had amble evidence to find that the Plaintiff was obligated under the contract to install the 3M wrap.

[32] While the contract did not state who was responsible for enlarging the hole in the floor to allow the second 3M layer to be applied, this is irrelevant because the Deputy Judge found that the Plaintiff was obligated to install the tape and he was responsible for ensuring that there was enough room to apply the 3M wrap before submitting his proposal.

[33] The argument that the Deputy Judge erred by not applying quantum meruit is not supported by any evidence. In argument today, counsel submits that photographs in the Appeal Book and Compendium at tab 11 show, in his view, that the Defendant benefited from the material and work that the Plaintiff did before leaving the Temple site. This argument is not connected to any of the evidence.

[34] There are four volumes of transcripts and I was not provided with reference to any evidence to show that the photographs at tab 11 of the Appeal Book and Compendium are proof that the Defendant was unjustly enriched by the work that the Plaintiff allegedly left behind.

[35] Counsel for the Defendant advises the court that the photos at tab 11 depict the work done by the company that was hired to correct the deficiencies and installation of the actual gas system that the Temple required. Either way, there is simply no evidence to support a quantum meruit claim.

[36] If as the Plaintiff now argues, the Deputy Judge failed to consider relevant evidence that leads to a palpable and overriding error then such must be identified so that the argument can be considered. This was not done.

[37] Lastly, the Plaintiff argues that the Deputy Judge erred because she did not consider the law of mutual mistake. Specifically, the Plaintiff says that the parties were mistaken about who was responsible for enlarging the hole in the floor so that the tape could be applied. I see no merit to this argument. The contract was clear. There was no mistake. The Plaintiff agreed to install the 3M tape. Simply put, the Plaintiff did not do his job properly by assessing the work required before submitting his proposal.

[38] In summary, the appeal is dismissed. The Plaintiff has not established any errors of law or any palpable an overriding errors of fact.

[39] I have endorsed the Appeal Book and Compendium as follows: “Reasons given orally. Appeal is dismissed. Costs of the appeal have been agreed on at $4,000 all inclusive. I order Ayube Mohamed o/a MA Fire & Safety Protection to pay costs the respondent fixed at $4,000 all inclusive. Given the reasons of the Deputy Judge, it must follow that costs are to be paid by Mr. Ayube Mohamed.”

___________________________ c. horkins J.

Date of Reasons for Judgment: March 20, 2018

Date of Release: March 22, 2018

CITATION: MA Fire & Safety Protection v. Satsang, 2018 ONSC 1916

DIVISIONAL COURT FILE NO.: 407/16 DATE: 20180320

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

MA FIRE & SAFETY PROTECTION

Appellant

(Plaintiff)

– and –

AYUBE MOHAMED o/a MA FIRE & SAFETY PROTECTION

Appellant

(Defendant by Defendant’s Claim)

– and –

SHREE SWAMINARAYAN SA)TSANG

Respondent

(Plaintiff by Defendant’s Claim)

ORAL REASONS FOR JUDGMENT

C. HORKINS J.

Date of Reasons for Judgment: March 20, 2018

Date of Release: March 22, 2018