Court File and Parties

COURT FILE NO.: CV-15-00531407-0000 DATE: 20180910 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: TURANO’S HOME IMPROVEMENT LTD. Plaintiff/Appellant – and – ZITTELL, BARI STERN Defendant/Respondent

COUNSEL: B. Romano, for the Plaintiff N.C. Tibollo, for the Defendant

HEARD: July 5, 2018

A.J. O’Marra J.

Endorsement

[1] The moving party, Turano’s Home Improvement Inc. (THI) and Vince Turano (Turano) apply for an order opposing the confirmation of the report of Master C. Wiebe, dated January 9, 2018 in a matter referred to the Master for management and determination under the Construction Lien Act, R.S.O. 1990, c. C. 30.

[2] At trial, heard July 11, 12 and 13, 2017 the plaintiff claimed $58,775.20 in relation to improvements made to the defendant’s residence at 576 Briar Hill Avenue, Toronto. The defendant counterclaimed $89,669.28 in damages for the removal and repair of the plaintiff’s deficient work. After trial, the Master found in favour of the defendant as to construction/renovation deficiencies to the defendant’s residential property for work performed by the plaintiff. In the result, the Master awarded the defendant on her counterclaim compensatory, breach of contract damages in the amount of $39,583.11.

[3] The plaintiff asserts that the Master made a number of reviewable errors in fact or mixed fact and law.

[4] The “undisputed facts” as cited by the Master in his judgment, which set out the circumstances as to the claims, are as follows:

• In the spring of 2014 the defendant wanted to renovate the master ensuite bathroom, refurbish the kitchen cabinets and refinish the hardwood floors on the first and second floors of her residence. To that end she hired an interior designer, Paula Himmel who in turn arranged with Clive Grandfield to prepare the design for the bathroom renovation.
• On a recommendation of either, Ms. Himmel or the defendant’s neighbour the plaintiff was retained to do construction work in October 2014. Mr. Turano paid a referral fee to Ms. Himmel of $4,000.
• In October 2014 Mr. Turano provided a quotation for the work with a total price of $57,517 (tax inclusive), which was accepted by the defendant.
• Mr. Turano objected to aspects of the master ensuite bathroom design that he considered might not have complied with the Ontario Building Code. He advised that one window be installed in the master bedroom ensuite and not two as set out in the design.
• Mr. Turano commenced construction November 3, 2014 and proceeded to demolish the old ensuite bathroom.
• Mr. Turano cut two openings for exterior windows in the master ensuite bathroom and did other work in the bathroom: masonry work around the window openings, wood framing, plumbing, electrical work, drywalling, install radiant floor heating and install wall and floor tiles. That work was invoiced November 11, 2014 in the name of “Turano’s Home Improvement” which was paid by the defendant.
• The work expanded and on November 17, 2014 Mr. Turano provided another quote to install tiling in the front hall door entrance, extra work in the master ensuite bathroom, additional work in the first floor hallway and stairs leading to the second floor, and removal and replacement of kitchen tile back splash and relocation of exhaust vent in the kitchen.
• In December 2014 and again in January 2015 the work scope expanded. On December 15, 2014 Mr. Turano quoted work to replace all hardwood flooring, the radiators at the front entrance and second floor bathroom and install radiant floor heating, upgrading the knob and tube wiring in the house and installation of fifty pot lights.
• On January 5, 2015, Mr. Turano quoted further work on the first floor. On January 9, he submitted a revised quotation, then on January 21, 2015 he quoted work to upgrade pot lights. The additional quotes were accepted by the defendant.
• All quotes were in the name of “Turano’s Home Improvement”.
• By the beginning of April 2015 the defendant became disenchanted with Turano’s work. She did not like the deviation from the master ensuite bathroom design, unevenness of the tiles in the main bathroom, unevenness of the stain on hardwood floors, poor masonry work on the outside of the master suite bedroom, and brick work around the kitchen exhaust fan.
• On April 5, 2015 the defendant made a payment and stated they had parted ways. On April 9, 2015, Mr. Turano attended to the site and retrieved tools.
• On April 9, 2015, Ms. Zittell hired Plumb Inc. with respect to the radiators that had been removed. She hired Direct Plumbing Limited to examine the plumbing work in which they found several issues including two exposed live wires in the basement and hallway areas.
• She hired an electrician to correct the electrical issues.
• On April 9 the defendant hired SplashWorksKB (SW) to examine all of Turano’s work in the three bathrooms and kitchen. Gary Pinto, the principal of SW identified numerous deficiencies, such as tiles being installed over tiles in the main bathroom, the toilet flange being too low, inadequate waterproofing in the shower, exposed radiant flooring close to the toilet sink impeding the toilet flange, one of the windows in the master ensuite bathroom was recessed into the wall, baseboard heating wire being exposed and the toilet flange being inserted too low. No work permits had been obtained by the plaintiff.
• On April 14, 2015 the defendant hired SW to expose and redo Turano’s work and correct deficiencies.
• SW proceeded to redo work and install a single window in the master bathroom.
• It was discovered that the electrical work had been done by an unlicensed electrician, without a permit and without inspection. In the master ensuite bathroom wiring had been affixed to a wood frame by screws which caused the electrical wiring to be pierced. Electrical wiring ran along the window framing making it susceptible to piercing. The vapor barrier had not been properly sealed, there was insufficient insulation, the tile work was shoddy, radiant heating was installed on top of existing floor tiles, crushed space pack piping in the attic.
• On April 24, 2015 the defendant received notice from the Electrical Safety Authority indicating that she was in breach of the Electrical Safety Code for having used an unlicensed electrician perform the work and for not obtaining an electrical inspection. Turano was charged by the Authority with having used an unlicensed electrician and received a $1,000 fine.

[5] The Master concluded that the plaintiff was in breach of contract due to the many obvious deficiencies. Further, he found that the plaintiff had repudiated the contract in not responding to the defendant’s email of April 20, 2015 advising the plaintiff of her issues with the deficiencies, the absence of permits and having to obtain quotes to complete the work, and her offer to pay the plaintiff $10,000 for a “release”. He found the April 20, 2015 e-mail to be notice of termination and an offer to settle.

[6] On the appeal, the plaintiff alleges that the construction lien Master made a number of reversible errors by:

1. Failing to consider the “admission by the defendant she owed Turano $58,775.20”;
2. Finding that the agreement between Turano and the defendant was a lump sum contract;
3. Finding that Turano repudiated its agreement with the defendant;
4. Failing to consider substantial amounts of work done by Turano that was not removed or redone by the defendant;
5. Failing to consider the amounts and deficiencies pleaded in the Scott Schedule;
6. Awarding the defendant $39,583.11 in damages, rather than deducting it from the $58,775.20, thereby awarding the plaintiff the difference $19,192.09;
7. Placing the onus on Turano to disprove the defendant’s allegations despite alleged spoliation of evidence;
8. Drawing an adverse inference from Turano’s failure to call the designer Himmel as a witness;
9. Making improper findings regarding quantification of deficiencies;
10. Giving weight to photographs which were not supported by evidence;
11. Finding the defendant’s contract was with Turano and not a limited liability corporation (THI);
12. Failing to consider evidence that the majority of Turano’s work replaced by the defendant was redone by the defendant to design specifications originally proposed by Turano;
13. Misapprehending the evidence of spoliation; and
14. Failure to consider the principles of unjust enrichment and quantum meruit.

Standard of Review

[7] The standard of review on a contested confirmation of a report from a reference is as an appeal, and not a trial de novo, (see Jordan v. McKenzie (1987), 26 C.P.C. (2d) 193). A court hearing a motion opposing confirmation of a construction lien reference report ought not to interfere with the results unless there is an error in principle, an absence of jurisdiction or a patent misapprehension of evidence.

[8] An appellate court should not interfere with the Master’s reasons unless there is a “palpable and overriding error”. The court must pay considerable difference to the Master’s findings of fact particularly where they are based on an assessment of credibility. The Supreme Court in Hodgkinson v. Simms, [1994] 3 SCR 377 at para. 53 noted that “failing a manifest error, an appellate court simply has no jurisdiction to interfere with the findings and conclusions of a trial judge”.

Credibility

[9] Here, the Master’s findings of fact as to deficiencies were based on the objective evidence presented, such as photographs, but also on the viva voce evidence he heard and accepted by him as credible.

[10] With respect to the plaintiff he found his credibility wanting in a number of aspects. He found that the plaintiff’s evidence lacked detail as to the corrective work he claimed to have done following the complaints of the defendant, that his evidence lacked corroboration, there were a number of inconsistencies and his denial of the obvious deficiencies of work he performed depicted in the photographs. Whereas, the Master found the defendant’s evidence and that of the witnesses called by her involved in the restitution and rectification of the deficiencies, and completion of work to be credible. The Master’s conclusions are all founded on the evidence recited as “undisputed facts” and that which she accepted as credible.

[11] The Master saw and heard the evidence and it is not for the appellate court to re-try the case. The findings of fact by the learned Master are owed deference and will not be interfered with absent palpable and overriding error that is plain and obvious effecting the entire judgment, (see Luxterior Design Corp. v. Gelfand et al. 2018 ONSC 1621 at para. 11).

Breach of Contract

[12] The principle issue was whether there had been a breach of contract. Grounded in the evidence, the Master found that there were in fact a number of contract documents (lump sum contracts) between the plaintiff, Turano and defendant, Zittell as a result of the several quotations and approvals. As stated by the Master at para 39:

Together, I view these documents as being an original fixed price contract for the lost quotation plus the series of fixed price extras. Together they will be called “the contract”.

[13] Further, the Master found that the contract had been between the plaintiff, personally and the defendant, on the evidence that all of the quotations, other than the initial one which was lost, were tendered in the name “Turano’s Home Improvement”, the name of Mr. Turano’s sole proprietorship, the insurance policy for the project was in Mr. Turano’s name and that the defendant’s cheques were all made out to “Turano Home Improvements”. At no time, as found by the Master, did Mr. Turano bring to the attention of the defendant that he was acting as an agent on behalf Turano Home Improvements, a corporation or limited company. There is no error in law in the Master’s finding that the defendant dealt with Mr. Turano, the plaintiff personally, having failed to satisfy his onus of proof that he had informed the defendant he was acting as an agent for a corporation. (See: City Press Inc. v. Grain 1996 CarswellOnt 1646 (Gen. Div.) and Total Crane Erectors Ltd. v. Fontana, 2007 ONCA 121 at para 3).

[14] As to the Master having found that there was a repudiation of the contract, the Master applied the test cited in Angus v. Pinalski requiring “an inquiry as to whether the deficiencies were capable of being remedied and, if so whether they could be remedied in a period which would not destroy the commercial purpose of the contract”. The Master stated at para 66:

I have applied this test to the case before me, and have concluded that Mr. Turano did fundamentally breach the contract on account of ten deficiencies I noted above in para 54:

• The substantial electrical work was provided by an unlicensed electrician, and there was no electrical inspection. It is undisputed that a licensed electrician was necessary and was not provided by Mr. Turano. It is also undisputed that an electrical inspection was necessary and was not provided by Mr. Turano. This amounted to a breach of Ontario Electrical Safety Code. There is no need for an expert to prove this point.
• The exposed electrical wire that burned a hole into a copper pipe. This was obviously a matter of public safety and there is no need for expert evidence.
• The pinning of wiring with screws in the master ensuite bathroom, and the installation of wiring on window openings. These issues are matters of public safety and there was no need for expert evidence.
• The tile being installed on existing tile was an obvious deficiency.
• The radiant floor piping being placed on existing floor tile. There is no need for expert evidence to prove this was unacceptable.
• The protrusion of the second window into the wall in the master ensuite bathroom. This deficiency was obvious from the photograph.
• The low toilet flanges on the second floor bathrooms, high toilet flange in the basement bathroom, and the radiant piping located near the toilet flange were again obvious deficiencies.
• The poor exterior brick work was obvious from the photographs.
• The holes in the drywall were obvious from the photographs.
• The non-square framing, which is evident from the photographs.

[15] Of particular concern was Turano’s use of an unlicensed sub-trade to do electrical work without inspection or permit:

This was a matter of public safety and necessitated the opening up of walls for inspection and, if necessary re-doing the electrical work, a substantial amount of additional work. Furthermore, this fact compounded by the obvious disregard Mr. Turano had for public safety in allowing live wire to burn a hole in a copper pipe, in having screws pin electrical wiring, in having wiring installed on window openings, and in having radiant floor heating pipes installed on existing tile would have led any reasonable owner to conclude that Mr. Turano was not capable of completing the work in accordance with the basic building standards and public safety requirements.

[16] The defendant, as found by the Master, had clearly lost confidence as a builder due to the clear and obvious unsightly and unsafe deficiencies.

[17] There is no manifest error with respect to the Master’s conclusion that the plaintiff was in breach of contract.

[18] As found by the Master, an email sent April 20, 2015 which “represented a notice of contract termination plus a settlement offer” was not followed by any meaningful correspondence between the plaintiff and defendant furthering the project. The Master specifically found that Mr. Turano’s evidence that the contract was “abruptly terminated” on May 8, 2015 by the defendant locking him out was not credible. Specifically, he found that the defendant accepted Turano’s repudiation of the contract on April 20, 2015.

[19] On the issue of alleged spoliation there was no misapprehension of evidence by the Master. The Master considered the issue of the defendant’s duty to preserve at paragraph 58 of his reasons:

There was no evidence that Ms. Zittell was served with the Turano claim for lien before the THI action commenced on June 29, 2015. By that time, much of the correction work was done. Therefore, it is an open question as to whether Ms. Zittell should reasonably have anticipated litigation when the correction work was done and whether she was under a duty to preserve evidence. Furthermore, if such a duty arose when the deficiencies were corrected, Ms. Zittell appears to have the defence of not knowingly destroying evidence to undermine the litigation process, as there was no evidence that she did so.

[20] Further, photographs taken of the substandard work were available to the Master to consider in addition to the viva voce evidence he accepted as credible.

[21] There was no evidence that Turano was ready, willing and able to remove the defective and deficient work. Having found that Turano abandoned the contract by a repudiation, the defendant was justified in having SW identify and correct the deficiencies of Turano’s substandard work.

[22] Due to the magnitude of Turano’s incompetence and fundamental breach of contract that went to the root of the contract as found by the Master, Ms. Zittell was not required in law to afford Turano and his unlicensed trades an opportunity to rectify deficiencies and complete work undertaken by them without permits and inspections.

Damages

[23] Contrary to the submission of counsel, there was no admission by the defendant in evidence she owed Turano $58,775.20. Indeed, the evidence of the defendant, found to be credible was that the plaintiff was paid by the defendant for the work he did.

[24] With respect to the claim of quantum meruit, pleaded in the alternative, the Master having found breach of contract by repudiation through substantial non-performance due to the many deficiencies, and that the defendant needed to have the work done by Turano removed and rectified by others, there was no basis to have found that there was an unjust enrichment.

Conclusion

[25] In this instance, the plaintiff, by claiming the various errors cited above, which are either without merit or based on findings rooted in the evidence heard at trial with which he disagrees, in effect he has sought to re-litigate the case and to have this court on appellate review apply a different interpretation to the evidence heard by the Master or try the matter de novo. As noted by Justice C. Brown in Parma General Contractors Inc. v. Aloe et al. 2015 ONSC 6229 at para 59:

Differences and interpretation of certain viva voce and documentary evidence do not in my view constitute a palpable or overriding error that would permit an appellate court to intervene with a trial judge’s decision.

[26] The Master’s reasons are thorough, fair and balanced. I conclude that there are no overriding or palpable errors of fact or misapprehension of fact or law that warrant appellate intervention.

[27] The plaintiff’s motion is dismissed and the report of the Master is confirmed. Leave to appeal the issue of costs of the report of the Master is dismissed.

[28] Costs are awarded to the defendant/respondent on this review. If the parties are unable to agree between themselves as to the matter of costs, counsel may make written costs submissions no more than four pages in length, including a costs outline within 15 days of the release of this decision. The responding submission is to be made within 15 days thereafter.

A.J. O’Marra J.

Released: September 10, 2018

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: TURANO’S HOME IMPROVEMENT INC. Plaintiff – and – ZITTELL, BARI STERN Defendant

REASONS FOR JUDGMENT A.J. O’Marra J. Released: September 10, 2018