Court File and Parties
Court File No.: CV-14-00006045-0000 Date: 2023-01-25 Ontario Superior Court of Justice
Between: Harris Brothers Ltd., Plaintiff And: Mud Creek Capital Corp. and Carlo Corsini, Defendants
Counsel for Plaintiff (Harris Brothers Ltd.): Kyle A. MacLean
Counsel for Defendants (Mud Creek Capital Corp. and Carlo Corsini): Tom Serafimovski
And Between (Counterclaim): Mud Creek Capital Corp. and Carlo Corsini, Plaintiffs by Counterclaim And: Harris Brothers Ltd. and Peter Edward Harris, Defendants to the Counterclaim
Counsel for Plaintiffs by Counterclaim (Mud Creek Capital Corp. and Carlo Corsini): Tom Serafimovski
Counsel for Defendants to the Counterclaim (Harris Brothers Ltd. and Peter Edward Harris): Kyle A. MacLean
Heard: May 9, 10, 11, 12, and 16, 2022
Reasons for Judgment
Howard J.
Overview
[1] This case is all about the reasonable expectations of the parties to a contract. This case is about a failure to communicate.
[2] The defendant Mud Creek Capital Corp. (“Mud Creek”) is the owner of farm property and a hunting lodge, comprising about 2,000 acres, located at 7539 and 7593 Mud Creek Line, next to Mitchell’s Bay, Ontario (the “Property”).
[3] The defendant Carlo Corsini is the principal and directing mind of Mud Creek.
[4] In or about 2010, Mr. Corsini was approached by representatives of East Lake St. Clair Wind Inc. (the “Project Company”) [1] and was asked to allow nine wind turbine towers to be constructed on the Property owned by Mud Creek.
[5] In or about January 2014, following the construction of the wind turbine towers, the areas surrounding the base of each of the nine turbine towers required levelling and regrading to the elevation of the surrounding lands.
[6] Ultimately, the plaintiff was retained to do that work. The initial quotation provided by the plaintiff contemplated that the work could be completed for just over $10,000.
[7] The plaintiff maintains, however, that it was subsequently understood and agreed to by all parties that the actual work required would be much more extensive than the scope that was first quoted. To that end, the plaintiff ultimately presented Mud Creek with an invoice in July 2014 claiming payment of $130,763. 61.
[8] On behalf of Mud Creek, Mr. Corsini refused to pay the invoice. The relationship between the parties then broke down, and this litigation ensued.
[9] At trial, the plaintiff claims that the amount outstanding and owing to it is $120,620.73.
[10] For their part, the defendants maintain that Mud Creek is owed $10,124,80 on the counterclaim for the cost to remedy the deficient and/or incomplete work of the plaintiff.
[11] The sad reality is that, in stark contrast to the current acrimony between these parties, they were very much known to each other before this litigation arose, and for many years, they apparently enjoyed a positive and constructive relationship.
[12] In this regard, it is common ground that, historically, the plaintiff had done considerable work for Mud Creek or Mr. Corsini’s other companies for almost 15 years, billing the defendant company some $600,000 over that period. [2]
[13] Both of the parties equally report that there has never been any previous dispute as to payment between the two of them. But of course, each party would like me to draw different inferences from that fact. The plaintiff, in essence, asks me to infer that because Mr. Corsini has never before disputed any one of the plaintiff’s previous $600,000 worth of accounts, the sanctity of their accounts should now be viewed as above reproach. And the defendants ask me to infer that because they have always paid the plaintiff’s other $600,000 worth of accounts, Mr. Corsini would of course cause the plaintiff’s outstanding invoice to be paid if it were at all legitimate.
[14] I see the matter somewhat differently than do each of the parties.
Factual Background
[15] I do not propose to summarize the evidence of the 14 witnesses whose evidence was heard at trial. There is no need to repeat all of that detail here. While the parties should know that I have considered all of the evidence presented at trial, this written decision deals with the particulars of the material evidence only insofar as necessary to determine the legal issues in dispute or provide sufficient context for an appreciation of the determination of those issues.
[16] Further, for the most part, to the extent that it is necessary to make findings of fact on the specific evidence pertaining to a material issue, I shall do that below in the course of my consideration of the evidence on that specific issue.
[17] That said, I would provide the following background.
[18] When Mr. Corsini was approached by the Project Company in 2010 (as were other owners of other properties in the area upon which it was proposed that other wind turbines would be erected), the arrangement contemplated that Mud Creek would be paid for the lease of that portion of the Property on which the nine wind turbines would be erected.
[19] The Project Company contracted with H.B. White Canada Corp. (“H.B. White”) to have the construction of the nine wind turbine towers on the Property performed by H.B. White.
[20] It appears that the construction of the towers was completed over the period of 2012 to 2013. [3] The towers were erected on portions of the Property that are rented out as farmland to a tenant farmer.
[21] In or about January 2014, following the construction of the nine wind turbine towers, H.B. White subcontracted the levelling and regrading work required at the base of each of the nine towers to the plaintiff.
[22] In early January 2014, a considerable amount of email correspondence passed between Mr. Peter Harris, the owner and president of the plaintiff, Harris Brothers Ltd. (“Harris Bros.”), and Mr. Jeffrey Tripp of H.B. White. The evidence of Mr. Harris, which I accept, was that he understood Mr. Tripp worked for H.B. White and was a site foreman who looked after multiple sites. [4]
[23] On January 9, 2014, Harris Bros. provided a quotation to H.B. White for the provision of topsoil and grading services required to bring the settlement areas around the base of the turbine towers up to the same grade as the surrounding land. The total price of this quotation was $10,142.88, inclusive of HST, time, and materials (the “Original Quote”). [5]
[24] The Original Quote contemplated the provision of 18 loads of topsoil (216 cubic metres) in total for all nine turbine towers, together with regrading services for the base area around the nine towers and along the access road. [6]
[25] The evidence of Mr. Harris was that he felt the parties required a site meeting and that, accordingly, on March 11, 2014, Mr. Harris, Mr. Tripp, and Mr. Raymond Vandevelde (“Ray”) met on site at the Property. [7] Ray is the property manager at Mud Creek, and he actually resides on the Property, providing a wide variety of daily property maintenance and caretaking duties.
[26] It is common ground, even on the evidence of Mr. Harris, that Mr. Corsini did not attend the site meeting of March 11, 2014.
[27] I would also note that Ray had no memory of the meeting of March 11, 2014, and Mr. Tripp did not testify at trial.
[28] The evidence of Mr. Harris was that all three of the persons attending the March 11th meeting toured the Property and observed many “low points” or depressions in the soil in the areas surrounding the base of the various towers. The evidence of Mr. Harris was that they all agreed that it was going to take “a lot more topsoil” than the 18 loads contemplated by the Original Quote in order to complete the required levelling and regrading work properly.
[29] Consistent with the account of Mr. Harris, some three weeks after the date of the Original Quote, H.B. White issued a purchase order to Harris Bros. on March 31, 2014, for the provision of general grading and site work to be performed at the Property by Harris Bros. (the “Purchase Order”). [8]
[30] The total price stated on the face of the Purchase Order was $40,000, exclusive of HST. [9] The Purchase Order identified Harris Bros. as the “vendor” and/or “Subcontractor.”
[31] Near the bottom of the first page of the Purchase Order, there are various notations, the first of which states: “Work will be done on a T & M basis. Harris Brothers to provide all necessary equipment and material to complete the scope. Re-grading and Topsoil placement.”
[32] That notation is followed by a list of unit prices for various materials and equipment, indicating that, for example, topsoil would be provided at a price of $350 per load, work performed by a backhoe would be charged at $85 per hour, work performed by a “D3 dozer” would be charged at $85 per hour, etc.
[33] A subsequent notation at the bottom of the Purchase Order indicates that the contact person at the site is Mr. Tripp.
[34] On the second page of the Purchase Order, instructions are provided to the vendor, who is asked to: “Please sign and return this Purchase Order to [H.B. White]. Vendor signature confirms acceptance of attached terms and conditions.”
[35] Attached to the Purchase Order is a schedule of several “Terms and Conditions” listed in 14 paragraphs. Paragraph 2 of the listed Terms and Conditions provides as follows:
Acceptance. This purchase order is H.B. White Canada Corp.’s offer to purchase the services and/or the material described on the face of this purchase order from the Subcontractor. Company’s placement of this order is expressly conditioned upon the Subcontractor’s acceptance of all the terms and conditions of purchase contained on or attached to this purchase order. Commencement of performance by Subcontractor shall constitute Subcontractor’s acceptance of this purchase order and all of its terms and conditions. Any additional or different terms or conditions which may appear on any communication from Subcontractor, including but not limited to, terms and conditions in any printed form of Subcontractor, are hereby expressly objected to and shall not be effective or binding unless specifically agreed to in writing by Company . This offer shall be automatically revoked if Company does not receive the described material or services or the Subcontractor’s written acceptance of the terms hereof within twenty (20) days of the date of this purchase order. [Emphasis added.]
[36] The evidence of Mr. Harris was that he signed the Purchase Order to indicate his acceptance of same and that his signature appears immediately above the line on the face of the Purchase Order marked “Vendor’s Signature.”
[37] Mr. Harris gave evidence about his understanding of the nature of the Purchase Order. Again, that evidence must be considered in the context of this court not having the benefit of the evidence of the representative of the other contracting party to the Purchase Order – i.e., Mr. Tripp.
[38] That said, Mr. Harris testified that he understood that the Purchase Order was, first and foremost, a contract for “time and materials” – hence the reference to the “T & M basis” on the face of the Purchase Order. The evidence of Mr. Harris repeatedly stressed that it was understood to be an “open” purchase order – which he understood to mean that the ultimate price charged under the Purchase Order would be “based on how much it takes” to complete the work.
[39] When questioned about the significance, if any in his mind, of the fact that the stated total price on the face of the Purchase Order is $40,000, Mr. Harris explained that he understood the insertion of the $40,000 figure “was just to get going.” In cross-examination, it was put to Mr. Harris that the inclusion of the $40,000 total amount on the face of the Purchase Order could not be reasonably understood as giving him a “blank cheque” to bill whatever he wanted. Mr. Harris seemingly agreed, and replied: “No, but it’s to get started.” Mr. Harris testified that Mr. Tripp had said to him that “we’d start at this.” Obviously, the latter statement is hearsay evidence and, without more, cannot be accepted for the truth of its contents.
[40] Mr. Harris testified that, after he signed the Purchase Order, “not too much” happened on the work primarily because in March 2014 the grounds of the Property were still frozen, and it was not possible to proceed with the work at that time.
[41] The evidence of Mr. Harris was that not much happened with the work until he received another email from Mr. Tripp on May 2, 2014, in which Mr. Tripp advised:
For clarity, please continue to hold on any and all work related to the East Lake St. Clair Wind Farm – H.B. White Canada will issue you a notice to proceed at a later date. We will follow up with you to discuss schedule and better define scope once we receive direction from the owner on some outstanding issues.
[42] The at-first curious email of Mr. Tripp is perhaps better understood once placed in the context of the chronology of the dealings that Mr. Corsini had with the project.
[43] The evidence of Mr. Corsini was that Mud Creek assumed or took an assignment of the contract that H.B. White had entered into with Harris Bros. to complete the work for the provision of topsoil and regrading/levelling services at the Property. To summarize, the evidence of Mr. Corsini in this regard was that:
a. On behalf of Mud Creek, Mr. Corsini took an assignment of the contract between H.B. White and Harris Bros. in or about March 2014.
b. In the course of his discussions about taking the assignment, Mr. Corsini dealt with a representative of the Project Company, whose name he could not remember. He believed the gentleman to be of East Indian origin. He did not have discussions with Mr. Tripp about the assignment of the contract. Similarly, he did not have discussions with Mr. Harris about the assignment at the time.
c. The Original Quote was emailed to Mr. Corsini sometime in March 2014. He said he definitely received a copy of the Original Quote, and it was on that basis that Mr. Corsini understood and agreed to take the assignment. Mr. Corsini understood that his company was assuming the contract between H.B. White and Harris Bros. as reflected in the Original Quote. Essentially, he thought the contract he was assuming was for “finishing” work, to “make it right.”
d. Mr. Corsini believed that he received a copy of the Original Quote in March 2014 because he recalled that he received it when he was vacationing in Florida. It has been the practice of Mr. Corsini to vacation in Florida from mid-December to mid-April, a practice that he has followed since he was 19 years of age.
e. Mr. Corsini never saw or knew about the Purchase Order at the time that he agreed to assume the contract. The evidence of Mr. Corsini was that he had never seen the Purchase Order before the litigation commenced.
f. Mr. Corsini never spoke to Mr. Harris about the Purchase Order before taking the assignment because insofar as Mr. Corsini was concerned, he said, he had never seen the Purchase Order at that time. The evidence of Mr. Corsini was that Mr. Harris never advised him that he had the Purchase Order. Mr. Corsini testified that he had no discussions with Mr. Harris about the Purchase Order at all.
g. Interestingly, the evidence of Mr. Harris was, also, that he never had any discussions with Mr. Corsini about the Purchase Order. In examination-in-chief, Mr. Harris testified that he never mentioned the Purchase Order to Mr. Corsini.
h. Mr. Corsini testified that Mud Creek was required to provide a release to the Project Company as part of the assignment, in exchange for a payment to Mud Creek of $10,142.88.
i. Mr. Corsini testified that once Mud Creek received the payment of $10,142.88, he signed the release on behalf of Mud Creek.
j. Mr. Corsini testified that, had he known about the Purchase Order for $40,000, he would never have signed the release, having been paid only $10,142.88. He testified that in those circumstances, he would not have signed the release until he knew that H.B. White or the Project Company had paid the $40,000 amount to Harris Bros.
k. In his testimony, Mr. Corsini said that he wished he had known about the Purchase Order, but that, having already signed the release, he believed he was not in a position to go back and ask for relief.
l. In the course of the litigation, and specifically at examination for discovery, Mr. Corsini was asked to produce, and gave an undertaking to produce, any emails, text messages, or other correspondence through which he received any documents concerning the assignment of the contract. However, the defendants produced no documents responsive to the undertaking. In answer to the undertaking, counsel for the defendants simply advised that “all documents have already been produced.”
[44] It appears to be common ground, at least, that the immediate parties had an on-site meeting in early May 2014. In particular:
a. Mr. Harris testified that in early May 2014, Mr. Corsini telephoned him and advised that he had assumed the contract. Mr. Harris believed that to be the Purchase Order, although he said he never discussed the Purchase Order with Mr. Corsini.
b. Consistent with the evidence of Mr. Harris, the evidence of Mr. Corsini was that, prior to his attendance at a site meeting with Mr. Harris in early May 2014, described below, he recalled having told Mr. Harris that he had taken over the contract.
c. I note that on Tuesday, May 6, 2014, Ray sent a text message to Mr. Harris saying that, “Carlo wants u to call him.” [10]
d. The evidence of Mr. Harris was that following his brief telephone conversation with Mr. Corsini, there followed an on-site meeting at the Property.
e. The evidence of Mr. Harris was that Mr. Corsini told him during the on-site meeting at the Property that he wanted the work done, and that he wanted “no puddles.”
f. The recollection of Mr. Harris was that he was told to “just fill the holes” and that, with respect to what he understood to be the “open” Purchase Order, “no one said stop.”
g. The evidence of Mr. Corsini was that he did not specifically remember attending a site meeting at the Property, but he allowed that “it would be logical that we would” (attend such a meeting). Mr. Corsini recalled “one meeting at the very beginning.”
h. The evidence of Mr. Corsini was that he met with Mr. Harris on site at the Property at either the end of April 2014 or early May 2014.
i. The evidence of Mr. Corsini was that he did not speak to Mr. Harris about the terms of the job but that he just said, “please do a good job.” He testified that, by that, he meant level the dirt and remove the standing water.
j. Mr. Corsini testified that he had just the one initial meeting with Mr. Harris. That evidence is not really contradicted.
k. The evidence of Mr. Corsini was that he had no discussions with Mr. Harris about the Purchase Order or its terms – which, Mr. Corsini maintains, he had not seen at that point. And the evidence of Mr. Harris corroborates same, in that, the evidence of Mr. Harris was that he himself never had any discussions with Mr. Corsini about the Purchase Order.
l. The evidence of Mr. Corsini was that he had an interest in having the work completed as quickly as possible. He explained that, among other things, he wanted the work done so that his tenant farmer could regain the use of that farmland.
[45] There was some delay in the progress of the work – or at least that was the perception of the defendants. For present purposes, it does not really matter whether that perception was valid and, if so, whether there were legitimate reasons for the perceived delay. In that vein, on Monday, May 26, 2014, Ray sent a text message to Mr. Harris asking: “R u moving dirt soon”? Mr. Harris replied in the affirmative and explained that his forces were screening topsoil and hauling and dumping it around the towers.
[46] On Thursday, June 5, 2014, there was a further text exchange, and Ray asked, “How u doing with turbines”? Mr. Harris replied to the effect that the recent rainy weather had delayed progress but that in “another couple days should have it pretty close.” He added that they would “[h]opefully finish Monday.”
[47] On Monday, June 16, 2014, Ray made a further text inquiry of Mr. Harris, which went unanswered (at least by text).
[48] It would appear matters came to a head on Thursday, July 31, 2014, after Ray sent a further text message to Mr. Harris that afternoon, saying, “R your guys on strike[?] Nobody working for 3 weeks wtf.” Mr. Harris replied: “Those guys were there last Monday dozing and hauling. So why do u say 3 weeks WTF?” Mr. Harris went on to explain that his forces had exhausted the supply of dirt they were using on site, that they have to screen more dirt, but that his screener is on another job, and: “[i]t’s taking way more dirt than anyone anticipated.” He later added: “[w]e have already hauled almost 275 loads of dirt.”
[49] Ray replied that same afternoon, simply stating: “[n]ot here.” [11]
[50] The evidence of Ray at trial was that he toured the Property daily in the course of his duties, and at that time of year, he would drive by the site of the towers up to four or five times a day; although he acknowledged that he observed various work being done by the Harris Bros. forces, he maintained that he did not observe 275 loads delivered to the towers on the Property. The evidence of Ray was that, to him, the job should have taken no more than a week to complete.
[51] The evidence of Ray was consistent with that of his son, Mr. Tyson Vandevelde (“Tyson”), who also worked at Mud Creek. Tyson had been employed at Mud Creek for some 18 years and assisted his father in maintaining the Property. The evidence of Tyson was that they (he and his father, Ray) toured the Property every morning, and while they were not “babysitting them” [Harris Bros.] and certainly did observe the Harris Bros. forces on site moving some dirt, he did not see a lot of activity on the Property. The evidence of Tyson was that from the path that he and his father drove upon on their morning tours, one could “throw a rock” to the “windmill road” where (most of) the towers were located. In short, and to paraphrase, Tyson’s evidence was that he and his father were well placed to be in a position to monitor the activity of the Harris Bros. forces on a daily basis.
[52] Not coincidentally, on the very same day as that text exchange between Mr. Harris and Ray, Harris Bros. delivered an invoice to Mud Creek dated July 31, 2014, providing what was called a “progress billing” for work said to have been completed in May, June, and July 2014. The invoice itemized the number of loads of dirt allegedly provided by each of three trucks used (Truck 1 – 92 loads; Truck 2 – 110 loads; Truck 3 – 72 loads), [12] and set out particulars of the number of hours worked and corresponding hourly rates for different pieces of equipment. The total amount of the invoice was $130,763. 61, inclusive of HST (the “Last Invoice”). [13]
[53] It is clear from the evidence of Mr. Harris that the amount claimed in the Last Invoice did not represent the total price for completion of the entirety of the work. It is common ground that the work had not been finished as of July 31, 2014, and there was further work to be done to finish the job.
[54] On Thursday, August 7, 2014, Ms. Sharon Bechard, the office manager at Harris Bros., sent a copy of the Last Invoice to Mr. Corsini’s personal email address and asked him to kindly confirm receipt, which he did. Ms. Bechard then sent a further email to Mr. Corsini that same afternoon, stating: “[w]e were wondering if we could get a part payment on this project as this work is for May, June and July. Anything would be great – Thanks for the consideration.”
[55] The response from Mr. Corsini came the next morning, on Friday, August 7, 2014, when he sent an email to Harris Bros. that attached two documents, namely, a copy of the Initial Quote, on which Mr. Corsini had circled the text that said, “Total Price: $10,142.88”, and then a copy of the Last Invoice, on which Mr. Corsini had drawn a large question mark covering the entire page.
[56] While Mr. Corsini and Mr. Harris did subsequently attend a meeting to discuss their differences, there was no resolution reached. Mud Creek then terminated the contract and advised Harris Bros., through the former’s solicitor, that Harris Bros. was prohibited from attending at the Property.
[57] It is common ground that, under cover of letter dated August 14, 2014, Harris Bros. received payment from Mud Creek in the total amount of $10,142.88, being the amount of the Original Quote. [14] That is, Mr. Corsini made sure that Mud Creek paid the total amount of the Original Quote – but no more.
[58] That same day, Mud Creek received a quotation dated August 14, 2014, from Ms. Rebecka Heyink of Henry Heyink Construction Ltd. (“Heyink”), another contractor that was retained to complete the grading and levelling work around the nine towers. The price quoted by Ms. Heyink for completion of the work was $8,960.00, plus HST. [15]
[59] Heyink completed the work in relatively short order. It issued an invoice dated September 19, 2014, to Mud Creek for $8,960.00, plus HST ($1,164.80), for a total invoice amount of $10,124.80. That amount was paid by Mud Creek on October 3, 2014. [16]
[60] On November 10, 2014, Harris Bros. issued its statement of claim.
[61] In response, Mud Creek and Mr. Corsini delivered their statement of defence and counterclaim dated December 19, 2014. While various heads of relief were originally claimed in the counterclaim, the only relief pursued at trial was the claim for recovery of the $10,124.80 amount Mud Creek paid to Heyink.
Issues
[62] In my view, at the conclusion of the trial, the live issues that emerged as requiring determination by the court are as follows:
a. Has the plaintiff established that its claim should succeed as a matter of contract?
b. In the alternative, has the plaintiff established that its claim should succeed on the basis of the doctrines of quantum meruit and/or unjust enrichment?
c. Have the defendants established that their counterclaim should succeed?
d. Is there any merit to the various claims that the personal defendants are personally liable?
Analysis
Has the plaintiff established that its claim should succeed as a matter of contract?
[63] I agree with Mr. MacLean that the plaintiff has a claim against Mud Creek that should succeed as a matter of the law of contracts.
[64] In my view, it is instructive to recall at the outset the primary purpose of contract law. To my mind, there are few better statements of the principal function of the law of contracts than that succinctly put by Prof. Stephen M. Waddams, who wrote that: “[t]he principal function of the law of contracts is to protect reasonable expectations.” [17]
[65] To the same effect is the opening title appearing on page 1 of the Corbin on Contracts text, which proclaims: “The Main Purpose of Contract Law Is the Realization of Reasonable Expectations Induced by Promises.” [18]
[66] The same point has been judicially recognized by the Supreme Court of Canada, most recently in its 2020 decision in Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, [19] where the court held that the correct analytical approach to pre-incorporation contracts must be guided by the common law’s long adherence to the objective theory of contract formation. Citing Prof. Waddams and others, the Supreme Court in Strata Plan observed that:
Parties’ reasonable expectations are an interest which is generally protected in the common law of contracts: J. D. McCamus, The Law of Contracts (2nd ed. 2012), at pp. 32-33; S. M. Waddams, The Law of Contract (7th ed. 2017), at §§141 and 148. [20]
[67] Later in Strata Plan, the court held that:
The subjective approach taken in Northumberland Avenue Hotel and Bagot Pneumatic Tyre is anomalous, because parties’ reasonable expectations are generally protected in the common law of contracts : McCamus, at pp. 32-33; Waddams, at §§141 and 148. This general rule means that “a subjective mutual consensus is neither necessary nor sufficient for the creation of an enforceable contract” and that “a person may be bound by contractual obligations that she did not intend (subjectively) to assume”: Waddams, at §§92 and 146. At common law, the risk arising from one party’s reasonable reliance on the existence of an agreement is allocated to the party whose conduct gave rise to a reasonable expectation that a contract between the parties would be legally binding. [21]
[68] I approach the issues in this case with these principles in mind.
[69] In my view, it is clear that the relationship between Harris Bros. and Mud Creek was governed by contract. For what it is worth, both Mr. Harris and Mr. Corsini gave evidence that made it plain that they regarded themselves as being governed by a contract.
[70] However, it is also clear that each party had a different view, or position, as to what was the contract that governed their relationship. The position of Mr. Harris and Harris Bros. is that the governing contract was the Purchase Order. For reasons that I explain below, I agree with that position.
[71] The position of Mr. Corsini and Mud Creek is that the contract that governed the relationship between Harris Bros. and Mud Creek was the Initial Quote for some $10,000. I have great difficulty with, and do not accept, that position. The Initial Quote was just that – a quotation. There is an obvious difference between a quotation and a binding contract. I do not accept that an accomplished businessperson such as Mr. Corsini, who is the owner and/or principal of some 27 companies, does not appreciate the difference between a quotation and a binding contract. He surely does. His subsequent dealings with Heyink reflects that he does.
[72] However, there is nothing on the face of the Initial Quote, which was provided by Harris Bros. to H.B. White, and which was entered as part of Exhibit 4, to indicate that it was accepted by H.B. White. I also note the language of the Initial Quote: it states: “[o]ur proposal is based on the following scope provided …” I note the word “ proposal .” Harris Bros. was making a proposal. I do not accept that Mr. Corsini does not understand the difference between a proposal and a binding contract.
[73] There is simply no document before this court that establishes that H.B. White, or the Project Company for that matter, ever signified their acceptance of the Initial Quote. In contractual analysis terms, there is no objective evidence of the acceptance of the Initial Quote as a binding contract.
[74] Moreover, Mr. Corsini provided no evidence to explain why he regarded the Initial Quote as a binding contract. As I have said, no such evidence is apparent from the face of the document itself. If Mr. Corsini had any reasonable expectation that the Initial Quotation constituted the governing contract, he could not have gleaned that from the document itself; he must have got that from the representations of another party with whom he was dealing at the time of his assignment talks. The only other parties would be either Mr. Harris on behalf of Harris Bros., or someone from H.B. White, or someone from the Project Company. But the clear evidence of Mr. Corsini was that he had no discussions with Mr. Harris or anyone from Harris Bros. about the assignment of the contract. Similarly, he testified that he did not deal with H.B. White about the assignment. His evidence was that he dealt only with a representative of the Project Company about the assignment – except he cannot remember who that person was. In any event, Mr. Corsini provided no explanation or evidence as to what was said to him or represented to him by that unknown representative of the Project Company that made him believe that the Initial Quote was the governing contract. All that Mr. Corsini said was that he received a copy of the Initial Quote in the course of the assignment discussions.
[75] In sum, there is no objective evidence of any acceptance of the Initial Quote, and there is no objective evidence of any reasonable expectation on the part of Mr. Corsini that the Initial Quote represented the governing contract in the circumstances.
[76] It is therefore clear that the Initial Quote was not the governing contract.
[77] To my mind, it is equally clear that the Purchase Order did constitute the governing contract in the instant circumstances.
[78] I have already explained above the nature of the Purchase Order according to its terms. Paragraph 2 of the Terms and Conditions attached to, and forming part of, the Purchase Order expressly explained that the Purchase Order was “H.B. White Canada Corp.’s offer to purchase the services and/or the material described on the face of this purchase order from the Subcontractor”/Vendor, who was expressly identified as Harris Bros. The express terms of the Purchase Order indicated that the signature of the vendor would confirm acceptance of the Purchase Order and its “attached terms and conditions.” Mr. Harris signed the Purchase Order, thus confirming the acceptance by Harris Bros. of H.B. White’s offer to purchase his company’s services. Further, the express terms of para. 2 of the Terms and Conditions attached to the Purchase Order indicated that commencement of performance by the Subcontractor/Vendor would constitute its acceptance of the Purchase Order “and all its terms and conditions.” Mr. Harris caused the labour forces of Harris Bros. to commence performance of the work, thus confirming the acceptance by Harris Bros. of H.B. White’s Purchase Order and all its terms and conditions.
[79] There is no doubt that there was a binding contract between Harris Bros. and H.B. White, as reflected in the accepted Purchase Order.
[80] Indeed, the only binding contract here (at that time) was between Harris Bros. and H.B. White, as reflected in the accepted Purchase Order.
[81] That said, Mr. Corsini was quite clear in his evidence that he (Mud Creek) assumed “the contract” – and by that, he meant the contract with Harris Bros. But the only contract that existed with Harris Bros. was the contract between Harris Bros. and H.B. White, as reflected in the accepted Purchase Order. There was no contract between Harris Bros. and the Project Company . There was no evidence at all of any contract between Harris Bros. and the Project Company directly. Thus, when Mr. Corsini testified, repeatedly, that he on behalf of Mud Creek had assumed or taken an assignment of the contract with Harris Bros., he must be taken to mean the contract between Harris Bros. and H.B. White, as reflected in the accepted Purchase Order, because, again, that was the only contract then in existence with Harris Bros.
[82] But Mr. Corsini maintained that he never saw the Purchase Order.
[83] More precisely, Mr. Corsini gave evidence that he never saw the Purchase Order “before this litigation.”
[84] That evidence causes me some difficulty.
[85] And by that, I mean that while Mr. Corsini struck me as an otherwise forthright and credible witness, I have difficulty completely accepting his evidence on the issue of the assignment of the Harris Bros. contract. Indeed, that is perhaps the sole area of his evidence where he gave me some cause for concern to question the credibility of his evidence. And so, while I may accept that, strictly speaking, it may be correct to say that Mr. Corsini never saw the Purchase Order before the litigation was commenced by issuance of the statement of claim on November 10, 2014, that is not to say that Mr. Corsini did not see the Purchase Order at sometime after the litigation was commenced in November 2014. Perhaps it was included in documents that were forwarded to him as part of the assignment documentation but were, for whatever reason, not reviewed by him until after November 2014. I do not know, and I will not engage in speculation.
[86] But, having considered all of the circumstances before me, I have come to the conclusion that I must draw an adverse inference against the defendants insofar as concerns their assertion that they had no knowledge (or acceptance) of the Purchase Order at the time they agreed to the assignment of the Harris Bros. contract. In drawing that adverse inference, I have considered the following:
a. Generally speaking, I found the evidence of Mr. Corsini on the issue of the assignment of the Harris Bros. contract to be extremely vague. I recall at trial being struck by the vagueness of the evidence on such a crucial issue as the assignment.
b. The evidence of Mr. Corsini was that he assumed or took assignment of the Harris Bros. contract in March 2014, when he was then, on his evidence, vacationing in Florida.
c. Mr. Corsini initially testified that he had never seen the Purchase Order “before this litigation.” He later testified in examination-in-chief that the first time he saw the Purchase Order was when Mr. Serafimovski provided him with a copy of the parties’ Joint Book of Documents in preparation for trial (in 2022), which contained a copy of the Purchase Order at tab 14, and which was then entered as Exhibit 8 at trial.
d. However, in cross-examination, Mr. MacLean established that Mr. Corsini had in fact seen the Purchase Order at least as early as his examination-for-discovery, which took place on November 17, 2020. I then made the mental note that Mr. Corsini was not exactly careful in his testimony as to when (in 2020 or 2022? Or otherwise?) he first saw the Purchase Order.
e. Mr. Corsini testified at trial that he had no discussions at all with Mr. Harris about the assignment of the Harris Bros. contract. However, in cross-examination at trial, Mr. MacLean established that, on his examination-for-discovery in November 2020, Mr. Corsini admitted that, in February 2014, he confirmed and agreed with Mr. Harris that Mud Creek would be assuming H.B. White’s contract with Harris Bros. on the same terms as the Initial Quote. As such, I have reason to doubt the testimony that Mr. Corsini gave at trial about the nature and extent of his discussions with Mr. Harris about the assignment of the Harris Bros. contract. In his testimony at trial, he was adamant that he had no discussions at all with Mr. Harris about the assignment. At discovery, he admitted that he spoke with Mr. Harris about the assignment in February 2014.
f. Similarly, Mr. Corsini testified that he had no discussions with Mr. Tripp, nor anyone else from H.B. White about the assignment.
g. The evidence of Mr. Corsini was that the only person he spoke with about the assignment of the Harris Bros. contract was a representative of the Project Company – except that he could not remember the name of that person. In his examination-in-chief, he agreed with his counsel’s suggestion that it was one “Keith Naiker” (whoever that is) but then later said that it was “Michael” somebody-whose-name-he-could-not-recall.
h. The defendants did not call any witness on behalf of the Project Company to speak to the discussions they had with Mr. Corsini about the terms of the assignment. As such, there was no evidence from the Project Company or contracting party as to the terms of the assignment agreement or what documents were in fact provided to Mr. Corsini.
i. Mr. Corsini testified that he was provided with a copy of the Initial Quote in the course of his dealings with the assignment. Being in Florida at the time of the assignment, the evidence of Mr. Corsini was that he would not have had that document physically delivered to him, but that he would have received that document most likely by email. However, Mr. Corsini produced no email correspondence evidencing his receipt of the Initial Quote.
j. Given that Mr. Corsini, on his own evidence, was then staying in Florida, I do not accept that there was no assignment agreement or (at least) email correspondence passing between Mr. Corsini and the representative of the Project Company with whom Mr. Corsini said he was dealing about the terms and conditions of the assignment. Certainly, there must have been some email correspondence passing between the two or other record of their dealings that defined and confirmed the scope of the assignment. I do not accept that a businessperson such as Mr. Corsini would not have insisted upon, and maintained a record of, correspondence or other documentation that defined the nature and extent of his obligations under any assignment. At his examination for discovery, Mr. Corsini was asked to produce any such correspondence, and he gave an undertaking to do so. But Mr. Corsini produced nothing.
k. Specifically, Mr. Corsini admitted that he received a copy of the Initial Quote, which, he maintains, constitutes the governing contract between Mud Creek and Harris Bros., but he could not explain how he received that document. He assumed he received it by email while he was in Florida. At his discovery, he was asked to produce any such email. But Mr. Corsini produced nothing.
l. Mr. Corsini testified that Mud Creek was paid $10,142.88 in exchange for the provision of a release, which he executed on behalf of Mud Creek. The defendants have never produced a copy of the release that Mr. Corsini said he executed. The evidence of Mr. Corsini was that he could not locate a copy of the release. While I have some doubt about that evidence, it also makes me question – if Mr. Corsini cannot locate the release document, what other documents surrounding the assignment might be in existence that he also cannot locate? If he cannot locate any such documents, how can he be certain that they do not exist?
m. Mr. Corsini testified that Mud Creek was not paid the $40,000 under the Purchase Order but was paid only the $10,142.88, being the amount payable under the Original Quotation. The defendants provided no banking records to confirm same, specifically, they produced no banking records to confirm the deposit of (only) $10,142.88.
n. The defendants were asked at examination-for-discovery to produce the documents that would address many of these outstanding questions, and they gave an undertaking to address that concern, but, in the result, nothing was really produced.
o. The production by the defendants of the requested information by the plaintiff as to what was actually produced to the defendants concerning the assignment could have corroborated the evidence of the defendants that, essentially, nothing other that the Initial Quote and the release was produced.
p. A fully responsive answer by the defendants also would have set out exactly what contractual documents were assigned.
[87] In these circumstances, I am struck by the overwhelming conviction that Mr. Corsini has not “come clean” with this court about what documents he actually received in the course of his assignment discussions.
[88] As such, I draw an adverse inference against the defendants. Contrary to the evidence of Mr. Corsini, I find that the defendants were in possession of a copy of the Purchase Order and that Mud Creek must be found to have been in possession of, and at least implicitly agreed to, the binding contract between Harris Bros. and H.B. White, as reflected in the accepted Purchase Order.
[89] To be clear, I find that the terms and conditions of the contract between Harris Bros. and H.B. White, as reflected in the accepted Purchase Order, are binding on Mud Creek by way of assignment.
[90] That said, my finding that the terms and conditions of the assigned contract between Harris Bros. and H.B. White, as reflected in the accepted Purchase Order, are binding on Mud Creek does not end the matter.
[91] I disagree with the plaintiff’s characterization of the nature of the contract as reflected in the accepted Purchase Order.
[92] Mr. Harris testified that he considered the Purchase Order to be an “open” purchase order. In speaking of the Purchase Order, Mr. Harris repeatedly emphasized (seemingly to the exclusion of other features or provisions of the Purchase Order) that it was a contract based on “time and materials.” To listen to Mr. Harris describe the nature of his “open” Purchase Order, it is plain that he believed his “open” Purchase Order would essentially allow Harris Bros. to charge an unlimited amount pursuant to the Purchase Order. To his mind, there was no fixed cap or limit on what amounts could be charged.
[93] I would just pause on that point to note that the actual provisions of the Purchase Order do not support that view. Nowhere in the Purchase Order does it indicate that it is an “open” purchase order. There is nothing in the language of the Purchase Order or its attached terms and conditions that supports that view. If Mr. Harris’s view of the “open” nature of the Purchase Order was what was actually intended by the parties, that was not reflected in the language that they used in the contract. Any such intention is external to the actual text of the Purchase Order. Anyone not being privy to those unexpressed intentions who just picked up that document and read the plain language of the document could not reasonably come to the conclusion that it was an “open” purchase order in the manner that Mr. Harris described it. And more to the point, anyone subsequently taking an assignment of that document who was not privy to the original parties’ unexpressed intentions would have no way of knowing the intended nature of the document – unless it was brought home to that assignee.
[94] One of the difficulties I have with Mr. Harris’s conception of the contract is that it places such emphasis on the “time and materials” provision almost to the point that it reads out of existence other provisions of the contract. There is no doubt that the Purchase Order states that the “Work will be done on a T & M basis.” And I accept that the parties understood that to mean that the work would be done on a time and materials basis. But that reference appears below what I consider to be another important provision of the contract – being the total contract price of $40,000. That $40,000 figure appears on the face of the Purchase Order in bold font. Mr. Harris’s interpretation of the contract treats the Purchase Order as if the $40,000 amount never appears on it.
[95] Mr. Harris gave evidence that it was understood and agreed by Mr. Tripp and Mr. Harris that the $40,000 amount was just to get the work started. The problem he faces is that the language of the Purchase Order – the terms of the contract – do not support that view. The problem he faces is that Mr. Tripp did not give evidence at trial.
[96] In my view, the interpretation of the contract given by Mr. Harris essentially ignores the $40,000 amount. On his view, there is no particular significance to be given to the $40,000 amount at all. Indeed, on his view, it is as if any number could have been chosen.
[97] Respectfully, I disagree with that view. One does not properly interpret a contract by ignoring its clear provisions and plain language. One does not properly interpret a contract by reading out of existence the expressed contract price.
[98] A good example of the correct approach to the task of contractual interpretation was expressed by Fraser C.J.A. of the Alberta Court of Appeal in ATCO Electric Ltd. v. Alberta (Energy & Utilities Board), 2004 ABCA 215, [22] where Her Honour emphasized the objective nature of the process of interpretation:
It must be understood therefore that the search for the parties' intentions is conducted on an objective basis, meaning that the focus is on what a reasonable person would infer from the words used. This interpretive exercise must be undertaken with due regard to the entire contract. One cannot simply pick and choose clauses – or parts of clauses – without considering the contract as a whole. It also means being alive to the relevant background against which the contract was concluded, the purpose of the exercise being to ascribe to the written text the most appropriate meaning which the words can properly bear. [23]
[99] A proper interpretation of the Purchase Order requires one to read the plain language of the provisions and to read all of the provisions together, included the provisions of the attached Terms and Conditions. In particular, one cannot ignore the provisions set out in para. 2 of the attached Terms and Conditions, as quoted above, which essentially require that “any additional or different terms or conditions” – any changes to the contract – must be “specifically agreed to in writing.”
[100] When one does that, in my view, it is clear that what was intended by the contracting parties was that Harris Bros. was to perform the work and invoice on a time and materials basis, up to a maximum of $40,000, and any work beyond the $40,000 was required to be specifically agreed to in writing by the parties if Harris Bros. wished to be paid for it.
[101] But of course, that is not what happened in this case.
[102] In this case, unfortunately, based on his erroneous interpretation of the contract and his flawed understanding of what the provisions of the Purchase Order required, Mr. Harris permitted Harris Bros. to perform work on the Project that (it would appear) far exceeded $40,000 without seeking out the consent of Mr. Corsini and having Mud Creek specifically agree to the additional work in writing.
[103] I well appreciate the implications for the business of Harris Bros. I understand that it may well be that work was performed by Harris Bros. and topsoil was delivered to the Property, the cost of which cannot now be recovered by Harris Bros. from Mud Creek. And that result, no doubt, may seem harsh in the eyes of Mr. Harris.
[104] At the same time, I should think that it seemed harsh in the eyes of Mr. Corsini to receive an invoice – called a “progress billing” invoice, mind you, and not a final invoice – for $130,763. 61, when, on his evidence, he believed the contract price was some $10,000, as reflected in the Initial Quote. Even imputing to Mr. Corsini constructive knowledge of the $40,000 Purchase Order, receiving an invoice for more than three times the contract price would certainly have provoked a reaction that the invoice was both unreasonable and unfair, if not more.
[105] And it must be said that Mr. Harris was in a position to avoid the whole problem in the first instance.
[106] As I have said, it is common ground that in early May 2014, Mr. Corsini and Mr. Harris had a telephone conversation during which Mr. Corsini advised Mr. Harris that Mud Creek had assumed the Harris Bros. contract for the Property. It is also common ground that shortly after that initial telephone conversation, Mr. Corsini and Mr. Harris met on site to discuss, albeit briefly, the work.
[107] At that point in time, Harris Bros. had barely begun its work. Indeed, it is not clear from the evidence before the court whether, at that point, Harris Bros. had even begun to deliver any topsoil to the various towers. Their forces were engaged in screening the on-site topsoil for a considerable length at the outset of the work. As such, if the question of the $40,000 Purchase Order had been raised at that initial May 2014 juncture, one wonders whether this entire litigation might have been avoided.
[108] And who was in the best position to raise that question? Mr. Harris, of course.
[109] Leaving aside the evidence of Mr. Corsini that he had never seen the Purchase Order before the litigation was commenced, I would ask what was the state of knowledge of Mr. Harris as of early May 2014, when Messrs. Corsini and Harris had their telephone conversation and on-site meeting about the assignment of the contract to Mud Creek. Mr. Harris’s understanding of the situation at that point included the following:
a. Mr. Harris knew that the Original Quote of January 9, 2014, had been replaced, to his mind, by the Purchase Order of March 31, 2014.
b. Mr. Harris certainly knew the identity of the representatives of H.B. White with whom he had dealings about both the Original Quote and the Purchase Order, and in both instances that person was Mr. Tripp.
c. On his own evidence, Mr. Harris knew that he had no dealings at the time with Mr. Corsini about either the Original Quote or the Purchase Order at that time. He dealt with Mr. Tripp; he had no dealings with Mr. Corsini.
d. Mr. Harris could therefore have no reasonable expectation that Mr. Corsini would have any knowledge of the terms of either the Original Quote or the Purchase Order. Indeed, there is no reasonable basis on the evidence before me that indicates that Mr. Harris had any reason to believe that Mr. Corsini had even ever seen either document before.
e. Mr. Harris knew that there had been a significant increase in the total price of the contract price, going from the $10,000+ price under the Original Quote to the $40,000+ price under the Purchase Order.
f. On his evidence, Mr. Harris said that he had discussions with Mr. Tripp about the Purchase Order being an “open” purchase order and that they agreed that the stated $40,000 purchase price was just to get the work started. Even accepting that evidence for the moment, it is clear that Mr. Harris knew that Mr. Corsini was not privy to those discussions with Mr. Tripp. Moreover, given that none of those alleged terms is actually expressed in the provisions of the Purchase Order itself, Mr. Harris would have known or ought to have known that Mr. Corsini would have had no knowledge of such unexpressed intentions unless someone – Mr. Harris – had told him.
[110] And so, during the early May 2014 telephone conversation and on-site meeting with Mr. Corsini, when Mr. Corsini advised Mr. Harris that Mud Creek had assumed the Harris Bros. contract, what did Mr. Harris say about any of the above?
[111] Nothing.
[112] On his own evidence, Mr. Harris testified that he never had any discussions with Mr. Corsini about the $40,000 Purchase Order. And, specifically, he testified that he did not raise the issue with Mr. Corsini during their early May 2014 dealings. He remained silent.
[113] I have to say, I am puzzled by that silence. That is, when Mr. Corsini first said to Mr. Harris that Mud Creek had assumed the Harris Bros. contract, knowing what Mr. Harris knew at the time – and, in particular, given that Mr. Harris knew that Mr. Corsini had not been involved and did not participate in the previous dealings with Mr. Tripp and H.B. White concerning the Purchase Order – why would Mr. Harris not simply have said to Mr. Corsini some words to the effect of, “okay, when you say you assumed the ‘contract,’ just so you know, there is a Purchase Order dated March 31, 2014, and I have a binding contract with H.B. White for at least $40,000, and in fact, we agreed that it is an ‘open’ purchase order, and so if you say that Mud Creek has now assumed that contract, you should know that I understand that Harris Bros. can charge well beyond the stated $40,000 purchase price …”? Why not raise any of that with Mr. Corsini? Why did Mr. Harris raise none of that?
[114] It seems to me that, if Mr. Harris had raised those issues in early May 2014, the matter would have come to a head at that point, and Mr. Corsini would then have had an opportunity to indicate whether Mud Creek was agreeable to these unknown contractual provisions and unexpressed intentions or not. It would have got sorted out at that point.
[115] In a similar vein, given that the stated contract price of the Purchase Order was $40,000, when Mr. Harris knew that Harris Bros. was well and truly exceeding that $40,000 marker or, earlier, was going to exceed that $40,000 amount – again, the ultimate “progress billing” invoice of $130,763.61 was more than three times the contract price in the Purchase Order – did it not behoove Mr. Harris to go to Mr. Corsini and advise him that the work was going to exceed the $40,000 marker? By more than some three times?
[116] But Mr. Harris did none of that. As I said at the outset of these reasons, this case is about a failure to communicate.
[117] And I also said that this case is about the protection of the reasonable expectations of the parties. In that regard, to my mind, para. 2 of the Terms and Conditions attached to the Purchase Order was intended to serve as the arbiter of reasonable expectations within the context of the contract reflected in the accepted Purchase Order. Paragraph 2 contemplated and, in my view, required that if Harris Bros. wished to seek an amendment, i.e., addition, to the contract price of $40,000, they were required to obtain the written consent of Mud Creek. That would have required that Harris Bros. raise the issue with Mud Creek in advance. Mud Creek would then have been in a position to agree with the extras or disagree. The parties’ reasonable expectations would have been protected.
[118] But that did not happen.
[119] Mr. Harris and Harris Bros. were in possession of all the relevant information. Mr. Corsini and Mud Creek were not. Given the failure of Mr. Harris and Harris Bros. to act on that relevant information, the reasonable expectations of Mr. Corsini and Mud Creek should be protected.
[120] I find that, in accordance with the terms of the Purchase Order, there was never any express written (or other) agreement by Mud Creek to exceed the $40,000 contract price under the Purchase Order, as required by para. 2 of the Purchase Order’s Terms and Conditions. Indeed, there was certainly never any agreement, whether written or otherwise – or, I would add, knowledge – by Mud Creek to pay the invoiced amount of $130,763. 61 – again, more than three times the expressed $40,000 contract price under the Purchase Order.
[121] Accordingly, the plaintiff’s claim for any amount beyond the $40,000 contract price under the Purchase Order must be disallowed.
[122] That said, I am satisfied, on all of the evidence before me, that the plaintiff supplied time and materials to the Property of at least $40,000.
[123] Therefore, I find that the plaintiff should have judgment against Mud Creek in the amount of $40,000, plus HST of $5,200 (in accordance with the provisions of the Purchase Order), for a total amount of $45,200.
[124] It is common ground that Mud Creek has already paid the amount of $10,142.88 to Harris Bros.
[125] In the result, the plaintiff shall have judgment against Mud Creek in the total amount of $35,057.12, being the total principal obligation of $45,200, less the amount already paid by Mud Creek of $10,142.88, together with prejudgment interest on the outstanding balance of $35,057.12 from August 14, 2014, in accordance with s. 127 of the Courts of Justice Act. [24]
In the alternative, has the plaintiff established that its claim should succeed on the basis of the doctrines of quantum meruit and/or unjust enrichment?
[126] Given my findings in favour of the plaintiff on its contract claim, there is no need to address the relative merits of the plaintiff’s alternative claim based on the doctrines of quantum meruit and/or unjust enrichment. Clearly, that alternative claim cannot succeed.
[127] I have found that the parties’ relationship here was governed by contract. The labour and material supplied by Harris Bros. was performed pursuant to a binding contract, as reflected in the accepted Purchase Order. As such, the terms of the parties’ relationship here were governed by contract.
[128] In the circumstances of the instant case, there is no room for the doctrines of quantum meriut or unjust enrichment.
[129] The three elements of a valid claim for unjust enrichment are not in dispute here. The third element of an unjust enrichment claim – being, the absence of a juristic reason – was described by the Supreme Court of Canada in its landmark decision in Kerr v. Baranow, 2011 SCC 10, [25] in the following terms:
The third element of an unjust enrichment claim is that the benefit and corresponding detriment must have occurred without a juristic reason. To put it simply, this means that there is no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff, making its retention “unjust” in the circumstances of the case: …
Juristic reasons to deny recovery may be the intention to make a gift (referred to as a “donative intent”), a contract , or a disposition of law … [26] [Emphasis added.]
[130] A claim for recovery based on quantum meruit will be denied where the parties’ relationship at the relevant time was governed by a contract:
In my view, Ariston cannot claim its commission on the basis of quantum meruit for services provided pursuant to the listing agreement during the term of the agreement. Such services are governed by the agreement. The introduction of Context to the property was a service provided pursuant to and during the term of the agreement.
The existence of the agreement is a juristic reason for refusing Ariston's claim for its commission on the basis of quantum meruit : Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 (S.C.C.), at para. 41 . Equity cannot imply and substitute another contract with conflicting terms in place of the listing agreement. [27]
[131] Accordingly, in my view, the plaintiff’s claims on the basis of the doctrines of quantum meruit and unjust enrichment must fail.
Have the defendants established that their counterclaim should succeed?
[132] The defendants’ counterclaim must be dismissed.
[133] Pursuant to para. 39(c) of their statement of defence and counterclaim, the defendants claim recovery of the amount of $10,124.80 – being the amount they paid to Heyink for completion of the work at the Property – for “the cost to remedy the deficient and/or incomplete work of the Plaintiff.”
[134] In fairness, it was not a matter of the plaintiff providing deficient work that the defendants were required to remedy; rather, the defendants’ claim was that they engaged another contractor (Heyink) to complete the work that they had prohibited the plaintiff from completing.
[135] Under the Purchase Order, Mud Creek was to be billed for time and services rendered by Harris Bros.
[136] Harris Bros. had not completed all of the work at the time that Mud Creek terminated the contract in August 2014. Mud Creek then prohibited the Harris Bros. forces from attending at the Property to complete the work.
[137] In these circumstances, the defendants’ counterclaim must fail.
Is there any merit to the various claims that the personal defendants are personally liable?
[138] On the main claim, the plaintiff elected to sue Mr. Corsini in his personal capacity, along with Mud Creek. On the counterclaim, the defendants elected to sue Mr. Harris in his personal capacity, along with Harris Bros.
[139] In my view, there is no merit to the claims against either of those personal defendants. I agree with the very fair observation by Mr. Serafimovski that there is simply no evidence that supports any finding of liability against either Mr. Corsini or Mr. Harris in their personal capacity on those claims.
[140] In closing argument, I put the question to Mr. MacLean to seek his consent to a dismissal of the claims against the personal defendants, and his only reservation was that, he thought, there might be some question as to Mr. Corsini’s personal liability on the claim for quantum meruit .
[141] While, respectfully, I disagree and would not have found Mr. Corsini liable on the quantum meruit claim in the circumstances of the instant case, given that, in my view, there is no merit to the quantum meruit claim in any event, the action against Mr. Corsini in his personal capacity must fail.
[142] Moreover, in closing argument, Mr. MacLean very fairly (and in my respectful view, correctly) conceded that if the court were to find that there was a binding contract between Harris Bros. and Mud Creek – as I have found here – then there is no valid claim against Mr. Corsini in his personal capacity.
[143] In the result, both the plaintiff’s action against Mr. Corsini in his personal capacity and the defendants’ counterclaim against Mr. Harris in his personal capacity shall be dismissed.
Conclusion
[144] The plaintiff’s action shall be dismissed as against the personal defendant, Carlo Corsini.
[145] The defendants’ counterclaim shall be dismissed as against the personal defendant to the counterclaim, Peter Edward Harris.
[146] The balance of the plaintiff’s action as against Mud Creek shall be allowed to the extent that there shall be judgment in favour of Harris Bros. against Mud Creek in the amount of $35,057.12, together with prejudgment interest on that amount in accordance with s. 127 of the Courts of Justice Act, calculated from August 14, 2014.
[147] The balance of all other claims, including the defendants’ counterclaim, are dismissed.
Costs
[148] My presumptive view is that success on the trial was very much divided and that, accordingly, there should be no order as to costs. Each party should bear their own costs.
[149] As such, I have every hope – and expectation – that counsel for the parties will be able to resolve the question of costs of the proceeding amongst themselves, given, inter alia , my presumptive view as to the apparent divided success of the parties at trial.
[150] That said, if the parties should find themselves unable to agree on the questions of costs, they may file brief written submissions with the court, of no more than five (5) double-spaced pages (exclusive of any costs outline, bill of costs, dockets, offers to settle, or authorities), in accordance with the following schedule:
a. The defendants shall deliver their submissions within twenty (20) days following the release of these reasons.
b. The plaintiff shall deliver its submissions within twenty (20) days following service of the submissions of the defendants.
c. The defendants shall deliver their reply submissions, if any, which shall be limited to no more than three (3) double-spaced pages, within five (5) days following service of the plaintiff’s responding submissions.
d. If any party fails to deliver their submissions in accordance with this schedule, they shall be deemed to have waived their rights with respect to the issue of costs, and the court may proceed to make its determination in the absence of their input or give such directions as the court considers necessary or advisable.
Original signed by Justice J. Paul R. Howard
J. Paul R. Howard
Justice
Released: January 25, 2023
[1] It is common ground that the name of the Project Company has changed over the years as the company has been transferred to different corporate entities. It is common ground that, for the purposes of this litigation, the actual identity or name of the corporate entity is not material.
[2] The defendants entered as an exhibit a copy of their vendor ledger for Harris Bros., which indicates that from January 2001 to August 14, 2014, a total of $641,610.12 had been paid to Harris Bros. See Exhibit 28.
[3] The evidence of Mr. Raymond Vandevelde, the property manager at Mud Creek, was that the towers were erected in 2012 but the project took more than a year to complete.
[4] That said, in the email correspondence passing between Messrs. Harris and Tripp, the latter’s email signature identified him as a Project Director with Infrastructure & Energy Alternatives LLC, under an “IEA” logo. However, it is plain from a review of all the evidence that Mr. Tripp appears to have had the ostensible authority to speak on behalf of H.B. White (see, for example, Exhibit 9) and, clearly, Mr. Harris regarded him as such. I note from Exhibit 4 that the original quotation of January 9, 2014, was sent by Mr. Harris addressed to “H.B. White Canada Corp., Attn: Jeffrey Tripp.” Mr. Tripp did not testify at trial. I was advised in closing argument that both parties were intent upon calling Mr. Tripp but he could not be located. As such, I draw no adverse inference against any party based on the failure of Mr. Tripp to testify at trial.
[5] See Exhibit 4.
[6] The evidence at trial was that the volume of each “load” of topsoil (per tri-axle dump truck) was 12 cubic metres. See Exhibit 14.
[7] I refer to Mr. Vandevelde as “Ray” only because Ray’s son, Mr. Tyson Vandevelde, also testified at trial, and I wish to be clear to distinguish between the two witnesses. It goes without saying, and I wish to make it perfectly clear, that my use of Mr. Vandevelde’s given name is certainly not meant as any sign of disrespect.
[8] See Exhibit 8, which consists only of pp. 54-55 and 57 of the documents appearing at tab 14 of the parties’ Joint Book of Documents.
[9] A notation to the stated $40,000.00 purchase price indicates that the “Currency is CAD” and that “HST is not included on the PO but will be paid with the invoice.”
[10] See Exhibit 10.
[11] See Exhibit 10.
[12] I note that the total of the loads itemized in the invoice is 274.
[13] See Exhibit 12.
[14] That amount was paid by Mud Creek’s cheque dated August 14, 2014, which was enclosed with the letter of the same date from Mud Creek’s solicitor to Harris Bros. See Exhibit 13.
[15] See Exhibit 26.
[16] See Exhibit 27.
[17] S.M. Waddams, The Law of Contracts , 8th ed. (Toronto: Thomson Reuters, 2022), at 97. See also, ibid. , at 479: “All definitions of the law of contracts include an element of enforceability: a promise or a set of promises for the breach of which the law gives a remedy, an agreement giving rise to legally enforceable obligations, realization of reasonable expectations induced by promises.”
[18] A.L. Corbin, Corbin on Contracts , (St. Paul, West Pub. Co., 1952), at 1. See also A. Swan & J. Adamski, Canadian Contract Law , 3rd ed. (Toronto: LexisNexis Canada, 2012), at 15, para. 1.27: “At a very basic level the purpose or function of the law of contracts is to protect the reasonable expectations of the parties to any contract.”
[19] Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, 450 D.L.R. (4th) 105 [ Strata Plan ].
[20] Ibid. , at para. 23.
[21] Ibid. , at para. 31.
[22] ATCO Electric Ltd. v. Alberta (Energy & Utilities Board), 2004 ABCA 215, 31 Alta. L.R. (4th) 16.
[23] Ibid. , at para. 77. [Footnotes omitted.] See also Swan & Adamski, at 634-635; Consolidated Bathurst Export Ltd. v. Mutual Boiler & Machinery Insurance Co., [1980] 1 S.C.R. 888, 112 D.L.R. (3d) 49, at 901 per Estey J.; and Ventas Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205, 85 O.R. (3d) 254, at para. 24 per Blair J.A.
[24] Courts of Justice Act, R.S.O. 1990, c. C.43, s. 127.
[25] Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, 328 D.L.R. (4th) 577.
[26] Ibid. , at paras. 40-41.
[27] Ariston Realty Corp. v. Elcarim Inc., 2014 ONCA 737, 378 D.L.R. (4th) 197, 47 R.P.R. (5th) 169, at paras. 26-27 .