Tas-Mari Inc. v. DiBattistaGambin Developments Limited

DiBattistaGambin Developments Limited v. Tas-Mari Inc. et al. DiBattistaGambin Developments Limited v. Fernbrook Homes (Creditview) Limited et al. Ballantry Homes (Fletcher's Meadow) et al. v. DiBattistaGambin Developments Limited [Indexed as: Tas-Mari Inc. v. DiBattistaGambin Developments Ltd.]

109 O.R. (3d) 603

2011 ONCA 189

Court of Appeal for Ontario,

Laskin, MacPherson and LaForme JJ.A.

March 10, 2011*

• This judgment was recently brought to the attention of the editors.

Construction law -- Contract -- Trial judge properly finding that developer was not entitled to bill builders for certain repairs in residential building project because it had not complied with notice provision in agreement with builders -- Notice provision not ambiguous -- Developer not making out case of promissory estoppel based on builders' [page604] payment of some invoices despite lack of notice -- Developer's own evidence establishing that its determination to disregard notice provision was not affected by anything that builders did -- Trial judge not erring in requiring builders to post security to cover possibility that developer would call on them for their shares of cost of repairs ordered by municipality -- Builders having clear contractual obligation to maintain security deposit.

The trial judge held that the appellant, a developer, was not entitled to bill builders for certain repairs in a residential building project because it had not complied with a notice provision in art. 11.05 of agreements between it and the builders. The appellant appealed. The respondents cross- appealed an order requiring them to post security to continue to cover the possibility that the appellant would call on them for their shares of the cost of repairs ordered by the municipality.

Held, the appeal and cross-appeal should be dismissed.

Article 11.05 was not ambiguous, and the trial judge did not err in finding that the notice provision was not restricted to requiring notice only for repairs that were ordered on the lots actually developed by each builder. Moreover, the trial judge did not err in finding that the appellant had not made out a case of promissory estoppel on the basis of the respondents' payment of several invoices despite the lack of notice. The appellant's own evidence demonstrated a determination to disregard the notice provision; nothing the respondents did affected that determination.

The trial judge did not err in requiring the respondents to post security. They had a clear obligation to maintain a security deposit in accordance with the agreement.

APPEAL AND CROSS-APPEAL from judgments of Gray J. (2009), 2009 CanLII 41355 (ON SC), 97 O.R. (3d) 579, [2009] O.J. No. 3296 (S.C.J.) in two joined actions.

Robert D. Malen, for appellant/respondent by way of cross- appeal DiBattista*Gambin Developments Limited. Alistair Riswick, for respondent Tas-Mari Inc. Brett D. Moldaver, for respondents/appellants by way of cross-appeal Ballantry Homes (Fletcher's Meadow) Inc., David Hill, David N. Hill, Atul Vanmali, Devonlea Estates Inc. and Bobby Bhoola.

Endorsement

[1] Endorsement BY THE COURT: -- The appellant DiBattista*Gambin Developments Ltd. ("DBG") appeals from the judgments of Gray J. dated August 5 and October 20, 2009. In these judgments, which followed a two-week trial of two joined actions, the trial judge held that DBG was not entitled to bill the respondent builders for certain repairs in a residential building project because DBG had not complied with a notice provision in the agreements between the developer DBG and various builders. [page605]

[2] In the same judgments, the trial judge held that the respondents Devonlea Estates Inc., David Hill and Bobby Bhoola had to post security to continue to cover the possibility that DBG would call on them for their shares of the cost of repairs ordered by the municipality.

[3] DBG appeals on the notice issue. Devonlea, Hill and Bhoola cross-appeal on the posting of security issue.

The Appeal

[4] DBG submits that the trial judge erred in his interpretation of art. 11.05 of the contract, which provides:

11.05 Notice: In no event shall the Vendor, at the Purchaser's expense, repair any damage or draw upon the Security Deposit, prior to providing to the Purchaser written notice specifying the Damage or default complained of and allowing seven (7) days for the Purchaser to remedy such default or repair the Damage or commence and diligently undertake repair of the Damage or cure of such default within a reasonable time as determined by the Vendor but not exceeding 15 days from delivery of the written notice thereof by the Vendor[.]

[5] In many instances, DBG did not provide the notice required by art. 11.05 to the builders with respect to repairs in the common areas of the multi-builder project on the basis that art. 11.05 required notice only for repairs that were ordered on the lots actually developed by each builder. The trial judge held that this was too narrow a reading of the provision and that, therefore, the builders did not have to contribute towards repairs for which they had received no notice.

[6] On appeal, DBG submits that the trial judge erred in his interpretation of art. 11.05 by not properly considering (i) the agreement as a whole; (ii) the factual matrix within which the agreement was made; and (iii) repairs "within the lot lines" as an implied term of the contract. Further, DBG submits that the trial judge erred in not holding that art. 11.05 was, at the very least, ambiguous. Because of this ambiguity, the post-contractual conduct of the builders (in paying invoices from DBG and raising no complaints about notice) was relevant in that it indicated that the builders held the same interpretation as did DBG.

[7] Finally, DBG relies on the doctrine of promissory estoppel. DBG contends that by paying several invoices, though no notice had been given, the builders represented that notice was not required, and DBG relied on those representations.

[8] We called on the respondent builders on DBG's submission on promissory estoppel. [page606]

[9] On the interpretation of the agreement, we agree with the trial judge that art. 11.05 was not ambiguous and, on its clear language, covered services within and outside the lot lines. We also agree with the trial judge that there is no basis to imply a "within the lot lines" term into art. 11.05. Such an implied term might, as the trial judge recognized, have made the agreement work more efficiently, but it is far from an obvious term. Other provisions of the agreement -- for example, art. 10.04 -- show we cannot presume the parties intended that the notice requirement in art. 11.05 was to be confined to services within the lot lines.

[10] Finally, we are not persuaded that the trial judge erred in finding that DBG had not made out a case of promissory estoppel. Mr. DiBattista's own evidence demonstrated that for his own reasons he was determined to disregard the notice provision. Nothing the respondents did affected his decision to do so.

[11] Accordingly, the appeal is dismissed.

The Cross-Appeal

[12] Devonlea Estates Ltd. seeks to reverse the term of the trial judge's order requiring it to post security (now reduced to half the original amount under the agreement). Mr. Hill and Mr. Bhoola seek to reverse the term of the judgment requiring them to personally post the security.

[13] We do not agree with either of these submissions. On the first issue, the builders had a clear obligation to maintain a security deposit in accordance with the agreement. Devonlea did not do this and the trial judge made an order that simply reinstated this component of Devonlea's obligation. On the issue of the personal liability of Mr. Hill and Mr. Bhoola, in the light of the structure of Devonlea and the roles of Mr. Hill and Mr. Bhoola, the trial judge's decision to assign personal liability to them was consistent with the cases he cited in para. 125 of his judgment.

[14] In the end, we are satisfied that the trial judge interpreted the agreement in a sensible way that was fair to all parties. The effect of the trial judge's decision was to remedy, fairly, each side's breach of some of the provisions of the agreement.

[15] Accordingly, the cross-appeal is also dismissed.

Costs

[16] DiBattistaGambin Developments Ltd. shall pay the respondent, Tas-Mari Inc., its costs of the appeal the amount of $20,000, plus disbursements and applicable taxes. [page607] DiBattistaGambin Developments Ltd. shall also pay the respondents, Ballantry Homes (Fletcher's Meadow) Inc. David Hill, David N. Hill, Atul Vanmali, Devonlea Estates Inc. and Bobby Bhoola, their costs of the appeal in the amount of $20,000, plus disbursements and applicable taxes. In turn, those respondents as cross-appellants shall pay DiBattista*Gambin Developments Ltd. its costs of the cross-appeal in the amount of $10,000, plus disbursements and applicable taxes.

Appeal and cross-appeal dismissed.