Court of Appeal for Ontario

Citation: Allto Construction Services Ltd. v. Toronto and Region Conservation Authority, 2017 ONCA 488

Date: 2017-06-12

Docket: C61686

Judges: Weiler, van Rensburg and Huscroft JJ.A.

Between

Allto Construction Services Ltd. Plaintiff/Appellant

and

Toronto and Region Conservation Authority, Aplus General Contractor Inc., Peter Martins, Accent Building Sciences, and Naji Hassan Defendants/Respondent

Counsel

Doug LaFramboise, for the appellant

Lena Wang, for the respondent

Heard: June 5, 2017

On appeal from: the order of Justice P. Sutherland of the Superior Court of Justice, dated January 11, 2016.

Reasons for Decision

Introduction

[1] The appellant Allto Construction Services Ltd. ("Allto") sued the respondent Aplus General Contractor Inc. ("Aplus") for $163,202.98, the amount alleged to be owing under a subcontract to install a sewage system during the construction of a pool for the Heart Lake Conservation Area for the Toronto and Region Conservation Authority (the "Owner"). The appellant appeals the trial judgment dismissing its claim.

[2] At the conclusion of oral argument, we allowed the appeal for reasons to follow. These are those reasons.

Discussion

[3] In our view the trial judge erred in principle when he concluded that the appellant did not prove it was owed the amount it claimed.

[4] In its amended statement of defence Aplus denied owing the amount claimed, pleaded that during its work Allto damaged an on-site irrigation system for which Aplus incurred repair expenses of $33,611.85, and asserted that Allto had overbilled Aplus $5,135.85 for additional risers which were included within its original scope of work. Aplus asserted a set-off and counterclaim in the amount of $38,747. Allto also pleaded that it was a term of the parties' contract that payment would be made only if and when Aplus received payment for the work from the Owner. While the original statement of defence asserted that Allto had not yet been paid by the Owner, this was removed from the amended pleading.

[5] In her opening to the trial judge, Aplus's counsel described the theory of the defence case as "quite simple" – that Allto had overbilled Aplus (for an extra for risers) and that Allto damaged the irrigation system as part of its work, did not fix the damage and that Aplus incurred expenses to repair the damage.

[6] Two witnesses testified at trial. The appellant's witness, Larry Acchione, identified the purchase order issued by Aplus. He testified that the work had been performed. He confirmed, under cross-examination, that Allto was owed the amount claimed in the statement of claim ($163,202.98). The respondent's witness, Sanjeev Desai, did not contradict any of this evidence and confirmed the work had been performed without deficiencies. By the end of the trial it was obvious that Allto was not claiming for the amount that Aplus asserted was an extra. The only material point of dispute in the evidence was with respect to whether Aplus had damaged a sprinkler head in the irrigation system, and the cost of its repair.

[7] In his reasons for judgment dismissing the action, the trial judge stated that the evidence showed, on a balance of probabilities, that the parties entered into a contract for a price of $288,150, that Allto performed the work with no deficiencies, and that there was an amount outstanding for the work it performed. He referred to submissions that there was no evidence at trial of invoices for the work performed or an accounting of the amount billed by Allto and paid by Aplus. The trial judge dismissed Allto's claim after finding that Allto failed to meet its burden to satisfy the court it was owed the amount claimed in the statement of claim.

[8] The trial judge also dismissed Aplus's counterclaim. He found that Allto had damaged the irrigation system, but rejected Aplus's evidence on the repair cost of $33,611.85, as well as the argument that the repair cost had been admitted by Aplus.

[9] In our view, the trial judge's reasons demonstrate reversible error. The central issue in this case was whether Allto caused damage to an irrigation system sprinkler head, if so, the reasonable cost of repair, and whether Aplus was entitled to a set-off for this amount from the balance of the contract price. While Aplus denied the amount owing, it admitted the contract (which it confirmed through a purchase order), and Allto's performance of the work. Other than the claimed set-offs, there was no other credit claimed by Aplus. Mr. Acchione provided oral evidence that the amount claimed had not been paid. In the circumstances of this case, this was sufficient to establish Allto's outstanding claim. There was no requirement for any further proof through invoices or a statement of account.

[10] The respondent asked that, if this court were to allow the appeal, any judgment should be reduced by the cost of its repairs to the irrigation system, notwithstanding that its counterclaim was refused by the trial judge and there is no cross-appeal. The respondent says that the trial judge erred in rejecting its evidence on this issue, and in failing to give effect to deemed admissions from an unanswered request to admit. We do not give effect to this argument.

[11] First, the respondent's claim for set-off was not made out on the trial record. The trial judge charitably described Aplus's evidence of the cost to repair the damaged sprinkler head as "unreliable". On its face, Aplus's documentation was suspect and the amount for the repair of a sprinkler head unreasonable. Second, the trial judge was entitled to interpret the deemed admissions as he did – as admitting an entitlement to a back-charge but not a right to the amount the respondent claimed.

[12] In these circumstances, there is no basis for a set-off to the amount claimed by the appellant.

Disposition

[13] The appeal is therefore allowed. The appellant shall have judgment for the sum of $174,518.38. This amount includes pre-judgment interest under the Courts of Justice Act, R.S.O. 1990, c. C.43 in the sum of $11,315.40, calculated at the rate of 1.3% per annum from the date of issuance of the statement of claim, February 7, 2012.

[14] The trial judge's costs award is set aside and the appellant shall have its costs of the action in the sum of $16,000. Costs of the appeal to the appellant in the sum of $7,800, inclusive of HST and disbursements.

"K.M. Weiler J.A."

"K. van Rensburg J.A."

"Grant Huscroft J.A."