The Birkshire Group Inc. v. Wilkes et al. Wilkes et al. v. Fiume et al.
[Indexed as: Birkshire Group Inc. v. Wilkes]
Ontario Reports
Court of Appeal for Ontario
G.J. Epstein, van Rensburg and Fairburn JJ.A.
July 11, 2018
142 O.R. (3d) 476 | 2018 ONCA 631
Case Summary
Judgments and orders — Reasons for judgment — Trial judge reopening case to hear evidence of two witnesses after determining that it could bear on material issue of respondents' credibility — Trial judge ultimately finding respondents to be credible without referring to witnesses' evidence — Trial judge's reasons for judgment deficient — Appellants' appeal allowed.
The appellants hired the respondent B Inc. to perform construction work on their home. B Inc. registered a construction lien against the residence and sued for what it claimed was the balance owing under the contract. The appellants denied that there was any further amount owing and claimed that there were deficiencies and damages caused by the work. They counterclaimed in the construction lien action and started an action against the other respondents (the wife of B Inc.'s principal and her company). After the evidence was concluded at trial, the trial judge granted the appellants' motion to reopen the case to hear the evidence of two witnesses on the basis that that evidence could bear on material issues at trial, including the issue of the respondents' credibility. Ultimately, the trial judge found the respondents to be credible without referring to the evidence of those witnesses. He awarded B Inc. damages, recognized a lien on the property, and dismissed the action against the other respondents. The appellants appealed.
Held, the appeal should be allowed.
The trial judge's reasons for judgment were deficient. It was incumbent on the trial judge, having pre-determined the materiality of the witnesses' evidence, to at least advert to that evidence and resolve the discrepancies between that evidence and the evidence of the respondents. In the absence of any mention of the witnesses, it was impossible to know whether and why the trial judge accepted or rejected the evidence or if it impacted his credibility findings. The trial judge's failure to address evidence relevant to the parties' credibility also precluded effective review of the issue of whether B Inc.'s lien was perfected in time.
Cases Referred To
- Dovbush v. Mouzitchka (2016), 131 O.R. (3d) 474, 2016 ONCA 381
- R. v. H. (J.M.) (2011), 113 O.R. (3d) 80, [2011] 3 S.C.R. 197, 2011 SCC 45
Statutes Referred To
Appeal
APPEAL from the judgment of M.L. Edwards J., [2013] O.J. No. 4350, 2013 ONSC 5703 (S.C.J.).
Peter-Paul E. Du Vernet, for appellants.
Kevin Sherkin and Jeremy Sacks, for respondents.
Reasons for Judgment
[1] BY THE COURT: -- This appeal arises out of litigation concerning a home renovation. The appellants retained the respondent the Birkshire Group Inc. ("Birkshire") to perform work on their home. Renovations began in December 2006 and continued into the spring of 2007. As of April 2007, the appellants had paid the sum of $60,000. At that point, the relationship between the parties had deteriorated. Birkshire registered a construction lien against the residence and sued for the balance of what it claimed under the parties' contract. The appellants denied that any further amount was owing, and they claimed there were deficiencies and damages caused by the work. They counterclaimed in the construction lien action and started an action against the other respondents, Maria Fiume (the wife of Michael Fiume, the principal of Birkshire) and her company.
[2] The actions were tried together. The trial judge concluded that the contract price was $122,565. After crediting the appellants for the amount they already paid, and for some deficiencies and damages, he awarded Birkshire damages of $50,000, prejudgment interest of $13,398.24 and costs of $83,500. He recognized a lien on the property for the total amount of $146,898.24 and dismissed the action against Ms. Fiume and her company.
[3] The appellants raise three issues on appeal. It is sufficient for the determination of the appeal to deal only with the first issue, which concerns the trial judge's failure to refer to the evidence of two witnesses called by the appellants in his reasons for judgment.
[4] After the evidence was concluded, and on the day closing arguments were to take place, the appellants brought a motion to reopen the case so that two former employees of Birkshire could testify. The motion was supported by affidavits from the two proposed witnesses setting out their intended evidence. Among other things, one of the former employees, Chris Derewonko, claimed that he built bathroom vanities at the Wilkes' residence. He did so based upon verbal instructions given to him by Ms. Fiume. Mr. Derewonko maintained in his affidavit that "[a]fter the court action began", Mr. Fiume showed him a photograph of one of the vanities and asked him to make a drawing from the photograph. That drawing was attached as an exhibit to the Derewonko affidavit, filed in support of the appellants' request to reopen the case.
[5] The vanity drawing that Mr. Derewonko said he had prepared after the litigation began duplicated a drawing that had been previously entered as an exhibit at trial. Ms. Fiume had testified about the vanity drawings and suggested that they had been prepared and approved prior to the vanities being installed.
[6] In his ruling permitting the Wilkes to reopen their case to, among other things, have Mr. Derewonko testify, the trial judge noted that the proposed evidence bore on material issues at trial, including the credibility of the respondents: "The evidence of Chris Derewonko, if believed, raises credibility issues as they relate to the evidence adduced by [the respondents] regarding drawings that have been entered into evidence in this trial."
[7] The parties disagree about the import of Mr. Derewonko's viva voce evidence at trial. The respondents maintain that his evidence is unclear and difficult to follow from the transcript. Although we agree that Mr. Derewonko's evidence is not a model of clarity, it is clear that he testified that he had been asked by Mr. Fiume a couple of years before he testified (being at least a few years after the litigation commenced), to prepare a drawing of a bathroom vanity he had built without a drawing. His evidence on that point is in direct conflict with Ms. Fiume's evidence that Ms. Wilkes had approved the construction of all of the vanities after she was shown the drawings.
[8] The trial judge accepted the Fiumes' evidence as entirely credible. He did so without making any reference to Mr. Derewonko's evidence in his reasons for judgment.
[9] The respondents argue that there is no requirement for a trial judge to "refer to every item of evidence considered or to detail the way each item of evidence was assessed" (see R. v. H. (J.M.) (2011), 113 O.R. (3d) 80, [2011] 3 S.C.R. 197, 2011 SCC 45, at para. 32). They submit that there are very good reasons for the trial judge to have rejected the evidence of Birkshire's two former employees, or to have considered it to be irrelevant to the issues at hand. In their view, even if credibility played a role, there is no reason to interfere with the trial judge's factual findings since he effectively explained why he preferred the respondents' evidence over that of the appellants.
[10] We disagree. Considering the record as a whole, including the fact that the trial judge reopened the case to hear the evidence of the two witnesses after determining that it could bear on the material issue of the respondents' credibility, the trial judge's failure to address this evidence in his reasons creates problems on appeal. Credibility played an important role in the trial, in which the central issue was the scope and terms of the home renovation contract. The trial judge rejected the evidence of the appellants on several points and he explained why he preferred the evidence of the respondents. If Mr. Derewonko's evidence had been accepted, it would have meant that a drawing that was introduced by the respondents at trial as being contemporaneous with Birkshire's work, was created well after the litigation had commenced. Such evidence could have had a material effect on the credibility of the respondents, and indeed on the administration of justice.
[11] Although we specifically refrain from commenting upon the credibility of the evidence led by the appellants when they reopened their case, it was incumbent on the trial judge to at least advert to the evidence and resolve it. This is particularly true given that the trial judge had pre-determined the materiality of the evidence, acknowledging that it was sufficiently probative of credibility to justify the exercise of his discretion in favour of reopening the case.
[12] As this court noted in Dovbush v. Mouzitchka (2016), 131 O.R. (3d) 474, 2016 ONCA 381, at para. 29, "[a] trial judge owes the losing party an explanation for rejecting [the] evidence of a key witness or witnesses . . . and, while the absence of such an explanation is not necessarily dispositive, it may go a long way toward putting the reasons beyond the reach of meaningful appellate review". Unfortunately, that is the result in the present case. In the absence of any mention of these witnesses, and having regard in particular to the potential importance of Mr. Derewonko's evidence to the question of the respondents' credibility, it is impossible to know whether and why the trial judge accepted or rejected the evidence or if it impacted his credibility findings.
[13] Another issue in the proceedings was whether Birkshire's construction lien was perfected in time in accordance with the requirements of the Construction Lien Act, R.S.O. 1990, c. C.30. In particular, for the lien to be valid it was necessary for contract work exceeding $1,000 to have been performed (which would fix the contract completion date) after a certain date (which was identified by the trial judge as April 4 or 6, 2007). The parties disagreed about whether the work that was done during the relevant time was contract work, repair work or work to correct a deficiency. The trial judge, in brief oral reasons, accepted that there was at least $1,000 worth of work to be done within the relevant time frame, and he referred specifically to the children's vanity, installation of crystals on a chandelier and the hardwood flooring. Having considered the evidence, we are of the view that the trial judge would have had to have accepted the Fiumes' evidence and rejected that of the appellants, with respect to the timing and nature of the work that was done on each of these items, and, as such, the trial judge's failure to address evidence relevant to the parties' credibility precludes effective review of the lien issue as well.
[14] The appeal is therefore allowed. The judgment is set aside and a new trial of the two actions is ordered. In the interim, Birkshire's construction lien remains registered against the subject property and its validity will be determined at the new trial. Costs to the appellants in the sum of $8,500, inclusive of HST and disbursements. Costs of the first trial shall be determined by the judge hearing the new trial.
Decision
Appeal allowed.
End of Document