[CITATION](http://intra.judicialsecurity.jus.gov.on.ca/NeutralCitation/): 2510145 Ontario Inc. v. Prestige Buildings 2016 Ltd., 2022 ONSC 5107
DIVISIONAL COURT FILE NO. DC-19-325
DATE: 20220907
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
2510145 Ontario Inc.
Plaintiff (Appellant)
– and –
Prestige Buildings 2016 Ltd.
Defendant (Respondent)
Dimitrios Mylonopoulos, for the appellant
David Convway, for the respondent
HEARD: June 17, 2022, by video conference, at Barrie
On appeal from the judgment of Deputy Judge Paul Dusome of the Small Claims Court, dated January 7, 2019.
REASONS FOR DECISION
S.T. Bale J.:
[1] 2510145 Ontario Inc. (“251”) appeals from a trial judgment dismissing its action against Prestige Buildings 2016 Ltd. (“Prestige”) and granting judgment on Prestige’s defendant’s claim in the amount of $25,000.
Overview
[2] In April 2017, 251 and Prestige negotiated for the design and construction of a steel building to be used as an automobile dealership. 251 paid a deposit to Prestige. Prestige then prepared drawings for 251 and ordered the building from its supplier. In November 2017, 251 alleged misconduct on the part of Prestige and demanded the return of its deposit. When Prestige refused to do so, 251 commenced this action for its return. Prestige then filed a defendant’s claim for loss of the profit that it would have earned, had the agreement been completed.
Background facts
[3] Negotiations between the parties took place by email. Prestige provided 251 with a proposal dated April 25, 2017. The proposal outlined the specifications for the building and gave a price of $301,900 plus tax, as negotiated in the email exchange. The proposal outlined terms relating to Prestige’s supply of work and materials, subject to adjustments for contingencies, such as fluctuations in the exchange rate between Canadian and American Currency, and subject to items that were the responsibility of 251 to obtain. The proposal provided for a deposit of 10 per cent; however, 251 negotiated a reduction of the deposit to $10,000 which it paid on April 26, 2017.
[4] 251 later determined that it could save money by having the foundation work done by another contractor. At 251’s request, Prestige submitted a revised proposal from which the foundation work had been removed, with a total price of $272,230.97.
[5] In November 2017, Prestige emailed 251 saying that it had not heard back with respect to the revised proposal. In response, 251 alleged “lies and false promises” on the part of Prestige, and demanded the return of its deposit. Efforts made by Prestige to repair the parties’ relationship were ultimately unsuccessful, resulting in this litigation.
[6] Without requesting or obtaining leave to do so, the plaintiff included an affidavit in its exhibit book which was not part of the evidence at trial. Based on its contents, it would not have met the test for the filing of fresh evidence on appeal. Worse, it contained statements of the plaintiff’s principal to the effect that the trial judge had made several errors and had violated the principles of procedural fairness. For obvious reasons, I have not considered the affidavit in coming to my conclusion on the merits of the appeal.
Issues on appeal
[7] 251 raises four issues on appeal:
• whether the trial judge erred in finding that the parties entered into a contract;
• whether the trial judge erred in finding that 251 breached the contract;
• whether the trial judge erred in awarding damages for lost profits and the cancellation fee paid to Corle; and
• whether the trial judge erred in failing to consider all the evidence.
Standard of review
[8] The appellate standard of review is set out in Housen v. Nikolaisen, 2002 SCC 33. On questions of law, the standard is correctness. On questions of fact, the standard is palpable and overriding error. On questions of mixed fact and law, the standard is palpable and overriding error, unless there is an extricable question of law, in which case, the standard of review on that extricable question is correctness.
[9] A palpable and overriding error is an error that can be plainly seen and that affected the result. “The same proposition is sometimes stated as prohibiting an appellate court from reviewing a trial judge’s decision, if there was some evidence upon which he or she could have relied to reach that conclusion”: Housen, at para. 1. It is not the function of this court to re-weigh the evidence.
[10] The principle that applies to findings of primary fact also applies to inferences drawn by trial judges. In General Motors v. Johnson, 2013 ONCA 502, at para. 51, the court quoted the following paragraph from L. (H) v. Canada (Attorney General), 2005 SCC 25, at para. 74:
Not infrequently, different inferences may reasonably be drawn from facts found by the trial judge to have been directly proven. Appellate scrutiny determines whether inferences drawn by the judge are "reasonably supported by the evidence". If they are, the reviewing court cannot reweigh the evidence by substituting, for the reasonable inference preferred by the trial judge, an equally — or even more — persuasive inference of its own. This fundamental rule is, once again, entirely consistent with both the majority and the minority reasons in Housen. [Emphasis in original.]
Analysis
[11] The issues raised by 251 involve questions of fact or mixed fact and law. It is not argued that there are extricable questions of law.
First issue: whether the trial judge erred in finding that the parties entered into a contract
[12] 251 argues that the parties did not have a mutual intention to enter into a legally binding contract and that there was no “meeting of the minds”, because the parties failed to reach an agreement with respect to the terms of the contract. However, the trial judge, following a thorough review of the evidence, concluded that an agreement had, in fact, been reached. In doing so, he noted:
251 was inconsistent in its testimony between claiming that: 1) there was no contract at all because 251 did not sign a contract; 2) or that there was an agreement or a retainer, but not a contract; 3) or that there was a contract for drawings only. That inconsistency impairs the reliability of 251's evidence. This is reinforced by 251's own pleading in its claim, “for breach of contract (both oral and written)", and referring to 251 having retained Prestige "to prepare stamped engineering drawings'', and “to supply the building, to erect it, along with creating the concrete foundation and floor for the building." The estimate/proposal stated with respect to drawings that "Building engineered drawings and delivery are included in the above pricing." The pleading supports the existence of a contract for all of the work related to the building.
The estimate/proposal of April 25, 2017 was consistent with negotiations in the April 24 and 25, 2017 emails between Prestige and the principal of 251. 251 denied that any terms or conditions were given, but terms and conditions are clearly set out in the seven pages of the estimate/proposal. One of the terms is that there be a deposit paid on approval of the proposal.·251 paid a deposit the next day, which act is evidence that there was a contract in the terms of the estimate/proposal. That document sets out all the work to be undertaken by Prestige for preparing and erecting a steel building. That document does not support 251's claim that the agreement was for drawings only. Prestige emailed 251 on April 28, 2017, asking 251 to review and choose colours. 251 responded “everything seems fine location wise with the drawings", then chose the colours. The testimony of 251 was that that response was only choosing colours. That testimony ignores the text about the drawings. It is unlikely that 251 would choose colours for the building if there was no contract to do the work of preparing the building for erection. Based on these findings, there was an offer and acceptance of the estimate/proposal dated April 25, 2017, for the completed building, not just for drawings.
[13] On the evidence before him, it was open to the trial judge to find that the parties had, in fact, entered into a contract.
Second issue: whether the trial judge erred in finding that 251 breached the contract;
[14] 251 argues that the trial judge erred in finding that it breached the contract. However, the trial judge, again following a thorough review of the evidence, concluded that 251 had breached the agreement. In doing so, he noted:
On the evidence, it was clearly 251 that was in breach of the contract. It tried to amend the contract by eliminating foundation work, but then did not accept Prestige's revision to the contract as requested. 251 refused to carry out the contract, and went on the offensive in its email to Prestige of November 7, 2017. It made false accusations against Prestige.
It is clear from the Ambashi report obtained by 251 that it had contacted Ambashi on July 23, 2017, to obtain evidence to support its claim for a refund of part of the deposit. That is consistent with 251 having already decided at that point to terminate the contract. Subsequent claims by 251 that Prestige breached the contract by not supplying window frames (contradicted by 251's window supplier's emails in May 2017) and by Prestige trying to increase the price when the U.S. dollar had gone down (denied by Prestige) are simply after-the-fact attempts to justify its own breach of contract, and to shift the blame for breach from itself to Prestige,
[15] On the evidence before him, it was open to the trial judge to find that 251 had breached the contract.
Third issue: whether the trial judge erred in awarding damages for lost profits and the cancellation fee paid to Corle
[16] 251 argues that Prestige was the “author of its own misfortune” and exacerbated its damages by unilaterally proceeding with ordering production of the building, despite permits not having been issued and knowing that 251 had issues with the drawings produced by them.
[17] However, while Prestige confirmed that the building manufacturing process would not begin until the drawings had been approved and the manufacturer was instructed to begin, there was no agreement that the building would not be ordered until the drawings were approved. On April 25, 2017, 251 said the following in an email to Prestige:
We're obviously going to need some time to give the drawings into the town in order to get the permit to begin leveling it and creating a driveway opening to move the project forward. There may even be a request on the town's end for building specification changes to meet their red tape demands. In that case, I want to make sure that the building manufacturing process doesn't begin with the contractual signing and deposit exchange, but rather when we give the go ahead once our permit is received.
[18] Prestige responded to the email by saying: “No, the building manufacturing process doesn’t begin until you approve the drawings and I okay the release to the plant.”
[19] Prestige was required to pay a cancellation fee as a result of the cancellation of the order. I was not referred to any evidence to suggest that the manufacture of the building had begun. I was also not referred to any evidence that 251 experienced any difficulty in getting their plans approved by the town.
[20] On the evidence before him, it was open to the trial judge to find that it was reasonably foreseeable that Prestige would suffer a loss of profits, and incur a cancellation fee, in the event of a breach by 251.
[21] In any event, even if Prestige had not been required to pay a penalty to Corle, it would have suffered a loss of profit exceeding the monetary jurisdiction of the Small Claims Court.
Fourth issue: whether the trial judge erred in failing to consider all the evidence.
[22] 251 argues that the trial judge erred in failing to consider all the evidence.
[23] A trial judge’s failure to refer to a specific piece of evidence is addressed in Cowles v. Balac (2006), 83 O.R. (3d) 660, at para. 117:
A trial judge's failure to refer to a specific piece of evidence does not per se constitute palpable and overriding error. It is only when an omission gives rise to a reasonable belief that the trial judge must have forgotten, ignored or misconceived the evidence in a way that affected her conclusion that an appellate court is entitled to intervene: Housen v. Nikolaisen, supra, at para. 72.
[24] There are two parts to 251’s argument on this issue.
[25] First, 251 argues that the motion judge failed to consider the April 25, 2017 emails (referred to above) relating to its request that the manufacture of the building not begin until a building permit had been received. 251 argues that if the trial judge had carefully considered those emails, the outcome of the trial would have been different. However, as is evident from my finding in relation to the third issue, even if the trial judge did, in fact, fail to consider the emails, I do not see that failure as having affected the outcome of the trial.
[26] Second, during the examination-in-chief of a plaintiff’s witness, a question arose as to whether a particular document had been produced in advance of the trial. A principal of the defendant corporation then asked to see the document and said the following:
I don't know what that is. Your Honour, we've never seen this document and if the Court has a copy, you know, I'll agree to it but we've never seen it and I can only assume the Court has never seen this and under the rules of at least 30 days prior to I would- I'm requesting that it not be admitted because we, we don't know what it is.
[27] 251 argues that this was a blatant and misleading lie which resulted in the trial judge not considering the document and coming to an incorrect finding of fact. However, when the question was raised at trial, counsel for the plaintiff said, “Let’s set is aside for now. I’m almost certain I have provided it but I’m not going to debate … It’s not – nothing is going to rise or fall on that.” Accordingly, even if the document was relevant and should otherwise have been considered by the trial judge, no ruling was requested, and it was open to the trial judge to proceed on the basis that nothing would rise or fall on the admission or non-admission of the document.
Disposition
[28] For the reasons given, the appeal is dismissed.
[1] The parties agreed that the costs of the appeal would be fixed in the sum of $6,000 payable to the successful party. I would therefore award costs to the respondents in that amount.
“S.T. Bale J.”
Released: September 7, 2022
CITATION: 2510145 Ontario Inc. v. Prestige Buildings 2016 Ltd., 2022 ONSC 5107
DIVISIONAL COURT FILE NO. DC-19-325
DATE: 20220907
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
2510145 Ontario Inc.
Plaintiff (Appellant)
- and –
Prestige Buildings 2016 Ltd.
Defendant (Respondent)
REASONS FOR DECISION
S.T. Bale J.
Released: September 7, 2022