CITATION: Prasher Steel Ltd. v. B.W.K. Construction Company Ltd., 2024 ONSC 1427

DIVISIONAL COURT FILE NO.: DC-23-16

(Brampton) DATE: 20240308

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: PRASHER STEEL LTD., Appellant

AND:

B.W.K. CONSTRUCTION COMPANY LIMITED and PEEL DISTRICT SCHOOL BOARD, Respondent

BEFORE: Backhouse, D.L. Corbett and O’Brien JJ.

COUNSEL: Angela Assuras, for the Appellant

R. Scott Fairley and Alex Daley, for the Respondent

HEARD at Brampton: March 6, 2024

ENDORSEMENT

D.L. Corbett J.

[1] Prasher Steel appeals as of right from the judgment of McGee J. dated February 22, 2022 (2022 ONSC 1261) and the subsequent costs endorsement of McGee J. dated June 9, 2022 (2022 ONSC 3494). Prasher raises numerous arguments on appeal, most of which are devoid of merit, and those few points which are tenable do not provide a basis on which this court should interfere with the trial judgment: for the reasons that follow, the appeal is dismissed.

Jurisdiction and Standard of Review

[2] This court has jurisdiction over this appeal pursuant to s.71(1) of the Construction Act, RSO 1990, c. C.30. I note at the outset that the parties agree that the “pre-amendment” version of the Act applies to this case, the contract and issues all having arisen before the date on which the amended Act applies. The “appellate standard of review” applies to the appeal: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65; Housen v. Nikolaisen, 2022 SCC 33; Dominus Construction Corporation v. H&W Development Corp., 2022 ONSC 1240 (Div. Ct.), para. 30; Maplequest (Vaughan) Developments. Inc. v. 2603774 Ontario Inc. (Div. Ct.), 2020 ONSC 4308, para. 4.

[3] In her reasons, the trial judge found Prasher’s basic contract accounting to be confusing, inconsistent and at odds with uncontested documents. She found that Mr Prasher was not a credible witness (para. 71), and in particular, was not a forthright and truthful witness.

[4] The trial judge noted that the trial was heard about a decade after the events in issue, and thus that everyone’s memories had faded, and the most reliable remaining evidence was set out in documents. She then stated as follows:

Almost all of Mr. Prasher’s evidence consisted of reading his email communications, documents, and pointing to the drawings that were contained in his five Exhibit Books. He confirmed what those consent exhibits recorded but for when the emails showed he had failed to complete contracted tasks on time or caused delays to the project. With regard to those points, he would interject blanket denials and/or blame others for the events. Often, his denial and his externalization of responsibility for the same failure were at odds. The pattern persisted in his cross examination, as the force of his denials increased, and the circuitous blaming of others created inconsistencies with his direct evidence and his exhibits in evidence. (para. 74)

[5] The trial judge contrasted this finding with the evidence on behalf of BWK, of which she stated: “BWK’s theory of the case was clear, mathematically consistent and corroborated within the plaintiff’s five volumes of exhibits.” (para. 75)

[6] The trial judge then set out her factual findings on the contested issues. She found that the contract price was $108,000. She found that there were no authorized extras to this contract price. She found that a steel deck built by another supplier was contract work, had a value of $18,328, and was a deduction from the contract price because Prasher failed to do this work. She found that a payment of $13,000, made directly to one of Prasher’s suppliers, MDS, was a payment to the benefit of Prasher made at Prasher’s direction. She found that Prasher was paid $3,240, leaving a balance owing of the contract price of $73,522. These are all factual findings, grounded in the record.

[7] The trial judge then found that the amount claimed in Prasher’s claim for lien ($149,114.80) was unreasonably inflated (para. 91), given that basic contract accounting showed a maximum tenable claim of about half that amount. (para. 91)

[8] The trial judge then noted that the onus was on Prasher to establish that it had performed the contract work. Prasher provided no timesheets for employees showing the work done or documents showing amounts paid to suppliers and subcontractors. (para. 93) The trial judge noted that Mr Prasher testified that he used to have records establishing the value of the work done, but that he no longer had those records. It is evident that the trial judge considered that this failure to retain relevant records could be spoilation, but she did not rest her judgment on an adverse inference arising from spoilation. Rather, she concluded that there was an absence of evidence to substantiate the value of Prasher’s work, an available conclusion on the record below, given the trial judge’s credibility findings.

[9] Given that the trial judge found Mr Prasher’s evidence to not be credible, and there was no documentation to establish Prasher’s claim, the trial judge fully explained why she relied on the documents in evidence and the testimony of BWK to establish BWK’s cost to complete. The trial judge rejected Prasher’s claims for extras (valued by Prasher at about $10,000) on the basis that any extra expense incurred was the consequence of Prasher’s delays in performance. These findings were available on the record. As a consequence, Prasher’s arguments respecting waiver of strict compliance with contractual requirements regarding extra work would make no difference to the result.

[10] In oral argument, Prasher submitted that the trial judge found the value of Prasher’s work to have been $73,522, from which the trial judge made deductions. The trial judge’s reasons are clear on this point: she was unable to assess the value of Prasher’s work because of the lack of evidence. Instead, she proceeded on the basis that the contract work was eventually completed, by someone, and the way to proceed was on the basis of a simple contract accounting (described above at para. 6) and then a determination of BWK’s costs to complete the contract work, as credits to BWK against the contract price. This approach accords with basic principles of contract law.

[11] In oral argument, Prasher submitted:

(a) four items of work (to an aggregate value of about $9,000) should not have been back-charged to Prasher when the project Architect testified that these items were extras to the Prasher contract;

(b) four items for which BWK claimed back charges were not properly documented and should not have been awarded; and

(c) site charges of about $20,000 per month were credited to BWK for two months without analysis of actual costs incurred for that period as a consequence of delays caused by Prasher.

[12] In respect to item (a), counsel for BWK submitted that the Architect did not give evidence about the contested back charges. Counsel for Prasher was unable to provide pinpoint references to the Architect’s testimony, because of technological challenges during argument. I have now reviewed the transcript of the Architect’s evidence (pp 136 – 147). No questions were asked about the four back-charged extras, and the Architect did not give any evidence about whether these items were contract work or extras to the contract.

[13] In respect to item (b), above, BWK provided copies of invoices received respecting the disputed back charges, but did not produce cheques proving that the invoices had been paid. Mr Kubbinga did testify that the claimed costs were incurred. The trial judge accepted Mr Kubbinga’s evidence, as she was entitled to do. Counsel for Prasher argued that this was inconsistent with the trial judge’s approach to Prasher’s evidence. With respect, it was a different approach, but not an inconsistent one. BWK properly documented its case. BWK’s witness was believed. Prasher did not document its case properly. Prasher’s witness was disbelieved. These core findings of the trial judge explain why she was willing to accept Mr Kubbinga’s evidence that the invoices were paid while she was not willing to accept Mr Prasher’s evidence.

[14] In respect to item (c), BWK documented its costs to be on site, based on its contract terms with the owner, and it explained the basis of its accruing site costs. This was sufficient evidence for the trial judge to find that the expense was incurred. It could have been open to Prasher to explore this issue in cross examination, and some initial questions of the Architect seemed directed to this issue, but not to the point that the premise of this item of BWK’s counterclaim was brought into question, and certainly not to the point that the trial judge was precluded from making the factual finding that she did on this issue.

[15] Finally, Prasher argued that the trial judge erred in principle in her award of costs because Prasher succeeded on the main claim and BWK succeeded on the counterclaim. This argument pays no heed to the substance of the judgment and the real issues between the parties. Disputes about basic contract accounting were resolved on the basis of BWK’s position. Prasher’s claims for extras were all rejected. BWK’s claims for chargebacks were almost all accepted, aside from a reduction in the claim for overhead (which was allowed at 5% rather than 15%). On any measure, BWK prevailed in this dispute and was entitled to its costs. The trial judge awarded substantial indemnity costs and her reasons for doing so justify the enhanced costs award.

[16] In the result, the appeal is dismissed, with costs payable by Prasher Steel to BWK in the agreed amount of $7,500, inclusive, payable within thirty days.

D. L. Corbett J

I agree:

Backhouse J.

I agree:

O’Brien J.

Date of Release: March 8, 2024