The plaintiffs contracted with the defendants to build a custom home, which included finishing 1000 square feet of the basement.
The defendants finished an additional 570 square feet, which they claimed the plaintiffs orally requested.
The plaintiffs paid the extra cost under protest on closing and successfully sued in Small Claims Court to recover the funds.
The trial judge found the defendants' witnesses credible regarding the oral request but ruled in the plaintiffs' favour based on an entire agreement clause in the written contract.
On appeal, the Divisional Court set aside the trial judgment, holding that the trial judge erred in law by failing to apply the two-stage analysis from Shelanu.
The Court found that the entire agreement clause did not apply to a subsequent oral agreement, and even if it did, it would be unconscionable to enforce it given the plaintiffs' knowledge and acquiescence.
The appeal was allowed and the plaintiffs' claim dismissed.