SUPERIOR COURT OF JUSTICE

Court File No. 09-CV-371831

IN THE MATTER OF THE CONSTRUCTION LIEN ACT, R.S.O. 1990, C.c.30

B E T W E E N: )

VALLIE CONSTRUCTION INC. ) Ms. Angela Assuras, for the

) Plaintiff and Defendant by

Plaintiff ) Counterclaim

• AND - )

CAROL MINAKER ) Mr. Howard L. Shankman, for the ) Defendant and Plaintiff by

) Counterclaim

Defendant )

Heard: September 12, 13, 14, 15 and 16, 2011

MASTER SANDLER

[1] These Reasons deal with the trial of a non-lien construction action, by way of a reference under Rule 54, which action involves the claim by the plaintiff contractor for payment of the balance alleged to be owing by the defendant homeowner for work done and material supplied by the contractor in connection with the renovation of the homeowner’s home, in the amount of $37,549.65 but later reduced to $28,387.40, and a set-off/counterclaim by the homeowner for credits for non-agreed to extras, and for incomplete work, and for the cost to repair deficiencies, and for other miscellaneous damages for breach of contract.

The History of the Action

[2] Since this is a non-lien action that was tried on its merits by a master, it is necessary to explain how this came to be. The contract was entered into and the work was done in the period from mid-July, 2008 to on or about October 29, 2008, at which time the contractor and the owner “parted ways” without the job being finished. (I will deal more in detail with this “parting of the ways” later in these Reasons.)

[3] The contractor issued its statement of claim on February 5, 2009, claiming payment of $37,549.65 as the balance owing on the construction contract for the renovation of the owner’s home. This case was thus governed by the Simplified Procedure – Rule 76. The owner delivered her statement of defence and counterclaim for $50,000.00 in damages on April 17, 2009. The owner was then representing herself. Pleadings closed around May 15, 2009. The plaintiff brought a contested motion for an inspection of the home by various experts and this order was made by a judge on August 25, 2009. The inspection took place on October 24, 2009. There was a Rule 76 pre-trial (settlement) conference before a master on January 28, 2010. No settlement was reached and a trial date was fixed for June 7, 2010 to last five days. The defendant retained Mr. Shankman to act for her around April 6, 2010, two months before trial. Mr. Shankman sought an adjournment of the trial and the parties appeared before Madame Justice Himel on May 31, 2010 in Trial Scheduling Court. She ordered the trial adjourned, to start instead on January 4, 2011 for up to eight days. She also ordered a further Rule 76 (settlement) pre-trial for October 27, 2010. This further pre-trial took place on October 27 before Madame Justice Roberts. Again, no settlement was reached. On December 20, 2010, the trial record was filed. On December 21, 2010, a further mediation session took place before a roster mediator. Yet again, the case did not settle so it proceeded to trial on January 4, 2011 as scheduled and came before Mr. Justice Stinson.

[4] He noted, in an endorsement on the trial record, the amounts of the claim and the counterclaim, the myriad of issues around what the contract was, the claims for extras, who owed who what, and the many defects in the work alleged by the owner and the costs to repair them, and that the trial was estimated to take between 6 and 8 days. He also felt that this case could be more suitably and effectively tried by a master and that he considered that a reference under rule 54 was the more appropriate course to follow. He also wrote that the master designated to hear the case should issue directions to ensure that the trial would be concluded as efficiently as possible. The formal judgment of reference is dated January 4, 2011, and orders and adjudges that the action and counterclaim be referred to a master at Toronto for trial, and that the party found liable do pay to the successful party the respective amount due to it, and that the master determine all questions arising in this action and counterclaim, and that the findings be set out in a Report, and that the master determine all questions of costs. This reference was assigned to me by Team Leader Master Glustein.

The Hearing for Directions – Rules 55.01 and 55.02

[5] The reference first came before me on April 12, 2011 for directions. I reviewed the pleadings in detail and heard submissions from both counsel as to what the issues were. I set forth the issues to be as follows:

1. What was the original agreement between the contractor and the owner as to what work was to be done and at what price?

2. Was the original agreement amended or modified as to the scope of work or the price?

3. Was there ever a final agreement as to the scope of work or the price?

4. If there was no agreement as to price, what is the fair value (quantum merit) for the work and any extra work that was done?

5. What work that was supposed to be done, and that was paid for in advance, was not done or not done completely, and so what credit, if any, must be given by the contractor to the owner for such not-done or incomplete work.

6. Were there deficiencies in the contractor’s work and what were or will be the proper costs to repair such deficiencies for which the owner is entitled to claim damages.

7. What other counterclaims for other damages, including delay damages, is the owner entitled to, if any?

8. Was there an abandonment of the contract by either the contractor or the owner amounting to a fundamental breach of contract entitling the opposite party to terminate the contract and to sue for damages or possibly, quantum meruit?

[6] I gave the following directions pursuant to Rule 55.02 (3):

1. The plaintiff was to present all its evidence to prove the allegations in paras. 4,5,6 and 8 of its statement of claim by affidavits of its various witnesses. The affidavits were not to contain any evidence on information and belief and were to comply with the laws of evidence governing trials in the Superior Court. The Rule 4.06(2) exception permitting heresay evidence was not to apply.

2. Any documents that were to be relied on by the plaintiff had to be proved by the appropriate witness’s affidavit.

3. The plaintiff’s affidavits were to be served and filed by May 24, 2011.

4. The defendant was to present all her evidence that relates to or contradicts the evidence in the plaintiff’s affidavits, or that purports to prove the allegations in paras. 4(a), 5, 6, 7, 8, 9, 11 (first 2 lines), 24, 24(a), 24(c), and Schedule A to her statement of defence, items 35-54 inclusive, but not including the so-called deficiencies referred to in items 1-34 and 39 of that Schedule, in the same format as above-noted for the plaintiff’s affidavits. These affidavits were to be served and filed by no later than July 22, 2011.

5. One of the defendant’s witnesses, Ernest Thibodeau, was to be allowed to be called at trial, viva voce, because he had refused to supply an affidavit.

6. The plaintiff was to be entitled to present proper reply evidence to the evidence of the defendant, again in affidavit form, with any such affidavits to be served and filed by August 22, 2011.

7. I gave certain other directions concerning the proof of documents in the Document Books already exchanged between the parties, and how these Document Books were to be organized. (The full written text of my directions is in the court file.)

[7] Most importantly, I directed that this part of the reference would be called “Phase 1”, and would deal with all issues raised in the pleadings except the issues of the alleged deficiencies in the work and the costs to repair any such deficiencies, and the other alleged damages, as pleaded and claimed by the defendant in the counterclaim and in the “Schedule A List of Deficiencies--Work Unfinished and Substandard Workmanship”, being items #’s 1-34 and 39. The other issues raised in this Schedule A, being outstanding items #’s 35-54 but excluding #39, were also to be tried in Phase 1, as these were allegations of other work not completed or not done at all such that the contractor was not entitled to be paid for such work and thus, had to give credits to the defendant if such work had, in fact, been paid for by the defendant. And it was the defendant’s contention that if any such work had been invoiced for, such invoices had to be “cancelled” or not allowed.

[8] There were so many issues to be tried in Phase 1, and the duration of the trial, now mainly just for the cross-examinations and argument, would require so much time, (at least 5 days), and would cost the parties so much money, ($15,000 to $20,000 each – my conservative estimate), that I felt that the many remaining issues of alleged defective work – 34 + 1 = 35 listed items in the said Schedule A – could better be dealt with once all the other issues had been adjudicated upon. I also felt that once the parties had rulings on these first set of issues, and knew who had to pay what amount to whom, and knew what it had cost each of them to reach this point, and which party might have to pay costs to the other party, that common sense might prevail and that a settlement might be reached dealing with these Phase 2 issues. (I had not forgotten that there were 3 unsuccessful efforts to settle this action at pre-trials before Master Brott, Justice Roberts and the roster mediator, all of which had failed, but I was hopeful that the experience of Phase 1 might provoke a settlement of the Phase 2 issues. A full trial to determine liability and damages for each of these 34 + 1 alleged deficiencies would take at least 5, and possibly up to 10 more trial days.) And several times during the course of the trial itself, I urged the parties to try and settle this case because of all the uncertainties, the multiplicity of issues, and the expense and risks re “costs”, but my pleas fell on deaf ears.

The Evidence

[9] The plaintiff delivered the following evidentiary material:

1. Affidavit of Angelo Casarella, the vice-president of the plaintiff, who was the person who negotiated directly with the defendant on all aspects of this job. This affidavit is 10 pages, 48 paragraphs, in length.

2. Plaintiff’s Exhibit Book, Volume 1, Tabs 1-19, containing the drawings, plaintiff’s original quotation and subsequent quotations, so-called “Receipts” for payments paid by defendant to plaintiff, plaintiff’s schedule of work not completed and credits accordingly given, e-mails between the parties, various invoices from suppliers of paint for use on the job, and miscellaneous other documents, all identified as exhibits in the Casarella affidavit.

3. Affidavit of Michael Casarella, the president of the plaintiff, whose area of responsibility was office administration. This affidavit identifies as exhibits certain Tabs in plaintiff’s Exhibit Book, Vol. 1. This affidavit is 2 pages, 7 paragraphs, in length.

4. Plaintiff’s Exhibit Book, Volume 2, containing 92 photos taken by David Hellyer, a professional engineer and registered home inspector and building design specialist, who did a home inspection on behalf of the plaintiff on October 24, 2009 and who wrote a report dated March 5, 2010.

5. Plaintiff’s Exhibit Book, Volume 3, containing a “chart” of the various quotations and of the additions and deletions to this contract, prepared by counsel for the plaintiff for use by the court as an “aide memoire”, and an invoice from the electrician hired by the defendant to complete the electrical work after the plaintiff left the job, and excerpts from the defendant’s daily diary for August, September and October, 2008, and 9 photos, (24 sheets – many duplicates), most of which were taken by the defendant on November 1, 2008, 4 days following the departure of the plaintiff from the job site. A few of these photos were taken later, in early 2009. None of the documents in plaintiff’s Exhibit Book 3 are actually identified in any of the plaintiff’s affidavits.

6. Plaintiff’s Exhibit Book, Volume 4, containing the C.V. and report of David Hellyer, plaintiff’s expert witness, dated March 5, 2009, and a further report of Hellyer dated August 10, 2010, replying to the report of the defendant’s expert, Joseph Pendlebury, and also the c.v. and report of David Mackay, another plaintiff’s expert witness, a quantity surveyor and cost consultant, dated August 25, 2010, and finally, at Tab 7, the c.v. and “report” of John Lasic, dated March 4, 2010, whose company, Lasic Electrical Limited, was the plaintiff’s electrical sub-contractor on this job.

[10] The defendant delivered the following evidentiary material:

1. Affidavit of the defendant, Carol Minaker, 20 pages, 69 paragraphs.

2. Defendant’s Exhibit Book, Volume 1, Tabs 1-14, all made exhibits to the Minaker affidavit. These documents are the five quotations from the plaintiff, two “Summaries of Contract” prepared by the plaintiff, (in effect, invoices), an e-mail from the defendant to the plaintiff, some plans and photos, and some invoices and miscellaneous bills paid for by the defendant, and several other miscellaneous documents.

3. Affidavit of Joseph Pendlebury, a quantity surveyor retained by the defendant, containing 4 pages, 16 paragraphs, which identifies, as an exhibit, his inspection report of April 6, 2010, which is to be found at Tab 1 of defendant’s Exhibit Book, Vol. 2.

4. Affidavit of Darren Watchorn, a quantity surveyor specializing in the field of electrical work, also retained by the defendant, containing 3 pages, 10 paragraphs, which identifies, as an exhibit, his inspection report of July 18, 2010 which is to be found at Tab 2 of the defendant’s Exhibit Book, Vol. 2.

5. Defendant’s Exhibit Book, Volume 2, containing the two reports referred to in para.’s 3 and 4 above-noted, and five handwritten receipts for four cash payments and one bank draft payment made by defendant to plaintiff during August, September and October, 2008.

[11] The plaintiff delivered the following reply evidentiary material:

1. Reply affidavit of Angelo Casarella containing 15 pages, 61 paras.

2. Reply affidavit of David Hellyer containing 4 pages, 15 para.’s, replying to the Pendlebury affidavit and report.

3. Reply affidavit of John Lasic, containing 3 pages, 13 para.’s, who, as noted-above, was the principal of Lasic Electric, the plaintiff’s electrical sub-contractor. This affidavit identifies as an exhibit, John Lasic’s report dated March 4, 2010, found at Tab 7 of plaintiff’s Exhibit Book, Vol. 4 (above-referred to). This affidavit, in para. 13, also replies to some of the evidence in the said report of Darren Watchorn. Lasic is not really an “expert’ witness but rather, a workman-subcontractor who did the electrical work.

4. Reply affidavit of Garry Novalski, one of the owners of Bristol Contracting and Maintenance Inc., who was the drywall and painting sub-contractor of the plaintiff on this job, containing 3 pages, 18 para.’s.

5. Reply affidavit of David Kerr-Taylor containing 2 pages, 8 para.’s. His company, Kerr-Taylor Electric Limited, was hired by the defendant to complete certain electrical work in her home following the departure of the plaintiff from the job. But he is the plaintiff’s witness.

6. Reply affidavit of Fabrizio Carelli, containing 2 pages, 7 para.’s. He is a cabinet maker. He was hired directly by the defendant to build and install the kitchen cabinets which he did in late 2008 and in early 2009 after the plaintiff left the site. He had also been previously hired by the plaintiff to supply and install the baseboards and install the quarter round. .

The Trial

[12] The trial took 5 days from September 12-16, 2011. If not for my direction that the direct evidence be given by affidavit, the trial would have taken at least 10 days if not more. There were viva voce cross-examinations and re-examinations of Angelo Casarella, Carol Mineker, Joseph Pendlebury, David Hellyer, John Lasic, Gary Novalski, and Darren Watchorn.

[13] There were two witnesses who refused to provide affidavits and so they testified viva voce in full. The plaintiff called Joanne Cary, the associate director of human resources at York University, the defendant’s employer, to prove the defendant’s attendance record over the period from August 1, 2008 to November 4, 2008, the period covering the construction. She also provided a copy of the defendant’s job description. The other viva voce witness was Ernest Thibodeau, who was called by the defendant. He is the national credit manager for Sherwin-Williams, a well-known paint manufacturer and supplier of paint. He brought with him and proved 15 invoices for paint and related material sold by his company to Bristol Painting, the plaintiff’s painting sub-contractor, that was apparently used at the Sutherland Drive job-site.

[14] All this live evidence finished around 11:30 a.m. on Friday, September 16 and argument from counsel followed immediately thereafter and finished at the end of that day.

The Property in Question

[15] The job-site at 59 Sutherland Ave., in the Leaside district of Toronto, was a relatively small two-storey and basement typical center-hall-plan house with 788 sq.ft.on the main floor, 708 sq.ft. on the second floor, and 788 sq.ft. in the basement. The main floor has a center hall with a living room on one side, a dining room on the other, and a kitchen/breakfast area across the back of the house. The second floor has a large master bedroom on one side, two smaller bedrooms on the other side, and a linen closet and bathroom in the center front area and a staircase at the center rear. The basement has a recreation room on one entire side, a laundry room on the other side at the front, and a utility room and storage/oil tank/ electrical panel room across the back of the house, under the back-of-house kitchen/ breakfast area.The center area of the basement is made up of a staircase, and a storage area and closet under the stairs at the center back, and a closet at the center front (see floor plan, defendant’s Exhibit Book, Vol. 1, Tab 11).

The Key Chronology and Key Documents and Key Evidence (a very long and complex story)

[16] May-June-July, 2008

Sometime during this period, the defendant, who was residing at 16 McRae Drive, agreed to purchase 59 Sutherland, the house in question, which purchase was to close on or about August 15.

[17] Around Early July, 2008

Minaker, who has a degree in interior design, and who ran her own design company for 12 years, and who was, at this time, employed as an interior designer at York University, prepared some drawings for the electrical work to be done in her new home and a drawing for the design of a new kitchen. These drawings are in the Exhibit Books and I will discuss them in more detail later in these Reasons. (The drawings (4 pages) that the plaintiff testified he got from the defendant are different from the ones (5 pages) that the defendant testified she herself drew and gave to the plaintiff or the electrician–not a good beginning to any construction project.)

[18] June-July, 2008

Minaker met with Angelo Casarella to discuss whether he and his company, Vallie Construction Ltd., would be interested in doing the renovation work she wanted to do. She knew Casarella as his company had done construction work for her employer, York University, and he was “always around” her office trying to get more work. She testified that she told him she “trusted him” and that she would “not be getting other quotations” other than his. (This is not a very wise move for any owner to do.)

[19] July 16, 2008

The plaintiff then prepared a quotation for labour and materials for certain described work to be done at the house. (This quote can be found at Tab 3 of Vol. 1 of Plt.s Ex. Bk. and Tab 1 of Vol. 1 of Deft.’s Ex. Bk.) The original scope of work involved removing all the old wallpaper throughout the house; removing all the old carpet and kitchen flooring; “skim coating” all previously wallpapered walls to prepare them for painting; “skim coating” all ceilings that were going to be damaged by the new electrical work; removing the old kitchen cupboards and existing kitchen bulkheads; removing the old kitchen plumbing and installing new rough-in kitchen plumbing; patching the kitchen walls and ceiling; painting all the walls and ceilings throughout the house – 3 floors; sanding, filling and staining the existing hardwood floors and stairs; supplying and installing new hardwood flooring in the kitchen and breakfast area; removing and disposing the old basement oil tank; supplying and installing a new boiler (furnace); supplying and installing a new 100 amp 24 circuit electrical panel which included replacing much of the old “knob and tube” wiring throughout the house that was behind the plaster walls and ceilings with new wiring; supplying and installing new plugs and switches; all as per the drawings provided to Vallie (which had been prepared by Minaker as above-noted);reversing the swing on two doors; and providing the necessary garbage disposal bins. In the weeks and months that followed, there were many additions and deletions to this original scope of work that I will describe later in these Reasons. There was no structural work involved; the renovations were mostly “cosmetic” but did involve, as noted above, modernizing the electrical and, originally, some of the HVAC system.

[20] The price quoted was $105,113 plus 15% overhead and profit (OH&P) of $15,766.95, totalling $120,879.95, plus GST of $6,043.99, for a final total price of $126,923.94.

[21] Work in the second floor bathroom and a new air conditioning system were all expressly excluded. The quote also provided that “All light fixtures will be provided by the owner.”

[22] As to the electrical work, this was a large portion of the job, as most of the old wiring from the basement to the second floor, up through the entire house, had to be removed and new wiring had to be “fished up” from the new basement 100 amp panel, through the walls and ceiling throughout the house, necessitating the cutting of access holes into the old lath and plaster walls and ceilings and then necessitating the repair of such holes with new drywall inserts and patching and taping.

[23] July 16-17, 2008

The defendant asked for a breakdown of this said basic $105,113 price for each of the specified items of work and the plaintiff provided a breakdown- (see Def.’s Ex. Bk., Tab 1, p. 3). I summarize this breakdown as follows:

Wallpaper removal $13,988

Carpet-floor removal $6,016

Skim coat walls $14,688

Skim coat affected ceilings $6,825

Removals in kitchen $1,800

Removal/re-install kitchen plumbing $1,600

Painting $12,326

Hardwood floors-both old and new $10,845

Remove oil tank $1,600

New boiler $6,200

Electrical work $25,000

Reverse swing on 2 doors $600

Disposal bins $2,400

$105,113

[24] July 18, 2008

The defendant reviewed this July 16 quote and breakdown in detail and then, on July 18, provided the plaintiff with an e-mail list (the “List”) of 13 additional items she wanted done. The plaintiff responded with a hand-written note containing his comments and additional price quotations as follows: (see Plt.’s Ex. Bk., Vol. 1, Tab 5, pp.2-3; Def.’s Ex. Bk., Vol. 1, Tab 2, p. 1 and p. 2).

Defendant’s New Requests Plaintiff’s Response

1. Paint front door-interior side -already included

2. Remove dining room fixtures from

16 McRae and install in 49 Sutherland $300

3. Disconnect exterior wall sconces (lights)

from 16 McRae and install in new house $600

4. Remove existing backsplash tile from

kitchen $300

5. Remove light fixtures from kitchen and

kitchen window area $600

6. Possibly relocate small rad in kitchen -included in

mechanical quote

(see Aug. 12 quote below)

7. Remove existing wall in basement

Between utility room and laundry room $600

8. Remove all old light fixtures in basement

and replace with new light sockets $700

9. Paint basement concrete floors $500

10. Supply and install new hardwood floor

in kitchen to match hardwood floors planks

in other parts of house -already included

11. Reverse 2 door swings in bedrooms and

modify wood panelling $600

12. Remove built-in cabinet in small rear

bedroom $400

13. Install new thermostat in dining room -included in

mechanical quote

(see Aug. 12 quote, below)

[25] The total quoted price for all these additional items was $4,600.

[26] August 12, 2008

There were further changes discussed between plaintiff and defendant and the plaintiff issued a new quotation dated August 12, 2008 (see Pltf.’s Ex. Bk., Vol. 1, Tab 5, p. 1; Def.’s Ex. Bk., Vol. 1, Tab 3). This new quotation provided in part as follows:

Original July 16 quote $105,113.00

Delete boiler – $6,200.00

The July 18 “List” (above-noted) $4,600.00

Tile work at front entrance way $690.00

Air Conditioning $10,520.00

Mechanical $37,370.00

New Quote $152,093.00

15% OH&P $22,813.95

Total $174,906.95

GST $8,745.34

New quote incl. taxes $183,652.29

[27] It is important to note that the defendant did not accept the plaintiff’s quotes for the air conditioning and mechanical work and hired others to do this work so the only agreed changes were to delete the “boiler” work (new furnace), and add the July 18 “List” work, and add the front entrance tile work. Therefore, this new “quote” of $183,652.29 can be ignored. The “agreed-upon” changes were incorporated into a further replacement quotation of “Aug. 8/Sept.8”, described below (in para. 31). (And I note that the charge of $4600 for the July 18 “List” work never made it into any other subsequent quotation and I can’t see anywhere where the plaintiff actually bills or charges the defendant for these 9 additional items listed on the document of Def.’s Ex. Bk., Vol.1, Tab 2, p.2; Plt.’s Ex. Bk., Vol. 1, Tab 5, p. 3.)

[28] August 15, 2008

The purchase of 59 Sutherland closed and Minaker got possession of the home and moved in.

[29] Late August-Early September, 2008

During this time, there were yet further discussions between Casarella and Minaker about more additions and deletions to the scope of work to be done. The plaintiff prepared a further revised 3-page quotation which Casarella testified he dated August 8, 2008 but which the defendant insists she only got on September 8, 2008 (see Plt.’’s Ex. Bk., Vol. 1, Tab 4 and Def.’s Ex. Bk., Vol. 1, Tab 4, pp. 1-3). (The exact date that the plaintiff gave this new quotation to the defendant is not critical to this case and I will henceforth refer to it as the “Aug. 8/Sept. 8” quotation.)

[30] August 22, 2008

This is the date that the defendant testified the plaintiff’s workers were first on site doing work. Casarella could not recall his start date and he has no records for the entire job as to when trades were on site. The defendant testified she was expecting the plaintiff to start work on August 15 just after she moved in and that she was upset when the plaintiff didn’t start work on August 15 as Casarella had promised and only started on August 22. Her own work attendance record at York University (Trial Ex. 4) shows she was not at her work on August 14, 15, 18, 19, 20, 21, 22, 25, 26, 27, 28 and 29 and shows her as being on “Vacation”, but there is no evidence as to whether she was just at her new house or actually away on a vacation during this time. According to the defendant’s job diary (about which I will say more later in these Reasons) the plaintiff was working on site on August 22, 23, 25, 26, 28, 29, 30 and on September 1, 2, 3, 4,5, 6, 9, 10, 11, 12, 13, 15, 16, 17, 18, 19, 20, 22, 23, 24, 25, 27, 29, 30, and for a few days in October. (I will detail the October work later in these Reasons.) This job diary can be found at Plt.’s Ex. Bk., Vol.3, Tab 3.

[31] September 8, 2008

On this date, the defendant testified she received the new 3-page “Aug. 8/Sept.8” quotation of the plaintiff (see Plt.’s Ex. Bk., Vol.1, Tab 4; Def.’s Ex. Bk., Vol. 1, Tab 4, pp. 1-3). There were 4 deletions and 9 additions therein as follows:

Deletions:

1. Patch kitchen walls and ceilings (original price was $1,225)

2. Remove and dispose of existing oil tank (original price was $1,600)

3. Supply and install new boiler (original price was $6,200)

4. Reverse swing on 2 doors and rework paneling (original price was $600)

The credits that the plaintiff gave for these deletions are as follows:

1. No credit because Casarella testified that this work was incorporated in new added kitchen work – (see below)

2. $1,600 credit

3. $6,200 credit

4. $600 and $600 credits

Total Credits: $9,000

[32] The “Original quote” was $105,113. These “Deleted items” totalled $9,000 in credits so that the “REVISED QUOTE”, as it was called, is shown as $96,113.00.

[33] Additions:

Kitchen: Remove existing sink wall, and closet, and ceiling, and remove old electrical, and supply and install new (electrical). Supply and install (new) drywall, insulation and wood blocking to sink wall uppers. Supply and install new drywall to exposed ceiling.

Price $11,568.00 plus GST

Garage: Remove loft and shelf. Supply and install (new) studs, insulation and drywall. Reinstall loft shelf. (This was later deleted - see Def.’ Ex. Bk., Vol. 1, Tab 6, p.3, “Contract Summary”, third line.)

Price $1,960.00 plus GST

Stair (area in basement): Remove wall and door below stair. Remove VAT, relocate light and stud and drywall. Supply and install new 24” louver door. Remove (old) handrail. Trim around ceiling. Cap one side of wood stringer, patch drywall and prime. (See Def.’s Ex. Bk., Vol. 1, Tab 10, photo # 6, of this area, taken Nov. 1, 2008.)

Price $3,900.00 plus GST

Laundry Room (existing furnace room): Originally, there were 3 separate rooms on the south side of the basement area, being a laundry room, a furnace/electrical-service/utility room, and an oil tank/storage room – (see Def.’s Ex. Bk., Vol. 1, Tab 11 – floor plan of house). The work here was to “Remove center wall” dividing the laundry room from the furnace/electrical-utility room, and “Remove ceiling at electrical panel” and “Relocate electrical panel” into the oil-tank /storage room.

Price $6,844.00 plus GST

Oil tank room (also called “storage room”): The work here was to “Remove ceiling”, install “stud drywall and insulate” and “Install ½˝ plywood to one wall” (where electrical panel was to be located) and “Prime and paint”. (See Def.’s Ex. Bk., Tab 10, photos at p. “13” and “13A” showing state of some of this work as of November 7, 2008 (“13A”) and December 3, 2009 (“13”). Photo “13” shows the main electrical shut-off box still located in the so-called “laundry room” and Photo “13A” shows the re-located 100-amp electrical panel now located in the oil tank (storage) room. How these electrical box and panel were handled is one of the defendant’s many complaints that I will deal with later in these Reasons.)

Price $3,109.00 plus GST

Recreation room: Supply and install 2’ x 4’ (wall) partition complete with insulation, drywall, taping and primed. (See Def.’s Ex. Bk., Vol. 1, Tab 10, photo 11, showing the state of work in this recreation room as of November 1, 2008.)

Price $940.00 plus GST

Bedroom (2) (the larger one on the south side): A new closet was to be created, so the “closet door trim” and “interior wall sections” were to be removed and “new wood blocking” was to be installed, and a new closet opening was to be created with “studs, drywall, tape and prime”.

Price $1,100.00 plus GST

Upper Bathroom: “Remove (existing) light fixture and heat lamp” and “Install 3 (new) pot lights” and “Patch plaster, prime and paint”.

Price $1,950.00 plus GST

New oak stained quarter round: Supply and install new oak stained quarter round in living room, dining room, lower hall, upper hall, bedroom # 1 and bedroom #2, and master bedroom, and install new paint grade base[board] in kitchen.

Price $2,200.00 plus GST

[34] So it can be seen from the “Aug. 8/Sept.8” quotation that the plaintiff was no longer going to be doing any of the mechanical work (furnace, oil tank, air conditioning – Minaker got a better price elsewhere); that the work in altering the kitchen layout was expanding somewhat but did not include the supply of any new kitchen cabinets or countertops or the sink/faucet; that the scope of work now included significant interior alterations to the basement areas (“stair”, “laundry room”, “oil tank room”, “recreation room”) whereas, initially, the basement work only involved removing the wall between the utility room and the laundry room, changing some basic light fixtures/sockets, and painting the basement walls, ceilings and floors; that some alteration to the layout of bedroom #2 was now to be done; that the lighting in the upper bathroom was to be changed which would affect some of the bathroom plaster ceiling and a bathroom wall and would require patching the plaster and priming and painting; and finally, that new oak stained quarter round was to be supplied to match the newly stained existing hardwood floors throughout the house and paint grade baseboards were to be supplied in the kitchen.

[35] So the new added items added up to $33,571 (later, $31,611 after the $1,960 garage item was deleted) on top of the revised quote of $96,113.00 (above-noted) for a total price of $129,684 plus 15% OH&P = $19,452.60 which totals $149,136.60 plus GST. This amount of $129,684 is called the “Original Contract” amount on the October 1 “Contract Summary” (to be detailed below) and is the starting point for the plaintiff’s “billings/invoices” of October 1 and October 9 (again to be detailed below). This amount also includes the sum of $4,600 for the 13 items on the defendant’s “List” of July 18, above– described.

[36] This “Aug. 8/Sept. 8” quotation also shows that 5 other items were not included but could be supplied by the plaintiff as follows:

1. Exterior painting of shutters, doors

and windows Price $2,330.00

2. Paint aluminum trim around windows Price $1,200.00

3. Chimney repairs Price $1,800.00

4. Skylight – (needs further info. – not priced)

5. Fan hood exhaust pipe – (need further info. – not priced)

[37] So, as of September 8, 2008 the final price (excluding GST) had risen from the initial July price of $120,879.95 to the above-noted amount of $149,136.60, an increase of $28,256.65.

[38] September, 15, 2008

Casarella and Minaker had yet further discussions about futher extra work and the plaintiff gave her another quotation (see Def.’s Ex. Bk., Vol. 1, Tab 5) for certain extra work as follows:

1. Exterior painting of shutters, doors $2,300.00

and windows (not $2330.00)

2. Paint aluminum trim around windows $1,200.00

3. Paint soffit and eves $850.00

4. Frame skylite (skylite to be $1,600.00

provided by others)

5. Credit for not painting back of house – $600.00

These extras actually total a net of $5,350 but this quotation totalled them at $5,380. Minaker testified that she brought this error to Caseralla’s attention and, in later documents, he showed the correct amount of these extras at $5,350. (The $600 above-noted credit was explained by Casarella, in his evidence, to be for painting the back of the house by mistake when it was really not supposed to have been painted.)

[39] Items 1, 2 and 4 of this new work were actually first discussed on the last page of the “Aug. 8/Sept. 8” quotation, but at that time, were not agreed to and were not included in the scope of work. Now, they were, as well as item 3. And all this work was actually done by the plaintiff during the latter part of September or early October.

[40] So as of September 30, the contract scope of work and the price were as follows:

Revised quote ($105,113 less the 4 items above-noted)

$96,113.00

Add 9 new items (above-noted)

$33,571.00

New revised quote

$129,684.00

Add 4 Sept. 15 extras and give 1 credit

$5,350.00

Total

$135,034.00

Delete garage work (was in “Aug. 8/Sept. 8” quotation but later deleted by agreement)

• $1,960.00

Total

$133,074.00

15% OH&P

$19,961.10

Final Total

$153,035.10

(excluding GST)

[41] So, as of September 30, the final price (excluding GST) had risen from the initial July price of $120,879.95 to this new amount of $153,035.10, an increase of $32,155.15.

[42] As of September 22, the plaintiff had already asked for and the defendant had already paid $60,000 in cash instalments on account of this job. The total cost had risen, as above-noted, to just over $153,000 (from an initial figure of about $120,800), and the plaintiff had done considerably more work so the plaintiff now wanted to be paid more money. The plaintiff was planning to ask Minaker for a further payment of $75,000 (to total $135,000) and, in expectation of receiving this amount, prepared a “Receipt No. 3” (see Plt.’s Ex. Bk., Vol. 1, Tab 9, p. 1) dated October 1, 2008. See the words “This Payment” on “Receipt No. 3” which I read as, and consider to be, a demand for payment.

[43] It is important to note that the plaintiff did not prepare any invoices as such for these interim payments. It did however prepare what it called “Receipts” in anticipation of being paid. “Receipt No. 2”, dated August 12, for $40,000, can be found at Def.’s Ex. Bk., Vol. 1, Tab 7. (“Receipt No. 1” is not in evidence.) This amount of $40,000 was paid by a cash payment of $20,000 on September 15 and a further cash payment of $20,000 on September 22 (see Pltf.’s Ex. Bk., Vol. 2, Tab 3).

[44] “Receipt No. 3”, above noted, indicates, as I have noted above, that the plaintiff was going to be asking for $75,000 from Minaker. Both Caserrella and Minaker in their testimony agree that this is the amount that was being asked for. But, as noted later in these Reasons at para.’s [48], [58] and [67], Minaker decided that she was only going to pay $60,000 based on her own assessment of the progress of the work. So she arranged for a bank draft which she gave to Casarella on October 8 (see Def.’s Ex. Bk., Vol. 2, Tab 3, p. 2).

[45] Also, instead of invoices per se, the plaintiff prepared what it called “Summary of Contract and Work to Date”. (There were two of these and they are, in effect, invoices and one actually claims a “Balance Due”. The first one is dated October 1 and the second one is dated October 9. In fact, the defendant herself called the October 9 “Summary” an “invoice” in her e-mail of October 27 (see Plt.’s Ex. Bk., Vol. 1, Tab 19, p. 3 where she writes “6. Last invoice dated the 09th of October 2008”). (my emphasis) (These two “Summaries” are found at Plt.’s Ex. Bk., Vol. 1, Tab 8 and Tab 10. They are also found at Def.’s Ex. Bk., Vol. 1, Tab 6, p. 3 and Tab 7.) Minaker agreed that she was given copies of these “Summaries” although she testified that she really didn’t read them very carefully. But I note that she analysed the October 9 “Summary” very carefully in her October 27 e-mail at p. 3 of that e-mail (which I will describe in detail below).

[46] The October 1, 2008 “Summary” picks up the September 30 contract amount of $153,035.10 (see para. 41 above) as the “Contract to Date” amount. It then sets forth 11 “Extras to Contract Performed to Date” (my emphasis). These are as follows: (I have numbered them 1 through 11 for future ease of reference but they are not numbered on this document.)

1. Add extra pot light at outside door to kitchen

$300.00

2. Add phone line to kitchen

$150.00

3. Add phone line and cable to living room

$300.00

4. Add cable to master bedroom

$150.00

5. Remove light in master bedroom closet and add 2 new lights

$600.00

6. Add three pot lights to basement landing

$900.00

7. Add two electrical outlets to new rec. room walls as required by city inspector

$500.00

8. Supply/install kitchen exhaust pipe

$250.00

9. Supply/install new roof vent in kitchen

$200.00

10. Repair missing floor at fireplace in living room

$600.00

11. Supply/install 4 extra pot lights at skylights

$1,200.00

Total

$5,150.00

15% OH&P

$772.50

Total New Extras

$5,922.50

[47] So the new accounting is shown as follows:

Revised Contract as of Sept. 30

$153,035.10

Add (above-noted) additional work

$5,922.50

Total Revised Contract

$158,957.60

[48] As of October 1, the plaintiff had only been paid $60,000 and thus it shows, in this “Summary”, the sum of $98,957.60 as what the balance outstanding would be ($158,957.60 – $60,000) at the end of the job provided that all the work would be completed. The plaintiff had done considerably more work since it was last paid on September 22. That is why the plaintiff was asking Minaker for $75,000 more around October 1, but, as noted above (at para. [43], and later at para.’s [58] and [67]) she only paid him $60,000 and only on October 8.

[49] I do note that with respect to these 11 “Extras to Contract Performed to Date”, Minaker now disputes any obligation to pay for about half of them. (I will deal with the propriety of these and other “extras” in detail later in these Reasons.) Her e-mail of October 27 is silent about any dispute about them but she there claims that the “Grand Total”…. to date on Completed Project” is $147,093.63. She notes various items as being “not done” on pp. 1 and 2 and these items total $20,151.15. So, to figure out what she is saying is the total value of the contract, one must add $147,093.63 + $20,151.15 = $167,245.13 which is almost the same number as the plaintiff’s final number of $168,893.60 on its October 9 “Summary”. The plaintiff was then saying (in its October 1 “Summary”) that the total contract price was $153,035.10, but then increased to $158,957.60 with these additional 11 items totalling $5,922.50. The final number is $168,893.60 shown on the Oct. 9 “Summary”. And in para. 48 of her main affidavit (sworn July 18, 2011) Minaker expressly disputes the extra items which I have numbered as 2, 3, 5, 7, 9 and 11 ($150 + $300 + $600 + $500 + 1,200 = $2,950 + 15% = $442.50) = $3,392.50) so she is now (at trial) admitting that she owes ($5,922.50 – $3,392.50 =) $2,530.00 to cover the undisputed items of these said 11 extras. (As noted, I will rule on all the claimed extras later in these Reasons.) In her main affidavit, at para. 67, she maintains that the total contract price was only $153,035.10. Of course, for the plaintiff to be paid the entire contract price, whatever it turns out to be, it would have had to perform 100% of the work without any deficiencies, which of course, did not happen as I will detail later in these Reason. [I have ignored the 5% profit and 5% GST credits that Minaker consistently claimed in paras.’ 22-53 of her main affidavit because she agreed, in cross-examination, that her 5% profit credit claim figure was a mistake, and because the plaintiff, at the end of the trial, gave up entirely on its claim for GST. (Presumably, it will have to personally absorb the proper amount of the GST that is legally payable on this contract whenever, (and if ever), it is called upon to settle up with the Canada Revenue Agency.)

[50] October. 1, 2008

As the work was progressing in September, Casarella and Minaker had yet further discussions about extra work that Minaker was considering doing, mainly in the basement, which was the last area to be worked on by the plaintiff. These discussions resulted in the plaintiff preparing yet a further quotation for this further proposed work dated October 1, 2008 (see Def.’s Ex. Bk., Vol. 1, Tab 6). The proposed work and prices were as follows:

Laundry Room

Remove balance of ceiling

$500.00

Build new drywall bulkhead to cover pipes

$840.00

Drywall balance of ceiling

$1,440.00

Relocate doorway to boiler room

$500.00

Build out doorway wall at boiler room to cover pipe

$490.00

Electrical – install two lights and two switches, relocate dryer power from panel and relocate dryer plug

$1,800.00

Remove and reinstall laundry sink

$1,600.00

Total

$7,170.00

Other Areas

Stud, insulate and drywall three outside walls (in basement) and laminate ¼” drywall to interior wall prime

$4,400.00

Skim coat front hall ceiling

$800.00

Finish hardwood in two phases – additional costs

$1,400.00

Remove and replace baseboard in bedroom #2

$420.00

Total

$7,020.00

Total Extras

$14,190.00

15% OH&P

$2,128.50

Total Extras

$16,318.50

(plus GST)

[51] Minaker testified that she didn’t agree to proceed with all of these “extras” and that this list of extra work was prepared by the plaintiff and just given to her. She did agree in cross-examination that the first 5 “Laundry Room” items were agreed to and are proper charges, and she also agreed to the sixth further “Laundry Room – Electrical” extra work item at $1200 (not $1800). I note that the plaintiff only billed her $1200 for this item of work because it did not “relocate the dryer plug” and also never billed her for “Remove and reinstall laundry sink” of $1,600” because, again, it did not do this work. This was admitted by Casarella in his evidence.

[52] As I have noted elsewhere (at para.’s [43], [59] and [68) on October 8, the defendant paid the plaintiff $60,000 instead of the requested $75,000.

[53] October 9, 2008

On October 9, the plaintiff prepared another “Summary of Contract and Work to Date” (see Def.’s Ex. Bk., Vol. 1, Tab 7 and Plt.’s Ex. Bk., Vol. 1, Tab 10). This summary picks up the “Contract Price” of $158,957.60 as of October 1, 2008 as set forth in the October 1 “Contract Summary” (above-noted), and then adds 15 new “extras”. It is interesting to compare the 11 “extras” on the October 1 quotation-- (Def.’s Ex. Bk., Vol. 1, Tab 6, p. 1)--with the 15 “extras” on the October 9 “Summary”--(Def.’s Ex. Bk., Vol. 1, Tab 7).

[54] This comparison is as follows: (The 15 “extras” were not numbered but I have numbered them 1 through 15, again for ease of reference.)

1. (Laundry room) – remove balance of ceiling

$500.00

• also on the Oct. 1 quote

2. (Laundry room) – build new drywall bulkhead to cover pipes

$840.00

-also on the Oct. 1 quote

3. (Laundry room) – drywall balance of ceiling

$1,440.00

-also on the Oct. 1 quote

4. (Laundry room) – relocate door to boiler room

$500.00

-also on the Oct. 1 quote

5. (Laundry room) – build out doorway wall at boiler room to cover piping

$490.00

-also on the Oct. 1 quote

6. Patch holes in basement washroom (damaged by Mech.)

$400.00

-not on Oct. 1 quote

7. (Electrical) – install wiring for 2 lights and 2 switches

$1,200.00

-the Oct. 1 quote also provided for relocating dryer power from panel and relocating dryer plug and had a total quote of $1,800, but $600 of this anticipated work was not done.

8. Relocate closet basement light to wall

$300.00

-not on the Oct. 1 quote

9. Skim coat front hall ceiling

$800.00

-also on the Oct. 1 quote

10. Remove and replace base[board] in bedroom #2

$420.00

-also on the Oct. 1 quote

11. Re-work ceiling at boiler room doorway and add NIB wall

$400.00

-not on Oct. 1 quote

12. Paint kitchen back door

$300.00

-not on Oct. 1 quote

13. Repaint 2 rads wall colour

$600.00

-not on Oct. 1 quote

14. Remove and replace base to upper linen closet

$150.00

-not on Oct. 1 quote

15. Add third light to master bedroom closet

$300.00

-not on Oct. 1 quote

[55] The other items that are on the Oct. 1 quotation but that are not on the Oct. 9 Contract Summary are “Remove and reinstall Laundry sink $1,600”; “Stud insulate and drywall three outside walls etc. $4,400” and “Finish hardwood in two phases – additional cost $1,400” and it is clear that the plaintiff never billed for these items because it did not do any of this work.

[56] These additional 15 items on the October 9 “Contract Summary” said to have been “performed to date” total $8,640, and together with 15% OH&P = $1,296 = $9,936, so this amount, added to the contract price as of October 1, 2008, at $158,957.60, totals $168,893.60. This is the exact gross amount that plaintiff’s counsel in argument before me stated was owing, before adding GST and deducting $135,000 in payments and giving credits of $5,781.57 for “not-done” work. Later, in argument, counsel withdrew the claim for GST and so argued that $168,893.60 minus $135,000 minus $5781.57 = $28,112.09 was the “net–net” proper amount owing to the plaintiff. See also para.’s [??] and [??] below where I detail Ms. Assuras’ submissions on the exact amount now claimed.

GST

[57] All the plaintiff’s quotations, except the Sept. 15 one, included a provision for adding on the GST, and on some, actually showed the amount of the GST. But interestingly, the two “Contract Summaries” of Oct. 1 and Oct. 9 do not show any GST amount even though each one shows the claimed balance due after deducting payments.

[58] Minaker testified at trial that it was the clear understanding of Casarella and herself during the early negotiations for this contract that she would pay the plaintiff in cash and that Casarella would not charge her GST. She testified that the GST issue “was off the table from day one”. Casarella testified that this cash arrangement to avoid paying GST came from Minaker and that he only agreed to it because she insisted on it. Minaker testified that it was the mutual desire of both of them that the plaintiff would be paid in cash, which would obviously allow the plaintiff to avoid paying GST or income tax for this job and would allow the defendant to avoid paying GST. Such arrangements are known to be common in the home renovation industry (as well as in other areas of commerce, and have been the subject of much media attention and have also been the subject many attempts by the Canada Revenue Agency to crack down on these tax avoidance schemes). Further, I have come across this cash arrangement in many other home renovation cases that I have tried in my over 20 years of doing construction lien work. I find that there is no other believable and rational explanation for the defendant paying the plaintiff $75,000 in cash stuffed in envelopes, as she testified, other than to allow the plaintiff to avoid income tax and GST and to allow Minaker to avoid paying the GST.

[59] Both parties anticipated that a further $75,000 would be paid by Minaker in cash but she testified that she could not arrange to obtain cash in such a large amount from her local bank in the time required by the plaintiff, and also by then she had decided to pay only $60,000 so she obtained from her bank a bank draft of $60,000 payable to Angelo Casarella in person which strongly upset him. All this is in the testimony of Minaker which I accept on this issue.

[60] During the original presentation of the argument, I asked counsel for the plaintiff how she calculated the plaintiff’s claim. The statement of claim claimed $37,549.65. Ms. Assuras then outlined the up-to-date calculation of the plaintiff’s claim as follows:

Final Contract Amount $168,893.60

GST $8,444.65

Total Contract Including GST $177,338.25

Less Payments as Agreed $135,000.00

Preliminary Balance $42,338.25

Less Credits for Work Not Done -$4,788.00

Less 15% OH&P on $4,788.00 -$718.20

Less GST on $4,788.00 -$275.31

Total Credits -$5,781.51

Balance Claimed from Defendant $36,556.74

[61] So it can be seen that during the initial presentation of the plaintiff’s claim during argument, Ms. Assuras made it clear that the plaintiff was claiming $8,444.65 GST. But, after the lunch break on September 16, Ms. Assuras returned to court to complete her argument and announced that the plaintiff was now agreeing to forgo its GST claim of $8,444.65. (See also para. [60] above where the plaintiff’s net-net claim is discussed.) I am sure that some of my comments during the morning session of the argument about what I was prepared to infer from the cash and in-person bank draft payments of $135,000, being that the only reasonable explanation for the form of these payment was the avoidance of income tax and GST, motivated this change in the plaintiff’s position.

The Date for Completion

[62] There is nothing in writing in any of the documentation about the date for completion or the time allowed for the duration of the work. And Minaker gave no evidence about an express time for completion being agreed to. But Minaker was planning to and did move into the house on or about August 15 and she planned to live there during the construction and I find that Casarella was aware of her plans by, at least, the end of July or very early August and, of course, he knew that she was living in the house when he started the construction and thereafter throughout the job.. In fact, he and some of his trades testified that her residency in the home during construction made the progress of the work go slower because of the need to clean up at the end of each work day and to work around the areas that she was occupying, namely, for the most part, the master bedroom and upper bathroom. And further, the scope of work kept on expanding because of all the changes asked for by Minaker, as detailed above, so this also prolonged the length of the job. Therefore, since there was no contractual completion date, as I so find, the time for completion is, by law, what was reasonable in all the circumstances. Minaker testified that she complained constantly and almost from the beginning of construction about the plaintiff’s lack of progress and the lack of continuous attendance of Casarella and his trades. And yet, she paid the progress payments in September and October, as detailed above, and never put anything in writing complaining about the lack of progress until her e-mail of October 24, which I will discuss in detail in due course. I find that the defendant has not proved that there was a breach of the obligation of the plaintiff to complete the work within the time that was reasonable for this job, based on all the circumstances that here existed.

The Agreement as to Progress Payments

[63] There is nothing in any of the written quotations or in any other documentation about progress payments to be paid during the course of the work. But both Casarella and Minaker agree that they discussed progress payments at the beginning of the job and then agreed that, as the work progressed, the plaintiff would ask for progress payments which were to have some correlation to the amount of work done. Minaker testified that she knew and understood that this was to be the arrangement. Nothing was said about the number or frequency of these progress payments nor were there any specified work “milestones” as is often the case in home renovations. And there was no agreed mechanism for determining the amount of these progress payments or for resolving disputes about the amounts to be paid. There was, of course, no payment certifier.

[64] Minaker paid Casarella $20,000 in cash on Wednesday, August 27, and he wrote out a receipt and signed it. As of this time, the plaintiff had been on the job since on or about August 22. This payment was noted by the plaintiff, in his “Receipt No. 2” (see Plt.’s Ex. Bk., Vol. 1, Tab 7), to be a “deposit”. (See also the handwritten receipt at Def.’s Ex. Bk., Vol. 2, Tab 3, p. 1)

[65] The defendant paid Casarella a further $20,000 in cash on Monday, September 15 and he wrote out another receipt and signed it (see Def.’s Ex. Bk., Vol. 2, Tab 3, p. 1).

[66] The defendant paid Casarella a further $20,000 in cash on Monday, September 22 and again he wrote out another receipt and signed it and noted that “total to date” [was] “$60,000” (see Def.’s Ex. Bk., Vol. 2, Tab 3, p.1.).

[67] These specific amounts were requested by Casarella, and Minaker agreed to them and arranged with her bank for the cash to make these payments.

[68] At the beginning of October, as I have noted earlier, Casarella was asking for a further $75,000, presumably because he believed that he had done $135,000 worth of contract and extra work by this time-- (see “Receipt No. 3 – Def.’s Ex. Bk., Vol. 1, Tab 9). Minaker testified that she did not feel that a $75,000 progress payment was warranted by the amount of work done and left to be done, so she decided, without discussing it with Casarella, that she would pay only $60,000. As I noted earlier, she went to her bank to get the $60,000 in cash but her bank, being a local bank branch, told her it would take two weeks to get this amount of cash. So Minaker decided, because Casarella was pressing her hard for more money, and because she wanted him to keep working, to obtain a $60,000 bank draft but payable to Casarella in person and not to his company (the plaintiff) in order that there would be “no paper trail” as she testified. As noted earlier, she testified that when she handed Casarella this $60,000 bank draft, he became very upset and complained to her because of the lesser amount and because there was now a paper record of this payment but, in the end, he took it. And on October 8, he wrote out a further receipt for this “Bank Draft” [of] “$60,000.00” (see Def.’s Ex. Bk., Vol. 2, Tab 3, p. 2).

Saturday, October 11 through Saturday, October 18

[69] This was the period during which the staining of the existing hardwood floors throughout the house was done (see Minaker’s job diary for Sat., October 11 through Sat., October 18 with her notes therein, which is one of the plaintiff’s exhibits (in Plt.’s Ex. Bk., Vol. 3, Tab 3). Since this diary was put before me in an exhibit book of the plaintiff , (not the defendant), I rule that I can rely on it as part of the evidence before me in favour of the defendant and against the interest of the plaintiff. Also, counsel for the defendant cross-examined Casarella on this job diary without any objection from plaintiff’s counsel. The required floor work was to sand, fill and stain all existing hardwood floors on the first and second floors and the main staircase, and supply and install a new hardwood floor in the kitchen and breakfast area (see the photo of this work at Plt.’s Ex. Bk., Vol. 2, p. 7, photos #’s 0031 and 0030, p. 7; and photos #’s 0032 and 0033, p. 8). As noted earlier, Minaker had decided to live in the house during the renovations but had, for the most part, only the use of the master bedroom and the second floor upper bathroom. She had put most of her furniture and belongings from her house at 16 McRae into storage. Her job diary indicates that on Thursday, October 16, she slept in the basement of her house, presumably because of the floor staining work that had been done upstairs in the master bedroom, and that on Friday and Saturday, October 17 and 18, she stayed in a hotel, presumably because the floor staining work was then being done on the main floor.

Monday, Oct. 20, Tuesday, Oct. 21 and Wed., Oct. 22

[70] On one of these three days, Casarella asked for more money from Minaker. It appears from the plaintiff’s document-(at Pltf.’s Ex. Bk., Vol. 1, Tab 11)-entitled “Receipt No. 4” that he was asking to be paid $34,115. The evidence of Michael Casarella was that he prepared all these “Receipts” based on what Angelo Casarella told him he, Angelo, would be asking Minaker to pay. In other words, these “Receipts” were prepared in advance of communicating Angelo’s requests for payment to Minaker and of any actual payment by her. “Receipt No. 3”, (Tab 9), shows a “Payment” of $75,000 on October 1. In fact, Minaker paid only $60,000 on October 8 (by bank draft) so this “Receipt” does not show what really happened. “Receipt No. 4” (Tab 11) was apparently prepared on October 20, and Casarella testified that he intended to and did give this document to Minaker and wanted to get a progress payment of $34,115. This would leave an unbilled balance of $14,778.60 if his Oct. 9 “Contract Summary” amount of $168,893.60” was correct. I note that in her Oct. 24 e-mail, she acknowledged that this “major renovation” was “± $170, 000.00” so Casarella’s number seems to be correct. (I will get into the details of what price was agreed to and what work was done, later in these Reasons.) Minaker testified that she was, indeed, asked by Angelo Casarella to pay $34,115 but she paid him only a further $15,000 in cash and she considered this $15,000 payment to be the balance of the $75,000 that he had asked for earlier in October, after she had decided to give him just $60,000. In her testimony, she called this $15,000 payment a “catch-up” payment. She testified that she couldn’t remember if Casarella gave her this October 20 “Receipt No. 4” but she did not deny receiving it. Casarella testified that he gave it to her. It appears to me from all the evidence, and Casarella admitted it, that once payment problems began in early October, with the $60,000 and $15,000 payments, the progress of the work slowed right down after the floors were finished on October 18. This is why almost no work was done between Monday, October 20 and the “blow up” on Oct. 28, to be described below.

Friday, October 24, 2008

[71] The critical days in this lawsuit are what happened on Friday, October 24, Saturday, October 25, Monday, October 27, Tuesday, October 28, and Wednesday, October 29. The parties now agree that the last day of work by any of the plaintiff’s trades was on Tuesday, October 28 (the tile setters working in the front hall). The plaintiff alleges that the defendant wrongfully terminated the contract on October 28 by then refusing to pay any further progress payment as demanded, or even a lesser amount, and that the plaintiff was, at that time, at least entitled to be paid some further amount of money (at least, $12, 147.38 which was the defendant’s figure on the last page of her Oct. 27 e-mail) and that, without such further payment, the plaintiff was entitled to cease work, based on a fundamental breach of contract by the defendant.

[72] The defendant argues that the plaintiff was not entitled to be paid any more money as of October 28, based on the amount of work and value of that work that had then been done and the progress that had been achieved. I understood her testimony to amount to the point that she was entitled to then take the position that when the job was finished to her complete satisfaction, and when all deficiencies then known were rectified to her satisfaction, she would then pay what she considered to be the proper amount owing as the last payment. When the plaintiff refused to continue with the work, on the terms that she demanded, she was then entitled to terminate the contract which she did. The big issue in this case is “who was right?”

The Defendant’s E-mail of Friday, October 24, 2008 (Def.’s Ex. Bk., Vol. 1, Tab 8; Plt.’s Ex. Bk., Vol. 1, Tab 18)

[73] In this e-mail, Minaker firstly complains that the painters had not attended to finish their work as she was expecting. She notes that she had just been informed of this fact by Casarella. And she also notes that, on that day, he also told her that the electrician, John Lasic, would not be coming to do work on the next day, Saturday, October 25, as had been earlier confirmed by Casarella. It is a fair inference that this was because of the money problems that I have just described.

[74] Further, she expresses her disappointment about the “orchestration” of her project by which I believe she is referring to what she believes is Casarella’s lack of supervision and the poor progress of the work. Interestingly, she notes on p. 1, as I pointed out earlier, that this was a “+/ – $170,000 ... major renovation” for her. The Contract Summary of October 9 showed a “REVISED CONTRACT AMOUNT” of $168,893.60 so she knew what the plaintiff was saying the final price was going to be and seems to be accepting it. But later, once this lawsuit was started, she has maintained that the contract price for the work that she agreed to pay for was far less at $153,035.10.

[75] She also notes in this e-mail (in para. 3) that Casarella has never had to wait for any money from her until now, and that the $15,000 that she did not pay, as asked for in early October, was not a large amount to be waiting on. She complains about having to run around herself for samples and how she has had to rent a storage locker for her belongings for an extra month and how she has had to stay in a hotel because of bad scheduling by “the floor guy”.

[76] She then complains about being asked to pay $850 plus GST to one “John Gneo” who apparently did some work at 16 McRae. She refuses to pay this item. (There is nothing in the plaintiff’s documents or billings about asking for this money so it must have been an oral demand that was eventually abandoned.)

[77] She then complains about the progress of the work of the electrician, John Lasic, and, in her view, the unnecessary and extreme number of holes (openings) that he cut in the walls, floors and ceilings for his new wiring, and how the drywaller, Gary (Novalski) and his “guys” had to constantly follow Lasic to patch up these numerous holes.

[78] She then complains about the scheduling of the floor staining work which was done after the painting and the need now for painting touch-ups to overcome floor stain blotches on the new paint work. She also complains about the drywall patching work having been done after the painting, and the need now for re-painting in the north wall of the master bedroom. She says that she does not intend to pay for this extra painting work. (She was never billed for it.)

[79] She complains that the electrician, Lasic, apparently did not want to come back to finish the electrical work on the first and second floors to fix unstraight receptacles (outlets), and to install cover plates, rims on the potlights and the track lighting. This was probably Casarella’s doing because of the payment problems he was encountering.

[80] She complains about the trades having little concern for her as owner and about their delay.

[81] She states that “…unless all the work outlined as per my list…” (not in evidence before me) “…and the few additional items I have verbally mentioned to you…” --(she lists 4 deficiencies)-- is done, she “..will not be paying you another cent…”. Further, she writes “I WANT THIS WORK COMPLETED. I am moving in [presumably, her belongings that were storage] on Thursday the 30th of October, 2008 no matter what. If I have to complete this project by others I will.”

[82] This e-mail was obviously written in response to the failure of the painters to show up on October 24, (also, I infer, probably Casarella’s doing) and the advice from Casarella that the electrician, Lasic, would not be showing up for work the next day, Saturday, October 25, and also in response to Casarella’s request for payment of $34,115 earlier that week, and after she had paid him only $15,000 two days earlier on October 22. No work was done on Saturday, October 25.

The Defendant’s E-Mail of Monday, October 27, 2008 at 8:25 a.m. (Plt.’s Ex. Bk., Vol. 1, Tab 19).

[83] On Monday morning, October 27, Minaker noted in her job diary- (Pltf.’s Ex. Bk., Tab 3, p. “22”)- that “No one here- Ang promised me that John elec. and Fab to do millwork …” which meant that each man was supposed to come to do unfinished electrical work and millwork on the previous Saturday, October 25, or that Monday. She then drove to work and composed and sent a detailed 3-page e-mail to Casarella which he noted, on his copy in his hand writing, that he received on Tuesday, Oct. 28 at 8:00 a.m. (It is interesting to note that while Minaker’s prior October 24 e-mail is in her exhibit books (productions) at Vol. 1, this October 28 e-mail is not and is only to be found in the plaintiff’s exhibit book.)

[84] This e-mail is an important document and is highly relevant to many of the issues in this case that I must decide. Her opening paragraph complains about not wanting to be “held hostage” by Casarella or his subtrades. She then says that if he or his trades do not want to finish the contract he should tell her and she will “move on and hire someone who wants to work”. These comments were obviously made because the electrical and millwork workmen did not show up for work on either Saturday, October 25 or Monday, October 27 as Casarella had apparently promised.

[85] She then asks for an “accounting” of the electrical portion of the job so she could understand how the sum of $35,500, (which she calls “35,000”), that is in the plaintiff’s “Summary of Electrical Work”, that had been given to her by the plaintiff earlier in October- (Def.’s Ex. Bk., Vol. 1, Tab 6, p.2)- had been arrived at.

[86] Then she sets out her “take-off” of the plaintiff’s accounting of the project. She firstly refers, at item 1, to the “Original Contract of $105,113.00” of July 13- (Def.’s Ex. Bk., Vol. 1., Tab 1, pp. 1-3; Plt.’s Ex. Bk., Vol. 1, Tab 3, pp. 1-2)- and then refers to $8,400 in deletions, for a contract price of $96,713, but then alleges incomplete items of work totaling $6,381.50, leaving $90,331.50 owing on this “Original Contract”. (She adds 15% for OH&P later.)

[87] Next, she refers, at item 2, to her “List of 13 Items” -(Def.’s Ex. Bk., Vol. 1, Tab 3, p. 1 and 2)- where these items were priced at $4,600. She alleges incomplete items of work totaling $2,000 which should mean that she would owe $2,600 for these added 13 items. But instead, she deducts $2,600 from her said $90,331.50 amount owing, instead of adding $2,600. She then shows a figure owing of $88,331.50.

[88] She then refers, at item 3, to the “Aug. 8/Sept.8” 3-page quotation--(Def.’s Ex. Bk., Vol. 1, Tab 4)--which, in my view, made major changes to the contract. Nonetheless, she lists just 10 items of added work (her #’s 9 and 10 were not included in the new “Aug. 8/Sept.8” contract but rather in the Sept. 15/08 quote--(Def.’s Ex. Bk., Vol. 1, Tab 5). She claims that only #’s 1, 3, 4, 6, 9 and 10 were done and says she owes $26,751.00 for this added work (again, adding the 15% OH&P later). So she adds $26,751.00 to her above-noted amount owing of $88,331.50 to get a new total amount owing of $115,082.50.

[89] She then refers, at item 4, to the Oct. 1/08 quote- (Def.’s Ex. Bk., Vol. 1, Tab 6)- which, in fact, quoted an additional price of $16,318.50 (plus G.S.T) for 11 added items. She claims that five items were done totalling $3,770 (plus, she refers, rather confusingly, to the sum of $6,844 from a “former Quotation” but she doesn’t say this amount is owing). She then refers to items #’s 6, 7, 8, 9 and 10 and says that amounts of $1,200, $4,400, $800 and $205, totalling $10,375, were done. She adds this $10,375 amount to her above-noted amount owing of $115,082.50 to arrive at her new grand total of $125,457.50.

[90] She then refers, at item 5, to the “Quotation dated the 15th of September 2008 additional items”--(Def.’s Ex. Bk., Vol. 1, Tab 5)--and says two items were done of $850 and $1,600, totalling $2,450.

[91] She then does her calculation at the bottom of p. 2 of this e-mail, of $125,457.50 (above-noted), and adds $1,450 (she made an error here – it should have been $2,450), and comes up with a further total of $127,907.50, and then adds 15% OH&P = $19,186.13, for her “Grand Total” of $147,093.63 for all the contract work done.

[92] She then notes, at the top of p. 3, correctly, that she has paid $135,000, so the “Difference” is $12,093.63.

[93] She then deducts, at the top of p. 3, $550 for “additional storage and hotel accommodation” leaving a balance owing of $11,543.63.

[94] She lastly, at item 6, refers to the plaintiff’s “Last Invoice dated the 09th of October, 2008” which I have called the “October 9 Summary”--(Def.’s Ex. Bk., Vol. 1, Tab 6, p. 3). There are 15 listed items which both she, (then), and I, (at trial and in these Reasons), have numbered 1 through 15 (although they are not numbered on this “Summary”). But she only makes reference to #’s 6, 8, 12, 13, 14 and 15. She omits any reference to #’s 1, 2, 3, 4, 5, 7, 9, 10, 11. These 15 items total $8,640 plus $1,296 for 15% OH&P, totalling $9,936 in extras. She says that a part of #8 at $150, a part of #12 at $150, a part of #14 at $75, and a part of #15 at $150, were done and these total $525, plus 15% OH&P at $78.75, that totals $603.75.

[95] She then adds this $603.75 to her above-noted balance owing of $11,543.63--(noted at para. [93] above)--to get a final total of $12,147.38.

[96] She doesn’t explain why she omits any reference to items #’s 1, 2, 3, 4, 5, 7, 9, 10 or 11.

[97] And she makes no reference to the October 1 Summary (invoice) that I find, on the evidence contained in the cross-examinations of Casarella and Minaker, she was actually given. (And I note that this Summary is one of her productions-(at Def.’s Ex. Bk., Vol. 1, Tab 6, p. 3). This Summary (invoice) shows 11 extras being claimed, totalling $5,150, plus $772.50 for OH&P, totalling $5,922.50.

[98] Her total amount for work “not done” -(listed on pp. 1, 2 and 3 of her said e-mail)- is [$800 + $3,081.50 + $2,500 + $2,000 + $3,900 + $940 + $1,950 + $2,200 + $600 + $1,600 + $205 + $150 + $150 + $75 + $150 =] $20,301.50.

[99] Therefore, if I add $147,093.63, the amount she says is the completed project amount and the amount of $20,301.50, the amount she says is the amount of incomplete or non-done work, then the total contract price for all work done and to be done, according to the defendant, is $168,048.88.

[100] This amount of $168,048.88 is to be contrasted with what the plaintiff said in its October 9 “Summary” was the “Revised Contract of $168,893.60”, which is also what plaintiff’s counsel contended, in argument before me, was the exact gross amount owing to the plaintiff, before adding GST, and before deducting payments ($135,000) and also before deducting the plaintiff’s newly “offered” credit- (see para. [??] above) - of $5,781.57 for work “not done”. The difference is a mere $845±.

The October 28 Meeting: Casarella’s Evidence

[101] In para. 36 of Casarella’s May 27, 2011 trial affidavit, he deposes as to how he received Minaker’s October 27 e-mail on October 28 which admitted work done of $147,093.63 (he says, in his affidavit, “inclusive of GST” but, in fact, she does not therein say “inclusive of GST” nor does she make any reference to GST, so Casarella is wrong on this point), and which admitted that she owed Vallie $12,147.38 as of that date. He further deposes that he did not agree with all her figures and told her so when he met her at her house on October 28. (Trial Ex. 4 shows that Minaker did not go to work that entire day.) He goes on, at para. 37, to depose that he told her, at this October 28 house meeting, that since, on her calculations, she owed him $12,147.38, she should pay him that amount but she refused to pay him anything. He deposes that he “pressed [her] for payment”, but he claims that she said she would not make any more payments, and that Vallie should not return to the job site to do any further work. When he was told this, he then considered the contract terminated.

[102] In para. 39 of this affidavit, Casarella deposes, inter alia, that he later tried to phone her but she wouldn’t return his phone calls. He deposes that he and his brother then went to her workplace at York University to try and get some payment but she refused to talk to them. (There is also a reference to a “rubbish” dispute – he says she dumped it on his doorstep; she denies it – but it is not necessary for me to try and determine whose version of this issue is truthful as it does not affect the key issue of who was in breach of contract.)

[103] At paras. 40, 41 and 42 of his affidavit, Casarella asserts that, as of October 28, there were only a few aspects of the work that had not been completed. He has prepared, for this lawsuit, a list of 9 credits for this incomplete work for labour only-- (see Plt.’s Ex. Bk., Vol. 1, Tab 13)--because he claims that all of the material that was necessary to complete the work was left on site except for one basement closet door that he took away (which I believe the evidence shows he is not charging her for). His 9 credits total $4,560. He adds GST of $228 for a total credit of $4,788. (I will deal with the fairness of these credits later in these Reasons.) I note he does not add 15% OH&P to his credit number of $4,560 which disadvantages the defendant. Had he done so, this credit would have been larger by $684 ($4,560 x 15% = $684 = $5,244 without GST; GST would be an additional $262.20).

[104] In para. 44 of his affidavit, he deposes that the sum owing to the plaintiff as of May 27, 2011 (the affidavit date) is $37,549.65 which is also the exact amount claimed in the statement of claim. (My calculation, using his calculations in his October 9 “Summary”, is $168,893.60 + GST of $8,444.65 = $177,338.25 less $135,000 paid = $42,338.25, less credits of $4,788.00 = $37,550.28, a difference of $0.63.) Note that at trial, during argument, Ms. Assuras increased these credits to $5,781.51 – see para. [60] above.

[105] In para. 47 of his affidavit, he deposes that the value of the work completed by Vallie is “approximately $164,105 excluding GST”. I have determined that he gets this figure by simply taking the total invoiced amount, as per the October 9/08 “Summary”, of $168,893.60, and then deducts his credit figure of $4,788, leaving a value of work completed at $164,105. (I get an exact amount of $164,105.60.)

[106] In cross-examination, Casarella admitted that Vallie didn’t do any work after October 24 and the reason was because “she didn’t pay me”. But, in re-examination, he testified that his two tile setters were doing front hall tile work on site on October 28. This is not disputed. He also admitted that he wasn’t at the job site on October 29 or 30, or November 1, as his statement of claim pleads. He came to the job site on the morning of Tuesday, October 28 for the meeting with Minaker. He admits he removed some of his equipment from the site but he can’t remember when or what equipment. He claims that Minaker locked other equipment of his in her garage.

[107] In re-examination, he also testified that at this October 28 meeting, Minaker “took the contract” and “put her percentages as to completion”.

[108] He also testified that, at this October 28 meeting, he reviewed Minaker’s October 27 e-mail with her. He then asked her that, assuming her percentages of work done were right, could he at least have payment of the $12,147.38 that she seemed to be saying in her e-mail was owing but she “just said ‘NO’”.

[109] And in re-examination, he was referred by his counsel to Minaker’s October 24 e-mail and he agreed that it raised issues about Vallie’s progress. He testified that by October 24, the job was “95% - 96%” finished. He explained in his testimony, in response to Minaker’s complaints in her e-mail about the poor progress of the work, that he had to schedule the different trades at different times. He also testified that he was “trying to finish” the job in mid to late October but Minaker wasn’t paying him. He further testified that, as of October 28, she owed him around $35,000 for work that had been completed. But this is wrong. It is true that Receipt (invoice?) No. 4 of October 20-(Plt.’s Ex. Bk., Vol. 1, Tab 11)-seeks payment of $34,115. But she had paid him $15,000 on October 20, 21 or 22, as noted earlier in these Reasons, which is not reflected in Receipt No. 4 so that, as of October 28, she only owed him, at best, $19,115.

[110] He then further testified in re-examination that he tried talking to her about paying just some further amount of money and mentioned to her the $12,000–odd amount that she “admitted” in her e-mail that she owed, or, if not that, then a somewhat lesser amount, or at least paying him for the tile setters’ work that was being done that day, but she refused all his requests for more money. He then told the tile men to finish their work at the front door area. He testified that he “…was trying to reason with her – he wanted to finish the job…” and that “…he was trying to get back on track…”. He testified that he asked her if “...we could resolve the problem…” but Minaker “…just walked away”.

[111] In response to Minaker’s counsel’s cross-examination questions about removing his tools, he testified that he “doesn’t remember”. He had his hand tools and a vacuum cleaner and a portable drill on site, and he testified that he might have taken those with him when he left. He testified that he left all the unused materials on site and that some materials were put in the garage- (except that he might have taken the new basement closet door – see List of Credits, Plt.’s Ex. Bk., Vol. 1, Tab 13). But see the defendant’s post-departure photo of the basement closet- (at Def.’s Ex. Bk., Vol. 1, Tab 10, photo # 10)- which shows the closet and which shows that there are two and possibly three closet doors there, but I note that the one with the door knob is probably an existing door.)

[112] Following this unsatisfactory meeting with Minaker on October 28, Casarella decided not to schedule any of his sub-trades to go back to the job site and do further work.

[113] In his reply evidence, responding to Minaker’s assertion in her cross-examination of the poor progress of the work, Casarella testified that the staining of the floors on the main and second floor was done between Tuesday, October 14 and Friday, October 17. He testified that stained floors take time to dry, especially in the cooler temperatures of October, and that no one can walk on the floors during this operation. (Minaker testified that this work was done between Saturday, October 11 and Saturday, October 18 as I have noted above, not a significant difference.) But the totality of the evidence is clear that not much if any work was done during the following week of October 20, i.e., Monday, Oct. 20 to Friday, Oct. 24, and I infer that this is what prompted Minaker’s e-mail of October 24- (Def.’s Ex. Bk., Vol. 1, Tab 8). This was also the time frame where the plaintiff was having difficulty getting money from Minaker as I have noted above.

The October 28 Meeting: Minaker’s Evidence

[114] At para. 55 of Minaker’s trial affidavit of July 18, 2011, she denies that she terminated the contract and claims that the plaintiff “abandoned the job site.” (In my view, this statement is merely a conclusion of law rather than a detailed description of what factually occurred between October 24 and October 28.)

[115] At para. 68 of her trial affidavit, she responds to Casarella’s evidence in para. 38 of his trial affidavit (where he deposes that “When I pressed the Defendant for payment, the Defendant told me she was not going to make any more payments and that we were not to return to the job site to do any further work. When she told me this, I considered the contract terminated.”). She says his evidence is “simply not true”. She denies that she ever told him “that [she] was not going to make any more payments and that he was not to return to the job site” as he deposes. She also refers to his tile contractors, Alex and Leo, who came to do work on October 28. Of course, this was the critical day when Casarella and Minaker had their morning meeting to discuss her October 27 e-mail and the payment of more money. The tile men were already at the home, having started working early, by the time Casarella and Minaker began their discussions as above-described. As to whether Alex and Leo were at her home “the next 2 days to complete the tiling work”, as she deposes, the evidence tends to suggest otherwise. Her job diary- (Plt.’s Ex. Bk., Vol. 3, Tab 3, for October 28 and 29, at p. 22) - is not helpful. The area to be tiled was quite small and would not take long to do. And there is no entry in her job diary about the critical meeting between her and Casarella on October 28. And there is no entry about the tile setters being on site on October 28. There is just an entry on October 28 that says “no Fab, no John” which refers to the millworker and the electrician. There is a diary entry for Wednesday, October 29 that says that Angelo took some material and some tools and that he “came into the house” but no reference to the presence of the tile setters that day. And her work attendance sheet (Trial Ex. 4) shows her being at work at York University all day on October 29. She was off work all day on Thursday, October 30 (as per Trial Ex. 4) but there is no diary entry for that day. I find that the tile setters were last on the job on Monday, October 28 and not thereafter. But this issue is not a critical one except on the issue of these parties’ credibility.

[116] In Minaker’s cross-examination, she admitted that her October 27 e-mail was “her take-off on the plaintiff’s accounting” in order for her to “get an understanding of where she stood” and “what she thought she owed at that moment in time”. Her final analysis was that the figure of $12,147.38 “is what she thought was owing” at that time, and she testified that “I thought it was fair”. But, she agreed in her cross-examination, that she “wasn’t prepared to pay the plaintiff this amount on October 28”. She then claimed in her evidence in cross-examination that she didn’t make such payment and that she “wasn’t asked to” (which I don’t believe) and that she made “no payment any day thereafter” (which is clearly true).

[117] When asked where she got the figure of “+/- 170,000.00” in her e-mail of October 24--(Def.’s Ex. Bk., Vol. 1, Tab 8, p.1)-- she couldn’t say but denied that she got that figure from the plaintiff’s October 9/08 “Summary”--(Def.’s Ex. Bk., Vol. 1, Tab 7)--which speaks of a revised contract amount of $168,893.60. I find as a fact that she did get this $170,000+/- figure from this “Summary” and that she was then agreeing that the proper contract amount was around $170,000+/-.

Events on Wednesday, October 29 and Thursday, October 30

[118] Trial Ex. 4 shows Minaker was at work all day on October 29. And it shows she was off work all day on October 30 and the sick leave code shows this absence was because of “personal illness”. In cross-examination, she testified that she had both locks to her house changed on October 30. I infer that this is why she did not go to work on October 30, not through “personal illness”. The invoice from Pro Locksmith Ltd.--(Def.’s Ex. Bk., Vol. 1, Tab 12, p.1)--shows that the work was done on Thursday, October 30 at a cost of $223.16. She testified that she arranged for this locksmith because Casarella had a key or keys to her house. She testified that Casarella came to her house on October 29 and took back all his tools and unused materials. She asked him to finish the job and he said “We’re done”. She asked for the keys back but he refused. She denied that she called the locksmith on October 28 and claimed she only called them on October 29 when Casarella came to remove his tools and materials. She did admit however that she “didn’t want him back” after their meeting on October 28. The locksmith invoice shows that the “Date of Order” was October 28 but she claims this is a mistake and that she only called the locksmith the next day, October 29. She did agree that in the next few days following October 28, Casarella did come to York University, her place of work, to try and speak to her about the job and what could and should be done about their dispute but she just walked away, refusing to speak to them.

[119] In re-examination, Minaker testified that on the evening of October 29, she called Casarella and told him that since he had removed his tools, she presumed he wasn’t going to come back to finish. She then asked him return the house keys and he refused so she then called the locksmith that evening.

[120] Casarella, in his reply evidence, did not say anything that conflicted with Minaker’s evidence about what had occurred between them on October 29. I do find that the locksmith invoice supports the contention that she called the locksmith sometime on October 28 and I reject her evidence on this point that the order date on this invoice is wrong. I also find that the conversation between Casarella and Minaker about the return of the keys took place on October 28. If she didn’t know that Casarella would refuse to return the keys to her until October 29, as she says, why would she call the locksmith on October 28? This locksmith work was going to cost her over $200 and, on her version, she didn’t know that such work would be necessary until Casarella refused to give her the keys on October 29 and yet she organized the locksmith work on October 28. Her version of events does not make any sense to me.

[121] Thereafter, Minaker arranged for other trades to come to her house to finish the renovations that were to have been done by the plaintiff and also to provide further work and materials that were not included in the plaintiff’s contract but that were necessary to make her house habitable, such as the HVAC system and other mechanical work, and the kitchen cupboards and countertops and kitchen plumbing, and the supply of the skylight in the kitchen breakfast area and also certain garage work.

[122] The David Kerr-Taylor affidavit shows that Minaker hired him to do certain electrical work in late 2008 and 2009 to complete the electrical work that was to be done by the plaintiff – (see para. 3 of the Kerr-Taylor affidavit).

[123] The Fabrizio Carelli trial affidavit shows that Minaker hired him to build and install kitchen cabinets in late 2008 which were not part of the plaintiff’s work. He also deposes that he had been hired by the plaintiff, i.e., Vallie, to supply and install baseboards for the defendant’s home. He supplied the baseboard material to Vallie who delivered this material to the defendant’s home. He was also to install the quarter round that was to have been supplied by the plaintiff. The new baseboards were unable to be installed by Carelli because of the termination of the contract by the defendant. He had removed the existing baseboards in the kitchen and in the second bedroom which were then to be installed in other areas of the house. He also removed baseboard from an upper linen closet but wasn’t able to re-install the new baseboard because of the termination of the contract.

Considerations Affecting My Finding as to Who Breached the Contract

[124] It is important and necessary in this case to distinguish between work done and billed by the plaintiff that the defendant claims she did not contract for, that is, did not agree to or consent to or approve to be done, often called “disputed extras”, on the one hand, and, on the other hand, work that was supposed to be done by the plaintiff but that the defendant claims, or the plaintiff admits, was not done, either totally, or partially, or was done defectively. The former work will relate to my finding on the issue as to the amount of the total contract price. Such price will have to be used by me to calculate, inter alia, what amount the plaintiff is entitled to if the defendant is found to have wrongfully terminated the contract so that the plaintiff can claim the full contract price (but less the proper credits for incomplete work and possibly, less credits for the cost to the defendant of repairing any deficiencies, to be discussed later in these Reasons). The latter work will relate to my finding as to the amount of any such credits, and my finding on the question of how much work was done, and what was the contract value of such work, so as to determine whether the plaintiff was entitled, as of October 28, to be paid any more money over and above the $135,000 that the defendant had already paid, as the plaintiff was then demanding and which the defendant was refusing to pay, so as to determine who was in breach of contract when the work stopped on October 28.

[125] If the value of the work the plaintiff had done, as of October 28, less previous payments, was not as much as the plaintiff was then demanding to be paid, or perhaps was willing to accept as of that time, (as I discuss below, Casarella’s evidence showed that he was prepared to negotiate on the amount of such an additional progress payment), and if the plaintiff then stopped work and left the job because of the proper refusal of the defendant to make any such further payment, then the plaintiff was in fundamental breach and the defendant was entitled to terminate for such breach. In other words, the plaintiff would have been wrong in saying “no more money, no more work”.

[126] On the other hand, if the value of the work done by the plaintiff, as of October 28, less previous payments, exceeded the amount of money it was demanding or was willing to accept, so that the plaintiff was entitled to be paid some more money, as a progress payment, and the defendant wrongfully refused to make any further payment, then the defendant was in fundament breach for non-payment, and the plaintiff was entitled to stop work, terminate the contract, and sue for damages for breach of contract. The law on this point will be reviewed later in these Reasons but see especially, Landmark II Inc. v. 1535709 Ontario Lt. (2011) 2011 ONCA 567, 5 C.L.R.(4th) 1 (C.A.).

What Is the Total Contract/Extra Price? – The Disputed Extras

[127] I now turn to deal in detail with the many items of alleged “not-agreed-to” work (disputed extras) raised by the defendant in her October 27 e-mail, and in her trial affidavit of July 18, 2011, and in her cross-examination, and raised by Casarella’s responses thereto, and raised in the evidence of the other witnesses who provided affidavits and who were cross-examined at trial. Later, I will deal in detail with the many alleged items of “not-done” or “incompletely-done” work.

[128] To determine the proper total contract- plus- extra price, it becomes necessary to consider each of the plaintiff’s 26 claimed extras listed on the October 1 and October 9 Summaries (invoices)-- (see Dft.’s Ex. Bk., Vol. 1, Tab 6, p. 3 and Tab 7)--and the defendant’s objections to many of these claimed extras, and to rule on the propriety of each of them in order to determine what was the total contract-plus-extras price so as to be able to determine what was the proper additional progress payment, if any, that was payable by the defendant as of October 28 and to eventually determine what amount, if any, is owing to the plaintiff.

[129] The law on what is a proper recoverable extra to a construction contract is well set out in Deminico v. Earls, [1945] O.W.N. 375, by Master Marriott. (In quoting from this decision, I have omitted the Master’s references to all the legal authorities he relied on.) He said the following:

“Because contractors and builders have always been prone to make claims for extras, the Courts have laid down certain requirements to be met before such claims may be allowed. The ordinary law of contract does not find any place for extras, and unless the contract itself provides for it, a claim for any additional work must depend upon a new contract, either express or implied… An express contract may be either in writing or oral, but an experienced contractor will always endeavour to have the order in writing because the onus is upon him to prove it by a preponderance of evidence… An implied contract may be inferred from the conduct of the parties, but in all cases an essential element is that the owner at least knew that the work was going on an acquiesced in the contractor doing it. So that where the contractor goes ahead and does work he is not bound to do under the contract, and the owner knows nothing of it, the contractor cannot recover anything for it…In some cases it may be presumed that the owner consented to such extra work if so great that it must have been done with his knowledge or was necessary and not foreseen… Finally, in asserting a claim for extras the contractor must prove conclusively that the work done was not a part of the main contract, and for this purpose if the main contract is in writing it must be produced.”

[130] See also, the case of Ron’s Trenching and Haulage Ltd. v. Estevan (City) (1985) , 11 C.L.R. 148 (Sask. Q.B.) at p. 151, Matheson J., who said the following:

“Extra work, entitling the contractor to additional payment must be work which is substantially different from, and wholly outside the scope of, the work contemplated by the contract: Goldsmith, Canadian Building Contracts (3rd ed., 1983) p. 83. Although there appears to be no generally accepted definition of ‘extra work’, it has been suggested that in a lump sum contract it may be defined as work not expressly or impliedly included in the work for which the lump sum is payable. If work is included in the original contract sum, the contractor cannot recover extra payment for it, although he may not have anticipated that the additional work would be necessary: Keating, Building Contracts (3rd ed., 1969), p. 63. (italics are in the original)

Keating has also suggested (at p. 62) that, in order to recover payment for work as an ‘extra’, the contractor must prove: (1) that the ‘extra’ work was not included in the work for which the lump sum is payable; (2) that there was a promise, expressed or implied, to pay for the work; (3) that any agent who authorized the work was authorized to do so; and (4) that any condition precedent to payment has been fulfilled”.

[131] See also Fairwood Construction Ltd. v. Lin (1997), 1997 CanLII 4292 (BC SC), 33 C.L.R. (2d) 111 (B.C.S.C.) at pp. 119-121, where the general principles governing the law of extras are well set out. There, the defendant home owners were aware of the extra work being done and did not object and the plaintiff contractor was held to be entitled to payment for them.

(Because of the length of these Reasons, and the large number of extras to be dealt with, I am going to adopt a point form abbreviated and hyphenated format when reviewing all the evidence and making my rulings.)

[132] The 11 Billed Extras on the October 1, 2008 Summary(Invoice)

1. Add extra pot light at outside door to kitchen - $300 – defendant admits is a proper extra and that work was done - Ruling:

Proper Extra: $300 Percent Complete: 100% - Allow: $ 300

2. Add phone line to kitchen - $150 – defendant admits was agreed to be done – see Minaker trial affidavit, para. 48, p. 12 – but she claims work not done–she never used this phone line in kitchen--see Casarella response trial affidavit #2, para. 42 – outlet box pull strings were done but phone/cable wires were to be provided by phone/cable installers – he says this was not part of plaintiff’s contract--Ruling: I find phone phone/cable wires should have been supplied by plaintiff as part of this item of work.

Proper Extra: $150 Percent Complete: 50% - Allow: $75

3. Add phone line and cable to living room -- $300 – defendant admits was agreed to be done – see Minaker trial affidavit, para. 48, p. 12, - she claims work not complete - in cross-examination, she said work “not done”- she never used phone line or cable in living room - cable work not done - she is willing to pay $150- see Casarella response trial affidavit #2, para. 42--same response as #2 above-- Ruling: I find the phone/cable wires should have been supplied by plaintiff as part of this item of work.

Proper Extra: $300 Percent complete: 50% -Allow: $150

4. Add cable to master bedroom -- $150 – no mention of any problem with this item in Minaker trial affidavit – see para. 48 in cross-examination, she said “not done” – never used cable in master bedroom - since no complaint in trial affidavit, Casarella did not respond -- Ruling: Not fair to allow this item to be raised for the first time in cross-examination-plaintiff can’t respond.

Proper Extra: $150 Percent Complete: 100% - Allow: $150

5. Remove light in master bedroom closet and add 2 new lights - $600 – see Minaker trial affidavit, para. 48, p. 13-- 2 new lights were to be installed but she disagrees that old light was to be removed because it was never there--in cross-examination, Minaker admitted that wiring was done and switch was installed but the 2 simple white porcelain bulb sockets were not installed by plaintiff--was installed by her “new guy”--see Casarella response trial affidavit #2, para. 43--light in closet was removed and replaced--Ruling: I am not satisfied that all this work was done--sockets have not been proved to have be installed.

Proper Extra: $600 Percent Complete: 75% - Allow: $450

6. Add 3 pot lights to basement landing -- $900 – Minaker admits 3 pot lights were supplied and installed --Ruling: Allowed in full.

Proper Extra: $900 Percent Complete: 100% - Allow: $900

7. Add 2 electrical outlets to new rec. room wall as requested by city inspector - $500 – see Minaker trial affidavit, para. 48, p.13 – not requested or agreed to – same evidence in cross-examination--see Casarella response affidavit #2, para. 43 – outlets required by city electrical inspector –he says no objection by Minaker in October 27 e-mail (but I note that this e-mail does not deal at all with the October 1 Summary (invoice) but just the October 1 quotation at Dft.s Ex. Bk., Vol. 1, Tab 6, p.1) – a different document--Ruling: This work was necessary work but was not foreseen.

Proper Extra: $500 Percent Complete: 100 % - Allow: $500

8. Supply and install kitchen exhaust pipe - $250 – agreed to –

Proper Extra: $250 Percent Complete: 100% - Allow $250

9. Supply/install new roof vent in kitchen - $200 – see Minaker trial affidavit – para. 48, p. 13 – not requested or agreed to –she claims was done by plaintiff without her knowledge – in cross-examination, she said a new skylight was installed in kitchen/breakfast area and this roof vent was installed in this area as well – work was done in mid-October when rest of kitchen work was being done – she claims Casarella should have discussed this with her--she never complained about this work until July, 2011, the date of her trial affidavit – Casarella in cross-examination says “she agreed to this”–Ruling: I find Minaker stood by while this work was being done--she was living in house all during construction-she had to be aware of it--never complained about work until over two years later–Ruling:she impliedly accepted this work.

Proper Extra: $200 Percent Complete: 100% - Allow:$200

10. Repair missing floor at fireplace in living room - $ 600 – admitted by Minaker in cross-examination --Ruling: Allow in full.

Proper Extra: $600 Percent Complete: 100% - Allow: $600

11. Supply/install 4 extra pot lights at skylight area in breakfast area - $1,200 – see Minaker trial affidavit – para. 48, p. 13 –she claims this work was included in the quotation for electrical work of July 16, 2008 for $25,000 –she says the provision in the July 16 quotation that “All light fixtures will be provided by owner” was a mistake made by Vallie –she claims Vallie knew from day one that it was to supply all light fixtures as part of the July 16 contract – she claims she told Casarella about this mistake in his quotation– she admitted in cross-examination that she supplied a portion of the electrical fixtures, being the dining room fixture and the track lighting – see Casarella’s first trial affidavit of May 27, 2011 –he says Minaker provided plaintiff with a set drawings prepared by her – they were not “working drawings” and did not provide the necessary detail for the work to be done –these drawings were 4 pages –( see Plt.’s Ex. Bk., Vol. 1, Tab 1) – p. 1 is the critical drawing showing the electrical work to be done on the main floor –it shows 22 pot lights but no pot lights are shown for kitchen/ breakfast area- (I note the drawing at Plt.’s Vol. 1, Tab 2, is for kitchen cupboards and shelving and has nothing to do with the work done by the plaintiff -is not helpful) – defendant’s set of these drawings is at Dft.’s Ex. Bk., Vol. 1, Tab 9, 5 pages – pages 1-4 at defendant’s Tab 9 are same as pages 1-4 in plaintiff’s Tab 1 – but page 5 in defendant’s Tab 9 does show 22 pot lights plus 4 additional pot lights to be supplied in kitchen/ breakfast area - but this drawing is not in plaintiff’s set of drawings at Plt.’s Ex. Bk., Vol. 1,Tab 1-- in her cross-examination, Minaker said “she thinks” the set of drawings she gave to Lasic, plaintiff’s electrical sub-contractor, did show these 4 additional pot lights in the kitchen /breakfast area – she claims she gave the plaintiff both sets of drawings, i.e., with and without these 4 additional pot lights being shown – there is no dispute that these lights were, in fact, installed – Minaker had the October 1,2008 Summary (invoice) charging her $1,200 for these 4 pot lights since on or about October 1 but she never made any objection to this charge until her July 18, 2011 trial affidavit –almost 3 years later-- she got plaintiff’s Summary of Electrical Work showing $35,000 in electrical work -(Dft.’s Ex. Bk., Vol. 1, Tab 6, p. 2)- some time before October 27,2008 because, in her October 27 e-mail, on p. 1, she refers to this $35,000 figure – she didn’t object to this ‘extra’ in her October 27 e-mail – and I note that all other items on this Summary of Electrical Work are proper extras either mentioned in the Aug. 8/Sept. 8 quotation or ruled on above as proper-- it is true that some of the electrical work items were not completed but that is a different question) -- Ruling: The fact that there are two electrical drawings for the main floor has caused confusion--I am not satisfied that the defendant has proven that she had given the plaintiff this particular drawing- (Dft.’s Ex. Bk., Vol. 1, Tab 9, 5th page)- prior to it giving her its July 16 quotation which quoted $25,000 for the electrical work described as “all as per drawings provided”. And I note that the new “kitchen” work described in the later Aug./Sept. 8 quotation, which required Vallie to “remove old electrical and supply and install new”, was not included in the original July 16 quotation. And there is no reference to any “drawings” in the Aug./Sept. 8 quotation. If a mistake was made, as I find it was, with Minaker operating on one version of the drawing and Vallie operating on another, it was caused by Minaker preparing 2 different versions of the electrical drawings for the first floor work, causing confusion, and Minaker should bear the responsibility for this confusion. I therefore find that these 4 pot lights and the related electrical work for the kitchen/breakfast area were not part of either the July 16 or Aug./Sept.8 quotations and the plaintiff is entitled to be paid for this extra as claimed.

Proper Extra: $1,200 Percent Complete: 100% - Allow: $1,200

[133] Said 11 Extras above–ruled on, summarized as follows:

Total Agreed Extras:

$2,950 + 15% OH&P

= $442.50 = $3392.50

Total Proper Extras

so found (including

above agreed extras) =

$5150+15% OH&P=$772.50=

$5922.50

Total Allowed Extras:

based on above-ruled on percentage completion:

$4775 + 15% OH&P

= $716.25 =

$5,491.25

[134] The 15 Billed Extras on the October 9, 2008 Summary (Invoice)

1. Laundry room – remove balance of ceiling - $500 – defendant admits is proper extra – Ruling: Allowed as claimed.

Proper Extra: $500 Percent Complete: 100% Allow: $500

2. Build new drywall bulkhead to cover pipes - $840 – defendant admits is proper extra – Ruling: Allowed as claimed.

Proper extra: $840 Percent Complete: 100% Allow: $840

3. Drywall balance of ceiling - $1,440 – defendant admits is proper extra – Ruling: Allowed as claimed.

Proper Extra: $1,440 Percent Complete:100% Allow: $1,440

4. Relocate door to boiler room - $500 – no objection in Minaker’s October 27 e-mail – Minaker says “not agreed to” in para. 43 of her trial affidavit – in cross-examination - she agreed that work was done but claims she never agreed to this work being done – she made a mistake by not complaining about this charge in her October 27 e-mail – Casarella says in his response trial affidavit #2, at para. 47, that she agreed to this work –I note that this work is quoted on in the October 1 quotation under the heading “Laundry Room”, line 4- (see Dft.’s Ex. Bk., Vol.1 , Tab 6, p. 1) – best evidence, aside from conflicting evidence of Minaker and Casarella, is Minaker’s October 27 e-mail – para. 6.6, p.3 – Ruling: I allow extra as claimed.

Proper Extra: $500 Percent Complete:100% Allow:$500

5. Build out doorway wall at boiler room to cover piping - $490 – in Minaker’s October 27 e-mail – no objection – in para. 49, p. 14 of her trial affidavit, she says work was “discussed” but she never “consented or agreed” to have this work done – in cross-examination, she maintained work not authorized – in Casarella response trial affidavit #2 – para. 48 – he says she agreed to have this work done and it was done –I note that this work was quoted on in the October 1 quotation under the heading “Laundry Room”, line 5- (Dft.s Ex. Bk., Vol. 1, Tab 6 p. 1) –aside from conflicting evidence of Minaker and Casarella, best evidence is her October 27 e-mail at p. 2, para. 4.5 –there, she agreed work was agreed to and was done – in Casarella’s cross-examination, he says he discussed work with her – gave her a price – she agreed. Ruling: based on evidence, on balance of probabilities, this work was discussed and agreed to.

Proper Extra: $490 Percent Complete: 100% Allow: $490

6. Patch holes in basement washrooms (damage by Mech.) - $ 400 – Minaker objected to this charge in her October 27 e-mail – p.3, para. 6.6 – see Minaker trial affidavit – para. 49, p. 14 – she claims holes were made by Lasic – not by her mech. contractor – in cross-examination, Casarella admitted that this work was not done and that Minaker is “entitled to $400 credit plus 15% etc.” and that it is not a proper charge. Casarella resiled from what he said at para. 49 of his response trial affidavit #2. Ruling: Disallowed.

Proper Extra: $0.00 Allow: $0.00

7. Install wiring for 2 lights and 2 switches - $1,200-this work was mentioned in Minaker’s “List” of July 18, item #8 (see Dft.’s Ex. Bk., Vol. 1, Tab 2, p. 1)- and again, in plaintiff’s quotation of October 1, 2008 (see Dft.’s Ex. Bk. Vol. 1 , Tab 6). Minaker deals with this work at para. 44 of her trial affidavit - says work was “not done”- and again, at para. 49, p. 14, where she says “work was not completed” and she first claims a credit of $1,800 and later only $1,200 - see Casarella’s response trial affidavit #2, at para. 45, responding to Minaker’s affidavit at para. 49, p. 14, where he claims to rely on what he says at his para. 44. But his para. 44 refers to “four pot lights” and has nothing to do with this extra which is for 2 lights and 2 switches in laundry room. But see para. 50 of Casarella’s response trial affidavit #2 where he refers to his October 1 quotation – (see Dft.’s Ex. Bk., Vol. 1, Tab 6) which quotes $1,800 for 2 lights – 2 switches –and relocate dryer power from panel and relocate dryer plug – all for $1,800. Casarella claims he supplied/installed the 2 lights and 2 switches but did not do the other work so he only billed $1,200 and not $1,800 – see Minaker’s October 27 e-mail at p. 2, para. 4.6 where she says this work, at $1,200, was “not completed” and that “Cost to Complete” is “$600”. Minaker in cross-examination said Kerr-Taylor did this work, and that she was “double charged” by Vallie, and also that this work was “not done” by Vallie – Ruling: Best evidence is Minaker’s October 27 e-mail at p. 2, para. 4.6 and I accept Casarella’s evidence here as most probable.

Proper Extra: $1,200 Percent Complete:100% Allow: $1,200

8. Relocate closet basement light to wall - $300 – In Minaker’s trial affidavit, para. 49, p.15, she says “This work was not done”. In her October 27 e-mail, p. 3, para. 6.8, she says “50% of this portion done” – “Cost to Complete $150” – Casarella in his response trial affidavit #2 at para. 50 claims that “work was completed in its entirety”. The picture of the basement closet area is found at Dft.’s Ex. Bk., Vol. 1, Tab 10, photo #10. In the Hellyer Report of October 24, 2009, at Plt.’s Ex. Bk., Vol. 4, Tab 2, Appendix 1, containing photographs, see third page of 5 pages of photos, photos #’s IMG 0099.JPG and IMG 0100.JPG, show this light. And photos IMG 0104.JPG and IMG 0105.JPG and IMG 0093.JPG show other similar basement lights having been installed. Ruling: I find on balance of probabilities that this work was, in fact, done; claim allowed.

Proper Extra: $300 Percent Complete:100% Allow: $300

9. Skim coat front wall hall ceiling - $800 – Minaker admitted this extra her October 27 e-mail, p.2, para. 4.9 that this work was done and is payable. Ruling: Allowed.

Proper Extra: $800 Percent Complete:100% Allow: $800

10. Remove and replace baseboard to bedroom #2 - $420 – see Minaker trial affidavit, para. 47 – she agrees is an extra but only half done – will pay $210 – in cross-examination, agrees to pay only $195 – see Casarella response trial affidavit #2 – para. 51 – old baseboard was removed – new baseboard was stained/varnished - not installed - in cross-examination, Casarella acknowledged that no credit was given on his credit list (at Plt.’s Ex. Bk., Vol. 1, Tab 13) and he testified that he can’t figure out what credit should be given. I think half is fair as per Minaker’s para. 47 affidavit at $210 – Ruling: Allow $210.

Proper Extra: $420 Percent Complete: 50% Allow: $210

11. Rework ceiling at boiler room doorway and add NIB wall –

discussed but not consented to or agreed to – but I note, importantly, that there was no complaint about this extra billing in her October 27 e-mail – see p. 3, para. 6, where her other disputes as to the October 9 invoice are set forth - and see Casarella response trial affidavit #2, para. 56 – he says she did agree because she wanted the exposed piping covered – Ruling : Best evidence is her October 27 e-mail; allowed at $400.

Proper Extra: $400 Percent Complete: 100% Allow: $400

12. Paint kitchen back door - $300 – see Minaker trial affidavit –para. 49, p. 15 where she says “This work was completed” but claims that this work was included in July 16 quotation re painting work, for $12,326 – but see October 27 e-mail, p. 3, para. 6.12, where she says “50% of this portion done. Cost to complete $150.00” –and see Casarella affidavit – para. 57 –he says Minaker did agree to pay $300 to paint kitchen door and that she says this work was “completed” in her affidavit at para. 49. Ruling: I note the wording of July 16 quotation re painting –says“paint walls and ceilings” – no mention of doors that lead to outside, either front door to outside or kitchen back door to outside – Ruling: Allowed at $300

Proper Extra: $300 Percent Complete: 100% Allow: $300

13. Repaint 2 rads wrong colour - $600 – see Minaker trial affidavit – para.15, p. 15 – She claims Vallie painted 2 rads wrong colour and she wanted them repainted the correct colour –she objects to him charging her for his mistake – see Casarella response trial affidavit #2, para. 58 – he says she asked for the repaint – she picked grey and rads were painted grey - she didn’t like the colour and then asked for green – rads were then painted green – he claims it would take painter one day to paint 2 rads - $600 total –he say$50 for paint and $550 for labour -I note that $550 ÷ 8 hours = $68.75/hr.! –Ruling: there is a clear conflict in testimony – no other evidence for me to rely on one way or other and $600 is far too high to paint 2 rads twice –I find it would not take painter one full day to repaint – see photo of these rads at Hellyer Report – October 24, 2009--(Plt.’s Ex. Bk., Vol. 4, Tab 2, photos IMG. 0067.JPG; IMG. 0056.JPG; IMG.0049.JPG; IMG. 0043.JPG; IMG. 0010.JPG and IMG. 0012JPG) --Ruling: Plaintiff has not proved entitlement to extra on balance of probabilities as to both liability and reasonableness of quantum-disallowed.

Proper Extra: $0.00 Allow: $0.00

14. Remove and replace baseboard to upper linen closet - $150 – see Minaker e-mail October 27 – p. 3, para. 6.14-“Not completed. 50% of this portion done. Cost to Complete $75.00” – see Minaker trial affidavit, para. 49, p. 16 – plaintiff removed baseboard but did not replace with new – I note that plaintiff agrees – see plaintiff’s Carelli trial affidavit, para. 7 –he says Vallie couldn’t complete because of termination but that new material left on site – I note the credit given on plaintiff’s credit list – (see Plt.’s Ex. Bk., Vol. 1, Tab 13, item #4)- for all quarter round work and baseboard work not done –credit is $600- Ruling: I accept Minaker’s evidence and position to pay $75.

Proper Extra: $150 Percent Complete: 75% Allow: $75

15. Add 3rd light to master bedroom closet - $300 – see Minaker October 27 e-mail, p.3, para. 6.15 – “Not completed. 50% of this portion done. Cost to complete $150.00” – see Minaker trial affidavit, para. 49, p. 16 – now says “This work was not done” – nothing said about this in Casarella’s response affidavit – Casarella testified in cross-examination that this work was fully done. Ruling: conflict in testimony – best evidence is Minaker’s October 27 e-mail – work half done- allow 50% at $150.

Proper Extra: $300 Percent Complete: 50% Allow: $150

Said 15 Extras above-ruled on, summarized as follows:

Total Agreed Extras:

$3,580 + 15% OH & P

= $537 = $4,117.00

Total Proper Extras

so found (including

above agreed extras)

= $7,640 + 15% OH&P

= $1,144 = $8,786.00

Total Allowed Extras:

based on above – ruled on

percentage completion: $7,205

• 15% OH&P = $8,285.75

Therefore, the total of the extras that I have found were expressly or impliedly agreed to is $8,786.00+$5,922.50=$14,708.50. The total of the extras that I have allowed based on the degree of completion that I have found is $8,285.75+$5,491.25=$13,777. These amounts will be incorporated into my calculations, later in these Reasons.

Who Was at Fault for Termination of the Contract----The Law

[135] As was said by Perry Co. Ct. J. in Longwell Enterprises Ltd. v. McGowan (1990), C.L.R. 13 at p. 41, “Where work ceases altogether, the Court has to find that one or the other of the parties was wrong”. And as was said by Menzies J. in Wilson v. Hudson (2001), 5 C.L.R. (4th) 127 at p. 132, para. 28, “Where a contract is not completed, it is usually as a result of the fault of one party or the other. It is for the court to determine who is at fault.”

[136] The Longwell case, supra, (cited by plaintiff’s counsel in her Brief of Authorities), is factually quite similar to the facts in the present case. There, the dispute was, again, between a contractor and an owner over renovations to the owner’s house. The contractor provided a written quotation for $21,944 which the owner accepted. The parties orally agreed that the contractor would be paid by installments for the value of the work as it progressed. The written quotation did not specify a completion date for the work. The owner paid a deposit of $2000. The contractor did some work and submitted an interim bill to the owner who refused to pay it claiming it was too much for the work that had been done and it also contained charges for extras that were not part of the contract. The contractor tried to return to the job site to finish the work but he was locked out and the owner arranged for others to complete the work. The contractor brought a lien action for payment of $13,288 being the alleged balance due for the value of the work done and materials supplied. The owner counterclaimed for the cost of correcting the contractor’s alleged deficient work and the cost of other accommodation caused by the contractor’s alleged delay.

[137] The court allowed the contractor’s claim and dismissed the counterclaim. The court carefully analysed the conduct of both the contractor and the owner and came to the conclusion that the owner was the cause of the work stoppage and was in breach of contract and had repudiated the contract by refusing to pay the interim bill and denying the contractor access to the job site and in arranging for completion of the contractor’s work. The contractor was found to have accepted this repudiation and had not itself wrongly abandoned the contract. There was no delay by the contractor. A careful reading of this judgment (30 pages) shows that there are many legal and factual similarities to the case before me, and the various legal propositions laid down in that case are also applicable to the present case.

[138] In Wilson v. Hodson, supra, again, the dispute was over the renovation of a house by a contractor for an owner. In this case, the contractor provided an estimate for renovation costs. The contractor submitted regular invoices as the work progressed during the period of August 16, 2008 to December of 2008 which were promptly paid. On January 7, 2009, the contractor submitted an invoice for $14,238 which was only partially paid at $2,802. The owned stated that they believed they had paid for the value of all the work completed to-date and would not pay any more until the project was completed. Further invoices were submitted but no further payments were made. The plaintiff-contractor continued to work through the rest of January and February and up to March 18, 2009, at which time the contractor refused to return to complete the contract by reason of the refusal of the owners to pay any more money.

[139] The court noted that failure to pay interim invoices as they became due may be fundamental breach of a contract – (see p. 133, para. 32). The court seems to have found that the parties orally agreed that there would be interim billings as the work progressed based on the value of the work done as of each invoice and that the total of interim invoices, including the last one of January 7 for $14,238, were equal to the value of the work done as of January 7. And the court further held that if the owners felt that all the interim invoices totalled more than the balance of the work done as of January 7, then the parties were obligated “to undertake meaningful negotiations” (my emphasis) to try and come up with an amount that the owners were willing to pay and that the contractor was willing to accept to cover the latest interim invoice. Of course, it is important to note that when the work would be completed, the contractor would be entitled to 100% of the contract price and the owners would have to pay 100% of the contract price so the agreed-to interim payment would not affect either party’s ultimate legal rights. The court held that the failure to pay any further money after January 7, coupled with the failure to undertake meaningful negotiations, (again, my emphasis) constituted a fundamental breach of contract. On the facts, the contractor only “abandoned” (the court’s word, at p. 133), i.e., terminated, the contract after it became clear that the owners were refusing to pay any further money. On these facts, the court there held that the owners were at fault for the termination of the contract.

[140] In this Wilson v. Hudson case, the “contract” was an estimate and the contractor, at trial, was trying to recover more than his “estimate” and was also trying to recover for some extras. The court allowed the contractor to claim some slight amount over and above the “estimate” and allowed the contractor to recover only $8,557.50 in extras, much lower than the contractor had claimed. The court concluded its judgment, at pp. 140-141, with an assessment of the defendant’s counterclaim for the cost of remedying deficiencies at $1000.

[141] So it can be seen that the method both courts used in analysing the facts and the law in these two above-noted cases is of much assistance to me in arriving at the proper outcome in the present case.

Interim / Progress Payments – The Law

[142] At common law, a contractor, in the absence of some express provision in the contract, is not entitled to payment until substantial completion of the work. A contract may provide for completion in separate stages, entitling the contractor to payment on completion of each stage of the work done even if a later stage is not done. Such payments are not strictly speaking progress payments in the sense in which those words are commonly used in the construction industry and in the many reported cases on the issue, but are final payments in the sense that each phase or stage of the work is a separate and complete work in itself, on the completion of which, the contractor is entitled to payment therefore irrespective of the completion of subsequent phases or stages. In my experience, this type of payment provision is not common and was not used in this case.

[143] In today’s construction industry, whether in large industrial, commercial, institutional or residential projects, or even in small residential construction or renovation jobs, progress payments, also called interim payments, are almost always provided for in the construction contracts. Common sense shows the need for such progress payments. The practical need for interim payments was also judicially recognized many years ago in Cragnoline v. Southwick (1916), 27 O.W.R. 445, where the court said:

“It might easily be … that a contractor relied upon such payment wherewith to purchase materials and pay wages as he went along and could not proceed without it. A contractor … cannot wait until all [contracts] are completed for payment, but must have interim payments to carry him along”.

These payments are payments made to a contractor during the progress of the work on an agreed basis before the contractor has all actually earned the right to payment by completion of all the work contracted for so it has money to pay for material, labour and subcontractors. Contractors can rarely if ever finance the construction out of their own capital or be expected to do so.

[144] In large construction projects where a CCDC-type contract is being used, there are elaborate provisions dealing with the right of the contractor to progress payments, and exactly when a progress billing may be made (often at month end), and the method by which the amount of the progress payment is to be fixed (by calculating the percentage completion of each element of the work broken down in accordance with an agreed schedule), and who is to make the final determination (usually the agreed payment certifier who is usually the project architect or engineer who must act in a quasi-judicial manner).

[145] In smaller contracts, one often finds a much simpler contractual provision that provides for the payment of progress payments based on the contractor having achieved certain performance milestones (for example, foundations complete, framing complete, roof complete, windows installed, etc.), or based on some time frame such as a month end, with either specific agreed-upon amounts to be paid or amounts to be paid based on the value of the work done as shown initially by the contractor’s interim invoices, or some other agreed way of arriving at the quantum of each progress payment.

The Arrangements in the Present Case

[146] In the present case, all the written contractual quotations from the contractor were silent on the question of progress payments. However, it is clear contract law that, unless a contract provides otherwise, the parties may orally agree to such a provision even if a contract is otherwise in writing, ie., the contract becomes partly written and partly oral. In this case, the contractor asked for and received interim payments of $20,000, $20,000, $20,000, $60,000 and $15,000 as detailed earlier in these Reasons. And both parties agreed in their testimony that the idea of progress payments was agreed to and that the amounts of such payments were to have some correlation to the value of the work done. The problem here was that there was nothing agreed to as to the number or frequency of these progress payments nor were there any agreed-to work milestones. Nor was there any agreed mechanism for determining the amount of these progress payments or for resolving any dispute over the amounts that the contractor was entitled to be paid as progress payments. My experience is that this lack of specificity is often the case in house renovation cases.

[147] And yet, the law is clear that the failure to pay progress payments properly calculated on the basis provided for in the contract can constitute a breach of contract on the part of the owner. And if sufficiently serious, such as an unequivocal and unjustified refusal to pay the amount due to contractor, will entitle the contractor to regard the contract as terminated by fundamental breach – (see Longwell v. McGowan, supra., at p. 41, top; Wilson v. Hodson, supra., at p. 133, para. 32; Heyday Homes Ltd. v. Gunray (2004), 31 C.LR. (3d) 70 at p. 133, para. 345; Wells Construction Ltd., v. Thomas Fuller Construction Co. (1986), 22 C.L.R. 144 (Nfld. T.D.); Cragnoline v. Southwick, supra; and Landmark II Inc. v. 1535709 Ontario Limited, supra, at p. 4, para.’s 2, 3, 4; pp 5-6, para.’s. 7, 8, 9; p. 6, para. 10.

Counsels’ Submissions

[148] To better understand my Reasons for Judgment, I thought it would be helpful to set forth the submissions of both counsel and therefore I have attached a summary of all their arguments and submissions as an Appendix to these Reasons.

Who was in Breach?--The Facts in this Case

[149] The plaintiff had been working from August 22 to August 27 and asked for and had been paid $20,000 on August 27. The plaintiff continued working from August 28 to September 15 and asked for and had been paid a further $20,000. The plaintiff continued working from September 16 to September 22 and asked for and had been paid a further $20,000. The plaintiff continued working from September 23 to September 30 and asked for further payment of $75,000. Minaker was only willing to pay $60,000 which she paid on October. The plaintiff continued working from October 1 to October 17 or 18 and was paid a further $15,000 on October 22 which the plaintiff felt was for pre – October 1 work. It must be noted that Minaker felt otherwise. So, on October 28, the plaintiff was really only asking for--($34,115 from Receipt #4 (invoice) less $15,000 paid on October 22 =)--$19,115. But the evidence is clear that Casarella was willing to accept defendant’s seemingly offered amount of $12,147.38 – (see Minaker’s October 27 e-mail, p. 3).

[150] So it becomes necessary to consider what further amount, if any, by way of further progress or interim payment the plaintiff was entitled to as of October 28 to see if there was any breach of contract by the defendant in refusing to pay “another cent” as her October 24 e-mail said – (see Def.’s Ex. Bk., Vol. 1, Tab 8) – and as the testimony of both Casarella and Minaker in their respective cross-examinations made clear.

[151] I have found, earlier in these Reasons, that the total price that would have had to be paid for the 26 claimed extras (11 + 15) that I have found to be proper is $14,708.50 if all the work involved had been done so the proper total contract price plus extras price is $153,035 .10 + $14,708.50 = $167,743.60, (not the $168,893.50 amount that Casarella has always been contending for).

[152] I find as a fact, from a review of all the evidence in minute detail that 89%--(not 95%-96% as Casarella has testified – his exact figures being $168,893.50 minus $4,788 = $164,105.50 over $168,893.50=97.16%)--of the contract/extra work had been done as of October 28. So 11% had not been done. So 89% of $167,743.60 = $149,291.80 and 11% = $18,451.80. Minaker had previously $135,000 so that, as of October 28, the proper maximum progress payment would have been $149,291.80 minus $135,000 = $14,291.80. [I note that Casarella’s claims for extras, as of October 28 and at trial, totalled $15,882.50, but I have found that the actual allowable amount for these extras claims is $13,777, so that the plaintiff was claiming $2,105.50 too much. Minaker was offering, through her trial testimony, too little at $7,509.50 ($3,392.50 + $4,117), as above-noted, so the amount in dispute for these extras is ($15,882.50 minus $7,509.50 =) $8,373.]

[153] Another way of doing these calculations is to take the total agreed price of $153,035.10 and then deduct the credits for work not done that I make findings on, later in these Reasons. It will be seen that the plaintiff eventually offered a credit for work not done of $5,244 and I have found the defendant to be entitled to a further total credit of $12,800 for work not done, for a final total credit or deduction of $18,044.65. This leaves a balance of $134,990.45 as the value of the original contract work that had been done as of Oct. 28. To this figure must be added my figure for the allowed extras that were either completely or partially done, as I have above found, of $13,777. This leaves a value of work done, as of Oct. 28, of $148,767.45. Minaker had paid $135,000, leaving a net maximum amount that could have been the subject of a further progress draw, as of Oct. 28, of $13,767.45. These are the calculations that I use when doing my final accounting to be found at the end of these Reasons.

[154] So, whichever way I do the calculations, the bottom line is that, as of October 28, the plaintiff was entitled to be paid, as a further progress payment, around $13,000 to $14,000. Casarella was initially asking for $19,115 but then offered to accept the defendant’s figure of $12,147.38 that was set out on p. 3 of her October 27 e-mail.

[155] And I find as a fact, based on all the evidence and the fair inferences to be drawn therefrom, that Casarella was willing to negotiate further with Minaker and would have accepted an even somewhat smaller amount of somewhere around $10,000 as the further progress payment which, if it had been paid, would have resulted , as I so find, in the plaintiff arranging for his trades to come back to finish the contract work. It is important to remember that the plaintiff’s two tile setters were on site on October 28 completing the front entrance tile work. It is also important to remember that this was just a dispute over an interim payment and that the final amount to be paid would have to wait to be determined until the end of the job when the parties would have to sit down and work out the final accounting.

The Law Governing the Situation in which These Parties Found Themselves

[156] In circumstances like those that existed here, where the concept of progress payments had been agreed to by both parties, which payments were to reflect the value of the work done from time to time, but where there was no agreement as to when these payments were to be made, or what specific amounts were to be paid, or how the amounts were to be arrived at, aside from there needing to be some correlation between these payments and the value of the work done, and without any mechanism having been agreed to deal with disputes over the amount of any request for progress payments, the law, as noted above, will require the parties to act reasonably.

[157] In Wilson v. Hodson, supra, at p. 133, para. 32, Menzies J. held that there was a duty on the parties in similar circumstances, where there was a dispute, “to undertake meaningful negotiations” to arrive at the proper progress payment due.

[158] In Longwell v. McGowan, supra, at pp. 38-39, the court noted that the defendant, Ms. McGowan, refused to pay the plaintiff’s progress draw of $13,600 due December 17, 1984. The plaintiff there was found entitled to be paid within one week of receipt of the invoice or to be given a cogent reason for such failure in a timely way. Ms. McGowan was silent and unresponsive for 15 days. Finally, Ms. McGowan decided, on January 3, to write the plaintiff a letter. The court noted that neither in her letter, nor at any time thereafter, did she “…offer to pay the plaintiff any lesser sum than the amount it had requested”. The court went on to say, at p. 41, that it was clear that the defendant had “made it clear… that she intended to make no payment whatever. This attitude could not be justified in the absence of proof that the work done by the plaintiff was of no value”.

[159] I also rely on the case of Voyager Contracting Ltd. v. Hancock (1992), 47 C.L.R. 221 which was also a house renovation case involving a dispute between a contractor and an owner over some work done, resulting in a failure of the owner to pay the balance owing, and with the court holding that the owner was in fundamental breach for refusing to pay the balance found to be owing. And again, the court required the parties act reasonably when the dispute arose and found that the owner had acted unreasonably and was in fundamental breach of contract.

Finding on Who Breached The Contract

[160] In this case, the totality of the evidence, especially the emails of the defendant of October 24 and October 27 (above-noted) show what Minaker’s attitude was to making any further progress payments or even to try and negotiate a compromise. As described above, she made it clear that there would be no more money paid until the job was completed to her complete satisfaction and until all disputes about extras and deficiencies were resolved to her complete satisfaction.

[161] The evidence shows that Casarella was willing, at their October 28 meeting, to negotiate and compromise on his request for a further progress payment of $19,115 and was willing, at that time, to accept the defendant’s stated figure (in her October 27 e-mail) of $12,147.38. And it is a reasonable inference to be drawn from all the evidence before me that had the defendant offered to pay even somewhat less than that, Casarella would have accepted it as the last progress payment before the final payment. As I have already found, Vallie was entitled, at that time, to be paid, in accordance with the initial agreement about progress payments, an additional amount of between $13,000 and $14,000 as the sixth progress payment. Evidence of Casarella’s willingness to negotiate and compromise on the amount of this progress payment was his attendance with his brother at Minaker’s place of work on October 29 or 30 to try and work something out. Evidence of the defendant’s unwillingness to negotiate at all is the fact that she admittedly refused to talk to him and that she called the locksmith on the evening of October 28 to come to her house to change the locks. I find that the defendant failed to act reasonably and the plaintiff was acting reasonably in being at least willing to try and reach a compromise. It is obvious that any money that Casarella did not then receive as a progress payment would become payable when the job was completed and when the full contract price, including all the proper extras, would become payable. If the defendant refused to pay the proper full amount due at that time, because outstanding disputes could not be resolved, the plaintiff would have its remedy by a collection action (probably in Small Claims Court) or by a construction lien action, and the defendant would have her remedies by way of set-off or counterclaim, or her own separate action for damages for breach of contract if the plaintiff did not pursue its own claim for the balance owing.

[162] It is not necessary for me to decide, on the conflict in the evidence as between Casarella and Minaker where he says she “ kicked me off the job” on October 28, and she says he “quit” on October 28 when he didn’t get his money, who is telling the truth.. Both their statements are really just conclusions. It is beyond question that Minaker was refusing to pay any more money at all and was refusing even to attempt to negotiate a compromise. Had she offered a reasonable amount as a compromise, I find he would have accepted it and would have finished the job and this lawsuit might have been avoided.

[163] I thus rule that the defendant, by her actions, fundamentally breached the contract on October 28 and is thus, in law, to be considered as having repudiated the contract. The plaintiff accepted this repudiation as shown by Casarella’s conduct between October 28 and October 30 as above described and was entitled to terminate the contract without incurring any liability itself for breach of contract, and sue for damages for breach, being whatever amount was owing to it for the value of the work it did up until termination.

[164] (Another reasonable option might be for an owner, in these circumstances, to offer to pay the entire requested but disputed progress payment into the owner’s lawyer’s trust account, if the owner has one, or if not, the owner might then retain one, to be held in trust until the parties can both agree to a release of the money at the end of the job after a final accounting has been agreed upon or, failing agreement, until a court orders otherwise if the dispute goes to litigation. If the contractor refused to accept this proposal to end their impasse, and then walked off the job, it might itself then be found by a court to have acted unreasonably and to itself be in fundamental breach of contract for terminating the contract, with all the legal consequences that would follow.)

A Repeat of My Calculations as to the Maximum Amount of a Further Progress Payment that was Due and Payable on Oct. 28

[165] To repeat, I have calculated that the amount of the proper extras that the plaintiff was entitled to be paid for if it had completed 100% of the proper extras work was $14,708.50. So this amount must be added to the basic agreed-upon contract price of $153,035.10 so that the total contract/extras price was $167,743.10. But I have earlier found that only 89% of the work had been done so that the maximum value of the contract/extras work actually done, as of October 28, was ($167,743.10 x 89%=) $149,291.80. The defendant had, by that time, paid $135,000, so the maximum amount the plaintiff was entitled to be paid, as a further progress payment, as of October 28, was $14,291.80.

[166] Another way of doing this calculation is to use what I have found (above) to be the total allowed amount of extras, based on the value of the work actually done, for each of these extras, which is $13,777, and add this amount to the original contract price of $153,035.10 but then deduct the amount of credits for work not done or not completed which I have found, as set out below, to be $18,044.65 , for a net final amount of $148,767.45. From this amount must be deducted the payment of $135,000. This would mean that the plaintiff would have only been entitled to be paid, as of October 28, a further maximum progress payment of ($148,767.45 less $135,000 paid =) $13,767.45. This is the approach that I have used to calculate what amount is owing to the plaintiff as of the end of this trial as shown in my Final Accounting section at the end of these Reasons.

[167] The difference between these two amounts is ($14,291.80 minus $13,767.45=) $524.35, a small difference. The former amount is arrived at by using the estimated completion percentage of 89% of the total contract/extras price. The latter figure is arrived at by using my detailed review of the percentage completion of the many specific items of work, after this trial, set out above and below in these Reasons, which of course would not have been available to Minaker as of Oct. 28,2008 or the few days following. But since the defendant was refusing to pay anything more, and was refusing to even try to negotiate a lesser but reasonable sum, whereas the plaintiff was willing to so negotiate as I have so found, this difference in calculation makes no difference.

[168] The bottom line is that the plaintiff was entitled, as of Oct. 28, to a further progress payment of around $14,000 but the defendant was refusing to pay any more money, and was refusing to attempt to negotiate some other reasonable amount, and the evidence shows that the plaintiff would have accepted a further negotiated progress payment of around $10,000, and so I find that it was the defendant who was in fundamental breach of contract.

Issues About the Measure of Damages

[169] The Landmark case, supra, makes it clear that the plaintiff, having elected to accept the repudiation, then had a right to alternative remedies being (1) a right to claim on a quantum meruit or (2) a right to claim damages, but the plaintiff was required to elect between these two alternative remedies, at the latest, by the time of judgment.

[170] In the Landmark case, it was held that, looking at its pleading and the way it presented its case and the evidence it presented at trial, the only claim maintained and presented by the plaintiff was a quantum meruit claim for the value of the work performed. It did not claim damages for breach of contract. In the Court of Appeal, the plaintiff argued (see para. [11] of the judgment) that the trial judge erred by failing to award it damages for breach of contract, being its lost profits which it argued were, at a minimum, $24,500. But the court ruled that it could not claim lost profits because of the way it had pursued its claim. See also Wiebe v. Braun, fully cited at para. 236 below, at p.316, para.15.

[171] For a discussion of the proper measure of damages,I refer to the leading text authority of “Keating on Construction Contracts”, 8th Ed., 2006, where in Chapter 8, “Default of the Parties – Damages”, under the heading “5. Employer’s Breach Of Contract” there appears the following statement of the law:

“Work partly carried out. Where the contract work has been partly carried out and the contract is brought to an end by the employer’s repudiation, the contractor is entitled to be paid the value of the work done at contract prices, and to claim, in addition, damages, the measure of which is normally the loss of profit on the unfinished balance”.

‘If while [the contractor] was duly proceeding to fulfill his contract, he was wrongfully impeded by the Respondents, and by them prevented from doing what he had undertaken to do, they would be answerable to him in damages for all the consequences of their wrongful act. Such damages would of course be in part calculated on the value of the plant and other articles of which he had been wrongfully deprived; but the effect would not be to alter the relative position of the parties as to the contract itself, to entitle the appellant to say that there had been no contract, or that he was to be paid for what he had done without reference to the contract….The right of the Appellant would be to recover such amount of damages as would put him in, as nearly as possible, the same position as if no such wrong had been committed – that is, not as if there had been no contract, but as if he had been allowed to complete the contract without interruption’.

“He was not entitled ‘to an account of work already done, to be taken on terms different from those for which he had contracted’ ” (Ranger v, GW Railway(1854) 5 H.L.C. 72 at 96. H.L.;).

[172] The learned authors go on to quote Dixon J. in McDonald vs. Dennys Lascelles (1933) 48 C.L.R. 457 at 476(Austr. H.C.) (which is noted in a footnote to have been approved by the House of Lords in later cases in 1980 and 1989) who said the following:

“When a party to a simple contract, upon breach by the other contracting party of a condition of the contract, elects to treat the contract as no longer binding upon him, the contract is not rescinded as from the beginning. Both parties are discharged from further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected... [W]hen a contract ... is dissolved at the election of one party because the other has not observed an essential condition or has committed a breach going to its root, the contract is determined so far as it is executory only and the party in default is liable for damages for its breach.”

[173] In the other leading text authority of Hudson’s Building and Engineering Contracts, 12th Ed., in Chapter 7, “Damages and Remedies”, under the heading, “Breach by the Employer”, and under the sub-heading,“Terminated contracts”, at p. 1033, appears the following:

“In ‘total prevention’ cases, where a contract has been discontinued as a result of Employer breach, the Robinson v Harman compensatory principal will, in the more usual case where work has been partially performed at the time of termination, entitle the Contractor to the full contract value of any work done up to that time, less sums previously paid and possibly also (although subject to a number of important factual reservations) a sum for profit lost on the remaining work.”

[174] And finally, in the leading text authority of McGregor on Damages, 14th Ed., 1980, in Chapter 25, “Building Contracts” , under the heading “Breach by Owner” and under the sub-heading “1. Prevention Resulting in Non-completion”, at p. [601], para. 872, appears the following:

“On the measure of damages where the owner acts so as to bar completion there appears to be, surprisingly, no English cases. General principles would put the normal measure at the contract price less the cost to the builder of executing or completing the work.”

[175] In my view, Laskin J.A. in the Landmark case, supra, was not holding that the only component in a claim by a contractor for damages for breach of contract, where the owner fundamentally breached the contract and terminated the contract part way through the work, was the contractor’s loss of profits. As the excerpt from McGregor on Damages, above-noted, states, general principles would put the normal measure of damages where substantial performance has been achieved, as I have found to be so in this case, at the contract price less the cost to the contractor of completing the work. As has been stated in the authorities above, the general rule is to put the contractor in the same position he would have been in if the contract had not been breached. In order to use the above- referenced “McGregor” measure, there would have to be evidence tendered by the contractor as to what its costs for material and labour and subcontractors and overhead would have been if it had completed the work, so these could be deducted from the contract price. There was no such evidence in this case. And as McGregor notes, it is often very difficult if not impossible for the contractor to prove its costs of completing the work.

[176] In my view, a reasonable alternative measure of damages, in a case like this where 89% of the contract work was completed before termination, is to award the entire contract price plus the price of any proper extras less a credit to be given by the contractor to the owner based on the value of any not-done or incomplete contract work, or not-done or incomplete extras, as measured by the contract price (and by the price of any extras or, if the price for any extra that was incomplete had not been agreed upon, then less a reasonable credit for the incomplete extra work taking into account the value of the extra as a whole and the quantum meruit value of the portion of the extra not done. Or, as an alternative approach to arriving at an allowance for such incomplete extras, where the price had not been agreed on, a court could simply allow the portion of any extra that had been done, to be recovered on a quantum meruit basis.) This “alternative approach” is the approach to the calculation of the plaintiff’s damages that it adopted in this case. And counsel for the defendant did not object to this approach, but only to the plaintiff’s calculated amounts in the event that the defendant lost on her primary argument that it was the plaintiff who was in fundamental breach of contract and that the defendant was entitled to terminate and the plaintiff was entitled to recover nothing since no substantial performance had been reached. Nonetheless, notwithstanding the defendant’s counsel’s lack of objection to the plaintiff’s approach to the appropriate measure of damages, it is my responsibility to adopt a proper measure of damages that is grounded in the law of damages for breach of contract.

[177] Since the contract price included an element for overhead and profit, in this case, at 15%, the credit for the value of the incomplete contract work should include a 15% overhead and profit figure to be fair to the owner. The plaintiff originally gave a credit of $4,560 + GST of $228 = $4,788 as the value of the contract work not done-- (see Plt.’s Ex. Bk., Vol. 1, Tab 13). This credit was later increased to $5,781.57- (see para. [60] above). In coming up with this $4,560 figure, the plaintiff seems to have just “picked a number out of the air” based on Casarella’s experience. It does not seem to include any allowance for overhead and profit. And it is definitely not based on any evidence of the plaintiff’s actual or anticipated labour costs, costs of materials and costs of subcontractors, plus overhead and profit. I have already found, elsewhere in these Reasons, that this credit is too low. (In my long experience in dealing with construction cases, I have seen that credits offered by contractors for work not done are often too low, just as prices claimed for extra work, when prices have not been agreed to in advance, are often too high.)

[178] Another possible variation on the above-noted “reasonable alternative measure of damages” might be to consider the percentage of the work completed and apply this percentage to the contract price. (I have used this approach myself earlier in these Reasons to determine what was the proper progress payment that was payable on Oct.28.) But this measure, by itself, would not compensate the contractor for its lost anticipated profit on the percentage of the work not done, but such a calculation would be difficult to determine both for the contractor and for a court. Lost profit claims are always difficult to deal with for obvious reasons. And in this case, the plaintiff is, thankfully, not making a claim for its lost profit on that portion of the contract work that it was unable to do.

[179] To get some guidance on this tricky question of calculating the value of the work completed in a case like the present one, where there is a fixed price contract which the owner prevents from being completed because of a fundamental breach, namely, the non-payment of one or more proper progress payments which breach results in the contractor being entitled to abandon the job without completing it, I turn for a moment to the holdback provision in the Construction Lien Act (which I know has no application to this non-lien construction action). Under s. 22(1) of the Act, the holdback is to be 10% of “the price of the services or materials as they are actually supplied”, and under s. 1(1), “price” is defined to mean “the contract or subcontract price, (a) agreed upon between the parties. . . ”. (Part (b) of this definition has no application here and can be ignored.)

[180] In the context of a lien action, it sometimes happens that there is a fixed price contract between a contractor and an owner, and the contractor wrongfully abandons the job prior to completion, and liens are then filed by the subcontractors, and the issue then arises as to the calculation of the proper holdback as between the owner and the lien claimants. A court has to calculate the “price of the services and materials” that were “actually supplied” so that it can then apply the statutory 10% holdback percentage. And so both in the case before me (in order to determine whether a further progress payment was due, and, possibly, to determine what amount is ultimately owing to the contractor) and in such a case as above- described, the task of the court is to calculate the “price” of the services or materials that were supplied up to the date of termination.

[181] In the mechanic’s lien case of Batts v. Poyntz (1916), 11 O.W.N. 204, the court there held as follows:

“The proper method of finding the value of work done prior to default by a defaulting contractor is not to deduct the cost of completion from the contract price and take the difference as the work done prior to default. Evidence of the cost of completion is relevant, and may help in arriving at a proportionate valuation of the previous work. But the cost of completion is generally, and often materially, out of proportion to its value compared with the value of the previous work, or calculated on the basis of the original contract price. To be a true guide, the value of the subsequent work must be calculated on the same basis as the previous work; that is, on the basis of the original contract price, and not on a higher basis of cost, whether done by day-labour or by reletting the work to a new contractor. . . To arrive at the [per cent] due to the lien holders, it must be calculated on the value of the work in proportion to the contract price without any deduction for damages or extra cost of completion. We must get down to the basis of the original contract as far as we can, even when the cost of completion is the only evidence we have to go by.

[182] In a later mechanic’s lien case of Len Ariss v. Pelosso, 1958 CanLII 103 (ON CA), [1958] O.R. 643, the Ontario Court of Appeal held as follows:

“There being a contract price in the present case, the holdback is not to be calculated on the actual value of the work, service and materials furnished but upon a value for such work arrived at ‘on the basis of the contract price’. This does not mean that a percentage of the contract price is to be taken but that the value of the work done or materials furnished is to be calculated with the contract price as a basis of value.

[183] In Wirsta v. Stetna Developments Inc. (2002), 18 C.L.R. (3d) 126, (Alta. Master), another lien case, the court accepted the owner’s approach to the calculation of the holdback which was to look at what the contractor should have done to fully perform the contract work and then look at what the contractor in fact did, and calculate what percentage of the contract work was actually done and then apply that percentage completion to the contract price. There, the contract price was known, at $115,439, and the court found, on the evidence, that 35% of the contract work had been done, so the holdback was calculated at 35% x $115,439 = $40,473. (I get $40,403, ignoring cents, so there seems to be either an error in calculation or a typo in the law report.) But the point is that this was an accepted approach to calculating the value of the work done and materials provided.

[184] In the case before me, I have reviewed in minute detail what work was supposed to have been done under the main contracts of July, Aug./Sept., Sept. and Oct. (as above fully described) and the express or impliedly agreed-upon extras listed in the Oct.1 and Oct. 9 Summaries ( as above fully described) , and what work was actually done. In the main, some of the electrical work throughout the house, and much of the required renovations in the basement including, especially, the patching, priming and painting, were not done, as well as some minor electrical work in the upper bathroom, and some minor cosmetic work on the main floor. The deficiencies later complained about by the defendant had not yet been identified. A list of the defendant’s alleged deficiencies and incomplete work is set out in a Scott Schedule attached as part of the Hellyer report of October 24, 2009-- (see Plt.’s Ex. Bk., Vol. 4, Tab 2). Again, I point out that it is important to distinguish between what is said by the defendant to be deficient work that was done but needs to be corrected, on the one hand, and, on the other, what was incomplete work or work that was not done at all, as above described, such as the incomplete work in the basement. Some help in understanding the extent of the incomplete work comes from the defendant’s photos at Def.’s Ex. Bk., Vol. 1, Tab 10, photos #’s 7, 8, 9, 10, 11, 15, 22, 24, 25, 33, 37, 40 and 49. Also see Plt.’s Ex. Bk., Vol. 2, photos at pp. 10, 11, 12, 13, 14, 15, 16, 17, 19and 20. Some of the deficiencies can be seen at Plt.’s Ex. Bk. Vol., 2, photos at pp. 1, 2, 3, 4, 5, 6, 7 and Def.’s Ex. Bk., Vol., 1, Tab 10, photos #’s 14, 15, 16, 17, 19, 20, 22 and 23. I have already found earlier in these Reasons that 89% of all the work that had to be done, was done as of Oct.28.

Issues About the Value of the Plaintiff’s Work

[185] In paras. 5, 6, 7 and 8 of the statement of claim, the plaintiff, pleads that the amended contract price was $168,893 exclusive of GST, and $177,337.65 inclusive of GST; and that from August to November, 2008, the plaintiff did all the required work except for $4788 worth of work (inclusive of GST) which was not done because the defendant had wrongfully terminated the contract and for which a credit had been given; that the defendant had paid the plaintiff $135,000; and that there was presently owing $37,549.65 (which would be $29,105 without GST). These paragraphs show the plaintiff’s approach to its calculation of its damages claim, i.e., the total contract price less credit for work not done and less payments.

[186] The plaintiff’s trial evidence as to the amount claimed to be owing is found at paras. 27 and 40-47 of the first trial affidavit of Casarella. Again, the contract price is stated to be $168,893.60 plus GST, which totals $177,377 (rounded). The credit for work not done is again stated to be $4788 (inclusive of GST). The defendant is said to have paid $135,000, so the balance owing is $37,549.65 inclusive of GST. At para. 47, Casarella deposes that the value of the work completed was $164,105 excluding GST, which is the contract price of $168,893 (rounded) less the credit of $4788. Again, by contrast, my number for the value of the work completed, as of Oct. 28, is $149,291.80 or $148,767.45 (excluding GST) depending on which of the two methods of calculation are used.

[187] Another reason that this question of “value of work done” needs to be considered, aside from what has already been said, is because of paras. 11 and 12 of the statement of claim where the plaintiff, in the alternative, claims payment of $37,549.65 as the “reasonable value of the materials and services supplied by it... on the basis of quantum meruit, restitution or unjust enrichment”.

[188] So, in its statement of claim, the plaintiff pleaded the remedies of both a claim for damages for breach of contract and a quantum meruit claim. But, at trial, the plaintiff led no evidence as to its labour costs, its material costs, its subcontractor costs, and its claims for overhead and profit, relating to the work it did. Therefore, I conclude that, by the opening of trial, which started with the plaintiff’s first trial affidavit of May 27, 2011, and thereafter, it had elected to claim damages for breach of contract and to give up any alternative claim it had on a quantum meruit.

[189] As I noted earlier in these Reasons, at para [176], counsel for the defendant (quite properly) raised no issue about the election of remedies or about the plaintiff’s approach to the calculation of its damages. The only disputes that were raised were (1) what was the proper total contract price and the proper extras and (2) what were the proper credits to be given for the not-done or incomplete work, and (3)what was the actual value of the portion of the plaintiff’s work that was commented on (a) by Joseph Pendlebury, the defendant’s quantity surveyor, being the “skim coating” wall and ceiling work and (b) by Darren Watchorn, the defendant’s other quantity surveyor, being the electrical work. (Of course, as noted earlier, Mr. Shankman first argued that it was the plaintiff, not the defendant, who was in fundamental breach and since, according to his submissions, substantial performance had not been reached, the plaintiff could recover nothing. This was his primary argument.

[190] Pendlebury, in his report, says his services were requested to prepare quantum meruit valuations on some issues relating to the renovation work, being the cost of providing a skim coat over plaster walls and plaster ceilings, and also to calculate the price variance to the contractor between using Sherwin Williams and Benjamin Moore paint, and also to calculate the cost to relocate the main electrical switch (shut-off) and also to calculate the cost of the originally proposed scope of the electrical work, the changes, and the value of the electrical work completed.

[191] Watchorn, in his report, says his services were requested to prepare quantum meruit valuations on some specific issues relating to the renovation, being to review and price the original scope and added scope of the renovations to the electrical system, and to review and price the work that was listed on the ESA deficiency list, and to review and price the electrical work that was not completed.

[192] All this is important for me to comment on because of the evidence of Joseph Pendlebury and Darren Watchorn, the two expert witnesses whose trial affidavits were filed by the defendant, which then necessitated response trial affidavits of David Hellyer and David Mackay, two other expert witnesses, filed by the plaintiff. And Pendlebury, Watchorn and Hellyer were cross-examined resulting in even more evidence.

[193] It is clear from the affidavit evidence and the two exhibited reports of Pendlebury and Watchorn--(see Def.’s Ex. Bk., Vol. 2, Tabs 1 and 2)-- that the defendant is seeking, by this evidence, to question some of the original prices that the plaintiff and the defendant had agreed to in the various quotations of July 16, Aug./Sept.8, Sept.15. and Oct.1, above-noted, and also to question the cost and perhaps, the value, of certain portions of the plaintiff’s work that it claims it had done. Both Pendlebury and Watchorn call their reports “Opinion of Value of Progress on Site”. The Pendlebury report, and his evidence at trial, sought to determine, inter alia, what the cost of providing a skim coat over plaster walls and ceilings ought to have been so as, I presume, to determine what price the plaintiff ought to have charged the defendant for this work, so as to show that the plaintiff overcharged the defendant in its original agreed-upon quotations. But, in cross-examination, Pendlebury admitted that he wasn’t dealing with pricing as between contractor and customer and that was not his concern in his report.

[194] In addition, the Pendlebury and Watchorn reports, and their evidence at trial, sought to determine, inter alia, what the cost of the plaintiff’s electrical work ought to have been, and what was the value of the incomplete work, and what were the costs going to be to fix the deficiencies. As to the “price” that the plaintiff ought to have charged for the electrical work, the defendant is trying to use this evidence to show that the plaintiff overcharged the defendant in its price quotations even though the defendant agreed to these prices. But again, it is clear from Pendlebury’s cross-examination that he was not concerning himself with pricing as between contractor and customer.

[195] I agree with plaintiff’s counsel’s submission in argument that a court will not concern itself with the adequacy of the consideration in a contract. As she argued, “a deal is a deal”. The prices were agreed to and there were no misrepresentations or other reprehensible conduct alleged on the part of the plaintiff. He quoted prices; the defendant agreed. Now, the defendant is arguing that the prices agreed to were too high and she wants to rewrite the deal. This cannot be done. She was, as I so find, despite her denials in para.’s 57 and 58 of her trial affidavit, a sophisticated consumer based on her education and work experience, about which she testified in cross-examination.

[196] As to Pendlebury’s and Watchorn’s evidence as to the perceived defects in the plaintiff’s skim coating and finishing of the walls and ceilings, and the perceived defects (as opposed to incomplete or not-done work) in the electrical work, these defect issues were, according to my pre-trial directions, supposed to be dealt with in Phase 2 when the alleged defects and costs to repair are to be considered. (I will have more to say about proceeding with Phase 2 at the end of the Reasons.)

[197] As to valuing the incomplete or not-done work, I have already made my finding, at para. [152] above, based on a consideration of the entirety of the evidence as to what was supposed to be done and what was done, that 11% of the value of the entire contract price ($18,451.80) was not done. And further, that the value of the extra work actually done was $13,777. I do not accept the evidence of Pendlebury that the skim coating work was “not all done” since he isn’t sure himself, as he so states. As to Pendlebury’s report on the cost savings to a contractor by using Benjamin Moore paint instead of Sherwin Williams paint, I find, as below-noted, at para. [229], that Benjamin Moore paint was used on all the interior walls (excluding primer which I find was not required to be used by the contract drawing spec.) so it is not necessary for me to consider any issue of the amount of cost savings as detailed in the Pendlebury report at para. 3 on pp. 4-5.

[198] As to Pendlebury’s and Watchorn’s reports concerning the failure to relocate the main electrical switch (shut-off), I find there was no such failure. I accept Casarella’s explanation in his evidence as to what occurred and how relocation was not permitted by the electrical regulations. Thus, Pendlebury’s evidence at para. 4 of his report, on p. 5, and the related evidence of Watchorn, is irrelevant. They were not aware of the whole story.

[199] Since there was considerable time and money spent on obtaining these expert reports, and having the experts testify at this trial, I think I should comment briefly on what this evidence was.

The Expert Reports-The Relevant Chronology

[200] The work stopped on October 28, 2008. The plaintiff’s statement of claim was issued February 5, 2009. Pleadings closed around May 15, 2009. Joseph Pendlebury, the defendant’s first expert, visited the site on February 24, 2010, well over one year after the work stoppage; his report is dated April 6, 2010. Mr. Shankman was retained around April, 2010. Darren Watchorn visited the site on March 26, 2010, again well over one year after the work stoppage; his report is dated June 18, 2010. The defendant testified that she lost her job at York University sometime in late 2009 or early 2010 and was forced to put her house up for sale in the spring of 2010. The sale closed in June, 2010. David Hellyer had visited the site earlier, on October 24, 2009, about one year following the work stoppage, pursuant to an order made by Justice Low dated August 25, 2009 on a motion brought by the plaintiff to obtain an order for inspection. Hellyer’s report is dated October 24, 2009. Hellyer also prepared a second response report dated August 10, 2010, to the Pendlebury report of April 6, 2010. No further site visit was done by Hellyer prior to the writing of this second response report. There is also a response report of David Mackay, quantity surveyor, dated August 25, 2010 to the Pendlebury Report. No site visit was done by Mackay. He responds to the wall and ceiling plaster coating issues addressed in items 1 and 2 of the Pendlebury report. He deals with the reasonable estimated cost to do the skim coating of the walls and says $4.00/S.F. is a reasonable cost. His reasonable cost for the ceiling skim coating work is $5.00/S.F.

[201] All these reports were placed in evidence before me.

The Pendlebury Evidence

[202] His evidence consists of his trial affidavit sworn July 15, 2011 and his report dated April 6, 2010 which is an exhibit thereto – (see Def.’s Ex. Bk., Vol. 1 Tab 2). His affidavit, at paras. 1-13, repeats the findings in his report. His site visit was on February 24, 2010 and, at that time, the renovations were complete, apparently having been completed by others, so he could only rely on his site inspection, and on some photos provided by Minaker, and on the plaintiff’s productions, and on the Hellyer report of October 24, 2009. Pendlebury was asked to prepare a quantum meruit calculation of the following:

1. The cost of providing a skim coat over plaster walls after removal of wall paper.

2. The cost of providing a skim coat over plaster ceilings affected by new electrical work.

3. The volume of plaster that would be required.

4. The price variance between Sherwin Williams and Benjamin Moore paint.

5. The cost to relocate the electrical main shut-off switch.

6. The cost of the contractual scope of the electrical work.

7. The value of the electrical work completed.

He was not asked to assess other alleged deficiencies and other alleged incomplete work.

[203] The following points were made by Pendlebury:

1. He believed that the walls were not all skim coated but without a destructive scratch test, he couldn’t be sure.

2. The cost of skim coating 3130 S.F. (square feet) should cost 75¢ to $1.00/S.F. for a total cost of between $2400 and $3130.

3. The plaintiff charged $14,688 so it was charging over $4.50/S.F.

4. If the plaintiff intended to just “patch” the walls where necessary, this process should cost 15¢/ S.F.

5. He believes that the ceilings were not all skim coated but again, he can’t be sure. He saw cracks and old blemishes.

6. The cost of skim coating 1280 S.F. of ground and second floor ceilings should cost 75¢ to $1.00/S.F. for a total of between $960 and $1280.

7. The plaintiff charged $6828 so it was charging over $5.00/S.F.

8. Patching of ceilings should cost 15¢ /S.F.

9. Cost saving to the plaintiff if it used Sherwin Williams instead of Benjamin Moore paint would be $565 plus overhead and profit and GST. He did not determine whether Sherwin Williams paint was, in fact, used.

10. The cost to now relocate the main electrical shut-off switch, which was originally required, would be $1200. It would have cost $500 if done originally when the other work was being done. The cost to install the new 100 amp electrical panel and relocate the panel and switch, done as part of the original contract electrical work, back at the relevant time, should have been $1800. He does not deal with the question of why the plaintiff failed to relocate the main shut-off switch. (I have found the plaintiff’s explanation to be satisfactory.)

11. The value of all the electrical work done by the plaintiff is $18,300 (as per the Watchorn report).

12. The value of the incomplete work is $3,600 (as per the Watchorn report).

13. The value of the deficient work is $3,600 (as per the Watchorn report).

14. The related values to Vallie’s original quote of $25,000, using comparing ratios, are $53,000, $10,600 and $10,600. ( I don’t understand these numbers at all.)

[204] In his affidavit (as opposed to his report), at para. 14, Pendlebury, having reviewed the David Mackay report of August 25, 2010, (tendered by the plaintiff), where Mackay states that a reasonable cost to skim coat walls would be $4.00/S.F., disagrees and says that this is not a reasonable estimate. He says an entirely new wall could be built at a cost of $3.00-$5.00/S.F. and these walls were already constructed and only required a skim coat of plaster.

The Watchorn Evidence

[205] His evidence consists of his trial affidavit sworn July19, 2011 and his report dated June 18, 2010 which is an exhibit thereto-- (see Def.’s Ex. Bk., Vol. 1 Tab 3). His affidavit, at paras. 1-9, repeats the findings in his report. His site visit was on March 16, 2010, and again, the renovations to the residence were complete. So he only relied on his site inspection, and further, on the same material that Pendlebury has reported that he relied on, and also on what Minaker told him had been done. Minaker pointed out to him what work was done by which electrical contractor because, after Vallie left, she hired Kerr-Taylor Electric Limited to do some work, and possibly, another electrician after him--(see the David Kerr-Taylor trial affidavit ). Watchorn was asked to prepare quantum meruit calculations on all the renovations to the electrical systems and to review and price the deficiency list from ESA. Watchorn reports as follows:

1. Electrical work appeared complete except for 2 phone jacks and 1 jack which had heavy static on the line.

2. Vallie was to relocate the main shut-off switch to a new location, along with a new electrical panel, but the main switch was not relocated. (He doesn't say why.)

3. The value of all the electrical work is $18,300.

4. The value of the deficiencies in the electrical work is $3,600.

5. The value of the incomplete work is $3,600.

[206] In his “Work Not Completed” list, at p. EA5 of his report, he shows 19 light fixtures and 35 pot light trims as not having been completed by the plaintiff, and the costs of these is shown to be a total of $1048. But there is a live issue at this trial as to whether the plaintiff was required by its contract to supply these fixtures and these pot light trims which are also, as I so find, “fixtures”. The July 16, 2008 Vallie contract quotation, on p.2, provides that “All light fixtures will be provided by the owner.”

[207] Based on all the evidence before me, including the evidence of the defendant’s expert witness, Watchorn, who agreed, in cross- examination, that these words in the contract would mean, to him, that the owner had to supply all the light fixtures, which, I so find, would include the pot lights and the trims, I find that the supply of these fixtures was not the contractual obligation of the plaintiff, and thus, the Pendlebury/Watchorn opinion that $593 + $455 = $1048 worth of electrical work for these fixtures was incomplete, is incorrect and that, at a maximum, $3562 - $1048 = $2514 worth of electrical work was incomplete. And I note that the plaintiff gave electrical work credits of $400 and $1000 = $1400 for incomplete electrical work--(see Plt.’s Ex. Bk., Vol. 1 Tab 13)-- so the difference between the plaintiff and the defendant on this issue is $1114 ($2514-$1400). And, as I have found earlier, the plantiff’s first credit amount of $4788 (Tab 13) and even its later credit of $5781.51 (see para. ?? above) is too low. My credit number of a total of $18,044.65(above set forth) would easily cover this difference of $1114.

The Hellyer Evidence

[208] This consists of his trial affidavit sworn August 21, 2011, and his reports of October 24, 2009 and August 10, 2010 which are exhibits to his affidavit. My comments about his evidence are set forth below under the heading of his cross-examination

Cross- Examinations of the Three Expert Witnesses:

Pendlebury

[209] He was first asked many questions about the statements in the Hellyer response report of August 10, 2010--(Plt.’s Ex. Bk., Vol. 4, Tab 4)--made at p. 2, where Hellyer is responding to Pendlebury’s statements at pp. 3 and 4 of his report where Pendlebury says he “believes” that the walls were not all plastered. Pendlebury discusses what skim coat over plaster walls is; how it is done; under what conditions it should be done; and what observations he made of the walls as to cracks and seams showing from the original plaster wall, and the presence of old blemishes on the walls, leading to his conclusion above-noted. This cross-examination seriously undermined the basis for Pendlebury’s conclusion that “the walls were not all plastered”.

[210] The cross-examination then turned to Pendlebury’s opinion, on p. 4 of his report, as to what skim coating ought to have “cost”. By this expression, I first presumed that he meant ought to have “cost” the defendant owner, i.e., ought to have been charged by the plaintiff. He calculated that the plaintiff charged over $4.50/S.F. He testified that the “cost” should have been 75¢ to $1.00/S.F. and if only “patching” was done, the “cost” should have been 15¢/S.F. But later, when explaining his use of the word “cost” and how that relates to “price”, he admitted that he doesn’t deal with pricing as between the customer and the contractor and that was not his concern in his report.

[211] He admitted that he could not say how much “skimming” work was actually done and not done by the plaintiff. He stated that either the plaintiff didn’t do it, or didn’t do it very well. When confronted with David Mackay’s report that the proper cost would have been $4.00/S.F., he disagreed with Mackay.

[212] The cross-examination next turned to the cost of the ceiling work. He agreed that ceiling work is harder and should cost more and he therefore used $1.00/S.F. overall.

[213] He also testified that the words in the contract being “skim coat all ceilings affected by electrical work” is different than if the contract said “patch”, so, in his opinion, more than just patching was required to be done.

[214] As to his statement that destructive “scratch” testing would have to be done to make a definitive finding whether a skim coat of plaster had been applied, he has never done such a test and there is no literature on the subject. He then explained where he observed the “seams” from the original plastic lath.

[215] As to the issue of what type of paint was used, he doesn’t actually know what was used. He was just calculating what the cost savings to the contractor would have been if Sherwin Williams instead of Benjamin Moore paint had been used. He really “doesn’t know”.

[216] His re-examination dealt with the actual construction materials used to construct the plaster walls in this old house and also what pre-mixed plaster compound was apparently used to do the skim coating work according to the photo at Def.’s Ex. Bk., Vol. 1, Tab 10, p. 10.

[217] All in all, I did not find Pendlebury’s evidence to be of any real help on the issue of whether the skim coating of the walls, and skim coating of the ceilings affected by the electrical work, as required by the original July 16, 2008, was all actually done. The issue of deficiencies in the work is quite a different question. And as to his evidence as to what the “cost” of the work should have been, I find it to be irrelevant because, as stated above, there is no basis to attack the agreed-upon prices.

Watchorn

[218] His July 18 report indicates that he was asked to prepare “quantum meruit valuations” of the work involved in renovating the electrical systems. He agreed that costs to renovate older houses, as this one was, are higher than new house construction, especially if the owner is in residence during construction, and he explained why. He also agreed that changes required by an owner, after the work has progressed for some time, increases costs.

[219] As to the hourly rates, he used $45.00/hr. plus a 15% overhead and profit mark-up = $51.25/hr. He agreed that if Vallie used a $35.00-$40.00/hr. rate, (which appears to be the case) that rate would be reasonable. He agreed that the subsequent electrician, David Kerr-Taylor, used $75.00/hr.

[220] As to the issue of the failure of the contractor to relocate the main electrical switch, he explained that the electrical code has different rules governing the locations of the electrical panel and the main shut-off switch or box. The panel can be located anywhere but the shut-off box must be close to the incoming electrical line-- (see Def.’s Ex. Bk., Vol.1, Tab 10, photos #’s 13 and 14). Photo #13 shows the new shut-off box in the original location; photo #14 shows the new panel in the new location. Minaker is complaining that the shut-off box wasn’t moved as required by the contract quotations of July 16 and Aug./Sept.8. Vallie explained in his testimony that the electrical inspector and/or the electrical regulations wouldn’t allow the shut-off box to be moved away from the incoming electrical line. Minaker complains that she wasn’t informed of this by Vallie and had she been so informed, she would have decided not to move the electrical panel if the shut-off box couldn’t also be moved. She claims that the whole point was to move all electrical equipment from the newly renovated basement utility room to the storage-oil tank room where it would not be seen. Now, part of this equipment is hidden away in the storage-oil tank room and part is in view in the utility room. Watchorn admitted that Minaker never told him this whole story and, in particular, what Vallie’s explanation was as to why the shut-off box was not, and could not be, relocated.

[221] He also admitted that in his discussions with Minaker prior to writing his report, Minaker told him she was very upset at the prices for the electrical work that she had agreed to pay Vallie and she wanted him to analyze what her costs for this work ought to have been. (It must be remembered that Vallie was charging $25,000 for all the electrical work set out in the July 16 quotation, and an additional $10,000 for both the additional electrical work in the Aug. 8/Sept. 8 quotation and the electrical extras listed on the October 1 Summary (invoice). This is all set out in the Summary of Electrical Work—(at Def.’s Ex. Bk., Vol. 1, Tab 6.) So he calculated what the fair market value of that scope of electrical work should have been and he came up with a figure of $18,300. He valued the incomplete work at $3,600, so he calculated that $14,700 is the value of the electrical work actually done by the plaintiff. As noted earlier, he agreed in cross-examination that the provision in the July 16, 2008 quotation that “All light fixtures will be provided by owner” would include pot lights. He was not asked his opinion about the pot light trims but I find that pot light trims are also “fixtures”. And yet he noted on p. EA5 of his report that the plaintiff failed to supply 19 pot lights and 35 pot light trims. He obviously did not know about this contractual provision.

[222] He was cross-examined on various items of work and of costs listed on p.EA3 of his report and these were compared to Vallie’s prices, and his figures, as compared with Vallie’s prices, have led me to conclude that, in many cases, Vallie’s prices were reasonable although, as I have ruled elsewhere in these Reasons, the defendant is not entitled in law to question now whether these agreed-to prices were reasonable.

[223] As to his calculation of the value of the work not completed, set out on p.EA5 of his report, and his conclusion that its value was $3562 (rounded to $3600) he agreed that his inspection occurred on March 26, 2010, seventeen months after Vallie left the job. At the time of his inspection, all the electrical work had been done so he had to rely on what Minaker told him had been done by Vallie and what had been done by the successor electrician or electricians. He also testified that Minaker had given him a set of her electrical drawings but these were not identified in his Report. If the pot lights and trims are excluded from his list because “All fixtures were to be supplied by the owner”, then his number is reduced from $3562 to $2514 for the value of the contract electrical work not completed.

David Hellyer

[224] It is important to note that Hellyer’s original report of March 5, 2010 just makes observations on the 65 allegations of deficiencies and incomplete work made by the defendant in her amended Scott Schedule and in her statement of defence and counterclaim. There is, with a few exceptions, nothing about costing and pricing in these observations and comments. I will not repeat those observations and comments here, but if necessary, they can be read as they are an Appendix to his March 5, 2010 report.

[225] And Hellyer’s second report of August 10, 2010 is a review of the Pendlebury Construction Costs Report and a commentary on Pendlebury’s claim that he believes that “the walls were not all plastered” but that a scratch test would be required to make a definitive determination. Hellyer agrees that the dining room ceiling paint job was not properly done. He also saw a small area in the hall where skim coating was not done but he prepared no estimate as to the costs to repair or complete this work. He noted that this hall area problem was a localized one of 1 to2 S.F. He referred two photos #59 and #60 in his report dealing with the skim coating issue. He agreed that the upstairs bathroom work and the basement work were not finished and that he had said so in his original report of March 5, 2010.

[226] As to the other ceilings, he could not determine if they were skim coated but they were all smooth and properly painted.

[227] He explained the difference between “skim coating” and “patching” using drywall “mud”. He testified it would be a mistake to put “mud” over an entire wall, so as to put on an additional layer of plaster. The idea is not to build up the surface of the wall but rather, to fill up any depressions and then skim off the excess “mud”.

[228] He then referred to para.’s 8 and 9 of his trial affidavit as to the make-up of the walls and ceilings on all three levels of this house. He repeated what he had said about the wall skim coating work on p.2 of his August 10, 2010 report. He didn’t see any “seams” as Pendlebury had reported, and repeated in cross-examination what he said at paras. 11, 12, 13, 14 and 15 of his trial affidavit. He couldn’t say whether skim coating was or was not done everywhere but he did observe that the walls were smooth and the wall finish was ready for painting. He said that if skim coating is done well, then the painter doesn’t have to sand before painting. If not done well, then the walls must be sanded.

[229] Rulings on Defendant’s Claims for Credits for Contract Work/Extra Work Alleged Not to Have Been Done at All or Not Done Completely; and for Alleged Improper Charges,; and for the Alleged Failure To Supply Items/Materials At All or Improperly

(Again, because of the length of these Reasons and the number of disputed items, I am adopting a point form abbreviated and hyphenated format for this part of my Reasons.)

1.Credit Claim of $14,688 + 15% + 5% + 5% - Walls Not Skim Coated

The July 16 contract required the plaintiff to “Skim coat all wallpaper walls” for a price of $14,688 (+15% OH & P) – see Minaker’s trial affidavit at paras. 20-22 – she claims “work not done” and also there were “cracks/blemishes/small holes/ridges” – Casarella responds in his trial affidavit #2 – paras. 14 to18 – the key paras. are 16 and 17 – he saw no cracks, blemishes, small holes or ridges when he was there – and see also Novalski trial affidavit to same effect at paras. 3-7 – Pendlebury in his report thinks that walls “were not all plastered”. In Hellyer first report – October 24, 2009 – at Scott Schedule Appendix, item #35 – says some localized areas where skim coat was incomplete and not sanded or painted –he says may be necessary to paint to nearest break line – see photo IMG.0060 at Plt.’s Ex. Bk., Vol. 2, p. 9 for a picture of the incomplete skim coat– and see Minaker’s October 27 e-mail, p.1, para 1.8 – she says that 75% of painting of walls and ceiling was done – she does not complain about failure to “skim coat all wallpaper walls” – Ruling: contract did not require a full coat of plaster to be applied to all walls but just required drywall compound to make walls smooth and ready for paint –all as described by Hellyer in his trial affidavit at paras. 8-15, and in his cross-examination, and in his August 10, 2010 Report – (see Plt.’s Ex. Bk., Vol. 4, Tab 4). While there may have been some defects in this skim coating of the walls, the work was substantially done as required by the contract and defendant has not proved that she is entitled to the credit she claims or for any lesser credit. I will deal with her claim for costs to repair any defective work in the skim coating, later in these Reasons.

2. Credit Claim of $5,718.75 + 15% +5%+5% - Ceilings Not All Skim Coated

The July 16 contract required the plaintiff to“Skim coat all ceilings affected by electrical work” for a price of $6,825 (+15% OH &P) – see Minaker trial affidavit at para. 23 – she says all ceilings in house were affected by electrical work and all should have been skim coated – she doesn’t believe this work was done – cracks and blemishes on ceilings are visible – she never saw “wet plaster” being put on ceilings even though she was living in house during the time the work was being done – she claims the only ceilings that were skim coated were living room and dining room – second floor ceilings were not touched -- old crack in master bedroom still shows – front foyer (hall) ceiling was also to be done for an $800 extra –she claims she paid this to plaintiff but work was not done – so original price of $6,825 + $800 = $7,625 x 75% of work not done = her claim of $5,718.75 + 15% OH + 5% profit + 5% GST--see Casarella response affidavit – paras. 19-21 – he denies that work was not done – see also Novalski trial affidavit – paras. 8 and 10 – he says that this work was done--he was the drywaller – see Pendlebury April 6, 2010 report – p. 4, para.2—he says he “believes that the ceilings were not all plastered” – he saw cracks and old blemishes – see Hellyer October 24, 2009 report at Scott Schedule Appendix – item #’s 36 and 24 – some ceilings may need local repair and fresh paint –the Minaker October 27 e-mail at p. 1, para. 1.4-- shows all this work having been done – and again see her October 27 e-mail at p. 2, para. 4.9 – she admits that front hall ceiling skim coating was done and there was no complaint-- Ruling: While there may be some defects in the skim coating of ceilings “where affected by electrical work”, defendant has not proved that she is entitled to the credit she claims for this work that she claims was not done, or for any lesser credit. I will deal with her claims for costs to repair any deficiencies in this skim coat ceiling work, later in these Reasons.

3. Credit Claim of $4,255.20 + 15% +5% +5% for Not Doing All the Painting Required by the Contract

The July 16 contract required the plaintiff to paint the walls and ceilings on main floor, second floor and basement for a price of $12,326--see Minaker trial affidavit at para. 25—she says plaintiff painted main floor and second floor but not basement at all-- she calculates basement S.F. (square footage) at 788 S.F., whole house at 2284 S.F., so $12,326 ÷ 2284S.F.= $5.40/S.F. so credit is 788 S.F. x $5.40/S.F. = $4,255.20 –but see Casarella trial affidavit #2 –paras. 22 -23-- as a result of termination, Vallie could not paint basement –this is admitted – Vallie provided credit of $900 for this painting not done (see Plt.’s. Ex. Bk., Vol. 1, Tab 13, item #9) – in cross-examination, Casarella said painting of main floor and second floor was far more labour intensive – painter needs to protect woodwork, etc. – is much simpler work to paint basement – can’t just use S.F. calculation – shouldn’t use S.F. of footprint of entire house but rather the actual square footage of walls and ceilings – this is 5000 S.F. approximately, so, on these numbers, I calculate that $12,326 (total cost of painting) ÷ 5000 S.F. = $2.46/S.F. and this would be a fairer square foot rate, so 5000 S.F. ÷ 3 (floors) = 1666 S.F.(for each floor) x $2.46/S.F. = $4,098.36 if this method of calculation is used. However, I think a better method should be based my finding , which I now find as a fact, that 25% of the total painting cost relates to the basement, and 75% to the main and second floor, and this is a reasonable allocation, so the credit should be $12,326 x 25% = $3,081.50 +15% OH & P = $462.25 = $3,543.75 credit for the basement painting work not done and I so rule.

4. Credit Claim of $150 + 15% +5% +5% for Not Re-installing Dining Room Fixture from McRae to Sutherland

This item of work is #2 on Minaker’s 13–item “List” of July 18-- (see Def.’s Ex. Bk., Vol. 1, Tab 2, p. 1)-- cost was to be $300 – see Minaker trial affidavit – para. 26 -- $300 price was quoted, and she claims she was charged the full amount but re-installation was not done – but see her October 27 e-mail, p.1, para. 2 – no complaint about this item not being done – see Casarella trial affidavit #2, para. 27 –he says plaintiff couldn’t re-install light fixture because contract was terminated – he claims that a credit was given in his credit list-- (at Plt.’s Ex. Bk., Vol. 1, Tab 13, items #5 and #6)—but I see no credit figure given for this item and it does not fit within his headings of credit items #5 or #6. But as I have noted elsewhere, I see no billing in either of plaintiff ’s Oct.1 or Oct. 9 invoices for this work-- all there is is this July “List” of 13 items – the quoted- on items from this “List”, which is shown on plaintiff’s handwritten copy of this “List” --(see Def.’s Ex.Bk., Vol. 1, Tab 2, p. 2)-- is referred to in the August 12, 2008 quotation-- (Def.’s Ex. Bk., Vol. 1, Tab 3)-- as item #3, under the heading “Summary”, and entitled “Your List”, but, as noted above, this work and the prices on this quotation were never included in, and billed for in, either the Oct. 1 or Oct. 9 Summaries (invoices). Therefore, no credit need be given since this work was never billed for and no payment was ever made by defendant.

5. Credit Claim of $525 + 15% +5% +5% for Not Removing All Old Light Fixtures in Basement and Replacing With New Light Sockets.

See item #8 on Minaker’s July 18 “List”--price quotation was $700 – see Minaker trial affidavit, para. 27 – she says this work “largely not done at all” – she claims she was charged $700 – she says 1 or 2 light fixtures were removed but the rest were not removed and the new light sockets were not installed – see her October 27 e-mail, p. 1, para. 2.8 – “not complete – fixture in basement washroom still there, fixture in Rec Room still there” –but see Casarella trial affidavit #2, paras. 28 -29 –he says this work was completed-- see photos at Plt.’s Ex. Bk., Vol. 2, p. 14, photos #’s 0104.JPG and 0105.JPG – these show new light sockets were installed – in cross-examination, Casarella testified this work “was done”- - Ruling : I see no billing for this work in any of the plaintiff’s two said invoices of Oct. 1 and Oct. 9 and no payment by defendant. And, in any event, I find this work was, in fact, done, as the said two photos above show, so Minaker’s evidence is wrong on this issue , so for this reason also, no credit need be given.

6. Credit Claim of $500 + 15% +5% +5% for Failure to Paint Basement Concrete Floor

See item #9 on Minaker’s July 18 “List” – price quotation was $500 – see Minaker’s trial affidavit, para. 28 – “floor was not painted” – see her October 27 e-mail, p. 1, para. 2.9-- “not done” – but see Casarella trial affidavit #2, para. 30 –he says work not done but a credit was given --(see Plt.’s Ex. Bk., Vol. 1, Tab 13, credit list – item #8) –there is a credit of $900 for not painting all basement areas including “basement concrete floor” – but I note that painting of basement rec. room, laundry room and basement hallway was part of the Aug. 8/Sept. 8 scope of work and was included in the “New Revised Quote” of $129,684, on p. 3, and was billed for, so a credit for this Aug.8/Sept.8 painting work that was not done, has to be given—but I note that “paint concrete basement floor” was not in the Aug.8/Sept.8 quotation--perhaps plaintiff included words “and basement concrete floor” in his credit list, Tab 13, in error – in cross-examination, Minaker testified that just a $900 credit, for all the basement painting not done is, in her view, insufficient. But, as noted above, I see no evidence that this item of $500 to paint the basement concrete floor was ever billed for, on either of the plaintiff’s Oct. invoices, or was ever paid for by the defendant, so the defendant is not entitled to any credit for this item.

7. Credit Claim of $2,000 + 15% +5% +5% for Failure to Complete All the “Stair” Work

See Aug. 8/Sept. 8 quotation – (Def.’s Ex. Bk., Vol. 1, Tab 4, p. 2)-- where 5 items of work are listed, for $3,900 – see Minaker October 27 e-mail – p. 2, para. 3.2 – “stair -- $3,900.00 – Not done” – in cross-examination, she admitted this is a mistake and that some work was done – see Minaker trial affidavit – para. 29 – “plaintiff failed to complete all this work” – light not relocated – 24” louver door not supplied or installed or door opening not framed – stringer not capped – area not patched/primed-- (see Def.’s Ex. Bk., Vol. 1, Tab 10, photo # 10, taken November 1, 2008) – Minaker’s $2,000 claimed credit amount of the total $3,900 price works out to 50% of the work not done – see Casarella trial affidavit #2, para. 31 – he agrees that plaintiff did not complete work because of the termination – plaintiff gave credit of $160 + $75 + $25 = $260 plus a paint credit which was included in credit item #8 -- $900 – (see Plt.’s Ex. Bk., Vol. 1, Tab 13, item #’s 1, 2, 3 and 8) – this work was billed for in the October 1, 2008 invoice within the “original contract” amount of “$129,684.00” which amount comes from the Aug. 8/Sept. 8 quote-- (see Def.’s Ex. Bk., Vol. 1, Tab 4, p. 3) – in cross-examination, Casarella says work item #’s 1, 2, 4 of this stair work were done-- re item #3, a 24” louver door was supplied but was then taken back by plaintiff because of the termination –and re item #5 (part) – cap side of wood stringer was not done --and re other part of item #5 (part) – patch drywall and prime was done – he can’t say how his price of $3,900 for all this work was broken down or made up – his credit items of $160 + $75 + $25 on Tab 13 were just for labour – Ruling : his credit of $260 plus a small part of the $900 paint credit, and no credit being given for the louver door taken back, is not sufficient. I allow a credit of $1,560 (I find that 60% was done – 40% not done so 40% x $3,900 = $1,560) + 15% OH & P at $234 = $1,794 total credit.

8. Credit Claim of $600 + $600 + $1,200 + 15% +5% +5% for 3 Items of the “Laundry Room” Work Not Done

See Aug. 8/Sept. 8 quotation which lists four items of work – see Minaker October 27 e-mail – p. 2, para. 3.3 – she writes “What is covered in this ? ? ? ” but this item, which she labels as “item 3”, is then shown by her as one of the items of “work completed”, and she further shows a total amount payable of “$26,751.00” – but see Minaker trial affidavit – para’s. 30, 31, 32, 33, 34 and 35 – in para. 30, she says “Some of this work was not completed by the Plaintiff and some of this work is a duplication of other items already included in previous quotations for which the Plaintiff appears to be charging me a second time” – note that the first item of work, under the heading “Laundry Room”, is to “remove centre wall” – this is the same item of work as in item #7 of Minaker’s July 18 “List” of 13 items for which a price of $600 was quoted on plaintiff’s handwritten copy of this “List” – (see Def.’s Ex. Bk., Vol., 1, Tab 2, p. 2)--it is clear that only one wall was removed by plaintiff – Minaker claims she was charged twice – as I noted earlier, none of the items on her July 18 “List” of 13 items was ever billed by plaintiff , or paid for by defendant, so there was no double billing – but in Casarella’s cross-examination, he was referred to Minaker’s “List” and his handwritten copy of this list-- (see Def.’s Ex. Bk., Vol. 1, Tabs 1 and 2)-- where there is shown a price of $600, and he was then also referred to his Aug. 8/Sept. 8 quotation, under the heading “Laundry Room”- -“Remove centre wall” , and he agreed this is the same wall, so he agreed that this claim was “billed twice” and that Minaker was now entitled to a credit of $600 +15% . So, since he agreed , I will give Minaker a credit of $600 + 15% = $90 = $690.

In para. 31 of her trial affidavit, Minaker says drywall in laundry room was not primed or painted after being installed and electrical panel was not relocated – but she then says the electrical panel, i.e. the fuse panel, was relocated to oil tank room but the main shut-off switch was not relocated – this shut-off switch is still in the utility room where it was originally – it was not moved – and she further claims that the cost of relocation of the electrical (fuse) panel, which was moved to the oil tank room, was included in the $25,000 item for electrical work on the July 16 quotation – item #13 --(see Def.’s Ex. Bk., Vol. 1, Tab 1, p. 3) –so her credit claim for this item is $1,200 + 15% + 5% + 5% --and for the laundry room work that was not primed or painted – she claims a credit of $600 + 15% +5% + 5% -- but see Casarella trial affidavit #2, paras. 32, 33, 34 – only one wall was removed –and he agreed to move the electrical (fuse) panel but not the main shut-off box – there is no reference to this item in the Aug. 8/Sept. 8 quotation which says “Relocate electrical panel” – no reference to moving main shut-off box – and further, this shut-off box had to remain in its existing location, close to incoming main line-- (for reasons described earlier herein) – Casarella says he told Minaker this “from day one” – he says she is not entitled to a credit for not moving this shut-off box – the plaintiff patched and primed the new drywall but couldn’t paint it because of contract termination – the holes in the drywall-- (see Def.’s Ex. Bk., Vol. 1, Tab 10, photos #’s 15 and 49)-- were caused by other trades hired by Minaker – a credit has been given for not taping/sanding drywall in “Laundry Room” – this credit is part of the $600 credit amount – (see Plt.’s Ex. Bk., Vol. 1, Tab 13, item #7and item #8) –and credit for not painting laundry room is part of the $900 credit at item #8 of said Tab 13 – in cross-examination, Casarella couldn’t answer why moving the electrical panel was not included in the $25,000 charge for electrical work on the July 16 quotation-- he couldn’t remember what the item “relocate electrical panel” on “Summary of Electrical Work” document was for – (see Def.’s Ex. Bk., Vol. 1, Tab 6, p. 2)-- he agreed that he did charge Minaker $2,500 to move the electrical panel as Tab 6, p. 2 shows-- this $2,500 charge was part of the $6,844 price for the “Laundry Room” work shown on the Aug./Sept.8 quotation –( Def.’s Ex. Bk., Vol. 1, Tab 4, p. 2) – Casarella later claimed that laundry room was patched and primed contrary to what Minaker testified – he couldn’t say what credit should be given if the court found that drywall in laundry room was not patched and primed – the credit he did give is part of items #7 and #8 on his credit list-- (at Def.’s Ex. Bk., Vol. 1, Tab 13) – in cross-examination, Minaker claims two electrical credits re laundry room electrical work of $1,200 and $2,500 because the $2,500 price that was included in the $6,844 price quotation was already included in the original $25,000 electrical work quotation- Ruling: the $2,500 price quotation, being part of the $6844 price quotation, for moving the electrical panel was not included in the original $25,000 price. It was a proper extra and was properly included in the said $6,844 price quotation which was billed for in the Oct. 1 invoice. And her $1,200 credit claim is also not proper. The electrical fuse panel was moved but the shut-off switch could not be moved because of electrical regulations as detailed earlier. And further, the Aug. 8/Sept. 8 quotation only speaks of the electrical (fuse) panel and not the main shut-off switch so it was not included in the scope of work, so when it was not done, no credit need be given to the defendant because it was never billed for. But the credits given for not patching and priming and painting the new laundry room drywall, within credit items # 7 and #8 of Tab 13 ($600 and $900), are too low. Defendant is entitled to an additional credit of 10% (only 89%-90% of this work was done, as I so find) of $6,844 = $684 + 15% = $102.60 = $786.60 in addition to the credits already given in plaintiff’s Tab 13 credit list, plus $690 for the apparent admitted “billed twice” item, as above noted, for a total credit of ($786.60 + $690 =) $1,476.90.

9. Credit Claim of $1,166.40 + 15% +5% +5% for Failure to Prime and Paint Drywall in Oil Tank Room

See Aug. 8/Sept. 8 quotation re oil tank room - 4 items of work are listed there – one item was to prime and paint new drywall - price was $3,109 in total- -but see Minaker trial affidavit - para. 36 –she claims plaintiff failed to prime or paint this new drywall –her credit calculation is 216 S.F. of wall surface x $5.40/S.F. so her calculation in para. 25 is $1,166.40 plus 15%+5%+5%- - but see her October 27 e-mail, p.2, para. 3.4-- where she says oil tank room “completed”--in cross-examination, she said this must be another error on her part –and see Casarella trial affidavit #2, para. 35 -- priming and painting work was not done because of contract termination -- a credit was given on plaintiff's Tab 13, item # 8, of $900 for all paint work not done in basement -- in cross-examination, Casarella said oil tank room is 10' x 10' - would take one half hour to paint –would be $60 cost --and paint already on site - he agreed that an additional credit of $466 would be fair --Ruling: his Tab 13 credit is too low--in my view, a reasonable credit would be an additional 10% (only 89%- 90% of work was done as I so find) of $3,109 = $311 + 15% = $46.50 = $357.50. Minaker's credit claim of $1,166.40+15%+5%+5% is too high as it works out to 37 1/2% of the total quoted price of $3,109 for all this work but the priming and painting was just a small part of the total work for "Remove ceiling; stud, drywall and insulate; install 1/2"plywood to one wall; and prime and paint". But Casarella was willing to give an additional credit of $466 inclusive of OH&P, so the additional credit will be $466.

10. Credit Claim of $422.09 + 15% + 5% + 5% for Failure to Prime and Paint the New 2 x 4 Partition

The quoted price in the Aug.8/Sept.8 quotation was $940 to supply and install new wall partition -- insulate -- drywall -- prime and paint –but see Minaker’s October 27 e-mail - p. 2, para. 3.5 -- she says “not done” at all, but in her trial affidavit, she says just “not primed or painted” –she testified that her October 27 e-mail on this item “was another mistake” on her part – and see Minaker trial affidavit -- para. 38 –and see photos 11 and 49 at Def.’s Ex. Bk., Vol. 1, Tab 10 – they show the wall in question – this work was billed for -- Minaker calculates square footage of wall at 11' 2" x 7' = 78 S.F. x $5.40/S.F. = $422(+/) credit +15% + 5% + 5% -- in cross-examination, she admitted that she paid Shawn, her new painter, $820 to paint the entire basement – and see Casarella trial affidavit #2 -- paras. 36, 37, 38 -- he agrees priming and painting of rec room new 2 x 4 drywall partition was not done-- he gave a credit of $900 to cover all painting work of rec room, laundry room, basement hallway and basement concrete floor that was not done -- in cross-examination, he agreed that wall is 100 S.F. so he was willing to give an additional credit of $150 +15% -- he said $940 charge in Aug. 8/Sept. 8 quotation did not include painting of partition wall –this painting work was covered by the $12,326 painting price in the July 16 quotation -- it covers all painting of all walls and ceilings on all 3 floors – so defendant, and the court, can't take a percentage of $940 price which did not include painting-- Ruling: defendant's claimed credit is ($422+15%=$63.50=) $485 (rounded) with just 15% OH & P added) -- plaintiff's offered additional credit is $150. I find $150 + 15% OH & P at $22.50 = $172.50 additional credit is reasonable and I allow it at this amount.

11. Credit Claim of $1,950 + 15% + 5% + 5% for Failure To Do Any of Upper Bathroom Work

See Aug. 8/Sept. 8 quotation-- (Def.’s Ex. Bk., Vol. 1, Tab 4, p. 2) – price quotation was $1,950 to remove existing light fixture and heat lamp, install 3 pot lights-- (note: not supply)-- and patch, plaster and paint – see Minaker October 27 e-mail - p.2, para. 3.7-- where she says “not done” –and see Minaker trial affidavit - paras. 39 - 40 -- she says none of this work was done – she claims full credit of $1,950 + 15% + 5% +5% -- see Def.’s Ex. Bk., Vol. 1, Tab 10, photo #25 which shows existing light fixture as of November 1, 2008--but see Casarella trial affidavit #2, para. 39 -- he says Minaker was using bathroom daily and she refused to provide access to enable plaintiff to remove old fixture and install new pot lights -- he claims rough-in for pot lights was done -- he refuses any credit -- in cross-examination, he couldn't break down the $1,950 price as between the 3 components of the work – he gave a figure of $300 x 3 for installation of pot lights = $900 --he gave Minaker a credit of $400 for not wiring up pot lights -- (see Plt.’s Ex. Bk., Vol. 1, Tab 13, item #5 ) – he couldn't give a percentage of this entire item of work that was not done -- said some patching and rough-in was done –he claims that his” non-painting” credit for this item of work was included in the $900 credit—( at Plt.’s Ex. Bk., Vol. 1, Tab 13, item #8---which I note, by its very wording, doesn't cover this area) --see Minaker cross-examination -- she says plaintiff did not do any of this work -- she hired Kerr-Taylor Electric to do all this work including electrical rough-in -- heat lamp was removed either by Kerr-Taylor or her new painter -- she disagrees with Casarella’s testimony in his cross-examination about what he said about his obligation to “supply” these pot light –he said “he didn’t have to”-- she claims the Aug. 8/Sept. 8 quotation that says “install 3 pot lights” is plaintiff's mistake -- he meant to say, and should have said, “supply and install” because that was their deal but she admitted that, at the time, she agreed to buy(supply) and did buy(supply) the 3 pot lights in question--I believe the evidence shows that these 3 pot lights were on site as of October 28 – I note that this Aug. 8/Sept. 8 quotation which says “install 3 pot lights” but which does not say “supply”, is consistent with the original July 16 quotation that says “All light fixtures will be provided by the owner” -- Minaker says this wording in both these quotations were “mistakes” by the plaintiff. On this, I disagree with her. Ruling: However, plaintiff has not proved, on a balance of probabilities, that any of this upper bathroom work was done -- this work was billed to defendant in the October 1, 2008 invoice – defendant is entitled to full credit of $1,950+ 15% OH & P = $292.50 = $2,242.50.

12. Credit Claim of $2,200 + 15% + 5% + 5% for Failure to Supply/Install New Oak-Stained Quarter Round and New Paint Grade Baseboard in Kitchen

See Minaker October 27 e-mail -- p. 2, para. 3.8 –says “not done” -- see Minaker trial affidavit -- para. 41 – says plaintiff neither supplied nor installed -- see photos 33 and 37 at Def.’s Ex. Bk., Vol. 1, Tab 10 for examples of missing quarter round and baseboard -- in cross-examination, Minaker agreed that her statement was slightly in error -- the material was “supplied” but was then taken back by plaintiff on October 29 – but see Casarella trial affidavit #2 -- para. 40 -- quarter round and baseboard material were supplied -- were on site as of October 28 when contract was terminated -- plaintiff provided a credit on his Tab 13 of $600 for labour not done for this installation -- see Aug. 8/Sept. 8 contract-- (Def.’s Ex. Bk., Vol. 1, Tab 4, p. 2) -- it shows plaintiff was to “supply and install new oak stained quarter round to living room, dining room, bedroom #1, bedroom #2, master bedroom, upper hall (2nd floor), lower hall (1st floor) and install new paint- grade baseboard to kitchen” for $2,200 -- in cross-examination, Casarella said he has no bill for purchase of quarter round or baseboard –said this material came out of his “stock” – said his Tab 13 $600 credit can be broken down as $400 for labour for all quarter- round installation and $200 for labour for baseboard installation -- he agreed that if court finds he didn't supply/deliver materials to site and didn’t leave them there, defendant would be entitled to full $2,200 +15% OH & P credit -- plaintiff billed defendant for this work on the October 1 invoice – see further, Minaker cross-examination -- she was cross-examined on this issue at length -- she agreed that all old existing quarter round was removed and old baseboard in bedroom #2 was removed-- (see Def.’s Ex. Bk., Vol. 1, Tab 10, photo #37)-- and was to be used in kitchen but was not re-installed there -- she agreed that new oak quarter round and new baseboard material were all delivered to site but she claims that plaintiff took this material back on October 29 or 30 after termination on October 28 -- Minaker admits that she paid her new contractor, Jerry, cash to do this work, same as how she paid Vallie--quaere why?—answer seems obvious to me –and he was to supply and install--Ruling : Issue is who to believe ? -- plaintiff has the burden of proof that this material was supplied and left on site so that it can show it was entitled to be paid for the material -- it is seeking to charge defendant $2,200 + 15% OH &P = $330-- less a $600 credit = $1,930 -- plaintiff hasn’t proved that material was left on site following termination, on a balance of probabilities -- plaintiff has no “corroborative evidence such as photos, invoices, aside from disputed testimony of Casarella ---- Carelli, plaintiff’s witness, deposed in his affidavit that this material was supplied but this is not in dispute -- the question is whether the material was taken back by plaintiff on or after October 28. Accordingly, I allow a credit of $2,100 + 15% OH & P = $315 = $2,415. I am allowing plaintiff $100 + 15% = $115 to cover labour to remove all old existing quarter- round and baseboard but this amount is already included in plaintiff’s invoice of October 1so all that is needed is a deduction of $2415 from plaintiff’s claim.

13. Credit Claim of $1,800 + 15% + 5% + 5% for Failure to Repair the Chimney

See Minaker trial affidavit - para. 42 -- she says this work was included in Aug.8/Sept. 8 quotation but Def.’s Ex. Bk., Vol. 1, Tab 4, p. 3, which says “The following items are not included” and “we offer separate prices for your consideration” – “Chimney repairs - $1,800” -- this work was not in the September 15 quotation -- (see Def.’s Ex. Bk., Vol. 1, Tab 5)-- where other “items for consideration” were then quoted on and were billed for on the October 1, 2008 invoice-- (see Def.’s Ex. Bk., Vol. 1, Tab 6, p. 3) –and see Casarella trial affidavit #2 -- para. 41 -- he says Minaker never agreed to have chimney work item added to contract -- it was never billed -- it was never paid for-- and see Minaker October 27 e-mail p. 2, para. 5 – is not mentioned -- Ruling: this chimney work was not part of any contract -- work was not done -- was not billed for-- defendant not entitled to any credit whatsoever -- total improper credit claim

14. Credit Claim of $500 re Relocate Doorway to Boiler Room

See Minaker trial affidavit - para. 43 - this item has already been dealt with by me above, under the claim for extras under item #4 of October 9, 2008 invoice – no further credit allowed.

15. Credit Claim of $1,800 re Electrical - Install 2 Lights and 2 Switches, Relocate Dryer Power from Panel and Relocate Dryer Plug

This item also already dealt with above under claim for extras, under item #7 of October 9, 2008 invoice – no further credit allowed.

16. Credit claim re Remove and Re-install Laundry Sink - $1,600 + 15% + 5% + 5 %

See Minaker trial affidavit - para. 45 -- see Casarella trial affidavit #2 -- para. 52 – he says “no mention of this on any of the quotes or summaries of the contract” and “never formed part of the contract” and “no credit payable”. He is wrong -- it is the 7th item listed under “Laundry Room” on the October 1, 2008 quotation -- (see Dft.’s Ex. Bk., Vol. 1, Tab 6, p. 1) -- and the other 6 items under that heading were done and were billed for under the October 9, 2008 invoice -- (the $1,800 item re electrical was only billed at $1,200 as above-noted)-- but the work was never done and was never billed for so no credit need be given --(Note that under the heading “other areas”, the $4,400 item and the $1,400 item were also not done and not billed for).

17. Credit claim re finish hardwood in 2 phases - $1,400 +15% + 5% + 5%

See Minaker trial affidavit - para. 46 -- see Casarella trial affidavit #2 -- para. 53 -- he says “no mention of this on any quotes or summaries” -- he is wrong -- see October 1, 2008 quotation -- (Dft’s Ex. Bk., Vol. 1, Tab 6, p. 1, second last item - $1,400)-- but this was never billed for as noted in #16 above so no credit need be given.

18. Credit claim re remove and replace baseboard in bedroom #2 - $210 + 15% + 5% + 5 %

See Minaker trial affidavit - para. 47 – this item already dealt with above under claim for extras, under item #10 of the October 9, 2008 invoice ,so no further credit is to be given.

19. Credit claim re Disposal Bins - $2,400 +15% + 5% + 5%

See Minaker trial affidavit -- paras. 50, 51 -- Vallie charged $2,400 to “Provide necessary disposal bins” on the original July 16 quotation and this was billed for on the October 1, 2008 invoice, line 1, under the heading “Original Contract”, as amended by Aug. 8/Sept. 8 contract-- no dumpsters were ever provided at the site -- construction debris taken by Casarella in his truck and put in dumpsters at a York University site -- see Casarella trial affidavit #2, para. 26 – he says Sutherland construction debris taken in truck to disposal bin located at York University because Minaker did not want bin placed on her driveway -- she needed to park her car there -- debris was removed -- she got benefit of removal in dumpster bin and therefore, no credit to be given -- in cross-examination, Casarella said bin wasn't put on her property and he couldn't put it on street -- agreed that there was not a dedicated dumpster for her job -- in re-examination, he said he was charged for the bins he supplied at the York University site -- he is charged by the bin company by the size of the bin and not the length of time it was there - full bin charge is $800 per bin and he figured the Sutherland construction debris, including removal of carpet and wallpaper and drywall and wood, would take 3 bins so he quoted $2,400 on the July 16 quotation - he filled up these bins at York University with Sutherland debris - weight is the key factor in the charges to him by the bin company -- in cross-examination, Minaker agreed that she did not complain about the lack of supply of disposal bins in her October 27 e-mail -- if bin was placed in her driveway, she would have parked on street but Casarella told her she couldn't park her car on street for the entire construction period if the bin was placed in her driveway -- he told her he would take construction garbage to York University and so he put it in his truck from time to time -- she can't say whether the old kitchen floor was taken up and taken away -- she claims Vallie did not remove the kitchen cupboards but removal of kitchen cupboards and bulkheads was part of the July 16 contract and there is no complaint by her that this was not done -- and in the Aug. 8/Sept.8 contract, Vallie was to “remove sink wall” and “remove closet” and “remove ceilings” and “remove old electrical”-- there were “other removals” re “stair”, “laundry room”, “oil tank room”, “bedroom #2” - -he testified that there were no complaints from Minaker about the disposal bins not being supplied on site all during the contract time from late August to October 28. Ruling: It is clear that the construction and removal debris were disposed of by the use of disposal bins paid for by Vallie but located at another of his construction sites -- this problem of the location of the disposal bins was discussed between Minaker and Casarella -- a different disposal arrangement was required -- she never objected until after termination - -she received the benefit of the disposal services and it cost Vallie to provide such services. I am not satisfied that garbage disposal services were not provided by plaintiff and the defendant therefore is not entitled to any credit as claimed.

20. Credit claim for Non-Painting of Bedroom #2 - $422.09 + 15% + 5% + 5%

In August 8/September 8 quotation, plaintiff was required to do some removal work and build new closet and drywall, tape and prime for $1,100 -- there is nothing about this credit claim in Minaker's trial affidavit -- in October 27 e-mail, p. 2 para. 3.6-- she says “ 6- Bedroom No. 2 - $1,100” and further says “Item #6” – “work completed”--in cross-examination at trial, she claims her figure of $422.09 is based on 11’2” x 7’ = 77 or 78 S.F. x $5.40/S.F. rate as per para. 25 of her trial affidavit, because apparently, she claims this new drywall wasn’t painted and all painting was covered by the July 16 quotation for a price of $12,326 which she has been charged for by the plaintiff -- Ruling: since this was never raised by defendant at any time before her cross-examination, it is not fair to allow her to raise this new item and make a claim in her cross-examination. Her trial testimony is inconsistent with her October 27 e-mail and her trial affidavit. Credit claim dismissed.

21. Credit Claim for Failure to Use Benjamin Moore Paint - $565 + 15% + 5% + 5%

See Minaker trial affidavit – paras. 52 – 53 –and see Dft.’s Ex. Bk., Vol 1, Tab 6 –the set of drawings at p. 4 – her note says “Walls to Receive Paint/Benjamin Moore” – nothing else said about brand of paint to be used is contained in the July 16 or August 8/September 8 or September 15 or October 1 quotations. In particular, nothing said about the brand of paint for exterior work described in the September 15 quotation-- “(Dft.’s Ex. Bk., Vol . 1, Tab 5) –see her affidavit, at para. 52, that says “the 4th drawing specifies that all paint used during the construction was to be Benjamin Moore paint” –this statement of hers is wrong – the words used are only “walls” to receive Benjamin Moore – there is nothing about “all paint used to be Benjamin Moore” in any quotation or drawing – Minaker thinks Sherwin Williams paint was used by Bristol Painting because she saw empty Sherwin Williams paint containers left behind after plaintiff left job site – she relies on photos at Dft.’s Ex. Bk., Vol. 1, Tab 10, photo #s 43 and 47 – photo shows “enamel”, “semi-gloss”, “interior latex” and “A-100” gloss luster paint which is for exterior use – see testimony of witness Thibodeau and trial exhibit 6, p. 3 – and photo shows some big blue buckets without paint names-- these are 19 litre pails which contained interior latex primer according to trial exhibit 6A – photo 47 shows a big bucket of white interior latex primer manufactured by Sherwin Williams and not Benjamin Moore – she then relies on Pendlebury’s report at Dft.’s Ex. Bk., Vol. 2, Tab 1, p. 4, para. 3-- to say that if all 8,060 square feet of painting area had used Sherwin Williams paint instead of Benjamin Moore paint, the savings to the contractor would have been $565 plus contractor’s mark ups--Pendlebury can’t say whether Sherwin Williams or Benjamin Moore paint was used--Minaker claims $565 +15% + 5% + 5%-- see Casarella trial affidavit #2, para. 26 – he notes that drawing prepared by Minaker only says “walls to receive paint/Benjamin Moore” – he claims all paint used on the interior of the walls was Benjamin Moore – some primer for exterior was Sherwin Williams but Benjamin Moore paint was not required by the contract for exterior painting – and further, painters often used empty Sherwin Williams – marked paint cans to fill paint being used on job and that explains the Sherwin Williams paint cans in photos 43 and 47 – see Novalski trial affidavit – para. 15 – he says all paint used in interior was Benjamin Moore paint – some exterior primer was Sherwin Williams – and he repeats story that it is a common practice for painters to use old paint cans to split paint so painters can work in more than one area at a time – in cross-examination, Casarella testified he used Benjamin Moore paint as specified for all interior walls – Sherwin Williams paint was used on exterior – a brown color – in cross-examination, Minaker testified that there was a specification to use Benjamin Moore paint on exterior but she agreed that there is nothing in the quotation or the drawings that say this – in re-examination, Casarella identified a note he made of the paint types and colors to be used on this job – these notes were marked as trial exhibit #1 – the numbers are HC105, OC 48, OC 114 and 2067 -40 and these are all Benjamin Moore paints – this can be seen from the paint chip color samples marked trial exhibit #2--these are the paints that he and Bristol ordered and used – in cross-examination, Novalski agreed that he did the drywall work and that his co-worker, Spiro, was the painter who did the painting for this job – his affidavit that says “I too performed the paint work along with the other workers from Bristol” is not correct – Spiro and the other painters purchased the paint for this job – as to the paint supply invoices at Plt.’s Ex. Bk., Vol. 1, Tab 16, he doesn’t know anything about them – maybe Spiro sent them to Vallie – although he said in his affidavit that Benjamin Moore paint was used, he admitted in cross-examination that he wasn’t at the job site for the painting work – he really knows nothing about what paint was used or anything else about the painting work done – Novalski was a very unsatisfactory witness and I do not accept as truthful any of his testimony about the painting and I am very sceptical about his evidence about the skim coating and drywall work unless it is confirmed by other testimony or exhibits. Witness Ernest Thibodeau was called as defendant’s witness – he is national credit manager for Sherwin Williams – has been with Sherwin Williams for 21 years – he brought a package of invoices of the paints sold, by the Sherwin Williams store at 816-820 Eglinton Avenue East which is near the Sutherland job site, to Bristol Painting – this package of invoices was marked as trial exhibit 6 – these invoices are for the Sutherland job--the dates run from July 10, September 22, September 24, September 26, September 30, October 3, October 4, October 6, October 20, October 21 and October 22 which is when the paint work was being done--page 2 shows a 5 gallon can of white latex primer for interior use; p. 6 shows a 1 gallon can of A-100 exterior latex gloss custom brown for exterior use; p.5 shows 1 quart of ASE LTX CL black which can be used for exterior or interior use – I note that in several of the Hellyer report photos, they show the exterior front door painted black; p.7 shows 1 quart of interior/exterior enamel oil base custom brown (was for exterior), and 1 quart of latex exterior/interior black (front door was black); p. 9 shows 1 gallon of latex semi-gloss white which is for interior use; p. 12 shows 1 gallon of exterior latex custom brown; 1 gallon of exterior oil based wood primer custom color; 5 gallon pail of white interior latex primer; p. 13 shows 1 gallon of interior latex primer; p. 14 shows 1 gallon of extra white oil based for interior use – eggshell sheen finish for use on top of pre-existing oil surfaces – (possibly used for wood casings and trims ); p. 15 same as p. 14; trial exhibit 6A describes in detail what each product of paint shown on these invoices is used for and the type of paint – in cross-examination, this witness confirmed that the tag reference “Sutherland” is given by the customer, in this case, Bristol –see Plt.’s Ex. Bk., Vol. 1, Tab 16 and 17-- Casarella identifies these invoices as the ones covering the paint purchased by Bristol for the Sutherland job – Tab 16, p. 1 shows 4 gallons of Benjamin Moore paint of different colors; p. 2 shows 1 gallon of Benjamin Moore purchased; p. 3 shows 2 gallons of Benjamin Moore of different colors purchased – invoices are for September 13, October 2 and October 21 – Tab 17; p. 1 shows 5 gallons of Benjamin Moore alkyd ceiling white purchased and two 1-gallon cans of alkyd ceiling white – no brand specified; p. 2 shows purchase of two 1-gallon cans of Benjamin Moore color OC48; 1 gallon of Benjamin Moore Int. alkyd pearl and 1 gallon of Benjamin Moore OC-114; p. 3 shows 1 gallon of Benjamin Moore OC-48; two 1-gallon cans of Benjamin Moore 2067 – 40; 1 gallon of Benjamin Moore HC-105 semi-gloss base #2; and 1 gallon interior alk semi-gloss ultra white – no brand specified; p. 4 shows same interior alk semi-gloss ultra white and no brand specified-- Ruling: on the evidence before me, I am satisfied that the plaintiff used Benjamin Moore paints on all the interior walls as specified in the defendant’s drawing-- (Dft.’s Ex. Bk., Vol. 1, Tab 6, p. 4)-- which was given to plaintiff (and is in Plt.’s Ex. Bk., Vol. 1, Tab 1, p. 4) . Therefore, plaintiff used the correct paint in the areas specified and defendant is not entitled to the claimed credit.

22. Failure to Do Garage Work .

In cross-examination, Minaker complained about failure to do the garage renovation work but nothing was said about this in her trial affidavit. And more importantly, it is clear that this garage renovation work that was included in the Aug. 8/Sept. 8 quotation, was later deleted by agreement and this is shown on the October 1 Summary (invoice) at the 3rd line therein. (In her statement of defence in the schedule of defects attached, she writes about 2 lights and 2 switches in the garage, and two motion sensor floodlights over the front garage door that were not done, and these lights and switches are shown on the electrical drawing for the main floor that was given to Vallie and were part of the July 16 quotation and I deal with this item of not-done electrical work at the end of these Reasons where I deal with “Deficiencies”.)

23. Credit Claim For Failure to Do Kitchen work

In cross-examination, Minaker claimed that not all the kitchen work listed in the July 16 and Aug. 8/Sept. 8 quotations was done but there is nothing about this kitchen work not being done in her October 27 e-mail except about not all the “remove and re-install kitchen plumbing” work being done—and on page 1, para. 1.6 of her e-mail she says “50% of this portion done. Cost to complete $800”. There is nothing about incomplete kitchen work in her trial affidavit – in her October 27 e-mail, on p. 2, when referring to the Aug. 8/Sept. 8 quotation, she claims that all the kitchen work was done-- Ruling: again, since this was never raised by the defendant at any time before her cross-examination, it is not fair to the plaintiff to allow her to raise this new item for the first time in her cross-examination and make a claim. This credit claim of $800 is dismissed. And, in any event, there is no justification for the amount claimed of $800.

24. Credit Claim of $28,000 based on the Watchorn Report

In cross-examination, Minaker claims she was charged $53,000 for all the electrical work, based on the Watchorn report (above referred to), rather than the $35,000 set out in the Summary of Electrical Work-- (Dft.’s Ex. Bk., Vol. 1, Tab 6, p. 2)-- so she now claims a further credit of $53,000 - $25,000 = $28,000. She disagrees that she should at least use the $35,000 figure rather than the $25,000 figure. She claims she only agreed to pay $25,000 for electrical work as per the July 16 quotation and disagrees with the other $10,000 in electrical charges, being $900 + $2,500 + $3,000 +$1,200 + $2,900 listed on the Electrical Summary --(see Dft.’s Ex. Bk., Vol. 1, Tab 6)-- which were included in the numbers in the Aug.8/Sept. 8 quotation and in the October 1, 2008 Summary (invoice). Ruling: I rule that this effort to claim, interestingly, for the first time in her cross-examination, a credit of $28,000 is totally misguided. She was not charged $53,000 for the electrical work. This is not what Watchorn said, and what he did say, at the top of p. 4 of his June 18, 2010 report-- (Dft.’s Ex. Bk., Vol. 2, Tab 2)-- is, at least to me, incomprehensible.

Final Ruling on Defendant’s Claims for Credits

[230] The plaintiff has given credits of $4,560 without GST (which must now be excluded because of the concession by be consistent with all other calculations. This is the correct way of calculating the credit that must be given by the plaintiff based on plaintiff’s credit amount—(see Plt.’s on this, added 15% OH & P and added that to her credit number and then also added a credit of $275.31 for GST on $4,788, but the proper credit number for GST is only $228 as shown on the calculation at Tab 13. So the proper Ex. Bk.,Vol.1, Tab 13) of $4,560. The calculation used by plaintiff re its GST claim as noted earlier in these Reasons –the amount, with GST, was $4788) . To this figure of $4,560 should have been added 15% OH & P = $684 = $5,244, to Ms. Assuras as set out at para. [60] above, is wrong because she took the amount of $4,788 which included GST and, calculation of this credit (as noted in this para.) using the plaintiff’s basic credit amount of $4,560 in Tab 13, is $5,244.

[231] But, I have totalled the additional credits I have now allowed (as set out in the above-noted credit paragraphs) for heading # 3, ($3,543.75); #7, ($1,794.00); # 8, ($690 + $1,476.90); # 9, ($466); #10, ($172.50); #11, ($2,242.50); and #12, ($2,415) = $12,800.65 which must be added to the plaintiff’s own credit amount of $5,244, for a total credit amount of $18,044.65. And it must be remembered that the defendant’s claimed amount for the value of the contract/extras work not done or not completed, as of that time, in her October 27 e-mail, was $20,301.50 + 15% for OH& P = $3,045.20 = $23,346.70 so my final credit amount for the work not done/not completed ( which is what Minaker’s figure was also attempting to calculate) is not that far off her own figure which should be of some comfort to her.

The Defendant’s Counterclaim for Deficiencies

[232] In my original Hearing Directions of April 12, 2011, I directed that items # 1-34 and #39 listed in Schedule “A” to the defendant’s statement of defence and counterclaim were to be tried in Phase 2 of this reference. In paragraph 1 of the counterclaim, the defendant claims $50,000 for deficient work which, she says she overpaid for, and also claims for her costs to rectify these deficiencies. The alleged deficiencies are as follows:

1. Walls and ceilings left dirty from sanding floors

2. Rad feet stained by hardwood floor stain which were not re-painted

3. Floor stain left on existing baseboards above height of future quarter

round to be installed

4. Outlets, hinges, window mouldings, glass framing and woodwork and closet rods painted over – paint not wiped off

5. Water damage to gumwood wainscoting in front hall; holes drilled through wainscoting base in front hall; hole drilled through floor in front hall; six holes drilled through master bedroom floor- all holes made by electrician

6. Paint tins left on site

7. Missed portion of dining room ceiling not painted – bedroom #2 closet and shelving, and linen closet and shelving, not painted at all

8. Light fixtures not installed – track lighting in all 3 bedrooms and living room and dining room and kitchen not installed – pendant fixtures in dining room not installed

9. Pot lights not installed in basement hall or back hall of kitchen – pot light rims missing

10. ESA electrical deficiencies – other incomplete electrical work

11. Outlets not level – electrical boxes sticking out from wall face –this impedes placement of cover plates

12. Hardware/security bar removed from various doors and not re-installed

13. Improper painting of master bedroom ceiling – gloss white instead of flat white --- blue color can be seen through white paint

14. Shelving in closets only partly installed and wall paint scratched

15. Outlets/switch plates/dimmer switches/track lighting/sockets not installed in master bedroom

16. Phone outlets/internet lines left loose – no outlets installed in box

17. Ceiling fixtures and light sockets not installed in basement and 2 bedrooms and kitchen

18. Quarter round not installed – baseboards in kitchen and bedroom #1 and linen closet not supplied/installed – new baseboard/quarter round not supplied/installed in living room by fireplace

19. Upper bathroom – electrical switch/GFI outlets not installed

20. Upper bathroom – light fixture not removed and new one installed – no plastering done

21. Wood sill not installed in bedroom #2 – back-stair wood cap and basement stair stringer cap not installed

22. Slate (tile) in front hall – not sealed – tile in front hall didn’t connect with existing parquet flooring edge – needed further strip and to be sanded, stained and urethaned

23.Old weather- stripping at front door not removed and replaced with new

24. Holes for pot lights in dining room and living room too big – were gaps after fixtures installed – ceiling needs to be re-plastered around fixtures and repainted

25. Failure to install required GFI outlets on sink wall in kitchen – just regular ones were installed

26. Second floor hardwood stair colour darker than first floor hardwood stain colour

27. Poor installation of flooring in kitchen – was to match flooring in rest of house – too wide – inferior material – inordinate number of short pieces have been installed

28. Painting incomplete – 3 areas in kitchen – back stairs – basement areas – radiators in front hall and stair landing

29. No switches/lights installed in garage – no motion sensor light at main door to garage installed

30. Wire left dangling after removal of old light fixture above front door – hole needs caulking

31. GFI outlets on exterior walls not straight

32. Storm window to back outside door painted but not re-installed

33. Over-paint on sliding doors and garage door – needs cleaning

34. Deck floor – white paint marks need to be removed – marks made from painting old radiator outside on deck

35. ESA electrical deficiencies – other incomplete electrical work – repeat of item #10 above

[233] After Hellyer’s Oct 24, 2009 inspection, he recorded his observations on an amended Scott Schedule attached as an Appendix to his report – (see Plt.’s Ex. Bk., Vol. 4, Tab 2). The item numbers in his Scott Schedule coincide with the numbers in Schedule A of Minaker’s statement of defence and counterclaim (above-noted) and I now list his comments as follows:

1. No comment

2. Can be repaired with local touch-ups – cost – he refers to a Cost Estimate prepared by the plaintiff which is not attached to his report and is thus, unavailable to me, and I am calling it the unavailable document

3. Stain visible on most baseboards – baseboards not properly sanded before quarter round installed – quarter round was installed by defendant’s contractor –will need to sand and repaint baseboards – cost – refers to the unavailable document

4. Was overpainting in multiple locations – needs clean-up – cost – refers to the unavailable document

5. Minimal blushing of varnish is visible – cause was not verified – drill holes need repair –need to remove putty and repair drill holes – cost – refers to the unavailable document; damaged hardwood should be repaired with new – cost – refers to the unavailable document;

6. Type of paint used – can’t verify

7. Dining room ceiling has second coat which was only half done –and there is a gap where pot light was installed – hole is too large – ceiling needs patch and repaint – cost – refers to the unavailable document

8. No comment

9. No comment

10. No comment

11. Some of switch and outlet boxes are not flush with wall –they do protrude – is a cosmetic issue – simple to correct – estimated cost - $225

12. No comment

13. Blue paint on ceiling visible – there is a crack in ceiling – could be old or caused by contractor – cost to repair – refers to the unavailable document

14. Scratches on wall visible

15. One closet fixture is missing –the rest are done

16. No comment

17. Just a temporary lighting provision

18. All this installation work complete at time of inspection – cost to remedy – refers to the the unavailable document

19. Oversized opening observed – cost to repair – refers to the unavailable document

20. Fixture was removed –but unused electrical box opening was not plastered over – cost to repair – refers to the unavailable document

21. Wood sill not installed – cost to repair – refers to the unavailable document – cap on half wall at top of basement stairs is complete – can’t determine what was to be done on basement stair stringer

22. Slate tiles in front hall don’t connect to original hardwood – a filler strip has been installed – stands out visibly as new material against old – is an aesthetic problem only – can re-work filler strip with original salvaged material – cost to repair - $200

23. Damage to weather-stripping at front door – damage to paint finish caused by closing front door before paint was dry – need to replace weather- stripping and repaint door - cost to repair – refers to the unavailable document

24. Dining room – oversized pot light hole – see #7 above; Living room – no oversized pot light hole noticed – if it exists, can be locally repaired at minimum cost

25. No comment

26. Minor shading variation visible – cause cannot be determined – could be workmanship or differences in natural colour of wood due to age and sun bleaching

27. Difficult to get good match between old and new material – no standard for amount of short material included in supplied packages– 24” pieces are considered long pieces in many grades – for good match, would need a custom order or would have to use re-stained material –he saw a few chips/blemishes – cause could not be determined – cost to repair – see the unavailable document

28. All rooms painted except basement and upper bathroom

29. This work was completed at time of inspection – cost to complete should have been around $350

30. No cover plate – hole filled with caulking – minimal cost involved to repair – under $10

31. Rear patio receptacle is straight – front garden base receptacle is a bit crooked – minor aesthetic issue

32. No comment

33. Did not see this – owner apparently cleaned

34. Some white paint on deck – cannot verify source – cost to repair – see unavailable document

35. Electrical permits were “closed” at time of inspection – cost to complete should have been around $700

[234] I have reviewed these 36 plus 1 items (37) and note that items 7,8,9, part 10, 15,16,17,18, 19, 20,21,23,28,29,30 and 32 are items of alleged incomplete work as opposed to deficient work, and have already been dealt with earlier in these Reasons by my allowed credits of $18,044.65 for incomplete work. (Item # 39 is a repeat of item # 10). My credit allowance includes item #29, (referred to above), being the failure of the plaintiff and/or its electrician, Lasic, to install the 2 lights with switches in the garage, and the exterior floodlight motion sensor light to be located above the garage door, all as shown on the electrical drawing which was given to and received by the plaintiff or Lasic (to be found at Dft.’s Ex. Bk., Vol. 1, Tab 9, p. 1). The July 16 quotation provides for “Supply and install…plugs and switches all as per drawing provided” (my emphasis). There is no mention of “lights” or a “floodlight” in this July 16 quotation, but they are shown on the drawing, and I think it is a reasonable interpretation of this contractual document to find that these 2 garage lights and their switches, and the double motion sensor floodlight, were to be included in the scope of work for the $25,000 price. I note there is nothing about this item of “incomplete” work in Minaker’s trial affidavit and there was no evidence about these missing items at all during the trial. Nonetheless, I think my finding of 11% of the contract work being not done or incompletely done, and the value thereof that I have assigned, as above set forth, would cover these items of not-done work.

[235] As to items 1,2,3,4,6,11,12,14,26,27,31,33 and 34, these are very minor items that would undoubtedly have been dealt with by the plaintiff during the final phase of completion of this job if it had been able to complete its work. As Hellyer noted in the last paragraph of his March 5, 2010 report – (Plt.’s Ex. Bk., Vol 4, Tab 2) “…the cost to remedy the reported concerns [in the Scott Schedule] would have been substantially less had the repairs been done during the course of the renovations without any delay.” It is well known that in most construction jobs, and especially in house renovation jobs, the owner typically prepares a list of deficiencies that it says needs corrections and these are usually dealt with by the contractor who knows it won’t get paid its final payment until these deficiencies are satisfactorily addressed, one way or the other.

[236] The law is clear that even where the contractor is found to be entitled to a judgment against the owner for damages for breach of contract or for a quantum meruit award, relating to the work it did under a construction contract that was improperly terminated by the owner, the owner can still counterclaim for the proper costs to rectify faulty workmanship or defective materials supplied by the contractor and is entitled to set off such costs against the plaintiff’s judgment: see Alsu Investments Ltd. v. Chez Marie Restaurant Ltd. (1984) 5 C.L.R. 18 (Ont. H.C.); and see Keating on Construction Contracts, supra, at Ch. 8, para. 8 – 046, where, in dealing with the assessment of the contractor’s damages, it says “The Employer is entitled to an abatement of the contract price if the incomplete work is defective.” And I refer to footnote 33 therein referring to Slater v. Dugemin Ltd. (1992) 29 Con. L.R. 24 at p. 27. And the case of Hoenig v. Isaacs [1952] 2 All E.R. 176 at 181, C.A. also dealt with this point. See also Wiebe v. Braun (2012) ^ C.L.R. (4th)311, Menzies J. (Man. Q.B.) at p.320-321, para.’s31-32; and Kencourt Interiors Inc. v. Gateway Construction & Engineering Ltd. (2004) 34 C.L R. 69 , Jewers J. (Man. Q, B.) at p.75, para.s 21-24

[237] But where an owner is claiming the cost to repair defects in the contractor’s work, the law requires the owner to act reasonably to mitigate its damages. This duty to mitigate was discussed in the recent case of Connolly v. Greater Homes Inc. (2012), 6 C.L.R. (4th) (N.S.S.C.) 22, at p. 35, where Robert W. Wright J. sets forth a governing principle where an owner alleges defects in a contractor’s work. It is that whenever it is reasonable, an owner has a positive obligation to afford the contractor an early opportunity to examine the alleged defects and, if any are accepted as deficiencies, to afford the contractor an opportunity to attempt to rectify them. He cites Ontario (A.G.) v. CH2M Gore & Storrie Ltd. (2002), 48, C.E.L.R. (N.S.) 145; [2002] O.J. No. 3611, [2002] O.T. C. 683; (Ont. S.C.J.), a decision of Kruzick J. who himself cites two cases for this mitigation principle at para. 58 of his judgment, being Quintas v. Gravel and Antons v. Singlas (citations set forth in para. 58).

[238] Further, in Wilson v. Hodson, supra, at p. 140, Menzies J. held that:

“It is accepted law that an owner is entitled to set off the costs of remedying deficiencies under a construction contract. The contractor has the corresponding right to have the occasion to remedy any defects in the work himself. As was stated in Obad v. Ontario Housing Corp., [1981] O.J. No. 282 (Ont. H.C.) at para. 48:

‘With respect to the claim for damages resting on expenditures to correct the plaintiff’s work, it would seem that, although the defendant, Ducharme, is entitled to have a set-off for defective work, its obligation to mitigate its damages would require that it allow the plaintiff to continue, having in mind the reasonable probability that the plaintiff would correct its own work in order to obtain payment of the price. On that basis the defendant, Ducharme, is not entitled to have damages based on its own costs of correction.’ ”

[239] In this case, the conduct of the defendant on and after Oct. 28, as above- described, resulting in her fundamental breach of contract, was the cause of the plaintiff being entitled to leave the job and of actually leaving the job. This meant that the complained-of deficiencies could not be addressed by the plaintiff at what then would have been a minimal cost because most of them were minor and cosmetic and could easily have been repaired. The defendant arranged for the locks to be changed on Oct. 28 so the plaintiff no longer had access. But without a further progress payment of some agreed amount, the plaintiff was not going to return in any event. By wrongfully terminating the plaintiff’s contract before completion, as I have previously found, and then apparently hiring various trades to repair the complained-of deficiencies, the defendant brought higher repair costs on herself.

[240] There is also evidence to show that the defendant sold her house sometime in June, 2010, but, of course, there is no evidence about whether these minor deficiencies had been corrected by then and if so, at what cost. (This absence of evidence is, admittedly, because of my directions above-noted re Phase 1 and Phase 2).

[241] This entire case turns out to involve relatively small amounts of money. It turns out that the plaintiff’s claim is actually worth $13,767.45 as I have found. The defendant, in her statement of defence and counterclaim, showed a value of her counterclaim at $50,000 for the Schedule A items – see paras. 23 of her statement of defence and para. 1(a) of her counterclaim. All the items in paras. 35-38 and 40-54, and the incomplete electrical work alleged in para. 39, of her Schedule A, have now been dealt with by me in this Phase 1, and I have found the proper allowed credits to which she is entitled to be $18,044.65. As to the remaining items listed in her Schedule A, #’s 1-4, 6, 11-12, 14, 26-27, 31, 33-34, they are, as I have noted, very minor. Items #’s 5, 13, 22, 24, 25, and 39 being the ESA electrical deficiencies, could have cost the defendant significant sums to repair if she had had them all repaired before she sold the house, and provided it is determined that, in fact, each of these items was a defect in the plaintiff’s work. But then, the question arises as to whether the costs to repair should be what the defendant paid or should be what it would have cost the plaintiff to repair had it been allowed to complete the job. In the Appendix to Hellyer’s Oct. 24, 2009, report- (Plt.’s Ex. Bk., Vol. 4, Tab 2)-he notes that the cost to repair said item 22 should be $200 and that the cost to repair said item 24 should be “minimal”. That leaves the cost of said items 5, 13 and 25 as unknown. The cost to the defendant to repair said item 39, the ESA deficiencies, was $1,300 inclusive of GST (as per the David Kerr-Taylor trial affidavit) .

[242] This case has taken up an inordinate amount of this court’s resources. I have already described the court resources devoted to this case leading up to Justice Stinson’s order of reference dated Jan. 4, 2011. The case consumed 5 trial days before me last September just to deal with the cross-examinations on the various trial affidavits, and to briefly hear from 2 viva voce witnesses, and to hear the submissions of both counsel. I have devoted over 60 working days to review the massive amount of testamentary and documentary evidence-(described at the beginning of these Reasons)- and to review the relevant law, and to write, review, edit and finalize these Reasons. If I were to allow this case to proceed, to deal with all the Phase 2 issues that have been raised, as originally directed, an even more inordinate demand on court resources would be required to deal with the many remaining allegations of defective work, many of which, as I have noted above, are minor and some even trivial.

[243] Further, the costs that these parties have incurred to date for legal fees, expert reports, expert witness fees and the other usual litigation costs (conduct money, photocopying, courier charges, etc.) must be extremely high and out of all proportion to the real amounts that are in issue in this case.

[244] Accordingly, I have decided not to allow the parties to proceed with Phase 2. I was unaware, when I gave my directions re Phase 2, that many of the listed items that were to be decided in Phase 2 were, in fact, items of not-done or incomplete work rather than alleged defective work. I have now dealt with all the items of not-done work and incomplete work in my rulings on the extras and the credits earlier in these Reasons. Under Rule 55.01(1) of the reference rules, I am to “devise and adopt the simplest, least expensive and most expeditious manner of conducting the reference” and I may “adopt a procedure different from that ordinarily taken” including deciding “what evidence is to be received” as per Rule 55.02 (3) (c).

[245] Accordingly, I have decided to do my best to assess and value what a reasonable amount would be to award the defendant as reasonable compensation for the alleged defects in the plaintiff’s work, keeping in mind the duty of the defendant to mitigate her damages as discussed above, and keeping in mind her failure to do so by wrongly terminating the plaintiff’s contract before it could complete the job including the addressing of all the alleged defects. Considering all the evidence before me, and doing the best I can to arrive at a figure that is fair to both parties, I will allow an amount of $1,500 as a further credit against what I have already found is owing by the defendant to the plaintiff, namely, $13,767.45, leaving a net balance payable by the defendant to the plaintiff of $12,267.45.

Credibility

[246] In assessing credibility, I have kept in mind the comments of judges in the cases of Kor-Ban Inc. v. Pigott Construction Ltd. (1993) 11 C.L.R. (2d) 160 at p. 73; Premier Trust Co. v. Beaton (1990), 1990 CanLII 6663 (ON SC), 1 O.R.(3rd) 38 at p.56; and Faryna v. Chorny, 1951 CanLII 252 (BC CA), [1952] 2 D.L.R. 354 (B.C.C.A.) at p. 357. As to the credibility of Casarella as a witness, where his evidence conflicted with that of Minaker, I found him to be a rather unreliable witness. To many questions in cross-examination, he would answer with expressions like “I suppose” or “I think” or “probably” or “I don’t remember”. He did not seem to have a good recollection of the events which is not surprising since he was testifying about events that occurred three years ago. On controversial issues, I do not accept his testimony, whether in his two trial affidavits or in his cross-examination, unless there is some documentary evidence or other reliable evidence to corroborate what he says, or unless his evidence is consistent with the probabilities taking the evidence as a whole. As to the credibility of Minaker, I found her also to be an unreliable witness where her evidence conflicted with that of Casarella or with the documentary evidence. In her cross-examination, she was argumentative, confrontational, even hostile, and highly emotional. When asked many questions by plaintiff’s counsel, she objected to them and replied that they were improper or insulting even when her own counsel made no objection. I warned her on many occasions to keep her temper in check and just answer counsel’s questions unless instructed by me otherwise and yet, she ignored my warnings and continued to be combative and insulting to cross-examining counsel. On several occasions, she even argued with me as the propriety of Ms. Assuras’ questioning even though I had ruled the questioning to be proper. Further, on numerous occasions, when confronted with a document that was contrary to her testimony, she would claim that the document was in error or it was a mistake. Examples of this were the July 16 quotation that provided the all fixtures were to be supplied by owner. She insisted this was a “mistake”. And the date on the Pro Locksmith work order of Oct. 28 was another “mistake” because she wanted her instructions to the locksmith to be found to have been given on Oct. 29. And there were many statements of fact in her Oct. 27 e-mail that were against her position at trial and yet she testified that these were, again, “mistakes” and that her trial testimony was correct even though the Oct. 27 e-mail was written contemporaneously with the events in question, and her trial evidence was being given three years after the events in question. Again, where her evidence conflicted with that of Casarella, or with the documentary evidence, on controversial issues, I do not accept her testimony, whether in her trial affidavit or in her cross-examination, unless there is some other evidence, mainly documentary, to corroborate what she says, or unless her evidence is consistent with the probabilities, taking the evidence as a whole into account.

[247] Final Accounting

Total Contract Amount

$153,035.10

Total Allowed Extras

• $13,777.00

Less Credits (Adjusted) Given By Plaintiff (Tab 13) For Work Not Done – ($4,788, adjusted to $4,560 + $684 OH&P = $5,244)

-$5,244.00

Less Additional Allowed Credits For (a) Alleged Contract Work Not Done at All; (b) Not Done Completely; (c) Alleged Improper Charges; (d) Alleged Failure to Supply; (e) Alleged Supply of Wrong Paint;

-$12,800.65

Less Payments

-$135,000.00

Gross Owing by Defendant to Plaintiff

+$13,767.45

Less Allowed Credit for Repairs for Defective Work

-$1,500.00

Net Amount Owing by Defendant to Plaintiff

$12,267.45

Pre-Judgment Interest

[248] As to pre-judgment interest, the applicable Courts of Justice Act rate (statement of claim issued Feb. 2009, pre-judgment rate for the last quarter of 2008)-is 3.3%. The annual pre-judgment interest amount is $12,267.45 x 3.3% = $404.83 /year. Feb. 5/09 – Feb 5/12 = 3 years = $404.83x 3 = $1,214.50. Per diem amount is ($404.83 divided by 365)= $1.10 /day. Feb 6/12 – May 18/12(anticipated reasons release date) = 102 days x $1.10 = $112.20. Total pre-judgment interest up to May 18/12= $1,326.70. Add $1.10 /day until the formal Report is dated and signed.

Costs

[249] As to costs, the plaintiff was claiming $37,549.65 right up until mid way through its counsel’s submissions and then counsel reduced the claim to $28,112.09. It has recovered $12,267.45 or about 33% of its original claim. The defendant was resisting paying the plaintiff anything and had a large counterclaim. She was successful in reducing the plaintiff’s claim from $35,549.65 to $12,267.45 but was unsuccessful in her primary position that she owed the plaintiff nothing because it was in fundamental breach of contract. In my view, there was divided success and, on this basis, my inclination is to award no costs which is the common costs order when there is divided success. However, if either counsel wish to make submissions against my preliminary view of what the costs order should be, both counsel can do so. If there were any Rule 49 offers to settle, further submissions would certainly be appropriate. Any such costs submission shall be served and filed with my registrar, Al Noronha, or faxed to me at 416-327-6405, to be received within 20 days of the date of release of these Reasons. Any reply submission by opposite counsel shall also be served and filed, in like manner, within 15 days thereafter. Any costs submission shall be no longer than 5 pages in length, double-spaced, with usual margins.

The Formal Report

[250] My decision shall be incorporated into a Report as required by Rule 54.06. (For some guidance on the form of this Report, counsel might have regard to Form 21 of the statutory forms authorized by the Construction Lien Act but this form will have to be extensively modified as this proceeding is not a construction lien action.) The draft report cannot be completed until the costs issues have been finalized. If costs submissions are made, as above-noted, I will advise counsel of my costs decision by fax. Thereafter, Ms. Assuras shall draft the report, send it to Mr. Shankman for approval, and then leave the original, and the approved copy, with my registrar, for my signature. If there are any disputes about the form of the Report, I will settle the form by a telephone conference or, if necessary, a further court attendance. I can be advised on any such dispute by fax addressed to my registrar. The form of the Report will be a very simple one, just finding and declaring that the defendant is to pay the plaintiff the sum of $12,267.45 plus the proper pre-judgment interest amount, forthwith upon confirmation of this Report, and the balance of the plaintiff’s claim, and the counterclaim, are to be dismissed, all without costs. The post-judgment interest rate shall be the current posted rate of 1.3% . The Report shall provide, in its last paragraph, that it may be enforced by the use of the procedures under Rule 60 once it has been confirmed. I bring to counsels’ attention that confirmation of the Report is governed by Rule 54.07 (1) and Rule 54.09 (1) (a) or (b). The confirmed Report shall be entered immediately after it has been confirmed – see Rule 54.07 (2).

[251] I will retain the court file, and all the trial material and exhibits, until the Report has been confirmed, and will then return the court file to the 10th floor court office for storage. I will destroy all the exhibits unless counsel want them back in which case I should be notified in a timely way. If a motion to oppose confirmation (appeal) is launched, I will retain the entire court file and will ensure that it is available to the judge hearing the motion. This should obviate the necessity of duplicating all the affidavit material and the documentary material and the trial exhibits. Counsel must keep me advised of the hearing date for any such motion (appeal) so the appropriate file transfer can be arranged. If the contents of the file need to be inspected by counsel, I can be spoken to, to make arrangements for this.

Dated: May i8, 2012 “Master David H. Sandler”

Master D.H. Sandler

DHS/rn

Appendix to Reasons

Summary of Arguments of Counsel

Counsel for Plaintiff – Ms. Assuras

Issues are what were the terms/scope/prices of the contract; what was incomplete work; what are costs to complete?

There is no dispute about work or prices were shown on the July 16, Aug./Sept. 8 or September 15 quotations – agreed price was $153,035.10. The claimed extras were $5,722.50 and $9,936.00 =a total of $168,893.60. And GST = $8,444.65 for a total claim of $177,338.25 less what defendant paid= $135,000 = $42,338.25, less credits for work not done of $5,781.51 ($4,788 + 15% = $718.20 + GST --- $275.31), so net balance claimed is $36,556.74. Without GST, the claim is $168,893.60 less $4,788 and less $718.20(15% OH&P) = less $5,506.20 = $163,387.40 – defendant paid $135,000.00 so $28,387.40 is the net claim.

When Minaker refused to pay $12,147.38, or a negotiated reduced amount, on and after October 28, she repudiated contract – she refused to allow plaintiff to complete – plaintiff was entitled to accept repudiation by Minaker.

As of Oct. 28, plaintiff left material on site – see defendant’s Ex. Bk., Vol. 1, Tab 10, photos #’s 5,7,8, 10, 11; and plaintiff left tools on site – see plaintiff’s Ex. Bk., Vol. 3, Tab 4, photo at p. 26/39 –there was no intention to abandon job.

Plaintiff tried to get job back on track –Casarella went to York University to try and talk to her – she walked away – she was the cause of the job ending.

GST issue-whose version is true – is a credibility issue – Minaker was a poor witness – avoided answering questions - was hostile – confrontational – if something was not to her advantage, she called it an “error” – e.g. provision in contract that all fixtures were responsibility of owner-she said this was an error; also, she said her harmful admissions in her October 27 e-mail were “mistakes”; also, in her October 27 e-mail ,she agreed that certain items were extras but at trial denied many of them – she said she was just trying, by her defence and counterclaim, to wipe out Vallie’s claim –and her evidence was inconsistent with other evidence – e.g., she said the locksmith date of order of October 28 was his “mistake” and was not the date she ordered the change of locks – she claimed to have little experience in construction but this assertion is contrary to her work experience and her education –and she prepared sophisticated drawings which are in evidence –and she was given the Contract Summaries (invoices) of October 1 and October 9 but claimed that she did not read them-this is not a credible statement.

Counsel then reviewed all the evidence about disputed extras – one issue was the controversial evidence about the two versions of the electrical drawing for the main floor – one doesn’t show, and one does show, 4 pot lights in kitchen/breakfast area – Why are there 2 drawings? Casarella should be believed that his version did not show 4 pot lights in kitchen/breakfast area.

October 27 e-mail sets out her complaints at that time – her trial affidavit and cross-examination go way beyond her October 27 complaints – the longer this case goes on, the more complaints she has.

Plaintiff’s witnesses are credible.

Plaintiff’s expert witnesses, Hellyer and MacKay, are more credible than defendant’s expert witnesses, Pendlebury and Watchorn.

The evidence is clear that Benjamin Moore paint was used to paint all interior walls – that is all that was required by the drawing notation at defendant’s Ex. Bk., Vol. 1, Tab 9, p. 4. The contract didn’t require Benjamin Moore paint for exterior or for ceilings or for woodwork or for priming which is what the Sherwin Williams paint was used for.

Credits given by plaintiff for work not completed, or work not done, after October 28 termination, (Tab 13), are reasonable.

In her October 24 e-mail, Minaker acknowledged the renovation was “+/- $170,000.00”

Counsel reviewed all evidence about the 26 extras and how plaintiff has proven they are all proper.

Counsel reviewed all evidence re: incomplete work from July 16 quotation – 5 items; and July 18 e-mail – 3 items; and Aug. 8/Sept. 8 quotation – 7 items; and October 1 quotation – 8 items; and claims plaintiff’s evidence is to be preferred over Minaker’s evidence.

Counsel for the Defendant – Mr. Shankman

There are 30 items of work that plaintiff is charging for that Minaker never agreed to –the court must decide on each item based on conflicting evidence.

Court must decide who breached the contract and what flows from such a finding. Did Vallie abandon or did Minaker improperly terminate?

The delay issue – work started on August 22 – by mid-October, work was not substantially complete – Mr. Shankman reviewed evidence as to what work was done and not done by October 27.

Mr. Shankman reviewed evidence of lack of progress from electrician, Lasic, including Minaker’s diary entries in plaintiff’s Ex. Bk., Vol. 3, Tab 3.

Mr. Shankman reviewed evidence about lack of workers on site and lack of progress from October 20 onward – non-attendance of Spiro, the painter, and Lasic, the electrician, and Carelli, the carpenter –he reviewed the promises Minaker said were made by Casarella to have the trades attend job site from October 20 onward – counsel agrees that Minaker did not terminate contract because of delay.

On October 28, plaintiff came to house and was demanding more money – Casarella said “no more money, no more work” – he came back on October 29 and removed his tools and materials – Minaker concluded plaintiff was abandoning the job – this was a reasonable conclusion – test of abandonment is an objective one – so that is when she said “we’re done” and asked for key back and when she didn’t get it, she changed the locks – plaintiff evinced an intention to no longer be bound by the contract – it was the plaintiff who was in fundamental breach--not the defendant.

Since no “substantial performance” had been achieved because of all the work left to be done, and since the plaintiff was in fundamental breach, it can recover nothing – it is not entitled to any further payment – but Minaker is not entitled to get back the money she has already paid.

Counsel relies on the following cases:

L.J.L. MacLean Ltd. V. Winters (1990), 1989 CanLII 9856 (NS SC), 35 C.L.R. 148.

Corazzin v. Donovan (1993), 9 C.L.R. (2d) 277.

Greystone Construction Ltd. v. MacLean (1994), 15 C.L.R. (2d) 86.

Heyday Homes Ltd. v. Gunraj (2004), 31 C.L.R. (3d) 66; appeal dismissed, (2005), 44 C.L.R. (3d) 169.

Credibility – Casarella used words like “probably” and “maybe” in giving his evidence – he doesn’t know or remember well – is a poor witness – Minaker’s recollections in her testimony should be accepted – Casarella’s evidence, especially about “dumpster” issue, and “paint” issue re use of Sherwin Williams rather than Benjamin Moore paint shows him to be an unreliable witness – he is hiding the truth on these issues.

Counsel for Plaintiff in Reply – Key Points

There was no undue delay – after floors were done as of October 18, plaintiff was trying to get further progress payment that was due and payable – no time fixed for completion in contract so plaintiff was entitled to a reasonable time to complete – progress was reasonable –was just that Minaker didn’t think so.

There was substantial completion – Casarella says 90% - 95% complete – look at the evidence.

Plaintiff relies on Alkok v. Grymek, 1968 CanLII 10 (SCC), [1968] S.C.R. 452 (S.C.C.), rev’g 1966 CanLII 19 (ON CA), [1966] 2 O.R. 235 (Ont. C.A.) – evidence of plaintiff as to “cost to complete” was reasonable, i.e., the credits given at Plt.’s Ex. Bk.,Vol 1, Tab 13 – none of defendant’s experts gave evidence about costs to complete to contradict plaintiff’s evidence.

Ms. Assuras cited Downie v. Norman (1964), 1964 CanLII 941 (NS CA), 50 M.P.R. 150 (N.S.C.A.) where owner failed to pay final instalment because of defects. Both trial judge and appellate court held that where work is substantially performed, then plaintiff can recover balance owing less deductions for defects. Plaintiff relies on this case but argues that the failure to skim coat walls and ceilings, as defendant alleged, have not been proven on balance of probabilities – Hellyer’s evidence is preferable to Pendlebury’s evidence.

There was no intention on plaintiff’s part to no longer be bound by the contract – plaintiff’s tilers were on site doing work on October 28 when the confrontation over payment of the last progress draw erupted. It was the failure of the defendant to pay any further amount as a progress payment that was the ultimate cause of the stoppage of the work and the plaintiff leaving the job – it was entitled to do so.

Court File No. 09-CV-371831

2011 ONSC-6565

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF THE CONSTRUCTION LIEN ACT R.S.O. 1990

B E T W E E N

Vallie Construction Inc.

Plaintiff

• and –

Carol Minaker

Defendant

Heard:September 12,13,14,15,16, 2011

MASTER SANDLER