NEWMARKET COURT FILE NO.: CV-09-096078-00

DATE: 20121228

ONTARIO

SUPERIOR COURT OF JUSTICE

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

BETWEEN:

ML DRYWALL LTD.

Plaintiff

– and –

ANGELO ABBRUZZESE, MICHAEL ANTHONY MANAGEMENT & CONSULTING INC., and FOREMOST MORTGAGE HOLDING CORPORATION

Defendants

P. Summers, for the Plaintiff

E. Bisceglia, for the Defendant, Angelo Abbruzzese

HEARD: November 26, 27, 28, 29, 30 and December 14, 2012

HOWDEN J.

[1] Angelo Abbruzzese purchased a vacant lot at 23 Forest Heights Blvd. in the City of Vaughan near Kleinburg. Construction of his 5300 sq ft. house began in 2008 and by February 2009 the project supervisor Louis Capozzi described its state as ready for installation of the framing necessary for the drywall. Mr. Capozzi was the principal in the defendant Michael Anthony Management and Consulting Inc., a project management firm (referred to as “MAM”).

[2] The basement ceiling structure under the main floor was concrete slab. The excavation for the foundation was large. The ceiling detail on the design plans was complex involving a number of coffered ceilings in the basement, main and second floors, crown mouldings and other fine features. Unlike the upper levels, the basement required metal framing for the coffered ceiling due to the concrete slab structure whereas the coffered ceilings on the second and third floors were installed on a wood frame which the carpenters did, not the drywaller. The basement ceiling work for the drywaller was far more time consuming than the work for the other ceilings above the basement.

[3] M L Drywall Ltd. provides insulation, framing, and drywall services including installation of all types of wall and ceiling board as well as plaster, sealing, taping and sanding to the smoothness required for the final decoration, be it paint or wallpaper or satin or whatever. Its President and principal workman is Manuel Lopes. He has many years of experience in supplying drywall to residential and commercial buildings and owners. He has done drywall jobs, he said, for 50 to 60 custom homes; 5 were in the 5000 sq. ft. class, but only 2 had concrete slab ceilings like the basement level in this house.

[4] In March 2009 Mr. Lopes said he received a call from Louis Capozzi suggesting this job to him. They had known each other for some years and Lopes said he had worked on one prior project for Capozzi. Mr. Capozzi said there were 3 to 4 projects they worked on since 2007. Lopes quoted on the job. M L Drywall was one of four drywallers who tendered on the project.

[5] Mr. Capozzi suggested to Abbruzzese that Lopes do the drywall and insulation work on this job. Mr. Abbruzzese agreed that M L Drywall was the one Capozzi pushed for, saying Lopes gave a better price and he would satisfy Abbruzzese’s standards. By this time, both Abbruzzese and Capozzi said there were, in addition to architectural drawings, detailed design drawings provided by an internal design firm for the ceilings. Lopes attended the property and walked all three floors of the structure before quoting on the job.

[6] By an agreement dated March 17, 2009, following at least two draft proposals and a lengthy 1.5 - 2 hour telephone call between Lopes and Abbruzzese with Capozzi assisting Abbruzzese, the plaintiff M L Drywall and the defendant Mr. Abbruzzese entered a written agreement for M L Drywall to do the insulation and drywall work on the 23 Forest Hts. project (Ex 2, tab 5). The scope of the work was set out in the agreement as including the drywall and insulation work for the basement, main floor, second floor and garages. The following specific references were made to certain material and labour being required as part of the scope of work under the agreement (this is not a verbatim list of everything in the contract’s scope of work but it includes many of the points at issue now between the parties):

Second Floor - ceiling resilient channel and R-40 blow insulation

• showers boarded w/ cement board and tubs denshield (water resistant board)

• attic mechanical room insulated and boarded

Main Floor - ceiling where no living space above R-40 blow insulation and ½” gypsum board throughout

• resilient channel to powder room ceiling

Basement - Ceiling 1/2” gypsum board

• Inner side of exterior walls R-12 batt insulation w/ 6 mil poly and ½ ” gypsum board

• Interior walls 1/2” gypsum board

• Showers boarded w/ cement board and tubs denshield

Below the scope of work in the contract, there was added “furring channel to basement ceiling”.

Garages - Ceiling R-40 blow insulation and ½” gypsum board

• Walls (to be insulated and drywalled)

[7] No reference as made to the theatre room or the cold room except as part of the basement drywalling. No reference was made in the contact to architectural and design drawings. Abbruzzese and Capozzi insist that they were all discussing the contractual arrangements with the plans in front of them and that Lopes had a copy. Mr. Lopes insists equally strongly that no plans were shown to him at this time and he got his understanding of the job from Capozzi, his walk through the structure and his measurements. After speaking of walking the site with Capozzi before he submitted his initial proposal, Lopes said that he saw no plans, there was no discussion of plans, and he saw no need to see plans as all he needs to do is walk through the frame structure and do his measurements as well as talk to the project head. Therefore he drew the scope of work as a list of what he anticipated was required of him on each floor.

[8] The price was stated as $74,000 + GST on the face of the final agreement. During negotiations Abbruzzese suggested that payment should be made $ 30,000 in cash and $44,000 plus GST by cheque and Lopes agreed that at one point the deal was to be $30,000 cash and 44,000 by cheque, referring to Ex 2, tab 3, a draft agreement mentioning only the $44000 + GST as the contract price with the $30,000 not mentioned in writing at all. At least one of the parties could not live with that. In the end, the written agreement prepared by Lopes with his son’s help and signed by Abbruzzese, dated March 17 2009, reads:

All the above work to be completed in a substantial and workmanlike manner for the sum of seventy four thousand, Dollars ($74,000) +G.S.T.

[9] Strangely, for an agreement where the parties say they agreed that payment was to be made $30,000 in cash and $44,000 by cheque (they disagree on the addition of GST), it goes on to read,

Payments to be made according to the following terms:

50% of this total is due by drywall delivery; 25% due by drywall installation and the remaining 25% when work is complete.

[10] As for extras, the agreement reads:

Any alterations or deviation from the above specifications involving extra cost of material or labour will become extra charge over the sum mentioned is (sic) this contract.

[11] There is no mention of the work having to accord with certain plans or design drawings or that it was to be in accord with certain plans and drawings. Mr. Abbruzzese signed under the clause marked “ACCEPTANCE”, as follows:

You (M L Drywall) are hereby authorised to furnish all materials and labour to complete the work mentioned in the above agreement, for which the undersigned (Angelo Abbruzzese) agrees to pay the amount in said agreement and according to the term of hereof.

[12] On the subject of the command hierarchy on site, Mr. Abbruzzese and Mr. Capozzi agreed that Louis Capozzi acted as the project manager and Mario Auciello worked under him as site supervisor. Mr Abbruzzese said under cross-examination that Capozzi had no authority to make major decisions. All issues beyond the minor were to be brought to him and he would give Capozzi his instructions. Cappozzi in turn instructed the site supervisor and either the site supervisor or Mr. Cappozzi would direct the sub-contractors and their forces.

[13] Counsel have been able to narrow the issues to basically six, for which I am very appreciative. They agreed in their opening addresses that the following questions express the issues accurately:

(1) Was the lump sum of $74,000 to include GST or was GST to be added to it?

The final agreement signed by Mr Abbruzzese and prepared by Mr. Lopes, typed by his son Daniel, stated:

“All of the above work to be completed in a substantial and workmanlike manner for the sum of ...$74,000 + G.S.T.”

In the left margin of the agreement dated March 17, 2009, a hand-printed note appears, put there by Mr. Abbruzzese but never initialled by the parties:

“$44,000 cash taxes included Mar17/09”

Mr. Lopes says the deal was $30,000 in cash and $44,000 by cheque plus G.S.T. on the total as in the written agreement. Mr. Abbruzzese says the deal was $74,000 all inclusive, $30,000 to be paid in cash.

[14] (2) Was the coffered ceiling in the basement properly charged by the plaintiff to the defendant as extra or was it included in the lump sum contract price? Were the additional charges in the same invoice dated June 19 2009 properly charged as extras?

The invoice from M L Drywall for this and several other smaller extras totalled $18,011.50 (GST not included), of which $14,212.50 relates to the basement coffered ceiling.

[15] (3) Was the plaintiff paid $20,000 in cash on account of this contract in March 2009?

The plaintiff denies ever receiving that amount. He says he received nothing on this job right up until substantial completion by July 3 when his last work was performed and that he had invoiced for parts of his work on June 15(for $37,000), on June 22 (for $18,500 plus the extras for the coffered basement ceiling, substitution of quiet rock board and removal of drywall in the Theatre Room, archway framing, water resistant board in the cold room, finish columns and drywall in garages, and family room bulkhead totalling $18,011.50). The defendant Angelo Abbruzzese says that he gave two bundles of bills, amounting to $10,000 each in a bag to Mr. Cappozzi to pay Mr. Lopes on March 25 2009 on his return from winning at gambling in Nassau. By then, he (Lopes) had gotten the basement metal framing so well in hand within the first three days that Abbruzzese felt it was “90% complete” then, allowing other trades to do their work. Capozzi swears he gave the cash to Lopes at his truck on March 26 2009. There is nothing in writing to confirm that any such payment was received by M L Drywall.

[16] (4) Is the plaintiff M L Drywall liable for back-charges for failure to complete the work contracted for?

The invoice paid by the defendant on this account is $22,500 plus GST.

[17] (5) Is the plaintiff liable for a back-charge for the work required to remedy mold found in several rooms in the basement and for interest on money he borrowed to pay into court the necessary deposit to remove the lien claim from the title registration of the house property?

The amount claimed by Mr. Abbruzzese is $21,525 to remedy the mould problem and the interest claim is calculated on the full mortgage amount which is well beyond the amount posted using the mortgage interest rate, in the sum of $15,273.98.

[18] (6) Apart from 26 hours of work required which the plaintiff’s forces allegedly were prevented by the defendant’s representatives from completing on July 7, 2009, did the plaintiff complete the work contracted for?

Therefore, was it the defendant Mr. Abbruzzese who effectively is responsible for the breakdown in the contractual relationship by failing to pay as required and by preventing the plaintiff from completing the work on July 7, 2009?, or was the fundamental breach of contract the failure of the plaintiff to meet with Mr. Abbruzzese as he requested?

[19] The position of each party through their respective counsel in their concluding addresses to the court appears below.

Position of M L Drywall

[20] Contract price $74,000 plus GST

Extras $18,011.50 plus GST

Total = $92,011.50 plus GST

Less included work not done

Resilient channels not installed $ 372.75

R-40 insulation not installed $1,512.00

26 hours labour to complete $1,774.50

Profit of incomplete work $ 832.00

Total credit against contract

Price $4,491.25

Net claim by plaintiff $92,011.50

less $ 4,491.25

Total claimed $87,520.25 plus GST

Position of Defendant A. Abbruzzese

Contract price owed $74,000

Less:

Maxum account to complete work $22,500

(plus GST)

Watson Bldg Supplies

(to remove molded drywall) $12,600

Maxum account, replace

molded drywall $ 8,925

Payment on account $ 20,000

Interest paid to vacate lien $15,273.98

Total $79,298.98 plus GST

Due to Abbruzzese $79,298.98 plus GST

Total owed to Abbruzzese

Less contract price $74,000.00

Amount owing to Abbruzzese $5,298.98 plus GST

[21] Counsel for each party made detailed submissions on each of the issues I have outlined above. I have considered them fully as well as the evidence from the witnesses and the following sets out my reasons for judgment.

Analysis

1. Was the price of $74,000 to be tax-included or partly tax-included, or was GST to be paid by the defendant on the whole $74,000?

[22] Mr. Lopes said his first draft agreement was for 66,000 and if they wanted furring channels added to the basement ceiling, it would be $9,800 more. The second draft occurred after he and Mr. Cappozzi talked at the site and he talked to Mr. Abbruzzese. The furring channels were added to the basement ceiling work and the price became $74,000 plus GST. The third draft, also on the 17th, was in the total sum of $44,000 + GST. That is when Mr. Abbruzzese’s preference for payment partly in cash was discussed. The final draft agreement retained the furring channels for the basement ceiling and was in the sum of $74,000 +GST. Mr. Abbruzzese signed both the previous draft in the amount of $44,000 and the final one for $74,000 +GST but he printed the margin note “74,000 cash taxes included Mar 17/09” because, he said, Mr. Lopes had told him to write it on there.

[23] It was unspoken before me but both parties were obviously trying to find a vehicle to cut some or all of the tax out without causing a problem with the tax authorities. Mr. Abbruzzese was the one who was more forthcoming in my view about how the final price was reached. He said Mr. Lopes was uneasy about the $44,000 as a fictitious but written price and said that he had to have GST on the price. Abbruzzese said that Mr. Lopes asked him, “Can you do $74,000 cash?” To which Abbruzzese says he replied, “why should I trust you? You wouldn’t trust me”. To which Lopes said, according to Abbruzzese, “Write $74,000 cash”. And so Mr. Abbruzzese wrote the marginal note on the final agreement. It was never initialled as accepted by Lopes but Lopes proceeded with the work without objection to the addition.

[24] The contract as it stands is ambiguous and I have to resort to parol evidence to ascertain the parties’ intent. In my view, they both accepted in the last two drafts and in their conversation that there would be payment of the contract partly in cash, $30,000, and the balance by cheque. I did not find Mr. Lopes at all convincing when he said he had no idea where the note about tax being included came from or who printed that marginal note. He appeared very defensive and less than frank about the final deal. In his own testimony in chief he did say that the deal was $30,000 in cash and $44,000 plus GST by cheque, despite the term in the contract requiring a lump sum of $74,000 + GST. Mr. Lopes had given in on the price of the furring channels by agreeing to the price of 74,000, not the original $66,000 + his quote of $9,800 for the furring channels = $75,800. Mr. Abbruzzese yielded to Mr. Lopes’s request for the $74,000 to be shown on the contract plus GST while both accepted that part would be paid in cash and the rest by a paper record, a cheque. This whole negotiation attempting to evade tax on the real value of the contract was murky and they concluded with a conflict on the face of the contract. What I find had been agreed by both was that the cash portion of $30,000 was tax included, both hoping to avoid that issue entirely, and if push came to shove over the tax issue on the balance, GST on the $44,000 was to be paid by Mr. Abbruzzese and any GST on the $30,000 was to be Mr. Lopes’s responsibility.

[25] I find on this issue that liability for GST to Mr. Abbruzzese was limited to the final $44,000.

2. Was the coffered ceiling in the basement properly charged to the defendant Angelo Abbruzzese as an extra or was it part of the original contract?

[26] This is the most important issue between the parties relating to alleged extras charged by Mr. Lopes. A coffered ceiling is agreed by the parties to be a ceiling framed by a series of bulkheads, square in shape in this case, each containing a sunken panel of the same shape. The ceiling is finished with drywall before the paint or wallpaper or whatever the final decorating material was to be. The agreement contained no mention of coffered ceilings but coffered ceilings were called for on the main floor, the second floor, and the basement. It is true that the basement ceiling for a drywaller required far more work because, due to the concrete slab construction, he would have to do all the metal framing and bulkheads across a large area, in addition to applying the drywall, whereas in the floors above, all the framing for the coffered ceilings was done by a carpenter because it was wood framing, not metal. The amount required for the coffered ceiling in the basement as an extra was over $14,000 including labour. (See M L Drywall invoice breaking down work and material dated June 19 2009, faxed June 22, 2009. Ex. 2, tab 20

[27] The approach of the courts to the determination of what the true intent of the parties was at the material time is summed up in the following excerpt from the recent Ontario Court of Appeal judgment in Salah v Timothy’s Coffees of the World Inc., 2010 ONCA 673, [2010] O. J. No. 4336 at para. 16:

The basic principles of commercial contract interpretation may be summarized as follows. When interpreting a contract, the court aims to determine the intentions of the parties in accordance with the language used in the written document and presumes that the parties have intended what they have said. The court construes the contract as a whole, in a manner that gives meaning to all its terms, and avoids an interpretation that would render one or more of its terms ineffective. In interpreting the contract, the court must have regard to the objective evidence of the factual matrix or context underlying the negotiation of the contract, but not the subjective evidence of intention of the parties. The court should interpret the contract so as to accord with sound commercial principles and good business sense, and avoid commercial absurdity. If the court finds that the contract is ambiguous, it may then resort to extrinsic evidence to clear up the ambiguity.

[28] The contract in this case is drawn as a list of what the drywaller would provide. Both Capozzi and Abbruzzese are sophisticated business men. Mr. Abbruzzese’s business is land development and Capozzi’s is managing building projects. Both negotiated with Lopes and read over the contract. They had the furring channels added to the contract for which Lopes increases the price to $74,000 from $66,000. Yet the contract they signed simply does not either incorporate ceiling design plans nor does it include in the scope of the work the considerable additional work required of the drywaller to install the bulkheads and metal framing for the sunken squares of a coffered ceiling in the basement. There is nothing in the contract to indicate that the work was to accord with ceiling design drawings and I accept that Lopes did not see such drawings until after the agreement was signed. While Lopes’s sub-contractor stated that Lopes had plans when that sub-contractor started the job, there is nothing to indicate that Lopes had been afforded access to them or that the contract was that the work was to conform to any particular design plans. The architectural drawings were probably available but they do not show the ceiling design in the basement. Only the design drawings do. I do not accept the evidence after the fact of Mr. Capozzi that he had provided information to Lopes prior to the contract being signed as to the additional framing work for the coffered ceiling in the basement. It appears to me that Capozzi may have gambled on Lopes doing it anyway but Lopes refused to do it except as an extra for obvious reasons. It falls within the words of the contract:

“Any ...deviations from the above specifications involving extra cost of material or labour will become extra charge over the sum mentioned in this contract.”

[29] I accept Mr. Lopes’s evidence that the amounts in the invoice of June 19 2009 under the heading “Bulkhead/coffered ceiling” represent the extra material and labour on this account.

[30] The remaining items charged as extras are: $265 for linen chute, $600 for sound insulation and quiet rock board for the walls in the Theatre Room, removal and installation of drywall for the Theatre room for $235, $395 for framing an archway with metal on the main floor, $819 for installation of water resistant board in the basement cold room, $740 for drywalling the garages and 5 columns above the garage doors, and $545 for doing drywall a second time in the basement family room, all plus GST.

[31] I find that the quiet rock board was a late requirement after Lopes had drywalled part of the Theatre Room. Paulo Dinis, the acoustics person with Watson Building Supplies, confirmed that this was the case. It was at a meeting in June in the Theatre Room and Dinis said that the room had been drywalled, at least partly, with gypsum board. The contract had made no other provision for the Theatre Room. Mr. Dinis said that it was then that he recommended quiet rock, a special wallboard with better acoustic results. Lopes therefore had to take out the partial drywall and install quiet rock. The extra charges of $600 and $235 for this work are proven as extras. Mr Abbruzzese says that he negotiated a set price with Lopes of far more than that and a cheque changed hands for $3,675 but I understood that Lopes says he never agreed to that amount and did not cash it. This story is somewhat bizarre to me as Abbruzzese ended up being charged only $835 on this account. What it does confirm is that the removal work and replacement with quiet rock is properly an extra. I also find that the linen chute and the cold room work were extra to the contract. That work was not listed in the contract nor was the linen chute framed for Lopes to see when he walked the site. I do not accept that somehow Mr. Capozzi made the cold room work part of the contract where it is simply not listed as being part of the drywall contract.

[32] As to the extra for the garage and the redoing of part of the basement family room, I am not satisfied that either is properly charged as an extra. The garage drywall work is set out in the contract and there is no limitation in the contract to indicate that the drywall charged as an extra there was not part of the scope of the contract. The family room and archway work appear to be corrections by M L Drywall of earlier work included in the contract and they are not proven as extras.

[33] I find that there is due to M L Drywall the sum of $15,512.50 on account of extras plus GST.

3. Did the defendant home-owner Angelo Abbruzzese pay the plaintiff $20,000 in cash on his return from a holiday trip at the end of March 2009 through Louis Capozzi?

[34] Unlike the foregoing claims by the plaintiff, the defendant Angelo Abbruzzese, as the party asserting that he paid moneys owing to the plaintiff for work done, bears the burden of proof on this issue. The civil burden of proof applied to the plaintiff regarding his claims in parts 1 and 2 above. The defendant Abbruzzese and the defendant MAM&C must meet it to succeed on this issue. It is not a strict onus but it does require proof on a balance of probabilities. In other words, has the defendant shown that it is more likely than not that he, Mr. Abbruzzese, paid $20,000 in cash to Manuel Lopes through Louis Capozzi on his return from the Bahamas in late March 2009? Manuel Lopes, for his company M L Drywall, denies utterly that he received this money. Mr. Capozzi signed a receipt that he received the cash from Mr. Abbruzzese and Capozzi says he handed over $20,000 to Mr. Lopes without any record that he did so. Mr. Capozzi agreed that Lopes was not a personal friend or in any trust relationship with Capozzi.

[35] An electrician Danny Chiodo was called to say he saw Capozzi handing over several bills to Manuel Lopes from a group of bills in Capozzi’s hand. However he says that this happened only one week before Mr. Capozzi asked for witnesses. Mr. Capozzi says that he did not ask for witnesses to a cash transaction until three months after the event because he says he did not know of Lopes’s position denying the payment until June 25. Chiodo remains an electrician who obviously depends on getting work through contractors like MAM and Mr. Capozzi. He could remember exactly where he was standing and that he watched them long enough to see Lopes counting bills handed to him by Capozzi from a thick wad of bills in his hand. There was no reason advanced by Chiodo as to why he could remember in this detail what he regarded as a common sight - cash being handed over to a sub-trade on a building site - months after the event when Mr. Capozzi put out the word that he wanted to hear from someone who could back him up about his handing over the cash to Lopes. There was also a rehearsed quality to Chiodo’s evidence. I did not find him a convincing witness.

[36] Under cross-examination, Mr. Abbruzzese told differing stories about how he brought money back from his Bahamas trip and paid $20,000 out of his gambling winnings of $70,000. He first said he brought $10,000 of it back on his flight and left the balance of his winnings, $60,000 of the $70,000 in his account in Nassau. Yet on discovery, Abbruzzese said that he brought the whole $20,000 back to pay Mr. Lopes in case Lopes had started and done a substantial part of the basement framing work as Lopes had said he would. When asked if there was any record of the money returning with him on the plane, Mr. Abbruzzese then said that his girlfriend and he each brought $9,999 with them in Canadian funds. As any traveller knows, the maximum amount of actual money allowed into Canada as of right, according to the immigration cards handed to returning citizens, is under $10,000. Mr. Abbruzzese produced no record of a bank account in the Bahamas and neither he nor Mr. Capozzi could produce any record of this transaction with Mr. Lopes or his company.

[37] It is for Mr. Abbruzzese to meet the burden of proof on this issue, and, in my view, the evidence falls far short of meeting that burden. I find that on a balance of probabilities, Mr. Lopes was not paid $20,000 in cash close near the end of March 2009 as Mr. Capozzi and Mr. Abbruzzese suggest he was.

4. Is the plaintiff liable for back-charges for failing to complete the work contracted for in the sum of $22.500 plus GST?

[38] There is no doubt that when M L Drywall ceased work on this project, there was unfinished work within the scope of its contract which it did not complete. Mr Lopes admitted that when he ceased work, there remained to be done 26 hours of work. The R40 insulation was not installed on the second floor, the main floor or the garage as the contract called for. In the basement, he said that the drywall needed sanding.

[39] As of June 29, 2009, Lopes said he had been paid nothing and he never received any payment for his work, though he agreed he did receive a cheque for the work and material he had to undo partially and complete with quiet rock as an extra. He lost the cheque and never cashed the replacement as I reviewed earlier.

[40] Maxum Drywall estimated the work that it found to be required to “complete and repair all necessary work.” Its estimate does not refer to the M L Drywall contract’s scope of work. The employee from Maxum, David Rhymes, who did the estimate, looked only at the plans. He never mentioned looking at the actual work M L Drywall had contracted to do in its agreement with Mr. Abbruzzese. The Maxum estimate is $22,500. It later completed this work and invoiced the defendant at the estimated price plus tax. So this is the first difficulty with the evidence from Maxum Drywall.

[41] Under cross-examination, Mr. Lopes disagreed with the first floor portion of the estimate, saying the first floor was complete except the shower. The bathroom photograph, said to have been taken between July 7 and 9, after Lopes had stopped work and before Maxum completed it, shows an unfinished wall, the wiring and insulation not yet covered. The fireplace edges were not completed though I accept that all the drywaller had to do was screw in cement board, as Mr. Lopes said; it was finished in elegant wood panelling by another trade. The staircases were not drywalled; Lopes said he could not do them because they were not installed when his men were refused entry on July 7. Therefore, by his own admission he had not completed insulating and drywalling the ensuite bathroom plus plaster, taping and sanding; the staircases were not drywalled; the shower was unfinished; and the fireplace in the main living area was not completed.

[42] Maxum’s estimate for the second floor included removal and reinstalling of drywall and finish in order to install resilient metal channels. Mr. Lopes said he was told not to install them by the site supervisor Mario Auciello. I accept Mr. Lopes’s evidence on this point. He knew that these channels were required in the second floor and main floor powder room. Installation is a very minor cost, $372.75, and the material for them was on site. He said that the site supervisor Auciello and Louis Capozzi both told him not to install them in the second floor ceiling because the electrical installations there did not leave sufficient space for the channels and the drywall. The site manager and supervisor never complained to him on this account as the work proceeded despite Auciello being there every day and Mr. Capozzi’s letter dated July 9 2009 after Lopes’s men were barred from the site, never mentioned them as something that should have been done.

[43] Mr. Capozzi denied telling Lopes not to proceed with the resilient channels. He had no knowledge of any electrical problem associated with them, he said. He saw cracking in the ceiling and found there were no resilient channels after Lopes’s work ended because there was a deflection or unevenness in the second floor ceiling and you could see they were not there through the pot lights. Yet, it makes no sense that Capozzi could see so easily they were not installed. He and Auciello were on site daily and never complained to Lopes about the lack of resilient channels in the second floor ceiling, and installation of them cost so little with the material required for them on site and ready to go in. I accept Mr. Lopes’s evidence that he was told not to proceed with the second floor resilient channels.

[44] The contract signed by Mr. Abbruzzese contains no mention of resilient channels in the laundry room. The Maxum estimate included the latter as well as removal, installation of the resilient channels on the second floor and the powder room and replacement of drywall , taping and sanding.

[45] The Maxum work included the following additional work in the main floor: finish installation , taping and sanding the south garage, drywall fireplace enclosure, drywalling to finish the ensuite bathroom and shower enclosure, sanding kitchen and dining room, and drywalling the two staircase enclosures. I find that this was work not done by M L Drywall though it comes within its contract.

[46] In the basement, Lopes said all that was required was some finish sanding. He did not do the staircase as it had not been installed before his men were stopped from completing their work on July 7. Maxum included in its invoice, in addition, drywall work to be finished in the bathroom and “to 2 unfinished cathedral ceilings”, removal of partial drywall and installing ceiling drywall and layer of quiet rock to the walls in the Theatre Room and finish. Lopes said the bathroom required nothing more, the cathedral ceiling work was an extra he did not do, and the Theatre Room was done in quiet rock as an extra by him. This Maxum invoice does not include work to be redone due to the allegation of mold in some drywall. That is covered in another invoice, according to their own estimator Mr. Rhymes. I will deal with it separately. Why the Theatre Room removal and reinstallation work was included here as well as in the second Maxum invoice for mold remedial work was never explained.

[47] The problem with the Maxum invoice is that it included work not required of M L Drywall regarding the resilient channel installation as well as work in the Theatre Room which it billed as mold remediation in its second invoice. It also included work in the first floor laundry room not within the M L Drywall contract. Because there is no breakdown of individual items, the Maxum invoice is of limited assistance. It does give an order of magnitude from which a rough estimate of the valid completion work can be arrived at as an approximation.

[48] Mr. Abbruzzese himself admitted on his examination for discovery that the M L Drywall work was substantially complete. It appears to me that the completion work that was validly claimed within M L Drywall’s contract would appear to be approximately one-half of the total Maxum invoice of $22,500.

[49] Mr. Lopes’s view of the proper amount to complete is low in my view. I do not accept that all drywall work was completed on the first floor. The ensuite bathroom was completely unfinished. The staircase enclosures remained to be drywalled and finished to a smooth surface. The basement staircase remained to be done and insulation was not installed. In my view, Mr. Lopes’s estimate of 26 hours to complete or $1774.50 plus the insulation installation at $1440 is self-serving and too low in view of my findings. A fellow workman, Walter Salgado estimated completion to take longer than Lopes’s estimated 26 hours. I find that the price for the work left to be done is properly $11,250 and that amount shall be credited to the defendants.

5. Is the plaintiff liable to a back-charge of $21,525 for mold remediation?

[50] This issue requires no lengthy exposition. This is another complaint that developed after Mr. Lopes’s work was ended. In fact, like the resilient channel issue, Mr. Lopes heard nothing about a complaint over mold until the counterclaim was pleaded and examinations for discovery occurred. Certainly there is nothing about a mold issue in Mr. Capozzi’s lengthy letter of July 9, 2009.

[51] The shipping invoices show that the drywall material was shipped to the site including the types of board for each floor and the garages on June 5 2009. The drywall work proceeded for the remainder of June and into July until M L Drywall forces were refused entry to the work site on July 7. There was no mold issue mentioned to Mr Lopes throughout this time. Capozzi says he mentioned it to Lopes on June 25 -he merely said it came up. Yet, Mr. Capozzi, Abbruzzese, and Mr. Dinis all say they saw black marks on the board in the southeast corner of the basement cold storage room on June 8th. Mr. Capozzi also saw black marks in the hallway and on the wallboard in the Theatre Room and the cold room wine cellar. Dinis saw it only in the cold storage room and a corridor, not in the Theatre Room though, as I have found, the Theatre Room board had to be replaced for other reasons. His view was that water resistant wall board should have been used in the cold room. Cappozzi at one point thought the Ontario Building Code required water resistant board in cold rooms. Under cross-examination, he admitted that he knew of no such provision in the Ontario Building Code requiring water resistant board in cold rooms. As well, Dinis and Capozzi agreed under cross-examination that the Theatre Room and the cold storage room were the same basic structure. Both bordered on exterior walls at a corner of the house. Water resistant board was not required by the contract in the Theatre Room or the cold room.

[52] Given the silence of Mr. Capozzi about mold in his final letter to M L Drywall on July 9, I do not accept his vague evidence that mold “came up with Lopes on June 25”.

[53] It is extraordinary that within 3 days of delivery of drywall to the site and Lopes continuing to work on site, he or his men, until July 3, mold was found on June 8on drywall he had just installed. In view of the relative silence about its discovery until Lopes and Abbruzzese parted company on July 7, 2009, and the delay in dealing with it - removal of so-called molded drywall in the east basement part of the house did not occur until August 18, 2009, according to the Watson Building invoice and replacement drywall was not applied until October 15, 2009 - I have serious doubts about the date when the so-called mold was discovered.

[54] Beyond that, I have no evidence from an expert witness that what was found in the house was in fact mold. No effort was made to keep samples to test. Furthermore there is no evidence that ML Drywall was the cause of the condition, if in fact it was mold. There can be many causes for mold developing on a building site including the level of moisture and humidity in the basement and other sources from which it can spread other than the drywall and the drywaller.

[55] Finally, the contract did not call for water resistant board in any of the cold rooms. It was called for in the basement shower but that is not where the mold was complained of. In fact, in one cold room (there are four in the plans), water resistant board was installed as an extra in the invoice of ML Drywall dated June 19 2009.

[56] I am not able to find any breach of contract by M L Drywall on this account, or any causal relationship between the plaintiff’s work, and the development of what is said to be mold. I will not allow the defendants’ claim for mold remediation against this plaintiff.

6. Was there a breach of contract and if so, by whom?

[57] The defendant Mr. Abbruzzese says that in June and early July 2009, he tried to arrange a meeting with Mr. Lopes to discuss the issues that seemed to have arisen. Until July 3, M L Drywall had men working at the site and on July 7, they were refused entry to complete the work. Mr. Abbruzzese says that he wanted a meeting and would be right down to the gate but Lopes or his men had left. He said that Lopes would agree and then would not come to other meetings they set. Mr. Lopes says that he came to one and that two men associated with the defendant Abbruzzese threatened him. One told him he would never finish. The two tried to force him into a car. Before any of these proposed meetings were to occur, Mr. Lopes said when he talked to Capozzi on site on or about June 25 to ask about payment - at this point M L Drywall was out over $19,000 for material and the terms of payment in the contract had been ignored by the defendants - he said Capozzi threatened him. On other occasions when he would call, he would be insulted. So he did not attend the proposed meetings.

[58] I find that all this narrative is neither here nor there regarding the contractual relations between these parties. I find that on June 5 when the drywall arrived, the defendant Abbruzzese had agreed to pay the plaintiff 50% of the contract price, or $37,000. The plaintiff sent an invoice for that amount. The defendant did not pay it despite the fact that the plaintiff continued to work toward completion of the contract until his men were denied entry to complete the work. No meeting was required for this to occur. The defendant did not pay Mr. Lopes in accordance with the contract that he signed. He even failed to pay 30,000 in cash that he had urged upon Lopes, and certainly not the whole $37,000 owing since June 5. In my view, the denial of access to complete the work on July 7 and non-payment of the 50% due on June 5 amount to a fundamental breach of contract by the Defendant Angelo Abbruzzese.

[59] I find no merit in the claim for interest on the funds paid to remove the lien claim from title. For one thing, the lien claim has been substantially upheld. For the other, the interest rate relates to the condition of Mr. Abbruzzese’s finances at the time. But in any event, this kind of claim based on individual circumstances for one party has no foundation in law, particularly where that party is the one who caused the termination of contractual relations and his failure to pay as required by the contract he signed brought the lien claim against his property.

[60] Therefore, the Defendant Angelo Abbruzzese shall pay to the plaintiff forthwith the following:

Contract price $74,000 plus GST on $44,000 of it

Extras, add $15,512.50 plus GST

Total $89,512.50 plus GST

Less work not completed $11,250.00

$78,262.50

[61] Therefore I award judgment to the plaintiff in the sum of $78,262.50 plus GST on $78,262.50 less $30,000, or GST on $48,262.50.

[62] Counsel may submit brief submissions on costs and PJI to me at my chambers at The Court House, 75 Mulcaster St., Barrie, Ontario L4M 3P2. The plaintiff’s submissions shall be delivered by January 10 and the defendants’ by January 24, 2013. Reply by January 31, 2013. I would appreciate submissions as to why the case should not be dismissed against MAM except for the alleged $20,000 regarding which judgment may properly go against MAM as well as Angelo Abbruzzese.

[63] I thank counsel for their professionalism and efficiency in getting to the real issues in this case and for their continued courtesy to the court, of which they are officers in good standing.

HOWDEN J.

Released: December 28, 2012