2028604 Ontario Ltd., Groupe Sima and California Acrylic Industries Inc.

2012 ONSC 984

Oshawa COURT FILE NO.: 51590/07

DATE: 20120224

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN

WILLIAM VAN EVANS

Plaintiff

— and —

2028604 ONTARIO LTD., GROUPE SIMA

and CALIFORNIA ACRYLIC INDUSTRIES INC.

Defendants

COUNSEL:

Alan J. McMackin for the Plaintiff

Norman Groot for the Defendant, 2028604 Ontario Ltd.

HEARD: Trial – November 22-24, 2011

Sosna, J.

REASONS FOR JUDGMENT

OVERVIEW

[1] The plaintiff, William Van Evans, seeks damages of $62,267.22 from three defendants claiming that:

(1) 2028604 Ontario Ltd. breached its contract to install a spa at his residence, and that

(2) Groupe Sima, the distributor of the spa and California Acrylic Industries Inc., the manufacturer of the spa, breached their warranty to provide him the necessary parts to maintain the spa.

[2] 2028604 Ontario Ltd. denies any breach of contract submitting that William Van Evans terminated the contract by prohibiting them from completing the installation of the spa. 2028604 Ontario Ltd. asks that the action be dismissed.

[3] Groupe Sima denies that it was a party to any contract for the sale or installation of the spa. It asks that the action against it be dismissed.

[4] On August 5, 2008, in a separate action brought by William Van Evans against California Acrylic Industries Ltd. for the purchase and installation of the same spa, default judgment was registered against California Acrylic Industries Ltd.

[5] 2028604 Ontario Ltd. counterclaims against William Van Evans seeking $1,800.00 in damages, submitting he failed to pay that portion of the purchase price.

[6] William Van Evans denies he breached the contract and argues that he is entitled to equitably set off any amount found due by him against his claim against 2028604 Ontario Ltd.

NARRATIVE FACTS

[7] The plaintiff, William Van Evans, (“Van Evans”) resides in the City of Pickering, Province of Ontario.

[8] The defendant, 2028064 Ontario Ltd. (“West Coast”) is a company incorporated under the laws of the Province of Ontario and at all material times carried on business as a spa dealer known as West Coast Imports. It was owned and operated by Nick Cutaia.

[9] West Coast sold and installed spas manufactured by the defendant California Acrylic Industries Inc., a company incorporated in the State of California (“Cal Spa”). Cal Spa provided a manufacturer’s warranty for the spa.

[10] The defendant, Groupe Sima, is a company incorporated in the Province of Quebec, and at all times was the distributor of spas, including those manufactured by Cal Spa and sold by West Coast.

[11] On August 15, 2005, Van Evans entered into a written agreement with West Coast for the supply and installation of a spa manufactured by Cal Spa. The spa was to be installed at his residence in Pickering by West Coast. The final contract price of $24,700 included the installation by West Coast of a cement pad to house the spa. Van Evans left a deposit of $5,000 with the balance ($19,500) to be paid on the date of delivery.

[12] The spa included Cal Spa’s 5-year manufacturer’s warranty.

[13] West Coast delivered the spa to Van Evans’s residence on October 21, 2005. Prior to delivery the cement pad had been installed by West Coast using the services of a sub contractor.

[14] Van Evans was not at home on the date of delivery but his wife was. The balance of $19,500 was not paid to West Coast that day.

[15] Other than plumbing hook up, the cost of which was an additional $200, installation of the spa was substantially completed on or about November 21, 2005. Cutaia spoke to Van Evans the next day, November 22, 2005. Van Evans instructed Cutaia not to complete the plumbing hook up until the following spring. Cutaia wanted to complete the plumbing, fill the spa with water, run it and test it.

[16] Despite their differing views, an informal agreement was reached to complete installation sometime in the spring of 2006.

[17] On December 3, 2005, West Coast received payment by cheque for the spa in the amount of $17,700 issued by Ortho-Dent Ltd., the dental company that Van Evans operated. The cheque was $1,800 less than the amount of $19,500 owing on the contract.

[18] Cutaia telephoned Van Evans and demanded payment of the outstanding balance, namely $1,800 on the contract and $200 for the plumbing hook up. Van Evans refused, advising Cutaia that the spa was still not operational. He considered the $2,000 to be a hold back which would be paid once installation was completed in the spring.

[19] Van Evans made a number of attempts to contact Cutaia in the spring of 2006 but was unsuccessful. When contact was made, Cutaia advised he was unavailable to complete the hook up until May.

[20] Van Evans objected to the delay and refused to pay the $2,000 he held back in November 2005. The details of their disagreement will be later reviewed in the judgment.

[21] Van Evans retained a private contractor to complete installation in 2006. Thereafter, the spa suffered a number of electrical and parts breakdowns.

[22] Van Evans later contacted Groupe Sima and Cal Spa to provide parts under warranty to maintain the spa. They did not provide assistance.

[23] According to Van Evans, the spa was unusable from 2006 to 2009 on this account.

POSITION OF THE PLAINTIFF, VAN EVANS

[24] Relying on the terms of the contract, verbal agreements outside the contract and the Sale of Goods Act, R.S.O. 1990, c. S.1 as amended, Van Evans submits that West Coast breached its duty to supply and install the spa by:

1. Failing to deliver the spa and have it operational in a timely manner;

2. Failing to provide a manufacturer’s warranty for the spa;

3. Failing to provide all parts necessary to install the spa;

4. Failing to complete installation of the spa in a timely manner;

5. Dissuading other spa dealerships with Groupe Sima from providing parts and/or labour under warranty to maintain the spa;

6. Misrepresenting the quality and operation of the spa’s chemical filtration system including the “ozonator”;

7. Failing to provide a spa that met his intended use, namely an exercise swim spa.

[25] Van Evans submits that as a result of the breaches by West Coast, the spa was not useable from 2005 through 2009 on this account.

[26] He further submits that Groupe Sima and Cal Spa breached their duty to provide parts and/or labour under warranty to maintain the spa and argues that Cal Spa provided him with a spa of questionable merchantable quality.

[27] Van Evans submits that he has sustained substantial losses resulting from the breaches by the three defendants and seeks the following damages:

1. Return of the purchase monies of $22,700.

2. The cost of repairs to rectify deficiencies to the spa of $1,189.50.

3. $18,000 for mental distress and loss of use and enjoyment of the spa.

4. $3,052.86 for a 4-year membership to use a public pool in lieu of using the spa at his private residence.

5. $8,715 to restore the landscaping surrounding the spa.

POSITION OF THE DEFENDANT, WEST COAST

[28] West Coast denies all the breaches alleged by Van Evans. West Coast argues that Van Evans, terminated the contract by not allowing it to finalize installation, when it was prepared to do so in November 2005 and May 2006.

[29] West Coast argues that Van Evans chose to use an independent contractor and not West Coast to complete the installation. Any issues with the spa’s operation thereafter were not the responsibility of West Coast.

[30] West Coast further argues that the spa was used by Van Evans for its designed purposes, namely swimming and recreation.

[31] West Coast submits that Van Evans’s claim for damages should be dismissed.

[32] By counterclaim, West Coast submits that Van Evans arbitrarily withheld $2,000 from the contract price until installation of the spa was completed in the spring of 2006. West Coast argues that Van Evans’s hold back of the $2,000 was a breach of the contract and seeks recovery of this sum.

POSITION OF THE DEFENDANT, GROUPE SIMA

[33] Groupe Sima denies that at any time it was a party to a contract with Van Evans for the sale and installation of the spa.

[34] Further, Groupe Sima submits that West Coast never acted as its agent for the sale or installation of the spa. In its dealings with Van Evans, West Coast at all times acted as an independent merchant.

[35] Groupe Sima denies that it had any duty to Van Evans. More specifically, Groupe Sima denies that it had any duty to provide direction, installation, or parts under warranty to Van Evans for the operation or installation of the spa.

[36] Groupe Sima asks that the action against it be dismissed.

POSITION OF THE DEFENDANT, CALIFORNIA ACRYLIC INDUSTRIES, INC.

[37] As previously noted, default judgment was registered against the defendant Cal Spa on August 5, 2005 in a separate action (Exhibit 3) and no further review is required.

LEGAL ISSUES TO BE DETERMINED

1. Were there any verbal agreements between Van Evans and West Coast outside the terms of the August 15, 2005 contract for the sale, delivery and installation of the spa? If so, did West Coast breach them causing the contract to be terminated?

2. Are West Coast or Groupe Sima bound by the provisions of the Sale of Goods Act? If so, were any of the provisions breached causing the contract to be terminated?

3. If there were any breaches, did Van Evans suffer any damages?

Regarding the Counterclaim:

1. Was Van Evans’s hold back of the $2,000 a breach of the August 15, 2005 contract which provided that full payment was to be made on the date of delivery?

FINDINGS

1. Were there any verbal agreements outside the terms of the August 15, 2005 contract for the sale, delivery, and installation of the spa? If so, did West Coast breach them causing the contract to be terminated?

There is no dispute that the August 15, 2005 contract (Exhibit A Tab 2) set out the following:

A. Swim spa - $18,887.11

B. Delivery and installation of the swim spa including a cement pad - $4,000

C. GST - $1,615.89

D. Deposit - $5,000 (which was paid)

E. Balance due on delivery

[38] Van Evans submits that prior to entering the contract, Cutaia undertook to have the spa delivered and operational by early October 2005. Van Evans submits that this verbal commitment was part of the contract and was breached since the spa was delivered late and not operational until November 2005.

[39] West Coast denies there was any verbal agreement supplementing the written contract that the spa would be operational by early October 2005.

[40] At trial, Van Evans did not know the date the spa was delivered. I accept Cutaia’s evidence that the spa was delivered on October 21, 2005, approximately 10 weeks after the contract was finalized. There is no evidence that in those 10 weeks Van Evans communicated with Cutaia inquiring why the spa had not yet been delivered. There is also no evidence that any complaint was made upon the delivery date, either from Karen Van Evans, the plaintiff’s wife who was home, or any time later from Van Evans.

[41] I accept Cutaia’s evidence that during his negotiations with Van Evans he could only estimate the date of delivery. I accept Cutaia’s evidence that it normally takes two to three months to have the spa manufactured in California and then delivered. I accept his evidence that some delays were encountered due to Van Evans’s work schedules and travel which denied him access to the property in order to construct the cement pad designed to house the spa.

[42] Further, there is no evidence that between the dates of October 15, 2005 (when the spa was delivered) and November 22, 2005 (when Van Evans instructed Cutaia not to complete installation until the following spring) that Van Evans communicated any complaint to Cutaia that the spa was not operational at an earlier date.

[43] In absence of any evidence that Van Evans specifically complained to West Coast, either about the delivery date or the later date in November when the spa was ready for final installation, I find that the August 15, 2005 contract did not include an additional verbal term that the spa was to be operational by early October. If such a term existed, it is inconsistent with Van Evans’s lack of complaint or follow up from August 15, 2005 to November 22, 2005. Having found no such term existed, I reject Van Evans’s submission that the contract was breached by West Coast because the spa was not operational by early October 2005.

[44] Van Evans testified that Cutaia advised him that the spa was protected by a 5-year warranty. Van Evans submits that an additional verbal term to the August 15, 2005 contract was that West Coast was to deliver the warranty to him. Van Evans contends that West Coast never provided him with a warranty for the spa. He submits non-delivery of the warranty is a fundamental breach of West Coast’s contractual obligation causing the contract to be terminated.

[45] On this issue, I accept the evidence of Cutaia and reject the submission of Van Evans for the following reasons:

1. Cutaia testified that consistent with all other spa deliveries, the spa when delivered at Van Evans’s residence was shrink wrapped. The Owner’s Manual is attached to the unit in a plastic sleeve under the shrink wrapping. Exhibit 5, the Owner’s Manual, includes the warranty provisions which detail the warranty terms, their limitations and exclusions, along with the address and telephone number of Cal Spa for customer service.

2. Cutaia testified that Van Evans was not at home but his wife Karen Van Evans was. He testified he provided Karen Van Evans with an Inspection Report from Cal Spa, a Bill of Sale, the Owner’s Manual, and a Warranty Card for the spa. He recommended that she review the manual and provided her with some general instructions regarding the operation of the spa.

3. Cutaia testified that it was Van Evans’s responsibility to register the warranty. The responsibility of the purchaser to register the warranty is corroborated by the evidence of Stewart Risto, a Cal Spa dealer who Van Evans contacted in 2008 when he was experiencing problems with the spa. Cutaia denied in cross-examination that the warranty could be registered only after the spa was completely installed. He testified that Van Evans never registered the warranty.

4. Karen Van Evans was not called as a witness to contradict Cutaia’s evidence that he provided her with the warranty information. Nor was Cutaia’s evidence undermined in cross-examination that in fact Van Evans had not registered the warranty, and that final installation of the spa was not a condition precedent for the registration. I accept Cutaia’s testimony on these issues.

[46] Therefore, even if (as submitted by Van Evans) providing a warranty was an additional verbal term to the August 15, 2005 contract, there was no breach. I find that Cutaia provided the warranty documentation. I further find that Van Evans took no steps to register the warranty although provided with the documents.

5. Are West Coast and Groupe Sima bound by the provisions of the Sale of Goods Act? If so, were any of the provisions breached causing the contract to be terminated?

[47] Regarding Groupe Sima, there is no dispute that it distributed spas including those manufactured by Cal Spa. I accept Van Evans’s evidence that he contacted Groupe Sima to provide labour and/or parts under warranty for his spa. I accept his evidence that Groupe Sima declined.

[48] However, I find, as set out in the Statement of Defence that Groupe Sima was never a party to the contract between Van Evans and West Coast for the sale and installation of the spa. I further find that West Coast was never an agent for Groupe Sima in that transaction.

[49] Although a distributor of Cal Spa products, Groupe Sima owed no duty to provide direction, installation or parts to Van Evans after his impasse with West Coast. The details of this impasse will be reviewed later.

[50] Absent any contractual relationship express or implied between Groupe Sima and Van Evans, the Sale of Goods Act has no application to Van Evans’s claim against Groupe Sima.

[51] For these reasons, Van Evans’s action against Groupe Sima is dismissed.

[52] Regarding West Coast, counsel on its behalf agrees that the provisions of the Sale of Goods Act apply to the August 15, 2005 contract in so far as:

A. The spa is a “good” – s.1

B. Van Evans was a “buyer” – s.1(1)

C. West Coast was a “seller” – s.1(1)

D. The “[spa was] of a description that was in the course of [West Coast’s] business to supply” – s.15(2)

E. West Coast was in the business of selling spas.

[53] Although Van Evans and West Coast agree that s.15(1) and (2) of the Sale of Goods Act import statutory conditions to the August 15, 2005 contract, West Coast denies that it has breached those conditions causing the contract to be terminated.

[54] Section 15(1) states:

Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description that it is in the course of the seller’s business to supply...there is an implied condition that the goods will be reasonably fit for such purpose...

[55] Section 15(2) states:

Where goods are bought by description from a seller who deals in goods of that description...there is an implied condition that the goods will be of merchantable quality...

[56] Van Evans contends that the implied conditions in s.15(1) and (2) were breached by West Coast because:

A. The spa they provided was not suitable for his intended purpose, namely swim training and;

B. The spa’s operation was not maintenance free with the minimal use of chemicals, most notably chlorine.

[57] Van Evans argues that these breaches by West Coast caused the contract to be terminated.

[58] In examination-in-chief, Van Evans testified that he was interested in physical fitness through swimming and had been an active swimmer all his life. Because the limited size of his residential lot could not accommodate a swimming pool he decided that a “swim spa” in which one swims in a stationary position against a current generated by the jets would meet his exercise requirements.

[59] He further testified that because chlorine was detrimental to one’s health, it was imperative for him to swim in a “chlorine free environment”. Additionally, he sought the purchase of a “swim spa” that was maintenance free.

[60] He testified that prior to signing the contract, he advised Cutaia of these requirements and Cutaia assured him they would be met by ordering a Cal Spa “Champion” spa (Exhibit 4 p.13) and an “outdoor ozonator” (Exhibit 1 Tab 2 p.2).

[61] Although it is not clear which of the two was selected for Van Evans’s spa - the “Cal-Zone Quest 2000 Ozonator” or the “Cal Zone Quest 1000 Ozonator”; the units are described as follows:

“Cal-Zone Quest 2000 ozonator...This maintenance free system purifies your spa water” (Exhibit 4 p.3 of the Cal Spa Sima product brochure).

“Cal Zone Quest 100 Ozonator...Your new Cal Zone Quest 1000 Ozonator...is a state-of-the-art bacteria killing machine. This unit will assist you in maintaining clean and clear water, while saving you time and expense with spa chemicals.” (Exhibit 5 p.45 of the Cal Spas 2005 Owner’s Manual).

[62] Cutaia testified that the “Champion” model selected by Van Evans was designed to be used for more than the specific swimming purposes in which Van Evans expressed interest. The spa was also designed to be used for recreational and therapeutic purposes. This evidence is consistent with promotional photographs in the Cal Spa Sima brochure (Exhibit 4) which depict individuals swimming, playing, and resting on the inside perimeter of the spa where the jets are located.

[63] Despite testifying in-chief that because of breakdowns of the spa between 2006 and 2009, he was unable to use the spa for his intended swim exercise, Van Evans conceded in cross-examination that he, friends and family, between 2006 and 2009 did also use the “swim spa” on approximately 10 occasions for recreational and not swimming purposes. He reluctantly acknowledged this included the use of the spa by his trial counsel on one occasion for recreational purposes.

[64] Given Van Evans’s acknowledgement that the spa was also used for recreational purposes, I find his evidence in-chief that only detailed his inability to use the spa for exercise swimming to be inaccurate and misleading. I find that although Van Evans may have primarily intended to use the spa as an exercise “swim spa” he also used it for recreational purposes.

[65] I further find the additional recreational use of the spa does not support Van Evans’s contention that one of the reasons the spa was unusable and not used between 2006 and 2009 was because the ozonator was malfunctioning and the water was not chlorine free.

[66] I accept Van Evans’s evidence that wanting a spa which required minimum or no maintenance and which operation created a “chlorine free environment” were important factors in his purchase. I accept his evidence that at the pre-contract stage he advised Cutaia of those requirements. I accept his evidence that Cutaia provided him with Exhibit 4, the Cal Spa product brochure, which states: “This maintenance free system [Cal-Zone Quest Ozonator] purifies your water”. I have already reviewed the function and purpose of an ozonator system as set out in Exhibit 5, the Owner’s Manual.

[67] However, I find Van Evans’s interpretation and expectation of the ozonator far exceed its function and purpose as set out in Exhibits 4 and 5. The ozonator does not create a “chlorine free environment” as expressed by Van Evans. The ozonator does no more than “assist in maintaining clear and clean water, while saving you time and expense with spa chemicals” (Exhibit 5 p.45). Chemicals are still required, including chlorine to maintain the water chemistry. I find to the extent that the ozonator is described as a “maintenance free system” (Exhibit 4) that description pertains to its internal operation, and has no bearing on the water chemistry including chlorine which requires monitoring and maintenance.

[68] Further, the submission that West Coast breached s.15(1) of the Sale of Goods Act by providing Van Evans a spa that was not minimally chemical free and did not meet his “purpose” as a swim spa is inconsistent with his claim for damages for the “loss of use and enjoyment” of the spa.

[69] Van Evans testified that he has been an active swimmer all his life. In his younger years he was a lifeguard and later had been an active member in swim clubs. Swimming continues to be his main form of exercise and he regularly swims a number of times a week.

[70] He testified that because the spa was not operational in 2005 and because it was broken down for extended periods between 2006 and 2010 he did not use it. In order to continue and maintain his passion for swimming and receive the health benefits from swimming, between 2005 and 2010 he regularly swam at a public pool at the Y.M.C.A. As part of his damages he seeks recovery of his monthly membership fee at the Y.M.C.A. totalling $3,052.86.

[71] Although the following is not judicial notice, it is notoriously known that public swimming pools are heavily treated with chemicals including chlorine. Van Evans testified that because of health issues as he perceived them to be, a “chlorine free environment” was critical to his use of swimming facilities. He testified that because the ozonator was malfunctioning he rarely used the spa for swimming or any other purpose because the spa could not provide a “chlorine free environment” for his activities. Yet, despite his purported health concern over unnecessary chemical use including chlorine, he elected to swim at a public facility while his residential “swim spa” sat idle.

[72] I find the submission by Van Evans that s.15(1) of the Sale of Goods Act was breached because West Coast did not provide a spa which met his criteria of chemical free operation to be as exaggerated, tenuous, and self-serving as his evidence regarding how the spa was used, who used it, and how often.

[73] On these questions, I find no fundamental breaches of implied contractual conditions under s.15(1) and (2) of the Sales of Goods Act as submitted by Van Evans , which would terminate the contract.

[74] In addition to the breaches of verbal terms outside the August 15, 2005 contract, and the breaches of s.15(1) and (2) of the Sales of Goods Act, Van Evans submits that Cutaia interfered and dissuaded Cal Spa and spa dealers associated with Groupe Sima from honouring the 5-year warranty to provide parts and labour that came with the spa.

[75] In cross-examination, Cutaia admitted that in April 2007 he was aware that Van Evans contacted Groupe Sima to get parts under warranty for repair. He admitted he asked Groupe Sima not to provide the parts until he was paid the $2,000. On April 25, 2007, Groupe Sima prepared the following memo:

“Bill Van Evans – swim spa needs to be connected. No longer wants to deal with West Coast; he does not have a choice” (Exhibit 2 Tab 16)

[76] I find as a fact that Groupe Sima never provided the requested parts to Van Evans.

[77] Cutaia admitted that later in July 2007 he was aware that Van Evans had contacted Cal Spa to provide parts under warranty for repair. He acknowledged that the $2,000 hold back had still not been paid by Van Evans. He admitted that he asked Cal Spa not to provide the parts until he received payment.

[78] I find as a fact that Cal Spa never provided those parts.

[79] However, it is only Cal Spa that provided the 5-year warranty. Neither West Coast nor Groupe Sima provided any warranty. Van Evans has already obtained default judgment against Cal Spa (Exhibit 3). I have already found that Groupe Sima had no contractual obligation to Van Evans.

[80] Although I have no doubt that Cutaia’s contact with Cal Spa and Groupe Sima may have influenced their decisions not to assist Van Evans, both Cal Spa and Groupe Sima are independent bodies. They make their own decisions even with the input acknowledged by Cutaia.

[81] In that regard, with reference to the warranty, I accept Cutaia’s evidence concerning Groupe Sima – “I have no control over what they do.” Similarly with reference to Cal Spa – “They hold the warranty, they make the decision.” (Trial Proceedings November 24, 2011 p.4 lines 19 to 22).

[82] I find Cutaia’s overtures to both Groupe Sima and Cal Spa not to be breaches of any contractual obligations that West Coast had with Van Evans. West Coast was not a party to any warranty held by Van Evans; nor as already found was Groupe Sima. That warranty was offered by Cal Spa alone. There is no evidence that Cutaia’s representations to Cal Spa directly or indirectly impacted that warranty.

[83] Van Evans further argues that West Coast breached its contractual obligations to finalize installation of the spa in a timely manner and to provide all parts necessary for that installation. He submits that, in November 2005, West Coast did not leave the parts necessary to complete installation. He submits West Coast’s decision not to return in the spring of 2006 to complete installation left him both with incomplete parts and an inoperable spa. Installation, hook up and completion by an independent contractor were problematic and the spa was unusable through 2009 due to numerous breakdowns.

[84] West Coast submits that all parts necessary to complete installation were left with Van Evans in 2005. West Coast submits that they were prepared to complete installation both in 2005 and 2006 and that on both occasions Van Evans instructed them not to do so. West Coast submits that it was Van Evans who terminated the contract in 2006 when he ordered West Coast not to return to his property to complete installation. Lastly, West Coast denies that the spa was inoperable from 2006 through 2009 as submitted by Van Evans.

[85] On these issues, I accept West Coast’s position for the following reasons:

1. Although Van Evans testified that all parts necessary to complete installation were not left on his property in November 2005, he was unable to identify what those parts were. He testified he believed that Stewart Ristow, a Cal Spa dealer, provided the missing parts.

2. Ristow testified that he attended Van Evans’s property three years later in the fall of 2008. He determined that the ozonator was causing the breaker to trip, further causing the spa to shut down. He found the pump to be working properly. After disconnecting the ozonator, both the pump and spa were fully operational. He processed a warranty claim for the ozonator but the claim was denied. He provided no evidence of installing any missing parts to the spa.

3. Cutaia testified that on November 21, 2005, all parts necessary were onsite to complete the installation. What remained was hooking up the plumbing which was a labour cost of less than $200. The components including the Topside control, the pump and the ozonator had already been installed. He testified he wanted to complete the plumbing, fill the spa with water and test run it to ensure its operability. He testified that Van Evans instructed him to take no further steps and to complete installation the following spring.

4. Van Evans, in his testimony, agreed that he did not want the spa to be fully installed until the following spring. He did not dispute Cutaia’s evidence that Cutaia wanted to finalize installation and run the spa in 2005.

5. To run the spa would require installation of all parts. Those parts would need to be readily available and at hand. Given his intention, Cutaia’s evidence is consistant and logical; all parts necessary to complete installation were onsite at Van Evans’s residence in November 2005. There is no evidence that Cutaia left with any parts after Van Evans instructed him to complete installation the following spring. As already reviewed, there is no evidence that Stewart Ristow provided any missing parts for the spa as suggested by Van Evans.

[86] I reject Van Evans’s testimony that West Coast did not provide him with the necessary parts to complete installation and find West Coast did not breach the contract.

[87] Van Evans further contends that West Coast breached its contractual obligations by not returning in 2006 to finalize installation, leaving him with an inoperable spa through 2009. He testified that between March and May of 2006, he telephoned West Coast on at least 20 occasions wanting to arrange an installation date. He testified that when he finally reached Cutaia, Cutaia advised him that because of his spring schedule it would take two or three months before he could attend. Van Evans submits that Cutaia had no intention of returning and did not return to finalize installation because he was angry that West Coast had not been paid the outstanding $2,000 held back on the contract.

[88] Cutaia testified that he spoke to Van Evans in March and April of 2006 and advised him that hook up could not be completed for three or four weeks because West Coast was busy in the spring season. He testified that Van Evans became angry over that delay and stated the contract was terminated, he would complete the installation himself, and was keeping the $2,000 as a set off. He indicated to Cutaia that West Coast was no longer welcome on his property. Cutaia testified he did not return until 2009 when permission was given for him to inspect the spa after litigation had commenced.

[89] As previously reviewed, there is no dispute that West Coast was prepared to complete installation in November 2005 and that it was Van Evans who postponed the installation until the spring of 2006. His reasons for doing so were because he felt it was wasteful to fill the spa with 1500 litres of water late in the season and then drain it for the winter season.

[90] I accept Cutaia’s evidence that completing the installation was a minor job requiring connection of four pipes to a distance of seven or eight feet. I accept his evidence that he wanted to fill the spa with water and then run it in November 2005 to identify any immediate problems that might arise. I accept his evidence that only after completing installation and running the spa would he be able to conduct a “show and tell” that is to provide Van Evans with an overview and additional verbal instructions regarding maintenance and operation of the spa. I accept his evidence that he wanted the spa operating before the end of November because it is the better practice to complete installation and have the spa constantly operating.

[91] I also find that Cutaia’s recommendation to finalize installation in November 2005 was dictated by a further factor. Although delivery was complete and installation almost finalized, the $19,500 balance remaining on the contract had not been paid. Completed installation in November as desired by Cutaia would potentially conclude that issue. In that regard, the later hold back of $2,000 by Van Evans has significant relevance.

[92] After delivery of the spa, having not been paid the balance owing, I accept Cutaia’s evidence that in November 2005 he confronted Van Evans requesting full payment. Van Evans advised him on both November 21 and 22 that the cheque for the balance was delayed and was in the mail. A cheque dated November 4, 2005 in the amount of $17,700 payable to West Coast was received on December 2, 2005 (Exhibit 2 Tab 14). Cutaia called Van Evans the same day and was advised for the first time that the $2,000 outstanding was a hold back which would be paid when installation was completed in the spring of 2006.

[93] Although I accept that the discussions between Van Evans and Cutaia were heated and acrimonious regarding the date for installation in the spring of 2006, there is no evidence that Cutaia refused to return and complete installation because of the $2,000 hold back, as submitted by Van Evans. Cutaia may have been frustrated and angered by the arbitrary hold back exercised by Van Evans. However, for Cutaia not to return and finish $200 worth of installation, thereby foregoing the $2,000 outstanding is illogical and makes no economic sense.

[94] In summary, I find that West Coast did not breach its obligation to complete installation as set out in the August 15, 2005 contract. West Coast was prepared to finalize installation both in 2005 and 2006. On the contrary, I find it was Van Evans who unilaterally terminated the contract in 2006 by ordering West Coast not to return to his property to complete installation or for any other purpose.

[95] There is no dispute that after 2006 Van Evans experienced difficulties with the spa’s operation.

[96] On September 5, 2007, Home and Leisure billed Van Evans $2,490.22 for the replacement and installation of a new Topside Control (Exhibit 1 Tab 6). That Topside Control was defective and Van Evans recovered judgment against the installer in that amount.

[97] On July 7, 2008 Rand Pools billed Van Evans $490.50 to rebuild the pump (Exhibit 1 Tab 9).

[98] As previously reviewed, in the fall of 2008, Stewart Risto, a Cal Spa dealer, disconnected the ozonator because it was causing the pump to turn off. Warranty coverage for Risto’s attendance was denied.

[99] Because of the breakdowns and because the ozonator was later disconnected in 2008 requiring higher levels of chlorine for its operation, Van Evans considered the spa to be unusable from 2006 through 2009. He contends the breakdowns were solely caused because the main pump, electrical panel and ozonator installed by West Coast were never operational.

[100] However, this assertion requires review in light of Van Evans’s maintenance of the spa between 2006 and 2009.

[101] In cross-examination, Van Evans admitted that from 2006 to 2009 each spring he filled the spa with water and in October or November of each year the spa was drained and winterized. Exhibit 1 Tab 9, two invoices from Rand Pools and Spa, confirm winterization in November 2006 and 2007.

[102] Exhibit 5, the Owner’s Manual, cautions against winterization and recommends that the spa be operated 365 days a year:

“In many areas of the country, the temperature drops below 32 degrees Fahrenheit. We recommend that you always have your spa full of water and running at normal spa temperatures (80 degrees Fahrenheit to 100 degrees Fahrenheit). This will help reduce the risk of freezing in your spa and your spa’s equipment.

WARNING: IF YOU FIND THE NEED TO DRAIN YOUR SPA, PLEASE BE AWARE OF THE POTENTIAL OF FREEZING IN YOUR SPA EQUIPMENT AND PLUMBING. EVEN IF THE DIRECTIONS BELOW ARE FOLLOWED PERFECTLY [re draining and winterizing], THERE IS NO GUARANTEE THAT YOUR SPA WILL NOT SUFFER FREEZE DAMAGE AND THEREBY VOID THE WARRANTY COVERAGE.”

[103] I have already found, contrary to Van Evans’s evidence, that Exhibit 5 was left at Van Evans’s home on the delivery date in October 2005 and that Cutaia instructed Karen Van Evans to review the manual.

[104] Cutaia’s evidence was not contradicted that when he delivered the spa on October 21 he provided a cover for the spa. Covering of the spa when not in use is recommended in the Owner’s Manual:

“Important! Keep the spa covered when not in use...You are required to keep the spa covered to maintain warranty coverage.” (Exhibit 5 pg. 41).

[105] I accept Cutaia’s evidence that when he attended Van Evans’s property on November 21, 2005 for installation, the cover was half off the spa and he observed one to two feet of water in the bottom of the spa. He was concerned about this residual water and advised Van Evans to have it removed.

[106] The additional importance of covering the spa with a tarp when the spa is winterized, was corroborated by the instructions left with Van Evans by Rand Pools who winterized the spa for him the next year in November 2006:

“Customer responsible for keeping water out of spa. Recommend covering with tarp.” (Exhibit I Tab 9)

[107] Cutaia testified that he attended Van Evans’s residence on November 24, 2009 with the permission of Van Evans’s counsel to conduct an inspection of the spa. He took photographs of the spa and its components (Exhibit 7A to 7J). On that date, the spa had already been winterized. Photograph 7G depicted anti-freeze present in the bottom of the spa with two empty anti-freeze bottles laying on their side.

[108] Referring to photograph 7B, Cutaia testified that the spa was not properly winterized; contrary to the instructions to Van Evans by Rand Pools in 2006 and instructions in the Owner’s Manual (Exhibit 5 p.55):

“WINTERIZING (Cold Climate Draining)...Cover your spa with a good spa cover and an all-weather tarp to ensure that either rain nor snow enter the spa.”

[109] The spa was only covered with the cover supplied by the manufacturer and not additionally with a winter tarp.

[110] Referring to photograph 7E, Cutaia testified that the spa was empty of water but the power had not been turned off and the pump was still running. He testified the spa with no water in it was overheating. This would cause damage to the heater, the pump and the spa’s control panel.

[111] Referring to photograph 7F, Cutaia testified that the plumbing unions had not been disconnected from the spa in order to ensure that the lines had been blown clear of water to avoid freezing.

[112] Van Evans submits that Cutaia’s inspection of the spa in November 2009, without running it is not helpful and not relevant to this action. I disagree with this submission.

[113] In submitting that the spa’s breakdowns from 2006 and 2009 were caused solely because the main pump, electrical panel and ozonator installed by West Coast were never operational rending the spa unusable, the lack of proper maintenance of the spa by Van Evans as late as 2009, is highly relevant.

[114] Although I accept that Van Evans experienced problems with the spa between those years, there is no evidence other than Van Evans’s self-serving speculation that those problems occurred because West Coast installed defective components in 2005. Cutaia’s evidence of his 2009 inspection is not undermined because he did not operate the spa. The winterization and maintenance of the spa in 2009 was error ridden on a number of fronts. I accept Cutaia’s evidence that those errors individually or collectively could cause damage to the spa’s components causing the spa to breakdown. Van Evans called no evidence that the maintenance of the spa in 2009 was a departure from his maintenance in the years 2006 through 2008.

[115] I find any breakdowns to the spa and the reduced use of the spa, as submitted by Van Evans, did not result from any breach by West Coast and other defendants.

[116] For the aforementioned reasons, Van Evans’s action is dismissed. Having dismissed the action, the question of damages requires no review.

THE COUNTERCLAIM

[117] Was Van Evans’s hold back of the $2,000 a breach of the August 15, 2005 contract which provided that full payment of the contract price was to be made on the date of delivery?

[118] The express terms of the contract (Exhibit A Tab 2) have already been reviewed. Both parties agree that the contract stipulates that the balance of the contract price ($19,700) is to be paid on delivery. I have already found that the spa was delivered on October 15, 2005. On that date West Coast did not receive any monies.

[119] There is no dispute that Van Evans held back the $1,800 still outstanding and the $200 for the cost of plumbing hook up until installation to his satisfaction was completed in the spring of 2006.

[120] For reasons already reviewed, West Coast did not complete installation. There is no dispute that the $2,000 was never paid by Van Evans.

[121] West Coast submits that Van Evans has breached his contractual obligation to pay the balance owing - $2,000 less the value of the installation work to be completed – namely $200 for that work. West Coast seeks judgment of $1,800, interest on that amount and its costs for this action.

[122] Van Evans denies any breach, submitting that the reasonable commercial interpretation to be given to the term “delivery” includes the delivery and installation of a fully functional and operational spa. He submits that since West Coast did not fulfill these obligations, it is not entitled to any judgment on its counterclaim.

FINDINGS

[123] Van Evans argues that the principle of construction “contra preferendum” requires that provisions in agreements and other written documents that suffer from ambiguity are to be construed against the interest of the person who drafted the ambiguous provision. Among other things this doctrine works against unfair surprise of the non-drafting party.[^1]

[124] Van Evans submits that any ambiguity in the wording of the contract is to be construed in his favour since Cutaia has a law degree, has practiced law in the past, and drafted the contract.

[125] I reject this submission for the following reasons:

1. There is no ambiguity in the wording of the contract regardless of who drafted it.

2. The balance of payment was due on “delivery”.

3. “Delivery” expressly or by implication does not include installation, even more so full installation of a functional and operational spa as submitted by Van Evans.

[126] There is no provision in the contract that permitted Van Evans to hold back any payment upon delivery regardless whether or not installation was completed to his satisfaction. This submission defies common sense and is inconsistent with commercial reasonableness.

[127] For the aforementioned reasons, judgment on the Counterclaim is awarded to West Coast in the amount of $1,800.

[128] If the parties cannot agree on the prejudgment interest rate or its commencement date or costs of both actions, written submissions are to be forwarded to the Court to the attention of the Trial Co-ordinator within 30 days of release of this judgment by the defendants West Coast and Groupe Sima. The plaintiff shall have 15 days thereafter to respond. The defendants shall have 10 days thereafter to reply.

The Honourable Mr. Justice A. Sosna

DATE RELEASED: February 24, 2012

[^1]: The Law of Contracts John D. McCamus [2003] p.722.