Ontario Superior Court of Justice

COURT FILE NO.: CV-07-085010-00
DATE: 20130910

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

The Birkshire Group Inc.

Plaintiff

– and –

David Wilkes and Angela Wilkes

Defendants

Joel S. Kuchar, for the Plaintiff

Self Represented

Peter-Paul Du Vernet, for the Defendants, for Closing Arguments on November 20, 2012 only

HEARD: May 25, 29, 30, 31, June 6, 7, 8, August 24, and November 20, 2012

REASONS FOR DECISION

Edwards j.

Overview

[1] A chance encounter while the defendants were in the Forest Hill neighbourhood, of the City of Toronto where the plaintiff was undertaking an extensive renovation of a large home ultimately lead to the plaintiff, undertaking various renovations on the defendants home in Richmond Hill (the “residence”).

[2] The plaintiff in this case is in the business of home renovations. The defendants own their residence, which if their evidence was accepted, they intended to renovate with a view to ultimately selling the property. The initial encounter involving the plaintiff and the defendants occurred in October of 2006. This encounter ultimately leads to a meeting involving the president of the plaintiff corporation, Michael Fiume (“Michael”) and the defendants at their residence in November 2006. At that time a walkthrough at the defendants’ residence took place and the defendants provided Michael with what essentially amounted to a wish list. Michael then prepared what is described as a “budget” for the various items that the defendants wished to renovate. The total of the budget came to approximately $126,000.00.

[3] The budget proposal was provided to the defendants at a meeting involving Mrs. Wilkes and Mary Fiume who is Mr. Fiume’s wife. I will refer to Mrs. Fiume as (“Mary”) throughout these reasons. Mary is an interior designer and on the evidence I heard works very closely with her husband Michael, although she maintains her own independent business known as Fiume Interiors. Ultimately one of the issues that this court was called upon to decide is whether or not Mary represented herself to the defendants as someone who is either employed by and/or was a partner with Michael.

[4] At the meeting between Mrs. Wilkes and Mary it became clear that some of the items in the initial budget proposal of November 20th were not items that the defendants wished to proceed with. This resulted in a new budget proposal the total of which came to just under $92,000.00. At this meeting when various items were deleted from the initial budget proposal Mrs. Wilkes testified that she made clear to Mary that the defendants had a maximum budget of $100,000.00 and that the renovations had to be completed by mid January 2007 so that the residence could be listed for sale. For reasons that will become clear, I reject the evidence of Mrs. Wilkes that she told Mary, that they had a maximum budget of $100,000.00 and that the renovations had to be completed by January 15th. I also reject her evidence that the budget of $100,000.00 included such items as landscaping, the installation of a new front door, and a new stone front entrance.

[5] As events unfolded the renovation commenced in late December 2006 with the installation of crown mouldings, and progressed through to the early part of April 2007, at which point in time the relationship between the plaintiff and the defendants had deteriorated. The cause of the deterioration in the relationship would appear to be in part due to a request by the plaintiff for a further draw of $20,000.00 to be applied against the renovations that hadn’t been completed by that point in time. As of April of 2007 the plaintiffs had paid $60,000.00 to be applied against the contract price. One of the fundamental issues this court has to decide is what the contract price was, and what the terms of the contract included.

[6] The plaintiff filed a lien against the defendants’ residence in late April of 2007 for a total of approximately $68,000.00.

The Case for the Defendants

[7] Unlike many construction projects where the homeowner may be perceived to be unsophisticated in the world of renovations, the Wilkes are two well-educated and highly intelligent individuals. Mr. Wilkes has a PhD in computer science and runs his own computer software company. Mrs. Wilkes has a science degree from The University of Toronto, as well as a partially completed Masters degree. She completed two years of what she described as an articling program with one of the major accounting firms and went on to run her own company for five years.

[8] The residence which is the subject matter of these proceedings was purchased by the Wilkes in March 2000 for approximately $600,000. By the time this case came to trial before me, the house was listed for sale at $2,780,000, having been previously listed by the Wilkes in 2008 for $2,480,000. In addition to the residence, the Wilkes also maintained a home on Teston Road, as well as a home in England. For reasons best known to the Wilkes, they chose, with the exception of retaining counsel for closing argument, to represent themselves throughout the trial.

[9] Michael is the president of the plaintiff, Birkshire Group Inc. (“Birkshire”), which is a company that has been doing residential and some commercial renovation work since 2004. After speaking with the Wilkes about what they wanted done at their residence, as previously noted a budget (the “budget”) was prepared which is dated November 20, 2006, which established a “preliminary list of preliminary job costing of items discussed at the site meeting”. The budget as previously discussed provided for a total costing of $126,064. This estimated costing did not include the cost of landscaping, the cost of a new front door, nor the cost of a new stone front entrance.

[10] Subsequent to the initial meeting between the parties, there then followed a meeting between Mary and Mrs. Wilkes at Mary’s place of work. What occurred at this meeting is the subject matter of a factual dispute between Mary and Mrs. Wilkes.

[11] Mrs. Wilkes maintains that she made it very clear to Mary that the maximum amount that they could commit to their renovation was $100,000. Perhaps more importantly, Mrs. Wilkes maintains that she made it clear to Mary that the renovations had to be completed by mid-January 2007. The completion date was critical from the perspective of Mrs. Wilkes because they wanted to have the residence ready to be listed for sale. Mary gave a completely different version of what happened when she first met with Mrs. Wilkes to discuss the budget. Mary denied that there was any discussion about a January completion date and that there was no discussion about a maximum budget of $100,000.

[12] In coming to the ultimate conclusion that I have about what was discussed and agreed to between Mary and Mrs. Wilkes, I have both considered the manner in which these two witnesses presented their evidence, as well as the documentary evidence and lack of documentary evidence.

[13] As a witness, I found both Mr. and Mrs. Wilkes, at times, evasive and, at other times, unwilling to answer simple questions without a long explanation. Unlike the Wilkes, I generally found both Mary and Michael to be straight-forward in their answers.

[14] What is particularly telling about the theory advanced by the Wilkes, in their evidence, is the absence of any documentation between mid-January 2007 and mid-April 2007 that suggests that time was of the essence. Not until early April 2007 when issues have arisen between the parties about the work being done by Birkshire is there any mention of a completion date in January 2007. If January 2007 was so fundamental to the Wilkes’ plans to sell their residence, it is not unreasonable to have expected that the Wilkes would have been documenting their concerns well before April 14, 2007. This is particularly so, given the evidence of Mr. Wilkes that he would not enter into a contract worth $100,000, which was not properly documented.

[15] Furthermore, the Wilkes did not present any corroborative evidence from their real estate agent that, in fact, they had plans to sell their home in January 2007. In an email of April 14, 2007 from Mr. Wilkes to Michael and Mary, Mr. Wilkes stated that their plan to sell their home could be confirmed by their real estate agent. The failure of the Wilkes to call evidence to corroborate such a fundamental term of the contract (i.e., a completion date of January 14, 2007) undermines not only this part of the Wilkes’ theory, but more importantly undermines their credibility as a whole.

[16] The Wilkes’ maintained in their evidence that the Michael and Mary were well aware that they had a total budget of $100,000 to complete all the renovations at the residence. This figure included the various interior renovations that are reflected in the budget but also exterior landscaping, a new front door, and a new stone front entrance. The budget also included the cost of what Mrs. Wilkes described as a real limestone fireplace. Significantly, evidence was presented at the trial by the plaintiff that the cost of a limestone fireplace, like that which Mrs. Wilkes maintains she contracted for would have been approximately $45,000. This is significantly higher than the budgeted cost of approximately $12,000. This aspect of the Wilkes’ evidence is completely lacking in credibility and again detracts from the overall credibility of the Wilkes’ evidence as a whole.

[17] One of the more significant motivating factors in causing the Wilkes to undertake renovations to their home arose out of damage to their hardwood flooring. The budgeted cost for sanding and re-staining the floors was originally set at $10,500. Once the flooring contractor was brought into the residence by Birkshire to commence work on the flooring, it became readily apparent that the floors could not be re-sanded. A “stop gap” method of repair was the chosen course of action, at a much reduced cost. The Wilkes now argue that because of the poor workmanship in relation to the hardwood floors caused by the plaintiff that it will now cost in excess of $35,000 to replace the floors.

[18] What is again particularly telling in the documentary evidence is any mention made by the Wilkes in the exchange of emails which took place in April 2007, filed as evidence, about any concerns about the state of repair or method of repair of the flooring. What is particularly telling is the glowing commentary in the material prepared for the real estate listing of their home, including the hardwood flooring. Accepting that it was unlikely that the Wilkes would have drawn attention to defective hardwood flooring in promotional material put together in connection with the sale of their home, nonetheless, I accept the evidence of Michael that the work done by Birkshire on the Wilkes’ hardwood flooring was, in fact, a “stop gap” measure only. It was a “stop gap” measure agreed to by the Wilkes. The Wilkes were under no illusions that they would have pristine hardwood flooring intended to last another generation. Certainly, it was never contemplated that they would be entitled to brand new hardwood flooring as suggested by the Wilkes at various times in their evidence and in closing argument. I do not accept the evidence of the Wilkes in connection with the theory that they advanced concerning their hardwood flooring.

[19] Other aspects of the evidence of the Wilkes also detracts from the credibility of the overall theory of their defence and counterclaim. The Wilkes have maintained that the overall budget which they had to complete their project, included the cost of landscaping. If this were the case, and assuming that the house was to have been listed in January 2007 as suggested by Mrs. Wilkes in her evidence, there would then have been the possibility of a sale shortly thereafter. I fail to understand why the Wilkes’ would then have been considering landscaping as part of their overall budget of $100,000, where there was at least some reasonable probability that the house would have been sold prior to any point in time when landscaping, given winter conditions, could have been undertaken. This aspect of the Wilkes’ case, again, lacks credibility.

[20] I have previously described the limestone fireplace and how this impacts on the total cost of the renovation. Mrs. Wilkes had seen a limestone fireplace during the chance encounter that she had with the plaintiff in the Forest Hill neighbourhood in the Fall 2006. She had seen a limestone fireplace in the Forest Hill home and decided that she would like to duplicate this fireplace. As the evidence unfolded at trial, I accept the evidence of Michael that Mrs. Wilkes picked the model that she wanted and that she got what she contracted for. Specifically, she contracted for a Windsor Arms limestone finish fireplace. Given the other significant renovations that the Wilkes wanted completed at their residence, it is totally lacking in credibility that the Wilkes’ would have dedicated close to 50 per cent of their total budget to the type of fireplace that Mrs. Wilkes now maintains that she had contracted for. Where the evidence of Mrs. Wilkes is contradicted by the evidence of Michael and Mary as it relates to the fireplace, I accept the evidence of Michael and reject the evidence of Mrs. Wilkes.

Theory of the Plaintiff

[21] As I indicated in my overview, one of the critical questions that this court has to resolve is what the contract provided for and at what costs. Both Michael and Mary, in their evidence, make clear that the budget, dated November 20, 2006 was essentially a wish list that the Wilkes’ could add to or delete as they saw fit. Ultimately, various items reflected in the budget were, in fact, deleted, such as, the items with respect to the master ensuite and the staircase, as well as the suggested figure of $10,500 to sand and re-stain the hardwood floors was ultimately changed given the difficulties that were presented once the hardwood flooring subcontractor was called upon to undertake the work. For the reasons set forth above, I do not accept the evidence of the Wilkes as credible. Ultimately, I accept the evidence of Michael and Mary that the total contract price that was agreed to was $91,673.04. This contract price reflected the deletion of the previously mentioned items. There was no contractual term that required Birkshire to complete the renovations by mid-January 2007 as suggested by the Wilkes’ in their evidence.

[22] In addition to the items reflected in the revised budget, there were various extras that were requested by the Wilkes and completed by Birkshire. Anyone who has been involved, in any way, with the renovation of their home will quickly appreciate that during the course of a renovation there may very well be items that will be deleted and for that matter a number of items that will be considered extras. The renovation involving the residence was no different. During the course of the renovation, I accept the evidence of Michael that there were, in fact, various extras requested by the Wilkes, the total of which came to approximately $32,000. As such, the total contract price that was agreed to, not only when the budget was approved by the Wilkes, but more importantly, as the work unfolded with the addition of various extras, was $123,565. The Wilkes’ have paid $60,000.

[23] The Wilkes’ maintain that they have a counterclaim for an amount which is pleaded in the counterclaim of $200,000. A significant portion of the counterclaim relates to the additional cost to replace the hardwood flooring and the limestone fireplace. What is particular telling with respect to the position taken by the Wilkes in relation to the counterclaim and in relation to the total contract price is the fact that when the relationship between the parties began to deteriorate in April 2007, despite the issues raised by the Wilkes at that time, there still was a willingness on the part of the Wilkes to make a further payment of $20,000 to Birkshire on account of the work that had been undertaken to that point in time. In an email from Mr. Wilkes to Michael and Mary, dated April 14, 2007, amongst other things, Mr. Wilkes stated:

…Angela had a $20,000 payment with her at this time. This was an expectation of Mary providing the required receipts, contractor invoices, and related documentation, which Angela had clearly requested from Mary. Angela had prepared the payment in good faith, with the expectation that you had stayed within budget for the overall project…

[24] At a point in time, where the relationship between the parties was clearly deteriorating and where the bulk of the renovation work had been completed by the plaintiff, it is difficult to understand why the Wilkes would have then been prepared to make a further payment of $20,000, given the position that they now advance at trial. It is clear to me, having now heard the evidence as a whole, that the Wilkes knew full well, as of April 2007, that they were responsible for a significant unpaid portion of the contract, hence the willingness to pay a further $20,000.

[25] For the reasons set forth above, I accept that the unpaid portion of the contracted for price between the plaintiff and the Wilkes is $63,565 (i.e., the adjusted budget of $91,673, plus extras of $31,892.38, less $60,000 paid on account, for a net amount owing by the Wilkes to the plaintiff of $63,565).

[26] With respect to the counterclaim and action involving Mary and her company, I heard a substantial amount of evidence with respect to deficiencies in the work undertaken by the plaintiff. This included the work in relation to the hardwood flooring, issues with respect to the work undertaken by the plaintiff for the master ensuite and the jack and jill washroom. There were also issues with respect to damage to the granite kitchen counter top. The Wilkes also maintain that employees of Birkshire or one of its subcontractors dropped a chandelier that was not properly repaired. I accept that, in fact, the chandelier was damaged as a result of the conduct of the plaintiff and that it was not properly repaired. I do not accept that the plaintiff is responsible for the cost of replacing the chandelier that was estimated by the Wilkes to be something in the order of just under $12,000.

[27] The evidence, as it was presented by the Wilkes, with respect to the various deficiencies, the action involving Mary and her company, and the various costs of repair was disjointed and, at times, very difficult to understand. This was, in part, a reflection of the fact that the Wilkes’ chose to represent themselves. Doing the best that I can with respect to the various deficiencies and repair costs, I am reducing the total amount that is owed by the Wilkes to the plaintiff from the aforesaid figure of $63,565 to a total of $50,000.

[28] Subject to further argument with respect to pre-judgment interest and costs, I am therefore ordering the defendants to pay to the plaintiff the sum of $50,000, plus the appropriate pre-judgment interest and costs. The action against Mary and her company is dismissed. It may very well be that there are issues with respect to costs and pre-judgment interest that will require further submissions by the parties, I would strongly encourage all parties to this litigation to consider their positions with respect to pre-judgment interest and costs so as to minimize any further litigation costs. If the parties cannot resolve those issues, written submissions are to be received by the court no later than October 15, 2013. If oral submissions are required, an appointment is to be made with the trial co-ordinator.

Justice M.L. Edwards

Released: September 10, 2013