ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-104363

DATE: 20131129

CORRIGENDA: 20131129
CORRIGENDA: 20140122

BETWEEN:

Ella Raitman and Samuel Raitman

Plaintiffs

– and –

Medallion Development Corporation

Defendant

In person

Matthew P. Maurer, Counsel for the Defendant

HEARD: November 25 and 27, 2013

revised Reasons for judgment

The text of the original endorsement has been corrected with the text of the corrigendum (released today’s date)

Boswell J.

[1] Three years ago the plaintiffs purchased a house to be constructed. They paid over $700,000 for it. They were disappointed with the delivered product. Their disappointment led to complaints and then to this lawsuit. These are my reasons for judgment following a trial.

[2] The substantive issues for trial were whether the parties agreed that the basement of the plaintiffs’ home would have a finished ceiling clearance of 7’10” and, if so, whether the defendant breached the agreement in that respect.

The Incorrectly-Named Defendant

[3] The plaintiffs named Medallion Development Corporation (“MDC”) as the defendant to this action. In its statement of defence, MDC indicated that it was improperly named as a party and that the corporate entity with whom the plaintiffs contracted was in fact Medallion Developments (South Maple) Limited (“Medallion”). At the outset of the trial, the Court inquired of the plaintiffs whether they wished to amend their claim to name Medallion as the defendant in this action. Counsel to Medallion indicated his consent to such an amendment. The plaintiffs said they did not wish to amend their pleadings, that they thought Medallion was no longer an operating company, that Medallion was a subsidiary of MDC and that MDC was therefore vicariously liable for the actions of its subsidiary.

[4] I find as a fact that the plaintiffs contracted with Medallion and not MDC. There is no basis in law or in fact, on the record before the Court, on which to find MDC liable for the plaintiffs’ claim. On this basis alone the plaintiffs’ claim must be dismissed. The Court encouraged the plaintiffs to amend their pleading, without success. The plaintiffs’ insistence on pursuing MDC is, unfortunately, fatal to their claim.

[5] Having said that, I do not intend to end the judgment at this point. It would be unsatisfactory in my view, despite the plaintiffs’ position, to render a decision solely on the basis that the plaintiffs named the wrong party when anyone looking at this claim can readily see that there was an agreement between the plaintiffs and Medallion. Justice requires, in my view, that the claim be examined as though Medallion had been appropriately named. At the end of the day, in any event, I find that Medallion has no liability, for the reasons that follow.

The Disappointing Basement

[6] The plaintiffs purchased a two story single family residence from Medallion, by agreement of purchase and sale (“APS”) dated February 7, 2010. The home has a substantially finished basement with a walkout.

[7] The basement ceiling is too low, from the point of view of the plaintiffs. There is no question that it exceeds the minimum requirements of the Ontario Building Code, but aesthetically it is not pleasing. The finished space appears dark, and causes the plaintiffs to feel closed in.

[8] The plaintiffs described the basement and entered photographs into evidence as exhibits. I agree with the plaintiffs that the ceiling appears low, at least by aesthetic standards. In an otherwise modern and very appealing home, the basement stands out as somewhat of an oddity. The plaintiffs have not been comfortable using it for the home office space they intended, nor have they entertained in it because they are embarrassed by it. In my view, their disappointment is justified. That said, disappointment with the finished product does not necessarily equate to breach on the part of Medallion.

The Contract

[9] The APS – at least the copy filed as an exhibit at trial – is some 45 pages in length. Each page is initialled by the plaintiffs. They had an opportunity to review the agreement with Medallion’s sales representative. They raised no complaints about the conduct of the sales person, nor the manner in which she reviewed the APS with them. Indeed Mrs. Raitman described the sales person’s conduct as “perfect”, in terms of what she would have expected.

[10] The APS was conditional for a period of five days on the plaintiffs obtaining legal advice regarding its legal terms. They took advantage of the conditional period and in fact obtained legal advice about the terms of the agreement.

[11] It is common ground that the APS does not include a provision regarding a minimum height requirement for the basement ceiling.

[12] The APS does include a number of other clauses relevant to the determination of the claim. In particular:

11(a) …there is no representation, warranty, guarantee, collateral agreement or condition precedent to, concurrent with, or in any way affecting this Agreement or the Property other than as expressed herein and more specifically, the Purchaser absolves the Vendor from any representations made by any and all sales representatives unless the same have been reduced to writing herein. This Agreement represents and expresses the entire Agreement between the parties.

11(b) …The parties agree that the Purchaser…will meet at the Dwelling on or before the Closing Date to conduct the pre-delivery inspection (the “PDI”)…During such inspection all uncompleted and defective work, if any, shall be listed in writing on the Certificate of Completion and Possession form (the “CCP”) and the Pre-Delivery Inspection form (the “PDI Form”) provided for by Tarion and which forms shall be signed by the Purchaser and Vendor’s representative. Save as so listed the Purchaser shall be conclusively deemed to have accepted the Property as complete in accordance with the Agreement…

11(h) The registration of the transfer to the Purchaser shall constitute acceptance by the Purchaser of the Property and shall be deemed to be a complete release by the Purchaser, of the Vendor under this Agreement from any and all liability of any kind whatsoever under this Agreement save only for the completion after closing of the work, if any, listed as aforesaid on the CCP and PDI Form, or, if there is no list, as required to be done in accordance with the Agreement.

The Pre-Delivery Inspection

[13] A pre-delivery inspection took place on November 23 or 24, 2010. The plaintiffs recognized that the basement ceiling appeared low, but had very little discussion about it. Mrs. Raitman said she asked Medallion’s representative, “why so low?” The only reply she noted was the representative’s question as to whether they had purchased a ceiling height upgrade, to which she replied no. They did not note any concern about the basement ceiling on the PDI Form.

[14] The purchase closed on November 25, 2010. The plaintiffs’ lawyer raised no concerns with Medallion or Medallion’s counsel prior to closing regarding the height of the basement ceiling.

The Alleged Representation

[15] When the plaintiffs first attended Medallion’s sales office, they stumbled upon a document entitled “Structural Upgrades Price Sheet”. The first available upgrade on the list appeared as follows:

Basement ceiling height upgrade

to approximately 8’4” (standard approximately 7’10”) $7500

[16] Mrs. Raitman said she asked Medallion’s sales person, Leanne Schmid, whether the price sheet was current. Ms. Schmid said she thought there was a new one, which would be mailed to them after the APS was signed. There was no particular discussion on the subject of the basement ceiling height.

[17] The Structural Upgrades Price Sheet was admittedly not provided to the plaintiffs by Ms. Schmid. Mr. Raitman acknowledged that he found it while looking through cupboards in the sales centre. An updated Structural Upgrades Price Sheet was, however, mailed to the plaintiffs after the APS was signed. It included the same language about the upgrade to the basement ceiling height, but the price was increased to $9200.

[18] The plaintiffs subsequently met with another representative of Medallion, Ms. Judy Levine, in May 2010, at Medallion’s Décor Centre. The purpose of the meeting was to select finishings and to review the available upgrades. The plaintiffs concede that there was no discussion about the height of the basement ceiling while meeting with Ms. Levine save that Ms. Levine asked if they wanted the upgraded ceiling height and they said no.

[19] To the extent that there was any representation regarding the height of the basement ceiling, it is restricted, in this case, to the reference to a standard ceiling height of 7’10” mentioned on the Structural Upgrades Price Sheet.

[20] Mrs. Raitman testified that the Upgrades Price Sheet was clear and unambiguous regarding the standard basement ceiling height. In the result, she did not ask any questions about it. She said she discussed with her husband whether they wanted an upgraded ceiling height and they decided 7’10” was high enough and that they’d be better to spend their available funds on other upgrades.

The Ceiling Height

[21] The plaintiffs have taken measurements of the as-built, finished ceiling height in their basement. The measurements range from a low of 78.5” below the main duct running through the basement to a high of about 90.5”.

[22] The Ontario Building Code provides for a minimum basement ceiling height of 77” under ductwork. Moreover, 75% of a basement ceiling must be at least 83” high. I have no evidence to support an assertion that the minimum standards established by the Building Code were not met, nor is such an assertion being made.

The Allegation of Breach

[23] It is the position of the plaintiffs that the reference to a standard basement ceiling height of 7’10” as set out on the Structural Upgrades Price Sheet is in fact a term of their contract with Medallion. I cannot agree with that assertion.

[24] It is, in my view, at its highest, a representation that the standard basement ceilings height was approximately 7’10” high. I accept that the plaintiffs relied on that representation in electing not to pay for an upgraded ceiling height. I have no evidence that they relied on it in terms of their decision to purchase the home in the first place. In fact, the evidence is to the contrary. The APS was signed prior to the Structural Upgrades Price Sheet being delivered to the plaintiffs.

[25] At any rate, it is clear that the contract did not contain a provision that required Medallion to construct the basement with a ceiling height of 7’10”. Paragraph 11(a) is an entire agreement clause which, in my view, completely forecloses the plaintiffs’ argument that the reference to a standard ceiling height in the Structural Upgrades Price Sheet rose to the level of a contractual term: see Mid Park Construction (1998) Ltd. v. Krofchick 1992 CarswellOnt 626, 28 R.P.R. (2d) 80. Moreover, on the plain wording of the contract, the plaintiffs’ failure to note a deficiency with respect to the basement ceiling on the PDI Form and their decision to close the purchase transaction without mention of any ceiling height deficiency, preclude them from raising the alleged deficiency now.

Conclusion

[26] In the result, the plaintiffs’ claim is dismissed. If the parties cannot agree on the matter of costs, they may make submissions to me in writing. Their submissions are not to exceed 3 pages in length. Medallion shall make its submissions by December 10, 2013 and the plaintiffs shall make their submissions by December 20, 2013. Submissions should be delivered to my assistant, Jennifer Beattie by email to Jennifer.beattie@ontario.ca.

Boswell J.

Released: January 22, 2014

CORRIGENDA

1. The Defendant as set out in the Citation on page 1 has been corrected to read:

“Medallion Development Corporation”