BARRIE COURT FILE NO.: 11-0162

DATE: 20140319

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ROB MARCHAND CONSTRUCTION LTD.

Plaintiff

– and –

BLAINE M. SCOTT and BARBARA JEAN SCOTT and MERIDIAN CREDIT UNION LIMITED

Defendants

P. Krysiak, for the Plaintiff

P. Horgan, for the Defendants Blaine M. Scott and Barbara Jean Scott

HEARD: November 12, 13, 14, 15, 18, 19, 20, 21, 22, 25 and 26, 2013

REASONS FOR DECISION

HOWDEN J.:

Overview

[1] In 2009, Blaine and Jean Scott decided that they either had to buy a larger house or expand their present home at 1075 Everton Rd. in Midland. They considered the size of their anticipated household, being themselves and five children, one of whom was an adult. But a recent injury meant that he would need to live at home, plus Mrs. Scott’s mother. The present home contained 1200 sq. ft. in living space with only one bathroom. They decided that year to renovate and enlarge their present home. They sought out an architectural design firm to produce drawings incorporating their ideas and needs. In this case, it was Dupuis & Ouellet Inc., a local firm which was experienced in producing house designs for renovations and new homes. Mr. Scott then contacted Rob Marchand, principal of the plaintiff corporation, and brought the drawings to him for his perusal. Essentially, the plans were to add a second floor to a bungalow.

[2] The three parties, Blaine and Jean Scott and Rob Marchand, met together at his office during the first week of May 2010. Mr. Marchand had by then drawn up an estimate setting out in eleven pages his proposals for the renovation. According to Mr. Scott, the discussion included garbage costs, limitation on plumbing and other trades to rough-in only, express exclusions from the contract (central vacuum), expected completion date, weekly site up-dates, payment terms, explanation of extras, and credit for Hydro. Mr. Scott recalls they signed the quote. Rob Marchand does not recall that; his memory was no one signed the quote as he was not in the habit of doing that. Mr. Scott said that he could not produce a signed copy because Mr. Marchand collected them at the meeting saying his assistant would send one to them. The Scotts say they never received it, though they did receive an unsigned copy or copies.

[3] The quote from Mr. Marchand in effect became part of the contract between them dealing with the scope of work and the agreed price of work and material. The agreed price came to $259,345 (p.1 of quote). It is silent as to terms of payment and anything else other than the work that was to be done. Therefore the parties’ agreement here was partly in writing and partly oral. They agreed orally that progress payments, or draws against the full contract price, of $30,000 or less be paid every 2 weeks and the initial deposit was to be the same, $30,000. Those terms were acted on, each payment was invoiced by Marchand, and paid until November 10, 2010 when the breakdown in their relationship seemed to begin. The last day of work by the plaintiff’s people was November 19, 2010. The work had begun in late May. Marchand estimated that the job was 90% to 95% complete when the contract was terminated. and that only work and material totalling $12,995 remained to be done

Positions of the Parties

(i) The Plaintiff Robert Marchand Construction Ltd.

[4] For the plaintiff builder, Mr. Krysiak submitted that the defendants breached the contract by refusing to pay the November 10 progress payment invoice by the plaintiff and then by refusing the plaintiff’s reasonable counter-offer of December 7, 2010 where he agreed to do all ten items listed by the defendants and the money for the balance of the interim payment less the holdback to be paid following completion of those items. As well he agreed to complete the contract when the amount specified as the balance of the contract price was confirmed as being held in trust by the Scotts’ lawyer for release on completion. No answer came for several weeks. Finally on January 13, 2011, some thirty-five days later, the defendants’ lawyer communicated their refusal to agree and that they would seek other contractors to complete the work. As well, Mr. Krysiak asserted that the Scotts continually caused delays by ordering more and more extras and by their indecision over various aspects of the project, failing to allow the project to go ahead with timely directions. In those circumstances, Mr. Krysiak submits that the plaintiff is not liable for any delay so found and is entitled to judgment for damages in the amount of the balance owing on the contract plus three final invoices for extra work outside the scope of the contract (Ex. 3, tabs 120 - 122). That amount was $35,386.26 less credits owed the Scotts of $5,287.51 for the garage doors, central vacuum, and generator. Those items were either excluded from the contract when it was negotiated (i.e. the vacuum) or not provided. The balance owing to the plaintiff is $30,098.75.

[5] In the plaintiff’s submission, the defendants’ counterclaim is for damages largely for items paid to other contractors allegedly to complete the contract or for work outside the scope of the contract. Their claim for living expenses for alternative accommodation and expenses for six months beyond September 30, 2010 was groundless because there was no firm completion date ever agreed to and the delay in completion was caused primarily by the Scotts’ inability to decide what they wanted in finishes like window and door dimensions and location of fixtures. In the plaintiff’s view, the counterclaim is exaggerated or totally unfounded.

(ii) The Defendants Blaine and Barbara Jean Scott

[6] The defendants’ submissions take a very different view of events and the work. Mr Horgan, on behalf of the Scotts, submits that the delay in completion of the contract was not due to the Scotts. Instead he argues that the delay was caused by Mr. Marchand’s failure to attend the site regularly, lack of consultation with the Scotts and the trades, procrastination in dealing with the Hydro connection at the street and completion of extras, and structural issues including poor placement of a load-bearing wall. He submits that, despite reasonable efforts by the Scotts to settle their differences by negotiation, Marchand terminated the contract by unreasonably demanding a progress payment that would include part of the hold-back and later demanding security for the full balance of the contract, not just the ten items that the Scotts stipulated after Marchand had removed all his gear and materials. Marchand had called off the trades, and registered a lien by November 25. Then the plaintiff’s own lawyer stated in his first letter dated December 1, 2010 that Mr. Marchand had elected to terminate the contract without any attempt to negotiate reasonably.

[7] Regarding damages, Mr. Horgan submitted that Mr. Scott’s concerns about quality of the work done was borne out by the inspection report of Peter Frueh, a qualified home inspector, and by the invoices from other contractors correcting defective work. The estimate of Marchand for incomplete work as of the stoppage of work on November 19, 2010 was $11,500. Mr. Horgan states that that estimate has been shown to have been a gross under-estimate, meaning that far less than 90% of the contract had been completed. The claim for damages is lengthy and followed the Scott Schedule and the addendum added during trial to that schedule. It shows the claims as follows:

(i) for completion of unfinished work, overcharges and correction

of deficiencies $60,489.38

(ii) for credits due the Scotts and not granted $23,944.67

(iii) for delay (extended off-site living expenses and costs for

6 months from November 23, 2010) $13,808.42

Total $98,242.47

Of the items in category (i), $4,656 was admitted as owing to the defendants by Mr. Marchand and in category (ii), $631.51 was conceded as owing. This was as of the commencement of trial. During the trial, Mr. Marchand agreed to some further credits. They will be dealt with in section 3 of these Reasons for Judgment entitled Assessment of Damages.

[8] The Scotts claim in addition what Mr. Horgan referred to as damages in an unspecified amount for added pressure and stress, loss of enjoyment of life, and change to Mr. Scott’s career plans due to early retirement from teaching incurred by this exaggerated lien claim against them and their property.

[9] Mr. Horgan included in the outline of his final submissions a list of the issues in this case. I have found that helpful in organizing my decision and will generally follow it in disposing of the claim and counterclaim in this action. The issues are:

A. The scope, price and term of the contract between the parties

B. Who is responsible for breach of this contract?

C. The amount, if any, owed to the plaintiff Rob Marchand Construction Ltd. on the contract and as extras.

D. The amount, if any, owed to the defendants in damages for correcting deficiencies and completing the contract.

E. Was the claim for lien exaggerated within the meaning of s. 35 of the Construction Lien Act, and, if so, what damages flow from that finding?

[10] Section 35 of the Construction Lien Act, R.S.O. 1990, c. C.30, reads as follows:

35. In addition to any other ground on which the person may be liable, any person who preserves a claim for lien or who gives written notice of a lien,

(a) for an amount which the person knows or ought to know is grossly in excess of the amount which the person is owed; or

(b) where the person knows or ought to know that the person does not have a lien,

is liable to any person who suffers damages as a result.

Analysis

1. Scope and Terms of the Contract

[11] As I stated in the Overview section, the contract in this case can only be described as part written and part oral. The only documented parts of the agreement between the defendants and the plaintiff as of the time of the meeting in May 2010 is the quote by Mr. Marchand consisting of ten pages and a cover page and the 12-sheet building plans drawn by Dupuis & Ouellet Inc., Architectural Design Services. It is a firm headed by Mr. Dupuis as president. He is a mechanical engineering technologist by education who is recognized as a building designer under the Ontario Building Code. The plans are dated as revised last on April 12, 2010. Sometime in April, Blaine Scott contacted Rob Marchand by telephone and, as requested, provided the plans to Mr. Marchand with an email explanation for the purpose of his giving a detailed quote. After the quote was provided, Mr. and Mrs. Scott sat down with Rob Marchand in his office.

[12] The matrix of this contract is important to determining the actual terms. Mr. Scott is a local teacher who obviously is most articulate and uses email frequently for communication. The number and detail of these emails is prolific especially for someone who describes himself as a “newbie”, a person new to the issues of home-building and renovation. They are most helpful to me in determining the facts of the contractual history here.

[13] A contract is nothing more but also nothing less than the terms which are to govern the project as intended by the parties at the time of the contract. The intention of the parties in agreeing to those terms is their contract particularly in a case where the written document they agreed to is admittedly not the complete contract. The court must consider the written documents extant at that time and signed or acknowledged as binding on them, their conduct before, at the time of, and after the agreement was reached in order to determine what their intent was, i.e. the scope and terms of their actual contract. It is not necessarily the intent of the parties as expressed after the fact and at trial.

[14] The matrix of a contract is the factual context which the parties brought to the table in arriving at a meeting of minds, their agreement. The meeting of the three parties to agree on price and the quote and other issues occurred on a day between May 4 when Blaine Scott and Rob Marchand met and May 29 when the parties’ emails indicate the project was commencing. This is the first Monday after the May long weekend which Marchand recalled as the day they commenced work. Mr. Scott recalled the date of this meeting as during the first week of May and the quote is dated May 3, 2010.

[15] The matrix of this contract can be summarized in the following evidence. As of May 2010, Mr. Marchand was a building contractor who is said to do general contracting work in the construction field including home renovation. Blaine Scott and he met twice before the final meeting which included discussion of the quote. The emails from Blaine Scott to Marchand prior to the meeting of the three parties confirm Mr. Scott’s evidence: the preliminary meetings discussed the Scotts’ ideas for the renovation and the reasons for it. On April 12, Blaine Scott’s email to Rob Marchand indicates that the Scotts had not decided on the finishes, the location of fixtures, external and internal wall materials and colour, exact window and door make and number and dimensions, in other words, the look of the finished dwelling inside and out. Mr. Scott wrote Marchand on April 12 about meeting date, one contractor for the whole project, start-up ideas and need for the garage first, and ended with this unusual paragraph:

Materials/supplies; lumber/shingles etc. purchases I hope don’t have to be included in any quote; just trades and contractors salary etc. How are you with this?

[16] Mr. Marchand replied only regarding scheduling of the meeting to discuss price, his quote and terms of the contract. But it was apparent early on in the project that the defendants were hesitant about committing themselves to materials generally. The next emails in the document books are dated May 31 by which time the contractual meeting had occurred and Marchand had the job. To him, the quote and plans were the project he was to build, subject of course to some extras for work outside the scope.

[17] The matrix for this contract included the Scott’s reason for the renovation which was a severe need for more bedrooms and space. The new plans provided for four second floor bedrooms and three bathrooms, a bath/laundry on the first floor and a two-car garage. They knew they would have to live elsewhere during construction in rented accommodation. But to them, as Mr. Scott referred to it, this project was a process which began with the plans and the contractor, and changes of plan were to be expected as their research continued throughout the building period.

[18] The quote from Mr. Marchand is eleven pages long including the cover page. No doubt because of the Scotts’ needing time to consider finishes and material it sets out with some particularity what work each segment of the building would include. Both sides understood that the quote included the work to be done by the plaintiff, and matters not listed or expressly excluded were not included within the contract price. The cover page states that the plaintiff company was to supply all labour and material for the “attached 10 pages”. The estimated job cost is $259,345. Both sides agree that the price was to be paid in stages as the work proceeded. The payments were to start before work began with a $30,000 deposit and Mr. Marchand was to invoice them for other progress payments from time to time. Except for the deposit of 10% (rounded by Marchand to $30,000), these payments were left to be as invoiced by Mr. Marchand; they did not relate to stages of building or added value as many contracts do.

[19] A summary of the quote follows with the significant evidence regarding contract terms at their meeting in early May 2010.

[20] Page 1 - Removal of roof from entire house, remove drywall from walls in living room, kitchen, garage, and entrance. The quote then stated, “Not bedroom wing at this point.”

[21] Mr. Marchand described the area of the house this referred to. To illustrate that evidence, while he was being examined, I drew a line around the main floor plan where the rooms were labelled dining room, office and laundry room on the west side of the home. It forms a rectangle on the west side. Though the rooms on the plan are not labelled as such, this main floor wing had been where the bedrooms were. Mr. Marchand said that was what was excluded from the contract by this wording. Mr. Scott, in his evidence, also agreed that the west wing as I had drawn it was not to be changed in the following respects: the lath and plaster and drywall in the west wing as described by Mr. Marchand were to be retained and not disturbed. This appeared to mean the same thing as Marchand said - those rooms were not within the contract’s scope. Ten specific parts of the house were listed for removal: roofing, drywall (“except (existing) wing with bedrooms”), insulation, existing electrical, garage surfaces and front wall of garage, front entrance walls, basement stairs, and part of concrete floor to allow for new support footing. Garbage bins and load to be supplied by the plaintiff company with cost of bins and tippage to be invoiced to defendants on a cost plus basis, i.e. “invoice plus 15%”).

[22] P. 2 - Framing - a detailed list of twenty-one items are listed. The framing for the first floor and the second floor exterior walls were to be “according to plan” and all interior walls to be “according to plan”. One item states “frame second floor according to truss company layout”. Garbage costs are included.

[23] P.3 - Roofing - a list of 7 items follow stating exactly what was to be installed, for instance, “ice and water at all eves”, “all necessary flashings”, “30-year shingles”, and garbage costs are included.

[24] P.4 - The work description is headed “This is a quote for the following Subtrades”, following which a list of twelve wiring-related matters are listed. A note at the bottom states this quote does not include wiring of heat pump/air cleaner, Hydro cable from road to house, or pot lights, and other listed lights, telephone, cable, audio, or dimmer switches.

[25] P.5 - Rough in plumbing for house “according to plan.” A list of six rooms to be roughed in, plus water line connection and piping and all inspections as required. Under this section, the quote states: “All fixtures including taps...etc. will be supplied by owner” and labour for fixture installation will be priced at the time.

[26] P. 6 Alarm, Vacuum, and Garage Doors. A price is set out for installation of each of these items. Mr. Marchand’s position agrees in the end with the Scotts’ on the exclusion of the central vacuum, and they had made their own arrangement for the garage doors. They disagree on the amount of the credit for the garage doors and I will deal with that shortly. The credit to the Scotts for the central vacuum, which they did not want and said so at the time is agreed at $1,200 + HST ($156) = $1,356. The alarm pre-wiring remained part of the contract. In summary, no adjustment was made to the price at the time of the contract being formed and therefore, as neither the garage doors nor the vacuum was provided by the plaintiff company, the defendants are entitled to a credit for their value in the quote. That amount is $7,525 plus HST.

[27] P.7 – Supply mechanical contractor for installation of heating system, air conditioning, and HRV (the heat recovery ventilator), all duct work, gas line and wiring. Most of these installations are self-explanatory and well-known except the HRV. According to the Popular Mechanics website:

a heat-recovery ventilator (HRV) is similar to a balanced ventilation system, except it uses the heat in the outgoing stale air to warm up the fresh air. A typical unit features two fans—one to take out household air and the other to bring in fresh air. What makes an HRV unique is the heat-exchange core.

The amount of the credit for the incomplete systems as of the termination is in dispute, not the fact that this work was not completed by then. There was no change to this provision made or discussed at the time the contract was formed.

[28] P.8 – this page covers installation of the insulation, vapour barrier, tape, 1/2” drywall, mud, sand and prime, soffit, fascia, and eaves-trough. It also requires the contractor to supply labour only to strap all ceilings. No finishes for the new covered porch ceiling are included.

[29] P. 9 – 4 round load bearing fibre glass 8” pillars plus capitals and base are to be supplied and installed for $1,200 + HST, included in the price. No change was discussed for this item at the time of the contract. The changes came later.

[30] P. 10 – Labour and material to supply and pour concrete slab at the front entrance, concrete in new garage, and new garage load bearing footing and stairs.

[31] It is clear from the quote, which was adopted as the written part of the contract and as indicating the scope of the work, that this project as contracted was by no means for a finished renovation job. No doubt because of the owners’ expressed request to leave finishes and materials generally to a later date, the contractor plaintiff had to respect that direction while having to provide for material to at least provide the shell of a house mostly roughed in but by no means finished. One can understand how the reliance on the owners to provide consistent and early direction for exactly what window and door openings were to be required, the location for rough-in of the necessary piping for plumbing fixtures, and other finishes, as well of course as the expedition of the contractor, would impact on the timeliness of progress on this job.

[32] Finally, the parties discussed at the time of the contract being formed at the May meeting the following:

· Garbage provisions and how to be paid;

· 200 amp service would be required in place of the present100;

· Exclusion of the main floor west wing from the contract;

· Garage doors and central vacuum;

· Progress payments of up to $30,000 would be required approximately 2 weeks, starting with $30,000 to be paid before work started;

· Scotts asked what trades would be on the job;

· Expected completion of the contract;

· Scotts asked for site visits weekly;

· Scotts asked to speak with the plumber before he did his work because, as Mr. Scott put it , he needed to get the feel for what was to go in each bathroom; after all, a bathroom is a very personal space;

· The Scotts had not decided at all on any finish in the renovated home and they were researching this – Mr. Scott said even the location of fixtures as shown on the plans may change; they understood they were to provide the fixtures.

[33] The matters agreed upon from the above list were garbage provisions which were set out in the quote and changed depending on the portion of the renovation at the time the garbage was deposited – Mr. Marchand said that after the demolition was finished all garbage costs were to be included in the price quoted; 200 amp service was in the quote; exclusion of the main floor west wing from the contract except where it stated otherwise or work in the rest of the home required some work in the west wing; and the principle of staged payment and the timing and approximate amount of progress payments.

[34] The remaining topics were discussed but I find that no addition was made in the contract terms set out in the quote to accommodate them as firm promises or terms of the contract. Each request was accepted by Mr. Marchand as a matter he would try to provide but that is all. In particular, the Scotts merely asked when Mr. Marchand expected to complete and he said he expected by the end of August or September but that the timing of renovations were always dependant on matters unforeseen until the work began. In other words, there is no indication from either party that completion date was to be firm or that time was important enough to firm it up as a term of the contract where the parties did not do so and the Scotts were fully aware at that point that they would have to rent accommodation. In the lease they signed, the term was to the end of September subject to renewal, according to Mr. Scott. This renewal clause underlined their clear understanding that no promise of a set completion date was ever made. I accept Mr. Marchand’s evidence on that point which is largely agreed with by Mr. Scott’s own account of the contract discussions.

2. Breakdown of Contractual Relations and Liability for Breach of the Contract

[35] The work began on May 29, 2010. The Scott family did as they had agreed and moved to their substitute accommodation on May 31. Until October 25, Mr. Scott and Mr. Marchand would communicate orally at the job site or through email. Soon, email messages from Mr. Scott asking questions or requesting changes in the planned work or work and material beyond the scope of the contract became a large, very detailed and frequent accompaniment to Mr. Marchand’s days. Mr. Krysiak had a chart prepared from the evidence of the emails in the document books. It shows that between June 17 and November 20, 2010, Mr. Scott made 47 requests requiring changes to the plans. These meant work additional to the contract and delays in the progress of the renovation. I do not recall one instance in which Mr. Marchand is said to have not tried to meet the request.

[36] There now are disagreements over things like the width of the second floor hall and the height of the bedroom ceilings which do not meet the plans but no mention of those matters appears in any of the voluminous message traffic at the time. Mr. Marchand stated that both of those changes had been agreed to by Mr. Scott orally on site early on in the work. This is denied by Mr. Scott but those instances were never the subject of any message from Mr. Scott prior to this litigation. Mr. Horgan or his clients produced nothing to refute Mr. Krysiak’s chart or its accuracy.

[37] Mr. Marchand was cross-examined on this point about pre-November complaints about Marchand’s work. He referred to an email on September 9 requesting Mr. Scott to advise of information necessary to complete a form for Hydro. This form is apparently required before Hydro will look after the connection from the street to the house. The form was dated in June and on October 27 an exchange occurred with Scott accusing Marchand of causing delay in the Hydro work by failing to look after this form since June and Marchand saying his office had sent it in in June. The problem however was not whether it had been sent in but Mr. Scott failing to complete the form and not filing it and Marchand’s office agreeing to help out and then not getting the form completed and sent in. This matter is ultimately Mr. Scott’s responsibility but Marchand was lax in trying to help out and then being dilatory in doing so. The completion and filing of this form was not Mr. Marchand’s responsibility. His office simply tried to help but failed to do it in a timely fashion. I do not see this as a major complaint or a fair one in the circumstances. That was all before October 25.

[38] There is little doubt that the Hydro form delay by Marchand’s office played on Mr. Scott’s mind and on October 25, 2010 he sent an email which he characterizes as a contemporaneous complaint. The message mentioned the following points in answer to a message from Marchand earlier:

· told that the insulation inspection is booked and drywall to start very shortly; Mr. Scott comments that certain insulation above the garage is being done today before the inspection;

· regarding when the next progress payment would be ready, Mr. Scott writes: “There has not been $30,000 worth of work done since the last cheque in September”. He goes on to list certain thing he hopes to see done soon and then that he will be reviewing the contract to see what other extras they may want done by the plaintiff. Within the hour, Marchand replies in part: “Blain, I agree there has not been $30,000 worth of work done since the last invoice, however there is not $73,916.94 worth of work left. In the past we have always paid in the front, not in the rear, which is exactly what we are doing right now. I know as a consumer it is hard to understand that you have to pay first on large projects like this, however this is the agreement that we had…I am a man of my word and I will get the work done. However without the next draw it will not. I will swing by tonight...”

[39] Before I enter further into the parties’ evidence and my findings in respect to breach of the contract, it is important to understand the dynamics between the Scotts and the contractor or the trades they dealt with directly, in this case Mr. Marchand, Mr. Templeton, the supplier/installer of the windows and doors including the front door, and the plumber, Robert Tough. Window and door sizes and openings were not included in the contract with the plaintiff; they were to deal directly with the window/doors supplier. Mr. Marchand gave evidence concerning the problems caused by constant changes in direction by the owners regarding selection of finished surfaces, locations of fixtures, dimensions of openings, etc. Section 8 of the Plans’ General Notes (p.A2.3) reads, “External openings are … suggested sizes. Contractor/owner to verify sizes.”

[40] The components which Marchand blamed most for hold-ups on the job site was the lengthy time taken by the Scotts to finalize the window and door openings and the large expansion of the front door beyond the plan dimensions. Several times throughout the summer and the fall into October, the emails and evidence of Mr. Marchand refer to this problem. For instance, on July 28, Mr. Scott states by email that “Windows will be ready in 3-4 weeks. We are going with Strassburger windows and have the gentek colour swatch...I’ll leave you the colour number to pass onto Jones (the soffit installer) at the meeting.” By September 20, Marchand writes Scott “Just wanted to check up ...we are anxious to get started there again”; Marchand related this hold-up to the delay over windows and door openings. And on October 7, Marchand’s email states that the bath wall will proceed now that a decision has been made about the window there: “...you only made up your mind on that window just the other night”.

[41] The window/door supplier and installer was Templeton Windows, a firm started by the present operator’s father. David Templeton stated that he has been in the business for sixteen years. He entered a contract with Mr. and Mrs. Scott to supply windows and patio and French doors in May 2010 when he received a copy of the building plans. Later they asked him to supply and install the front door. He identified the plans he was given as Ex. 12, the same plans used by Mr. Marchand. Templeton initially followed the plans and completed a quote with pictures which Mr. Scott picked up. Two days later, the Scotts revised all the sizes and he redid the whole order, again using North Star windows. More changes were directed by the Scotts in June and July with transoms over the windows and a particular make of door.

[42] Then, Templeton said, by July, Mr. Scott said he did not like the North Star windows. They directed Templeton to order all windows by a different manufacturer, this time Strassburger windows. Later in July Templeton spent 1.5m hours measuring openings at the site and going over all the window and door draft order with the Scotts. Different manufacturers use different sizes of windows and doors as standard. By then they still had not produced what they wanted as a design for the patio door.

[43] In late July, the Scotts went over all the details of the latest draft order. They seemed to be satisfied and provided Templeton with a deposit against the order. He did not send in the order right away. He waited until September as the window companies shut down in August, according to Marchand’s evidence. He began work designing the entrance door which he described as “giant”. They wanted an arch over it; he did 7 drawings but could not produce a workable design using the arch. He showed Mr. Scott what he felt could be done but he did not like the top of the door. Therefore Mr. Templeton made changes to try to follow what Mr. Scott was telling him. He sent in the order for the revised door with arch. The product all came. Templeton took 4 men to the site to install the windows. Mr. Scott told him he wanted frosted glass so Templeton ordered it as directed and re-installed them. There was some misunderstanding about the size of one of the windows. Templeton thought he had it right but accepted it and they moved on.

[44] Templeton said he agreed to do the patio and kitchen doors. The front door was still not in in September. It had to be custom made by two manufacturers, a difficult order. His men installed it when it came in. He thought it was a beautiful door. Templeton began to receive emails from Mr. Scott saying it was the wrong door and questioned the height of it.

[45] On October 28, the Scotts came to a meeting Templeton asked for. It was stormy confrontation. They argued with each other, expressed anger, were yelling at each other and at him. Templeton finally had to close the door as the yelling became too loud. As he understood it, they were angry at him for taking 2” off the height. Finally, Templeton suggested a new door be designed. The Scotts agreed, as much of the existing door as possible to be re-used. The new height was to be 108”, or 9 feet. The new door system was ordered, came in two weeks later and was installed finally in December 2010.

[46] In summary, Mr. Templeton said that during his time working for the Scotts, every opening changed three and four times. He made five major changes to the window designs and make and thirty small ones. In every case, the change delayed construction. And some delays he described as major. At least twice in September, Marchand emailed the Scotts asking for finality to the openings because the job was held up. Despite Templeton stating under cross-examination that the windows were all installed by August, delays were incurred due to changes in the window in the northwest corner and to other windows as late as September 20 when the job again was held up waiting for the Scotts to resolve the window issues. Mr. Scott blames Marchand's failure to communicate with Templeton for the delays but Templeton was a very straightforward witness and his evidence was clear that the Scotts' indecision and frequent changes of mind was the cause of much of the delay of his contract and on this job.

[47] Mr. Marchand summed up what happened on this site regarding delays. He said that he lost control of the project amid the large numbers of requests for changes from the plans and extras, all of which he agreed to do after giving the Scotts an estimated price. As well, Mr. Scott often was directing Marchand on how to go about various components of the work and then demanding up-dates. As early as May 31, Marchand e-mailed Scott stating he found the amount of messages from Scott “overwhelming” and to please break up his emails into point form. One email might cover one to twenty-five matters. For instance, the e-mail from Mr. Scott to Mr. Marchand on June 21, 2010 about four areas where window/door openings are to change, and the e-mail of August 23 summarizing emails for the first three weeks of August:

Hi Rob, here is a short list compiled from the emails sent in Aug. ignore some of them if they are going to be answered in the fact that the subs are in this week.

-steel L beams over the two front windows

-Georgia Pacific DensArmor Plus drywall (difference between the green board and the densarmor)

-soundproof drywall difference of drywall it replaces.

-plan for how the old garage is to be insulated

-difference for plywood on garage wall

-when was gas fitter in to take out the gas lines at the house.

-the hangers missing on the floor joists in the new area section of the basement

-The pipes for the HRS venting runs through the void where the chute is

-Are there HRS vents in each of the bedrooms

-The two light sockets in the alcove why?

-opening in the roof near the hydro pipe covered

-frame laundry chute door in on hallway side covering upper section in prep for drywall

-remove stud on other side of laundry chute to allow for shelves inside

-remove 2x4 stud on each side of kitchen/bath doorway to allow for 36” door

-remove studs to widen door of linen closet in upstairs hall.

-finish furnace vents to downstair, return air in East bedroom, heat vents in master bedroom

-move HRS pipe in master bath to behind door,

-finish all HRS venting through to basement (is there one of these in the office area/dining room/kitchen (two in kitchen because of size and amount of air in it?))

-drain masterbathroom vanity to plumbing (in east bedroom?)

-remove the rest of the copper pipes

-trench to get water to house

-digging the gas trench deeper to allow for a gravel footing for a retaining wall on that side of the property before the digging resumes

-putting two separate 2” pipes in it for the gas and hydro line? How close can this wall be to lot line;

-quote for insulation going in the basement

-quote for framing main floor bath (shower and laundry section)

for subs: (let me know what day Hook is in.)

are the furnace, HRV (certified by the Home Ventilating Institute (HVI)?, and air conditioner (has a SEER of 14.5 or higher (complete system replacement, including indoor coil and outdoor components); applicable for the energy rebates at http://www.homeperformance.com/ontario-rebates-toronto-hamilton-london-barrie-orillia

[48] It is important to have this background for purposes of considering liability for breach of this contract. Each party has his or her own recollection of what happened in November/December 2010 and how the fatal chain of events for this building job began. The documents in evidence as well as the parties’ evidence indicate fairly clearly and consistently what happened here.

[49] Mr. Marchand says that that chain began with his request for another payment, this time $20,000. The invoice of November 10, 2010 states that the remainder owing on the contract price was $43,916 with HST, that attic insulation, soffit/fascia work, drywall second floor and site clean-up had been done since the last invoice for a progress draw, and that remaining to be done were main floor and kitchen drywall, electrical panel installation and drywall mudding and sanding. It shows the payment due as $20,000. Marchand says he told Mr. Scott he wanted his draw and the reply was, he, Scott, did not have the $20,000 and would tell him when they have it. Scott’s email of November 21 repeats it: “I’ll let you know as soon as I know, when I have another $20,000.” That is also the email that refers to Scott learning of his obligation under the CLA to hold back 10% of the cost for 45 days after substantial completion and that the amount of the hold back now is affecting the draw amount which Marchand was demanding. Marchand says that was not what Scott first told him. He said he was told by Mr. Scott that he did not have the money.

[50] This was not the first time that Mr. Scott had complained. There was some unhappiness emailed to Marchand by Mr. Scott on October 25, 2010: he complained about the request for a progress payment in late October for $30,000 saying there was not that amount of work done since that previous payment. He also complained about Marchand not doing what he said he would do in regard to the Hydro forms required from the owner and the delay in Hydro digging the front trench for service connection. But Mr. Scott did pay this interim bill after Marchand explained to him the reason for the interim payments - that is, the builder is not required to finance the project and money is paid throughout on account of past and future work and material.

[51] Marchand says he met Scott on site in the rain on November 22 where Scott informed him he should be able to wait as he was in the profit portion of the contract. Mr. Scott also said he did not have the money. On November 23, Marchand talked to Mrs. Scott by phone. Mrs. Scott was very upset. He told her that he would not complete the contract without payment but she proposed an idea which Marchand found potentially acceptable. The proposal was that the funds would be paid and held in trust by a lawyer; Mr. Scott confirmed that by email saying they had to see the lawyer to decide the terms for transfer of the funds to Marchand’s company.

[52] On November 23, Mr. Marchand gave Scott written notice that he would pick up his bin the next day. He also emailed Scott that he hadn’t heard for a few days and wondered how the payment of finds to the lawyer in trust was coming. Marchand confirmed that Scott had told him things would be ironed out with the lawyer. The final email from Mr. Scott to Marchand was on November 26 confirming that the lawyer would have the funds that day, November 26, and the amount in excess of the hold back would be “available immediately”. No letter was received from the Scotts’ lawyer until December 6. By then removal of equipment from the site by Marchand, registration of the claim for lien (on November 25), and a letter from Marchand’s lawyer to Scott’s lawyer dated December 1 had occurred. The letter of December 1 includes some important statements showing how the situation and climate were worsening as no word was received from the Scotts’ lawyer. It requires some attention. Marchand’s counsel’s letter made the following points:

· the plaintiff had supplied work and material on the Scotts’ home since May 2010;

· it has not been paid for the work and material to date;

· a claim for lien was registered on November 25 for $35,386;

· as a result of your breach of the contract terms, my client has elected to terminate the contract and not to proceed with the work remaining under the contract;

· if the funds owing are not paid plus costs of $750 in 14 days, the lien action may be proceeded with together with another claim of costs;

· the contract can be reinstated on meeting certain terms.

[53] Meanwhile, his last work on the site was on November 19, 2010. Yet Marchand’s lawyer states in the December 1 letter that the contract was terminated but could be reinstated by payment. Marchand insisted under cross-examination that he still wanted and was ready to complete and that he never instructed his lawyer to give the notice of termination entered in the December 1 letter.

[54] Despite Scott’s email of November 26 that they were proceeding with the payment in trust idea which Scott said would mean immediate release of the funds in excess of the holdback, nothing further was received from the Scotts or their lawyer for ten days after Scott’s last email of November 26, 2010. Following the December 1 demand letter from Marchand’s counsel, on Dec. 6, the Scotts’ lawyer wrote that there were ten items that the Scotts wanted Marchand to do in order to receive the disputed progress draw less the holdback. The Scotts had paid their lawyer $14,611.02 representing that amount but there would be no immediate release of some of the progress payment. They proposed instead that Marchand must complete a list of ten items and then the draw less holdback could be released to Marchand. The holdback could not be released until 45 days after substantial completion of the contract. The Scotts also requested that Marchand complete all the work contracted for and after the statutory 45-day statutory holdback retention period, the balance of the contract price and extras would be released from the lawyer’s trust account.

[55] Mr. Marchand took only one day to instruct his lawyer and a counter-proposal was made by him stating he would do all of the ten items listed and would agree to accept less than the Scotts’ offered as an interim payment. One term was questioned by Marchand because he had no control over Hydro. It reads as follows:

3. Contact Ontario Hydro to arrange for the installation of the underground electrical line and install same.

[56] Marchand’s position was not that he refused to do it; he would contact Hydro immediately but it could be weeks before Hydro would do the connection work. Therefore he would not agree to the release of funds being tied to when Hydro completes its work. He agreed to accept $7,847.63 on completion of the ten-point list as the balance outstanding on work done to date provided the Scotts’ lawyer would confirm that he was holding holdback funds calculated on the proportion of the contracted work done to date. That amount was stated as $27,538.63. The same letter of December 7 set out a “financial history” of the contract. So, the way the amounts referred to could be understood, I will summarize it as follows:

Contract Price (incl. GST and HST) $283,916.99

Unpaid extras (incl. tax) $4,464.27

Total $288,381.25

Work not completed $12,995.00

Work done to date $275,386.25

Holdback $27,538.63

Payments to date $240,000.00

Balance outstanding in addition to holdback $7,847.63

[57] Marchand also wanted the Scotts’ lawyer to confirm that if he was to complete the contract, estimated at $12,995 (including HST), he would do so if those funds were held in trust by Scott’s lawyer to be paid out on completion. This counter-offer was left in limbo by the Scotts and their lawyer for over a month. It was rejected by Scotts’ lawyer by a short letter of January 13 which also stated that they would have another firm complete the work. This completes Marchand’s account of what led to the final termination and breakdown of the contractual and trust relationship the Scotts and Marchand had when the contract was entered and for months thereafter.

[58] Mr. Scott’s account of the same chain of events was somewhat different though the main points were the same. He confirmed that he refused to pay the $20,000 draw, that work stopped, the final three extras to date were billed to him, he received the plaintiff’s lawyer’s notice of termination and nevertheless the parties attempted to negotiate possible completion of the contract on terms. Negotiations ended because the Scotts found the Marchand counter-offer unacceptable. Mr. Scott also stated the following:

· the list of work not done on the November 10 invoice was incomplete and this was of great concern; the 25 feet of soffit’fascia not done and the drywall for the east bedroom was not done as two examples;

· no meeting took place on November 22 because it was his daughter’s birthday; he left a message postponing it to November 23 - he nevertheless attended the site on November 22 late afternoon and found no one there;

· on Tuesday November 23, Mr. Scott went to the site in the morning; he had installed a new lock and had locked the front door, then he heard a knock, opened the door, Marchand was there and entered telling his men to take out the drywall material; Scott asked what it would take for Marchand to complete the project and Marchand said, pay me. Words were exchanged which made Scott feel threatened, and then Marchand started directing his men to remove the furnace. Scott told him to stop, that was dangerous, and when they went outside, Scott asked him what it would take to have Marchand finish. Marchand left the site;

· Scott received a letter that night saying that Marchand would have his bin picked up at 4 pm the next day with whatever material may be in it at the time and that this was notice of that intention;

· Scott said his wife provided the money to the lawyer on Friday, November 26 ;

· Scott received the letter from Marchand’s lawyer dated December 1 in which the lawyer stated that the contract was terminated but could be reinstated; Scott said he felt the contract was still alive until they received that letter and after Dec. 1 he believed the contract was gone;

· The letters after that were not added to by Mr. Scott’s evidence; when asked if he accepted Marchand’s counter-offer referred to above and dated December 7, he said no.

[59] On this evidence, and the evidence of Brian Jones who said Mr. Marchand asked him not to return to complete the soffit work on November 10 because there were problems, the question is who is responsible for breach of the contract. The relevant law was set out helpfully by Master Albert and Master Sandler in two cases: Homewood Development Inc. v. 2010999 Ontario Inc., [2013] O.J. No. 3018 (Master Albert, O.S.C.J); Vallie Construction Inc. v. Minaker, [2012] O.J. No. 2906 (Master Sandler, OSCJ). The question in Homewood was similar in principle to the present issue in this case. As the Master put it:

51 Where a contract is not completed, it is usually as a result of the fault of one party or the other. It is for the court to determine who is at fault. In the present case the question is whether Homewood (the building contractor) is at fault for leaving the project prior to completion or whether 201 (the owner) is at fault for refusing to pay.

And at para. 66:

Whether an interim payment is tied to the exact value of work completed to the date of an invoice or to a distinct phase, stage or item of work completed, the principle is the same: the contract reflects that the parties agree that the contractor will not have to finance the construction and wait until the entire contract is performed for payment, but is entitled to interim payments to carry him along: Vallie Construction, supra, at paragraph 143 citing Cragnoline v. Southwick, (1916), 27 O.W.R. 445.

[60] In Vallie, Master Sandler reviewed the law on breach of contract in the context of a contract contemplating interim or progress payments. At para. 143, he states the meaning of such contracts for the builder:

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

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

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

[61] Master Sandler then referred to the case of smaller contracts including home renovation where interim payments were orally dealt with:

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

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

[62] The Master then came to the duty in law of the parties where progress payments are agreed without any agreed relation of the payments to stages of construction. His conclusion was as follows:

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

[63] Where he wrote “as noted above” in para. 156, he is referring to his earlier review of the law. The cases cited by him were: Longwell Enterprises Ltd. McGowan (1990), 37 CLR 13 (B.C. Co. Ct., Vancouver); Wilson v. Hudson, (2011), 5 CLR (4th) 127 (Man. Q.B.); Voyager Contracting Ltd. v. Hancock (1992), 47 C.L.R. 221 (Nfld. S.C.-Tr. Div.). An interesting supplementary note by the Master in Vallie is particularly interesting for its application to this case, in view of the response of the Scotts to Marchand’s refusal to continue for non-payment of a progress payment.

164 (Another reasonable option might be for an owner, in these circumstances, to offer to pay the entire requested but disputed progress payment into the owner's lawyer's trust account, if the owner has one, or if not, the owner might then retain one, to be held in trust until the parties can both agree to a release of the money at the end of the job after a final accounting has been agreed upon or, failing agreement, until a court orders otherwise if the dispute goes to litigation...)

[64] Master Sandler added to the money-in-trust idea that if the contractor walked off the job after this sort of proposal, he could well be held to have acted unreasonably and in breach of the contract. In this case, after the owners’ initial refusal to pay the progress payment, and being told again that they were not paying it, Marchand was receptive to the proposal to hold the $20,000 in trust. On November 23, Mrs. Scott suggested the idea of a payment in trust. Nothing further was communicated for three days. Then Mr. Marchand sent the following email to the Scotts indicating his interest in such a mechanism:

Haven’t heard from you in a few days, just wondering how you were making out with the next draw of $20,000.I know you said you were going to iron things out with the lawyer.

[65] Mr. Scott confirmed they were proceeding with this idea and that the amount in excess of the hold-back would be “available immediately”. This was also on November 26. It was clear, at this point, that despite the wording of Marchands lawyers letter on December 1, the parties contemplated the project as continuing subject to terms of the interim payment to be agreed. Finally, on December 6, the Scotts proposed the ten-point list through their lawyer.

[66] Marchand`s lawyer replied promptly on December 7, one day later, agreeing to do all of the ten items. He agreed to contact Hydro immediately as requested but payment was not to be conditioned on Hydro’s completing their work to connect the home to the main electrical line on the street because he had no control over Hydro’s schedule.

[67] Marchand’s proposal was that all items on the Scotts’ list would be done by him. But it indicated the fear that Marchand had resulting from Mr. Scott’s initial answer, that he had run out of money. On completion of the listed work, he wanted the $7,847 to be released to Marchand’s lawyer and the Scotts’ lawyer would confirm that it was holding the $27,538 to be released to the Marchand company 45 days after completion of this work. The further proposal regarding the balance of the contract was that the contract would be completed provided that the $12,995 for unfinished contract work was being held by the Scotts’ lawyer in trust to be released on completion of the contracted work. The Scotts failed to reply for several weeks and finally, over a month later on January 13, 2011, they refused the Marchand proposal without any further negotiation and gave notice that they would finish the remaining work without the involvement of the plaintiff company. It should be added, because of the Scotts complaints at trial over the quality of the plaintiffs work, that as late as November 14 he was requesting extra work by the plaintiff. In the November 14 e-mail, Mr. Scott asked for three more quotes for work he wanted done extra to the contract. Quality of work was simply not an issue at this time.

[68] This contract was partly oral and partly in writing. Orally they had agreed as part of their contract that Marchand would be paid the contract price in increments of $30,000 or such amount as Marchand would invoice every two weeks.

[69] In addition, I find that never did the parties agree, as part of the contract, to a fixed date by which the work was to be completed; nor did anyone insist on a ‘time being of the essence’ provision. Marchand simply gave them his expectation of timing during the contract discussion in May, but that is all that was provided or asked for. I rely on Mr. Scott’s and Mr. Marchand’s evidence on this point Marchand also advised them that with any renovation there would be unforeseen events that may delay the project. There is no email history of complaints by the Scotts over the time of completion. And that is for good reason. In this case, I find that much of the delays beyond September were the responsibility of Mr. and Mrs. Scott due to their apparent inability to decide on finishes including most obviously the windows and doors and the lengthy list of work requested in addition to the contract. I accept Mr. Marchand’s and Mr. Templeton’s evidence in this regard, corroborated by the email history in evidence.

[70] As a contract with no set terms to determine how interim payments were to be calculated, in accordance with Master Sandler’s review of the applicable law, when the conflict developed over the November 10 invoice for a $20,000 progress payment, it was the duty of the parties to act reasonably to attempt to resolve the problem. I accept that view of the law in this circumstance.

[71] The evidence of the parties’ attempt to negotiate shows that the negotiations terminated rather abruptly first by the Scotts’ failure to respond in a timely way to Marchand’s willingness to consider payment in trust and later by refusal to allow Marchand to continue the work without any reasonable response to the counter-proposal by December 7. By December 1, there is little doubt that the lawyer’s letter of that date on behalf of Marchand was written to impress the Scotts with the seriousness of the situation and to negotiate terms to resolve the issue of the interim payment. The negotiations ended by the Scotts’ refusal of the proposal from Marchand of December 7 where he agreed to perform the listed items of work within his control and to receive payment of less than the Scotts had proposed by 50%.

[72] Hovering in the background was the statement orally and by Mr. Scott’s email to Marchand that the Scotts did not have the money to complete their contractual responsibility of full payment of the contract price; hence the registration of the claim for lien to protect his interest and the request that the Scotts pay into their lawyer’s trust account the contractual hold-back funds on the work completed and the amount of $12,995, to be released following completion of the contract. Despite the earlier statement by Marchand’s lawyer that he was terminating the contract on December 1 after not hearing from Scott since November 26, he remained prepared to complete all of the immediate ten-point work list proposed by the Scotts and proposed security be posted for the balance of what he estimated to be the work done to date and to complete the contract. It seems to me that the Scotts’ sudden withdrawal from, and then refusal to attempt, further negotiations in view of the closeness of the parties to a workable solution, showed no real effort to act in accordance with their duty in law in these circumstances. On the evidence which I accept from Mr. Marchand and on all the evidence including the documentary record, it was entirely reasonable in the circumstances for Marchand to insist on security for payment of the work done and then, if to complete the contract work, for the estimated balance of the contract.

[73] In my view, the failure of the Scotts to engage in serious negotiations in a timely way and then at all is not acting reasonably toward a possible solution to the lacuna in the contract over progress payment terms. I find that the contract was breached by the Scotts’ refusal to pay the progress payment and by their refusal to act reasonably thereafter. The use of the holdback provision to justify their initial refusal is a red herring. If they were serious, they would have paid the amount of the progress payment less a proportion of the holdback funds required on the total project. I accept Mr. Marchand’s evidence and the statement in Mr. Scott’s email of November 21, 2010, that they had run out of funds and were not sure if they could get access to more in order to complete the contract. Their payment in trust did not even secure the balance of the funds required by the contract so that timing of release to the contractor could be meaningfully considered.

3. Assessment of Damages

[74] Where a party sustains loss by reason of a breach of contract, the goal of damages at common law is to place that party in the same situation, or as close to it as money can accomplish, as he would have been if the contract had been completed. It is both a ruling and a just principle. It enshrines the idea that the purpose of damages is compensation to the victim for a breach of contract. The Law of Contract in Canada by G.H.L. Fridman, 6th ed.; Carswell 2011 at p.703. One common method of arriving at this measure of damage where the majority of the work has been achieved is to use the contract price where one is established and subtract from that the cost to the contractor of completing the work. McGregor on Damages, 14th ed., 1980, at para. 872, cited in Vallie Construction Inc. v. Minaker, supra, at para. 174-5.

[75] This method seems to have been adopted in this case. I use “seems” because neither counsel provided his own complete calculation of the claims. In exhibit 57A, the plaintiff’s principal, Mr. Marchand, provided as of the date of the breach of contract a calculation of the plaintiff’s claim. The material portions of it, omitting the adjustments made for the change-over from the GST to the HST as of June 30, 2010, can be summarized as follows:

Initial deposit $30,000

May, 2010

Draw May 31, 2010 $30,000

Draw June 11, 2010 $30,000

Draw June 30, 2010 $30,000

Total $120,000

Conversion to HST, total work with GST $152,312

New balance with HST included $163,917

Draw July 13, 2010 $30,000

Draw August 2, 2010 $30,000

Draw September 20, 2010 $30,000

Draw October 20, 2010 $30,000

Total payments with HST from June 30 $120,000

Total with HST $163,917

Payments post-June 30, 2010 with HST $120,000

Balance November 10, 2010 $43,917

Work left to Complete $11,500

Work left with HST $1,495

Balance of work remaining on account of contract price $12,995

Balance due November 30, 2010 $30,922

[76] The plaintiff also claims the amount of the three unpaid post-payment-refusal invoices for extras; they each come to $1,362, $2,285, and $1,014. The total of the three is $4,661. Therefore, the plaintiff claims on account of the defendant’s breach of contract the sum of $35,583. I am rounding all figures to the nearest dollar.

[77] Mr. Horgan submits that the amount for work to complete and to remedy deficiencies is well in excess of $11,500. He says that the suspicions of the Scotts that they had overpaid for the work done were confirmed by the cost of the work performed by the other contractors who were brought in to complete the job. His submissions then combine together the work alleged to complete the contract and the work alleged to repair deficiencies in Marchand’s work. I will follow the same order. In the end, both heads are credits to the defendants against the contract price, subject to the following caveat and distinction. The work to complete must take into account that that work is part of a contract price. Referring generally to the cost of work by other contractors, I have had the same experience as Master Sandler and others who preside over construction lien trials. It always costs more when others have to come in to do the work.

[78] In Vallie, the presiding judicial officer cited the following excerpt from Batts v. Poyntz (1916), 11 O.W.N. 204 in this regard:

The proper method of finding the value of work done prior to default by a defaulting contractor, is not to deduct the cost of completion from the contract price and take the difference as the work done prior to default. Evidence of the cost of completion is relevant, and may help in arriving at a proportionate valuation of the previous work. But the cost of completion is generally, and often materially, out of proportion to its value compared with the value of the previous work, or calculated on the basis of the original contract price. To be a true guide, the value of the subsequent work must be calculated on the same basis as the previous work; that is, on the basis of the original contract price, not on a higher basis of cost, whether done by day-labour or by reletting the work to a new contractor. It is all a question of proportion.

[79] This is an important point which I will bear in mind where an assessment of completion cost is involved. One must look not just at the cost of completing the item in question but to what proportion of the entire contract price the item bore. In this regard I have reviewed the evidence of Mr. Marchand, of Mr. and Mrs. Scott, the trades people who worked on this job, the building inspector, the architectural technologist who did the original plans and later the plans revised to reflect the changes during construction, and the contractor hired to do further work on this house including the alleged incomplete portions. I have reviewed the photographs showing the progress in the building from May 2010 to August 2011. Most importantly, and this is something that neither the building inspector nor the later contractor had done, I have reviewed the actual contract. As I stated near the beginning of these Reasons, Mr. Scott raised with Mr. Marchand before the quote was drafted, the Scotts’ concern that they had not decided on finishes and fixtures and therefore their original position put to Marchand was, as stated in the last paragraph of Mr. Scott’s email of April 12, 2010:

Materials/supplies; lumber/shingles etc. purchases I hope don’t have to be included in any quote; just trades, and contractors salary etc. How are you with this?

[80] And in chief, Mr. Scott stated that they were still researching finishes. They expected to be able to meet the plumber before any plumbing rough-in was done and that could affect the location of bidet, toilet, sink and the rest. He told Marchand from the start that the location of fixtures was very much subject to change from what was indicated on the original building plans. As the project went on, the same must be said of the window and door openings which were not finalized, excluding the entrance door, until September 2010, and the entrance door not until November. All of this confirms why the contract does not, and was not intended to, provide more than a two-storey structure with framing and walls in and stairs but no more than rough-in for plumbing, electrical, and mechanical plus installation of some internal and necessary fixtures like the furnace, air conditioning unit and minimum wiring with a new 200-amp service, but no finished surfaces and fixtures not expressly set out. In other words, the contract was never to provide a finished two-storey house. Therefore estimates of the percentage completed and finish recommendations from witnesses like the building inspector, Mr. Frueh and the later hired contractor who had never reviewed either the contract or the plans are less than satisfactory and I give them little weight.

[81] Mr. Marchand estimated that he would have completed the contract in one more week. While that may be so, Mr. Horgan’s cross-examination indicated that some figures on his non-completion list are fairly soft. After reviewing each of the relevant trade’s evidence as well as that of Marchand, the Scotts, their project photographs, Dupuis, the contractor, Mr. McNaughton, whose company was hired in 2011 and the contract, in my view to complete this contract meant a cost of approximately 10% of the contract price.

[82] The $11,500 figure in percentage terms would mean that approximately 92% of the contract was complete. Mr. Frueh, the building inspector, said that from his observations and experience, without reference to the contract’s scope of work, he said the place looked about 70-75% complete. But the contract does not provide for a completed house.

[83] Mr. Krysiak, in his cross-examination of Mr. Dupuis, asked him to exclude from the plans the windows and doors, exterior finish, foundation, internal stairs, bathroom fixtures and internal walls, what is left is 70.75% of the plans. These are alleged to be the items excluded from the contract. He used this answer to argue that if you apply 70% into Mr. Dupuis’s 75% sans contract exclusions, you would get about 93% as an indicator of degree of completeness. It is also close to the estimate the court arrived at from reviewing the evidence on what the trades and Marchand actually did.

[84] The defendants claim that much more than these amounts and much less than 90% approximate completion was the correct position. Mr. Horgan did not put together a list of the matters alleged to be incomplete. Instead he relies on the Scott schedule and the evidence of the witnesses called by the defence to allow the court to draw out the breakdown of the total alleged to be incomplete, the total alleged to be correction of deficient work within the contract, and the total of inflated accounting methods they found were used by Mr. Marchand in billing certain matters which I will come to shortly. The list of these items claimed by the Scotts follows, using the Scott schedule and the evidence together with Mr. Horgan’s partial list.

4. Credits Claimed by the Defendants: Non-completion and Deficiency Remediation

[85] I will deal with these claims as briefly as I can. These Reasons are lengthy to this point. I do not intend to cover the claims in detail. I have reviewed all the evidence relevant to each one and the following are my findings and disposition. It must be remembered that the onus of proving the counter-claim is on the defendants to prove their claims on a balance of probabilities, just as the onus is on the plaintiff in regard to his claim. I am following the same order as Mr. Horgan until he ran out of either patience or time or both and simply referred me to the remainder of the claims of his clients in the Scott Schedule.

(i) Load bearing wall

[86] This matter was outstanding since July 2010 when the Town refused to pass certain matters on its inspection. No. 9 on the July 26 Townbuilding report refers to the point load in basement offset from bearing wall. Mr. Marchand placed a wall on the first floor some distance away from the bearing wall in the basement. Because this project involved addition of a second floor on a bungalow with added weight, he failed to line up the wall with the bearing wall in the basement. Also the floor joists were unsupported underneath and so hangers, blocking and a lintel had to be installed. The basement was not included in Marchand’s quote but that is not the answer. This was work additional to the contract and required because he did not think, or failed to retain a structural engineer to look at what he was doing, when he installed the wall in the first floor offset from the supporting beam in the basement. The Town properly made this an issue Marchand had to address because it was caused by his forces’ work. The cost of correcting the perceived sag in the main floor seems to me a feature of the old house. Correction of the floor was for the owner to correct. The defendants are due a credit for Georgian Contracting for part of invoices 242 and 245 totalling $950. Because HST will be charged on all the credits, I will leave it to be added to the total.

(ii) Soffit/Fascia/Eavestrough

[87] Mr. Marchand properly admitted that a credit was required against the contract price because this work was not complete. The evidence of the installer Mr. Jones was that $150 to complete the soffit and $2,000 for the eavestrough were due for unfinished work included in the contract. The defendants are therefore due a credit against the contract price for $2,150 on this account.

(iii) Plumbing

[88] The contract included nothing more than plumbing rough in and water line connection to the water tank. Regarding the flange 18” from the wall, Mr. Marchand solved this with the consent of the Scotts. In any event, the plumbing work contracted for was done and passed by the Town in their September inspection. The concern of the Scotts over a meeting with the plumber was a request but nothing more. If they had wanted something different, they should have not agreed to the plans as they stood and marked the locations of the fixtures where they wanted them. In any event, I find that Mr. Scott did meet with the plumber as Mr. Tough stated. He answered Mr. Scott’s questions. If his memory of the time of the meeting is not correct, that does not change his memory and his evidence that it did occur and he acted accordingly. He recalled specifically Mr. Scott telling him he was proceeding too quickly. This would have been typical for an owner who proved time and again throughout this sorry saga that he and his wife simply had not done their homework before starting so they could give proper direction as to location of fixtures and type of fixtures. Scott admitted that he told Marchand he would want changes in location of fixtures for this reason before the work had started. I can see no reason for the plumber to not be truthful about this. As it stood, I find the work as contracted was done and no credit is ordered for the plumbing.

(iv) 10-Foot vs. 9-Foot Walls on Second Floor

[89] I find that Mr. Marchand’s evidence that Mr. Scott agreed to accept this slight change early in the work is what happened. I cannot see any credibility in Mr. Scott’s now professed concern about this. Among all the detailed emails sent by him to the builder raising every conceivable issue as the work progressed, not once is there any concern expressed by Mr. Scott on this subject. His silence throughout the period July to November 2010 and into January 2011 when the Scotts refused to allow Marchand back is consistent with Marchand’s evidence of an early agreement by Mr. Scott on this which he now does not want to acknowledge. It is not consistent with Mr. Scott’s actions throughout the time Marchand was on the job. There is no record of this being raised as a problem until litigation began when it was in the Scotts’ interest to mount a large counterclaim against the builder. In any event, no loss is proven as a result of this slight and accepted change. No credit is ordered on this account.

(v) Hallway on Second Floor: Width Change 4’ to 3’6”

[90] This was a matter Mr. Scott mentioned in his email of July 8, 2010 and indicated that Marchand had initially thought it was as the plan called for – 4’. Mr. Marchand says that the problem was with the plan. The decision had to be made either to shorten the bedroom or have a hall 3.5’ wide. He said the Scotts decided on site that they preferred to take the hall 6” narrower orally. There is no record of this agreement but there is also no record after July 8 of the Scotts’ complaining about this deviation from the plan. There is an estimate only on this account for $810; it appears the Scotts have never had this change made though they proceeded with many other things and paid for them in 2011. I prefer the evidence of Mr. Marchand on this point; why else would there be no mention in the post-July emails of this as a continuing problem for them before the litigation started? No credit is allowed.

(vi) Laundry Chute

[91] There was a laundry chute directed on the plans (Ex. 12) from the second floor bathroom to the laundry on the first floor. None was installed. Mr. Scott raised this twice on August 3 and on October 28 and Marchand said he was having one made. However none was provided and the opening somewhat compromised the idea but it does not appear to have been followed up in the completion work. The Scotts are due a credit for the failure to provide the laundry chute. From the evidence of Marchand, I am not satisfied that there no room for one as an opening of 16” was said to have been available for one. No amount was proven for lack of the laundry chute itself. It was to be made specifically for this house and so was custom work. Where there is entitlement proven, as there is here and yet no specific amount is provided, it is for the court to do its best to compensate the defendants. A nominal amount of $200 is allowed the defendants as a credit. It was part of the contract.

(vii) Labour Charges

[92] Mr. Scott has gone over the Marchand labour bills and claims $2,873.25 because Marchand charged for labour at $39 /hour and Mr. Scott believes that labour should have been charged at closer to cost. There is nothing improper in a contractor charging more than his cost for items including labour. If Mr. Scott claimed the right to set labour rates, he should have negotiated that as part of the contract. He claims that the framing deficiencies are so severe that they could not be fixed and on some bills for this work credit is claimed for the entire labour charge in the Scott schedule. Yet most of this work was done and billed from May to October, was all paid for and if the deficiencies were so obvious, why were they paid without complaint? This is simply an argument to obtain a credit after the event that is without merit. It is interesting to note that on virtually all the Georgian Contracting bills, the labour was charged at $50/hour (one entry excepted) and yet the labour involved did not always require some special skill and I am sure this was not close to the contractor’s cost. No credit is allowed on this account.

(viii) Claim for GST/HST Billed on Sub-trade Invoices Including the tax Portion

[93] These again were all part of bills paid by the Scotts for months and no question was even asked about this until this matter went to litigation. In my view, Mr. Marchand is entitled to charge a mark-up for administrative cost as he did here which happens to be similar to the tax rate. The material billed was all used on this project. No credit is due the defendants on this account. Regarding claims like this and the prior ones for the laundry chute and labour charges, there is no merit to them and they will be considered to the defendant’s prejudice on the issue of costs at the end. I warned the defendants not to pursue these matters during the trial but they have persisted with no evidence of practice in the industry to support them. No credit is allowed.

(ix) Unpaid Electrical Work Included in the Contract Price

[94] The defendants claim that $3,400 should be allowed as a credit against the contract price because only part of the electrical contracted for was done. The remaining part of the wiring included in the quote of the 200 amp service from metre base, receptacles, wiring for the air conditioner was not done and were part of the contract. Mr. Marchand conceded this in his original Scott schedule but at trial tried to say that Ex. 80, a late produced invoice, showed the completed rough-in was paid for. That position is at odds with the one invoice produced and the quotation. Ex. 81, the electrical quote, shows that for complete rough-in, 50% of the $13,600 was due. The only proof that Mr. Marchand has come up with confirms his original, position that his quote included another 25% or $3,400. The Garraway quote (Tab 137, Ex. 3) includes more than the contract with Marchand provided but it confirms the parts of the work in the contract that were not completed. This claim of $3,400 is allowed as a credit against the contract price. The amount is taken directly from the quote to Marchand and so the 50% quoted for rough-in should be in Marchand’s cost to complete.

(x) Drywall

[95] The defendants claim the amount invoiced to them by another contractor for drywall. That contractor’s bill is far from satisfactory. It includes the top floor at $12,850, the main floor with no amount set out separately for it and the basement walls at $1,400. Written in under the top floor total, of $12,850, by whom I am not aware, is HST of $1,670 and a total of $14,520.50. $4,500 is shown as deducted opposite “sand and prime” and then the $1,400 is added for the basement. The total of this bill is $9,750 + HST of $1,852.50, and a total of $11,602.50. Mr. Marchand says that $5,800 would have covered it, the amount he set out as part of the unfinished work in Ex. 57A and B. He suspected that much of the Adams invoice was for parts of the house not included in the contract, being the basement and the old and new garages. He stated that the second floor was drywalled and the main floor portion was left to be drywalled when he ceased being paid. He estimated that area to be approximately $1,800 square feet and in cross-examination 2000 sq. ft. He stated that an amount in the order of $4,000 was the amount of work and material required to complete the work contracted, not anything in the order of $11,000.

[96] The drywaller who completed the work was not called. I am not satisfied as to the full amount charged back, as it is not proven that this was not all work required by the contract. Also, as a part of the contract, $14,500 is well out of proportion to the main floor drywall job as a part of the price. The onus is on the claimants by counter-claim to prove their damages and they have not met that onus in regard to the drywall claim.

[97] Marchand estimated $5,300 to drywall the west wing which looks to be about 25% smaller than the remaining main floor to be drywalled. He now says that was inflated assuming the Scotts would have him do the job over two to three times. I do not give that explanation any weight and Marchand should be ashamed as a professional contractor for suggesting it. The quote reads as a quote for the work required to do the job, not including revisions. There will be a credit against the contract price to the defendants for $6,500.

(xi) Garage doors

[98] There is no issue that the garage door supply and installation were to be done by a supplier hired by the Scotts, but the amount from them was not removed from the contract price. Mr. Marchand tries to suggest that it was agreed, again orally, no record of it, that he would supply labour to do the demolition work. I do not accept Mr. Marchand’s position that his forces helped demolish the part of the old building as a trade-off for not supplying the garage doors. His time records were produced late, are incomplete, and are open to doubt as to what part of the work they apply to. I accept what Mr. Scott said about the garage doors, and this may be the source of the ambiguity over the garage doors and whether they were considered excluded from the quote, not some vague unrecorded trade off against other work. Mr. Scott stated that his understanding at the time of the contract discussion in May was that the Scotts wanted the garage doors removed and the quote price adjusted accordingly. They had made their own arrangement for installation of what they wanted for garage doors and simply had not told Mr. Marchand before he composed his quote on the job. Instead, Mr. Scott said that the garage doors were not crossed out at the time. He said he understood the contractor would have an extra $6,000 plus to work with. The Scotts claim this amount plus tax because it remained included in the quote and the contract but were not provided by Mr. Marchand. The following e-mail excerpt from Mr. Marchand is significant:

Thursday, June 17, 2010, 3:09 p.m.

Hi Blaine,

Looks like you are on your way on the demo, thank you …

[99] Just as I have drawn my findings at times at least partly from the record of communication between the parties and a failure to report problems by the defendants at the time, in this instance it is noteworthy to me that there is no credit recorded by the plaintiff for demolition work.

[100] No reduction was made from the contract price for the removal of the garage door installation. There was no credit recorded in Mr. Marchand’s accounts to the Scotts at the time he allegedly helped with the demolition work as a credit and the contemporaneous photographs taken by the defendants and the above e-mail tend to show otherwise. No time sheet was submitted to show otherwise until trial when he tried to rely on very incomplete time sheets produced very late, during the trial, and which are inconclusive in any event. The time for production of such records was before trial, and then Mr. Marchand produced an affidavit saying all his relevant non-privileged records were produced. I draw an inference that had complete time sheets been made available, they would not support the Marchand claim of the demolition trade-off. I doubt the credibility of Mr. Marchand on this point and accept Mr. Scott’s evidence that he and another person did the demolition work.

[101] The following amount is set out for the garage doors in the quote that was relied on as the written part of the contract. A credit of $6,325 is due the Scotts on this account. This amount is taken directly from the contract and so no adjustment to the amount is required.

(xii) Central Vacuum

[102] It was agreed that the Scotts are due a credit of $1,200 on this account.

(xiii) Fibre Glass Pillars

[103] I accept Mr. Marchand’s evidence on this point as corroborated by the change of mind by the Scotts during construction to replace the fibre glass pillars on the front porch with stucco/stone ones and the fact that the Scotts paid all progress payment invoices to and beyond this work without any objection or reference to a credit due them on this account. I accept that the porch was not included in the quote or the contract but for the specific reference to these pillars being installed as part of that contract. No credit is due the defendants.

(xiv) Thermostat Controller

[104] There is no issue that this item was not supplied before the contract was terminated. I accept Mr. Marchand’s evidence that it was quoted at $600. The Scotts claim $835 because that is what they were charged. I do not accept that this item was quoted at full retail value. A credit is due the Scotts against the contract price for $600.

(xv) Reframing Old Stairwell

[105] The removal of the basement stair and fill framing was agreed to as part of the contract. Mr. Marchand says that the remaining structure was not found adequate by the Town. This work was agreed to by Mr. Scott as an extra, and was paid for. (See Ex. 2, Tab 100, Marchand Invoice #2356, August 12, 2010). There was no problem reported about this by the defendants until litigation began and they decided to add this item, among others not included in the contract, to their counterclaim. No credit is allowed the defendants.

(xvi) Pocket Doors, Dining Room

[106] No provision was made for these two doors in the plans. Marchand stated that he framed a wall with 2 sets of pocket doors; the plans called for removal of the wall. Therefore the work (agreed to and paid for by the Scotts, according to Marchand, as an extra) included more than just the doors and installation. Invoice #2354 dated August 10, 2010 indicates both labour and material regarding the framing and installing of the pocket doors. I do not accept the Scotts view that they were overcharged as they had assumed they were charged for no more than door cost and installation. No credit is ordered.

(xvii) Framing - Brackets for Balconies

[107] On the counterclaim, the claimants have the onus of establishing their loss or damage. I am not able to find that these brackets were part of the contract. The plans show external post-support for the balcony and no interior framing for it and therefore no internal framing was to be done by him. Marchand states that he had brackets made and installed them as an extra which was paid for without any cavil by the defendants on November 19 at a time when friction between the parties had developed and any objections would probably have not been held back. The invoice #2458 dated November 19, 2010 refers clearly to supply and installing of steel brackets, as well as design work and welding for $782.74. There was no objection or problem mentioned contemporaneously by the Scotts in the email record regarding the brackets; if the brackets were installed as badly as the Scotts say now, and it would have been obvious if they were as stated in the Scott schedule, they could not have missed seeing them. If there is any present deficiency on this account, I am not able to find whose responsibility it is because another contractor completed the balcony installation. No credit against the contract price is established on this account.

(xviii) Insulation

[108] This is another example of a “problem” that was not a problem as building proceeded. Marchand explained the reason that foaming insulation was not used as per the plans. The foam truck could not attend the site; Marchand asked Scott on site to use the BIBS system between floor joists in the circumstances. Scott agreed. The Scotts say that they were never consulted about this change. Marchand as a builder should have known better than not to record changes agreed to. However, the Town building inspector examined the insulation job and passed it as acceptable under the OBC. The onus is on the Scotts to prove their counterclaim. In my view, Marchand has explained that there was a reason for the change, that Mr. Scott agreed orally on site, and that what he did conformed to the OBC in the Town’s view. Mr. Scott’s position is not corroborated in the copious emails he was in the habit of sending and constant attendances he made to the site. It is hard to imagine Mr. Scott not knowing every detail of this job. No mention is made of this matter. At the least, this alleged credit is not proven.

(xix) Other Insulation Issues

[109] The defendants complain that the wall between the garage and the east stairwell was not insulated with the BIBS system. Insulation batts were used. Similarly, they complain that insulation/vapour barrier was not inserted in the garage wall. In addition, the inspector hired by the Scotts after they refused to allow Marchand to continue found that “joints were not taped and/or sealed in numerous locations” and floor joists not wrapped to allow “continuity of the air barrier”.

[110] In the first two instances, Mr. Scott refers to the contract, under “Insulation” where BIBS system insulation was to go “in all living areas”. The designer Mr. Dupuis stated that in his opinion the area between the stair and the garage was regarded despite the Town’s conclusion as part of the living area. The Town building department found no fault with the insulation job; the inspector passed it. It is evident that the Town took its inspection duties seriously as it refused to pass certain other elements until done to their satisfaction in compliance with the OBC. What is a living area is defined in the OBC and the Town’s building department was there to see that the Code was enforced. The Town’s building department was on site and found no O.B.C. violation.

[111] It is clear from the email requests for changes that this job was replete with changes from the contract. I accept Marchand’s evidence in this regard as it is corroborated by the Town’s inspection and passing on the insulation job, while Marchand was still on the job.

[112] Regarding Mr. Frueh’s evidence of untaped joints and unwrapped joists, I do not doubt Mr. Frueh’s evidence of what he saw. His inspection occurred on January 31, 2011, more than two months after Marchand’s forces had stopped work. I simply cannot say that that was the condition when Marchand was still on the job and the Town’s inspection failed to find a similar condition then. I have no evidence, apart from the mention by Scott and Marchand in November about Scott putting in a lock for which Marchand had no key, as to how secure this site was while it was awaiting completion by the Scotts. No credit is proven on the insulation issues.

(xx) Alarm System Wiring

[113] This was not done before Marchand’s work stopped on non-payment of the November progress payment. As incomplete work due within the contract price, the credit sought is proper. However, this wiring could not be done until the front door was installed and that was not done until December 2010 due to the Scotts’ inability to give clear directions as to what they wanted. I will allow $100 as this was to be part of a lump sum contract, not a separate job and as I have already found, what is proper within a lump sum contract is on a different basis than an isolated job supplied separately. Contrary to the Scotts view of what was efficient, Mr. Marchand did not arrange for finishing the contacts on the doors and windows in October or November after the other doors and windows were in because they would have had to re-attend for the front door in or after its December installation. A credit of $100 is allowed on this account against the contract price as incomplete work within the contract.

(xxi) Mechanical Items: Furnace, HRV and Air Conditioner

[114] The contract included furnace, HRV and air conditioning system with necessary parts and connections. The furnace and HRV were installed, the wiring issues included within the scope would have been completed in a day and there is nothing the defendants have produced that causes me to increase Marchand’s mechanical allowance more than $500. The quote from Pine Rock is only an indication of the increased cost of hiring a separate contractor to do more than the original contract allowed for. The air conditioner was not included. I accept Mr. Marchand’s uncontradicted evidence that $2,500 was what he allowed in the quote and the contract for it. The Scotts cannot charge Mr. Marchand’s company for a more expensive unit not purchased at cost. I will allow a credit for the incomplete mechanical including the items found unfinished by Mr. Frueh within the contract and the air conditioner at the sum of $3,000 against the contract price.

(xxii) Electrical Work

[115] This claim, or series of claims including a bill from Garraway’s Electrical for $7,074.34 + HST for numerous items including fixtures and 200 amp service panel and wiring and invoices from the same company for $293.80, $2,109.66, and $898.82 concern the same electrical allowance which I have already dealt with in finding a credit due the Scotts on account of the Miken Electric’s unfinished rough-in work. The one exception is the supply of a generator for 631.51, agreed by Mr. Marchand were not provided by him though it was part of the contract with the Scotts. Apart from the $7,074.34 bill which did include wiring, it and the rest were largely for fixtures and installation, finishes which the Marchand/Scott contract did not include as I found earlier in this decision. Regarding their complaint about the lack of guarantee, the Scotts would or should have understood the risks to any guarantee if they discharged the plaintiff but that is what they did. There is nothing owed in that regard to them. The credit ordered of $3,842 against the contract price for electrical should be increased only by the amount agreed for the generator of $631.51. So ordered.

(xxiii) Georgian Contracting Invoices for Incomplete Work and Deficiencies

[116] This portion of the Scotts’ counterclaim comprises numerous invoices for work and material supplied to the subject site ostensibly to complete the work the contract with the plaintiff called for and to correct deficiencies in the plaintiff’s work. The Scotts selected Georgian Contracting to do this work. The claim based on the Georgian Contracting invoices is for $16,441.50 including HST. I have already dealt with the invoices concerning the load-bearing wall misjudgment by Marchand and the allowance on that account.

[117] As for the remainder of these attempted charge-backs, the witness called to prove the work of Georgian Contracting certainly can be said to have proved they were at the site and that they did various jobs there. What he could not help with was whether the work he did above and beyond what I have already dealt with was within the scope of the Marchand-Scott contract. Like Mr. Frueh, he had not examined the Marchand contract at all. Much of it was work in the basement, garage, and west wing or referred to doors and windows, which, apart from certain work specifically mentioned as being within the contract, was not part of the job Marchand quoted on and the lump sum price they agreed to. The supply and installation of all doors and windows were contracted for by the Scotts with Templeton Windows.

[118] I have reviewed the Georgian invoices and the evidence and the submissions of counsel and in my view, apart from what I have already dealt with as work required and not completed by the plaintiff builder, this part of the defendants’ counterclaim has not been demonstrated to be part of the scope of work agreed to by the parties. The evidence of Mr. Frueh and Mr. McNaughton looked at the work not completed and work required in the west wing and basement as all part of the contract’s scope, as if Marchand was to deliver a fully finished renovation. As I have found earlier, that was far from the truth. In my view, much of the counterclaim was an attempt by the defendant owners to obtain a finished product for a partially completed price.

[119] I find that no further credit is due the defendants regarding the work beyond what I have already allowed in relation to the load-bearing off-set beam which was connected to work Marchand was responsible for and should have known would be an issue he required engineering help with when he was quoting on this job.

5. Claims for Extended Living Expenses and General Damages

[120] They also claim for the cost of Hydro power and home insurance during the course of building from May to November 2010. I have made my findings in that regard in the section headed Scope and Terms of the Contract. There was no completion date agreed to as part of this contract. The expression of an opinion by the builder, qualified as it was, does not make time of the essence of the contract or make his opinion part of the terms of a contract. I find that the conduct of the defendants throughout the period to September 30, 2010 indicated no concern about the completion date. They continually ordered jobs done that were additions to the contract, as indicated by the quotes provided by Marchand and the email history to and including work requested on extras on November 14, 2010, and their failure to give direction regarding final locations, dimensions and design of doors and windows delayed the project more than the present complaints, post- Marchand, about Marchand’s conduct. I do not find any basis on which to found damages for delay against the plaintiff.

[121] I understand that the defendants believe they should receive general damages for the stress and pressure they endured due to the alleged breach of contract of the plaintiff. In view of the fact that I have found that Mr. and Mrs. Scott breached the contract in this case and in view of the lack of any evidence, medical or otherwise, to support such a claim, Mr. Scott’s early retirement was his decision. I fail to see how this project caused that decision to be made. I award no general damages on the counterclaim.

6. Damages for Exaggerated Claim under s.35 C.L.A.

[122] In view of my findings, I see no basis for an award under this head. I simply do not find the claim was exaggerated. There was a rational basis for it.

7. Summary of Conclusions

[123] My findings are outlined in the following table. As I stated earlier, as this was the method both counsel assumed, I have used it.

Initial deposit $30,000

May, 2010

Draw May 31, 2010 $30,000

Draw June 11, 2010 $30,000

Draw June 30, 2010 $30,000

Total $120,000

Conversion to HST, total work with GST $152,312

New balance with HST included $163,917

Draw July 13/10 $30,000

Draw August 2/10 $30,000

Draw Sept. 20/10 $30,000

Draw Oct. 20/10 $30,000

Total payments with HST from June 30 $120,000

Total with HST $163,917

Payments post-June 30/10 with HST $120,000

Balance Nov. 10/10 $43,917

Invoice #2473 dated November 17, 2010 $2,285

Invoice #2481 dated November 22, 2010 $1,076

Invoice #2480 dated December 19, 2010 $1,014

Total due contractor including HST $48,292

Work left to complete plus remediation $25,057

HST on incomplete and remediation work $3,257

Work left/remediation with HST $28,314 $28,314

Balance due Plaintiff on contract (not including interest) $19,978

[124] Judgment is awarded in favour of the Plaintiff Rob Marchand Construction Ltd. for damages for breach of contract by the defendants in the sum of $19,978 plus interest before and after judgment in accordance with the Courts of Justice Act, R.S.O. 1990, c.C.43. But for the amount of $28,314 found due to the defendants, and credited against the balance of the contract price, the counter-claim is dismissed. The Plaintiff’s lien against the subject property may be enforced, if necessary, in the amount of $19,978 and costs, if ordered, or agreed in writing. A schedule containing the legal description of the subject property municipally known as 1075 Everton Road, Midland shall be included with the formal judgment.

[125] If costs cannot be agreed, counsel may send me brief written submissions, the plaintiffs’ counsel within two weeks of release of these Reasons and defendants’ counsel may have an equal period following receipt of the Plaintiff’s submissions. Reply will be received within ten days of delivery of the defendants’ submissions.

[126] I thank counsel for their assistance throughout the trial and their courtesy despite the hard-fought nature of the case.

HOWDEN J.

Released: March 19, 2014