ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 8394-12
DATE: 2014/03/21
B E T W E E N:
THE WINDOW & DOOR CENTRE INC.
Plaintiff
- and -
PINE LAKE PROPERTIES INC. and MIDDLESEX CONDOMINIUM CORPORATION NO. 185
Defendants
Peter N. Dobbie, for the Plaintiff
Wade W. Sarasin, for the Defendants
HEARD: March 3, 4, 5 and 6, 2014
Grace J.
[1] Pine Lake Properties Inc. (“Pine Lake”) manages a ten building condominium project on behalf of Middlesex Condominium Corporation No. 185 (“MCC 185”) located at 490 Third Street, London, Ontario (the “property”).
[2] Pleased with the work undertaken by The Window & Door Centre Inc. (“WDCI”) on three buildings in 2011 (the “Phase I project”), WDCI was retained to complete the same work on four other buildings in 2012 (the “Phase II project”).
[3] History did not repeat itself. Dissatisfied with WDCI’s work on the Phase II project, MCC 185 refused to satisfy WDCI’s final invoice. WDCI filed a claim for lien and certificate of action under the Construction Lien Act, R.S.O. 1990, c. C.30 (the “CLA”). It seeks payment of $39,728.58.[^1] The defendants deny anything is due. In fact, MCC 185 asks the court to order WDCI to pay it $14,564 to correct the most glaring deficiency it says exists.[^2]
A. Background
[4] In early May, WDCI and Pine Lake executed a two page document dated March 31, 2012 relating to the Phase II project (the “Phase II contract”).[^3] It described the work in these terms:
Renovation Project
Replace the existing Siding, Soffit, Fascia and Eavestrough on twenty-four units as units 28-50. Numbers 17-27. 51-56. 57-63.
[5] Units 28-50 had been the subject of the Phase I project completed by WDCI in 2011. Units 17-27 and 51-63 were the subject of the Phase II project.
[6] After outlining the details of the siding, house wrap, soffit, fascia, eaves trough, downspouts, headers and capping to be used and the aggregate price ($78,190 plus $10,164.70 for HST), the document set forth the terms of payment as follows:
Ten-percent of the total contract including tax as a deposit with the signed order $8,835.47
Forty-percent interim payment when fifty-percent of the work as (sic) been completed $35,341.88
Balance due upon completion $44,177.35
[7] In mid-May, work commenced and continued until approximately July 27, 2012. Siding, soffit, fascia and eaves troughs were replaced.
[8] WDCI received the deposit and interim payment the contract required.[^4]
[9] Until July 9, 2012, the relationship between WDCI and the defendants appeared to be a harmonious one. An e-mail of that date from Lorraine Harris of Pine Lake to Nick Allen of WDCI signified a change. She wrote:
Hello Nick,
We met with the Board this weekend and it has become apparent that there is an abundance of errors at the property. You will need to review all of the work done to date and the current work in progress. Some of the issues are as follows:
· Cable under the siding (unit 57) this will have to be redone
· Down-spouts that are twisted and/or too far away from the end of the eaves-trough and/or from the splashpads
· Concern that eaves-troughs are located too high in the middle
· Dimpled siding
· Wavy siding
· Hole at the peak on the side of unit 51
· Window framing that is crooked
We will be happy to speak with you about this, however, I am asking that you please attend at the site and take a good look before calling us.
[10] On July 11, 2012 and after inspecting the work, Mr. Allen sent Pine Lake a one page report summarizing his observations. He agreed that some of the items required repair and undertook to complete them. It became clear during the trial that the most significant area of concern was the siding. With respect to that item, Mr. Allen wrote:
Dimpled & Wavy Siding
Yes, there are both in certain locations, particularly on the rear of 52 and 55/56, both caused by the existing substrate. Both the waves and dimples are caused by the existing sheathing and/or studs not being on a flat plane. When we meet on site we will show you an example so you can decide how you would like us to proceed with this.
FYI
In some areas the initial construction is so bad you can see between the interior of the drywall between units from the outside; one I noticed was either 59/60 or 61/62 at the rear.
[11] Mr. Allen proposed an on-site meeting on July 16, 2012. Ms. Harris responded two days later. In part she wrote:
Hi Nick,
Sorry for the delay in responding. Yes we can meet on site on Monday…
As an FYI about the seriousness of the Board, I had been asked to have you stop work until you had a chance to look at the work, however that e-mail came in the same day as you were attending so I did not ask you to stop the work.
[12] Shortly after the meeting, WDCI provided Pine Lake with a quotation to “[i]nstall new wall sheathing over the existing substrate to provide a flat and level plane to accept siding” at the front of units 22 through 25 and the rear of units 55 and 56 for $662 per unit plus HST.[^5]
[13] Five days later, Ms. Harris responded by e-mail. She wrote:
Hi Nick,
Received your call today. Thank you for the update. I will give the Board a reminder about the sheathing and what they would like to do. They have been quiet so far on this issue, not like them :)
[14] Having heard nothing, Nick Allen sent Ms. Harris an e-mail on July 27, 2012. In part he wrote:
We completed Third St on Tuesday, I have completed an inspection and everything appears to be ok and the list of corrections and changes has been dealt with. I was hoping we would hear about the renovations to the three wall sections before we had finished the job but as we did not we are scheduling other work.
If you find there are any areas of concern please let me know and I will make sure they are addressed straight away.
The final invoice…is attached, we would appreciate payment as soon as you can arrange it…
[15] Several e-mails passed back and forth that morning. Ms. Harris’ response advised Mr. Allen that the “Board would like you to proceed with the sheathing option” but asked whether that work would “fix the wavy problem?”
[16] Mr. Allen confirmed that the new wall sheathing was “a guaranteed fix; no more waves.” He agreed to complete the work “ASAP” but could not provide a date then “as we now have other job commitments”. Mr. Allen closed with a request for expedited payment of the final invoice due to cash flow concerns.
[17] The chain ended with this response from Ms. Allen:
Thank you Nick, I will advise the Board. I know that they will want to review their concerns and check on the fixes and will see what I can do about a cheque for early to mid next week.
[18] Once again, Mr. Allen initiated contact. An August 2, 2012 request for payment received this response the following day.
Hi Nick,
I have e-mailed the Board to ask for payment, in full or in part and am awaiting their response. We attended and met with Brendan this week and noted visible defects and we were only looking at the units 22-27. As a result of that the Board has brought in a contractor to review the work including the spacing of nailing, damage to siding, extended eaves and excessive waves in the siding etc., they have been told that his report will be to us today…We will let you know later in the day if the Board asks us to cut a cheque but in all truthfulness…we are not expecting them to be issuing a cheque in the full amount today as their opinion is that the work is not done, or not done satisfactory (sic).
[19] Mr. Allen requested an update several days later. The parties agreed to meet on-site in the early evening hours of August 13, 2012.
[20] Mr. Allen and Ms. Harris testified at trial. They agreed the meeting took place that day in the rain and that representatives of WDCI, Pine Lake and MCC 185 were there.
[21] At trial, Mr. Allen said that the meeting was a waste of time due to an unsystematic inspection, by too many participants, too often speaking simultaneously and in wet weather conditions that made note taking difficult and resulted in the notes disintegrating.
[22] According to Ms. Harris, Mr. Allen failed to fulfill his promise to provide and then satisfactorily remedy, deficiencies identified during the August 13, 2012 meeting.
[23] E-mails exchanged after that attendance confirm that nothing productive occurred. Each party asked the other for a list of deficiencies. Neither complied.[^6]
[24] I found that odd. Mr. Allen had acknowledged that “some of my notes survived the rain” and that a post-August 13 inspection had been completed in an August 20, 2012 e-mail. Ms. Harris’ reply simply ignored Mr. Allen’s request for a “complete, comprehensive and final list” so that the required work could be completed later that week.
[25] On August 21, 2012, Peter James of Pine Lake stepped forcefully into the fray. His detailed e-mail:
a) Acknowledged that MCC 185 “was content and pleased with the” work done on the Phase I project;
b) Indicated that the prior satisfactory experience caused the board of directors of MCC 185 to retain WDCI for the Phase II project even though the per unit cost was significantly higher;[^7]
c) Advised that issues were identified with the work undertaken on Phase II only after the work was well underway;
d) Attributed the defects to the fact that WDCI “sent a different crew of men…to perform the work without proper supervision;[^8]
e) Alleged that Mr. Allen had said if he had seen the first case of wavy siding he would have promptly contacted Pine Lake to “discuss what the potential causes were and how to remedy this problem prior to carrying on”;
f) Maintained that Mr. Allen “did not once in over an hour, balk at or dispute any of the defects pointed out” during the August 13, 2012 meeting;
g) Alleged that Mr. Allen stopped taking notes when the rain became too heavy, agreed to re-attend to complete and then circulate the list and to remedy the deficiencies at WDCI’s expense.
[26] Mr. James’ e-mail closed with the following:
We will await your sending us the defect lists, both that of MCC 185’s governance and your subsequent list after which you have our word, we will have our client as promptly as possible complete their final list of required work regarding the phase 2 of 3 project.
[27] If there was a response from WDCI I have not seen it. On August 27, 2012, WDCI registered its claim for lien. This action was commenced about seven weeks later.
[28] On October 29, 2012, WDCI’s solicitor wrote to a lawyer for the defendants. The letter included these passages:
As far as the work crews employed on this project are concerned…there was…a crew of eight men in 2012 for Phase Two. Five of the men were the same on each crew and these five were all senior employees with several years’ experience. Their observations of the walls comparing the two Phases was that the substrate in Phase Two had more areas, and worse areas, of unevenness. They did their best to keep the siding flat by not driving all of the nails down hard to the studs in areas where this would cause or accentuate a wave in the siding.
We again invite your client to identify any and all alleged defects other than those listed in the contractor’s report of August 3, 2012…
My client remains willing and able to flatten and level your client’s walls in accordance with its proposal of July 18, 2012. It is also willing to extend this service to Units 21 and 53 and any other areas of your client’s choice at the same rates for labour and material.
[29] The issues were not resolved prior to trial. During argument, counsel for WDCI acknowledged that Pine Lake executed the contract relating to the Phase II project as agent for MCC 185. Consequently, judgment is sought against MCC 185 alone.
B. The Position of the Parties
[30] While evidence was led concerning several aspects of WDCI’s workmanship such as nail length, spacing, location and penetration, the entire focus of MCC 185’s submissions related to the fact that the siding installed in Phase II was, in places, uneven – or wavy.[^9]
[31] Both in his communications with MCC 185 and at trial, Mr. Allen attributed that problem to the original construction. He said that the some of the underlying studs were not straight. Some bowed out, others in. He said that, as a result, the sheathing in those areas was not flat.
[32] The problem was not new. Mr. Allen acknowledged that bowed studs and uneven surfaces had been discovered with increasing frequency during the Phase I project. Michael Stephenson and Galilee Harper, two other WDCI employees, agreed.
[33] All three described the method that WDCI utilized in an effort to make the siding flat and level. The shorter nails used at the beginning of Phase I were replaced with longer, two inch nails. Installers were instructed to make adjustments when they encountered a bowed stud or uneven surface. If straight and flat, each nail was to be driven down so that the head of the nail protruded by approximately 1/32nd of an inch – the width of a dime – to allow the siding to expand and contract with changes in temperature.
[34] If not straight and flat, the WDCI witnesses said that nail penetration – the extent to which the nail was driven into the underlying stud or surface – was varied. This fastening technique was intended to leave the surface of the siding as flat as the unevenness below allowed.
[35] WDCI submits that it completed all of the work as outlined in the Phase II contract and that payment of the balance ($39,728.56) is overdue. Mr. Allen agreed that some of the items identified by Ms. Harris in her July 9, 2012 e-mail were deficiencies but claims that they were all addressed with the exception of wavy siding at a few locations.
[36] WDCI maintains that the complete remedy – the installation of new sheathing – was not within the scope of the work set forth in the Phase II contract. While WDCI offered to undertake that work on the terms set forth in its July 18, 2012 quotation, MCC 185 did not, ultimately, accept WDCI’s terms.
[37] WDCI alleges that it was ready and willing to attend to any other deficiencies but says it could not do so because MCC 185 declined its requests to provide a “complete and final” and itemized list.
[38] In summary, WDCI maintains that the renovation it undertook is complete and has resulted in the cosmetic and functional improvement MCC 185 sought. It says that observations made by the structural engineer retained by MCC 185, Gordon W. Debbert, do not affect the weatherproof envelope WDCI installed.
[39] In his argument, counsel for MCC 185 submitted that the “salient issue…is whether MCC 185 contracted for a substandard siding installation.” He submitted that MCC 185 “contracted for a standard siding installation which would be…free of defects and deficiencies” such as “waves and undulation”.
[40] In essence, MCC 185 maintains that the Phase II contract obligated WDCI to install new sheathing to the extent required to ensure that the new siding was flat and level.
[41] MCC 185 submits that WDCI breached the terms of the Phase II contract and that two consequences follow: first, no further payment is due to WDCI and second, WDCI should bear the cost of installing the sheathing required to rectify the problem in the affected areas. According to MCC 185, eleven sections of new sheathing are required. It says the cost can be calculated using the rate ($1,324 per section) set forth in WDCI’s July 18, 2012 quotation ($14,564 plus HST).
[42] WDCI argued that MCC 185’s counterclaim should be dismissed. It maintains there was no evidence that any portion of the siding had become unfastened or of any repairs being contemplated, let alone undertaken, by the property owner.
C. Analysis and Decision
[43] I had some difficulty following MCC 185’s argument because the only authority it relied upon at trial was a portion of a text concerning the interpretation of contractual terms.[^10] All of the excerpts reproduced and referenced by its counsel related to the interpretation of language that appeared in the contract in issue.[^11]
[44] Those passages do not seem to me to have any application to this fact situation. The Phase II contract is nothing more than an accepted quotation. The entirety of the language relating to siding consists of the following:
Renovation Project
Replace the existing Siding…on twenty-four units as units 28-50. Numbers 17-27. 51-56. 57-63
Details
Designer D4.5 PVC Horizontal Siding in Harvard Slate
[45] Nothing appears in the Phase II contract that addresses the stud/substrate problem. Two notes appeared in addition to the brief description of the project, the materials to be provided, price including HST and payment terms. They are reproduced below:
Notes
Should we find any rotted sections of wood fascia board after removing the existing Aluminum Fascia they will be replaced without additional cost.
Drip Edge if required, is an additional charge of $0.70 per lineal foot. (It was not required on units 28-50)
[46] Unfortunately, neither of them addresses bowed studs or uneven substrate.
[47] In my view, resolution of the issues raised at trial does not involve interpreting contractual language – because there isn’t any that requires interpretation. WDCI did replace the existing siding, soffit, fascia and eaves trough on the exterior of units 17-27, 51-63. Subject to the deficiency issue to which I will return, the obligations of WDCI expressly set forth in the Phase II contract appear to have been performed.
[48] The contractual issue raised by MCC 185 involves a determination of whether and to what extent any additional terms are to be implied. On that topic, I was given no assistance at all.
[49] However, helpful authorities do exist. In Goldsmith on Canadian Building Contracts[^12] (“Goldsmith”) principles relating to implied terms were summarized as follows:
Even in the most voluminous written agreements, it is not always possible to foresee every conceivable situation…and to include specific provisions for every contingency. If such a situation arises, the court will sometimes imply a term to cover the particular situation that has arisen, on the assumption that if the parties had contemplated such a situation, they would themselves have included such a provision. This will only be done to the extent that it is necessary in order to give business efficacy to the agreement and the court will not rewrite the agreement for the parties. It is inherent in the concept, that if there is an express term in the contract dealing with the situation, no term can be implied.[^13] [Citations omitted]
[50] By way of example, the authors wrote:
There is an implied term on the part of the contractor that he will perform his work in a workman-like and diligent manner and that any materials supplied…will be fit for use as intended.[^14]
[51] One of the cases cited was G. Ford Homes Ltd. v. Draft Masonry (York) Co. (1983), 1983 1719 (ON CA), 43 O.R. (2d) 401 (C.A.) (“Ford Homes”). The issue in Ford Homes was whether an oral contract for the supply and installation of staircases was to include an implied term that the project would fulfil the requirements of the Ontario Building Code.
[52] Writing on behalf of the Court of Appeal, Cory J.A. (as he then was) set forth some general propositions at para. 9:
When may a term be implied in a contract? A Court faced with that question must first take cognizance of some important and time-honoured cautions. For example, the Courts will be cautious in their approach to implying terms to contracts. Certainly a Court will not rewrite a contract for the parties. As well, no term will be implied that is inconsistent with the contract. Implied terms are a rule based upon the presumed intention of the parties and should be founded upon reason. The circumstances and background of the contract, together with its precise terms, should all be carefully regarded before a term is implied. As a result, it is clear that every case must be determined on its own particular facts.
[53] In that case, the owner of the property was required by the building inspector to remove and replace the stairways Ford Homes supplied and installed because the headroom was 1 ½ inches short of the minimum required by the Ontario Building Code. At para. 17, the Court of Appeal concluded that “there must of necessity be an implied term that the staircase could be and would be installed so as to comply with the Ontario Building Code.” Cory J.A. explained the court’s rationale as follows at para. 15:
In applying the principles to this case it is important to bear in mind the following…It was the subcontractor that was “expert” in the manufacture and installation of stairs. When the contract was negotiated the house plans were offered to Ford who chose to ignore them. The houses were framed in so that measurements could be taken to ensure that the stairs complied with the provisions of the Building Code. No one else could better appreciate whether they could be installed in the house and comply with the Code. It would be natural and reasonable in the circumstances of this case for the appellant to rely upon Ford and to supply and install the staircases in compliance with the Ontario Building Code. It would be unrealistic to come to any other conclusion.
[54] At paras 17-18 he added:
…To sanction the installation of such a staircase in contravention of the Code would be tantamount to sanctioning an illegal contract…
Alternatively or additionally a term should be implied that both the work and materials will be reasonably fit for the purpose for which they were required. Such a term must be implied unless the circumstances of the contract are such as to exclude any such obligation…The work and materials supplied could not be reasonably fit for the purpose for which they were required unless they complied with the provisions of the Ontario Building Code.[^15]
[55] MCC 185 makes a similar, though more expansive, submission in this case. It asks the court to imply a term that required WDCI to comply with the requirements of the Building Code,[^16] installation standards of the CSA Group, the vinyl siding installation manual published by the Vinyl Siding Institute in Washington D.C. and the siding manufacturer’s installation guide.[^17]
[56] Should the Phase II contract be supplemented with any implied terms? In my view, that question should be answered in the affirmative. The Phase II contract is not comprehensive. It outlines in point form the materials to be used and the aggregate cost of the labour and materials but it does not address their quality or the standards of installation.
[57] While Pine Lake is a property manager, all aspects of the Phase II project were under WDCI’s control. It selected the materials – including siding from a different manufacturer than it had used on Phase I. WDCI was selected because of its expertise and, importantly, MCC’s satisfaction with the cost and quality of the work undertaken by WDCI on the Phase I project.
[58] It is clear from the circumstances and the authorities that a term should be implied in the Phase II contract. What term or terms?
[59] I start by reiterating two principles drawn from Ford Homes: caution is to be exercised in implying terms and the court is not to rewrite the contract for the parties.
[60] At common law a contractor performing work and supplying materials impliedly undertakes to use materials of good quality, to do the work with care and skill and agrees that the work and materials will be reasonably fit for the purpose for which they were required.[^18] Those terms were implied in Ford Homes “[a]lternatively or additionally” and should be implied here.[^19]
[61] Further, I am of the view that this is also a case where, by necessity, the Phase II contract is to include an implied term that the materials and installation would comply with the provisions of the Building Code. Made under the authority of the Building Code Act, 1992, the Building Code sets standards “for the construction and demolition of buildings”.[^20]
[62] Section 1(1) of the Building Code Act, 1992, defines “construct” as meaning “to do anything in the erection, installation…or material alteration or repair of a building…” and provides that the word construction “has a corresponding meaning”.
[63] In addition, section 1(4) of the Building Code Act, provides that:
It is the role of manufacturers, suppliers and retailers of products that are intended for use in Ontario in the construction of a building for a purpose that is regulated by this Act or the building code to ensure that the products comply with the standards established under this Act and the building code.
[64] The quality of the materials used is not in issue in this trial. The dispute relates to the quality of the installation and to WDCI’s failure to install new sheathing in the various locations where it encountered a bowed stud or uneven substrate.
[65] Section 9.27.5.1 of the Building Code contains provisions that specifically address the “attachment of cladding”. Portions deal with the product used in this case: vinyl siding.
[66] The Building Code outlines what the siding is to be fastened to (“framing members or furring members”), the size, spacing and depth of penetration of “fasteners” (nails in this case) and requires that “vinyl cladding…be positioned to permit expansion and contraction”.
[67] Over the objection of counsel for WDCI, I qualified Mr. Debbert to give opinion evidence with respect to compliance of the work undertaken with the various standards MCC 185 submits apply. Mr. Debbert described the methodology he used.
[68] In September, 2013, Mr. Debbert attended at the property while twenty six test openings were made at various points in Phase I and Phase II. Mr. Debbert then catalogued his observations and summarized his conclusions with particular reference to any standard that had not, in his opinion, been met.
[69] Four observations were made most frequently: first, that nails were spaced too widely and often did not penetrate a stud (a “framing member”) or a piece of lumber running horizontally between the studs (a “furring member”); second, nails were not driven into the center of the flange but at an end; third, that the head of a nail did not protrude by approximately 1/32nd of an inch but either by much more or not at all and fourth, that the siding was not flat but undulated.
[70] I will deal with each of those conclusions in turn.
[71] According to Mr. Debbert, the first item failed to meet the requirements of s. 9.27.5.1(1) of the Building Code. It reads as follows:
Except as permitted in … (2) to (7), cladding shall be fastened to the framing members or furring members, or to blocking between the framing members.
[72] During cross-examination, Mr. Debbert acknowledged that the requirement that cladding be fastened to framing (i.e. studs) or furring members (horizontal pieces of lumber) is subject to s. 9.27.5.1(3) (b) and (c) of that regulation. They provide:
Vertically applied metal siding…are permitted to be attached to the sheathing only where the sheathing consists of not less than,
(b) 7.5 mm plywood, or
(c) 7.5 mm OSB or waferboard.[^21]
[73] The WDCI witnesses testified that the existing sheathing consisted of a combination of OSB and tentest fiberboard. The WDCI witnesses acknowledged that tentest was more prevalent than OSB.
[74] During his examination in chief, Mr. Allen offered that tentest was not a sheathing that would fit within s. 9.27.5.1(3). However, metal – or vinyl – siding can be fastened to OSB.[^22]
[75] Mr. Debbert’s testimony – and the supporting photographs - satisfied me that there were occasions where studs were missed and nails driven into tentest. Fastening in that fashion was not in accordance with the Building Code. The problem was identified most frequently in Phase I (for example, units 50F, 44F, 43F, 45F, 42R, 36R and most notably the gable end of 35F).[^23] and, on occasion, in Phase II (for example, units 23F, 52R and 62F).[^24] Interestingly, however, the evidence also established that WDCI used, throughout Phase II and for most of Phase I, nails that exceeded the Building Code requirement.[^25]
[76] I turn to the second and third items. All of the WDCI witnesses acknowledged the importance of placing nails in the middle of a slot in a flange. That location allows vinyl siding to expand and contract as s. 9.27.5.6 of the Building Code requires. So too does the allowance of a small space (approximately 1/32nd of an inch) between the head of the nail and the flange. Once again, I am satisfied based on the evidence of Mr. Debbert and the photographs introduced at trial that, on occasion, WDCI failed to fulfill that requirement. Examples include units 42R and 30R in Phase I and units 21F and 17R in Phase II.
[77] The fourth item relates to the fact that some sections of the siding WDCI installed are wavy. The Building Code does not address that issue. Other sources do. For example, the installation guide produced by Mitten Premium Building Products (“Mitten”), the manufacturer of the siding used in Phase II, addresses what occurred here – residing – as follows:
Residing
Nail down all loose boards and replace any rotten ones. Remove shutters, downspouts, light fixtures, moldings and old caulking around doors and windows. Vinyl siding MUST be applied over a rigid sheathing that provides a smooth flat surface and provides sufficient thickness to support the nail. The use of Levelwall insulation will assist. [Italics added]
[78] As noted, MCC 185 submits that the installation guides of the manufacturers, a trade association (collectively the “installation guides”) and the CSA group should be implied as well as the Building Code. I disagree.
[79] As discussed, the court is to adopt a cautious approach to the implication of terms. The court is not to rewrite – nor, in my view is the court to write - the contract, for the parties. Nor is the court to imply a term that is inconsistent with the terms as the parties have expressed them. In this case, there are three things that the Phase II contract delineates with some care: the scope of the work, the materials to be used and, notably, price.
[80] MCC 185 asks the court to imply a term which would require WDCI to supply and install additional material (sheathing) to provide a smooth flat surface without any increase in price. As outlined in the authorities, a term is implied based on an assumption that the parties would have included such a provision had they turned their mind to the situation that arose.
[81] That assumption is not possible in this case. WDCI had already encountered the same situation that arose in Phase II in Phase I. Instead of installing new sheathing, it utilized a fastening technique – longer nails, driven down to varying levels – to address it. That method yielded a product that was delivered for the price that was originally quoted and which was of a quality which MCC 185 accepted and paid for. Furthermore, MCC 185 hired WDCI to install the same items for a price adjusted to correct the fact that WDCI had failed to include a labour cost for part of the Phase I project.
[82] The quote for the Phase II project included the same materials (although the siding was obtained from a different manufacturer) and services as Phase I. Phase I did not involve the installation of new sheathing. The fastening technique was used to address the problem of unevenness when encountered. Any other solution would have involved additional cost. The implication MCC 185 seeks is inconsistent with that reality.
[83] MCC 185’s solicitor submitted that WDCI had to install the siding in accordance with the installation guides to protect the manufacturer’s warranty. No evidence was led that provides a basis for that submission. In fact, the Mitten installation guide recommends “that installers review local building codes before starting a project of this nature.” The guide published by the Vinyl Siding Institute is expressed to be “as a service to the industry”. It acknowledges the importance of “applicable laws and regulations”.
[84] I can say little about whatever standards the CSA group has created. While an excerpt appeared in the aide memoire I was given outlining Mr. Debbert’s likely testimony, I was not given its full text. Furthermore, s. 9.27.12.1(1) of the Building Code incorporates by reference CAN/CGSB-41.24 but not CAN/CGSB-41.33-M87 which Mr. Debbert quoted as being the applicable CSA standard.
[85] My finding may seem inconsistent with Mr. Allen’s testimony. In cross-examination he readily agreed that WDCI’s work was to comply with every requirement relating to vinyl siding that existed – whether in the private or public sector.
[86] However and with respect, he did not go so far as to say that WDCI was prepared to install new sheathing as if it was part of the original contract. In fact, the evidence is clear that the item was treated as an “extra”: by WDCI and by Pine Lake as agent for MCC 185.
[87] At trial, Ms. Harris testified that following a July 17, 2012, meeting it was agreed that WDCI would provide a quotation to install new sheathing at various locations. She said that the board of directors of MCC 185 asked why they had not been told of the problem earlier. That question was, in my view, a good one to have asked.
[88] Unfortunately, it wasn’t because, according to Ms. Harris, MCC 185 was willing to pay WDCI to have the additional work done. As noted, on July 27, 2012 she advised Mr. Allen by e-mail that the “Board would like you to proceed with the sheathing option.” For reasons that are not completely clear, WDCI’s quotation was not accepted despite that e-mail and Mr. Allen’s assurance that the installation would be “a guaranteed fix; no more waves.”[^26]
[89] In summary, implication of a term that WDCI would comply with the Building Code is consistent with the authorities I have referenced. Implying additional terms is not.
[90] What is the effect of the occasional failure of WDCI to attach the siding as the Building Code requires?
[91] The WDCI representatives testified in chorus. Each said that WDCI’s personnel and standards were of the highest quality. With respect, they weren’t. In my view, WDCI did not fulfill the implied term relating to the Building Code to the extent of the nail location issues described earlier in these reasons. Nor, to that extent, did it fulfill its obligation to perform the work with care or skill.
[92] However, WDCI did review and correct the errors that were identified in July, 2012 to the extent that they related to the scope of the agreed upon services. WDCI and MCC 185 share responsibility for not eliminating similar problems discussed during their August 13, 2012 meeting. Mr. Allen could and should have shared the notes of that meeting and of a subsequent inspection referenced in his August 20, 2012 e-mail. The response Mr. James sent on behalf of MCC 185 was detailed and thoughtful. However, MCC 185 could and should have compiled its own list when WDCI did not.
[93] WDCI supplied and installed the agreed upon materials. It has not been paid the final instalment. In light of my findings, MCC 185 can only resist payment based on the fact there are instances where the spacing and placement of nails did not comply with the Building Code. However, MCC 185 conceded those transgressions are minor. I would go further. There is no evidence that MCC 185 has incurred or will incur any cost to rectify them – or indeed any other alleged deficiency. At trial, Mr. Allen testified that WDCI warranted its work for ten years. That warranty was said to be in addition to each manufacturer’s warranty. Mr. Allen said that to date there has been no request that WDCI honour its warranty. The court’s expectation is that WDCI will do so when asked.
[94] Thus far, the siding is fastened and performing its function despite the presence of waves in some locations.
[95] I have already given my reasons for concluding that WDCI was entitled to treat the installation of new sheathing as an extra. It was not an express or implied term of the Phase I or Phase II contract.
[96] While understandable that MCC 185 would not retain WDCI again, it should have paid the price agreed.
D. Conclusion and Costs
[97] For the reasons given, WDCI is entitled to judgment against MCC 185 for $39,728.58 together with prejudgment interest commencing August 27, 2012[^27] at the rate of 1.3% per year as contemplated by s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43.
[98] In its statement of claim, WDCI sought an order that the interest of MCC 185 in the property be sold in default of payment. Neither party made mention of any remedy under the CLA at trial. If through inadvertence, I will remain seized of that issue and will hear counsel on a date arranged by them through the trial coordinator. Obviously prompt payment of the judgment would eliminate the need for a further attendance.
[99] Short written cost submissions not exceeding five pages, exclusive of any offer(s) to settle, may be delivered by WDCI by April 10 and by the defendants by April 28, 2014. The parties are asked to bear in mind the recent comments of Goudge J.A. in Marcus v. Cochrane, 2014 ONCA 207 at paras. 15-16.
“Justice A. D. Grace”
Justice A. D. Grace
Released: March 21, 2014
COURT FILE NO.: 8394-12
DATE: 2014/03/21
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
THE WINDOW & DOOR CENTRE INC.
Plaintiff
- and -
PINE LAKE PROPERTIES INC. and MIDDLESEX CONDOMINIUM CORPORATION NO. 185
Defendants
Released: March 21, 2014
[^1]: The final invoice dated July 27, 2012, sought payment of a slightly different amount: $39,716.61.
[^2]: Paragraph 41 of my reasons explains how this amount was calculated.
[^3]: Nick Allen signed the agreement on behalf of WDCI. His signature is dated May 8, 2012. Peter James signed the agreement on behalf of Pine Lake. While his signature is undated, Lorraine Harris of Pine Lake indicated in a May 13, 2012 e-mail to Mr. Allen that she was returning the “signed contract”.
[^4]: According to the final invoice, the initial deposit was received on May 24, 2012 and payment of the June 15 interim invoice was received on June 22, 2012.
[^5]: The amount quoted totalled $4,488.36 ($3,972 plus $516.36 for HST).
[^6]: At some point WDCI received an August 3, 2012 report from an anonymous contractor retained by MCC 185 outlining some alleged deficiencies relating to units 21-23 and 53. That report was referenced in an October 29, 2012 letter sent by WDCI’s solicitors.
[^7]: In a March 31, 2012 e-mail, Mr. Allen explained to Pine Lake that he had failed to include a labour cost for the rear of the buildings located within the Phase I project and that there were two additional gable ends in the Phase II project.
[^8]: He also alleged that the crew was unskilled. Those allegations were not pursued at trial.
[^9]: Sometimes the issues concerning WDCI’s nailing practises and wavy siding were interrelated. Sometimes they weren’t.
[^10]: Hall, Geoff, Canadian Contractual Interpretation Law (Markham: LexisNexis Canada Inc., 2007) pp. 24-35; 53-57 and 77.
[^11]: The headings of the portions provided to me were “Interpretation as an Objective Exercise”, “Commercial Efficacy”, “Every Effort Should be Made to Find a Meaning” and “The Contra Proferentem Rule”.
[^12]: Goldsmith, Immanuel and Heintzman, Thomas, Goldsmith on Canadian Building Contracts, looseleaf (Toronto: Carswell).
[^13]: Ibid. at 1§3(c).
[^14]: Ibid.
[^15]: The Court of Appeal’s analysis was endorsed in ter Neuzen v. Korn, [1995] 3 S.C.R. at paras. 94-96 and 114 and has been followed many times.
[^16]: The Building Code is a regulation enacted pursuant to the Building Code Act, 1992, S.O. 1992, c. 23, s. 34. The most current version is found at O’Reg. 332/12 as amended.
[^17]: The manufacturer of the siding installed in the Phase II project was Mitten Premium Exterior Building Products. Royal Building Products manufactured the siding installed in the Phase I project.
[^18]: G. Ford Homes Ltd. v. Draft Masonry (York) Co. (1983), 1983 1719 (ON CA) at para. 10.
[^19]: Ibid. at para. 18.
[^20]: S.O. 1992, c. 23, s. 34 allows the Lieutenant Governor in Counsel to make regulations governing standards for the construction and demolition of buildings.
[^21]: OSB stands for oriented strand board.
[^22]: As mentioned, s. 9.27.12.2 provides that the attachment of vinyl siding shall conform to the requirements dealing with metal siding.
[^23]: F stands for front and R for rear.
[^24]: Mr. Debbert testified as if the Code always called for spacing of 16 inches (400 mm). In fact, table 9.27.5.4 uses that distance if the metal cladding is nailed to sheathing only and 600 mm if nailed to framing. I have assumed that metal siding is a type of metal “cladding”. As noted, vinyl and metal siding are subject to the same requirements. In any event, Mr. Debbert noted a number of examples of spacing beyond 600 mm (23 5/8s of an inch).
[^25]: Two inch nails were used after the initial stage of Phase I. The Code requires 38 mm (approximately 1 ½ inch) nails for cladding of the kind used here.
[^26]: At my request, the parties provided authorities dealing with post-contract conduct which I reviewed. They include: Arthur Andersen Inc. v. Toronto-Dominion Bank (1994), 1994 729 (ON CA); leave to appeal dismissed, [1994] S.C.C.A. 189; Canadian National Railways v. Canadian Pacific Limited (1978), 1978 1975 (BC CA) and Shelanu Inc. v. Print Three Franchising Corp., 2003 52151 (ON CA).
[^27]: That is the 30th day following delivery of the final invoice.