COURT FILE NO.: CV-08-351729

DATE: March 27, 2014

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

PARMA GENERAL CONTRACTORS INC.

R. Lachmansingh and H. Keith Juriansz for the plaintiff

Tel.: 416-226-2342,

Fax: 416-222-6874

Plaintiff

- and -

ROMINA PULCINI, M.J.R. CANADA

ENTERPRISES INC. and THE TORONTO

DOMINION BANK

Joseph C. Vieni, for the defendants, Romina Pulcini and M.J.R. Canada Enterprises

Tel.: 416-221-8181

Fax: 416-221-0303

Defendants

HEARD: May 21, 28, 29, 30, 31, June 5, July 30 and 31, August 1, 2, 8, 9, 15, 16, 22, 23 and 30, September 17, December 3 and 4, 2013

Master C. Wiebe

REASONS FOR JUDGMENT

I. BACKGROUND:

a. Case background:

[1] This action and two others that are before me arise out of a joint venture agreement between Remo Molinari (“Remo”), Giancarlo Aloe (“Giancarlo”), Rocco Chiappetta (“Rocco”), Romina Pulcini (“Romina”) and M.J.R. Canada Enterprises Inc. (“MJR”). Rocco and Romina are siblings, and Rocco and Giancarlo are partners in MJR. The agreement came together verbally in 2005 and was created for the purpose of purchasing, severing and redeveloping residential lots in Toronto, and sharing in the profits realized from the sales of these lots. This agreement was not purported to be captured in any written document until December, 2007. This agreement will be called the “Joint Venture.”

[2] It is undisputed that the general concept behind the Joint Venture was a sharing of resources in return for a sharing of profit. Remo was an experienced carpenter and builder. He became a first time bankrupt in 2004, and therefore had limited access to credit. He also divorced his wife during the events in question, a divorce which was concluded in late 2007. Rocco was a real estate agent, had done project management of construction projects, and was a builder through MJR, which had a Tarion license. Giancarlo had moved to Canada from Italy in 2000 and had financial sources capable of providing loan capital. Romina had accounting knowledge and experience, and with her husband Joseph Pulcini (a real estate agent) also had access to credit. It is undisputed that, with the exception of Rocco and MJR, these parties contributed money to the Joint Venture to some degree.

[3] The general concept was that the properties would be purchased in the names of credit worthy members of the Joint Venture (namely not Remo), that MJR would be the “builder” for the properties given its Tarion license, and that MJR would use Parma General Contractors Inc. (“Parma”) for the framing work. Parma is a company that was incorporated in 1997 and that has Remo’s son, Daniel Molinaro (“Daniel”), as its named principal. There was no written contract between Parma and MJR. Under the Joint Venture, net profits from the sales of the developed lands were to be split as follows: Remo to receive 33%; Gioncarlo 33%; Rocco 16.5%; and Romina 16.5%.

[4] The Joint Venture focused its efforts on properties in Etobicoke. It purchased a lot at 97 Evans Avenue (“Evans”), severed it into 97 and 97A Evans, developed these lots and sold them; it purchased a lot at 93 Evans, severed it into 93 and 95 Evans, developed these lots and sold them; it purchased a lot at 32 Evans, severed it into 32 and 34 Evans, developed these lots and sold them. A lot at 121 Evans was purchased with input from one, Nick De Luca, and was severed, developed and sold; but it was not clear whether it was a part of the Joint Venture.

[5] A lot at 153 Jones Street (“Jones”), Oakville was purchased in 2006, and was developed as a single lot. Jones was unusual since it was owned by two persons who were not in the Joint Venture, namely Dubravko Hajdarevic and Fuad Mujakic. The Joint Venture undertook the development of the lot in return for a sharing of the sale profits. Under a trust agreement dated March 27, 2006 Hajdarevic and Mujadic promised to hold the property in trust for the two of them plus Rocco and Remo in equal parts. However, the named owners defaulted on mortgages, and the property was sold in late 2007 or early 2008 under a power of sale process at a significant loss. Rocco advised that this was the first loss that was suffered by the Joint Venture.

[6] The Joint Venture also purchased a lot at 27 Roseland Drive (“Roseland”), Etobicoke in the name of Rocco, and severed it into 27A and 27B Roseland. The lots were sold, undeveloped, in 2008 after this dispute arose.

[7] The lots in issue in the subject actions are in Etobicoke and were purchased by the Joint Venture in 2006. On July 31, 2006, 7 Lloyd George Avenue (“Lloyd George”) was purchased in the name of Giancarlo and was developed as such. This lot was eventually severed into 7A and 7B Lloyd George. On October 10, 2006 22 Carnarvon Avenue (“Carnarvon”) was purchased in the names of Romina and Joseph Pulcini. This lot was the first to be severed into three lots, 22, 24 and 26 Carvarvon, which were then developed. As with the previous lots, Parma performed the framing work for MJR on these lots for a fixed price.

[8] 22 Carnarvon was sold on December 3, 2007 before Parma registered its claims for lien. By this time or shortly thereafter, there was a dispute between Remo and his Joint Venture partners concerning the status of the Joint Venture.

b. Litigation background:

[9] On February 22, 2008 Parma registered three claims for lien: one on 24 Carnarvon in the amount of $97,606; one on 26 Carnarvon in the amount of $97,606; and one on the yet undivided 7 Lloyd George in the amount of $145,000.

[10] On April 4, 2008, Parma purported to perfect its liens by starting three lien actions as follows:

• The lien action concerning 24 Carnarvon named Romina, MJR and mortgagee, the Toronto Dominion Bank (“TD”), as defendants and has the above noted title of proceeding, CV-08-351729 (“Action 29”);
• The lien action concerning 26 Carnarvon named Romina, Joseph Pulchini, MJR and TD as defendants and has file number CV-08-351735 (“Action 35”);
• The lien action concerning 7 Lloyd George named Gioncarlo, MJR, TD and another alleged mortgagee, Maria Torres, as defendants and has file number CV-08-351730 (“Action 30”).

In Actions 29 and 35, the actions were discontinued as against TD, and the non-TD defendants defended and raised a $40,000 counterclaim. In Action 30, the action was discontinued as against Giancarlo, TD and Maria Torres, and MJR defended and raised a $40,000 counterclaim. I will refer to the defending defendants, Romina, Joseph Pulchini and MJR, collectively as “the Defendants.”

[11] With these claims for lien on title, Giancarlo and Romino nevertheless proceeded to sell 24 and 26 Carnvarvon and 7A and 7B Lloyd George. The sale of 24 Carnarvon was scheduled to close on May 23, 2008. On May 22, 2008 MJB obtained an order vacating the Parma claim for lien from the title to 24 Carnarvon upon the posting by MJB of $122,007.50 in cash security ($97,606 for the lien and $24,401.50 for costs). The sale of that property closed the next day.

[12] The sale of 26 Carnarvon was scheduled to close on May 29, 2008. On May 28, 2008 MJB obtained an order vacating the Parma claim for lien from the title to 26 Carnarvon upon the posting by MJB of the same amount of cash security as had been posted for the Parma claim for lien on 24 Carnarvon. The sales of the two Lloyd George properties were scheduled to close later, in June, 2008. However, none of these last three sales closed as scheduled.

[13] Remo took action against his Joint Venture partners. On May 27, 2008 he started a non-lien action (“the JV Action”) against them claiming inter alia damages for breach of trust, an accounting concerning the disposition of the properties in the Joint Venture and certificates of pending litigation (“CLPs”). On May 28, 2008 he registered CPLs on 24 and 26 Carnarvon and 7A and 7B Lloyd George. The sales of all of the properties were interrupted.

[14] Trades of MJB started proceedings against MJB claiming that they had not been paid. As a result, the defendants in the JV Action obtained an order in that action from Master Sprout on September 5, 2008 inter alia lifting the CPLs and requiring that some of the proceeds of the sales be used to vacate the Parma claim for lien from the Lloyd George properties, all for the purpose of allowing the sales to close. The order also required that the net proceeds of the sales be paid into court to the benefit of the JV Action, and that the parties agree on the use of these net proceeds to resolve the trade claims.

[15] As a result, the sale of 26 Carnarvon closed on September 8, 2008. On September 11, 2008, MJB obtained an order from Master Albert vacating the Parma claim for lien from the title to the Lloyd George lands upon the posting by MJB of $181,250 in cash security, being $145,000 for the lien and $36,250 for costs. On September 16, 2008 the sales of the Lloyd George lands closed.

[16] Because MJR posted the security for the Parma claims for lien and arguably had privity of contract with Parma, it was the principal Defendant in the actions.

[17] The parties to the JV Action could not reach an agreement on the resolution of all the trade claims. As a result, the trades initiated a process that culminated in the order of Justice Stinson dated June 27, 2009 in the JV Action specifying what could be paid out on consent, and scheduling a trial of the remaining issues.

[18] In the Parma lien actions, separate judgments of reference were obtained by Parma in each action. Actions 29 and 35 were referred to the lien master at Toronto in two judgments of reference given by Justice Strathy on January 2, 2009. Action 30 was referred to the lien master in Toronto in a judgment of reference given by Justice Low on October 15, 2009. The references in Actions 29 and 35 came before Master Polika for a first trial management conference on May 25, 2009. The reference in Action 30 came before Master Albert for a first trial management conference on January 11, 2010. Given the obvious connection between these three references, Master Albert transferred the reference in Action 30 to Master Polika.

[19] MJB brought a motion before Master Polika on February 11, 2010 seeking a reduction in the cash security posted by MJB for the Parma claims for lien on 24 and 26 Carnarvon on the basis that the amounts claimed included claims for work done by Parma on 22 Carnarvon on which it had no lien rights. Master Polika ordered a reduction of $34,026 in the security for the Parma claim for lien on 24 Carnarvon (leaving security of $70,385.19 for the lien and $17,596.30 for costs), with the reduction to be paid back to MJB.

[20] Master Polika also ordered a reduction of $24,553.34 in the security for the Parma claim for lien on 26 Carnarvon (leaving security of $77,963.33 for the lien and $19,490.83 for costs), but then ordered that that reduction be paid into court for the benefit of the JV Action on the basis that the security posted for the 26 Carnarvon Parma lien could be traced to the proceeds of sale of 24 Carnarvon and was therefore a “specific fund” under Rule 45.02 against which Remo had a serious claim in the JV Action on account of what Remo had done in relation to the Carnarvon properties under the Joint Venture.

[21] The Toronto-Dominion Bank, a creditor of MJB, eventually obtained orders that the above noted $34,026 reduction in the security posted for the Parma claim for lien on 24 Carnarvon be paid to the Sheriff for the benefit of MJB creditors.

[22] Meanwhile, the process ordered by Justice Stinson ended up in an order from Justice Himel in the JV Action dated February 16, 2010 specifying the payout of the posted funds to the trades (with the exception of Parma). The Himel order specified in addition that any security posted for the Parma claims for lien that was not in the end used to pay for Parma’s lien claims was to be used to pay the shortfall in the established trade claims, including any shortfall in recovery in Parma’s breach of trust claim (as Parma had apparently by this time also commenced a breach of trust action). Remo was ordered to pay the trades their costs in an amount to be determined.

[23] Over a year later, on March 30, 2011, on motion by the defendants in the JV Action, Justice Hoy varied the Himel order to remove the Parma entitlement to the excess lien security and ordered that Remo pay the said defendants $15,000 in costs of the motion forthwith.

[24] In the Parma lien references, Master Polika conducted six trial management conferences before ordering the lien trial: these occurred on May 29, 2009, December 14, 2009, January 27, 2010, February 4, 2010, May 31, 2010 and September 27, 2010. On September 27, 2010, Master Polika scheduled the trial in these three actions to start May 31, 2011 and to run for 10 days. At another trial management conference convened at the request of Parma on May 24, 2011, Parma sought an adjournment of the trial due to a change in counsel, an adjournment request that was not opposed. Master Polika adjourned the trial to May 8, 2012 again to run for 10 days.

[25] MJB brought a motion on January 10, 2012 seeking orders either declaring the three Parma claims for lien expired on account of being registered too late, or reducing the posted security by the amount of the claims for site supervision on the basis that site supervision was not lienable. Master Polika dismissed the motion and ordered costs against MJB in the amount of $10,000 in the event Parma succeeded at trial on the timeliness issue, and in favour of MJB in the amount of $2,556.68 in the event Parma failed on that issue.

[26] On April 25, 2012 another trial management conference was convened at the request of Parma, this time to seek an adjournment of the trial on account of the poor state of health of Remo. He was described in Master Polika’s directions as being a crucial witness on the issues of carpentry and site supervision. Master Polika noted in his directions that the question of getting Remo’s evidence for trial by alternative means (should he eventually succumb) was discussed as an issue for Parma to determine. Master Polika adjourned the trial a second time, this time to start on May 21, 2013 and again to run for 10 days.

[27] I am advised that Remo died shortly after this time, on May 15, 2012. Daniel is the estate trustee for Remo’s estate, and in that capacity continues the JV Action.

[28] Master Polika retired at the beginning of 2013. I proposed to the parties that I be the replacement reference master. Parma initially questioned the perception of my impartiality on account of my involvement as opposing counsel to Mr. Jurianz in another, unrelated case while I was in private practice. Parma asked that I recuse myself from this case. I reviewed this other case in which I had acted against Mr. Jurianz, and advised the parties in writing that I would not be recusing myself from the within case. Parma changed its position on April 29, 2013. Both parties consented to me being the replacement reference master. The trial commenced on May 21, 2013.

[29] After one day of evidence, I ordered an adjournment of the trial due to late production of documents for the trial by Parma. These were mostly phone records. The trial resumed on May 28, 2013 and proceeded on that day and on May 29, 30 and 31, 2013. There was then another interruption, this time due to a medical condition that affected Mr. Vieni, defendants’ counsel. As a result, I adjourned the trial to resume on July 30, 2013. The trial resumed on that day and continued on July 31 and August 1, 2013. At the commencement of trial on August 1, 2013, defendant Romina Pulchini produced further documents, causing me to adjourn the trial to the next day in order to allow Parma to examine the documents. The trial resumed on August 2, 2013 and continued on August 8, 9, 15, 16, 22, 23 and 30, 2013. The trial could not be heard in a more compressed manner due to everyone’s schedule.

[30] August 30, 2013 was originally scheduled for closing argument. However, on that day I was advised by Mr. Vieni that the original of a ledger book Rocco had referred to on several occasions in his evidence had been delivered to him, Mr. Vieni, the previous day by Mr. Lachmansingh. Mr. Lachmansingh advised that he had just found the ledger book in his files. I adjourned the trial in order to allow the parties to take positions on this development.

[31] On September 17, 2013, I conducted a conference call with counsel. Mr. Vieni advised that the ledger book was a critical document whose absence seriously affected Rocco’s evidence. I, therefore, ordered another day of evidence, with Rocco to be called back to give evidence arising out of the ledger book. Because of everyone’s schedule, this day was scheduled for December 3, 2013. I adjourned the closing argument to the following day, December 4, 2013. The trial proceeded and concluded accordingly. Therefore, the trial, originally scheduled for 10 days, consumed about 18 days spread over 7 months.

II. ISSUES:

[32] The issues in this case are essentially as follows:

a) Was Parma an “owner” under the Construction Lien Act (“CLA”), and therefore incapable of asserting claims for lien and claims for breach of contract?

b) What was Parma owed in relation to its contract scope of work, if anything?

c) What was Parma owed in relation to extras to its contract scope of work, if anything, including the claimed amount for site supervision?

d) Did Parma’s lien rights expire before it registered its claims for lien on February 22, 2008?

e) If Parma’s lien rights are not expired, and if it is entitled to be paid for the claimed extras, are all of the claimed extras capable of giving rise to lien rights? In particular, the issue is whether the claimed site supervision and the claimed services performed off site were capable of giving rise to lien rights.

[33] It should be noted that at trial, Rocco formally withdrew the counterclaims stating that, while MJR had initially been concerned about deficiencies in Parma’s work, the Defendants were not pursuing those set-off claims at trial.

III. EVIDENCE:

[34] Before I deal with the above noted issues, I must comment on the credibility of the evidence presented at trial.

[35] The trial had a total of 14 witnesses. Parma produced 8 witnesses in the following order: Harpreet Attal (City Cards manager), John Grossi (a plumber), Jennifer Borges (Rogers clerk), Pietro Gambino (associate of paving trade), Roberto Rota (IBM manager and friend of Daniel), Dorian Kolinas (Daniel’s wife), Marco Molinari (Daniel’s brother), Michael Matzaridis (Daniel’s brother-in-law) and Daniel. The major witness for Parma was Daniel. The Defendants produced 6 witnesses in the following order: Joseph Chita (principal of JC Concrete & Drain), Wayne Penny (cleanup trade), Romina, Gerry Kuchartz (trim trade), Giullio Mallozzi (principal of Wireline Electric) and Rocco. Rocco was the major witness for the Defendants.

[36] As a general comment, I found that all of the major witnesses (and persons) in this case had significant credibility issues. I will discuss this in further detail.

[37] The most challenging part of this case was the absence of the key partner, Remo, who died in May, 2012. Because of this, I relaxed the hearsay rules of evidence in order to allow in essential evidence about what Remo said and did. Neither side put into evidence any recorded or written evidence from Remo. Mr. Vieni tried to introduce some of Remo’s discovery evidence from the JV Action in closing argument, but I did not allow it as it had not been entered as evidence. The absence of written or recorded evidence from Remo was noted by me in light of what Master Polika stated in his directions of April 25, 2012 was discussed at that time about Parma getting Remo’s trial evidence by alternative means in light of his ill health.

[38] Neither side directly addressed the issue of Remo’s motivations and credibility in closing argument. Clearly, Remo was an accomplished framing contractor with a strong work ethic. That was why Rocco partnered with him. Many of the Defendants’ witness mentioned negative things about Remo. Rocco talked about Remo’s stubbornness and hot temper. Mr. Chita talked about Remo being “tough” on his son. I take Rocco’s comments with a “grain of salt” given his interest in this case. However, Mr. Chita’s comments had some weight, as he had no interest in the outcome of this case.

[39] What was most telling for me in assessing Remo’s motivations and credibility was more objective evidence. Two things struck me in particular. Firstly, there was evidence that Remo altered the Kuchartz invoice about the trim and other work Mr. Kuchartz and his son did at the end of January, 2008. By this time there was tension between Remo and his partners, and the timeliness of Parma’s lien rights was in jeopardy. Mr. Kuchartz was somewhat confused at times, but he was clear in his recollection that it was Remo personally who hired him and that Mr. Kuchartz had nothing to do with Daniel. When Mr. Kuchartz’s wife left the payee’s name off of the invoice, Remo was quick to take the invoice and insert on it Parma’s name and wording that purported to link the Kuchartz work to “carpentry,” namely Parma’s work. Parma then rendered an invoice to MJR for this work. In my view, this showed a willingness on the part of Remo to alter documents to suit his interests, and to use Parma to advance his own interests. Secondly, it is undisputed that Remo was going through a divorce at the relevant time (a divorce which ended in the fall of 2007), and that he did not want to hold property in his own name as a result to avoid detection by his wife. This shows again a willingness on the part of Remo to hide the truth to suite his interests.

[40] Daniel’s lengthy and close relationship with his father, Remo, therefore served to detract from his credibility, particularly in light of his father’s dispute with his partners. It is undisputed that Daniel and Remo worked closely together for many years, that Remo and Daniel assisted each other wherever possible, that Remo lived in a house in Woodbridge registered in Daniel’s name, that Daniel paid Remo’s bills and that Remo drove an expensive car registered in Daniel’s name. Daniel would therefore naturally be inclined to assist his father in meeting his father’s Joint Venture obligations and later in his dispute with his partners. Daniel admitted in cross-examination agreeing with his father at the time that he was being cheated out of money.

[41] Given this background, the absence of key corroboration seriously detracted from Daniel’s credibility. Mr. Lachmansingh is right in asserting that Daniel produced much documentation at trial to support his evidence, but what he did not produce was the usual corroboration any trade would produce to substantiate its claim. For instance, a large part of Parma’s claims concerns alleged extras for labour spent by Parma in various jobs on the Carnarvon and Lloyd George properties. These were charged by Parma, according to Daniel, at an hourly rate of $65, which is a rate he thought was reasonable. This was the first time Parma claimed extras based on an hourly rate. What struck me was the absence of any time sheets or other contemporaneous documents evidencing the time allegedly spent on these tasks. These are the documents a trade normally creates when working on extras for labour paid by the hour, particularly when the contractor is often absent from the site, as Daniel asserted was the case with MJR. The claimed hours were not even shown on the December 31, 2007 invoices for these charges. At trial Daniel reconstructed the extras from the witness stand. It has been held that the court can draw an adverse inference from a failure to product time sheets to corroborate a claim; see Dirm Inc. v. Bennington Construction Ltd. 2010 CarswellOnt 4171 at paragraph 111 (Ont.Sup.Crt). I draw such an adverse inference.

[42] Another glaring absence was the lack of corroboration of the alleged agreement Parma had with MJR for site supervision on the Carnarvon and Lloyd George sites. Site supervision represents the single largest Parma claim on these sites. Daniel alleged that there was an agreement with MJR whereby Parma was to be paid for site supervision on these sites at the rate of 10% of the cost of construction, with the cost of construction being $120/square foot. This agreement was said to be unique to the Carnarvon and Lloyd George properties. This was an extraordinary alleged agreement, because it in effect committed MJR to pay Parma a relatively fixed amount for site supervision well in excess of the agreed upon fixed price for the Parma framing work, when it was, at best, unclear as to what site supervision was needed. Rocco denied this agreement. I would have thought that such an extraordinary agreement would have been confirmed in some written form by Parma; but Daniel produced none.

[43] Finally, I note that Parma, apparently under Daniel’s instruction (at least in part), registered two claims for lien for Parma on February 22, 2008 on 24 and 26 Carnarvon in amounts that clearly exceeded what should have been included in the claims by at least $45,000. This is the amount that Daniel stated in his evidence was for the unpaid work on 22 Carnarvon, a property that was sold 2 ½ months before the claims for lien on 24 and 26 Carnarvon were registered and on which no claim for lien was registered. At trial Daniel showed how the Parma December 31, 2007 invoice concerning Carnarvon was allocated between the three Carnarvon properties. The court was given no explanation as to why that work was not done before the claims for lien were registered to make sure that the registered claims only included work on 24 and 26 Carnarvon. It is hard not to draw the conclusion from this that Daniel was as capable as his father of obfuscation and exaggeration to suite his interests.

[44] The other Parma witnesses were minor. They addressed issues that were not core to this case. Mr. Attal and Ms. Borges were called to put documents into evidence. Mr. Grossi was a plumber on the subject sites. Mr. Gambino was a person associated with the party that presented a paving quote. The two gave their evidence in a straight forward and believable fashion. The other witnesses, Mr. Rota, Ms. Kolinas, Marco Molinari and Mr. Matzaridis, are all friends or family relatives of Daniel, and were therefore no doubt inclined to assist Parma. However, their evidence concerned marginal and largely undisputed points such as Daniel’s use of the cell phone, and Daniel’s involvement in transporting tiles and working with other trades. I did not in the end rely heavily on these witnesses.

[45] The Defendants’ major witness was Rocco. In argument, Mr. Lachmansingh made several apt attacks on Rocco’s credibility. He rightfully pointed out that Rocco has a clear stake in the outcome of the case, given his interest in MJR. He pointed out that Rocco openly admitted forging Daniel’s signature on a six month lease back to the vendor on a property located at 40 Daisy Avenue, Etobicoke (“Daisy”). Daisy became an important sub-issue of credibility at the trial. Remo, Daniel and Rocco had agreed in 2007 to purchase this lot in the name of Daniel with down payment money coming from Rocco and with Rocco to become eventual co-owner. Rocco admitted to forging Daniel’s name on the said lease to the vendor and returning half the rent to Daniel. He said this was done out of expediency.

[46] Mr. Lachmansingh also pointed out that Rocco did not make written disclosure of his interest in the Daisy purchase when he acted for both the vendor and purchaser on that purchase, contrary to his obligations under the Real Estate and Business Brokers Act, 2002, S.O. 2002, C.30. Rocco admitted to not having given such a written notice for at least ten years on similar transactions. His explanation was that he always gave verbal notice, which he considered sufficient. Mr. Lachmansingh also showed how Rocco’s ledger was inconsistent with payment documentation.

[47] Mr. Lachmansingh also urged me to find that Rocco had taken part in the eventual development of Roseland after it was sold, based on the evidence of Wayne Penny that he worked there. The argument was that this showed that Rocco had in effect “stolen” the profit from the Joint Venture since that property was purchased with sale proceeds from earlier Joint Venture properties. The evidence was not at all that clear on this point, and I do not make that finding.

[48] In general, though, I had concerns about Rocco’s credibility given this troublesome evidence about largely collateral matters. It showed at minimum a cavalier attitude towards transparency and veracity. In assessing Rocco’s credibility on the critical issues in the case, I therefore applied what I viewed to be a standard of overall reasonableness using objective corroboration wherever possible, just as I did with Daniel’s evidence.

[49] Romina was the other Joint Venture partner called by the Defendants. The thrust of her evidence was on the composition and running of the Joint Venture and on the accounting concerning the Joint Venture properties. She is a party in this action, and I treat her evidence with caution as a result. Mr. Lachmansingh also succeeded in getting Romina to admit in cross-examination that she had not, as she had originally maintained, transferred all of the proceeds of the construction loan on Carnarvon to MJR. She admitted that she used a not insignificant part of the construction loan to pay off another mortgage, which was a breach of the construction loan. She explained this change in evidence as a memory lapse, which I find difficult to believe given her profession of accounting. I was left wondering whether I could rely on her other testimony. In the end, however, Romina gave limited evidence on key issues, and I did not therefore rely on it very much.

[50] Mr. Kuchartz I found to be a witness with a hazy memory, but also with an honest disposition. He openly admitted where his memory failed him. But he was firm on some key points to which I gave significant weight, as he had no interest in the case.

[51] Mr. Chita was another witness that had no interest in the case. Mr. Lachmansingh argued that Mr. Chita was not believable as his evidence was tailored to suite the Defendants. He pointed to several misstatements Mr. Chita made about site conditions. I do not agree. While Mr. Chita worked for Rocco on some jobs after the ones in question, I do not think that this caused him to be bias and misrepresent the projects. For instance, he stated that Rocco never dressed to do site work, which was not favourable to the Defendants. On the critical issue of site supervision, Mr. Chita was the forming trade, a critical trade, was firm in stating that there was neither the need for nor the existence of site supervision, and was believable in this statement as he had experience on subdivision projects (where site supervision was required) to support it. I treated Mr. Chita as more of an objective witness.

[52] Then there was Giulio Mallozzi, the electrician used on the projects. He also had no interest in the case. He did admit to being an old friend of Rocco and having worked for MJR on other projects. But, like Mr Chita, I do not think that this was such as to undermine his overall credibility on key points. He in fact retained Remo to do the framing on his own properties as he was impressed with Remo’s work. Like Mr. Chita, Mr. Mallozzi was firm in his evidence that there was neither the need for nor existence of site supervision on the sites, and was believable in that statement as he also had the experience of subdivision work to support it. Mr. Lacmansingh pointed out that Mr. Mallozzi stated in chief that he did not know as to the availability of money to pay him when Rocco told him to wait on his billing, and then stated in cross-examination that Rocco told him there was no money. I do not agree with Mr. Lachmansingh, though, that this was a contradiction and undermined Mr. Mallozzi’s credibility, which generally stood up.

[53] Finally, there was Wayne Penny, the person whom Rocco used for cleanup work. He works for Rocco regularly, and I therefore approach his evidence with skepticism. I found that Mr. Penny had a hazy memory, but an honest disposition. In the end, his evidence was not critical, and I did not rely upon it to any extent in reaching my judgment.

[54] For the reasons stated, I assessed the relative merits of conflicting evidence from Daniel and Rocco on an issue by issue basis as discussed above, and preferred the evidence of Messrs. Chita and Mallozzi, on the one hand, to Daniel’s, on the other, where the two conflicted.

IV. ANALYSIS

a. Was Parma an “owner” under the CLA?

[55] The Defendants argued that Parma is an “owner” as defined by under the CLA section 1. To be found an owner under the CLA, a person must be found to have an “interest” in the improved lands. This proposition was not disputed.

[56] Mr. Vieni argued that Parma was an “owner” because it was indistinguishable from Remo. He called Parma a “front” for Remo, and argued that it was Parma that therefore invested in the Joint Venture, with Remo as the controlling mind behind the company. As such, so the argument went, Parma had a beneficial interest in the lands purchased, improved and sold by the Joint Venture, and that this undermined Parma’s claim for lien, as such a claim cannot be sustained by an “owner” of an improvement. It is well settled law that a person with an interest in a joint venture that owns property is an “owner” for the purposes of the CLA, and cannot preserve a lien in relation to his or her own land; see Celebrity Flooring Systems Ltd. v. One Shaftesbury Community Assn., 2006 CarswellOnt 5995 at paragraph 240 (Ont. Master).

[57] The Defendants made the following points in support of this proposition:

• While Parma takes the position that Daniel was the sole shareholder, director and officer of the company, Parma internal records show that Remo was a shareholder.
• The evidence of Rocco, Mr. Chita, Mr. Mallozzi and Mr. Penny, namely persons who worked at the sites, was that Remo was the one in control of the work done by Parma.
• Parma was incorporated in 1997 when Daniel was just over twenty years old, and just out of high school. Therefore, Daniel was not capable of running the company, at least for several years. The inference urged upon me was that Remo was the one in control of the company.
• Remo lived with Daniel in a property registered in Daniel’s name. Remo drove a Ferrari car registered in Daniel’s name.
• Remo worked for Parma, but drew no salary. Parma’s records show that Remo was paid “management fees” by the company.
• Most importantly, Parma issued the three cheques totaling close to $140,000 that were used by the Joint Venture to help pay for the down payments on the properties being purchased, developed and sold by the Joint Venture. One of these cheques was for $44,000 and was used directly in the purchase of Lloyd George. The other two cheques were used to purchase earlier Joint Venture properties. These payments appear on Parma’s tax records as “investments” by the company. Daniel reiterated the word “investment” in a complaint he later lodged with the Real Estate Council of Ontario about Rocco.
• There is evidence that Parma lent $20,000 to MJR to help pay for trades working on the Joint Venture properties.
• In email correspondence from Daniel to the law firm of James & Associates, Daniel refers to Parma work on the subject lands as being motivated by his “commitment to seeing [the Joint Venture] succeed.”

[58] Parma’s response was that the payments made by Parma to the Joint Venture were entirely made as agent for Remo to avoid his bankruptcy and divorce proceedings. The other evidence was just circumstantial and of no weight on this issue.

[59] I agree with Parma. I rest my conclusion almost exclusively on the contents of the written agreement dated December 17, 2007. This document was signed by all of the parties to the Joint Venture between December, 2007 and February, 2008. It will be called the “Agreement.” Rocco’s evidence was that toward the end of 2007 Remo’s divorce was concluded and he, Remo, wanted a greater sense of security. He did not want to leave the Joint Venture as the verbal agreement it had been to that point. He had his lawyer, Frank Lento, prepare this document for the members of the Joint Venture to sign.

[60] Both Rooco and Romina claimed that they signed this Agreement under duress and misrepresentation. Firstly, it is not clear whether the Defendants take the position that the Agreement is not enforceable due to duress and misrepresentation. I was presented with no pleadings in which the Defendants take that position.

[61] Secondly, and in any event, if that is the position of the Defendants, the evidence and the law do not support it. The key person for the Defendants was Rocco. Giancarlo appears to have signed the document later under the advice of Rocco. Romina’s evidence was that she relied upon Rocco’s advice in signing the document in February, 2008. Rocco in turn asserted that Remo had exercised duress and misrepresentation by promising to deliver a joint venture agreement concerning Daisy only after the Agreement was signed (Rocco wanted this Daisy joint venture document to protect his interest in that property), and by promising not to register claims for lien. The allegation is that Remo followed through on neither of these promises.

[62] However, Rocco obtained independent legal advice before signing the Agreement. Attached to the Agreement is a Certificate of Independent Legal Advice dated December 17, 2007 signed by lawyer, Joseph Baglieri, wherein Mr. Baglieri states that he explained the Agreement to Rocco and that Rocco fully understood it. Rocco asserted that Mr. Baglieri’s advice was poor as he told him, Rocco, to negotiate further terms with Remo concerning Remo’s representations. This was not bad advice. Further negotiation is something that Rocco, a seasoned businessman, could have, but did not, do. In any event, I was advised that the Defendants have taken no action against Mr. Baglieri. Furthermore, the Remo promise not to register claims for lien was legally not enforceable by virtue of CLA section 4, something a builder such as Rocco should have known. Based on the evidence presented, I do not find that the Agreement is unenforceable due to duress or misrepresentation.

[63] In any event, I note that the objections made by Rocco and Romina to the contents of the Agreement were not substantial. They objected to the absence of the following: no references to how losses would be dealt with; no references to the Daisy joint venture document and the promise not to lien; no detail as to the referenced “management fees” for Rocco and Remo. They also objected to what they perceived was a preference given to payment of Parma over payment of other trades. Given my earlier discussion about the Daisy joint venture document and the promise not to lien, I do not find the absence of these references essential to the enforceability of the document. As to the other allegedly missing terms, in my view they are not essential to the enforceability of the document. As to the alleged preference, I do not view the document as giving such a preference.

[64] I therefore find that the Agreement reflected terms of the Joint Venture that were previously verbally agreed upon, and is an enforceable document to that extent. It guided me on the issue of whether Parma was an “owner”; see Celebrity Flooring, supra, at paragraph 241.

[65] The Agreement contains the following points:

• as stated in the second preamble paragraph, it was Remo, not Parma, who contributed to the Joint Venture “through effort or financial contribution”;
• as stated in the fifth preamble paragraph, it was Remo, not Parma, who was one of the “real owners” of the Joint Venture properties, including Carnarvon and Lloyd George;
• as stated in the eighth preamble paragraph, the registered owners of the lands were holding the lands in trust for inter alia Remo, not Parma;
• as stated in the ninth preamble paragraph, it was Remo, not Parma, who was entitled to a 33% share in the net profits from the sales of these properties; and
• as stated in paragraph (i), Parma’s invoices were to be treated as “invoices rendered by the trades.”

These points make it clear that it was Remo, not Parma, who had an interest in the Joint Venture and through the Joint Venture an ownership interest in the Carnarvon and Lloyd George properties. The Agreement also makes it clear that Parma was to be treated as a trade of MJR.

[66] This evidence is supported by Rocco’s evidence. He said clearly in chief that it was Remo who contributed financially to the Joint Venture, and that the reason Remo had the cheques issued by Parma was because of his desire to avoid his divorce proceedings. Rocco also admitted that Parma was Daniel’s company, not Remo’s. In fact, all of the factors raised by Mr. Vieni in argument on this point are consistent with that explanation, namely that Remo used Parma as his agent to invest Remo’s funds in the Joint Venture.

[67] I, therefore, find that Parma was not an “owner” pursuant to the CLA.

b. What is owed to Parma in relation to its contract scope of work?

[68] It is undisputed that Parma’s agreed upon scope of work was the framing for each of the Joint Venture properties. It is also undisputed that Parma was to do this work for a fixed price of $18,000 per house in relation the Carnarvon and Lloyd George properties. The fixed price per house for the Evans properties was $16,000 because these houses were about 240 square feet smaller.

[69] Parma rendered an invoice dated November 30, 2007 for the unpaid framing work on Carnarvon. It pertained to all three Carnarvon properties. It totaled, with tax, $57,240. Rocco showed in his evidence that $25,000 was paid for this work. This was not seriously challenged by Parma. There was evidence from Daniel that some of this $25,000 was applied to other accounts, but satisfactory proof was not given of that assertion. In any event, the Defendants conceded at trial that the entire $25,000 payment could be allocated to 22 Carnarvon and that the remainder of the account, $32,240 could be allocated to Action 29 and 30. Therefore, I find that Parma is owed $32,240 for its framing work on 24 and 26 Carnarvon. This amount will be divided equally between Actions 29 and 35.

[70] Parma also rendered an invoice dated November 30, 2007 for the unpaid framing work on Lloyd George. It was in the amount of $38,160, inclusive of tax. Mr. Vieni conceded in closing argument that this amount was owed. I so find.

[71] Therefore, I find that Parma is owed a total of $70,400 on account of its framing work. The entity that owes this money is MJR.

c. What is owed to Parma, if anything, in relation to extras?

[72] This is where most of issues in the case were. I will divide my discussion of these issues into categories, starting with the extras that were primarily conceded by the Defendants.

(i) November 30, 2007 invoices:

[73] In closing argument, Mr. Vieni conceded that MJR owed Parma certain extras on invoicing that was rendered by Parma at the end of November, 2007 concerning the subject properties. I have reviewed the evidence and the positions of the parties where there was disagreement on these claims, and make my rulings as follows:

a) $836.43: Parma submitted an invoice dated November 30, 2007 on Carnarvon and Lloyd George for the Ryder truck rental, the pallet pump truck used to deliver tiles, and the Home Depot products and rentals. It was conceded by MJR. Parma asserted that $127.81 of this invoice concerned 22 Carnarvon, which was not challenged by MJR. The remainder, $836.43, will be divided equally between the three actions, namely $278.81 for each.

b) $3,498: This was the amount of the Parma invoice dated November 30, 2007 on Lloyd George for framing a skylight, applying Tyvec.Poly glue, and installing bay windows. It was conceded by MJR. It will be applied to Action 30.

c) $3,710: Parma submitted an invoice dated November 30, 2007 on Carnarvon for framing two skylights, applying Tyvec.Poly glue, and installing bay windows in the amount of $5,565. It was conceded by MJR. 2/3 of this item, $3,710, will be divided equally between Actions 29 and 35, namely $1,855 for each.

d) $3,604: This was the amount of the Parma invoice dated November 30, 2007 on Lloyd George for carpentry work in building rear decks, stairs and railings. It was conceded by MJR. This will be applied to Action 30.

e) $3,604: Parma submitted an invoice dated November 30, 2007 on Carnarvon for carpentry work in building rear decks, stairs and railings in the total amount of $5,406. While not apparently addressed in closing argument by Mr. Vieni, I note that this item was conceded by the Defendants in the Scott Schedule subject to a deficiency back-charge, which was waived at trial. Therefore, I find in favour of Parma on this claim. 2/3 of this item, $3,604, will be divided equally between Actions 29 and 35, namely $1,802 for each.

f) $4,982: Parma submitted an invoice dated November 30, 2007 on Carnarvon for the construction on a fence and gates in the total amount of $6,678. Rocco stated in evidence that he had a verbal agreement with Remo (acting for Parma) to have this work done for a fixed price of $1,500 plus GST per house, namely $4,770. However, I note again that in the Scott Schedule the Defendants conceded this item in full. Therefore, I give Parma the benefit of the doubt on this claim.

Parma skewed the allocation of this amount between the Carnarvon properties with about half being allocated to 26 Carnarvon and a quarter to 24 Carnarvon, an allocation which was not seriously challenged by MJR. I will, therefore, allocate $1,696 to Action 29 and $3,286 to Action 35.

g) $1,590: Parma submitted an invoice dated November 30, 2007 on Lloyd George for the removal, rectification and rebuilding of new wood fence for a total amount of $3,074. Rocco stated in evidence that he had a verbal agreement with Remo (representing Parma) to have this work done for a fixed price of $1,500 plus GST, namely $1,590. This was the position taken by the Defendants in the Scott Schedule. The Parma invoice was marked up by Rocco accordingly when he received it. Without Remo present to deny this assertion by Rocco, I am left with little choice but to agree with it. I so find. This $1,590 will be applied to Action 30.

[74] The amounts I have found owing to Parma on the November 30, 2007 invoices total $21,824.43 (inclusive of tax), and will be allocated between the actions as follows: $5,631.81 to Action 29; $7,221.81 to Action 35; and $8,970.81 to Action 30.

(ii) Additional fence and deck extras:

[75] On December 31, 2007, Parma prepared and shortly thereafter submitted two invoices containing numerous claims for extras on Carvarvon and Lloyd George. These claims form the core of the three actions. I will deal with the bulk of these claims later.

[76] Firstly, though, I need to deal with certain claims in these invoices that appear to pertain to the fence and deck work that was billed by Parma in the November 30, 2007 invoices. In the December 31, 2007 invoice for Carnarvon there are these claims:

Removal of chain link fence and posts: $780.00;

Stake out fence and deck posts with concrete: $520.00;

Installation of all 4” x 4” posts with concrete: $1,170.00;

TOTAL: $2,470.00.

[77] There is one such claim on the Lloyd George December 31, 2007 invoice, as follows:

Drill holes and install 4” x 4” posts with concrete for fence and decks: $1,170.00.

[78] I agree with the Defendants that these claims are not credible. Rocco stated that these items pertained to the fence and deck work that Parma billed on November 30, 2007. Daniel admitted that all of the work on the fences and decks was done by the time the November 30, 2007 invoices were rendered. In fact, in the November 30, 2007 invoices concerning the decks, Parma describes the deck work as being “completed.” Daniel gave no explanation as to why these items in the December 31, 2007 invoices were not included in the earlier November 30, 2007 invoices. Given the suspicious nature of these claims, I would have thought that Parma would have taken more care in substantiating them, such as with time sheets, but that was not the case. I note as well that I have found that the fence work on Lloyd George was done under a fixed price that was fully billed in the November 30, 2007 invoices.

[79] Therefore, I deny these additional fence and deck extras claims.

(iii) Framing related extras:

[80] There are certain extras claims in the two December 31, 2007 invoices that fall within the ambit of framing work. I will, therefore, treat them as a group and separately, as they would legitimately qualify as “extras” to framing contracts. The other claimed extras appear to fall outside the ambit of framing work, and would qualify therefore as claims for separate contracts. The framing related claims concern labour only, charged at the rate of $65/hour per man, as stated earlier.

[81] The framing related extras claims concerning Carnarvon are the following:

Extra 314 square feet added to each house: $9,420;

Building conventional roof over master bedroom: $3,900;

Building conventional roof above veranda: $2,100;

Building 14’-2”x 6” high walls around master bedroom and top of stair: $1,896;

TOTAL: $17,316.

[82] The framing related extra claims concerning Lloyd George are the following:

Building conventional roof over bedroom: $2,600;

Building conventional flat roof over the veranda: $1,400;

Building 14’ high walls around bedroom and stair location: $1,280;

TOTAL: $5,280.

[83] The Defendants deny these claims. In his evidence, Rocco did not deny that this work was done. He asserted that these were items that were shown on the Lloyd George drawings, and that he got Remo to agree (on behalf of Parma) to incorporate the framing costs for all of these changes in the increased framing cost per house on both Lloyd George and Carnarvon. He stated that he did not have the Carnarvon drawing changed to incorporate these changes in order to save consulting costs, all of which he asserted Remo knew about and approved. Both sides agreed that the framing cost per house on the Evans lots was $16,000 and that the framing cost per house on Carnarvon and Lloyd George was increased to $18,000.

[84] Daniel asserted in his evidence that the increase in framing cost per house was agreed upon by Parma before Daniel or Remo saw the drawings, and that therefore these are legitimate extras. He stated that the framing cost was agreed upon in February, 2007, and that Parma first got to see the drawings when Parma was working on the footings in April, 2007. There was no documentary corroboration of these statements.

[85] I do not find Parma’s position credible. Remo was an experienced framing contractor. It seems unlikely that he would have agreed (on behalf of Parma) to an increased framing price without seeing the drawings that would govern the revised framing work. In fact, in his evidence Daniel admitted that Parma needed to see the drawings before the footings were done.

[86] Furthermore, there is a contradiction in one of Parma’s framing extras claims. Daniel admitted that the increase in framing costs on Carnarvon and Lloyd George was because of an increase in the size of these houses. Yet, Parma claimed an extra (beyond the increased price) for the increase in size of the Carnarvon houses due to the fact that the changes were not shown on the Carnarvon drawings. I find this to be a self-serving contradiction that undermines the credibility of the entirety of these Parma framing extras claims. I find plausible Rocco’s assertion that Remo knew of the changes and knew that the changes would not be made to the Carnarvon drawings, as the Joint Venture would have had an interest in minimizing costs wherever possible.

[87] Finally, I note that these claims were inserted in the December 31, 2007 invoices which, as stated earlier, were issued when there was increasing tension between Remo and his partners. I was given no explanation was to why these claims were not asserted earlier in the November 30, 2007 invoices.

[88] Therefore, I find that Parma has not met its onus of establishing its entitlement to these framing extras.

(iv) Site supervision:

[89] Site supervision is the single largest claim in each of the two December 31, 2007 invoices. I will discuss it at some length as a result.

[90] Daniel stated that this claim was based on a verbal agreement between him and Rocco whereby Parma would do all of the site supervision for Carnarvon and Lloyd George at the fixed amount of 10% of the cost of construction, which, according to Daniel, was stated by Rocco to be $125/square foot. Daniel stated that Parma charged at the rate of $120/square foot, which he thought was reasonable. Since the square footage for each of the Carnarvon and Lloyd George properties was assumed to 1,800, the site supervision charge per property was $21,600. The total claimed in Action 29 and 35 is, therefore, $43,200, and the total claimed in Action 30 is $43,200.

[91] The Defendants claimed that either no site supervision was done by Parma or that, if it was, it was done voluntarily to assist Remo fulfill his obligations to the Joint Venture to assist Rocco wherever needed in managing, supervising and completing the improvements. The Defendants argued that this claim was trumped up by Remo to enhance his position in the Joint Venture. Parma disputed this position, asserting that Parma performed site supervision in accordance with the above noted verbal agreement, that Remo had no site supervision obligations to the Joint Venture and that when Remo and Daniel worked together on site supervision they were doing so on behalf of Parma. Parma asserted that Remo’s only up-front obligation to the Joint Venture was his financial contribution, which he fulfilled and for which he has not been fully repaid.

[92] Having reviewed the evidence, I agree with the Defendants. This is not a credible claim for an extra by Parma, and I do not accept it. Here are my reasons for this conclusion:

a) The onus for establishing this claim on a balance of probabilities rests on Parma.

b) The Agreement provides some guidance as to whether Remo has site supervision obligations to the Joint Venture. It states in the second preamble paragraph that “each” of the partners in the Joint Venture contributed to the “endeavor” through “effort or financial contribution.” In interpreting whether to view this phrase disjunctively, I note that one of the partners, Romina, contributed financially and through effort (ie. accounting), without further compensation. As a result, there is precedence for viewing this phrase conjunctively, particularly when applying the doctrine of contra proferentum. I do not, therefore, find that the Agreement specified that partners who contributed financially would also not contribute through “effort.”

c) The Agreement gives little other guidance on this point. It does state in clause (i) that both Rocco and Remo earned “management fees” on “all of the properties.” Parma argued that this clause referred to the limited help Remo was to give Rocco for off-site, project management work, and did not include site supervision responsibilities. The Defendants argued that it referred to the site supervision fees Remo earned on Jones, which was a project that differed from the others in size and distance from the other sites. According to the Defendants, Rocco agreed to pay Remo up-front for this work as an exception, and in fact did pay him $12,500 for that work. I find that Parma’s version of this phrase more closely fits the wording of the Agreement since the clause refers to “all of the properties.” But I also find that the clause in question does not exclude site supervision work by Remo for the Joint Venture.

d) Given the lack of clear guidance on this question from the Agreement, I looked at what the partners would have agreed to, acting reasonably, concerning Remo’s obligations to the Joint Venture. I agree with the Defendants that the issue of risk allocation is key in this regard. The partners that contributed financially (Remo, Romina and Gioncarlo) appear to have done so equally. The only one of these three that did not take on risk beyond his financial contribution was Remo. Gioncarlo obtained capital and took ownership of some of the properties; Romina took ownership of some of the other properties. Ownership exposed these partners to claims of purchasers and trades, to property taxes and other carrying costs, and to financing obligations. The fourth partner, Rocco, did not contribute financially, but instead took on the considerable burden of project identification, property development, project management and sales. Remo could help only with project management. The risk that Rocco also took on was through MJR. MJR possessed the Tarion license that was vital to the Joint Venture, but also exposed Rocco and Gioncarlo to deficiency claims from the statutory authority and purchasers. Also, MJR entered into the trade contracts for the improvements, thereby exposing the company and its principals to trade claims. Rocco did get compensation in commissions on sales and for project management (approximately $5,000 per house). But he also got only 16.5% of net profits, namely half of what Remo obtained.

Given this distribution of risk, reward and responsibilities, it makes no sense that the partners would have agreed, acting reasonably, to allow Remo his 33% of the net profits without receiving more than just his financial contribution. That additional contribution would have included site supervision as needed, as that is what Remo was capable of, given his experience in home construction. This was Remo’s “effort” as referred to in the Agreement. Therefore, I find that Remo had obligations to the Joint Venture beyond his financial contribution, which obligations included site supervision as needed.

e) The existence of the agreement claimed by Parma for its site supervision extra is, as previously stated, highly dubious. It is an extraordinary agreement, as it purports to give Parma an up-front entitlement to fixed compensation that grossly exceeds the set prices for Parma’s framing contracts. Such an agreement would significantly deplete Joint Venture profits. Daniel admitted that such an agreement had not previously existed. I would have thought that there would have been some form of correspondence or other documentation confirming this agreement (at least from Parma), but none was produced.

f) The necessity for the site supervision claimed by Parma is also questionable. The Carnarvon and Lloyd George houses were less than 20% larger than the other Joint Venture houses (other than Jones). When asked about this, Daniel asserted in cross-examination that he was retained to do site supervision for the entirety of the Carnarvon and Lloyd George projects because Rocco and Remo were travelling to Italy in the summer of 2007 and needed someone to run those projects in their absence. These trips overlapped and consumed no more than about 6 weeks of the summer, certainly not the entire duration of these four projects. This would not justify such a sweeping and expensive extra.

g) Parma produced no trade witnesses. The ones who were produced (Messrs. Chita, Mallozzi and Penny) were produced by the Defendants. They denied the existence of site supervision as they understood it, and stated that, in any event, any site supervision was done by Rocco. I give weight to their evidence in this regard.

h) Parma appears to have done site supervision related activity on the subject lands. It produced records showing that Daniel used a cell phone to communicate regularly with trades and suppliers. It showed how Daniel helped with the work of other trades and in getting supplies to the sites. Yet, all of this work could just as much been voluntary assistance to Remo than work for MJR. Daniel admitted that Parma was used by Remo to invest his money in the Joint Venture, and to having a very close connection with Remo. It makes sense, therefore, that Remo would also have used Parma to fulfill his site supervision obligations to the Joint Venture. On the other hand, it makes no sense that MJR would have its framing trade, Parma, do site supervision.

i) Parma claimed that MJR paid Parma for modest site supervision it provided on previous Joint Venture projects. I have reviewed that evidence and make the following comments.

Parma produced a Parma invoice dated August 28, 2006 for “site supervision, extra work and equipment” on 97A and 97B Evans in the amount of $12,500. An MJR cheque to Parma in that amount dated September 25, 2006 was also produced. Rocco claimed that the said invoice was fabricated, that the cheque was the payment to Remo for his site supervision work on Jones, and that Remo directed that the cheque be made out to Parma to avoid detection in his divorce proceedins. I note that the MJR ledger shows this cheque as having been entered under 93 and 95 Evans, and not under Jones, and that the words, “Parma General (management),” appear in this entry. Rocco called the location of the entry in the ledger a mistake. I was left somewhat confused by all this evidence. Daniel admitted that this invoice date is about a year after the alleged site supervision work was done, thereby making it highly suspicious. Also, Jones was twice the size of any of the Evans projects and was situated well away from the other sites. Rocco would have needed supervision assistance for Jones much more than for Evans. I therefore draw no conclusion from this that MJR paid Parma for site supervision work.

Parma also produced a Parma invoice dated June 29, 2007 for “site supervision, extra work and equipment” on all of other Evans properties. It produced a Parma invoice dated July 5, 2007 for work of the same description in relation to Jones. The totals for these two invoices and another invoice (dated July 12, 2007) for work Parma did on Rocco’s own home came to just under $80,000. Daniel then claimed that these three invoices were paid by a cheque issued by Rocco personally to Daniel personally dated July 19, 2007 in the amount of $80,000. The Defendants deny this, claiming that the above noted two site supervision invoices were fabricated and that the $80,000 cheque was an advance on the Daisy purchase.

I will not rule on the veracity of these invoices. Suffice it to say that the invoice for the alleged Evans site supervision appears questionable, as the date of the invoice is long after the completion of those projects. I will rule though on the allegation concerning the $80,000 as it pertains to this case. Rocco sued Daniel in relation to the Daisy purchase. In that action, Daniel’s initial Statement of Defence (dated April 18, 2008) described the cheque as a “repayment of various loans.” About two years later, Daniel amended his Statement of Claim to state that the $80,000 was really a payment by Rocco on behalf of MJR to Daniel on behalf of Parma “for services rendered.” There was no explanation for the initial admission that was subsequently reversed. Given the fact that the cheque was from Rocco personally to Daniel personally, I do not give the admission reversal credence.

I therefore find that there is insufficient evidence that MJR paid any funds to Parma for site supervision on previous Joint Venture improvements.

j) Finally, the timing of the December 31, 2007 invoices is highly suspicious. By this time, the evidence showed that there was mounting tension between Remo and his partners. With his divorce freshly behind him, Remo had in early December, 2007 presented a draft of the Agreement to his partners for signature. With the loss on Jones being crystallized at this time, it appears that Remo was concerned that his interests in the Joint Venture were not being protected. The evidence indicates that he was taking steps to advance his position within the Joint Venture.

[93] Therefore, I find that Parma has not met its onus of proving its entitlement to the claim for extras for site supervision work, and I deny those claims.

(v) Other extras claims:

[94] In the December 31, 2007 invoices, Parma asserts numerous other claims for extra charges. These are claims that fall outside the ambit of the framing contracts, do not pertain to the fences and decks, and are alleged not to be included in the claims for site supervision.

[95] Concerning Carnarvon, there are 32 of these claims. They are the following: cleaning up of Evans and transporting material to Carnarvon; installing a temporary safety fence; constructing tree protection barriers prior to demolition; cutting and removing trees prior to demolition; cutting and removing branches that interfere with excavation; constructing a broken fence protection around trees; cleaning of collapsed fill in footing foundation and pumping out water; stripping, removing and cleaning footing boards; cutting down and removing big pine trees; picking up, delivering and storing basement windows; cutting concrete foundation walls to fit a door and a window; digging a hole to expose and fix damaged water shut-off valve; installing glass and screens for 12 basement windows; picking up and delivering 1 crate of tiles; picking up and delivering 9 crates of tiles and 7 shower trim sets; picking up and delivering hardwood flooring; removing and disposing of a tree stump in the back yard; installing temporary door locks in all 12 exterior doors; removing retaining log wall and concrete slab, fixing grading and cleaning up; relocating neighbour’s tool shed; working with the landscaper to grade property and install sod; removing and cleaning concrete forms from the inside of the cold cellars; picking up, delivering and installing 3 cold cellar doors; continuous cleaning of mud, gravel and debris from neighbour’s driveway; picking up, delivering and installing 12 washroom mirrors; picking up, delivering and installing 3 sump pumps; removing and cleaning wood forms from the veranda, stairs, garage slab and door/basement window sills; moving construction trailer from Carnarvon to Lloyd George sites 3 times during construction; moving the fork lift from Carnarvon to Lloyd George 3 times during construction; the work involved in transporting big tree logs with fork lift from the backyard, loading the trailer in the front and assisting clean up; picking up, delivering and installing all window screens and hardware, and cleaning of windows prior to installation; fork lift rental; and cleaning garbage, coordinating homes and jobsite for the total period of construction.

[96] The total of all of these claims on Carnarvon is $43,057.75 (plus GST). With the exception of the fork lift rental, all of these claims were for labour only, charged at the rate of $65/hour per man, as stated earlier. No time sheets or other corroborating documents were provided to substantiate the quantum of these charges. The hours claimed were not shown on the invoice. Daniel in effect reconstructed the quantum charged for each item from the witness stand.

[97] Concerning Lloyd George, there are 34 of these extras claims as well. They are the following: installing a temporary fence; constructing tree protection barriers prior to demolition; cutting down 3 big trees on the construction site; removing and clear cutting trees and debris from the site; removing stones collapsed in the basement foundation and restacking them in the neighbour’s backyard; picking up and delivering footing boards from the Carnarvon site; preparing and connecting temporary water for the construction site; cutting and clearing branches from a big tree in the front yard; picking up, storing, delivering and reviewing installation of basement windows; picking up temporary stairs and other construction material from Jones and delivering them to Lloyd George; cutting of concrete foundation walls to fit door installation; digging of hole to expose and fix damaged water shut off valve; cleaning of collapsed fill in footing/foundation and pumping out water; stripping, removing and cleaning footing boards; delivering, loading and unloading tiles from Carnarvon garages to Lloyd George; removing of 2 exterior doors and picking up, delivering and installing 2 new doors; installing glass and screens for 6 basement windows; picking up and delivering lumber to frame and form the front stairs, veranda and garage slab; installing temporary door locks for 8 exterior doors; continuous cleaning of mud, gravel and debris from neighbour’s driveway; removing 4 washroom vanities, rectifying all deficiencies and making adjustments accordingly and reinstalling; framing, insulating and sheeting on the underside of 2 bay windows; removing and cleaning wood forms from the veranda, stairs, garage slab and door sills; picking up, delivering and installing 6 washroom mirrors; picking up, delivering and installing all window screens and hardware; cleaning of windows prior to installation; picking up, delivering and installing 2 cold cellar doors; picking up, delivering and installing 2 sump pumps; removing and cleaning concrete forms from the inside of the cold cellars; moving construction trailer 3 times from Lloyd George to Carnarvon; moving fork lift 3 times from Lloyd George to Carnarvon; cleaning garbage, coordinating homes and jobsite for the period of construction; and fork lift rental.

[98] The total of all of these claims on Lloyd George is $39,872.50 (plus GST). With the exception of the fork lift rental, all of these claims were for labour only, charged at the rate of $65/hour per man, as stated earlier. No time sheets or other corroborating documents were provided to substantiate the quantum of these charges. The hours claimed were not shown on the invoice. Daniel in effect reconstructed the quantum charged for each item from the witness stand.

[99] Daniel went through each of these claims in his evidence. A pattern became evident. All of this labour was done by Daniel and Remo on Rocco’s instructions or on their own initiative in order to move the projects forward. None of this work was done following an agreement between Parma or Remo, on the one hand, and MJR, on the other, to have the work done and for the payment of same.

[100] The Defendants denied these claims. Concerning the vast bulk of the claims, the Defendants did not deny that Daniel and Remo did this work. Their basic point was that this was all work to be done by Remo as a part of his “sweat equity,” namely his “effort” as stated in the Agreement, and that Daniel was simply voluntarily assisting his father in this regard. Rocco’s consistent point was that if Remo or Daniel wanted to be paid for extra work, they were obliged to get an agreement for that payment from MJR in advance. They had done so with some items, such as with the decks and the fences. Otherwise, by default, the work fell under Remo’s general obligation to the Joint Venture to assist Rocco in managing and advancing the construction, and, therefore, was not subject to an up-front payment obligation to Parma. The Defendants argued that these claims were essentially trumped up by Remo to enhance his position in the Joint Venture.

[101] Furthermore, the Defendants argued that the specific claims for “coordinating homes and jobsite” (totaling $16,250 for both sites) were duplicative of the site supervision extra claim. Also, concerning the one non-labour claim for the fork lift rental (totaling $40,800 for both sites), they argued that this claim was not credible as the fork lift was used for the framing work, and therefore was covered by the framing contracts. If the fork lift was to be used for other work, there should have been an agreement with MJR in advance for that and there was not, and that therefore the forklift rental was not eligible for extra compensation.

[102] Having reviewed the evidence, I agree with the Defendants. Based on the distribution of risk, reward and responsibilities in the Joint Venture and the close relationship between Parma and Remo all as discussed earlier, I have concluded that the partners to the Joint Venture would have, acting reasonably, looked to Remo to provide on-site assistance to Rocco as needed in order to maximize profits, and that Remo would have used Daniel and Parma to fulfill this obligation. Therefore, I agree that the presumption must have been that any non-framing work not done under separate agreements between MJR and either Parma or Remo for extra payment for such work, was part of Remo’s obligations to the Joint Venture. Such on-site assistance would have included the type of work claimed in these extra claims. Otherwise, Joint Venture profits would have been significantly depleted to, what would have been viewed by the partners as, the indirect and disproportionate advantage of Remo.

[103] I also agree that there is no evidence that Daniel’s work with Remo on these items was anything more than his voluntary assistance to his father. The work appears to have been necessary and much of it appears to have been done under the direct instruction of Rocco. But, given Remo’s responsibilities to the Joint Venture and Parma’s close ties to Remo, Parma had a heavy onus of showing that this was all work MJR and the Joint Venture would have agreed to pay as extras to its framing contractor, Parma. I find that Parma has not met that onus.

[104] There is other evidence that bolsters my conclusion on this point. As stated earlier, Parma produced none of the usual back-up for these claims that a trade would prepare to substantiate a claim for extras paid by the hour, such as time sheets. This indicates that Parma never originally expected to make these claims. Furthermore, as stated earlier, I have reviewed the Parma earlier invoices for “site supervision, extra work and equipment” on the other projects, and have concluded that there is no conclusive evidence that MJR paid for the claimed extra work by Parma on these earlier sites just as there is no conclusive evidence that MJR paid Parma for the claimed site supervision. This is consistent with the Defendants’ position that MJR would not pay for extras that it had not agreed to in advance. Finally, there is the timing of these claims, coming as they do in the December 31, 2007 invoices, when tension was rising between Remo and his partners.

[105] I, therefore, deny these other Parma claims for extra payment.

d. Did Parma’s lien rights expire?

[106] As stated above, the Agreement is clear that Parma was to be treated as a trade of MJR. What was MJR? The evidence from Daniel, Rocco and Romina was consistent that MJR was to be used as the builder on each of the improvements because it had the Tarion license. Since MJR itself took no direct or beneficial interest in the lands themselves, MJR would amount to a “contractor” under the CLA, namely the person who contracted with the owner to supply services and materials to the subject improvements. Since Parma was a trade of MJR, Parma would amount to a “subcontractor” under the CLA.

[107] Under CLA section 31(3), where, as here, there are no certificates of substantial performance, the lien rights of a subcontractor expire 45 days from the date the subcontractor “last supplied services and materials to the improvement.” It is undisputed that all of Parma’s work had been completed as of the end of December, 2007 other than what happened at the end of January, 2008. This means that Parma’s lien rights will have expired by the time it registered its claims for lien on February 22, 2007 unless it is found to have supplied services and materials to the improvements after January 8, 2008.

[108] Parma claims that it did provide such services and materials at the end of January, 2008 by hiring and paying for the work of Mr. Kuchartz and by providing paving quotes to MJR.

[109] Concerning the work of Mr. Kuchartz, I have reviewed the evidence and have concluded that it was not the work of Parma. The following are the things I considered in reaching this conclusion:

a) Rocco stated that MJR’s trimming trade, Barrie Trim, refused to return to the sites to finish its trim work, and that in mid-January, 2008 he asked Remo for a referral to complete this trim work. Tensions were building between Remo and the other partners, but had not reached a breaking point.

b) Rocco stated that Remo told him that he, Remo, approached a man named “Ziggy” who could not do the work but who referred Remo to Mr. Kuchartz. Rocco stated that he then got in touch with Mr. Kuchartz and met him at the Lloyd George site in mid-January, 2008 and retained him. This makes sense to me. Why would a contractor approach its framing subcontractor (Parma) to finish the much later work of its trim subcontractor?

c) Mr. Kuchartz stated that he was approached and retained by Remo. Yet, in re-examination, he admitted that he was somewhat confused and that he sensed that Remo represented a “company.” What Mr. Kuchartz was clear about, though, was that he had nothing to do with Daniel. It is therefore clear that Parma had nothing to do with this work. At most, Mr. Kuchartz worked for Remo in his capacity as agent for MJR or in his capacity was “co-manager” for the Joint Venture.

d) According to Mr. Kuchartz, he and his son, Shane, performed trim work at both Lloyd George sites on January 17, 18, 21, 22 and 23, 2008, and Shane installed some locks on the Carnarvon sites. The Kuchartz invoice dated January 31, 2008 was then generated and was delivered by Mr. Kuchartz at the Lloyd George site. 55 hours of Kuchartz work were shown. The amount charged was $1,625 and was stated as pertaining to Lloyd George. The payee was left blank on the invoice, probably because of the uncertainty as to the identity of the payee. Rocco stated that he asked for the invoice but that Remo insisted on taking it.

e) The evidence was that Remo filled in the Kuchartz invoice with the name of the payee, Parma, and with wording that purported to link the Kuchartz work to Parma’s work, carpentry. Mr. Kuchartz also stated that Remo added $70 for the Carnarvon work done by Shane, making the final invoice amount $1,695. As stated earlier, I find that this was in effect a fabrication of a document, as by this time Remo would have known that Parma’s lien rights were in jeopardy.

f) Parma then generated an invoice to MJR dated February 4, 2008 in the amount of $2,520 for “carpentry to complete interior trim.” Daniel stated that a small amount was added to the Kuchartz invoice to account for Remo’s work in helping Mr. Kuchartz and his son.

g) Parma then paid the Kuchartz invoice on February 15, 2008. Daniel admitted that Parma had never hired and paid for a sub-contractor in the past on improvements for the Joint Venture. That history makes this payment highly suspicious.

h) Later, after the Parma claims for lien were registered, Daniel asked Remo for clarification of the $70 that Remo had added to the Kuchartz invoice. Remo produced a note back-dated to January 31, 2008 apparently in Mr. Kuchartz’a handwriting describing Shane’s work on Carnarvon as pertaining to more than just lock installation. It includes trimming the stairs and “40 ft. baseboard and quarter round.” This is a highly suspect document given the back-dating and the new work that was described, and given how Remo had altered the Kuchartz invoice in the first place.

[110] I find that the Kuchartz work was not that of Parma. It had been requested by MJR. At most, it was done for Remo personally as agent for MJR or for the Joint Venture. I find that Remo in effect re-drew the Kuchartz invoice to make it appear as having been rendered to Parma, and that Daniel and Remo drew up the Parma invoice to MJR to complete the misrepresentation.

[111] Mr. Lachmansingh argued that the Kuchartz work was analogous to an employment situation and that the court should apply a “true employer” test as outlined in those cases to determine the party for whom Mr. Kuchartz worked. I do not agree. The fact that Mr. Kuchartz issued an invoice is conclusive proof to me that he considered himself an independent contractor. Employees typically do not render invoices for their services. With an independent contractor like Mr. Kuchartz, the key issue is the entity with whom he contracted, not the entity that hired him, paid him and exercised the most control over him.

[112] The invoice again is the vital evidence of the contractual relationship. That Remo in effect re-drew the Kuchartz invoice to make it appear as having been rendered to Parma in fulfillment of Parma’s work is tantamount to an admission by Remo that the underlying facts did not support that conclusion. That Parma voluntarily paid the Kuchartz invoice does nothing more than create a potential Parma claim against MJR for reimbursement of the payment. It does not extend Parma’s lien rights.

[113] Parma also claims that it provided MJR with paving quotes at the end of January, 2008. Daniel testified that he was asked by Rocco to get these quotes at this time. Parma called Mr. Gambino as a witness to confirm that, at Daniel’s request, he got a company named Pavestar to provide quotes to MJR for paving work to be done on the Carnarvon and Lloyd George properties.

[114] I find that this work does not extend Parma’s lien rights. Firstly, I was given no Parma invoice to MJR expressly referring to this work of getting paving quotes. If Parma claims that this work was a part of its claim for an extra for “site supervision,” I have already found that the Parma claim for an extra for site supervision is not proven. In any event, the invoice for the site supervision extra was rendered a month before this work was allegedly done. Also, the proximity in time of this claim to what was done by Remo and Daniel in relation to the Kuchartz work and invoice adds an aura of incredulity. Secondly, and in any event, this work does not give rise to lien rights, as none of these quotes ended up in work being done on site. That was confirmed by both Mr. Gambino and Daniel. It was at best off-site, project management work, and there is good authority for the proposition that off-site, project management services do not give rise to lien rights; see 697470 Ontario Ltd. v. Presidential Developments Ltd. 1989 CarswellOnt 698 at paragraph 8.

[115] I, therefore, find that Parma’s lien rights have expired.

e. Issues concerning lienability of supply:

[116] As I have found that Parma’s lien rights have expired, I do not have to explore the question of whether the amounts I have found owing to Parma give rise to lien rights, and I do not do so.

V. CONCLUSION

[117] I, therefore, find that MJR owes Parma the following amounts concerning Parma’s breach of contract claims on 24 Carnarvon in Action 29, namely the action with the number CV-08-351729:

Contract scope of work: $16,120.00 (half of $32,240);

November 30, 2007 invoices: $5,631.81;

TOTAL: $21,751.81.

[118] I also find that MJR owes Parma the following amounts concerning Parma’s breach of contract claims on 26 Carnarvon in Action 35, namely the action with the number CV-08-351735:

Contract scope of work: $16,120.00 (half of $32,240);

November 30, 2007 invoices: $7,221.81;

TOTAL: $23,341.81.

[119] I also find that MJR owes Parma the following amounts concerning Parma’s breach of contract claims on Lloyd George in Action 30, namely the action with the number CV-08-351730:

Contract scope of work: $38,160.00;

November 30, 2007 invoices: $8,970.81;

TOTAL: $47,130.81.

[120] I dismiss the counterclaims in each of these actions.

[121] Furthermore, I declare that the Parma lien rights concerning each of the subject improvements have expired, and order that Parma’s claims for lien in these actions are discharged.

[122] Furthermore, I further find that Parma is entitled to prejudgment interest up to the date of the reference report and post-judgment interest thereafter, all in accordance with the provisions of the Courts of Justice Act, on the amounts I have found to be owing to Parma.

[123] As to costs, on January 17, 20914, Mr. Vieni delivered three Costs Outlines for the Defendants, one in each of the actions, showing the following claims for costs. All figures are tax included:

Action 29: $34,225.30 (partial indemnity); actual costs: $72,440.31;

Action 30: $30,688.32 (partial indemnity); actual costs: $64,364.96;

Action 35: $34,225.30 (partial indemnity); actual costs: $72,440.32.

[124] On January 23, 2014 Mr. Lachmansingh delivered a Bill of Costs for Parma in relation to all three actions showing a total partial indemnity claim of $110,244.24 (tax included).

[125] Generally costs follow the event. If the parties are unable to agree on costs, counsel may file written submissions on costs. Submissions may not exceed four pages (typed, 8 ½” x 11” pages, double spaced, minimum font size 12). Given the history of this and other related litigation, I want the parties also to address in their submissions the issue of what is to be done with the cash posted by MJR as security for these actions, as that must form a part of my report(s). Also, parties must address any applicable earlier court orders.

[126] Cost submissions must adhere to the following schedule:

a) The Defendants’ costs submissions must be served and filed by April 10, 2014;

b) Parma’s costs submissions must be served and filed by April 24, 2014;

c) The Defendants’ reply submission, if any, must be served and filed by May 1, 2014.

[127] If the parties are unable to agree on the form(s) of the final report(s) in these references, an attendance may be required to settle the report(s).

[128] Finally, I herewith order that these Reasons for Judgment apply to each of Actions 29, 30 and 35, and must be filed accordingly.

___________________________

MASTER C. WIEBE

Released: March 27, 2014

COURT FILE NO.: CV-08-351729

DATE: March 27, 2014

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

PARMA GENERAL CONTRACTORS INC.

Plaintiff

- and -

ROMINA PULCINI, M.J.R. CANADA

ENTERPRISES INC. and THE TORONTO

DOMINION BANK

Defendants

REASONS FOR JUDGMENT

Master C. Wiebe

Released: March 27, 2014