COURT FILE NO.: 3267/04
DATE: 20140425
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JENS NIELSEN CUSTOM CONTRACTING LTD.
Kenneth W. Watts, for the Plaintiff, Defendants to the Counterclaim
Plaintiff
- and -
JOHN LITWIN and HEATHER LITWIN
Tudor B. Carsten and Jennifer A. Whincup, for the Defendants, Plaintiffs by Counterclaim
Defendants
AND BETWEEN
JOHN LITWIN and HEATHER LITWIN
Plaintiffs by Counterclaim
- and -
JENS NIELSEN CUSTOM CONTRACTING LTD. and JENS NIELSEN
Defendants to the Counterclaim
HEARD: Heard January 7, 8, 9, 14, February 25, 26, 27, 28, March 1, 4, 5, 6, 7, 2013
REASONS FOR JUDGMENT
Fragomeni J.
[1] John and Heather Litwin reside at 59 The Kingsway. They wanted to carry out renovations to their home and hired Jens Nielsen Custom Contracting Ltd. (JNCC) to carry out those renovations. The total of the costs to carry out the renovations was $550,652.69. The plaintiff, JNCC, alleges that the defendants made payments totalling $360.000.00 and there is still owed to JNCC the sum of $190,652.69.
[2] The defendants, John and Heather Litwin, plaintiffs by counter-claim, advance a counter-claim on the basis that they did not get what they contracted for. The construction involved both a renovation to the existing home as well as construction of an addition. In their counter-claim the defendants allege that the workmanship of the construction was poor and structurally unsafe. JNCC deviated from the agreed upon design and the construction was not completed on time. The Litwins acknowledge that $70,865.46 is owed to JNCC in relation to the original agreement. The Litwins also acknowledge that they owe $2,990.00 to JNCC for extras. However, set off against these amounts the Litwins claim the following:
(a) $20,931.68 as allowance credits;
(b) $2,247.00 as an allowance error;
(c) $8,595.75 for missing items;
(d) $39,000 in general damages for failure to follow designs;
(e) $23,597.68 for rent and storage costs;
(f) $92,106.97 for structural repairs already carried out;
(g) $29,321.97 for other repairs already carried out;
(h) $37,634.50 for remaining deficiencies to be carried out.
Total = $179,580.09
[3] The Litwins seek damages from both JNCC and Jens Nielsen personally, on the basis that Mr. Nielson made fraudulent misrepresentations to the Litwins to induce them to enter into the agreement with JNCC.
THE TRIAL
Pre-Contractual Discussions
[4] In 1998 the Litwins moved to England. While in England they rented their home at 59 The Kingsway to three different people. The last family to rent it broke the lease in January 2002. The Litwins were not scheduled to return to Canada until September 2002. In these circumstances, therefore, they decided to renovate the home while it was empty. In January 2002, while in Canada, Mr. Litwin arranged to meet with various contractors.
[5] Mr. Litwin wanted a contractor who could do both design and drafting. JNCC advertised that it did both.
[6] On January 30, 2002 Mr. Litwin had a meeting with Mr. Nielsen and several important aspects of the proposed renovations were discussed. These discussions included the following:
Whether he could do both the design of the project and the build;
Could he do the work for a fixed price? Mr. Litwin did not want a cost plus contract as suggested by Mr. Nielsen because he would not be in the country to supervise the quality of the job. While in England Mr. Litwin would not be available. Mr. Litwin testified that he said to Mr. Nielsen, “Can you do it for a fixed price because if you cannot we can just end the conversation here.” Mr. Nielsen agreed to a fixed price contract;
That he was insured and licensed;
That every building permit would be in place;
The length of time to complete – Mr. Nielsen indicated about 6 months.
[7] Mr. Litwin testified that Mr. Nielsen agreed to accommodate all of the concerns raised by Mr. Litwin. Mr. Nielsen also advised Mr. Litwin that he would be on the job site every day supervising and managing the site and that he had an experienced crew with a fellow by the name of Matt Storey in charge of the crew.
[8] Mr. Litwin paid Mr. Nielson $5,000 for a design, blueprints and permits with no further commitment if they could not agree on a construction price.
[9] Mr. John Pinkney identified himself to Mr. Litwin in an e-mail that he does the design and drafting for JNCC.
[10] Mr. Nielsen and Mr. Pinkney used a computer program to create a budget for the construction, referred to as a Project Summary. This Project Summary resulted in the May 15, 2002 letter. Mr. Nielsen characterized that letter as the Budget. The Litwins take the position this letter is the contract. Mr. Litwin points to the fact that the total in the Project Summary, namely $430,865.78 is the same total as in the Budget. I will refer to the May 15, 2002 letter as the Budget as it was referred to that way at trial.
[11] Mr. Nielsen testified that the Budget presented to Mr. Litwin and signed by Mr. Litwin indicated that “structural details not final” and “subject to review by structural engineer and the City of Toronto Building Department.”
[12] In cross-examination, Mr. Nielsen was asked about the element of the risk component of the Budget. Mr. Nielsen acknowledged that risk is only included in a fixed price contract:
A: Okay. We have a contingency in there which I will say always gets used up. Then if we are going to guarantee the price, an absolute fixed contract, then we calculate the five percent.
Q: Which is risk?
A: Yeah, because we are taking a risk in guaranteeing.
Q: Okay. So let me clarify for once and for all.
A: Okay.
Q: This was a risk component, correct?
A: Correct.
Q: Right. And I was going to get to that. And I suggest that you further told Mr. Litwin that the costs plus was cheaper because there was no risk factor, whereas conversely, if he went with fixed price there would also be a risk factor built in.
A: Correct.
Q: Thank you – now – and I can suggest to you – I mean, you just agreed with me again on that point about risk, but on your examination I suggest to you that you yourself said the difference between a fixed project and the costs plus was that on a fixed project you’d have a risk factor. You yourself said that was the difference between the two contracts.
A: That’s the difference.
[13] I am satisfied that the contract for this project included a risk component and that on his own evidence Mr. Nielson confirms that a risk component is only included in a fixed price contract. This contract was a fixed price contract.
May 16, 2002 Meeting to discuss the Budget
[14] Mr. Litwin testified that on May 16, 2002 he and Mr. Nielsen had a meeting at Mr. Litwin’s home. Mr. Nielsen had with him three copies of the Budget, a set of plans, Mr. Nielsen’s daytimer and the Project Summary. Although Mr. Litwin was provided with the Budget he was not provided with a copy of the detailed Project Summary nor was that document ever shown to him.
[15] In order to give context to the discussion of the various elements of the Budget it is important and informative to reproduce the May 15, 2002 Budget in these reasons in its entirety:
Mr. & Mrs. Litwin
59 The Kingsway
Etobicoke, Ontario
M8X 2T3
Dear Mr. & Mrs. Litwin,
We are pleased to present the following budget as per plans by John Pinkey dated April 24th, 2002. With the following clarifications.
Design, drafting, permit and engineering $5,200.00
300 square foot of stone included
Adjustment rate from stone to stucco $13.00 per square foot
Windows, exterior doors and skylight $18,900.00
3rd floor carpet supply and install $4.00 per square foot
Hardwood supply and install $8.00 per square foot
Limestone front hall supply only $10.00 per square foot
Ceramic Tile (including Backsplash) supply only $5.00 per square foot
Hardware allowance $2,800.00
Painting allowance $14,400.00
Heating and air conditioning $16,300.00
Gas fireplace $2,000.00
Bathroom cabinet and countertops $4,200.00
Shower glass and mirrors $3,800.00
Plumbing fixtures $8,525.00
Excavate and Damp proof the front west corner of existing basement
Woodburning firebox with stone front in the basement
2x4 basement exterior walls
Structural details not final
R12 insulation in exterior basement wall
No drywall
Staircase and laundry in basement completed with drywall and ceramic tiles on floor
Crown moulding and chair rail in the dining room
2 new special pocket French doors between kitchen and family room
10 new doors to match existing
Refinish staircase to the 2nd floor
Central vacuum included
Removal of existing basement floor installation of Styrofoam and new concrete
Replace drainpipes under basement floor
IKO Cambridge shingles
Water and sewer line presumed to be ok from house to lot line
PST included on all allowances
GST excluded on all allowances
Structural elements subject to review by structural engineer and The City of Toronto building department
Kitchen cabinets and counter not included.
Electrical
200 amp service
120 regular outlets
6 gfi plugs
50 potlights
3 under cabinet lights
4 bathroom fans
7 TV and phone
3 smoke detectors
Total construction budget $402,678.00
- 7% GST $ 28,187.46
$430,865.46
[16] Mr. Litwin testified that at the May 16, 2002 meeting the following issues were confirmed in relation to the Budget:
Mr. Nielsen confirmed it was a fixed price contract;
Mr. Nielsen confirmed he would do the construction for the fixed price as long as the Litwins stayed within the allowances;
With respect to the allowances, if the Litwins went over the allowance amount they would be responsible to pay JNCC the difference. If the Litwins went under any allowance they would get a credit for the amount.
[17] Mr. Nielsen testified that as a general rule he could not go over an allowance without the Litwins’ authority to do so, however, he understood and believed he could do so in certain areas of the work, as long as he advised or informed Mr. Litwin that he was doing so.
Structural Element of the Budget
[18] Mr. Nielsen testified that the May 16, 2002 Budget was not a final Budget. In support of that position Mr. Nielsen points to two areas in the Budget:
Structural details not final;
Structural elements subject to review by structural engineer and the City of Toronto building department.
[19] Mr. Litwin testified to the following on this issue:
Mr. Litwin was uncomfortable with those two lines in the Budget and asked for an explanation from Mr. Nielsen;
Mr. Nielsen confirmed that a structural engineer had looked at the home;
Mr. Litwin expressed concern about payment of any structural changes and Mr. Nielsen told him it was not a problem in that when a structural engineer reviews a set of plans and submits those to the City, the City will approve them because the engineer has taken the risk and accepts responsibility for the structure;
Mr. Nielsen included those references in the Budget only to cover himself in the event that the City disagreed with the structural engineer.
[20] Mr. Nielsen confirmed that the plans which had been submitted to the City had been stamped by an engineer.
Specific Allowances
[21] Again it is important when discussing these items to reproduce Exhibits 7 and 8 filed at trial:
Exhibit 7
JENS NIELSEN
CUSTOM CONTRACTING LTD.
Additional Information per your request as of: February 19, 2004
Description of Work
Allowance
Actual
Balance
Design, Drafting, Permit & Engineering
$5,564.00
$7,048.44
$1,484.44
Windows, Exterior Door & Skylights
$20,223.00
$18,705.85
($1,517.15)
Hardware
$2,996.00
$1,927.34
($1,068.66)
Painting
$15,408.00
$16,392.23
$984.23
Heating & Air-conditioning
$17,441.00
$36,107.11
$18,666.00
Gas & wood burning fireplace
$2,140.00
$5,677.18
$3,537.18
Bathroom Cabinet & Countertops
$4,494.00
$6,149.62
$1,655.62
Shower Glass & Mirror
$4,066.00
$2,867.40
($1,198.60)
Plumbing Fixtures
$9,121.75
$14,485.66
$5,363.91
Plumbing Labour
$10,486.00
$11,165.52
$670.52
Roofing
$5,510.50
$10,543.59
$5,033.09
Electrical
$16,215.85
$17,688.59
$1,472.74
Drywall
$15,886.29
$19,217.20
$3,330.91
Ceramic Tile & Limestone
$7,383.00
$8,748.63
$1,365.63
Garbage containers & disposal
$3,210.00
$7,261.02
$4,051.02
Additional stonework on exterior
$3,638.00
$3,638.00
Quarter cut hardwood floor – 2,600’ x $1.75
$4,550.00
$4,550.00
Third floor hardwood floor – 380’ x $5.75
$2,185.00
$2,185.00
Extra framing per Eng. & Building Dept.
$8,560.00
$8,560.00
Wainscoting – dining room
$3,745.00
$3,745.00
Excavate driveway incl. gravel
$2,568.00
$2,568.00
Balcony on third floor
$2,675.00
$2,675.00
Additional labour (John)
$9,603.00
$9,603.00
Oak staircase to third floor
$856.00
$856.00
Underpin basement
$5,029.00
$5,029.00
Replace basement pillar with steel
$1,605.00
$1,605.00
Front entry canopy
$2,675.00
$2,675.00
New stucco on chimney & front
$5,350.00
$5,350.00
Install stone into existing chimney
$1,284.00
$1,284.00
Back door step & wall
$1,605.00
$1,605.00
Stucco in front entry
$1,284.00
$1,284.00
Rough-in plumbing for basement bath
$1,284.00
$1,284.00
Extra drywall in basement
$1,385.00
$1,385.00
Total
$103,711.88
Overhead – 5%
$5,185.60
Contractor fee – 10%
$10,889.75
GRAND TOTAL
$119,787.23
Exhibit 8
JENS NIELSEN
CUSTOM CONTRACTING LTD.
CONTRACT – COST OVERRUNS & EXTRAS AS OF: December 31, 2003
Description
Contractor
Invoice
Date
Amount
Design, Drafting, Permit & Engineering
N/A
$7,048.44
Total
$7,048.44
Windows & Ext. Doors
Rona
136930B
Nov. 29/02
$2,360.95
Rona
136931B
Nov. 19/02
$1,225.90
Rona
136925B
Nov. 19/02
$595.70
Rona
136928B
Nov. 19/02
$733.70
Rona
136949B
Nov. 19/02
$339.25
Rona
136935B
Nov. 19/02
$3,438.50
Rona
136934B
Nov. 19/02
$289.80
Rona
136922B
Nov. 19/02
$1,460.50
Rona
136924B
Nov. 19/02
$1,084.45
Rona
147350B
Feb. 16/03
$1,086.22
Rona
147269B
Feb. 16/03
$1,237.98
Rona
903848B
Feb. 25/03
$374.33
Rona
270028L
May 23/03
$27.57
Rona
138703B
Nov. 27/02
$2,607.05
Rona
138702B
Nov. 27/02
$1,270.75
Skylight
N/A
$653.20
Total
$18,705.85
Hardware
Rona
238656L
Sept. 26/02
$144.73
Rona
239278L
Sept. 30/02
$52.17
Rona
265268L
Apr. 25/03
$39.95
Rona
262478L
Apr. 2/03
$12.81
Rona
266111L
Apr. 30/03
$16.47
Rona
287367L
Sept. 12/03
$15.93
Rona
266990L
May 6/03
$21.40
Rona
266512L
May 2/03
$53.44
Rona
266250L
May 1/03
$149.73
Rona
274725L
June 18/03
$31.48
Rona
274037LRC
June 16/03
($25.74)
Rona
274039L
June 16/03
$11.73
Rona
274029L
June 16/03
$25.74
Summerhill
N/A
N/A
$1,386.50
Total
$1,927.34
JENS NIELSEN
CUSTOM CONTRACTING LTD.
Continued…
Description
Contractor
Invoice
Date
Amount
Plumbing Fixtures
Tiles Plus
0144887
Dec.11/02
$10,252.25
Tiles Plus
0147294
May 7/03
$57.50
Tiles Plus
0147295
May 7/03
$327.75
Tiles Plus
0147749
June 3/03
$1,403.00
Tiles Plus
71866
May 15/03
$1,232.80
Tiles Plus
72616
July 7/03
$63.25
Home Depot
1032266
June 5/03
$91.87
Rona
060730T
May 1/03
$706.54
Rona
070188T
Sept. 16/03
$282.90
Rona
070606T
Sept. 23/03
$67.80
Total
$14,485.66
Plumbing Labour
Principal
03-03471
Dec. 8/03
$310.31
Principal
03-03146
Feb. 8/03
$6,368.97
Principal
03-03348
Sept. 1/03
$4,486.24
Total
$11,165.52
Flooring
Azores
11856
Apr. 30/03
$27,082.15
Azores
11994
June 16/03
$654.84
Rona
1615429
Apr. 23/03
$162.52
Total
$27,899.51
Roofing
Metropolitan
129
Dec. 12/02
$4,066.00
Metropolitan
128
Nov. 27/02
$3,616.60
Metropolitan
134
Feb. 25/03
$400.00
Petene
S1434403
Nov. 01/02
$1,289.91
Petene
S1435023
Nov. 04/02
$549.24
Petene
S1435143
Nov. 05/02
$277.18
Petene
S1437120
Nov. 11/02
$344.66
Total
$10,543.59
Electrical
CAM
4443
Dec. 9/02
$17,688.59
Total
$17,688.59
Drywall
Yovan Inc.
A-00165
Feb. 04/03
$16,692.00
Yovan Inc.
A-00166
Feb. 07/03
$2,525.20
Total
$19,217.20
JENS NIELSEN
CUSTOM CONTRACTING LTD.
Continued…
Description
Contractor
Invoice
Date
Amount
Painting
Royal
7051
Dec. 5/02
$953.30
Royal
8028
Sept. 10/03
$3,953.65
Royal
8042
Dec. 14/03
$481.50
Kevbra
0636
July 30/03
$11,003.88
Total
$16,392.33
Heating & Air-conditioning
Principal
03-03339
Aug. 14/03
$30,657.75
Prinicipal
02-03120
Dec. 31/02
$1,484.47
Excel Heating
5388
Mar.15/03
$1,287.21
Excel Heating
5418
June 3/03
$537.68
New Pipe – Air Conditioning
$2,140.00
Total
$36,107.11
Gas Fireplace
BBS
2100856
Nov. 7/02
$174.34
BBS
2556672
Oct. 9/02
$673.35
BBS
2100553
Oct. 31/02
$488.24
Betz Cut Stone
66758
May 31/03
$1,265.00
Athra Gas?
111747
Dec. 23/03
$1,471.25
Total
$4,072.18
Cabinet & Countertops
Yarrabee
Q00438
Mar. 13/03
$4,627.75
Yarrabee
Q00662
July 02/03
$746.33
Rona
060730T
May 01/03
$706.54
Akia
N/A
N/A
$69.00
Total
$6,149.62
Shower Glass & Mirror
Canada Glass
45285
May 20/03
$534.80
Koski Glass
3068
May 1/03
$2,332.60
Total
$2,867.40
[22] I will deal with each of these items separately.
Design, Drafting, Permit and Engineering: - $5,564.00
[23] JNCC claims it is owed a further $1,484.44. The Litwins submit they are owed a credit of $2,013.13.
[24] JNCC puts forward that at the time of the Budget the structural details had not been finalized and they were subject to review by the City building department. There was a 10% increase.
[25] The Litwins submit that they are responsible for the following invoices produced by JNCC in support of this claim:
April 2002 invoice from the City of Toronto $2,258.23
May 2002 invoice from John Pinkney $ 600.00
May 2002 invoice from Oakville Blueprint $ 272.00
June 2002 invoice from the City of Toronto $ 40.00
July 2002 invoice from SWS Engineering $ 380.00
Total $3,550.87
[26] The Litwins submit that:
The other invoices could not be produced by JNCC
It related to work done by Mr. Pinkney after the plans were submitted
Even if related to the Home it was not authorized by the Litwins.
[27] In his testimony Mr. Nielsen acknowledged that he did not have back-up invoices nor could he explain what they were for.
[28] On that basis those additional amounts are not allowed. Without knowing what they related to I cannot allow these additional amounts on the basis of quantum meruit.
[29] The Litwins will therefore be given a credit in the sum of $2,013.13.
300 Square Feet of Stone - $6,420.00
[30] JNCC seeks payment of $3,638.00 on this item. Mr. Nielson testified that the Budget included an allowance of 300 square feet of stone. The 300 square feet was an allowance for stone work, not as the Litwins claim, 300 square feet over and above the stonework to be done. JNCC submits that the Budget did not read “300 square feet allowance for additional work”. JNCC submits that a common sense reading of the allowance is that it was the allowance for stone and not additional stone.
[31] The Litwins claim a credit of $3,616.00.
[32] The Litwins submit that the plans indicated that the extension was to have stone going around it to a height of three or four feet to match the existing home. The 300 square feet of stone allowance set out in the Budget was “extra stone” not indicated on the plans. This extra stone would be used for capping the chimney and steps or accents around the windows. The Litwins estimate only 40 feet of the 300 were used and therefore claim a credit of $3,616.00.
[33] I agree with the position of JNCC on this item.
Windows, Exterior Door, Skylight - $20,223.00
[34] JNCC is prepared to give the Litwins a credit of $1,517.15.
[35] The Litwins, however, claim two further credits, one for $3,191.52 and one for $5,560.00.
[36] With respect to the first credit the following chart sets out how the Litwins arrived at their number:
Invoice
Amount
Argument
Reduction
Rona invoice
136934B,
Nov. 19, 2002
$298.00
This invoice is for trim – for stills. Mr. Nielsen had told Mr. Litwin that trim is included in the fixed price of the Budget.
$289.80
Rona invoice
136924B
Nov. 19, 2002
$1,084.45
Two of the Windows in this invoice were not used in the Home. These windows total $703.80
$703.80
Rona invoice 270028L, May 23, 2003
$27.57
This item is not a window. It is foam. It should have been included in the fixed price of the contract.
$27.57
Skylight
$653.00
No invoice has been provided.
$653.20
Total Reduction
$1,674.37
Amounts Claimed by JNCC
$18,705.85
Difference
$17,031.48
Allowance
$20,223.00
Amount Owing to JNCC
($3,191.52)
[37] The second amount relates to the leaded windows. Mr. Nielsen testified that the cost of the windows the Litwins requested was more than the allowance. In May 2002 the type of leaded-glass to be installed and which windows were to have that type of glass had not been determined. Mr. Nielsen thought the windows could come within the allowance but it did not. Mr. Litwin made his own arrangements then as to what he wanted for lead-glass windows. The Litwins also chose what windows were to have leaded glass. Mr. Nielsen states that this clearly was an allowance and since not all of the window allowance was used he agreed to provide a credit to the Litwins of $1,517.15.
[38] The Litwins, on the other hand, claim a further credit of $5,560.00 for leaded windows that were purchased by him as evidenced in an invoice from Restoration Stained Glass. The Litwins argue that the leaded windows are part of the fixed price component of the Budget.
[39] I agree with the Litwins’ position as set out in the Chart that they are owed a credit of $3,191.52 ($1,517.15 + $1,674.37).
[40] I am not, however satisfied that the leaded windows were part of the fixed price component of the Budget. The second credit claimed by the Litwins is not, therefore, allowed.
Third Floor Carpet and Hardwood - $23,882.40
[41] JNCC claims the following:
(a) Quarter cut hardwood floor – 2600’ x $1.75 $4,550.00
(b) Third Floor Hardwood Floor – 380’ x $5.75 $2,185
Quarter cut hardwood floor – 2,600’ x $1,75
[42] The Budget provided for hardwood floors at $8.00 per square foot. At the time of the Budget, the Defendants had not chosen the type of hardwood floor they wanted. The Defendants upgraded to a more expensive quarter cut hardwood, at a cost of $9.75 per square foot or $1.75 per square foot more. The Defendants have acknowledged the Azores flooring invoice of April 30th, 2003, in the amount of $27,082.15. The Plaintiff therefore claims the above amount.
Third Floor hardwood floor – 380’ x $5.75
[43] The third floor bedroom was changed from carpet to quarter cut hardwood. The conversion factor provided in the Budget from carpet to wood is an additional $5.75 per square foot (wood being $8.00 per square foot and carpet being $4.00 per square foot, plus an additional $1.75 per square for quarter cut). These adjustment amounts are reflected in the Budget. The Defendants have recognized the hardwood flooring account from Azores to the Plaintiff in the amount of $27,082.15. The Plaintiff therefore claims the above amount.
[44] The Litwins claim they owe JNCC only $3,199.75 on these items. This is set out in the chart set out in their written submission as follows at page 35:
Invoice
Amount
Argument
Reduction
Azores invoice 11994, June 16, 2003
$654.84
This is an invoice for re-buffing the floor, which Mr. Nielsen agreed to do at his own expense after mistakenly varnishing the floors while the house was dirty.
$654.84
Rona invoice 1615429, April 23, 2003
$162,52
This appears to be a bill for tile and grout. It has nothing to do with the hardwood installed in the Home.
$162.52
Total Reduction
$817.36
Amounts Claimed by JNCC
$27,899.51
Difference
$27,082.15
Allowance
$23,882.40
Amount Owing to JNCC
$3,199.75
[45] Mr. Nielsen agreed at trial that the two invoices should not have been included. Mr. Nielsen submit, however, that the defendants have acknowledged the Azores flooring invoice of $27,082.15.
[46] I agree with the position JNCC on these items so the adjusted amounts will be allowed.
Limestone and Ceramic Tile (including Backsplash) - $7,383.00
[47] JNCC is not pursuing this claim.
[48] The Litwins claim a credit for the full amount of the allowance of $7,383.00. The Litwins submit that JNCC has not been able to establish that it spent any money with respect to this allowance.
[49] JNCC did not file any documentary proof by way of invoices to verify or confirm the amount. I am satisfied, therefore, that the Litwins are entitled to a full credit for this allowance.
Hardware - $2,996.00
[50] JNCC provided an allowance of $2,996.00. JNCC is prepared to issue a credit to the Litwins, however, JNCC submits that it supplied hardware with a value of $1,927.00. The difference of $1,069 ought to be given as a credit to the Litwins. JNCC acknowledges that the Litwins did provide some of the hardware for an undetermined value. The Litwins seeks credit for the full amount. In his testimony Mr. Nielsen acknowledged that the hardware only referred to door knobs, handles for the French doors and pocket door hardware. Mr. Litwin testified that he was going to be supplying the hardware or would be reusing hardware in the home. JNCC’s foreman was instructed to keep the hardware including the leaf of the hinges, and the strike plate to accommodate the 1926 locks in the house. As a result Mr. Litwin supplied all the hardware. Mr. Litwin wanted vintage hardware and Mr. Nielsen knew this. Mr. Litwin did not expect a contractor to source that. The reason this item was included as an allowance was simply to give the Litwins an idea of what they could expect to spend.
[51] At his trial evidence Mr. Nielsen stated the following regarding this allowance:
Q. Thank you. If you look under Exhibit 7 there is a heading for hardware and the allowance you provided is the same as we’ve just discussed, $2,996, correct?
A. Yes.
Q. Thank you. So you say what you’re actually seeking is $1,927.34,correct? If you look at Exhibit 7, it’s easier for you.
A. Yes. I – okay.
Q. Okay?
A. The actual, $1,927.
Q. So you yourself concede that some money is owed back to my client on that heading?
A. Yes. And as indicated…
Q. Okay.
A. …on that.
Q. So on hardware you have listed a whole bunch of invoices on which you rely and I was able to identify those and I was able to put them together for the Court, and we can find those at tab 32C, okay?
THE COURT: That’s volume 2 of 3 and it is the pink one.
MR. CARSTEN: Q. Now, to be clear, where we’ve gotten these invoices is because you’ve identified them in Exhibit 8?
A.Yes.
Q. So in Exhibit 8, which is something you provided to my clients, you set out those invoices on which you’re relying with respect to hardware and they’re on the front page – first page, correct?
A. Right.
Q. Okay. And these are invoices that you provided to my clients, the Nielsens [SIC]?
A. Yeah.
Q. The Litwins, excuse me.
A. Yes.
Q. Thank you. So again what, what hardware was – it was basically doorknobs, correct?
A. I would say so.
Q. Okay. So my understanding, I’ll put it to you, is that Mr. Litwin bought all his own doorknobs, every last one.
A. Uh…
Q. Would you agree or disagree with that?
A. I would disagree because we have some hardware here.
Q. Well, that’s not the question I’m asking. The question is do you agree with me that Mr. Litwin bought all his own doorknobs for the home?
A. I do not recall.
Q. I suggest to you that that’s the case.
A. Okay.
Q. So these invoices on which you rely, I, I – I’ll be clear, I challenge them all because they can’t possibly fit under this category. You can’t possibly recover, that’s our position, but I’m happy to have you explain to me now why you believe you should recover under any of them?
A. Okay. I – in doing my paperwork on how I broke it out, I see now I included a number of different things in those smaller amounts of hardware.
Q. So would you agree with me that you’re not entitled to recover on these invoices under this heading, under the – under this allowance?
A. The first two are some special bolts and I do not know exactly what they’re for, so that’s the best answer I can give you to the first two invoices.
Q. Okay.
A. The third one is quite simple. They are door stops. Yeah, they’re door stops.
Q. But they’re not doorknobs…
A. No.
Q. …or door handles?
A. No, no. Hardware is not necessarily just door handles.
Q. Well, actually I thought we discussed before about what, what it was and I thought we agreed what it was. It will certainly be our evidence that it was exactly just that and I believe you also agreed to that when we first discussed it.
A. The next little item in the next page, this is a – again it’s a hinge.
Q. Which I submit to you – I put to you doesn’t qualify.
A. And the next item…
THE COURT: Hold on. What was the response to that, though?
MR. CARSTEN: I submitted to him that it didn’t qualify. He didn’t respond.
Q. I guess – do you disagree with me? You think…
A. Yes.
Q. …it does qualify?
A. I wouldn’t have put it here if I didn’t think so.
Q. Okay.
A. Next item is a steel shelf support.
Q. I submit to you that doesn’t qualify. I submit to you that none of these qualify. Let me be clear.
A. Okay.
Q. So as you go through them, please indicate whether you still believe you should recover on any of these. Do I take it you believe you should recover on all of them?
A. So far, yes.
Q. Okay. So are we on the one that says “flush bolt?” Is that the one we’re on now, sir?
A. Flush bolt, yes.
Q. I, I’d like myself and His Honour to follow along with you.
A. Yeah, yeah, yeah.
THE COURT: I’m there with…
MR. CARSTEN: Okay.
A.Yes.
THE COURT: …you on that. It’s flush bolt.
A.Yes.
MR. CARSTEN: Q. And this is what, sir?
A.That is a bolt that you put on a door that generally goes up or down.
Q. But it, it’s not a decorative door knob or door handle, is it?
A. No…
Q. Okay.
A. …but it’s hardware.
Q. Next item.
A. The last item I will – I’ll say you can take – the first – the first - there’s three items.
Q. The Shop Vac extension wand.
A. Out. That’s, that’s not in this number
Q. That’s not in the number?
A. No.
Q. Okay. Okay.
A. Drain stopper with chain, I actually do not know what it is, but it is…
Q. A drain stopper with a chain, I suggest to you, is one of those things that goes in the bathtub.
A. It, it – yes, I think…
Q. So do you think you should recover that as hardware?
A. We can put it under plumbing.
Q. This is – sir, this should not be a guessing game at this point.
A. No.
Q. So you don’t want to recover it under hardware?
A. No.
Q. Okay. Glass dead latch jamb strike?
A. Yes.
Q. Okay. Next.
A. Yes.
Q. So this whole invoice is yes. And tell me what these items are.
A. Uh…
Q. I see – sorry, I see closet rods. I see a shelf.
A. Yeah. It’s a closet rod and a shelf and a – it’s – a head striker is, is part of the assembly where you have your door handle.
Q. Is it? Okay, and, and a shelf. There’s no separate category for shelf, you’re telling me, for shelving in your project summary? I can’t find it if I go through it right now and find a category for shelves, for example, or things in closets as a separate item?
A. Yes, you can.
Q. So I suggest to you, then, that it doesn’t belong under hardware.
A. Take it out.
Q. Okay. Next invoice.
MR. CARSTEN: And in case I’m in any way unclear Your Honour, we don’t believe any of this counts as hardware. I may raise specific objections to specific ones, but our overall position is none of this counts.
Q. And to be clear, it’s going to be our client’s evidence – and I put it to you to be clear – that he supplied all door knobs, door stops, door strikers, bathroom fixtures and special hinges that were used, that Mr. Litwin supplied all of those at his own expense for the home. Do you agree with me?
A. No.
Q. Okay. So we’re on now an invoice which starts with “quick seal tile and tub.”
A. Take it out because you’ve got the shelving thing. You just proved that to me.
Q. Okay, is – are we taking out the whole invoice?
A. Yes
Q. Okay. That invoice is gone. Next one, it starts with floor high dome stop something.
A. That’s in.
Q. Okay. What is this?
A. These are door stops.
Q. Okay, next item.
A. That’s a credit.
Q. Okay, it’s a credit.
A. It’s a credit.
Q. And you’ve included it as a credit in your summary. I guess you returned something?
A. Yeah.
Q. Okay.
A. It’s, it’s in the - it’s in here.
Q. Yes, it is. You’ve accounted for it.
A. Yeah.
Q. Next invoice.
A. It’s in.
Q. What is it?
A. It’s a hinge.
Q. It’s a hinge, okay. Next item.
A. Also hinge.
Q. Okay. And those are all the invoices on which you’re relying?
[52] It is my view that Mr. Nielsen’s evidence on this issue is vague and uncertain and the invoices he has included to support this item do not come within the hardware allowance. I accept the testimony of Mr. Litwin on this item.
[53] I am satisfied that the Litwins ought to be given a full credit for this allowance.
Painting - $15,408
[54] JNCC has produced invoices totalling $16,391.33. The allowance is $15,408.00. JNCC, therefore, claims the additional amount of $984.23.
[55] The Litwins are not willing to pay any amount over the allowance. Mr. Litwin testified that he had his own painter who could have done the job for less had Mr. Nielsen gone ahead and had this work done without consulting him. Mr. Nielsen did not seek permission to exceed the allowance. I agree with the position of the Litwins. Painting is part of the fixed price of this contract. If JNCC went over that amount it bears the risk of doing so. Further, I am not satisfied this increase was discussed with Mr. Litwin.
Heating and Air Conditioning - $17,441.00
[56] With respect to this item, the testimony of Mr. Nielsen and Mr. Litwin is markedly different.
[57] JNCC notes that there was an allowance for heating and air conditioning of $16,300.00 but the furnace finally selected by the defendants along with installation was $36,107.11. The heating system was extensive and included in-floor heating in the basement and the bathrooms. JNCC sets out the following:
Total heating and air conditioning was $28,652.22 + $1,387.26 + $1,203.00 + GST at 7% = $36,107.00
JNCC therefore claims $18,666.00.
[58] JNCC submits that the furnace discussions took place after the May 16, 2002 meeting and after Mr. Litwin had returned to England.
[59] Mr. Nielsen’s evidence was that a furnace specialist was brought in to review the Home after the building permit of July, 2002, had been issued. It was suggested the furnace be moved to provide more open space and that a high efficiency unit would be needed because the existing furnace needed a conventional chimney and if moved, would require a new chimney to be constructed. It should be noted that the Budget [Exhibit 3] makes no mention of either moving the furnace or that it was to be a high efficiency unit.
[60] Mr. Nielsen’s further evidence was that numerous telephone calls were exchanged with Mr. Litwin over the furnace including its location and type.
[61] The evidence given was that a price for the high efficiency furnace was $8,000.00 and Mr. Litwin had investigated it himself. In addition, there were discussions that a manifold could regulate each radiator individually, and a hot water heater that would work in conjunction with it, for $3,000.00.
[62] The drawings of April 24, 2002, [Exhibit 1] at page 3, (the basement and addition) do not show any movement of the furnace from the position it was on page 1 (the existing basement).
[63] The testimony of Mr. Litwin is significantly different than that put forward by JNCC. Mr. Litwin testified that at his first meeting with Mr. Nielson on or about January 30, 2002 he told Mr. Nielsen that the furnace needed to be moved. Mr. Litwin also sent an e-mail to Mr. Pinkney on February 6, 2002 stating in part relating to the basement:
Relocate furnace to basement of dining room extension/with 2 windows and fireplace?
[64] A further e-mail is sent on March 8, 2002 stating in part:
Basement
Three good size rooms. Moving the furnace frees up some good space.
[65] Prior to this March 8, 2002 e-mail Mr. Pinkney had responded to Mr. Litwin on February 6, 2002 stating, in part:
Thank you for the assignment. I look forward to beginning as soon as possible … In the interim I will have a discussion with Jens about the project…
[66] Mr. Nielsen denied that a furnace move had been contemplated.
[67] The Litwins submit that their contemporaneous e-mails to Mr. Pinkney clearly support their position that relocating the furnace was contemplated.
[68] Mr. Nielsen agreed that Mr. Pinkney kept Mr. Nielsen advised on the design and kept him up to speed but not with every minute detail. The Litwins submit that it is inconceivable that Mr. Pinkney would not have advised Mr. Nielsen of this major item.
[69] At trial Mr. Litwin gave the following testimony regarding a telephone call he had with Mr. Nielsen regarding the relocation of the furnace. It was Mr. Litwin’s evidence that, several days after his return to England from his July, 2002 trip to Canada, he received a call at work from Mr. Nielsen regarding the furnace. His evidence was as follows:
(a) Mr. Nielsen said that there was a problem with the furnace. Because the furnace was not high-efficiency, it could not be relocated. If Mr. Litwin wanted to relocate the furnace, he would need to purchase a new furnace.
(b) Mr. Nielsen apologized for the situation, and explicitly said that it was his mistake.
(c) Mr. Nielsen said that there were two options: a $1,000 furnace that wouldn’t last a long time, and wouldn’t be of good quality but would do the job, or a German furnace made by some company named Viessman that would cost about $3,000 or $3,500.
(d) Since Mr. Litwin wanted to move into the House in December, 2002, he had to make a decision quickly. He chose the more expensive furnace.
(e) Concerned about this increase in the allowance, Mr. Litwin discussed with Mr. Nielsen about where some money could be saved to compensate:
(i) A compressor would no longer be needed, so that was $2,500 off the allowance.
(ii) Mr. Nielsen could produce some old radiators that he had obtained from a demolition that JNCC was doing on Wendover Street. Mr. Litwin agreed to accept them – since they were free – and that would allow the Litwins to save money on radiators.
(iii) Mr. Nielsen could sell the Litwins’ old furnace for $500.
(f) Based on these savings, Mr. Litwin worked through the math with Mr. Nielsen as to what the final difference would be. Even without factoring in the radiators, Mr. Litwin and Mr. Nielsen considered that the Litwins would either break even on the allowance, or there would be an extra $500 to pay.
[70] Mr. Nielsen admitted in cross-examination that he had some radiators from a previous job that he could use to save money. His evidence was that he didn’t recall how much he told Mr. Litwin that the Litwins could save as a result of those radiators, and as value for their old furnace.
[71] The Litwins are prepared to pay up to $3,500 for the new furnace but with the following set offs:
(i) The $500 trade-in for the Litwins’ old furnace;
(ii) $200 each for the six used radiators;
(iii) $2,500 for an air compressor that was no longer necessary;
[72] The Litwins are prepared to accept that the heating allowance has been spent but they are not prepared to pay more than the allowance. In any event, the Litwins submit that the additional amount spent by Mr. Nielsen was not discussed or approved by the Litwins.
[73] I agree with the Litwins’ position on this issue. I accept Mr. Litwin’s testimony on this item.
Gas Fireplace - $2,140
[74] Mr. Nielsen testified that he was supposed to construct a convention wood burning fireplace in the basement and a gas fireplace in the new family room. The gas fireplace would be a prefabricated box unit with all the parts and a surround in either wood or marble. Mr. Nielsen advised Mr. Litwin that if a conventional fireplace was constructed in the family room it would be equipped with a removable gas unit so that it could be used for wood as well. Mr. Nielsen testified further that the Litwins choose that option and a conventional fireplace was built. Mr. Nielsen claims the full amount of $3,537.18 over the allowance.
[75] The Litwins submit that they are owed a credit of $668.75.
[76] Exhibit 8 sets out the five items relating to this item as follows:
Description
Contractor
Invoice
Date
Amount
[77] The Litwins submit that the first four invoices relate to the construction of the stone firebox. This construction forms part of the fixed cost component of the Budget. The allowance for a gas fireplace was solely for the insert so that the Litwins could have a gas fireplace instead of wood. The Litwins agree to pay only that fifth invoice from Athra in the amount of $1,471.25. This leaves a credit to them of $668.75 (allowance of $2,140 less $1,471.25).
[78] In support of their position the Litwins points to answers given by Mr. Nielsen in cross-examination:
Q. I suggest to you, sir, that what was contemplated in the allowance was the cost of the actual fireplace, not the cost of building stuff around it or building the chimney, but the cost – let me finish – the cost of the fireplace unit itself, would you agree with me? You have to say “yes”, “no” or “I don’t know” and then you can qualify your answer. Would you agree with me?
A. Okay. Yes.
Q. …let me be clear, is that some of these costs you relate to the chimney, and you’ve just included them as part of the allowance when they should be as part of the fixed cost and my client shouldn’t have to pay for them?
A. Okay.
Q. Do you agree with me?
A. I agree there’s a bit of a mix-up here.
[79] I agree with the Litwins’ position with respect to this item. Mr. Nielsen has not satisfied the Court that this item should be allowed. He has not explained the mix up to permit the Court to find that this claim ought to be allowed.
Bathroom Cabinet and Countertops
[80] The allowance for this item is $4,494.00. The invoice produced by JNCC is for $5,374.29. JNCC, therefore, claims $964.29, the difference, with respect to this item.
[81] The Litwins on the other hand claim they are owed $1,904.60.
[82] The Litwins are prepared to pay for the two vanities set out in the March 13, 2003 invoice totalling $2,589.00. The Litwins submit that the other items are not cabinets or countertops so should not be allowed under this item. Those items are a tub deck and a shower jamb.
[83] JNCC points to Exhibit 10, Tab 32M as the invoices for these items.
[84] I agree with the Litwins that the tub deck and shower jamb do not come within this allowance for counter tops or cabinets. The Litwins are properly owed a credit of $1,904.60 ($4,494.00 less $2,589.00).
Shower Glass and Mirror $4,066.00
[85] JNCC is prepared to issue a credit to the Litwins in the sum of $1,198.00 as the shower glass and mirror chosen by the Litwins was less than the allowance of $4,066.00.
[86] The Litwins, however, seek a credit of $1,733.40. The difference is explained by the Litwins as follows: an invoice from Canada Glass dated May 20, 2003 for $534.80 was for two French doors that are explicitly listed in the fixed part of the Budget. The Project Summary includes these French doors under “Wood Finishes”.
[87] I agree with the Litwins’ position with respect to this item.
Plumbing Fixtures - $9,121.75
[88] JNCC claims $5,363.91 on this item. The allowance was $9,121.75. The total expenditure for the plumbing fixtures was $14,485.66 as set out in Exhibit 10 Tab 32D.
[89] The Litwins agree that they exceeded the allowance, however, it is their position that only $4,935.57 is owed not $5,363.91. It was Mr. Litwin’s evidence that with respect to the Rona invoice 060730T dated May 1, 2003 for $706.54, only the $260 sink was installed in the home. None of the other items listed in that invoice were installed in the home.
[90] I agree that the amount owed on this item ought to be reduced by $428.34 ($5,363.91 less $428.34 = $4,935.57).
EXTRAS
Plumbing
[91] The Plaintiff is not pursuing this claim.
Roofing
[92] The Plaintiff is not pursuing this claim.
Electrical - $1,472.74
[93] The Budget did not provide for a specific allowance for this item. The amount is found in the Project Summary. The Project Summary sets out the electrical component at $16,215.85. The actual cost was $17,688.59. This extra cost is comprised of the CAM invoice at Exhibit 6.
[94] The Litwins submit that JNCC is not entitled to this claim for $1,472.74 as the electrical work was part of the fixed price portion of the Budget. The reason the electrical work was not included as an allowance was because of the fact that it was part of the fixed price portion of the Budget. The Litwins submit that if the electrical work cost more that is part of the risk component of a fixed price contract. I agree. This claim by JNCC is not allowed.
Drywall - $3,330.91
[95] As with the electrical work, the Budget did not provide for a specific allowance for drywall. The drywall component is found in the Project Summary. The Project Summary set out an amount of $15,866.29. The actual cost turned out to be $19,217.20. The additional drywall expense is set out at Exhibit 6, the invoice of Yovan Inc. Mr. Nielsen testified that the additional drywall was needed in the dining room, living room, and hall and Mr. Litwin was so advised.
[96] The Litwins take the same position on this item as they did with the electrical. The drywall is part of the fixed price cost and any risk is to be absorbed by JNCC. The risk component of a fixed price contract is included in the fixed price and cannot later be an extra cost. Again, as with the electrical, I agree with the position of the Litwins.
Ceramic Tile and Limestone
[97] The Plaintiff is not pursuing this claim.
Garbage Containers and Disposal
[98] The Plaintiff is not pursuing this claim.
Extra Framing per Engineering and Building Department - $8,560.00
[99] Exhibit 13 filed at trial set out all the invoices for lumber. The Budget provided for a cost of material of $22,035.00. The actual cost was $31,543.00 leaving a balance only of $9,508.00. JNCC claims the reduced amount of $8,560.00. JNCC states that the additional lumber was reprised after the Budget was done but before the permit was issued. The City of Toronto required these changes at the time the permit was issued.
[100] Mr. Litwin testified that at the May 16, 2002 meeting to discuss the Budget, Mr. Nielsen told him that the plans had been submitted to the City and those plans had been stamped by an engineer. As such there was very little chance any changes would be required by the City. Any changes would be discussed by Mr. Litwin and Mr. Nielsen.
[101] When Mr. Litwin returned to Canada in July 2002 he met with Mr. Nielsen. Mr. Nielsen told him there were no issues and no problems related to the balcony. The Litwins point to the following testimony to support this:
A. When we met in May the balcony was an unresolved issue with the City. Mr. Nielsen asked me how big I wanted to make it, with respect to the dormer versus balcony ratio. He said that there might be a problem with the City in that we couldn’t get a balcony. And, I wanted a balcony. When I met with him in July, he said, “We got the balcony.” And, that’s all I cared about. And, I said, “Is there any problem? Does this affect anything?” And, he said, “No, there are no problems, no issues.”
Q. Were you told – did you discuss – okay. I’m going to be careful on this. Did Mr. Nielsen tell you that there would be any increased cost to you associated with this change?
A. No. There were no issues. There were no problems. There were no extra costs.
[102] Mr. Litwin also points to an e-mail he sent to his wife Heather Litwin which sets out the following:
Over the weekend, I met with Jens to discuss the house. Everything is on schedule with no surprises so far… The balcony issue worked out well as it increases the floor space in the rear dormer, replaces the windows with floor to ceiling French doors and creates a small balcony. There were no other issues.
[103] Mr. Nielsen acknowledged in his testimony the increased cost was never discussed.
[104] I am prepared to allow this claim to JNCC. Mr. Litwin clearly wanted a balcony. Mr. Nielsen got the balcony and that’s all Mr. Litwin cared about. Mr. Litwin never asked about any increased costs to get him the balcony and Mr. Nielsen never actually told them that would be the case however, it is a logical and reasonable inference to draw that such a discussion was not necessary as the change clearly would result in additional lumber to comply with the City’s changes. Mr. Litwin wanted a balcony and he got a balcony. To get that balcony required additional lumber. I am satisfied JNCC is entitled to recover that additional amount.
Wainscoting - $3,745,00
[105] The Budget refers to crown moulding and chair rail not wainscoting. Mr. Nielsen submits that a chair rail is quite different from wainscoting.
[106] The Litwins requested wainscoting and provided the design. Mr. Nielsen submits that Mr. Litwin knows the difference. The Budget was not ambiguous on this item.
[107] Mr. Litwin, on the other hand, testified that wainscoting was always contemplated and he did not know the difference between wainscoting and a chair rail. When a chair rail was put in the Budget Mr. Litwin thought it meant wainscoting.
[108] I do not accept Mr. Litwin’s testimony on this item. Mr. Litwin was very particular about what he wanted in this home. He is not an unsophisticated home owner. He asks questions and expects answers and he does not take things at face value without inquiry. I cannot accept that he would not know what wainscoting was or that having seen chair rail in the Budget he would not have asked for clarification on what that entailed.
[109] I am satisfied that JNCC is entitled to this claim.
Excavation of the Driveway, including Placing Gravel - $2,689.41
[110] Mr. Nielsen testified that Mr. Litwin requested that JNCC remove the old driveway and place stone. There was no item in the Budget for this work. This was clearly an extra. The invoices for this work totalled $2,689.41.
[111] Mr. Litwin testified that he asked Mr. Nielsen how much it would cost to remove the driveway and put down gravel so as to remove a continuing problem of dragging mud and dirt into the home. Mr. Litwin was also looking into putting in a new driveway. Mr. Litwin testified that they agreed that the price would be under $1,000. The Litwins are, therefore, only prepared to pay $1,000 for this item.
[112] I am satisfied based on the supporting invoices that the actual cost of complying with this request by the Litwins was $2,689.41 and as there is no issue that the work was done this claim will be allowed.
Third Floor Balcony - $2,675.00
[113] The approved drawings extended the balcony beyond what was submitted to the City. This extension required a larger area of decking and more railings.
[114] Mr. Litwin’s testimony was that he wanted a balcony to be able to sit out and look at his garden.
[115] I am satisfied that this item is allowed for the same reasons I set out when dealing with the item under Extra Framing per Engineering and Building Department.
Additional Labour (John Remais) - $9,603.00
[116] Mr. Nielsen testified that Mr. Litwin specifically requested that John Remais do all the finishing work and Mr. Litwin insisted on this. Mr. Nielsen explained this item this way:
Q: Now, you have another item under here, “additional labour John”?
A: Yes.
Q: Can you explain to the Court what is meant by that?
A. What happened was on all the trim inside and out, John is an elderly carpenter, he’s a craftsman, and John really likes his work. Rather than having some more junior people, because this is all quite fussy work because it has all the heavy trims and in and out, and he requested that John would do all the work. Well, the majority of it. I, I let him know at the time it was going to do – it was going to take a lot of additional time to have john do this by himself.
[117] JNCC calculated John Remais’ time from his time sheets. The addition cost for John is $11,447.80 but JNCC is only claiming $9,603.00.
[118] The Litwins submit they were never told there would be an extra cost on this item.
[119] I accept the evidence of Mr. Nielsen on this item and I am satisfied this claim should be allowed.
Oak Staircase to Third Floor - $856.00
[120] JNCC states that the stairs to the third floor were to be carpeted. The Litwins changed it to an oak staircase after the Budget had been prepared and signed. This $856.00 only represents the cost for the additional oak.
[121] The Litwins state that they were never told this would be an extra cost.
[122] I am satisfied that this claim is allowed. Mr. Litwin does not specifically deny or dispute that such a request was properly complied with by JNCC. Mr. Litwin would have reasonably expected that more oak would be necessary for the staircase and this cost should not have been a surprise to him.
Underpinning Basement - $5,029.00
[123] Mr. Nielsen states that he provided an estimate to Mr. Litwin of $5,000 to underpin the existing basement and Mr. Litwin testified to that effect as well. However, Mr. Litwin then stated that Mr. Storey, an employee of JNCC, indicated to him the underpinning would only cost $500.00.
[124] Mr. Litwin testified that when he returned to Canada in July 2002 he met with Mr. Nielsen and during that meeting one of the issues discussed was the underpinning of the basement. Mr. Litwin’s evidence was as follows:
(a) As originally contemplated, the existing basement had 7 feet clearance, and the basement in the addition was to have 8 feet clearance. Mr. Nielsen proposed that the Litwins have the same clearance in both basements, so that basement for both areas would be on the same level.
(b) Mr. Litwin asked Mr. Nielsen what the implications would be, including whether there would be a price difference or a permitting issue.
(c) Mr. Nielsen said that if Mr. Litwin wanted to have 8 feet of clearance in both the existing and new basement, then JNCC would need to apply to the City for a permit, and that would take more time. If Mr. Litwin was content with 7.5 feet clearance in both areas, that would not require a new permit.
(d) Mr. Litwin asked Mr. Nielsen what the cost would be to have both basement areas with 7.5 feet clearance and, at that point, Mr. Matthew Storey joined the conversation.
[125] Mr. Nielsen confirmed in his evidence that the existing basement would be underpinned so as to allow the floor in the existing basement to be lowered. Mr. Litwin’s evidence, however, was that the cost would only be $500. During the meeting with Mr. Nielsen and Mr. Storey, Mr. Nielsen agreed it would not cost more than $500. Mr. Storey in his testimony testified that he could not recall talking of pricing but he tried not to get involved in pricing.
[126] I pause here to make a general comment that I find it difficult to understand how it was that neither Mr. Nielsen or Mr. Litwin reduced these types of conversations to writing or confirmed the details of these conversations by way of an e-mail. I find this lack of confirmatory e-mails or reducing such conversations to writing more troubling as it relates to Mr. Litwin. Mr. Litwin is not an unsophisticated man. I agree with Mr. Nielsen’s assessment that Mr. Litwin appears to be a detailed individual. Mr. Litwin has filed other e-mails during the course of the trial on other matters. It would not have been a difficult or time consuming exercise to confirm these types of discussions relating to the work being done during this project. For example the following e-mail could have been sent to Mr. Nielsen:
Further to our meeting in July 2002 this will confirm that the cost to underpin the basement is $500 and will be comprised of following work : …
Or the same information could have even been handwritten with both of them signing the document. That simple process would have given this item and other items the certainty Mr. Litwin required relating to the cost of the work being done on his home.
[127] Returning then to this item I cannot determine what the pricing conversation was exactly. Even if it was $500 the work done resulted in an invoice of $5,029.00. I am not satisfied that Mr. Nielsen properly prices out what the work could be before he did it nor did he properly explain it to Mr. Litwin. In all of these circumstances it is my view that the parties bear a 50-50 responsibility in not properly documenting the conversation they had on this item. I will reduce this claim by 50% and allow only $2,500.00.
Replace Basement Pillar with Steel - $1,605.00
[128] Mr. Nielsen’s position on this item is set out in paragraph 45 of his written submissions as follows:
The basement pillar was moved to permit a double-door entry at the bottom of the staircase. This is not shown on the City approved drawings [Exhibit 4] as this came about after the drawings of Mr. Pinkney of April 24th, 2002, had been completed. The original drawings [Exhibit 1] showed the existing single door remaining at the bottom of the stairs in the basement. The change to the double-doors was made after Mr. Nielsen suggested to Mr. Litwin that it would be a more appropriate way to have an entrance to the basement. There is no evidence from Mr. Litwin that this change was going to be free of charge. In fact, additional engineering was required from Mr. Sam Wong to design a steel beam with gusset plates to reinforce the beam in order to provide double-doors. Although there were issues with the securing of the columns to the floor, the beam designed by Mr. Wong remained. The TAK report [Exhibit 15] did not show that as a deficiency. The Plaintiff therefore claims the above amount.
[129] Mr. Litwin submits that this work was discussed by Mr. Nielsen and Mr. Litwin prior to entering into an agreement and that this work forms part of the fixed cost portion. It is not an extra. Mr. Litwin’s evidence, which I accept on this item, was that he had talked to Mr. Nielsen about this pillar as early as the January 30, 2002 meeting. It was contemplated then by Mr. Nielsen that the post would be moved and that would have been or should have been a cost included in the fixed price budget price Mr. Nielsen prepared. This item, therefore, is not allowed.
Front End Canopy
[130] The Plaintiff is not pursuing this item.
New Stucco in Front of Home - $5,350.00
[131] Mr. Nielsen submits that the original front and side of the home were to remain in the original stucco. The stucco to the new addition at the rear was to match the old stucco as much as possible. Four samples were shown to Mr. Litwin and he picked one. Mr. Nielsen stated that once the stucco work was completed on the new addition Mr. Litwin did not think the new stucco matched. As a result Mr. Litwin requested the front and sides be done as well in the new stucco so that all of it would match. It is not reasonable to think that this extra work would have been done by JNCC for free.
[132] Mr. Litwin’s position is that all of this work was part of the fixed costs of the Budget. Mr. Litwin testified that he discussed this with Mr. Nielsen and that Mr. Nielsen agreed that it was part of the fixed cost and his responsibility.
[133] I accept Mr. Nielsen’s evidence on this item. I cannot accept Mr. Litwin’s position that Mr. Nielsen would have done this substantial additional work as part of the fixed cost and therefore at no charge.
[134] This item will be allowed.
Install Stone in Existing Chimney - $1,284.00
[135] This item was not in the Budget. Mr. Litwin liked the appearance of the new chimney so he requested that the stone be put in the existing chimney. The cost of this item was not discussed at the time.
[136] At page 63 of the Litwins’ written submissions, Mr. Litwin sets out his evidence on this issue. I accept his evidence on this issue and as such this item is not allowed.
A. Well, we have the chimney stucco issue on the outside. We had – I had told Mr. Nielsen in January in our first meeting that I wanted to match looks and I told him about – I wanted stone capping on top of the existing chimney. And, since he was building the chimney higher, that he could do that extension with the stonework. And, in the contract, we had had that allowance for extra stonework. So, on a chimney that is six or seven feet wide and about three or four feet in the other direction, you’re looking at about 22 feet around the chimney, and I would like three or four feet of this stone capping. It’s very high up so you need to have a significant amount, so, about 80 or 90 square feet of stone capping. Now, when Mr. Nielsen built the chimneys he didn’t put that in. And, I told him about it, and I said, “That was part of why I had the allowance for the extra stone and that you were supposed to do it on both chimneys.” So, I said, “Why don’t you just do it on the top?” And, he said that wouldn’t be a cost-effective solution, and I asked if he had a – any other solutions to offer, and he said that he could have his stonemason cut a few decorative spots in the existing chimney so that he didn’t have to take down the chimney about three or four feet to rebuild the tops. But, he could have them insert stone to provide an accent. This would be – and, he would do it as his own expense. So, I showed him the stone I had, which was the existing limestone in brown, and I said, “Well, these are the pieces I would want because they’re the brown colour.” He had his workmen do it, and he put in new grey stone. I don’t know why he did it.
Backdoor Stone Wall
[137] The Plaintiff is not pursuing this item.
Stucco Inside Front Entry - $1,284.00
[138] The original plans required that the closet in the front foyer be removed. This would have required a minor repair to the stucco. Further the City of Toronto Building Department required the wall to be opened to confirm the bearing load points. This work was not included in the Budget and is an extra. When these two areas were repaired Mr. Litwin was not satisfied with the match so the solution was to re-stucco the entire foyer. Mr. Litwin also wanted the back hall done. Mr. Nielsen submits only a repair was part of the Budget and Mr. Nielsen testified that he told Mr. Litwin it would be an extra to do the entire front foyer and back hall.
[139] Mr. Litwin’s position on this item is that apart from the excavation of the driveway, the underpinning of the basement, the new furnace, and the drywall in the basement, he was never told there would be any other extra costs.
[140] I accept the position of Mr. Nielsen on this item. It is logical and reasonable that this extra work, not encompassed by the Budget and requested by Mr. Litwin, would attract additional cost that Mr. Litwin would be required to pay. I am satisfied that this claim is allowed.
Extra Drywall in the Basement - $1,385.00
[141] The Litwins agree to pay this claim.
MISSING ITEMS CLAIMED BY THE LITWINS
[142] The Litwins seek compensation from JNCC for the following specific items that JNCC did not provide. All of the items are set out in the Budget as part of the fixed cost portion. The cost of the following items is derived from the Project Summary. The Litwins are only claiming the base cost and GST not the 19% mark-up JNCC added to the cost of these items.
New Doors - $2,268.40
[143] The Budget provides for 10 new doors to match existing doors. Mr. Nielsen agreed to credit Mr. Litwin if JNCC did not have to provide the new doors. Some of these new doors were provided by Mr. Litwin. Mr. Nielsen could not remember whether or not the Litwins provided the 10 doors themselves.
[144] JNCC does not deal with this item in their written submissions.
[145] This claim will be allowed to the Litwins.
Pot Lights - $2,541.25
[146] The Budget provides for 50 pot lights. Mr. Litwin testified that Mr. Nielsen agreed that the Litwins would get a credit for any unused pot lights. Only 31 pot lights were installed and of those 28 uninsulated. Insulated pot lights were $90 each and the insulated pot lights were $125 each. The Litwins submit that since there were only to have been 20 uninsulated pot lights this indicates that JNCC substituted the uninsulated pot lights for at least 8 of the insulated pot lights. The Litwins claim for 19 insulated pot lights at $125 each is allowed (19 x $125 = $2,375.
[147] In his testimony Mr. Nielsen stated he had no reason to disagree with Mr. Litwin’s evidence on this item.
Aluminum Siding and Soffting – 2,985.30
[148] Mr. Litwin testified that Mr. Nielsen agreed that JNCC would not install this item and that the Litwins would get a credit for this amount as it had been included in the fixed price cost.
[149] JNCC does address this item in their written submissions. It was the evidence of Mr. Nielsen that wood soffiting was installed similar to that in the original Home. The Defendants’ evidence is consistent that they wanted the new addition to the Home to replicate as close as possible to the original Home. It is stretching credibility that Mr. Litwin has now given evidence that he wanted aluminium soffiting on the entire Home. The approved Plans did not show aluminium soffiting. Mr. Nielsen’s evidence was that the Project Summaries showed the eaves as aluminium as it was a pre-set item on the computer grogram to establish a budget but, that it was always intended that wood soffiting be used in the new addition to match the existing Home and similar homes in the neighbourhood. There is no evidence that the Defendants have installed aluminium soffiting, notwithstanding the Plaintiff completed its work nine (9) years ago. Therefore, it is submitted that no compensation should be given for this item.
[150] I agree with the position of JNCC on this item. Consequently this item is not allowed to the Litwins. The wood soffiting was installed to match the existing home and JNCC charged for it as set out in the Project Summary and included in the fixed cost although under a different name pre-set item. I am satisfied that no compensation should be given for this item.
Smaller Missing Items - $800.00
[151] These items are listed at paragraph 197 of the Litwins’ written submissions and include the following:
Bathroom fan $107
Shower light $133.75
Whirl tub electrical work $169.50
3 cabinet lights $321
Garbage disposal $69.55
All of these items will be allowed.
[152] JNCC does not address these in their submissions. Mr. Nielsen could not recall whether or not they had been provided.
FAILURE TO FOLLOW DESIGN
[153] It was important to the Litwins to match the existing home to the new and that was made clear to JNCC. The Litwins submit that this was not done. The Litwins claim damages for the failure of JNCC to follow the agreed-upon design.
[154] In response to this claim JNCC submits that:
(a) The failure to follow the design did not diminish the value of the home and
(b) There was no timely objection by the Litwins.
[155] The Litwins submit, however, that they were in England until September 2002 and relied on Mr. Nielsen and Mr. Storey to follow the design. After all Mr. Nielsen had promised he would be on the job site almost daily and Mr. Storey was supervising the construction.
[156] The Litwins submit further that it is not reasonable to expect Mr. Litwin to notice design flaws. That is clearly outside any knowledge or experience in the construction aspect of the home.
[157] I will deal with each area raised by the Litwins separately.
West Gable at Wrong Height
[158] It was Mr. Litwin’s evidence that, in November, 2002, he was told by Mr. Nielsen that there was a problem with positioning the windows as had been agreed. Mr. Nielsen had explained that the headers had come down, and the windows had to be put underneath the headers, and this had affected the west gable of the Home. Mr. Nielsen thereafter realized that JNCC had not followed the design plan, but – without consulting with Mr. Litwin – had instead taken a shortcut in building the roof. When Mr. Litwin complained, Mr. Nielsen said that the only alternative to putting the windows in low was to tear it all down and delay the job. Mr. Litwin told Mr. Nielsen that they would do the best they could in the circumstances, but that the Litwins would be looking for a major price concession on the price. Mr. Nielsen did not respond.
[159] The testimony of JNCC on this item was that unanticipated problems can and often do occur with additions to existing buildings. The evidence of Mr. Nielsen and Mr. Storey was that a ridge-board and a couple of rafters had been put in place on the West Gable and it was at this time that it became apparent that there was going to be an obstruction from the existing roof eave in the side windows of the new gable if constructed with the window at the height as called for on the drawings.
[160] JNCC submits that no compensation should be given because if one looks at the pictures of the gable it is not unattractive from an objective view. JNCC also submits that the first written notification of the window being too low was after the litigation started. Finally JNCC submits there is no evidence the home has any less value because of this item.
[161] I agree with the Litwins on this item.
[162] It was important to them that the agreed-upon design be complied with. The cost of this construction was significant to them. JNCC’s argument that the look of the house be viewed from an objective standard is unreasonable. This was the Litwins’ construction and it was particular to them as to how they expected it to look. JNCC knew the Litwins wanted a particular design and a particular look. There is no doubt that at times unanticipated problems can arise, however, not following an agreed-upon design can result in damages. The Litwins seek $5,000 for this flaw. Mr. Litwin explains it this way:
A: We – I’m seeking $5,000 for failure to follow design. That’s based on a number of items associated with what was built versus what was in the original plan. By lowering the roof, he lowered the ceiling in the room, and we had more of these diagonal walls cutting into the ceiling at quite a low level, some starting at four feet. The windows were lower. We couldn’t use my son’s existing furniture because the desk would impede the opening of the window. The two side windows on the north and south side were very low, well under two feet high, and we felt that that posed a bit of a safety risk that somebody could easily climb out. Because of the windows being so low we had to leave a lot of floor space open around the windows because we couldn’t put anything in the windows area, because we had to leave that space so you could open windows. So, generally, we, we felt that there was functional considerations on the inside of the house, and then there was the aesthetic element on the outside. We were expecting to get something. We paid for a bigger gable and we got a smaller one. So, there was less material in the construction.
Q: And, so, in coming up with the $5,000?
A: We – given the value of the house and the cost of the addition, and we were told that it would cost – was it $50,000 to rebuild the gable if we had seeked that remedy; that, I think it’s a reasonable consideration.
New Chimney Too Small
[163] The new chimney was to have been built the same size as the existing home. On a cosmetic basis the Litwins claim $2,000 for failure to build the new chimney according to plan.
Second Floor Laundry Room – Too Small
[164] This room had been built 15” too narrow. The staircase cuts a diagonal through the headspace. Mr. Nielsen said nothing could be done because he installed the staircase and the staircase determined the size of the room. Mr. Nielsen suggested the Litwins purchase European machines which would take up less room.
[165] The Litwins claim $5,000.00 in damages for purchasing the European machines, loss in aesthetic value, and diminution in use.
Third Floor Staircase Missing a Landing
[166] The Litwins submit that the new staircase is not attractive and it is a safety issue as well. It does not have a landing for convenience. The Litwins seek $2,000 in damages for this item.
[167] JNCC submits that the only issue is that there was a small protrusion, about 5 to 6 inches out of the wall by 12 to 74 inches long at the half-way up the staircase where the stairs change direction. This protrusion was removed by Resand and the Litwins are claiming those costs. This small protrusion prior to the removal by Remais, was merely an esthetic issue.
[168] I am not satisfied in light of the removal that the Litwins are entitled to general damages on this item.
Third Floor Build Too Small
[169] JNCC built the third floor more than 8 inches shorter than the plans. Mr. Litwin had arranged for the third floor to be built a certain size to accommodate his barrister bookcases.
[170] The Litwins claim $3,000 in damages for this item.
[171] JNCC submits that no compensation be given. There is no evidence the house has been reduced in value and the claims is purely subjective.
Smallest Bedroom (east side) Not Enlarged
[172] JNCC built this room a foot smaller than specified. The Litwins claim $10,000 for failure to follow design in relation to this item. Mr. Litwin explained that as this bedroom is very small the home is not really a four bedroom home and the difference in value between a three and a four bedroom home in his neighbourhood is very significant, possibly $200,000 and may affect the sale of the property as a four bedroom home. The Litwins did not file an expert report with respect to how this item affected the value of the home or how much.
Staircase to Basement
[173] Mr. Litwin’s evidence was that where the basement staircase comes up to the first floor landing area, a very thick wall was to have been removed. JNCC did not follow the plans and the wall was not removed. As a result the Litwins identify two problems:
Space on the staircase landing was significantly reduced (10”);
A piece of the wall jutted out into the staircase.
[174] Rusand Constructions in their remedial works, to be dealt with later in these reasons, removed the jutting piece of wall. However, the loss of space remains making it awkward to go up and down the stairs and to bring things into the basement.
[175] The Litwins seek $10,000 in damages for that loss of space.
[176] JNCC submits that there should be no compensation for this item and sets out his reasons at paragraph 83 of their written submissions as follows:
There is no evidence as to what the size of the staircase was to be other than what was built. The only issue is that there was a small protrusion, approximately 5 to 6 inches out of the wall by 12 to 14 inches long, at the landing half-way up the staircase where the stairs changed direction. Again there is no written notification from Mr. Litwin that the size of the staircase was perceived as a problem. This protrusion was removed by Rusand and the Defendants are claiming those costs. There is no evidence that the width of the staircase did not comply with the Ontario Building Code and there was no Order to Comply filed by the City of Toronto. The small protrusion, prior to its removal, was merely an aesthetic issue. Therefore, it is submitted that no compensation should be given for this item.
Shingles Not Installed As Specified
[177] Mr. Nielsen asked Mr. Litwin to look through samples. Mr. Litwin said he did not have to look at samples as he knew what he wanted, IKO Cambridge driftwood shingles. One of the samples Mr. Nielsen had was IKO Cambridge driftwood so it was selected. After they were installed Mr. Litwin noticed they were different than the IKO shingles on his neighbour’s roof. Mr. Nielsen had installed Biltimore driftwood not IKO Cambridge driftwood.
[178] The IKO shingles cost $24.25 per unit which is $4 more per unit than the Biltimore. Mr. Litwin testified as follows on this issue:
A: So, the shingle that we were requesting appears to be $4.25 more than the shingle supplied, or over 20 percent more than the one that we received. So, we would like to claim $2,000. The roofing, Mr. Nielsen claimed was, I believe, in the neighbourhood of $10,000, so that $2,000 is only 20 percent and the value of the shingles is 20 percent, and we’re not making a claim on the aesthetics or the facts we didn’t get the product we wanted. But, we, we definitely don’t like the shingle as much as the other one, but we would like to be as reasonable as possible.
[179] Mr. Nielsen’s evidence on this point is that he was unable to obtain the IKO shingles as per the Budget as they were discontinued, so he obtained two different shingles comparable in look and quality. Mr. Litwin picked one of those and they were installed.
[180] The Litwin claim $2,000 for JNCC’s failure to install the correct shingles.
[181] I agree with the position of JNCC on this item. Mr. Nielsen was unable to order the IKO for reasons outside of his control. Mr. Litwin looked at samples and picked one and it was that shingle that was installed. I am not satisfied that any fault lies at the feet of Mr. Nielsen on this item.
[182] A representative from the manufacturer came out to inspect the shingles and he confirmed that these were the correct shingles that were ordered and as selected by Mr. Litwin from the samples.
[183] I am not satisfied the Litwins’ claim on this item should be allowed.
[184] In summary Mr. Litwin claims the following damages for failure to follow design:
West Gable at wrong height - $5,000
New chimney too small - $2,000
Second floor laundry room – too small - $5,000
Third floor stair case missing a landing - $2,000
Third floor built too small - $3,000
Smallest bedroom (east side) not enlarged - $10,000
Staircase to basement - $10,000
Shingles not as specified - $2,000
Total claimed $39,000
[185] The Litwins did not file any expert report or call any evidence from an expert to address the issue of how these design flaws affected the value of the home. In these circumstances it is difficult to assess what the damages are. However, I agree with the Litwins that they ought to be compensated for JNCC’s failure to follow the design. In not doing so the Litwins’ enjoyment of their home has been compromised.
[186] I am prepared to assess these damages globally at $25,000.
RENTAL AND STORAGE COSTS INCURRED BY THE LITWINS - $21,532.68
[187] Mr. Litwin testified that Mr. Nielsen told him that they could move into the home by December 2002. Mr. Nielsen did not guarantee that all the work would be finished but he did assure the Litwins the house would be in a liveable condition.
[188] At the July 2002 meeting Mr. Litwin made it clear to Mr. Nielsen that they were returning to Canada in September 2002. Relying on the December time line the Litwins rented premises from September to December with an option for January and February 2003.
[189] Mr. Litwin described the state of the home at Christmas 2002 as nowhere close to liveable conditions and it was a total mess with no drywall, no floor and no plumbing.
[190] Mr. Litwin advised Mr. Nielsen he had the option of renting for extra months but expected Mr. Nielsen to be responsible for these two months. Mr. Nielsen did not argue the point.
[191] Mr. Nielsen moved the move in date first to February then to April 1 and then to May 1, 2003.
[192] Mr. Litwin described the state of the home as of the May 3, 2003 weekend as follows:
(a) The outside of house was a construction site, with scaffolding, tools, debris and old radiators. The driveway was mud.
(b) Various areas inside the Home were still being worked on, and there were construction sites for carpentry and drywall, along with construction materials, table saws, electrical power tools, extension cords, workers’ equipment and discarded gloves.
(c) On the inside, the tile and the floors were there. No telephone had been hooked up. There was only one functional washroom. There was no electricity on the second or third floors. There was no heating system in the house, and therefore no hot water.
(d) There was no kitchen, and no kitchen appliances save for one tiny refrigerator. Mr. Nielsen, had put in what he called a “temporary kitchen” – a slab of plywood on boxes or sawhorses. The Litwin’s stove had been broken during the Construction. The dishwasher wasn’t set up, and was filled with dirt and drywall.
(e) There was no laundry room.
(f) The second floor railing near the washroom had not been secured, causing a concern given that the Litwins had, at that time, two children: a four-year-old and a six-year-old.
(g) The basement was full of construction materials, dust and debris.
[193] As a result the Litwins had to quickly find rental accommodations and again Mr. Litwin told Mr. Nielsen he expected him to pay for that additional expense. Again Mr. Litwin testified that Mr. Nielsen did not argue the point.
[194] The Litwins did not move into the house until August 2003.
[195] The total costs of rent and storage is as follows:
Rent - January, 2003 $2,530.00
Rent - February, 2003 $2,350.00
Rent - March, 2003 $2,350.00
Rent - April, 2003 $2,725.00
Rent - May 3 – May 10, 2003 $1,890.00
Rent - May 10 – May 30, 2003 $2,800.00
Rent - June 17 – July 17, 2003 $2,800.00
Storage Costs – January, 2003 – August, 2003 $6,332.68
Total $23,778.68
[196] Mr. Nielsen, on the other hand, submits that the time frame was estimated at 6 to 8 months from the time of the issuing of the building permit. No firm fixed date was given. At 8 months that would have put the final construction at the end of February 2003.
[197] JNCC argues that the Litwins are not entitled to any compensation.
[198] With respect to the storage costs, Mr. Nielsen submits that these costs were paid by Mr. Litwin’s employer T.D. Securities so Mr. Litwin is not entitled to same.
[199] With respect to the storage costs it was Mr. Litwin’s evidence that his employer paid for the storage costs in exchange for reducing his bonus.
[200] I am satisfied that the Litwins are entitled to rent and storage for the following period:
Rent March 2003 - $2,350
Rent April 2003 - $2,725
Rent May 3 – May 10, 2003 - $1,890
Rent May 10 – May 30, 2003 - $2,800
Rent June 17 – July 17, 2003 - $2,800
Total $12,565
Storage from March 2003 to August 2003 pro-rated to total $3,958. Total Rent and Storage = $16,523
[201] I am satisfied that even with an anticipated December 2002 move in date it was not unreasonable to expect additional time may be required. As such the Litwins rightfully took the option to rent for the months of January and February. It is not unreasonable, therefore, that these rental and storage costs would have been anticipated. However, the delays occurring after February fall squarely at the feet of JNCC and the Litwins should be compensated fully for rent and storage from that time to August 2003.
THE QUALITY OF JNCC’S WORK
The Evidence of Joseph Fusco
[202] Joseph Fusco, a City of Toronto building inspector, inspected the home on July 23, 2002, February 24, 2004 and April 14, 2005. Mr. Fusco testified that overall his impression of the work done by JNCC was “on the lower end of the staff he normally sees.”
A. 2005? Okay. How may inspections I would have done? Well, probably in the neighbourhood of about 1,500 to 2,000 inspections a year. And I’ve been doing it since 1933.
MR. CARSTEN: Q. Can you let the court know what your impression was of the renovation work done on this construction versus typical work you would have seen?
A. I don’t like to comment on people’s – I would say it was on the lower end of the stuff that I normally see.
[203] The Litwins point to the following testimony of Mr. Fusco in support of their position that the quality of work performed by JNCC was before the quality standards set by the Building Code:
The existing footings were undermined and were not at the appropriate locations or depths for the alterations;
Engineering sketches he received from SWS Engineering Inc. dated July 13, 2007 did not include sufficient information, were not clear as to what needed to be done and none of the sketches were signed by the engineer;
In his inspection report and subsequent order to comply Mr. Fusco noted the following deficiencies:
Flat roofs pond water;
Balcony railing was climbable;
S-traps in the ensuite vanity is not a proper installation of a trap;
Sloped floors indicated settlement or poor construction;
HVA – the radiator was meant to be vertical not horizontal;
Framing in the basement showed signs of poor workmanship. Mr. Fusco explained it in this way:
Q: Tell us why those framing issues were of concern to you, and how important – how big a concern those were.
A: Framing is very important. Structural framing, you don’t want a building to collapse or – so, yes, all those elements are important. And I made a few observations. One was there was a steel beam that was put in place and there was a welded plate to the bottom of the steel beam. And the welding on it was haphazard, it wasn’t – it didn’t, in my opinion, have any consistency; just looked of poor workmanship. And that’s why I made the comment, “looks questionable.”
Q: Not good. Okay. Then you say, “Cracked joist not repaired properly.”
A: Yes. There – obviously there was a joist, I don’t recall its location, that had been cracked.
Q: Okay.
A: And maybe there was an attempt to try and repair it. And, again, I just felt it was a very poor repair job.
Q: And why is a cracked joist problematic, sir?
A: Well, a cracked joist has reduced capacity.
Q: Okay.
A: And obviously don’t want it to fail.
Q: What happens if a joist fails, sir?
A: Well, if it fails, you can have a collapse.
- Underpinning of existing footings performed by JNCC was neither authorized by permit nor inspected in stages as required.
[204] Mr. Nielsen responds to these assertions by the Litwins as it relates to Mr. Fusco’s evidence as follows:
The only comment on July 23, 2002 was to have an engineer inspect the site because the existing footings had been undermined by the addition of a device;
The other inspection in 2004 occurred after JNCC had been terminated so JNCC had no opportunity to repair the deficiencies;
The Litwins did not attend to correct the deficiencies until almost four years after the inspection was done;
Although Mr. Fusco noted that the work was at the lower end of the range it was still within the ranges;
Mr. Fusco describes the issue with the third floor balcony as an easy fix. A piece of plywood would have resolved the issue. The fact that the Litwins did nothing in nine years to correct it is reflective of the fact that this item was of little concern to them;
The TAK report was prepared by an engineer and was more extensive and it did not find any fault with the junction or welded plates;
Mr. Fusco’s comments were that the workmanship was poor but he did not state that it was negligent or dangerous.
[205] I accept Mr. Fusco’s evidence and when it is considered in its totality and within the context of the whole of the evidence called at this trial, I accept his assessment of the quality of the work of JNCC as observed by him was poor and fell at the lower end of what he normally sees.
The Evidence of Bruce Hemming
[206] Bruce Hemming, a City of Toronto building inspector attended the home on February 24, 2004. He noted the following framing deficiencies:
TJI (manufactured) joists weren’t supported, or were not properly supported;
Some existing joists were shimmed;
Some cracked joists were not properly repaired or not properly attached to sister joists; and
Some joists were not supported on both ends.
[207] Mr. Hemming’s concerns related to the issue that if the floor settled it may result in structural damage, property damage and possibly collapse. He stated in his testimony that “obviously the, the joist was damaged, so, therefore, it could not sustain the loading that it was meant to carry. So it – what the contractor had done was to put another joist beside the old joist and nail a piece against the old joist to repair it. But was not done in a – it wasn’t a good job.”
[208] Mr. Nielsen points out that Mr. Hemming’s observations were that while there was poor workmanship it is common when doing “a framing inspection to find deficiencies.” Shimming of existing joints was common practice. Mr. Hemming also noted that the joists that were not supported on one end could easily be corrected by simply adding a stud and attaching it to the wall.
[209] As with Mr. Fusco I accept Mr. Hemming’s testimony and when it is considered within the content of the total body of evidence called at trial I accept his evidence about the concerns he had with the quality of the workmanship of JNCC as observed by him.
THE HELLYER REPORT
[210] David Hellyer is the principal of Hellyer Engineering and his report is dated April 2, 2008. He was qualified as an expert with respect to residential construction and home inspections. The Hellyer report is Exhibit 14 at trial. The report identified set out structural deficiencies including violations of the Building Code. The Litwins identify the following points made by Mr. Hellyer in his testimony:
There was a lack of welding on the outside corners of steel shelf brackets. Without the welding, the brackets may not be strong enough to hold up the beam, which could cause the floor to fall;
As two steel posts had been placed too far apart, the stress on beam between them had gone up exponentially with the extra distance. By deviating from the original designs without any supporting engineering documentation, the construction by JNCC did not meet the standards set out by the Code. The deviation could result in bending and possible cracking in the floor above the steel beams;
A column was not properly attached and supported, which could result in the column moving and even possibly falling out;
Support for the new floor joists was “abysmal”. Mr. Hellyer said that he did not use words like “abysmal” very often, but it was apparent from the photographs that the “workmanship is just no good” with respect to the support of the new floor joists.
[211] Mr. Hellyer testified that the extent of the deficiencies required significant work. The home needed to be “gutted”.
[212] JNCC did not address the Hellyer report in its submissions.
[213] I accept Mr. Hellyer’s testimony in its entirety.
THE TAK REPORT
[214] Mr. Tom Zeniuk, the principal of TAK Engineering testified about the structural elements relating to the home.
[215] The TAK Report is Exhibit 15. At pages 13 and 14 of the report the following structural requirements are set out that must be carried out:
59 The Kingsway
Etobicoke, Ontario
January 8, 2009
CONCLUSIONS & RECOMMENDATIONS:
The information provided in this report is based on limited investigation and overall assessment of the structural condition of the residence. It should be noted that the results contained in this report are limited to the conditions found on site at the time of survey.
The following structural requirements MUST be carried out:
Existing footings were of poor quality and not structurally adequate to carry additional third storey. As approximately 40% of the existing footing was deteriorated and/or constructed underpinning was unacceptable. Therefore, we are of the opinion that, the deteriorated part of the existing footing and/or badly constructed underpinning MUST be removed and replaced with new.
The underpinning must be done where missing especially in the areas where existing house a slab-on-grade was lowered to match new addition the slab-on-grade level and existing footings were exposed.
A masonry pier attached to existing masonry wall must be constructed at the corner located at the test pit D. The pier will provide the required support for the steel beam. Further, a 4’ x 4’ x 10” footing must be constructed under the pier and masonry wall; see drawing No. Sl. Prior construction of the new pier, existing facing concrete blocks must be removed, and if existing exposed masonry wall is in unacceptable structural condition, the masonry must be removed and re-constructed including building the steel beam support.
A new footing 3’ x 3’ x 10” must be constructed under each existing HSS 3 ½” diameter steel post; see drawing No. Sl. All existing HSS 3 ½” diameter adjustable steel posts should be replaced with full height HSS 3 ½” diameter steel posts.
If required, a new footing 4’ x 4’ x 10” must be constructed under a masonry pier supporting 5-2” x 10” wood beams in the recreation room.
Add strip footing under load bearing stud wall between recreation room and corridor/furnace room.
All the new short TJI joists resting on a plate welded to W10x22 steel beam in the basement (recreation room) must be reinforced as shown on the detail 5/S2.
All floor joists resting on loose masonry or on wood wedges must have support reconstructed, must rest on a solid masonry wall.
It is recommended to remove masonry wall over existing steel beam W10x22 (W250x33) at the basement (recreation room) as it appears that deflection is at its limit.
We have designed a cross beam (SB1) and parallel beam (SB2) to support a part of the stair case and landing, see third paragraph of “Structural Design Check” section. The SB1 beam will be supported by 3-2” x 4” post in the staircase wall at one end and by another beam (SB2) at the other end. Beam SB2 will be supported by the post at both ends. All shown on the attached structural drawings Nos. S1 and S2.
All the new short TJI joists resting on a plate welded to steel beam must be reinforced as shown on the drawing No. S2.
Existing masonry piers, see drawing No. S1 must be verified for constructed underpinning and if the existing footing is missing, it must be constructed, minimum 4’0” x 4’ 0” x10”.
Existing 3-2” x 10” beam (SB3) over the family room at the bay window must be reinforced with a single 2” x 10” S-P-F #1 ply, see drawing No. S2.
All the new short TJI joists supported by W 10 steel beam and the masonry wall at the basement must have enough bearing support (minimum 1 ½ “); see drawing No. S2.
Achieving the objectives of this report has required us to arrive at conclusions based on the best information presently known to us. Professional judgment was exercised in gathering and analyzing the information obtained. Our undertaking is to perform our work within the limits prescribed by our client with the thoroughness and competence of the engineering profession. It is intended that the outcome of this investigation client risk with respect to structural impairment; our work should not be considered risk impairment. No other warrant or representation, expressed or implied, is included or intended in this report.
These conclude our observations, comments and recommendations.
For: TAK Engineering Ltd.
Sgd
Mehrdad Alaei, P.Eng.
[216] JNCC’s position on this item relating to the TAK report is set out in his submission at paras. 69 to 74 as follows:
TAK report found problems with both the underpinning and existing footings.
The existing footings were of poor quality and required repair in order to permit a lowering of the basement in the original Home.
The Budget did not contemplate any work being performed on the existing footings, or any underpinning.
the Plaintiff, after conversation with Mr. Litwin, did undertake to do the underpinning in order to lower the basement in the original Home but it has never been held that the Plaintiff was also to redo the existing footings. This is the work that would have been required whether the underpinning was done or not. However, the cost for performing repairs to both the new underpinning and existing footings, as submitted by Rusand Home Renovations Inc. (“Rusand”), should not be borne solely by the Plaintiff alone. The invoicing of Rusand did not delineate what amount was for underpinning and what amount was for repairs to the existing footings.
The poor quality of the existing footing was only revealed because of the digging required for the underpinning.
The Litwins should bear part of the cost of the Rusand invoices for repairs to the existing footings. There has been a betterment to the Home by repair of the deteriorated existing footings. The report of TAK at page 13, did not give a percentage between deteriorated footings and unacceptable underpinning but stated that 40% of the existing footings were deteriorated and/or underpinning was unacceptable. No calculations were available through Rusand’s invoicing to delineate between footings repairs and underpinning repairs. Therefore, the cost of Rusand for these items should be a 50/50 split between the Plaintiff and the Defendants (Exhibit 10, Tab 36, invoices 101 & 103].
STRUCTURAL DEFICIENCIES REMEDIED BY RUSARD CONSTRUCTION
[217] Mr. Jerzy Piecuch is the principal of Rusand Construction. In consultation with Mr. Tom Zeniuk at TAK Engineering he carried out the remedial work identified in the TAK report. Rusand also did the following work:
Levelled all of the floors and reinstalled hardwood after levelling was complete;
Properly waterproofed the basement;
Removed the bulkhead from the stairway between the main floor and the basement;
Fixed a non-insulated pipe which was causing condensation and a leak in the ceiling above the kitchen;
Moved the wall in the laundry room to create more space;
Provided downspouts and fixed the slope on the eaves troughs; and
Installed a heated floor in the whole basement.
[218] The following work done by Rusand are to be deducted from the Rusand invoices for the remedial work as this work was non-remedial work conducted by Rusand:
$6,600 for the basement walkout;
$2,500 for the drywall labour (the drywall itself was provided by the Litwins); and
$300 for the cold cellar partition wall.
[219] The total claimed by the Litwins for structural repairs already carried out by Rusand is $92,106.97.
[220] The Litwins also claim for other repairs as well. The Litwins submit that all of these other repairs were required because of the failure of JNCC to carry out its work in a workmanlike manner. I will deal with each of these separately as set out by the Litwins:
New Radiator $240
Rough-in for Laundry and Washroom $1,000
Basement Under-Floor Drains $7,500
Crown Moulding $1,200
Laundry Room – New European Washer and Dryer $2,823.25
Roofing $428
Tiling $850
$234.14
Heating $963
Stone Steps $1,160.00
$300.00
Grading Driveway, Installing Gravel Sub base $700
Heating $6,609.75
Flooring, Fireplace and Trim $7,073.08
Eaves Trough and Down port and Flashing $3,207.75
Repairing Asphalt Garage Floor $214
[221] JNCC responds to all of the Rusand invoices in their written submissions. JNCC submits that a number of the items set out in the invoices did not form part of the Budget and upgrades. JNCC sets out the following position with respect to the various invoices challenged.
Invoice #103 Exhibit 10 Tab 36 - $18,952.50
[222] The sanitary server line to the property did not form part of the Budget and in fact the Budget specified “water and sewer line presumed to be OK from home to lot line”. The work on the server line only became necessary after it was decided that the floor drain should be put at the rear of the home which required the sewer line to be lower. Mr. Piecuch testified that the old drain to the street was clogged with debris and roots.
[223] JNCC seeks a reduction for the Rusand invoice in the amount of $4,777.50. I agree with the position of JNCC on this item.
Walk-out from the Basement
[224] Mr. Piecuch testified that a walkout from a basement would typically cost $15,000. Mr. Piecuch modified that to $6,000-$6,500 because the men and equipment were already at the home doing basement concrete work.
[225] JNCC does not accept that figure. The invoice does not set out any calculations justifying the reduction. Transporting men and equipment to a site would not reduce the usual $15,000 to less than half.
[226] JNCC seeks a reduction therefore of $14,175.00 to reflect the actual cost of the basement walk-out. Again, I agree with the position of JNCC on this item.
Invoice #104 – Exhibit 10 Tab 36 - $7,092.00
[227] JNCC submits that this invoice be reduced by its entire amount as this walk-out was an upgrade and not part of the Budget. I agree.
Invoice # 105 – Exhibit 10 Tab 36 - $1,546.41
[228] The invoice is dated May 3rd, 2009. The first two items for City Concrete (March 25th and 27th, 2009) are identical to Rusand invoice (#103) dated March 29th, 2009. Also, there is an intervening invoice of April 15th, 2009 from Rusand. One would have expected that the March invoices would have appeared as April invoices.
[229] All other concrete amounts in all the other invoices have different figures except these two. The only explanation is that they are duplicates. Therefore, this invoice should be reduced by $1,546.41. In addition, no actual invoices from the concrete suppliers have been produced which would have clarified the matter. I agree.
Invoice #107 – Exhibit 10 Tab 36 - $4,218.87
Invoice # 107 – Exhibit 10 – Tab 36 - $4,218.87
[230] The Plaintiff’s Budget only called for fibreglass batten insulation. Foam spray insulation was used by Rusand, which is three times the price. Therefore, this invoice should be reduced by $3,045.00. I agree.
[231] No reason was given as to why Rusand should be entitled to a mark-up on the work of Zandberg Construction. Therefore, it is submitted that this portion of the invoice be reduced in the amount of $1,173.87. I agree.
Invoice # 108 – Exhibit 10 – Tab 36 - $15,827.70
[232] Dry walling of the basement. This work did not form part of the Plaintiff’s original Budget. In addition, it was Mr. Litwin’s evidence that this does not form part of his counterclaim. Therefore, there should be a reduction of $8,400.00.
[233] Spray foam of beam. This work did not form part of the Plaintiff’s original Budget. There is no calculation or estimate of the actual cost. Therefore there should be a reduction of $840.00.
[234] Extra roof vents. There was no evidence given that these were required. No City inspection reports produced, nor was any expert evidence given, stating that these vents were required. Therefore, there should be a reduction of $1,050.00. This was an extra the Litwins wanted but no reasoning has been given. I agree.
[235] Electrical. There was no evidence given as to what this work was for. There is no estimate or invoice. The Budget was solely limited to electrical outlets on exterior walls where studs and insulation had been put up. Therefore, there should be a reduction of $5,537.70.
[236] It is submitted that most, if not all of the work set out in the above invoice (#108) was to finish the basement, which was never part of the Plaintiff’s Budget. I agree.
Invoice # 118 Exhibit 10 – Tab 37A - $10,245.85
[237] No back-up invoices for Rex Lumber and Rona Ontario were provided. There is no copy of an estimate for the hardwood floor. There is no explanation of the work that was done. The invoice is dated March 2nd, 2011, which is two years after the work was done regarding the basement and the levelling of the floors, and seven (7) years after the Plaintiff had been taken off the Project. The Litwins appear to be re-renovating their home, seven (7) years after the Plaintiff did its work.
[238] JNCC submits further that there was no explanation as to why 124 hours, or almost three weeks of work, was required for doors and trim. The work was done in August, 2010, but not invoiced until March, 2011. Did the Defendants live without doors or trim for seven (7) years? Again, the Litwins appear to be re-renovating and demanding that the Plaintiff pay for it. There was no evidence that this work was necessary.
[239] This invoice is primarily for levelling the old floor in the dining room. The evidence of Mr. Nielsen and Mr. Storey was that the new addition was level but the old floors were sloped. The home was seventy (70) years old. Mr. Litwin was advised that to level all the floors was expensive, so a compromise was made to split the difference in height.
[240] The Litwins did not like the results achieved by splitting the difference to fix the floors so, seven (7) years after the Plaintiff was on the Project, decides to correct the problem and level the old floors.
[241] The evidence and photographs of the basement show the joist in the dining room ran from the front of the house to the back of the house. The photographs show where the floor was lowered. What had to be lowered was all the old joists under the dining room. Only one side is shown which had previously been the exterior back wall. There is no evidence before the Court as to the slope, if any, on other side.
[242] Therefore, it is submitted that this invoice be reduced in its entirety as work that was done to level the existing floors, was not part of the Budget.
Sloped Floors
[243] JNCC submits that the Budget did not encompass levelling of the existing floor. JNCC submits that there is no evidence that any unevenness existed between the new floors and the existing floors in the large rear addition where there was a great deal of new floor meeting old floor. JNCC argues that the only complaint and the only photographic evidence provided by the Litwins, involved the small west side extension of three feet in the dining room and second floor bedroom.
[244] The Litwins submit that there is good reason to believe that the sloping floors are attributable to the incorrect installation of a steel bar by JNCC. Mr. Litwin’s evidence on this issue was as follows:
A. This photo is showing – is in the dining room where we have the sloping floor. The floor slopes up towards the windows on the left and the same problem exists in the bedroom above. The photo shows that the original floor joists of the house ran in the direction of the slope. And, that this was a steel beam installed by Mr. Nielsen.
Q. What, what, what is, “this”?
A. Sorry, this red line on the top left.
Q. And, at what point, during the renovation by Mr. Nielsen, was this photo taken?
A. This was – no this was taken in the remedial work by Rusand Contracting. So, they opened up the entire dining room ceiling to expose the floor joists of the bedroom above. They found that there was this steel beam, here, installed by Mr. Nielsen and they were in the process of, of lowering the steel beam, installed by Mr. Nielsen, so that the floor joists would not slope up three inches but would be level.
[245] I agree with the position of the Litwins on this issue as the photographic evidence supports their position.
Attila Plumbing – Exhibit 10 – Tab 37B - $840.00
[246] Mr. Litwin’s evidence was that the drain work was needed because the slab in the basement had been removed. However, the evidence was that the new drain was run to the rear of the home. The Budget and approved drawings did not require that the Plaintiff put the floor drain at the rear of the home. No invoice has been provided and therefore there should be a reduction of $840.00 as additional work was undertaken to run it to the rear of the home. I agree.
Attila Plumbing – Exhibit 10 – 37 C - $1,500.00
[247] Again, no invoice has been produced to show what work was done nor witnesses called and therefore there should be a reduction of $1,500.00. I agree.
Cash cheque – Exhibit 10 – 37 D - $1,200.00
[248] No invoice has been produced. No information has been provided as to what was purchased and in what quantity. In fact, the cheque is made payable to “Cash”. Therefore, there should be a reduction of $1,200.00. I agree.
H & R Group Inc. – Exhibit 10 Tab 37E - $2,823.25
[249] The original space under the staircase to the third floor was not designed to accommodate a full size washer and dryer. Mr. Nielsen gave Mr. Litwin the option of moving one of the walls, but Mr. Litwin refused to agree to that solution. Mr. Litwin’s evidence is that he eventually did have the wall moved by Rusand. The Defendants want the Plaintiff to pay for a second washer and dryer. It was Mr. Litwin’s evidence that the washer and dryer are now in storage. The invoice should therefore be reduced by its full amount. I agree with the Litwins on this item.
Infinite Roofing – Exhibit 20 – Tab 37 F - $428.00
[250] There is no proof of payment of this invoice. In any event, the work performed simply took the form of general maintenance. Therefore, the invoice should be disallowed. I agree.
Jim’s Tile & Marble Granite – Exhibit 10 – Tab 37 G and 37 H - $1,084.14
[251] This work was done six-and-a-half (6 ½) years after the Plaintiff was on the Project. The Plaintiff is not responsible for maintenance of the Litwins’ home. There were no warranties given. Part of this claim is for tile in the laundry room after the wall was moved. As previously stated, the Plaintiff offered to move the wall at its cost but Mr. Litwin refused. The Defendants now want the Plaintiff to pay for the repairs for moving the wall. This should not be allowed, therefore, there should be a reduction of $850.00 on the invoice. I agree.
[252] Mr. Litwin changed the tile in the shower as he did not like the colour. This issue was never previously raised with the Plaintiff. Colour of tiles can vary. The Plaintiff never provided any warranty for the colour. Therefore, there should be a reduction of $234.14. The Defendants had five (5) years of use of the tile placed by the Plaintiff.
Mars-Plumbing – Exhibit 10 – 37 I - $963.00
[253] The radiators were existing in the Home. The Plaintiff was not responsible for purchasing radiators under the Budget. In addition, the work was done almost two (2) years after the Plaintiff was no longer on the Project. Therefore, there should be a reduction of $963.00. I agree.
Build two steps – Exhibit 10 – Tab 37 J - $1,160.00
[254] If the steps were damaged, they were repaired. Mr. Litwin provided no evidence that he ever advised the Plaintiff that he did not approve of the repair. Therefore, there should be a reduction of $1,160.00. I agree.
Master Masonry – Exhibit 10 – Tab 37 K - $7,000.00
[255] The evidence of Mr. Litwin was that the Defendants believe the Plaintiff should be responsible for $300.00 of this invoice. The Plaintiff disputes this claim as the work was performed almost two (2) years after the Plaintiff had left the Project. The invoice should be disallowed.
Master Masonry Exhibit 10 – Tab 37 L - $7,500.00
[256] Mr. Litwin did extensive work on the driveway, including interlocking and paving. The driveway was not part of the Budget. Driveway work was an extra [Exhibit 23 – Tab 5]. No evidence was led to show that the Plaintiff was to supply enough gravel for a paved driveway with an interlocking brick shoulder. The claim is another attempt to have the Plaintiff pay for new work the Defendants were doing to improve their home. The Defendants obtained from the Plaintiff what was billed to them. If more gravel was necessary, it was of work to be done by the interlocking and paving contractor. Therefore, the invoice should be disallowed. I agree with the position of JNCC.
Invoice – Zandberg Construction – Exhibit 10 – Tab 37 M - $2,173.50
[257] Relocating Existing 5 Coaxial Venting for Viessmann boiler. No reason has been given to support his claim nor has evidence been led that the existing location was wrong. Therefore, there should be a reduction of $525.00. I agree.
[258] Zoning for new bathroom and new storage room. Again, this work did not form part of the Budget. Therefore, there should be a reduction of $756.00. I agree.
[259] Radiator – 2nd Floor – Replace old rad valve and reconnect. This was an existing radiator valve in the Home. The Plaintiff was not responsible for existing radiators under the Budget. In addition, the work was done 5 ½ years after the Plaintiff was no longer on the Project. Therefore, there should be a reduction of $315.00. I agree.
REMAINING DEFICIENCIES
[260] The Litwins set out a number of deficiencies caused by JNCC that have not yet been remedied. Rusand gave an estimate for each of the areas claimed by the Litwins that have yet to be done.
Second Floor Railing $1,864.50
Third Floor Balcony Railing $2,034.00
Ensuite Vanity Sink Drains $2,090.50
Movement of Ensuite Vanity $847.50
Radiator Window Bench/Seat
Design, Build and Paint $2,542.50
Fireplace Mantle $2,203.50
Paint Kitchen Ceiling $536.75
Drywall in Ensuite Bathroom $1,356.00
Dry Wall in Master Bedroom and Closet $1,808.00
Bathroom Exhaust and Roof Vent $395.50
Dryer Duct to Roof Vent $282.50
Drywall and Paint in Powder Room $508.00
Unfinished Oak Staircase $1,695.50
Stain and Urethane Stringers to match Gumwood $1,017.00 and
Staircase between Main and Second Floor $2,034.00
Side Entrance Canopy $3,842.50
Rebuild Chimney $9,576.75
Landscaping $3,000.00
The total estimate of work yet to be done is $25,057.75.
[261] JNCC takes issue with the Litwins’ claim for these future items. JNCC submits the following:
It has been 9 years since the Litwins moved back into the home and over one year since the estimates were provided and none of the work has been done.
None of the items not yet remedied has prevented their use of the home. JNCC argues that the Litwins in fact have no intention of completing this work.
Rusand was already at the home performing work there and Rusand knew this litigation was ongoing at the time. This relationship should cause the Court concern with respect to the estimate amounts.
The estimate makes no distinction between labour costs and material costs.
There is only one estimate from Rusund. No alternative estimates were obtained.
Many of the items were based on costs based on the Litwins preferences and hypotheticals. JNCC points to the following examples:
(a) Instead of installing three panels of expensive tempered glass to the third floor balcony railing, at a cost of $1,800, a simple piece of plywood would have sufficed. In his testimony of March 6, 2013 Mr. Piecuch admitted that a solid railing could be used as an alternative to expensive tempered glass. Further, the Budget did not provide for glass panels;
(b) With respect to the family room limestone mantle and surround, Mr. Litwin testified that the sole issue relating to the mantle was that it was installed upside down and that there are a couple of visible screw holes. Further in his testimony of February 26, 2013 Mr. Litwin acknowledged he was not claiming compensation for the mantle.
Claim for Landscaping
[262] The Budget did not provide for landscaping nor is it shown on the drawings. The sanitary line to the street was done by Rusand and it required the front yard to be excavated.
Rebuilding of the Chimney
[263] The Litwins allege there are chunks falling from the chimney. The photo show one small amount of stucco coming off. The Litwins are not entitled to have the entire chimney re-stuccoed. The photo depicting that is undated.
THE LAW
[264] JNCC submits that the Budget provided set out the work to be done and allowances for specific items. Significant details had not been finalized in the Budget and the Litwins never requested further clarification.
Allowances and Extras
[265] JNCC refers the Court to the decision of Satanove J. in Fairwood Construction Ltd. v. Lin 1997 Carswell BC 1053. In Fairwood the Court concluded that the Plaintiff was entitled to be paid for the extra costs pursuant to the principle of contractual quantum meruit. At para. 32 the court set out the following:
From my review of the cases, the elements required to be proved by the plaintiff in a contractual quantum meruit action (as opposed to a restitutionary quantum meruit claim - for a discussion of the difference between the two see Laird v. Edamura (1990), 43 C.L.R. 113 (B.C.C.A.)) are:
there was a contractual relationship between the parties;
the parties agreed that certain work was to be done but failed to agree on all aspects of the contract, for example, the price to be paid;
the defendants accepted the work;
both parties had, or should have had in the circumstances, an expectation that the work was not being rendered gratuitously; and
the payment sought was reasonable remuneration for the work done.
[266] JNCC also refers to Deminico v. Earls 1945 CarswellOnt 196 for the proposition that the Court held that in some cases it may be presumed that an owner consented to extra work if such work is so great that it must have been done with the owner’s consent.
[267] JNCC further submits that in relation to quantum meruit the value of the work done is measured by the value of the services rendered not the benefit to the person for whom the work is done.
[268] JNCC submits that any changes or extras were discussed in depth with Mr. Litwin. The circumstances of the project resulted in new implied contracts relating to the averages of the allowances and extras being formed.
Regarding Completion Dates
[269] JNCC submits that since the written contract does not provide for a completion date then the Court should consider what was a reasonable length of time in the circumstances. (see both Vallie and Deminico).
LITWINS’ POSITION REGARDING PERSONAL LIABILITY OF MR. NIELSEN
[270] The Litwins claim that Mr. Nielsen is personally responsible since he made several fraudulent misrepresentations to induce the Litwins to hire JNCC to do the work. The Litwins point to the following:
That he would be on the job site every day;
That he was licenced;
That the plans that were submitted to the City had been reviewed and stamped by an engineer.
[271] The Litwins assert that they would never have hired JNCC if they had known the truth about these matters.
[272] The Litwins submit that Mr. Nielsen either knew what he was saying was false or he spoke recklessly, without knowing whether or not what he was saying was true. In support of these legal principles the Litwins rely on AGDA Systems International Ltd. v. Valcom Ltd. (1999), 1999 1527 (ON CA), 43 O.R. (3d) 101 (C.A.) at para. 34 leave to appeal to S.C.C. refused, [1999] S.C.C.A. No. 124 and Corfax Benefit Systems Ltd. v. Fiducie Desjardins Inc. (1997) 1997 12195 (ON SC), 37 O.R. (3d) 50 (Gen. Div.) at p. 9.
[273] Further JNCC is not entitled to the extras that the Litwins did not approve. The Litwins submit that contractors are not entitled to payment of extras, unless the contract itself provides for extras or a new contract, either express or implied is formed. An express contract may be in writing or oral. An implied contract may be inferred from the conduct of the parties. The onus is on the contractor.
[274] The Litwins argue that JNCC attempted to re-characterize as “extras” certain items covered by the fixed prior Budget.
(a) Failure to have a City licence
[275] JNCC argues that this was nothing more than an administrative detail and had nothing to do with the competence of the construction. This did not induce the Litwins to enter into the contract. Mr. Litwin attended at 88 Kingsway, a similar home, that JNCC had worked on, and Mr. Litwin was impressed with the quality of JNCC’s work. That was why Mr. Litwin hired JNCC.
PERSONAL LIABILITY OF JENS NIELSEN FOR FRUDULENT MISREPRESENTATION
Failure to have a City licence
It was Mr. Nielsen’s evidence that his company had been licenced by the City of Toronto for a number of years but this administrative fee for the licence had not been paid for several years. This resulted from his bookkeeper/secretary of twenty years having left him. She would normally have done that registration on behalf of the company. [Trial transcript – February 25th, 2013 – page 96 – lines 15-25]. It was an incorrect statement, based on the reasonable belief that the bookkeeper/secretary had looked after it. It may be negligent but, not reckless or fraudulent.
There is no evidence that the payment of licencing was anything more than an administrative detail. It had nothing to do with regards to competence in construction. The lack of an administrative registration did not in any way affect the Plaintiff’s company from having plans approved by the City, obtaining building permits and obtaining inspection of the work.
Mr. Litwin has confused an administrative registration of a builder with the licencing requirements of tradespeople. In his evidence, he makes reference to television programs he watched in England which emphasized that the “tradespeople” should be licenced [Trial transcript – February 25, 2013 – page 134 – lines 17-19]. Licenced trades people are plumbers, electricians and heating/air conditioning workers who must pass courses and demonstrate competency in a particular field of work in order to obtain a licence. There is no evidence that the tradespeople that did the work at the Litwin Home were not licenced and that was never an issue at trial.
It is submitted that Mr. Litwin attended at 88 The Kingsway, a home similar to the Litwins which the Plaintiff had recently renovated. Mr. Litwin was impressed with the Plaintiff’s work. Mr. Litwin was relying on the Plaintiff’s renovation work at 88 The Kingsway when entering into the Budget, not an administrative licence. Failure to pay an administrative fee and sloppy bookkeeping does not amount to fraud.
It is submitted that the licence was purely an administrative matter not related to the Project.
Periods of Time that Jens Nielsen was to be at the Project
There is nothing in the Budget [Exhibit 3, Plaintiff’s Budget May 15, 2002] that speaks to the frequency Mr. Nielsen would have to be in attendance at the Project. There was no written evidence produced by the Litwins as to what the frequency would be. If this was such an important item to the Litwins, one would have expected there would have been some notation on the Budget or some other documentation confirming Mr. Nielsen would be there every day.
When the Litwins returned from England in September 2002, they could view the Project daily. There are no notes, documentation or oral evidence that the Litwins confronted Mr. Nielsen about their concerns regarding his attendance at the Project or that they considered him to be in breach of the Contract by not attending at the Project daily. The Litwins were aware at all times that the Plaintiff was doing other work in the area.
There is no evidence, other than Mr. Litwin’s testimony, that Mr. Nielsen would be at the Project every day. Mr. Nielsen’s evidence in fact has been consistent that he would not be there every day. On May 25th, 2006, at his discovery, Mr. Nielsen indicated he would be there once a week or once every two weeks. His evidence at trial was that his frequency would depend on the stage of the Project. At the very early stages of the Project, he would be there quite often, in middle stages less so, and at the end stages to be there more frequently. There is no evidence to contradict Mr. Nielsen’s frequency of attendance at the Project. As Mr. Nielsen indicated in his examination in chief, he oversaw the Project and was on the Project as required.
No evidence was given that if Mr. Nielsen was on the Project daily, it would have proceeded any differently.
Plans submitted to City Stamped by an Engineer
The evidence of Mr. Nielsen is consistent that the plans were not stamped by an engineer. In fact, the documentation [Exhibit 3, Plaintiff’s Budget May 15, 2002] states that “structural elements subject to review by structural engineer and the City of Toronto.” It is clear from Exhibit “1”, the initial drawings, and Exhibit “4”, the approved drawings, there are no engineer stamps on these.
Mr. Nielsen’s evidence was that an engineer was involved, not that the plans had been stamped by an engineer [Trial transcript – January 8, 2013 – page 25 – line 22]. Mr. Nielsen’s evidence was clear. Why would he say stamped by an engineer when clearly the plans were not and that could easily be verified by someone looking at the plans. Mr. Nielsen is factually correct. Mr. Litwin may have simply misunderstood.
The fact remains however, the plans were subsequently approved by the City of Toronto and the renovations were performed in accordance with the plans. There is simply no fraud involved. The fact that there is no engineer stamp is of no consequence and was not required.
General Comments Relating to the Claim of Misrepresentation
Mr. Litwin is a well-educated individual, holding an MBA, who was employed by the TD Bank as an analyst on a work assignment in England. He appears to be a very particular and detail-oriented individual when it suits his interests. During the Project, Mr. Litwin had every opportunity to question and confirm all aspects of the work and yet at no time did he reduce any of those questions or comments to writing.
The facts are that one of the alleged fraudulent misrepresentations the Litwins are claiming for:
(a) were ever made terms or conditions in the Budget; nor
(b) documented, either through notes or any other documentation, at any time, up to and including the date of termination on March 15th, 2004 of the Plaintiff [Exhibit 9].
It is submitted that these alleged misrepresentations by Mr. Nielsen were developed for the litigation in an attempt to personally involve Mr. Nielsen and not just the Plaintiff corporation.
The Litwins have not alleged that the Plaintiff (Jens Nielsen Custom Contracting Ltd.) was not the party they were contracting with. Neither have they alleged that Mr. Nielsen (the principal of the Plaintiff), was acting in any capacity other than as a representative of the Plaintiff or that he was dealing with them personally. Therefore, at all times, the representations being made were those of the Plaintiff corporation.
It is therefore submitted that the corporate veil should not be pierced to attach personal liability to Mr. Nielsen.
JNCC’S POSITION REGARDING PERSONAL LIABILITY OF MR. NIELSEN
[276] JNCC submits that the three areas identified by the Litwins supporting the Litwins’ position of fraudulent misrepresentation do not satisfy the test for piercing the corporate veil.
[277] JNCC submits that failure to pay an administrative fee for a licence and sloppy bookkeeping does not amount to fraud.
(b) Periods of Time Mr. Nielsen was to be on Site
[278] JNCC submits that there is nothing in the Budget that speaks to this issue. The evidence on the frequency of Mr. Nielsen’s attendance on site is conflicting.
(c) Plans submitted to City Stamped by an Engineer
[279] JNCC submits that the evidence of Mr. Nielsen is consistent with the fact that the plans were not stamped by an engineer. Mr. Nielsen’s evidence was that an engineer was involved not that an engineer had stamped them. In any event the plans were approved by the City.
[280] JNCC submits that the corporate veil should not be pierced.
[281] In support of their position JNCC refers to the recent case of Choc v. Hudbay Minerals Inc., 2013 CarswellOnt 10514. In Choc the Court set out the following at paras. 44 and 45 and 47:
Since Salomon v. Salomon & Co., supra, Anglo-Canadian law has recognized that a corporation is a legal entity distinct from its shareholders. A parent corporation is also a legal entity distinct from a wholly-owned subsidiary. In Gregorio v. Intrans-Corp. (1994), 1994 2241 (ON CA), 18 O.R. (3d) 527 (C.A.) at para. 24, the Court of Appeal stated with respect to the separate legal personality of a parent and subsidiary:
Generally, a subsidiary, even a wholly owned subsidiary, will not be found to be the alter ego of its parent unless the subsidiary is under the complete control of the parent and is nothing more than a conduit used by the parent to avoid liability. The alter ego principle is applied to prevent conduct akin to fraud that would otherwise unjustly deprive claimants of their rights.
Ontario courts have recognized three circumstances in which separate legal personality can be disregarded and the corporate veil can be pierced: (a) where the corporation is "completely dominated and controlled and being used as a shield for fraudulent or improper conduct" (642947 Ontario Ltd. v. Fleischer (2001), 2001 8623 (ON CA), 56 O.R. (3d) 417 (C.A.) at para. 68); (b) where the corporation has acted as the authorized agent of its controllers, corporate or human (Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc., 2009 ONCA 256, [2009] O.J. No. 1195 at para. 51); and (c) where a statute or contract requires it (Parkland Plumbing, supra, at para. 51).
Concerning the first exception, the plaintiffs in the Choc action plead that "CGN is completely controlled by, subservient to and dependent upon Hudbay Minerals." However, the plaintiffs have not pleaded the second element of this exception. As stated recently by Morgan J. in Shoppers Drug Mart Inc. v. 6470360 Canada Inc., 2012 ONSC 5167, [2012] O.J. No. 4320 at paras. 72-73:
The separate identity concept is foundational to Anglo-Canadian law, and applies even where the evidence demonstrates that the corporation has been involved in impropriety. As the English courts put it in a recent confirmation of the Salomon principle, "it is not permissible to lift the veil simply because a company has been involved in wrong-doing, in particular simply because it is in breach of contract." Dadourian Group International Inc. v. Simms, [2006] EWHC 2973, at para. 683 (Ch D), affd [2009] EWCA Civ 169 (CA).
To put it another way, the corporate veil should be pierced not where a corporation has misappropriated funds, but where the very use of the corporation is to hide that misappropriation. "[I]t would make undue inroads into the principle of Salomon's case if an impropriety not linked to the use of the company structure to avoid or conceal liability for that impropriety was enough." Trustor AD v. Smallbone and others (No. 2), [2001] 3 All E.R. 987, at 996 (HC).
[282] In Shoppers Drug Mart Inc. v. 6470360 Canada Inc., 2012 CarswellOnt 11346, the Court set out the following at para. 77 regarding the high threshold that must be met in order to lift the corporate veil:
To put it another way, the corporate veil should be pierced not where a corporation has misappropriated funds, but where the very use of the corporation is to hide that misappropriation. "[I]t would make undue inroads into the principle of Salomon's case if an impropriety not linked to the use of the company structure to avoid or conceal liability for that impropriety was enough." Trustor AB v. Smallbone (No. 2), [2001] 3 All ER 987 (Eng. Ch.), at 996.
[283] In summary JNCC submits that none of the three items constitute fraudulent misrepresentation. None of these items were part of the contract and none of the three items affected the construction.
[284] I agree with the position of the Litwins with respect to liability also attaching as against Mr. Nielsen personally. I am satisfied that the Litwins relied on representations made by Mr. Nielsen and those representations were critical to the Litwins in hiring JNCC. I accept Mr. Litwins’ evidence that he would not have hired JNCC if he had known the truth about the matters that were important and necessary for the hiring of JNCC. Those factors included:
Time required to complete the project;
That Mr. Nielsen would be on the job site every day. This was important as Mr. Litwin would be in England and could not attend the job site to monitor the progress of the work;
That Mr. Nielsen was licensed;
That the plans had been reviewed and stamped by an engineer.
PLAINTIFF’S SUMMARY OF AMOUNTS CLAIMED
Plaintiff’s Trial Submissions
Defendant’s Trial Submissions
TAB 1
TAB 6 & 8
CONTRACT
Page
Para.
Page
Para.
Due and owing on original contract/agreement
1
1
Exhibit “A”
$70,865.46
ALLOWANCES
Design, Drafting, permit & Engineering
3
9
30
72-75
$1,484.44
Windows, Exterior Door & Skylights
3
11
32
81-82
-$1,517.15
Hardware
4
13
36
95-100
-$1,069.66
Painting
4
14
38
101-104
$984.23
Heating & Air-conditioning
4
15
39
105-120
$18,666.00
Gas & wood burning fireplace
6
21
43
121-126
$3,537.18
Bathroom Cabinet & Countertops
6
22
45
127-131
$964.29
Shower Glass & Mirror
7
23
46
132-133
-$1,198.60
Plumbing Fixtures
7
24
46
134-135
$5,363.91
EXTRAS
Plumbing Labour
7
25
N/A
N/A
$0.00
Roofing
7
26
N/A
N/A
$0.00
Electrical
7
27
49
139-140
$1,472.74
Drywall
8
28
49
141-143
$3,330.91
Ceramic Tile & Limestone
8
29
35
90-94
$0.00
Garbage containers & disposal
8
30
N/A
N/A
$0.00
Additional Stone Work on Exterior
8
32
31 & 50
76-80 & 144
$3,638.00
Quarter cut hardwood floor – 2,600; x $1.75
9
33
34 & 50
85-89 & 145
$4,550.00
Third Floor hardwood floor – 380’ x $5.75
9
34
34& 50
85-89 & 146
$2,185.00
Extra Framing per Eng. & Building Dept.
10
35
50
147-154
$8,560.00
Wainscoting
10
37
52
155-157
$3,745.00
Excavate driveway including gravel
11
38
54
158-160
$2,689.41
Plaintiff’s Trial Submissions
Defendant’s Trial Submissions
TAB 1
TABS 6 & 8
Page
Para.
Page
Para.
Balcony on third floor
11
39
55
161-165
$2,675.00
Additional Labour (John)
11
40
57
166-167
$9,603.00
Oak Staircase to third floor
12
42
58
168-169
$856.00
Underpin basement
12
43
58
170-175
$5,029.00
Replace basement pillar with steel
13
45
60
176-178
$1,605.00
Front Entry Canopy
13
46
N/A
N/A
$0.00
New Stucco in Front of Home
13
47
62
179-180
$5,350.00
Install stone in existing chimney
14
48
62
181-182
$1,284.00
Backdoor Step & Wall
14
49
N/A
N/A
$0.00
Stucco in front entry
14
50
64
183-184
$1,284.00
Rough-in Plumbing for Basement Bath
15
51
N/A
N/A
$0.00
Extra Drywall in basement
15
52
65
185
$1,385.00
TOTAL:
$157,322.16
DEFENDANTS/PLAINTIFFS BY COUNTERCLAIM SUMMARY OF BALANCES OWING
CHART OF BALANCES OWING[1]
SUMMARY
By Category Amount Owing
Contract
$70,865.46
Allowances
($20,931.68)
Errors in Allowances
($2,247.00)
Extras
$2,990.00
Missing Items
($8,595.75)
Failure to Follow Design
(39,000.00)
Rent and Storage Costs
(23,597.68)
Structural Repairs Already Carried out
$92,106.97)
Other Repairs Already Carried Out
($29,321.97)
Remaining Deficiencies to be Corrected
($37,634.50)
Total
(179,580.09)
CONTRACT
Item Amount Owing
Base Price
$430,865.46
Payments
(360,000.00)
Total
$70,865.46
ALLOWANCES
Item
Allowance incl GST
Actual Cost
Amount Owing
Design, drafting, permit and engineering
$5,564.00
$3,550.87
($2,013.13)
300 square feet of stone
$6,420.00
$2,803.40
($3,616.60)
Windows, exterior doors and skylight[2]
$20,223.00
$17,031.48
(3,191.52)
• Leaded Windows
(5,560.00)
Third floor carpet and Hardwood[3]
$23,882.40
$27,082.15
$3,199.75
Limestone and ceramic tile (including backsplash)[4]
$7,383.00
$0.00
($7,383.00)
Hardware
$2,996.00
$0.00
($2,996.00)
Painting
$15,408.00
$15,408.00
$0.00
Heating and air conditioning
$17,441.00
$17,441.00
$0.00
Gas fireplace
$2,140.00
$1,471.25
(668.75)
Bathroom cabinet and countertops
$4,494.00
$2,589.40
($1,904.60)
Shower glass and mirrors
$4,066.00
$2,332.60
($1,733.40)
Plumbing Fixtures
$9,121.75
$14,057.32
$4,935.57
Total
$119,139.15
$103,767.47
($20,931.68)
ERRORS IN ALLOWANCES
Item
Allowance
Project Summary
Amount Owing
Hardware (incl GST)
$2,996.00
$5,243.00
($2,247.00)
Total
($2,247.00)
EXTRAS
Item Amount incl GST
Excavation of driveway, including placing gravel
$1,070.00
Lowering basement floor
$535.00
Extra drywall in basement
$1,385.00
Total
$2,990.00
MISSING ITEMS
Item Amount incl GST
10 new doors
(2,120.00)
(2,268.40)
19 pot lights
(2,375.00)
(2,541.25)
Aluminum siding and soffit
(2,790.00)
($2,985.30)
Bathroom fan
($100.00)
($107.00)
Shower light
($125.00)
($133,75)
Whirltub electrical work
(158.41)
($169.50)
3 cabinet lights
($300.00)
($321.00)
Garbage disposal
($65.00)
($69.55)
Total
($8,595.75)
FAILURE TO FOLLOW DESIGN
Item Amount Owing
West gable at wrong height
($5,000.00)
New chimney too small
($2,000.00)
Second floor laundry too small, lower ceiling
($5,000.00)
Third floor staircase missing a landing
($2,000.00)
Third floor built too small
($3,000.00)
Smallest bedroom (east side) not enlarged
($10,000.00)
Staircase to basement
($10,000.00)
Shingles not installed as specified
($2,000.00)
Total
(39,000.00)
RENT AND STORAGE COSTS
Item Amount Owing
Rent – January, 2003
($2,350.00)
Rent – February, 2003
($2,350.00)
Rent – March, 2003
($2,350.00)
Rent- April, 2003
($2,725.00)
Rent – May 3 – May 10, 2003
($1,890.00)
Rent – May 10 – May 30, 2003
($2,800.00)
Rent – June 17 – July 17, 2003
($2,800.00)
Storage Costs – January 2003 to August 2003
($6,332.68)
Total
($23,597.68)
STRUCTURAL REPAIRS ALREADY CARRIED OUT
Invoice Cost Amount incl GST
Rusand Home Renovations Inc. Invoice #101
($9,308.03)
($9,773,43)
Rusand Home Renovations Inc. Invoice #103
($18,278.58)
($19,192.51)
Rusand Home Renovations Inc. Invoice #104
($6,755.00)
($7,092.75)
Rusand Home Renovations Inc. Invoice #105
($18,208.83)
($19,119.27)
Rusand Home Renovations Inc. Invoice #106
($16,344.16)
($17,161.37)
Rusand Home Renovations Inc. Invoice #107
($11,560.35)
($12,138.37)
Rusand Home Renovations Inc. Invoice #108
($16,665.97)
($17,499.27)
Sub-Total
($101,976.97)
Deduction for work carried out to install basement walkout
$6,930.00
Deduction for drywall labour in basement
$2,625.00
Deduction for work carried out for cold room
$315.00
Total
($92,106.97)
OTHER REPAIRS ALREADY CARRIED OUT
Item Amount
New radiator – Addison’s
($240.00)
Rough-in for laundry and washroom – Attila’s Plumbing and Drains
($1,000.00)
Basement under-floor drains – Attila’s Plumbing and Drains
($1,500.00)
Crown Moulding
($1,200.00)
Laundry Room (new washer and dryer) – H&R Group
($2,823.25)
Roofing – Infinite Roofing
($428.00)
Tiling – Jim’s Tile Master Installation Invoice 0137
($850.00)
Tiling – Marble Granite Depot Inc Invoices 0061494
($234.14)
Heating – Mars Plumbing & Heating, Work Order 132
($963.00)
Stone step – Master Mason
($1,160.00)
Stone cap – Master Mason
($300.00)
Grading driveway, installing gravel sub base – Master Mason
($700.00)
Heating – P. Zandberg
($6,609.75)
Heating – P. Zandberg
($819.00)
Flooring, Fireplace and Trim – Rusand Home Renovations Inc.
($7,073.08)
Eaves trough and downspout and flashing – S&I Home Improvements Inc. Invoice 556642
($3,207.75)
Repairing asphalt garage floor
($214.00)
Total
($29,321.97)
REMAINING DEFICIENCES TO BE CORRECTED
By Rusand Home Renovations Amount
Second floor railing – reinstallation, cut floor and baseboards, secure to wall
($1,864.50)
Third floor balcony railing – supply and install tempered glass to eliminate climbing risk
($2,034.00)
Ensuite vanity sink drains – reinstall drains to sinks, install p-trap in two sinks
($2,090.50)
Movement of ensuite vanity
$847.50)
Radiator window bench/seat – design, build and paint
($2,542.50)
Fireplace mantle – supply and install new fireplace mantle, drywall repair and paint as required
($2,203.50)
Paint kitchen ceiling – primer and two coats of paint
($536.75)
Drywall in ensuite bathroom – drywall and paint holes in ceiling and wall under vanity
($1,356.00)
Drywall in master bedroom and closet – drywall and paint holes
($1,808.00)
Bathroom exhaust to roof vent – ridged 4” metal ductwork
($395.50)
Dryer duct to roof vent – 8’
($282.50)
Drywall and paint in powder room – fix and paint drywall hole
($508.50)
Unfinished oak staircase – risers, staining and urethane
($1,695.00)
Stain and urethane stringers to match gumwood
($1,017.00)
Staircase between main and second floor – plaster, taping, sanding and painting
($2,034.00)
Side entrance canopy – framing, roof, finishing, painting, aluminum eaves trough
($3,842.00)
By Others
Amount
Rebuild chimney - Korlicki Masonry Ltd.
($9,576.75)
Landscaping
($3,000.00)
Total
(37,634.50)
CONCLUSION
Allowances
Litwins Total = $20,316
JNCC Total = $10,373
Owing to the Litwins = $9,943
Extras
JNCC = $38,647
Owing to JNCC = $38,647
Missing Items
Litwins = $5,608
Owing to the Litwins = $5,608
Failure to Follow Design
Litwins = Damages = $25,000
Owing to Litwins = $25,000
Rental and Storage
Litwins - Rent - $12,565.00
Storage 5/8 x $6,332.68 = $3,958
Owing to Litwins = $16,523
Structural and Other Repairs Already Carried Out
Litwins = $92,106.97 + $29,321.97 less $46,188
Owing to Litwins = $75,239
Remaining Deficiencies to be Corrected
Litwins - $25,057.75 Less Landscaping of $3,000.00
= $22,057.75 ÷ 2 = $11,026.00
I am also reducing this claim on the basis that it has now been over a decade since the Litwins moved in and this work has not yet been done. I agree with JNCC’s position on these items in that there is no breakdown of labour and material. I also agree that the only estimates presented at trial come from Rusand who was hired to do the remedial work.
In all of these circumstances I am not satisfied there is certainty in not only what work will be done but what that cost will be. On this heading of damages therefore I am prepared to reduce that claim by 50% to (½ x $22,057.75) = $11,026.00.
OWING TO JNCC - $ 70,865 (contract)
$ 38,647
Total $110,512
OWING TO LITWINS - $ 9,943
$ 5,608
$ 25,000
$ 16,523
$ 75,239
$ 11,026
Total $153,344
Owing to Litwins - $153,344 Less $110,512 = $42,832
[285] Judgment to issue as against Jens Nielsen Custom Contracting Ltd. and Jens Nielsen in his personal capacity as follows:
- (a) $42,832.00
(b) Pre-judgment interest in accordance with the Courts of Justice Act.
- The defendants, plaintiffs by counter-claim shall serve and file written submissions on costs within 30 days. The plaintiff shall serve and file responding submissions on costs within 30 days after receiving the defendants’ costs submissions. The defendants shall serve and file any reply within 15 days.
Fragomeni J.
Released: April 25, 2014
COURT FILE NO.: 3267/04
DATE: 20140425
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JENS NIELSEN CUSTOM CONTRACTING LTD.
Plaintiff
- and –
JOHN LITWIN and HEATHER LITWIN
Defendants
AND BETWEEN
JOHN LITWIN and HEATHER LITWIN
Plaintiffs by Counterclaim
- and –
JENS NIELSEN CUSTOM CONTRACTING LTD. and JENS NIELSEN
Defendants to the Counterclaim
REASONS FOR JUDGMENT
Fragomeni J.
Released: April 25, 2014
[1]All amounts include GST
[2] Litwins will not pay anything over allowance and claim $5,560 refund for leaded windows they paid for themselves
[3] Includes the combined allowance for carpet ($1,626.40) and hardwood ($22,256.00)
[4] Includes the combined allowance for limestone ($2,675.00) and ceramic tile ($4,708.00)