ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-11-419865
DATE: 20150611
BETWEEN:
2177706 Ontario Inc. o\a I Frame and Building System
Plaintiffs
– and –
Sky Roofing Company, Burim Aziri, Defrim Ismaili and Aurora Ismaili
Defendants
Gregory Gryguc, for the Plaintiffs
Burim Aziri, Defrim Ismaili and
Aurora Ismaili, representing themselves
HEARD: February 18-21 and May 4, 2015
REASONS FOR JUDGMENT
Carole J. Brown, J.
[1] The plaintiff, 2177706 Ontario Inc. o\a I Frame and Building System ("plaintiff"), brings this action as against the defendants, Sky Roofing Company, Burim Aziri, Defrim Ismaili and Aurora Ismaili (together referred to as "the defendants" and individually as "Sky Roofing", "Mr. Aziri", "Mr. Ismaili" and "Ms. Ismaili") for damages arising from breach of contract and/or negligence. The plaintiff alleges that it entered into an agreement with the defendant Corporation to supply and install a flat roof at property owned by the plaintiff located at 1378 Yonge Street in Toronto. It alleges that the roof, as installed by the defendants, was substandard, resulting in significant damage to the property.
[2] The defendants deny any breach of contract or negligence and state that if there was damage sustained, it did not arise from their installation of the roof, but rather arose as a result of the negligence of other contractors working on the premises and on the roof.
[3] It is the position of the plaintiff that they entered into a contract with Sky Roofing dated June 25, 2010 to construct a flat roof for $39,900, with a 10% deposit being paid. The plaintiff alleges that the roof did not comply with the standard construction guidelines and was found by their expert who subsequently inspected the roof to be in a "failed" condition. The plaintiff submits that there were discussions between the parties to repair the roof which were unsuccessful and not fulfilled. As a result of the failed roof, they allege that they sustained significant water leakage, were required to conduct cleanup and removal of materials as well as removal of portions of the roof, and were required to hire a roofing contractor to replace the faulty roof.
[4] The plaintiff takes the position that Ms. Ismaili, as sole proprietor of the defendant, Sky Roofing, is legally an extension of the proprietorship, such that she is liable for all acts and omissions of the sole proprietorship and would therefore be liable for damages. The plaintiff claims damages in the total amount of $174,975 together with $1,000 not paid as regards the delivery of materials pursuant to the contract.
[5] It was the position of the defendants that the contract for roofing in the amount of $39,900 was not a contract but only an estimate. The defendants take the position that between the time that they contracted for installation of the flat roof and the time that the roof was to be installed, the blueprints were changed and they were forced to do work which was not originally contracted for, namely installation of a roof with a slope. They stated that the additional work required additional material, labour and time for completion, that they recommended not to install the roof as redesigned, but that they were forced to do so. They maintain that, because the changes would necessitate an increase in the amount to be charged, they told the supervisor that they would commence work if they were assured of being paid for the additional amounts. The supervisor indicated that his "boss" was on vacation, that he could not authorize the amounts to be paid, but that he told the defendants to "trust him”, and they thereafter commenced work on the roof.
[6] They further maintain that after the roof was installed, other contractors were hired to do stucco work. They allege that these workers put tarps over the roof and used 1 inch staples all around the roof in order to secure the tarp which caused holes in the roof and caused the leakage of which the plaintiffs now complain.
The Evidence
Evidence of the Plaintiff
Frank Anastasopoulos
[7] Frank Anastasopoulos is a building inspector with 30 years experience, primarily in roofing. He has a BTech, Architectural Science from Ryerson University. He is employed with TSS Building Science Inc. He was retained by the plaintiff to perform a final roof inspection of the premises and to provide an inspection report, which is dated October 15, 2010. Based on his inspection of the roof, it was his opinion that the roof was in a "failed" condition, and had to be removed and replaced.
[8] Three reports from TSS were in evidence, an initial report dated October 15, 2010 and two follow-up reports dated November 3 and 9, 2010. In the initial report, based on his initial inspection of the roof, it was Mr. Anastasopoulos’ opinion that the roof was in a "failed condition", that there were multiple deficiencies and the installation details, in many cases, did not comply with any manufacturer guidelines or with industry standards within the professional roofing industry. The initial inspection revealed that the vapour retarder was suspected to not having been properly adhered to the steel deck such that the roof system was pulling away from the steel deck; that there was no cover board between the insulation and the base; standard application of bituminous roof membrane was not properly installed, no primer was used at the vertical surface resulting in delamination and water entering the roof system; flashing was not installed in accordance with manufacturer's details; the parapet flashing was not carried to the top of the parapet resulting in water entering the roof system; the aluminum parapet flashing was not properly affixed and was loose; the drainage system was not properly installed resulting in water ponding at most roof sections; and the roof scuppers were not properly flashed allowing water to penetrate into the roof system. The report concluded that while the expected useful life span for this type of roof system is approximately 25 years if properly designed and installed, this roof had already failed.
[9] The second inspection, a predictive maintenance roof inspection, used thermography to detect the thermal variants across the roof. Thermal variants of 50 to 60% were detected and verified using a moisture meter probe.
[10] During the third inspection, test cuts were completed on the patios of the seven upper units at the above address. It was found that there was no evidence of an insulation cover board at any of the test cut locations which is not an acceptable industry method of installation; and that the layers of membrane did not appear to be secured or bonded together and all appeared to be loosely laid, which is not considered an acceptable industry method of installation. Moisture was detected at four of the seven units.
[11] Mr. Anastasopoulos testified that upon initially being retained to inspect the roof, there were two potential options: to modify and repair the roof or to replace it, depending on further observations. After the second and third inspections, the opinion was that the roof could not be salvaged, but had to be replaced. He testified that he found two major deficiencies between the insulation and the roofing membrane. The requisite cover board was absent, such that no inspector would provide approval of such roof. Further, detailed work at the perimeters of the roof did not follow the manufacturer's regulations, and showed signs of delamination, allowing water to enter. At the second and third inspections, as seen in the second and third reports produced and described above, there was proof of water and moisture found in the roofing system.
[12] He testified that a thermographic or infrared scan of the roof was conducted, which revealed that in 50% of the roof an anomaly was found ("thermal variance"). In a normal roof there should be no variance.
[13] At the time of the third visit, he used the information found on the second inspection, and using destructive testing methods, in which the roof was opened to verify the anomalies, moisture was detected in the insulation. Seven test holes were cut, one at each of the units' patios. Moisture was found at four of the seven destructive cuts. The destructive investigation also revealed that no cover board had been installed anywhere that the destructive testing was done.
Christopher Lam
[14] Christopher Lam is the owner of I-Frame, which is in the business of construction. He has been in the construction business since 1997. His company acted as general contractors for construction at 1378 Yonge Street, Toronto.
[15] He testified that they had finished the commercial parts of the building and done renovations on the first and second floors. They were to do new construction on the fourth and fifth floors of the building. In that regard, he described their scope of work in constructing the fourth and fifth floors as installation of the structural, drywall, painting and roofing. There were seven units to be built on this top floor.
[16] For purposes of installation of the roof, which was to be flat, he contracted with Sky Roofing, which he had learned of through the Yellow Pages and the Internet. He first met "John" (Mr. Aziri) and "Dan" (Mr. Ismaili), who he understood to be the owners and principles of Sky Roofing sometime in May. He had gone to their jobsite in order to see their performance. The contract was concluded at a second meeting with his project manager and Sky Roofing. He was not in attendance. He signed the contract dated June 25, 2010.
[17] The roof installation was to take approximately 6 weeks.
[18] He testified that from first installation, the roof leaked. The leakage extended down to the first floor. He called the defendants to repair the leakage, but they were unable to stop the leakage. He testified that they would not return, unless they were paid additional amounts for the repairs. They requested more money in order to repair the roof, which he refused.
[19] The building owner contacted TSS Building Science Inc, which inspected the roofing system and found multiple deficiencies. Manuel Cabral was retained on October 4, 2010 to repair the roofing, in order to stop the leakage. The temporary repairs cost $4,929.66. Following the inspection and reports from TSS, three estimates for replacement of the roof were obtained, and V Mat Roofing Ltd., which had the most competitive bid, was selected to replace the roof at a cost of $100,000 plus HST. The cheques in evidence regarding payment to V Mat do not amount to $100,000, but rather amount to $82,170.
[20] Mr. Lam testified that, due to Sky Roofing's performance in installing the roof, the building owner did not trust Mr. Lam to hire another roofer, so undertook the task himself, after retaining the expert inspector. The building owner forced Mr. Lam to agree to use his company’s money, which had been retained by the building owner, to replace the roof. The owner paid for the second contractor to remove and replace the roof, using the monies that the contractor had held back from him in the amount of $100,000. Mr. Lam testified that he did not know the reason for the discrepancy, nor did he have any evidence that V Mat was paid in full, but only assumes that was the case.
[21] He testified that in order to do the work, Sky Roofing required a crane to hoist the products used onto the roof, for which I-Frame paid $803.02. I-Frame further paid for two policemen to guide traffic while the crane was hoisting the materials, which came to over $1,000 in total. There was no invoice produced as regards retaining of policemen. Additional invoices for materials required to replace those damaged by the leaking roof were included in evidence. All invoices were paid by I-Frame.
[22] As a result of the deficient roof and the requirement to reinstall a new roof, Mr. Lam was terminated. He stated that he ultimately lost approximately $300,000 to $400,000.
[23] As part of the plaintiff’s evidence, counsel for the plaintiff, Mr. Gryguc, read in testimony from the transcript of Mr. Aziri, as follows. As regards the sole proprietorship, he and Mr. Ismaili operate the business. Ms. Ismaili does not perform any functions and has no knowledge of the operations of the business, although she is the registered sole owner of the business. Ms. Ismaili is the only person who signs the cheques and makes bank deposits. Mr. Aziri is the manager and does all of the estimates for the business.
Evidence of the Defendants
[24] The defendants, Burim Aziri, and Defrim Ismaili gave their evidence in their native tongue, Albanian, which was translated into English by a certified translator. Ms. Ismaili testified in English.
Aurora Ismaili
[25] Aurora Ismaili is the registered sole proprietor of Sky Roofing. She is married to the defendant, Defrim Ismaili. She testified that they decided to put the business in her name as her command of English is better than her husband's. She testified that she is not involved in the business, other than small tasks.
[26] Her job is as a medical lab technician with the Trillium Hospital Network.
[27] She conceded in cross-examination that she signed cheques for the business when her husband told her to, and did the banking. She also conceded during cross-examination that in the beginning, she did some of the bookkeeping, but then became very busy with her own work. She admitted in cross-examination that while she was the owner on paper she did nothing but the banking and the signing of cheques when requested to do so.
Burim Aziri
[28] Burim Aziri testified that he managed the business on a day-to-day basis, and he was responsible for providing estimates for projects. He has done this since 2008. He and his cousin, Defrim Ismaili, operated the business.
[29] Mr. Aziri testified that beginning in June of 2010, he was contacted by Christopher Lam to give an estimate for installation of a flat roof. He went to the location, 1378 Yonge Street. He testified in cross-examination that he had been preparing estimates for their contracts for approximately 2 years since 2008. He also conceded in his testimony that this was the first flat roof they had installed and he did not have experience in quoting for a flat roof. They do primarily roofs for residential and private homes, and mainly do shingle roofs.
[30] Mr. Lam had the original blueprints which called for two slopes and 16 downspouts on the roof. Based on the blueprints that he saw "he gave an estimate of $38,000 plus GST and three dollars per foot for flashing. He also indicated that to hoist the materials to the roof with a crane would cost approximately $1,000. He testified in cross-examination that the plaintiff agreed to pay $1,250 cash for the hoist.
[31] He testified that they were to receive 10% of the estimate when the estimate was signed, another 10% when the materials for the flat roof arrived, but they had nothing in writing to that effect. He testified that he only received four cheques, two in the amount of $3,990 each, one in the amount of $5,250 and a fourth in the amount of $3,000. I note, however, that the cheques from the plaintiff to Sky Roofing, in evidence at trial, amounted to $40,170.
[32] He testified that a final contract was never reached, but they had only given an estimate. He stated that this was the way they did business as some clients would want more work once the contract was started. He stated that at the beginning the contract, only an estimate was given and the contract is signed at the end of the job. He denied that the signed agreement dated June 25, 2010 was a contract and maintained that it was only an estimate. He testified that on the estimate given (Exhibit 6) someone changed "Estimator’s Signature" to "Contract Agreement”. However, in his testimony, he maintained that this was not a contract.
[33] Subsequently, the supervisor instructed them to do only one slope rather than two. He testified that they told the supervisor that one slope was not practical, but were told that the architect changed the blueprints. He testified that he told the supervisor that due to the changes to the slope, he could not guarantee whether the water would drain. He further stated that they wanted flashing although they did not need flashing and he did not recommend it. He testified that the supervisor said that standing water on the roof was no problem as gravel would be put on the roof. He explained how the roof was installed. He testified that he had advised the supervisor that the changed work would require much more in the way of materials, and requested $25,000 additional. He testified that after the work was completed, the plaintiff called them several times to fix the roof as it was not uniform and water had begun to collect. He maintained that they were not called initially due to leakage, but because water was collecting on the surface of the roof on the backside.
[34] They attended at the roof and saw that workers had stapled tarp all over the roof. He testified that the staples were 1 inch staples which went through the protective layers of the flat roof and that there were over 1,000 staples on the entire roof where the walls were. He testified that he never took any photographs as he trusted the people. He advised the supervisor that staples would and had caused the water to seep in and, as a result, Sky Roofing would not provide a warranty. He testified that they were not responsible for the leakage, which was caused by the stucco subcontractors who used staples to affix the tarp to the roof.
[35] He testified that the plaintiff requested that they repair the roof as the drywall was being installed. They indicated to the supervisor that another layer of capping would have to be installed and the supervisor said that he had no authority to pay them any more for the repairs.
[36] He testified that approximately one week later they were called to meet with the owner of the building and Manuel Cabral from V Mat. He testified that Manuel Cabral had indicated at the meeting that the job that they did was good. He testified that the flashing had to be removed and he requested assistance with this from Manuel Cabral, who gave a quote of $10,000 to do this. However, he had no money to pay Mr. Cabral. He testified that Mr. Cabral was there because he did a lot of work for the building owner’s father.
[37] He testified that he and Mr. Ismaili subsequently saw and went up on the roof in October or November and found that there was no change to the roof. There were still puddles on the roof and everything was the same except that it was covered with aluminum. Sky Roofing maintains that that no changes were ever made to the roof after they completed the installation, except for a new top layer, and no new roof was ever installed.
[38] He testified that when he began the contract work, they worked from approximately 5 am to 9 or 10 am and then stopped due to the high heat that summer. They had workers who worked at night. He was unable to say whether protective flooring was used on the roof.
[39] He testified that he had never seen Christopher Lam on site. However, he conceded that because he was only there from 5 am to 9 am daily, it was conceivable that Mr. Lam attended on site when he was not there.
Defrim Ismaili
[40] Defrim Ismaili testified that they were approached by the plaintiff and gave an estimate for installation of a flat roof. He conceded in cross-examination that this was the first flat roof that they had built, but stated that they told the plaintiffs this at the beginning.
[41] He testified that when they provided the estimate to the plaintiff, Mr. Lam told them that there was no problem if there was water on the flat roof because they would put gravel on the roof. He testified that the supervisor wanted flashing on the roof. He told the supervisor that it was not necessary, but the supervisor insisted. They told him that the flashing should not have been installed. He advised Mr. Lam that it would not be possible to remove all of the water from the roof, as changed. Initially, they were to install eight pipes on the front of the roof and eight on the back for drainage. However, on the day that the work began, the plaintiff eliminated pipes on the front and demanded a 2% incline on both sides of the roof. He testified that he and Mr. Aziri asked for blueprints for the roof which were not given to them. He told the plaintiff that without blueprints, they would not know where to make cuts for the roof. Given the changes requested, he asked to see the owner, who came to the site. He advised the owner that there would be would be problems with the changes and the owner told him to do what they needed to do. He advised that in order to do the work as changed, they would need $25,000 for the additional work required. The supervisor advised him that Mr. Lam was on vacation and that the supervisor had authority only to a maximum of $5,000. The supervisor told him to start the work and that Mr. Lam would authorize the rest of the money required when he returned.
[42] They installed roofing in order to give slope to the roof. He testified that the temperatures on the roof were between 47 and 50°C, due to the heat that summer and to working with torches, and they could not work during the day. They requested projectors to work at night. He testified that the supervisor told them to provide the projectors and that they would be paid back later, although they never were.
[43] He testified that when the roof had been installed, the owner came to speak with him and stated that he had found water on the roof and that there should not be any water on the roof. Mr. Ismaili told him that the plaintiff had said that there was no problem as there would be gravel placed on the roof.
[44] Thereafter, the stucco contractors came. They placed a tarp on the roof with staples. He called the owner and indicated that this would ruin the roof and cause leakage and advised the owner that a top layer of rubber would have to be placed on the roof. He testified that the owner told him to do it at their own cost and he refused. Mr. Lam called him to ask when they would finish the work and he told them that he would do so after the plaintiff paid him. They never did pay, and Sky Roofing did not return to the site.
[45] Mr. Ismaili conceded that their job may not have been a five-star job, but stated that it was not bad.
[46] He testified that he and Mr.Aziri subsequently returned and went on to the roof. He stated that although the gate was closed, they knew the property and went over the fence, then went up the stairs to the roof. He stated that they saw the entire roof and that no work was done other than putting one coating of rubber on the roof. The new roof was never installed. The defendants adduced no evidence to substantiate this. He testified that they had done no testing in order to establish that there was not a new roof installed. He testified that when they came down from the roof, the owner had come onto the property and advised them that this was private property. The owner had called the police due to the intrusion.
Reply
[47] The plaintiff called Christopher Lam in reply. He was asked about the testimony given by the defendants regarding the supervisor authorizing $5,000 for the revised work, and advising that Mr. Lam would authorize the rest when he returned from vacation. Mr. Lam testified that no one, other than himself, has authority to give out promise of payment on behalf of the company.
[48] As regards the defendant’s testimony that the plaintiff’s only complaint regarded standing water on the roof, he testified that after meeting with Mr. Cabral, he learned that the issue was not the pooling of water on the roof but the leakage into the building.
Analysis
[49] The defendant company is a sole proprietorship, with its sole proprietor being Aurora Ismaili. The day-to-day affairs of the company are handled by the other two individual defendants.
[50] While the defendants maintained throughout that the agreement signed between the parties was only an estimate and not a contract, I am satisfied that this was in fact a contract, with offer, acceptance and consideration in the form of the deposit paid. It was on the basis of this document that the installation of the roof occurred. As the work progressed, no other written documentation, and no amendments to the contract were made. Indeed, the defendants acknowledged that they did not put everything in writing, but worked on trust.
[51] As regards the deficiencies in the roof, the independent inspection company, TSS Building Science Inc. was retained to inspect the roof installed by the defendants and to provide his report, which was in evidence. That report concluded that the roof, as installed by the plaintiff general contractor's subtrade, Sky Roofing, was in a failed condition, did not comply with manufacturing guidelines or with industry standards within the professional roofing industry and the deficiencies would cause leakage of water into the building, which occurred. The report further found that there was no ability to repair the roof, but that it had to be reinstalled. The destructive testing done to the roof demonstrated that there was no cover board between the insulation and the roof membrane, which caused the leakage. Mr. Anastasopoulos of TSS further indicated that no inspector from the government would approve of the installation of the roof as it existed, and that no warranty would be given. Further, Mr. Anastasopoulos testified that there was no evidence of any staples in the roof as urged by the defendants. The defendants produced no evidence, expert or otherwise, to the contrary. While the defendants maintained that the deficiencies and leakage were not their responsibility, but rather that of the owner, who had changed the roof structure, and the stucco contractors who had put staples into the roof, causing the leakage, there was no evidence to this effect other than the testimony of the defendants. I accept the reports of TSS, and the testimony of Mr. Anastasopoulos, and accept that the cause of the leakage was the improper installation of the flat roof, which did not meet industry standards.
[52] While the defendants maintained that no new roof was installed following their work, the evidence of the inspector was that he returned to the property and saw the new roof as installed. I accept this evidence. Correspondence sent by the owners of the building, 1148813 Ontario Inc., to Christopher Lam of I-Frame Building Systems indicated that, as the plaintiff had not taken steps to correct the failed roof, the owner of the building had obtained three estimates for the roof replacement pursuant to the recommendations of the inspector, TSS, and selected the most competitive estimate provided by V Mat Roofing Limited. It further indicated that the owner had had thorough discussions with both Manuel Cabral of V Mat and Frank Anastasopoulos of TSS, as regards the required scope of the work necessary to satisfy the TSS recommendations contained in the reports. It was, thereafter, agreed between the plaintiffs and the building owner, 1148813 Ontario Inc., that the owner would proceed with entering into a contract and engaging V Mat Roofing to remove and install a new roof pursuant to the contract and that the owner would receive a credit for the total contract price of $100,000 plus HST against the general contract price with the plaintiff.
[53] I am satisfied, based on all of the evidence before me, including the expert reports, that the leakage sustained to the subject building was the result of the defective roof installed by the defendants. I am of the view that the defendants were negligent in the construction of the roof.
[54] The plaintiff seeks damages for the amount it cost them to restore the roof to a working roof. They claim $174,975 together with $1,000 not paid as regards the delivery of materials pursuant to the contract.
[55] In awarding damages, I note that there are discrepancies between the amount claimed and the actual supporting documentation for those claims. Indeed, Mr. Lam testified that there were discrepancies between the amount claimed and the evidence in support, which he could not explain. I have accepted the amounts claimed resulting from the leakage from the roof, including repairs to the roof as a stopgap measure and installation of the new roof, as set forth at Exhibit 20, but have reduced the amount paid for the installation of the new roof by V Mat from $100,000 to $82,170, which amount is supported by the cheques paid to V Mat for replacement of the roof. I have further reduced the amount claimed for the hiring of another contractor to stop the leaking roof, to $4,929.66, which amount is supported by the cheque paid to Manuel Cabral for that work. I have also added $830.02 for the amount paid by the plaintiff to hire a crane to hoist the defendants’ materials to the roof, which amount was, pursuant to the agreement entered into between the parties dated June 28, 2010, to be paid to the plaintiff by Sky Roofing Company, which was not done.
[56] The plaintiff also claims for the costs of clean-up of the floors damaged by the leakage. Of the amounts claimed in this regard, they have supporting documentation for costs incurred in the amounts of $1,644 sand $3,832.80. The other costs claimed do not have any back up documentation or receipts.
[57] Accordingly, I award an additional amount of $5,476.80, for those costs supported by evidence. Based on all of the foregoing, the plaintiff is entitled to damages in the amount of $145,500.16, payable jointly and severally by all of the defendants.
[58] Ms. Ismaili, as registered sole proprietor and therefore a legal extension of the sole proprietorship, is responsible for the damages. I further find that the two other individual defendants Mr. Ismaili, and Mr. Aziri, are also responsible for the damages as they are the principals of the company and did all of the work, which was done negligently.
Costs
[59] I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.
Carole J. Brown, J.
Released: June 11, 2015
COURT FILE NO.: CV-11-419865
DATE: 20150611
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
2177706 Ontario Inc. o\a I Frame and Building System
Plaintiffs
– and –
Sky Roofing Company, Burim Aziri, Defrim Ismaili and Aurora Ismaili
Defendants
REASONS FOR JUDGMENT
Carole J. Brown, J.
Released: June 11, 2015