ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-54461
DATE: 20150702
BETWEEN:
7250118 CANADA INC.
o/a KANATA RENOVATIONS
Margot L. Pomerleau, Counsel for the Plaintiff
Plaintiff
- and -
2308095 ONTARIO INC.
Defendant
Paul D’Angelo, Counsel for the Defendant
HEARD: June 3, 4, and 5, 2015
mcnamara R.S.J.
REASONS FOR JUDGMENT
Overview
[1] This is an action by the plaintiff for damages for breach of contract or, in the alternative, for negligent misrepresentation. Central to the plaintiff’s case is an alleged agreement it claims the parties reached in March/April of 2012. The defendant denies any breach of contract or misrepresentation on its part, and counterclaims for damages alleged to have been caused by the actions of the plaintiff.
General Factual Background
[2] The corporate plaintiff and defendant by counterclaim, 7250118 Canada Inc. o/a Kanata Renovations, has its head office in the City of Ottawa and carries on business as a construction general contractor. The corporate plaintiff’s principal is Brian McMahon and, in these Reasons, a reference to the plaintiff is a reference to Mr. McMahon unless otherwise indicated.
[3] The defendant and plaintiff by counterclaim, 2308095 Ontario Inc., was incorporated in December of 2011 specifically for the purpose of operating a new Anytime Fitness franchise in Ottawa. One of its two principals is Jeffrey Christison who gave evidence on behalf of the principals at trial. Reference in these Reasons to the defendant is a reference to Mr. Christison unless otherwise indicated.
[4] The evidence establishes that in late 2011 Mr. Christison, then approximately 24 years old and having worked for some time as a manager in the fitness industry, decided to go into business for himself. He began exploring options and in December 2011, with his partner Hussein Mahmoud, purchased an Anytime Fitness franchise from the American parent corporation. This was his first business venture.
[5] In early January of 2012 he began in earnest looking for commercial space to renovate to accommodate the new business. He ultimately found what he was looking for in a building described municipally as 1867 Carling Avenue. That property is owned by Carling Properties and, after some negotiation, Carling Properties and the defendant arrived at a framework for leasing the premises.
[6] The defendant’s next step was to locate a contractor who could do the necessary refit to the premises in order that they might meet the requirements of the parent franchisee. The defendant says he spoke to the owner of another Anytime Fitness location in Kanata who supplied him with the name of two contractors, one of whom was the plaintiff. The defendant’s landlord also apparently supplied a name.
[7] Consistent with the above, the plaintiff testified that in approximately mid-February of 2012 he was contacted by the defendant about this project. Relying on an agenda book the plaintiff kept at the relevant time, he says that after several conversations he first met with the defendant on the afternoon of February 16, 2012. The plaintiff conceded that at that time he was aware there were other contractors sizing up the project. It was the plaintiff’s evidence that, fairly early on in the process, the defendant told him: he had visited other Anytime Fitness locations in the Ottawa area where the plaintiff had done the renovations; he was impressed with the plaintiff’s work; and, while there were other contractors involved in the process, he was leaning toward the plaintiff because of the experience the plaintiff’s company had with these franchises.
[8] According to the plaintiff’s agenda, the next meeting with the defendant was on March 16 at the site on Carling Avenue. The plaintiff recalled that there was another contractor present at that time, as well as the landlord. In any event he had a walk-through of the location with the defendant, there were discussions about what was planned, and shortly thereafter he was provided with some preliminary drawings.
[9] According to the plaintiff, on March 20, 2012, he and his right-hand man, John Biggs, travelled to Cornwall, Ontario, with Mr. Christison and his partner to view another larger Anytime Fitness located in that city. It was the plaintiff’s evidence that after that trip there were more strong indications from the defendant that the plaintiff’s company was going to be doing the project.
[10] The plaintiff testified that on March 23, 2012, a detailed estimate was prepared for the work and forwarded to the defendant on March 24. After some discussions additional amounts were added for signage and permits, resulting in a total contract price of $171,598.25. In the e-mail accompanying the estimate, there is reference to a meeting that was to take place at a Starbucks the next day.
[11] The plaintiff says that he brought a copy of the estimate and a draft contract to that meeting and gave them to the defendant. The plaintiff’s evidence was the defendant looked at the contract, told him it looked good and then asked if the plaintiff’s forces could start the job earlier than the April 9, 2012, date stipulated in the draft contract. The plaintiff says he assured the defendant they could. In the plaintiff’s words he had the very clear understanding that this was a “done deal” save and except finalizing the signage issue, which was resolved on March 27, 2012.
[12] The evidence would suggest that in and around that date the defendant went with the plaintiff’s draft contract to his bank. According to the plaintiff, the defendant got back to him after that meeting and indicated the bank had an issue with the large deposit of just over $42,000 called for in the draft contract. The plaintiff says that led to a final revision of the contract document wherein he reduced the deposit to $25,000, a figure he says was suggested by the defendant. The revised contract was provided on March 29, 2012. The plaintiff testified that it was clear to both himself and the defendant that that was now the contract with a start date of April 9, 2012, as called for in it.
[13] The plaintiff testified that on Sunday, April 1, 2012, he took a number of employees out for dinner in order to celebrate the awarding of the contract. He also indicated that in and around this time the defendant called and requested that the defendant start work on April 3. The plaintiff says he agreed, and there is a note in his diary to that effect.
[14] There was also entered into evidence a series of text messages exchanged between the plaintiff’s right-hand man, John Biggs, and the defendant. On April 2, 2012, there is a text sent from the defendant to Mr. Biggs as follows:
Hey buddy I’m just waiting on the keys and then will get you guys in threre [sic] I’m hoping we can have it all figured out today and get you in there tomorrow give me a call sometime today thanks jeff.
[15] Mr. Biggs responded:
Sounds good man I have all my guys booked for demo tomorrow call you soon
[16] The plaintiff points to this exchange as confirmation that they had a deal with an early start date and were just waiting for access to the premises.
[17] There are further texts from Mr. Biggs later on April 2 and another on April 3 seeking confirmation that the plaintiff’s forces could get started as he had men standing by. There was no response.
[18] On April 11 Mr. Biggs sent another text asking for input and on April 12, 2012, Mr. McMahon was sufficiently concerned that he sent an e-mail to the defendant enclosing a letter from the plaintiff’s lawyer. On April 18 Mr. Biggs again texted the defendant seeking status and this time the defendant responded. In that response he indicated that he expected everything would be resolved as of the following Monday and stated, “I’ll let you know what steps we are taking then”.
[19] On April 24 Mr. Biggs follows up with a text as follows:
Morning Jeff didn’t hear from you yesterday we have been waiting for 3 weeks to start the job material has been ordered and ready we just need to know our start date thanks.
[20] The defendant responds:
John I’m sorry to inform you do [sic] to recommendation from the bank and others we are not going with you after going through the contact
[21] The plaintiff McMahon advised he was completely taken aback by this response and also indicated that he was never made aware that the bank had any role in all of this.
[22] On cross-examination, Mr. McMahon acknowledged that while he supplied the defendant with what he believed to be a final version of the contract, it was never signed. He confirmed that the plaintiff company’s argument that there was a binding agreement is based on the texts, various meetings, conversations, and acts the parties took in furtherance of their agreement.
[23] In view of this response and the plaintiff’s earlier evidence that he was confident they had the job, counsel for the defendant put the following exchange to the plaintiff from his examination for discovery:
Q. And so with all that experience and your use of an agenda and e-mail and notes and contracts, why if you thought you had the job as early as February, why did you not even send a one-line e-mail to Jeff or why did you not confirm it anywhere in writing.
A. Because it wasn’t guaranteed. He was saying to us that he’s going to go with us, he wants us, he likes us, he liked John, we had --- everything was working well. And we were even told that he made the decisions and not his partner.
[24] It was suggested on cross-examination the plaintiff knew that, in the construction business, until there is a signed contract, or a deposit is provided, or the contractor is actually on site, a job is not guaranteed. The plaintiff disagreed with that proposition and reiterated that after the Cornwall trip he was confident from what he was told by the defendant that the job was theirs.
[25] On the issue of the revised deposit number, the plaintiff reiterated that he was certain the revised number of $25,000 came from the defendant and was not his number. He denied that the plaintiff ever told him that the bank was adamant that the deposit be zero.
[26] The plaintiff acknowledged that he knew from his experience that before bank financing can be accessed in a project of this nature, the bank has to provide approval. He reiterated, however, that he was unaware there were any issues with the bank, or that there were any problems vis-à-vis gaining access to the property from the landlord.
[27] The plaintiff did acknowledge that there was nothing from his end, no text or e-mail, confirming there was a firm agreement, nor was there anything from the defendant to that effect.
[28] Mr. McMahon also agreed on cross-examination that on this project there was no formal request for tender, no tender rules, and no tender package. The contractors were simply supplied with a design manual produced by Anytime Fitness and some basic floor plans.
[29] The plaintiff agreed that by April 20, 2012 (the day the defendant indicated in his text that he expected everything would be resolved by Monday), there was no signed contract, no final plans, no building or demolition permits had been secured, and no expenses had been incurred by the plaintiff for sub-trades or materials other than some letters that had been ordered by the plaintiff for a future sign at a cost of $1,200, but which were never paid for or picked up.
[30] John Biggs testified on behalf of the plaintiff.
[31] Mr. Biggs is the Operations Manager of the corporate plaintiff and, in consequence, has more of a “hands on role” than does Mr. McMahon in the company’s day-to-day operations. He has in excess of 25 years of construction experience.
[32] Much of his evidence was confirmatory of certain aspects of Mr. McMahon’s evidence. He confirmed that there were at least two attendances at the Carling Avenue site and that from his perspective the re-fit of the space was an average job. He saw no great differences between it and the other two Anytime Fitness franchises they had done.
[33] Mr. Biggs was asked when he thought the work on behalf of the defendant company had been confirmed. It was his impression that that happened in mid to late March, and, based on his discussions with Mr. McMahon, it was his clear understanding they had the job. In furtherance of that he began making contact with sub-contractors, etc., in order to be ready to move when called upon.
[34] Mr. Biggs was taken to the Joint Book of Documents and reviewed the text messages between himself and Mr. Christison that appear at Tab 14 of that document. He confirmed each of the texts, and specifically confirmed that it was his understanding of the text from Mr. Christison on April 2, 2012, that he was waiting for the keys in order to let the plaintiff’s forces in the next day to begin work.
[35] On cross-examination Mr. Biggs testified that in addition to the texts between himself and the defendant he had one or two phone calls with Mr. Christison. He could not recall the specifics of those conversations. He also agreed with the proposition that much of the information he had came from Mr. McMahon. He was not aware of the specifics of any deposit issue. He knew there were issues with the landlord but not the specifics. He was also aware, as referenced in one of his texts, that the plaintiff was going to the bank but, again, he did not know the specifics of why.
[36] The main witness for the defence was Jeff Christison.
[37] Mr. Christison confirmed that: he was 24 years of age at the time relevant to this litigation; he had limited resources; this was his first venture into business; and he had never done renovations of any sort nor hired a contractor.
[38] He testified that after securing his franchise from Anytime Fitness in late 2011, he began looking for a suitable location. In due course he found the premises at 1867 Carling Avenue which met his needs. Towards the latter part of January he submitted an “Offer to Lease” which seemed acceptable in principle to the landlord subject to the defendant providing proof that he had financing for the project. Mr. Christison testified the landlord made it very clear from the beginning that the premises were subject to a lease in favour of Rogers, who had possession until April 30, 2012, and, in consequence and despite the fact Rogers was no longer using the premises, Rogers required notice that someone was going in to view the space and had to attend to turn off the alarm.
[39] Next the defendant had to line up a contractor. He had been supplied the names of four potential contractors, and the plaintiff was one of those contractors. He met with the plaintiff in late February, they had some discussions, and the plaintiff was shown the premises.
[40] The defendant was asked about the plaintiff’s suggestion that early on in this process the defendant gave the plaintiff a clear impression they were going to retain the plaintiff company. The defendant was adamant that never happened because he did not yet know what the quotes were going to be, and he was nowhere near securing financing for the project. What he says he did tell all of the contractors was that whether or not they were retained was dependant on the price quoted, his being approved for financing, and him coming to final leasing arrangements with the landlord.
[41] The defendant confirmed that he, his partner, Mr. McMahon, and Mr. Biggs went to Cornwall on March 20 to view an Anytime Fitness in that city. Again, he was clear that there was no discussion about the plaintiff being his contractor for all the same reasons indicated above.
[42] Mr. Christison agreed he received various quotes and draft contracts from the plaintiff over the next period of time. He also agreed that the first draft contract called for a deposit of $42,000 which he found to be rather high. His concerns in this regard were reinforced when he attended at the bank and brought along the draft contract for their review. His loan officer was quite clear that under the financing program the defendant was being considered for, none of the bank’s money could be used to fund any sort of a deposit.
[43] The defendant testified that he informed the plaintiff of this development, and, when he received a further draft of the contract document, the amount for the deposit was reduced to $25,000. He indicated he spoke with Mr. McMahon and reiterated that the bank had said the deposit had to be “zero”, failing which the defendant would have to fund the deposit from his own funds. Funding the deposit himself would have been impossible because, at this point, he and his partner had spent all of their money as well as $25,000 of his father’s money for the franchise fee and the equipment for the gym. He explained all of that to the plaintiff who, he says, indicated in essence that there had to be a deposit of some sort.
[44] Throughout all of this the defendant indicated that he continued to discuss the project with the plaintiff’s competition, Krista Construction Ltd. The other two contractors who had initially viewed the premises were no longer involved. Krista’s estimate called for no deposit.
[45] The witness was asked about the text messages from April 2 and 3, 2012, quoted earlier in these Reasons.
[46] According to the defendant, the reference to waiting on the keys, etc., in the first of those texts from himself to Mr. Biggs had nothing to do with starting the project. Rather the defendant was still in negotiations with the landlord about whether or not he would take over the whole of the ground floor of the building as opposed to the portion of that space that had originally been discussed. The defendant wanted to let the contractors in so they could view the additional space, see what they could do with it, and determine what the cost might be. Again he was waiting for the key because he always had to arrange with the landlord through Rogers to gain access to the space. The defendant afforded Krista Construction the same opportunity on April 4, and Krista in fact prepared a floor plan dated April 4 showing the whole space. That floor plan was entered into evidence at Tab 2 of the Book of Documents.
[47] In terms of the texts from Mr. Biggs on April 2 and 3 in which he is speaking about getting in to start demolition the following day, Mr. Christison testified he was up in the Gatineaus overnight on April 2 and into April 3. There was no cell phone service in the area, so he did not see those texts until April 3. He says he called Mr. Biggs right away on his return and made it crystal clear that he did not know what Mr. Biggs was talking about when he was speaking of demolition as no contract had been agreed to, the space was yet to be finalized, and there was no financing agreement in place.
[48] The defendant gave evidence that after that April 3 call where he was clear on his position, he heard nothing further from the plaintiff until he received texts on April 11 and April 18 effectively asking for status. On April 20 he responded to Mr. Biggs that he expected everything would be resolved over the following weekend and he would get back to him the next week.
[49] Over the weekend the defendant testified he spoke with his father and his partner, considered the advice and input he had received from his bank and landlord, and decided once financing was confirmed he would go with Krista Construction. In addition to the advice he received, he took into account the fact that Krista’s quote was somewhat lower, it called for no deposit, and Krista came highly recommended.
[50] By correspondence dated April 23, 2012, the defendant received advice from the bank that he had been approved for his business financing. On April 24 he finalized his deal with the landlord and also signed a contract with Krista Construction.
[51] Geoffrey Lauzon testified. He is the President of Krista Construction.
[52] Mr. Lauzon testified that Krista is in business as a general contractor and has been for the past 36 years. Their focus is commercial construction as opposed to residential.
[53] Mr. Lauzon stated that in early to mid-February he was contacted by Jeff Christison to quote on a renovation job at the property on Carling Avenue. He knew the property quite well as over the years he has done a number of projects, large and small, for the building’s owners. Like the plaintiff he was supplied with certain drawings prepared by Anytime Fitness and again like the plaintiff he travelled to Cornwall to view the Anytime Fitness located in that city. The witness told us that from his discussions with the defendant Christison he was aware that Mr. Christison and his partner were dealing with the Royal Bank of Canada (RBC) and attempting to secure a small business loan. He also knew, of course, that there had been discussions between the defendant and the landlord vis-à-vis a potential lease.
[54] Mr. Lauzon prepared a quote for the job and he confirmed it did not call for any amount by way of deposit. It was his evidence that he never does make such a request and that it is not standard practice in the type of work his company does.
[55] A contract was eventually signed after he was awarded the job and he confirmed that that contract was sent to the defendant when he was told they had a deal pursuant to his quote. There were never any discussions about starting the job earlier and the witness volunteered that he never starts a job until he has a signed contract.
[56] Mr. Lauzon also confirmed that, on April 3 or 4, 2012, he attended at the premises for another site visit and that the reason for the visit was to provide some input about the layout should the defendant decide to take more space than originally discussed. He also identified the drawing that appears in evidence dated April 4, 2012. He confirmed that the total contract price pursuant to his quotation was $169,697.75.
[57] John Pagliaro testified. He is the owner of Carling Properties which in turn owned the building where the defendant wished to lease space.
[58] The thrust of this witness’s evidence was that the space had previously been occupied by Rogers Video who had vacated late in 2011, but remained in possession pursuant to a lease set to expire April 30, 2012.
[59] The witness was asked about access to the premises by himself and a potential tenant. He advised that the premises were alarmed, so every time they wanted to enter he had to arrange for someone from Rogers to come, turn off the alarm and open the doors. He did that on several occasions over the course of this matter.
[60] In late January the witness agreed that he and the defendant came to a tentative agreement to lease the space subject to the defendant supplying proof of financing from his lending institution.
[61] The witness was referred to an e-mail from himself to his lawyer dated April 3, 2012. In that he discusses with the lawyer a few changes that may be made to the Offer to Lease, including an increase in the amount of space to be leased.
[62] The witness was asked whether or not around April 3 there was any possibility that the defendant could have had access to the property for purposes of demolition. He indicated absolutely not, as they did not even have an agreement on square footage at that point and Rogers was still in possession.
[63] Mr. Pagliaro confirmed that on April 23, 2012, he received confirmation that the financing was in place and so he and the plaintiff set about finalizing the leasehold arrangements.
[64] Ross Gilchrist also testified.
[65] Mr. Gilchrist is the Commercial Accounts Manager at RBC who had carriage of the defendant’s file.
[66] Mr. Gilchrist explained that the proposed loan was pursuant to the Canadian Small Business Loan Program, which has a number of benefits for young entrepreneurs attempting to get a new business underway. He also indicated, however, that he made it clear to Mr. Christison that when a bank is funding these loans none of it can go towards deposits. They will make progress payments, only, at various stages of the work. It was his evidence that he reminded Mr. Christison and his partner of that on several occasions.
[67] Mr. Gilchrist confirmed that he saw the quotes from both the plaintiff and Krista. He noted and discussed with the defendants the fact that Krista’s quote did not call for any deposit while Kanata’s was rather high. He indicated that that structure would not be something the bank could approve, so if they wanted to go with the plaintiff they would have to come up with additional cash.
[68] He confirmed that in due course he was advised that the defendant planned to go with Krista, and, very shortly thereafter, by letter dated April 23, the loan was approved.
Position of the Parties
[69] It is the position of the plaintiff that the evidence, analyzed in its entirety, establishes on a balance of probabilities that the parties reached a common understanding on each of the core provisions of their agreement and were of the same mind. Counsel for the plaintiff rely heavily on the plaintiff’s viva voce evidence, which they submit is confirmed by the texts, various meetings, draft contract, and acts in furtherance of a firm contract. They submit that the defendant breached a binding agreement and damages follow.
[70] Counsel for the plaintiff further argue that there was, on the facts of this case, a submission of a tender by their client in response to an invitation to tender and that that gave rise to contractual obligations because, they say, the evidence establishes the parties’ intention to enter into contractual negotiations.
[71] They argue that the defendant failed to treat the plaintiff fairly and in good faith, looking at the evidence as a whole.
[72] Finally, and in the alternative, they submit the defendant is liable on the basis of negligent misrepresentation.
[73] It is the position of the defendant that, first and most importantly, there was no contract at any time between the parties because there was never a clear and unqualified acceptance of the plaintiff’s proposal, nor was there ever a meeting of the minds. They submit further that the facts in this case do not establish a tender process but rather, at best, establish an invitation to treat by the defendant designed to illicit a quote from the plaintiff which was never accepted. Finally they submit the law of negligent misrepresentation has no application whatsoever to the facts of this case.
Analysis
[74] The parties agree that, applying the law of contract, there can be no contract without a meeting of the minds of the parties. A consensus must have been reached after an offer has been made and a clear acceptance of that offer has occurred. If either the offer or acceptance is missing, there is no proof the parties were ever ad idem.
[75] To determine if there ever was a meeting of the minds, it is necessary to resolve the conflict in the evidence between the plaintiff and the defendant on certain key points.
[76] It is the evidence of the plaintiff McMahon, as reviewed earlier in these Reasons, that the defendant Christison, on two occasions, confirmed they had an agreement. First, Mr. McMahon received positive input from Mr. Christison on their trip to Cornwall. Second, at the meeting at Starbucks during which the draft contract was given to the defendant, according to the plaintiff, the defendant told him that everything looked good and asked if the plaintiff’s forces could start earlier than the date stipulated in the draft contract. As of that date, as indicated in his evidence, the plaintiff had said it was a “done deal”.
[77] The plaintiff acknowledged in his evidence that subsequent to the Starbucks meeting he was advised that the bank had a problem with the amount of deposit called for in the draft contract, but says that after he agreed to reduce the deposit to the $25,000 number that was suggested by the defendant, the deal was again confirmed, and he suggests that that is evidenced by the text that refer to the plaintiff’s forces getting into the premises on April 3, 2012.
[78] Conversely, the defendant testified that he never gave any sort of assurance they had an agreement at any time, nor could he have done that. The bank financing was not in place and without that he could neither finalize the leasing of the space with the landlord nor hire a contractor. Further there were outstanding issues, including the amount of the deposit, the start date, and the final layout and floor plan of the new fitness centre. The defendant testified that he never communicated any sort of acceptance to the plaintiff and, on the subject of the deposit, while he advised the plaintiff there was a problem with the deposit, he never suggested a revised deposit figure.
[79] The onus of course is on the plaintiff company to establish on balance that there was a meeting of the minds. In my view it has failed to meet that onus.
[80] There is nothing in writing from the plaintiff to the defendant at any time after the Starbucks meeting or the deposit discussions confirming that they had reached an agreement. While the plaintiff admits that that is so, he relies on verbal assurances he says the defendant made accepting his proposal. At trial he was quite categorical on this point but, on discovery, he was less so. On discovery he used phraseology like he “had the impression” they had a deal and “it wasn’t guaranteed”. Certainly no contract was ever signed between the parties, and no demolition or building permits were ever applied for.
[81] A key document the plaintiff relies on in support of its position is the transcribed copy of the texts of April 2 and 3, 2012. The plaintiff suggests they are confirmatory of an agreement - why else would Mr. Biggs’ text indicate that they were standing by ready to commence demolition? The difficulty is that the defendant’s version of these texts is equally consistent with what was transpiring. The defendant testified, as confirmed by the landlord, that in and around this date he was considering taking on more space and wanted the contractors still involved in the process to come in and provide input on a proposed layout. That testimony would seem to be corroborated by the April 4 floor plan drawn by Krista Construction showing the entire available space.
[82] Further there is no evidence that satisfies me that there was ever an agreement on the key deposit issue. In addition, despite some correspondence in evidence to the effect that the plaintiff was mobilizing men and equipment, there is no evidence that that was in fact the case.
[83] The evidence of Mr. Biggs is of no assistance on this credibility issue as he confirmed in his evidence that the defendant never told him directly they had the job.
[84] The plaintiff’s position that the defendant gave him clear assurances of an agreement seems illogical. The defendant had no financing in place and, without it, did not have a lease. He had another very competent contractor quoting on the same job who in fact submitted a slightly lower bid. He had no prior experience or involvement with the plaintiff. In essence, he had no reason to favour the plaintiff. Conversely, the defendant’s version of events makes sense with what ultimately occurred and is supported by some of the documentary evidence. Once the defendant’s financing was confirmed he immediately finalized his lease arrangements, and retained the contractor who had submitted a somewhat lower bid.
[85] It may be that the plaintiff was overly optimistic or misinterpreted things. In any event, the evidence taken as a whole falls short of satisfying me as the trier of fact on a balance of probabilities that the parties ever had a meeting of the minds.
[86] The law of tender is of no assistance to the plaintiff.
[87] First of all, there is a very serious issue on the evidence as to whether or not a tendering process existed in this case. There was no tender contract or form or rules issued, nor any tender or contractual terms that bound the quoting parties as they submitted quotes. Further, on balance, none of the parties indicated in evidence that they thought they were involved in a tender process.
[88] Even if the negotiations had been found to be a formal tender process, in the circumstances of this case that would be of no moment. That is so, of course, because again I am not persuaded there was ever an acceptance of a successful bid.
[89] I turn briefly to the claim for negligent misrepresentation.
[90] Counsel agreed in their submissions that the requirements to establish a successful claim of misrepresentation are (1) there must be a duty of care based on a “special relationship” between the representor and the representee; (2) the representation in question must be untrue, inaccurate, or misleading; (3) the representor must have acted negligently in making said misrepresentations; (4) the representee must have relied, in a reasonable manner, on the said negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted.
[91] As indicated above, while it is certainly possible the plaintiff may have misunderstood things that were said, there is no evidence before me that on balance satisfies this court that the defendant made any untrue, inaccurate or misleading representations.
[92] Based on the evidence as a whole applied to the relevant law I am not satisfied the plaintiff has met its onus and the action is dismissed against the defendant.
[93] In a similar way, there was no basis in the evidence to support the counterclaim nor were any submissions made by counsel in support of it. The counterclaim is also dismissed.
Damages
[94] Despite the dismissal of this action on liability, it is incumbent on the court to quantify damages.
[95] The plaintiff argues that it is entitled to damages for loss of profit on this project and for the loss of opportunity to secure other work during the relevant time in 2012.
[96] In terms of the loss of profit, the plaintiff gave evidence that built into his contract price of $171,598.25 was an anticipated profit of something in the $40,000 range. In support of the quantum of that claim the plaintiff put into evidence copies of the profit and loss statements prepared by his accountant for the other two Anytime Fitness projects performed by the plaintiff’s forces. According to those statements the plaintiff company realized a net profit on the Manotick project just over $37,000, and, on the Kanata location, just over $47,000. It was the plaintiff’s view that all indications were that the profit margin on the Carling Avenue project would be in that range.
[97] While the simplicity of this approach is attractive, the court does not have the advantage of any financial statements of the company for the relevant years nor any tax returns. Further the plaintiff admitted on cross-examination that in 2012, despite the loss of this project, the company grossed more than it did in 2011.
[98] I have no difficulty with the notion that had this project gone ahead, there would have been a profit realized by the plaintiff company. There is no evidence to suggest anything to the contrary. Having said that, however, the plaintiff admitted in evidence that the company did secure a modest amount of work for the period of time during which they had expected to be engaged on this project, and there are always contingencies on a construction project that are unanticipated, but can affect the bottom line.
[99] Taking all factors into account, with the evidence not allowing for an exact calculation to be made, it is my view that a figure of $30,000 would be fair and a reasonable reflection of the damages in this case.
[100] In terms of the loss of economic opportunity argument, it fails. There is no evidence before the court that would support an argument that in addition to the damages awarded for loss of profit on the project, there were opportunities lost for work that would have somehow been done by the company while they were fully committed to the Carling Avenue project.
Costs
[101] There were no submissions as to costs. If the parties are unable to agree I will receive brief written submissions.
Mr. Justice James E. McNamara
Released: July 2, 2015
COURT FILE NO.: 12-54461
DATE: 20150702
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
7250118 CANADA INC.
o/a KANATA RENOVATIONS
Plaintiff
- and -
2308095 ONTARIO INC.
Defendant
REASONS FOR JUDGMENT
McNAMARA R.S.J.
Released: July 2, 2015