Court File and Parties
COURT FILE NO.: C-977-13 DATE: 2016-07-21 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Pylon Paving (1996) Inc. Plaintiff – and – Arrow Lofts Inc., Stonerise Construction Inc., and The Toronto-Dominion Bank Defendants
COUNSEL: A. Conte, for the Plaintiff M. Butkus, for the Defendants
HEARD: May 10, 11, 12 and 2016
BEFORE: The Honourable Mr. Justice P. J. Flynn
Endorsement
[1] This case started as very ordinary lien action by the Plaintiff (Pylon) for the unpaid balance ($20,200.85) for paving work to the Defendants’ (Arrow) parking structure.
[2] Arrow Lofts is a condominium in downtown Kitchener constructed out of the former factory where the Arrow shirts were made.
[3] The work in dispute was the first of two phases by Pylon at the Arrow Lofts.
[4] There is no complaint by Arrow about Pylon’s work on the second phase.
[5] The paving in dispute was started on November 14, 2011, and finished three days later. But Arrow never did pay for all of this work. So on October 17, 2013, Pylon registered a Lien Claim and then issued its Statement of Claim on or about November 8, 2013.
[6] Arrow responded on December 4, 2013 with its Statement of Defence and Counterclaim – a Counterclaim which now sought $175,000.00, (more than eight times the size of the lien claimed) – for breach of contract and breach of express warranty.
[7] Arrow denies that it owes anything to Pylon, and pleads that, if it does, it is entitled to set off against such amounts the costs of removing and replacing the defective asphalt installed by Pylon.
[8] Arrow, since the litigation commenced, received quotations for removing and replacing the asphalt and the underlying waterproofing membrane and repairing the concrete, amounting to $147,030.00, including HST. And with the set-off, Arrow now seeks judgment for $125,830.00.
[9] There is no evidence that the asphalt supplied by Pylon is other than of the quality specified. Arrow’s complaint is that Pylon was to supply and install 50 mm of asphalt throughout the project and did not do this. Arrow relies upon the General Terms and Conditions of its Purchase Order of September 8, 2011, in particular item 8:
The acceptance of this order shall constitute an express warranty by the Subcontractor/Supplier that the material is fit for the purpose intended, is of first quality, complies with all laws and is in every respect according to description or sample. The contractor reserves the right to reject and/or hold the Subcontractor/Supplier responsible for any loss caused by defective material or workmanship. Acceptance or use of material by us shall not constitute a waiver or claim under this warranty.
[10] While the Contractor on the purchase order is shown to be Stonerise Construction and the second listed Defendant is Stonerise Construction Inc., the parties throughout have proceeded as if there were but one Defendant, namely Arrow Lofts Inc.
[11] Pylon has not taken issue with the fact that the Purchase Order is in the contractor’s legal name, so I won’t concern myself with that legal nicety. But a plain reading of that article (8) of the General Conditions of the purchase order does not help the Defendants – it mainly deals with the material itself – for which there has been no complaint – and losses caused by defective workmanship.
[12] Arrow has not sued in negligence. And while complaints were raised in its Counterclaim at paragraph 15 with what could amount to allegations of defective workmanship, none were raised in evidence before me.
[13] Pylon concedes that 50 mm of asphalt was not installed in the first phase. It argues that Arrow ought to be given a credit for the cost of the uninstalled material amounting to about $1,000.00.
[14] On the other hand, Arrow wants a complete “redo”.
[15] Each side called an expert – both highly qualified witnesses. Both experts agree that the obvious problems with the deterioration of the parking deck is caused by the differential inter-layer movement of the concrete, the water proofing membrane and the asphalt. And both agree that less than 50 mm of asphalt was laid on the deck and that to some extent this contributed to the differential inter-layer movement. But I repeat that this is a breach of contract claim and Pylon only laid the asphalt. It had no responsibility for the construction of the underlying concrete deck or the waterproofing membrane.
[16] Pylon’s expert, Salman Bhutta, testified that the design is flawed in calling for only 50 mm of asphalt. In his view more thickness was required to avoid the resulting problem. Even if there is a complete “re-do” If more asphalt is not specified, required and laid the same problem will occur again. And according to Mr. Bhutta the design and underlying concrete construction make it impossible for a paver to deliver 50 mm of asphalt.
[17] While both experts are highly qualified and each acknowledged each other’s expertise, I prefer the opinions of Mr. Bhutta, mainly because his expertise is grounded “closer to the road” in terms of practical experience with these types of paving projects. I accept his opinion on the undulations in the underlying deck and his conclusion – much like that of the witness Darryl Gardiner – that Pylon did the best it could with the unpaved project it was given.
[18] While there is certainly controversy in this case about whether or not there were in fact undulations in the underlying concrete, and Arrow’s expert denies that there were, Mr. Butta explained that these undulations occur on every job and are unseen by the human eye. I accept his evidence because there could be no other explanation for the varying thicknesses in all of nearly 50 samples that were taken by both experts.
[19] To achieve a top surface 50 mm above the concrete deck actually only allows 42 mm of asphalt – considering that the waterproof membrane system occupies 8 mm of the space.
[20] Both sides’ experts caused several bore hole samples to be taken and measured. The evidence shows that out of more than 45 tests, only 4 locations met or exceeded 50 mm of thickness of asphalt. 23 of those tests showed less than 40 mm of asphalt and in 2 locations the sample showed less than 25 mm thickness.
[21] The average of these sites from the samples alone, as the experts agree, is about 39.5 mm. That’s an interesting number because the evidence shows that there is a 3 mm tolerance in the specified thickness of the asphalt. If only 42 mm is available to lay the asphalt then that would put the amount of the sample bore holes within the tolerance. But that is not to say those samples bore holes show the thickness of the entire layer of asphalt on that parking deck.
[22] Here I prefer Pylon’s calculations shown at Tab 11 of Exhibit 1 which reveal that the average thickness of the asphalt place was 42.15 mm.
[23] In any event I am satisfied that, given the necessary allowance for the waterproofing membrane and given the equipment being used when considering the design, with particular attention to the obvious problems caused by the catch basins, that thickness is as much as Pylon could achieve.
[24] I’m convinced by the evidence of Mr. Gardiner that on projects like this, the most common types of paving machine used are 8 foot to 16 foot pavers. On this job an 8 foot paver was used. Gardiner’s practical wisdom, having completed some two thousand paving jobs, trumps that of either of the experts insofar as how the job gets done.
[25] Gerald Postma testified that he constructed the concrete deck and left a lip of 50 mm at the ramp, door entrances and catch basins. Accordingly there was only 42 mm of space left for the asphalt material.
[26] I find as a fact that Rosario Collosimo told “Sam”, Arrow’s superintendent, on November 7, 2011, at a pre-job site meeting in the week before the work commenced, that Pylon could not achieve 50 mm because of the control points and that the concrete and catch basins should be adjusted. I accept his evidence – he memorialised in the work sheet filed in Tab 11 of Exhibit 1. And I further accept that he was instructed by Sam to go ahead and pave it anyway.
[27] I would say that Pylon’s mistake here was not to transmit Collosimo’s concern in writing to Arrow and then to insist on written authorization to commence in the face of Pylon’s concerns. Too often in these construction disputes an ounce of writing could prevent a pound of trouble. That simple exchange in writing may have produced a shouting match ending with “I told you so”, but it most likely would have avoided a three day trial.
[28] In the anxiety to get projects built, those in the construction field often fail on the documentation side and those failures lead to a whole new industry.
[29] The evidence addresses the question of how much asphalt would satisfy the terms of the contract in another way. No one from the Defendants measured the thickness of the asphalt as it was being applied on the first phase. Nor did they follow their own requirement on the Purchase Order to review quantities or check measurements. And they had been told by Collosimo that they were not going to get 50 mm on November 7, 2011.
[30] Michael Dufresne was Arrow’s supervisor on the second phase of the paving- the garage extension. He has 20 years’ experience as a supervisor. Best practice can be seen in how Mr. Dufresne dealt with the paving in that phase. He supervised the paving as they laid it and measured it with each pass of the machine.
[31] There are two photographs at Tab 19 of Exhibit 3 which show those measurements. Mr. Dufresne spoke and demonstrated in imperial measure, where two inches is equal to 50 mm. Not only are there no complaints with Pylon’s second phase work, but the asphalt as laid measured about 1.75 inches (about 45 mm), which Mr. Dufresne said meets the 50 mm requirement. It would therefore seem a custom of the trade that appears to say “close enough”. Of course, this part of the project has no protruding catch basins – clearly part of the problem on the first phase.
[32] The breach of contract alleged here is the failure to install 50 mm of asphalt. I am satisfied that this could not be achieved and that Arrow knew this by November 7, 2011. At the very least, Arrow, using best practices supervision, should have known this when the paving job was competed on November 17, 2011.
[33] The limitation clock began to run from one of those dates and the Counterclaim and set-off claim were not made until December 4, 2013, more than two years later. Accordingly, Arrow’s claims are both Statute barred.
[34] If I am wrong about that, I would still dismiss the Counterclaim and deny the set-off. I am not satisfied that Pylon’s failure to deliver 50 mm of asphalt is a breach of contract. Given the membrane, the most that could have been installed was 42 mm and by Pylon’s calculation that was what was delivered.
[35] The design would not permit the installation of 50 mm. Moreover, paving must be done in conformity with the control points. Pylon complains that the concrete deck as constructed prevented the ultimate installation of 50 mm of paving. And the Defendant was advised of this in the week before the paving work began.
[36] Accordingly, it was a failure on the part of the Defendants that resulted, in the large part, in the thickness of the asphalt not reaching 50 mm. In my view it was no fault of the Plaintiff.
[37] If I am wrong about that, what damages have the Defendants proved?
[38] The Defendants seek complete betterment – a brand new paving job with a new waterproofing membrane. They are not entitled to that. They based their whole claim on that posture and presented this court with no options about repair.
[39] Moreover, while James Crich testified about the estimates that Arrow received from Del-Ko Paving and A-1 Restoration, those estimates are, of course, hearsay. No one was called to justify those quotations. I put little weight on them. No options were advanced by Arrow for repairs amounting to less than full replacement. Arrow’s position is that the Condominium Corporation required this betterment, but there has been no evidence from the Condominium Corporation at all. I was refereed by the Defendant to a condominium board audit, which was not produced for the court, from April of 2014 which required repairs. But no repairs have been thus far effected.
[40] The parking deck is still being used as a parking deck. It has been there more than four and a half years. And there was no evidence to tell the court what impact on compression of the layer of asphalt such use causes. Without corrections to the design and underlying construction, there have been no worthwhile opinions on how long a parking deck like this might last. In any event I am not satisfied that Arrow has met its burden to prove any damages.
[41] Accordingly I dismiss Arrow’s Counterclaim and its right to claim set-off.
[42] But that does not end the matter. As pointed out earlier, a critical failure on the part of the Plaintiff was the fact that it proceeded with the work on phase one in the face of the deficiencies in the underlying work that Mr. Collosimo observed without a written order to proceed, and these deficiencies were such that they prevented Pylon from delivering 50 mm of asphalt.
[43] There has to be a consequence for this kind of failure. Had this matter been addressed on November 7 or 17, 2011, a different route would have been taken to resolution.
[44] Pylon seeks the unpaid balance of its Lien Claim in the amount of $20,200.65. In my view Pylon is not entitled to be paid the entire balance. I would reduce the amount of the Claim for its failure to address the deficiencies on the spot in writing by $10,000.00 – an entirely arbitrary amount. Accordingly it is only entitled to $10,200.65. In summary then there shall be judgment for the Plaintiff in the amount of $10,200.65. Arrow’s Counterclaim is dismissed and its claim for a set-off is denied.
Costs
[45] I will determine and fix costs, if any, after reviewing the parties submissions in accordance with the following directions:
- On or before August 19, 2016 the Plaintiff shall serve and deliver to me at my Kitchener chambers its Costs Outline, augmented by no more the two pages, together with its Bill of Costs and any relevant Offer(s):
- And on or before September 16, 2016 the Defendant shall deliver their Costs Outline, augmented by no more the two pages, together with their Bill of Costs and any relevant Offer(s).