ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-14-0495 DATE: 2016-07-22

B E T W E E N:

Finn Way General Contractor Inc., Plaintiff

• and -

Senator Group Inc., Defendant

BEFORE: Regional Senior Justice D. C. Shaw

COUNSEL: Daniel Matson, for the Plaintiff The Defendant noted in default and not appearing

HEARD: July 21, 2016, at Thunder Bay, Ontario

Reasons For Judgment On Uncontested Trial

[1] The defendant, Senator Group Inc., did not defend this action. The plaintiff, Finn Way General Contractor Inc., noted the defendant in default on February 18, 2015.

[2] The plaintiff brought a motion without notice pursuant to rule 19.05(1) for judgment in the amount of $1,677,397.62, plus pre-judgment interest and costs. The motion was before Justice Fitzpatrick on July 3, 2015. Based on the amount of the claim, Justice Fitzpatrick ordered that the action proceed to an uncontested trial, pursuant to rule 19.05(3). He required that the plaintiff serve the defendant by regular mail with a copy of his endorsement and notice of the trial.

[3] A trial date was set for July 21, 2016. The plaintiff effected the service required by Justice Fitzpatrick.

[4] The defendant did not respond to the endorsement of Justice Fitzpatrick nor the notice of the trial.

[5] At trial, the plaintiff led the evidence of Frank Bisignano, the project co-ordinator at Finn Way who had direct involvement with the matter in issue.

Facts in support of the claim

[6] In or about August 2014, Finn Way was contracted by the Province to construct and install four staff quarters for firefighters for the Ontario Ministry of Natural Resources at the Ministry’s Sioux Lookout headquarters. Two of the four buildings were to be completed by April 2015 and the remaining two buildings were to be completed by March 2016.

[7] The buildings were to be in accordance with detailed project drawings received from Infrastructure Ontario.

[8] Finn Way intended to use pre-fabricated buildings to complete the work in accordance with the project drawings. It chose to subcontract the construction and installation of the pre-fabricated buildings.

[9] Senator Group Inc. submitted a quotation to construct, deliver and erect on site four pre-fabricated buildings in compliance with the project drawings. The quotation was for $587,899.31 for each building, for a total of $2,351,597.24.

[10] Finn Way accepted the quotation and issued a Purchase Order dated August 18, 2014, for the four buildings, including all mechanical, electrical, plumbing and control work, plus transportation and installation of the buildings and utility hook-ups. The Purchase Order excluded decks, ramps and skirting, building permits, site work, foundation, slab on grade, furniture and appliances.

[11] Finn Way provided Senator Group Inc. with a project schedule which required completion of the first two buildings in April 2015. Senator Group Inc. delivered its own project schedule showing that the first two buildings would be in production by November 2, 2014. However, in a telephone call in early November 2014, the principal of Senator Group Inc. advised Finn Way that no work on the buildings had started.

[12] By letter dated November 19, 2014, Finn Way expressed its concern that it had not received any word as to the progress of the construction of the modular buildings or confirmation of their intended delivery. Finn Way advised that if by November 21, 2014, Senator Group Inc. had not provided an update, with a schedule of construction, delivery and installation, Finn Way would have to provide the buildings by other means and would look to Senator Group Inc. to pay all expenses for other contractors to provide the scope of work required under the Purchase Order. Senator Group Inc. did not respond to the letter. It did not construct the buildings.

[13] Finn Way terminated its contract with Senator Group Inc. by e-mail dated November 28, 2014.

[14] Finn Way sought out another company, Modular Building Solutions, to construct two modular units, as there was not sufficient time to build the first two buildings from the ground up, on site, in time for the March 2015 deadline. The remaining two buildings were constructed by Finn Way’s own work force. The two pre-fabricated buildings provided by Modular Building Solutions were completed about 15 days past the date set out in the project schedule. The two buildings built by Finn Way were completed ahead of schedule.

[15] The scope of the work under the contract with Modular Building Solutions did not include plumbing, hydronic heating, air exchange, air conditioning, electrical and control systems. It also did not include windows and insulation. This was work which was included in the contract with Senator Group Inc.

[16] The contract price between Finn Way and Modular Building Solutions for the two modular buildings was $1,229,900. Finn Way’s costs for labour and material to construct the other two buildings was approximately the same as the Modular Building Solutions price. This did not include a profit component for Finn Way.

[17] Finn Way paid the following amounts to subcontractors to complete the work which was included in the contract with Senator Group Inc.:

• Thermal Mechanical – plumbing and hydronic heating - $573,832;
• Thermal Mechanical – mechanical (HRV) - $112,000;
• City Wide Electric – electrical - $54,000;
• Barcol Controls – control work - $277,271;
• Thermal Mechanical – air conditioning units and installation - $438,000;
• DEW Environmental – HVAC balancing - $4,245;
• Thunder Bay Insulation - $30,000; and
• Silex Fiberglass Windows – windows - $79,600.76.

[18] The total of the new purchase orders to complete the scope of work required under the contract with Senator Group Inc., plus Finn Way’s cost for constructing two of the buildings with its own work force, was $4,028,947.76. This was $1,677,397.52 over and above the agreed price with Senator Group Inc.

Decision

[19] Pursuant to rule 19.02(1)(a) a defendant who has been noted in default is deemed to admit the truth of all allegations of fact made in the statement of claim. Pursuant to rule 19.05, where a plaintiff’s claim is for unliquidated damages, the plaintiff must adduce evidence to support its claim. Rule 19.06 provides that a plaintiff is not entitled to judgment on a motion for judgment or at trial merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment.

[20] I have considered the deemed admissions that flow from the statement of claim, namely that there was a contract between Finn Way and Senator Group Inc. which Senator Group Inc. breached. Finn Way is entitled to damages for the breach of contract. The measure of damages is the cost to Finn Way of procuring substitute labour and material in excess of the contract price. The plaintiff adduced at trial admissible evidence as to its costs of completing the work required under the contract with Senator Group Inc. That evidence, combined with the deemed admissions, entitles Finn Way to judgment for its costs over and above the agreed price with Senator Group Inc.

[21] The plaintiff is therefore awarded judgment for damages for breach of contract in the sum of $1,677,397.52 plus pre and post judgment interest at the rates prescribed by the Courts of Justice Act.

Costs

[22] The plaintiff has provided a Bill of Costs up to the date of trial. The Bill of Costs sets out partial indemnity fees of $2,702.55, plus HST. The plaintiff seeks a counsel fee of $500.00 for the trial. The plaintiff submits that partial indemnity costs of $3,500.00, all inclusive, are reasonable. I agree. The plaintiff shall have its costs in the sum of $3,500.00, inclusive of fees, disbursements and HST.

Regional Senior Justice D. C. Shaw Released: July 22, 2016