1904601 Ontario Limited O/A Hi-Tek v. 58 Cardill Inc., 2016 ONSC 7040
CITATION: 1904601 Ontario Limited O/A Hi-Tek v. 58 Cardill Inc., 2016 ONSC 7040
COURT FILE NO.: C-1162-14
DATE: 2016/11/17
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1904601 Ontario Limited O/A Hi-Tek Drywall & Acoustics
Plaintiff
– and –
58 Cardill Inc., Prica Group Inc. and Rathcliffe Holdings Limited
Defendants
Peter J. Mitchell, for the Plaintiff
Les O’Connor, for the Defendants
HEARD: September 7 and 27, 2016
the honourable mr. justice G. E. taylor
Introduction
[1] This is a motion by the plaintiff for summary judgment for the amount said to be owing by Prica Group Inc. on a contract for the supply and installation of drywall to a building located at 58 Cardill Crescent in the City of Waterloo. The plaintiff also seeks judgment for the amount of extras to the contract.
Facts
[2] 1904601 Ontario Limited O/A Hi-Tek Drywall & Acoustics is a drywall contractor. Prica Group Inc. was the general contractor for the construction of a student residence at 58 Cardill Crescent in the City of Waterloo. Hi-Tek and Prica entered into a contract for the supply and installation of drywall for 58 Cardill. The contract was in the form of Standard Construction Document CCA 1 Stipulated Price Subcontract of the Canadian Construction Association (“the Contract”). The Contract price was in the amount of $1,267,469 plus taxes of $164,770.97 for a total Contract price of $1,432,239.97.
[3] Part 6 of the Contract allows Prica to make changes to the Contract either by way of Change Order or Change Directive, both of which are described as written documents. Part 6 states that Hi-Tek shall not perform any change to the work specified in the Contract without a Change Order or Change Directive.
[4] Hi-Tek has been paid the sum of $1,072,204.91 on account of the Contract price leaving a balance owing on the Contract of $360,035.06. Prica admits that there is an amount owing on the Contract but claims entitlement to a credit for payments made to other drywallers which it says were necessitated by the failure of Hi-Tek to complete its work in a timely fashion.
[5] Hi-Tek submitted invoices for additional work over and above the scope of work in the Contract in the amount of $980,398.34 plus HST of $127,451.78 for a total of $1,107,850.12. Prica acknowledges that there was some work which was beyond the scope of work in the Contract but denies that it approved, by way of Change Order or Change Directive, extras in the amount claimed.
[6] None of the extras to the Contract were approved in the manner set out in Part 6 of the Contract. However, nor were the extras which are acknowledged by Prica, approved by way of a written Change Order or Change Directive as required by Part 6.
[7] Both parties retained experts to provide opinions as to the value of the extras to the Contract. Both experts reviewed the six largest claims for extras which totaled $716,335.98. The plaintiff’s expert concluded that 98 percent of the amount claimed for the extras which were reviewed were reasonable. Accordingly, the plaintiff’s expert assessed the value of all of the extras to the Contract at 98 percent of the total claimed which amounted to $960,790. In contrast, Prica’s expert concluded that the extras which he reviewed had a value of only $285,404.44. Therefore applying the same factor to the total claim for extras he concluded that the amount owing for extras is $390,606.
Discussion and Analysis
[8] In Hryniak v. Mauldin, 2014 SCC 7, the Supreme Court of Canada ushered in a new era for summary judgment motions referring to the procedure as “an important tool for enhancing access to justice”. However, the Court also makes it clear that the traditional trial has not become obsolete.
[9] In my view, in the present case, there are many factual issues requiring a trial for resolution. Whether the parties amended the contract to relieve compliance with Part 6 with respect to extras to the Contract is one such issue. The timing of the submission of the invoices for the bulk of the extras is an issue which, in my view, requires viva voce evidence to resolve. Both parties retained experts and both parties submit that the opinions of their expert should be preferred to the opinions of the other side’s expert. This is an issue which cannot be decided on a motion for summary judgment.
[10] Other factual issues which I do not feel can be resolved on a motion include the following:
a) Hi-Tek claims that extras totaling more than $1,100,000 were verbally authorized by Prica’s project manager who also encouraged Hi-Tek to complete the extra work before submitting written pricing for approval.
Prica responds that the invoices for the extras were not submitted until after the building was certified as being substantially complete. Invoices for extra should have been submitted at the same time as the regular draw submissions by Hi-Tek.
Zeljko and Drazen Prica both deny ever receiving requests for extras or approving extras.
Prica says it is project manager was well aware of Prica’s requirement that written approval for all extras to a contract was required.
b) Hi-Tek claims that when the Contract was signed Prica knew but did not tell Hi-Tek that there would be a significant amount of extra drywall work over and above what was contemplated by the Contract.
Prica responds that the drawings on which Hi-Tek submitted its tender clearly showed the areas of the building where additional bulkheads would be required.
c) Hi-Tek claims that there were numerous design changes to the drawings which were initiated by Prica, there was poor coordination on the part of Prica and there was a compressed construction schedule, all of which combined to necessitate a massive increase in the amount of drywall work and material needed to complete the building.
Prica responds that a careful analysis of the invoices for the extras shows that much of the work claimed as extra to the Contract was within the scope of the Contract. Prica also says that the price charged for the extras is unreasonable.
d) Hi-Tek claims that the changes to the Contract were so numerous, frequent and last-minute that there was no time to submit anything in writing until after the project was complete.
Prica responds that it defies logic for Hi-Tek to have done more than $1 million worth of work which was extra to the Contract and not seek to be paid for that work until after the project was complete. Prica also says that Hi-Tek was so thinly capitalized it requested payments biweekly instead of within 45 days after a draw submission was presented.
e) Hi-Tek claims that each and every extra was approved verbally by either the project manager or Zeljko Prica.
Prica responds that it required written approval for extras because of the number of projects with which it was involved and the need to control expenditures for the benefit of the owners for whom it worked.
f) Hi-Tek claims is that it provided Prica with costing for extras on July 17, 2014 and that 90 percent of the costing for the extras had been received before the project manager left approximately two weeks prior to substantial completion of the building.
Prica responds of that there were a few claims for extras submitted in July 2014 and these were immediately rejected by Drazan Prica. There is no written approval for any of the alleged extras nor did Hi-Tek ever request such approval.
g) Hi-Tek claims that its work was completed on time and in a workmanlike manner.
Prica responds of that because Hi-Tek was falling behind schedule, it had to retain other drywall subcontractors in order to assure completion of the building on time. Furthermore, because Hi-Tek’s work was not completed on time, Prica had to pay for students to reside in hotels until the building was ready for occupancy which costs should be borne by Hi-Tek. Prica says there were numerous deficiencies which Hi-Tek was required to correct.
[11] I am satisfied, however, that a trial is not required with respect to the balance owing on the Contract and the value of the extras which Prica, through its expert, admits to be owing.
Conclusion
[12] For these reasons, judgment is granted in favour of the plaintiff for the sum of $360,035 owing on the Contract plus the sum of $390,606 for extras for a total of $750,641. The balance of the motion for summary judgment is dismissed.
[13] There are funds in court to the credit of this action I excess of $1 million. There are potentially competing claims to those funds. I am directing that execution on the judgment granted in favour of Hi-Tek against Prica be stayed for a period of 45 days from the release of these Reasons to permit any party interested in the funds in court to bring a motion with respect to the disbursement of those funds.
[14] In dismissing the balance of the motion for summary judgment I have considered the appropriateness of imposing terms pursuant to rule 20.05. The parties are to deliver a joint statement setting out what material facts are not in dispute within 60 days of the release of these Reasons. No further examinations for discovery are to be held without leave of the court. The transcripts of the cross examinations of Hassan Halbouni on behalf of Hi-Tek and Zeljko Prica and Drazen Prica on behalf of Prica conducted in relation to this motion can be utilized as transcripts of examinations for discovery.
[15] If counsel are unable to agree on the appropriate disposition as to costs they may make written submissions. The written submissions on behalf of Hi-Tek are to be delivered to my office within 14 days of the release of these Reasons, not to exceed three pages in length exclusive of a Bill of Costs and Costs Outline. Responding submissions are to be delivered to my office within 28 days of the release of this these Reasons, not to exceed three pages in length. Electronic copies of the submissions are to be sent to Kitchener.superior.court@ontario.ca immediately after the submissions are filed with the court.
G. E. Taylor J.
Released: November 17, 2016
CITATION: 1904601 Ontario Limited O/A Hi-Tek v. 58 Cardill Inc., 2016 ONSC 7040
COURT FILE NO.: C-1162-14
DATE: 2016/11/17
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1904601 Ontario Limited O/A Hi-Tek Drywall & Acoustics
Plaintiff
- and –
58 Cardill Inc., Prica Group Inc. and Rathcliffe Holdings Limited
Defendants
REASONS FOR JUDGMENT
G. E. Taylor J.
Released: November 17, 2016