COURT FILE NO.: CV-14-517490
DATE: 20180523
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
C2C CABINETRY INC.
Plaintiff
– and –
ROBERT LAW and 2778751 CANADA INC. cob CNC AUTOMATION
Defendants
Micheal Simaan, for the Plaintiff
Barry Yellin, for the Defendant 2778751 Canada Inc. cob CNC Automation
HEARD: April 16, 17, 18, 19, 20, 30 and May 1, 2018, followed by written submissions
REASONS FOR JUDGMENT
W. MATHESON J.
[1] This action relates to the plaintiff’s purchase of an edge banding machine for use in its cabinetry manufacturing business. The plaintiff claims breach of contract, and seeks return of the purchase price, related tax and a nominal amount for other damages claims.
[2] Prior to the commencement of the trial, the action against the defendant Robert Law was dismissed on consent. In these reasons for decision, I refer only to the company carrying on business as CNC Automation (“CNC”) as the defendant.
Events giving rise to claim
[3] The plaintiff manufactures kitchen and bathroom cabinetry in Scarborough, Ontario. The defendant is a Quebec company that sells various manufacturing equipment and carries on business in Ontario, among other places.
[4] Eddie Li testified as the main witness for the plaintiff. Mr. Eddie Li[^1] was the General Manager and directly involved in a number of ways. The licensed electrician that did electrical work for the plaintiff also testified, Mr. Cho-Sun Wan. In its defence, the defendant called its National Sales Manager, Robert Law; its President, Andrew Legault; the President of the manufacturer, Andrea Volpato; and two technicians, Eric Ouellette and Joseph Wytenburg, all of whom had involvement with the events giving rise to this action.
[5] Much of the history of this matter is documented in work orders and emails and is not in dispute.
[6] The plaintiff had an edge banding machine, which is used to finish the edges of panels that have been cut to size and will form part of cabinetry. The edge banding machine that the plaintiff was using was getting old and was limited to basic functions such that manual labour was required to finish the product after the machine was used. The plaintiff was interested in purchasing a better edge banding machine that used more types of material and did high gloss cabinetry with smooth and rounded corners without manual labour, allowing the plaintiff to potentially compete for higher end jobs.
[7] The plaintiff had purchased equipment from the defendant CNC before the issues in this action arose, and had a good relationship with CNC. The plaintiff therefore approached CNC when it was considering this purchase (along with the purchase of two other pieces of equipment).
[8] In late 2012, the plaintiff contacted Robert Law, the National Sales Manager for CNC. Mr. Law was well familiar with the plaintiff and its facility.
[9] Mr. Law testified at trial, and agreed that he was told that the plaintiff wanted the ability to create a higher end product with edging that the current machine could not do, such as high gloss and different thicknesses, with rapid setup and changeover that would save time and labour and produce a finished product.
[10] Mr. Law recommended the Fravol Automatic Edging Machine Model Rapid-RX700 (the “Machine”). He explained at trial that he did so because the Machine had controls giving it the ability to store programs and work with different edges and thicknesses, it was easy to use with a quick setup once the operators were trained and cut down on manual labour. In Mr. Law’s view, it was exactly what the plaintiff needed for what the plaintiff wanted to do.
[11] As their sales representative for a couple of years, Mr. Law had been to the plaintiff’s facility many times. The plaintiff’s manufacturing was done in two connected rental units in an industrial building. Space was limited. In Mr. Law’s view, that facility was suitable for the Machine.
[12] The plaintiff requested a sample of the edging done by the Machine and, after receiving a sample, went to the CNC facility in Quebec for two demonstrations of the Machine.
[13] Ultimately, a quote for the purchase of the Machine was signed back by the plaintiff in June 2013. There is no issue between the parties that the signed back quotation is the written contract between them for the purchase of the Machine (the “Contract”). As shown in the Contract, and as agreed in cross-examination at trial, it was a complicated machine with a lot of moving parts and electrical components, and a pneumatic system that needed to be kept dry.
[14] The agreed price was $135,000, which is shown as a discounted price on the Contract. The purchase price was paid in installments. Ultimately, the plaintiff paid the full amount plus HST, totalling $152,550.
[15] The Machine arrived for installation in July 2013. Under the Contract, CNC was responsible for installation and training. The plaintiff was responsible for providing the necessary external power, air compression and dust collection for the Machine. The plaintiff had been told that its existing dust collector would be sufficient. Mr. Wan, the plaintiff’s electrician, did the work required to meet the electrical requirements of the Machine in terms of voltage and amps. Mr. Wan did not recall any instructions about grounding, but there was grounding supplied by the building itself and another grounding bonded to the water pipe in the plaintiff’s facility. He used the existing grounding.
[16] From the outset, there were problems associated with the installation and use of the Machine at the plaintiff’s facility. The parties agree that there were problems. The dispute focuses on the nature and extent of the problems, and who was responsible for them.
[17] The initial installation took place over three days. Dust collection was an immediate problem. The plaintiff connected its existing dust collector to the Machine in a makeshift way, with duct tape and improper tubing, which Mr. Eddie Li testified was a temporary connection. The plaintiff did not later substitute a proper connection. There was disagreement about whether the existing dust collector would be sufficient (if properly connected). After discussions over the next few months, a new dust collector was put in and properly connected to the Machine in the fall of 2013, which was partly paid for by CNC. In the interval there were some other steps.
[18] By November 2013, the Machine was in production. As set out in an email dated December 6, 2013, Mr. Poon of the plaintiff sought confirmation of a number of items, all of which CNC confirmed, including completing the setup and training by December 22, 2013. Significantly, the plaintiff requested and CNC agreed to restart the warranty as of November 2013, “when the equipment was in production.”
[19] Mr. Eddie Li received training in November and December 2013, and in early 2014. CNC knew others would also operate the Machine, trained by Mr. Eddie Li rather than CNC because they did not speak English. Overall, the training was 98 or 99% complete, but lasted longer due to problems with the Machine. From the plaintiff’s standpoint the training was never 100% complete.
[20] There were numerous work orders in relation to the Machine, regarding installation, training and various issues that arose in the period from July 2013 to September 2014. Some issues were small and resolved quickly while others took some time. CNC was diligent and responsive to service requests but problems continued to arise.
[21] The problems did not necessarily render the Machine inoperable. In his evidence, Mr. Eddie Li acknowledged repeatedly that the Machine could do basic functions but the more sophisticated functions were not working, especially rounding, and the product therefore still required significant manual labour to finish. On a small number of occasions, the Machine could not be used at all for safety reasons, pending repair. Until the last work order, all of the work was done under warranty at no charge to the plaintiff.
[22] By July 2014, the plaintiff was getting customer complaints due to delays.
[23] The issue of water in the Machine was noted in June and July 2014. Mr. Eddie Li said it was due to hot summer days. In July 2014, the President of the Italian manufacturer, Mr. Volpato, attended at the plaintiff’s facility along with one of his technicians, at CNC’s request. Mr. Volpato is a Mechanical and Electronics Engineer and Fravol is his family’s company. Mr. Volpato stayed for about two days and found a number of problems, which he discussed with Mr. Eddie Li, including water in the Machine and electrical issues. Although Mr. Eddie Li testified that he regularly cleaned the Machine, when Mr. Volpato arrived the Machine had not been properly cleaned. Mr. Volpato also tried to train the other person who was operating the Machine to address maintenance and cleaning, with Mr. Eddie Li translating.
[24] As a result of finding water in the Machine, a new air dryer was installed by the plaintiff in August, but there remained the possibility that the water had already caused damage.
[25] In early September 2014, the main CNC technician for the plaintiff, Mr. Wytenburg, thought he had found the reason for the random failures; specifically, the problem was feedback from the encoder. He testified that the encoder was the heartbeat of the Machine. Mr. Volpato’s view was that it was the grounding issue that had created the problem with the encoder.
[26] By his email dated September 4, 2013, Mr. Wytenburg referenced Mr. Volpato’s observation that the grounding of the Machine needed to be improved. As a result, the plaintiff was asked to add an isolated grounding rod for the Machine. In the meantime, Mr. Wytenburg locked out the power to the Machine until the grounding issue was resolved. The plaintiff replied the next day, noting that its electrician, Mr. Wan, had done the work to ground the Machine before installation. The new ground would require that a hole be drilled through the concrete floor. The plaintiff asked CNC to confirm that the additional grounding would solve all the problems they had been experiencing, before it approached its landlord about taking that step. CNC was not prepared to give that guarantee but was prepared to pay for the additional grounding.
[27] The parties met on September 9, 2014 to discuss the issues between them. Although nothing turns on it now, it is apparent from the evidence that they had very different views about what was and was not agreed to at that meeting. From CNC’s standpoint, Mr. Legault left with the understanding that CNC would give the plaintiff a credit for the return of the Machine, in an amount not yet determined, to be applied against the purchase of a new, simpler edge bander machine. From the plaintiff’s standpoint, CNC was going to take the Machine back and give the plaintiff a full refund. This difference does not need to be resolved because this is not an action to enforce a settlement.
[28] In October 2014, counsel to the plaintiff wrote to say that they had been instructed to sue. Counsel indicated that the plaintiff had to get rid of the Machine and recognized that it may have some value to CNC, inviting CNC to take it failing which it would be disposed of. Correspondence between counsel followed, reflecting the dispute between the parties about why there had been problems regarding the Machine and, as regards the proposed “disposal” of it, the plaintiff’s duty to mitigate.
[29] This action was commenced in early December 2014.
[30] In April 2015, the plaintiff listed the Machine for sale on Kijiji for a reduced price of $95,000. The listing says that the first listed price was $175,000 but it does not say when that listing was posted. The ad indicates that the Machine had been installed in November 2013, but “our supplier could not get it setup running properly to our requirements”. Mr. Law came across the ad because he was looking for used edge banders for the customer he was then working for, a kitchen cabinet maker. Mr. Law did buy some used equipment as a result of his online searches, but, given the lawsuit then outstanding against him, he did not pursue purchasing the Machine.
[31] The Machine remains at the plaintiff’s facility with a protective covering, not in use.
Analysis
[32] As of final argument, the issues arising in this breach of contract claim were as follows:
(i) whether there was a breach of a condition of the Contract, giving rise to repudiation of the Contract and the right to the return of the purchase price;
(ii) whether, even if there was a breach of a condition, it could only be treated as a breach of a warranty under the Sale of Goods Act, R.S.O. 1990, c. S.1; and,
(iii) what damages should be awarded, if there was a breach of contract.
[33] The legal principles that apply to determine whether a contract term is a condition or a warranty are well-settled. A condition is fundamental to a contract’s performance. It goes to the root of the contract, where a warranty is collateral to the main purpose of the contract: Canadian Encyclopedic Digest, “Contracts”, (Thomson Reuters Canada, 4th ed.), XI.1.a, at para. 688; General Refractories Co. of Canada Ltd. v. Venturedyne Ltd., [2002] O.T.C. 10 (S.C.), at paras. 200-203.
[34] The importance of the characterization of a term relates to remedy. If the term is a condition, it gives rise to a right to repudiate the contract. If the term is a warranty, there is only a claim for damages: Canadian Encyclopedic Digest, “Contracts”, (Thomson Reuters Canada, 4th ed.), XI.1.a, at para. 688; General Refractories Co. of Canada Ltd. v. Venturedyne Ltd., at para. 203.
[35] The plaintiff submits that three terms of the Contract were breached, all of which are put forward as conditions, specifically: (1) that the Machine was automatic; (2) that it produced high quality product; and (3) that no manual labour was required to finish the edges after the Machine did its work. Although the Contract does not contain these phrases, the plaintiff submits that the Contract’s detailed provisions regarding the Machine and what it was capable of, taken in context, give rise to these three terms.
[36] The proper approach to contract interpretation was summarized in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at para. 47, as follows:
[T]he interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine “the intent of the parties and the scope of their understanding” [citations omitted]. To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning:
No contracts are made in a vacuum: there is always a setting in which they have to be placed. . . . In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating. [Citation omitted.]
[Emphasis added.]
[37] In accordance with these principles, I have read the Contract as a whole. I had regard for not only the written Contract but also the relevant surrounding circumstances, including the testimony of Mr. Eddie Li and Mr. Law where they largely agree on what the plaintiff was looking for. The plaintiff has not sued for misrepresentation based on any pre-contractual statements made by Mr. Law, but does rely on his admissions at trial as relevant surrounding circumstances. Mr. Law testified that he recommended the Machine because it was easy to use after training, cut down on manual labour and had the ability to do more types of edges and functions, and was therefore exactly what the plaintiff was looking for. As well, the plaintiff already had an edge bander that did basic functions. These circumstances support the plaintiff’s position, although not without some qualifications.
[38] In the Contract itself, there is some language that supports the plaintiff’s position but it should not be read in isolation.
[39] With respect to the plaintiff’s submission that the Machine was to be “automatic”, the Contract does describe the Machine as “versatile and user friendly” and describes the Touch Screen as “simple and user-friendly”. As well, some function descriptions include the observation that the system can “automatically select the correct set-up according to panel height and edge thickness” and some specific functions, such as loading a roll of edging, are described as automatic. However, there are over forty specific items and, read as a whole, the Contract does not include a term that the Machine is “automatic” in the sense of just pushing a button. Mr. Eddie Li agreed that he did not expect to just push a button. On the contrary, the Machine is sophisticated and has numerous different components, operations, potential choices and adjustments, computer technology and controls, and ongoing maintenance requirements.
[40] With respect to the plaintiff’s submission that the Machine was to produce a “high-quality product”, that phrase is not used in the Contract, but there are functions listed in the Contract that, based on the trial evidence, fit that description. For example, the Contract expressly mentions rounding functions, which are part of the higher quality functionality. There are other functions mentioned that are also more sophisticated.
[41] With respect to the plaintiff’s submission that no manual labour would be required to finish the edges after the Machine did its work, the Contract does not say as much. I accept that, implicitly, if the Machine performed certain functions such as rounding, that function would no longer need to be done manually.
[42] Interpreting the Contract in accordance with the above legal principles and having regard for the relevant trial evidence, I conclude that the Contract did include implicit terms albeit of a more qualified nature than those advanced by the plaintiff. I find that those terms are as follows: (i) that the Machine had the ability to store programs and was easy to use with a quick setup once the operators were trained; (ii) that it performed more functions, including rounding, and worked with different edges, materials and thicknesses; and (iii) that it cut down on manual labour.
[43] The issue of whether these terms are conditions or mere warranties need not be addressed here, due to the impact of the Sale of Goods Act. Under s. 12(3) of that Act, a breach of a condition is treated as a breach of warranty if there has been acceptance of the goods, and I conclude that there was acceptance of the Machine. Subsection 12(3) provides as follows:
Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, or where the contract is for specific goods the property in which has passed to the buyer, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect.
[44] There is no term of the Contract that displaces the impact of s. 12(3) in this case. Accordingly, the above terms, even if conditions, can only be treated as a breach of warranty if the plaintiff accepted the Machine.
[45] With respect to acceptance of the Machine, s. 34 of the Act addresses the question of when a buyer will be deemed to have accepted the goods, as follows:
The buyer shall be deemed to have accepted the goods when the buyer,
(a) intimates to the seller that the goods have been accepted;
(b) after delivery, does any act in relation to them that is inconsistent with the ownership of the seller; or
(c) after the lapse of a reasonable period of time, retains the goods without intimating to the seller that they have been rejected.
[46] I readily conclude that there was deemed acceptance under both subsection (a) and (b). With respect to subsection (a), the plaintiff certainly intimated to CNC that the Machine had been accepted when it negotiated a restart to the warranty in December 2013 on the basis, among other things, of its own statement that the equipment “was in production.” There was other evidence as well, including the continued use of the Machine even if only for basic functions and even with some interruptions. With respect to subsection (b), the plaintiff listed and attempted to sell the Machine, which is inconsistent with ownership by the defendant.
[47] Given acceptance of the Machine, the plaintiff is limited to seeking damages for breach of warranty, as set out in s. 12(3) of the Act.
[48] Before considering the quantification of damages, it remains to be determined whether or not the Contract was breached. I therefore return to the question of whether the plaintiff has established that any of the three terms set out above were breached by CNC.
[49] I find that the plaintiff has not established that the first of those terms was breached, regarding ease of use. Having regard for Mr. Eddie Li’s evidence as a whole, I find that while he admitted that this was not a Machine that could be used by simply “pushing a button”, the plaintiff’s evidence taken as a whole amounts to saying that that should have been the case. On the contrary, the plaintiff purchased a sophisticated machine with controls that made it easy to use relative to its sophistication.
[50] I address the next two terms together, specifically the term that the Machine was to perform more functions, including rounding, and the term that the Machine would cut down on manual labour. These two terms are related. Only if the more sophisticated functions worked would the need for manual labour be reduced.
[51] Having regard to all the trial evidence, I find that while the Machine successfully performed basic functions, it never successfully performed all of the more sophisticated functions required under the Contract, including, most significantly, rounding. As a result, there was not a significant reduction in manual labour. This gives rise to the question of why this was the case. The plaintiff submits that it fulfilled all of its obligations, and the reasons for this failure were entirely caused by the Machine. This is disputed. CNC submits that these problems were caused by the plaintiff, including through inadequate maintenance, inadequate air compression, inadequate dust collection and inadequate grounding, all responsibilities of the plaintiff.
[52] Even after a number of the issues raised by CNC were resolved, the Machine still did not perform its more sophisticated functions. The dust collection issue was resolved by the fall of 2013 and not identified as an issue going forward despite all of the service calls after that time. The inadequate air compression, causing some water in the Machine in the summer of 2014, was resolved by August 2014. I recognize that there could have been some consequences to the water having been in the Machine to begin with, but that was not identified by CNC after that time as the reason for the ongoing problems. Similarly, I find that there was some deficient maintenance identified at least in July 2014, when Mr. Volpato and his technician were at the facility. However, he did more training at the time and that too was not put forward as the reason for ongoing problems in the events that followed.
[53] It was the grounding that CNC identified as the ongoing problem. However, I accept the evidence of Mr. Wan that when the Machine was installed he took all the necessary steps to see that it was properly connected to the grounding of the building. No other licensed electrician was called as a witness to challenge this evidence. Further, the Contract did not require extra grounding. This was a new issue raised for the first time in the summer of 2014.
[54] By the time the grounding issue was raised, there had been numerous work orders, investigations and adjustments, and the main technician responsible for this Machine, Mr. Wytenburg, had extensive experience with the Machine. He testified that by early September 2014, there were still issues regarding things not working and he concluded that a new encoder had to be installed. He testified that the encoder was the heartbeat of the Machine and Mr. Volpato’s view was that the grounding issue had created the problem with the encoder.
[55] As of September 2014, the Machine was still not performing its more sophisticated functions. The plaintiff had fulfilled its obligations with respect to grounding under the Contract. CNC was unable to point to anything in the communications at the time of purchase or installation requiring a second ground. The failure of the Machine to perform the more sophisticated functions without the additional grounding was a breach of the Contract.
[56] CNC submits that the plaintiff should have taken the steps to have the additional ground put in place. However, to do so was not straightforward. The plaintiff’s premises were rented and it was proposed that an additional ground be put through the cement floor, which would obviously require permission from the landlord. After the lengthy series of difficulties with the Machine, the plaintiff was reluctant to approach the landlord without some assurance that this would work. I do not criticize CNC for refusing to guarantee the outcome, but also do not find the plaintiff’s conduct unreasonable in the circumstances.
[57] In summary, the Contract terms that required more sophisticated functions and decreased manual labour were breached.
Damages
[58] The above breaches must be treated as breaches of warranty and accordingly, the plaintiff has a claim for damages. The plaintiff submits that the damage for breach of warranty in this case is still the full purchase price, plus tax, since the Machine did not do the more sophisticated functions it was purchased for. It did basic functions, but the plaintiff already had a machine that did those functions. As well, the plaintiff seeks nominal damages for its claims of consequential damages, in the sum of $1,000. The defendant submits that the plaintiff has failed to prove its damages and has failed to mitigate its damages.
[59] The onus is on the plaintiff to prove its damages on a balance of probabilities. A plaintiff will not be able to recover for those losses that could have been avoided by taking reasonable steps: Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, [2012] 2 S.C.R. 675, at para. 24.
[60] As far as the duty to mitigate is concerned, the parties both rely on Southcott Estates Inc. As set out in para. 24 of that decision, where it is alleged that a plaintiff has failed to mitigate, the burden of proof is on the defendant, who needs to prove both that the plaintiff has failed to make reasonable efforts to mitigate and that mitigation was possible.
[61] These two principles and how they work together was usefully discussed in 100 Main Street Ltd. v. W.B. Sullivan Construction Ltd. (1978), 1978 CanLII 1630 (ON CA), 20 O.R. (2d) 401 (C.A.), as follows:
The basic principle is that the onus is on the plaintiff to prove its damages on a reasonable preponderance of credible evidence. Its damages are that sum of money which would put it in the same position as if the defendant had performed. The well-established method for determining this is to give the difference between the contract price and the market value. It is basic that the plaintiff cannot have the contract price and the land. Thus, I do not think that the plaintiff has proven its case by merely proving the contract price and then the defendant's breach, in the expectation that he will recover the full price unless the defendant proves that "the property could be sold to someone else without loss to the plaintiff". I would construe these words of the trial Judge as also meaning "in reduction of the plaintiff's loss".
As I have said, with respect to the issue of mitigation, the onus is on the defendant. However, the onus on the defendant to prove failure to mitigate does not relieve the plaintiff from proving an obvious element in the calculation of his damages. McGregor on Damages, supra, in para. 212, p. 149, puts the matter this way:
The onus of proof on the issue of mitigation is on the defendant. If he fails to show that the plaintiff ought reasonably to have taken certain mitigating steps, then the normal measure will apply.
Included in the "normal measure" is the difference between the contract price and the market price. Thus, I think that the proper course is for the plaintiff, in presenting its case, to adduce evidence of the contract price and of the market price or resale price upon which he relies in establishing the loss of bargain. The onus is then on the defendant to show, if he can, that if the plaintiff had taken certain reasonable mitigating steps the damages would be lower. [Emphasis added.]
[62] There is some evidence of damage. Obviously, the contract price is known. The evidence regarding the value of the Machine is more complicated. The plaintiff still has the Machine. The plaintiff advances the position that is it has value to CNC. The plaintiff has not put a figure on that value except to say that it would be between zero and the contract price. The plaintiff also takes the position that the Machine has no value except to the CNC. I reject that submission. The trial evidence included Mr. Law’s evidence that shows interest in the Machine by a third party. Based on that evidence and evidence about CNC selling this Machine in Canada, I find that there was a market for the used Machine at the right price.
[63] With respect to mitigation, I find on the trial evidence that the defendant has demonstrated that mitigation was possible through the evidence of Mr. Law, who was himself, on behalf of another company, seeking to purchase used equipment of this kind using the same website that the plaintiff used in its mitigation efforts.
[64] The defendant has also demonstrated that the plaintiff failed to make reasonable efforts to mitigate. The plaintiff took two steps in mitigation. First, it offered the Machine to CNC. Second, the plaintiff listed the Machine for sale. The plaintiff did not put forward evidence about attempts to sell the Machine; the evidence I have arises from cross-examinations. Based upon the evidence before me, I find that no further steps were taken to sell the Machine, including attempts to sell the Machine through other channels or at a further reduced price. The plaintiff also submits that its cooperation in problem-solving were mitigation steps. While I have taken that into account, considering all the evidence I conclude that reasonable mitigation steps were not taken.
[65] The plaintiff cannot have the full purchase price unless the Machine’s value is zero, and the evidence shows that the Machine has value. It is therefore not appropriate that the plaintiff receive the return of the entire purchase price. The defendant submits that since the plaintiff has not proved the value, I should award no damages. However, bearing in mind the trial evidence that I do have regarding the value of the Machine, including the full and discounted prices shown on the Contract and the plaintiff’s ad listing it at the further discounted price of $95,000, at which price it did not sell. I find that the value was 50% of the contract price of $135,000. Damages, being the difference between the contract price and the value, are therefore $67,500 plus $8,775 in respect of HST.
[66] With respect to the consequential damages claims, I accept that staff at the plaintiff spent time dealing with various problems associated with the Machine. However, no records were retained recording that time, nor do I have even a reasonable estimate of that time in the trial evidence. Similarly, I accept that there were some customer difficulties, but the plaintiff has not established that any work was lost or actual profit lost. Further, these claims have not been broken down to distinguish between problems caused by the Contract terms that were breached, and other problems some of which were caused by the plaintiff. In these circumstances and given that other damages have been awarded for the same breaches, I am not persuaded to also award nominal damages.
Judgment
[67] The plaintiff shall have judgment in the amount of $76,275.
[68] If the parties are unable to agree on costs, they shall make their costs submissions in writing as follows: the plaintiff’s brief written submissions plus a costs outline shall be delivered by June 4, 2018 and the defendant’s brief written submissions plus a costs outline, if any, shall be delivered by June 18, 2018.
Justice W. Matheson
Released: May 23, 2018
COURT FILE NO.: CV-14-517490
DATE: 20180523
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
C2C CABINETRY INC.
Plaintiff
– and –
ROBERT LAW and 2778751 CANADA INC. cob CNC AUTOMATION
Defendants
REASONS FOR JUDGMENT
MATHESON J.
Released: May 23, 2018
[^1]: Mr. Eddie Li is named in this way because there was another Mr. Li employed by the plaintiff.