Court File and Parties
Court File No.: 27/17 Date: 2018 10 09 Superior Court of Justice - Ontario
Re: Devlan Construction Ltd., Plaintiff And: Westminister Square Ltd, 2345171 Ontario Inc. carrying on business as Guelph Medical Imaging and Coldpoint Capital Crop., Defendants
Before: Justice G.D. Lemon
Counsel: Robert J. Kennaley, Counsel for the Plaintiff, Devlan Construction Ltd. Mauro Marchioni, Counsel for the Defendant, 2345171 Ontario Inc.
Heard: September 24, 2018
Endorsement
The Issue
[1] The Plaintiff, Devlan Construction Ltd., moves for summary judgment against the Defendant, 2345171 Ontario Inc. carrying on business as Guelph Medical Imaging. Devlan submits that Imaging owes it $105,700.17.
Background
[2] Imaging is a tenant at 33 Farley Drive, Guelph. Imaging’s president is Probash Mondal.
[3] Westminister Square Ltd. is the owner of the Farley Drive property and Imaging’s landlord. The action against Westminister and Coldpoint Capital Corp. has been discontinued. They play no role in this motion.
[4] On November 7, 2015, Devlan provided Mr. Mondal with a quote to build Imaging’s premises for a price of $342,231.00 plus HST. That quote was not accepted. On January 26, 2016, Devlan sent a revised quote to Mr. Mondal of $241,551.00 plus HST. This quote was accepted.
[5] Devlan alleges that Imaging approved two changes to the accepted quote. First, an installation of credenza and millwork, for the sum of $3,887.00 exclusive of HST, and second, the demolition and reconstruction of an existing room to create an x-ray room complete with radiation protection and structural support, for the sum of $81,218.00 exclusive of HST.
[6] It is common ground that Imaging has already paid Devlan the sum of $262,586.00.
[7] During argument, Imaging acknowledged that, on the evidence to date, it still owes Devlan the sum of $74,169.47. The total in dispute is $21,902.01. That is made up of the amounts of $13,650.00 relating to an electrical bill, $4,138.01 with respect to whether Devlan should be able to charge 5% or 10% profit and $4,114.00 with respect to invoices that Imaging submits are improperly added to the account.
Positions of the Parties
[8] Simply put, Devlan submits that the evidence confirms that the two changes were approved and, subject to an issue with respect to the electrical bill, Mr. Mondal approved the payment of the bill as presented.
[9] In response, Imaging denies that anyone with authority agreed to any changes or extra work; Mr. Mondal was the only one with such authority and he denies giving that authority. Imaging submits that Devlan has no written approval for any extra work. It submits that the accounting now provided by Imaging is unsatisfactory and needs to be proved at a trial. Imaging also submits that there were deficiencies in the work to be completed.
[10] More generally, Imaging submits that the evidence currently before me is insufficient to provide me with the confidence required to fairly resolve this dispute. The affidavit and transcript evidence do not provide a sufficient basis to resolve these material differences. There are serious accounting issues and credibility issues that require a trial to fairly resolve the dispute.
[11] Imaging submits that the serious issues that require a trial to be resolved include:
a) the accounting,
b) the nature of the agreement, if any, in respect of the x-ray room,
c) the profit and overhead to be charged, if any, and
d) whether the parties agreed on the amount of profit or overhead.
[12] It is Imaging’s position that oral evidence is required to determine the material facts and assess credibility, given the contradictions in the evidence before this court.
[13] Imaging submits that pursuant to my powers under r. 20.04(2.2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), I should hold a mini-trial given that the parties have “diametrically opposed versions of events.”
Authorities
[14] The relevant provisions of r. 20 of the Rules are that a plaintiff may move with supporting affidavit material or other evidence for summary judgment on the statement of claim after the defendant has delivered a statement of defence (Rules, r. 20.01(1)).
[15] In response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial (Rules, r. 20.02(2)). Many cases have made clear that the responding party must “lead trump” or risk losing the motion: see e.g. Boland v. Lyle (2016), 2016 ONSC 7418, 262 A.C.W.S. (3d) 618, at para. 13:
The expectation that parties “put their best food forward” or “lead trump or risk losing” in motions for summary judgment applies with even more fervor after Hryniak. There are numerous cases confirming that judges will generally assume that parties have played their best cards in bringing or responding to motions for summary judgment. Based on this expectation, judges will infer that no better evidence will be available at trial. In Danos v BMS Group, 2014 ONSC 2060, Goldstein J. stated as follows:
“A party on a summary judgment motion cannot just sit back and wait for more favorable evidence to develop at trial. I am entitled to assume that the evidence filed by the Danos’s is as good as it gets. I can and do draw an adverse inference from Peter Danos’s failure to put forward any evidence whatsoever in relation to the critical issues in this case. Assuming there is no better evidence available, as I am entitled to do, it would be unjust to force the Defendant to carry on with this litigation to trial.”
[16] The court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence (Rules, r. 20.04(2)(a)).
[17] In determining whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and a judge may weigh the evidence, evaluate the credibility of a deponent and draw reasonable inferences from the evidence, unless it is in the interest of justice for such powers to be exercised only at a trial (Rules, r. 20.04(2.1)).
[18] A judge may, for the purposes of exercising any of those powers, order that oral evidence be presented by one or more parties, with or without time limits on its presentation (Rules, r. 20.04(2.2)).
[19] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada set out the proper approach on a motion for summary judgement under r. 20 of the Rules. I should first determine if there is a genuine issue requiring a trial based only on the evidence before me without using the powers set out in the Rules (Hryniak, at para. 66). There will be no genuine issue requiring a trial if the summary judgment process provides me with the evidence required to fairly and justly adjudicate the dispute in a timely, affordable, and proportionate procedure.
[20] If there appears to be a genuine issue requiring a trial, I should then determine if the need for a trial can be avoided by using the powers under r. 20 of the Rules. I may, in my discretion, use those powers, provided that their use is not against the interests of justice. Their use will not be against the interests of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality, in light of the litigation as a whole: Hryniak, at para. 66.
[21] There will be no genuine issue requiring a trial if I am able to reach a fair and just determination of the merits on the motion. This will be the case when the summary judgment process allows me (i) to make the necessary findings of fact, (ii) to apply the law to the facts and (iii) is a proportionate, more expeditious, and less expensive means to achieve a just result: Hryniak, at para. 49.
Analysis
[22] I can start with the accepted quote. It sets out that the contract was to be completed for $272,952.63 inclusive of HST.
Authorization
[23] Mr. Mondal denies he authorized any extras to this contract.
[24] In its Statement of Claim, Devlan claims for a balance owing of $95,981.46 plus HST. The materials filed show HST to be 13% for a total claim of $106,539.80. This includes the two extra work orders for the credenza and millwork, and the demolition and construction of the existing chamber to create an x-ray room.
[25] Imaging filed a Statement of Defence to that claim. Briefly put, this Statement of Defence raises three issues. First, that the amount owing is the obligation of the Defendant, Westminister. Second, it seeks a detailed accounting from Devlan. Third, it pleads that Devlan’s lien was registered outside the period established by the Construction Lien Act, R.S.O. 1990, c. C.30. The Statement of Defence also cross-claimed against Westminister, although, by that time, Devlan’s claim had already been withdrawn against Westminister.
[26] The Statement of Defence does not dispute the two extra items of additional work. It is silent on that issue. From the pleadings, it appears that this is not an issue requiring a trial.
[27] As set out above, the total of the extra work orders amounts to $106,539.65 inclusive of HST, in addition to the quote of $272,952.63 inclusive of HST. Imaging has already paid $262,586.00 to Devlan, and yet acknowledges that $74,169.47 is still owing. On the evidence before me on this motion, as a matter of arithmetic, the extras must be admitted as authorized.
[28] Besides the pleadings, Devlan relies on two pieces of evidence to support that the extras were authorized.
[29] First, it attaches an email from Katy Cournoyer dated June 30, 2016. In that email, Ms. Cournoyer is identified as “Supervisor Guelph Medical Imaging.” In it, she says “Of course, we will cover all costs due to the x-ray room changes.” This email was apparently copied to Mr. Mondal. There is a supportive affidavit from the representative of Westminister.
[30] In response, Mr. Mondal says:
At no time did anyone, who was authorized to do so by Imaging, approve any changes or extra charges, apart from those set out in the quote in January of 2016. I never executed any acknowledgments of change orders on behalf of Imaging, and I am the only one with such authority.
[31] Mr. Mondal makes no reference to Ms. Cournoyer or this email. He offers no explanation for the email from Ms. Cournoyer. He files no affidavit from Ms. Cournoyer. Mr. Mondal makes no comment with respect to the affidavit of Westminister. Apparently, this is his entire evidence to show a lack of authority.
[32] I can draw an adverse inference from this silence with respect to Ms. Cournoyer. I can find that her evidence would not assist Imaging. On that evidence alone, it would be open to me to find authorization. But Devlan provides an additional argument that lends credence to its claim.
[33] Second, Devlan relies upon a number of emails from Mr. Mondal. They include such comments as “Revise the invoice accounting for electrical and the cheque will be waiting” (November 15, 2016); “Again, I will reiterate adjust the invoice by $13,560 and you will be paid instantly” (December 15, 2016); “Reduce the bill by the full amount to the Electrician and get paid” (December 16, 2016). These only relate to the electrical invoice of $13,650.00. There is no suggestion that the credenza and millwork and the balance of the x-ray room were in dispute.
[34] On this evidence, there is no genuine issue for trial with respect to Imaging’s authorization of the extras. I find that authorization was clearly given by Imaging. I can render a fair and just determination on the merits of the case based on the evidence presented on this motion.
[35] If I were required to assess the evidence of Mr. Mondal, his failure to admit the obvious on this issue is damaging to his credibility.
[36] To summarize the accounting to this point. The contract totalled $272,952.63 inclusive of HST. The extras totalled $96,168.65 inclusive of HST. Those two items total $369,121.28. From that, it is agreed that Imaging has paid $262,586.00. The balance owing is $106,535.28.
Deficiencies
[37] In Imaging’s Statement of Defence, there is no plea with respect to any deficiencies in the work done. There is no counter-claim for deficiencies or damages for failure to complete the contract. There has been no request to amend the Statement of Defence.
[38] In Imaging’s response to this motion however, Mr. Mondal states that there were deficiencies in the work performed by Devlan and for which a deficiency list was provided to Devlan.
[39] Mr. Mondal says:
There were also numerous deficiencies in the work performed by the Plaintiff. Attached hereto and marked as Exhibit ‘F’ to this my affidavit is a copy of the deficiency list provided to the Plaintiff. As a result of the deficiencies, the x-ray lab was delayed in opening and damages were occasioned. Attached hereto and marked as Exhibit ‘G’ to this my affidavit is an email sent to the Plaintiff in November of 2016 advising of such damages.
[40] Exhibit ‘F’ is an email dated November 9, 2016, from Devlan’s representative, Mr. David Anderson, describing the deficiencies as minor. There are no values attached to this list.
[41] Exhibit ‘G’ is an email from Mr. Mondal to Mr. Anderson dated November 11, 2016. He sets out his concerns however again, there are no values to his various items. He ends by saying “you were shown the deficiencies and once completed, minus electrician’s bills and Brent’s one day stoppage, I would cut a cheque.” There is nothing else in the evidence with respect to these deficiencies.
[42] Further, these emails of November 2016 pre-date the emails set out above that show that Mr. Mondal’s concerns were only about the electrical bill. Apparently, any concerns about deficiencies had been resolved and were no longer an outstanding concern to Imaging. If so they would have been mentioned in those emails about the electrical bill.
[43] In this motion, there is no evidence of the deficiencies at the end of the contract or their value. Imaging has failed to provide the necessary evidence to “lead trump” with respect to this issue. The issue, not pleaded, would be irrelevant at trial. This issue with respect to deficiencies can be dismissed summarily.
[44] To this point, the balance owing remains $106,535.28.
Electrical Bill
[45] As set out above, Mr. Mondal refers to an electrical bill that he disputes in this action. Mr. Anderson, in his affidavit in support of this motion, sets out (I have italicized those items that are likely hearsay):
- Based on the above, I believe the only portion of Devlan’s claim which has been disputed by GMI is the Impulse Invoice in the amount of $13,650.00, inclusive of HST.
- I believe, based on a review of the Impulse Invoice itself, that Impulse Electric (“Impulse”) has invoiced [Imaging] for electrical work it performed in the x-ray room at the Premises on or about October 27, 2017 which, more particularly, involved running wire and conduit to provide electricity to the x-ray unit.
- I do not believe that Devlan should have to credit GMI for the amount of the Impulse Invoice, for the following reasons.
- First, running wire and conduit to provide electricity to the x-ray unit was part of Devlan’s scope of work, and Devlan was always willing and able to perform that work. In fact, I believe based on conversations with Devlan’s Ken Beauvais and a representative from Juno Electric (Devlan’s electrical subcontractor) that Devlan and Juno were on site on October 27, 2017, ready to perform that work. However, I am further told in that regard that Mr. Mondal locked Mr. Beauvais and Juno out of the Premises and refused to let them perform the work in question. I note, in this regard, that Devlan had arranged for Juno to be on site even though Devlan was only informed that the x-ray unit had been scheduled to be installed on October 27, 2017 on the afternoon of October 26, 2017.
- In addition, I believe that the amount of the Impulse Invoice is excessive, relative to the value of the work that was part of Devlan’s scope of work.
- Based on the telephone conversations I had with a representative of Impulse Electric, I understand that the Impulse Invoice included for: a) running eight feet of conduit and wire to connect the x-ray machine (which was part of Devlan’s scope of work); b) extra charges for Impulse’s having attended to do the work on a rush basis and giving up another scheduled contract as a result; and c) the installation of an extra outlet in the x-ray room which was not part of Devlan’s contract. (I believe Mr. Mondal has acknowledged that this was an extra, in an e-mail which is attached as Exhibit “U” ).
- I accordingly believe that only item a), above, was part of Devlan’s scope of work. I further believe, based on my experience in the construction industry, that that work would cost no more than $400.00 in labour and materials. In spite of this, Devlan has credited GMI with nearly four times this amount, or $1,500.00, for the performance of the work by Impulse. Devlan has not charged for the attendance of Devlan and Juno on October 27, 2016, when Devlan was locked out.
[46] In response to this affidavit, Mr. Mondal is silent. He apparently has no evidence to bring to trial over this issue.
[47] Even deleting the hearsay evidence, Devlan has provided the only evidence on this issue. There is no reason to reject it. There is no need for a trial on this issue.
[48] To this point, the balance owing remains $106,535.28.
Miscellaneous Invoices
[49] Imaging submits that Devlan has not provided any evidence that payments with respect to either the materials or labour have been made by Devlan to its suppliers. Although backup invoices have been provided pursuant to Devlan’s undertakings, Imaging says that Devlan has not provided the cheques to show that the invoices have been paid. Without more, I am satisfied that, on a balance of probabilities, Devlan has obligated itself to pay these amounts if they have not already been paid. This is not an issue that requires a trial.
[50] Imaging disputes certain in-house billing practices as to how labour charges were calculated for Devlan. Given the admissions as to what is already owed, this is not an issue that requires a trial. It is a fishing expedition thrown up in argument by Imaging.
[51] Next, Imaging points out that Devlan has pleaded that the first day of supply to the premises was June 7, 2016, and the last day was November 14, 2016. However, in the answers to the undertakings, a number of invoices were dated prior to June 7, 2016 and there were labour charges dated after November 14, 2016. Accordingly, Imaging says that those should be reduced from the claim.
[52] I agree that a total of $520.65 material invoices were charged to the project prior to the commencement of work. There is no evidence from Devlan to explain that. I would not grant that amount in judgment. On the other hand, on this evidence, it does not require a trial. I can assess the balance of the claim while deducting these unproven elements.
[53] With respect to the labour charges, some were charged to the end of November 2016. On a balance of probabilities, that is for work done before November 14. There is, however, a labour cost of $414.89 charged in December. Without evidence, I cannot find that amount for Devlan.
[54] Subtracting those two items, the balance owing is $105,599.74.
Profit
[55] Imaging submits that the amount being sought by Devlan for overhead and profit is different from that maintained in the cross-examination of the deponent for Devlan. In its answers to undertakings, Devlan delivered an accounting for materials and profit which showed a 10% overhead and profit figure on invoices rendered by trades and their own labour costs. Imaging submits that there was no such agreement even in the original written quote.
[56] The transcript of the cross-examination reveals:
Mr. Kennaley: Right. What’s – what’s your markup? You . . . The Deponent: I would – I would imagine somewhere around five percent.
[57] Mr. Anderson is then asked for an undertaking on that amount and it shows 10%. I do not see that as an inconsistency but as an answer that required research to provide an accurate answer rather than what the witness “imagined.”
[58] Mr. Mondal has given no evidence on this issue and, as set out above, he had agreed to pay subject to the electrical bill. There is no need for a trial on this issue.
Lien Claim
[59] The validity of the lien claim was pleaded in the Statement of Defence but not argued during the motion. The evidence on the motion shows that Imaging accepts that the last work was done November 14, 2016. The lien is shown to be registered November 24, 2016. The action was commenced January 25, 2017. On that basis, the lien is valid.
Payment into Court
[60] Imaging paid funds into court to lift the lien. If necessary, I order that those funds are to be paid out to Devlan.
Result
[61] Devlan provided a number of totals for its claim. That depended on whether HST was included or not and often depended on who was doing the arithmetic after payments were credited to Imaging. I find that judgment should go for $105,599.74 plus the usual pre-judgment interest as claimed.
[62] At argument, Devlan sought judgment for $105,700.17. Its Notice of Motion claimed only $95,981.46; however, I am satisfied that this request was the only time that figure was not followed by “exclusive of applicable taxes.” Imaging does not submit that it was surprised or prejudiced by the claim as argued.
[63] If my arithmetic is incorrect, counsel may provide brief written submissions.
Costs
[64] Devlan shall provide its costs submissions within the next 15 days. Imaging shall provide its responding submissions within 15 days thereafter. No reply submissions shall be served unless I request them.
[65] Each submission shall be no more than three pages, not including any Offers to Settle or Bills of Costs.
[66] Written submissions shall be forwarded to me at my office at the Superior Court Office, 74 Woolwich Street, Guelph, Ontario, N1H 3T9.