Court File and Parties

COURT FILE NO.: DC-16-0006 DATE: 2019 03 06

ONTARIO SUPERIOR COURT OF JUSTICE

(SMALL CLAIMS COURT APPEAL)

B E T W E E N:

1466941 ONTARIO LTD. Appellant

Salvatore Mannella for the Appellant

- and -

CAROL TYLAK and MICHAEL TYLAK Respondent

David R. Conway, for the Respondent

HEARD: September 21, 2018, at Brampton

REASONS FOR DECISION

[On appeal from a judgment of Deputy Judge S. Richardson of the Small Claims Court at Brampton dated December 17, 2015]

L. SHAW J.

Introduction

[1] The appellant/contractor appeals from the judgment of Deputy Judge Richardson dated December 17, 2015. In her reasons, the Deputy Judge dismissed the appellant’s claim seeking payment of a final invoice it rendered to the respondents/ homeowners in connection with construction/renovation work it had performed. The Deputy Judge also dismissed the respondents’ claim with respect to damages for deficiencies with respect to the construction/renovation work. The respondents have not appealed that decision. The only appeal before me is with respect to the Deputy Judges’ decision to dismiss the appellant’s claim seeking payment of its invoice.

[2] The appellant relies on only one ground of appeal as follows:

• The learned trial judge erred in her findings of fact and conclusions of law in holding that there was insufficient evidence to support the damages claimed by the plaintiff for breach of contract.

The Pleadings

[3] The appellant claimed $14,104.17 was owed to it for labour and materials it supplied for renovation work performed at the respondents’ home located at 1070 Woodchoppers Lane, Kettleby, Ontario (the “property”). This amount was for the last invoice rendered to the respondents that was not paid.

[4] The respondents filed a Statement of Defence and Defendant’s Claim. They pleaded that the agreement, as set out in an email from the appellant to the respondent, Carol Tylak, did not comply with the provisions of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A, and was therefore not valid. They also pleaded that there were a number of deficiencies with the work and claimed that they would have to spend $14,882.89 to remedy the deficiencies. They requested that the appellant’s claim be dismissed and that judgment be granted in their favour for the costs they would incur to remedy the deficiencies.

[5] The Statement of Defence did not plead that there was any dispute with the last invoice regarding the quantum charged or the work performed as set out in that invoice and supporting documentation. The pleading was that the agreement was not valid pursuant to the Consumer Protection Act and, therefore, the respondents did not have to pay the last invoice.

[6] Having pleaded that there was no valid agreement and therefore the last invoice did not have to be paid, the respondents did not plead a set-off. Their position was that the appellant’s claim should be dismissed as not being a valid agreement and that they should be awarded an amount to remedy the deficiencies.

The Evidence

[7] The owner of the appellant company, Mr. Robert Gabriele, had been friends with the respondent, Carol Tylak, for many years. The respondent, Michael Tylak, is Ms. Tylak’s son and also an owner of the property. Although he did not participate in the trial, the Deputy Judge found that the ruling applied to him as well.

[8] There was no signed contract entered into by the parties. By way of an email from the appellant to the respondent, Ms. Tylak, dated July 8, 2012, Mr. Gabriele set out the scope of work for the renovation of the property at a total estimated cost of $126,000.

[9] Mr. Gabriele, on behalf of the appellant, testified that the work commenced at the property in November 2012 and was completed in November 2013. He testified that the appellant completed all the work it was contracted to do and the extras requested by the respondents.

[10] There was no dispute at trial that seven invoices were remitted by the appellant to the respondents and that all but the last one was paid. Each of the invoices set out a description of the work done and the rates charged. The last invoice, dated January 31, 2014, was similar to the previous six invoices. Attached to each invoice were the receipts/bills in support of the amounts listed in the invoice.

[11] Mr. Gabriele, on behalf of the appellant, testified that the work was billed as a time and material cost project. The trades and material cost would be at raw cost meaning that whatever the appellant was billed for those amounts would be billed to the respondents with no mark-up. The only mark-up was for labour the appellant provided.

[12] Mr. Gabriele’s evidence was that the respondents paid each of the invoices, except the last one, and did not raise any issues with the invoices or make any allegations that the work performed was deficient.

[13] Mr. Gabriele testified that when he rendered the last invoice, the respondents did not raise any issues or concerns with the invoice.

[14] The total amount billed for the contract, including the extras, was $200,100.54 of which the respondents paid $186,015.37. Only the last invoice that totalled $14,104.17 was not paid.

[15] The cross-examination of Mr. Gabriele was very brief. He agreed that the email dated July 7, 2012 which he sent to Ms. Tylak did not provide a breakdown of the costs for each item described but provided a total finished cost. It did not detail how extras were to be charged or how and when payments were to be made.

[16] Mr. Gabriele was not cross-examined about the final invoice itself or about any of the alleged deficiencies claimed by the respondents.

[17] During her cross-examination, Ms. Tylak testified that she received and paid for each of the invoices except the last one. Her evidence was that the appellant provided her with the invoices and the corresponding documents or receipts for the amounts that were listed in the invoices. She did not review all of the receipts/bills attached to the invoices as she trusted Mr. Gabriele saying they had been friends for years.

[18] During cross-examination, she was asked the following questions and gave the following answers regarding the last invoice dated January 31, 2014 that was in dispute:

Q. Okay. And did you remit payment? A. I did not. Q. Okay. And why did you not remit payment? A. Why? Because, honestly, when I reviewed it and I looked at the charges, more detailed…. Q. Mm-hmm A. …or with more concentration, there were many issues on this final invoice that I did not agree with that I had questioned were legitimate Q. Mm-hmm A. I, actually, to be honest with you, what I did do, there was one of the items listed here that I had – what’s the word for it – I really doubted was a valid charge. So I took it upon myself to contact – the subcontractor myself…. To – to make an inquiry whether or not my suspicions were correct that this perhaps might not be a legitimate claim…that Mr. Gabriele was submitting to me. I contacted them three to four times by email and by voicemail, leaving messages. Seeing that I had an invoice with an invoice number dated such and such with an amount, I simply wanted them to confirm with me that these charges, whether or not these charges were paid and to call me back to give me the information because there was a missing HST number on the invoice that I had paid in full. I never ever received any reply back from the company. There were – my calls were totally ignored, which led me to believe that, once again, this was not a valid charge. I also looked at some of the other charges such as for electrical heaters which Mr. Gabriele admitted in his testimony he left on the property to heat the home. He charged me a hundred and fifty dollars each for two of them for a total of three hundred. These were used heaters, which he was more than welcome to take back. They belonged to him, not to us. I never asked to purchase them from him. He had a free reign when he came to pick up his tools to take his heaters with him. The fact that he charge me three hundred for used heaters when I didn’t ask to purchase his heaters was not a valid charge. There were also charges, if you see on this particular invoice for a carpenter/operator for 29.5 hours at $50 an hour and a carpenter helper for 5 hours at $45 an hour, which seemed exorbitant to me. I sat and did estimates on how many hours were spent on – on carpenter work. Those appear to me to be duplicate charges and exorbitant charges. That’s a little of why I didn’t pay. My main issues were that I still had these deficiencies of roofing, windows and plumbing that I needed to resolve on my own and pay for. That’s also- and you’re not going to go into all of it. You asked me why I didn’t pay it. Q. Mn-hmm A. That’s – I’m trying to summarize why I didn’t pay it, ‘cause I didn’t feel that these were charges I owed Mr. Gabriele. I felt at this point, I was –I had lost trust in him.

[19] She testified that she did not communicate her concerns about the last invoice to Mr. Gabriele as he was hostile and threatening towards her as their relationship was strained and had deteriorated during the course of the project.

[20] The amounts for the carpenter work that the respondents were questioning in the last invoice totalled $1,700. This amount, together with the disputed heaters, totaled $2,000 that was billed on the last invoice. Ms. Tylak gave no evidence about what other specific charges she was challenging on the last invoice other than evidence of trying to speak with a subcontractor who did not return her phone calls.

[21] In support of its claim for the unpaid invoice, the appellant filed as evidence copies of each invoice given to the respondents for payment. The receipts/bills that were attached to the invoices were not filed as evidence. There was no dispute, however, that the respondents received those documents.

[22] During her examination-in-chief, the respondent, Ms. Tylak, gave evidence about the deficiencies in the work performed by the appellant. This included deficiencies with the roof, windows and plumbing.

[23] Copies of three quotes to replace the roof were filed as evidence. They were in the sums of $5,305, $6,380 and $6,573. Ms. Tylak testified that she decided, however, to replace the roof with a more expensive metal roof. She also filed as evidence an estimate to replace the windows at a cost of $5,995. She testified that the plumbing was repaired at a cost of $4,520.

Reasons for Judgment

[24] The Deputy Judge delivered oral reasons after the two-day trial which can be summarized as follows:

• The appellant provided services and the respondents were to pay for those services. The respondents had issues with the last bill.
• Both witnesses were quite straightforward and they were not misleading.
• The contract was entered into by two people who were clearly knowledgeable. The respondent, Ms. Tylak, knew what she was doing and she was not taken advantage of by an unscrupulous contractor.
• There was no evidence to prove the appellant’s final invoice as no back-up receipts were provided. The respondents raised issues with respect to that bill as she could not verify the amounts charged and did not want to purchase the used heaters that were on the invoice.
• There were deficiencies which included the roof, windows and plumbing. There were some discussions about deficiencies.
• There was difficulty in accepting that the amounts claimed for the deficiencies were correct and were the responsibility of the appellant.
• The deficiencies needed fixing but the appropriate amount to remedy those deficiencies could not be determined.
• There was no proper evidence as to whether a whole new roof was needed or whose responsibility it was for the damages.
• There was something due and owing to the appellant but there were deficiencies and the appellant was responsible for fixing those deficiencies.
• The proper amount to be assessed for the work that was done by the appellant could not be determined.

The Law

[25] The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a palpable and overriding error. The standard of review for an error of law is one of correctness.

Position of the Parties

[26] The appellant’s position is the Deputy Judge erred in finding that the invoice filed as evidence at trial was insufficient to prove the amount owing to it by the respondent. Her finding was that without the supporting receipts attached to that invoice, there was insufficient evidence to prove the amount owing to the appellant. The appellant submits that the finding was an error in law and was incorrect. The appellant’s position is that the decision ought to be set aside and this court should substitute its own decision and find in favour of the appellant.

[27] The respondents’ position is that the Deputy Judge did not err in law or combined fact and law and the appeal ought to be dismissed. In the alternative, if this court finds there was an error, it is the respondents’ position that, even though they did appeal the Deputy Judge’s decision dismissing their claim, in determining the amount owing to the appellant, the court must consider the respondents’ claim for deficiencies and set off that amount from what is owing to the appellant.

Analysis

[28] The powers of this court on hearing an appeal can be found in s. 134(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43. The powers include substituting the court’s own decision or ordering a new trial. The guiding principle in determining if the court should substitute its own decision is if it is in the interests of justice to do so: Dasham Carriers Inc. v. Gerlach, 2013 ONCA 707, 313 O.A.C.95, at para. 36.

[29] To substitute its own decision, this court must be satisfied that the record before it is sufficient to determine the relevant issues: Selladurai v. Aiello, 2018 ONSC 2253, at para. 35.

[30] The starting point is to determine if the error made was one of fact or of law. The alleged error is whether the appellant had provided sufficient evidence to the court, by way of a copy of the final invoice, without the attached receipts, to support its claim. Specifically, was it an error in law to conclude that the court could not rely solely on the invoice rendered to the respondents to determine the amount owing to the appellant?

[31] I am satisfied that the Deputy Judge made an error in law. The invoice was sufficient to establish the appellant’s claim. The Deputy Judge specifically found that both the appellant and respondent, Ms. Tylak, were credible witnesses and did not mislead the court. It was not in dispute that the respondents had received all of the receipts/bills that were itemized in the final invoice. Ms. Tylak identified only two specific issues with the final invoice being the carpenter’s work that she thought was duplicative, and the cost for electric heaters.

[32] The appellant’s evidence was that it performed the work and provided the material as set out in the invoice. The Deputy Judge found the appellant to be credible. There was therefore no necessity to file the supporting receipts to confirm the amount owing as outlined in the invoice. The respondents had received copies of the receipts/bills attached to the invoice. Other than the two items listed above, the respondents presented no other evidence about work performed or material provided that was not accurately set out in the invoice. Her own evidence about the main reason she did not pay the invoice was because of deficiencies with the roof, windows and plumbing. She did not testify that she disputed the amount owing for the last invoice, other than the issues with the heaters and amounts charged for the carpenters.

[33] I also note that the respondents did not raise any issue with the last invoice in their Statement of Defence and Defendant’s Claim. Furthermore, the appellant was not cross-examined about the last invoice or about the respondent’s concerns with some of the charges included in the last invoice. That was a violation of the rule set out in Browne v. Dunn (1893), 6 R 67 (H.L.).

[34] If the respondents disputed the amounts charged in the invoice, they had the onus to lead evidence of why the invoice or any part of it should not be paid. At best, Ms. Tylak’s evidence was that she did not want the heaters for which she was billed $300. She was also suspicions about an unspecified item owing to another subcontractor and thought the carpentry charges were duplicative. That evidence was nothing more than speculation and conjecture. Ms. Tylak had the receipts. If she needed to rely on those receipts to challenge the invoice, she could have presented them as evidence. She did not do so. A party cannot simply make a bald assertion that they dispute what is owing and then lead no evidence to support his/her position.

[35] Given the credibility findings made by the trial Judge, the respondent’s admission that she received the invoice and attached receipts, the invoice was sufficient evidence of the amount owing to the appellant and the onus was on the respondents to prove why the invoice should not be paid.

[36] The appeal is therefore granted and the decision of the Deputy Judge is set aside.

[37] It is in the interests of justice that I substitute my own decision and I am satisfied that I have sufficient evidence on the record before me to do so. I am satisfied that the respondents had an issue with the cost of the heaters of $300. There was no other evidence led to call into question the balance owing on the invoice. The total amount owing to the appellant is therefore $13,804.17.

[38] The respondents’ position is that this court ought to consider the amount the respondents incurred to remedy the deficiencies with the roof, windows and plumbing and set-off that those costs against any amount found owing to the appellant.

[39] In her reasons, the Deputy Judge made a finding that there were problems with the roof, windows and plumbing but there was insufficient evidence led to prove the cost to repair those deficiencies. The reasons were somewhat contradictory as the Deputy Judge found that it was the appellant’s responsibility to fix those deficiencies but then also stated that it was difficult to accept that the deficiencies were the responsibility of the appellant. It is not clear from the reasons what finding the court made on whether the respondents had proven that the deficiencies were the result of the appellant’s work.

[40] The respondents’ position is that the Deputy Judge erred in finding there was insufficient evidence to assess the respondents’ damages. The difficulty with that position is that the respondents did not appeal that finding and that issue is not before this court. There is therefore no basis for this court to consider any findings made by the Deputy Judge regarding the cost to repair the deficiencies.

Conclusion

[41] The decision of Deputy Judge Richardson is therefore set aside and in its place, there shall be judgment granted in favour of the appellant for $13,804.17.

[42] If the parties cannot agree on costs, they may file a one page submission on costs together with their Bill of Costs by April 1, 2019.

L. Shaw. J.

Released: March 6, 2019