Court File and Parties

COURT FILE NO.: CV-15-519767 DATE: March 29, 2019

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF the [Construction Act, R.S.O. 1990, c.C.30](https://www.ontario.ca/laws/statute/90c30)

BETWEEN:

ALMOS DEZSI c.o.b. DEZSI CONSTRUCTION Plaintiff Almos Dezsi, self-represented, Tel.: 905-244-7076, Fax: 905-231-9602.

• and -

ANGELA WALKER, PETER WALKER and BANK OF MONTREAL Defendants Angela Walker for herself and Peter Walker, self-represented, Tel.: 416-277-6384, Fax: 416-277-6384.

HEARD: February 6, 7, 8, 9, 13, 14, 15, March 1, June 13, 14, 15, August 3, 15 and December 5, 2018.

Master C. Wiebe

REASONS FOR JUDGMENT

I. INTRODUCTION

[1] On December 15, 2014 Almos Dezsi registered a claim for lien in the amount of $25,295.05 on the title to a residential home with the registered owner, Angela Walker. The claim was on account of framing work Mr. Dezsi performed in 2014. Peter Walker is Ms. Walker’s husband. The municipal address of the property is 7 Northolt Court, Toronto. Mr. Dezsi purported to perfect his lien by commencing an action on January 15, 2015. The claim for lien was vacated by order of Master Albert dated April 16, 2015 upon the Walkers posting security. On April 30, 2015 the Walkers defended this action and counterclaimed for damages of $312,000 for alleged rectification of deficiencies and $50,000 for alleged delays, plus other damages. On July 10, 2017, I gave leave to the Walkers to amend their pleading to increase their rectification damage claim to $500,000 “based on Dec 2016 quote.”

[2] Initially, both sides were represented by lawyers. Mr. Dezsi ceased being represented by a lawyer in 2015. The Walkers were represented by a lawyer throughout this reference until the trial hearing in February, 2018 when Ms. Walker took the lead in carrying the case for the Walkers. Mr. Walker was present throughout the trial. The action as against the Bank of Montreal was dismissed pursuant to my first directions dated October 3, 2016. I conducted three trial management conferences. At the third trial management conference on July 10, 2017 I scheduled a nine day trial hearing with eleven witnesses to take place on February 6, 7, 8, 9, 13, 14, 15 and March 1 and 2, 2018.

[3] In the end, due to several interruptions, some of which concerned the medical condition of Ms. Walker, the trial hearing was spread over 14 days in February, March, June, August and December, 2018.

II. BACKGROUND

[4] I begin with a summary of the facts of this case that are undisputed.

[5] The Walkers had an existing house on the premises. In 2014 they had a plan to gut this old house leaving aspects of the block exterior. The plan involved building essentially a new structure behind the block exterior, including an addition. The old house was about 2,000 square feet in size, while the new house was about 4,000 square feet in size. Ms. Walker herself designed the new house, but had an architect, Cunha Design Consultants (“Cunha”), prepare permit and construction drawings. She also managed the construction. Ms. Walker has a background in banking. Mr. Walker is a well-known roofing contractor. The Walkers moved out of the house into rented premises to facilitate the project.

[6] Ms. Walker’s mason referred her to Mr. Dezsi. On or about May 16, 2014 Ms. Walker signed a written contract with “Dezsi Construction Ltd.” (“the Contract”) whereby Dezsi Construction Ltd. (“Dezsi”) promised to do framing work for the project for a fixed price of $54,500 plus HST. Ms. Walker signed as the “contractor/homeowner.” Mr. Dezsi signed for Dezsi. Mr. Dezsi, not Dezsi Construction Ltd., is the party that purported to preserve and perfect the subject claim for lien. The Walkers did not make an issue of this. I will assume, therefore, that the parties accept that the Contract was between the Walkers and Mr. Dezsi.

[7] The Contract specified that pricing was based on the provided plans, namely the Cunha plans, that the Walkers would supply the materials other than nails and screws, and that Dezsi had liability insurance. Dezsi also promised that its services would be provided “in a workmanlike manner” and in accordance with governing laws. There was a list of milestones for the payment of the price, but no expressed schedule for the work. The parties gave evidence that they expected that the Contract work would be done in 8 to 10 weeks.

[8] Mr. Dezsi began working on June 13, 2014 with the construction of the main floor. There was a crew of three. That work was done by June 24, 2014, and the Walkers paid the first floor installment ($12,317) on June 21, 2014.

[9] The crew increased to four. On June 28, 2014, Ms. Walker noticed squeaking in the floors for the first time. Work proceeded to the second floor. A member of the crew left, someone named Nick. The Walkers paid the second floor installment ($12,317) on July 11, 2014.

[10] The truss manufacturer, Shell Lumber, measured for the trusses on July 6, 2014. Ms. Walker changed the plans by requiring an attic for a second furnace. The trusses had to be redesigned to include the attic. The Walkers travelled to Greece for two weeks in July, 2014. Bank inspectors attended the site. The trusses arrived on July 23, 2014, and were placed on the driveway where they stayed until July 29, 2014 when the crane arrived. Truss installation then commenced. Trusses did not line up properly and had to be cut. There were other issues. The roof was done by mid-August, 2014. Mr. Walker put up the roof shingling between August 20 and 23, 2014. The roof at this point had four skylights. The Walkers paid the roof installment ($12,317) on August 29, 2014.

[11] During the truss delay, Mr. Dezsi and his crew did basement framing in July, 2014. There were changes in the design in the basement, namely the bathroom and laundry room locations were changed. This involved breaking the concrete to install piping.

[12] Mr. Dezsi and his crew left the project at the end of September, 2014. There was a building inspection of the framing on October 9, 2014. Mr. Dezsi was there. The framing was found to be in conformance with the plans, although Mr. Dezsi was advised to provide additional blocking for the floors. The Walkers paid the framing inspection installment ($12,317) on October 10, 2014. This was the Walkers’ last payment.

[13] Mr. Dezsi returned with a crew of five in mid-October, 2014 to finish the framing. He said the hiatus was because the electrical and plumbing work had not been done. Mr. Dezsi asserted that there continued to be many changes, such as dimension changes. On October 31, 2014 Mr. Dezsi rendered a bill for 8 extras totaling $4,842.65, and a bill for the remaining contract amount of $12,371, namely the basement framing and rough-in installments.

[14] Towards the end of October and the beginning of November, 2014 Ms. Walker raised concerns about squeaks in the floors and Mr. Dezsi’s alleged delays in fixing same. She stated that this was an old and continuous issue that needed immediate attention as the ceilings were about to be finished. She demanded that the floors be screwed down. On November 3, 2014 she texted Mr. Dezsi threatening to hire someone to fix the squeaking floor and deduct the cost from the Dezsi bill. Mr. Dezsi responded the same day with a text stating that he was stopping work until he was paid in full.

[15] On November 3, 2014 Mr. Dezsi prepared another invoice for 19 extras totaling $8,136. It is an open issue in this case as to whether this invoice was rendered at that time.

[16] At Mr. Walker’s invitation, Mr. Dezsi met Mr. Walker in the evening of November 5, 2014 to see whether they could resolve the dispute. Mr. Dezsi stated that Mr. Walker promised to pay him $10,000 to facilitate the final work, with the balance to be paid once the work was done. Mr. Dezsi worked at shimming one area of the main floor entry door archway that had squeaks and screwing down other areas of the subfloor. He said that Mr. Walker then offered to pay only $4,000. Mr. Walker, on the other hand, said he offered the $10,000 if Mr. Dezsi fixed the squeaking, which did not happen. He said that he offered to pay $5,000 “as a gesture of good will,” that Mr. Dezsi became belligerent, and that the Walkers decided that Mr. Dezsi could not continue. On November 6, 2014, Ms. Walker texted Mr. Dezsi barring him from coming on the premises.

[17] The Walkers hired Planet Green Construction to do framing work in November and December, 2014. They hired Cleary Contracting Inc. to complete framing work, such as bulkheads, and drywall repairs. Cleary was also instructed to correct the squeaking floor. The principal, Matthew Cleary, attended at the site with another worker at the end of November, 2014. Ms. Walker had marked out four areas in the main floor where she had detected squeaking. In December, 2014 Cleary cut open the subfloor in those four marked areas of the main floor (ie. 20 feet on the east side of the partition wall of the living room, a corner of the dining room by the front door, the passageway between the family room and the kitchen, and a portion of the area in the kitchen eventually occupied by the island). Mr. Cleary himself detected squeaking on the second floor. He opened up areas of the floor there. He remembered one area being a part of the landing, but could not remember where the others were or how many there were. He took pictures.

[18] In December, 2014 and January, 2015, Mr. Cleary applied glue to the hangers that held the joists to the steel beams, packed wood pieces between the hangers and the beams, and further nailed down the hangers. It then covered up the cut areas with subfloor. It is undisputed that the squeaking permanently ceased in the areas Mr. Cleary repaired.

[19] On January 14, 2015, Ms. Walker texted Mr. Dezsi advising that the Cleary work was nearing completion. She said she would be putting Mr. Dezsi’s insurer on notice of the joist issue. She said that she could not continue the repair work due to “timelines” issues. The Walkers moved back into the house on March 5, 2015.

[20] On December 12, 2014 Mr. Dezsi purported to preserve a claim for lien in the amount of $25,295.05. This represented the one unpaid contract invoice and the two invoices for extras. On January 15, 2015 he purported to perfect the claim for lien by commencing an action. The Walkers delivered a Statement of Defence and Counterclaim on April 30, 2015. They amended their pleading by order dated July 10, 2017 increasing their counterclaim as stated above.

[21] On June 7, 2016 the Walkers obtained an unopposed judgment of reference from Justice Pollak referring this action to the lien master. The order for trial was issued on July 15, 2016. The reference came before me by way of first trial management conference on October 3, 2016. I held another trial management conference on November 4, 2016. At the third trial management conference on July 10, 2017 I scheduled the trial hearing.

[22] At the commencement of the trial hearing on February 6, 2018 Ms. Walker raised an issue concerning outstanding unanswered Dezsi undertakings, and a two day late Dezsi response to the Walker Request to Admit. I resolved the outstanding undertakings on February 7, 2018. I did not hold Mr. Dezsi to the alleged deemed admissions in the Walker Request to Admit. On February 6, 2018 Mr. Dezsi wanted a site visit, but withdrew that request. He advised the court that he was not calling the expert witness on his witness list, one “Stavros,” as there had been no expert report from this person.

[23] I should note as well that in the course of the trial hearing on March 1, 2018, at the request of Ms. Walker, I ordered that Ms. Walker and Mr. Dezsi submit affidavit evidence concerned remaining issues in order to make best use of the remaining trial time. I did this to be fair to the parties as they are self-represented.

III. ISSUES

[24] Based on the evidence and submissions, I believe that the following issues are the ones to be determined: a) Did Mr. Dezsi fundamentally breach the Contract? b) If so, what are the Walkers damages?

IV. WITNESSES

[25] Before I analysis the issues, I will comment on the credibility of the witnesses.

[26] Concerning Mr. Dezsi, I found that he was often more of an advocate than a witness. This, plus the obvious fact that he is a party to the action, detracted from his credibility. He also did not refer often to documentary corroboration, which further detracted from his credibility. As to the documents he did rely upon, there were critical ones that required explanation from their authors, such as the City of Toronto inspector reports; but Mr. Dezsi did not take the trouble to call the authors, thereby leaving the probative value of the document and his credibility in further doubt. Having said that, though, I found that Mr. Dezsi was straight forward in giving his evidence in chief. In cross-examination, he was frank in admitting openly not having had the license he said he had, having built the stairway opening too big, having nailed the subfloor before screwing it down, and having not installed the joist hangers straight up and down. These were admissions against his interest, and enhanced Mr. Dezsi’s credibility.

[27] Mr. Dezsi ended up not calling three people on his witness list, including the expert “Stavros.” He did call Michael Carlini, who was one of the framers on Mr. Dezsi’s crew. Mr. Carlini said he had known and worked with Mr. Dezsi for some 10 years, and admitted that this relationship continued. This coloured his evidence. Mr. Carlini gave evidence somewhat defensively about the changes to the Dezsi scope of work, the truss delay, and quality issues. He denied facts shown in the Cleary photographs, namely that the joist hangers were too wide, and that the glue for the subfloor was inconsistently applied. He denied that it mattered where the truss installation started. He asserted that the Cleary pictures of the subfloor plywood showed only usual cracks. His evidence, however, changed in cross-examination. He admitted to his credit, and against Mr. Dezsi’s interest, that cracked plywood as shown in the photographs should not be used, that butt-ended joinder of plywood sheets as shown in the photographs could retain water, and that working with Mr. Dezsi could be messy and stressful. Most strikingly, Mr. Carlini also admitted in the end that Mr. Dezsi owed him money and that he, Mr. Carlini, had a stake in the outcome of this case. These frank admissions, while honest, seriously detracted from Mr. Carlini’s overall credibility.

[28] Mr. Dezsi’s final witness was Shkelzen Gjergji, whom everyone simply referred to as “George.” George was the mason. He was the one who referred Mr. Dezsi to Ms. Walker. When he was finished, I was left wondering why he had been called as a witness at all as his work, the masonry and the provision of the steel beams, predated Mr. Dezsi’s work. George added nothing to the critical issues in the case, and I gave his evidence minimal worth.

[29] Ms. Walker was the primary witness for the Walkers. Like Mr. Dezsi, Ms. Walker is a party and was much more an advocate than a witness. But in her case, this problem was quite extensive. For instance, in her examination-in-chief, Ms. Walker regularly wondered into argument. She introduced the Phoenix floor plan, the manufacturer’s plan for the Walker custom made floors, and, despite admitting that she had limited construction experience, could not resist showing me how I should interpret the plans. She went further and obtained and, without objection from Mr. Dezsi, filed a letter she had obtained from Phoenix explaining how the floors were to be constructed, all without going to the trouble of calling anyone from Phoenix to explain these documents. Despite my reminders about her argumentative evidence and the hearsay problems with the Phoenix documents, Ms. Walker persisted. This all significantly detracted from Ms. Walker’s credibility. Indeed, I found it difficult to decipher where her evidence, as opposed to argument, was. To her credit, Ms. Walker made generous reference to corroborating documents and I relied upon these heavily in the end.

[30] Ms. Walker’s argumentative nature affected not only her evidence, but also he Walkers’ entire case. Ms. Walker consistently had difficulty bringing out evidence without undue influence. For instance, she directed Mr. Cleary where to do his repair work. She presented Mr. Tichy with the evidence he relied on to give his opinion on the further floor squeaking. She had Mr. Tichy give oral evidence on joist blocking when that was not a part of his report.

[31] Mr. Walker, while also a party with a stake in the outcome, was on balance a more credible witness than his wife. A roofing contractor, Mr. Walker made admissions against his interest, which enhanced his credibility. He admitted to the limits of his construction expertise. He admitted that cost was a relevant factor in determining the appropriate standard of workmanship beyond what was required by the Ontario Building Code. He admitted that Mr. Cleary’s method of packing hangers was not necessarily what the contract required. He admitted not having reviewed the framing quotes. He admitted that the three week delay to truss installation was due to a design change. He admitted that the trusses required leveling. But, on the other hand, he also relied on hearsay evidence on key points like the building inspector’s comments at the October 9, 2014 site inspection of the floors.

[32] Ms. Walker called four other witnesses. The most credible ones were the two from Cleary Contracting Inc. Matthew Cleary, the principal, gave careful and measured evidence as to what he did to repair the floor squeaks. He had no stake in the outcome. He was the only one who actually opened up the subfloor to examine the problem. He took photographs of what he saw and what he did, which significantly enhanced his credibility. He admitted against the interests of the Walkers that only a small part of the plywood subfloor was water damaged. He admitted that his standard of workmanship was higher than the industry base standard. He admitted that even new homes have squeaks, although he added that what he encountered at the Walkers’ residence was quite unusual. I gave Mr. Cleary’s evidence considerable weight.

[33] Dylan Lauzon was Mr. Cleary’s co-worker. His evidence largely reiterated what Mr. Cleary stated. Mr. Lauzon added detail about his plywood gluing technique and his repair work. Like Mr. Cleary, Mr. Lauzon was careful and measured in his evidence. He tied his evidence into Mr. Cleary’s pictures. He too admitted that all squeaks could not be eliminated. Mr. Lauzon admitted frankly that he had not done many top-mounted hangers, and that he had not investigated whether there was adequate blocking between I-joists. I also gave Mr. Lauzon’s evidence weight.

[34] Ms. Walker called two expert witnesses. First, there was Jiri Tichy, a structural professional engineer. He was qualified to give opinion evidence about the floor construction. I found that Mr. Tichy’s opinion had limited credibility. He testified that he visited the house twice after the Walkers moved back, once on October 20, 2016 and then again on May 24, 2017. He was asked to comment about the basis of the “further squeaking and clicking” he noticed throughout the house. He did so, not by opening up any of the floor areas where the “further squeaking” was taking place to take a direct look, but by looking at the Cleary photographs (namely photographs of areas examined and repaired almost two years earlier) and at unspecified “videos provided” and by relying on the statements the Walkers gave him about what had happened.

[35] Despite the obvious limitations of these sources, Mr. Tichy had no trouble brazenly concluding in his report that, on account of the improperly installed joist hangers and the water damaged and improperly installed plywood, the whole “floor structure is improperly assembled, and needs to be corrected to resolve the ongoing issues with squeaking and creaking of the floors.” In his report, he stated that it was only the “degree of impact” he could not assess without opening up the floors. In the witness stand, Mr. Tichy reiterated the “findings” in his report. But then, surprisingly, and without objection from Mr. Dezsi, had no trouble suddenly commenting about Mr. Dezsi’ inadequate blocking between floor joists, a topic that had not been raised in his report and had not been a part of his investigation. Mr. Tichy struck me as an expert witness capable of rushing to conclusions on the thinnest of evidentiary foundations.

[36] Finally, Ms. Waker called John Oborne of Oborne Contracting Inc., a construction contractor, as an expert in building renovation costs. He was qualified as such. His opinion concerned the cost of correcting the floor now that the house was done. Mr. Oborne was a careful and credible expert witness. He was careful in qualifying his “budgetary estimate” on cost as not being a “firm price.” A “firm price” according to Mr. Oborne, required that the floors be opened up for an examination of the alleged damage. He said he noted squeaking in the hallways, master bedroom, closets, other bedroom and kitchen. But he conceded frankly in cross-examination that he did not know whether the floors were defective and that a “permanent squeak-free floor” was unattainable. The problem with Mr. Oborne’s evidence was not its credibility, but its utility. It was a speculative opinion on costs.

[37] For these reasons, I put considerable weight on the evidence of Mr. Cleary and Mr. Lauzon, and lesser weight on the evidence of Mr. Walker and the two experts. As to the evidence of Messrs. Dezsi and Carlini, on the one hand, and Ms. Walker, on the other, I found them equally difficult to accept, and relied mostly on corroborating documents to resolve conflicts in their evidence.

V. ANALYSIS

a) Did Mr. Dezsi fundamentally breach the Contract?

[38] The Walkers allege that Mr. Dezsi fundamentally breached the Contract by improperly installing the floors (leading to unacceptable squeaking throughout the house), by refusing to properly correct this major defect and by insisting on being paid nonetheless, thereby justifying their termination of the Contract in November, 2014.

[39] Speaking generally about the law of contract, the Court of Appeal in 968703 Ontario Ltd. v. Vernon, 2002 ONCA 35158, 2002 CarswellOnt 573 described in paragraph 16 the factors to be considered in determining whether there has been a fundamental breach releasing the innocent party from its contract performance: (a) the ratio of the party’s obligation not performed to the obligation as a whole; (b) the seriousness of the breach to the innocent party; (c) the likelihood of repetition of the breach; (d) the seriousness of the consequences of the breach; and (e) the relationship of the part of the obligation performed to the whole obligation.

[40] As applied to construction contracts, Justice Perell aptly summarized the law in the case of D&M Steel Ltd. v. 51 Construction Ltd., 2018 ONSC 2171 at paragraphs 51 to 55. I summarize in my own words the relevant portion of His Honour’s comments as follows: a) If a contractor performs the contract so defectively as to amount, in substance, to a failure or refusal to carry out the contract work, the owner is entitled to terminate the contract, claim damages for the breach, and be discharged from his or her obligations to pay including any obligation to pay on a quantum meruit basis or for work already performed. Mere bad or defective work or insignificant non-compliance will not entitle the owner, in general, to terminate the contract. The defect must be significant; see also Heyday Homes Ltd. v. Gunraj, 2004 ONSC 34324 at page 84 and Angus v. Pinalski (1991), 41 C.L.R. 284 (BCSC) at paragraphs 61 and 62. b) If the contractor demands payment before it is due under the contract or if the contractor refuses to proceed unless paid, this may be conduct that evidences an intention to no longer be bound by the terms of the contract amounting to a fundamental breach or repudiation of the contract; see also Gokdenz Construction Ltd. v. Dalakis, 2011 ONSC 7135 at paragraph 32, and Voka Steel Inc. v. Edgecon Construction Inc., 2011 ONSC 1938 at paragraph 40.

[41] In a leading decision in this area, Heyday Homes Ltd. v. Gunraj, 2004 ONSC 34324, Master Sandler also reviewed the law of construction contract repudiation in depth. At page 77, the Master made the following statement which he said applied whether the contract price was payable in lump sum or in installments: “If some installments had been paid and then the builder abandoned and failed to substantially complete, the owner usually cannot recover what he has already paid but is relieved from paying further installments and can recover for the costs of correcting defective work and for the increased costs of completion, that is, his damages for the builder’s breach.”

[42] The Contract required that Mr. Dezsi provide the labour (plus nails, screws, tools and equipment) for the framing of the house, all for a fixed price of $54,500 plus HST. The Walkers were to provide the material for the framing work. There was no mention of a schedule. The price was stated to be paid at six specified milestones in the contract work. Importantly, this is what the Contract stated about the quality of the work: “[Dezsi] shall provide the services in a workmanlike manner, and in compliance with all applicable Federal and Provincial laws, regulations and by-laws including, but not limited to all provisions of the Ontario Building Code and Occupational Health and Safety Act.”

[43] That the finished floors squeaked was not disputed. Mr. Dezsi simply maintained that the squeaks were not significant and were what would normally take place in any finished house of this kind. This is what Mr. Carlini also stated. Mr. Dezsi asserted that squeaking was raised by Ms. Walker on only two occasions and concerning two places, and that he corrected these two problems as of November 5, 2014. He also pointed to the fact that the building inspector did not complain about squeaking during the inspection on October 9, 2014.

[44] All of the Walkers’ witnesses disputed this position. Messrs. Cleary and Lauzon in particular stated that the level of squeaking they encountered was in several areas and was well beyond what would normally be expected of new house construction of this kind. Mr. Tichy reiterated this evidence, as did the Walkers themselves. Ms. Walker also produced audio-video evidence of the present squeaking floors on the first and second floors. Mr. Dezsi did not produce an expert that addressed this issue. Furthermore, I take judicial notice that, while the building inspector did not mention squeaking floors in his report of October 9, 2014, it is an open question as to whether this was within the inspector’s realm of concern. His concern would typically be Ontario Building Code compliance and structural integrity, not squeaking floors. Therefore, on balance, I find that the Walkers have established that there is squeaking with the floors throughout the house, and that it was and is excessive.

[45] What is causing the squeaking floors? Ms. Walker produced compelling evidence of the cause. Mr. Cleary stated that the metal hangers that held the floor joists and that were top-mounted onto the nailer plates of the load-bearing steel beams were not properly installed. He stated that the hangers should be flush with the wooden floor joists, but that they were not in this case. He also stated that the hangers should be nailed in every nail hole except for the top two holes, and were not in this case. He took several detailed pictures of the areas of the subfloor that he opened up. These pictures showed hangers that were widespread and not properly nailed in several, if not all, places shown. Mr. Cleary stated that the effect of the widespread and improperly nailed hangers was to allow the floor joists to move and push up on the subfloor, thereby causing squeaking. He made other comments about the gluing of the subfloor to the floor joists, but he was not definitive in his statement that this was improper. At one point, he stated that in fact there “probably was sufficient” glue on the plywood. Mr. Lauzon reiterated Mr. Cleary’s observations. Mr. Tichy raised another concern that was evident from the Cleary photos, namely the problem of the hangers rubbing against steel beams due to narrow nailers. Mr. Cleary and Mr. Lauzon applied glue and blocking (called “stiffeners”) to the hangers to secure the floor joists where they detected excessive squeaking.

[46] Ms. Walker produced a portion of the manual from the manufacturer for the hangers, USP, which cautioned against “over-spreading” the hangers, as that would lead to squeaking. This is what the manual stated: “Ensure that the top mount hanger is installed so the flanges of the hanger are not over-spread which tends to elevate the support I-joist causing uneven floor surfaces and squeaking. Similarly, ensure that the hanger is installed plumb such that the face flanges of the hanger are mounted firmly against the wide-face surface of the header.” Mr. Tichy in his report also referred to a supplier manual (Simpson) which showed the proper width of nailers. Mr. Cleary, and later Mr. Tichy in his report and oral evidence, stated that these features were basic requirements of floor construction and were not followed by Mr. Dezsi.

[47] I am, therefore, driven to the conclusion, and do find, that the cause of the excessive floor squeaking was the improper installation by Mr. Dezsi of the joist hangers, and that this was a deficiency in his work.

[48] Other theories behind the squeaking were propounded by Ms. Walker. First, there was an issue as to whether the stiffeners Mr. Cleary installed as a repair were required as a part of the initial installation. Mr. Dezsi produced a manual from the joist manufacturer, Anthony Eacom, which showed that the stiffeners were not such a requirement. I do not find that the absence of these stiffeners was the cause of the squeaking and amounted to a deficiency.

[49] Second, during the course of the trial hearing Ms. Walker propounded another theory for the excessive squeaking that also purported to explain the delay in the squeaking that manifested itself after the Walkers moved back into the house on March 5, 2015. Ms. Walker argued that Mr. Dezsi had not properly inserted blocking between the floor joists themselves, and that this caused improper load distribution throughout the floor and the “delayed” squeaking with floor use over time. The permit Cunha drawings did not deal with the floor design. The applicable floor design was that of the floor manufacturer, Phoenix Building Components. Ms. Walker produced the Phoenix floor plans and, with no objection from Mr. Dezsi, a Phoenix letter explaining these plans. The plans show a row of joist blocking in the kitchen area of the main floor, which, according to the letter, was to avoid vibration of the joists. They also show extensive blocking at the steel beams to avoid joist rotation. Ms. Walker then showed me a few of the Cleary photographs that did not show consistent blocking in the areas opened by Mr. Cleary. She also showed me pictures she had taken in the basement of the area underneath the kitchen floor in June, 2014. Ms. Walker alleged that these pictures showed that Mr. Dezsi had not complied with the Phoenix plans for blocking. When Mr. Tichy was on the witness stand, she guided him to this evidence, and Mr. Tichy indicated that the Dezsi blocking was not attached to the joist flanges thereby causing improper load distribution. He also opined that there was insufficient quantity of blocking.

[50] On balance, I do not accept this explanation for the “delayed” squeaking. The June, 2014 photographs are not precise as to the alleged improper blocking shown, as they focused on a much larger area. Furthermore, Mr. Tichy did not deal with this issue in his expert report; yet, he was allowed to give this evidence orally based on his view of the imprecise June, 2014 photographs without objection. This was unfair to Mr. Dezsi, and I, therefore, cannot and do not give this evidence weight. In any event, Mr. Tichy could have opened up the areas of the ceiling where the blocking is in order to observe the issue directly, and did not do so. As a result, I do not give Mr. Tichy’s opinion on this subject weight. He also did not comment on how the alleged improper blocking caused the “delayed” squeaking, if at all. The Cleary photographs do show inconsistent blocking, but I was not shown how exactly this was inconsistent with the Phoenix drawings and how this caused “delayed” squeaking. Ms. Walker’s own repeated assertion that the blocking was not done properly (thereby causing “delayed” squeaking) also carried little weight. She is not an experienced builder, and is a party to the action. In any event, Mr. Cleary gave a concise and credible explanation for the delayed squeaking, namely that it stemmed from the improperly installed hangers and caused squeaking over time due to increased traffic throughout the house.

[51] Is the hanger issue a significant deficiency? While Mr. Dezsi stated with accuracy that the Walkers alerted him to only two areas of concern, there is little doubt that the squeaking problem was much bigger. By the time Mr. Cleary started his remedial work in November, 2014 there was squeaking in four other areas of the main floor and several areas of the second floor. By the time Mr. Tichy observed the house in October 20, 2016 and May 24, 2017 there was squeaking in several areas of the house that was not repaired by Mr. Cleary. Mr. Oborne confirmed Mr. Tichy’s observation. The repair work was significant, as the subfloor had to be removed at the steel beams, and the joist hangers secured. Mr. Cleary charged the Walkers almost $20,000 for all of his work, and, based on his invoices, it appears that about 1/2 of those charges, namely $9,045, pertained to his limited floor repair. Had Mr. Cleary done all of the floor repair at that time, no doubt this charge would have been much higher, namely a significant portion of the original Contract price. Mr. Oborne opined that, with the house in a finished state, it will now cost the Walkers between $430,000 and $550,000 plus HST to repair the floor. For these reasons, I have reached the conclusion as a result, that this is a very significant deficiency.

[52] Did Mr. Dezsi improperly refuse to correct this deficiency in fundamental breach of the Contract? Ms. Walker first raised the issue of a squeaking problem in the living room with Mr. Dezsi by text message on June 28, 2014. Mr. Dezsi convinced her that it was not a concern. Four months later, on October 26, 2014, Ms. Walker texted Mr. Dezsi complaining about squeaks in the floor. She told Mr. Dezsi to bring “the floor gun.” On November 2, 2014, Ms. Walker texted Mr. Dezsi again complaining about “numerous” squeaks “on first and second floor,” and requiring that Mr. Dezsi bring the floor gun no doubt to screw down the subfloor. She sent a longer text on November 3, 2014 demanding an immediate fix to the squeaking floors as the drywall trades were about to put up the ceilings. She raised the prospect of hiring someone else to do this work and deducting that cost from the final Dezsi bill, but added that she did so simply to underscore the urgency of the issue.

[53] Mr. Dezsi sent back a text immediately on November 3, 2014 stating that, as Ms. Walker “had just threatened my paycheque,” he “will not do ANYTHING” until he was paid in full “to today.” To that date, Mr. Dezsi had been paid the installments for the completion of the first floor, second floor, roof and framing inspection. On October 31, 2014, Mr. Dezsi prepared and rendered two invoices, one in the amount of $12,317 for the final two installments of the contract price, namely for the completion of the basement framing and the rough-in, and one in the amount of $4,842.05 for eight alleged extras. The Contract did not specify when payment should be made. I note that Mr. Dezsi reiterated his statement about not working without full payment on several occasions thereafter.

[54] I find that Mr. Dezsi’s conduct here amounted to a fundamental breach of the Contract. It was implicit, if not explicit, in the installment payment provisions of the Contract that Mr. Dezsi had to “complete” the specified work in order to be paid. This included any deficiency correction work. The Walkers were entitled to hold back payment if identified deficiencies with the work were not corrected. Mr. Dezsi had been paid for the floor work in the summer as the squeaking had not manifested itself sufficiently at that time. Therefore, when the squeaking manifested itself in the fall, the Walkers had a right to withhold payment until this issue was resolved. For Mr. Dezsi to insist, as he did at this time, on immediate payment of the full contract price and the extras invoice (namely $17,159.05) before he would do “any” further work, including the deficiency correction work on a significant deficiency such as the now manifested squeaking floors, was highly improper and, I find, a fundamental breach of the Contract. This conduct evinced an intention on the part of Mr. Dezsi not to complete this deficiency correction at all, and therefore not be bound by the Contract. As stated by Justice Perrell in D&M Steel Ltd., a contractor’s insistence on being paid before payment is due or refusal to proceed unless paid can amount to a fundamental breach. I find that to be the case here.

[55] That is not the end of the story though. At Mr. Walker’s invitation, Mr. Walker met with Mr. Dezsi in the house in the evening of November 5, 2014. The purpose of the meeting was to try and resolve the impasse. The two men agreed in their evidence that the prospect of immediate payment of $10,000 to Mr. Dezsi was discussed. Mr. Dezsi stated that the two agreed that there was one area that needed fixing, namely the area by the archway at the front door, that he would be paid the $10,000 if he applied the fix, and that he, Mr. Dezsi, fixed that area by opening the subfloor there and applying a shim between the joist and plywood. He also screwed down several other areas of the subfloor. In a text dated November 6, 2014, Mr. Dezsi admitted that the one identified squeaking problem in the archway was probably due to the hangers. Mr. Dezsi stated that the meeting ended when Mr. Walker “reneged” on his promise and only offered to pay $4,000 claiming he “forgot his check book.” Mr. Dezsi insisted that the meeting ended amicably.

[56] Mr. Walker’s account, on the other hand, was that he offered immediate payment of $10,000 if Mr. Dezsi fixed all of the squeaking problem, and that he, Mr. Dezsi, did not fix the problem as squeaking in the kitchen and other areas, including the archway, remained despite Mr. Dezsi’s efforts that evening. Mr. Walker stated that he then offered to pay $5,000 as a gesture of good faith, and that Mr. Dezsi became upset, started throwing his tools around and caused Mr. Walker to fear for his safety. According to Mr. Walker, this response convinced the Walkers that Mr. Dezsi could not be trusted to complete any of the work that remained. They then terminated the Contract.

[57] I find Mr. Walker’s account of this event more credible. Ms. Walker’s text messages indicate had by this point she had identified several areas of squeaking, not just the one in the archway. It makes no sense that Mr. Walker would have promised to pay the $10,000 with a fix in only the archway. Furthermore, given the repair work that Mr. Cleary eventually did in the archway (and elsewhere), it is unlikely that Mr. Dezsi fixed that area as he claimed. Finally, given Mr. Dezsi’s strident response to Ms. Walker’s not unreasonable insistence on a repair of the squeaking in her November 3, 2014 text message, it seems to me likely that he would have had a volatile response to not being paid the full $10,000 that evening. I, therefore, accept Mr. Walker’s account.

[58] This event underscores Mr. Dezsi’s fundamental breach of the Contract on November 3, 2014. Mr. Dezsi’s conduct on November 5, 2014 indicated that he was not serious about getting at the root of the squeaking problem. He identified the hangers as the possible source of the problem, but made no effort to investigate the hangers in the other areas of the floor that were squeaking. At most, he shimmed one area and quickly screwed down the subfloor in certain other areas, an effort that was grossly inadequate.

[59] Furthermore, by his threatening conduct on November 5, 2014, Mr. Dezsi showed that his primary concern was getting paid and not completing his contract work. Mr. Dezsi claimed in argument that the building inspection on October 9, 2014 proved that he had completed his work. But, as stated earlier, the building inspection did not concern all aspects of the Contract work, such as the squeaking floors.

[60] In closing argument, Mr. Dezsi asserted that he had not been given an opportunity to correct the floor deficiency. I do not agree. The Walkers notified Mr. Dezsi of this deficiency on several occasions, and demanded that he correct it. He simply did not do so, and indeed in the end showed no real intention to do so.

[61] I, therefore, find that Mr. Dezsi fundamentally breached the Contract at this time. Therefore, the Walkers were justified in terminating the Contract and in hiring a completion contractor as they did. They are also as a result released from their obligation to pay Mr. Dezsi further under the Contract, and can pursue Mr. Dezsi for their damages.

b) What are the Walkers’ damages?

[62] The Walkers outlined their damages claim in the ordered Scott Schedule. I will, therefore, follow the Scott Schedule in analyzing their damages claim. My findings are as follows.

b.1) Floor:

[63] Items 1, 2, 3, 4, 11, 12, 26, 29, 30, 31, 32, 33 and 34 are the items in the Scott Schedule that deal directly with the Walkers’ claim for damages due to the floor issue. I summarize these items as follows: i. Past Cleary repair costs: $9,045 ii. Past engineering costs to certify floor deficiencies: $1,039.60 iii. Oborne estimated future floor repair cost: $430,000 iv. House rental (I year) during future repair work: $48,000 v. Utilities costs during future house rental: $3,300 vi. Six month alternative lease for basement tenant: $21,600 vii. Six months of utility costs for basement tenant: $1,500 viii. Moving expenses during the future repair: $25,000 Total: $539,484.60

[64] The claimed past costs fall into two categories. Concerning the Cleary repair costs of $9,045, I have no difficulty awarding the Walkers these costs as they are evident in the Cleary invoices and relate directly to the repair of Mr. Dezsi’s work on the floor.

[65] Concerning the $1,039.60 for past engineering costs to certify the floor deficiencies, that is another matter. I do not understand what this claim relates to. The Scott Schedule makes reference to documents that are not a part of the trial exhibits. I did not find reference to this item in Ms. Walker’s exhibit 14 affidavit. If this pertains to the costs of Messrs. Tichy and Oborne, those costs would be claimable as a part of legal costs. I, therefore, have no choice but to reject this claim.

[66] The claimed future repair costs are by far the largest claim, namely $529,400. I will deal first with the five claims for the cost of future alternative accommodation while the repair is done, both for the Walkers and their tenant. These total $99,400. There was absolutely no evidence to support these claims. While I accept that the Walkers will have to move out of the house while Mr. Oborne does his repair work, Ms. Walker provided me with no evidence of the cost of renting alternative housing, both for the Walkers and for their tenant. Some evidence in this regard must have been available to Ms. Walker, as the Walkers rented alternative accommodations during the subject project. That evidence was not presented. Ms. Walker provided me with no evidence of the existence of a tenant in their house, the terms of the tenancy and the cost of alternative accommodations for the tenant. Ms. Walker provided me with no evidence of the costs of moving out of and back into the house. Again, this evidence must have been available, as the Walkers moved out in order to make way for the subject improvement. There was also no evidence as to the estimated one year time period for the repair work. Mr. Oborne made no reference to the time period for his work in his “budgetary estimate” or in the witness stand. There was no expert evidence concerning these damages. Therefore, I am driven to the conclusion that I cannot accept these claims. While the court will strive to compensate a damaged party with whatever best evidence is presented, it cannot award damages on the basis of no evidence.

[67] Concerning the claim for future floor repair costs, $430,000, there was evidence, namely the “budgetary estimate” of John Oborne, the principal of Oborne Contracting Inc. Mr. Oborne, an experienced remediation contractor, was retained in November, 2016, made two visits to the house at that time, reviewed the permit drawings and certain photographs, and on December 23, 2016 prepared his “budgetary estimate” of the cost to repair the floor. The estimate specified significant work, including first the demolition, disposal and relocation of existing house furnishings, appliances, molding, insulation, tiling, hardwood, cabinetry, millwork and subflooring, and second the securing of the joist hangers, and third the replacement of destroyed tiling, hardwood, plywood, tiling and molding, and fourth the reinstallation of the appliances and other equipment. Mr. Oborne estimated a cost range of $430,000 to $550,000 plus HST. There is no doubt that the vast bulk of this cost is the labour cost, a point he reiterated in the witness box. In the witness box he also emphasized that this was not a “firm price.” He stated that he needed to open up the floor to examine the problem in order to get a “firm price.” Again, I was left wondering why any of the subject floor had not been opened up either for Mr. Oborne or for Mr. Tichy. Mr. Oborne’s “budgetary estimate” in the end was a somewhat speculative opinion, an estimate, as to the Walkers’ future floor repair costs.

[68] Nevertheless I am satisfied that the Walkers will incur future damage for the floor repair. The question is the proper measure of this damage.

[69] After considering other evidence, I have decided to rest my ruling here on a fundamental principle, namely the question of the Walkers’ mitigation efforts. There is a basic principle of the law of damages that the damaged party is “not entitled to recover compensation for loss that could, by taking reasonable action, have been avoided;” see S. M. Waddams, The Law of Damages (Toronto: Thomson Reuters Canada, 2018) at 15.70. Professor Waddams explains that, while it does not lie in the mouth of the offending party to be overly critical of the good faith attempts by the innocent party to avoid difficulty caused by the offender, the court will draw the line at some point. He said the following at 15.150: “The fact that the expenditure of time or money is required to avoid a larger loss will not excuse the plaintiff from making the expenditure if the expenditure is reasonably small and the chances of avoiding the greater loss favourable.” I believe that this principle applies to this case.

[70] I am aware that the onus of establishing lack of reasonable mitigation rests on the offender, in this case Mr. Dezsi; see Red Deer College v. Michaels, [1976] S.C.J. No. 324 at page 331 and Jopaul Construction Ltd. v. Maple Leaf Racquet Court Inc., 1983 CarswellOnt 725 at paragraph 53. Mr. Dezsi did not call evidence on the issue of mitigation or argue this point. Nevertheless, I am also mindful of the fact that Mr. Dezsi is a self-represented party, and that the court has an obligation to enforce the evident rights of a self-represented party despite the fact the party has not expressly claimed them. The Canadian Judicial Council’s Statement of Principles on Self-represented Litigants and Accused Persons, September, 2006 specifies on page 4 that the court should do whatever is possible to prevent an unfair disadvantage to a self-represented person, and that the self-represented person should not be denied relief on the basis of a minor or easily rectified deficiency in their case. These Judicial Council principles have been approved by the Supreme Court of Canada; see Pintea v. Johns, 2017 SCC 23, [2017] 1 SCR 470 at paragraph 4 and Mazranni v. Industrial Alliance Insurance and Financial Service Inc., 2018 SCC 50 at paragraph 39. I believe that the evidence establishes a basis for the mitigation defence for Mr. Dezsi, and that it would be unfair to him to deny him this defence on account of his failure formally to pursue it.

[71] I questioned Ms. Walker during her closing argument as to whether she had reasonably mitigated the Walkers’ damages in limiting the work of Mr. Cleary at the squeaks that were manifesting themselves at that time, namely in November and December, 2014. This was at a time when the house construction was not done, and when the Cleary cost of repairing was a fraction of what Mr. Oborne estimates the repair will now cost. She insisted that she had acted properly. She argued that the hanger problem that Mr. Cleary identified and corrected was not present in the areas that subsequently squeaked after the Walkers moved back into the house. She propounded the theory of “delayed” squeaking that attributed the subsequent squeaking to Mr. Dezsi’s alleged improper joist blocking. She argued that the Walkers, therefore, had no reason to suspect that the squeaking would manifest itself elsewhere later.

[72] This “delayed” squeaking theory the Walkers have not pleaded and did not raise in their opening statement. I have already dismissed this theory as an explanation for the subsequent squeaking, and have attributed the subsequent squeaking to the same hanger problem that Mr. Cleary corrected. I put much credibility in Mr. Cleary’s testimony that the subsequent squeaking was due to the hanger problem and that the delay in squealing manifestation was due to increased traffic over time in these other areas.

[73] What is telling is that Ms. Walker’s own text messages contradict her argument. In text messages Ms. Walker sent to Mr. Dezsi in November and December, 2014 and January, 2014, it is evident that Ms. Walker realized at that time that the squeaking problem and its solution was much larger than the squeaking that was manifesting itself at that time. These were text messages that Ms. Walker drew my attention to in her evidence and closing argument. In the November 3, 2014 text message Ms. Walker sent to Mr. Dezsi she said the following: “No one is going to buy an expensive home years down the road with bad squeeks. If they are bad now. They will just get worse.” In a text message Ms. Walker sent on January 5, 2015 she framed her criticism of Mr. Dezsi’s joist hanger work in sweeping terms as applying to all of Mr. Dezsi’s joist hanger work: “Not sure which one of you guys installed the joists and hangers, but they are definitely not qualified. . . . this was basic construction and you should not override what is required to install the joists and all that goes along with that installation.”

[74] But the most significant text messages from Ms. Walker came on January 14, 2015. Ms. Walker indicated that Mr. Cleary had one more joist to complete, that Walkers were about to leave on a trip, and that they were planning to have the final flooring put down in early February, 2015 and to move back into the house in mid-February, 2015. She then said this: “I will be calling your insurance company to [p]ut them on notice regarding all the issues we have uncovered as apparently this is not the end [o]f the joist issues.” This shows that, despite the fact that she was bringing the Cleary work to an end, Ms. Walker knew that this was “not the end of the joist issues.”

[75] Shortly thereafter on the same day Ms. Walker send another text message in which she said the following: “Regarding you insurance, it is an FYI notice that if any future further issues arise from the improper installation of the floor joist[s], we will be making a claim. We just can’t keep opening and fixing as our timelines have been shot.” This shows that Ms. Walker at this time made the fateful decision not to proceed with the further fixing of the joist hangers by Mr. Cleary “as our timelines have been shot.” She clearly anticipated further repair work on the floor joists, but preferred suing Mr. Dezsi later when the project was done (and the issues manifested themselves) to continuing with the floor repair work at that time. No doubt, she was concerned about interrupting the schedules for further construction work and delaying the Walkers’ move back into the house, as they were renting other premises at this time.

[76] In my view, this was not proper mitigation. The floor repair work that Mr. Cleary did to that point cost no more than $9,045. The Walkers stated several times that the Cleary repair was and remains effective in eliminating squeaks. In my view, the more reasonable decision for the Walkers to have made at this time would have been to continue having Mr. Cleary open up the subfloors at the steel beams to fix all the joist hangers. With the construction project not finished, there was minimal impediment for this repair option.

[77] There was no evidence from Mr. Dezsi as to the cost the Walkers would have incurred had they completed the floor repair with Mr. Cleary. But, again, following the Judicial Council Principles as referred to above, I believe it would be unfair to Mr. Dezsi to deny him this defence, on the one hand, and the Walkers any recovery, on the other hand, on account of this absence of precise evidence. Furthermore, given the evidence from Mr. Cleary as to the areas he did repair as compared to the 4,000 square foot area of the finished house and the Phoenix floor plans, the court is not without some basis in concluding, as I do, that the direct cost of this repair option would probably not have been more than 5 times the $9,045 figure, namely about $45,000. I was not made aware of any serious obstructions to Mr. Cleary’s work.

[78] As to indirect costs of this repair, these are my comments. The only conceivable indirect cost to the Walkers of this repair option would have been the added one to two month’s rent the Walker would have incurred to delay their move-in to get this work done. In Scott Schedule item 17 the Walkers claim $4,765 for the two months of extra rent after December 31, 2014 that they did incur before they in fact moved back in on March 5, 2015. I cannot conceive of other costs associated with this option. Trades for other finishing work may have insisted on additional costs to delay their work, but this is truly speculative in nature. I, therefore, conclude that this repair option would have cost the Walkers no more than a total of $50,000 less the $9,045 they had already spent on Mr. Cleary, namely $40,955.

[79] This is only 6.5% to 8.5% of the $430,000 to $550,000 plus HST that Mr. Oborne now estimates it will cost to correct the squeaking problem. Mr. Oborne’s evidence was clear that the bulk of the cost his company will incur will be the labour of removing the furnishings, appliances, molding, insulation, tiling, hardwood, cabinetry, millwork and subflooring, much of which was installed after the subfloor was done. He also discussed having to destroy much of the molding, insulation, tiling, hardwood, millwork and subflooring that is in the house now.

[80] In my view, Ms. Walker should have realized in January, 2015 that the repair option she chose to follow would cost the Walkers grossly in excess of what it would have cost the Walkers to have Mr. Cleary finish the repair job at that time in 2014-15 when the construction project was unfinished. While Ms. Walker stated that she had not coordinated a construction project prior to this one, she said that she had business experience and that she consulted with her husband, an experienced contractor, daily. If she did do so on this issue, her husband is implicated in the decision. The Walkers eventually retained engineering and construction experts in this case. It is not clear why they did not do so at the time when this fateful decision was made. I am driven to the conclusion that the Walkers made this decision recklessly.

[81] It is trite law that the Walkers are entitled to the costs they would have incurred had they followed the more reasonable, less expensive repair option; see Waddams, op. cit., paragraph 15.90. I have estimated the reasonable future repair generally at $40,955. Mr. Dezsi may find this excessive, but he has done nothing to assist himself with this defence and, therefore, does not merit the benefit of the doubt on this issue. I am nevertheless going to reduce this amount by the $5,000 for the two months of additional alternative house rental, as the Walkers have not provided any substantiation for the $4,765 of actual additional alternative house rental they are claiming in item 17 of the Scott Schedule. As the Walkers have not gone to the trouble of substantiating their claim for actual alternative house rental costs, it is not unfair to them, in my view, to be denied any claim for alternative house rental costs.

[82] Therefore, I deny the Walkers’ claim for future floor repair costs and confine their recovery in this regard to $40,955 less the $5,000 (for alternative accommodation), namely the figure of $35,955. This $35,955 plus the $9,045 for the past Cleary floor repair, namely a total of $45,000, is what I find the Walkers are entitled to in damages for the floor repair.

[83] I acknowledge that this has been an exercise on the edge of probative evidence concerning damages and one that I would not usually embark upon. But I believe that it was necessary in this case to provide a just result with two self-represented parties.

[84] I should make one final comment here. I have dismissed the Walker claim for future alternative accommodation costs while the repair work is done, all on account of absence of substantiation. Had there been substantiation, I would nevertheless have dismissed that claim in any event on account of the mitigation issue and my comments above.

(b.2) Basement apartment framing

[85] I will now go through the other items claimed by the Walkers in the Scott Schedule to determine the full extent of their damage recovery.

[86] In item 5, the Walkers claim $3,000 for the alleged extra cost they incurred for insulation and a fire stop in the basement apartment in order to comply with the fire separation requirements of the Ontario Building Code. In her affidavit, exhibit 14, Ms. Walker refers to an invoice from Dunright Foam Inc. for “extra work” in the total amount of $1,469, an invoice from Plumber Bros. for $18,396 and Mr. Cleary’s invoices. In the Scott Schedule, Mr. Dezsi stated that the installation of drywall and “resilient channel” were not specified in the Contract documents. Mr. Dezsi’s affidavit, exhibit 22, simply denied that there were outstanding framing issues.

[87] I have concluded that this item is to be denied. There was no evidence as to how exactly Mr. Dezsi did not comply with the Ontario Building Code in his basement framing work. Also the evidence of the alleged damage is imprecise. I note also that Mr. Dezsi was not, and now will not be paid, the installment for his basement framing work. The onus to prove this claim rests on the Walkers, and they have not proven it.

(b.3) Kitchen pocket door framing

[88] In item 6 the Walkers claim $250 for an increase in the size of the kitchen door openings. Mr. Dezsi was paid for this work. The permit drawings do not specify door heights. Ms. Walker alleged that Michael Carlini advised her erroneously that the custom in the industry for door heights was 7 ½ feet, which is why she says she instructed Mr. Dezsi to make the doors in the house that height. Ms. Walker alleged that she found out later from the lumber supplier that the custom was in fact 8 feet and that the 7 ½ foot doors were much more expensive. This is why, she says, she changed the door heights to 8 feet.

[89] The problem is that neither Mr. Dezsi nor Mr. Carlini admitted to advising Ms. Walker to make the door heights 7 ½ feet, and, as stated earlier, I give little credibility to Ms. Walker’s unsubstantiated evidence. There was also no evidence of the quantum claimed. This claim is not proven, and I deny it.

(b.4) Gable cedar beams

[90] In item 7 the Walkers claim $2,845 for Mr. Dezsi’s alleged failure to install large cedar beams in the front gable. The permit drawings did not specify cedar beams. The requirement for cedar beams was made in October, 2014. In exhibit 14, Ms. Walker showed that Mr. Dezsi did install a continuous LVL beam which was inconsistent with the cross-section drawing of the gable in the permit plans. However, Mr. Dezsi in his response showed that other parts of the permit plans showed a continuous beam. Therefore, it is not clear whether Mr. Dezsi breached the Contract here.

[91] I also note that Mr. Dezsi has not, and now will not, receive payment of the rough framing installment, thereby leaving the question open as to what damages the Walkers suffered on this item. Finally, I also note that Ms. Walker has not provided any evidence of the quantum claimed. Therefore, I find that this claim is not proven, and I deny it.

(b.5) Gable rafter

[92] In item 8 the Walkers claim $270 for an alleged wrong framing of a gable stud beam. In exhibit 14, Ms. Walker referred to two pictures which showed, she alleged, an inadequately sized front rafter beam in the gable. Mr. Dezsi’s response was that this was “fascia” which in the permit drawings was to be of different material. There is, in my view, insufficient evidence of a Contract breach. Furthermore, there is no evidence of the quantum claimed. I deny the claim.

(b.6) Garage framing

[93] In item 9 the Walkers claim $275 for an alleged failure by Mr. Dezsi to install bulkheads in the garage. There was no evidence in support of this claim, and I deny it.

(b.7) Bulkheads in basement

[94] In item 10 the Walkers claim $3,300 for the installation of bulkheads in the basement apartment. In exhibit 14, Ms. Walker pointed to pictures of these basement bulkheads. Mr. Dezsi responded that these bulkheads were outside the contract scope. I did not see these bulkheads in the permit drawings. Furthermore, Mr. Dezsi is not being paid for his basement and rough-in work in any event. Finally, Ms. Walker in exhibit 14 did not refer to evidence in support of the quantum claimed. I deny the claim.

(b.8) Coffered ceiling adjustment

[95] In item 13, the Walkers claim $450 on account of an adjustment to the coffered ceiling in the master bedroom in order to enable crown molding to be installed on the outside of the toilet glass enclosure. Mr. Dezsi’s response in the Scott Schedule was that he built the coffered ceiling as per the permit drawings. Ms. Walker asserted in the Scott Schedule that Mr. Dezsi was aware of the requirement for the crown molding, and should have adjusted the coffered ceiling accordingly. No evidence was proffered for this claim, including the quantum. I deny it as a result.

(b.9) Shower basin in basement

[96] In item 14 the Walkers claim $150 for allegedly wrong framing of the shower basin in the basement. I was not made aware of any evidence in support of this claim, and I deny it.

(b.10) Attic hatch

[97] In item 15 the Walkers claim $140 on account of Mr. Dezsi’s alleged improper installation of the attic hatch leading to the attic. Mr. Walker provided a video of this issue. It appears to be a legitimate deficiency issue.

[98] The problem is that Ms. Walker did not provide proof of the correction cost claimed. Nevertheless, given the validity of the underlying claim and the small size of the quantum claimed, I grant the claim.

(b.11) Tile installer

[99] In item 16 the Walkers claim $1,400 on account of having to hire a tile installer “at the last minute” due to Mr. Dezsi’s delays.

[100] I am not satisfied that any delay related claims have been adequately proven by the Walkers. There was no evidence of an agreed upon schedule. The Contract had no expressed schedule. The parties anticipated that the work would take 8 to 10 weeks, and this might have been a reasonable schedule in the circumstances. The court will always imply a schedule in a construction contract. The problem then is, however, that there is no clear evidence that Mr. Dezsi was solely responsible for the delay. In particular, I am referring to the truss delay, which, in my view, was the result of a design change by the Walkers. There were also several extras that the Walkers created. I note that the Cunha permit drawings were marked up on their face by Ms. Walker in several respects.

[101] As to the specific issue of the tile installer, there was simply no evidence. Furthermore, Ms. Walker again failed to substantiate the quantum of this claim. I deny it.

(b.12) Alternative house rental

[102] In item 17 the Walkers claim $4,765 on account of having to rent alternative house accommodation for an additional two months after December 31, 2014. In the Scott Schedule, Ms. Walker asserted that the move-in date had originally been planned to between October 31 and December 31, 2014, and that the Walkers rented the alternative home until December 31, 2014 accordingly. I was referred to no evidence in support of these propositions, namely the alleged planned move-in date, the lease the Walkers allegedly signed, the lease extension the Walkers allegedly signed, and the rental charges the Walkers allegedly paid. Furthermore, I reiterate my comments concerning b.11 above about delay. There is no evidence that Mr. Dezsi was solely responsible for any delay that did occur. I deny this claim.

(b.13) Upper landing size

[103] In items 18 and 19 the Walkers claim $1,000 on account of the correction of the error in the size of the stair opening leading to the upper landing. Mr. Dezsi was paid for this work. It is not disputed that Mr. Dezsi’s stair opening size was larger than specified. He said that this was usual construction practice, and that manufacturers of stairs always finalize stair openings. He had no evidence in support of this position.

[104] Ms. Walker blamed Mr. Dezsi for having cut the opening too widely, and in her video showed how this impacted other aspects of the house construction, such as the width of the main floor bathroom. Because of this evidence, I am inclined to accept this claim; but, again, there was no evidence to support the quantum of the claim.

[105] Nevertheless, I make an exception here and grant the claim. My logic is much the same as in b.10 above. The amount is not, in my view, huge in light of the effect this had on the related construction, and I must be fair to the Walkers.

(b.14) Roof truss correction

[106] In item 20 the Walkers claim $500 on account of alleged corrections to the roof trusses. Mr. Dezsi was paid for this work. There was evidence that the roof trusses, which were delivered late, had to be corrected. Truss tails were cut; the pitch was adjusted; corner jacks were adjusted; gusset plates had gaps that needed covering. That repair work was done by Mr. Dezsi. It is not at all clear to me that these issues were Mr. Dezsi’s fault. Furthermore, again, Ms. Walker has not provided any evidence in support of the quantum of the claim. I, therefore, deny the claim.

(b.15) Interior wall contour

[107] In item 21 the Walkers claim $1,000 on account of, what they allege, was Mr. Dezsi’s failure to build the interior walls straight. There was no evidence on this point and I, therefore, do not accept this claim.

(b.16) Water damage from door plates

[108] In item 22 the Walkers claim as part of the floor repair an unspecified amount due to pooling of water on the second floor subfloor caused allegedly by Mr. Dezsi’s failure to remove bottom plates at doorways, thereby impeding the flow of pooled rain water. In the Scott Schedule Mr. Dezsi did not deny placing these door plates, and maintained that this was proper construction technique in order to facilitate door opening changes. Ms. Walker in response stated that Mr. Dezsi was required to remove these plates and did remove some of them. I was not shown any evidence on this issue of door plates and water flow, and therefore do not accept the claim.

(b.17) Excessive wood waste

[109] In item 23 the Walkers claim $150 on account of having to change door heights in the first and second floor. Based on the Scott Schedule, this appears to be an extension of the issue described in b.3 above, namely the “kitchen pocket door framing” and alleged wrong advice from Michael Carlini. I reject it for the same reason. I note as well that Ms. Walker has provided no substantiation of the quantum claimed.

(b.18) Gym entry door rework

[110] In item 24 the Walkers claim $25 on account of having to change the “wrong” installation of the gym entry door in the basement. It is undisputed that the design of the basement framing was significantly changed by the Walkers in July, 2014. Ms. Walker and Mr. Dezsi physically re-plotted the basement framing. This one item appears to pertain to an alleged wrong framing of the gym entry door.

[111] There was no evidence concerning this specific item and no evidence concerning the alleged quantum. I note as well the Mr. Dezsi will not be paid for his basement work. I deny the claim.

(b.19) Interior apartment walls

[112] In item 25 the Walkers claim $100 on account of allegedly Mr. Dezsi’s wrong installation of the interior walls of the basement apartment. This appears to be very similar to item b.18 above. I reject the claim for the same reasons.

(b.20) Searches

[113] In items 27 and 28 the Walkers claim a total of $55.31 for searches they conducted at the City of Toronto concerning Mr. Dezsi’s business name and license. These are properly claimable as legal costs, and will be treated as such.

(b.21) Vanities installation

[114] In item 35 the Walkers claim $2,500 on account of having to contract out the vanities installation in the seven bathrooms in the house due, they say in the Scott Schedule, to the delay caused by Mr. Dezsi.

[115] As I have stated earlier, the question of fault for delay is muddy at best due to absence of the Contract schedule, the truss delay and the apparently many extras and changes on this project, such as the basement framing changes, all of which cannot be blamed on Mr. Dezsi. Furthermore, there was no evidence in support of this claim. Were the Walkers initially responsible for the vanity installation, and how is that proven? Who was eventually retained to do the vanities installation, and when were they retained? When did they do the work? What did they charge? How did this all relate back to the timing of Mr. Dezsi’s framing work? None of these questions were addressed in the evidence. I, therefore, deny the claim.

(b.22) Garbage

[116] In item 36 the Walkers claim $500 for having to pick up garbage after Mr. Dezsi. While I concede that there was evidence that the Walkers complained about the lack of cleanup, there was no evidence as to how this damaged the Walkers. There is also no evidence substantiating the quantum. I deny the claim.

(b.23) Interest charges

[117] In item 37 the Walkers claim an unspecified amount for the interest on the funds the Walkers paid into court to vacate the Dezsi claim for lien. The vacating order is dated April 16, 2015 and the Walkers posted $31,618.82 in cash.

[118] With the result in this case, namely with Mr. Dezsi losing his claim entirely, this is a head of damage to which the Walkers are entitled, particularly as I have found that Mr. Dezsi fundamentally breach of the Contract. However, as with so many of the Walkers’ claims for damages, there is no evidence in support of this claim – no quantum, no bank records. If the Walkers obtained a loan for this amount, there should be loan documents and bank records. If the money came from a cash account, there should be bank records as to the interest income that was lost. There was none of that.

[119] There is, however, some evidence of rates that resemble the prevailing market rates in the section 128 of the Courts of Justice Act R.S.O. 1990, c. C.43 ( “CJA” ). I will, therefore, to be fair to the Walkers, order that there be an interest recovery on the posted security at the prejudgment rate specified by CJA section 128 for this action, 1.3%, running from April 16, 2015 to the date the posted cash is returned.

(b.24) Loss of rental income

[120] In item 38 the Walkers appear to claim $25,200 on account of a 16 month delay in renting the basement apartment. As described in the Scott Schedule, the Walkers allege that due to Mr. Dezsi’s failure to “attend court” and to correct deficiencies, they delayed renting the basement apartment from the initially expected rental commencement date of January 1, 2015 to July 1, 2016. They say they started renting the apartment on July 1, 2016 at $1,400 per month.

[121] Again, there was no evidence in support of these propositions – no proof of the intention to rent as of January, 2015, no lease documents and no rental payments. Furthermore, this claim engages the issue of mitigation as well. In January, 2015, the Cleary floor repair was largely done. The Walkers moved back in on March 5, 2015. There was no explanation as to why the basement apartment was no rented out immediately. I, therefore, must deny this claim, and I do.

(b.24) Lost Walker revenue due to delay

[122] In item 39 the Walkers claim $50,000 on account of their own lost time and revenue on account of Mr. Dezsi’s issues, particularly delay. As to delay, given my discussion in b.11, b.12 and b.21 above, I am not prepared to compensate the Walkers in this regard for the reasons stated there.

[123] Generally concerning this claim, I note again the profound absence of any substantiation, namely the exact time that the Walkers say they spent on this project, how this compared to what they expected to spent, how this added time affected their other daily activities, and how this added time amounted to a loss in revenue for the Walkers. The court cannot grant a damage claim in a complete vacuum of evidence. I, therefore, deny this claim as well.

(b.25) Materials purchased by the Walkers

[124] In item 40 the Walkers claim $5,000 on account of what they allege were materials they purchased to correct Mr. Dezsi’s work. There was again no substantiation for this claim, and I deny it. I note that the Walkers had an obligation under the Contract to purchase the material. Therefore, this claim would have required a detailed comparison between what the Walkers reasonably expected to pay for materials and what additional materials they had to obtain on account of Mr. Dezsi’s Contract breaches. That simply was not there. I deny this claim.

(b.26) Pain and suffering

[125] In item 41 the Walkers claim $25,000 on account of “costs for pain and suffering, punitive and exemplary damages.” In the Scott Schedule, Ms. Walker claimed there was “excessive stress” during the project and thereafter due to Mr. Dezsi’s conduct. She referred to the February 25, 2015 default judgment that Mr. Dezsi obtained and that Master Albert set aside in her April 16, 2015 order, with costs in the amount of $4,000 to be paid by Mr. Dezsi. I note that Mr. Dezsi paid these costs. Ms. Walker alleged in the Scott Schedule that this default judgment caused her embarrassment and stress with her employer, the Bank of Montreal, which she got to fund this project. But there was no substantiation of this allegation.

[126] In the Scott Schedule Ms. Walker alleged “excessive stress” due to Mr. Dezsi’s volatile nature during the project. I have found Mr. Dezsi’s response to Ms. Walker’s November 3, 2014 text messages concerning the floor issue and his conduct with Mr. Walker on November 5, 2014 volatile, but I have not found other instances of volatile conduct on the part of Mr. Dezsi. There was also no medical substantiation that the alleged “stress” was in fact “excessive” for Ms. Walker or her husband – no records of visits to physicians, no medical records, and no records of medication. There is stress with every construction project. Therefore, medical evidence is needed if a party is to make such a claim. There was none in this case.

[127] Concerning the law of punitive and exemplary damages, Waddams, The Law of Damages (Thomson Reuters Canada Limited, 2017), quoted the Supreme Court of Canada in Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362 at paragraph 62 as follows: “punitive damages are restricted to advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own.” While things may have gotten heated at times on the project, there was no evidence of such malicious and outrageous behavior on the part of Mr. Dezsi. I deny this claim.

(b.27) Other claims

[128] In exhibit 14 Ms. Walker makes reference to several other claims that do not appear in the Scott Schedule: jams in gym bathroom; missing wall in gym bathroom; missing window pane in second floor bathroom; build out of strapping in bike room; master bathroom shower jam; roof plywood too short; other outstanding framing deficiencies as of November 3, 2014. None of these appear in the Scott Schedule, and, therefore, it is not fair to Mr. Dezsi for the Walkers to raise these issues at trial. I deny these claims.

VI. CONCLUSION

[129] I, therefore, find that Mr. Dezsi’s claim is dismissed. I also discharge his lien and order that the Walkers’ posted security be returned to them.

[130] I also find that Mr. Dezsi is to pay the Walkers the following: (i) $45,000 on account of the floor issue (see b.1); (ii) $140 on account of the attic hatch issue (see b.10); (iii) $1,000 on account of the upper landing size issue (see b.13); (iv) prejudgment interest on these three items in accordance with CJA section 128; and (v) the yet to be determined interest on the Walkers’ posted security at the rate of 1.3% running from April 16, 2015 to the date the security is returned (see b.23). This is a total of $46,140 plus the interest amounts.

[131] I directed that the parties deliver costs outlines at the end of the closing argument. Mr. Dezsi delivered a “Costs Statement” that showed a total of $27,456.51. The Walkers delivered a “Bill of Costs” showing actual costs of $75,519.05, substantial indemnity costs of $67,167.15 and partial indemnity costs of $45,311.43.

[132] In this case, the Walkers were technically the successful party, but their success was limited in scope. Given the result and my ruling, I encourage the parties to reach an agreement on costs, the pre-judgment interest on the $46,140 judgment amount, the interest to be paid pursuant to item b.23, and any post-judgment interest.

[133] If the parties are unable to agree on these issues, counsel may file written submissions concerning these issues. The initial written submissions must not exceed three pages. The written submissions of Ms. Walker must be served and filed by April 12, 2019. Mr. Dezsi’s written submissions in response must be served and filed by April 23, 2019. Ms. Walker’s reply submissions, if any, must not exceed one page and must be served and filed by April 29, 2019.

[134] I will then render my further written decision on costs and interest. I will also prepare the final report for the purpose of Rule 54 and will circulate a draft of same for approval by the parties.

Released: March 29, 2019

MASTER C. WIEBE