Court File and Parties

COURT FILE NO.: 11018/16 (Welland) DATE: 2019/05/16

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Ralph Mastracci c.o.b. as Bosco Roofing and Sheet Metal R. Hosseini and Ms. Ibrahimi, for the Plaintiff Plaintiff

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FirstOntario Credit Union Limited, Gregory Earle, The Guarantee Company of North America and 1882877 Ontario Inc. D. Macfarlane, for the Defendants Defendants

A N D B E T W E E N:

1882877 Ontario Inc. D. Macfarlane, for the Plaintiff by Counterclaim Plaintiff by Counterclaim

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Ralph Mastracci c.o.b. as Bosco Roofing and Sheet Metal R. Hosseini and Ms. Ibrahimi, for the Defendants by Counterclaim Defendants by Counterclaim

HEARD: November 27, 28, 30, 2018 and February 25, 2019

Corrected decision: A correction was made on June 4, 2019 changing the year in the neutral citation from 2018 to 2019. No changes were made to the content.

REASONS FOR JUDGMENT

M. J. Donohue, J.

OVERVIEW

[1] The plaintiff, Bosco Roofing, sues for payment of an invoice. The defendant company counterclaims for damages.

[2] The defendant, 1882877 Ontario Inc. (“188”) was constructing a three-storey residential condominium building in Thorold, Ontario. Dominic DiFranco was one of the principals of 188 and he was the general contractor overseeing the actions of the trades. He invited tenders from roofers to supply and install the flat roof on the structure.

[3] The plaintiff, Bosco Roofing (“Bosco”), tendered to install the roof and was accepted. Supplies were ordered and delivered to the site. The roofing material was an “IKO” product.

[4] Robert Mastracci, roofing for his father, the owner of Bosco, did the tender and the work at this site. He believed that he and his men began the job on November 2, 2015 and the work was largely completed on December 18, 2015. They took the Christmas break and returned to do further work to the entranceway flat roof, and the areas around the A/C unit and other pipes on January 6, 20, and 21, 2016. On the last day, they were asked to leave the site by Mr. DiFranco before all the work under the tender had been finished.

[5] An interim bill by Bosco Roofing of $108,700.12 had been paid by 188 in November 2015. Bosco reduced their final bill by $1,950, as they had been told to leave before work was finished. There remained an outstanding bill of $67,683 which they submitted for the balance of the job. 188 did not honour this bill for reasons set out below.

[6] Bosco Roofing filed this construction lien claim for $67,683. 188 paid the lien amount into court, as well as costs of $16,920.77.

[7] The defendant 188 then counterclaimed for damages on the basis that the workmanship of the roof was poor and had to be remedied by retaining another roofer to lay a third layer of roofing material. This cost 188 a further $84,750.

[8] 188 also claimed that they incurred additional costs because the further roofing work required delayed the occupancy date for new residents.

[9] Evidence was given that there were various leaks in the building during the Christmas break of 2015 which Bosco Roofing repaired. At one time 188 included in its counterclaim damages resulting from those leaks. At trial those claims were not pursued. The evidence did not establish on the balance of probabilities that there was a causal link between any fault in the roof to the leaks or the resulting damage.

[10] It was Mr. DiFranco’s concern over the leaks in December 2015, however, which caused him to retain the services of an independent roofing consultant to visually assess the quality of the workmanship in the installation of the roofing system by Bosco.

[11] The independent consultant, Mr. Jocelyn, provided a report with an opinion that the overall workmanship was poor, that the roof would not last the expected 20 to 25 years, and that it would not meet any of the manufacturer’s requirements.

[12] On receiving this report in mid-January 2016, Mr. DiFranco, for 188, chose to terminate the services of Bosco Roofing and retain a new roofer, King Roofing, to finish the job.

[13] 188’s counterclaim relates to the new roofer’s costs and the delay in the project’s completion.

[14] The court was advised at trial that the claims as against FirstOntario, Gregory Earle, and The Guarantee Company were to be dismissed.

Delay Claims Counterclaimed by 188

[15] The occupancy date for residents had been March 18, 2016 and there was a delay to April 15, 2016.

[16] 188 paid two delayed occupancy claims of $5,550 and $5,727.74. As well, they claim the need for an additional interest payment of $23,697.94 made on a loan on April 15, 2016.

[17] Evidence was given by Mr. Mastracci and roofer, Mr. Bessey, that other trades were delayed in their completion which slowed the progress of Bosco’s work. There were also delays for weather, noted by Mr. Mastracci. Mr. DiFranco, for 188, in response, did not dispute the evidence that other trades were delayed.

[18] There was no discussion between Bosco Roofing and 188 regarding timing. The agreement between the parties did not make time of the essence.

[19] Despite this claim of damages for delay being initiated in 2016, 188 did not retain the construction schedule. This would have shown whether other trades were on time or not. Mr. DiFranco testified that he had destroyed the schedule. Mr. DiFranco agreed under cross-examination that without the construction schedule it could not be determined that other trades were delayed as well.

[20] The court requires an evidentiary basis before grounding a case in damages.

[21] There is no evidence that the building was on schedule for completion by March 18, 2016.

[22] I am not satisfied that 188 has satisfied their onus of proof that their building would have been completed on time, but for the additional roofing work required.

[23] The delay claims in the counterclaim by 188 are accordingly denied.

Workmanship of the Roof

[24] Bosco’s claim to be paid for its work and 188’s claim to be paid the additional roofing cost rest on a finding of whether the work was done adequately and whether a third layer of roofing material was required.

[25] Mr. Mastracci, for Bosco, testified that the roof membrane was complete by January and the only issues left to be finished were the pitch pocket plumbing stacks, the A/C curb and the lower entranceway roof, which he did on January 20 to 21, 2016.

[26] Mr. Jocelyn, the independent consultant, was not concerned, however, about those remaining jobs. His concerns and criticisms related to the workmanship of what had been completed on the roof proper.

Is the Jocelyn Report Proper Opinion Evidence?

[27] Counsel for Bosco submitted that the court should only accept the testimony of Mr. Jocelyn to the extent that he was a fact witness and that he is not entitled to provide opinion evidence.

[28] The submission was based on Mr. Jocelyn stating that his retainer had been to do an inspection report. He stated that if he had been told it was for litigation, he would have followed a different procedure. In particular, he would have consulted with Bosco Roofing.

[29] This argument is not accepted, as Mr. Jocelyn’s credentials as an independent consultant were not questioned. A voir dire of both parties’ expert witnesses was waived. It was agreed that each could give expert evidence that was relevant and necessary. His special expertise was not questioned. Neither was his independence questioned.

[30] When Mr. DiFranco wanted a roof inspection done, he called the IKO manufacturer of the roofing material. The IKO representative gave him a list of several roof consultants. Mr. Jocelyn was chosen. There is no evidence that he was partisan or biased.

[31] Overall, Mr. Jocelyn presented as a credible, reliable witness with extensive expertise in roofing. I accept his ability to testify as an expert witness in this case.

A Challenging Surface

[32] Mr. Mastracci tendered on the work to be done on this roof without seeing it first. He assessed the amount of product and the amount of labour required before having been to the site.

[33] The roof was covered in concrete coreslabs.

[34] Mr. Mastracci described the state of the roof when he commenced work. Specifically, he described the unevenness of the coreslabs where variants in height between slabs ranged from a quarter inch to one inch in height. The unevenness meant that the roofer could not roll out the roofing material in a straight line. It made the job challenging for them. He said they had to manipulate the product as best they could and it took more time for them to do so.

[35] Mr. Mastracci testified that he raised the issue of the coreslabs with Mr. DiFranco prior to work commencing, who instructed him to commence work in any event.

[36] The defence expert Mr. Thapar testified that the uneven surface could compromise the intended slope of the roof and affect drainage. Drainage, however, was not an issue in the trial. Mr. DiFranco testified that there was some ponding of water but that the roof drained properly. The 188 expert, Mr. Jocelyn, was also not critical of the ponding that occurred.

[37] Mr. Pero, of King Roofing, who later applied the third layer of membrane to fix the deficiencies outlined by Mr. Jocelyn’s report, testified that the coreslabs were indeed uneven. In his experience, he stated that such coreslabs are never on a horizontal plane but one could still install a watertight roofing system.

[38] Mr. Jocelyn testified under cross-examination that the uneven coreslabs had nothing to do with waterproofing the roof. In re-examination, he clarified that roof decks “always have some lumps and bumps in them.” The insulation foam boards may be scored to level the surface and take out abnormalities. Where there are larger gaps, they may be filled with a half-inch insulation.

[39] If indeed the uneven coreslabs were the issue, it is reasonable to infer that Bosco should have expected this and accounted for it in their order for materials and what the final labour cost would be.

[40] The unevenness of the coreslabs explains why the job was challenging but does not address the deficiencies identified by the roofing inspection report of Mr. Jocelyn.

The Need for a Third Layer of Roofing Material

[41] The real issue that Mr. Jocelyn identified was that the installation was not in accordance with the IKO roofer’s recommendations/specifications such that the roof would not last the expected 20 to 25 years. He was critical that the: a) Granules were not embedded at the endlaps and were not bonded; b) There was insufficient end lap overlap and they were not properly staggered or offset; c) The overlapped corners were not properly trimmed at a 45-degree angle; d) There was excessive bleed-out in some areas and in other areas no bleed out, where the capsheet to be bonded to the membrane below was either burnt or not bonded at all; e) The perimeter and curb flashing was inconsistently installed, was not compliant with the manufacturer’s recommendations, and some corners were loose and open which could allow water into the roof system; f) There was poor cap sheet installation at the cap flashings with no overlap that would lead to leakage; and g) The workmanship was poor with edges not cut in a straight line, jagged cut lines, inconsistency of flashing sizes and corner detailing, and foot prints imbedded in warm material.

[42] The deficiencies were supported by photographs showing examples of each of the problems. Mr. Jocelyn stated that he did not photograph every one of the problems he found, but the photographs are indicative of problems he found across the entire roof.

[43] The defence expert, Mr. Thapar, could not comment on the adequacy or correctness of the deficiencies.

[44] Mr. Mastracci, for Bosco, never had the chance to see the Jocelyn report and look at the deficiencies in the roof before the third membrane of roofing was applied by King Roofing. He explained that the uneven coreslabs made the job challenging. However, for much of the deficiencies noted he did not give evidence denying the possibility of such deficiencies, with two exceptions.

[45] Firstly, Mr. Mastracci stated they had not finished their work on the pitch pockets or cap flashings so it was unfair to critique that work. Secondly, at the perimeter and curb flashings, Mr. Mastracci had done a watertight overlap up the perimeter walls that would not have been visible to Mr. Jocelyn’s inspection as he did not do intrusive or destructive testing, so Mr. Mastracci considered there was no real deficiency there.

[46] The conclusion to be reached nonetheless is that the entire roof had serious problems with the roofing system. The photographs establish in a straightforward manner the poor workmanship described.

Remedy for Deficiencies

[47] As noted above, the opinion evidence of Mr. Jocelyn was found to be independent and credible. He testified that the remedy for the deficiencies was to apply a third membrane, a new cap sheet over the entire roof. His evidence was that it would not be economical to try to patch each one of the deficiencies as it would end up being “a quilt”. The remedy to get it back to a new condition roof was a third cap sheet over the entire roof.

Cost of Remedial Work

[48] There is very little evidence of what the fair cost of the remedial work would be. The only evidence is that King Roofing submitted an invoice for $75,000 plus HST for a total of $84,750. The invoice states the description of work as follows:

• Set up safety equipment as required
• Remove flashing from perimeter of building
• Remove pipe flashings/install new pipe flashings
• Apply IKO bonding agent to entire existing roof
• Torch apply 250 cap membrane, entire roof
• Correct drainage issues with lower roof
• Torch apply 250 cap membrane, lower roof
• Re-install flashing to perimeter of building
• Caulk and polybitume to all required areas

[49] Bosco was not provided the opportunity to inspect the deficiencies, or read Mr. Jocelyn’s report before the roof was redone by King Roofing.

[50] However, Mr. Mastracci for Bosco gave no evidence that work done by King Roofing was excessive or overpriced. Neither did Mr. Mastracci give evidence of what he would have charged for laying the third membrane of roofing material and finishing the job.

[51] There was no evidence to suggest that the price charged by King Roofing was unreasonable.

Missing Evidence

[52] Mr. DiFranco testified that Bosco was not informed that Mr. Jocelyn was doing an inspection of their roofing job. Bosco was never given Mr. Jocelyn’s report. Mr. Mastracci testified that they were ordered off the job site without further explanation.

[53] Mr. DiFranco testified under cross-examination that he hired King Roofing to apply the extra membrane to the roof at a time when he believed he had a claim against Bosco roofing. He stated he wanted the remediation work done as quickly as possible to keep the condominium project going. The occupancy date for residents to move into this condominium was set for March 18, 2016.

[54] King Roofing was hired the day after Bosco Roofing was ordered off the job site.

[55] Bosco was never given an opportunity to repair the deficiencies complained of.

[56] The evidence of the deficiencies was destroyed by the remedial work done by King Roofing. What remains are the photographs and report of Mr. Jocelyn’s inspection.

Law and Analysis

[57] 188 did not provide any authorities to the court except for the basic principles on workmanship in contract law. As set out in T. Heintzman & I. Goldsmith, Canadian Building Contracts, 5th ed., loose leaf (Toronto: Thomson Reuters, 2014), at p. 4-50,

A contract between an owner and a contractor is a contract for work and materials. Unless the contract or the circumstances indicates otherwise, the contract will contain an implied term that the work shall be done in a good and workmanlike manner, that the workmen employed on the work will possess the ordinary skill of those exercising the particular trade and that the materials will be of good quality and reasonably fit for the purpose for which they are used.

Law on Spoliation

[58] The defence relied on the law of spoliation as set out in McDougall v. Black & Decker Canada Inc., 2008 ABCA 353, 97 Alta. L.R. (4th) 199, and cited in Nova Growth Corp. v. Kepinski, 2014 ONSC 2763.

[59] The court in McDougall reviewed the law of spoliation in Canada and at para. 29 summarized the principles as follows:

1. Spoliation currently refers to the intentional destruction of relevant evidence when litigation is existing or pending.
2. The principal remedy for spoliation is the imposition of a rebuttable presumption of fact that the lost or destroyed evidence would not assist the spoliator. The presumption can be rebutted by evidence showing the spoliator did not intend, by destroying the evidence, to affect the litigation, or by other evidence to prove or repel the case.
3. Outside this general framework other remedies may be available – even where evidence has been unintentionally destroyed. Remedial authority for these remedies is found in the court’s rules of procedure and its inherent ability to prevent abuse of process, and remedies may include such relief as the exclusion of expert reports and the denial of costs.
4. The courts have not yet found that the intentional destruction of evidence gives rise to an intentional tort, nor that there is a duty to preserve evidence for purposes of the law of negligence, although these issues, in most jurisdictions, remain open.
5. Generally, the issues of whether spoliation has occurred, and what remedy should be given if it has, are matters best left for trial where the trial judge can consider all of the facts and fashion the most appropriate response….

[60] At para. 25, the court in McDougall specifically noted that,

Spoliation should not be confused…with the unintentional destruction of evidence….the unintentional destruction of evidence is not spoliation, and it is not appropriate to presume that missing evidence would tell against the person destroying it where the destruction is unintentional and the trier of fact cannot draw inference that the evidence was destroyed because it would tell against the spoliator.

Analysis of the Spoliation

[61] In this case, 188 applied the third membrane of roofing material over the evidence of deficient workmanship. This means the evidence was relevant and it was destroyed on purpose. Mr. DiFranco did concede that he was contemplating litigation at the time. It follows that there is a rebuttable presumption that the evidence was destroyed as it would “tell against the spoliator.”

[62] The evidence in this case rebuts the presumption. Mr. DiFranco had a deadline of March 15, 2016 to meet for completion of the project. He had a concern about leakage and damage in light of the leaking which had occurred at Christmas. He had the independent roofing inspector, Mr. Jocelyn, stating that an entire third layer of roofing was required.

[63] Counsel for Bosco submitted that meant there was no way for them to determine the integrity of its workmanship as the evidence was no longer available. There was, however, the detailed report with photographic evidence by Mr. Jocelyn of all the particulars of the deficiencies.

Law on Opportunity to Correct Deficiencies

[64] Bosco did not provide any authorities regarding reasonable opportunity to correct deficiencies but did argue the factual issue.

[65] The general proposition set out in C.S. Bachly Builders Ltd. v. Lajlo, [2008] O.J. No. 4444, at para. 87, is that unless the contractor’s deficient work is a fundamental breach of the contract (i.e. a breach so serious it goes to the root of the contract) the owner must give the contractor a reasonable opportunity to correct the deficiencies in their work.

[66] This was most recently stated in TIF Mechanical Limited v. Ortolli and Lobello, 2016 ONSC 3172, at para. 73, where the court reiterated,

The general rule is that a contractor who is not in breach of contract should be given a reasonable opportunity to correct its deficiencies before it is charged the costs of correcting them, and if that is not done, there can be no deduction from the contractor’s entitlement to payment for such costs.

Analysis of Opportunity to Correct Deficiencies

[67] On the independent evidence of Mr. Jocelyn, there needed to be an entire third roofing membrane applied to correct the multiple deficiencies.

[68] The manufacturer’s recommendations for the installation of the IKO membranes were not followed. Mr. Jocelyn’s opinion was that if properly installed such a roof would be expected to last 20 to 25 years. He determined, however, that there were multiple places where water would find its way under laps or between seams which would lead to either immediate leaks or leaks in a few years that will cause much damage and premature failure to the roof membrane.

[69] The court is satisfied that the deficient work amounted to a fundamental breach of the contract and therefore no opportunity needed to be given to Bosco to make the corrections. The deficiencies were too significant and time was too short to entrust Bosco to complete the work.

[70] As such this is an appropriate case for the defendant 188 to receive a set-off for the roof work which they paid to correct that which was defective.

Bosco’s Claim for Work Done Net of Remedial Work

[71] The plaintiff led evidence of the hours of work done, the materials paid for, and that the job was all but finished except for the pitch pockets and the entranceway roof area. They reduced their final bill by $1,950 for what had not been completed. This demonstrates that out of a job which was quoted at $159,982, they were 99 percent finished the job.

[72] The deficiencies in the job were detailed by Mr. Jocelyn.

[73] The deficiencies could have been, and actually were remedied by a third cap sheet being applied such that 188 now has a triple membrane roofing system rather than a double membrane.

[74] In light of the extent of deficiencies identified by Mr. Jocelyn and the pressure 188 was on to complete the project, it was not unreasonable for them to choose to have a different roofer complete the remedial work. The cost of the remedial work done by King Roofing was not plainly unreasonable.

[75] The evidence establishes that the work was done and the IKO product that was purchased was installed. This provided 188 with two full membranes of roofing material. On that basis, the plaintiff’s outstanding claim could be ordered to be paid.

[76] The quote was for $159,982. The evidence by Mr. Mastracci was that there were extras of $1,075 and $8,750 plus HST of $1,277 which was another $11,102. 188 did not give any evidence that the extras had not been approved. On this evidence, the agreed price is then $159,982 plus $11,102; for a total of $171,084.

[77] 188 had paid $108,700 such that $62,384 remained from the prices agreed to for the job.

[78] There is no evidence why the plaintiff’s claim would be greater than $62,384 other than that they sent an invoice for that amount.

[79] Concurrently, the court must decide how to deal with the poor workmanship and risk of future leakage to which Mr. Jocelyn testified. The cost to remedy this was the third layer applied by King Roofing of $84,750. The defendant 188 now has a triple membrane roofing system.

[80] The plaintiff’s judgment of $62,384 must be set off by the defendant’s judgment on the counterclaim of $84,750.

[81] On this approach, the plaintiff, defendant by counterclaim, ought to pay $22,366.

[82] Alternative approach:

[83] The plaintiff roofer quoted the job as $159,982 for a new roof to be installed. Extras agreed to were $11,102. This total of $171,084 was the price agreed to by the parties. 188 has paid $108,700 on the interim bill to the plaintiff and then a further $84,750 to King Roofing for the deficiencies for a total of $193,450. 188 now has a proper workmanlike roofing system but 188 has paid $22,366 more than the price agreed upon to achieve a proper roofing system because of the poor workmanship of the plaintiff roofer.

[84] On this approach, the plaintiff, defendant by counterclaim, ought to pay $22,366.

[85] Each approach results in the same conclusion. 188 is made whole if they are paid $22,366. Accordingly, in light of the set-off, the plaintiff’s action is dismissed and the defendant by counterclaim is to pay 188, the plaintiff by counterclaim, $22,366. The defendant by counterclaim is also to pay prejudgment interest pursuant to the provisions of the Courts of Justice Act.

Costs

[86] If the parties are unable to resolve costs, the defendant 188 is to serve written submissions within 14 days of this judgment. The plaintiff Bosco is to serve responding submissions within seven days thereafter. The defendant may serve reply submissions within seven days thereafter, if needed. Cost submissions are not to exceed three pages plus any bills of costs, offers to settle, and case law.

[87] The parties’ submissions are to include directions for payment of funds out of court.

[88] If submissions are not received within 30 days of this judgment, the issue of costs will be considered settled and the file closed.

M. J. Donohue, J.

Released: May 16, 2019