Court File and Parties

COURT FILE NO.: CV-17-570060 DATE: February 15, 2021

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Act, R.S.O. 1990, c.C.30

BETWEEN:

NEW GENERATION WOODWORKING CORP. Plaintiff

AND:

ADAM ARVIV and CANADIAN IMPERIAL BANK OF COMMERCE. Defendants

BEFORE: Master C. Wiebe

COUNSEL: Charles W. Skipper for the plaintiff, Tel.: 416-941-8841, Fax: 416-941-8852; Email: cskipper@foglers.com. Adam Arviv for the Defendant Tel.: 416-930-1221, Fax: Unknown; Email: arvivadam@gmail.com.

HEARD: January 13, 14, 15 and 19, 2021.

REASONS FOR JUDGMENT

I. INTRODUCTION

[1] This reference concerns this one action wherein New Generation Woodworking Corp. (“NGW”) purported to preserve and perfect a claim for lien in the amount of $73,767.26 in relation to millwork work it did in a large, luxury, residential condominium (unit 604, 118 Yorkville Avenue, Toronto) owned by the defendant Adam Arviv. I will call these premises “the Unit.” Mr. Arviv defended this action and asserted a set-off and counterclaim. The filed Scott Schedule showed the counterclaim as being in the range of from $76,508.79 to $101,508.79.

[2] NGW also claims full priority over the first mortgage of the Canadian Imperial Bank of Commerce (“CIBC”). Towards the end of the reference another mortgage was registered on title on February 28, 2020 by NHE Capital Corp. (“NHE”) in the face of the NGW claim for lien. On September 15, 2020 I signed a consent order confirming the full priority of the NGW claim for lien to this second mortgage.

[3] As a preliminary matter, the provisions of the Construction Act, R.S.O. 1990, c. C. 30 (“CA”) as it read before July 1, 2018 apply to this case. The contract procurement, contract and work were all performed before July 1, 2018. My references to the CA will be to the old provisions.

II. BACKGROUND

[4] I begin with a summary of the facts of this case gleaned from the plaintiff’s evidence.

[5] Mr. Arviv purchased the Unit and wanted new kitchen and other cabinetry in the Unit. He had the Unit generally renovated by a contractor, Carl Smith. The Arviv family lived in an offsite facility while the renovation was being done. Mr. Smith knew the principal of NGW, Carlos Areias, and introduced Mr. Arviv to Mr. Areias concerning this work.

[6] Mr. Arviv and his wife, Ashley Arviv, met Mr. Areias and NGW’s project manager, Alexandra DeSouza in early July, 2016 and walked through the Unit. In a restaurant later that day, Mr. Areias wrote on a napkin the budget number $225,00 or $250,000 for the design, construction and installation of what Mr. Arviv wanted done.

[7] On July 22, 2016 Mr. Smith sent Mr. Areias drawings concerning the Unit. These drawings were prepared by someone employed by Mr. Arviv. They concerned five specific areas of the Unit: kitchen cabinetry; a closet storage area and built-in desk in the girls’ bedroom; millwork and cabinetry in the master walk-in closet; a vanity in the girls’ ensuite bathroom; and a vanity in the master ensuite bathroom.

[8] Using these drawings, NGW prepared a written quotation to Mr. Arviv dated July 28, 2016 that concerned the indicated work in the indicated five areas. The document showed a “package price” of $150,000 plus HST. Design work was not included in this scope. The quotation had a list of exclusions that included “decorative hardware/handles” and “lighting/electrical work.” The quotation required a deposit payment of 50% of the price, payment of 40% of the price upon delivery of the millwork to the site, and payment of 10% of the price upon “installation.”

[9] Mr. Areias met with Mr. Arviv in the lobby of the condominium building on July 28 or 29, 2016 and handed him the quotation. Present were Ms. DeSouza, Mr. Arviv’s assistant, Mia Shendale, and Mr. Arviv’s designer, Michael London. Mr. Arviv confirmed that Mr. London was the designer for the project, including the NGW work.

[10] Over the next two weeks there was an exchange of text messages between Mr. Arviv and Mr. Areias. Mr. Arviv wanted a lower price and different payment terms. Concerning price, Mr. Areias was not prepared to compromise for the specified scope. Concerning payment, there was a discussion of other options.

[11] Finally, on August 8, 2016 Mr. Areias texted Mr. Arviv stating that NGW was prepared to agree to a price of $150,000 plus HST. Mr. Arviv texted back, “Cool at 150,000.” After a further exchange of texts, there was approval of the following payment plan: $60,000 to be paid immediately; $60,000 to be paid in 30 days; $30,000 to be paid at the end. On August 8, 2016 Mr. Arviv paid NGW $60,000 by way of a cheque from Mr. Smith.

[12] On August 12 and 14, 2016 Mr. London emailed “updated drawings.” Ms. DeSouza did not find significant differences from the earlier drawings, and NGW did not seek any change to the contract price or a change order. Ms. DeSouza affixed a happy face symbol to each of these drawings to mark them as the governing contract drawings.

[13] NGW proceeded to fabricate the millwork in its shop. In accordance with Mr. Areias’ practice, he invited Mr. Arviv to attend at the shop to observe the finished millwork. Mr. Arviv paid $25,000 by wire transfer on October 13, 2016. The shop visit took place on October 15, 2016. Mr. Arviv was satisfied and paid another $25,000 in cash at that time.

[14] The installation work started at the end of October, 2016. NGW used two installers. There were no complaints as the installation proceeded.

[15] At the end of October, 2016, Mr. Arviv expressed satisfaction with the NGW work and asked Mr. Areias to install the same millwork that was in the master walk-in closet in the two girls’ walk-in closets. He also wanted cabinetry for the laundry room of the same kind that was in the kitchen. Finally, he wanted a large wall frame with a white board and cork board in the girls’ bedroom. There were no London drawings for this work. Ms. DeSouza prepared a sketch of the frame which was approved by Mr. Arviv. The work was rushed as the Arvivs were planning to move in soon. Therefore, Mr. Areias did not provide a quote in advance, as was his normal practice for extra work; but he did advise Mr. Arviv that this would be extra. NGW proceeded to do this work.

[16] On December 7, 2016 NGW rendered an invoice to Mr. Arviv in the amount of $56,250, the unpaid portion of the contract price. On December 8, 2016 NGW rendered an invoice to Mr. Arviv in the amount of $17,517.28 for the extra work. To prepare the extras invoice Mr. Areias estimated a fixed price. The total of these two invoices is $73,767.28.

[17] On December 17, 2016 the work was almost totally complete. It was not totally complete because of outstanding deliverables from Mr. Arviv, namely kitchen hardware and trim/filler pieces for the girls’ bedroom. On that day, Mr. Areias and Ms. DeSouza walked through the Unit with Mr. Arviv and Ashley Arviv. The Arvivs raised the following issues. Concerning the master bedroom walk-in closet, they mentioned the absence of lighting, the absence of shoe storage space, and the absence of mirrors. Concerning the kitchen, they did not like having all the appliances bunched up on one wall. Mr. Areias offered to get the Arvivs an electrical contractor for the lighting.

[18] On December 19, 2016 Mr. Arviv texted Mr. Areias that he, Mr. Arviv, had “just hired an electrician.” That same day Mr. Arviv emailed Ms. DeSouza stating that, “I’m not paying a penny till I’m satisfied and that includes the possibility of ripping out the entire closet and redoing it.” That was the last written correspondence from Mr. Arviv to NGW.

[19] Both Mr. Areias and Ms. DeSouza emailed, texted and called Mr. Arviv repeatedly concerning the outstanding owner deliverables and the unpaid invoices. There was no response. On January 27, 2017 NGW registered a claim for lien in the amount of the unpaid invoices, $73,767.28. NGW purported to perfect its lien by commencing this lien action on February 21, 2017 and registering a Certificate of Action on February 28, 2017.

[20] Using lawyer, Marc Kestenberg, Mr. Arviv delivered a Statement of Defence and Counterclaim on June 1, 2017. The Counterclaim contained a claim for $85,000 in alleged overpayment, $300,000 in damages for alleged deficiency correction costs, and $100,000 in punitive damages.

[21] On March 12, 2018, NGW obtained a judgment of reference from Justice Allen which referred this action to a Toronto construction master for trial. I made an order for trial on May 4, 2018.

[22] Mr. Arviv hired a new lawyer, Maria Trigianni, and delivered a Fresh As Amended Statement of Defence and Counterclaim. I became seized of the reference when I held the first trial management conference on August 20, 2018. At this time, Francesa D’Aquila-Kelly of Ms. Triggiani’s firm represented Mr. Arviv. She advised that Ms. Triggiani was leaving the firm and that Mr. Arviv was seeking new lawyer. I adjourned the trial management conference to September 10, 2018. At that time, Mr. Arviv was in the process of hiring lawyer, Mario Middonti, who could not be present. I adjourned the trial management conference to September 13, 2018 to allow Mr. Middonti to be properly retained and instructed.

[23] At the trial management conference on September 13, 2018 I made orders for various interlocutory steps, such as production, a Scott Schedule and discoveries. I included an order on consent that NGW be allowed a three-hour site visit on November 20, 2018 to examine the deficiencies raised by Mr. Arviv in the Scott Schedule, as I was advised that these deficiency issues had not been worked on. Prior to the site visit, Mr. Arviv unilaterally prohibited Mr. Areias from attending the site visit. Mr. Areias sent Ms. DeSouza in his place.

[24] At the next trial management conference on February 11, 2019 the parties advised that production, the Scott Schedule and discoveries were done. However, they were not ready for trial. Counsel advised that both parties wanted a private mediation. I ordered that one take place by May 10, 2019. No such mediation took place because Mr. Arviv did not make himself available.

[25] At the next trial management conference on May 21, 2019 Mr. Middonti advised that Mr. Arviv would be back from his many travels abroad in June, 2019 for the private mediation. I ordered that the mediation take place by September 30, 2019.

[26] On May 21, 2019 I also scheduled the trial. NGW provided me with a list of four trial witnesses, while Mr. Arviv provided me with a list of eight trial witnesses. I scheduled a nine-day summary trial to take place in person before me in late July and early August, 2020. I set a schedule for the delivery of affidavits for evidence in chief in advance of the hearing.

[27] On December 12, 2019 Mr. Middonti obtained an order removing himself from the record as Mr. Arviv’s lawyer. Lawyer, Mark Wiffen, replaced him in late January, 2020.

[28] In March, 2020 the COVID-19 pandemic caused the suspension of in-person court hearings. As the court gradually resumed non-trial hearings, virtual and in-person, I convened a trial management teleconference on June 23, 2020. I was advised that the mediation I had ordered take place by September 30, 2019 did not take place. I was not given the reason for that failure.

[29] Neither the court nor the parties were in position on June 23, 2020 to proceed with the scheduled trial or to reschedule it. Counsel advised that the parties wanted a settlement conference with either Master Short or retired Master Albert. Eventually, they chose Master Short, and on June 30, 2020 I ordered a virtual settlement conference with Master Short take place on July 23, 2020. I was later advised that Mr. Aviv left the conference after one hour. There was no settlement.

[30] The next trial management teleconference occurred on July 31, 2020. The focus of this teleconference was the sudden appearance of the NHE second mortgage on title in the face of the registered NGW claim for lien. I made orders concerning that mortgage.

[31] The next trial management conference took place on September 15, 2020. By this time the court was again scheduling trials. Mr. Skipper advised that a huge trial in another matter that he was involved with and that had been scheduled to start in February, 2021 had been adjourned to April, 2021. Therefore, on consent I rescheduled the trial hearing to take place in this matter by videoconference on January 12, 13, 14, 15, 19, 20, 21 and February 4, 2021. This fit into everyone’s calendar. All agreed to this schedule. The witness list remained the same, with NGW having four witnesses and Mr. Arviv eight. I ordered again that this be a summary trial with affidavits for evidence in chief served and filed in advance of the hearing. I set a schedule for these affidavits, a schedule that included the deadline of November 13, 2020 for the service of Mr. Arviv’s affidavits for evidence in chief. I conducted another trial management teleconference on November 27, 2020 to review the protocol to be followed for the virtual trial hearing.

[32] On December 21, 2020 Mr. Wiffen emailed me advising that he wished to be removed from the record as Mr. Arviv’s lawyer, that Mr. Arviv “is seeking new counsel,” and that Mr. Arviv was not opposed to Mr. Wiffen’s removal. I convened a teleconference for December 23, 2020. I required that Mr. Arviv be present.

[33] On December 23, 2020, Messrs. Wiffen and Skipper were present, but not Mr. Arviv. Instead he sent a one-year lawyer from the Groia & Company firm, Dawit Debssou, who advised that the Groia firm was in the process of being retained. Mr. Debssou indicated that Mr. Arviv wanted the trial adjourned in order to retain and instruct counsel. Mr. Wiffen confirmed that Mr. Arviv had delivered none of the seven affidavits for his seven fact witnesses in gross breach of my directions. There was no explanation for this breach.

[34] Mr. Skipper advised that NGW opposed any trial adjournment as NGW had served its affidavits for its two fact witnesses and the reports for its one expert witness in accordance with my directions as amended on consent and was ready for trial. Mr. Skipper said that NGW wanted me to strike the Arviv pleadings. I scheduled all three motions (the Wiffen removal motion, the NGW striking motion and Arviv adjournment motion) to be heard by me by videoconference on January 7, 2021. I was later advised that on that day, December 23, 2020, Mr. Debssou informed Messrs. Wiffen and Skipper by email that the Groia firm would not be acting for Mr. Arviv due to “scheduling conflicts.”

[35] Mr. Skipper served the NGW motion record on both Messrs. Wiffen and Debssou on December 23, 2020. Mr. Wiffen served his motion on Mr. Arviv on December 24, 2020. By January 7, 2021 NGW had filed its trial evidence, namely two substantial affidavits and two expert reports. It had also filed the joint document brief and the trial record.

[36] By January 7, 2021 NGW and Mr. Wiffen had filed their motion records for their motions. There was nothing from Mr. Arviv – no affidavits for evidence in chief, no motion record and no lawyer. Messrs. Wiffen and Skipper joined the conference. Mr. Arviv did as well, but only by audio connection from his residence in Miami, Florida. The Wiffen removal motion was unopposed by NGW and Mr. Arviv. I granted the removal motion.

[37] Mr. Arviv explained his total failure to deliver his trial evidence as being on account of being too busy on other matters. At one point, he said that this case was a “waste of his time.” As for lawyers, he said he could not remember being represented by Mr. Middonti. He said he did not use the Groia firm because “they are not construction lawyers,” which is not what Mr. Debssou said. Mr. Arviv said he would be approaching two new lawyers “in 48 hours,” but did not give their names. He said he could get his trial evidence done in “in thirty minutes” if I adjourned the trial, and, when I challenged his credibility, he said that I did not have to believe him.

[38] I struck Mr. Arviv’s counterclaim and set-off claim and denied the trial adjournment. I concluded that Mr. Arviv’s failure to produce evidence was critical, that Mr. Arviv’s case appeared to lack merit, that he was just delaying, that a delay prejudiced NGW and that Mr. Arviv would in any event not take this case seriously with a delay. By not striking the defence I allowed Mr. Arviv to rely on his defence and to cross-examine the NGW witnesses accordingly.

[39] Given that the trial hearing was now reduced to the NGW evidence, I adjourned the commencement of the trial hearing to January 13, 2021, in part to give Mr. Arviv (or his future lawyer) more time to prepare cross-examinations. I prepared written reasons for decision which I issued on January 11, 2021 and which are attached hereto as Schedule A.

[40] On January 11, 2021 Mr. Skipper copied me with an email exchange he had with lawyer, Julian Binavince. I encountered Mr. Binavince on a separate matter that same day. Mr. Binanvince advised he was considering being retained by Mr. Arviv and wanted to know whether the trial could be adjourned. Mr. Skipper forwarded my reasons for decision to Mr. Binavince.

[41] On January 13, 2021 Messrs. Skipper and Wiffen were present for the videoconference trial, and Mr. Arviv joined both by audio and video. Mr. Binavince was not there. Mr. Arviv repeated his demand for an adjournment of the trial in order to obtain and instruct counsel. He then made another demand, namely that I recuse myself as he said he had a reasonable apprehension that I was bias against him due to his ethnicity. Mr. Arviv stated that he is an Israeli Jew with a Jewish name, that I had stated at one point on January 7, 2021 that “you’re one of those people,” and that this created a reasonable apprehension in him that I have an anti-Semitic or anti-elitist bias against him. I heard argument on both points, and I adjourned the trial to the next day to consider my decision. At one point, Mr. Arviv threatened me by saying he has connections and that “this is not the last you will hear about this.”

[42] During the adjournment, I reviewed the oral recording of the January 7, 2021 proceeding. I determined that, after Mr. Arviv stated that he had vacationed in St. Bart’s on December 23, 2020, I said the following: “so you were one of those people who were travelling abroad.” I denied both the requested adjournment of the trial and the recusal. I found the representation issue to be a part of a delay strategy. I found the recusal issue to be invalid. I prepared written reasons which I read into the record when the trial resumed on January 14, 2021. I also ordered a transcript of the January 7, 2021 proceeding which I obtained and distributed on January 19, 2021.

[43] On January 14, 2021, Messrs. Wiffen, Skipper and Arviv were present. There was also lawyer, Alex Fidler-Wener, who stated that she would represent Mr. Arviv if the trial was adjourned to at least February 4, 2021. She was not aware of my January 7, 2021 ruling and my January 11, 2021 reasons. She gave me no assurance that Mr. Arviv would make the effort to abide by my directions in the future. She said she would not go on the record if I adjourned the trial hearing to start later in the existing trial schedule. I did not change my decisions. I amended my written reasons to incorporate this event and released these reasons. They are attached hereto as Schedule B.

[44] On January 14, 2021 there were opening statements and the examination of Mr. Areias on his affidavit. I excused Mr. Wiffen. Mr. Arviv gave no opening statement. He asked questions of Mr. Arias for ten minutes. I asked most of the questions. Mr. Arviv asked that the hearing be adjourned at 3 p.m. to accommodate his schedule and that the hearing on January 15, 2021 be delayed in order to accommodate his golf game. I adjourned the hearing at 3 p.m. on January 14, 2021 to accommodate Mr. Arviv’s schedule but did not delay the hearing on January 15, 2021 to accommodate his golf game.

[45] On January 15, 2021 I completed my questions of Mr. Areias. I found out later from the Registrar that Mr. Arviv had joined by audio connection for four minutes during this time. I did not notice his presence. He did not join for the remainder of the day. There was then the examination of Ms. DeSouza on her affidavit and the examination of Mr. Walker on his two expert reports. I asked all the questions. The evidence was completed on January 15, 2021, and I adjourned the trial hearing to January 19, 2021 to hear closing argument. I asked Mr. Skipper to email Mr. Arviv informing him of this fact. He did so, copying the court. Mr. Arviv emailed back immediately stating, “I’m unavailable at that time.”

[46] On January 19, 2021 Mr. Arviv was not present. Mr. Skipper gave his closing argument. After a break near noon, Mr. Skipper reported that his assistant had received an email from Mr. Arviv at 10:04 a.m. stating the following: “I have no call in or Zoom info I was not provided with proper details for this call. I’m purposely being excluded from scheduled calls.” The email contained a phone number for Mr. Arviv, 1-416-930-1221, which is the same phone number Mr. Arviv gave to me on January 13, 2021. The assistant emailed back to Mr. Arviv stating that he should join the hearing using the Caselines videoconference connection as had been the case throughout the trial. Mr. Arviv responded with the following email: “I wasn’t properly provided the info in a timeline that allowed me to join. Again the court acts with bias against me.”

[47] I found this email exchange mystifying for two reasons. First, Mr. Arviv emailed on January 15, 2021 advising that he was unavailable on January 19, 2021. Second, Mr. Arviv joined the same videoconference trial hearing on each of January 13, 14 ad 15, 2021 without difficulty. I instructed Mr. Skipper to call Mr. Arviv in my presence using the phone number shown in Mr. Arviv’s January 19, 2021 emails. The phone rang 30 times without an answer. I concluded the trial hearing.

[48] At my direction, Mr. Skipper emailed Mr. Arviv to inform him of the conclusion of the trial hearing and the unanswered call to his phone number. Mr. Arviv emailed back as follows: “That’s a lie and I have proof that you did not call and it did not ring 1 tone.” Mr. Skipper emailed back a photograph he had taken of his phone containing the number he called. The photograph shows the number, “94169301221,” Mr. Arviv’s number. There was no response from Mr. Arviv.

III. ISSUES

[49] Having reviewed the evidence and the submissions of the plaintiff, I believe that the following are the issues to be determined:

a) What was contained in the contract? b) Did either party repudiate the contract? c) Is NGW entitled to be paid its contract invoice? d) Is NGW entitled to be paid its extras invoice? e) Did NGW preserve and perfect its lien rights? f) What is the amount of the NGW lien? g) What is the priority of the NGW lien to the CIBC mortgage?

IV. WITNESSES

[50] Before I analyze the issues, I will comment briefly on the credibility of the witnesses.

[51] The two fact witnesses for NGW, Mr. Areias and Ms DeSouza, were credible witnesses. Their affidavits for evidence in chief were detailed, thorough and without exaggeration. The affidavits provided detailed corroboration. I acknowledge that Mr. Areias is the president of NGW and Ms. DeSouza is a prominent and long-time employee of NGW, facts which give both an interest in the outcome of this case. However, the detail and corroboration in their affidavits helped overcome the natural skepticism in their evidence stemming from their interest in NGW.

[52] There was another aspect about Mr. Areias’ affidavit that impressed me. He stated that, when Mr. Arviv denied him access to the site visit on November 22, 2018, he did not want to fight about this issue to save costs. He had good reason to fight. Instead, he allowed Ms. DeSouza to attend in his place. This showed me that Mr. Areias is a practical, careful man not prone to anger.

[53] Both also impressed me with their oral evidence. Mr. Areias showed me his expertise in millwork when he explained the difference between the material he used and the material of lesser quality the Arvivs replaced it with. He frankly explained his process in preparing the extras invoice and admitted that it deviated from his normal process of quoting in advance of the work. He explained this deviation as being as a result of the rush the Arvivs were in to move into the Unit, which dovetailed with the other evidence. When Mr. Arviv asked Mr. Areias whether Mr. Areias knew that Mr. Arviv did not have construction experience, Mr. Areias frankly admitted that fact. Again, Mr. Areias came across as a careful witness not prone to exaggeration.

[54] Ms. DeSouza went over with me in detail the items she saw on the November 22, 2018 site visit and in her own words explained the difference in quality between the material NGW installed and the replacement material. She was careful and measured in response to my questions.

[55] The third plaintiff witness was the expert, Travis Walker. He presented two reports, a signed Form 53 and a curriculum vitae. After a review of these documents, I accepted Mr. Walker as an expert witness to give opinion evidence in the area of architectural millwork construction and valuation, which is what his reports focused on. He is the principal of a prominent high-end architectural millwork firm, Mirmil Products.

[56] The first Walker report, dated June 26, 2019, concerned both his participation in the site visit on November 22, 20218 and his subsequent attendance at the NGW workshop to observe the NGW production process. He opined on the potential causes of the observed alleged defects as described in the Scott Schedule and the costs of correcting same. He also opined on the value of the items he saw concerning the NGW extras invoice all of which had been replaced by the Arvivs. The second Walker report dated November 23, 2020 concerned Mr. Walker’s valuation of the alleged extra work that appeared in the NGW extras invoice.

[57] What struck me about these reports was the care with which Mr. Skipper had included with the reports his instructional letters and the lists of documents he provided to Mr. Walker. This provided a clear understanding of what Mr. Walker was addressing in his reports and the factual foundation for them. Furthermore, in the reports themselves Mr. Walker was careful not assign blame for deficiencies as he was not instructed to do so. He was careful to corroborate conclusions. All this instilled credibility into the reports, which formed Mr Walker’s evidence in chief.

[58] Mr. Walker’s oral evidence was also forthright, clear and circumspect. Where he complemented the NGW work, he was careful to explain the basis for the complement. For instance, he described the NGW “white lacquer finish” in the kitchen as “exceptional” and “the best I’ve ever seen.” He described in detail the basis for this opinion, namely the ease with which this finish shows dust and color changes. His description was clear and understandable. He went into detail about his visit to the NGW shop and stated with corroboration why he was impressed with the high quality there. For instance, he stated that he saw skilled individuals doing hand carving, which he said was a declining art, and produced photographs in support.

[59] Concerning his second report, Mr. Walker was careful to show me that he did not have the NGW invoice in front of him, and that he assessed the items independently based on NGW photographs. His estimate turned out to be very close to the NGW extras invoice. He explained in an understandable way why this was not a surprise to him. I found Mr. Walker’s oral evidence credible.

V. ANALYSIS

a) What was contained in the contract?

[60] Based on the pleadings, both sides accept that there was a contract whereby NGW was to do specified millwork for a fixed price of $150,000 plus HST.

[61] The evidence is clear that this agreement is primarily embodied in the quotation dated July 28, 2016 that Mr. Areias presented to Mr. Arviv in the lobby of his condominium on that day. By this time, drawings by Mr. Arviv’s designer, Michael London, were provided to NGW. Using these drawings, NGW prepared the quotation. The quotation covered five areas of work: the supply and installation of itemized millwork in the shared girls ensuite; the supply and installation of itemized millwork in the girls’ wall closet; custom work on the kitchen fridge and oven wall; millwork in the master bedroom; and millwork in the master ensuite. The indicated price is $150,000 plus HST. The stated terms included a payment plan and there were specific exclusions. There was a space for the signature of Mr. Arviv that was never signed.

[62] The agreement, however, was eventually reached. Concerning the price, there was negotiation over the price and the payment terms. This was conducted by Mr. Areias and Mr. Arviv by text messages as they both were on vacation. Finally, on August 8, 2016, Mr. Arviv texted Mr. Areias, “I’m cool at 150.” I find that this represented an agreement on the contract price as stated in the July 28, 2016 quotation.

[63] There was then a further exchange of texts that day about the payment plan. Finally, the two men came to an agreement to have the price paid as follows: $60,000 immediately; $60,000 in 30 days; and $30,000 “at the end.” In his examination, Mr. Areias appeared to assert that the payment plan was different. I do not accept that evidence. The above noted plan I have described is clearly reflected in the text message exchange.

[64] Concerning the scope, both sides plead that the scope was to be defined primarily by the drawings and specifications of Mr. Arviv’s designer, Mr. London. Ms. DeSouza showed that Mr. London produced a final set of 11 drawings by email on August 14, 2016. They covered the areas described in the NGW quotation. Mr. Areias and Ms. DeSouza testified that they did not see any reason to change the contract terms on account of these drawings. Ms. DeSouza stated that, in accordance with her practice, she affixed a “happy face” stamp on each of these drawings to confirm that they were the governing contract drawings. I find that these drawings and the contents of the quotation defined the scope of the NGW contract work.

[65] Concerning schedule, the quotation did not touch on that subject and the parties did not discuss this matter. However, Mr. Areias made it clear that the work was being done on “as soon as possible” basis since the Arvivs were living in another location and were eager to move in. I find that this was the contract schedule.

[66] Hence, by the middle of August, 2016 there was an enforceable contract that comprised of the original July 28, 20216 quotation amended to incorporate the payment plan as described above plus the London drawings dated August 14, 2016, with the work to be done as soon as possible.

b) Did either party repudiate the contract?

[67] Mr. Arviv pleaded that NGW “abandoned” the contract. Abandonment, if proven, can have two consequences. For a contractor with a contract with the owner, like NGW, “abandonment” triggers the running of the lien period; see CA, section 31(a)(ii). Also “abandonment” can be a repudiation of the contract by the contractor, which is what Mr. Arviv also alleges against NGW. I will deal with the latter point here.

[68] The case authority is clear that “abandonment” by a contractor takes place when there is a “cessation of work and a lack of intention to carry the work through to completion”; see Baeumler Quality Construction Inc. v. Pirraglia, 2018 ONSC 7610 (SJC) at paragraph 25, and Nigeco Contracting Ltd. v. Aizenstros, 2019 ONSC 3364 (SCJ) at paragraph 22. Cessation of work is not enough. There must be proof of a lack of intention to complete the work. This lack of intention to complete is what makes contractor abandonment a repudiation of the contract, as it shows that contractor no longer wishes to be bound by its contract obligations; see the leading case of Heyday Homes Ltd. v. Gunroj (Master) at paragraphs 341-343. As contract repudiation, abandonment by a contractor carries with it the risk that the contractor, such as NGW, will lose its claim for compensation; see Heyday, op. cit., at paragraph 345.

[69] The evidence in this case is clear that there was no abandonment by NGW. By the middle of December, 2016 when there was the final walk-through, NGW had almost completed the entirety of its contract and extras work. What remained to be done were minor touchups. Significantly, one item of remaining work was the installation of handles. These were to be supplied by the owner, which is clear from the quotation. Gaining access to the Unit was not a straight-forward matter as there was heavy security in the condominium building. Therefore, it only made sense for NGW to plan one final attendance over one day once Mr. Arviv had supplied the handles. This is what Ms. DeSouza tried to do. Her affidavit shows that she sent Mr. Arviv nine unanswered written correspondences from December 14, 2016 to February 13. 2017 seeking a status update on his delivery of the handles and a schedule for the final NGW attendance. This is evidence of a continuing NGW intention to complete its work, not abandonment. That is what I find.

[70] What the evidence shows clearly on the other hand was a contract repudiation by the owner, Mr. Arviv. In Dirm 2010 Inc. v. Prestressed Systems Incorporated, 2017 ONSC 2174 (Master) at paragraphs 307 to 310 Master Albert adopted definitions of contract repudiation such as the one by the Supreme Court of Canada in Guarantee Company of North America v. Gordon Capital Corporation, [1999] 3 S.C.R. 423, namely “where the very thing bargained for has not been provided.” She went on to describe five factors that had been identified by the Court of Appeal in 968703 Ontario Ltd. v. Vernon to be considered in determining contract repudiation: how much of the contract was performed by the breaching party; the seriousness of the breach on the innocent party; the likelihood of repetition of the breach; the seriousness of the consequences of the breach on the innocent party; and how much of the contract had yet to be performed by the breaching party. Master Albert also pointed out that once a repudiation takes place, the innocent party has an election to bring the contract performance to an end or to keep it alive.

[71] Applying these factors to the case before me, I have little trouble finding that Mr. Arviv repudiated the contract in December, 2016, January, 2017 and thereafter. He approved entirely of the NGW millwork during his visit to the NGW shop on October 15, 2016 and paid NGW $25,000 in cash at that time. However, once the millwork was in place, he complained not about the installation or the material, but about the design. In his text of November 25, 2016, Mr. Arviv started talking about missing items: no laundry room rod, no trash can pull-outs in the kitchen, no pull-outs in the girls’ closet, insufficient lighting in the master closet, insufficient shoe storage and insufficient mirrors. During the final walk-through on December 17, 2016 Mr. Arviv and his wife reiterated the issues about darkness of the master closet, absence of mirrors, and insufficient shoe storage. They also disapproved of the bunching of appliances on one wall of the kitchen. As Mr. Areias pointed out in his affidavit, none of the missing items were in the contract design and the appliance configuration was as specified. In short, the Arvivs suddenly wanted a different design and not the one specified by the contract. NGW was not responsible for design. This was a complete deviation from the contract by Mr. Arviv.

[72] Mr. Arviv then ceased paying and ceased giving access to NGW. By December 17, 2016 with the work almost done Mr. Arviv had paid NGW $110,000, namely about 59% of the contract price plus the extras, leaving 41%, a significant amount, unpaid. On December 7, 2016 NGW rendered the bill for the remainder of the contract price, $56,250. Mr. Areias acknowledged in his oral evidence that a significant part of that bill - I calculate $22,350 - was for the remainder of the second installment which should have paid months earlier. On December 8, 2016, NGW rendered the bill for the extras, $17,517.26. These bills were not paid. Furthermore, as stated above, Mr. Arviv also ceased giving NGW access to the site to complete its work despite Ms. DeSouza’s many correspondences seeking access.

[73] In addition, and significantly, Mr. Arviv also completely ceased corresponding with Mr. Areias and Ms. DeSouza despite their many correspondences with him. He did not even articulate his dissatisfaction to NGW. Mr. Arviv’ last correspondence with Mr. Areias was a text on December 19, 2016 stating that he had just “hired an electrician.” His last correspondence to Ms. DeSouza was that same day by text threatening not to pay “a penny till I’m satisfied and that includes the possibility of ripping out the entire closet and redoing it.” This non-response happened even when Mr. Areias and Ms. DeSouza began pressing Mr. Arviv for payment by text sent on January 25, 2017.

[74] Paying the contractor and giving access to the contractor to do its work are two critical obligations of owners in construction contracts. Mr. Arviv’s failure to do these two things combined with his complaints about the design and complete cut-off of correspondence sent the message that he had permanently walked away from the contract.

[75] I do not find that the Mr. Arviv had a concern about the quality of NGW’s work. If he had such a concern, he had an additional obligation to notify NGW accordingly and give NGW access to complete the repair of these deficiencies; see Turano’s Home Improvement Inc. v. Stern, 2018 ONSC 201 (Master) at paragraph 63. There was no evidence that Mr. Arviv made any complaint to NGW at any time about the quality of its work, much less give formal notice to NGW to correct deficiencies. This bolsters my conclusion that Mr. Arviv repudiated the contract. He wanted a different design.

[76] Concerning NGW’s election, Mr. Skipper argued that the registration of the NGW claim for lien on January 27, 2017 was not an election by NGW to bring the contract to an end as Ms. DeSouza sent another text to Mr. Smith on February 13, 2017 seeking access to finish the work. However, there was no such correspondence thereafter. As a result, I accept Mr. Skipper’s argument that the perfection of the NGW lien by the commencement of this action on February 21, 2017 amounted to an election by NGW to accept Mr. Arviv’s repudiation and end the contract.

[77] The result of Mr. Arviv’s accepted contract repudiation is that, had Mr. Arviv’s counterclaim and set-off claims not been struck and had he been able to establish his alleged deficiency correction damages, NGW would not have been liable to pay them as it was excused from performing deficiency correction work.

c) Is NGW entitled to be paid its contract invoice?

[78] As stated above, the portion of this invoice that represented the unpaid portion of the second instalment of the contract price, $22,350, was clearly due and owing on December 7, 2016, the date of the invoice, as the period of 30 days from the commencement of the work had long passed. The issue is with the remainder, the unpaid last instalment, $33,900.

[79] In the contract, this installment was due and owing upon “installation,” or “at the end.” There was evidence from each of Mr. Areias, Ms. DeSouza and Mr. Walker that the work was not totally complete. Mr. Areias stated that the value of the work left to be done was in the $1,500 to $2,000 range, being the kitchen handles and fillers for the laundry room and the girls’ room. Ms. DeSouza said the same, that it would take a day, and that its value was at least $1,500. Mr. Walker estimated the remaining work as being two days for one person valued at $2,000. $2,000 is just over 1% of the total contract price of $183,767.26 (HST incl.).

[80] There is authority for the proposition that “substantial completion” is enough for a contractor to establish entitlement to payment of a whole price contract or the last payment of a contract price to be paid in parts, as in this case. In Heyday, op. cit., at paragraphs 338 – 347, Master Sandler quoted extensively from Goldsmith on Construction Contracts, 4th edition, Carswell, 1988, chapter 5, “Breach of Contract.” In paragraph 339, the following quotation appears: “A contractor is not, in the absence of some express provision of the contract, entitled to payment until substantial completion of the work.” In paragraph 346 there is this quotation: “As it is sometimes put, performance is a condition precedent to payment. However, minor defects in completion will not prevent a contractor from establishing that he has in substance fulfilled the condition precedent, and what is generally known as “substantial completion” is sufficient compliance with the obligation to complete.”

[81] The CA contains definitions that assist in understanding this notion of “substantial completion.” CA section 2(1) defines “substantial performance” of a contract, the concept that triggers the running of the initial lien period. It has limited utility for our purposes, however, because the concept contemplates further work and further payment under the contract. A better guide is the way the CA deems “completion” to have occurred for the purpose of triggering the running of the final lien period. The final lien period should run when the final payment is due. In CA section 2(3) “completion” is deemed to have occurred when the cost to complete is the lesser of 1% of the contract price or $1,000. I note that under the new version of section 2(3) the formula is the lesser of 1% of the contract price or $5,000. This definition of “completion” provides guidance as to whether a contractor has reached “substantial completion” under the contract that triggers the obligation for final payment.

[82] Based on this definition, there is no doubt that NGW reached “substantial completion” of the contract by the time of the December 17, 2016 walk-through. Mr. Areias testified that by that time the Arvivs had moved into the Unit and were living there. As stated above, the value of the work left to be done was no more than between $1,500 and $2,000, which is around 1% of the contract price. I note that total completion did not happen because of Mr. Arviv’s failure to deliver the handles and failure to give access. What was left to be done was indeed just “minor defects in completion” to quote from Heyday, op. cit., paragraph 346. I find that NGW was entitled to be paid the last installment of its contract invoice, $33,900.

[83] This means that NGW was and is entitled to be paid the entirety of its contract invoice of $56,250 and was entitled to be paid upon delivery of the invoice.

[84] Mr. Skipper cautioned me to include an analysis of the Arviv set-off and counterclaim as articulated in the Scott Schedule. Usually, I do not wander into unnecessary issues. But in this case I will do so. There was extensive evidence on this subject from the plaintiff. Furthermore, given my striking order and Mr. Arviv’s threats of an appeal of my decisions, it might be useful for another court to see my conclusions on those issues.

[85] In this part of my reasons I will focus on those parts of the Scott Schedule that concern the contract invoice.

c.1) Kitchen deficiency 1 – missing freezer doors and hinges: $4,800

[86] This item on the Scott Schedule concerns the Arviv allegation of two missing fridge and freezer door panels and insufficient fridge door hinges. Ms. DeSouza stated in her affidavit that the fridge and freezer door panels were on site during the walk-through on December 17, 2016, and that they were not installed because NGW was awaiting the delivery by Mr. Arviv of the handles for the fridge and freezer.

[87] Ms. DeSouza stated that during the site visit of November 22, 2018, 23 months later, she noticed that the door panels were not there. She asked Ms. Shendale, Mr. Arviv’s assistant, as to their whereabouts and Ms. Shendale said they “may be in the closet.” I find that this is not a deficiency. It is rather an item of uncompleted work that was uncompleted due to Mr. Arviv’s failure to deliver the handles.

c.2) Kitchen deficiency 2 – fasten chrome to 8 glass doors: $600

[88] This item concerns the allegation that chrome was separating from 8 glass doors. Ms. DeSouza in her affidavit pointed out that there was no such issue during the walk-through on December 17, 2016. During the site visit on November 22, 2018, 23 months later, she noticed one glass door above the cooktop that had separated from the chrome. She attributed this issue to the absence of a handle, which was a design issue, and most importantly to the change that Mr. Arviv subsequently made removing the touch-latches NGW had installed. Without touch-latches, constant use would naturally create this issue. I do not find this to be a deficiency.

c.3) Kitchen deficiency 3 – repaint 1 chrome door: $500

[89] This item concerns the allegation of a spot on the lower left corner of a chrome door. Ms. DeSouza stated that on the site visit of November 22, 2018 she was shown a spot on the door above the coffeemaker, an area of high use. She swore that this was not there on December 17, 2016. She attributed the spot to the absence of touch-latches and handles as indicated in c.2 above. I accept that evidence and deny this item as a deficiency.

c.4) Kitchen deficiency 4 – missing tip-on latches on 8 doors and 2 cracked cabinet bottoms: $500

[90] This item concerns the allegation that 8 tip-on latches for cabinet doors had not been installed, and that 2 cabinet bottoms were cracking. Ms. DeSouza stated in her affidavit that NGW installed the tip-on latches as specified, but that Mr. Arviv removed them to make way for subsequently installed lighting.

[91] Concerning the cracked cabinet bottoms, Ms. DeSouza said she noticed only one, and attributed this cracking to Mr. Arviv’s removal of the NGW touch-latches, which then caused a “slamming” of the doors leading to the cracking. I accept that evidence and deny the deficiency allegation.

c.5) Kitchen deficiency 5 – repair damaged drawer face: $350

[92] This item concerns the allegation that NGW damaged the drawer face of the drawer beneath the coffeemaker. Ms. DeSouza showed me a photograph she took of this damage on November 22, 2018. There were scratches of a sharp object in the wood. Ms. DeSouza stated that drawer was overloaded and heavily used. This is obviously the result of wear and tear, not an NGW deficiency. I deny this claim.

c.6) Kitchen deficiency 6 – supply and install appliance pulls: $1,707

[93] In the Scott Schedule, this item was described as the failure to supply and install three appliance pulls. Ms. DeSouza deposed that Ms. Shendale explained during the site visit of November 22, 2018 that it really pertained to the missing handles. The contract expressly excludes the provision of handles by NGW. This is not a deficiency.

c.7) Kitchen deficiency 7 – longer screws for hinge plates: $300

[94] This item appears to pertain to the absence of “longer screws” for hinge plates. Ms. DeSouza stated in her affidavit that NGW used the screws that were recommended by the door manufacturer. There was no evidence of what Mr. Arviv meant by this item. I deny this claim.

c.8) Kitchen deficiency 8 – supply and install hinge restrictors: $50

[95] Ms. DeSouza explained this item the way it was explained to her on the site visit. There are two kitchen cabinets that were designed and installed with their doors opening next to and close to a wall. The wall cannot be moved. This design was causing damage when the doors were opened carelessly. There was no specification for a hinge restrictor. Ms. DeSouza stated that this was a design issue as a result. Furthermore, she stated that putting in hinge restrictors would significantly diminish the functionality of the doors. I accept her evidence, and, as a design issue, deny the claim.

c.9) Kitchen deficiency 9 – supply and install soft close hinges: $780

[96] This item pertains to the alleged failure of NGW to install soft close hinges on cabinet doors. Ms. DeSouza explained that this was another design issue. She stated that NGW would install soft close hinges as a standard feature if handles were specified for the doors. She stated that she discussed this with Mr. London and he specified touch-latches instead of handles. Ms. DeSouza explained that touch-laches do not work well with soft close hinges, and that soft close hinges are not a standard NGW feature with touch-latches. This is a design issue, and I deny the claim.

c.10) Kitchen deficiency 10 – install proper venting for electronics: $350

[97] This item pertains to the alleged failure of NGW to install a cabinet in the kitchen with proper venting for the electronic equipment Mr. Arviv planned to have there. Ms. DeSouza explained this as another design issue. The London contract drawings do not show a requirement for such a venting cabinet. Therefore, I agree with Ms. DeSouza and deny the claim.

c.11) Kitchen deficiency 11 – supply and install chrome trims for appliances: $50

[98] This item pertains to a stainless-steel trim that NGW had installed on the appliances and that had become loose. Ms. DeSouza acknowledged based on what she saw on the site visit of November 22, 2018 that this issue existed. She could not explain its cause. She stated that, had the contract not been breached, NGW’s one-year warranty might have applied.

[99] I find that this might have been a valid deficiency item had Mr. Arviv not repudiated the contract. I note that Mr. Walker assessed the cost of correcting this item at only $300.

c.12) Kitchen deficiency 12 – supply and install new flip-up over oven: $400

[100] Ms. DeSouza stated in her affidavit that on November 22, 2018 Ms. Shendale described this item as referring to the replacement of the flip-up cabinet door above the coffeemaker. Ms. DeSouza stated that the flip-up door she observed was fine and that all that was required was a re-tensioning of the hinges for the door.

[101] This too might have been a valid deficiency item had Mr. Arviv not repudiated the contract. But the correction cost would have been minor. I note that Mr. Walker assessed the cost of correcting this item at only $75.

c.13) Kitchen deficiency 13 – remove one cabinet: $7,100

[102] This item concerns the reconfiguration of the cabinets to lower the height of the microwave. Both Ms. DeSouz and Mr. Areias stated that this was a design issue, as NGW followed the London contract drawings concerning the cabinet configuration. I agree. This is further evidence that Mr. Arviv wanted a different design than what was contained in the contract.

c.14) Kitchen deficiency 14 – realign misaligned doors: $250

[103] This item concerns the realignment of misaligned doors. In her affidavit Ms. DeSouza stated that during the site visit of November 22, 2018 she noticed that there were some misaligned cabinet doors. She said that this was a minor item to correct. Mr. Areias stated that the misalignment may have been the result of misuse, such as overloading.

[104] I find that this is another area where there might have been a finding of deficiency had Mr. Arviv not repudiated the contract. I note that Mr. Walker assessed the cost of correcting this item at only $150.

c.15) Kitchen deficiency 15 – realign misaligned drawer fronts: $250

[105] This item concerns the realignment of misaligned drawer fronts. In her affidavit Ms DeSouza conceded that there were some misaligned drawer fronts. She pointed out that this misalignment was slight. Both Ms. DeSouza and Mr. Areias pointed out that the misalignment was probably the result of misuse such as overloading.

[106] There is some small chance that this may have been found to be a deficiency had Mr. Arviv not repudiated the contract. The costs of correction would not, however, have been great. Mr. Walker assessed that cost at only $150.

c.16) Kitchen deficiency 16 – install dishwasher: $350

[107] This item concerns the “failure” of NGW to install the dishwasher. Ms. DeSouza noted in the site visit of November 22, 2018 that she was shocked to discover that after 23 months, Mr. Arviv had still not installed the dishwasher. The contract is clear that NGW is not responsible for the installation of appliances. I therefore reject this claim.

c.17) Kitchen deficiency 17 – refasten loose kick plates: $150

[108] This item concerns the refastening of the kick plates at the bottom of the oven wall. Ms. DeSouza stated in her affidavit that she examined this issue closely during the site visit of November 22, 2018. She concluded that the kick plate NGW had installed had been removed by Mr. Arviv to facilitate the installation of a built-in vacuum cleaner. The installer, she said, had not reinstalled the kick plates. Based on this evidence, I find that this is not an NGW deficiency and deny the claim.

c.18) Kitchen deficiency 18 – replace cabinet drawers to match color: $4,

[109] Ms. DeSouza asked Ms. Shendale what this item was during the site visit of November 22, 2018. Ms. Shendale advised that it involved the replacement of all cabinet doors and drawers to match the color of the new fridge and freezer door panels that had to be supplied and installed due to NGW’s alleged failure to do so.

[110] As stated earlier, I am satisfied that the NGW had supplied the door panels and did not finish the installation due to Mr. Arviv’s failure to deliver the handles. Mr. Arviv lost or misplaced the panels. I find that this is not a deficiency and reject the claim.

c.19) Overpayment – between $25,000 and $50,000 (estimate)

[111] The Scott Schedule has this entry from Mr. Arviv alleging “overpayment.” There was no evidence of overpayment by Mr. Arviv. On the contrary, as discussed above, there was evidence of significant underpayment by Mr. Arviv.

[112] Mr. Skipper made another good point. There was no evidence that after 23 months of occupying the Unit, Mr. Arviv spent any money correcting the alleged kitchen deficiencies. At minimum, this undermines the credibility of these alleged deficiencies as “damages.”

[113] Therefore, I find that, had Mr. Arviv not repudiated the contract, his set-off and counterclaim would have had at most a recovery of no more than four items totaling no more than $675. None of this changes my view of NGW’s entitlement to payment of the contract invoice. NGW is entitled to be paid its contract invoice.

d) Is NGW entitled to be paid its extras invoice?

[114] On December 8, 2016 NGW rendered an invoice for the amount of $17,517.28 concerning three items: the supply and installation of laundry cabinetry; the supply and installation of the two girls’ closets; and the supply and installation of the nine foot high girls’ custom wall frame with magnetic board and cork. There are three issues concerning this invoice.

[115] First, there is the issue that was raised by Mr. Arviv in the Scott Schedule, namely whether these three items were outside the scope of the contract. I have no difficulty finding that all three were outside the contract scope. There is no mention of this work in the itemized list of work in the July 28, 2016 quotation document and in the London contract drawings.

[116] Second, there is the issue of authorization. There is clear evidence that Mr. Arviv authorized this work as an extra. In his affidavit, Mr. Areias indicated that Mr. Arviv was shown the finished NGW millwork in the NGW workshop on October 15, 2016 and approved all of it. Indeed, this is when Mr. Arviv paid NGW $25,000 in cash. Mr. Areias stated that shortly thereafter at the end of October, 2016 during the millwork installation on site Mr. Arviv asked Mr. Areias whether NGW would do what was being done in the master closet in the two girls’ closets. He also asked whether NGW would install the kind of cabinetry that was being installed in the kitchen in the laundry room, and whether NGW would install the large wall frame in the girls’ bedroom. Mr. Areias drew a sketch of the frame, as Michael London had not produced one. It was at this time, according to Mr. Areias, that he told Mr. Arviv verbally that he, Mr. Areias, would get back to Mr. Arviv “about pricing,” and that Mr. Arviv said, “don’t worry about it, Carlos, I trust you. Just make it the same as the other cabinets.” This amounted to authorization for the extra work.

[117] Third, there is issue of the quantum of the invoice. While there was no evidence that Mr. Areias and Mr. Arviv expressly agreed upon a method of paying for the extras, it was in my view implicit in the above noted discussions Messrs. Areias and Arviv had about the extras that NGW would charge a reasonable fixed price for them. Mr. Areias stated frankly in his affidavit and orally that as the work was being done on a rush basis, he did not follow his usual practice with extras of preparing a quotation and getting it approved before the work was done. NGW proceeded with the work immediately. Later in December, 2016 when the installation was largely done, he said he prepared the extras invoice on the basis of a fixed price estimate he made of the work. This leads to the question: was this fixed price reasonable?

[118] The most compelling evidence in this regard was from Mr. Walker. In his supplementary report dated October 28, 2020, Mr. Walker, an established millwork contractor, stated that he had been asked by Mr. Skipper that day to give an estimate of the value of the items of work in the extras invoice. He was told to rely on photographs Mr. Areias took of the NGW installation (that are in the productions) and to assume that construction took place with the materials NGW used. Mr. Walker stated in his oral evidence that he did not have the NGW invoice in front of him when he prepared his estimate. His supplementary report contains his assessments of each item of work. He assessed the labour and material costs and applied a 15% markup. On the witness stand, I asked him to total his figures. He did so and produced a total of $17,993.93, which is $476.65 more than what is contained in the NGW extras invoice.

[119] Mr. Walker stated that the closeness of his estimate to the NGW extras invoice did not surprise him. He said that informed and experienced millwork contractors do not have to contend with many variables in preparing their estimates. Based on this evidence, I find that the NGW extras invoice was reasonable.

[120] As I did for the contract invoice, I will comment on the Scott Schedule entries for the extras. The extras for the laundry room cabinetry and the two girls’ closets appear in the Scott Schedule with comments from Mr. Arviv that both were “wholly deficient.” There are no particulars of these alleged deficiencies. Mr. Arviv inserts figures - $6,114.43 for the laundry room cabinetry and $19,758.05 for the two girls’ closets. No doubt these represent Mr. Arviv’s position on the cost of replacing these installations.

[121] Ms. DeSouza confirmed that these two installations were in fact replaced. Both Ms. DeSouza and Mr. Areias stated that they saw no deficiencies with the NGW installations in December 2016. As stated earlier, the evidence shows that Mr. Arviv’s contemporaneous complaints about the extra work were about design, not the NGW millwork itself.

[122] Furthermore, I note that what Ms. DeSouza said she saw in the laundry room on November 22, 2018 was the same configuration of cabinetry as the NGW cabinetry, but with melamine material and a white lacquer finish that was lighter than the NGW installation. Concerning the girls’ closets, Ms. DeSouza commented that they both were of the same design but with lighter finish and with installed lighting. Interestingly, Ms. DeSouza noted that the replacement material was of a lower quality than what NGW had installed. I find that there is no justification for Mr. Arviv claiming these replacements as being the result of deficient NGW supply and installation. He wanted a different design than what was contained in the contract.

[123] I find that NGW is entitled to be paid its extras invoice.

e) Did NGW preserve and perfect its lien?

[124] There is no issue as to the lienability of the NGW work. That does not surprise me. The work concerned the supply and installation of built-in millwork, not free-standing furniture or cabinetry. I have also determined that NGW is entitled to be paid $73,767.28 for its work.

[125] The issue is whether NGW preserved its lien in time. NGW registered its claim for lien on January 27, 2017. Pursuant to CA section 1(1), NGW was a “contractor” as it had a direct contract with the owner. Under the old CA section 31(1)(b), a contractor’s lien expires unless it is preserved at the conclusion of forty-five days following the contractor’s “completion” or “abandonment” of the contract. That means that NGW must be found to have “completed” or “abandoned” the contract after December 12, 2016, five days before the walk-through on December 17, 2016, to be found to have preserved its lien in time.

[126] I have already determined that NGW did not abandon the contract. Concerning the issue of “completion” for the purposes of the CA, there is the deeming provision in CA section 2(3), namely the provision that deems completion to occur when “the price of completion, correction of a known defect or last supply is not more than then lesser of, (a) 1% of the contract price, and (b) $1,000.”

[127] Applying the section 2(3) deeming provision to this case, I find that that NGW had not “completed” the contract on or before December 12, 2016. As stated earlier, the evidence of Mr. Areias, Ms. DeSouza and Mr. Walker was that the value of the work left to be done by NGW as of the time it ceased working was in the $1,500 to $2,000 range. That there may have been minor deficiency correction work on top of that only adds to this total. These numbers exceed the $1,000 minimum specified by the old version of section 2(3).

[128] Because NGW did no further work, there is also no issue that it perfected its lien in time. To perfect its lien in time, NGW must be found to have commenced this action and registered a certificate of action within 90 days from the completion or abandonment of the contract. NGW commenced this action on February 21, 2017 and registered a certificate of action on February 28, 2017. Since NGW neither abandoned nor completed the contract, its lien was perfected in time.

[129] I find that NGW properly preserved and perfected its lien.

f) What is the amount of the NGW lien?

[130] Pursuant to CA section 14(1), a person “who supplies services and materials to an improvement for an owner . . . has a lien on the interest of the owner in the premises improved for the price of those services and materials.” In CA section 1(1) “price” is defined to include the contract price “agreed upon between the parties.”

[131] I have found that NGW and Mr. Arviv agreed to the original contract price and the billed extras, and that NGW is owed a total of $73,767.28 for these two items. Therefore, it follows that NGW has a lien on the interest of Mr. Arviv in the Unit in the amount of $73,767.28. That is what I find.

g) What is the priority of the NGW lien to the CIBC mortgage?

[132] On December 5, 2017 the CIBC was noted in default and therefore, pursuant to CA section 54(4), is deemed to admit all allegations of fact in the statement of claim. The only allegation of fact that NGW pleads against CIBC is that its mortgage was taken by the CIBC to finance improvements and is, therefore, a “building mortgage.” Therefore, I am driven to the conclusion that the NGW has full priority to the CIBC mortgage only to the extent of any deficiency in the holdback required to be kept by Mr. Arviv pursuant to CA section 78(2).

[133] The basic holdback is defined by CA section 22(1) as 10% of the price of the services and materials “actually supplied.” I have found that NGW supplied services and materials to the full extent of the contract price of $166,250 plus the full extras invoice of $17,517.28 for a total of $183,767.28. 10% of that total is $18,376.72. There is no evidence of other holdback.

[134] At this point, Mr. Arviv has not paid this basic holdback. Therefore, the CIBC mortgage falls behind the NGW lien in priority to the extent of the basic holdback of $18,376.72 while that remains unpaid.

VI. CONCLUSION

[135] In conclusion, I rule that Mr. Arviv must pay NGW $73,767.28. I find that NGW has a lien on the Unit in the same amount of $73,767.26 and a breach of contract personal judgment against Mr. Arviv in that same amount.

[136] I also rule that the NGW lien has priority over the CIBC first mortgage to the extent of the basic holdback of $18,376.72 until it is paid, and full priority to the NHE second mortgage.

[137] As to costs, on January 19,2021 I required that the parties deliver cost outlines for the reference (including the trial hearing) on or before January 27, 2021. On January 26, 2021 Mr. Skipper delivered a Bill of Costs concerning the costs of this reference. It showed a total of $97,977.82 in partial indemnity costs and a total of $129,878.22 in substantial indemnity costs.

[138] This Bill of Costs did not include the costs of the motions on January 7, 2021. Mr. Skipper delivered a costs outline for those motions on January 13, 2021. It showed $11,255.03 in partial indemnity costs, $16,465.46 in substantial indemnity costs and $18,202.27 in actual costs.

[139] Mr. Arviv did not deliver a costs outline. On February 5, 2021 I emailed Mr. Skipper and Mr. Arviv giving Mr. Arviv until February 12, 2021 to deliver a costs outline. Mr. Arviv emailed back immediately on that day stating that he would not do so.

[140] If the parties cannot otherwise agree on costs and interest, NGW must deliver written submissions on costs and interest of no more than three (3) pages on or February 26, 2021. Mr. Arviv must deliver written responding submissions on costs and interest of no more than three (3) pages on or before March 10, 2021. Any reply written submissions on costs and interest cannot be longer than one (1) page and must be delivered on or before March 15, 2021.

[141] These written submissions must in addition to any issues the parties may wish to raise, deal with the following issues:

• the costs for the reference that should be awarded, and the basis for doing so;
• the settlement discussions between the parties, if any; and
• the prejudgment and post-judgment interests that should be applied, the date or dates from which the interest should run, and the per diem amount.

[142] If the parties are unable to agree on the form of my final report, an attendance may be required to settle the report.

Released: February 15, 2021

MASTER C. WIEBE

SCHEDULE A

COURT FILE NO.: CV-17-570060 DATE: January 11, 2021

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: New Generation Woodworking Corp. v. Adam Arviv and Canadian Imperial Bank of Commerce;

BEFORE: MASTER C. WIEBE COUNSEL: Charles Skipper for New Generation Woodworking Corp. (“New Generation”); Mark Wiffen, former counsel for Adam Arviv; PARTIES: Adam Arviv, one of the defendants; HEARD: January 7, 2021.

REASONS FOR DECISION

[143] At the teleconference on December 23, 2020 I scheduled three motions to be heard by me on January 7, 2021 by videoconference. They all affected the 8-day videoconference trial hearing in this matter that was scheduled to commence on January 12, 2021.

[144] The three motions that I scheduled were the following. The first motion was by Mr. Wiffen to be removed as lawyer of record for Mr. Arviv. I was advised that this motion would not be opposed.

[145] The other two motions were, I was told, contested. There was the motion by New Generation for an order striking the Arviv statement of defence and counterclaim on the grounds of non-compliance with my directions and a failure to appear at the summary trial proceeding which is technically already underway. There was the motion by Mr. Arviv to adjourn the trial hearing as his representative on the conference call, lawyer Dawit Debssou of the Groia & Company firm, advised that Mr. Arviv wanted that to happen to allow him to retain and instruct new counsel. Mr. Debssou advised that Groia & Company was actively considering being retained by Mr. Arviv and was “checking conflicts.”

[146] Mr. Wiffen delivered a redacted motion record in his removal motion to Mr. Skipper and, at my request, an unredacted version of the same motion record to me. This record satisfied me that there had been an irreparable breakdown in the solicitor-client relationship. Messrs. Wiffen, Skipper and Arviv were all present on January 7, 2021. There was no opposition to Mr. Wiffen’s motion from either Mr. Arviv or Mr. Skipper and I granted the order. Mr. Wiffen remained for the duration of the videoconference.

[147] Mr. Skipper delivered a motion record in the New Generation motion. He served it on Mr. Arviv on December 23, 2020 through M. Wiffen. Mr. Wiffen confirmed that the material was forwarded to Mr. Arviv. There was no responding material. Mr. Skipper, also in accordance with my previous trial directions, delivered and uploaded onto Caselines the affidavits for evidence in chief that New Generation would be relying upon to prove its case at the scheduled trial hearing. There are the affidavits of Carlos Areias and Alexandra Desouza, and two expert reports of Travis Walker. Mr. Skipper prepared and uploaded a trial record and the joint document brief (containing the documents to be relied upon at trial). I reviewed that material prior to January 7, 2021.

[148] On January 6, 2021 I received an email from Mr. Debssou advising that the Groia & Company firm would not be representing Mr. Arviv in this matter due to a “scheduling conflict.” Mr. Debssou indicated that he had informed Messrs. Wiffen and Skipper of this information on December 23 and 24, 2020.

[149] At the videoconference on January 7, 2021 there was no written motion material from Mr. Arviv. Also, there was no lawyer in attendance for him. After a short wait on the videoconference, Mr. Arviv appeared by audio link only. He advised at one point that he was calling from his residence in Miami, Florida, and that Groia & Company would not be acting for him as Mr. Arviv said “they were not experienced in construction cases.” That is not what Mr. Debssou advised me on December 23, 2020 or in his email of January 6, 2021. At one point on January 7, 2020, Mr. Arviv verbally asked to have the trial hearing adjourned in order to allow him to retain and instruct new counsel. He said he was approaching “two lawyers in 48 hours,” although he would not give their names after being asked for their names. I asked Mr. Arviv several other questions.

Motions to strike and to adjourn

[150] The New Generation motion is based on the allegation that Mr. Arviv is in violation of my trial directions of September 15, 2020 by failing to deliver the affidavits for the evidence in chief of seven of his eight trial witnesses, the fact witnesses. I had ordered that Mr. Arviv deliver these affidavits by November 13, 2020. The parties subsequently agreed between them to adjust this deadline to December 14, 2020.

[151] It is undisputed that Mr. Arviv is indeed in violation of my directions as he has not delivered affidavits for his fact witnesses at all, even as of January 7, 2021, five days before the scheduled trial hearing.

[152] The following are the additional background facts to be kept in mind:

a) This is a construction lien proceeding which is supposed to be of a “summary character, having regard to the amount and nature of the liens in question;” Construction Act, R.S.O. 1990, c. C.30 (“CA”), section 67(1). The subject project was a millwork improvement in a large luxury condominium located in Hazelton Lanes, Yorkville owned by Mr. Arviv. b) The New Generation claim for lien is in the amount of $73,767.26. This claim concerns unpaid invoices for contract and extra work. Mr. Arviv delivered a statement of defence and counterclaim. The counterclaim initially was for $86,000 in alleged overpayment, $300,000 in damages and $100,000 in punitive damages. It is undisputed that the damage claim concerns alleged deficiencies. The Arviv pleading went through two amendments, with the last one being on October 4, 2018. In this last version the numbers are removed. Concerning damages, Mr. Arviv pleaded that the amount is “unknown.” The pleadings indicate that it is Mr. Arviv who raises the issues to be determined in this case. c) Mr. Arviv hired and removed numerous lawyers in this matter. First, there was Marc Kestenberg, who delivered the Arviv pleading. Second, there was Maria Triggiani. Third, there was Mario Middonti, who started his representation in September, 2018 and ended it in December, 2019. Fourth, there was Mr. Wiffen who started his representation in January, 2020 and ended it in December, 2020 about a month prior to the scheduled trial hearing. On January 7, 2021 Mr. Arviv initially said he “did not recall” these lawyers other than Mr. Wiffen. Then he said he remembered the ones other than Mr. Middonti despite the fact that Mr. Middonti represented Mr. Arviv for the first 16 months of this reference and at four trial management conferences. This conduct shows at minimum a lack of interest in and attention to this reference. d) At the trial management conference on September 13, 2018 Mr. Middonti, on behalf of Mr. Arviv, consented to giving New Generation a site visit on November 20, 2018 without condition. I ordered that a such site visit take place. The purpose of this site visit was to allow New Generation to examine the deficiencies claims raised by Mr. Arviv. The New Generation motion material indicates that Mr. Arviv later unilaterally decreed that Mr. Areias, the principal of New Generation and the one who ran the project, could not attend. Mr. Arviv said on January 7, 2021 that he simply did not want Mr. Areias in his condominium. Others had to go in Mr. Areias’ place as a result. On January 7, 2021, Mr. Arviv tried defending his conduct as being within his right as a property owner, even though he had consented to allowing New Generation a site visit to examine his deficiency claims. This conduct shows that Mr. Arviv has little concern for procedural fairness. e) At the same trial management conference on September 13, 2018 I ordered the production of a Scott Schedule. The completed Scott Schedule has been produced in the filed Trial Record. The Arviv list of deficiencies in this Scott Schedule contains essentially the same minimal particularity that Mr. Arviv pleaded in his pleading, which undermines the credibility of the Arviv deficiency claims. f) At the trial management conference on May 21, 2019 I scheduled a nine-day summary trial in this action to take place in late July and early August, 2020 with affidavits for evidence in chief delivered in advance of the hearing. Due to the COVID-19 pandemic, I convened a trial management conference on June 23, 2020, and because the parties and the court were not ready to proceed with the scheduled trial, I vacated the trial schedule. At the trial management conferences on July 31 and September 15, 2020 I re-scheduled the summary trial. A complicating factor was Mr. Skipper’s commitment to a two-month trial in another matter in the North West Territories. At the September 15, 2020 trial management conference, Mr. Skipper confirmed that this other trial was adjourned to start in late April, 2021. This opened up January, 2021 in everyone’s calendar. I gave this case priority to other adjourned trials in my calendar because of the duration of this reference. I proceeded to schedule this summary trial for eight days in January, 2021 again with a schedule for the delivery of affidavits for evidence in chief in advance of the hearing. As a result, there must be a very good reason to delay this trial again, as any delay would be a second delay and would mean a delay of at least eight months given my present trial calendar. g) At the trial management conference on June 23, 2020 the parties indicated that they both wanted a settlement conference. I ordered one with Master Short that took place on July 23, 2020. According the evidence on the motion, at the settlement conference, Mr. Arviv walked away after one hour. h) On January 7, 2021 I asked Mr. Arviv as to why he had not produced any of the affidavits for his seven fact witnesses in contravention of my directions. He confirmed that he had received and reviewed my directions. His answer was that he “was too busy doing other things.” He gave no indication he was working on them. He did not blame his lawyers. In short, he, Mr. Arviv, had not given priority to this case. This shows he is not interested in it. He is not prepared to give it the attention it deserves. Indeed, at one point he lashed out saying this case was a “waste of his time.” i) At another point on January 7, 2021, Mr. Arviv promised to get his evidence delivered in “thirty minutes” if I delayed the trial. I asked why I should believe him given the history of this case, and he replied that “I didn’t have to believe him.” This again showed Mr. Arviv’s lack of care for and appreciation of the gravity of the legal process. It also seriously diminished his credibility. j) Concerning the trial, New Generation has filed two fulsome affidavits sworn by Mr. Areias and Alexandra DeSouza, the project manager. I have reviewed these affidavits and they show that New Generation worked diligently on its scope, including extras, until mid-December, 2016. At that point the work was nearing completion. There had been no complaints. Then suddenly Mr. Arviv and his wife raised an issue with the lack of lighting in the master bedroom closet and the absence of mirrors and shoe storage space, items that were not within New Generation’s scope. Mr. Arviv then simply ceased paying and ceased communicating. There was no notice of deficiencies; no notice of default; no notice of contract termination. Mr. Arviv simply walked away from the contract, much in the way he walked away from the settlement conference. Based on this evidence, there is a good chance Mr. Arviv will be found to have improperly terminated the contract, thereby disentitling him to any damages. k) Concerning the one Arviv witness who is an alleged “expert,” Jack Medland, the joint document brief contains a one-page letter from Mr. Medland “to whom it may concern” identifying what he calls deficiencies in the fridge wall, oven wall and five other areas of the kitchen that he says he identified in his site visit of October 9, 2018, some 22 months after New Generation ceased its work. He assessed the costs to correct these deficiencies at just over $22,000. However, there is no Form 53 and no curriculum vitae.

[153] New Generation relies primarily on Rule 60.12(b). This is the rule that authorizes the court to strike a defendant’s defence where the defendant has failed to comply with an interlocutory order. As stated earlier, there is no dispute that Mr. Arviv has failed to comply with my trial directions by failing to deliver the seven affidavits for evidence in chief as I directed, at all. The leading case concerning this rule is Koohestani v. Mahmood, 2015 ONCA 56, CarswellOnt 910 (Ont. C.A.). In this case, the Court of Appeal required that striking pleadings “should not be the remedy of first resort.” It required that the following additional factors be considered:

• The merits of the defence with a “blatantly unmeritorious defence” giving rise to the inference that the failure to comply with the order is a part of strategy of delaying a decision on the merits, thereby justifying the more severe sanction;
• The context of the misconduct with the view to balancing the severity of the response with the court’s overall obligation to seek a just determination on the merits;
• Whether the evidence indicates that it was the lawyer, not the party, who is responsible for the misconduct, with the court to bear in mind the basic principle that an innocent client should not be saddled with the loss of rights on account of an inadvertent lawyer.

[154] I examined these factors in the context of this motion and concluded that the Arviv set-offs and counterclaim must be struck.

[155] Concerning merits, as stated above, I found that the plaintiff’s filed evidence for the trial shows that Mr. Arviv simply walked away from his contract with New Generation apparently blaming the plaintiff for items that were not its fault. As a result, there is a good chance Mr. Arviv will be found to have wrongfully repudiated the contract thereby disentitling him to any damages. Furthermore, the evidence concerning Mr. Arviv’s alleged deficiencies is quite thin. His alleged opinion expert has written a one-page letter written concerning a site visit done 22 months after New Generation stopped working, a letter that concerns only a limited number of apparent deficiencies representing a relatively modest amount of money. As filed, this letter does not even amount to admissible evidence. The Scott Schedule, which should have given a detailed breakdown and description of the Arviv allegations of deficiencies, does not do so at all. It essentially reiterates the Arviv pleading. The Arviv pleading itself went through amendments that ended with a counterclaim that does not have numbers. This all leads me to conclude that the Arviv defence is indeed “blatantly unmeritorious” on its face and that Mr. Arviv’s non-compliance is part of a delay strategy.

[156] Concerning the context of the misconduct, the context could not be more compelling for a severe penalty. Mr. Arviv has essentially not submitted his trial evidence in support of his defence and counterclaim when he is the one who has raised the issues in dispute. He did so with full knowledge of the contents of my directions. He just did not to do the work. This is not “a peripheral issue involving a relatively small amount,” as was the case in Koohestani; see Koohestani, paragraph 61. Furthermore, an adjournment of the trial hearing at this point would undermine the fair running of the trial. As Mr. Skipper pointed out, if I were now to adjourn the trial for eight months, Mr. Arviv would have the unfair advantage of having all this time to review and respond to the plaintiff’s affidavit evidence. Even if I were to give New Generation the opportunity to redo its affidavits, these earlier affidavits will remain on the record and could be used against the plaintiff. Also, for this misconduct to happen after the parties and the court carefully scheduled this trial hearing delaying other trials in the process is a factor to be considered.

[157] Concerning the issue of whether lawyers were responsible for this misconduct, there is no doubt that in this case the misconduct was entirely that of Mr. Arviv. He admitted as much on January 7, 2021. He said he was too busy on other matters to work on his affidavits. He showed a profound lack of interest in this case and lack of appreciation of its gravity. I am not sure he has done any work to prepare his evidence. He even said that this case was “a waste of his time.” This was a part of a pattern of conduct in this reference that shows arrogance and a lack of appreciation of fair process on the part of Mr. Arviv. This was probably the most compelling factor. Mr. Arviv left me with no confidence that he would abide by any future trial directions I may give should I adjourn the trial. Also, to accommodate Mr. Arviv with an adjournment of the trial after he showed such disregard for my directions would be offensive.

[158] Mr. Skipper relied heavily on the case of Rock Precast Erectors Ltd. v. Canadian Precast Ltd., 2012 ONSC 5924 (Div.Crt.). This case was also a construction lien action. The action was scheduled for trial in four months’ time when the lawyer for the defendant corporation obtained an order allowing the lawyer to be removed from the record as the defendant’s lawyer. The order contained the necessary requirement that the defendant obtain another lawyer or leave for a non-lawyer to represent the defendant within a period of 30 days after being served with the order. The principal of the defendant attended a pretrial hearing after the 30-day period and represented that he had retained a lawyer when he in fact had not. At a later pretrial hearing a few weeks before the trial sittings, the principal of the defendant attended without a lawyer and without leave to represent the defendant. The plaintiff then brought a motion to strike the statement of defence for contravention of the removal order pursuant to Rule 60.12(b). The defendant filed no material on this motion. Indeed, he filed no material at any of the previous pretrial hearings. There was also a pattern whereby the principal either arrived at hearings late or left early. The motions judge granted the striking order, and on appeal the Divisional Court upheld this decision.

[159] This is what the Divisional Court said about the decision of the motions judge in paragraph 10: “The import of his order is that he considered the recalcitrance of the defendant sufficient to outweigh his entitlement to a trial. We do not see that he made any error of law, nor did he apply incorrect principals or make any palpable or overriding error of law.” Similarly, in the case before, I find that Mr. Arviv’s arrogance and recalcitrance is sufficient to outweigh his entitlement to a trial, at least a trial of his set-off and counterclaim.

[160] The Divisional Court in Rock Precast in paragraph 14 stated that a self-represented party will be extended courtesies “when circumstances permit.” The Divisional Court stated that, when a self-represented party is in clear violation of an interlocutory order on the eve of trial, attends pretrials late and without material, attends motions without material, makes material misrepresentations to the court, and does not file evidence, the court will be “less than sympathetic.” The Divisional Court concluded with this telling sentence: “When a litigant has done all these things in the face of a looming trial which has long been delayed, it should not be surprised when the court strikes its pleadings.”

[161] I believe I can say the same about Mr. Arviv. Having failed to make any effort to prepare and file his trial evidence in the blatant violation of my trial scheduling order, having let his lawyer end his retainer on the eve of trial without hiring a replacement, having shown a pattern of disregard and disrespect for the legal process in this reference, Mr. Arviv should not be surprised when I strike his pleadings.

[162] Mr. Skipper distinguished the case of Starland Contracting Inc. v. 1581518 Ontario Ltd., 2009 CarswellOnt 3431 (Div. Crt.). In this case, Master Albert made a “last chance” order requiring that the defendant complete certain interlocutory steps. She then made a second “last chance” order requiring that the defendant comply with undertakings and provide particulars of its defence by a specified date, failing which its defence and counterclaim would be struck upon proof on non-compliance with the order. The defendant made an effort to comply with this order. The plaintiff brought a motion to strike and Master Albert granted the motion finding that the compliance was not sufficient given the history of the reference. The Divisional Court overturned this decision finding that there had been substantial compliance with the second “last chance” order as a factual matter. I agree that this decision is distinguishable. Mr. Arviv has made no apparent effort to comply with my trial directions concerning evidence. I do not know when, if ever, Mr. Arviv will be delivering his affidavits. In this case, there has been complete non-compliance.

[163] New Generation also relies upon Rule 50.01(2)(b). This is the rule that provides that, where a defendant fails to appear at trial, the court may dismiss a defendant’s counterclaim and allow the plaintiff to prove its claim. I agree with Mr. Skipper that, being a summary trial, the trial in this case has effectively already begun. The evidence in chief of the plaintiff is already filed, as is the trial record and the joint book of documents. By failing to deliver his affidavits for evidence in chief, Mr. Arviv has effectively failed to appear at trial for the purpose of this rule.

[164] This rule should also, therefore, be invoked. I note that there is authority for the proposition that Rule 50.01(2)(b) is to be interpreted as allowing the court to dismiss a defendant’s defence as well as its counterclaim; see Mignelli v. Scavo, [2004] O.J. 2083 (Sup.Crt. J.) at paragraph 5. However, there is also authority for the proposition that the court may choose to dismiss only the counterclaim where there is no evidence that the plaintiff will be prejudiced by being required to prove its case; see Berky v. Cruz, 2016 ONSC 4067 at paragraphs 3 to 10. I applied these principals in my decision.

Conclusion

[165] For these reasons, on January 7, 2021 I decided to and did strike Mr. Arviv’s set-off claims and counterclaim, but not his defence. I did not see any evidence that the plaintiff will be prejudiced by being required to prove its case with the evidence already filed. I wanted Mr. Arviv to be able to cross-examine New Generation’s witnesses. I denied Mr. Arviv’s motion or request for an adjournment of the trial hearing.

[166] I advised Messrs. Wiffen, Skipper and Arviv of my decision on January 7, 2021. The above are my reasons for this decision.

[167] With this order, the scheduled trial will be reduced considerably as there will be no Arviv witnesses. As a result, I deferred the commencement of the trial hearing by one day, namely to January 13, 2021 to allow the parties, particularly Mr. Arviv, more time to prepare for the hearing. When I made this order, I noticed that Mr. Arviv had already left the videoconference. Mr. Wiffen undertook to communicate my orders to Mr. Arviv.

[168] Concerning costs, I required that the parties file costs outlines forthwith. I will rule on the costs of these motions as a part of the costs determination at the trial.

DATE: January 11, 2021

MASTER C. WIEBE

SCHEDULE B

COURT FILE NO.: CV-17-570060 DATE: January 14, 2021

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: New Generation Woodworking Corp. v. Adam Arviv and Canadian Imperial Bank of Commerce;

BEFORE: MASTER C. WIEBE COUNSEL: Charles Skipper for New Generation Woodworking Corp. (“New Generation”); Mark Wiffen, former counsel for Adam Arviv; PARTIES: Adam Arviv, one of the defendants; HEARD: January 13, 2021.

REASONS FOR DECISION

[169] On the first day of the videoconference trial hearing, January 13, 2021, Mr. Arviv appeared along with Mr. Skipper and Mr. Wiffen. Mr. Arviv made two motions: a motion asking me to overturn my order of January 7, 2021 refusing an adjournment of the trial hearing; and a motion that I recuse myself on the grounds that Mr. Arviv has a reasonable apprehension of bias concerning me. I heard oral argument over the course of that day and adjourned the trial until January 14, 2021.

[170] Concerning the motion to adjourn the trial, Mr. Arviv reiterated his argument that he is without counsel and that he needs time to retain and instruct counsel. I reject this argument again. I find that this representation issue is a part of Mr. Arviv’s delay strategy.

[171] There is no doubt that Mr. Arviv has always had more than enough resources to hire and instruct counsel. The question is his attention to this case and his desire to deal with it properly. Mr. Arviv has hired and let go five lawyers in this reference, the last one being Mr. Wiffen. Mr. Arviv admitted on January 7, 2021 to “being too busy on other matters” to prepare his trial evidence in November and December, 2020 as I had ordered. He did not blame Mr. Wiffen for this failure. He accepted Mr. Wiffen’s resignation on December 18, 2020, less than one month before the trial hearing and after my deadline for the delivery of Mr. Arviv’s trial evidence had passed.

[172] Mr. Arviv then hired the Groia & Company firm just to appear on his behalf at the December 23, 2020 teleconference convened to deal with the consequences of Mr. Wiffen’s removal so near to trial. Dawit Debssou, the Groia lawyer, said that Mr. Arviv did not oppose Mr. Wiffen’ removal. Mr. Debssou also said that his firm was considering being retained by Mr. Arviv and was just “clearing conflicts.” However, later that same day, December 23, 2020, Groia refused the retainer citing “scheduling conflicts.” There was no evidence as to what Mr. Arviv did to get a lawyer in the 15 days between December 23, 2020 and January 7, 2021, the date of the Wiffen removal motion and the New Generation motion for an order striking the Arviv statement of defence and counterclaim. This is a telling absence given the immediacy of the trial hearing.

[173] On January 7, 2021, Mr. Arviv appeared. Again, he did not oppose the Wiffen removal motion. But he said he wanted a trial adjournment to get and instruct a new lawyer. All he said about what he was doing to get a new lawyer was that he would be approaching two lawyers “in the next 48 hours.” He refused to give their names. I refused this request for an adjournment as I saw Mr. Arviv’s legal representation issue as a part of a strategy to delay the trial hearing, a strategy that included a gross breach of my directions to deliver his affidavit trial evidence and conveniently being without counsel on the eve of trial. I found that an adjournment would significantly prejudice New Generation, as its trial evidence was already on the record as I had ordered.

[174] Then on Monday, January 11, 2021 I learned of an email exchange between Julian Binavince, a well-known construction lawyer, and Mr. Skipper wherein Mr. Binavince advised that he would be retained by Mr. Arviv if the trial was adjourned. Mr. Binavince was unaware of my reasons for my January 7, 2021 ruling. Mr. Skipper sent these reasons to Mr. Binavince. I note that Mr. Binavince was not in attendance on January 13, 2021.

[175] Then at the commencement of the trial hearing on January 13, 2021, Mr. Arviv, faced with the prospect of the trial proceeding as scheduled, suddenly reversed his lack of opposition to the Wiffen removal order I made on January 7, 2021 and that Mr. Arviv had not opposed at that time.

[176] Then today, January 14, 2021, another lawyer appeared, Alex Fidler-Wener. Ms. Fidler-Wener said that she was retained by Mr. Arviv last night just to appear today to seek a trial adjournment at least until February 4, 2021. She said that, if I granted the adjournment, she would go on the record for Mr. Arviv. She said she had read my reasons for my January 7, 2021 rulings, and was aware that an adjournment would be for at least eight months. She gave me no assurance that Mr. Arviv would abide by future court directions with her representation. When I asked her whether she was prepared to go on the record if I adjourned the trial to start on another date in the existing trial schedule, she said no.

[177] In the end, therefore, there was nothing at the hearing on January 13, 201 and today that caused me to change my ruling denying the trial adjournment due to Mr. Arviv’s lack of legal representation. I remain of the view that this issue is of Mr. Arviv’s own doing and continues to be a part of his delay strategy.

[178] Concerning the recusal motion, Mr. Arviv alleged that on January 7, 2021 I made a statement that gave him a reasonable apprehension that I am biased against him. He said that I had said that “you’re one of those people.” He said that I made this statement in the context of a discussion of his present residence in Miami, Florida. He stated that he is an Israeli Jew, that his name, “Arviv,” is a well-known Jewish name, that it is well-known that many Jews live in Miami, and that my statement gave him a reasonable apprehension that I have an anti-Semitic bias against him. At one point, Mr. Arviv added that I am also “anti-elitist.” Neither I nor Mr. Skipper could remember me making such a statement on January 7, 2021 or at any time. Mr. Wiffen did not comment. I received written submissions and case authority from Mr. Skipper and adjourned the trial hearing to January 14, 2021.

[179] During the break, I found the time to listen to most of the audio recording of the proceedings of January 7, 2021. What I found out was the following. At one point, I discussed with Mr. Arviv his failure to attend before me at the teleconference of December 23, 2020. I had ordered that he do so. Instead, as I stated earlier, he sent a representative who was not his lawyer of record. I wanted to discuss this as it was part of the larger issue of Mr. Arviv’s pattern of non-compliance with court directions. Mr. Arviv said that, while he resided in Miami, he was vacating on the island of St. Bart’s on December 23, 2020 and that there was no audio connection on the island that allowed him to join the teleconference. At this point, I said in passing: “so you were one of those people who were travelling abroad.” I recall that I was referring to the recent controversy involving people who traveled abroad contrary to government recommendations against unnecessary foreign travel due to the COVID-19 pandemic. It was an unnecessary statement I should not have made. However, I note that Mr. Arviv took no exception to this statement at the time. The conversation just carried on.

[180] The transcript of this proceeding is being generated at my request and should be available by January 15, 2021. I intend to make the transcript available to the parties, if they so wish.

[181] The test about whether I should recuse myself due to a reasonable apprehension of bias is outlined by the Supreme Court of Canada in R v. S (R.D.), [1997] 3 S.C.R. 484 at paragraph 111 as follows: “the apprehension must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information. . . . [The] test is “what would an informed person, viewing the matter realistically and practically – having thought the matter through – conclude.”” The Court of Appeal in R v. Richards, 2017 ONCA 424 at paragraphs 43-50 gave more particularity to the test as follows: there is a presumption of judicial integrity; judges have a sworn duty to act impartially; the threshold for the moving party is high, but not insurmountable; the onus of meeting the test rests with the party alleging the reasonable apprehension of bias; the motion is determined by the facts in the case at bar; the apprehension of bias must be a reasonable one, held be reasonable and right-minded persons, applying themselves to the question and obtaining the right information about it. The Court noted that stereotyping reasoning may give rise to a reasonable apprehension of bias.

[182] Applying this test, I find that Mr. Arviv has not met the test for a reasonable apprehension of bias that would cause me to recuse myself. The statement that Mr. Arviv alleges I made is in fact not the statement I made. The statement I made concerned people traveling abroad in contravention of government recommendations. It has nothing to do with Mr. Arviv’s name, origin and ethnicity, and, in my view, would not cause a reasonable person to conclude that I harbor an anti-Semitic bias against Mr. Arviv.

[183] I also do not accept Mr. Arviv’s characterization of the statement as showing an “anti-elitist” bias against a wealthy person such as Mr. Arviv. My statement is on its face a statement of fact, namely that Mr. Arviv was one of the persons who were travelling abroad. It does not denote a value judgment. A reasonable person would not know from the statement whether I approved or disapproved of Mr. Arviv’s trip to St. Bart’s. On the other hand, if it can be viewed as denoting a value judgment, which I find not to be case, I note that many people from all walks of life have been embroiled in the controversy concerning travelling abroad, not just the “elites.” Therefore, a reasonable person reviewing the statement would not necessarily conclude that it shows an “anti-elitist” bias against Mr. Arviv. I also fail to see how travel abroad from Miami to St. Bart’s relates in any way to the issues in this case, which is after all a case about a construction project concerning Mr. Arviv’s condominium in Toronto.

[184] Mr. Skipper relied upon the decision in Jewish Family and Child Service of Toronto v. J. Z., 2014 ONCJ 165. Concerning the issue of recusal due to a reasonable apprehension of bias, the court quoted from Justice Hardman in Children’s Aid Society of Waterloo Region v. B. (L.A.) 2004 ONCJ 235. In that case, the judge knew the foster mother of the child in issue and got both parties to agree to allow the judge to hear the trial. Then, well into the trial, the mother objected to the trial judge. In denying the motion, Justice Hardman reviewed the authorities on recusal motions and had this to say:

[at paragraph 28] recusal is not warranted merely by the trial judge’s raising the possibility of an apprehension of bias. For a [judge] to disqualify himself on trifling or invalid grounds obviously raises concerns about wasted resources and delay with the attendant risk of injustice . . .

[at paragraph 55] Further, it has been noted by a number of courts . . . that often the trial judge is drawn towards recusing himself or herself out of an abundance of caution. However, the law is clear that to do so without having the onus met may result in prejudice to other parties or the system in general.

[185] The most that can be said about Mr. Arviv’s recusal motion is it raises issues that are, to use Justice Hardman’s words, “trifling.” But I prefer her other word as being more apt, namely that the issues are “invalid.” To recuse myself on these grounds would indeed be a waste of resources and an unnecessary delay.

[186] For these reasons, I deny Mr. Arviv’s recusal motion as well.

DATE: January 14, 2021

MASTER C. WIEBE