Court File and Parties

COURT FILE NOS.: CV-19-419-00 CV-20-111-00 DATE: 20210107 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

PHILIP WILLIAM CRAWFORD and HAILEY BROOKE CRAWFORD Plaintiffs -and- STANDARD BUILDING CONTRACTORS LIMITED (FEDERAL CORPORATION 1115109-6), STANDARD PAVING LIMITED (NOVA SCOTIA REGISTRY ID #3223128) AND SHANE ROSS Defendants

AND BETWEEN:

STANDARD BUILDING CONTRACTORS LIMITED Plaintiff -and- PHILIP WILLIAM CRAWFORD, HAILEY BROOKE CRAWFORD AND CIBC MORTGAGES INC. Defendants

Counsel: David Adams and Matt Taft, for Philip William Crawford, Hailey Brooke Crawford and CIBC Mortgages Inc. Paul Portman and Tyler Jensen, for Standard Building Contractors, Standard Paving Limited and Shane Ross

HEARD at Kingston: 23, 24, 25 and 26, November 2020 (by videoconference)

Mew J.

REASONS FOR DECISION

[1] On 15 July 2019, Brooke Crawford and her infant daughter Falynn were asleep inside their family home in Clarendon Station, Ontario, when they were awakened by the sound of the smoke detector.

[2] The hallway outside of Brooke Crawford's bedroom was filling with smoke. She grabbed her daughter, summoned the family dog, and got out of the building.

[3] The house was severely damaged. The house insurer deemed it a total loss. A demolition and rebuild was the only solution.

[4] Brooke Crawford's husband is Philip Crawford. His sister, Christina, was, at the time, dating a man called Shane Ross. The Crawfords were told that Mr. Ross was an accomplished general contractor. They were quickly in touch with him. Mr. Ross took a look at their insurance policy and, on 27 July 2019, attended the property and spoke with the Crawfords about their insurance policy and the rebuild. They were impressed. He seemed to be knowledgeable about what needed to be done and how to go about it. He was likable. They trusted him. They wanted him to rebuild their house and hired him and his companies to do so.

[5] A replacement home has yet to be rebuilt. Twenty months after they retained Mr. Ross, the Crawfords are living in a rented trailer located in the same place where their destroyed house once stood. In the meantime, they have been locked in litigation with Mr. Ross and his companies.

[6] The Crawfords say that they hired Mr. Ross as a general contractor to rebuild their house. Despite receiving $137,690.50 from the Crawfords' insurers, the Crawfords allege that Mr. Ross has done nothing more than undertake excavation and grading work in preparation for the installation of new footings. According to an expert retained by the Crawfords, the value of the work that has been done, including an allowance for floating and picking up forms, is roughly $10,000.

[7] The Crawfords terminated their relationship with Mr. Ross in November 2019.

[8] The plaintiffs claim the return of the amounts retained by Mr. Ross and/or his companies in excess of the value of the work actually done, and seek, in addition, damages for losses that they have incurred as a result of the defendants' breach of contract, including exemplary damages and punitive damages.

[9] Because this action is being conducted under the simplified procedure, the Crawfords have limited their total claim for damages to $200,000.

[10] Mr. Ross conducts business through two companies, Standard Building Contractors Limited ("Standard Building") and Standard Paving Limited ("Standard Paving"). He is the sole shareholder, officer and director of these companies. Mr. Ross and the companies are defendants in what I will refer to as the main action (Kingston Court File No. CV-19-00000419-SR). I will refer to them collectively as the "defendants".

[11] As well as the financial claims that they have made, the Crawfords obtained an interim "Mareva" injunction (or freezing order) from MacLeod-Beliveau J. on 20 December 2019. The defendants subsequently moved, but failed, to have MacLeod-Beliveau J.'s order set aside. The Crawfords now seek a permanent freezing order to prevent the defendants from dissipating assets to frustrate the enforcement of any judgment that they might recover.

[12] The Crawfords also seek a finding of contempt on the part of the defendants for violating MacLeod-Beliveau J.'s order.

[13] There is a counterclaim by the defendants for $198,607.15 which, they say, is the value of work done by them for the Crawfords.

[14] In addition, Standard Building registered a construction lien against the Crawfords' property in the amount of $34,493.92 on 20 January 2020. Standard Building asserts that subsequent and final accounting of the work done by them supports a higher amount than that which was registered. The construction lien action bears Kingston Court File No. CV-20-00000111-00.

Process

[15] With the agreement of all parties, the main action, counterclaim and construction lien claim were tried together in accordance with the summary trial procedure set out in Rule 76 of the Rules of Civil Procedure. With few exceptions, evidence-in-chief was entered principally by way of affidavit. A short oral examination-in-chief of these witnesses of not more than ten minutes in duration was also permitted. The witnesses were then available for cross-examination, for periods of time that varied depending on the witness, but which were also agreed on. Mr. Ross also delivered a reply affidavit which responded to multiple affidavits filed by the plaintiffs.

[16] Affidavit evidence was also accepted from Danielle LaBrash, a law clerk employed by the Crawfords' solicitors. This affidavit had many exhibits which were gathered during the course of various searches and investigations undertaken by Ms. LaBrash. The defendants, while not moving to strike portions of the LaBrash affidavit, cautioned me against relying on some of the conclusions drawn by Ms. LaBrash which, they correctly say, encroach on my role as trial judge to the extent that she offers “evidence” on what findings of fact should be made and conclusions drawn from the evidence presented by her. With that caveat, however, the LaBrash affidavit was admitted, and the defendants elected to not cross-examine Ms. LaBrash.

[17] The defendants called Kyle Horner as a witness. Because he did not provide an affidavit, his evidence-in-chief was taken in the traditional way. He had been the site supervisor involved with the work done by the defendants. Shortly before the trial began, the defendants had announced that they intended to commence proceedings against Mr. Horner. The defendants brought a motion seeking leave to commence third-party proceedings against Mr. Horner and adjourning the trial until that was done. I declined their request for that relief (reasons for decision reported at Crawford v. Standard Building Contractors Limited, 2020 ONSC 7022) without prejudice to the defendants commencing a separate proceeding against Mr. Horner. The threat of imminent litigation against him notwithstanding, Mr. Horner testified.

Issues

[18] While the parties have framed the issues to be determined differently, I have arranged them as follows:

1. What was the agreement between Mr. Ross and the Crawfords?
2. To what extent, if at all, did the parties fulfil the respective obligations pursuant to their agreement?
3. Who owes whom what?
4. Should the Mareva injunction remain in place?
5. Are the defendants in contempt of court?

Summary of Findings

[19] For the reasons that follow, I conclude as follows:

1. Mr. Ross was hired as a general contractor to rebuild the Crawfords’ house.
2. The defendants did little more than some excavation and related work to the value of $10,000.
3. The Crawfords validly terminated their agreement with Mr. Ross and his companies after they discovered that a forged engineer's stamp had been placed on documents that were prepared by or on behalf of the defendants for the purposes of obtaining a building permit.
4. $137,690.50 by way of insurance proceeds was advanced to Mr. Ross and/or his companies. The defendants are only entitled to keep $10,000 from those monies. A further $12,696.37 plus, potentially, contractual interest, is owed to Gemmill Sand and Gravel Limited (“Gemmill”) out of the advances made to the defendants by the plaintiffs’ insurer.
5. Mr. Ross engaged in deceptive and fraudulent conduct both personally and through his companies. He is personally liable not only for his own conduct but for what was done directly or indirectly by him through Standard Building and Standard Paving.
6. The Crawfords should have judgment against Mr. Ross and his companies, jointly and severally, in the amount of $127,690.50 (i.e., $137,690.50 less $10,000). This includes the amount of $12,696.37 owed to Gemmill. The defendants must, in addition, pay the plaintiffs an amount equivalent to contractual interest at 2% per month, as claimed on Gemmill’s invoices, up to the date of judgment.
7. In addition, the circumstances warrant an award of punitive damages against Mr. Ross and his companies in the amount of $50,000. There will be no award for aggravated damages.
8. The construction lien action by Standard Building is dismissed with costs and the certificate of action registered on title to the Crawfords' property should be vacated. The Crawfords are awarded $7,500 in damages pursuant to section 35 of the Construction Act, R.S.O. 1990, c C.30.
9. The order of MacLeod-Beliveau J. on 20 December 2019 (as subsequently varied) freezing the worldwide assets of the defendants is made permanent, but should be varied to limit the extent of the liquidatable assets covered by the freezing order to $500,000.
10. There have been multiple breaches of the freezing order made by MacLeod-Beliveau J. Mr. Ross is therefore in contempt of court. There will be an in-person hearing in Kingston on a date to be set by the court to receive submissions on what, if any, sanctions should be imposed on Mr. Ross as a result of his contempt.
11. Subject to the effect of any offers to settle that may have been made, the circumstances of these cases warrant an award of substantial indemnity costs in favour of the Crawfords.

Analysis

[20] Before turning to the issues that I have enumerated above, I will make some general comments regarding the evidence presented at trial.

[21] Much of the testimony given by three of the witnesses called by the defendants beggared belief.

[22] The evidence of Mr. Ross was peppered with bald statements and allegations that were either unsubstantiated, untrue on their face, or contradicted by other evidence.

[23] Mr. Ross challenged the integrity of most of the witnesses called by the Crawfords. In his reply affidavit, he commenced his response to the evidence of each of the plaintiffs’ witnesses with the statement “I disagree with the allegations made by [name of witness] and maintain that she [he] has warped or embellished the facts of this matter to support her [his] version of events”.

[24] The repeated use of this phrase is symptomatic of Mr. Ross’s attitude. Whatever else may have happened, it was not his fault. Everyone else is either mistaken, exaggerating or lying.

[25] As will be seen, however, his blandishments do not stand up to even basic, let alone close, scrutiny.

[26] Two other witnesses - Kyle Horner and Courtney Slaunwhite – who, at an earlier stage of these proceedings, each described themselves as “employees” of the defendant corporations, presented themselves at trial as independent contractors. Mr. Horner swore an affidavit as long ago as 14 January 2019, describing himself as an employee. Ms. Slaunwhite swore an affidavit as recently as 13 November 2020, describing herself as an employee of the corporate defendants. Yet at trial, they both claimed that they had been “mistaken” when they previously said they were employees.

[27] Ms. Slaunwhite has worked for the Standard Paving defendants for four years, running the office. She acknowledged that everything comes through her. Despite this, she testified that she was unaware of the freezing order made by MacLeod-Beliveau J. While she said that the corporate defendants have not operated since Christmas 2019 and that she has not been paid for her services since then, her only explanation for payments made to her out of the bank account for Standard Building Contractors in 2020 was that she had received a “loan” for expenses. Notwithstanding this, electronic transfer payments from a bank account in the name of Standard Paving Limited, which appears to have been opened on 20 January 2020, have been made to Ms. Slaunwhite in the amounts of $2,557.50 (27 January 2020), $108 (7 February), $3,000 (7 February), $217 (16 March), $3,267.50 (23 March), $2,262 (3 April), $2,742 (21 April) and $3,306 (1 May). Another company, TAB Civil Contracting Corporation, also made electronic payments to Ms. Slaunwhite. Evidence from the Royal Bank of Canada, which holds the TAB account, discloses that it is “owned” by Shane Ross. The total amount advanced to Ms. Slaunwhite between 30 December 2019 and 26 June 2020 from either the TAB account or the Standard Paving Limited account is $33,388.

[28] On 24 June 2020, a costs order which had been previously made against the defendants during the course of these proceedings was paid by way of a personal cheque in the amount of $5,610.71. Ms. Slaunwhite acknowledged that she was the payor of this cheque. She said it was a “gift” that she gave to Shane Ross. Mr. Ross, for his part, while confirming the gift, said that the amount involved was “not a lot”, that he has helped Ms. Slaunwhite out in the past, and that Ms. Slaunwhite did not ask what the money was for.

[29] These unexplained (or inadequately explained) payments are, in and of themselves, good reason for doubting the veracity of much of Ms. Slaunwhite’s evidence. Added to this, she was a feisty, argumentative and defensive witness.

[30] Turning, then, to Mr. Horner. Having sworn an affidavit back on 14 January 2019 in connection with the defendants’ motion to set aside the Mareva injunction, on 2 November 2020, Mr. Horner was examined for discovery, seemingly as a representative of the defendants, although he said that rather than being an employee of the defendant corporations, he was, on occasions, a “subcontractor”. His role on the Crawfords’ project was that of “site supervisor”.

[31] As will be described in more detail later in these reasons, in October or November 2019, Mr. Ross was in communication with Andy Dillon, the Chief Building Officer for the Township for Central Frontenac in connection with obtaining a building permit for the rebuild of the Crawfords’ home. According to Mr. Ross, he had received a set of design drawings dated 3 October 2019 from Kyle Horner. Those drawings indicated they were prepared by “S.R.” and bore an engineer’s stamp appearing to be from Frank Anrep, a professional engineer. It subsequently turned out that the engineer’s stamps on the documents were forgeries and that an email address, purporting to be that of Mr. Anrep, was a contrivance.

[32] Mr. Dillon had become suspicious of the communications he was receiving concerning the Crawfords’ proposed rebuild. On 6 November 2019, he received an email from what turns out to have been a false email address for Frank Anrep in which the writer, purporting to be Mr. Anrep, indicated that he had been speaking with “Shane and Kyle” about concerns that Mr. Dillon had raised about the lack of detail in the drawings presented, and that “there is no need to go into great detail for a basic structure such as this”. With the assistance of his office staff, Mr. Dillon then tracked down the real Mr. Anrep and learned that he had had no involvement with the project at all, that the permit application made on behalf of the plaintiffs as supplied by Mr. Ross was false, that Mr. Anrep’s signature had been forged and his seal used without his permission. An invoice, purporting to be from Mr. Anrep, that Mr. Ross had provided to Mr. Dillon, had not been issued by Mr. Anrep.

[33] Mr. Ross denies any knowledge of the falsification of the planning application documents. Mr. Ross said that he received the documents from Kyle Horner at a time when Mr. Ross was on a trip to Las Vegas, and that he approved the plans in haste. He asserts that Mr. Horner was, in fact, the perpetrator of the fraud. He appears to have come to this realisation around the time of examinations for discovery on 2 November 2020, when he apparently heard the recording of a voicemail that had been left for Mr. Dillon from someone purporting to be Mr. Anrep. This was, he says, when he first believed that the voice belonged to Mr. Horner.

[34] At his examination for discovery on 2 November 2020, Mr. Horner denied that he had left the voicemail posing as Mr. Anrep. However, at trial, having initially repeated his denial that he had anything to do with the concoction of evidence, Mr. Horner made a dramatic statement during the course of being cross-examined that he was not going to lie anymore. He then alleged that Brooke Crawford had asked him to pose as Mr. Anrep.

[35] Far from being a recent discovery first made in November 2020, the voicemail recording relied upon by Mr. Ross was sent to the lawyer then representing the defendants on 15 June 2020 under cover of an email, which pointed out that the cell phone number that the fake “Frank Anrep” had left was the same phone number as one found on an invoice sent by a company called Sunbelt Rentals in Vancouver to Kyle Horner at Standard Paving, bearing a date of “11/01/19”.

[36] Despite his late breaking mea culpa, Mr. Horner does not acknowledge involvement in forging the drawings. Rather, he says that he was told by Mr. Ross to retain as a consultant an individual called Christopher Meisner to do the drawings. Mr. Horner says that he decided instead to retain someone called Anthony Ramirez. Mr. Horner testified that, sadly, he no longer has any contact details for Mr. Ramirez. Indeed, neither of the parties were able to provide any clue as to who Mr. Ramirez is, if he exists at all.

[37] In January 2020, Mr. Ross had identified Mr. Meisner as the designer responsible for the preparation of drawings that were submitted to the Township in support of a building permit application. The defendants then commenced third party proceedings against Mr. Meisner seeking indemnity for any damages they were ordered to pay to the plaintiffs.

[38] In fact, as will be discussed in more detail later in these reasons, Mr. Meisner was not a designer at all. Far from it. In fact, he had nothing to do with construction or design. He was a personal friend of Mr. Ross, who lives in British Columbia and presently undertakes some volunteer work as a track and field coach.

[39] The third party proceeding against Mr. Meisner was only dismissed on consent on the eve of trial.

[40] To complete the charade of the mystery designer, Mr. Horner says he never told Mr. Ross that he had not retained Mr. Meisner. Nor did he tell Mr. Ross that he had retained Mr. Ramirez instead.

[41] Before turning to a more focused discussion of the issues, one further, but important detail.

[42] The engineering stamp used in the documents submitted to Mr. Dillon was identified by Mr. Anrep as having been copied from some drawings that he had provided as part of a legitimate commission which he had undertaken with Standard Building/Mr. Ross.

The Agreement to Rebuild the Crawfords’ House

[43] Mr. Ross denies that he was retained as a general contractor. Rather, he says, he explained several times to the plaintiffs that they would have to be their own general contractor and that the defendants’ role would be to assist as consultant only.

[44] Mr. Ross provided the plaintiffs with a proposal, set out on the letterhead of Standard Building Contractors Ltd. dated 1 August 2019 for “New Home Construction Fire Rebuild”, the first sentence of which said:

Standard Building Contractor [sic] Ltd. proposes to supply all required labour, materials, plant and equipment to perform the following work…

[45] The letterhead of Standard Building describes the company as “General Contractors” and “Construction Managers”. The document did not make reference to demolition of the damaged structure. The total project cost was $411,000 plus H.S.T. with a payment schedule commencing with the first charge of $100,000 plus H.S.T. (upon permit application).

[46] The rebuild quote for $411,000 plus H.S.T. was rejected by the plaintiffs’ insurers as being too high.

[47] The insurers had in hand a number of other quotes. One was for $350,000 plus H.S.T. (Rebuild Response Group). Another was for $424,443 plus H.S.T. from a company called “Kristopher Matthews Construction”. The address for that business turns out to have been an Ontario address for Mr. Ross.

[48] After rejection of his initial quote, Mr. Ross put in a revised quote for $363,900 plus H.S.T. Although in almost every other respect, the revised quotation is similar to the original quotation, the payment schedule provided for payment of the first $100,000 plus H.S.T. “upon signing contract”.

[49] Mr. Ross relies on the accepted quotation, which makes no reference to “permit application”, as evidence that the defendants’ role was to be that of a consultant rather than a general contractor and, further, that the Crawfords would be responsible for obtaining a building permit.

[50] Given the circumstances which the Crawfords found themselves in, it makes little sense that they would have taken on the role of general contractor. Rather, what was going on was the beginning of a web of misrepresentation and deception on the part of Mr. Ross.

[51] The Crawfords were consistent in their evidence that they hired Mr. Ross to be their general contractor. Although Philip Crawford works as a rebar installer, he does not have general construction experience. Both he and Brooke Crawford were firm in their evidence that neither of them assumed the role of general contractor.

[52] Mr. Crawford does concede, however, that in November 2019, he signed a building permit application form as owner. He says that he did so because, no building permit having materialised, Mr. Ross told him that if he signed application forms for a permit, taking responsibility as owner and contractor, for the drawings which Mr. Ross had obtained, Mr. Dillon would have no choice but to approve the permit application – which, up to that point in time, Mr. Dillon had refused to do.

[53] The drawings which accompanied this application were, of course, the forged Anrep drawings that I have already referred to. Not long after receiving Mr. Crawford’s application, Mr. Dillon advised the Crawfords that the drawings had a forged engineer's stamp.

[54] I accept, without reservation, the evidence of the Crawfords that they were not, and never had any intention of being, their own general contractor. It was only in November, after Mr. Ross’s submission to the Building Department had been rejected, that he counselled the Crawfords to assume responsibility for the drawings as general contractor/designer in an effort to get the drawings approved and obtain a building permit. Mr. Ross at all times, other than this attempt to enlist Mr. Crawford to mislead the Township, held himself out as or conducted himself in a manner consistent with that of general contractor. By way of one of many examples of such behaviour, in an email dated 17 September 2019 Mr. Ross wrote to Mr. Dillon saying "We have been retained by Mr. and Mrs. Crawford to complete the reconstruction of their home…" and attaching structural plans and an unsigned municipal permit application.

Did the Parties Fulfil Their Respective Obligations?

[55] The obligations of the defendants, as general contractor, was to construct a new home for the Crawfords in accordance with the revised estimate, which was signed on behalf of Standard Building Contractors Ltd. on 12 August 2019, with total project costs of $363,990 plus H.S.T.

Building Permit

[56] Because the revised estimate, unlike the first estimate presented by Mr. Ross, did not list obtaining a building permit, one of the issues at trial was whose responsibility it was to obtain one.

[57] Having concluded that the defendants, or at the very least Standard Building Contractors, were the general contractors, it would be a reasonable expectation that, as such, the defendants would be responsible for obtaining a building permit. Without a building permit, construction of the new home would have been prohibited under the Building Code Act, 1992, S.O. 1992, c. 23, s. 8. In Victor Couto’s Bridal Corner Limited v. Alliance Trade Centre Inc., (1998), 43 C.L.R. (2d) 122 (Ont. Ct. Gen. Div.), a dispute involving a somewhat more comprehensive contractor agreement than that in the present case, J Macdonald J. concluded, at para. 21, that the contractor agreement impliedly placed on the contractor the obligation to obtain the building permit. He added, at para. 30, that implying such an obligation on the part of the contractor gives business efficacy to a contract between an owner and a contractor. A similar logic should apply in this case.

[58] It is beyond dispute that the defendants did not obtain a building permit. They may have tried to obtain one, by filing unsigned application forms, and submitting inadequate and, ultimately, forged design drawings. But without a building permit there was very little that they were legally able to do on the Crawfords’ property.

[59] This failure meant that most of the contract became incapable of performance, and such work as was done became largely worthless.

Demolition Work

[60] One element of the work which needed to be done at the Crawfords’ property was the demolition of the burnt-out remnants of their former house.

[61] Brooke Crawford described how, when it came time to approach their insurance company for the funds necessary to demolish what was left of their home and take away the debris, the insurance company required them to obtain three competing quotes.

[62] By that time, the Crawfords had already spoken to a local company known to them, Gemmill Sand and Gravel, to provide a quote.

[63] Allison Gemmill confirmed that her company had been contacted by the plaintiffs to do the demolition work. She was told by the plaintiffs that they had hired a general contractor.

[64] According to Ms. Crawford, she was told by Mr. Ross that because his company would be handling the overall project, Gemmill should submit its quote to Mr. Ross, who would in turn submit a quote to the insurance company. He said that he knew other reputable contractors in the industry that did demolition work and could look after obtaining two additional quotes, in addition to putting in a quote of his own. He said that his company would submit a quote for the work at market value. Any difference between the market price and the price that Gemmill had agreed to do the work for could then be returned to the Crawfords.

[65] The Crawfords, somewhat unadvisedly, went along with this proposal. Under cover of an email dated 30 July 2019, Ms. Crawford sent an insurance adjuster three demolition quotations. One of them was from Standard Paving in the amount of $26,000 plus H.S.T. The others were from Horner Worx and Matthews Construction. Unbeknown to Ms. Crawford, the two competing quotations were prepared by Kyle Horner and Kris Matthews, both of them employees and/or subcontractors of the defendants.

[66] The insurers approved the Standard Paving quote. The work, though, was done by Gemmill, in accordance with their quoted price of $11,300 inclusive of H.S.T. Gemmill submitted an invoice in that amount to Standard Paving. A second invoice in a total amount of $429.40 was issued on 10 September 2019 to cover a flow charge associated with the digging of a trench for a water line to the temporary trailer which the plaintiffs had placed on their property.

[67] Neither of these invoices have been paid by the defendants. Contractual interest is accumulating at a rate of 2% per month.

[68] Mr. Ross states that Standard Paving had already deployed heavy equipment to the property to commence demolition and disposal work when Ms. Crawford informed him that the demolition and disposal work was going to be done by someone else. He claims that the work was subsequently completed by Gemmill without his knowledge.

[69] Despite the claim by Mr. Ross that he was unaware of what Gemmill was doing, Courtney Slaunwhite said that she was having dealings with Gemmill, including talking to them about a trench that they had allegedly failed to dig for the water line.

[70] And despite the apparent concerns of Mr. Ross and Ms. Slaunwhite about Gemmill, Mr. Ross claims that Standard Paving paid the first of the invoices from Gemmill. He produced an uncashed cheque payable to Gemmill dated 5 September 2019, in the amount of $11,300.

[71] Gemmill claims to never have received that cheque. Even at trial, Mr. Ross was professing himself as being willing to pay Gemmill. Yet the defendants have made no further efforts to effect payment.

[72] Bank records for Standard Paving confirm that on 27 August 2019, $24,690.50 was deposited, which Mr. Ross confirms represents the demolition claim payment advanced by the plaintiffs’ insurers.

[73] Perhaps of no great moment, but nevertheless significant to the overall evaluation of the truthfulness, or lack thereof, of evidence submitted by the defendants, the invoice that Mr. Ross submitted to the insurer in respect of the demolition, and to the Crawfords in respect of the rebuild, contained invalid H.S.T. numbers. This was, according to Mr. Ross, an “oversight”.

[74] With respect to the Gemmill payment, the cheque has never been voided or returned. Nor is there any evidence that the defendants have put a stop payment instruction out. Mr. Ross does, however, allege, without foundation, that Gemmill has intentionally avoided depositing the cheque to make him look bad in this lawsuit.

[75] Regardless of the unsatisfactory manner in which both the plaintiffs and the defendants conducted themselves vis-à-vis the insurance company in relation to the demolition work, Gemmill is entitled to be paid, and the defendants, having received funds from the insurance company for that purpose but having failed to pay the demolition contractors, have been unjustly enriched at the expense of the Crawfords and Gemmill.

Drawings and Designs

[76] The plaintiffs say they understood that Mr. Ross would be doing the initial design, and then getting a designer or an engineer to review and sign off on what he had prepared. Mr. Ross denies this, stating that at no time did he tell Ms. Crawford that he would prepare the final designs himself.

[77] Ms. Crawford also says that she was never told by Mr. Ross that Kyle Horner would be involved with the drawings. Nor did she ever hear the name Christopher Meisner until after this litigation had begun.

[78] Again, Mr. Ross paints a different picture. He says that Ms. Crawford was informed that Mr. Horner would be taking care of final arrangements, and that a designer had been hired to finalise things.

[79] It is not, ultimately, necessary for me to determine whether or not Mr. Ross undertook anything beyond some elementary design work. Nor do I have to reconcile the different accounts from Ms. Crawford and Mr. Ross about Ms. Crawford making constant changes to her concept of the rebuild. Such work as may have been done by Mr. Ross was of no value because of the deceit that he engaged in with respect to the preparation of drawings and the worthlessness of any such efforts in light of the subsequent deceptive building permit application and refusal of the Building Department to have further dealings with Mr. Ross or his companies.

[80] I would add that I was not persuaded by Mr. Ross that – as he alleged – “his” drawings were subsequently appropriated by the designer retained by the plaintiffs after they had terminated their contract with the defendants.

Trailer

[81] Mr. Ross and Mr. Horner between them claim to be entitled to payment for installation of the trailer which the Crawfords are presently living in. However, as Ms. Crawford attested, and I accept, the trailer was installed by NS Mobile Rental, and was paid for directly by the insurer.

[82] The electrics to the trailer were completed by RW Electric. Ms. Crawford concedes that Mr. Ross may have arranged for RW Electric to attend. However, Mr. Ross never paid RW Electric.

[83] Similarly, plumbing for the trailer was completed by Knowler Plumbing. Again, Ms. Crawford concedes that Mr. Ross made arrangements for Knowler to attend. The defendants did not, however, pay Knowler.

Invoices and Advances

[84] Having provided a revised proposal to undertake the rebuild for $363,900 – which the plaintiffs’ insurers had accepted – the defendants delivered an invoice dated 13 August 2019 in the amount of $113,000 ($100,000 plus H.S.T.) from “Standard Paving Limited O/A Standard Building Contractors”. The invoice contains no other detail or description. Ms. Crawford says that she and her husband expressed some concern to Mr. Ross about the lack of detail on his invoice. He responded that the invoices was just for insurance purposes (to secure the first tranche of payment), and that more detailed invoices would follow. They never did.

[85] Mr. Ross denies that such a conversation ever occurred.

[86] Under cover of an email dated 10 September 2019, a further invoice was sent by the defendants with some additional narrative in red printing:

• Includes consulting, design work, engineering and deposit on work to be completed up to and including completion of rough framing
• Per contract, invoice to be paid prior to completion of any work
• To date, consulting and design work has already begun and payment is past due
• Payment authorised by Shari Hamilton for Bay of Quinte Mutual Insurance

On this revised invoice, Standard Building Contractors Ltd. was described as – “Div. Standard Paving Limited”. Some asterisked red print at the bottom of the invoice read “Please make cheques payable to Standard Paving Limited.

[87] Mr. Ross's email of 10 September 2019 said that his lawyer and accountant were “getting pissed off” because he had started work on the project before getting paid. Ms. Crawford said that she was surprised because she had understood that the first payment would only be due upon completion of a building permit application. She had not realised that this detail had been left off the revised proposal. She also assumed that, having received an advance of $24,690.50 for the demolition when in fact Gemmill had done the work for $13,000, that the defendants would have funds in hand.

[88] As it was, the insurance company had already sent the plaintiffs the first tranche of payment for the rebuild.

[89] Again, Mr. Ross challenges this version of events. Rather, he says, the defendants’ lawyer was becoming concerned because they had completed “a significant amount of work” with no payment from the plaintiffs. Furthermore, he says, some of the receivables on the project were extending to sixty days.

[90] What is not in dispute is that on 12 September 2019, Ms. Crawford met Mr. Ross at the CIBC in Perth and paid him an instalment of $113,000.

[91] The bank records of Standard Paving disclose that when the payment of $113,000 was deposited, the account had a balance of $22,037.28. By the end of September 2019, the balance had been reduced by $102,369.90 to $32,667.38. It does not appear that any of the withdrawals made during that period were linked to the Crawfords’ project.

[92] Despite assertions by Mr. Ross that work had been done and expenditures made by the defendants in relation to the Crawfords’ project, Mr. Ross has been unable to point to any debits in the bank records which would correspond with payments made in connection with the Crawfords’ project. Nor, significantly, can Ms. Slaunwhite – the only payment she references is the cheque which she says was sent to Gemmill but was never received by Gemmill or presented for payment.

[93] The balance of the account was $63,506.90 when the contract between the plaintiffs and the defendants was terminated on or about 29 November 2019.

Excavation and Grading

[94] The defendants claim $20,746.50 for “foundation and site excavation work”. Ms. Crawford says that the defendants did partially excavate the site, commencing on the evening of 24 October 2019. The work was not completed. Gemmill subsequently came in to complete the excavation. The defendants never did work on the foundation.

[95] It is acknowledged that an excavator and a skid steer were brought to the site by the defendants or their subcontractors. The defendants assert a $13,000 charge for this work and a further $12,300 to float an excavator for the demolition. The plaintiffs challenge the amounts claimed.

[96] The defendants also claim for tree cutting and removal. However, according to the Crawfords, the defendants never cut down any trees on the property. They did push over some trees and left them in a pile next to the hole where the new house was to be built. They did not remove any trees from the property.

[97] The defendants also claim for rock breaking. Ms. Crawford states that Mr. Horner did attempt to break some of the rock in the area where the new house was to be constructed. However, he told the Crawfords that he was unable to do more without more appropriate equipment. Instead, he proposed to relocate the hole by about five feet and closer to the driveway.

The Excavator

[98] Mr. Ross claims that he is entitled to damages from the plaintiffs because of damage done to one of the excavators that he left on the plaintiffs’ property. Mr. Crawford acknowledges that he did use the excavator, without obtaining permission to do so, to move a couple of trees and to move a load of gravel over to where the trailer was set. Mr. Crawford denies having damaged the excavator. Furthermore, he recounted that Mr. Horner had told him that he had broken a window on the excavator when he was using it. Mr. Crawford had helped Mr. Horner clean up the broken glass.

[99] I found Mr. Crawford to be an honest witness, in contrast to Mr. Horner and Mr. Ross. I prefer his evidence to theirs. In the absence of any other evidence as to how the excavator was damaged, the defendants have not discharged their burden of establishing, on a balance of probabilities, that Mr. Crawford was responsible for the damage.

Termination of the Contract

[100] With the exception of some excavation and grading work in preparation for the installation of new footings, nothing else of any value was done by the defendants in the actual or purported performance of their contractual obligations. Once fraudulent plans had been submitted, it became clear that the Building Department was no longer prepared to accept any communications from Mr. Ross. The Crawfords understandably did not wish to proceed further with someone who they could not trust and who the Township would not deal with.

[101] In my view, the Crawfords were fully justified in terminating their contract with the defendants. The defendants’ dishonest conduct, their failure to obtain a building permit and their failure to undertake all but a minimal amount of actual work on the site, while all the time making empty promises and giving meaningless assurances, constituted fundamental breach of the contract justifying rescission of the contract and, subject to the discussion below, the return of all insurance proceeds advanced to the defendants.

Who Owes Whom What?

[102] The plaintiffs do not oppose the defendants being compensated on a quantum meruit basis for work that they actually did for the benefit of the project and related expenses reasonably incurred.

[103] Expert witnesses were called by the plaintiffs and the defendants respectively to assist the court in valuing the work done by the defendants.

[104] The defendants called John Di Santi as their expert. He has a civil engineering degree and has experience as a project manager, construction manager and in project accounting. His employer, High-Tech Structures, is primarily a general contractor with a particular speciality in concrete. He conceded that his company does not do a lot of residential construction. Mr. Di Santi was asked to review the project documentation provided by the defendants, the site report, and the report of the plaintiffs’ expert, Bill Anglin.

[105] Mr. Di Santi saw a number of shortcomings in Mr. Anglin's report which, he noted, was essentially created based on a site visit that took place five months after the defendants had left the work site. He added that perhaps Mr. Anglin did not receive or have access to all of the cost information that he did.

[106] While Mr. Di Santi was unable to verify that all of the things recorded in the documents he reviewed – which included daily job logs and GPS data – the dates, person hours, machine rentals and other items listed seemed reasonable to him.

[107] Mr. Di Santi conceded that he had not reviewed the statement of claim or the affidavits of Mr. Dillon, Mr. Anrep, or the plaintiffs. He had, however, interviewed Mr. Ross. But he did not speak with Ms. Slaunwhite, the administrator, or Mr. Horner, the site supervisor.

[108] Mr. Di Santi was asked to comment on a document prepared by Mr. Ross entitled “Crawford Project Accounting”. This document totalled the value of the work completed, with taxes and markup included, at $198,607.15. Based on a cost accounting assessment, Mr. Di Santi expressed the opinion that the amounts claimed and, in particular, the charge-out rates, were reasonable.

[109] Furthermore, even if it were to be assumed that the defendants were only entitled to be compensated for excavation work required for new footings, the value of that work, and of the mobilization of equipment required to do it, would, in Mr. Di Santi’s opinion, greatly exceed the $7,426.13 valuation of the plaintiffs’ expert, Mr. Anglin. According to Mr. Di Santi, eight to ten mobilisations, rather than the two allowed for by Mr. Anglin, would have been required to get the equipment on and off the worksite.

[110] According to the defendants, the GPS logs support a conclusion that there were at least five trips related to the setup and takedown from a location 200 km away from the jobsite. At $2,000 per trip (which was a figure that Mr. Anglin ultimately agreed with), the value of five roundtrips would be at least $10,000 just for the mobilisations alone. This is before taking into account the cost of the excavation and other work completed on site.

[111] The plaintiffs’ expert, Bill Anglin, holds a diploma in architectural technology. His company, Anglin Group Limited, is involved in commercial and residential construction (although, like High-Tech Structures, is mostly focused on commercial projects). Mr. Anglin deals with contract administration, estimating and site supervision. The work done by his company includes excavation and floating of equipment, either by themselves or through subcontractors.

[112] Mr. Anglin reviewed Brooke Crawford's affidavit, including the same “Crawford Project Accounting” document which had been produced by Mr. Ross and reviewed by Mr. Di Santi. Mr. Anglin also interviewed Philip Crawford and undertook a site visit on 15 April 2020.

[113] Mr. Anglin's opinion was that excavation work had been done at the site to lines and grades required for new footings, and was of sufficient size to accommodate a basic residential structure. It appeared to him that none of the excavated material had been removed from the site and any trees or shrubs that had been cut down had just been pushed off to the side. He said there was evidence of bedrock being encountered in one corner of the excavation and it appeared that a hoe ram had been used to break the rock. Approximately two cubic metres of bedrock had been broken and pushed off to the side of the excavation. Because of this, and other issues associated with potential settlement due to the existing bedrock elevation and water flow between the existing bedrock and native material left in place, Mr. Anglin's opinion was that the excavation at the site was not complete or ready to accommodate a rebuild. He further opined, albeit based on an inspection visit that occurred five months after the defendants had left the worksite, that there was no indication of any further work having been completed on site other than the excavation work. Specifically, there were no footing or wall forms on site.

[114] Mr. Anglin opined that it appeared that a maximum of two full days of work had been completed on the site. He estimated that the manpower and equipment required, including a round-trip to float the equipment in and out of the site, would be $7,426.13.

[115] Mr. Anglin challenged the suggestion made to him, during the course of cross-examination, that it would be reasonable for there to have been five truckloads of material transported in and out. He maintained his position that one load each way would have been all that was required, although he conceded that the total cost per trip – there and back – might be $2,000 – rather than the estimate of $1,000 to float equipment in and out contained in his report.

[116] Mr. Anglin did not take issue with the time and material charges contained in the document that Mr. Di Santi had said was reasonable. However, Mr. Anglin said that his opinion was based on the assumption that the work described in that document had, with the exception of the excavation work, not been done.

[117] Based on Mr. Anglin's evidence, but giving the defendants some benefit of the doubt with respect to the cost of the excavation work done and the floating of equipment to do it, the plaintiffs concede a valid quantum meruit claim by the defendants for $10,000.

[118] Because I have found that the defendants did not do the work which forms the basis for the document reviewed by Mr. Di Santi, I find that the value of the work done by the defendants should be based only on the excavation work and the cost of floating equipment.

[119] In that regard, the approach taken by the plaintiffs is, in my view, a reasonable one. It allows for the possibility that, for example, the cost of floating equipment in and out was more than the $1,000 built in to the Anglin estimate. The defendants should, accordingly, receive a credit of $10,000 against their liabilities to the plaintiffs arising from this decision.

[120] Subject to that offset, the defendants are indebted to the Crawfords for the $137,690.50 advanced by the plaintiffs (or their insurers). This includes the funds which should have been used to pay the accounts of Gemmill Sand and Gravel. In addition, the defendants must pay an amount equivalent to contractual interest at 2% per month, as claimed on Gemmill’s invoices, up to the date of judgment. It is expected that the Crawfords will remit to Gemmill all amounts which they recover from the defendants by way of the amounts due on the invoices (including interest).

Defendants’ Liability Joint and Several

[121] It is impossible to demarcate liability between the various defendants. The two corporations seem to have been used interchangeably and, indeed, some of the documentation suggests that one is a division of the other. More importantly, however, the corporations have been used as vehicles for Mr. Ross to obtain monies by false pretences and for fraudulent misrepresentation. In such circumstances, Mr. Ross cannot hide behind the corporate veil: Shoppers Drug Mart Inc. v. 6470360 Canada Inc., 2014 ONCA 85, at paras. 43-46.

Aggravated and Punitive Damages

[122] In addition to damages for breach of contract and for unjust enrichment, the plaintiffs claim aggravated damages and punitive damages.

[123] The plaintiffs’ claim for aggravated damages is based on the reported emotional distress, financial stress, sleep disturbance, anxiety, sadness and marital struggles that are said to have resulted from the actions of the defendants. Clinical notes and records of Ms. Crawford’s family doctor were tendered which contained repeated references to stress. Ms. Crawford’s mother, Brenda Raymond, also testified about the impact that the defendants’ conduct has had on her daughter’s well-being.

[124] While I do not doubt that distress, discomfort and anxiety have flowed from what has happened, I cannot be confident about the cause. Ms. Crawford and her child experienced a traumatic event – the fire. As a result of that, the family has ended up living in a trailer. That would have happened for some period of time regardless of Mr. Ross.

[125] While I would have been open to consideration of an award of aggravated damages if supported by a more complete and focused medical record, I am not prepared to make such an award on the evidence available to me at this time.

[126] The plaintiffs seek $50,000 in punitive damages.

[127] As the Supreme Court of Canada explained in Whiten v. Pilot, 2002 SCC 18, [2002] 1 S.C.R. 595 at para. 36:

Punitive damages are awarded against a defendant in exceptional cases for “malicious, oppressive and high-handed” misconduct that “offends the court’s sense of decency”: Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, at para. 196. The test thus limits the award to misconduct that represents a marked departure from ordinary standards of decent behaviour. Because their objective is to punish the defendant rather than compensate a plaintiff (whose just compensation will already have been assessed), punitive damages straddle the frontier between civil law (compensation) and criminal law (punishment).

[128] Among the situations where an award of punitive damages is appropriate is where the defendant's misconduct would otherwise be unpunished or where other remedies are inadequate to achieve the objectives of retribution, deterrence and denunciation: Whiten, at para. 94. To similar effect, punitive damages will be appropriate where compensatory damages are insufficient to accomplish these objectives. In that regard, having declined to award aggravated damages in the present case, the case for an award of punitive damages becomes stronger.

[129] Without a determination by this court of the defendants’ wrongdoing, the plaintiffs’ insurers have not been prepared to provide additional funds to the plaintiffs so that they can continue with and complete the reconstruction of their home. At the time of trial, the support of the plaintiffs’ insurer for monthly trailer rental payments was in jeopardy. Meanwhile, long after the contract was validly terminated by the plaintiffs, and, if he was honest with himself, in full knowledge that the work that he did for the plaintiffs was virtually valueless, Mr. Ross has refused to return money that was not his. His disingenuous assertions of his willingness to pay Gemmill – something which he could easily do, but has failed to – bears testament to his lack of sincerity.

[130] Although punitive damages are very much the exception rather than the rule, this case is one which involves behaviour on the part of Mr. Ross and his confederates that cries out for a condign sanction in the form of punitive damages. His web of deception is as scandalous as it is audacious.

[131] In my view, an award of punitive damages of $50,000 is appropriate to rationally accomplish the objectives of retribution, deterrence and denunciation.

Lien Claim

[132] It follows, also, that there is no longer any basis for the construction lien placed on the title of the Crawfords’ property. In light of the funds that the defendants had in hand since the time that the lien was taken out and the very limited value of the work done by them, there was never any valid basis for the lien. The construction lien action by Standard Building should, accordingly, be dismissed with costs on a substantial indemnity basis and the certificate of action registered on title should be vacated.

[133] Section 35 of the Construction Act provides for a cause of action in damages where a person preserves a claim for lien or gives written notice of lien if damage results when the claimant knew or ought to have known that the amount of the lien had been wilfully exaggerated or where the person knew or ought to have known that he or she did not have a lien: Construction Act R.S.O. 1990, c. C.30.

[134] The record shows that after the lien was registered, Mr. Ross wrote to the Crawfords’ insurer and purported to assert a trust over the remaining insurance proceeds available under the Crawfords’ policy.

[135] The plaintiffs argue that that communication constituted “written notice of a lien”, within the meaning of section 35, and that the notice was given without a legal basis and in bad faith. In addition, the exaggerated lien that was preserved has interfered with the Crawfords’ economic relations and has delayed their efforts to get their house rebuilt. They claim damages of $7,500 pursuant to section 35 of the Construction Act.

[136] I agree that the Crawfords have a valid claim for damages under the section 35 of the Construction Act and, in the circumstances, I award them damages in the amount of $7,500.

The Mareva Injunction

[137] Mr. Ross and the defendant companies are all residents for the time being in the Province of Nova Scotia. Mr. Ross, Ms. Slaunwhite and Mr. Horner, all representatives of the defendants, gave evidence at trial remotely from Nova Scotia.

[138] In another of the many oversights and misfortunes that seem to be set Mr. Ross, on 30 November 2020, he swore an affidavit describing himself as being “of the municipality of Trenton” when, in fact, he was in Nova Scotia. This, his solicitor subsequently explained, was another inadvertent error.

[139] In her decision on the motion by the defendants to set aside the Mareva injunction, MacLeod-Beliveau J. observed, at Standard Building Contractors Limited v. Crawford, 2020 ONSC 687, at para. 18, that all five requirements of the test for granting a Mareva injunction order existed, including there being valid grounds for believing that the defendants had assets in Ontario, valid grounds for believing that there was a real risk of the defendants’ assets being removed from the province of Ontario and that the dissipation of funds by the defendants was a reasonable inference to be drawn from the fraudulent circumstances of the case. MacLeod-Beliveau J. also found that the plaintiffs had legitimate concerns that the defendants had taken and spent their money and that the defendants would do whatever it takes to prevent the return of $139,000 to the plaintiffs and dissipate their funds.

[140] The defendants have provided no evidence to cause me to displace these findings. To the contrary, as will be discussed in respect of the contempt motion, my colleague underestimated the defendants’ capacity for deception and dishonesty. It is likely telling that, despite the protests by the defendants about the harm that has been done to their ability to trade and do business as a result of the Mareva injunction, they did not avail themselves of the opportunity to pay into court the sum of $139,000 which, had they done it, would have allowed the injunction to be lifted (the assertions by Mr. Ross that he had no resources to pay funds into court rings hollow when one looks at the activity in the various bank accounts controlled by him).

[141] I would, accordingly, maintain and make permanent the injunction, save that I would vary the order of MacLeod-Beliveau J. dated 31 January 2020 to permit the lifting of the injunction in the event of payment into court by the defendants of the sum of $400,000 (such sum to then remain in court pending satisfaction in full, or the setting aside or variation, of this judgment) or, in the alternative, upon the plaintiffs serving on the defendants and filing with the court a satisfaction piece confirming payment in full of all financial obligations resulting from this judgment, including payment of costs.

[142] As a result of information gleaned from records that have been obtained from the defendants’ banks, the scope of the Mareva injunction should be expanded to permit the Crawfords to obtain financial records for TAB Civil Contracting Corporation, Culloden Properties Corporation and the corporations identified in the evidence filed as part of the trial record identifying Mr. Ross as sole officer and director of, including 1 Oak Studio Inc., 3284747 Nova Scotia Incorporated, 8326053 Canada Inc., 8396663 Canada Inc., Astor Construction Group Limited, Six Sigma Capital Corp., Standard Building Contractors (West Coast) Limited and Standard Tire Limited. This will permit the Crawfords to locate accounts and obtain financial records for tracing purposes.

[143] The freezing order should be extended to cover the assets of TAB Civil Contracting Corporation.

[144] Furthermore, the defendants should be enjoined from incorporating, directly or indirectly, any new corporation while the injunction remains in place, either in their own name or in someone else's name, without notice to the Crawfords or leave of the court.

Contempt

[145] The order of MacLeod-Beliveau J. dated 20 December 2019, as varied by her order of 31 January 2020 – following a hearing that took place on 23 January 2020 – enjoined the defendants from dissipating their assets, including an account at the Bank of Montreal, and requiring the defendants to prepare a sworn statement describing the nature, value and location of their assets worldwide, whether in their own name or not and whether solely or jointly owned.

[146] On 22 January 2019, Mr. Ross swore an affidavit purporting to provide a statement describing the nature, value and location of the defendants’ assets worldwide. No bank accounts were listed, although the original order of MacLeod Beliveau J. had identified one Bank of Montreal account.

[147] Subsequent disclosure obtained as a result of the orders of MacLeod-Beliveau J. revealed that two days prior to swearing that statement of assets, Standard Paving Limited had either opened, or rekindled, a bank account with Royal Bank of Canada in Dartmouth, Nova Scotia. That account had a zero balance on 20 January 2020. It was then funded with the deposit of $17,967.79. Thereafter, the account was active, including receipt of a number of branch-to-branch credits as well as e-transfers or payments to Courtney Slaunwhite, Kyle Horner and “Mom and Dad”. By way of example, during the statement period of 24 January to 24 February 2020, there were deposits and credits totaling $27,641.55 and debits of $26,283.97. In the 24 February 2020 to 24 March 2020 statement period, the corresponding figures were credits of $47,855.47 and debits of $52,850.59. Yet, Mr. Ross maintains that he complied with Justice MacLeod-Beliveau's order, which restrained the defendants from dealing with any of their assets and not just the account that was specifically listed. Both the failure of Mr. Ross to disclose the existence of the Standard Paving account and the very active use of that account are clear breaches of both the letter and the spirit of the order.

[148] Mr. Ross maintains that this Standard Paving account was not covered by the order of MacLeod-Beliveau J. And he believes that the transaction on 31 January 2020 to “Mom and Dad” was a payment to Courtney Slaunwhite's parents.

[149] The bank records for Standard Paving Limited also discloses that on 23 April 2020 an online banking payment was made to a Canadian Tire MasterCard in the amount of $10,000. Mr. Ross testified that he is not sure whether that transfer was to his Canadian Tire MasterCard and that he is sure that he did not initiate that transaction. When shown the statement for a Canadian Tire MasterCard account bearing his name, and showing a credit of $10,000 from Royal Bank with a transaction date of 23 April 2020 and the posting date of 24 April, Mr. Ross stated that this did not help refresh his memory as to what had occurred. He said that a number of his subcontractors had access cards on the MasterCard account and that Ms. Slaunwhite also had access.

[150] The description of purchases recorded on the MasterCard statements show a mixture of what might be seen as personal and business expenses. The statements also demonstrate a pattern of round figure credits, denominated in thousands, and multiple purchases, giving the impression of use of the card in much the same way that a debit card would be used in a regular bank account. It is perhaps of some moment that Mr. Ross reported that he does not have a personal bank account in his own name.

[151] I do not believe the evidence of Mr. Ross that he was unaware of the transactions in which significant amounts of money were transferred into the MasterCard account from bank accounts. It is clear to me that he used the MasterCard account in much the same way that others would use a bank account.

[152] Once again, his use of this account violated both the letter and the spirit of the orders made by MacLeod-Beliveau J.

[153] Royal Bank of Canada also confirmed that Mr. Ross owns a bank account in the name of “TAB Civil Contracting Corporation”, as well as a credit card. Despite this, Mr. Ross states that he cannot authenticate monthly statements from the RBC TAB account. He says that he is not a director or owner of TAB Civil and has no information regarding TAB’s accounts. He was, he says, supposed “to be removed well in advance of the commencement of this project for the plaintiffs”, and it was his belief that he had been removed.

[154] Timothy Farrell, a branch manager with Royal Bank of Canada in Dartmouth, Nova Scotia, testified at trial. He confirmed that Mr. Ross was recorded as an owner of the TAB account. He conceded, however, that it was possible that Mr. Ross was not the only owner of the account. RBC's records would be based on the articles of incorporation at the time the account was opened. RBC had not received any updates since then.

[155] The review of the account statements for the TAB account, starting at the end of December 2019, includes references to familiar names: Kris Matthews, Kyle Horner, Courtney Slaunwhite, “Mom and Dad” ($3,000 on 30 December 2019, $1,000 on 2 January, $1,000 on 13 January, $4,300 on 20 February 2020). On 6 March there is a branch-to-branch credit memo “Client request Standard Paving to TAB Civil Contracting” for $5,000. On 20 March, an e-transfer of $800 was sent to Shane Ross.

[156] I do not believe the evidence of Mr. Ross that he was unaware of, and uninvolved with, the TAB account.

[157] No doubt a more detailed forensic examination of the financial documents obtained would provide a more comprehensive picture of the nature and extent of the financial activities engaged in by the defendants after MacLeod-Beliveau J.'s freezing order was made.

[158] Suffice it to say that I am left in no reasonable doubt, having regard to the examples cited in the preceding paragraphs, that the defendants have breached the Mareva injunction order on numerous occasions and, accordingly, that Shane Ross is in contempt of court. Mr. Ross will be required to attend in person, in court, in Kingston, at 10:00 a.m. on Monday 29 March 2021, to place any evidence which he wishes to the court to consider by way of possible mitigation or purging of his contempt, and to determine what, if any, sanctions should be imposed on him if the finding of contempt is sustained.

Costs

[159] Both sets of counsel are to be commended on having put together a comprehensive trial record in a relatively short period of time so that it was possible to proceed with a trial on all issues with only four days of court time required.

[160] Despite the relatively modest amount of court time involved, the record was substantial. By way of example, the first affidavit of Ms. LaBrash, with exhibits, consisted of 1,261 pages. Counsel also provided comprehensive written submissions to complement their oral submissions at the end of trial.

[161] Given the outcome, this is, in my view, a case justifying an award of costs in favour of the plaintiffs on a substantial indemnity basis, unless there are offers to settle which would displace that presumptive outcome.

[162] If counsel are unable to agree on the amount of costs to be paid, costs summaries should be exchanged fourteen days after the release of these reasons. No more than seven days after that, there should be written submissions from the plaintiffs not to exceed five pages in length followed, not more than seven days after that, by written submissions from the defendants not to exceed five pages in length. Copies of any relevant offers to settle should accompany the written submissions.

[163] If the parties are unable to agree on the terms of the formal judgment resulting from this decision within seven days of its release, counsel for the plaintiffs should submit a draft judgment to the trial coordinator in Kingston for approval by me. The defendants will be at liberty at that time to provide a short written submission setting out their position on any aspects of the draft judgment that they take issue with.

[164] I will also remain available to the parties to address any other issues arising from the implementation of my judgment.

Mew J. Released: 07 January 2021