COURT FILE NO.: CV-18-590020

DATE: July 30, 2021

ONTARIO

SUPERIOR COURT OF JUSTICE

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

BETWEEN:

ADAM ROWE carrying on business as CLANDESTINE

Plaintiff

Stephen D. Gadbois, for the plaintiff,

Tel.: 519-884-0800 (ext. 225),

Fax: 519-884-1026.

FRED HAGEMAN’S HOLDINGS LIMITED, JD DESIGN & BUILD INC. and KOSTA MENTIS

Nadia Condotta for JD Design & Build Inc. and Kosta Mentis;

Tel.: 416-256-1600 (ext. 347),

Fax: 416-256-0100.

Defendants

HEARD: April 21, 22 and 23, 2021.

Master C. Wiebe

REASONS FOR JUDGMENT

I. INTRODUCTION

[1] This reference concerns this one action wherein Adam Rowe carrying on business as Clandestine (“Mr. Rowe”) claims a lien and damages in the amount of $36,761.73 concerning construction work he did for the defendant, JD Design & Build Inc. (“JD”), on two high-rise residential towers in North York owned by Fred Hageman’s Holdings Limited (“Hageman’s). The general contractor for the underlying project was the defendant, Kosta Mentis. The action has been discontinued as against Hageman’s.

[2] JD and Mr. Mentis deny the claim. JD posted security for the claim for lien. JD and Mr. Mentis pleaded a set-off and counterclaim for damages totaling $104,725.60. By the time of trial, this figure had been reduced to $58,210 in damages for deficiency correction costs and $2,000 for lost equipment.

II. BACKGROUND

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

[4] Mr. Rowe and his crew provide labour on construction projects that require working at heights using swing stages. He has been doing this since 2014. However, prior to July, 2017 Mr. Rowe had not done caulking repair work.

[5] Joseph Didiano, the principal of JD, called Mr. Rowe in June, 2017 for a quote on the labour for high-rise caulking repair work on the two apartment towers located at 355-365 Grandravine Drive, North York owned by Hageman’s (“the Property”). Mr. Didiano had been referred to Mr. Rowe by a client of Mr. Rowe’s. Mr. Rowe says he told Mr. Didiano that his rate was $65/hour per man “from the shop.” Mr Rowe’s shop is located in Cambridge, Ontario. Mr. Didiano denied he agreed to pay for any travel time. Two days later Mr. Rowe talked with Mr. Mentis and reduced the rate to $55/hour per man.

[6] On July 11, 2017 Mr. Rowe met Mr. Didiano on site. Mr. Rowe maintained that Mr. Didiano said the work involved the removal of caulking from the top of the exterior portions of each floor slab and the installation of backer rods and new caulking on the top side. Mr. Didiano promised to provide engineering drawings. JD agreed to provide the materials and equipment. Mr. Didiano asserted that he advised Mr. Rowe to do both the tops and bottoms of the slabs. Mr. Rowe gave an estimate of a fixed price of $63,000 for each building, but that was not acceptable to Mr. Didiano, who wanted a time and material contract.

[7] On July 17, 2017 Mr. Rowe delivered a written quotation for the work to JD. The quotation specified that the work would be done by two men at a combined hourly rate of $110/hour (namely $55/hour per man). The work was described as follows: “To supply 2 men to install rods and caulking per engineered drawings for 2 buildings based on time and material.”

[8] In early August, 2017 Mr. Rowe did high-rise work for Messrs. Didiano and Mentis at 2067 Lakeshore Blvd. He caulked leaking vents. He billed for the labour on a time and material basis using the same combined hourly rate for two men, $110/hour. He was paid in full.

[9] On August 17, 2017 Mr. Didiano advised Mr. Rowe by phone that he had the job at the Property and that he should start on August 23, 2017. Mr. Rowe said Mr. Didiano also asked for a second crew. There was an agreement for bi-weekly billing. I will call the entire contract “the Rowe Subcontract.”

[10] Mr. Rowe arrived on August 23, 2017. There were no engineer drawings. Mr. Rowe said that Mr. Didiano gave more particulars of the work to be done, namely that Mr. Rowe should clean drain holes and install weepers on top of the slabs and in one place replace brick.

[11] JD provided swing stages that were only 15 feet long. This meant that Mr. Rowe’s crew could not reach the outside and middle parts of each exterior wall from the swing stages. Mr. Rowe was told to proceed. He started at the southeast corner of 355 Grandravine Drive (“the First Building”).

[12] Each day Mr. Rowe’s crew would meet at 6:30 a.m. in the shop in Cambridge, have breakfast, travel to the site together, and start working. There was a “tailgate meeting” to start each day to review the day’s work and make safety checks. Each day the team lead, usually Mr. Rowe, would fill out a “Job Site Safety Check Plan” that confirmed the safety checks, and described the work done and the hours spent. Starting with the second daily form dated August 28, 2017, each daily form (with one exception) showed the travel time to and from the site. Every second week Mr. Rowe used the daily forms to generate the invoices to JD based on the contract rate.

[13] The work proceeded on the First Building corner by corner. The crew size in late August and throughout September, 2017 was two. It increased in October, 2017 to three and at times four.

[14] By September 27, 2017 Mr. Rowe had finished the First Building. An architectural technologist named John Stirling arrived and inspected the work. He worked for Frontier Engineering (“Frontier”), the engineering firm was hired by Hageman’s to give engineering services concerning the overall project on the two buildings. Mr. Stirling criticized the work as it did not include the undersides of the slabs and did not have flashing over the slabs, a feature he said was in his plan for the work. This plan was not produced.

[15] Mr. Stirling wrote reports to the owner about the work he observed on both buildings. These were dated September 29, October 5 and 17, November 3, 13 and 28 and December 7, 2017.

[16] Mr. Rowe said that, after Mr. Stirling’s first visit on September 27, 2017, Mr. Didiano changed the Rowe work to include caulking replacement on the undersides of the slabs and painting of the slabs with an approved paint. Mr. Rowe was instructed to go around the First Building again to do this work. He billed for this added time. Mr. Didiano admitted that the painting was a change, and that he did not instruct Mr. Rowe to redo the top side caulking repair due to the lateness of the season. He said, “we took our chances.”

[17] On October 2, 2017, after one corner was done, a Tremco inspector, Matt Paulus, arrived and conducted a “pull test,” namely a test of the adhesion of the new caulking. The pull test failed. As a result, Mr. Rowe said that Mr. Didiano instructed Mr. Rowe going forward to apply a cleaning chemical, Xylitol, to the surface once the old caulking was removed and the area was brushed. Mr. Rowe also said that Mr. Didiano instructed Mr. Rowe going forward to use hands to push the new caulking into the opened space once the old caulking was removed. Mr. Didiano admitted that the use of the chemical was a change. Mr. Mentis described the chemical as “unnecessary.”

[18] JD ceased paying Mr. Rowe starting with the Rowe invoice numbered 1161, October 7, 2017, in the amount of $12,026.03. There was then the Rowe invoice numbered 1162, October 18, 2017, in the amount of $16,034.70, and the Rowe invoice numbered 1163, October 25, 2017, in the amount of $8,701. These also were not paid. These three invoices compose the Rowe claim for lien of $36,761.73.

[19] By October 14, 2017 Mr. Rowe was finishing the First Building. He was getting concerned about the non-payment. He sent an email that day to Mr. Didiano expressing his concern. In a responding email that day Mr. Didiano stated that he wanted to “fix all the mistakes” on the First Building before “we can settle up.” He did not specify what these “mistakes” were.

[20] By October 22, 2017 Mr. Rowe had moved the swing stages to the second building at 365 Grandravine Drive and was starting to work there. On October 23, 2017 he sent an email to Mr. Didiano expressing concern about non-payment. On October 24, 2017 Mr. Didiano emailed stating that “building management” had identified deficiencies, namely the absence of weepers and undrilled holes in every required location. He also blamed Mr. Rowe for the second circuit of the First Building.

[21] Mr. Rowe emailed back immediately on October 24, 2017 denying the alleged deficiencies, offering to help with any issue concerning the weepers and drilled holes, demanding payment, and stating he was stopping work until there was payment. The work stopped. On October 24, 2017 Mr. Didiano emailed that he and Mr. Mentis objected to the Rowe billing for travel time.

[22] On October 28, 2017 Messrs. Didiano and Mentis sent emails to Mr. Rowe referring to deficiencies, travel time and billing for hours not worked. Mr. Rowe denied these allegations in responding emails.

[23] On October 30, 2017 Mr. Mentis emailed Mr. Rowe stating that “you will not be returning to work for us.” He referred to “fraudulent invoices” and “bad workmanship.” Mr. Rowe did not return to the site. There is an allegation that he retained equipment worth $2,000.

[24] On November 27, 2017 Mr. Rowe registered his claim for lien in the amount of $36,761.73.

[25] JD hired Karma Custom Interiors Inc. (“Karma”) to complete Mr. Rowe’s work. There is a Karma estimate document dated November 27, 2017 showing the amount of $35,000 plus HST. This invoice described Karma’s work as repairing work, installing weepers, re-caulking joints and drilling drainage holes, all as “missed” by Mr. Rowe.

[26] Karma completed its work on both buildings by December 7, 2017. It was paid $60,725.60. Two of JD’s workers were certified to work on swing stages to get this work done.

[27] Mr. Rowe purported to perfect his lien by starting this action on January 16, 2018. On February 26, 2018 JD and Mr. Mentis defended this action and raised a counterclaim seeking a total of $104,725.60 in damages for deficiency correction costs, lost income and lost equipment.

[28] On December 5, 2018 Mr. Rowe obtained a judgment of reference from Justice Copeland. Over a year later, on December 12, 2019, Mr. Rowe obtained an order for trial from me.

[29] There was a delay due to the pandemic. I conducted the first trial management conference on June 23, 2020. At the second trial management conference on November 30, 2020 I scheduled a three-day summary trial hearing in this matter to take place on April 21, 22 and 23, 2021.

[30] The trial hearing proceeded by videoconference on those days. Mr. Rowed called as witnesses himself and two members of his crew, Jessie Reidpath and Adam Nickel. JD and Mr. Mentis called Mr. Didiano, Mr. Mentis, Mr. Sterling and Steve Persecetti who said he was the owner of Karma.

III. ISSUES

[31] Based on the evidence and submissions, I find that the following are the issues to be determined:

a) What was the scope in the Rowe Subcontract?

b) Was travel time to be compensated under the Rowe Subcontract?

c) Did Mr. Rowe charge for time not spent on the Project?

d) Was there a contract repudiation, and, if so, by whom?

e) What are the damages?

IV. WITNESSES

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

[33] Mr. Rowe was a credible witness. As a party, there is the obvious concern that he has a stake in the outcome of this case, which must be considered. But there were several factors that made him believable. First, his affidavit for evidence in chief was careful, detailed and full of documentary corroboration, as was his oral evidence. Second, he readily admitted the shortcomings of his expertise concerning the work he was called upon to do, as he had no experience doing caulking repair or masonry work prior this project. His experience was in swing stages on tall buildings doing other work. He said he therefore relied heavily on the directions he expected to receive from the engineer drawings he was promised. This makes sense generally. It also accords with his quotation of June 17, 2017 which clearly states that the work would be done in accordance with “engineered drawings.” When these drawings were not provided, it only makes sense that Mr. Rowe would rely entirely on Mr. Didiano for direction as to how the work would be done, which is what Mr. Rowe said. Fourth, Mr. Rowe admitted not being on the site every day, which is contrary to his interest in this case. Fifth, his position about the inclusion of travel time in the contract price was corroborated by his conduct. He showed through his daily forms that from the beginning of his work he tracked the travel time and included that time in each invoice. He also corroborated his travel time charges by using Google maps.

[34] Mr. Rowe called Jessie Reidpath as his second witness. Mr. Reidpath was also a credible witness. He gave evidence about the creation of the Rowe Subcontract, the work that he did and the generation of the daily forms. He is a brother-in-law of Mr. Rowe and has worked for Mr. Rowe for many years, which obviously would make him biased in favour of Mr. Rowe. This must be born in mind. However, Mr. Reidpath, like Mr. Rowe, prepared a careful, detailed and well corroborated affidavit. He admitted his total lack of experience in caulking repair, and his reliance on Mr. Didiano’s instructions. His evidence repeated much of what Mr. Rowe stated and was therefore of limited value, other than as corroboration of Mr. Rowe’s evidence.

[35] Mr. Rowe called Adam Nickel as his third witness. Mr. Nickel is an accredited aerial technician who trained with Mr. Rowe. He worked previously for Mr. Rowe on a part-time, “as needed,” basis. He began working on the site on October 2, 2017 as the work intensified. He gave evidence about the work he did and the breakdown in the relationship. He was also a credible witness. His connection to Mr. Rowe was not as strong as that of Mr. Reidpath. His affidavit was also careful, detailed and well corroborated. But, as with Mr. Reidpath, his evidence was of limited scope and value, other than as corroboration of Mr. Rowe’s evidence.

[36] The defendants’ primary witnesses were less credible. Their first witness was Mr. Didiano. He gave critical evidence about the Rowe Subcontract, the work and the breakup, particularly as JD was the party with which Mr. Rowe had his contract. There were several issues with Mr. Didiano’s credibility. First, he is the principle of one of the defendants, JD, which gives him a stake in the outcome of this case. Second, his affidavit was not detailed and not well corroborated. It was also at times argumentative. Third, his evidence was contradictory and conflicted with other evidence. For instance, his affidavit said that the work concerned the balconies, while Mr. Mentis said later that the balconies were not involved. Mr. Didiano said in his affidavit that he relied on Mr. Rowe’s assurance that he knew what to do, but in cross-examination admitted Mr. Rowe relied on him, Mr. Didiano, for instructions as to what to do. Mr. Didiano initially said that the Karma estimate document of November 27, 2017 concerned the First Building repair and then later said it was only about the second building. He said at one point that two of his men were certified to work at heights after Mr. Rowe ceased working, and then he said only one was. He said in his affidavit that the scope of work never changed, but then admitted that the painting and chemical application were changes. He admitted that answers he gave to written discovery interrogatories were wrong. It got to the point where Mr. Didiano openly admitted that his memory was bad. He said he “did not have a direct memory” of Mr. Rowe setting up swing stages for the second building.

[37] Fourth, and probably the most troublesome part of Mr. Didiano’s evidence, was the general unreasonableness of some of his evidence. The most telling part was his assertion that he approved a Rowe test of the work on the ground level slab of the First Building at the outset, a test that he said included work on the underside of the slab. He said that Mr. Rowe suddenly “forgot” to do the undersides on the higher floors, an oversight that he, Mr. Didiano, said he could not see from the ground. There was no corroboration for this evidence, and it makes absolutely no sense. Why would a trade, particularly one with Mr. Rowe’s level of inexperience with caulking repair, immediately “forget” about doing what Mr. Didiano, and indeed later Mr. Stirling, described as the most critical aspect of the Rowe work, namely the undersides of the slabs where water accumulates? For these reasons, I had considerable trouble with Mr. Didiano’s credibility.

[38] The defendants called Kosta Mentis as their second witness. Mr. Mentis was the general contractor that was hired by Hageman’s to do construction work on the two buildings, work that included substantial waterproofing. He hired JD as a subcontractor. Because he was not a party to the Rowe Subcontract, Mr. Mentis’ evidence was in large measure hearsay and of limited value. He did give direct evidence about the events leading to and concerning the contract termination and contract completion work, as he was directly involved with many of those events.

[39] I had trouble with Mr. Mentis’ credibility as well. As a party, he has a stake in the outcome of the case. Furthermore, his affidavit, like Mr. Didiano’s, was neither detailed nor corroborated. It was also at times argumentative. In cross-examination, Mr. Mentis came across as abrasive and didactic, interested more in lecturing than uncovering facts. His evidence about the Karma estimate document significantly undermined his credibility. In cross-examination he stated for the first time that Karma had given a “verbal quotation” about the repair work. There was no mention of that in any affidavit. Mr. Mentis also said that there was an invoice for the Karma work “somewhere.” It certainly was not in the filed material. This all left me wandering what I could believe from Mr. Mentis given his obvious animus against Mr. Rowe.

[40] The defendants called Mr. Stirling as their third witness. His evidence focused on his periodic investigation of the work. I found Mr. Stirling to be a credible witness. He had no stake in the outcome of the case. His affidavit focused on the reports he wrote after each investigation. He was careful and straightforward in both his affidavit and cross-examination.

[41] The defendants’ final witness was Steve Persecetti. He said he was the principal of Karma. He gave evidence about Karma’s contract and work. His credibility was problematic. His affidavit for evidence in chief conflicted with his oral evidence in cross-examination in several key areas. In his affidavit he said the Karma contracted with HK Contracting, Mr. Mentis’ company. In cross-examination he said Karma contracted with JD. In his affidavit, Mr. Persecetti said that the Karma estimate of November 29, 2017 concerned repair work of Mr. Rowe’s work. In cross-examination Mr. Persecetti said that the Karma estimate concerned the second building, the one Mr. Rowe had only started when his contract was terminated. Mr. Persecetti said orally that Karma did “minimal” work on the First Building. I came away with the impression that Mr. Persecetti’s affidavit was largely fabricated by others, not Mr. Persecetti. His overall credibility suffered. If I gave any weight to his evidence, it was his oral evidence, not his affidavit.

[42] Therefore, on balance, I gave more weight to the evidence of the Rowe witnesses, particularly that of Mr. Rowe, over that of Messrs. Didiano and Mentis whenever the two conflicted. I gave weight to Mr. Stirling’s evidence and some weight to Mr. Persecetti’s oral evidence.

V. ANALYSIS

a) What was the scope of the Rowe Subcontract?

[43] It is clear that the Rowe Subcontract was an oral one. There was no contract document. The Rowe Subcontract was between Mr. Rowe and JD. The best evidence of what was contained in the Rowe Subcontract is in the Rowe written quotation of June 17, 2017. It is undisputed that the only changes made to the agreement after this quotation was the absence of the referenced engineer drawings, the hourly rate charged for Mr. Rowe’s labour, the biweekly timing of payment, and the addition of men to Mr. Rowe’s crew. Therefore, the June 17, 2017 quotation is a critical document in defining the scope of the work.

[44] The first issue is the defendants’ assertion that Mr. Rowe defined the scope on account of his representation to Mr. Didiano at the outset that he, Mr. Rowe, had experience in exterior caulking repair work, a representation the defendants allege they relied upon in having JD contract with Mr. Rowe. Mr. Rowe denies making that representation. The Rowe quotation of June 17, 2017 does have the following statement under “included in price”: “2 experienced men with required training and PPE.” The “PPE” meant personal protective equipment. Have the defendants established that the word “experienced” in the quotation includes caulking repair experience? Have they established that Mr. Rowe made a collateral representation about his caulking repair experience?

[45] The answer is “no.” I accept Mr. Rowe’s position that he made no collateral representation about his caulking repair experience. The evidence was clear that Mr. Rowe in fact had no prior experience doing caulking repair work. His only experience with caulking work of any kind was the one day of work Mr. Rowe did for JD and HK at 2067 Lakeshore Blvd. in early August, 20177 after the Rowe Subcontract was entered into; and this was caulking work around leaking vents, not the kind of caulking work to be done on the Property.

[46] What the defendants are essentially alleging is that Mr. Rowe blatantly lied to them about his lack of experience with caulking repair work. Mr. Rowe vigorously denied this. As stated earlier, I find Mr. Rowe generally to be the more credible witness, and I accept his position here as a result. Furthermore, the defendants presented no corroboration of their position from contemporaneous correspondence. Had there been the alleged lying, there would have been many accusations at the time, particularly after Mr. Stirling started his investigations. There were none. I add that for Mr. Rowe blatantly to lie as alleged would be reckless given his lack of caulking repair experience, and Mr. Rowe did not strike me as reckless. I find that the word “experienced” in the quotation referred only to the established experience of Mr. Rowe’s crew working on swing stages at heights and that Mr. Rowe made no collateral representation about his caulking repair experience.

[47] What then defined the scope of the work? Mr. Rowe alleged that it was Mr. Didiano’s instructions. Mr. Rowe’s evidence was that Mr. Didiano promised to deliver engineer drawings that would define in detail the scope of work and that, when these drawings were not produced, Mr. Didiano gave instructions defining the work. The defendants do not deny that Mr. Didiano promised to deliver engineer drawings and did not deliver them. But, as stated above, they maintain that Mr. Rowe represented that he knew what to do and defined the scope. Again, I accept Mr. Rowe’s position, not only because of Mr. Rowe’s general credibility, his lack of experience with caulking repair work, and the absence of any collateral representation about his caulking repair experience, but also because his evidence accords with the wording of his June 17, 2017 quotation. In this document the scope of work under “prices” is defined as follow: “To supply 2 men to install rods and caulking per engendered [engineered] drawings for 2 buildings based on time and material.” This shows that Mr. Rowe was looking to the engineer drawings to define the scope of work. When those drawings were not produced, it only makes sense that both Messrs. Rowe and Didiano knew that Mr. Rowe would be relying on Mr. Didiano to define the scope. In fact, at one point in his cross-examination, Mr. Didiano conceded that he provided the scope. That is what I find.

[48] The next issue concerning the scope was whether the slab underside work was included in the scope from the beginning. The defendants allege that it was. They accept that the painting of the slabs and the application of the chemical were not originally in the scope. Indeed, Mr. Mentis described the chemical application as an unnecessary requirement of the owner. However, they insist that the slab undersides were included in the scope throughout. Mr. Rowe denied this position stating that Mr. Didiano did not specify the undersides when he defined the scope for Mr. Rowe at the outset. Mr. Didiano on the other hand maintained that he did when Mr. Rowe performed a test on the ground floor slab. Mr. Didiano stated that Mr. Rowe in fact did the underside during the test, and that Mr. Rowe decided for some reason not to do the undersides on the upper levels out of Mr. Didiano’s eyesight and scrutiny. I have already discussed my view of Mr. Didiano’s evidence in this regard. I reiterate that I do not find it credible and do not accept it.

[49] But the most telling evidence in this regard was the response of JD when Mr. Rowe was forced to redo the First Building to complete the undersides. This happened just after Mr. Stirling issued his first report on September 29, 2017. The building was almost done. Mr. Stirling criticized the work primarily for failing to deal with the undersides. As a result, Mr. Rowe was ordered to go around the building again doing the undersides. Critically, Mr. Rowe was paid to do this work by JD. If the undersides had been a part of Rowe scope from the beginning, JD would not have paid Mr. Rowe to “correct” this oversight. It would have required that Mr. Rowe do the work without pay. That JD paid Mr. Rowe in full for going around the building a second time to do the undersides is in effect an admission by JD that the undersides were not in the original scope. That is what I find.

b) Was travel time to be compensated under the Rowe Subcontract?

[50] A critical issue in the case was whether travel time was to be compensated under the Rowe Subcontract. The June 17, 2017 Rowe quotation did not expressly specify that Mr. Rowe was to be paid for the time it took for him and his crew to travel from Mr. Rowe’s office in Cambridge to the site at the beginning of the day and back at the end of the day. Mr. Rowe charged what in the end was as much as 113 hours of such travel time during the three-month work period from August 23, 2017 to October 23, 2017. Mr. Rowe asserts that he was entitled to charge travel time as he and his crew are federally accredited aerial technicians, and that the Rowe Subcontract in fact included such compensation. The defendants deny this assertion. Mr. Rowe has to onus of proving this point as the travel time is to his benefit.

[51] Because the contract was oral and travel time was not expressly addressed in the June 17, 2017 Rowe quotation, the issue of travel time will turn on what the parties verbally agreed to. If there is ambiguity in this regard, I should look to their conduct for corroboration. The parties to the Rowe Subcontract were Mr. Rowe and JD. Mr. Rowe stated that when Mr. Didiano called him in early June, 2017 seeking a quotation for this work, Mr. Rowe took the call on his Bluetooth phone in his truck with Mr. Reidpath beside him. The call was on speaker. Mr. Rowe said that he quoted a labour rate of “$65 per hour per man from the shop.” There is no dispute that the phrase, “from the shop,” meant the travel time from the Rowe shop in Cambridge to the job site and back every day. Mr. Reidpath stated that he heard Mr. Rowe give the quotation with that phrase. Both Messrs. Rowe and Reidpath stated that they concluded that travel time would be compensated. Mr. Didiano admitted knowing Mr. Rowe was based in Cambridge but denied hearing this phrase and agreeing to the travel time. In cross-examination, he stated that there was considerable road noise. There was no mention of this issue again until late October, 2017 when the parties were in dispute. Given this conflict in the evidence, I am inclined to believe Mr. Rowe over Mr. Didiano given my analysis of the general credibility of the witnesses as previously discussed. However, I will examine the conduct of the parties to determine whether my inclination is born out.

[52] I find that the conduct of the parties corroborates Mr. Rowe’s version of this issue. First, there is no doubt that Mr. Rowe tabulated travel time and included it in his billings from the very beginning. The daily forms contain the daily travel times. It was undisputed that this travel time was then included in the bills. I find that Mr. Rowe would have done this only if he believed he had contractual entitlement to payment for travel time. Second, JD had no issue paying the first two Rowe invoices, namely invoice 1157 dated September 19, 2017 and invoice 1158 dated September 27, 2017. These contained travel time.

[53] Third, and most importantly, the referenced emails and text messages show that Mr. Didiano did not raise this issue in correspondence when he said he first became aware of the travel charges. On October 28, 2017 Mr. Didiano sent Mr. Rowe an email stating that “me and Kosta had no idea we were paying travel time until 2 weeks ago.” Two weeks earlier on October 14, 2017 Mr. Didiano sent Mr. Rowe an email wherein he did not refer to travel time but instead to fixing “mistakes that were made on the first building” before settling the outstanding account. The next time travel time came up was in an email from Mr. Didiano to Mr. Rowe ten days later, on October 24, 2017, wherein he stated that he wanted Mr. Rowe to “adjust” his invoices to delete the travel time. By this time the parties were well into a dispute, started on October 14, 2017, about other issues concerning alleged deficiencies. When confronted by this documentation, Mr. Didiano insisted that he raised travel time verbally with Mr. Rowe after October 14, 2017; but Mr. Rowe denied that assertion. If the travel time was such a concern to the defendants as they allege, they would have raised the issue vociferously in written correspondence as soon as they learned about it. They did not do so.

[54] The travel time issue was almost an afterthought or a side issue. This all indicates to me that JD verbally agreed to pay at the outset for travel time and only made it an issue when Mr. Kosta started complaining about costs. This makes sense to me generally as Mr. Didiano obviously needed workers experienced at working on swing stages at height and did not have them readily at hand. Later after Mr. Rowe was dismissed, Mr. Didiano had to get a few of his own workers certified in order to complete the work. In these circumstances, it makes sense that Mr. Didiano would have agreed to pay for the travel time of Mr. Rowe’s experienced and certified crew. I find that Mr. Rowe has proven that travel time was compensable under the Rowe Subcontract.

[55] Ms. Candotta referred me to the decision in Connect Electric Inc. v. Pullen and Greensides, 2013 ONSC 1837 at paragraph 62. This is a construction lien case, and one issue was whether the lien claimant had proven an entitlement to be paid for travel time. The judge found in this paragraph that the lien claimant had failed to prove this entitlement. This case does not assist the defendants, as it does not preclude other lien claimants, such as Mr. Rowe, from proving an entitlement to be paid for travel time. I find that he has succeeded in doing so on a balance of probabilities.

[56] Mr. Didiano argued that it was not usual industry practice to pay for travel time. There was no evidence as to industry practice in this regard, and furthermore that also does not assist the defendants as there can always be a deviation from industry practice.

c) Did Mr. Rowe charge for time not spent on the Project?

[57] Mr. Rowe has the onus of proving that he is entitled to his lien claim amount. The defendants allege that he charged for time not spent on the Project.

[58] The daily forms for the following six days do not show the presence of Mr. Rowe on site on those days: October 12, 13, 17, 18, 19 and 20, 2017. Yet the bills for those days include time for Mr. Rowe. I tallied the total Rowe hours shown in the billings that are not reflected in the backup daily forms as being 54. This represents a cost of $55 x 54 hours = $2,970. Accounting for tax the total charge represented by this discrepancy is: $2,970 x 1.13 = $3,356.10. This is just under 10% of the Rowe claim for lien amount.

[59] In cross-examination, Mr. Rowe explained this discrepancy as being a function of the fact that Mr. Nickel filled out the daily forms on those days and simply missed his presence. He produced Google tracking maps which showed that Mr. Rowe in fact attended at the site on those days. The veracity of these maps was not questioned.

[60] Mr. Rowe was the leader of his crew. The prospect of Mr. Rowe not being on site for six days during a period when his crew was redoing the First Building and under increasing pressure to get the work done is not credible. However, there was also evidence that Mr. Rowe on occasion left the site to work elsewhere. Given Mr. Rowe’s onus of proof, I find that I must deduct a third of the $3,356.10, namely $1,118.70, as not being proven on account of this discrepancy in the evidence.

[61] There were also assertions from Mr. Didiano about Mr. Rowe’s crew not arriving and departing as required by the Rowe Subcontract and as indicated in the billings and on the daily forms. He said that on occasion he had to text Mr. Rowe to make sure he attended. In support of this position, he produced a handwritten log he said was prepared by the building superintendent, Harvey Montreuil, which he said logged Mr. Rowe’s times on site. Mr. Montreuil was not produced to address this document. Therefore, this was nothing but hearsay evidence which I discount. Mr. Didiano’s other evidence on this issue was not sufficiently corroborated, and I do not accept it.

d) Was there a contract repudiation, and, if so, by whom?

[62] Each party asserts that the other fundamentally breached the contract. Mr. Rowe alleges that JD fundamentally breached the Rowe Subcontract by refusing to pay on account for no good reason, namely by suddenly insisting on an accounting for deficiencies, travel time and overbilling that was groundless. The defendants assert that Mr. Rowe unreasonably ceased working when billings were essentially current, and refused to account for deficiencies, travel time and overbilling, an accounting demand they say was reasonable. Each party has the onus of proving its position.

[63] In D & M Steel Ltd. v. 51 Construction Ltd., 2018 ONSC 2171 at paragraphs 49 to 56, Justice Perell gives a very helpful summary of the law of contract repudiation. He pointed out that when an owner (or a payer such as JD in this case) ceases to make the required payments under a contract, cancels it or makes it impossible for no cause for the contractor to complete its work, there is a fundamental breach and the contractor (such as Mr. Rowe in this case) can abandon the contract and claim a lien or damages for the unpaid accounts. On the other hand, Justice Perell pointed out that a contractor (such as Mr. Rowe in our case) can be found to have fundamentally breached a contract by demanding payment when it is not due and ceasing to work as a result.

[64] Ms. Candotta referred me to my decision in The Gatti Group Corp. v. Zuccarini, 2020 ONSC 2830 at paragraph 112 where I quoted from Master Sandler’s decision in Kaplun v. Mihhailenko, 2005 CarswellOnt 1945 (Ont. Master) in paragraphs 114 and 115 concerning the central concept of contract repudiation: “[These authorities] show that where each party to a contract is alleging fundamental breach and repudiation by the other, the court must determine which party committed a substantial breach which amounts to a repudiation, i.e. evidencing an intention no longer to be bound by the terms of the contract. In making this assessment, the test is an objective one, and even a direct or indirect intention by a party allegedly in breach that it wished to continue the contract is not necessarily conclusive in rebutting a finding of a repudiation of the contract.”

[65] Having reviewed the evidence, I conclude that it was JD who fundamentally breached the Rowe Subcontract. First, Mr. Rowe did not demand payment and cease working before payment was due. It is undisputed that the third unpaid Rowe invoice, number 1161 dated October 7, 2017 for $12,026.03, was rendered on that day and was due to be paid on or before October 22, 2017. On October 23, 2017, over two weeks after the invoice was rendered and one day after it was due to be paid, payment had not been made and Mr. Didiano instead sent an email expressing concerns about deficiencies. In response on October 24, 2017 Mr. Rowe addressed the alleged deficiencies and stated that “we will not move forward until we get payment.” In short, Mr. Rowe did not demand payment and cease work before payment was due.

[66] Second, the deficiencies Mr. Didiano raised at that time were, in my view, groundless. In his email dated October 23, 2017 he stated that the “building management” had noticed that brick weepers were not installed on every slab and that drain holes were not drilled on every floor. He also referred to Mr. Rowe having to redo the building because “you forgot to remove the old caulking off the bottom of the slab.”

[67] Concerning the allegations about the brick weepers and drain holes, Mr. Stirling in his reports dated October 7 and 17, 2017 made no mention of these issues. On the contrary, in both reports Mr. Stirling expressly mentioned the weepers that had been installed with approval and made no mention of drain holes. The defendants did not call any representative of the “building management” as a witness to substantiate its alleged allegations. I therefore give Mr. Didiano’s comments on these two issues no credibility. Concerning the criticism about having to redo the first building, I reiterate my earlier finding that the slab undersides were not a part of the original contract scope. This was not a deficiency.

[68] In closing argument, Ms. Candotta argued that, while the defendants acknowledge that the application of the chemical to clean surfaces for the new caulking was excessive, Mr. Rowe should have known to apply water to clean the surfaces. This was a solution Mr. Mentis said was enough to allow the new caulking to adhere. There was no evidence that this criticism was raised by either Mr. Didiano or Mr. Mentis in October, 2017. Therefore, I view it immediately with suspicion. Furthermore, as stated earlier, I have found that Mr. Rowe was not experienced in caulking repair work and, to the knowledge of both Messrs. Rowe and Didiano, relied entirely on instructions from Mr. Didiano. If water cleaning was a necessary method, Mr. Didiano should have made that clear to Mr. Rowe and did not.

[69] I make one final comment about the water cleaning “deficiency” allegation. Both Messrs. Didiano and Mentis admitted not requiring that the top sides of the slabs be redone with the chemical application (or water) to insure proper caulking adhesion on the top sides. This was the case even though Mr. Rowe was already redoing the building to address the undersides. Had this issue of proper cleaning been viewed by the defendants as a real deficiency, they would reasonably have insisted that Mr. Rowe redo the slab tops as well and without pay. Again, they did not.

[70] Messrs. Didiano and Mentis said they could not afford to the lose the additional time it would have taken to do this work as the fall season was closing quickly. But Mr. Rowe was already redoing the building and what this additional time would have been was not disclosed by the defendants. Furthermore, I noticed that Karma finished the entire work on both buildings by December 7, 2017, namely well before the end of the autumn season, including the alleged deficiency correction work on the First Building. Therefore, I find that the top sides could have been redone before the season ended and the defendants made a strategic decision not to do so. This all undermines the credibility of this water cleaning “deficiency” allegation.

[71] On October 24, 2017 Mr. Didiano emailed Mr. Rowe stating that “I will not have payment ready until we complete all the work that needs to be done on the building.” By this time, all the work had been done on the building, and there were no “deficiencies.” Mr. Rowe, in my view, acted reasonably therefore when he responded with his October 24, 2017 email demanding payment and ceasing work as the defendants were making demands inconsistent with the Rowe Subcontract.

[72] The third issue about contract repudiation was the travel time and excessive billing. In his October 24, 2017 email Mr. Didiano stated for the first time that Mr. Rowe needed to “adjust” his invoice to delete the travel time. Mr. Rowe emailed in response on October 25, 2017 that he had been billing travel time all along and that this was a part of the contract. On October 28, 2017 Mr. Didiano emailed Mr. Rowe stating that “the owners” had noticed on many occasions that Mr. Rowe’s crew was not on site and that travel time was not in the contract.

[73] As stated earlier, I have found these two allegations groundless. I found that compensation for travel time was included in the Rowe Subcontract and that there was no evidence of overbilling other than the $1,118.70 for Mr. Rowe’s time on the above noted six days in October, 2017. This slight overbilling was but 3% of what had been invoiced by Mr. Rowe by the end of October, 2017 and not paid.

[74] It was the issues of alleged deficiencies, travel time and excessive billing that the defendants relied upon to terminate the Rowe Subcontract. Mr. Mentis followed Mr. Didiano’s email of October 28, 2017 with his own email to Mr. Rowe on the same day, October 28, 2017, wherein he stated that the allegations of overbilling and deficiencies were the two issues the defendants had with Mr. Rowe. On October 30, 2017 Mr. Rowe emailed back denying both allegations. That same day, October 30, 2017, Mr. Mentis emailed Mr. Rowe stating that, “you will not be returning to work for us.” He launched into a diatribe about Mr. Rowe’s “fraudulent invoices” and his “bad workmanship.” He threatened legal action to recover “every cost we have [in]curred.” It is undisputed that Mr. Mentis’ emails were sent on behalf of JD as well as Mr. Mentis.

[75] I find that there was no basis for this contract termination by JD. There were no deficiencies and the overbilling was minor, certainly not one justifying the drastic measure of contract termination. Mr. Rowe’s conduct did not evidence, to use Master Sandler’s words in Kaplun, an intention no longer to be bound by the terms of the Rowe Subcontract. Therefore, I find that by not paying Mr. Rowe and by then terminating his contract groundlessly, JD is the one who fundamentally breached and repudiated the Rowe Subcontract.

[76] Mr. Rowe had little choice but to accept this repudiation as he was evicted from the site. On November 27, 2017 he registered his claim for lien in the amount of $36,761.73. In my view, this amounted to an acceptance of the JD contract repudiation bringing the contract to an end.

e) What are the damages?

[77] The Scott Schedule shows that the defendants assert a set-off and counterclaim for alleged damages totaling $58,210.60. In closing argument, Ms. Condotta reduced this amount to $28,210. This figure represents two claims: $12,485 for alleged overpayment by JD to Mr. Rowe on account of the 113.5 hours of travel time in Mr. Rowe’s invoices; $15,725 on account of the work Karma did to correct alleged Rowe deficiencies.

[78] I find no merit in the claim concerning travel time as I have found that travel time was to be compensated in the Rowe Subcontract. Concerning the claim for Karma deficiency correction costs, Mr. Persecetti confirmed in cross-examination that the Karma estimate of November 27, 2017 concerned 365 Grandravine Drive, not 355 Grandravine Drive. He said that Karma was paid a total of $60,725 and that 95% of this work concerned 365 Grandravine Drive. Based on this evidence, Karma was paid no more than $60,725 x 5% = $3,036 to work on the First Building, namely the one Mr. Rowe had finished. At best, the JD set off and counterclaim would be this $3,036 in damages.

[79] However, I give JD and the defendants no entitlement to damages. As indicated by Justice Perell in D & M Steel Ltd., op. cit., paragraph 49, where the contractor payer fundamentally breaches the contract as JD did, it loses the right to claim damages. JD ceased paying Mr. Rowe and terminated the Rowe Subcontract without cause. I, therefore, find that the defendants are entitled to no damages.

[80] On the other hand, as the innocent party, Mr. Rowe is entitled to damages. It claims the unpaid last three invoices it rendered: invoice 1161 dated October 7, 2017 for $12,026.03 covering the work done between September 25, 2017 and October 5, 2017; invoice 1162 dated October 18, 2017 for $16,034.70 covering the work done between October 6, 2017 and October 18, 2017; and invoice 1163 dated October 25, 2017 for $8,701 covering the work done between October 19, 2017 and October 23, 2017. The total of these three invoices is $36,761.73, the amount of the Rowe claim for lien. I reduce Mr. Rowe’s entitlement in damages by the slight overpayment I have found, namely $1,118.70, which produces a result of $35,643.03.

[81] I make a final comment about the party that has the personal obligation to pay these contract damages. In his statement of claim, Mr. Rowe claims these damages from both JD and Mr. Mentis. The evidence indicates, however, that the parties to the Rowe Subcontract were Mr. Rowe and JD. Mr. Mentis was the general contractor on the project. Mr. Mentis interjected himself on many occasions into the relationship between JD and Mr. Rowe, sometimes almost to the point of making him the one to whom Mr. Rowe answered. I note that it was both JD and Mr. Mentis who posted the security for the Rowe claim for lien. But, in the end, the evidence shows that there was no change in the contractual relationship. The Rowe quotation of July 17, 2017 was issued to JD and all of the Rowe invoices were rendered to JD. I find that JD must pay the above noted damages.

[82] However, these damages also compose the amount of the Rowe lien, which must be paid for entirely from the security posted by JD and Mr. Mentis if JD does not pay it.

VI. CONCLUSION

[83] In conclusion, I rule that Mr. Rowe has a lien in the amount of $35,643.03 and a personal judgment for contract damages in that amount as against JD. I dismiss the set off and counterclaim of the defendants.

[84] As to costs, I required that the parties deliver cost outlines for the reference including the trial hearing. They did so. The Rowe costs outline shows a figure for actual costs of $69,342.37 and a figure for partial indemnity costs of $42,447.80. The defendants’ Bill of Costs shows a full indemnity figure of $35,834.06, a substantial indemnity figure of $32,311.35 and a partial indemnity figure of $21,743.63.

[85] Mr. Rowe appears to be the successful party and should be entitled to costs of this action and reference. If the parties cannot otherwise agree on costs and interest, Mr. Rowe must deliver written submissions on costs and interest of no more than three (3) pages on or August 10, 2021. The defendants must deliver written submissions on costs and interest of no more than three (3) pages on or before August 23, 2021. Any reply written submissions on costs and interest cannot be longer than one (1) page and must be delivered on or before August 26, 2021.

[86] 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 and action that should be awarded, and the basis for doing so;

• the party or parties who must pay costs and why;

• 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.

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

Released: July 30, 2021 __________________________

MASTER C. WIEBE

COURT FILE NO.: CV-18-590020

DATE: July 30, 2021

ONTARIO

SUPERIOR COURT OF JUSTICE

In the matter of the Construction Act, R.S.O. 1990, c. C.30

BETWEEN:

Adam Rowe carrying on business as Clandestine

Plaintiff

• and -

Fred Hageman’s Holdings Limited, JD Design & Build Inc. and Kosta Mentis

Defendants

REASONS FOR JUDGMENT

Master C. Wiebe

Released: July 30, 2021