COURT FILE NO.: CV-21-224 DATE: 2022/03/29 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
ROOF & BUILDING SERVICE INTL. Plaintiff – and – ISLAND HARBOUR CLUB INC. Defendant
Counsel: Mark Gallagher, for the Plaintiff Brett Hodgins, for the Defendant
HEARD: By videoconference on March 10, 2022.
Reasons for Decision
Parfett J.
[1] This is a motion for summary judgment brought by the Plaintiff.
Evidence
[2] The Plaintiff, Roof & Building Service Intl. (RBS), signed a contract with the Defendant, Island Harbour Club Inc. (IHC) to supply roofing labour and materials for a project located in Gananoque, Ontario.
[3] The Plaintiff completed the work and sent the Defendant two invoices totaling $64,281.42. Subsequently, $10,000 was paid and consequently, the remaining amount is $54,281.42, not including interest or costs. The remaining balance has not been paid.
[4] In July 2021, RBS sent a demand letter through their lawyers to the IHC. A response was received from IHC indicating that there were deficiencies in the work but stating that $20,000 could be held back for those deficiencies. However, the balance owing was still not paid.
[5] A site report detailing certain deficiencies was prepared in August 2020. The Plaintiff states that they received this report in September 2020 and they allege they dealt with all the deficiencies by the end of 2020. The Defendant contends that these deficiencies were never dealt with and that the Plaintiff has refused to deal with the deficiencies unless paid in full.
[6] In addition, the Defendant alleges there are problems with the roof that are covered by the warranty provided by the Plaintiff, but they have failed to address those problems.
[7] Both parties agree that the contract contains provisions for dealing with deficiencies. Subsections 3 and 4 of the section entitled ‘Standards of Work and Deficiencies’ provide:
The quality and deficiency of this subcontractor’s work will be determined by the Consultant and Construction Manager. Upon receiving notice of any deficiency from the C.M., the subcontractor must respond within 3 working days with a proposal for addressing the deficiency including a timeline for completing the proposed work, unless the deficiency gives rise to an emergency in which case the subcontractor shall respond immediately. These terms and their completion timeline must be acceptable to the Construction Manager. Failure to respond within the specified time will constitute default. Failure to complete the work within the approved time will constitute default.
In addition to any other remedies in this agreement, the Owner through the Construction Manager shall be entitled to back charge the Subcontractor’s account and/or withhold payment in an amount determined by the Owner to be the estimated cost of such work and a reasonable administration fee. The Owner may retain these monies as security for the cost of satisfying all repair work, including administration fees and any warranty obligations that the Owner estimates it may be held liable for.
[8] The Plaintiff claims that they never received any report in relation to deficiencies apart from the August 2020 report, which they state has been dealt with. The only report filed by the Defendant on this motion is the one dated August 2020, but they contend the Plaintiff has never dealt with the deficiencies outlined in that report.
Legal Principles
[9] The Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provide that summary judgment shall be granted if “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.”
[10] The Supreme Court of Canada stated in Hryniak v Mauldin, 2014 SCC 7 that there will be no genuine issue requiring a trial “when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment.” The judge will be able to do this when the motion for summary judgment:
(a) allows the judge to make the necessary findings of fact; (b) allows the judge to apply the law to the facts; and (c) is a proportionate, more expeditious and less expensive means to achieve a just result.
[11] The Court in Hryniak also encouraged judges to consider “whether the added expense and delay of fact finding at trial is necessary to a fair process and just adjudication.” The standard of fairness is “not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.”
[12] The Court further reminded judges that when deciding whether the process of a summary judgment motion gives them enough confidence to make the findings of fact and legal determinations necessary to resolve the dispute without the need for a full trial, they have a number of powers available to them by virtue of Rule 20.04(2.1) of the Rules. These powers work to “expand the number of cases in which there will be no genuine issue requiring a trial by permitting motion judges to weigh evidence, evaluate credibility and draw reasonable inferences.” Moreover, the powers are presumptively available – “they may be exercised unless it is in the interest of justice for them to be exercised only at a trial.”
Analysis
[13] I note at the outset that there are credibility problems with some of the assertions made by the Defendant.
[14] As noted earlier, the only report concerning deficiencies filed in this motion is the one dated August 2020. However, in its reply to the demand letter of July 2021, the Defendant states ‘there are deficiencies which have been inspected by our Bulletin 19 reporter and the condo performance auditor. There will be a report coming from the inspector shortly.’
[15] That statement suggests that a further report was being prepared. However, no such report was filed on this motion.
[16] In addition, the Defendant stated in that same email that it believed that the deficiencies would not cost more than $20,000 to deal with and that the remaining monies would be paid immediately.
[17] Moreover, after the Statement of Defence was delivered, the Defendant paid $10,000 towards the balance owing and advised the Plaintiff that more money would be coming ‘as cash becomes available’.
[18] These statements suggest that the Defendant may have a cash flow problem and is using the allegation of deficiencies to avoid paying the balance owed to the Plaintiff.
[19] Unfortunately, no cross-examination on the affidavits occurred in this matter and while I may be suspicious of the Defendant’s motives, I am not able to make the findings of fact that would be necessary to accede to the Plaintiff’s motion.
[20] What I am left with is the fact the Plaintiff has not been paid and the allegation by the Defendant that the unpaid balance is being held until repairs are made to the roof. The contract signed by the parties provides the owner – in this case IHC – has the right to withhold funds until repairs are made. IHC is alleging there are deficiencies that have not been addressed by the Plaintiff. The Plaintiff denies this allegation.
[21] Consequently, there is a genuine issue for trial. The issue of whether there are deficiencies and if so, what it will cost to make repairs is a live issue in this case.
[22] The motion for summary judgment is dismissed.
Costs
[23] If the parties are unable to resolve the issue of costs themselves, they can submit written submissions of no more than two pages with a bill of costs attached.
The Honourable Madam Justice Julianne Parfett Released: March 29, 2022