Caird-Hall Construction Ltd v. ROM Contractors Inc. et al., 2022 ONSC 2584

COURT FILE NO.: CV-17-63086

DATE: 20220516

ONTARIO

SUPERIOR COURT OF JUSTICE

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

B E T W E E N:

CAIRD-HALL CONSTRUCTION LTD.

D. Schmuck, for the Plaintiff

Plaintiff

• and -

ROM CONTRACTORS. Carrying on business as ROSS CLAIR CONTRACTORS INC. and THE CITY OF HAMILTON

K. Movat, for Defendants

Defendants

HEARD: May 18 to May 28, 2021, June 4 and 11, 2021, January 12 to Jan 14, 2022

The Honourable Justice A. Skarica

JUDGMENT

OVERVIEW

[1] On May 14, 2015, the City of Hamilton contracted with Ross Clair Contractors to construct the Waterdown Memorial Hall renovation for a price of $1,974,000 inclusive of HST (the “prime contract”). Ross Clair Contractors in turn subcontracted with the plaintiff, Caird-Hall Construction Inc., to preform construction work valued at $689,802.85 inclusive of HST (the “subcontract”).

[2] Substantial completion of the project was scheduled for January 31, 2016.

[3] However, the project was not substantially completed until June 16 of 2017, and the project, in addition, was over budget.

[4] Ross Clair blamed Caird-Hall for the construction problems. Ross Clair refused to pay Caird-Hall’s latest invoices, totaling approximately $200,000, and claimed that Caird-Hall owed Ross Clair a significant amount of money over and above $200,000 that Ross Clair refused to pay.

[5] Accordingly, Caird-Hall sued for payment of its invoices and Ross Clair defended the action and made its own Counterclaim.

ISSUES

[6] 1. Is Caird-Hall Constructed Limited (Caird-Hall) entitled to be paid for its unpaid invoices, including extra work not included in the original written contract (quantum meruit claim)?

2. Is Ross Clair entitled to be paid the amounts outlined in its Counterclaim?

FACTS

[7] Given the contradictory claims made by the parties, a determination of the credibility of the witnesses, called by the parties, is an essential component of any decision required to resolve this dispute. An assessment of the credibility of the witnesses who testified at this trial will follow. Note: Numerous documents were filed in CaseLines by both parties. These documents will be referred to by tab number or by page number or both.

PLAINTIFF’S WITNESSES

JIM HANNAN

[8] James “Jim” Hannan is the president of Caird-Hall.

[9] He testified that Ed Burns, CEO of Ross Clair, contacted him regarding the Waterdown renovation project (Waterdown project). Eventually, a contract was signed where Caird-Hall would do subcontract work on the Waterdown project – see page A48. The contract stipulated a start date of July 2, 2015, with an anticipated substantial completion date of January 31, 2016. Caird-Hall was to be paid $610,445.00 plus HST of $79,357.85 for a total of $689,802.85.

[10] In addition, Mr. Hannan was to be paid, by a separate contract, $6,000 per month plus HST to manage the site as site superintendent. The contract was between Mr. Hannan’s company (“247”) and Ross Clair.

[11] The on-site “guy” was Jim Hannan’s son, Martin Hannan, whose title was project manager coordinator. Martin Hannan was the site superintendent for the final 5 months of the project. Shane Babony from Caird-Hall was also the site superintendent. Ross Clair did not have anyone on site as a project manager or site superintendent. The City was asking the contractors to do major renovations on a World War I era building. The owner of the property was the City of Hamilton. Workshops Architecture were the architects who were authorized to make changes in the work by way of Change Orders, as required.

[12] It is to be noted that numerous Change Orders were issued by Workshop Architecture – approximately 60 plus – which increased the original contract value from $1,747,000 to $1,944,872.82 – an increase of $197,872.82 – see page A71 and page B1-150 to B1-153.

[13] Jim Hannan testified that on June 6, 2017, HVAC for Life was asked to do work authorized by a Change Order issued by Workshop Architecture. HVAC for Life was a contractor for Caird-Hall. The Change Order lists the contractor as Ross Clair Contractors. By June 6, 2017, Caird-Hall had removed themselves from this work. HVAC did the work on July 14, 2017, after receiving access from Ross Clair – see page A332, Tab 64. (Note: this occurred after the substantial performance date of June 16, 2017).

[14] Per Item 44, Tab 42 (A290), a major source of delay was a requirement that Horizon Utilities had to put in cables for a whole new electric feeder line. The parking lot had to be excavated.

[15] It was not until November 2015 that Ross Clair provided a $50,000 cheque for Horizon which Jim Hannan delivered to Horizon. Forsyth then connected the building to a new transformer and the new power went in sometime in August 2016. The Minutes of Construction Meeting # 22-June 1, 2016, shows Horizon delayed their involvement until May 2016 (page A1889) with the switching over of power in July 2016.

[16] Tab 58 (A321) is an invoice for HVAC for Life dated June 12, 2017, for duct work in the amount of $10,350, addressed originally to Caird-Hall. This invoice, with adjustments, was sent to Ross Clair and is stamped paid 09/11/2018 (A322). Jim Hannan “presumed” that Ross Clair paid this invoice. The paid invoice sent to Ross Clair totaled $9,936.00 after certain credits and legal fees were adjusted from the original invoice sent to Caird-Hall.

[17] Jim Hannan testified he was on site virtually every day from June to December 2016 – see, for examples, invoices sent to “Jim” at Tabs 71, 72, 73, 75 at page A347 to A349 and A352.

[18] Per Tab 81, on July 10, 2017, and page B-1-148, the architects prepared a list of deficiencies totaling $27,814.95. Jim Hannan testified that none of the deficiencies were the responsibility of Caird-Hall.

[19] Jim Hannan testified that Ross Clair got Caird-Hall to do more than expected. For example, Ross Clair asked Caird-Hall to clean the site and bill Ross Clair at the end of the month – see examples at Tab 25 (a) page 5 of 13 – page A2001 (labour – 32 hours - $2,522.73) for April 2016 and Tab 29A – page 8 of 16 – page A201 (labour and materials for $7,291.85) for July 2016.

[20] There were 2 sets of Change Orders:

1. Official Change Orders issued by the architect.

2. Caird-Hall Change Orders issued to Ross Clair for extra work asked of Caird-Hall by Ross Clair.

[21] Daily job logs were kept by Caird-Hall as to who was on the site. The Ministry of Labour requires these logs to be kept. The daily logs kept by Caird-Hall ends on Wednesday, December 21, 2016 – see Tab 147, A2350. Jim Hannan testified that the last job log he provided to plaintiff’s counsel was “maybe” the December 21, 2016, log.

[22] Jim Hannan testified he sought out lower pricing for the job and probably saved $100,000.

[23] Shane Babony was removed from the site in December 2016. There were no complaints from Ross Clair that any of the work was deficient. Before 2017, there was no complaint by Ross Clair that the project was delayed. Caird-Hall never received a Notice of Default.

[24] Jim Hannan outlined the following reasons for the delays involving the project:

1. One of the big delays was getting power into the building (as previously detailed).

2. There was an issue regarding the water main – the original pipes had to be replaced by steel pipes.

3. The gas line had to be replaced and this caused a delay.

4. The parking lot had to be excavated to allow for the work described above to be done – it took months to get a permit.

5. Regarding the excavation work, there was a carry-on between two City departments.

6. Some of the Ross Clair trades were reluctant to provide work due to outstanding monetary issues with Ross Clair.

[25] As a result, the completion date of January 31, 2016, which was ambitious, could not be met.

[26] There was a problem with the roof hatch – there was a misreading of the plans. A railing had to be put in to remedy the problem.

[27] In cross-examination, Jim Hannan indicated Caird-Hall was instructed to do extra work by Nick Chiappetta, the project manager from Ross Clair - see Minutes of Construction Meeting of June 1, 2016, report at Tab 117, A1890, where Nick Chiappetta is listed as project manager for Ross Clair.

[28] The extra work was added onto the bill and sent to Ross Clair. The first 16 invoices were paid by Ross Clair (see Tab 35-A253), and this confirmed that Ross Clair agreed to pay for it.

[29] The final Schedule of Values at Tab 47-A307, dated March 2017, shows a Cash Allowance of $160,629.43. It was suggested that you normally would expect to see only approximately $10,000. Jim Hannan testified that this approximate $150,000 increase was due to Ross Clair’s representative, Nick Chiappetta, instructing Caird-Hall to do extra work and then submit a bill and call the extra billing a Cash Allowance. Jim Hannan didn’t know if there was any written documentation confirming this arrangement.

[30] It was pointed out that in Jim Hannan’s discovery, he never said anything about Nick Chiappetta. Jim Hannan indicated that Ross Clair are not fools and they would not pay $160,000 for work not contracted for. Jim Hannan indicated that Ross Clair stopped paying because they did not want to lose money.

[31] On December 5, 2016, Caird-Hall advised Ross Clair that Shane Babony, site supervisor, was moving to another site – see B1-134. Jim Hannan’s interpretation of this document was that Caird-Hall had not been paid for 3 months and the job had reached the stage where there was very little to do. The City of Hamilton indicated to Ross Clair on December 19, 2016, that Caird-Hall appeared to be no longer involved in the project – see B1-138.

[32] On February 15, 2017, Beth Hannan advised Forsyth Electrical that Caird-Hall was no longer on the site and Beth Hannan forwarded their invoice to Ross Clair – see B1-141.

[33] In addition to the City Change Orders, Caird-Hall billed for extra work requested by Ross Clair. There was no difficulty with previous invoices sent to Ross Clair, but on the last 4 invoices, at the end of the project, Ross Clair refused to pay. Sean Richardson was taking the position that Ross Clair was paying for additional items not approved by Ross Clair – see B1-144-145.

[34] Tab 47, A307, Schedule of Values shows that by March 2017, almost all of the work required to be done by Caird-Hall was complete. All of the subtrade work under the control of Caird-Hall was done. As previously mentioned, a subtrade of Caird-Hall, HVAC for Life, returned to the site in July 2017.

[35] The original completion date was January 31, 2016. Substantial completion didn’t happen until the middle of June 2017 – 16.5 months later. Jim Hannan attributed the delays to lots of Change Orders and work added. For example, the electrical work required wasn’t engaged until April, May 2016. Jim Hannan agrees that he didn’t go to a single meeting in 2016 – the City did not want him there.

ELIZABETH (BETH) HANNAN

[36] Beth Hannan was the office administrator for Caird-Hall. She is in charge of payroll, accounts receivable and accounts payable.

[37] Regarding the Waterdown Memorial Hall project, in the beginning, she worked closely with Nick Chiappetta, the project coordinator. Jim Hannan, Martin Hannan and Nick Chiappetta helped on the invoices.

[38] Tab 35-A253 is a list of invoices. Total payments received were $951,351.05. At the bottom of A253 is a list of invoices that were overdue and unpaid. They totaled $211,044.38.

[39] Regarding the Tab 58 HVAC bill from June 12, 2017, HVAC billed both Ross Clair and Caird-Hall.

[40] In cross-examination, Beth Hannan agreed that there were architect Change Orders and non-architect Change Orders for additional work. There was no documentation designating invoices as Cash Allowances. The invoices and emails were delivered to Nick Chiappetta.

[41] In re-examination, Beth Hannan indicated she submitted the extra work in Cash Allowances and submitted the invoices to Ross Clair in 2015-2016. No one at Ross Clair said they didn’t authorize it. An example of her sending invoice and receipts to Nick Chiappetta appears at Tab 179 – January 2016 receipts at A2470-A2484.

MARTIN HANNAN

[42] Martin Hannan was the project manager for Caird-Hall Construction at the Waterdown Memorial Hall project.

[43] Martin reviewed a number of items of extra work requested by Ross Clair. Martin testified that Nick Chiappetta instructed Beth to do it on a Cash Allowance.

[44] An example of Ross Clair not paying subcontractors and slowing work down appears at Tab 176, A2433, November 30, 2016, to December 2, 2016. Shoreway Flooring did not show up, as promised. Ross Clair was not paying them. Eventually, an agreement was reached, and they came to the site to finish.

[45] As indicated in Tab 174, A2392, April 4, 2017, Caird-Hall’s response to Sean Richardson, it is confirmed that Ross Clair’s manager, Nick (Chiappetta) instructed Caird-Hall to bill for costs outside the contract as Cash Allowances, along with invoices, and forward them to Ross Clair.

[46] An example of Ross Clair requesting extra clean-up work appears at Tab 158, A2373, May 27, 2016, where Nick Chiappetta indicates, “Go ahead with the bin and labours to get the existing building and outside cleaned up and submit the invoice like you have been doing.”

[47] On June 7, 2016, Nick Chiappetta emails Martin Hannan and tells him to go ahead with the lift and we (Ross Clair) will cover it – see Tab 160, A2375.

[48] On June 23, 2016, Nick confirms with Martin Hannan that labour for site clean-ups will be covered – see Tab 161, A2376.

[49] Other examples appear at page 18 of the plaintiff’s submissions.

[50] Tabs 163-170 at page A2379 to A2386 show bills for significant costs for labour from June 2016 to December 2016, with a note that hours for labour can be confirmed by the site logs.

[51] In cross-examination, it was confirmed that for most of the items billed and not in the contract, the extra work was done basically on mostly verbal instructions from Nick Chiappetta.

DISCOVERY READ INS FROM SEAN RICHARDSON TESTIMONY

[52] Page 7-8 – Nick Chiappetta, the project coordinator, was let go in August, September 2016 because the job was a disaster. Sean Richardson stepped in to try to get the job done. In response to the question, “And was Nick fired from the company at that time”, Sean Richardson replied, “I believe towards the end of September.”

[53] Page 12 – Ross Clair was involved in 13-14 other projects. They got help on this project because it was a minor job “for us”.

[54] Page 14-15 – “Sean” from Ross Clair took over as site superintendent when Caird-Hall abandoned it in December 2016.

[55] Page 17 – Nick was on the job site once or twice a week from July 2015. Nick was being trained by other project managers.

[56] Page 20 – Jim Hannan’s 13 invoices from Jim Hannan’s Consulting Services, 247 Company, in July 2015 to August 2016 were paid, and Sean Richardson testified, “I know they were paid and that was part of the reason Nick got fired.”

[57] Page 22 – The process for approving invoices, in general, in 2015-2016 was:

1. Nick reviewed and approved the invoices and brought them to accounting.

2. Accounting would then approve to pay the invoice and cheques were cut.

3. 3 people would sign the cheques: Anne Richardson, Sean Richardson, and a controller.

[58] Page 45-46 – HVAC for Life completed a Change Order for $10,000 and Ross Clair engaged them directly to do that…the Change Order done by HVAC for Life near the end of the project was not in the Caird-Hall scope of work but was a Change Order by the architect.

[59] Page 47 – Ross Clair got emails from Caird-Hall at the end of 2016 that Caird-Hall wouldn’t be attending anymore – they thought they finished the job.

[60] Page 49 – The Caird-Hall invoice for November 2016 was not paid – the invoices were overbilled. They were billing for Cash Allowances that they never paid…we paid for all those…

[61] Page 59 – Change Orders were issued to Caird-Hall that added $126,000 to the contract.

[62] Page 92 – Mr. Movat indicates, “We say the very cause of the delay was Caird-Hall’s inability to manage the job.”

[63] Page 100, 106, 116 – Sean Richardson frequently resorts to salty language – i.e., “The arbitrator told him to fuck off”; “Babony (Shane Babony) there fucked it up”; “At the end of the day, I’ll be bold with you, it was piss poor, fucking – the job was run so badly. It was unbelievable.”

[64] Page 119-120 – Regarding the delays, Mr. Richardson blamed Caird-Hall, explaining, “If you’re going to wipe your ass after a shit every time, that’s going to delay the process.”

[65] Page 120 – Nick Chiappetta was a junior guy – he was collecting paperwork. At $6,000 per month, Jim (Hannan) was to look after the job.

[66] Page 126-127 – In 2017, Sean Richardson was running four different companies. Nick Chiappetta was the project coordinator and Sean Richardson was not sure if anyone was supervising or monitoring Nick.

[67] Page 131-132 – Regarding HVAC being asked for work on July 25, 2017, Sean Richardson sent HVAC for Life a Change Order and got a quote and issued them a purchase order and, subsequently, paid them for it.

[68] Page 149 – Ross Clair is waiting to be paid $300,000 by the City of Hamilton.

[69] Page 152 – When Ross Clair received the architect’s deficiency report on February 22, 2017, Caird-Hall was not asked to look after any of the items because Caird-Hall abandoned the job in December.

[70] Page 153 – The quality of work done by Caird-Hall was definitely an issue. Sean Richardson lost his temper with their superintendent quite a few times – Sean had to walk away – “The guy doesn’t deserve to be called a superintendent.” However, before 2017, Ross Clair did not put in writing there were deficiencies in the work that needed to be corrected. Sean explained that the work wasn’t finished so there was nothing put in writing.

SHANE BABONY

[71] Shane Babony was the site supervisor for the Waterdown Memorial Hall project and joined the project in January 2016.

[72] There were site meetings weekly and bi-weekly. Nick Chiappetta was the Ross Clair representative and was later replaced by Sean (Haughey). Shane Babony attended most of the meetings.

[73] Daily logs were kept of who was at the site. Nick Chiappetta never asked to see the daily logs.

[74] By 2017, Shane was no longer the site superintendent. There were money issues and trades were not showing up. Shane had dealings with Sean Haughey from Ross Clair in the last quarter. Sean stated that Shane Babony was competent.

[75] There were numerous problems at the site, i.e., material in the parking lot had to be moved around; there were problems with the footings and layout of the building – new site directions and drawings were required; doors were not propped properly and were eventually scrapped. Sean Haughey had come in to fix the doors. He ignored advice not to drill the doors in a certain way. The doors were drilled and were ruined.

[76] Waterlines were constantly flooding. The basement had leaks. Water was coming in the door. Water had to be pumped out of the basement – see A1777. There was mould in the basement. There was flooding in the basement near the elevator shaft. Two bathrooms in the basement had to be re-done. All of these problems caused delays. According to Mr. Babony, government agencies were involved in the delays. For example, the Ministry got involved in the mould statement which had been done pursuant to Ontario government mould guidelines – see Tab 41, A288 – May 27, 2016.

[77] The City has promised that the adjacent parking lot could be used for use of materials and vehicles. When that did not happen, material had to be continually moved around. There were problems with footings and layout of the building, which required new site directions and drawings. The engineer did not calculate the load for the curtain wall correctly; as a result, work on the elevator shaft and curtain wall were at a standstill and there was a delay of 2 weeks. This problem was allocated to the owner (City) and not to Ross Clair or Caird-Hall.

[78] The existing 4” sanitary sewer was condemned by the City of Hamilton building inspector, and new sewer and waterlines had to be installed – see A2392 and A2399.

[79] The water leaks recorded in the daily logs resulted from decades-old plumbing. The leaks resulted in mould growth that had to be cleaned up.

[80] Mr. Babony addressed some of the concerns outlined in Questions 1-10 by Sean Richardson in his April 4, 2017 email to Caird-Hall at B1-144:

Questions 2 and 3 – The boom was approved by Nick Chiappetta for Ross Clair’s carpenter, Rob McBride, for concrete panels on the roof. Ross Clair did not provide a boom and scaffold.

Question 4C – The charge for winter protection was to keep the poured concrete from freezing in December-January.

Question 4D – A new survey had to be done for the existing building as the original survey was not accurate.

Question 4G – The charge for rebar sorting was necessary as they were not given the area in the City parking lot, as promised. The rebar, accordingly, had to be moved “umpteen” times.

Questions 4H and 4I – Additional pump charges and elevator topping were incurred to prevent water damage.

Question 4J – The mezzanine needed a guard rail plate.

Question 6 – Southwestern Elevator was difficult to work with. The hydraulic fluid became contaminated with water.

Question 7 – The roof hatch was put in incorrectly by Ross Clair’s carpenter, Rob McBride. the latch location was put in incorrectly due to the drawing being crude and incomplete. Caird-Hall accepted the location but wanted a handrail.

[81] Sean Richardson came in after Nick was gone. Sean made the declaration he was now in charge after Nick was gone. Sean told Martin Hannan that money is not in the contract - it was in lawsuits and Change Orders. He said it in the parking lot. There was another argument in the parking lot where Martin asked Sean to pay his trades as they were not showing up.

[82] In cross-examination, Mr. Babony reviewed the daily logs. Mr. Babony was the site supervisor and made no distinction between the trades. Some trades would not come in due to unpaid invoices. Martin Hannan looked at the daily logs and created the invoices, for example, Martin Hannan would have added the miscellaneous labour invoice for 32 hours in the April 2016 invoice at Tab 25A-A1997, A2001.

ASSESSMENT OF CREDIBILITY OF PLAINTIFF’S WITNESSES

[83] The plaintiff’s witnesses, Jim Hannan, Beth Hannan, Martin Hannan, and Shane Babony all provided straightforward accounts of their involvement in the Waterdown Memorial Hall project.

[84] On numerous instances, their evidence was confirmed/corroborated by the voluminous documentary evidence filed by the parties. There were no material inconsistencies or contradictions in cross-examination, conducted by a very experienced and able counsel. Accordingly, I find that all the plaintiff’s witnesses gave credible and reliable evidence, which I intend to rely upon.

DEFENCE EVIDENCE

ED BURNS

[85] Mr. Burns is the CEO of Ross Clair.

[86] On June 15, 2015, Mr. Burns met with Jim Hannan and Martin Hannan at Rogue Bar in Hamilton. There would be an approximate 50/50 split between who would do what – see Tab 4-A51 and Tab 89-A433. They discussed the contract price and Caird-Hall was to be paid approximately $610,000 plus HST – see Tab 3, A48-A49.

[87] In addition, Jim Hannan was to be paid as project manager for $6,000 per month.

[88] It was agreed that they would split 50/50 on profits for any extra work regardless of which subtrade did the work.

[89] Mr. Burns was a credible witness.

SEAN RICHARDSON

[90] Sean Richardson is the president of Ross Clair. He testified he had minimal involvement with the Waterdown Memorial Hall renovation project until 2016. The contract between the City of Hamilton and Ross Clair for the renovation was for $1,747,000 not including applicable taxes.

[91] A contract between Ross Clair and Caird-Hall was drawn up and Caird-Hall was required to do work as outlined in a Schedule of Values (SOV), lines 1-24. The start date of the contract was July 2, 2015, with a completion date of January 31, 2016. The purchase order amount (contract amount) was for $689,802.85 – see Tab 3.

[92] In August of 2016, Sean Richardson got a nasty letter from the City of Hamilton regarding the state of the jobs.

[93] A Schedule of Values is the amount that Caird-Hall is expected to get paid for its work – see the original Schedule of Values for 2015, Item 244-A2039.

[94] A subtrade summary for Ross Clair and Caird-Hall is set out at Tab 89, A433-A434.

[95] For Caird-Hall, to get more, a Change Order has to be approved by the City of Hamilton.

[96] A final Change Order Summary for the project appears at B1-153. There were 63 Change Orders for the project totaling $197,872.82. This raised the original contract price from $1,747,000 to $1,994,872.82 – see B1-153.

[97] The Change Orders are generated by Workshop Architecture on behalf of the City of Hamilton. Substantial completion of the project was granted by consultants in June 2017.

[98] According to Ross Clair’s calculations, Caird-Hall was entitled to $116,959 due to the Change Orders – see Change Order Summary at B150-151. This would mean that Caird-Hall’s contract would increase from approximately $610,000 to $726,000 due to the approved Change Orders.

[99] On December 5, 2016, Sean Richardson received an email from Martin Hannan, project manager for Caird-Hall, that as of December 12, 2016, Shane Babony would no longer be on site as a site supervisor. The City of Hamilton started to issue Notices of Default.

[100] Their guy on the project was Nick Chiappetta, an employee of Ross Clair who worked in the office. Nick’s responsibility was to take Caird-Hall’s paperwork and send it to the City of Hamilton. In August of 2016, Nick had troubles and left. Nick had a nervous breakdown.

[101] In August of 2016, the job was in a bad state. The schedule had been overridden by 7 months. The City of Hamilton was aggravated with the project.

[102] On December 19, 2016, the City of Hamilton contacted Sean asking who the new project manager and site supervisor were going to be – see B1-138. The Ministry of Labour requires a site supervisor as long as subtrades are on the job. Sean Haughey was put in as site supervisor along with Sean O’Donnell.

[103] In February 2017, Beth Hannan emailed to indicate that Caird-Hall was no longer on the site and that she was telling the subtrade to bill Ross Clair directly – see B1-141.

[104] Sean Richardson noted irregularities with the Caird-Hall billing, and he testified he “fired” off a series of additional issues/questions at B1-144, April 4, 2017. Caird-Hall’s response is listed at Tab 174-A2392.

[105] Sean Richardson questioned the extra billing done by Caird-Hall. Sean Richardson claimed that Ross Clair was not responsible for a number of items billed to them by Caird-Hall. For example, the Caird-Hall invoice for September 2016 billed for 260 hours of labour for a total of $14,300 plus HST: Sean Richardson testified he had no idea what it was for. There was no request for labour. It was a generic bill that he was expected to pay. Nick Chiappetta was off the job in August. The bill, accordingly, would go to accounting. Sean couldn’t remember if he looked at it in October.

[106] Sean Richardson went through a number of Caird-Hall bills that Sean indicated they were not responsible for.

[107] However, regarding Tab 158, A2373 – May 27, 2016; Tab 160, A2375, June 7, 2016; Tab 162, A2378 – June 27, 2016, Nick Chiappetta gave instructions to pay these bills and Sean Richardson testified that they have to stand by that.

[108] Sean Richardson continued to pay Caird-Hall’s invoices until the final 4 from November 2016 onwards.

THE COUNTERCLAIM

[109] The Scott Schedule (Scott Schedule #1) that was filed at the beginning of the trial regarding the amount claimed appears at B1-445. The Scott Schedule itemizes 23 items of claims for a total of $419,731.57 inclusive of HST.

[110] At the end of trial, a revised Scott Schedule was filed (Scott Schedule #2). 12 of the original 23 items claimed were deleted. The Counterclaim was now reduced to $246,209.14 plus HST of $19,133.50, for a total of $265,342.64. Accordingly, the Counterclaim currently has been reduced by $154,388.93 from the original Scott Schedule #1.

[111] Sean Richardson addressed the largest part of the Counterclaim – Labour to complete work - $138,377.12 inclusive of HST, in examination-in-chief. The details of the labour claim are set out at page B311-315. The labour claim starts April 24, 2016, and extends to October 23, 2017, for a total of 1,910.75 hours for a claim of $113,494.26. With an added claim for Job-Costing and Transaction Report, Scott Schedule #2 has the claim for $122,457.63 plus HST of $15,919.49, for a total of $138,377.12.

[112] Sean Richardson testified that this Ross Clair labour cost would not have occurred if Caird-Hall had managed the job properly.

[113] The second highest claim in Scott Schedule #1 is a claim for Door Hardware-Trillium at $70,273.24.

[114] The third highest claim in Scott Schedule #1 is $39,027.21 for Horizon Utilities.

[115] The fourth highest claim on the Scott Schedule #1 is $26,253.09 for CRS Rentals/United. Sean Richardson testified that normally subtrades supply their own “stuff”. Further, Ross Clair has $1,000,000 worth of their own equipment. Mr. Richardson testified that Caird-Hall arranged for these rentals and then charged them to Ross Clair. Mr. Richardson found out in late November 2016 that Caird-Hall was renting stuff on his account.

[116] The fifth highest amount is “landscape not done” with a claim of $24,408 in Scott Schedule #1. Mr. Richardson indicated that Caird-Hall never did this work but billed it in the fall.

[117] The next highest amount – sixth highest – is $23,911 for payment for lien bonds. Mr. Richardson indicated they left the site at the end of December 2016 and had 45 days to file a lien but did not do so until 7 months later. Accordingly, the lien is invalid. A former Caird-Hall subcontractor, HVAC for Life, did do work in July 2017 pursuant to a Change Directive, which was outside the original contract, and Ross Clair dealt with HVAC for Life directly and paid them directly – see B1-710 – B1-713.

[118] The next highest amount – seventh highest – is $14,540.63 for Home Depot. Mr. Richardson testified that these were expenses and costs required to rectify Caird-Hall’s deficiencies. Accounting provided the total of $14,540.36 – see B1-417.

[119] The remaining smaller items on Scott Schedule #1 were all the responsibility of Caird-Hall as a result of:

1. Deficient and/or incomplete work.

2. Avoidable costs due to Caird-Hall’s mismanagement.

3. Costs incurred due to delays in the construction work, which was Caird-Hall’s responsibility.

[120] Sean Richardson summarized the effect of the project on Ross Clair as follows:

1. Ross Clair received a 5-year suspension from the City of Hamilton.

2. The City of Hamilton was “pissed” by the work – the work was completed 16 months late.

3. Caird-Hall fought with the City of Hamilton over minor things.

4. The City of Hamilton laid the blame on Ross Clair. Ross Clair should have got rid of Caird-Hall.

5. This project damaged Ross Clair’s 50 year standing.

CROSS-EXAMINATION

[121] Sean Richardson was cross-examined for the better part of 3 days. The cross-examination raised a number of concerns regarding his reliability/credibility. Examples include the following:

GENERAL ISSUES

[122] 1. At the beginning of the cross-examination, Sean Richardson was referred to correspondence from the City of Hamilton dated December 2, 2015, to Ross Clair’s director of administration, Kathy Hogeveen – see Item 314, Tab 196. In that letter, described as a 2nd written notice, the City indicates at Tab 196, page A2994, in part, “The City is concerned with the perceived lack of experience of Ross Clair’s co-ordinator…after a recent site meeting (October 21, 2015) the project co-ordinator from Ross Clair (Nick Chiappetta) admitted to the City and Prime Consultant that he does not have experience with projects similar to Waterdown Memorial. Understanding that this is a complex, highly political renovation and addition project…but also has challenging site constraints, the City is requesting an experienced project manager be assigned to this project immediately.” This report was initialed by Lu-Ann Duxbury, Project Manager for the City of Hamilton.

[123] Mr. Richardson disagreed that it was a complex, challenging project. It was a simple project for an experienced person – that it was why he hired Jim Hannan.

[124] At the time, Mr. Richardson was running Ross Clair and 4 other companies. It was pretty well impossible for him to give this project his full time and attention – see page 4 of June 4, 2021, transcript. A $2,000,000 project was not on his radar in the fall of 2015. Mr. Richardson was involved in a multi-billion dollars project at the time. Mr. Richardson indicated that Ms. Duxbury was not very experienced herself. Regarding Mr. Nick Chiappetta, he was not inexperienced. Mr. Chiappetta had worked on other projects for about 1.5 to 2 years. Mr. Richardson didn’t have anyone else.

[125] Mr. Richardson was not sure if he discussed the project status with Nick in 2015. In the response letter to the City of Hamilton, Ross Clair indicates, at page A2997, Ross Clair (Kathy Hogeveen) indicates: “Experience: to address your concern about project experience from Ross Clair, we specifically chose Martin Hannan to act as Project Manager because he has extensive experience with these types of projects and working with the City of Hamilton. Secondly, we have no concerns about Nick Chiappetta’s experience as a project co-ordinator.”

[126] Later, in the third day of Mr. Richardson’s cross-examination, at page 73 of the June 4 transcript, this exchange takes place:

Q. Who was responsible for preparing and submitting the Ross Clair bills to the City?

A. It would have been Nick and Accounting. They would have just taken what Caird-Hall submitted to them and put it on the schedule and sent it.

Q. Sir, you're just guessing, aren't you? That's hearsay.

A. Yeah. I was - as I said I wasn't involved with the project at this time.

Q. So you don't know whether Nick delivered the charge....

A. I was not involved in the project at the time.

Q. Since this case started, you didn't reach out to Nick to find out why, right?

A. Nick didn't know his head from his ass. That's why this job went this way.

[127] In examination-in-chief, Mr. Richardson testified that their guy on the project, Nick Chiappetta, had a nervous breakdown. Mr. Richardson then took control of the job in August 2016 as the job was in a bad state. Although technically not part of the cross-examination, Mr. Richardson indicated in the discovery read-in that Mr. Chiappetta was “let go” and was fired towards the end of September, and Mr. Richardson stepped in to try to get the job done as it was a “disaster”. He got one of his top superintendents, Sean Haughey, to go onto to the job – see page 7-8, 12-13 of the discovery read ins. At page 20 of the discovery read ins, mention is made that Jim Hannan and Company 247 got paid from July 2015 until August 2016 – a total of 13 invoices. Mr. Richardson responds, “I know they were paid and that was part of the reason Nick got fired.”

[128] Throughout the cross-examination, Mr. Richardson frequently blamed the delays on Caird-Hall’s mismanagement of the project. For example, this exchange takes place at page 23-24 of the June 4, 2021, transcript of Mr. Richardson’s cross-examination:

Q. And despite the fact this project was years behind schedule, would you agree with me that the City never imposed any liquidated damages penalty on Ross Clair for late delivery?

A. It was threatened.

Q. But did they?

A. Well they still owe me 60 grand so they did get their pound of flesh out of me.

Q. Did they impose liquidated damages?

A. They were on the table, but we managed to beg them to rescind it. It was more than liquidated damages, they wanted us to pay for all the overtime for the consultants, additional storage, quite a number of things.

Q. So Ross Clair was able to convince the City that there are a number of delays to the project that were the fault of the City or its consultants and that’s why they backed off on those failures?

A. No. No.

Q. So they were just throwing you a couple of hundred thousand dollars for the sake of being nice?

A. No, I had to be professional as a gentleman and try to get things done and they realized that you know we are a victim of, of – we tried to hire Caird-Hall to do the job or whatever and they made us look like assholes.

[129] The plaintiff’s evidence was that there were regular construction meetings while they were on the project. Minutes were prepared of these minutes. People who attended the meetings are marked with an “A” on the front page of the minutes. The minutes indicate that they are considered accurate, unless discrepancies are reported in writing. Minutes of Construction Meeting No. 35 appears at page A1946-A1950. The date indicates Thursday 8, 2016, but I assume it is December 8, 2016, as the meetings were to occur bi-weekly and page A1950 indicates the next site meeting is to be December 20, 2016. Mr. Richardson is listed as project manager for Ross Clair Construction and his name is listed as an attendee as well as Shane Babony as attendee.

[130] The next Minutes of Construction Meeting is listed as No. 36 at page A1951-A1955 for January 12, 2017. The last page at A1955 indicates Sean Richardson as representative for Ross Clair Construction. Jim Hannan and Martin Hannan appear as site superintendent and project manager on Construction Meeting No. 35, but their names have been removed from Construction Meeting No. 36 in January 2017 on the last page, consistent with the plaintiff’s evidence that Caird-Hall was no longer at the site effective mid December 2016. Sean Richardson is listed as attendee on Construction Meeting No. 35. No one from either Ross Clair or Caird-Hall appears to have been at Construction Meeting No. 36 but Martin Hannan and Shane Babony are listed as participants on the first page. Both the Minutes No. 35 and No. 36 contain this paragraph – 11G1 – at page A1947 and A1952 respectively:

11G1: Substantial completion date of February 19th, 2016 will not be met. Due to delays from unforeseen site conditions (Gas line – presented August 12, 2015 and resolved September 9, 2015. Correct survey benchmarks – presented October 8, 2015 and resolved November 6, 2015. Existing electrical to meet ESA standards – presented July 15, 2015 and resolved November 13. Horizon new electrical utilities order – cheque requested to be sent November 16, 2015 and sent on November 19, 2015, Horizon notes earliest start date is early to mid-January with a minimum 10 week construction period making mid to late March the earliest before the addition will have power.) Ross Clair is in the process of creating a new construction schedule to reflect these delays that will be submitted by the next construction meeting on December 16, 2015. These delays have slowed the construction process and any momentum due to trades having to remobilize until correct information is provided by the consultants. A delay claim will be submitted by Ross Clair to reject these dates. New dates will be established once the change order is received for the sanitary line – A new SP date will be set upon all details of the sanitary line work being known ie permits/locates.

Ross Clair are to review schedule to condense and scope of work if possible.

[131] Should there be any doubt that paragraph 11G1 is not Mr. Richardson’s position in December 2016-January 2017 (when Caird-Hall removed itself from the site), that doubt is removed by a letter dated December 12, 2016, sent to the City of Hamilton by Ross Clair under the signature of Sean Richardson – see page A3006-A3007.

[132] The letter is 2 pages long and contains these excerpts:

As we have stated through minutes and during the course of site meetings, the introduction of CD 33 has had a large effect on the completion of this project. The installation of sanitary and water lines at the end of a project has been cause to reschedule and delay elements that should have been undertaken as scheduled. The simple issuances of the change directive has caused significant delays, as you are well aware. The first issuance of the directions lacked sufficient information that should have come from your own consultants. You consultants have failed to attend the site since the beginning of 2016. It is not our responsibility to provide information to prepare a change directive, yet we did so to help the project along.

The quality of RFIs and changes on a project of this size and nature have also had a negative effect, as you know. The RFIs now total 135 and the changes are at 50, which would only lend itself to the quality of the contract documents which have also lent its self to a hoard of on-site discrepancies. The original building layout and subsequent work sequencing took much longer then should have, these are again not contractor issues. We expect that our time is respected and proper drawings are provided to actually perform the work, this has not been the case.

The work that was delayed due to the issuance of CD 33 has proceed and as you are well aware nearly complete, this was undertaken to expedite the completion of this project and a decision made by us to do so. It is extremely difficult to schedule work when we are relying on you to release change orders, this was discussed during many meetings. The act that CD 33 has been lingering for this amount of time and just cancelled, does not work to the benefit of the project.

In close, ROSSCLAIR Contractors Inc. has committed to completion of this project as discussed with Ms. Tina lacoe from procurement, regardless of your opinion. We do not see being adversarial at this point to anyone’s benefit nor does the contract documentation support you laying blame on the contractor.

[133] There is no reference at all in December 2016-January 2017 in these documents authored and/or endorsed by Sean Richardson attributing blame to either Ross Clair or Caird-Hall for the delays. The delays are blamed on (1) unforeseen circumstances, (2) City Charge Orders/Directive and (3) failure of City consultants to attend the site in 2016.

[134] This appears to have been Ross Clair’s position throughout the time Caird-Hall was at the site. At page A2997, Ross Clair indicates on December 8, 2015, that the delays are due to unforeseen site conditions including incorrect benchmarks issued for construction drawings.

[135] Nick Chiappetta, in a letter dated January 22, 2016, at Tab 197, A2998, details a delay of 12 weeks and 4 days due to issues involving (1) unforeseen gas line, (2) incorrect survey benchmarks and (3) bad weather.

[136] Nick Chiappetta, again, in a letter dated May 11, 2016, at Tab 199, A3001-A3002 outlines and details 7 reasons for delay of 115 days. None are attributed to Caird-Hall. The conclusion is that the delay is due to unforeseen circumstances.

[137] In a letter dated May 26, 2016, at Tab 200, A3003-A3005, Michael Weeks refers to Mr. Chiappetta’s letters of January 22, 2016, and May 11, 2016, and adopts the contents. Michael Weeks is the director of operations for Ross Clair.

[138] Mr. Richardson testified that lots of Caird-Hall work was deficient. He was asked if there was a deficiency list. Mr. Richardson indicated there was a deficiency list, but he doesn’t have them. When asked if there was anything in writing regarding a deficiency list, Mr. Richardson testified, “Probably not”. Mr. Richardson indicated he was sick of them – there was no point in doing it – he had to get the job done.

[139] As referred to earlier, Michael Weeks, director of operations for Ross Clair, in a detailed, lengthy letter dated May 26, 2016, responds to a City of Hamilton incident report where the City of Hamilton expresses concern about the lack of progress on the project. In that very detailed letter, there is no reference to any subpar performance by any of the subcontractors. It was also pointed out by counsel that in Mr. Richardson’s letter dated December 12, 2016, at Tab 201, A3006-3007 to the City, there is a no mention of anything about the subcontractors.

[140] On July 10, 2017, Workshops Architecture prepared a deficiency list on behalf of the City of Hamilton. It totals $27,814.95 – see B1-148. Mr. Richardson claims this is damages suffered by Ross Clair due to Caird-Hall leaving the job site. However, calculations on B1-148 show Ross Clair responsible for $9,500 of deficiencies, leaving Caird-Hall responsible for $18,314.95. In the June 11 transcript at page 64-65, Mr. Richardson testifies that he did the calculations that appear at B1-148.

[141] Ross Clair did not do the repairs on the list. Mr. Richardson says they were attempted but not accepted and “we said just take the money and that’s it” – see page 64-65 of the June 11 transcript.

[142] It is suggested to Mr. Richardson that in his Statement of Defence, not one of the 23 items that he is now raising as a Counterclaim is mentioned. Mr. Richardson is told to raise any items either in his testimony or by way of re-examination. There was no response to this suggestion. The Statement of Defence does not appear to detail the 23 items in the Counterclaim.

[143] It was pointed out that by February of 2016, Caird-Hall was billing more than the original value of the contract - $798,908.21 - see Tab 22, A128, Schedule of Values. Mr. Richardson indicated that Ross Clair management was definitely negligent in not realizing that Caird-Hall, by February 2016, was already billing more than the total Mr. Richardson says was payable at the end of the project – see page 18 of the June 4 cross-examination. Mr. Richardson agreed that Caird-Hall was paid all of 2015 and 2016 invoices until the last payment December 30, 2016. He did not deny that he approved five payments to Caird-Hall after he took over the project and discovered this mess.

[144] Mr. Richardson stopped payment when he did his reconciliation – see page 18-19 of the June 4 transcript. Sean Richardson described Caird-Hall as being sneaky and “I would say there was a little deceit there” – see page 17 of the June 4 transcript. At page 26 of the June 11 transcript, Mr. Richardson indicated most of the payments were pretty prompt “until we found out that we were getting scammed.” At page 37 of the June 4 transcript, Mr. Richardson indicates after his reconciliation he found out “we were being ripped off by Caird-Hall.”

[145] Mr. Richardson is asked at page 131-132 of his June 11 transcript: “Are you saying that Mr. Babony lied to CRS and said I work for Ross Clair and I want to order something on its account?” Mr. Richardson testified, “It’s actually that easy, yes. It is actually that easy.”

[146] Mr. Richardson goes on to testify that he probably should have charged Mr. Babony with fraud and “Probably should charge Caird-Hall with fraud too.”

[147] The Statement of Defence does not allege fraud; neither does Mr. Movat’s final submissions. There is absolutely no evidence of anyone having any fraudulent intent and/or actions in this case and that includes Mr. Richardson as well. The evidence before me involves a contract dispute between respectable contractors with past good reputations.

[148] Tab 89-A433 and Tab 4-A51 is a subtrade summary and it lists the various trades and who is hiring them. Mr. Richardson agrees that Ross Clair was to hire 20 subtrades and Caird-Hall was going to hire 19 subtrades. Caird-Hall was going to hire the mechanical and electrical subtrades that tend to bill the most in most projects. The big picture is that Caird-Hall was going to hire approximately half of the subtrades and manage the project, but Ross Clair was getting two thirds of the money payable by the City and Caird-Hall was getting one third.

[149] At page 46 of the June 4 transcript, this exchange takes place:

Now, sir, you mentioned in your examination in-chief something to the effect that Caird-Hall was always billing the exact same amount of hours for its miscellaneous labour charges every month. So I went through the invoices that Caird-Hall sent, and I did not see one instance where Caird-Hall billed the exact same number of hours in more than one month. Can you point me to any such invoice where you say they did that?

A. It was the same as - I could look but I believe it was September 2016, October 2016 where I believe the amounts were around $4,000 - 260 - $14,000, 260 hours and I believe there was another consecutive month where it was like 160 hours that tallied up to about - they merely changed the date on the invoice and fired it off to see if they could get away with it.

[150] As previously reviewed in Martin Hannan’s evidence, Tabs 163-170 at page A2379 to A2386 bill significant totals from June 2016 to December 2016. Both the invoices and Martin Hannan indicated the labour hours billed can be confirmed by the site logs. These labour bills indicate:

1. TAB 163-A2379-06/30/2016 – 143 HOURS - $7,865 PLUS $1022.45 HST.

2. TAB 164-A2380-07/28/2016 -74 HOURS - $6,453 PLUS $838.89 HST. Note: included in the above was $311 for materials plus HST.

3. TAB 165-A2381-08/02/16 – 149 HOURS - $8,195 PLUS $1,065.35 HST.

END OF AUGUST

• CHAIPPETTA LEAVES
• SEAN RICHARDSON AND EMPOLYEES TAKE CHARGE OF SITE

4. TAB 166-A2382-09/02/2016 – 176 HOURS - $9,680 PLUS $1,258.40 HST.

5. TAB 167-A2383-09/30/16 – 260 HOURS - $14,300 PLUS $1,859 HST.

6. TAB 168-A2384-10/31/2016 – 260 HOURS - $14,300 PLUS $1,859 HST.

7. TAB 169-A2385-11/30/2016 – 180 HOURS - $9,900 PLUS $1,287 HST.

8. TAB 170-A2386-12/30/16 – 60 HOURS - $3,300 PLUS $429 HST.

[151] The only two months with identical totals of labour were September and October 2016, of 260 hours each. They both indicate that “All hours can be confirmed by the daily site log.”

[152] It would be a simple matter to check these invoices by checking with Ross Clair’s representative to confirm these hours by referencing the representatives’ observations on the job and reviewing the daily job logs. However, that clearly was not done. Mr. Richardson testified as follows at page 4 of the June 11 cross-examination:

Q. Okay. I'm now showing you an excerpt from the daily job logs of Caird-Hall. This is tab 145, page A2304 and its' dated October 31, 2016. Do you see that?

A. I do.

Q. Now, did you ever review these daily job logs while the project was ongoing?

A. I've never seen them until this case. They were never sent to this office, sir.

Q. Okay.

A. We didn't even know they existed, to be honest with you.

[153] The contract between Caird-Hall and Ross Clair appears at Tab 3, A48-A50. At A49, Supplementary Condition #1 incorporates CCA1 2008 Stipulated Price Contract. CCA1 2008 Price Contract appears at Tab 175, A2402-A2432. Clause 7.1.2 at A2422 requires the contractor to give a Default Notice and instruct the subcontractor to correct the default in 3 working days. Clause 7.1.4 gives the contractor rights to cancel the contract or deduct the cost of the default from any payment to the subcontractor.

[154] Clauses 8 and 10 of the Ross Clair – Caird-Hall contract also provide for Notices of Default for deficient work – see A49. Mr. Richardson acknowledges his awareness of these provisions but did not comply with them. This exchange appears at page 2, 16-21, 27, 28 of the June 11 cross-examination:

MR. SCHMUCK: Q. Now to go back to 2016 on the project and we've seen that around December 19, 2016, you received an email that Shane Babony would be leaving the job site because Caird-Hall felt work was virtually done. Did Ross Clair at any time send a notice about default to Caird-Hall, or terminate Caird-Hall's contract?

A. I don't believe so. I mean they, they basically said they were gone, and we didn't get a job done.

MR. SCHMUCH: Q. Now, we've looked at the document I have up on the screen before, Mr. Richardson. This is the purchase order Ross Clair issued to Caird-Hall, correct?

A. It would look like it.

Q. Page A48.

THE COURT: Page A48?

MR. SCHMUCH: Yes.

THE COURT: Okay.

MR. SCHMUCH: Q. And it has some supplementary conditions attached to it, is that correct?

A. Yes.

Q. And do you see on the screen now the supplementary conditions attached to the Caird-Hall purchase order at page A49 and A50?

A. Yes. You're going up and down with it though.

Q. I'll stop there.

A. Okay.

Q. I'm going to focus on paragraph number 1 first and if you could just peruse that to yourself if you need to refresh your memory on it? Tell me when you're ready to go.

A. Go ahead.

Q. Okay. So was one of the terms of your contract with Caird-Hall that the terms and conditions in the CCA1 2008 stipulate a price subcontract were incorporated?

A. It, it would tie to it, yes.

Q. Now I'm going to show you the CCA1 document. So this is item 291. Is that the standard construction document, CCA1 2008 that we see up on the screen now?

A. That's what it states.

Q. Page A2402, purchase....

THE COURT: A?

MR. SCHMUCH: A2402.

THE COURT: Thank you.

MR. SCHMUCH: Q. I'm going to refer you to a clause, sir, which we call SCC7.1.

THE COURT: On what page?

MR. SCHMUCH: This is on page A2422.

THE COURT: A2422, okay.

MR. SCHMUCH: Right.

MR. SCHMUCH: Q. Sir, you've dealt with this contract many times?

A. Yes. We have people in the office that do this all the time.

Q. And the Ross Clair standard terms and conditions refer to this contract in every instance?

A. They did at that time.

Q. Can I – can you look at clause 7.1.2? I'll let you read it to yourself if you need to and tell me when you're finished.

THE COURT: 7.1, point?

MR. SCHMUCH: 2.

THE COURT: 2? Okay.

A. Yes.

MR. SCHMUCH: Q. I'm going to paraphrase it, sir. It says, if the subcontractor - and that's not Caird-Hall – neglects to prosecute the subcontract work properly or otherwise fails to comply with the requirements of the subcontractors substantial degree, the contractor may give notice in writing that the subcontractor is in default and instruct the subcontractor to correct the default in three working days. Can you point me to any notice in writing that Ross Clair gave to Caird-Hall until this clause saying to Caird-Hall the project is taking too long? You're not prosecuting the work quickly enough, you've breached your contract?

A. No. I cannot. The simple fact that it wasn't finished and we didn't pay them.

Q. I'm now going to refer you to clause 7.1.3.

THE COURT: All right. Just a second, I just have to make some notes. 7.1.3?

MR. SCHMUCH: Yes.

THE COURT: Okay.

MR. SCHMUCH: Sorry, 7.1.4.

THE COURT: Okay.

MR. SCHMUCH: Q. I'll read it, sir. If the subcontractor fails to correct the default in the time specified – and I'll paraphrase, the contractor may correct such default and deduct the cost or terminate the subcontractors right to continue with the subcontract work, or terminate the subcontract. Did Ross Clair – can you point me to anything in writing where Ross Clair exercised its rights in number 7.1.4 on this project with Caird-Hall?

A. No. I didn't think we had to when they abandoned site by their own admission. We were trying to get the job done. Fooling around with Caird-Hall, they had fooled around with the job was a waste of time.

Q. Were you making the decision about whether to give the notice of default or notice of termination to Caird-Hall?

A. I was concerned with satisfying the City of Hamilton, getting the job done. That was my, that was my – the legalities doesn't get a job done. We're already a year behind on our job that we had hired Caird-Hall to manage. My main objective was always and only to complete the job. I wasn't looking backwards, I was looking forward to get the job completed. And no, before you ask again, we didn't issue this. They had abandoned the site and paperwork wasn't going to get the job finished.

Q. You're not a big fan of paperwork, sir?

MR. MOVAT: Objection.

THE COURT: Yes, that's not a fair question.

MR. SCHMUCH: Q. Sir, were you the one at Ross Clair making the decision about whether to terminate Caird-Hall?

A. We never terminated, they abandoned site.

Q. No. But were you the one....

A. A year, a year after their scheduled completion date.

Q. Were you the one making the decisions about whether to stick with Caird-Hall or to do the work yourself or bring in others?

A. We had no choice. Caird-Hall abandoned site, for which they had been paid to manage.

Q. Sir, was it you or somebody else at Ross Clair? Sir, was it you or somebody else at Ross Clair that was making these decisions in 2017?

MR. MOVAT: Your Honour....

A. For what? The decision was made by Caird-Hall to abandon the site.

MR. SCHMUCH: Q. Yes. And....

A. We didn't have any decisions to make. We just had to get on with the job. Caird-Hall abandoned....

Q. One decision, one decision Ross Clair could have taken was to write to Caird-Hall and say, immediately come back to the site and immediately restore your full-time site superintendent. Ross Clair did not do that. Who was making those types of decisions at this time?

A. I made the decision not to bother with making a phone call because Caird-Hall had been proven worthless on this job. The job was a year overdue. It was a mess. It wasn't even worth spending a quarter to phone them. It was terrible. The City of Hamilton was pissed. We were pissed. Jim Hannan hadn't been on the site for a year, why bother? Okay? He, he – it's – they were a waste of time and to see them prove it over and over again. How do you run a job that's less than two million dollars a year over schedule? You can't. And it's not us just saying it, it was the consultants and it's the city.

Q. Sir, is it your evidence that you did not have five minutes to prepare a notice of default and send it to Caird-Hall in or around December....

THE COURT: That isn't a fair question. Mr. Schmuch, it's already been established there's nothing in writing. He thought it was a waste of time to contact them, so he didn't. That's pretty well clear enough.

MR. SCHMUCH: Q. Can you tell us, sir, why Ross Clair did virtually no work in January, February, March and waited four months to send the billing for the period December to the end of April if you were so focused on finishing the project ASAP?

A. We – you can't bill for deficient work. The bulk of the work was redoing what Caird-Hall had done. We don't send unionized men at their wages out to a jobsite to sit around. It doesn't happen that way. And the fact that the, the substantial completion wasn't issued until June, I mean, you can tell what's going on.

Q. Looking at clause 8 of these same supplementary conditions. Do you agree, sir, that the terms that Ross Clair put forward in this subcontract required Ross Clair to provide two days notice to Caird-Hall to remedy what you thought was a default under its contract before you were allowed to go ahead and have the work performed that you had asked it to do?

A. It's typically the case. But when you abandon the jobsite, it makes it a little different dynamic.

Q. You were unable to send a letter and give two days notice? Is that what your evidence is?

A. They sent us notice they were abandoning the jobsite.

Q. Which is a breach, which might entitle you if they were being paid to back charge them and send the notice. But the point is, you didn't send the notice, did you?

A. What would a bit of paper – how would the paper have got the project finished and the city off our back? I'll remind you, I got a five year suspension because of Caird-Hall's performance here.

Q. Sir, I'm going to refer you to paragraph 10 of the same document. Do you agree that your terms and conditions required you to give two weeks to Caird-Hall after receiving the formal deficiency report to correct deficiencies before Ross Clair was allowed to have somebody else doing them and back charge Caird-Hall?

A. Again, the situation was different. They had indicated they were abandoning site.

Q. Do you agree with my interpretation of that clause from your contract, sir?

A. That's the interpretation regarding this contract, but not this situation.

[155] It is to be noted that Martin Hannan, in an email to Sean Richardson dated December 5, 2016, at B1-36, advises that Shane Babony is no longer on the site. Mr. Hannan concludes the email as follows:

“We will schedule and handle all of our sub trades accordingly for any deficient work this Friday.”

[156] Jim Hannan testified that some of Ross Clair’s trades were reluctant to provide work due to outstanding monetary issues with Ross Clair.

[157] An example appears at page 9 and 28 of the June 11, 2021, cross-examination. At Tab 225, A3560, an email appears wherein Martin Hannan indicates on October 5, 2016, that Shane Babony has compiled a list of everything needed to be done “to wrap this project up”. Martin Hannan indicates, “We really need to have this project done, so we can all get out there and get paid…please contact Shane @ 905-220-6858 to schedule the outstanding work within the next 10 days.” Later that day, Gary Chiesa from Shoreway Flooring responds, stating that, “Martin, as discussed last week, we will not be returning until we are paid up 100% current.”

[158] Mr. Richardson, at page 9 of the June 11 cross-examination, does not deny that Shoreway Flooring is a sub of Ross Clair and Ross Clair was getting invoices from Shoreway Flooring.

[159] In a letter dated December 19, 2018, Grant Brailsford, Solicitor for City of Hamilton, indicates, in discussing the Waterdown Memorial Hall project, that Shoreway Flooring has an outstanding account with Ross Clair and has hired a collection agency to pursue the debt – see Item 149-A938-A939. The letter indicates that $283,387.80 is still owed to Ross Clair out of a total payable of $2,199,477.26 for the Waterdown project. $1,916,089.46 had been paid to Ross Clair for the Waterdown project by the City of Hamilton.

[160] At page 29 of the cross-examination, Mr. Richardson agrees that Ross Clair had not paid Shoreway Flooring. Mr. Richardson explained at page 29 that the City of Hamilton hadn’t paid Ross Clair and “this is two years past the substantial date of completion.” Mr. Richardson indicates, “Look at the date, December 2018. The substantial was issued in 2017 and yet, we’re out all this money still.”

[161] Mr. Brailsford, in his December 19, 2018 letter, refers to HVAC for Life and Caird-Hall commencing lien actions against Ross Clair and the City.

[162] In his cross-examination of June 11 at page 72, Mr. Richardson is referred to Tab 91, page A1739, which indicates that City Change Orders totaled $235,148.26 plus HST. Mr. Richardson indicates at page 72 he billed that amount but that is not what they were paid. At page 75, he indicates the city still owed him $54,000-$55,000 on the whole project overall and not just the Change Orders.

[163] It appears that as early as August 2016, a number of subcontractors were phoning the City of Hamilton and the City of Hamilton contacted Nick to get the phone calls to stop – see A3011. Mr. Richardson’s response was that the emails didn’t specify the trades – see page 73-74 of the June 4 cross-examination.

[164] Finally, it is to be noted that at Tab 191, A2870, Martin Hannan, on October 24, 2016, at 6:28 p.m., emails Sean Richardson that 5 subtrades are MIA and that 4 of them, who are all named, including Shoreway, are looking for payment.

[165] As previous discussed, the City of Hamilton communicated to Ross Clair that they felt Nick Chiappetta was not a competent project manager. The City requested a better, more experienced project manager – see A2994-A2997.When Nick Chiappetta was fired in or about August of 2016, Mr. Richardson testified he took over the project, which he described as a disaster. In the Minutes of Meeting No. 35, in December of 2016, Sean Richardson attended the meeting, according to the Minutes, as Project Manager – see A1946-A1950.

[166] As previously indicated, the City found out in December 2016 that Shane Babony was leaving as the site supervisor. Lu-Ann Duxbury, on behalf of the City, on December 19, 2016, sent an email to Sean Richardson and reminded him that the contract between the City and Ross Clair requires Ross Clair to provide updates regarding PM (project manager) and site supervisor overseeing the project. She indicates, “Please advise who is now taking over as the Project Manager and Site Supervisor at Waterdown Memorial” – see B1-138, B1-139.

[167] At page 39-40 of the cross-examination on June 11, Mr. Richardson indicates he was the owner of the company and “I wasn’t really project coordinator. I was taking a role to complete the project.” Mr. Richardson indicates he didn’t appoint anyone as the project coordinator for 2017.

[168] Regarding 2016, this exchange takes place at page 3-4 of the June 4 cross-examination of the Sean Richardson:

Q. Now we've heard earlier that Nick either quit or was fired at Ross Clair in mid-August 2016. Would you agree with me that Ross Clair did not appoint one person to be the project coordinator for the balance of that contract?

A. I stepped in.

Q. I couldn't hear that answer, sir.

A. I said, I stepped in personally.

Q. Okay. Well is it your evidence that you became the Ross Clair sole project coordinator for the balance of this project sometime in August of 2016?

A. Well I wasn't the coordinator, but I came in to, to try and get the job back on the rails.

Q. All right. But my question was, did Ross Clair appointment one person to be the project coordinator for the balance of this project?

A. I stepped in personally.

Q. Were you giving this project your full-time attention after mid-August 2016?

A. I brought a super in also with me, but no, I brought in numerous companies, pretty much impossible, that's why I was still trying to rely on Caird-Hall to get this done. They were the ones that were hired to do the job and they were intimate with it.

Q. And who was this person you brought in to be this site super?

A. I believe at that time it was Sean Haughey who I brought in there. I'd have to look back.

THE COURT: Again, this is it. Our final day of evidence. So if you're going to look back at it, you're going to have to do it at recess.

A. I will do, sir. Your Honour.

THE COURT: It's okay, you can call me sir or Your Honour, whatever else you want.

MR. SCHMUCK: Q. Are you saying that you had Sean Haughey as a site super starting in mid-August of 2016 to work alongside Shane Babony?

A. I have to look back at the break just to see exactly when that happened.

[169] Later in the June 11 cross-examination, Mr. Richardson indicates they were too busy for the Waterdown job and that is why they sublet it to Caird-Hall. Mr. Richardson didn’t assign a coordinator – he was just trying to get the job done and he brought his guys in. Mr. Richardson denies he was a full-time project coordinator for Waterdown Memorial – “But I had guys out there I could rely on.” Mr. Richardson indicates he didn’t really designate a site supervisor. Mr. Richardson indicates he was there to try to get it finished…Mr. Haughey: “when he had time, he’s the more senior guy there – yes.” Later in the cross-examination, Sean Richardson agrees that Sean Haughey’s main job with Ross Clair in 2017 was his project in Mississauga – see pages 87, 88, 89, 91, 117 of the June 11 cross-examination.

[170] I note that a review of the site meetings from August 2016 to January 2017 reveals the following:

1. Nick Chiappetta is listed as the Ross Clair Construction Project Manager in Site Meetings 27, 28 held on August 10, 2016, and August 22, 2016, respectively – see Tab 122, A1911, and Tab 123, A1916-A1920.

2. In Site Meeting 29, held on September 8, 2016, Nick Chiappetta is no longer listed. Sean Richardson is now listed as Ross Clair Project Manager – see Tab 124, A1921-A1925.

3. In Site Meeting 30 to Site Meeting 35 held from September 20, 2016, until December 8, 2016, Sean Richardson is listed as the Ross Clair Project Manager – see Tabs 125, 126, 127, 128, 129 from A1926-A1950.

4. In Site Meeting 36 held on January 12, 2017, Sean Richardson is listed under Ross Clair Construction and there are no persons listed as having any project manager/site supervisor positions – see Tab 130, A1955.

5. Sean Haughey’s name does not appear to be listed on the front page as a potential attendee on any of the above site meetings save and except the last one – see Site Meeting No. 36, Jan 12, 2017, where he did not attend – see Tab 130, A1951-1955.

[171] At page 8-9 of the June 4 transcript, Mr. Schmuck points out that at the September 8, 2016, October 5, 2016, to the January 2017 meetings, Mr. Richardson didn’t bring anyone from Ross Clair. Mr. Richardson indicated he didn’t need somebody to hold his hand to go to a construction meeting.

[172] At page 38 of the June 11 cross-examination, Mr. Richardson indicates that after Caird-Hall left the site full-time in December, Mr. Richardson brought in Sean Haughey, and he believes it was Chris Stewart, or it might have been Paul Stewart and Sean O’Donnell. These people were licensed union carpenters. Their role in 2017 was to get the job finished. At page 39, Mr. Richardson indicates, “All three of them had their own jobs they were looking after. So when I could get them freed up to get out here, they would do it. You name it, everything. Deficiencies, incomplete work. I mean, the job wasn’t finished.”

[173] At page 40 of the June 11 transcript, Mr. Richardson testifies that Sean, Chris, Paul and Sean would be more knowledgeable on a day-to-day basis than Mr. Richardson. When asked if anybody was keeping formal daily site logs in 2017, Mr. Richardson testified, “I believe they have, yes.” Mr. Schmuck indicated he hadn’t received these daily logs and asked if Mr. Richardson was guessing or not producing them for some reason. Mr. Richardson indicated, “I can’t recollect.” Mr. Richardson then indicated that if they have them, they would be in archives – he didn’t realize he needed to introduce them. Mr. Richardson agreed that daily logs are the most accurate record of what was done on a daily basis, and it is common for the construction industry to keep daily logs.

[174] Mr. Richardson is “pretty sure” Ross Clair took photographs of work done in 2017. When asked why these photos haven’t been produced, Mr. Richardson responded, “I don’t know.” Mr. Richardson was sure there were photos taken of incomplete work or deficient work done by Caird-Hall. Mr. Richardson could not say why the photos weren’t produced. He wasn’t responsible for productions.

[175] Mr. Richardson agreed that it “might be common” for the construction industry to take photos to demonstrate deficient or incomplete work, but it’s not mandated – see page 40-42 of the June 11 cross-examination.

[176] Ironically, when Mr. Schmuck referred back to Caird-Hall’s daily logs, Mr. Richardson described the logs as deplorable – “They’re probably the worst rendition of a daily log I’ve ever seen.” When Mr. Schmuck pointed out the Caird-Hall dailies were better than the dailies Ross Clair produced, Mr. Richardson responded, “Okay. All right” – see page 50-51 of the June 11 cross-examination.

[177] The cross-examination of Mr. Richardson revealed that Ross Clair’s trades, on occasion, did not show up as scheduled and this caused delays.

[178] For example, at page 44 of the June 11 cross-examination, Mr. Richardson is asked if he got involved in talking to his subtrades to get them moving. Mr. Richardson indicated, “I can’t recall.” Mr. Richardson is referred to an email chain at Item 307, A2865, involving E & E Custom Steel, in the transcript referred to as “EMD Custom Steel”. The email chain indicates that Martin Hannan is requesting shop drawings and samples immediately from E Kerikes from E & E Custom Steel, with a copy to Sean Richardson – see page 43-44 of the June 11 cross-examination. At page A2865, Mr. Richardson writes Mr. Kerikes from E & E Custom Steel on September 7, 2016, indicating, “We are on site and we do not see your men on site installing the steel nor have you picked up this template. It’s complete unacceptable and you are continually delay other trades now.” Mr. Richardson agreed he wrote that and said it was true – see June 11 cross-examination at page 45. Mr. Richardson blamed the whole situation on Caird-Hall mismanagement – see June 11 cross-examination at page 43-46.

[179] Another example of a Ross Clair subtrade not returning to the site appears at page 54 of the June 11 cross-examination. At A2868, Caird-Hall writes Mr. Richardson giving an update about work to take place. The elevator company – a Ross Clair subtrade – advised that they were not returning to the site as they had not been paid. Mr. Richardson again blames Caird-Hall indicating, “I believe this was an argument over the overtime Caird-Hall caused.”

[180] I find that throughout the cross-examination, Mr. Richardson was often evasive and often answered questions with answers that did not address the specific questions, but answered and/or volunteered blanket statements indicating that Caird-Hall was negligent, incompetent or outright dishonest.

[181] Examples from the June 4 and June 11 transcripts include the following testimony from Mr. Richardson:

1. “I mean the way Caird-Hall ran the job left a very sour taste in our mouth and you know, quite frankly I am just done with it.” – page 13 – June 4.

2. “Yeah absolutely, the gouging continued all the way until I caught hold of it and didn’t pay anymore until it got reconciled. Without a doubt, Ross Clair was well aware that one of our employees was taking advantage of them and was incompetent too.” – page 17 – June 4.

3. “It was very sneaky to throw in a SOV [Schedule of Values] for your contract and you have a SOV for your change orders and you’ve got a Cash Allowance, Caird-Hall will admit that. I would say there was a little bit of deceit here.” – page 18 – June 4.

4. “…we tried to hire Caird-Hall to do the job or whatever and they made us look like assholes.” – page 24 – June 4.

5. “Why are we having a court case? Caird-Hall just billed whatever they wanted.” – page 62 – June 4.

6. “They helped us out of a jam? They put us in an effing jam, a big jam.” – page 71 – June 4.

7. Regarding the following question, “Since this case started, you didn’t reach out to Nick to find out why, right?” Mr. Richardson's response was, “Nick didn’t know his head from his ass. That’s why this job went this way.” – page 73 – June 4.

8. “I believe most of the payments were pretty prompt until we found out that we were getting scammed.” – page 26 – June 11.

9. “It’s no wonder this was such a disaster. Fuck.” – page 45 – June 11.

10. “It was an abortion.” – page 108 – June 11.

11. Regarding the lack of Notice and not following the terms of the contract between Caird-Hall and Ross Clair: “Absolutely. Because Caird-Hall didn’t give a shit.” Page 120 – June 11.

12. In response to a question, “Are you saying Mr. Babony lied to CRS Rental Limited and said I work for Ross Clair and I want order something on its account?”, Mr. Richardson responded, “It’s actually that easy, yes. It is actually that easy.” – page 12 – June 11.

13. Regarding charging Mr. Babony with fraud, Mr. Richardson responded, “I probably should have, probably should have. Probably should charge Caird-Hall with fraud too.” – page 132 – June 11.

14. “It just goes to show you that they have no idea what they were doing, none. Not a clue or how to run a project.” – page 134 – June 11.

15. “Well, we forwarded a letter from the City yelling and screaming, didn’t we?” – page 124 – June 11.

16. “We’ve wasted enough time here now, so don’t worry about the clock.” – page 105 – June 11.

17. At page 46-47 of the June 11 cross-examination, Mr. Schmuck complains that the witness is volunteering information in response to his question. Mr. Schmuck asks the Court to ask their witness not to talk or add things himself and just answer his questions. I indicate that is Mr. Richardson’s way of answering the question, but I also indicate to Mr. Richardson that it’s not really answering the question. I indicate that I understood his position – “You’ve stated it many times, the job was a disaster. It should have been completed a year earlier – try to answer more specifically the question.” Mr. Richardson indicates he will.

18. However, as the summary above illustrates, Mr. Richardson eventually returned to his old ways.

COUNTERCLAIM – CROSS-EXAMINATION OF MR. RICHARDSON

[182] I have grouped the cross-examination for the Counterclaims in order to match the way they were grouped in examination-in-chief. In the cross-examination of Mr. Richardson, Mr. Richardson’s counsel explained that the $39,207.21 for Horizon Utilities is no longer part of the Counterclaim. At the time of Scott Schedule #1, the defence didn’t know what the basis of Caird-Hall’s Cash Allowances were as they didn’t correspond to Cash Allowances. Accordingly, according to defendant’s counsel, this was just evidence that it was not paid by Caird-Hall but, rather, by Ross Clair.

COUNTERCLAIM ISSUES

[183] A) SCOTT SCHEDULES #1 AND #2

1. ITEM LABOUR

SCOTT SCHEDULE #1 - $138,377.12 INCLUDING HST

SCOTT SCHEDULE # 2 - $122,457.63 PLUS $15,919,49 HST EQUALS $138,377.12

At page 85 of the June 11 cross-examination, Mr. Richardson agrees that the labour claim is for labour to complete the work and correct deficiencies of Caird-Hall. He repeats this evidence at page 98 of the June 11 transcript.

[184] At page 86-87 of the June 11 transcript, Mr. Richardson agrees that the labour charges include time that Caird-Hall was on the site. It appears nothing was put in writing regarding deficiencies as Mr. Richardson wasn’t involved with the job at the time. Mr. Chiappetta was on the job at least until end of August 2016.

[185] Mr. Richardson has no evidence to dispute that Ross Clair’s forces and subtrades were doing their own work – there were 20 subtrades of Ross Clair that were supposed to do half of the work – see page 85-87 of the June 11 cross-examination.

[186] As an example, Mr. Richardson could not say what work his employees, such as Mark Meechan, Robert McBride, or Christopher Stewart, were doing for the labour hours claimed in December 2016.

[187] Mr. Richardson testified he would have to look at the time sheets. However, these were not produced at trial. Mr. Richardson testified he could get them, but Mr. Schmuck pointed out, “It’s a bit late now” – see page 89-90, June 11 transcript. When asked if at any time before the lawsuit, “Did you write Caird-Hall and say you owe me $138,000 for labour costs I incurred to correct or complete the work?”, Mr. Richardson did not answer the question directly, but indicated, “The job got reconciled after” – see page 94, June 11 transcript.

[188] A time sheet appears at Tab 217 at A3506 for Mr. Haughey. The time sheet indicates Sean Haughey working at the Commerce Court job in Toronto and Change Directive 58 for the Waterdown job in March 2017. Mr. Schmuck points out that the Counterclaim can’t include work done for work being paid for by others. Mr. Richardson responds, “Well, to a degree. It depends, I mean, we'd have to ask him exactly what he was doing.” – see page 113, June 11 transcript. Mr. Richardson indicates he can’t determine what he was doing – you would have to ask Mr. Haughey – see page 114, June 11 transcript.

[189] Mr. Richardson agrees that Mr. Haughey’s main job with Ross Clair was Ross Clair’s project in Mississauga – see page 117, June 11 transcript.

[190] Mr. Richardson repeatedly indicated he had to react because of the lengthy delay. He did not send emails to Caird-Hall about work not getting done.

[191] B) SCOTT SCHEDULES #1 AND #2

2. ITEM #3 – DOOR HARDWARE TRILLIUM

SCOTT SCHEDULE #1 - $70.273.24

SCOTT SCHEDULE #2 - $0.00

3. ITEM #1 – HORIZON UTILITIES

SCOT SCOTT SCHEDULE #1 - $39,273.21

SCOTT SCHEDULE #2 - $0.00

5. ITEM #13 – HARDSCAPE NOT DONE

SCOTT SCHEDULE #1 - $24,408 ($21,600 PLUS $2,808 HST)

SCOTT SCHEDULE #2 - $0.00

The three items listed above – Items 3, 1, 13 – were the second, third and fifth largest claims in Scott Schedule #1. They were all abandoned at the trial. Scott Schedule #2 makes no claim at all for items 3, 1, 13.

[192] C) SCOTT SCHEDULES #1 AND #2

4. ITEM # 9 – CRS RENTALS/UNITED

SCOTT SCHEDULE #1 - $26,253.09 INCLUDING HST

SCOTT SCHEDULE #2 - $26,253.09

Item #9 - CRS Rentals/United - is the fourth largest item in the Counterclaim. This claim has been maintained in Scott Schedule #1 and #2 at an identical amount.

[193] There is a claim for a mini excavator in January 2017 for $1,595 due to unfinished work by Caird-Hall. There is a rental receipt for scaffolding for July 2016. Mr. Richardson indicates he has scaffolding in his yard and wouldn’t rent it for anybody (This was at a time Mr. Chiappetta was project manager for Ross Clair). Mr. Richardson indicated Mr. Babony lied to CRS and put it on Ross Clair’s account.

[194] Mr. Richardson claimed he raised it with Caird-Hall to stop renting it on his account. Mr. Richardson stated it was done on site and it’s in a few emails. Mr. Schmuck indicated he has not seen an email or invoice or letter from Mr. Richardson to that effect. Mr. Richardson indicated he should have charged Mr. Babony and probably Caird-Hall for fraud – see page 128-133, June 11 transcript.

[195] There is an August 22, 2016, invoice for the rental of a boom. Mr. Richardson indicated Ross Clair didn’t rent a boom. Caird-Hall did it on their account. Mr. Richardson indicated that in August or September or October or November or December, he asked Caird-Hall for reimbursement. He put it in writing. When asked for the date of that email, Mr. Richardson said it was the date when the job got reconciled - April 4, 2017 at B144.

[196] D. SCOTT SCHEDULES #1 AND #2

6. ITEM #23 – LIEN BONDS

SCOTT SCHEDULE #1 – 4 years x $5,191.00 = 23,911.00

SCOTT SCHEDULE #2 – 5 years x $5,191.00 = $29,102

This was the sixth largest item on Scott Schedule #1. The claim has been increased to $29,102 in Scott Schedule #2 due to the passage of time. The lien claim also involves HVAC for Life for 3 years as they are one of Caird-Hall’s trades. That bond was ordered cancelled on January 18, 2021 – see Item 27, B1-724.

[197] E) SCOTT SCHEDULES #1 AND #2

7. ITEM #20 – HOME DEPOT EXPENSES TO RECTIFY CAIRD HALL WORK

SCOTT SCHEDULE #1 - $14,540.63, INCLUSIVE OF HST

SCOTT SCHEDULE #2 - $14,540.63

The Item #20 Home Depot Expenses were the seventh largest claim item in Scott Schedule #1. The items and value in Scott Schedule #2 have been maintained.

[198] Tab 20 of the defendant’s list of claims regarding Home Depot appears at B1-417. However, no invoices are included. Mr. Richardson could not say if these expenses were required for deficiencies or work not done. Mr. Richardson does not know if back charges or letter of deficiencies were sent to Caird-Hall.

[199] Back up invoices are set out at B1-159-B1-249. The summary chart at B1-159 are dates from the invoice dates. There are no pictures of the deficiencies and no architecture deficiency list for 2016, but, according to Mr. Richardson, there are Default Notices from the City of Hamilton.

[200] The list of invoices in the summary chart at B1-159 indicates that of the $14,540.63 claimed, $8,816.98 are from invoices from June 2016 to December 17, 2016, with an additional $3,543.19 by January 17, 2017 (total of approximately $12,360.17) and an additional $1,130.95 in February of 2017, for a total of $13,491.12. Approximately another $1,000 was spent to the completion date.

[201] At page A3006, Sean Richardson wrote to the City of Hamilton on December 12, 2016, and laid the blame for the delay on Change Directives issued by the City of Hamilton. There is no mention at all that the delays have been caused by deficient or incomplete work by Caird-Hall. Caird-Hall is not even mentioned in that December 12 letter.

[202] This is at about the time that Martin Hannan advised Sean Richardson that as of December 12, Shane Babony was no longer supervising the site. Martin Hannon advised that they will schedule their subtrades to do deficient work “after this Friday” – see B1-136 and A3006, A3007.

[203] On December 17, 2016, $8,816.98 of the $14,540.63 had been billed on 61% of the total. By January 17, 2017, 85% of the Home Depot invoices had been accumulated with no reference in the documentation as of January 17, 2017, alleging deficient/incomplete work. Further, Martin Hannan had advised, in December 2016, that they were prepared to schedule their subtrades for any deficient work.

[204] F) SCOTT SCHEDULES #1 AND #2

8. ITEM #15 – RE: WATERLINES NOT DONE

SCOTT SCHEDULE #1 - $14,522.76

SCOTT SCHEDULE #2 - $0.00

This was the eighth largest amount claimed in Scott Schedule #1 and is no longer being claimed.

[205] g) SCOTT SCHEDULES #1 AND #2

9. CLAIMED INTEMS IN SCOTT SCHEDULE #1 ORIGNALLY UNDER $10,000

As indicated earlier, Scott Schedule #2 abandoned 12 claims of the 23 items covered by Scott Schedule #2. Three items increased in claims in Scott Schedule #2 – Item #23 (lien bonds) which has been already discussed. Another item – Item 19.1 and 19.2 – regarding Forsyth in Scott Schedule #1 have been deleted in Scott Schedule #2, but a larger amount of $15,650.72 has been substituted.

[206] In addition to Items 3, 1, 13, 15 in Scott Schedule #1, which were deleted in Scott Schedule #2, as previously discussed, the following items were also deleted:

Item 2 – Testing

Scott Schedule #1 - $5,605

Scott Schedule #2 - $0.00

Item 4 – Gas Lines

Scott Schedule #1 – $5,600.17

Scott Schedule #2 – $0.00

Item 5 – Install Door Hardware

Scott Schedule #1 – $7,650

Scott Schedule #2 – $0.00

Item 10 – Fine Line Paving

Scott Schedule #1 - $565.00

Scott Schedule #2 – $0.00

Item 11 – Planter Excavation not done

Scott Schedule #1 - $858.80

Scott Schedule #2 – $0.00

Item 14 – Sign Foundation not done

Scott Schedule #1 - $2,000

Scott Schedule #2 – $0.00

Item 17 – Voice/Data work not done/required

Scott Schedule #1 - $5,650

Scott Schedule #2 – $0.00

Item 19.1 – Forsyth Invoice

19.2 – Forsyth Invoice

$926.04

$5,106.50

Scott Schedule #1 – claim as outlined above in 19.1 and 19.2

Scott Schedule #2 – above claims deleted - 19.1-substitued as detailed below - 19.2 - $0.00 - but 19.1 in Scott Schedule is now being claimed at $15,650.72 as set out in Tab 19 of the Ross Clair Damages Brief

[207] The remaining amounts in Scott Schedule #1 and Scott Schedule #2 remain relatively consistent with some minor variation – i.e., the Item 16 elevator work overtime claim has increased from $4,634.93 in Scott Schedule #1 to $5,970.75 plus $776.20 HST in Scott Schedule #2. This is the third item that has been increased from the original Scott Schedule #1 total.

[208] Regarding Item 18 – misplaced roof hatch CH – claim of $4,500 – the City of Hamilton paid Ross Clair for the roof hatch: $9,484.10 plus HST – see Tab 192, A2877 and page 95-96 of June 11 transcript.

[209] Regarding the original Item 13 landscape claim in Scott Schedule #1, it is no longer being claimed in Scott Schedule #2. Mr. Richardson testified a lot of that work would have been in the labour claim – see page 97, June 11 transcript.

[210] Regarding Item 7, in both Scott Schedules, which is a claim of $3,015.78 for finishing drywall, that is work done in the fall of 2016 by CDS when Caird-Hall was still on site.

[211] Mr. Richardson agrees “absolutely” that he didn’t follow the terms of his own subcontract by given written Notice to Caird-Hall before doing work he had hired them to do. Mr. Richardson explained his reason for not giving Notice was “because Caird-Hall didn’t give a shit.” – see page 118-123 of June 11 transcript.

[212] Mr. Richardson could not point to any email or letter that Ross Clair sent in the fall of 2016 directing that Caird-Hall complete the drywall work – see page 124 of June 11 transcript.

[213] Regarding Greenfield Painting, Greenfield’s January 25, 2017, invoice is to Ross Clair. Mr. Richardson agreed that the painting was contract work and none of the invoices said correction or deficiencies. Invoice 6047 is for patina work that is in Ross Clair’s scope of work. Mr. Richardson indicated, “I’m saying I have to look into it.” – see page 127 of June 11 transcript.

[214] Mr. Richardson testified Ross Clair asked Caird-Hall to do the painting in 2017 but he has no documents to support that. In his business, they use the telephone.

[215] Regarding Reimar, Items 12.1 to 12.7 in both Scott Schedules, Reimar sued Ross Clair for over $60,000 ($66,935.90) because they were not getting paid – see Item 153 A946-A966. In its Statement of Defence at paragraph 7, Ross Clair denied owing any monies to Reimar. At paragraph 10, Ross Clair indicates Reimar has claimed for Change Orders not approved by Ross Clair. At paragraph 13, 14, Ross Clair states that Reimar did its work negligently, carelessly, unskillfully, and Ross Clair back-charged due to Reimar’s deficient and/or incomplete work and Reimar’s failure to meet its contractual obligation - see A958, A959.

[216] Mr. Richardson indicated that the claim was settled for $15,000. The holdback was $23,000. Mr. Richardson doesn’t know how the amounts were apportioned. Paragraph 3 of the Statement of Defence makes it clear the proceedings arise out of a construction project at Waterdown Memorial Hall. The Statement of Claim refers to work/materials supplied from July 2, 2015, to January 24, 2017.

[217] Regarding Item 12.1 – FCN-01 – on the two Scott Schedules, there are no documents that Ross Clair paid it. Regarding 12.5 – FCN-07 – re-bar sorting labelled EXTRA – Ross Clair got billed by Reimar $1,446.60. Mr. Richardson testified that this is Caird-Hall’s responsibility as they asked for it.

[218] Regarding Item 12.3 – Survey Benchmarks – FLN-04 - $2,079.20 – Mr. Chiappetta, at Tab 195, A2979, November 5, 2015, indicates he will pay for it. Mr. Richardson indicates that Mr. Chiappetta was out of his realm and that he needed to go through proper procedures. That is why Mr. Chiappetta was let go.

[219] Regarding Item 12.6 in both Scott Schedules regarding winter heat/behind schedule – the email chain between Mr. Chiappetta, Reimar and Caird-Hall at Tab 195, A2981-A2984 in February, March 2016, it indicates that Nick Chiappetta authorized the work and asked for a separate invoice to Ross Clair for this item.

[220] Nick Chiappetta’s email dated November 10, 2015, at Tab 228, A3567, authorizes payment by Ross Clair for FCN – 001 to FCN 006, which covers Item 12.1 to 12.4 Reimar work in both Scott Schedules. Mr. Richardson indicated that the reason for this was “Hannan” was not running the job properly.

[221] On November 5, 2015 – see Tab 228, A3570 – Nick Chiappetta authorizes billing to Ross Clair for the re-bar sorting itemized as Item 12.5-FCN-07 on both Scott Schedules.

[222] Regarding Item 12.7 in both schedules, asking for $858.80 for delay time, there are no emails where Ross Clair advised Caird-Hall that Ross Clair was seeking that Caird-Hall was to pay for Reimer delay costs.

[223] Regarding Item 16 – elevator delay – Scott Schedule #1 asks for $4,634.93 inclusive of HST. This rises to $5,970.75 plus HST of $776.20, for a total of $6,746.95 in Scott Schedule #2.

[224] The invoice from Southwestern Elevator to Ross Clair at Tab 16 at B405-B406 shows a total invoice of $4,634.93 (also the total claimed in Scott Schedule #1, Item 16), but Mr. Schmuck points out that the invoice only bills $314.25 for overtime. Mr. Richardson indicates that Ross Clair had to pay overtime because the elevator team came prematurely.

[225] Regarding Item 18 in both Scott Schedules – misplaced roof hatch – there is a claim for $5,085. The City issued a Change Order for this roof hatch – see Tab 218 A3526, A3527. At Tab 192, A2877, it indicates the City paid Ross Clair $9,494 for the Change Order regarding “roof access hatch”. Mr. Richardson indicates this claim is mostly for the time and cost of the roofer.

[226] Regarding Forsyth Electrical, this is Item 19.1 and 19.2 in both Schedules. In Scott Schedule #1, the claim is for $926.04 and $5,106.50. In Scott Schedule #2, the total claim rises to $15,650.72. In its submissions, at page 28, the plaintiff concedes that there should be a credit for Forsyth invoices totaling $12,173.68. Where the plaintiff’s amount comes from, I do not know. The plaintiff indicates at page 56 of its submissions that the Forsyth invoices at B1-407 can be removed from Caird-Hall’s claim. The invoices at B1-407-B1-413 total $15,650.72 as indicated by the defendant in its Scott Schedule #2 at Items 19.1 and 19.2.

[227] Regarding Tab 21 of both Scott Schedules, there is a claim for $2,455.15 for WeirFoulds expense for waterline dispute. Mr. Richardson indicated there was a mediation between Ross Clair and the City caused by Jim Hannan. Ross Clair cancelled the mediation and paid for cancellation expenses. Mr. Richardson explained there was no merit in Jim Hannan’s stance, and they walked from it.

GENERALLY

[228] At page B-459, Mr. Richardson indicates these are the Change Orders authorized by the City, and outlines what Caird-Hall is entitled to as opposed to the numbers Caird-Hall made up. Caird-Hall, after a deduction for Change Order 60 for deficiencies of $27,814.95, is entitled to compensation of $132,822.65 due to authorized Change Orders.

[229] Regarding the Minutes of Construction No. 36, dated January 12, 2017, the Minutes do not outline any work to be done by Caird-Hall. Mr. Richardson indicated that Caird-Hall did not help Ross Clair to complete any work in 2017.

[230] By April 4, 2017, Mr. Richardson had lots of concerns and sent them an email – see B1-144. At B1-145, there is a list of “RCC Counterclaim amounts against CH.” It totals $544, 668.18 plus HST.

[231] Mr. Richardson indicated Caird-Hall responded to the April 4, 2017, email – “they sent some BS.”

[232] At Tab 209, A3032, there is a deficiency report prepared by Workshop Architecture labelled Deficiency Report 01 - February 22, 2017. This is the first deficiency inspection after Caird-Hall left. It was suggested by Mr. Schmuck there are at least 20 items in the Scott Schedule #1 that are not there. Mr. Richardson indicated there was lots of activities in those two months after Caird-Hall walked off the job on December 15, 2016.

[233] In re-examination, Mr. Richardson indicated that Items 1.3 - 1.5 in the Deficiency Report are in Scott Schedule #1 at #7-CDS, to finish ceiling/dry wall. Items 7.1 - 7.3 in the Deficiency Report are in Scott Schedule #1 at #8, Greenfield Painting.

[234] The Deficiency Report 01 indicates a large number of the deficiencies that were addressed on February 27, 28, 2017. Pictures of deficiencies are attached to the report and at first glance, the deficiencies photographed appear to be relatively minor.

CONCLUSION RE CREDIBILITY/RELIABILITY OF SEAN RICHARDSON

[235] Sean Richardson, on numerous occasions, was evasive and refused to answer questions or simply answered that Caird-Hall completely mismanaged the project throughout and was incompetent. His statements in cross-examination were either not supported by documentary evidence or often contradicted by them. His claim that Caird-Hall’s work was incomplete and deficient throughout the project is simply not supported and/or contradicted by other testimonial evidence and documents, including Sean Richardson’s own letters and email. After considering Mr. Richardson’s evidence and testimony, which has been exhaustively summarized, I find Mr. Richardson to be a charismatic, no nonsense, forceful type of individual. I also find, however, based on the evidence tendered before me, that Mr. Richardson is not a credible or reliable witness.

REPLY EVIDENCE

SEAN CHICKOWSKI

[236] Mr. Chickowski is the senior estimator and part-time project manager for Reimar Construction. Ross Clair and Reimar had a contract dated July 15, 2015, for $258,442.30 for the Waterdown Project – see Tab 226, A3562. Reimar was not paid in full to include all charges. Reimar sued the City of Hamilton and Ross Clair for $66,935.90 – see A946. Reimar settled for $15,000 plus HST.

[237] Tab 228, A3567, is an email chain on November 10, 2015, where Nick Chiappetta approved FNCI – FCNG. Nick Chiappetta approved the survey benchmark work outlined at Scott Schedule #1 at Item 12.3 – see Tab 228, A3570. Nick Chiappetta also approved the re-bar sorting that is included in Scott Schedule 12.5 – see Tab 228, 3572-A3574.

[238] On November 4, 2016, Sean Richardson authorized the concrete pouring of footings, which is a cost that was not part of the original contract – see Tab 195, A2977.

[239] Mr. Hannan advises Sean Chickowski, at 3:39 p.m. on November 4, 2016, that he can’t approve the concrete pouring and that Sean Richardson’s approval is required. A November 4, 2016, email at 3:41 p.m. from Sean Richardson indicates, “Guys, what’s been poured here footings. Let’s go.” Accordingly, it took Sean Richardson about two minutes to approve a cost that was not in the original contract. Mr. Chickowski testified that sometimes Sean Richardson waited days – this time there was a quick response.

MARTIN HANNAN

[240] Martin Hannan was recalled in reply by the plaintiff. Regarding Sean Richardson’s April 4, 2017, email to Caird-Hall outlining 10 additional issues/questions, Mr. Hannan responded to those concerns at Tab 174, A2392-A2399 and included photos.

[241] Mr. Hannan testified that Mr. Richardson had little to no knowledge of what was going on. Mr. Richardson never responded to the 10 explanations provided by Caird-Hall. Caird-Hall answered the questions as they were operating in good faith and expected to get paid for their work.

[242] Mr. Hannan responded to the items listed on the Scott Schedule #1. There is no need to summarize any testimony regarding the items that have been deleted from Scott Schedule #1. Regarding the remaining items that appear in Scott Schedule #1 and #2, Martin Hannan testified as follows:

[243] 1. Regarding Item 6 – Labour to complete work and complete deficiencies:

Mr. Hannan stated that this amount was grossly inflated.

[244] 2. Regarding Item 7 – CDS to finish ceiling/drywall:

Mr. Hannan testified that the drywall subtrade had completed 98% of the work by December 2016. He never received an email that the drywall work was not satisfactory.

[245] 3. Regarding Item 8 – Greenfield Painting:

The Greenfield Invoice at B1-337 refers to a special coating on metal. This was scope of work that was in Ross Clair’s responsibility, as was the installation of steel handrails and stairs – see Item 109, A822.

[246] 4. Regarding Item 9 – CRS Rentals Limited:

Martin Hannan testified that this was for boom rental. Nick told Martin that they didn’t have that equipment and the rentals were not called off by Mr. Richardson. The mini excavator rented in January 2017 – see B1-341, 342 – was not required to do any deficiency work by Caird-Hall. Regarding the scaffolding and decking in July 2016, it was rented to complete work by Ross Clair for an addition.

[247] 5. Regarding Item 16 – Overtime claim for Southwestern Elevator:

Martin Hannan testified that Nick approved the overtime charges. Southwestern was a Ross Clair subtrade. Nick approved the overtime hours to keep them happy. Caird-Hall didn’t call Southwestern Elevator to the site.

[248] 6. Regarding Item 18 – Misplaced roof hatch:

Rob McBride, a Ross Clair carpenter, put the roof hatch in the wrong place – he had the drawing upside down.

[249] At Tab 224, page A3559, is a summary of billings to Ross Clair. $209,130.34 is still owing. The Caird-Hall invoices included Change Orders that were internal Change Orders between Ross Clair and Caird-Hall. Regarding the Cash Allowances totals, they were told to bill Cash Allowances plus contractual Cash Allowances. Caird-Hall didn’t make it up. Ross Clair approved it and that includes accounting, Nick and Sean.

[250] Post-December 2016, Caird-Hall did come back for deficient work in 2017. There is an email at Item 353, A3601, May 3, 2017, that relates to HVAC and Drywall deficiencies that were addressed in January 2017.

[251] In the January 12, 2017, Site Meeting No. 36, Martin Hannan and Shane Babony, from Caird-Hall, and Sean Richardson, are listed as participating parties.

[252] Practical Plumbing was hired by Caird-Hall to do work regarding a Change Directive in March of 2017.

[253] A 307 is the final Schedule of Values dated March 2017. It shows Change Orders totaling $155,789. Mr. Hannan testified that Nick told Caird-Hall to invoice Caird-Hall Change Orders with an asterisk. Nick told them to bill certain items as Cash Allowances. It was pointed out by Mr. Movat that at Tab 181, A2494, there is a list of Change Orders with no asterisks on the February 2016 Schedule of Values. Mr. Hannan indicated that they were sent to Mr. Chiappetta when he was around. He could distinguish between Change Orders for Caird-Hall and Change Orders internally. Only the City can issue Change Orders. However, Nick told Caird-Hall to put invoices in as a Change Order even though they weren’t true Change Orders. At Tab 181, A2488, Nick Chiappetta indicates, regarding Caird-Hall’s February invoices, they are waiting for the City’s payment to issue a cheque for Caird-Hall’s invoice.

CONCLUSION REGARDING REPLY WITNESSES

[254] I find Mr. Chickowski’s and Mr. Hannan’s evidence to be generally consistent and supported by the other reliable evidence. Their evidence was supported by a number of documents filed in the litigation. I find the reply evidence to be credible and reliable.

LAW

[255] The law regarding extras work outside the scope of the contract is succinctly summarized by Perell, J. in D & M Steel LTD. v. 51 Construction LTD, 2018 ONSC 2171 at paragraphs 57-60:

2. Extras under a Construction Contract

[57] A contractor is only obliged to perform and may only charge for work and material included in its contract with the owner. The term, "extra" refers to extra work outside the scope of the contract, for which an additional charge is made by the contractor or subcontractor; an item specifically provided for in the contract is not an extra.

[58] A contract may provide that the owner may order extras and specify a manner of payment but in the absence of such a provision, there must be a new express or implied agreement covering any extras. A contractor or subcontractor may charge for an extra where the owner or contractor expressly or impliedly instructed the contractor or subcontractor to do the extra work or to supply the extra materials. If no price is fixed for the performance of the extra work, the court will imply a promise to pay a reasonable amount on a quantum meruit basis. Conversely, when the contractor or subcontractor does work or supplies materials not called for by the contract (plans or specifications) without instructions, express or implied or without the consent of the other contracting party, the contractor is not entitled to charge for the additional work or materials.

[59] The cost for the additional work must be reasonable in the context of the construction project.

[60] Notwithstanding that a contract may require formalities in relation to requests for extras, where an owner has acquiesced in the provision of extras, it may be found to have made an implied promise to pay for them. An owner or contractor cannot orally request extra work be performed outside the scope of a contract, and then not pay for the work by relying on the written terms of the contract requiring confirmation of extras in writing. Orally requesting extra work outside the contract constitutes waiver by conduct.

[256] Justice Broad in 2016637 Ontario Inc. o/a Balkan Construction v. Catan Canada Inc. et al, 2013 ONSC 4727 provided the following summary of the law on quantum meruit at paragraphs 11-14:

[11] A contractor is obliged to perform only such work as is included in its contract, and accordingly, a contract may provide the owner with the right to order extra work and may specify some method of payment for such work, e.g. on a cost-plus basis. In the absence of such a provision in the contract there must be a new agreement between the owner and contractor covering the performance of, and payment for, any work not comprised in the contract. Such an agreement may be an express contract, or it may be an implied contract to pay for work done at the request of the owner and accepted by him/her. If no price is fixed for the performance of such work, the court will imply a promise to pay a reasonable amount on a quantum meruit basis (see DIC Enterprises Ltd. v. Kosloski (1987) 26 C.L.R. 85 (Sask Q.B.) at para. 30, quoting Goldsmith, Canadian Building Contracts (3rd) (1983) at pp. 81-82).

[12] Whether a particular item of work is an extra or not must be determined by reference to the terms of the contract, the nature of the work, and the surrounding circumstances. The contractor will, therefore, be able to recover payment on a quantum meruit basis only if it has performed work for the owner in pursuit of a contract which changed so fundamentally that the payment provisions in the contract no longer have any application to the work actually performed. There would be an implied promise to pay what the work is reasonably worth (see McGrath v. Woodrow (1998) 2001 CanLII 24163 (ON CA), 40 C.L.R. (2d) 145 (Ont. Gen. Div.) at para. 56, quoting Hudson- Building Contracts (1996), paras. 4-27.

[13] When a contractor performs work or supplies materials not called for by the contract without instructions, express or implied, from the owner, or the consent of the owner, it is not entitled to charge for this additional work or materials as an "extra". However, when the contractor performs work or supplies materials not called for by the contract on the instructions, express or implied, of the owner, it is entitled to charge for additional work or materials as an "extra". What amounts to instructions from the owner depends on the circumstances relating to each item. If the owner, without giving definite instructions, knows that the contractor is doing extra work or supplying extra materials, and stands by and approves of what is being done and encourages the contractor to do it, that will amount to an implied instruction to the contractor, and the owner is liable (see Chittick v. Taylor (1954) 1954 CanLII 492 (AB QB), 12 W.W.R. (N.S.) 653 (Alta S.C.) at paras. 8-10).

[14] Despite the fact that a contract may require certain formalities in relation to requests for extras, where an owner has acquiesced in the provision of extras, it may be found to have made an implied promise to pay for them (see Colautti Construction Ltd. v. Corporation of the City of Ottawa (1984) 7. C.L.R. 264 (C.A.) at para. 30). A provision in a contract requiring a written order as a condition precedent to payment for extra work may be waived by the owner's conduct or acquiescence, such as where the owner requests extras which he or she must, as a reasonable person, have realized would involve extra expense (see DIC Enterprises Ltd. v. Kosloski at para. 34 (quoting Goldsmith at pp. 87-88) and para. 37.)

[257] Wilson J, in his dissent (where the conclusions but not the law were dissented from) Jessco Structural Limited v. Gottardo Construction Limited, 2016 ONSC 2189, a decision of the Divisional Court, reviews the the case law on extras and waiver as follow at paragraphs 47-50, 54 and 58:

[47] Responsibility for payment of extras is often contentious in construction cases. The usual fight about payment of extras is whether or not the extra as claimed by a subcontractor was included in the contract or not.

[48] The decision of Justice Pierce in Anowara Construction Ltd. v. Tom Jones Corporation (2006), 54 C.L.R. (3d) 165 (Ont. S.C.), at paras. 18 and 20, provides guidance for what is considered “extra” work. She confirms the principles outlined in the cases that payment should be made for extra work outside the scope of the contract:

18. The term, “extra” refers to extra work outside the scope of the contract, for which an additional charge is made by the contractor or sub-contractor. In Noranda Builders Ltd., Nash J. at par. 132 remarked that the court will imply a promise to pay on a quantum meruit basis where work is done at the request of the owner and for his benefit without a specific contract for payment.

19. The Noranda Builders Ltd. court adopted the following principles of Egbert J. in Chittick v. Taylor 1954 CanLII 492 (AB QB), [1954] A.J. No. 23 (Alta. S.C.), par. 5:

Rule 1. An item specifically provided for in the contract is not an ‘extra.’

Rule 2. When the plaintiff supplied material of a better quality than the minimum quality necessary for the fulfillment of the contract, without any instructions, express or implied, from the defendant to do so, he is not entitled to charge the extra cost as an ‘extra.’

Rule 3. When the plaintiff did work or supplied materials not called for by the contract (plans or specifications) without instructions, express or implied, from the defendant, or the consent of the defendant, he is not entitled to charge this additional work or materials as an ‘extra.’

Rule 4. When the plaintiff did work or supplied materials not called for by the contract on the instructions, express or implied, of the defendant, he is entitled to charge for additional work or materials as an ‘extra.’” [Emphasis added]

[49] As is clear from the Anowara decision, there is a distinction in the case law how extra work outside the scope of the contract is to be treated, contrasted with extra work within the scope of work contemplated in the written contract.

[50] Taken together, the courts in Ontario have been clear that when additional construction work not contemplated by the contract is completed at the request of the owner, (or in this case the contractor) the party providing the additional work should be paid, as the party requesting the extra work would reasonably expect to pay for it. Requesting this extra work outside the contract is waiver by conduct. The cost for the additional work must be reasonable in the context of the construction project: see Deminico v. Earls, [1945] O.W.N. 375 (H.C.).

[54] As noted by Howard Wise in The Manual of Construction Law, loose-leaf (Toronto: Carswell, 1994), at page 3-15, the classic statement of the law for extras in construction projects outside the scope of the contract is from Master Marriott in Deminico. This statement was recently quoted by Master Sandler in Vallie Construction, at para. 129:

Because contractors and builders have always been prone to make claims for extras, the Courts have laid down certain requirements to be met before such claims may be allowed. The ordinary law of contract does not find any place for extras, and unless the contract itself provides for it, a claim for any additional work must depend upon a new contract, either express or implied… An express contract may be either in writing or oral, but an experienced contractor will always endeavour to have the order in writing because the onus is upon him to prove it by a preponderance of evidence… An implied contract may be inferred from the conduct of the parties, but in all cases an essential element is that the owner at least knew that the work was going on an acquiesced in the contractor doing it. So that where the contractor goes ahead and does work he is not bound to do under the contract, and the owner knows nothing of it, the contractor cannot recover anything for it…In some cases it may be presumed that the owner consented to such extra work if so great that it must have been done with his knowledge or was necessary and not foreseen… Finally, in asserting a claim for extras the contractor must prove conclusively that the work done was not a part of the main contract, and for this purpose if the main contract is in writing it must be produced. [Emphasis added]

[58] These cases confirm that an owner or contractor cannot orally request extra work be performed outside the scope of a contract, and then not pay for the work by relying on the written terms of the contract requiring confirmation of extras in writing. Orally requesting extra work outside the contract constitutes waiver by conduct. (See DIC Enterprises Ltd. v. Kosloski, [1987] C.L.D. 1211 (Sask. Q.B.), at paras. 30-32 and 34 (quoting Immanuel Goldsmith from Canadian Building Contracts, at pp. 87-88) and para. 37; 2016637 Ontario Inc. o/a Balkan Construction v. Catan Canada Inc. et al., 2013 ONSC 4727, 26 C.L.R. (4th) 84, at para. 14; Hydrastone Inc. v. Clearway Construction Inc., 2015 ONSC 2669; Domco Construction Inc. v. Aliva Holdings Inc., 2003 SKQB 506 ).

[258] In Consulate Ventures Inc. v. Amico Contracting and Engineering (1992) Inc 2007 ONCA 324, E.A. Cronk J.A. held at paragraph 99:

99. Thus, where the claim for restitutionary relief is based on quantum meruit, as in this case, an explicit mutual agreement Change Orders compensate for services rendered is not a prerequisite to recovery. It suffices if the services in question were furnished at the request, or with the encouragement or acquiescence, of the opposing party in circumstances that render it unjust for the opposing party to retain the benefit conferred by the provision of the services. See Fridman, surpa, at pp. 290-92; Nicholson v. St. Denis (1995), 1975 CanLII 393 (ON CA), 57 D.L.R. (3d) 699 (Ont. C.A.), leave to appeal to S.C.C. refused, [1975] 1 S.C.R. x (S.C.C.)

ANALYSIS

1. THE ORIGINAL WRITTEN AGREEMENT

[259] Ross Clair contracted with the City of Hamilton on June 19, 2015, to do renovations at the Waterdown Memorial Hall for a contract price of $1,747,000.00 – see Tab 2, A47. Ross Clair had numerous other bigger jobs on the go and decided to subcontract a portion of the job to Caird-Hall. A contract was signed with Caird-Hall with a start date of July 2, 2015. Caird-Hall was to supply and install all work associated with the trades outlined in a Schedule of Values, lines 1-24. The Caird-Hall contract was for $610,445.00 plus HST – see Tab 3, A48-A50.

[260] A purchase order summary at Tab 4, A51-52 outlines the work to be conducted by the contractor/subcontractor. Caird-Hall was responsible for approximately 16 items of contract work and Ross Clair was responsible for 21 items.

[261] Accordingly, Caird-Hall was responsible for 43% of the trades for 35% of the total contract price. At face value, this appeared to be a good deal for Ross Clair.

[262] Ed Burns, in an email dated July 19, 2017, indicated that the parties had initially agreed the project would make $200,000 for the two companies – see Tab 204, A3016.

2. THE ORAL AGREEMENT

[263] Sean Richardson is the president of Ross Clair. He testified that their “guy” on the project was Nick Chiappetta, an employee with Ross Clair. Nick Chiappetta is listed in various documents as the project manager for Ross Clair – see, for example, December 2, 2015, Minutes of Construction Meeting No. 11 at A1829.

[264] Sean Richardson admitted he had minimal involvement with the Waterdown Project until 2016. Mr. Richardson was involved with numerous, much larger projects elsewhere and the expectation was that Nick Chiappetta would handle the project on Ross Clair’s behalf. A $2,000,000 project was not on Mr. Richardson’s radar, as he admitted. The City of Hamilton was concerned about Nick Chiappetta’s experience level. They expressed these concerns in a December 8, 2015, 2nd incident report – see Tab 196, 2994. Ross Clair responded that they had no concerns about Nick Chiappetta’s experience as a project coordinator – see A2997.

[265] The City also expressed concerns about delays in the project and was concerned about the general contractor meeting the revised substantial performance date of February 19, 2016.

[266] The Caird-Hall Schedule of Values for December 2015 reproduced at B1-460-464 shows that a lot of work still needed to be done with a total billed to date of $254,932.38 out of total “original contract value”, which had now increased to $779,047.48 due to Change Orders and an item titled ‘Cash Allowances’. At that time, the Cash Allowance billing, which was outside the contracted lines 1-24 or 1-25, was only $10,912.29. How did the Cash Allowance total come about? Jim Hannan testified that Nick Chiappetta requested extra work not included in the original contract and these were billed as Caird-Hall Change Orders or Cash Allowances. The first 16 invoices were paid by Ross Clair spanning from September 25, 2015, to December 30, 2016 for invoices dated July 13, 2015 to October 31, 2016 – see Tab 35, A253.

[267] The final Schedule of Values dated March 2017, at Tab 47, A307, shows a Cash Allowance total of $160,629.43.

[268] Beth Hannan, Caird-Hall’s administrator, testified that in the beginning she worked closely with Nick Chiappetta, the project coordinator. She testified that there were non-architect Change Orders and Cash Allowances billed for extra work. The invoices and emails were delivered to Nick Chiappetta. She submitted the invoices to Ross Clair in 2015-2016. She testified that no one at Ross Clair ever said we didn’t authorize it. Martin Hannan, Caird-Hall’s project manager, confirmed that extra work was requested by Ross Clair.

[269] Nick Chiappetta instructed Beth Hannan to do it on a Cash Allowance. Most of the extra work was done basically on verbal instructions from Nick Chiappetta. Martin Hannan testified in reply evidence that they didn’t make it up – Ross Clair approved it and that includes accounting, Nick and Sean.

[270] In its final submissions, the plaintiff has prepared a chart at page 18 of extra work approved by Nick Chiappetta and Ross Clair. I adopt it as being correct and reproduce it as follows:

Extra Work Approved by Nick Chiappetta and Ross Clair

By Oral Request

As Testified To By Martin and/or Beth Hannan, Shane Babony

Item

Details - Invoice

The steel decking inspection complete by Peter MacCallum

A2563

Exterior basement insulation which was work that was missed during the tendering process by Ross Clair;

A2363

The mezzanine safety rail which was a non-contractual Change Order

A2015

Toilet rentals

See all Don’s Portable Toilet invoices, such as in January 2016 A2476

Handwashing facilities

See all Super Save Toilet Rentals invoices, such as B-1-633

Bin rentals

See all Budget Environmental invoices, such as June 2016 A2573

Tiger Torches and labour to operate (to dry in preparation for Ross Clair subtrade, Advanced Waterproofing)

A2361, and as non-contractual CO 22 at A2450

Concrete chipper rental used for all subtrades

A2365

Drywall repair work

A2380

Basement flooding – labour to clean up

Misc. Labour invoicing

Weeping tile

Rona receipt, A100

Caulking gun, wood

A103

Extra Work Approved by Nick Chiappetta and Ross Clair

By Written Request

Item

Details - Invoice

Mr. Chiappetta agreed to “bin and labours” by email

A2373

Mr. Chiappetta agreed to paying for replacing Caird-Hall’s submersible pump and costs associated with heating the basement by email

A2368-2369

Mr. Chiappetta agreed to pay for a construction lift by email

A2375

Mr. Chiappetta agreed to pay for miscellaneous labour by email

A2376-2377

Mr. Chiappetta requested a handwashing station rental

A2378

Mr. Chiappetta requested rental of scaffolding

A3487

Mr. Chiappetta requested labour to remove washroom flooring

A2377

Mr. Chiappetta requested labour to remove garbage

A2377

[271] In or about middle to late August 2016, Mr. Chiappetta was fired by Sean Richardson. In examination-in-chief, Mr. Richardson testified that Nick had troubles and left – “Nick had a nervous breakdown.” I reject that testimony – there were lots of examples in the trial where Mr. Richardson indicated Mr. Chiappetta was fired and/or let go. I find Mr. Chiappetta was fired. Mr. Richardson did not provide reasons for the firing except to say that Mr. Chiappetta was in over his head and didn’t know his “head from his ass”.

[272] Mr. Richardson then took over as the Ross Clair coordinator, albeit part-time due to his other obligations on other projects.

[273] Mr. Richardson testified that the project, when he took over, was significantly delayed and was a “disaster”. The question then arises: what was the state of the Schedule of Values in August of 2016 when Nick Chiappetta was fired?

[274] The August 2016 Schedule of Values appears at Tab 218, A3519. The original contract value had now ballooned to $946,277.43. Included in that total was $86,666.63 for “Cash Allowances” – see A3519 and Change Orders of $182,666.10.

[275] Martin Hannan testified that non-architecture Change Orders for extra work were to be marked with an asterisk. Change Orders, at page A3520, totaled $158,947.34, and the Change Orders marked with an asterisk, at page A3521, raised the Change Orders total to $182,666.10. The asterisk Change Orders, totaling $23,718.76, when added to the Cash Allowances total of $86,666.33, add up to a billing of $110,385.09 for extra work by August 2016.

[276] Mr. Richardson, I find, though not a credible or reliable witness, is, nonetheless, a very intelligent and very experienced and very capable construction expert. He surely would have noticed this supposed unauthorized billing. And what did he do to stop this extra billing? Nothing. At least until November to December 2016.

[277] The billing for Cash Allowances and Caird-Hall Change Orders was allowed to continue until Caird-Hall basically finished their work in December of 2016 – 97% completion. It was at that time that Ross Clair stopped paying in December 2016, leaving $210,000 in Caird-Hall bills unpaid – see Tab 35, A253 Invoices and Received Payments, and Caird-Hall v. Ross Clair Billing Summary at Tab 224, A3559 – Final – March 2017.

[278] At the time that Ross Clair stopped paying for November 2016, January 2017 and March 2017 invoices, the November 2016 Schedule of Values – see A216-A221 and A3331 – showed Cash Allowances of $141,935.42 plus Caird-Hall Change Orders, with an asterisk of an additional $24,759.36, totaling $116,694.78 of bills for extra work. Sean Richardson testified in-chief that he continued to pay Caird-Hall’s invoices until the final four from November 2016 onwards.

[279] Sean Richardson testified that he looked at the Caird-Hall invoice for September 2016. Mr. Richardson testified he couldn’t recall if he looked at it in October. I infer that he would have, given his experience and knowledge and concerns over Caird-Hall’s “gouging”. The September 2016 invoice billed for 260 hours of labour, for a total of $14,300 plus HST. That invoice appears at Tab 167, A2383. The invoice states that, “All hours can be confirmed via the daily site log.” As previously summarized, all the miscellaneous labour bills contain the statement “All hours can be confirmed by the daily site log.”

[280] Mr. Richardson testified he didn’t know what these labour hours were about. They weren’t in the contract, but he knew he was being billed for it. All the labour bills state the hours are in the daily logs. In cross-examination, at page 4 of the June 11 transcript, he testified he never checked into the daily job logs and didn’t know they existed. That testimony is highly questionable given that Mr. Richardson stated he was being cheated by incompetents who made a “disaster” of the project and who were billing whatever they felt like.

[281] To retrace and summarize: Nick Chiappetta was fired in August 2016. Sean Richardson took over as part-time project manager. Accordingly, to Sean Richardson, the job was a “disaster”, and the City of Hamilton was “yelling and screaming”.

[282] As I have indicated, Sean Richardson is a very experienced professional manager running numerous large construction projects in Ontario. I think it is reasonable to conclude that one of the first things – if not the first – that a highly competent construction professional would do would be to examine the Schedule of Values (SOV).

[283] Two of the largest four items, in the August 2016 SOV, were items not in the original contract, i.e., Change Orders at $182,666.10 and $86,666 for ‘Cash Allowances’ – see A3519. These huge sums would have jumped out at Mr. Richardson like a bright flashing light, especially given the circumstance surrounding his takeover.

[284] The September SOV figures are even worse from Ross Clair’s viewpoint. Mr. Richardson couldn’t recall if he looked at that Schedule of Values in October. I do not think it is a stretch to find that any competent manager would have examined that Schedule of Values to address whether to situation was improving. Mr. Richardson, although not a credible or reliable witness, appeared to be very knowledgeable regarding the construction industry, which would be expected from a man of his experience and responsibilities.

[285] The September 2016 SOV shows Change Orders unchanged, but Cash Allowances not provided for in the original written contract now increasing by over $15,000 to a large sum of $103,019.53 – see A3522. And what did Mr. Richardson do? Did he make inquiries about what was behind the Cash Allowances? Apparently no. Did he make inquiries about the Caird-Hall Change Orders with an asterisk? Apparently no. Did he make any inquiries about the miscellaneous labour charges labelled “All hours can be confirmed by via the daily site lot”? Apparently no. Did he examine the daily site logs? Apparently no. He did nothing. And so, the oral arrangement continued.

[286] The October SOV shows Cash Allowances now totaling $121,351.42 – a roughly $18,000 increase – and now the third highest item in the Schedule of Values – see B1-622. Mr. Richardson, again, appears to have done nothing, and so the oral contract continued.

[287] The November 2016 Schedule of Values is highly significant. It shows that almost all of the items 1-24 in the original contract are now 100% complete. The only item not completed is Item 25 – voice and data with $26,000 to complete – a negligible amount in the circumstances – see A216.

[288] The November 2016 total Cash Allowance item has increased by another $20,000 to $141,935.

[289] The job contracted by Caird-Hall was now basically complete (97%) by November-December 2016. It was at this time Mr. Richardson refused to pay the last four Caird-Hall invoices, totaling approximately $200,000 – see Tab 224, A3559. This nonpayment effectively eliminated the billings from the oral contract.

[290] Mr. Richardson is hardly a shy, bashful person seeking to avoid conflict. Early on when he took over, he sent that September 7, 2016, email criticizing a subcontractor for not showing up – see Tab 189, A2865. In his cross-examination, Mr. Richardson blamed Accounting for being incompetent for not catching the Cash Allowance situation. I find that Accounting was not incompetent – they were simply paying the billed Cash Allowances by Caird-Hall pursuant to the oral contract arrangement made by Mr. Chiappetta, which was never rescinded.

[291] An insight into the mindset of Mr. Richardson in the fall of 2016 is provided by the testimony from Mr. Chickowski from Reimar Construction. Mr. Chickowski was asked to do additional concrete work outside his contract by Martin Hannan. Martin Hannan, at 3:39 p.m. on November 4, 2016, told Mr. Chickowski that he needed Mr. Richardson’s approval and cc’d the email to Mr. Richardson. Two minutes later, at 3:41 p.m., Mr. Richardson responded, “Guys, what’s being poured here footings? Let’s go.”

[292] Mr. Richardson, in the quick response email, did not make any inquiry about contract formalities or even the cost of the work. As stated by Mr. Richardson numerous times in his testimony, Mr. Richardson just wanted to get the job done. That mindset did get the job done, leaving formalities and payment or nonpayment problems to be resolved for a future date. That mindset led to this litigation and other litigation involving Reimar and others.

[293] Putting it all together, the testimony of the witnesses and the documentation support Martin Hannan’s testimony that Ross Clair approved extra work done by Caird-Hall and Caird-Hall was told to bill it in the way it did, and that included Accounting, Nick Chiappetta and Sean Richardson.

CONCLUSION REGARDING ORAL CONTRACT AND QUANTUM MERUIT

[294] Mr. Chiappetta made an oral agreement with Caird-Hall to provide extra work and instructed them how to bill it through Caird-Hall Change Orders and Cash Allowances. This was going for about a year before Mr. Chiappetta was fired. Caird-Hall did the extra work and Ross Clair paid for it. Mr. Chiappetta left in August 2016, but this oral contract was not rescinded by Ross Clair.

[295] Mr. Richardson did nothing to change this pattern of conduct of billing and paying for extra work until Caird-Hall had basically completed their end of the job in November-December.

[296] I find that Mr. Richardson, at a minimum, acquiesced in the provision of extras, and there was an implied promise to pay for the extras exhibited by the pattern of conduct by the parties from July 2015 until December 2016 – see D & M Steel at paragraph 57-60, Balkan Construction at paragraph 13-14, Jessco Structural Limited at paragraphs 54, 58, Consulate Ventures Inc. at paragraph 99.

[297] I am satisfied that the plaintiff has made out its claim in quantum meruit.

DELAY

[298] Mr. Richardson testified that the project was delayed by the incompetence of Caird-Hall in mismanaging the project.

[299] Jim Hannan testified that there were several reasons for the delay, none of which were Caird-Hall’s fault. Jim Hannan indicated there was a big delay in getting power in the building; the original water pipes had to be replaced by steel pipes; the gas line had to be replaced; the parking lot had to be excavated; there was a carry on with City departments, and some of the Ross Clair trades were reluctant to provide work due to outstanding monetary issues with Ross Clair.

[300] A review of the vast documentary evidence supports Jim Hannan’s version of events.

[301] For example, Sean Richardson took over as part-time manager of the project in September 2016.

[302] On September 7, 2016, at 10:54 a.m., Sean Richardson emails ekerikes@eandecustomsteel and indicates they are not on site installing steel. Sean Richardson indicates, “It’s complete unacceptable and you are continually delay other trades now” - see Tab 189, A2865.

[303] On September 21, 2016, Martin Hannan sends an email to Sean Richardson that the elevator company is looking for payment before returning to site. Further, there was no response from E & E Steel regarding confirmation of rail installation – see A2868.

[304] On October 24, 2016, Martin Hannan emails Sean Richardson to advise that 5 trades are missing in action, including 4 that are looking for payment (this includes Shoreway Paving who ended up suing Ross Clair) – see Tab 190, A2870.

[305] On January 22, 2016, Nick Chiappetta outlines the reason for delay as 1) unforeseen gas line 2) correct survey benchmarks 3) weather. No blame is given to Caird-Hall for the delays – see A2998.

[306] On May 22, 2016, Nick Chiappetta outlines 7 reasons for the delay but none of them are attributable to Ross Clair – see A3001.

[307] On May 26, 2016, Michael Weeks, Director of Operations for Ross Clair, writes a lengthy, detailed 3-paged letter outlining the reasons for the delay. None of the details of the delay are blamed on Caird-Hall – see A3003 to A3005.

[308] As early as December 2, 2015, in the Minutes of Construction Meeting No. 11, the delay is blamed on “unforeseen conditions i.e., gas line, correct survey benchmarks, electrical to be brought up to ESA standards” – see A1825. No blame for the delay is credited to Caird-Hall. Sean Richardson is referred as one of the participants in that Construction Meeting – see A1824.

[309] These reasons for delay remain unchanged up to December 8, 2016 – Minutes of Construction Meeting No. 35 and Minutes of Construction Meeting No. 36 on January 12, 2017 – see A1946 and A1951, respectively. By the time of these last two Meeting Minutes, Caird-Hall has finished its work and left the site, and there is no reference to Caird-Hall being responsible for any delay.

[310] Most telling, however, is a two-paged letter sent to the City of Hamilton dated December 12, 2016, authorized and signed by Sean Richardson himself. In that letter, Mr. Richardson indicates that the installation of sanitary and waterlines at the end of the project has caused delay. Most of the delay is blamed on the City’s Change Directive and not on the contractor. The letter concludes that the contract documentation does not support the City laying blame on the contractor – see A3006-A3007. There is no mention at all of Caird-Hall in the letter.

[311] In short, in that December 12, 2016, letter, at a time when Caird-Hall has completed its work, Mr. Richardson laid the blame for the delay entirely on the City.

[312] Given the documentation outlined above, and the other concerns as previously outlined regarding Mr. Richardson’s credibility and reliability, I reject Mr. Richardson’s testimony that Caird-Hall was responsible for the delay. It appears that the Waterdown building was very old and, as could be expected, unforeseen problems caused by an aging building contributed to the significant delays in completing the project. Accordingly, I find that Caird-Hall is not responsible for any of the delay of the project.

DEFICIENT, INCOMPLETE WORK

[313] I have scoured the thousands of pages of documents seeking out any complaints made by Ross Clair regarding the quality of work done by Caird-Hall in 2015 to the end of 2016. I have not been able to uncover anything. I have already reviewed the Minutes of Construction Meeting No. 35 or December 8, 2016 – A1946, Minutes of Construction Meeting No. 36 for January 12, 2017 – A1951, and letters from Ross Clair, from Nick Chiappetta, Michael Weeks and Sean Richardson himself from January 2016 to December 12, 2016, regarding the reasons for delay, and there is no reference at all in these letters regarding any deficient and/or incomplete work by Caird-Hall.

[314] Mr. Richardson testified that he brought in Sean Haughey, Paul Stewart and Sean O’Donnell and their job was to deal with deficiencies and incomplete work. None of these people testified at the trial. In its claim for labour expenses “to complete work” in Scott Schedules #1 and #2, there is a reference in Scott Schedule #2 to refer to B1-311 to B315. A long list of Ross Clair employees is listed as having worked on the project from April 2016 to October 2017. There is no breakdown of exactly what deficient/incomplete work they were involved in. None of these employees were called as witnesses.

[315] Mr. Richardson testified at page 40-42 of his June 11 cross-examination that he was sure that Ross Clair took photos of incomplete and deficient work by Caird-Hall and could not say why they weren’t produced. Mr. Richardson agreed that it is common to take photos of incomplete work, but it is not mandatory.

[316] Mr. Richardson testified that Caird-Hall abandoned the job – see, for example, page 97 of the June 11 transcript. I find that claim by Mr. Richardson is not true.

[317] In the defendant’s own material at B1-136, Ross Clair includes an email dated December 5, 2016, that was sent to Sean Richardson from Martin Hannan indicating that as of December 12, 2016, Shane Babony will no longer be on site, and concludes, “We will schedule and handle all of our subtrades accordingly for any deficient work after this Friday.” Ross Clair does not appear to have taken up this offer.

[318] I note as well that the November SOV showed that the work was 97% complete. There was a small percentage of electrical work to be done. At page B1-732 is an invoice for Caird-Hall to Ross Clair dated February 28, 2017, regarding electrical work done by its subcontractor.

[319] At A3032-3039 is Deficiency Report 01 from Workshop Architecture dated February 22, 2017, listing deficiencies with pictures attached. The deficiencies appear to be relatively minor and the bulk of them appear to have been addressed by February 28. At A3017-3019 are emails from Sean Haughey to Caird-Hall on January 23, 2017 (with a picture) regarding a hanging defuser, and a further email from Sean Haughey dated March 29, 2017 regarding cleaning of over spray by work done the previous day by Caird-Hall’s concrete guy. Further, there is Minutes of Construction Meeting January 12, 2017, showing Martin Hannan and Shane Babony as participants.

[320] Cumulatively, all of the evidence establishes three important facts:

1. Caird-Hall did not abandon the project as claimed by Sean Richardson.

2. There is virtually no proof at all in the documentation or in the evidence at trial to support Sean Richardson’s claim of large scale deficient/incomplete work by Caird-Hall in 2015-2016. The evidence at trial in fact refutes that claim. I find there is no evidence to support the claim that Caird-Hall’s work was deficient or incomplete in any material way.

3. The only party who breached contractual terms was Ross Clair by refusing to pay the almost $200,000 it owed to Caird-Hall for work done by Caird-Hall.

[321] As pointed out in the cross-examination of Mr. Richardson, and the submissions of the plaintiff at paragraphs 28-33, regarding the supplementary conditions of the contract (see A49), no Notice of any kind of was given to Ross Clair regarding deficiencies/incomplete work until April 4, 2017. Pursuant to sections 8 and 10 of the supplementary conditions, Ross Clair had to provide Notice for Caird-Hall before it was able to back charge Caird-Hall for deficient/incomplete work.

[322] Ross Clair never provided any Notices as contemplated by the contract to Caird-Hall. Why? At page 120 of the June 11 transcript, Mr. Richardson is asked if he admits that he didn’t follow the terms of his own subcontract to give Caird-Hall notice first. Mr. Richardson responds, “Absolutely. Because Caird-Hall didn’t give a shit.” What more needs to be said?

CONCLUSION

ISSUE 1 – QUANTUM MERUIT CLAIM

[323] For the reasons outlined, I conclude that the plaintiff is entitled to compensation claimed pursuant to quantum meruit for an amount that will be calculated at the conclusion of this judgment.

ISSUE 2 - COUNTERCLAIM

[324] In the defendant’s submissions, at paragraphs 52-63, each item claimed relies on Sean Richardson’s evidence. Sean Richardson was the only witness called to support the Counterclaim. Given my finding that Sean Richardson’s testimony is neither credible or reliable, that finding alone should be sufficient to dismiss the Counterclaim. However, I add to that finding the following points:

1. Fluctuating Counterclaim

[325] On the page following Sean Richardson’s email to Caird-Hall regarding issues/questions is an itemized list of Counterclaim amounts apparently prepared by Mr. Richardson in his reconciliation, which totals $544,068.18 plus HST – see B1-145-146.

[326] At Tab 2 of the amended Trial Record, the Statement of Defence and Counterclaim seeks Counterclaim damages of $250,000 plus interest.

[327] In Scott Schedule #1 at B1-454 to B1-458, the total Counterclaim inclusive of HST has now ballooned to $419,731.57.

[328] In Scott Schedule #2, filed in final submissions, the total claim has now shrunk to $265,342.64 inclusive of HST. 12 of the original 23 items have been deleted with 3 items increasing in value. Mr. Movat, at page 82 of the June 11 cross-examination, explained that the Scott Schedule #1 was prepared because the defendant didn’t know how to exactly respond to Caird-Hall’s Cash Allowances.

[329] Regardless of that explanation, it is hard to see how a legitimate Counterclaim could have such wide variations in the amount claimed.

[330] 2. Item #16 - In the original Scott Schedule #1 – Item #16 regarding elevator overtime – there is a claim for $4,634.93 with a reference to see Tab 16 of the Ross Clair damages brief.

[331] Tab 16 at B1-405-406 contains one invoice dated November 21, 2016, totaling the claimed amount of $4,634.93. As pointed out in Mr. Richardson’s cross-examination, the overtime portion of that invoice totals $314.25. The original claim in cross-examination therefore was reduced to almost nothing.

[332] Scott Schedule #2, instead of now asking for $314.25, now asks for $5,970.75 plus $766.20. The defendant has added two new invoices – August 25, 2016, for $314.25 and October 13, 2016, for $5,342.05. The defendant’s submission relies on Sean Richardson’s evidence that it was Jim Hannan’s fault due to mismanagement. This ignores the evidence previously discussed that scheduling was difficult because Ross Clair’s trades were not showing up because they were not being paid. One of the new invoices is from August 2016, when Nick Chiappetta was the project manager. The evidence of Martin Hannan was that Nick approved Southwestern’s hours to keep them happy. There was no evidence that this oral agreement was ever rescinded.

[333] Martin Hannan also testified that Caird-Hall didn’t call Southwestern Elevator to the site. For reasons already outlined, I find that Sean Richardson’s evidence is not credible and reliable, and I reject this claim.

[334] 3. Item #6 - Labour to Complete Work - $122,457.60 plus $15,919.49. This claim relies on Sean Richardson’s claim that his employees had to do work to repair deficiencies and/or incomplete work done by Caird-Hall. As previously outlined, there is no breakdown of what these employees did exactly. None of them were called as witnesses. There were no photos or worksheets tendered. I could not find any documentation in thousands of pages of documents that contained complaints of deficient work/incomplete work in 2015 and/or 2016.

[335] The November 2016 SOV shows that 97% of the work was complete by that time. Further, if there were deficiencies/incomplete work, there was no Notice given to Caird-Hall to remedy them as required by the contact between Caird-Hall and Ross Clair – see A49 – Supplementary Conditions. In short, this labour claim relies virtually exclusively on a witness that is neither credible nor reliable. I reject this claim in its entirety.

[336] 4. Item #20 – Home Depot – This claim, again, is for recovery for alleged purchases required to assist in the remedy of deficient/incomplete work by Caird-Hall. A series of Home Depot invoices are found at B1-158-B1-249. Any time an invoice states it is for the Waterdown project, it is included. All the comments made by me regarding the Item 6 – labour claim – also apply to this item, and I reject this claim in its entirety as well.

[337] 5. Item #7 – CDS to finish ceiling drywall - $3,015.78. Martin Hannan testified that when they left the project, the drywall subtrade had completed 98% of its work. No Notice was ever provided to Caird-Hall to remedy this deficiency as required by the contract. Mr. Richardson confirms in his testimony, at page 120 of the June 11 transcript, that no Notices were ever given as required by the contract, as set out at A49 – Supplementary Conditions. This claim is dismissed as well.

[338] 6. Item #8 – Greenfield Painting – $2,523.33. Martin Hannan testified that this painting was for special coating on metal that was Ross Clair’s responsibility. In any event, no Notice of Deficiency was ever provided to Caird-Hall. This claim is dismissed.

[339] 7. CRS Rentals/United – $26,253.09. Martin Hannan’s evidence was that Nick Chiappetta authorized the boom rental. Martin Hannan testified that the scaffolding and decking was to complete work for Ross Clair work on an addition. The mini excavator was not required for Caird-Hall deficiency work. In any event, no Notices were ever given pursuant to the contractual requirement as set out at A49. I accept Martin Hannan’s evidence and reject Mr. Richardson’s evidence. Accordingly, this claim is also dismissed.

[340] 8. Items #12.1-12.7 – Reimar FCN 1-23. In addition to the points outlined in the plaintiff’s submissions at paragraph 171-183, the documentation referred to in Mr. Richardson’s cross-examination indicates Mr. Chiappetta authorized these expenditures. Further, no Notices were ever sent to Caird-Hall as required by their contract. These items are also dismissed.

[341] 9. Item 18 – Replaced Roof Hatch - $4,500. I accept Martin Hannan’s and Shane Babony’s evidence that Ross Clair’s carpenter cut the hole in the roof in the wrong place. This is a mistake that Caird-Hall was not responsible for. This claim is dismissed.

[342] 10. Item #21 – WeirFoulds – $2,455.15. I do not see any reason at all why Caird-Hall should be responsible for the mediation costs for mediation between the City and Ross Clair. This claim is dismissed.

[343] 11. Item #22 – Lien Bonds - $29,102. I agree with the defendant’s submission that in the final SOV, March 2017, Mechanical shows work to be 100% complete.

[344] However, the City of Hamilton issued a Change Directive which required HVAC for Life, a Caird-Hall subtrade, to return to the project. At A369, Caird-Hall is invoiced on June 12, 2017, in the amount of $9,701.05 for installation of ductwork and related materials. The plaintiff indicates at paragraph 38 of its reply submissions that Martin Hannan testified that HVAC for Life was completing such work around July 2017. I agree with the plaintiff’s submissions that this was extra work directed by the owner due to Change Directive 62 as listed on the invoice, and that Caird-Hall remained involved in the project until July 2017. There is evidence from Ross Clair that HVAC for Life was involved in the project on July 25, 2017 – see, for example, the plaintiff’s read-in from Sean Richardson discovery at page 131-132 of the discovery as previously summarized.

[345] The invoice amount of almost $10,000 is not trivial. There is no evidence that the work was done to bootstrap expired lien rights. I agree with the plaintiff’s submission that the lack of an invoice by Caird-Hall for its supervision of the Change Directive work by its subtrade is not indicative of deficiency work or bootstrapping, and the work remained a lienable service - see Provincial Partitions Ltd v. R.O.M. Contractors Inc C.O.B. Ross Clair Contractors 2015 ONSC 2839, 22-30, 33, 40, 41.

[346] Accordingly, I find Caird-Hall’s lien to be valid. Items #23 of the Counterclaim is also dismissed.

DEFICIENCIES CLAIM BY DEFENDANT

[347] The defendant, at paragraphs 73-74, asks for a credit for $18,314.95 for deficiencies recognized by Workshop Architecture on July 10, 2017. Paragraph 10 of the Supplementary Conditions of the contract at A49 requires Notices to be given to Caird-Hall, but as the evidence of Sean Richardson makes clear, no Deficiency Notices were ever given by Ross Clair to Caird-Hall. This claim is dismissed.

CONCLUSION

ISSUE 2 - COUNTERCLAIM

[348] The Counterclaim is dismissed in its entirety.

ISSUE 1 – THE AMOUNT OF THE QUANTUM MERUIT CLAIM

[349] At paragraph 86, 87 of its submissions, the plaintiff asks for $209,130.34 minus $17,138.68 to total $191,991.66 inclusive of HST. The calculation gives credit for the Forsyth invoices, wrongly calculated to be $12,173.68. The invoices, in fact, total $15,650.72 – see B1-413. The total credit to be given to the defendant is, therefore, increased to $20,615.72.

[350] Judgment in favour of the plaintiff is, therefore, assessed as $209,130.34 minus $20,615.72, equaling $188.514.62 inclusive of HST.

ORDER

[351] 1. The Caird-Hall lien is declared valid;

2. Caird-Hall is granted a lien and contractual judgment of $188,514.62 inclusive of HST plus prejudgment interest and costs on a partial indemnity basis; and

3. The Ross Clair Counterclaim is dismissed with costs to Caird-Hall on a partial indemnity basis.

Skarica J.

Released: May 16, 2022

COURT FILE NO.: CV-17-63086

DATE: 20220516

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

CAIRD-HALL CONSTRUCTION LTD

Plaintiff

• and –

ROM CONTRACTORS. Carrying on business as ROSS CLAIR CONTRACTORS INC. and THE CITY OF HAMILTON

Defendants

JUDGMENT

Released: May 16, 2022