COURT FILE NO.: CV-12-111980
DATE: 20220613 CORRECTED DATE: 20221128
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PRASHER STEEL LTD.
Plaintiff
– and –
PRE-ENG CONTRACTING LTD.
Defendant
Angela Assuras for the Plaintiff
Emilio Bisceglia and Daniel Campoli for the Defendant
HEARD: May 14-16, 22-24 and 27-31, 2019; August 9-13, 2021; and October 6-8, 2021. Additional written submissions filed October 8, 2021, November 1, 2021, November 22, 2021, December 13, 2021 and December 31, 2021.
Corrected Judgment: The text of the original Reasons for Judgment was corrected on November 28, 2022 and the description of the correction is appended.
reasons for JUDGMENT
C. boswell j.
I. INTRODUCTION
[1] Rick Hansen is a great Canadian. An athlete, activist and philanthropist, he has raised, or helped raise, many millions of dollars for spinal cord research. He is a member of the Order of Canada. It is unsurprising that a number of public schools are named after him. One is in Aurora and its construction is at the centre of this lawsuit.
[2] Construction on the Rick Hansen School on Mavrinac Boulevard began in 2011. It took about a year to complete. The finished building was unofficially turned over to the York Region District School Board (“YRDSB”) in August 2012. This lawsuit began in November 2012. It has taken about nine years to complete.[^1]
[3] The plaintiff is a steel fabricator and erector. The defendant is the general contractor hired by YRDSB to construct the school. The plaintiff entered into subcontracts with the defendant with respect to the fabrication and installation of the structural steel components of the school and with respect to the fabrication and installation of miscellaneous metal components throughout the project (collectively the “Subcontract Agreements”).
[4] The plaintiff asserts that it performed the work required of it, by and large, but remains largely unpaid. The plaintiff registered a construction lien against the school property on October 3, 2012 in the amount of $255,954.70. The defendant denies that any monies are owed to the plaintiff. It says the plaintiff did not complete significant portions of its contractual obligations, principally with respect to the miscellaneous metals work. It had to hire other contractors to complete unfinished work and correct deficiencies. It incurred significant costs in relation to that work, which it seeks to charge back against the plaintiff. The defendant counterclaims for $191,539.76.[^2]
THE LIVE ISSUES
[5] The pleadings and proceedings and the positions advanced by counsel raise a significant number of questions to be determined by the court. They include:
General Issues
A. Did the parties enter into one contract or two?
B. What are the terms of the contract(s)?
C. Did Prasher preserve its lien rights in a timely way?
D. Is Prasher’s claim statutorily barred by operation of the Limitations Act, 2002?
Issues Relating to the Structural Steel Contract
E. What is the value of the structural steel work performed by Prasher?
F. What is the value of any extra work performed by Prasher in connection with the structural steel contract?
G. How much has Prasher been paid for work performed under the structural steel contract, including extras?
H. Is Pre-Eng entitled to back-charge Prasher for any expenses it incurred in correcting or completing work that fell within the scope of the structural steel contract?
Issues Relating to the Miscellaneous Metals Contract
I. What is the value of the miscellaneous metals work performed by Prasher?
J. What is the value of any extra work performed by Prasher in relation to the miscellaneous metals contract?
K. How much has Prasher been paid for work performed under the miscellaneous metals contract, including extras?
L. Is Pre-Eng entitled to back-charge Prasher for any expenses it incurred in correcting or completing work that fell within the scope of the miscellaneous metals contract? And,
M. Is Prasher responsible to compensate Pre-Eng for any delay with respect to the completion of the project?
[6] I intend to canvass the evidence and make any necessary factual findings as I analyze each of the live issues in turn. Similarly, I will identify the parties’ positions with respect to each issue as the analysis proceeds. Having said that, a relatively brief overview of the facts and circumstances of the project and of the litigation in general will assist in putting the live issues into context.
II. FACTUAL OVERVIEW
The Protaganists
[7] Pre-Eng Contracting Ltd. (“Pre-Eng”) is a general construction contractor, focused on institutional buildings, including schools and libraries. Its principal, or one of its principals, is John Gregoris. Pre-Eng was retained by YRDSB to act as the general contractor with respect to construction of the Rick Hansen School. Its project manager was Steve Raviele and its site supervisor was Isaac Sela.
[8] Prasher Steel Ltd. (“Prasher”) is a steel fabricator and installer. The eponymous Manoj Prasher is its principal.
The Project
[9] The project involved construction of a three-level elementary school on Mavrinac Boulevard in Aurora. The owner was, and remains, YRDSB.
[10] The drawings and specifications for the project were prepared by CS&P Architects, who remained the consulting architects and payment certifier on the project (at least between the owner and the general contractor).
[11] The engineering firm, Read Jones Christoffersen Ltd. (“RJC”), was retained as consulting structural engineers.
[12] Construction on the school began in August 2011. It was ready for use by the time school commenced in September 2012, though the completed building was formally turned over the YRDSB on October 1, 2012.
The Structural Steel Contract
[13] At some point in the first half of 2011, Pre-Eng called for tenders from the trades necessary to construct the school.
[14] Prasher submitted a quote to Pre-Eng for the structural steel work on or about May 17, 2011. By way of edification, structural steel is any steel required for the support of the building, including columns, beams, joists and the like. Prasher’s quote covered the supply of shop drawings, fabrication of the necessary steel and erection. The amount of the quote was $220,000 plus HST.
[15] Prior to quoting on the work, Prasher was provided with copies of the tender drawings (which included structural and architectural drawings) and the specifications for the project so that they would understand the scope of the work they were quoting on.
[16] Pre-Eng accepted Prasher’s quotation. The date of acceptance is unclear in the evidence. Mr. Prasher testified that “one day” he received a call to tell him that Pre-Eng was awarding the contract to his company.
[17] Pre-Eng forwarded a draft subcontract agreement to Prasher with respect to the structural steel work on the project. Again, I am not clear on when the draft was forwarded to Prasher, but nothing really turns on that date.
[18] The draft agreement is dated August 2, 2011. It is not disputed that Mr. Prasher signed the agreement and returned it to Pre-Eng, though I am not clear about how or when it was returned. A copy of the agreement, signed by Mr. Prasher, is included in Volume One of the plaintiff’s Documents Brief, filed as Exhibit 1 at trial.
[19] Mr. Prasher testified that he never received a fully executed copy of the agreement back from Pre-Eng.
[20] Mr. Gregoris testified that he executed the agreement on behalf of Pre-Eng and returned it to Prasher. Pre-Eng included a copy of a fully-executed agreement in Volume One of its Documents Brief filed as Exhibit 34 at trial. Pre-Eng did not produce any evidence to corroborate Mr. Gregoris’ testimony that the fully-executed agreement was returned to Prasher.
[21] At any rate, Prasher’s first task, after being awarded the structural steel contract, was to prepare shop drawings of the steel to be fabricated. Krushnekent Shaw was employed by Prasher as a project co-ordinator in 2012. He worked on the Rick Hansen School project. He testified that Prasher’s draftsperson prepared the necessary shop sketches based on the architectural and structural drawings provided by Pre-Eng. They were submitted to the architect for approval.
[22] Once Prasher’s shop drawings were approved, they set about fabricating the necessary steel components.
[23] The project plans and specifications called for roughly 141,000 pounds of steel. Prasher estimated that roughly 542 hours of labour would be required to complete the installation.
[24] According to the daily reports of the site supervisor, Prasher commenced with erection of the steel on November 25, 2011. Prasher did not use its own in-house forces to erect the steel. Instead, they sub-contracted that work out to a third party, Bains Welding. At times, Prasher also used an installer called JJ Welding. Mr. Prasher testified that JJ Welding was used for extras added to the original scope of work.
[25] Fixing the date when the erection of the structural steel was completed is a matter of some controversy. According to Prasher’s invoicing, it was 100% complete by July 25, 2012.
[26] The consulting architect certified the structural steel work as 97% complete on April 24, 2012. Adrian Phillips was employed as an architect with CS&P in 2011-2012 and worked on the Rick Hansen School. He testified that by April 11, 2012 the steel and masonry work on the entire building was roughly 100% complete. The consulting architect certified it as 100% complete in its payment certificate dated August 14, 2012.
[27] Though it may have been fully completed sooner than Prasher’s July 25, 2012 invoice, I find that it was certainly 100% complete by no later than that date.
The Miscellaneous Metals Contract
[28] Pre-Eng also subcontracted the miscellaneous metal fabrication and installation work on the project to Prasher. Miscellaneous metal refers to anything made of steel other than the structural steel components of the building. On this project it included steel ladders, interior steel stairs and railings, bollards, door jams, brackets, coat hooks and chair dollies (rolling dollies used to hold stacking chairs under the stage in the gymnasium).
[29] Prasher submitted a quote on the miscellaneous metals work on August 4, 2011. The amount of the quote was $133,000.
[30] At some point Prasher was advised that their quote was accepted and Pre-Eng sent them another subcontract agreement to execute. The agreement, dated September 6, 2011, was signed by Prasher and returned to Pre-Eng.
[31] As was the case with the structural steel contract, Mr. Prasher testified that Pre-Eng never returned to him a fully-executed agreement. Prasher’s Documents Brief contains the miscellaneous metals contract signed only by Prasher. Pre-Eng, however, has produced in its Documents Brief, a fully-executed agreement. When it was executed by Pre-Eng and whether Prasher was ever provided with a copy of the fully-executed agreement are matters that remain unclear.
[32] The evidentiary record is also not clear about when work on the miscellaneous metals contract began. Volume Ten of Prasher’s Documents Brief (Exhibit 10) includes a series of payment certificates issued by the consulting architects. These certificates permit one to track the progress of the project, but they are not complete for reasons unclear to me. They include Payment Certificates 1, 2, 3, 5, 6, 7, 9, 10, 11, 12, 13, 14 (original and revised at substantial performance) and 15 (the release of holdback certificate), 16, 17 and 18 (final certificate).
[33] Payment Certificate 7 was issued March 6, 2012. It reflects work completed to the end of February 2012. The structural steel was certified at 64.5% complete. Work had yet to commence on the miscellaneous metals components of the project.
[34] Payment Certificate 8 has not been produced. It presumedly would have reflected work completed through to the end of March 2012.
[35] Payment Certificate 9 was issued May 10, 2012 and reflects work completed to the end of April 2012. At that point the structural steel work was certified at 97.1% completed. The miscellaneous metals work was certified at 26.3%.
[36] All this is to say that the miscellaneous metals work appears to have commenced at some point between March 1 and April 30, 2012.
[37] Payment Certificate 10 is dated June 11, 2012 and reflects work completed on the project to the end of May 2012. The miscellaneous metals work was still certified at 26.3%, suggesting that no progress had been made on that work between at least the end of April 2012 and the end of May 2012.
[38] Other Payment Certificates reflect the progress on the miscellaneous metals work as follows:
• 67.2% at June 30, 2012
• 78.1% at July 30, 2012
• 96.3% at August 31, 2012
• 99% at September 30, 2012
• 100% by December 31, 2012
[39] I will take a deeper dive into the progression of the miscellaneous metals work later in these reasons. I note, for now, that Pre-Eng had sufficient concerns with Prasher’s execution of that contract, to direct large parts of the work to third parties to complete.
The Removal of Work From Prasher’s Scope
[40] On May 24, 2012, Pre-Eng’s project manager, Steve Raviele, faxed a letter to Prasher advising that they had yet to have even one set of stairs installed on the project and were continuing to incur the costs of renting a scaffold set of stairs. Mr. Raviele advised that he would be engaging others to complete Prasher’s work. He was not clear, however, on what specific work he was going to engage others to do.
[41] Trying to piece together what was officially removed from Prasher’s scope of work in the miscellaneous metals contract is not easy.
[42] Mr. Prasher testified that “to finish the work faster” some of his scope of work was removed. He indicated that the items removed were a handrail, an exterior galvanized gate and a set of stairs referred to as exterior stair #7. He later added that a roof access ladder, gas meter door frame and steel gates at the loading area were also removed from his scope of work.
[43] Mr. Raviele testified that a significantly broader scope of work was removed from Prasher and completed by others. The evidentiary record more than bears out Mr. Raviele’s evidence on this point.
[44] Much of the scope of work under the miscellaneous metals subcontract was completed by two third parties: North York Welding and Industrial Welding. These are companies owned by brothers, Sergio Mariani and Bruno Mariani, respectively. Attempts were made by counsel to compare the invoicing of North York Welding and Industrial Welding to the scope of the work included in Prasher’s miscellaneous metals subcontract. The exercise was made somewhat difficult due to three factors:
(a) There is no single document by which Pre-Eng notified Prahser that a specific segment of its scope of work was being tasked to a third party. Instead, the project proceeded organically, with work within Prasher’s scope being directed to other parties as the need to do so arose;
(b) Prasher, North York and Industrial did not always use the same terms to describe the same work. In the result, it was sometimes difficult to tell if work done by North York Welding or Industrial Welding was within or extra to Prasher’s scope of work; and,
(c) The miscellaneous metals subcontract incudes a list of components to be fabricated and installed by Prasher. Included in that list is a catch-all category of “other metal fabrications required”. That provision is obviously vague and it was never made clear what particular metal fabrications on this project fell within that category. Frankly, I do not believe anyone knows for sure.
[45] In any event, perhaps the most significant dispute between the parties relates to charge-backs imposed by Pre-Eng on Prasher for the completion of the miscellaneous metals work on the project. The dispute includes whether the work done was properly part of Prasher’s work or whether it was extra to the contract, whether Pre-Eng had the right to remove the work from Prasher, and whether the charge-backs are reasonable.
Extras
[46] Experience has shown that most construction projects – big or small – involve modifications as they proceed. This project was no exception. It is not disputed that there were authorized extras involved in this project. What is disputed is the value of extra work completed by Prasher and whether all of the extras Prasher claims remuneration for were actually authorized.
[47] Prasher asserts that it worked on twelve extras, with a total value of $86,723.59. Over the course of his testimony, Mr. Gregoris accepted, on behalf of Pre-Eng, the validity of $29,043.94 worth of Prasher’s claims for extras on the structural steel contract, leaving $57,679.65 in dispute.
[48] I will examine each of the claims for extras under the structural steel and miscellaneous metals subcontracts as I analyze the live issues between the parties below.
Deficiencies
[49] At the direction of YRDSB, Pre-Eng retained Butler Inspection Group Inc. (“Butler”), to conduct random inspections of the structural steel installation, to note any deficiencies and to prepare reports on the progress and quality of the structural steel work.
[50] Butler produced periodic site reports that identified deficiencies in Prasher’s work. The deficiencies were itemized as “variations”, which is a term that reflects findings by Butler that certain aspects of Prasher’s work – or the work of its erectors – varied from the project drawings and specifications or CSA standards.
[51] Where variations were noted, it was incumbent upon Prasher to perform corrective work. Prasher’s response to identified deficiencies, or the lack thereof, is a source of disagreement between the parties.
Charge-Backs
[52] As I noted, the single biggest area of contention between the parties relates to the amounts Pre-Eng has back-charged Prasher for the cost of correcting deficiencies and, more significantly, the cost of using third party contractors to complete work within Prasher’s scope under the miscellaneous metals contract.
[53] Pre-Eng purports to impose some $170,078.10 in charge-backs against Prasher across both contracts. Prasher is prepared to accept $11,638.12 in charge-backs, inclusive of HST.
[54] I will address the charge-backs in earnest below.
The Lien
[55] Prasher’s Claim for Lien was registered on October 3, 2012.
[56] According to the registered document – and Mr. Prasher’s testimony here – Prasher’s last day of work on site was August 21, 2012 when it delivered five chair dollies and 60 metal brackets, which reflects work under the miscellaneous metals subcontract.
[57] The Claim for Lien included the following statements, among others:
Short description of services or materials that have been supplied: Supply and install structural steel and related materials.
Contract price or subcontract price: $500,832.48.
Amount claimed as owing in respect of services or materials that have been supplied: $255,954.70.
[58] The amount of the lien clearly reflects the sum Prasher claims as owing pursuant to both the structural steel contract and the miscellaneous metals contract.
[59] The registration of Prasher’s Claim for Lien was discharged on October 26, 2012 by order of Master Albert, upon Pre-Eng posting a bond in the amount of $319,943.38 with the Accountant of the Superior Court.
The Pleadings
[60] The Statement of Claim was issued November 14, 2012. Prasher seeks payment of the sum of $255,954.70 and to enforce its lien rights against the bond posted by Pre-Eng to discharge Prasher’s lien.
[61] Prasher’s claim has been adjusted slightly. Its position, as reflected in a revised Scott Schedule filed by Prasher’s counsel during closing submissions, is that the total owing to Prasher on account of the two contracts, plus extras, is $469,541.65, inclusive of HST, less the amount paid of $208,559.46, inclusive of HST, and less $11,638.12 in accepted back-charges, for a net amount owing of $249,344.07.
[62] Pre-Eng delivered a Statement of Defence and Counterclaim on or about December 4, 2012. Pre-Eng denied owing the amount claimed, or any amount, to Prasher. Amongst other things, Pre-Eng asserted that:
(a) Of the extras alleged by Prasher only one, in the amount of $7,326.70, was approved by the consulting architect. Any others were not payable, pursuant to the terms of the subcontracts, because they were not approved in advance;
(b) Expenses incurred by Pre-Eng to correct or finish work within Prasher’s scope were properly charged back to Prasher in the amount of $161,600.16;
(c) Prasher substantially delayed the project, resulting in losses to Pre-Eng; and,
(d) Prasher failed to preserve and perfect its lien in a timely manner.
[63] Pre-Eng sought a total of $300,000 in damages by way of counterclaim.
[64] With the foregoing brief overview in place, I will proceed with an analysis of the issues raised through the pleadings, the evidence and the positions of the parties.
III. DISCUSSION
A. Was there one contract or two?
[65] I begin the analysis with the question of whether the parties entered one global contract for steel work, both structural steel and miscellaneous metals, or whether they had two separate and distinct contracts.
[66] The determination of this issue is significant because, as Pre-Eng argues, each contract must be liened separately. As I will outline momentarily, Pre-Eng takes the position that Prasher attempted to preserve its Claim for Lien with respect to the structural steel contract, but did so out of time. And in Pre-Eng’s position, Prasher failed to preserve its Claim for Lien with respect to the miscellaneous metals contract at all.
[67] This issue is easily resolved.
[68] The structural steel contract and the miscellaneous metals contract were separately tendered. They were separately quoted on by Prasher. They were awarded separately and reflected in two separate written agreements executed on different dates. They were invoiced and paid as two separate contracts. The evidence amply supports the conclusion that there were two separate contracts. Even more compelling, however, is that Mr. Prasher admitted that there were two separate contracts.
[69] Prior to trial, Pre-Eng served Prasher with a Request to Admit. One of the things Pre-Eng asked Prasher to admit was that there were two separate contracts at all material times. Prasher admitted that there were.
[70] Under cross-examination at trial, Mr. Prasher agreed that there were two separate contracts. He agreed that Prasher did two separate billings throughout the project. And they made two separate requests for holdback funds.
[71] I find that there were two separate contracts.
B. What are the terms of the contract(s)?
[72] The dispute about the terms defining the parties’ relationship on this project boils down to this: Pre-Eng submits that the written Subcontract Agreements dated August 2, 2011 and September 6, 2011 govern; Prasher says that its quotations, as accepted by Pre-Eng, govern.
[73] I agree with the position of Pre-Eng.
[74] Mr. Prasher testified that he signed both Subcontract Agreements and returned them to Pre-Eng. He said he did not receive fully signed copies back. I accept that perhaps he did not. But there are at least three reasons why I find that the Subcontract Agreements establish the contractual terms between the parties.
[75] First, I find that the Subcontract Agreements were fully executed. Pre-Eng has included fully executed copies in their Documents Brief. I am unable to say if or when the fully executed contracts were returned to Prasher. But Prasher’s counsel did not explore in evidence or argument whether the return of fully signed agreements to Prasher was a necessary pre-requisite to contract formation.
[76] Second, I find that the parties governed themselves throughout the project in accordance with the terms and conditions of the Subcontract Agreements. In other words, their conduct evinced a shared intention to be bound by the terms of the Subcontract Agreements.
[77] Third, I find that Mr. Prasher accepted, during his testimony at trial, that the Subcontract Agreements were binding agreements between the parties and governed their relationship with respect to the project.
[78] During cross-examination, Mr. Prasher testified that he entered into a contract with Pre-Eng for structural steel dated August 2, 2011. He agreed in that contract to complete all of the structural steel work set out in sections 5100 and 5200 of the tender documents. He confirmed that the contract sets out the duties of the parties. He further testified that the miscellaneous metals contract was dated September 6, 2011 and included the same terms and conditions as the structural steel contract.
[79] The Subcontract Agreements mirrored one another save for the scope of the work covered by the contracts. Some of the more significant terms, having regard to the live issues in the case, are the following:
Article II(1): The work is to be performed in a good and workmanlike manner.
Article III: The Subcontractor will perform his portion of the work in accordance with the schedule or schedules to be provided by the Contractor.
Article V(1): The Subcontractor shall make applications for payment, together with supporting Statutory Declarations and/or other documents when required, on or before the twenty-fifth day of each month (herein called the submission date) to the Contractor for approval and due processing as provided by the Contract Documents. The amount approved for payment, less the holdback as per the Contract Documents shall become due and payable not more than forty (40) days after the later of the submission date or the issuance of the Consultant’s Certificate.
Article V(4): Any amounts due to the Subcontractor shall be paid ten (10) days after the Contractor has received payment of the Consultant’s Certificate from the Owner, provided that, as a condition precedent, the Contractor has been paid the Consultant’s Certificate, in which such amount has been included by the owner, and that the Subcontractor has fulfilled all his obligations under this Subcontract Agreement.
Article VI(2): If the Subcontractor should neglect to prosecute the work properly or fail to perform any provisions of the Subcontract Agreement the Contractor may notify the Subcontractor in writing that he is in default of his contractual obligations and instruct him to correct the default within two (2) working days of receiving the notice except that in case of an emergency the Subcontractor must act immediately in order to ensure the safety of life or property.
Article VI(4): If the Subcontractor fails to comply with the provisions of the above paragraphs the Contract may, without prejudice to any other right or remedy he may have:
(a) Correct such default and deduct the cost thereof from the payment then or thereafter due the Subcontractor; or,
(b) Terminate the Subcontractor’s right to continue with the work in whole or in part or terminate the Subcontract.
Article VI(5): If the contractor terminates the Subcontractor’s right to continue with the work in whole or in part or terminates the Subcontract under the conditions set out in this Article he is entitled to:
…(b) Withold any further payments to the Subcontractor until the work is finished.
Appendix “A” (9) The Subcontractor shall employ labour forces adequate to avoid labour disputes or disruption of the progress of the Work and prevent additional expenses to the Contractor.
Appendix “A” (10) Unless otherwise provided by the Contract Documents, the Subcontractor shall not perform any changed or additional work without prior written authorization from the Contractor’s Head Office. Under no circumstances will payment be made for such work without such authorization.
C. Did Prasher preserve its lien rights in a timely way?
[80] The Construction Lien Act, R.S.O. 1990 c.C.30 (the “CLA”) governed the plaintiff’s lien rights at the time of the project in issue. It has since been replaced by the Construction Act, R.S.O. 1990, c. C.30.
[81] Section 14 of the CLA provided that a supplier of services or materials to an owner, contractor or sub-contractor, has a lien on the interest of the owner in the premises improved, for the amount of the services or materials. But liens arising under that section did not survive in perpetuity.
[82] Section 31(1) of the CLA provided that a lien arising from the supply of services or materials to an improvement expired unless preserved. To preserve its lien rights, a party supplying services or materials to an improvement had to register its Claim for Lien within forty-five days of the date of last supply.
[83] I have concluded that there were two separate contracts. Pre-Eng takes the position that a finding of two separate contracts inexorably leads to the further conclusion that Prasher failed to preserve its lien rights in a timely way in relation to either contract.
[84] Pre-Eng’s argument is constructed as follows:
(a) The provisions of the CLA that grant lien rights to suppliers are to be strictly construed;
(b) A strict construction of s. 31(1) of the CLA dictates that each contract be considered separately in terms of the lien rights it gives rise to;
(c) Prasher clearly failed to properly preserve its Claim for Lien for any amounts alleged to be owing under the structural steel contract, given that the date of last supply with respect to that contract was no later than July 25, 2012. As I noted above, Prasher’s Claim for Lien was registered on October 3, 2012, well beyond the 45-day ceiling; and,
(d) Prasher failed to preserve any Claim for Lien with respect to the miscellaneous metals sub-contract. Its registered Claim for Lien described the services or materials supplied as “structural steel and related materials”. There was no mention of miscellaneous metals.
[85] The position of Pre-Eng gives rise to a series of sub-issues to be determined, including:
Is each contract to be considered separately in terms of Prasher’s lien rights?
If the answer to question one is yes, is the Claim for Lien with respect to the structural steel contract out of time?
Does Prasher’s registered Claim for Lien include amounts purportedly outstanding on the miscellaneous metals contract?
Was the lien for amounts owing under the miscellaneous metals sub-contract registered in a timely way?
[86] I will address each sub-issue in turn.
- Each contract gives rise to its own distinct lien right
[87] Lien rights arise under the CLA from the moment that a supplier first supplies services or materials to an improvement. (CLA s. 15). As I noted earlier, lien rights expire if not preserved in accordance with s. 31 of the CLA. For our purposes here, it is agreed that Prasher’s lien rights expired 45 days after the date of last supply (CLA s. 31(3)).
[88] Pre-Eng submits that the provisions of the CLA that grant lien rights to suppliers are to be strictly construed. I agree.
[89] Courts are generally compelled to construe statutory provisions liberally and in such a way as to promote the objects of a statute. See, for instance, s. 64(1) of the Legislation Act, S.O. 2006, c. 21.
[90] The CLA, however, is a statute that is, in a number of respects at least, subject to strict interpretation. The justification for a policy of strict construction is grounded in the fact that the CLA grants lien claimants rights against property owners that they would not otherwise enjoy at common law. The CLA also grants them a limited priority over other creditors. The Court of Appeal for Ontario identified this justification in Rudco Insulation Ltd. v. Toronto Sanitary Inc. (1998), 1998 CanLII 5529 (ON CA), 42 O.R. (3d) 292, at page 298, where Justice O’Connor said:
The first principle that I draw from the cases is the following: because the legislation creates a preference and a security for certain creditors that did not otherwise exist at common law, it ought to be given a strict interpretation in determining whether a particular creditor is a person to whom the benefit is given.
[91] The British Columbia Court of Appeal made similar remarks in Bank of Montreal v. No. 249 Seabright Holdings Ltd., 2012 BCCA 4, at para. 62, with respect to the strict interpretation of the Builders Lien Act, S.B.C. 1997, c. 45:
The jurisprudence is clear that because the Act creates new rights, the threshold question of entitlement is strictly construed; it is only once entitlement is established that the Act is to be construed liberally and with consideration to its remedial purpose…This principle is consistent with concern for certainty and fairness to all stakeholders in the construction industry. (Internal Citations removed).
See also Gillies Lumber Inc. v. Kubassek Holdings Ltd. 1999 CanLII 3757 (ON CA), [1999] O.J. No. 2692 and Clarkson Co. v. Ace Lumber Ltd., 1963 CanLII 4 (SCC), [1963] S.C.R. 110.
[92] Pre-Eng further submits that a strict construction of s. 31(1) leads to the conclusion that each sub-contract is to be considered separately in terms of the creation of lien rights. In other words, Prasher was required to register its Claim for Lien on the structural steel contract within 45 days of its last supply under that contract. And it was required to register its Claim for Lien on the miscellaneous metals contract within 45 days of its last supply under that contract.
[93] In support of its position, Pre-Eng cites the Supreme Court’s decision in Rocky Mountain School Division No. 15 v. Atlas Lumber Co., 1954 CanLII 61 (SCC), [1954] S.C.R. 589. There, Locke J. held, relying on the 1917 decision of the Saskatchewan Court of Appeal in Witlock v. Loney, 1917 CanLII 234 (SC EnBanc), [1917] 3 W.W.R. 971, that:
Where labour or materials are furnished under separate contracts, even though such contracts are between the same persons and relate to the same building or improvement, the contracts cannot be tacked together so as to enlarge the time for filing a lien for what was done or furnished under either, but a lien must be filed for what was done or furnished under each contract within the statutory period after its compliance.
[94] Prasher demurs. It contends that it is not always improper to join two lien claims over a common project involving the same parties. To support this contention, it relies on Chute v. Bicon, [1997] O.J. No. 2306 (Gen. Div.).
[95] The Chute decision was principally about slander of title. It involved a two-phase development of a ten-unit townhouse complex in Brantford, Ontario. The first phase consisted of four units, with the remaining six being constructed in phase two. The plaintiff was an excavation contractor who performed work on both phases. It was paid in full for its work on phase one. It claimed that it was unpaid for its work on phase two. It registered a general lien over all six units in phase two as well as one unit in phase one.
[96] The defendant claimed that phase one and two were separate contracts. The plaintiff, it said, had no valid Claim for Lien on the phase one unit. The defendant claimed the plaintiff had slandered title to the phase one property, resulting in damage to it.
[97] The court reviewed s. 35(b) of the CLA, which provided that a person may be liable to an owner for damages where he or she preserves a lien where he or she knows or ought to know that he or she does not have a valid lien. The trial judge held that, in the prevailing circumstances, it was not unreasonable for the plaintiff to have believed that it had an agreement for an ongoing, two-phase, ten-unit project. In the result, the claim based on slander of title was not made out.
[98] In my view, Chute does not assist Prasher here. Prasher did not believe it had one contract to do all of the steel work – both structural and miscellaneous – on the project. Prasher admits that there were two separate contracts. I have found that there clearly were two separate contracts.
[99] In my view, s. 31(1), strictly construed, provides for the expiration of lien rights on a contract-by-contract basis. Such an interpretation is consistent with the Supreme Court’s ruling in Rocky Mountain. A lien claimant cannot enlarge the time limit for filing a claim for lien by artificially merging separate contracts performed on the same improvement.
- Prasher’s claim for lien under the structural steel contract was out of time
[100] As I have noted, Prasher’s last day of supply under the structural steel contract was, at the latest, July 25, 2012. It had 45 days from July 25, 2012 to register its claim for lien. In other words, its lien rights under the structural steel contract expired September 8, 2012.
[101] Prasher’s lien was not registered until October 3, 2012. To the extent that it references the supply of labour and materials under the structural steel contract, it was out of time.
- Prasher’s Claim for Lien included amounts purportedly owing under the miscellaneous metals contract
[102] As I noted, Prasher’s Claim for Lien, as registered, described the services or materials supplied as, “Supply and install structural steel and related materials.” The contract amount was said to be $500,832.48.
[103] The lien does not expressly mention the miscellaneous metals contract or services or materials supplied with respect to it.
[104] Prasher urges the court to conclude that the phrase “related materials” includes miscellaneous metals. Pre-Eng’s position is that the lien exclusively referred to the structural steel contract. The reference to “related materials” must be read as being related to the supply and installation of structural steel.
[105] There is no doubt that the lien is poorly worded. The phrase “related materials” is, at best, equivocal. Having said that, there are two reasons why I am satisfied that the lien includes the supply of services and materials under the miscellaneous metals contract.
[106] First, the lien has to be read holistically. It is clear, given the amount of the lien claim, that Prasher has liened for payments allegedly owing under both the structural steel and miscellaneous metals contracts. Similarly, the time period in which services were supplied encompasses both the structural steel and miscellaneous metals works.
[107] In my view, Pre-Eng could not have been under any misapprehension that the lien, as registered, related only to the structural steel contract.
[108] Second, the CLA contained a curative provision. In particular, s. 6(1) provided:
6(1) No certificate, declaration or claim for lien is invalidated by reason only of a failure to comply strictly with subsection 32(2), 33(1) or 34(5) unless, in the opinion of the court, a person has been prejudiced as a result, and then only to the extent of the prejudice suffered.
[109] The requirement of a brief description of the services or materials supplied is found in s. 34(5). As such, it attracts the benefit of the curative proviso.
[110] In my view, the poorly worded description of the services and materials supplied by Prasher is a relatively minor error. It did not prejudice Pre-Eng in any way. To the extent necessary, the curative provision applies.
- Prasher’s Claim for Lien relating to the miscellaneous metals contract was registered in a timely way
[111] The date of Prasher’s last supply under the miscellaneous metals contract is a matter of some dispute.
[112] Prasher says that its last supply was August 21, 2012 when it delivered five chair dollies and 60 brackets to the site. The value of the chair dollies was $2,500.00. The value of the brackets was $3,000. Pre-Eng does not take issue with the delivery of these items but submits that they do not constitute the last day of supply. They were, Pre-Eng contends, a trivial delivery designed to artificially extend the deadline to register a lien.
[113] Pre-Eng relies on Wildberry Homes Inc. v. Prosperity One Credit Union Limited, 2008 CanLII 70790 (S.C.J.) as authority for the submission that the performance of a trivial amount of work is not sufficient to revive a lien which has otherwise expired. Wildberry was a ruling on a motion to vacate a lien on the basis that it was registered out of time. The plaintiff had done work on a property in Milton, though the nature and extent of that work is not clear from the decision. The plaintiff was to be paid $1,500.00 per week for whatever the work was. The motions judge found that the plaintiff had ceased to work on the project no later than April 30, 2008, except for an attendance on site on July 6, 2008 to install an $84.00 grab bar in a bathroom.
[114] The motions judge found that the attendance on July 6, 2008 was trivial and a transparent effort to extend the time in which to register a lien. In the circumstances of that case, I completely agree with the motion judge’s conclusion.
[115] The general purpose of the lien provisions of the CLA and its successor, the Construction Act, is straightforward. The intent is to see that suppliers of services and materials to construction projects get paid. The creation of a lien right prevents an owner from obtaining the benefit of improvements to his or her lands without paying for it. See, for instance, the dissenting reasons of Laskin J.A. in Gillies Lumber Inc. v. Kubassek Holdings Ltd., as above.
[116] The CLA includes a scheme by which owners (and other payors on contracts and subcontracts) are required to hold back 10% of the value of the services and materials as they are supplied until all liens that may be claimed against the holdback have expired or been satisfied, discharged or otherwise provided for under the statute. The statutory lien gives contractors and subcontractors a potent right they would not otherwise have at common law. The time periods in which to exercise that right are important. Owners, or other payors, need to know when it is reasonable to release holdback funds and when they may safely proceed to order their affairs on the expectation that any potential lien claims have expired. Business efficacy – the proper functioning of commerce – requires that certainty.
[117] Permitting parties to artificially extend the time limit in which to preserve a lien by the supply of trivial work or materials would undermine the certainty of the time limits in the CLA and the proper functioning of the Act.
[118] Whether any particular supply is “trivial” will be a context-driven assessment.
[119] In this case, I am not satisfied that the supply of the chair dollies and brackets was “trivial” or that it was an artificial attempt to extend Prasher’s lien rights. The value of the two items was about $5,500.00. That amount may not reflect a substantial percentage of the overall value of the work, but it could not, in my view, be characterized as “trivial”. Moreover, Prasher’s work on the miscellaneous metals contract appears to have proceeded in fits and spurts over a number of months. Indeed, Prasher’s apparent lack of focus and commitment to the work was an ongoing complaint of Pre-Eng. This is not a situation like Wildberry, where the contractor showed up two-and-a-half months after its last supply and installed a handrail in an obvious attempt to extend its lien rights. Prasher had been puttering away at the miscellaneous metals work for months.
[120] I find that the lien, insofar as it relates to miscellaneous metals work, was registered in a timely fashion.
D. Is Prasher’s claim statutorily barred by operation of the Limitations Act, 2002?
[121] During closing submissions, Pre-Eng advanced the following limitations argument:
(a) Prasher failed to preserve its Claim for Lien under the structural steel contract. Specifically, it failed to register a Claim for Lien within 45 days of its last supply of materials or services under that contract;
(b) Prasher failed to register a Claim for Lien at all with respect to any amounts claimed as owing in relation to the miscellaneous metals contract;
(c) Prasher is not entitled to a personal judgment under s. 63 of the CLA because of its failure to preserve and perfect its lien rights with respect to either of the Subcontract Agreements; and,
(d) Prasher is now barred from advancing a claim for a personal judgment on the miscellaneous metals contract by the provisions of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.
[122] In the preceding section, I found that Prasher did properly preserve and perfect the Claim for Lien with respect to the miscellaneous metals contract. For that reason alone, the limitations argument fails, insofar as it relates to the miscellaneous metals contract.
[123] Given that I have found that Prasher’s Claim for Lien with respect to the structural steel contract was not properly preserved, it remains to be determined whether Prasher’s claim for any amounts purportedly owing under that contract may continue as an ordinary contract claim for which a personal judgment may be rendered. If not, then Prasher will be out of time to commence a separate proceeding for that relief.
[124] Section 63 of the CLA, now s. 63 of the Construction Act, provides as follows:
Subject to paragraph 3 of subsection 36 (4) (sheltering), the court may award any lien claimant a personal judgment, whether the claimant proves the lien or not, upon any ground relating to the claim that is disclosed by the evidence against any party to the action for any amount that may be due to the claimant and that the claimant might have recovered in a proceeding against that party.
[125] Pre-Eng submits that the court’s jurisdiction to grant a personal judgment is limited to lien claimants. A “lien claimant” is defined in s. 1 of the CLA as “a person having a preserved or perfected lien”. I have found that Prasher does not have a properly preserved or perfected lien with respect to the structural steel contract. Pre-Eng submits that it naturally follows that s. 63 does not apply to any claim Prasher is advancing under that contract.
[126] In support of its position, Pre-Eng cited Master Sischy’s decision in Tilar Roofing Ltd. v. John Boddy Developments Ltd., [1986] O.J. No. 2678. In Tilar, the plaintiff registered a claim for lien, which was subsequently bonded off by the defendant. The plaintiff commenced an action to enforce the lien, some 142 days after its last supply, which was significantly out of time to perfect the plaintiff’s lien rights.
[127] The Master concluded that the court did not have the jurisdiction, under s. 65 of the CLA (now s. 63), to grant personal judgment because the lien had not been properly perfected. He distinguished between cases where a preserved and perfected lien was not proven at trial and cases where a lien has been declared invalid prior to trial. In the latter case, the court, he said, did not have the discretion to award a personal judgment.
[128] In at least two cases, subsequent courts have declined to follow the reasoning in Tilar, preferring a more generous interpretation of s. 63.
[129] In 612354 Ontario Ltd. v. Tonecraft Corp., 1991 CanLII 7208 (ON SC), [1991] O.J. No. 1958 (Ont. Ct. Gen. Div.), the plaintiff failed to set its lien action down for trial within two years of the commencement of the action, as required by s. 37(1) of the CLA. The defendant moved to dismiss the action. The plaintiff moved to amend its claim to add a claim for a personal judgment.
[130] Kozak J. disagreed with Master Sischy’s view, expressed in Tilar, that the court has no discretion to grant a personal judgment where a lien claim has expired in advance of trial. He held that to dismiss an action just because the lien expired prior to trial would force the plaintiff to commence a fresh proceeding for similar relief. This would result in unfairness and a multiplicity of proceedings. It would not adhere to the overarching purpose of the Rules of Civil Procedure which is to promote the just, most expeditious and least expensive determination of every civil proceeding on its merits. In the result, he dismissed the plaintiff’s claim to enforce its lien but permitted the action to otherwise continue as a personal action for breach of contract.
[131] In Emco Supply a division of Emco Ltd. v. Anduhyaun Inc., [1998] O.J. No. 121 (Ont. Ct. Gen. Div.), Master Sandler similarly took a more generous approach to the interpretation of s. 63. He offered the opinion that the term “lien claimant” only requires the plaintiff to have what purports to be a preserved lien. To require otherwise would be inconsistent with the phrase “whether the claimant proves the claim or not” as found towards the end of s. 63. Master Sandler concluded that a party with an improperly preserved lien may still proceed under s. 63 to try to obtain a personal judgment on its contract claim. This conclusion, in Master Sandler’s expressed view, enables the court to do what s. 58(4) of the CLA directs it to do, namely, “try and completely dispose of the action and all matters and questions arising in connection with the action.”
[132] The common theme in Tonecraft and Emco is that a multiplicity of proceedings is to be avoided. Where the pleadings allow for the just and efficient determination of all issues between the parties – including personal claims for breach of contract – those issues and claims should be permitted to proceed, even if the index lien is found to be invalid for one reason or another. In other words, s. 63 should not be interpreted in such a way as to impede doing justice between the parties. The modern approach to civil litigation, in a climate where there are profound concerns about access to justice, demands that a broad and generous approach be taken to the interpretation of s. 63.
[133] In my view, the Claim for Lien filed by Prasher on October 3, 2012 purported to preserve its lien rights arising from both the structural steel and miscellaneous metals contracts. The fact that it may have failed to do so in one respect or another does not, in my view, undermine the court’s jurisdiction to award a personal judgment on Prasher’s breach of contract claim, pursuant to s. 63 of the CLA.
[134] There can be no reasonable dispute that Prasher has clearly sued for payment of amounts it claims as owing on the structural steel and miscellaneous metals contracts. The fact that it may not be able to enforce its lien in some or all respects should not be an impediment to the determination of the principal live issue between the parties, which is what, if any amount is owing from one party to the other in relation to the construction of the Rick Hansen School?
[135] Pre-Eng took the position that Prasher’s claim should not be permitted to proceed under s. 63 of the CLA, but that it (Pre-Eng) should be able to proceed on its counterclaim. To accede to that argument would be to permit a distorted picture of the accounts between the parties to be adduced. It could only result in injustice.
[136] I have found that Prasher properly preserved and perfected its Claim for Lien with respect to amounts that may be owing under the miscellaneous metals contract. In the result, s. 63 is not engaged in connection with the claim under the miscellaneous metals contract. The limitations issue does not arise. Had I found otherwise, I would still have permitted its claim to proceed as a personal claim for damages for breach of the miscellaneous metals contract, under s. 63 of the CLA.
[137] I have found that Prasher purported to preserve its lien rights with respect to the structural steel contract but failed to do so. Nevertheless, based on the reasoning in the Tonecraft and Emco decisions, I am of the view that it is fair and just to permit Prasher to continue to pursue a personal judgment in contract for any amounts it claims are owing pursuant to the structural steel contract.
E. What is the value of the structural steel work performed by Prasher?
[138] There is no dispute that the structural steel work called for in the structural steel contract was completed by Prasher. There were a number of deficiencies identified by Butler Engineering as the work progressed but those were adequately resolved over time.
[139] The contract price for the structural steel work was $220,000.00 plus HST. Subject to an assessment of the value of any valid extras completed by Prasher and the validity of any back-charges applied by Pre-Eng, I find that Prasher is entitled to be paid the sum of $220,000.00 plus HST on account of the structural steel contract.
F. What is the value of any extra work performed by Prasher in connection with the structural steel contract?
[140] Prasher claims additional sums for extras it says it performed on the structural steel contact. It invoiced those extras from time to time as the project proceeded. In total, Prasher claims twelve extras having a value of $86,723.59. Some are acknowledged as valid by Pre-Eng, though most are not.
[141] Section 10 of Appendix “A” of the structural steel contract provides as follows:
Unless otherwise provided by the Contract Documents, the Subcontractor shall not perform any changed or additional work without prior written authorization from the Contractor’s Head Office. Under no circumstances will payment be made for such work without such authorization.
[142] Mr. Gregoris outlined the process for the approval of extras during his examination-in-chief. He testified that change notices (“CNs”) would be issued by the architect from time to time. Those notices do not always have a financial impact on the project. Pre-Eng would provide the change notices to their sub-contractors to determine if there was going to be a cost impact that they should know about. They would convey any cost impacts to the architect for consideration.
[143] If a change was authorized to proceed, the architect would issue a change order (“CO”) for the work. The architect’s final payment certificate on this project, dated August 14, 2013, includes a schedule with all of the change orders issued on the project. This certificate was marked Exhibit 22 at trial. It appears to reflect that some 93 change orders were issued throughout the life of the project.
[144] Pre-Eng takes the position that, in accordance with s. 10 of Schedule “A” to the structural steel contract, Prasher is not entitled to payment for any purported extra unless it was expressly authorized by a certified change order.
[145] I will tackle each of Prasher’s claimed extras one at a time.
(i) Brackets (invoice 1638) - $7,326.70
[146] On April 24, 2012, Prasher invoiced Pre-Eng for a “bracket made for forming company” in the amount of $7,326.70 plus HST. The evidentiary record is unclear about what exactly this work entailed. I am unable to determine, with reference to Exhibit 22, what change order authorized this work.
[147] Having said that, Pre-Eng does not take issue with this claimed extra. They accept that the work was approved and that Prasher is entitled to the amount invoiced.
(ii) Deflecting Beam (invoice 1639) - $46,860.00
[148] The single most significant extra in dispute has to do with the cost of shoring up a beam that was deflecting to a degree not acceptable to the project engineers. The design of the beam was undersized for purpose.
[149] CN25 was issued by the architect on February 23, 2012. It addressed the work needed to shore up the deflecting beam. Mr. Gregoris testified that Pre-Eng provided CN25 to Prasher to quote on. Prasher submitted a quote for the work on March 1, 2012 in the amount of $46,860.00. Mr. Gregoris testified that Pre-Eng did not accept Prasher’s quote. Instead, the architect issued a change directive that the work be done on a time and materials basis.
[150] A formal change order was not actually issued for over a year. After some negotiation about the value of the work on a time and materials basis, the architect agreed that Pre-Eng should be paid an additional $48,150.49 for the remedial work on the deflecting beam. CO89 was issued May 14, 2013 in that amount and Pre-Eng was paid that sum.
[151] It appears to be common ground that Prasher supplied the steel for this extra. CO89 reflects that $9,000.00 was paid for materials. There is no evidence that anyone other than Prasher supplied steel and accordingly I find that Prasher is owed $9,000.00 for the supply of steel for this extra.
[152] The parties dispute whose labour forces were utilized to complete the work. Mr. Prasher was under the belief that his forces completed the work, but he did not produce any supporting documents to corroborate that position. Pre-Eng asked Prasher to provide copies of its time sheets, or the time sheets of its sub-contracted forces, to support the hours they worked on this extra. No time sheets were ever provided.
[153] Mr. Gregoris testified that Pre-Eng decided to have other forces do the work on this extra because Prasher was already falling behind on its contract work and they did not want to slow them down any further.
[154] Steve Raviele testified that CN25 involved a significant change to the contract work. They were under pressure to complete the remediation work quickly. He testified that others were called in to do the work. These others included Advance Welding and Industrial Welding.
[155] Mr. Prasher testified that Pre-Eng authorized Prasher to go ahead with the work based on their quote of $46,860.00. He denied counsel’s suggestion in cross-examination that there is no communication between Pre-Eng and Prasher that gave the go-ahead. When pressed, he pointed to a copy of an email dated February 29, 2012 from Isaac Sela to him in which Mr. Sela listed a number of items that they had discussed in an on-site meeting that morning. One of the items relates to reinforcing beams in accordance with CN25.
[156] One immediate difficulty for Mr. Prasher is that his quote for the work was not prepared until the next day. Even if he and Mr. Sela had discussed CN25 on February 29, 2012 it was not until the next day that he submitted a quote for the work. He was unable to point to any communication from Pre-Eng subsequent to March 1, 2012 accepting his quote.
[157] Mr. Prasher denied that Pre-Eng got someone else to do the work on CN25. He testified that Bains Welding worked on the deflecting beam for one day in March 2012. He accepted that Industrial Welding worked on the beam for a day and a half but said the rest of the work was done by J.J. Welding.
[158] Bahadur Bains testified that his company, Bains Welding, did the work remediating the beam. He did not provide any particulars of the work they did, when they did it, or how long it took. Under cross-examination, he said he could not confirm whether it was a one-day job or a ten-day job.
[159] An invoice from Bains Welding for its work on Prasher’s behalf in March 2012 was filed at page 322 of Exhibit 3. It reflects work done by Bains at a number of different sites. During March 2012, they appear to have worked on the Rick Hansen School site only on the 15th, 19th and 20th. It is not immediately apparent from the descriptions provided in the invoice what, if any, work on those dates related to remediating the deflecting beam. Mr. Bains said, under cross-examination, that the 19th and 20th were not related to the deflecting beam. He agreed that, at best, a two-man crew worked on the beam for one day in March 2012.
[160] J.J. Welding’s invoice to Prasher for work done on the Rick Hansen School in March 2012 is found at page 340 of Exhibit 3. It reflects 22 hours of work on that site between March 13 and 16, 2012. There is no description of the work done on those dates. No one from J.J. Welding testified at trial.
[161] Mr. Prasher drew the court’s attention to a J.J. Welding invoice for work done at the Rick Hanson School site in April 2012. Between April 5, 2012 and April 14, 2012, J.J. Welding appears to have performed 35 hours of labour on the site. They billed $1,400.00 for that labour. Again, there is no description of the work performed on those dates. The remediation of the deflecting beam was a matter of some urgency. It seems unlikely to me that, in the circumstances, J.J. Welding worked on the beam for 3 days in March 2012 and then left it for a month before coming back to resume work on it in April.
[162] Adrian Phillips is an architect and worked with CS&P during the time that this project was underway. He testified that the remediation work on the deflecting beam was underway by March 14, 2012 and completed by April 11, 2012. On the basis of his testimony, it is not impossible that some of the work on the beam was in fact done by J.J. Welding in April.
[163] Prasher included some $32,400.00 in labour costs when it provided its quote to Pre-Eng for the remediation of the deflecting beam. It was unable to support anything close to that level of labour either through time sheets or invoices from its suppliers. I find that while Prasher did supply some of the labour to this extra, the majority of it was supplied by others.
[164] Pre-Eng utilized its own site supervisor’s daily logs to attempt to construct the number of hours that Prasher’s forces were on site working on the deflecting beam. They came up with a total of 44 hours. Valued at $75/hr., they accept that Prasher is owed $3,300.00 for labour on this extra, plus HST.
[165] In my view, the hours estimated by Pre-Eng using its own site records is reasonable and consistent with the invoices produced by Prasher from J.J. Welding (including their April 2012 invoice) and Bains Welding.
[166] In the meantime, Pre-Eng produced invoices from Advance Welding in the amount of $3,796.00 plus HST and Industrial Welding in the amount of $12,265.00 plus HST for work these firms performed on the deflecting beam.
[167] CO89 reflects that the architect approved – and the owner paid for – steel installation work on this extra in the following amounts: Industrial Welding - $15,775.00; Advance Welding - $3,796.00; and Prasher - $3,300.00.
[168] I am unable to explain the discrepancy between the amount of Industrial Welding’s invoice and the amount authorized by the architect and paid by the owner.
[169] For the purposes of this extra, however, I am satisfied that:
(a) Pre-Eng did not accept Prasher’s lump sum quote for the work;
(b) The remediation work was instead performed on a time and materials basis;
(c) Prasher supplied materials valued at $9,000.00 plus HST; and,
(d) Prasher supplied labour valued at $3,300.00 plus HST.
[170] In the result, I conclude that Prasher is entitled to be paid $12,300.00 plus HST for this extra.
(iii) New Beam W360 x 45 and Bearing Plates (invoice 1639) - $2,043.36
[171] On April 16, 2012, Prasher submitted a quote for the installation of a new beam, described as W360 x 45, with bearing plates at either end. The quote was in relation to CN19. The work is described in CO82 as the revision of a beam from reinforced concrete to steel.
[172] CO82 reflects that Pre-Eng submitted a claim to the architect for this extra in the amount of $3,787.29 plus HST, which was approved and paid. The change order reflects that the work was performed by a sub-contractor but it does not identify who that sub-contractor was.
[173] Mr. Prasher testified that Prasher supplied the steel and did the work on this extra. I have no evidence that suggests any party other than Prasher installed this beam. It seems highly likely that they fabricated it and supplied it to the project. I accept that they installed it, particularly in light of the fact that, as will be apparent momentarily, they supplied and installed a similar beam at the same time which Pre-Eng accepts as an extra.
[174] I find that Prasher is owed $2,043.36 for this extra, plus HST.
(iv) New Beam W310 x 33 and Bearing Plate (invoice 1639) - $1,719.46
[175] Like extra (iii), Prasher submitted a quote for a new steel beam on April 16, 2012. According to CO84, this required beam had been omitted from the structural drawings. A total of $2,729.31 was approved and paid to Pre-Eng.
[176] Pre-Eng accepts this claim and I find that Prasher is owed, for this extra, the sum of $1,719.46 plus HST.
(v) New Beam W310 x 39 and Bearing Plate (invoice 1639) - $2,279.65
[177] Again, Pre-Eng accepts this extra and I find that Prasher is owed $2,279.65 plus HST for this work.
(vi) OWSJ shoe support (invoice 1671) - $900.33
[178] Pre-Eng also accepts this invoice as owing and I find, on that basis, that Prasher is owed $900.33 for this work, plus HST.
(vii) Revision to Canopy Support at Stair 2 (invoice 1671) - $4,617.80
[179] This is another extra accepted by Pre-Eng. Accordingly, I find that Prasher is owed $4,617.80 for this work, plus HST.
[180] This is the last of the claimed extras that Pre-Eng agrees to. The balance of the claimed extras are not agreed.
(viii) Installation of Angles and Stiffeners (invoice 1684) - $16,906.00
[181] On August 25, 2012, Prasher invoiced Pre-Eng for two extras with a total value of $17,356.00. This first extra, billed in the amount of $16,906.00 is for work reflected in CN89 and authorized by CO86. Prasher refers to it as work reflected in sketch SK-1 dated March 20, 2012. In my view, it is unnecessary to drill down on exactly what the work entailed. It is not disputed that Prasher did the work.
[182] Mr. Gregoris, for reasons that are not clear to me, denied that what Prasher billed for on August 25, 2012 was the extra for the stiffeners, despite the fact that the invoice clearly says that is what it is for. He expressed concern that the structural steel work was done by March 2012 and yet the invoice was submitted in August 2012. In his view, this was not an approved change.
[183] The records of the architect belie Mr. Gregoris’ position. On April 30, 2012, Pre-Eng submitted a proposed change order to the architect seeking $14,209.80 for this extra which was approved. In November 2012, Pre-Eng submitted Prasher’s August 25, 2012 invoice to the architect and sought an increase to the amount previously approved. That increase appears not to have been approved.
[184] The amount approved by the architect and paid by the owner was $14,209.80. Of that, $11,356 related to work performed by Prasher and $700.00 related to the fee of Prasher’s engineer for preparation of a site drawing. In total, $12,356.00 was, in effect, paid by the owner to Pre-Eng on account of Prasher’s invoice.
[185] Paragraph (4) of Article V of the structural steel contract provides as follows:
Any amounts due to the Subcontractor shall be paid ten (10) days after the Contractor has received payment of the Consultant’s Certificate from the Owner, provided that, as a condition precedent, the Contractor has been paid the Consultant’s Certificate, in which such amount has been included by the owner, and that the Subcontractor has fulfilled all his obligations under this Subcontract Agreement.
[186] Paragraph (4) is a “pay as paid” provision, also known as a conditional payment clause. Prasher did not argue that this clause was, for any reason, not enforceable, or not applicable in this instance.
[187] I find that Prasher did the work on the extra, but that the architect did not value it as high as Prasher did. Pre-Eng was not reimbursed in the amount sought by Prasher. The pay as paid provision limits Prasher’s recovery to what Pre-Eng received.
[188] Under cross-examination, Mr. Prasher testified that he understood his bills had to be approved by the consultant (i.e. the architect) and he was prepared to accept payment for whatever the consultant certified.
[189] I find that Prasher is owed $12,356.00 plus HST for this extra.
(ix) Installation of shim material (invoice 1684) - $450.00
[190] This extra involved the installation of some shim material on top of a concrete post in order to ensure that a beam was level.
[191] Mr. Bains testified that Bains Welding did this work. They probably did, though I have some concern about his evidence as it relates to extras on the project. He admitted under cross-examination that he did not specifically recall doing any of the work on extras. He assumed they did because it was structural steel work and they did all the structural steel work on the project (except of course where J.J. Welding did it).
[192] Mr. Gregoris admitted under cross-examination that Prasher did this work. His position, however, is that it was not an extra.
[193] I have no real means of determining whether this work was an extra or not. It is clearly not supported by a change notice. Prasher was surely obliged to ensure that its steel installation was level as part of its contract. On the other hand, if extra work was required to level a beam because the concrete installer had failed to meet the site specifications, then perhaps that work would be an extra to the contract.
[194] On this evidentiary record, I am unable to determine whether this shim work was a proper extra to the contract. In the result, I am not able to conclude that Prasher is owed the sum claimed for it.
(x) Installation of shim material (invoice 1685) $1,450.00
(xi) Installation of wall plate (invoice 1686) $710.00
(xii) Adding washers and plate material (invoice 1687) $1,560.00
[195] I have lumped these last three purported extras together because I make the same findings with respect to each of them.
[196] Pre-Eng contests that any of the work invoiced as extras on invoices 1685-1687 was actually extra work. I am unable, on this evidentiary record, to determine if the work was extra or not. It might have been. It might not.
[197] These extras were addressed in only a cursory way during the testimony of the various witnesses who addressed them. None are supported by change notices or orders. Nor is there any other written record authorizing Prasher to perform this work as an extra to the contract.
[198] I accept that the work was done, but I am unable to conclude that it was extra to the contract or that Prasher is entitled to be paid for the work over and above the basic contract price.
Summary
[199] In summary, I find that Prasher is owed, on account of extras to the structural steel contract, the following sums:
Brackets – inv. 1638: $7,326.70
Deflecting Beam – inv. 1639: 12,300.00
Beam W360 x 45 – inv. 1639: 2,043.36
Beam W310 x 33 – inv. 1639: 1,719.46
Beam W310 x 39 – inv. 1639: 2,279.65
OWSJ Shoe Support – inv. 1671: 900.33
Canopy Support – inv. 1671: 4,617.80
Angles & Stiffeners – inv. 1684: 12,356.00
Total: $43,543.30
[200] Subject to deduction for purported charge-backs, I find that the total owing to Prasher under the structural steel contract, including the base amount of $220,000 plus extras of $43,543.30 is $263,543.30, plus HST.
G. How much has Prasher been paid for work performed under the structural steel contract, including extras?
[201] The determination of how much Prasher has actually been paid on the structural steel contract is not as simple as one might expect it to be.
[202] Mr. Prasher testified that Pre-Eng paid Prasher $163,330.20 on the structural steel contract and also paid MBS Steel Ltd., on Prasher’s behalf, the sum of $28,279.38. These two sums total $191,609.58.
[203] In her closing submissions, Prasher’s counsel submitted that Pre-Eng had paid Prasher $163,330.20 in total on both contracts, which I think was simply a mistake. On her revised Scott Schedule, submitted as part of her closing submissions, she indicated that Pre-Eng had paid a total of $208,559.46 on both contracts. I confess, I have not been able to figure out where that number came from.
[204] Pre-Eng submitted a schedule, marked Exhibit “L” at trial, which detailed the amounts paid to Prasher on the structural steel contract. They include:
December 31, 2011: $33,561.00
January 31, 2012: 22,374.00
February 29, 2012: 15,661.80
March 6, 2012: 51,460.20
April 20, 2012: 28,279.38[^3]
April 30, 2012: 22,374.00
May 31, 2012: 17,899.20
July 19, 2012: 9,568.57[^4]
[205] Under cross-examination, Mr. Gregoris conceded that a $791 charge-back had been deducted from the sum paid on April 30, 2012, such that it should be reduced to $21,583.00. He further conceded that a charge-back of $4,655.66 had been deducted from the payment made May 31, 2012, such that it should be reduced to $13,243.54.
[206] After making the foregoing adjustments, I find that the total amount paid to Prasher, either directly or indirectly, on the structural steel contract was $195,731.49.
H. Is Pre-Eng entitled to back-charge Prasher for any expenses it incurred in correcting or completing work that fell within the scope of the structural steel contract?
[207] The most significant area of dispute between the parties involves amounts “charged back” against Prasher by Pre-Eng in relation to both contracts. The charge-backs relate, generally, to amounts Pre-Eng paid to third parties to correct purportedly deficient work and to complete unfinished work that fell within the scope of Prasher’s contracts.
[208] The Scott Schedule completed by the parties lists 25 separate charge-backs, having a total value of $170,078.19, not including HST.
[209] Going forward, there are certain factual findings that will largely guide my approach to the charge-backs with respect to both contracts. Those charge-backs related almost exclusively, I note, to work completed and invoiced by North York Welding and Industrial Welding. I will take a moment to summarize my general findings.
(a) Prasher was overwhelmed
[210] I find that Prasher was in over its head on this project. Throughout 2012 it had a number of projects on the go and was simply too busy to properly attend to this job.
[211] Mr. Gregoris and Mr. Raviele both testified about how difficult it was to get Mr. Prasher’s attention with respect to this project. He often refused to respond to their attempts to contact him. Mr. Prasher admitted that there may have been times when he failed to return phone calls. I think there were many, many times. He testified under cross-examination that he “never wrote anything during the course of the project”. He said he is “not an email guy” and instead would “pick up the phone and call”. Except that he rarely picked up the phone and called Pre-Eng.
[212] Mr. Prasher testified forcefully that Prasher did everything it was required to do and did it in a timely and competent way. He took the position that Pre-Eng decided to undermine him and used others to complete Prasher’s work at costs well above what Prasher had quoted. Beyond that, much of the work done by North York and Industrial was, in his view, “extras”.
[213] I will be candid. I put little stock in Mr. Prasher’s testimony. He was a bombastic witness, prone to making lengthy speeches despite my numerous admonitions that he not do so. I found his testimony largely unhelpful because it was so difficult to separate rhetoric from fact. It was meandering, unfocussed and often generic in nature. One conclusion was obvious: he accepted little, if any, responsibility for the ramifications of not doing the work he was contracted to do.
[214] A classic example of his approach to testifying was his absolute insistence that his firm had done all of the work on CN25 (the remediation of the deflecting beam). He said Pre-Eng “cannot run from this.” Nevertheless, he refused to provide his worker’s time sheets or any other evidence that corroborated his position that Prasher’s forces had performed the work. He strongly denied that Pre-Eng had someone else do this work. Yet the evidentiary record clearly supports the conclusion that his firm did not do anywhere even close to all of the work on this extra.
[215] Mr. Prasher was equally adamant that Prasher did not leave deficiencies open for months on end. Butler – a completely independent engineering firm – found otherwise.
[216] The Butler reports, which I have summarized at Appendix “A”, in terms of variations, demonstrate that Prasher was very delinquent in attending to the satisfaction of deficiencies on the structural steel contract. Moreover, Prasher’s Statement of Defence to the Bains’ action tends to undermine Mr. Prasher’s testimony about the quality of the work done on this project. Prasher pleaded that Bains had not completed its work on this, and other, projects in a good and workmanlike fashion. Further, that Bains’ incompetence resulted in project delays and damages to Prasher.
[217] Mr. Bains testified here that 2012 was a busy year for them. They were working on 6 or 7 sites for Prasher. Wherever Mr. Prasher said they had urgent work, they would go there. He was juggling crews trying to manage Prasher’s various projects. I got the distinct impression that they moved from site to site “putting out fires”. Mr. Bains agreed, under cross-examination, that “it was crisis mode among the various sites”.
[218] According to Mr. Bains, Prasher began to fall behind in its accounts with Bains by April 2012. On April 20, 2012, Pre-Eng had to pay roughly $28,000 (including HST) to one of Prasher’s suppliers because Prasher did not have the money to pay it. Moreover, Prasher stopped paying Skyrider Equipment for the rental of boom lifts and other equipment it had on site. Skyrider threatened to lien the project. Pre-Eng eventually settled Skyrider’s account and paid it $9,568.57 on July 19, 2012 on Prasher’s account.
[219] I find that Prasher was in a state of crisis by the spring of 2012. They managed to, mostly, complete the structural steel contract, but were in real difficulty by the time work was to start on the miscellaneous metals contract. The evidentiary record is replete with correspondence from Mr. Raviele to Prasher imploring them to begin, carry on, or complete work on the miscellaneous metals contract and threatening to have third parties complete the work if Prasher did not attend to it.
[220] Mr. Raviele testified that he had to follow up with Prasher far more than he did with other trades to get work completed. He said that in all of the projects he has been involved in over 20 years, he has never had to manage a sub-trade in the way he had to manage Prasher. He had never had to go to a sub-contractor’s engineer directly in an effort to get deficiencies closed off. But he had to do that here, due to a lack of response from Prasher. He also said that in 20 years he had never had to get a replacement contactor in to perform work that a sub-contractor had contracted to perform. But he had to do that here.
[221] I accept Mr. Raviele’s evidence, without hesitation, about the difficulties he experienced trying to persuade Prasher to attend to its obligations, particularly under the miscellaneous metals contract. His evidence was not only straightforward and compelling, but it was entirely supported by a substantial record of correspondence directed by him to Prasher. It is further consistent with the circumstances on the ground.
(b) There were deficiencies in the work of Bains Welding
[222] Prasher failed to keep the accounts of Bains Welding current on this and other projects. In the result, Bains Welding sued Prasher for what it claimed were outstanding balances on account. Bains’ action was commenced on December 19, 2013. Bains sought $114,627 in damages. Prasher defended the action by way of a statement of defence dated April 29, 2014. Amongst other allegations in the defence, Prasher alleged that Bains had not completed its work at the Rick Hansen School in a good and workmanlike manner. Bains’ failures, Prasher said, resulted in back-charges of $18,000 on this project.
[223] Bains and Prasher settled the Bains’ lawsuit for $55,000, meaning that Prasher got a discount of about 50% against what Bains said was otherwise owing. Whether any of that discount is a reflection of poor workmanship and charge-backs at the Rick Hansen School is a matter that I can only speculate about on this evidentiary record.
[224] What is clear, however, is that Prasher represented to this court, in a publicly filed pleading, that Bains’ work on this project was substandard and was the basis for a number of charge-backs.
(c) The invoices of North York Welding and Industrial Welding are generally reasonable
[225] Sergio Mariani and his brother, Bruno Mariani, impressed me as being diligent, hard-working contractors who took immense pride in their work. They each kept detailed records of their work on this project and produced detailed invoices. Each was thoroughly prepared to testify. Prasher’s counsel urged me to approach their evidence with caution given how detailed it was. In my view, the fact that these witnesses were prepared and had detailed records and recall are not reasons to reject their evidence as credible and reliable.
[226] Sergio Mariani testified that he first attended at the project site in early June 2012. He said, and I accept, that the status of the miscellaneous metals work was “horrendous”. The work that had been performed was “very rough” and the welds that had been done were unacceptable and not up to their standards.
[227] I have no reservation in finding that both Bruno and Sergio Mariani did the work they purported to have done in the invoices they submitted to Pre-Eng. I find that this work, for the most part, was work that Prasher had contracted to do in its two contracts with Pre-Eng.
[228] I accept that hiring trades on an urgent basis to correct and complete work of another contractor is a difficult business and generally results in costs that are in excess of the original contracted price. On the whole, I have no difficulty with the scope of the work done by North York Welding and Industrial Welding or with the reasonableness of their invoices. That is not to say that Prasher is 100% responsible for all of the work invoiced by North York Welding and Industrial Welding. As will become apparent as I work through the charge-backs, some of the amounts invoiced are for extra work that was outside the scope of Prasher’s subcontracts.
(d) Prasher’s deficiencies on the structural steel work are independently verified
[229] A significant difference between the structural steel work and the miscellaneous metals work undertaken by Prasher is that the owner, YRDSB, arranged for an independent inspector to regularly assess and report on the structural steel work.
[230] Hamadreza Haghshenas is a certified level three welding inspector. He was employed by Butler Inspection Group Inc. in that capacity in 2011-12 and continues in that employment to the present. Mr. Haghshenas conducted regular spot-check inspections of Prasher’s structural steel work on the Rick Hansen School project on behalf of the owner. He was not the only inspector from Butler assigned to this project, but he was the principal one.
[231] Mr. Haghshenas had a practice of preparing a handwritten report on the progress of Prasher’s work when he was at the job site. A written report would subsequently be prepared and delivered to Pre-Eng. Mr. Prasher testified that their erector was given copies of the written reports on site. Subsequently, their office received copies of the typed reports.
[232] Butler Inspections did not, as a policy, comment on workmanship issues. They noted where the work performed by Prasher’s erectors varied from either the project plans and specifications or Canadian Standards Association requirements. When variations were noted, it was incumbent upon Prasher to address them. Butler’s expectation was that variations would be addressed within a reasonable period of time. Of particular concern was that as the project proceeded, walls were going up and the building was being closed in. Variations needed to be addressed before structural steel components became inaccessible.
[233] Sometimes work done to address a variation resulted in a structurally sound component, but one that did not align with the plans and specifications. When that happened, Butler required Prasher’s field engineer to prepare a field sketch for review and approval by the structural engineering consultant (RJC).
[234] Butler appears to have prepared 19 typed inspection reports (two shop reports and 17 site reports) ranging in dates from December 6, 2011 to August 13, 2012. The two shop reports identify modest variations from the plans and specifications. It appears those variations were promptly attended to.
[235] The site reports reflect a significant number of variations arising as the project progressed. There is no question that the variations were eventually resolved. They had to be, in order for an occupancy permit to be obtained.
[236] Attached as Appendix “A” to these reasons is a chart which outlines the number of variations reflected in each site report. Outstanding variations are tracked in the last column of the chart. The chart readily demonstrates that many variations identified by Butler remained outstanding for considerable periods of time.
(e) Prasher is responsible for field work sketches addressing variations
[237] In a significant number of instances, field work detail sketches were required from Prasher’s engineer, ABM, for review by RJC before an open variation could be closed. Prasher and Pre-Eng did not, and do not, agree on who is responsible for paying ABM for those field work sketches. ABM appears to have generally charged $700 plus HST each time they had to visit the site and prepare a field work sketch. Butler appears to have required at least eighteen field work sketches in relation to identified variations in the structural steel work, so the cost was not insignificant. Prasher priced the structural steel work in a way that would have seen them realize a profit of about $16,000 if everything had gone well. That was a slim margin and would have been all but erased by the cost of the field work sketches required by Butler.
[238] Under cross-examination, Mr. Prasher disputed the suggestion that there were open variations for months, though Butler’s reports belie his position.
[239] He agreed that Pre-Eng eventually called ABM directly to come out to the site and do field work sketches required by Butler. He said that Pre-Eng called him in advance for approval to contact ABM directly. He maintained, however, that Pre-Eng should bear the cost of those sketches. He acknowledged that Prasher was responsible for fixing up deficiencies (variations). But he testified that if Pre-Eng required a sketch of the corrected work, then it was an extra to the contract.
[240] No one debates Butler’s impartiality. Prasher accepts that it was responsible for correcting any variations identified by Butler. Pursuant to Article VI (2) of the structural steel subcontract, Prasher had two days to correct deficiencies it was notified of. In the event it failed to correct a deficiency, Article VI (4) (a) provided that Pre-Eng could correct it and charge the cost of the correction back to Prasher.
[241] In my view, the cost of correcting deficiencies includes the cost of any field work details (sketches) required to ensure the corrections were satisfactory.
[242] Prasher was required to complete its work according to the site plans, drawings and specifications. Butler identified instances where Prasher failed to do so and noted them as variations. I understand that field work details stamped by an engineer were required whenever there was a variation from the approved plans and specifications. More particularly, I understand that those stamped sketches were required in order to ensure the structure continued to comply with Building Code requirements, such that an occupancy permit for the building could ultimately be obtained.
[243] All of that is to say that the reason the field work details were required is because Prasher’s installers varied from the site plans, drawings and specifications from time to time. Those variations needed to be corrected and the corrections needed to be approved by an engineer as Building Code compliant. The cost of having the engineer do so was a direct result of Prasher’s installer varying from the contract requirements. It was Prasher’s responsibility to attend to the identified variations and any costs to do so are on Prasher’s account.
[244] With those general findings in mind, I will dive into a discussion of the specific charge-backs Pre-Eng imposed with respect to the structural steel contract.
(i) CB-11201 - $700 (+HST)
[245] CB-11201 relates to an ABM invoice of $700 plus HST dated April 16, 2012 and paid by Pre-Eng. Recall that ABM was Prasher’s consulting engineer. This ABM invoice relates to an attendance on site and the preparation of a sketch of a beam support.
[246] This charge-back appears as item no. 10 on the Scott Schedule and it has been recorded by Pre-Eng as having to do with the miscellaneous metals contract. I am confident it was recorded improperly. It relates to the support of a structural steel beam. It was incurred at a time when Prasher’s contractors were erecting structural steel.
[247] A letter from ABM to Pre-Eng dated April 16, 2012 outlines the purpose of the site visit and the subsequent sketch that was prepared. Behzad Mashhadi is the licensed engineer who operates ABM. He testified as part of Prasher’s case. Under cross-examination, he said that he was acting as Pre-Eng’s agent when he attended the site on April 16, 2012 and prepared the subsequent sketch, which he marked “SK1”. He indicated that the concern he was addressing had to do with the concrete. There was cracking at the area of a connection between a beam and a concrete wall. This was not, he said, Prasher’s issue.
[248] According to Mr. Mashhadi, Prasher was generally responsible for steel to steel connections, but this was a steel to concrete connection. He said that if Prasher had proposed the connection detail that had not worked, this would be their problem. But he could not say that it had been Prasher’s design. No one else testified that it was Prasher’s design. This particular beam connection does not appear to have been identified by Butler Engineering as a deficiency in Prasher’s work.
[249] In my view, this is not a proper charge-back and ought not to have been deducted from the amount paid to Prasher on April 30, 2012.
(ii) CB-11202 - $4,120.05
[250] CB-11202, in the amount of $4,120.05 (not including HST)[^5] was deducted from the payment made to Prasher on May 31, 2012.
[251] This charge-back reflects an invoice from Industrial Welding to Pre-Eng dated April 11, 2012. The work involved welding rebar to a number of base plates, installing lateral support brackets, removing a temporary guard rail, cutting out masonry blocks to access the base of a column and installing extra anchors in the base plate.
[252] Mr. Prasher accepted that the sum of $3,160.50 of the $4,120.05 charged by Industrial Welding in this instance was a valid charge-back against Prasher. He otherwise disputed two aspects of the Industrial invoice. First, the sum of $585.00 relating to cutting out masonry blocks and installing additional anchors in the base plate of a column. Second, the sum of $374.55, being a 10% mark-up charged by Pre-Eng on this and all other charge-backs. I will address each aspect in turn.
[253] Relatively little evidence was tendered in relation to this charge-back, likely because of Mr. Prasher’s concession.
[254] Recall that Bruno Mariani is the principal of Industrial Welding. He testified that he was first called by Pre-Eng to work on the Rick Hansen School on April 11, 2012. He described how he recorded his hours of work and how he prepared his invoices. He noted that all of the work on his April 11, 2012 invoice was structural steel work.
[255] Mr. Prasher testified that some of the work on Industrial’s invoice was not part of the scope of his contract. In particular, he disagreed that Prasher should be responsible for Industrial Welding having to cut through masonry blocks to get at a base plate that needed additional anchors.
[256] There is no dispute that Industrial did the work on its April 11, 2012 invoice. I am satisfied from the nature of the work that it was corrective work to a structural steel element. I am also satisfied that it was necessary for Industrial to cut through a block wall to gain access to the base plate that required additional anchoring. And I am satisfied that the reason that a block wall needed to be cut out is because of Prasher’s delinquency in attending to outstanding variations (as reflected in Appendix “A”). A beam that required further anchoring ended up walled in before the correction was made. That resulted in extra cost to gain access to the base plate. I am satisfied that the sum of $585.00 is a reasonable charge-back and recoverable against Prasher.
[257] The more difficult issue raised by Mr. Prasher is that of the 10% mark-ups charged by Pre-Eng on all charge-backs.
[258] Mr. Gregoris testified that there should be a 10% mark-up on all charge-backs. He described it as a nominal charge for their administrative costs in having to address the problems associated with the charge-backs. Mr. Prasher did not offer any evidence on the point. Neither side addressed it in closing submissions.
[259] The parties’ relationship is governed by the written contracts. Nowhere in those contracts does it provide for a 10% mark-up in Pre-Eng’s favour where Pre-Eng has had to arrange for third parties to correct deficiencies in Prasher’s work. Instead, the contracts provide, at para. 4(a), that if Prasher failed to comply with a deficiency notice, Pre-Eng may “correct such default and deduct the cost thereof from the payment then or thereafter due” to Prasher.
[260] In fairness, deficiencies in Prasher’s work are, in effect, breaches of contract. Pre-Eng is entitled to damages for those breaches, where they are proven. Damages payable as a result of a contractual breach are calculated according to the well-established rule in Hadley v. Baxendale, (1854) 9 Exch 341. Specifically, the measure of damages is the amount required to put the non-breaching party in the position it would have been in had the contract been performed as agreed. See also BG Checo International Ltd. v. British Columbia Hydro & Power Authority, 1993 CanLII 145 (SCC), [1993] 1 S.C.R. 12, at para. 12.
[261] Having said that, there are limits to a plaintiff’s recoverable losses. In Hadley v. Baxendale the English Court of Exchequer attempted to define those limits by use of the concept of foreseeability. The value of the performance promised is generally limited to the damages that would fairly and reasonably be considered to arise naturally from the breach or which may reasonably have been in the contemplation of the parties. In other words, the damages sought must have either:
(a) arisen naturally, according to the usual course of things; or
(b) been in the contemplation of both parties at the time they made the contract.
[262] I have no evidence that the parties mutually contemplated a 10% mark-up on charge-backs.
[263] I accept that it would be reasonably foreseeable to Prasher that Pre-Eng would incur administrative costs in dealing with breaches. In theory, I accept that Pre-Eng is entitled to recover something for those administrative costs.
[264] Mr. Gregoris suggests 10% is nominal. The total charge-backs in this case run to more than $17,000.00. I do not consider $17,000.00 in mark-ups to be a nominal figure. And I have no evidence of what specific administrative tasks were involved in addressing the charge-backs. I cannot, in the result, assess whether $17,000.00 is a reasonable estimate of those costs.
[265] It may be that a 10% mark-up on charge-backs is commensurate with industry standards. I cannot reach that conclusion, however, because I have no evidence about it.
[266] I accept that addressing Prasher’s deficiencies caused Pre-Eng to incur additional administrative fees beyond what they would have reasonably incurred if the contracts were not breached. But without actual evidence of what those costs are, nor evidence that allows me to assess whether a 10% mark-up is a reasonable reflection of those costs, nor evidence of an industry standard, I am left to speculate. Speculation is not a proper basis for fact-finding and, in the result, I am unable to award Pre-Eng anything for its purported administrative costs in relation to this or any other charge-back.
[267] In the result, I value this charge-back at $3,745.50, plus HST.
(iii) CB-11203 - $4,250.12
[268] This charge-back, dated June 26, 2012, reflects a number of different items, including:
• $1,567.50 for Pre-Eng’s own labour forces “pouring a slab late” and installing a new column in the garage room;
• $255.62 to Brafasco for anchor bolts and a hammer drill bit;
• $880.00 to North York Welding to install 4 bollards;
• $140.00 for a stair tower rental; and,
• $1,400.00 in fees to ABM for two site visits and sketches. The first was in relation to what ABM described as “repair work sketches”. The second related to an inspection of “the joist shoe repair at gym”.
[269] Pre-Eng has accounted for this charge-back in the structural steel file, but it appears to me that it relates largely to miscellaneous metals work.
[270] Mr. Prasher testified that his work had nothing to do with pouring concrete slabs or installing columns in the garage. A “new” column would in any event, he said, be an addition to the contract. He said he knew nothing about the anchors purchased from Brafasco. He further knew nothing about the drill bit, but thought he should not be paying to purchase other party’s tools. He initially accepted that the bollards were part of his work, but were removed by Pre-Eng. He was prepared to accept $880 of this charge-back, but later resiled from that acceptance on the basis that he discovered the bollards were in fact extras. He denied that the scaffold renting was his responsibility. Finally, he testified that the ABM invoices had to do with extras on the contract.
[271] Mr. Gregoris testified that it was Prasher’s responsibility to fabricate and install all of the stairs in the structure. By the end of May 2012, they had not completed the installation of any of the stairs. In the result, a stair tower had to be rented so that trades could access the different floors in the structure. The stairs Prasher was meant to be installing were what he described as “pan stairs”. They were fabricated out of steel but each stair was essentially a pan in which concrete was poured to create the stair. Prasher did not have the stairs ready to be poured when the concrete supplier was on site, so Pre-Eng had to do the labour later to pour concrete into the pans. They back-charged their time to Prasher.
[272] The bollards were, he said, part of Prasher’s responsibility. The ABM invoices involved matters identified as variations in Butler reports. And the hammer drill bit ($35.62) was something they needed in order to do work Prasher should have been doing.
[273] This is a difficult charge-back to assess because of the incomplete state of the evidentiary record. I will do the best that the record allows me to do, addressing each aspect of the charge-back in turn.
[274] Pouring concrete into stair pans was not Prasher’s work. I appreciate the argument that their delays with respect to getting the stairs finished resulted in additional work having to be done by Pre-Eng’s labour forces to pour concrete in the stairs. And, as I will get into in more detail below, I accept that Prasher was not as attentive as it should have been to its work under the miscellaneous metals contract. Moreover, Mr. Prasher was not readily accessible to Pre-Eng’s project manager or site supervisor. He failed to return communications on a regular basis.
[275] Having said that, though there was a master schedule for the project, the miscellaneous metals work was not included in it. Under cross-examination, Mr. Gregoris agreed that by mid-June 2012 he was trying to establish a schedule for the miscellaneous metals work. He intended to pass a schedule along to Prasher, but cannot say whether that was ever done.
[276] In the absence of evidence that Prasher had missed a fixed deadline to get the stairs done, it would be unfair to burden it with the cost of pouring concrete into the pans or, for that matter, with the cost of the rental of a stair tower.
[277] I do not know what the “new column” in the gym refers to and am unable to conclude that it is an item that Prasher is responsible for.
[278] Similarly, I do not know what the items purchased from Brafasco were used for. It is insufficient to say, generally, as Mr. Gregoris did, that they related to Prasher’s work. That is not helpful to the court.
[279] I accept that the bollards were part of Prasher’s work. Bollards are expressly included in the miscellaneous metals contract. Prasher’s counsel submitted that there was some evidence, included in Exhibit 40 (the architect’s change notices) that supported a finding that these particular bollards were extras. She referenced tab 18 of Exhibit 40, but I find no support for her position there.
[280] In my view, the bollards were properly charged-back against Prasher.
[281] The ABM sketches do appear to relate to Prasher’s work. Again, Prasher’s counsel suggested they were part of an extra, being CN89. I do not agree with her. The ABM invoices identified in this charge-back (invoices no. 1255 and 1265) have nothing to do with CN89. They relate to field repairs of work that appears to have been done by Prasher’s forces.
[282] Mr. Mashhadi testified that when he was asked by Pre-Eng to attend the site in May 2012 he contacted Prasher about it. He said Prasher gave him express permission to attend the site and prepare his drawing which is stamped May 17, 2012. It relates specifically to Butler Report #10 and variation items 1, 2, 3 and 4. He invoiced for it on May 22, 2012 (invoice no. 1255). This is not an extra.
[283] The second ABM invoice on this charge-back, no. 1265, dated Jun 19, 2012, specifically references an attendance at the site with an inspector from Butler. I infer from Butler’s presence that this attendance was again in relation to a deficiency of some sort.
[284] In my view, Prasher is liable for the cost of the ABM invoices.
[285] Counsel to Pre-Eng submitted that Prasher had attempted to pass along this entire charge-back to Bains in the Bains’ action. Indeed, charge-backs 11202 to 11209 were part of Prasher’s Affidavit of Documents in that action. The fact that those charge-backs were referenced on an Affidavit of Documents does not, however, support an inference that Prasher considered them to be entirely valid and entirely the fault of Bains. It means only that the document has some relevance to the Bains’ action.
[286] In the result, I find that $2,280.00 of CB-11203 is validly charged back against Prasher.
(iv) CB-11204 - $12,217.50
[287] This charge-back relates to structural steel work purportedly performed by North York Welding and Industrial Welding in June and July 2012. Prasher is prepared to accept that $1,413.80 of this charge-back is valid, but I confess I am not clear on how that figure is arrived at.
[288] The amount claimed in this charge-back represents three invoices. First, a North York Welding invoice, no. 2217, dated June 28, 2012 in the amount of $1,330.00 plus HST. Second, an Industrial Welding invoice dated July 3, 2012, no. 36, in the amount of $1,527.00. Third, Industrial Welding invoice no. 355, which has not, to my knowledge, been produced in evidence. It is apparently in the face amount of $9,360.00. I will consider these invoices in turn.
Invoice 2217
[289] Recall that Sergio Mariani is the principal of North York Welding. He testified that he was asked in June 2018 to supply some structural steel brackets, which he did. He invoiced $1,330.00 plus HST. I find that this material was structural steel and fell within Prasher’s scope of work. It is not clear to me why it was not supplied by Prasher. Mr. Prasher did not address these brackets in his evidence. According to Mr. Raviele, it is material that Prasher should have supplied but did not. I find that it is a proper charge-back.
Invoice 360
[290] Bruno Mariani testified about Industrial’s invoice 360, dated July 3, 2012, but he said only that he did the work reflected in the invoice in accordance with instructions he received from the site supervisor, Isaac Sela.
[291] Invoice 360 is actually in the amount of $3,147.50, but it reflects both structural steel and miscellaneous metals work. Pre-Eng has back-charged Prasher $1,527.50 against the structural steel contract and $1,620 against the miscellaneous metals contract. For now, I am concerned only about the amount charged back to the structural steel contract.
[292] The items attributed by Pre-Eng to the structural steel contract consist of the installation of shelf angles and work on stair #2. It appears to me that this work is more likely related to the miscellaneous metals contract, but for simplicity’s sake I will address it here.
[293] Prasher questions whether the work is really an extra.
[294] Under cross-examination, Bruno Mariani acknowledged that part of the work on this invoice related to CN53. That change notice related to a guardrail at stair #2, more particularly to “revise wall-mounted handrail to handrail with picket”.
[295] The work on stair #2 reflected in Industrial’s invoice dated July 3, 2012 is described as:
Start on stair #2 – Fabricate return and cover plate and install. Repair stringer where necessary and prime paint so railing could be installed.
[296] I am at a loss to understand how any of this work is covered by CN53, even though Mr. Mariani agreed that, to some extent, it was. I find that he was mistaken when he said that the work on stair #2 reflected in this invoice was part of an extra. In my view, the amount of $1,527.50 is properly charged-back against Prasher.
Invoice 355
[297] To my knowledge, Pre-Eng has not produced a copy of Industrial’s invoice no. 355. It purportely comprised $9,360.00 of the amount invoiced on CB-11204. Prasher’s counsel cross-examined Bruno Mariani about how much of that invoice related to extra work under CN91 (additional lintels for the clerestory windows in the gym). She submitted in closing argument that invoice 355 shows 85 hours related to CN91 work. I have no idea where she got that number, or whether perhaps she has a copy of invoice 355, which I could otherwise not find in the evidentiary record. It was not indexed in the multiple volumes of documents filed by the defendant, nor is it attached to CB-11204 in the defendant’s Charge-Back and Payments Brief.
[298] Under cross-examination, Bruno Mariani said that he did the work on CO91 on May 30, June 5, 6, 7, 8, 12, 19, 21 and 25, 2012. That is a substantial amount of work. Industrial’s invoice 360 is dated July 3, 2012 and does not include work on any of those dates. I think it likely that invoice 355 does include work on the extra reflected on CO91. As Prasher’s counsel submitted, it is not proper to charge-back to Prasher an amount that reflects an extra to the contract. I agree. In the absence of a copy of invoice 355, I am unable to determine how much, if any, of the work reflected in that invoice relates to work within Prasher’s scope.
[299] In the result, I find that $2,857.50 ($1,330.00 + $1,527.50) has been established as valid with respect to this charge-back.
(v) CB-11206 - $1,400.00
[300] This charge-back relates to two invoices from ABM for site attendances and sketches.
[301] The first ABM invoice included is dated May 22, 2012 and numbered 1255. This is the same invoice that I approved as part of CB-11203 and is a duplicate.
[302] The second invoice, number 1277, dated July 17, 2012 relates to an attendance by Mr. Mashhadi on site on July 9, 2012 and a sketch he prepared (SK-12). The visit and sketch relate to the completion of stair #3.
[303] Mr. Mashhadi testified, under cross-examination, that he had emailed Prasher on June 20, 2012 to advise that there were some deficiencies with respect to stairs 2 and 3 and he sent some sketches for remediation work. I find that the attendance on July 9, 2012 and SK-12 were both related to this remediation work. I conclude that this is a proper charge-back in the amount of $700.00 plus HST, though it appears likely that it ought to have been a charge-back to the miscellaneous metals contract.
(vi) CB-11207 - $973.53
[304] This charge-back relates to the rental of a skyjack scissor lift ($698.53) and five hours of labour supplied by Pre-Eng forces to help install a bent plate in the garbage room.
[305] Mr. Prasher testified that he did not know what the rental fee was for. He accepted that installation of the bent plate was his responsibility and said that Pre-Eng had brought in other forces to get the work done faster.
[306] Mr. Raviele testified that, like Mr. Prasher, he did not know what the scissor lift was for.
[307] In light of my earlier observations about Prasher’s inattentiveness to the project, I am satisfied that it was reasonable for Pre-Eng to have its own forces assist with the installation of the bent plate. It was part of Prasher’s scope of work and it was done by others. I allow $275.00 (5 hours x $55/hr.) as a valid charge-back. I do not allow anything for the equipment rental since there is no evidence about what it related to.
(vii) CB-11208 - $2,334.00
[308] This charge-back is accepted by Prasher and I allow it at $2,334.00.
(viii) CB-11209 - $4,328.35
[309] Both charge-back 11208 and 11209 relate to invoices from a company called Kanadian Fireproofers. Both relate to remediation work of a similar nature. It is not clear to me why Prasher accepts responsibility for CB-11208 but not CB-11209.
[310] The underlying facts are these. Prasher fabricated all of the structural steel in its own facility. All of the materials they fabricated received a coat of primer paint. When steel is primed, however, fireproofing material does not adhere to it. Some of the steel installed in the school was to be fireproofed. But, according to Mr. Prasher, Pre-Eng did not tell them which pieces were not to be primed so that they could be fireproofed. Ergo, they primed it all.
[311] To remedy the fireproofing issue, steel that was to be fireproofed but had been primed had to have mesh added to it. The Kanadian Fireproofers invoices relate to the addition of mesh to the steel that needed to be fireproofed.
[312] Under cross-examination, Mr. Prasher admitted that the project plans showed that fireproofing was required on some of the steel. He agreed that there were notes on the tender drawings as to beams that were to be spray fireproofed. He said, however, that they sent their drawings (which showed all steel was to be primed) to the structural engineer for approval in order to ensure they were right. Their primed steel was approved in this case.
[313] Jennifer Watson is an associate at RJC, the consulting engineers on the project. She testified that the architectural drawings address fireproofing.
[314] Adrian Phillips (the architect) identified on tender drawing A801, the various locations of beams with spray fireproofing. He noted that the specifications for the project required that if steel was to be fireproofed, it was not to be primed.
[315] In my view, it was incumbent upon Prasher not to prime steel that was to be fireproofed. They were aware of that requirement but were not careful enough to determine which beams were to be left unprimed. It is no answer, in terms of their liability, that the structural engineer did not correct their drawings.
[316] This charge-back also includes an ABM invoice, no. 1284, dated August 16, 2012, for $700.00. Mr. Mashhadi testified that this invoice related to an attendance on site with the inspector from Butler. The visit and a number of sketches that were prepared following the visit, relate to deficiencies in the structural steel work identified by Butler. This is an appropriate charge-back to Prasher.
[317] I find that the full amount of this charge-back is valid, at $4,328.35.
(ix) CB-112011 - $2,157.30
[318] This last charge-back against the structural steel contract has two elements. The first is an invoice from a company called M.C. Steel Erector Ltd. for the installation of an elevator beam and welding rods. The second is Mr. Bisceglia’s invoice for legal fees associated with the ex parte motion to bond off the plaintiff’s lien.
[319] Prasher once again takes the position that this steel work was an extra. I have no idea if it was or was not. The only evidence I have about it came from Steve Raviele. He said only that it involved the installation of an elevator beam, which of course is self-evident. I am not persuaded that it is a proper charge-back.
[320] Mr. Bisceglia’s fees are also not a proper charge-back.
Summary
[321] In summary, I find that the following amounts are valid charge-backs against the structural steel contract:
(i) CB-11201: nil
(ii) CB-11202: $3,745.50
(iii) CB-11203: 2,280.00
(iv) CB-11204: 2,857.50
(v) CB-11206: 700.00
(vi) CB-11207: 275.00
(vii) CB-11208: 2,334.00
(viii) CB-11209: 4,328.35
(ix) CB-11211: nil
Total: $16,520.35
[322] In the result, the accounting on the structural steel contract is as follows
(i) Base Contract Price $220,000.00
(ii) HST on Base 28,600.00
(iii) Extras 43,543.30
(iv) HST on Extras 5,660.69
(v) Charge-Backs (16,520.35)
(vi) HST on Charge-Backs (2,147.65)
(vii) Paid to Prasher (195,731.49)
Owed to Prasher: 83,404.50
[323] I will move on to an analysis of the miscellaneous metals contract.
I. What is the value of the miscellaneous metals work performed by Prasher?
[324] The gross amount of the miscellaneous metals contract was $133,000.00.
[325] Prasher completed only a portion of the work required by the contract. No evidence was adduced, such as a quantity survey, about the value of the work actually performed by Prasher.
[326] There is no doubt that Pre-Eng ultimately paid third party contractors to complete the work Prasher was contracted to do. And there is no doubt that Pre-Eng had to pay a premium to get the work done by third parties.
[327] I intend to approach the accounting between the parties with respect to the miscellaneous metals contract as follows. All of the miscellaneous metals work contemplated by the contract was, to the best of my knowledge, completed. I will begin with the premise that, had Prasher satisfactorily completed the work, it would have been entitled to payment from Pre-Eng in the amount of $133,000.
[328] I will then deduct from the gross contract amount, any amounts that I conclude Pre-Eng validly paid to third parties to correct work deficiently performed by Prasher under this contract or to complete work not completed by Prasher. Pre-Eng has back-charged Prasher for any such work. The total charged-back against the miscellaneous metals contract, according to the Scott Schedule, is $120,214.26. If Pre-Eng’s charge-backs are all valid, the net result will be an amount owing to Prasher of just under $13,000.00 (subject to amounts that have already been paid).
[329] I will do my best, of course, to account for any work done by third parties that was extra to the miscellaneous metals contract between Pre-Eng and Prasher. Obviously Prasher should not be back-charged for work that was over and above that which it contracted to do.
[330] To be clear, I find that Prasher breached its obligations under the miscellaneous metals contract. Specifically, it breached its obligation to complete the work required in a good and workmanlike fashion and to prosecute the work in such a way as to not impede the progress of the project. Such a finding is readily available on the evidentiary record before me and I have no hesitation making it.
[331] I have already alluded to the fact that Prasher’s business was in a state of crisis from and after April 2012. I find that Prasher had neither the time nor the resources to complete the miscellaneous metals work as contemplated by the contract within a reasonable time frame. Moreover, Mr. Prasher was generally inaccessible and not reasonably responsive to communications from Pre-Eng.
[332] In his written closing submissions, counsel to Pre-Eng provided a chart of some fifty communications Pre-Eng sent to Prasher between February 22, 2012 and October 5, 2012. I have reviewed each of these correspondences. Forty of them are appropriately described as instances where Pre-Eng implored Prasher to complete its works in a timely way or otherwise reproached Prasher for not doing so. The following is a modest sampling:
• February 27, 2012:
We have made several attempts to contact you at your office over the last four days with no response. We are insisting that you respond to the site’s request and Site Instruction 43, for the supply of steel lintels. If we have not heard back from you by tomorrow at noon we will proceed to have others provide these angles with the costs to your account.
• April 23, 2012:
Manoj,
The following items in the above mentioned job are either not done or not completed:
[List 1-9]
Please, complete your work ASAP, since you delay our subcontractor work.
• May 10, 2012:
Manoj, as discussed you will start installing the roof anchor support in the gym tomorrow as well as the hanging lintels at the overhangs on the north side.
Unfortunately the schedule does not allow us to wait any longer for you here as well as additional items where you have not finished your work. If the work has not started tomorrow on either of these items I will be making arrangements to have others come in and complete the work on your behalf immediately.
• May 15, 2012:
Manoj,
When I spoke to you Thursday last week you assured me that you would start the roof anchor reinforcement the next day. Your email…then indicated that it would start Monday. If your forces are not on site today doing the work we will be taking over this portion of your contract effective immediately. Costs will be to your account.
• May 24, 2012:
We have made several attempts throughout this project to communicate with you regarding scheduling, missing items, deficiency repairs etc. and throughout the project, we have received few return phone calls or any response whatsoever from Prasher Steel. We finally got you to agree to see us in our office on May 18th whereby we discussed our concerns and provided you notice that we would not continue in this manner. Contrary to your repeated assurances to us that you would have materials available and men working full time to complete this project, your forces left at 10 am this morning without providing a reason. We do not have one set of stairs installed to date and costs to rent a scaffold stair continue to mount as does our inability to co-ordinate pouring stair pans and landings with other concrete pours.
We will be engaging others to complete your work. Costs to do so will be to your account.
• June 11, 2012
Manoj, there is still a lot of work that you need to complete but you have no men on site today.
• June 13, 2012
The structural steel for the two canopies on the north elevation are not complete and you have not started the canopy on the west elevation. Kindly have all canopies complete ready for inspection by the end of this week after which time we will complete the work on your behalf. Costs will be to your account.
• June 21, 2012:
Manoj, there is no reason why stair 2 and 3 should not be finished by now including the attached details. We will have someone else to start finishing the stairs for you shortly. Also be advised that if the angle for the stage deck support is not on site today this too will be done by others.
• June 22, 2012:
Contrary to your assurances, you have not had anyone on site to continue with steel erection as required this week and delivered only part of the material necessary. Unfortunately we must continue to have others complete your work as we deem fit for the project.
• July 3, 2012:
Manoj, given the re-occurring late installations as well as the numerous deficiencies we have observed for your interior miscellaneous metals work, we will be having others proceed on all exterior railings as we can no longer afford any delays…
• July 16, 2012:
Manoj, last you were here on July 10th, we discussed and agreed what items you would try and complete for us on this project which was limited to the remainder of interior stair and wall railings, stairs 4, 5 & 6, the chair dollies and exterior gates. It was also agreed that you would have all railing completed by the end of last week. Unfortunately you haven’t had anyone on site installing steel since early last week and this continues to be a major concern for us given the limited time we have remaining before we turn over the school. The fact that you will not return phone calls also does not provide us with any level of comfort that you are willing to complete your work.
Unless there is some serious effort in getting materials and manpower to the site by this Wednesday we see no other recourse than to terminate the remainder of your contract and have it performed through other forces.
• July 18, 2012:
Manoj, we are doing the work as we deem fit. You have not delivered material as you have promised and we are unable to discuss any of the above with you as you do not return phone calls messages and/or answer your office phone whatsoever. As far as we are concerned it appears you have abandoned the project.
[333] I find that Prasher breached its obligation to complete all of its works in a good and workmanlike fashion and failed to correct deficiencies in its work in a timely way. Moreover, I find that Prasher breached its obligation to maintain a workforce sufficient to avoid disruption of the progress of the work.
[334] I further find that Pre-Eng gave repeated, written notices to Prasher to comply with its obligations under the contract as well as notices that work within their scope was going to be removed and given to others. In all the circumstances, I find that Pre-Eng was justified in bringing in third parties to correct and complete Prasher’s work.
[335] When this trial began, I understood that Prasher was prepared to credit Pre-Eng with a deduction from the miscellaneous metals contract price for the value of the work taken out of Prasher’s scope. As the trial proceeded, however, Mr. Prasher made it clear to the court that he was no longer prepared to agree to such a deduction because he had forces available to complete the work and Pre-Eng wrongly delegated it to others.
[336] In my view, Prasher did not have sufficient forces available to complete the work in a timely way. Recall that in the spring of 2012, Prasher was falling behind on its payments to Bains Welding. Moreover, Pre-Eng had to make payments directly to a steel supplier and a rental equipment supplier on Prasher’s behalf.
[337] Prasher was given every reasonable opportunity to complete the work with its own forces and patently failed to do so.
J. What is the value of any extra work performed by Prasher in relation to the miscellaneous metals contract?
[338] I find that Prasher did not complete any extras in the nature of miscellaneous metals works.
K. How much has Prasher been paid for work performed under the miscellaneous metals contract, including extras?
[339] I find that Prasher has been paid $27,052.20 on account of its work under the miscellaneous metals contract. That amount was paid May 31, 2012. Prasher was paid by a cheque on that date in the amount of $40,295.74, which includes the $27,052.20 paid on the miscellaneous metals contract and $13,413.54 paid on the structural steel contract.
L. What amounts is Pre-Eng entitled to back-charge against Prasher for expenses it incurred in correcting or completing work that fell within the scope of the miscellaneous metals contract?
[340] I will consider Pre-Eng’s charge-backs one-by-one, as I did with the structural steel contract. Unfortunately, Pre-Eng used the same numbering system for charge-backs under the miscellaneous metals contract that it used for charge-backs under the structural steel contract. In the result, the charge-back numbers are duplicated.
(i) CB-11202 - $571.54
[341] This charge-back involves a number of small invoices. Two are for anchor bolts bought from Brafasco to close out a deficiency in the structural steel work. I agree that the sum of $60.54 is a valid back-charge.
[342] The biggest portion of this charge-back is $385.00 for the time spent by Pre-Eng labourers pouring concrete into stair pads. That is not part of Prasher’s scope of work. Pre-Eng seeks to recover the value of this time against Prasher because, they say, Prasher’s delay in getting the stairs built and ready for concrete in the stair pans resulted in an inability to co-ordinate the stair pour with other concrete work when the concrete supplier was on site. As I noted earlier, in the absence of a specific schedule for Prasher’s work, I am not prepared to validate this part of the charge-back. The same can be said for the sum of $75.00 for the rental of a stair scaffold. This cost is, again, sought to be passed on to Prasher on the basis that Prasher was too slow getting the stairs completed. I agree that Prasher was slow, but it had not been given any specific deadline for the stairs, so I am not prepared to validate this part of the charge-back either.
[343] Finally, there is an invoice in the amount of $51.00 from a company called Wade Tech. I do not know what this invoice was for and am unable to say whether it is a valid charge-back.
[344] In the result, I find that $60.54 of this charge-back is valid.
(ii) CB-11203 - $3,305.00
[345] This is another charge-back that is comprised of multiple elements. In particular:
• A portion ($1,410.00) of a North York Welding invoice dated June 28, 2012 (no. 2218) in the amount of $15,933.00, relating to the supply of overhead door jams;
• The balance of Industrial Welding’s invoice dated July 3, 2012 (no. 360) in the amount of $1,620.00 relating to the installation of the door jams and the supply of masonry lateral support clips; and,
• $275.00 in labour costs of Pre-Eng’s own forces, who assisted in installing the overhead door jams.
[346] I am satisfied that this is a valid charge-back. The supply and installation of the overhead door jams was part of Prasher’s scope of work under the miscellaneous metals contract.
[347] Prasher’s counsel submitted that the amount of this charge-back relating to the invoice of Industrial Welding was a duplication of structural steel charge-back CB-11204. I disagree. Recall that only $1,527.50 of invoice 360 was back-charged under structural steel charge-back CB-11204. The balance of the invoice is charged-back here.
[348] I find that this is a valid charge-back in the amount of $3,305.00
(iii) CB-11204 - $9,000.00
[349] This charge-back relates to another portion of North York Welding’s invoice 2218 dated June 18, 2012. Specifically, the supply and installation of stair #7. The amount is consistent with North York Welding’s quote of $9,000.00. I find that this work clearly fell within Prasher’s scope and is a valid charge-back at $9,000.00.
(iv) CB-11205 - $10,500.00
[350] Things get a little confusing with CB-11205. There are two charge-backs labelled CB-11205. It is not unusual in this case to find charge-backs with duplicate numbers. As I indicated earlier, Pre-Eng used the same numbering system for its charge-backs under each of the two sub-contracts, so there are many duplicates. But in the case of the two charge-backs identified as CB-11205, I am of the view that both relate to miscellaneous metals work. Neither, in my view, relates to structural steel work, even though one of them was clearly attributed to the structural steel contract.
[351] In the case of this first CB-11205, the charge-back is in the amount of $10,500.00. It relates to an invoice from North York Welding for the supply of lateral steel angle supports. It was attributed to the structural steel contract. But these supports were quoted on by North York Welding when it initially submitted a tender on the miscellaneous metals contract and remained in its re-quote on that work dated June 1, 2012. The June 1, 2012 re-quote is, in fact, an exact duplicate of its original quote on the miscellaneous metals work.
[352] Prasher’s counsel submitted that these angle supports were part of an extra and covered by a change notice, but I have not be directed to any change notice or change order covering them. Moreover, the fact that they were part of the work originally bid on by North York Welding at the time of tender strongly suggests that they were part of the original work.
[353] Having said all of that, Sergio Mariani testified that he only supplied $2,500.00 worth of these support angles and that Prasher had supplied the rest. He said he billed for only $2,500.00 and not $10,500.00. His invoice bears that out. I accept his evidence and allow $2,500.00 for this charge-back.
(v) CB-11205 - $669.28
[354] This second charge-back with number CB-11205 relates to a number of invoices from Brafaso, principally for wedge anchors. Wedge anchors are typically used to anchor objects into concrete applications. I accept that they were used here to anchor steel to concrete.
[355] I find that that this is a valid charge-back in the amount of $669.28.
(vi) CB-11206 - $3,600.00
[356] This is a fourth charge-back generated by North York Welding’s invoice 2218 dated June 28, 2012. That invoice specifies that it is for three separate items on North York Welding’s quote, specifically numbers 4, 13 and 15. Number 4 was the $9,000.00 relating to stair #7 (CB-11204). Number 13 involved the overhead door jams (CB-11203). Number 15 related to the supply of lateral steel angle supports (CB-11205).
[357] I am not able to make any sense out of this charge-back. If it indeed relates to North York Welding’s invoice 2218, then it is a duplicate charge-back, since that invoice was fully charged-back through CB-11203, CB-11204 and CB-11205.
[358] Mr. Raviele testified only that this charge-back related to an invoice of North York Welding and was “properly chargeable to Prasher’s account”. That sort of superficial evidence is not particularly helpful. It tends to presuppose that the charge-back is valid and offers nothing by way of concrete support.
[359] Given that I am unable to discern what this charge-back relates to, I find that it has not been established in evidence that it was properly charged back against Prasher.
(vii) CB-11207 - $5,343.50
[360] CB-11207 relates to two Industrial Welding invoices, specifically invoice 361 dated July 9, 2012 in the amount of $2,291.50 (plus HST) and invoice 363 dated July 16, 2012 in the amount of $3,052.00 (plus HST).
[361] Mr. Prasher initially accepted that the sum of $1,332.50 was a valid charge-back with respect to those invoices, as it relates to work on stairs #1 and #3. Mr. Prasher resiled from that concession during the course of the trial, asserting that this work was extra to Prasher’s contract.
[362] Bruno Mariani’s testimony about the work detailed in his invoice 361 was that he “did some work for the electrician” and that he “did some labour on the stairs on the stage”. With respect to invoice 363, he testified that “the first part was putting a little support under the deck before the pouring of concrete on the stage”. The rest, he said, was work on the stairs.
[363] Under cross-examination, Mr. Mariani agreed that at least one element of his invoice 361 was an extra. Specifically, the installation and welding of the roof deck on the canopy by stair #2. This was part of CN35, later known as CO51. It is impossible, looking at invoice 361, to determine how much of it actually relates to work on the canopy. The work was done during part of the day on July 11, 2012. On that date, Industrial spent 10.5 hours on site (for a value of $682.50), but started on the canopy only at 2:00 p.m. Since I have no idea when Mr. Mariani started or ended work that day, I am of the view that it is fair to allocate one-half of the value of his work on July 11, 2012 to the extra on the canopy. In the result, I deduct $341.25 from the total of invoice 361. The balance of invoice 361 is work that I find, on balance, was properly part of Prasher’s scope and is a proper charge-back. The total allowed for invoice 361 is accordingly $1,950.25.
[364] I am satisfied that the whole of invoice 363 is work that was within Prasher’s scope.
[365] Prasher’s counsel submitted that the work on invoices 361 and 363 “appear to be primarily extra work on stairs 1, 2 and 3.” She pointed the court to CO30 as support for her assertion. I find, however, that CO30 is limited to revising a wall-mounted handrail to a handrail with pickets on stair #2. Invoices 361 and 363 do not appear to me to relate to stair #2 at all, save with respect to the canopy, which I have referred to.
[366] In the result, I allow a total of $5,002.25 for this charge-back.
(viii) CB-11208 - $3,327.50
[367] This charge-back reflects a charge of 60.5 hours of labour purportedly performed by Pre-Eng’s own forces, at a rate of $55.00 per hour. The work is primarily in relation to the installation of railings.
[368] Prasher’s position is that it did this work and, in any event, Pre-Eng labourers were not licensed to do it and should not be paid anything.
[369] Very little time was spent on this charge-back in evidence. It is Pre-Eng’s obligation to establish the amount claimed on a charge-back. I am not satisfied that they have done so in this instance.
(ix) CB-11209 - $14,493.25
[370] This charge-back consists of two elements. The first reflects 12 hours of Pre-Eng’s own labourers, billed out at $55 per hour, for assisting Bruno Mariani with the installation of handrails.
[371] Mr. Raviele testified that one of Pre-Eng’s labourers, Luis Bolanos, worked 7 hours on August 20, 2012 and another 5 hours the next day helping with railings. He was performing general labour duties and not welding. The railings were part of Prasher’s work under the miscellaneous metals contract. I am satisfied that this is an appropriate charge-back.
[372] The larger part of the charge-back reflects two invoices, 364 and 371, from Industrial Welding, in the amounts of $3,028.50 and $10,804.75 respectively. I will consider them in turn.
Invoice 364
[373] Invoice 364 related principally to correcting deficiencies on stairs #1 and #3 and installing two sets of stairs on the stage. Prasher’s position is that there were no deficiencies and the amounts claimed on this invoice are, for the most part, extras. I reject that position. There is no question that Prasher did not do much of the work required under the miscellaneous metals contract. And in my view, there is no serious question that the work it did do under that contract was deficient in many ways.
[374] I accept Bruno Mariani’s evidence that the condition of the stairs, when he first attended the site, was a “disaster”. The stairs, he said, were simply “sat down”, not fitted. Essentially, they were not finished and were just left. It took extra time to customize the stairs and make them safe and presentable looking. Most of the work on invoice 364 reflected that customizing.
[375] I found both Bruno and Sergio Mariani to be earnest witnesses, who took a great deal of pride in their work. I have no hesitation in finding that if either said corrective work was required, that it was actually required.
[376] Prasher’s counsel submitted that invoice 364 includes extra work – specifically pursuant to CO45. I agree. However, the amount charged for the extra work (relating to the installation of angles over overhead doors) in the amount of $780.00 does not form part of this charge-back. Invoice 364 is actually in the amount of $3,808.50 plus HST. Only $3,028.50 has been included in the charge-back.
[377] Prasher’s counsel also claimed that Bruno Mariani agreed that some other elements of this work was extra to Prasher’s contract. I did not find that in his evidence.
[378] She further referenced CO53 and suggested that it covered some of the work billed out on invoice 364. CO53 involved the fabrication and installation of steel plate closures at stairs #1 and #3 to close gaps between the stairs and the gypsum wall. It is not possible for me to determine, looking at invoice 364, whether it includes the work identified in CO53. Both Bruno and Sergio Mariani said that the work identified in CO53 was reflected on a subsequent Industrial Welding invoice, specifically no. 368. I accept their evidence on this point. In the result, I make no deduction for it from this charge-back.
Invoice 371
[379] There are a number of live issues with respect to invoice 371. This invoice covers miscellaneous work performed by Bruno Mariani between August 20, 2012 and September 1, 2012. Much of it relates to the installation of handrails and finishing work on stairs. It also includes the installation of bench brackets in the kindergarten, the installation of coat hooks and brackets in the change rooms and picking up wheels and welding them onto the chair dollies.
[380] The first live issue with respect to invoice 371 relates to Prasher’s claim that the installation of bench brackets is an extra, covered by CO47. In other words, it is not properly charged-back against Prasher because it was never part of Prasher’s scope of work.
[381] Although it can be very difficult to match change orders and the work ultimately performed by Industrial Welding, I am, on balance, satisfied that the amount charged for installing kindergarten bench brackets ($650) is covered by CO47 and is not a proper charge-back.
[382] The second live issue with respect to invoice 371 relates to the welding of new castors on chair dollies.
[383] Prasher originally supplied – and perhaps installed – castors on at least 5 of the 6 chair dollies called for in the miscellaneous metals contract. It appears the castors were undersized and did not work well on the gym floor. The architect approved an extra for new castors which Industrial installed.
[384] Picking up castors and welding them onto chair dollies appears to be covered by CO65. That said, it is difficult to tell how much time was spent on the chair dollies. The work on the dollies was done August 30, 2012. On that day, Bruno Mariani charged 12.5 hours but some of that time relates to the fabrication of shop angles for rails for the dollies and then welding and installing them. Without any further or better information to go on, I will deduct one-half of the value of the time billed on August 3, 2012 to reflect work relating to the castors, for a value of $406.25.
[385] The third issue with respect to invoice 371 involves the sharing of material costs between Pre-Eng and Prasher. There was an understanding, apparently, that some of the material costs reflected on the invoice would be divided. Mr. Raviele said that if they made a note “divide” on an invoice, which they did in this instance, it meant the costs were to be split between Pre-Eng and Prasher. The materials total $677.25, half of which ($338.63) should not be back-charged because the note “divide” does appear beside them on the invoice.
[386] The fourth issue with respect to invoice 371 is whether changes to handrails on stair #2 and stair #3 were extras to the miscellaneous metals contract. A note written on a copy of invoice 371 appears to suggest that 15 of the invoiced hours related to changes to the handrails required by the building inspector. Those changes are reflected in CO48 and were not within Prasher’s initial scope of work.
[387] Mr. Raviele was specifically asked whether invoice 371 included work covered by CO48 and he said it did not. But Bruno Mariani said that the work identified in CO48 was reflected on both his invoices 371 and 382. He specifically said that installing a 90-degree angle on stair #2 (which was billed as part of invoice 371) was part of CO48. The value of that work appears to be $747.50.
[388] Having considered each of the four issues raised, I deduct the sum of $2,142.38 from the amount of this charge-back. That sum is made up of $650.00 (covered by CO47); $406.25 (covered by CO65); $338.63 (reflecting Pre-Eng’s share of divided material costs); and $747.50 (covered by CO48). The balance of the charge-back, in the amount of $12,350.87, properly relates to work within Prasher’s scope. In my view, it is a valid charge-back.
(x) CB-112010 - $1,413.80
[389] This charge-back relates to an invoice from Industrial Welding, no. 368, dated July 31, 2012. The gross amount of this invoice was $3,601.30. The charge-back is for $1,413.80. The difference is explained by the fact that some of the work on this invoice is extra work required by CO53. In my view, the balance of the work reflected on this invoice (i.e. the $1,413.80) was within Prasher’s scope and is a valid charge-back.
(xi) CB-112012 - $57,150.00
[390] This is the single largest charge-back. It relates to an invoice of North York Welding, no. 2261, dated September 20, 2012. It reflects the bulk of work done to complete work Prasher had agreed to do under the miscellaneous metals contract but did not do. In particular:
• galvanized steel railing at exterior stairs 8, 9 and 10 ($29,800.00);
• galvanized steel railings and handrails at ramps 2, 3 and 4 ($21,600.00);
• exterior galvanized roof access ladder ($2,000.00);
• change room bench and shelf steel bracket supports and coat hooks ($2,150.00)
• four steel bollards ($1,000.00); and,
• galvanized steel bollard for automatic door ($600.00).
[391] The principal complaint Prasher has about this charge-back is that it relates to work that he says was removed from his scope of work. He appears to be of the view that if Pre-Eng removed work from him and gave it to others to complete that they cannot back-charge him for that work. That might be true had the parties agreed to an amendment of the contract terms. But what happened here was that Prasher agreed to do certain work for a certain price. They failed to complete that work in a timely way or in a good and workmanlike fashion. In the result, Pre-Eng had others complete the work, as they were entitled to do. They are entitled to claim the amounts paid to others in reduction of what they owe Prasher on this contract. Indeed, they are entitled to look to Prasher for compensation if the amounts paid to others to complete the contract work exceed the amount Prasher agreed to do the work for.
[392] I find that the work reflected in this charge-back was all work within Prasher’s original scope. It was work Prasher did not complete and work that had to be completed by a third party. It is properly charged-back against Prasher.
[393] Prasher’s counsel asserted that Mr. Prasher testified that his company had done the work on the change room brackets and coat hooks. My notes reflect that Mr. Prasher testified that Prasher supplied the brackets and hooks and someone else installed them. On North York Welding’s original quote, this work was valued at $9,000.00. North York Welding billed only $2,150.00 for this work which may well reflect the fact that Prasher supplied the materials. There does appear to be some consensus that Prasher did some, but not all, of the work on this item. In my view, the value of this item - $2,150.00 - is made out.
[394] Prasher’s counsel further asserted that the galvanized steel bollard ($600) was an extra, but I do not see how that could be. Prasher’s scope of work under the miscellaneous metals contract included all bollards.
[395] In my view, this charge-back is valid as charged and I allow $57,150.00 for it.
(xii) CB-112013 - $2,650.00
[396] This charge-back relates to a North York Welding invoice, no. 2335, dated June 12, 2012 for the supply and installation of “an additional galvanized security gate”.
[397] Mr. Raviele agreed under cross-examination that this item was extra to the contract he had with North York Welding. He could not say whether it was extra to the miscellaneous metals Pre-Eng had with Prasher. Sergio Mariani confirmed that it was an extra to his contract and he testified it would have been an extra to Prasher as well.
[398] In my view, this is not a valid charge-back.
(xiii) CB-112014 - $2,000.00
[399] This charge-back relates to North York Welding’s invoice no. 2293, dated October 25, 2012. It reflects the supply and installation of one chair dolly, as well as the supply of all castors.
[400] It is accepted that there were to be six chair dollies and that Prasher supplied only five. Prasher concedes that the cost of one chair dolly is a valid charge-back, but values one chair dolly at $200.00.
[401] Prasher claims the balance of the charge-back relates to the cost of castors. Prasher had supplied all castors, but as I noted earlier, alternate ones were requested and approved as an extra under CO65.
[402] When he testified about Prasher’s last date of supply, Mr. Prasher said he dropped off five chair dollies to the site on August 21, 2012. He said the value of those chair dollies was $2,500.00, which, by my math, works out to $500.00 each.
[403] In terms of this $2,000.00 invoice, I will accordingly attribute $500.00 to the one missing chair dolly that was Prasher’s responsibility. The balance of the invoice I accept was an extra and covered by CO65. As such, it is not a proper charge-back
[404] I accordingly allow $500.00 for this charge-back.
(xiv) CB-112015 - $3,000.00
[405] This charge-back relates to North York Welding’s invoice no. 2336, dated June 12, 2012. It reflects the supply and installation of steel gates in the loading area.
[406] Prasher submits that this is an extra to the contract and not validly charged-back against it. Mr. Gregoris, on the other hand, testified that he made it clear on Prasher’s quote that it included a gas meter gate, a loading dock gate and a guardrail.
[407] The miscellaneous metals contract describes the scope of work as follows:
Complete all the work outlined in section 5500 (metal fabrications) and in accordance with the contract documents. Also included is lateral masonry supports, gas meter gate/frame, loading dock gates and guardrails.
[408] The reference to “section 5500” was in relation to the project specifications.
[409] It would appear clear that loading dock gates are expressly included in Prasher’s scope of work. Prasher did not do the work. North York Welding did. In my view, the cost of the work is validly charged-back against Prasher.
(xv) CB-112016 - $550.00
[410] Little evidence was submitted about this charge-back. It relates to a North York Welding invoice dated June 28, 2012 (no. 2216) in the amount of $5,383.00 plus HST. For reasons not explained in the evidence, only the sum of $550.00 was sought to be charged back against Prasher.
[411] The invoice specifically relates to an “extra” to the contract. Unfortunately, the terms of North York Welding’s contract with Pre-Eng are not identical to Prasher’s contract with Pre-Eng. It is impossible to determine, on the face of the invoice, whether this work was an extra to both North York Welding’s contract and Prasher’s contract. Sergio Mariani testified that it was an extra to his June 1, 2012 quote and the $550.00 was a structural item. He did not elaborate on what that item was.
[412] Having said all of that, the invoice references PCO64. “PCO” is an acronym for “Proposed Change Order”. PCO64 relates to CN90 which involved the supply of additional lintels for the clerestory windows in the gym. There is nothing on North York Welding’s invoice that indicates that the sum of $550.00 related to something other than those lintels. In other words, it appears to me that the work sought to be charged-back to Prasher on this invoice was outside the scope of Prasher’s contract.
[413] In my view, this is not a valid charge-back.
Summary
[414] In summary, I find the following charge-backs are valid in relation to the miscellaneous metals contract:
(i) CB-11202: $ 60.54
(ii) CB-11203: 3,305.00
(iii) CB-11204: 9,000.00
(iv) CB-11205: 2,500.00
(v) CB-11205; 669.28
(vi) CB-11206: nil
(vii) CB-11207: 5,002.25
(viii) CB-11208: nil
(ix) CB-11209: 12,350.87
(x) CB-112010: 1,413.80
(xi) CB-112012: 57,150.00
(xii) CB-112013: nil
(xiii) CB-112014; 500.00
(xiv) CB-112015: 3,000.00
(xv) CB-112016: nil
Total: $94,951.74
[415] In the result, the accounting on the miscellaneous metals contract is as follows
Base Contract Price $133,000.00
HST 17,290.00
Charge-Backs (94,951.74)
HST (12, 343.73)
Paid to Prasher (27,052.20)
Owed to Prasher: 15,942.33
M. Is Prasher responsible to compensate Pre-Eng for any delay with respect to the completion of the project?
[416] In my view, the claim for damages for delay has no merit. Pre-Eng offered no evidence that they incurred any damages related to delay, other than the amounts they incurred in hiring third parties to do work within Prasher’s scope in order to avoid delay. Those amounts have already been accounted for in the charge-back analysis.
[417] The school was delivered on time.
[418] The main consultant on the project, the architect, Mr. Phillips, testified that the work was delayed about 5 weeks during the winter of 2011-12 due to inclement weather. He said that by May 9, 2012 the project was back on schedule. There is no evidence to suggest it fell behind schedule thereafter.
I. CONCLUSIONS
[419] I have made the following significant factual findings:
The parties entered into two separate contracts: one for structural steel work and one for miscellaneous metals work.
The terms of the contracts are set out in written agreements dated August 2, 2011 and September 6, 2011.
Prasher failed to preserve its lien rights with respect to the structural steel contract but validly preserved and perfected its Claim for Lien with respect to the miscellaneous metals contract.
Prasher has a continuing claim for a personal judgment against Pre-Eng in relation to the structural steel work, pursuant to s. 63 of the Construction Lien Act.
Prasher is owed, on account of the structural steel work, the base price of $220,000.00 plus HST, plus extras of $43,543.30 plus HST, less valid charge-backs of $16,520.35 plus HST, for a net owing of $279,135.99.
Prasher has been paid the sum of $195,731.49 on account of the structural steel contract, leaving a balance owing of $83,404.50.
Prasher breached the miscellaneous metals contract by failing to prosecute the work in a timely way and complete it in a good and workmanlike fashion. Their breach entitled Pre-Eng to look to third parties to complete the contract work.
Prasher is owed, on the miscellaneous metals contract, $133,000.00 plus HST, less $94,951.74 plus HST in valid charge-backs, for a net owing of $42,994.53.
Prasher has been paid $27,052.20 on account of the miscellaneous metals contract, leaving a balance of $15,942.33.
The net owing to Prasher on both contracts is $99,346.83.
[420] Prasher is entitled to pre-judgment interest on the amount awarded at the rate of 1.3% per annum from and after November 14, 2012. It is entitled to post-judgment interest from today’s date in accordance with the provisions of the Courts of Justice Act, R.S.O. 1990, c. C.43.
[421] Given my findings with respect to the validity of Prasher’s Claim for Lien, the amount owing in relation to the structural steel contract is enforceable as a personal judgment only. The amount owing on the miscellaneous metals contract is enforceable against the bond.
[422] Prasher’s counsel is invited to prepare the appropriate draft judgment.
[423] Counsel are encouraged to agree on the issue of costs. In the event they cannot agree, they make written submissions on a 14-day turnaround. Prasher’s submissions will be due by June 27 2022 and Pre-Eng’s will be due by July 11, 2022. Submissions are not to exceed 3 pages in length, not including cost outlines. Prasher will be entitled to a 2-page reply, which will be due by July 25, 2022.
Boswell J.
Corrected Date: November 28, 2022
November 3, 2022 – Corrections:
- Para. 322 now reads:
In the result, the accounting on the structural steel contract is as follows
(i) Base Contract Price $220,000.00
(ii) HST on Base 28,600.00
(iii) Extras 43,543.30
(iv) HST on Extras 5,660.69
(v) Charge-Backs (16,520.35)
(vi) HST on Charge-Backs (2,147.65)
(vii) Paid to Prasher (195,731.49)
Owed to Prasher: 83,41204.50
HST (13%): 6,6678.89
Total Owing: $57,959.35
- Para. 415 now reads:
In the result, the accounting on the miscellaneous metals contract is as follows
Base Contract Price $133,000.00
HST 17,290
Charge-Backs (94,951.74)
HST (12, 343.73)
Paid to Prasher (27,052.20)
Owed to Prasher: 15,942.33
HST (13%): 1,429.49
Total Owing: 12,425.55
- Para. 419-5 now reads:
Prasher is owed, on account of the structural steel work, the base price of $220,000.00 plus HST, plus extras of $43,543.30 plus HST, less valid charge-backs of $16,520.35 plus HST, for a net owing of $279,135.99.
- Para. 419-6 now reads:
Prasher has been paid the sum of $195,731.49 on account of the structural steel contract, leaving a balance owing of $83,404.50. With HST, the total owing to Prasher on the structural steel contract is $57,959.35.
- Para. 419-8 now reads:
Prasher is owed, on the miscellaneous metals contract, $133,000.00 plus HST, less $94,951.74 plus HST in valid charge-backs, for a net owing of $42,994.53.
- Para. 419-9 now reads:
Prasher has been paid $27,052.20 on account of the miscellaneous metals contract, leaving a balance of $15,942.33. With HST, the amount owing is $12,425.55.
- Para 419-10 now reads:
The net owing to Prasher on both contracts is $99,346.83.
APPENDIX “A”
| No. | Date | Description | Variations | Comments |
|---|---|---|---|---|
| 1 | December 21, 2011 | First site inspection report – inspections December 14 and 15, 2011 | 8 | |
| 2 | Missing | |||
| 3 | February 24, 2012 | Inspections February 10, 13, 14 and 17, 2012 | 8 | Four items still open from December 21, 2011. All require a field work detail stamped by Prasher’s engineer (ABM) |
| 4 | February 28, 2012 | Inspections February 22 and 27, 2012 | 3 | All items from December 21, 2011 still outstanding. Six items from February 24, 2012 report outstanding. Four items require field work details by ABM |
| 5 | March 14, 2012 | Inspection March 6, 2012 | 1 | All items from December 21, 2011 still outstanding. Six items from February 24, 2012 report still outstanding. All items from February 28, 2012 report still outstanding. One requires a field work detail by ABM. One requires review by ABM. |
| 6 | March 21, 2012 | Inspection March 16, 2012 | 5 | All items from December 21, 2011 still outstanding. Six items from February 24, 2012 report still outstanding. All items from February 28, 2012 report still outstanding. One item from March 14, 2012 outstanding. |
| 7 | March 28, 2012 | Inspection March 22, 2012 | 4 | All items from December 21, 2011 still outstanding. Six items from February 24, 2012 report still outstanding. All items from February 28, 2012 report still outstanding. One item from March 14, 2012 outstanding. All items from March 21, 2012 report still outstanding. |
| 8 | April 12, 2012 | Inspections April 10 and 11, 2012 | 2 | All items from December 21, 2011 still outstanding. Six items from February 24, 2012 report still outstanding. All items from February 28, 2012 report still outstanding. One item from March 14, 2012 outstanding. All items from March 21, 2012 report are closed. All items from March 28, 2012 report are still outstanding. Two require field work details by ABM. |
| 9 | April 26, 2012 | Inspection April 24, 2012 | 3 | All items from December 21, 2011 still outstanding. Six items from February 24, 2012 report still outstanding. All items from February 28, 2012 report still outstanding. One item from March 14, 2012 outstanding. All items from March 28, 2012 report are still outstanding. All items from April 12, 2012 report are still outstanding. |
| 10 | May 9, 2012 | Inspections May 2 and 7, 2012 | 6 | All items from December 21, 2011 still outstanding. Six items from February 24, 2012 report still outstanding. All items from February 28, 2012 report still outstanding. One item from March 14, 2012 outstanding. Three items from March 28, 2012 report are still outstanding. One item closed. All items from April 12, 2012 report are still outstanding. All items from April 26, 2012 are still outstanding. Two require field work details by ABM. |
| 11 | May 16, 2012 | Inspection May 9, 2012 | 0 | All items from December 21, 2011 still outstanding. Six items from February 24, 2012 report still outstanding. All items from February 28, 2012 report still outstanding. One item from March 14, 2012 outstanding. Three items from March 28, 2012 report are still outstanding. All items from April 12, 2012 report are still outstanding. All items from April 26, 2012 are still outstanding. All items from May 9, 2012 report are still outstanding. Four require field work details by ABM. |
| 12 | June 13, 2012 | Inspection June 11, 2012 | 2 | No change in terms of open variations from the May 16, 2012 report. |
| 13 | June 20, 2012 | Inspection June 13, 2012 | 0 | No change in terms of open variations from the May 16, 2012 report, except to add that the variations in the June 13, 2012 report are still outstanding. |
| 14 | June 28, 2012 | Inspections June 26 and 27, 2012 | 1 | One variation from the June 13, 2012 report is closed. One remains open. No other changes from June 20, 2012. |
| 15 | July 5, 2012 | Inspections July 3 and 5, 2012 | 0 | All items from December 21, 2011 still outstanding. Four field work details required from ABM. Six items from February 24, 2012 report still outstanding. Four field work details required from ABM. All items from February 28, 2012 report still outstanding. One requires a field work detail from ABM. One item from March 14, 2012 outstanding. Three items from March 28, 2012 report are still outstanding. Two require field work details by AMB. All items from April 12, 2012 report are still outstanding. All items from April 26, 2012 are still outstanding. Two field work details required from ABM. All items from May 9, 2012 report are still outstanding. Four require field work details by ABM. Two items from June 13, 2012 still outstanding with one field detail work required from ABM. Variation identified on June 28, 2012 report still outstanding. |
| 16 | July 16, 2012 | Inspection July 11, 2012 | 0 | Variation identified on June 28, 2012 report is closed. All others remain open. |
| 17 | August 13, 2012 | Inspection August 9, 2012 | 0 | All items from December 21, 2011 still outstanding. Four field work details required from ABM. Four of six items from February 24, 2012 report still outstanding. Two are now closed. Four field work details still required from ABM. Two of three items from February 28, 2012 report are closed. One is still outstanding and requires a field work detail from ABM. March 14, 2012 variation is closed. Three variations from the March 28, 2012 is closed. All require field work details by ABM. All items from April 12, 2012 report are now closed. All items from April 26, 2012 are still outstanding. Two field work details required from ABM. Two of six items from May 9, 2012 report are closed. Four are still outstanding. Three field work sketches have been prepared by ABM and require approval from the consulting engineer. One field work detail by ABM still required. Two items from June 13, 2012 still outstanding with one field detail work required from ABM. |
[^1]: The trial of this action commenced on May 14, 2019 during the Central East spring civil trial sittings. I am unable to comment on why it took seven and a half years for the case to reach trial. The trial was unrealistically scheduled for five days. It was not completed during the spring 2019 sittings and was adjourned to the fall sittings in October 2019. It could not proceed during the fall 2019 sittings due to scheduling conflicts. Subsequently, the court’s spring and fall 2020 civil trial sittings were cancelled due to the Covid-19 pandemic. Scheduling issues again prevented the trial from continuing during the spring 2021 sittings. It finally continued during the weeks of August 9, 2021 and October 6, 2021. The parties made oral closing submissions on October 7 and 8, 2021 and supplemented them over the next ten weeks with written submissions.
[^2]: See Pre-Eng’s written closing submissions, para. 5.
[^3]: Paid to MBS Steel Ltd., a supplier of Prasher’s, with Prasher’s approval.
[^4]: Paid to Skyrider Equipment, a supplier of Prasher’s, to avoid a lien claim.
[^5]: Unless expressly indicated otherwise, none of the amounts reflected in these reasons include HST. I will factor in HST in the final analysis.