COURT FILE NO.: CV-12-4521-00
DATE: 2023 02 22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
PRASHER STEEL LTD.
A. Assuras, for the Plaintiff
- and -
B.W.K. CONSTRUCTION COMPANY LIMITED AND PEEL DISTRICT SCHOOL BOARD
S. Fairley, for the Defendant
HEARD: October 4, 5, 6, 7, 11 and November 16 and 17, 2022
REASONS FOR DECISION
McGee J.
Overview and Result 2
Reasons for Decision. 4
Issues to be Determined. 4
Relevant Background. 5
The Nature of the Evidence heard at Trial 22
Summary of Findings. 25
Decision. 38
Costs. 39
Overview and Result
[1] The plaintiff, Prasher Steel Ltd. (“Prasher”), is a steel fabricator and erector. Its principal, Manoj Prasher, is the corporation’s directing mind.[^1] The defendant, B.W.K. Construction Company Limited (“BWK”), is a commercial builder founded by Bruce Kubbinga, now operated by Mr. Kubbinga’s son, Justin Kubbinga.[^2]
[2] The subject matter of this Trial is a March 19, 2012 contract between Prasher and BWK, in which BWK subcontracted to Prasher the structural and miscellaneous steel necessary to the construction of a school gymnasium addition on property owned by the second defendant, Peel District School Board.
[3] Prasher says that he met the terms of the contract, but he was forced to discontinue work in July 2012 when BWK did not pay him. On August 27, 2012, Prasher registered a Claim for Lien on the property. On October 11, 2012, he issued this Statement of Claim. He now asks for a payment of $108,000 plus HST and interest from BWK.
[4] BWK denies owing Prasher any monies. BWK argues that they were entitled to have all the steel and specified metal fabrications supplied and delivered for the contracted price, on schedule. They state that other trades had to be engaged to complete Prasher's unfinished work and to correct deficiencies. They claim that Prasher’s failures were responsible for a two-month delay to the construction and that they are entitled to back charges because Prasher failed to perform his work in a timely manner, or at all, despite being given ample opportunities and warnings.
[5] BWK responded to Prasher’s Statement of Claim and counterclaimed on April 15, 2013 for the increased costs, administration time, and project delays necessary to complete the school gymnasium. At trial, they ask for an Order dismissing Prasher’s claim, and that he pay them $62,522.37 in back charges.
[6] The second defendant, Peel District School Board was released from this litigation at an early stage, after Prasher’s Claim for Lien registered against the school property was vacated by an Order dated May 2, 2013. The Order was granted upon BWK posting a bond to the credit of this action in the amount of $186,393.50 to the Accountant of the Superior Court of Justice (“the Accountant.”)
[7] For the reasons set out below, I order that the amount of $20,000 be paid to Prasher from the $186,393.50 held by the Accountant, and that the balance of monies held by the Accountant be forthwith paid to BWK.
Reasons for Decision
[8] I will first set out the issues that I must decide and then move into the relevant background, inclusive of a chronology of events and communications. I will then comment on the nature of the evidence heard at Trial, summarize my findings, and confirm the terms of my decision.
Issues to be Determined
[9] The issues to be determined are:
a) Was the March 19, 2012 Contract amended to include additional work to be performed by Prasher, and if so, did Prasher complete the work?
b) What is the Maximum Amount that Prasher can claim against BWK?
c) Has Prasher demonstrated on a balance of probabilities that he completed the terms of the Contract and is entitled to $73,522?
d) Is BWK entitled to back charge Prasher for any expenses it incurred in correcting or completing work that fell within the scope of the March 19, 2012 contract?
Relevant Background
[10] In 2011, BWK indicated its interest to bid on the construction of a gymnasium addition to the Plum Tree Public School, located on Tenth Line West in Mississauga, Ontario. The successful bidder would be the contractor responsible for all aspects of its construction.
[11] The provision and erection of the structural steel necessary to the support of a building is critical to any construction and must be completed before the next steps, such as roofing and interiors, can begin.
[12] In previous projects, BWK had successfully subcontracted structural steel components and certain miscellaneous metal fabrication to Prasher. Miscellaneous metal fabrication includes any components that are not structural, such as ladders, interior stairs, and door frames.
[13] BWK provided Prasher with copies of the tender drawings and the specifications for the Plum Tree Public School project prior to submitting a quotation on the whole of the construction project. On March 12, 2011, Prasher provided a written quotation to BWK broken into three parts:
• $72,000 to supply the drawing, and to fabricate and erect the structural steel joists. Steel joints are typically lengths of steel supporting the structure of a building, often arranged in a parallel series to support a floor or ceiling.
• $15,000 to supply and install the steel decking, which is typically a sheet of high-performance galvanised steel with a ribbed or corrugated profile, and
• $25,000 to complete miscellaneous metal fabrication and installation.
[14] With an agreed adjustment of the total price to $108,000; BWK accepted Prasher’s quotation to supply the drawings for the structural steel, to erect the steel structure, and to supply and install the miscellaneous metal – specifically, the steel stairs with a rail, a ladder with cage, bracket supports, the steel dolly frames, and the lateral support and loose lintels (a horizontal support of timber, stone, concrete, or steel across the top of a door or window).
[15] With this, and other subcontracts in hand, BWK became the successful bidder for the Plum Tree Public School gymnasium addition. Work began in early March 2012. Construction was to be completed before the beginning of the 2012-2013 school year.
[16] The agreed performance terms between BWK and Prasher were confirmed in a contract dated March 19, 2012. The contract was signed by BWK that same day and emailed to Prasher under cover of a fax transmittal sheet that read “Submit Shop Drawings ASAP.” The agreed contract price was $108,000, which included all taxes but for harmonized sales tax (HST).
[17] Although Prasher did not sign the contract until much later, each party considered themselves bound by the contract. In this proceeding, Prasher specifically relies on the terms of the contract in his Statement of Claim.
[18] Article II of the contract provided that Prasher would submit to BWK, by the 25th of each month, a “written requisition for payment showing the proportionate value of the work performed to date from which shall be deducted a retention of 10%...and the balance of the amount of said requisition, as approved by BWK, and the Architects and Engineers, shall be due to Prasher on or about the 30th day of the following month, and upon receipt by BWK of monthly payment by the owners.”
[19] Under Article III of the contract, Prasher was liable for any damage caused to BWK resulting from his delay to the work’s progress. A work completion schedule was prepared by the project manager and copies were provided to BWK and all the subcontractors.
[20] Delays began within two weeks. Prasher failed to immediately prepare the shop drawings and deliver materials. Fabrication of the structural steel could not begin until the engineers had approved Prasher’s shop drawings. The balance of the trades on the project could not start work until the structural steel was erected.
[21] Over the week of March 26, 2012, BWK sent four email requests for the shop drawings.
[22] In the following paragraphs I have reproduced the emails relevant to this decision because many of them directly inform the issues that I must decide. Although I have only transcribed the relevant portions, I have examined the whole of the email strings from which they are drawn to make certain that they are intact. Neither party raised any question of the authenticity of the email communications, or the other electronic documents set out in the agreed exhibits. Each party relies on the emails for the truth of their contents, while maintaining different interpretations on certain of the exchanges.
[23] The first of the four email requests for the shop drawings was dated Monday March 26, 2012, and reads:
Hi Manoj
How are your shop drawings coming? I need you[r] anchor bolts for the columns with templates. We will be pouring them this week.
Thanks, Bruce
[24] The fourth, sent at 5:44 pm on Friday March 30, 2012 read:
Manoj,
I need the anchor bolts. I wanted the piers poured today. URGENT.
When are the shop drawings coming?
[25] The anchor bolt plan was sent a week later, on Wednesday, April 4, 2012. The shop drawings were not sent for two weeks thereafter, following on two more bold capped emails from BWK, with an unanswered request that Prasher immediately call BWK.
[26] Forty-five minutes after finally receiving the shop drawings on Thursday April 12, 2012, BWK emailed:
Hi Manoj,
These drawings good but I also need the fabrication drawing and the joist drawings. Do you have the trolley drawings done and the seat and shelf angles? Look at the handrail bracket arch detail. I need the deck drawings also. The stage deck should be ready by the end of this month for installation. Give me a call.
Thanks, Bruce.
[27] That same week, it became known that Prasher’s steel manufacturer, MDS Steel Ltd. (“MDS”), who had quoted $13,000 to fabricate the steel joists necessary for Prasher to complete his subcontracted work, would not proceed without payment in advance from Prasher, or some other form of security. To keep the project moving, on April 16, 2012 BWK signed an Irrevocable Assignment and Direction to Pay MDS directly.
[28] Prasher sent the requested joist drawing and calculations to BWK on Thursday, April 19, 2012. It was reviewed that day by BWK and then sent to the engineers and project managers, Halsall and Associates, for approval. The following week, the engineers sent the plans back, requiring them to be revised and resubmitted. The requirement to revise and resubmit was sent to Prasher on April 27, 2012. A further revise and resubmit was sent on April 30, 2012. Communications between the engineers and Prasher’s draftsman continued into the first week of May 2012.
[29] Prasher did not resubmit the revised drawings until Tuesday, May 22, 2012. There were further revisions required by the engineers over the next two weeks. Justin sent a series of emails to Manoj on Monday June 4, 2012. The approved drawings were not delivered to MDS until June 9, 2012.
[30] Meanwhile, on April 24, 2012, BWK were pressing Prasher to complete other contracted work. The email of Tuesday April 24, 2012 reads:
Hi Manoj
I need the rest of the misc metal shop drawings and the metal deck drawings.
I will be needed stage deck in two weeks.
Give me a call.
Thanks, Bruce
[31] On Tuesday May 15, 2012 at 11:50 am, Bruce’s son Justin wrote:
Hello Manoj,
It is urgent that get these running plates and joist plates. The work has started in this area.
You promised that the plates would be there this morning and so far nothing.
You are delaying the job.
Judge yourself accordingly.
Sincerely,
Justin Kubbbinga
Project Coordinator.
[32] At 1:03 pm that same day, Bruce added:
Hi Manoj URGENT
The bricklayers are waiting for the wall plates you were to deliver them this morning. Can you give Aubrey set of drawings showing locations. Give me a call.
Thanks, Bruce
[33] On May 28, 2012, BWK received an invoice from Prasher dated May 24, 2012. The invoice identified as invoice #1651 sought payment calculated as:
25% of the Contract $27,000
Less 10% holdback 2,700
$24,300 (plus HST)
To be paid within 15 days.
[34] BWK were incredulous. An email from Halsall and Associates dated May 10, 2012 confirmed 0% completion of structural steel, the steel deck, and steel joints for the month of April 2012. All three sets of Prasher’s drawings: E2, JE1 of 1, and the joist calculations had been sent back with the status of “Resubmit,” so the manufacturing of the steel deck and joist had not even begun. None of the metal fabrications had been delivered.
[35] Bruce Kubbinga testified at trial that there was no steel on the work site until May 29, 2012, when Manoj delivered a steel beam and some floor angles in his car. That day, Bruce received an email communication from Manoj that MDS had been making excuses to him that they had not received the shop drawings, but they had them now, and MDS was prepared to push them through production.
[36] But the foundational steel structure remained outstanding. Emails of Monday, June 4, 2012; Tuesday, June 5, 2012; Wednesday, June 6, 2012; and Thursday, June 7, 2012 give a sense of BWK’s growing desperation to keep the project on schedule:
Hello Manoj [June 4th]
There are two columns and one beam that are required for the Plumtree Elementary school. These pieces are holding up the masons. If there are any questions, please contact the site super @ [number provided]
Sincerely, Justin Kubbbinga
Hi Manoj [June 5th]
Please call me. URGENT!
Thanks, Bruce
Hello Manoj [June 6th]
We are still waiting for your shipment of steel. I was told by Bruce that you were to have your shipment delivered today. Please note that you are delaying the Masons. Where is your steel?
Manoj [June 7th at 9:04]
Give me a call. URGENT!!!
Bruce
SECOND REQUEST [June 7, 2012 at 9:39]
Manoj [June 7th, 2012 at 9:56]
You promised your steel would be installed Wed. No steel arrived. This is delaying the job. All your steel and deck was scheduled to be installed by the end of May, none has been installed. You have been delaying the masonry contractor and late deliveries of angles and bearing plates to this job site.
As a result of your steel not being ready on time the project is in jeopardy of not being completed on time which will have financial penalties.
GET YOUR STEEL ON SITE AND INSTALL IMMEDIATELY!!!
[37] Subsequent emails from Bruce were long, despairing, and disbelieving of the additional costs that he would have to incur to complete the project. Manoj sent only one email in response: his Friday, June 8, 2012 email asking Bruce to trust him that he was doing his best. He offered justifications for his failure to meet the schedule, such as delaying the delivery of the joists until the steel was ready, in order to save on ordering a crane twice. This was an invention because neither the steel deck nor the steel joists were close to being manufactured. The shop drawings on which they were based had only been delivered by Prasher that day: June 8, 2012. They had been due at the end of March.
[38] Things went from bad to worse. Because the gymnasium joists were late, the roof installation was pushed back. Because there was no roof, none of the interior finishing could be started. There was no longer any prospect of completing the project before the start of the school year.
[39] BWK began to take steps to get the project back on track. On June 13, 2012, they entered into a Change/Purchase Order with Canam Group to supply all labour, material, and equipment necessary to install the steel deck previously contracted to Prasher. Prasher did not object. On consent, BWK and Prasher entered into a corresponding Change/Purchase Order to delete the steel deck from their contract in the amount of $18,238.
[40] Canam delivered the steel deck on Monday, June 25, 2012. It is unclear to me who installed the steel deck, but the engineering report of June 20, 2012 indicated that with this step achieved, the overall installation of structural steel was now about 85% complete.
[41] That same week, BWK learned that the remaining structural steel and the joists had still not been made. Everything was held up waiting for the joists. BWK alerted Prasher in a June 21st email that the costs and associated costs would be charged to Prasher. An eight-point deficiency list on the metal fabrications was emailed by Justin to Manoj.
[42] Urgent follow-ups with MDS culminated in a Friday June 22, 2012 push back email from their Project Coordinator, Brandy Boyle. The Coordinator explained in an email to Prasher and BWK that although the Plum Tree Public School job had been booked with them on April 17, 2012, the final approval of the drawings was not received until June 9, 2012. They had been able to manufacture a partial issue of joists without approval “out of goodwill” (being the beam personally delivered by Manoj May 29th), but otherwise, there would be delivery of the order within their customary 5-6 weeks following the receipt of approved plans.
[43] Friday, June 22, 2012 was a terrible day on site. Bruce testified that Manoj had committed to hiring additional crew to get the steel deck delivered and installed over the July long weekend.
[44] None of the Prasher men were on site, as had been promised. None of the Prasher metal fabrications, such as stairs, were ready, as had been promised. Manoj’s personal promise to be on site was not kept. Urgent emails flew at Manoj without response. He did not return phone calls.
[45] In a second invoice numbered 1657 and dated Monday June 25, 2012, Prasher asked for payment of $63,180 (plus HST) calculated as follows:
90% completion of the work $97,200
Less the amount previously invoiced $27,000
$70,000
Less 10% holdback 7,020
$63,180
[46] Now Bruce was angry. He refued to pay the invoice and he called MDS directly to press them to rush the order.
[47] MDS emailed on Wednesday, June 27, 2012 that they would ship the joists on Friday, June 29, 2012. The coordinator wrote “[p]lease let the erector know. He called here looking for a delivery date as he needs to schedule a crane.” Justin arranged for the delivery of a crane, another cost that was to have been borne by Prasher as part of his subcontracted work. Justin emailed Prasher that he would treat the cost of the crane as a back charge to the contract. Bruce then issued a $1,080 back charge for the delivery of the steel and asked Prasher to confirm that his men would attend on Friday the 29th, as well as over the weekend as needed, to organize the deck, unload it, and install it pursuant to the contract.
[48] At 4:15 pm that Friday afternoon, Justin wrote in an email to Manoj that Prasher had had no workers on the job site at any time during the day.
[49] Manoj Prasher testified at trial that some of his men were present that Friday, but had not stayed late, so Justin must have missed seeing them. In Manoj’s view, that was the day that he had been “thrown off the work site” and, as a result, any negative consequences after that date had nothing to do with him.
[50] I cannot be certain from the evidence whether Prasher’s men were present that day, but it is uncontroverted that the steel deck was not installed over that Canada Day weekend.
[51] In an email sent to Prasher on Tuesday, July 3, 2012, the first workday back, Bruce confirmed that the brick layers had to be sent away that day because the steel framing was not up, and the scissor lift that Prasher was to have installed on site was not present. Justin rented the necessary scissor lift and emailed Manoj that the cost would be back charged.
[52] In the same email of July 3rd, Bruce also informed Prasher that the roofing trades had been pushed back at an additional cost, that the stage decking was not finished, and that the chair storage carts had not been started. Nor were the stairs installed, or the canopy lintels up.
[53] Bruce kept trying to engage Manoj that first week of July, to no avail. He wrote to him on July 4th and 5th urging him to take steps, or BWK would be forced to hire others to do the work and charge him. On Monday, July 9, 2012, he sent another urgent email indicating that he had gone to Prasher’s shop and discovered that the chair storage carts had not been started. He writes in his email to Prasher:
“…I found that nothing had been started. I had put a time limit of last Friday for them to be made. This was a month after you said they would be made. As a result, I will have to get these carts made by others and deduct the costs from your contract. I believe this will be the only way they will get done in time.
Your structural steel installation is not complete. You have not finished the deficiencies and you did not have men on site today. You are delaying the construction schedule. Have you walked off the job? Should I hire others to finish your contract?”
[54] A response came the next morning at 9:30 am on Tuesday, July 10, 2012, in one of the few emails sent by Prasher over the course of the contract:
Hi Bruce
Wall was not even up month before. We are working on the structural steel.
Structural steel is done and guys are on site today to finish the deficiencies.
We have not get any money yet for this job.
Please send us a cheque so we can give to the suppliers and erectors.
I already spoke to Justin in the morning and explain to him the situation so please prepare a cheque for us so we can pay to our suppliers and erectors.
[55] At trial, Bruce testified that the email confused him for reasons that are apparent in his responding email of Wednesday, July 11, 2012:
Manoj
Your late steel installation is delaying the construction schedule. No one from your company worked on the weekend, nobody work on Monday, two men showed up on Tuesday and worked part of the day, nobody on site today. I went to your office, nobody was in the office. I call your cell phone, you did not answer and never returned the call. I am hiring others to assist you on finishing your work on this project. All cost and associated costs will be deducted form your contract.
[56] The final word that day went to Manoj. Two hours later, he sent an email to Bruce:
Bruce,
I’ve asked you for money so I can pay my steel supplier and erector and you have continuously been telling me that I am delaying the job. Why should my guys have had to work last weekend when they already finished most of the work last Friday? Also recall that my contract with you is from Monday to Friday, weekends are overtime which you never want to pay for. There was a little part of the trimmer angles and moment connections left over which my guys worked on yesterday and today. I was at the job site around 2 pm and met with Justin to check out the site and determine what sketches they needed. Two of my guys are going back to the site tomorrow (Thursday) to correct any deficiencies.
Bruce, you have been accusing me of delaying the job for the past several weeks meanwhile you only started this job about 2 months ago. My structural steel and metal deck are 100% completed and miscellaneous metal is 70% completed. You took away my chair dolly, wall handrail, etc. and gave someone else to do it for a reason unknown to me. I am tired of listening to you accusing me. If I do not receive money for the invoices, I have sent to you by Friday evening, I will place a lien on the building on Monday July 16.
Manoj
[57] On July 18, 2012, BWK emailed Prasher that there were no steel men on site and that they would be hiring others to complete the work at Prasher’s cost. Prasher answered that he would not provide men unless he received his “monthly progress draw.” A series of angry emails ensued, with Prasher threatening that his wife would sue BWK. He renewed his threat to lien the project if he did not get his monthly draw. He emailed the owner and architects directly that BWK was not releasing the “May and June month due invoices money.”
[58] On Friday, July 20, 2012, BWK reminded Prasher in an email that his approved payment of $3,661.20 was still waiting to be picked up, with his copy of the contract which he had not yet signed. The cheque was eventually picked up and the contract signed. The cheque was not deposited by Prasher until August.
[59] On July 23, 2012, BWK gave Prasher notice that the wall was now finished, but because they had not installed the support legs for the ladder, the masonry would have to be opened up, the cost of which would be deducted from the contract. BWK asked Prasher for the fabrication drawings because the new steel contractor required them and BWK had no record that they had ever been submitted for approval. Prasher refused to supply the drawings even though he was warned that he would be charged for them if they had not been done.
[60] Prasher rendered his third invoice numbered 1676 on July 25, 2012. This one picked up the remaining 5% of the contract that had not yet been paid. It read:
Structural Steel Miscellaneous Contract $108,000
Progress of Work, 95% $102,600
Less invoices 1651, 1657 $ 97,200
Amount this invoice $5,400
Less 10% holdback $540
Amount this invoice $4,860
[61] At this point, BWK began actively taking steps to close the relationship with Prasher and to transfer all the remaining work to third parties. A closing meeting was first scheduled for August 13, 2012, but Bruce could not attend. It was rescheduled. Amongst other issues, BWK needed certain documentation from Prasher to address the payment of $13,000 being sought by MDS. On August 21, 2012, BWK sent an urgent email to Prasher that was relevant to MDS:
Manoj URGENT
I need the two 8.5 x 11 detail sketches for the changes from your Engineer signed, dated, and sealed. They will then be sent to Halsall for approval and after that, to Pinnacle for their review.
What you have done with your as-builts, by adding unapproved details on to them, has got us into trouble before with Engineers. Do not try it again.
I need the original Statutory Declaration with the sticker. Why did you bring just a copy?
I still do not have your revised invoices.
I still need three sets of all your approved shop drawings for the turnover manuals.
Your warranty is missing Sections [#s] on it. Check the warranty period for each section.
Make sure all the material required are 100% completed so that no more wasted time will be sent.
[62] Prasher did not respond. Instead, he sent his fourth invoice numbered 1677, dated July 25, 2012. It sought $32,600, calculated as follows:
2 Saturday work 3 men x 8 =48 hours $3,600
Extra trip for crane 4 Trip site not ready for steel $4,800
Your block wall not ready wait lose time 4 men... $2,400
1 day lose wait for deck and deck not come… $1,800
Not pay our progress draw Damage our other job 4 week $20,000
Total $32,600
[63] This additional work was not authorized by BWK. No invoices have ever been produced by Prasher to evidence these charges. Manoj gave an undertaking during his examination for discovery to produce proof of the charges. He did not.
[64] In a final invoice numbered 1678, dated the day previous: August 24, 2012, Prasher sent BWK an invoice for $10,260, being the total of the holdbacks charged on the first three invoices. (No hold back was included in the fourth invoice.) That same day, Prasher signed a construction lien which was registered in title to the property on August 27, 2012. The amount of the lien was $149,114.80.
[65] The construction of the gymnasium was incomplete by the start of the school year. It ran late, well into October, necessitating additional costs such as fencing and security to protect the school children from any risks posed by the ongoing work site.
The Nature of the Evidence heard at Trial
[66] This is the Trial of the claims made in Prasher’s October 11, 2012 Statement of Claim and the counterclaims made by BWK in their April 15, 2013 pleading. Mr. Manoj Prasher testified on behalf of the plaintiff; Mr. Bruce Kubbinga, for the defendant.
[67] In his opening statement at Trial, Prasher asked for damages and the dismissal of BWK’s claim for back charges. I pressed Prasher’s counsel for the amount sought and a draft Judgement. Some confusion followed, but I was thereafter advised that the amount sought by the plaintiff was $149,114. When I asked how the amount was calculated, I was advised that it was a claim for $129,000 inclusive of HST plus $20,000 in damages.
[68] As the trial progressed, Prasher withdrew the claim for damages, leaving the amount sought at $129,000. At no time did I receive an explanation as to how that figure was calculated. The amount of the contract: $108,000 plus HST is only $122,040.
[69] In closing submissions, Prasher’s counsel calculated his claim as the contracted $108,000 plus $10,800 in extras, plus HST. I did not receive a schedule as to how the $10,800 was calculated, nor was the claim reduced by the June 13, 2012 Change Order acknowledged by Prasher in his evidence as reducing the contract amount of $108,000 by $18,238.
[70] Prasher’s defence to the back charges was equally confused. Essentially, he asserts that the value of the back charges was zero because he was forced off the work site. But even the back charges incurred prior to Prasher leaving the work site and acknowledged at the time in email communications between the parties were contested.
[71] The confusion of the claim, coupled with Manoj Prasher’s blanket denials and assertions, lead me to a finding that he was not a credible witness.
[72] In making this finding, I have separated credibility from reliability. Credibility has to do with a witness’s genuine efforts to tell the truth in a wholesome manner, not leaving out details that could mislead the listener. Reliability relates to the parties’ ability to accurately observe, recall, and recount events in issue.
[73] This trial was not heard for a full decade after the events in question. I accept that the passage of a decade will diminish any witness’s reliability. Bruce Kubbinga has since retired. His son, Justin, now manages the corporation day-to-day. In 2012, Justin was the on-site supervisor for the Plum Tree project. Manoj Prasher is also of retirement age. It is to be expected that the memories of those involved will have faded over time, and that the Court will be left to place more weight on the documents executed by the parties at the time and their contemporaneous communications such as emails.
[74] Almost all of Mr. Prasher’ evidence consisted of reading his email communications, documents, and pointing to the drawings that were contained in his five Exhibit Books. He confirmed what those consent exhibits recorded but for when the emails showed he had failed to complete contracted tasks on time or caused delays to the project. With regard to those points, he would interject blanket denials and/or blame others for the events. Often, his denial and his externalization of responsibility for the same failure were at odds. The pattern persisted in his cross examination, as the force of his denials increased, and the circuitous blaming of others created inconsistencies with his direct evidence and his exhibits in evidence.
[75] In contrast, BWK’s theory of the case was clear, mathematically consistent and corroborated within the plaintiff’s five volumes of exhibits. They were able to explain and demonstrate how Prasher’s claim at his highest was $73,522 because there were no approved extras in accordance with the contract’s terms. BWK was also able to show that the original contract price of $108,000 payable to Prasher had been reduced by three amounts:
a. the July 6, 2012 payment to Prasher of $3,240
b. the agreed reduction of $18,238, and
c. the Irrevocable Direction for BWK to directly pay $13,000 to MDS, Prasher’s steel joist manufacturer.
[76] I found Bruce Kubbinga’s evidence to be credible and reliable. His recollection accorded with the plaintiff’s exhibits, and where it did not because his memory failed him, he deferred to a plain reading of the document. He acknowledged facts not in his favour and was candid about the tensions on the work site and how they developed. He was clear as to why he had refused to pay Prasher on invoices that were inflated or rendered contrary to the payment policy set out in the contract.
[77] Bruce described how things worsened when Manoj demanded unearned payments as a condition of returning to the worksite. He detailed his increasingly desperate efforts to reduce the tension and improve the workflow, and in turn, the success of the project, by speaking directly with Manoj; but his emails were rarely answered, and his phone calls were not returned. He testified that he had never before encountered such disinterest in solving work site issues and that it had not been his prior experience when working with Prasher.
[78] Manoj’s failure to respond to Bruce during the period of this project was not contested. When asked directly, Manoj shrugged that he was not an email guy, or a paper guy, and added that at the time, he was busy running other projects. He later justified not having returned calls because he was not being paid.
Summary of Findings
[79] Upon this complete record, I am now able to determine the origin of the lien claim for $149,114.80: it is the pre-HST total of the five invoices rendered by Prasher in 2012, less the payment received of $3,661.20 (incorrectly inclusive of HST.) For a reason unknown to me, it was incorrectly brought forward in the plaintiff’s opening as a claim for $129,000 inclusive of HST plus $20,000 of damages.
[80] The amount sought was not corrected in the plaintiff’s closing. In his closing submissions, Prasher stuck with a claim for the full $108,000 without deduction for the steel deck purchased from Canam or the $13,000 to be paid directly to MDS[^3], and then, as set out above, he added the uncharacterized amount of $10,800 in extras.
[81] I will now set out my findings on the issues identified in the start of these reasons.
Was the March 19, 2012 Contract amended to include additional work to be performed by Prasher, and if so, did Prasher complete the work?
[82] Article VII of the contract deals with Change Orders, additions, and deletions. It reads that “No alterations except as provided for in Articles V and VI hereof [referencing errors in the shop drawings as interpreted by the Architects and/or Engineers] shall be made in the work except upon written Order of BWK and, when made, the value to be added or omitted from the Contract Price.” A dispute resolution mechanism is then set out should the parties be unable to agree on the value of the changed work.
[83] The section goes on to read:
‘During the progress of the project, BWK may request the Subcontractor to perform additional work not covered by this Subcontract, or by alteration in the work that is covered by the above paragraph. When such requests are made, written authorization will be given to the Subcontractor in the form of a Subcontract Change Order which will give a description of the work to be done and state the terms under which it is to be executed.”
The Subcontractor shall not proceed with such additional work upon verbal request but must receive written authorization before proceeding. An invoice received by BWK for additional work not so authorized will not be honoured.
[84] At no time did BWK authorize Prasher to complete additional work in accordance with the contract. Prasher has not tendered a written order from BWK, and Bruce testified that he only backfilled Prasher’s contract responsibilities.
[85] The items set out in the fourth invoice were not proven, and, in any event, do not rise to additional charges. Specifically, Prasher cannot claim additional charges for the installation of a steel deck that he had failed to provide, and which had to be given to a third party – Canam – to provide. This seems to have been acknowledged by the plaintiff in amending his closing submission for only $10,800 for additional charges; however, the evidentiary basis for that figure is equally unclear to me.
[86] I find that the March 19, 2012 Contract was not amended to include additional work to be performed by Prasher, nor was additional work performed. The total of the contract price was therefore $108,000.
What is the Maximum Amount that Prasher can claim against BWK?
[87] Prasher asks that he be paid the whole of the contract price while at the same time agreeing that the June 13, 2012 Change Order for $18,238 (the steel deck Canam built) is a deduction to the contract price.
[88] It is undisputed that on April 16, 2012, BKW executed an Irrevocable Direction to directly pay Prasher’s steel supplier, MDS, $13,000 for the manufacturing of the steel joists.
[89] I find that both amounts – $18,238 and $13,000 – are deductions to the contract. The revised contract price is, therefore, $76,762.
[90] Against this amount, Prasher has been paid $3,240, leaving an amount of $73,522 outstanding.
[91] I find that the maximum value of Prasher’s claim against BWK is $73,522 plus HST. This finding confirms BWK’s assertion that the lien amount was excessive. By creating the fourth invoice ($32,600), ignoring the Change Order reduction ($18,238) and the Irrevocable Direction ($13,000), Prasher was able to place on title a claim of $149,114.80, which, when bonded off with an additional 25%, resulted in BWK paying into Court the amount of $186,393.50: well over double of the actual value of the lien.
Has Prasher demonstrated on a Balance of Probabilities that he completed the terms of the Contract and is entitled to $73,522?
[92] Prasher bears the onus to demonstrate that he completed the work that he was contracted to perform in a timely, workmanlike manner. As stated at para. 61 in TMS Lighting Ltd. v. KJS Transport Inc., 2014 ONCA 1, “it is... beyond controversy that a plaintiff bears the onus of proving his or her claimed loss and the quantum of associated damages on a reasonable preponderance of credible evidence.”
[93] BWK argues that Prasher has not met that onus because he has never tendered any evidence of work completed, except for work that he subcontracted to Bain Welding, who did keep work records. Prasher has submitted no timesheets for his employees setting out the work done or showed that he had paid his suppliers or subcontractors for work that he claims to have completed. He has been under an obligation to do so, and he gave a specific undertaking during his June 9, 2016 cross examination to provide evidence of work done in furtherance of the contract.
[94] Absent evidence, a plaintiff may only be entitled to nominal damages, see Martin v. Goldfarb, 1998 CanLII 4150 (ON CA), [1998] O.J. No. 3403, 112 O.A.C. 138, at para. 75, leave to appeal to S.C.C. refused, [1998] S.C.C.A. No. 516:
… I have concluded that it is a well established principle that where damages in a particular case are by their inherent nature difficult to assess, the court must do the best it can in the circumstances. That is not to say, however, that a litigant is relieved of his or her duty to prove the facts upon which the damages are estimated. The distinction drawn in the various authorities, as I see it, is that where the assessment is difficult because of the nature of the damage proved, the difficulty of assessment is no ground for refusing substantial damages even to the point of resorting to guess work. However, where the absence of evidence makes it impossible to assess damages, the litigant is entitled to nominal damages at best.
[95] Here, I have no way of assessing the work Prasher completed other than his own testimony which I do not find credible, the documentary evidence, and the evidence of Bruce Kubbinga. Nonetheless, I must do my best to assess the claim Prasher made that he is owed monies on the contract.
[96] When viewing the evidence as a whole, it appears that the troubles began from the very start of the contract, when Prasher did not complete the shop drawings in a timely, workmanlike manner. Prasher had received the specifications for the gymnasium addition prior to quoting in March 2011 and concluded the payment terms for the contract with BWK a year later, on March 19, 2012. The cover page for the contract stated, “Submit Shop Drawings ASAP.”
[97] Prasher led no evidence as to why it took until June 9, 2012 for the approved drawings for the construction of the steel structures to be delivered to the manufacturers. According to the Project schedule, the installation of structural steel was to have been completed by the end of July. The completion of miscellaneous metal was to follow in August.
[98] At no time did Prasher ask for an extension on the contract as was provided for in Article IV of the contract. This failure created a critical path delay with cascading consequences. Nor did Prasher lead any evidence as to why the manufacture of the miscellaneous metals was not completed within the required timelines.
[99] One can speculate that Prasher was overbooked and under-resourced but ultimately, the question within this litigation is whether Prasher is entitled to any further moneys on the contract. In this regard, Prasher bears the onus of proof.
[100] Confusing this onus was the plaintiff’s manner of presentation at Trial. Rather than demonstrating the work and value of work completed, the plaintiff’s case was primarily presented as a series of grievances. I will briefly address those grievances, as I understood them:
i. He was ordered of the site, so none of the resulting losses to BWK are his responsibility.
There is no evidence that Prasher was ever ordered off site. To the contrary, BWK was imploring Prasher to return to the site as late as July 11, 2012.
ii. The Forward Engineering Reports of June 29, 2012, July 6, 2012 and July 13, 2012 show the progress of the project. The July 13, 2012 Report showed the installation of the structural steel to be about 95% completed but BWK refused to pay him. The overall reports of the Project Manager for the site also showed completed rates that were not reflected in Prasher’s payments from BWK.
This assertion – which was a major focus of Prasher’s direct examination and closing submissions – conflates the project as a whole and the terms of the March 19, 2012 contract between BWK and Prasher. Moreover, the reports assess the status of the steel construction, not who completed it, or who paid for it.
iii. Bruce was being paid, so he should have been paid.
Prasher was only entitled to be paid in accordance with the Contract. BWK’s payment was governed by a separate contract with the owner.
Article II of the Contract between BWK and Prasher set out the process of submitting to BWK by the 25th of each month a “written requisition for payment showing the proportionate value of the work performed to date from which shall be deducted a retention of 10%...and the balance of the amount of said requisition, as approved by BWK, and the Architects and Engineers, shall be due to Prasher on or about the 30th day of the following month.”
Prasher submitted invoices on the 25th of the month, but on net 15-day terms. Contrary to the contract, he demanded payment before the work was approved by BWK, and the Architects and Engineers.
[101] Simply stated, Prasher was not paid because the amounts invoiced did not match the work performed or the payment terms of the contract. For example, Prasher rendered an invoice to BWK dated May 24, 2012 for payment on completing 25% of the contract work. But because only some minor metal fabrication had been completed, the amount approved was $3,240.
[102] By June 25, 2012, the architect had approved payments for a further 25% of structural steel work and 50% of the metal fabrication. But at this stage of the construction, BWK had already engaged a third party to build the steel deck. All other work was on hold pending this next step in the construction. Despite this, Prasher rendered an invoice for 95% of what he calculated on June 25, 2012 to be the remaining work set out in the contract.
[103] Prasher’s reliance at trial on the percentage figures in the architect’s structural steel reports was misplaced. As earlier stated, those reports do not assess who did the work and when. Moreover, the engineers only inspected specified areas of the project (grid lines) which were inconsistent with the overall progress of the project. For example, it is known that by July 5th, other steel tradesmen were on site to supplement Prasher's work.
[104] The best evidence of how much steel work was done by Prasher would be his own time records; employee or subcontractor time records of the materials supplied, proof of the materials installed, who installed them, and at what cost.
[105] At one point in the Trial, Prasher stated that he used to have those records but did not keep them. As the lien claimant, he cannot now say that he had the evidence but did not keep it. To the contrary, evidence of spoilation – the intentional destruction of relevant evidence when litigation is existing or pending – draws an adverse inference against the holder of the documents that the evidence was destroyed to influence the outcome of the litigation, see Gutbir v. University Health Network, 2010 ONSC 6752.
[106] I am not satisfied on the evidence before me that Prasher completed the contracted work in a manner that would entitle him to the remaining $73,522; nor am I satisfied that he should receive no further moneys. The emails – upon which both parties rely – demonstrate that the steel drawings were completed, albeit late; that one beam and some metal fabrications were delivered; and that Prasher’s men were on site from time to time to install or address deficiencies.
Is BWK entitled to back charge Prasher for any expenses it incurred in correcting or completing work that fell within the scope of the March 19, 2012 contract?
[107] A back charge[^4] is a deduction from a subcontractor’s payment for work performed or costs incurred that should have been performed or incurred by the party contracted to perform the work. Back charges are not provided for via statute, but instead, are governed by the terms of the contract between the parties.
[108] Article IX of the contract between BWK and Prasher reads:
If the Subcontractor at any time refuses or neglects to supply a sufficient amount of labour or materials of proper quality and quantity, or fails in any way to perform the Work according to schedule, or causes stoppage, or delay of, or interference with the Work of BWK, or other Subcontractors, or fails in performance of any agreements herein or becomes insolvent, BWK shall be free after three days written notice to the Subcontractor, to provide through others such labour and materials, and deduct the cost of same from any money due or thereafter to be due to the Subcontractor under this Contract.
[para]BWK shall be free to terminate the services of the Subcontractor for said work and to take possession for purpose of completing Work in the Contract of all materials, tools and equipment, and to employ others to finish the Work and to provide materials therefore.
[para] Upon termination no further payment shall be made to the Subcontractor until the said Work shall be wholly finished at which time, if the unpaid balance of the amount to be paid under this contract shall exceed the expense incurred by BWK, such excess shall be paid to the Subcontractor, but if such expense shall exceed such unpaid balance, then the subcontractor shall pay the difference to BWK. The expense incurred by BWK shall include the cost of materials, finishing the work and damage resulting from the subcontractor’s default.
[109] BWK claims back charges of $62,522.37 in accordance with fourteen invoices which I do not propose to review individually.
[110] Bruce Kubbinga reviewed all the back charges in his evidence and spoke to how each of the invoices related to the drafting, supply, and installation of structural steel and metal fabrication that was within the scope of the contract. He traced the notification of back charges within the emails, and Prasher’s lack of any objection to the charges at the time they were incurred.
[111] Even at Trial, Prasher did not offer any significant objections to the back charges. He would comment that certain amounts seemed unnecessary, such as the charges for cranes to reattend on the work site because the steel deck was not delivered on the first scheduled install date. He did not agree with the costs of delivering and using the Scissor lift, but he agreed with its rental costs and the extra labour necessary to erect the steel deck. He opined that the costs of the dollies and ladder were also unnecessary because he was prepared to manufacture them but for the fact that he was removed from the work site. I gave this last assertion no weight because it contradicted his earlier evidence that he had refused to complete further work until his invoices were paid.
[112] I found Bruce’s evidence on the notice of, and the pricing for the back charges to be sufficient to satisfy his onus of proof of the back charges. His evidence was not diminished in cross examination, nor was it substantially challenged, other than for the allocation of 15% in administration fees for each of the invoices. On this point, Manoj Prasher argued that he should not be subject to an administration fee added to the third-party invoices.
[113] In submissions, BWK justified the back charges by citing the considerable time spent sourcing and covering off the additional materials and trades necessary to complete Prasher’s work. Nonetheless, they were prepared to reduce all the administration fees to 5%. Such a reduction takes the claimed amount from $62,522.37 to $52,407.98.
[114] Prasher Steel Ltd. v. Pre-Eng Contracting Ltd., 2022 ONSC 3458, contains a recent and helpful treatment of administration fees. In that case, Prasher Steel was the lien claimant in a similar set of circumstances. Justice Boswell found that some administrative mark-up on back charges against Prasher for deficient and uncompleted work was foreseeable, but absent evidence of the actual costs, the court declined to include the mark-ups in the back charges.
[115] In reaching his decision on this point, Justice Boswell identified deficiencies as, in effect, breaches of contract. He comprehensively reviewed the law with respect to contractual breaches, the measure of damages required to make the non-breaching party whole and the limits to a plaintiff’s recoverable loss. He concluded, at para. 261, that:
“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 damage 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.”
[116] Here, Article IX of the contract provides that BWK may recover the cost of materials, finishing the work, and damage resulting from the subcontractor’s default. A review of the emails between the parties shows that from June 27, 2012 onward, either Justin or Bruce was giving Prasher notice by email that they would be sending his unfinished work to third parties and charging back to him the costs.
[117] Having the benefit of those emails which total over 200, only a sampling of which have been produced in these reasons, I am satisfied that an administrative mark-up in the reduced amount of 5% is warranted. The communications between BWK and the third parties are extensive and time sensitive. For the weeks leading up to the start of the school year, BWK was in crisis mode to complete the project.
[118] Bruce testified that for weeks, it occupied his entire day to visit potential suppliers, determine who could move the fastest, coordinate the extra work and supervise its completion. These were tasks that were in the contract and were ignored by Prasher after his demands for payment were not met.
[119] Having reviewed the record before me, and after listening to the oral evidence and cross examination of Bruce and Manoj, I am satisfied that the proposed back charges were fair and necessary to complete the work that Prasher was to have performed, and that a 5% administration fee on those charges are damages fairly and reasonably arising from the breach of the contract.
Decision
[120] I grant Prasher a rounded award of damages on the March 19, 2019 contract of $20,000, calculated as $73,522 less $52,407.98 in back charges. No interest is payable on this amount given the excessive amount liened by Prasher in 2012. I calculate this amount as an award that will approach making BWK whole as contemplated in Hadley v. Baxendale (1854), 9 Exch. 341, 156 E.R. 145 while recognizing that in 2012 Prasher performed some terms of the contract for which he should be paid.
[121] BWK’s counsel is invited to prepare the appropriate draft judgment. If there is a dispute as to its terms, I may be spoken to.
Costs
[122] The parties are encouraged to resolve the issue of costs. If they are unable to reach a resolution, they may make written submissions on costs and I will decide the issue. Each party’s submissions shall not exceed 4 double-spaced pages, excluding any Offers to Settle and a Costs Outline. Authorities being relied upon are to be hyperlinked into the submissions.
[123] The Defendant’s costs submissions shall be served and filed by no later than March 9, 2023. The Plaintiff’s responding costs submissions shall be served and filed by no later than March 23, 2023. Reply, if necessary is due on March 30, 2023.
McGee J.
Released: February 22, 2023
COURT FILE NO.: CV-12-4521-00
DATE: 2022 02 22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
PRASHER STEEL LTD.
- and -
B.W.K. CONSTRUCTION COMPANY LIMITED AND PEEL DISTRICT SCHOOL BOARD
REASONS FOR DECISION
McGee J.
Released: February 22, 2023
[^1]: Because Prasher Construction was, and continues to be solely operated by Manoj Prasher, I will use the pronoun “he” in these reasons when referring to either Manoj Prasher or Prasher Construction.
[^2]: To differentiate between Prasher and BWK, I will use the pronoun “they” when referring to the company BWK.
[^3]: It is possible that the $13,000 was never paid to MDS. Although not before me, I was advised that there was subsequent litigation between BWK and MDS, and the result is not known to me. In any event, I am satisfied that it is an amount that must be removed from the $108,000 contract as the cost of the steel joists is clearly the responsibility of Prasher within that document. He cannot now seek reimbursement for a payment that he never made, that is, he cannot pursue a debt that has been assigned to another, see Watt v. Beallor Beallor Burns Inc., 2004 CanLII 18877 (ON SC).
[^4]: Also referred to as a “charge-back.”