Court File and Parties
COURT FILE NO.: CV-20-00651979-0000 DATE: 20230828
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
DISTINCTIVE BY DESIGN FINE CABINETRY INC. Plaintiff – and – 1226132 ONTARIO INC., operating as TBM SERVICES Defendant
Counsel: Andrew Graham, for the Plaintiff
READ: August 9 & 24, 2023
Papageorgiou J.
Overview
[1] The plaintiff retained the defendant to install a new HVAC system. During the installation, pipes ruptured causing water to escape and damages to the plaintiff’s property.
[2] The plaintiff made a claim to its insurer who compensated it for the repairs. The insurer brought a subrogated claim herein against the defendant.
[3] The main causes of action alleged are negligence and breach of contract.
[4] The defendant failed to defend the proceeding and was noted in default.
[5] The plaintiff brings a motion for default judgment.
Conclusion
[6] For the reasons that follow I am granting the judgment as sought in the amount of $153,526.26.
The Issues
[7] The main issues are:
- Issue 1: Do the materials provide a basis for a finding of liability?
- Issue 2: If so, what are the damages to which the plaintiff is entitled?
Analysis
Issue 1: Do the materials provide a basis for a finding of liability?
Consequences of noting in default
[8] Pursuant to r. 19.02 of the Rules of Civil Procedure, having not defended the proceeding, a defendant is deemed to admit the truth of all allegations of fact made in the Statement of Claim.
[9] However, pursuant to r. 19.06 of the Rules of Civil Procedure a plaintiff is not entitled to judgment on a motion for judgment or at a trial merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment.
[10] In particular, r. 19.05 of the Rules of Civil Procedure provides that a motion for judgment which involves liquidated damages shall be supported by evidence given by affidavit. I point this out because in this case, as well as others, some parties appear to be unaware that they must prove their damages when they bring a motion for default judgment. In this case, the plaintiff filed supplementary materials to address its damages, but failing to do this at first instance results in inefficient use of judicial resources.
The test on a motion for default judgment
[11] The test on a motion for default judgement was set out in Elekta Ltd. v. Rodkin, 2012 ONSC 1900 as follows: A. What deemed admissions of fact flow from the facts pleaded in the Statement of Claim? B. Do those deemed admissions of fact entitle the plaintiff, as a matter of law, to judgement on the claim? C. If they do not, has the plaintiff adduced admissible evidence which, when combined with the deemed admissions, entitle it to judgement on the pleaded claim?
[12] I am satisfied that the plaintiff has established liability based upon the following deemed admissions in the Statement of Claim:
- The plaintiff retained the defendant, who is a heating and air conditioning contractor, to undertake work related to the removal of an old HVAC unit and installation of a new one: paras 3 & 4.
- The defendant failed to adequately seal the New HVAC system to the property’s duct system: para 5.
- This exposed the property to freezing temperatures, which caused the pipes to rupture and a subsequent flood: paras 6 & 9.
- The defendant breached a duty of care owed to the plaintiff based on the particulars set out in para 9 of the Claim.
- The contract entered into by the parties contained express or implied conditions and/or warranties that the New HVAC was of merchantable quality and fit for its intended purposes. The defendant breached these terms: para 10.
- Pursuant to the contract, the defendant was also contractually obligated to reimburse the plaintiff if the plaintiff suffered damages arising from any defect in materials, design or workmanship: para 12. The defendant’s work breached this term for the reasons set out in para 12 of the Claim.
Issue 2: What are the damages to which the plaintiff is entitled?
[13] With respect to the contractual claims, the plaintiff is entitled to be compensated for the loss of bargain which means it is entitled to be put in the same position it would have been in if the breaches had not occurred.
[14] With respect to the tort claim, the plaintiff is entitled to damages based upon being placed in the same position it would have been in if the negligence had not occurred.
[15] In this case, the damages for both the tort and the contract claim are the same.
[16] The plaintiff provided a report from Leeds Disaster Restoration Specialists who investigated the loss.
[17] The total amount paid to repair the water damage was $153,526.26. This is the amount which would be required to put the plaintiff in the same position as if the negligence had not occurred. It is also the amount required to put the plaintiff in the same position it would be in if the contractual breach had not occurred; that is, if the breach had not occurred, it would have received a new and fully HVAC system, not a defective one. As such, these damages flow from the breach.
[18] The plaintiff has requested pre and post judgment interest at the Courts of Justice Act which I order commencing on December 19, 2019, the date of the flood. This results in an interest calculation from today’s date of $11,306.26. (I note that the prejudgment interest calculation provide by the plaintiff was based upon judgment being granted on May 24, 2023. The plaintiff has provided a daily rate and I have used that daily rate to adjust the amount claimed so that prejudgment interest would be fixed as of today’s date which is the date of the judgment.)
[19] The plaintiff is also entitled to post judgment interest at the rate set out in the Courts of Justice Act.
[20] The plaintiff requests costs on a partial indemnity basis in the amount of $4,902.39, inclusive of disbursements. I have reviewed the rates and time charged which I find fair and reasonable. I also find that such costs were within the reasonable contemplation of the defendant.
Papageorgiou J. Released: August 28, 2023