COURT FILE NOS.: CV-19-616159 & CV-20-643699

DATE: 2023 08 31

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Act, RSO 1990, c. C.30, as amended

BETWEEN:

SJOSTROM SHEET METAL LTD.

R. Lepore, for the plaintiff

Plaintiff

• and -

GEO A. KELSON COMPANY LIMITED

J. Armel and L. Kung, for the defendant

Defendant

AND BETWEEN:

A. AMAR AND ASSOCIATES LTD.

K. MacDonald and J. Allingham, for the plaintiff

Plaintiff

• and -

GEO A. KELSON COMPANY LIMITED

J. Armel and L. Kung, for the defendant

Defendant

HEARD: October 18-21, 25-27, and November 17, 2022 (by videoconference)

REASONS FOR JUDGMENT

Robinson A.J.

I. OVERVIEW

[1] These two actions arise from the construction of a facility known as the UHN Centre for Cell & Vector Production (CCVP) in the building located at 661 University Avenue in Toronto. University Health Network contracted Canadian Turner Construction Company Ltd. (“Turner”) as the general contractor for the project. Turner subcontracted Geo A. Kelson Company Limited (“Kelson”) to perform required mechanical work. The project was delayed, ultimately reaching substantial completion in April 2019.

[2] In January 2018, Kelson sub-subcontracted A. Amar and Associates Ltd. (“Amar”) to perform all sheet metal work for a fixed price of $782,000.00 plus HST. During the course of its work on the project, Amar supplemented its workforce with labourers from Sjostrom Sheet Metal Ltd. (“Sjostrom”). Kelson’s position is that it was not initially advised that Amar lacked sufficient manpower to complete its required scope of work itself or about Sjostrom’s involvement.

[3] Several months into the project, in July 2018, Sjostrom walked off the job for non-payment by Amar. Kelson contacted Sjostrom and an agreement was reached for it to return to site with payment being made directly by Kelson moving forward. Kelson subsequently issued a “Sub-Contract Change Order” reducing Amar’s subcontract price by $61,924.50. The change order, identified as Revision 1, states that the reduction was for “work performed by others”. The intention behind the change order is disputed between Kelson and Amar. However, it is undisputed that the “work performed by others” refers to work performed by Sjostrom.

[4] The core disputes in these actions are whether Kelson entered into a direct subcontract with Sjostrom to supply the remaining sheet metal labour and whether the change order removed all remaining sheet metal labour from Amar’s scope of work. The character of Kelson’s payments to Sjostrom hinges on those determinations, namely whether the payments were made under a direct subcontract with Sjostrom or made to Sjostrom as Amar’s sub-subcontractor in accordance with a direct payment provision of the the Construction Act, RSO 1990, c C.30.

[5] In its non-lien action, Amar claims against Kelson for unpaid services and materials supplied under its sub-subcontract totalling $209,737.88. Amar’s position is that it ceased to have any responsibility for sheet metal labour after the change order was issued and that Sjostrom’s work after that point was under a separate, direct sub-subcontract between Kelson and Sjostrom. Sjostrom takes the same position. After completing its work, Sjostrom preserved and perfected a lien for $162,840.68 (reduced to $161,585.76 at trial, being the amount of Sjostrom’s unpaid invoices sent to Kelson). In its lien action, Sjostrom claims against Kelson both for its lien and in breach of contract.

[6] Kelson argues that it is caught in the middle of what should be viewed as a dispute between Amar or Sjostrom over who is entitled to payment of the earned and unpaid balance of Amar’s sub-subcontract. Kelson acknowledges the amount of $172,490.72, inclusive of HST, remains unpaid. Kelson’s position is that it cannot pay the sum to either Amar or Sjostrom until Sjostrom’s lien has been decided given Kelson’s statutory holdback obligations. Kelson further argues that, since it had no direct contract with Sjostrom, it has no liability in contract for Sjostrom’s claim and that Amar is responsible to pay any amounts proven by Sjostrom. Kelson has counterclaimed in Amar’s action for both damages and contribution and indemnity for any amounts for which Kelson is found liable to Sjostrom.

[7] For the reasons that follow, I find that Sjostrom and Kelson did enter into a separate sub-subcontract for Sjostrom to complete the remaining sheet metal labour in Amar’s scope of work, but that Sjostrom has failed to prove its claimed damages. I am thereby dismissing Sjostrom’s claim and discharging its lien. I further find that the effect of the Revision 1 change order was to remove all remaining sheet metal labour from Amar’s scope of work, that Kelson breached the sub-subcontract with Amar by non-payment, and that Amar is entitled to judgment in the amount of $209,737.88, including HST, plus pre-judgment interest.

II. Issues

[8] As ordered, the parties exchanged lists of disputed issues in advance of trial. With reference to those lists and considering how the trial unfolded, in my view, there are eight main issues to be decided, as follows:

(a) Did Kelson enter into a separate subcontract with Sjostrom for the remaining sheet metal labour in Amar’s scope of work?

(b) Has Sjostrom proven the claimed amount for the work it performed?

(c) On what basis and to what extent, if any, is Kelson liable to Sjostrom for its claim?

(d) Is Kelson’s claim for contribution and indemnity from Amar, which has been advanced by counterclaim in Amar’s lien action, permitted by and consistent with the Construction Act?

(e) Did the Revision 1 change order executed between Kelson and Amar contractually remove all remaining sheet metal labour from Amar’s scope of work?

(f) Who breached the subcontract between Kelson and Amar?

(g) What is the earned and unpaid amount owing to Amar under its subcontract before any set-offs?

(h) Is Kelson entitled to deduct the amounts that it actually paid to Sjostrom to complete the sheet metal labour in excess of the amount deducted by the Revision 1 change order?

III. Analysis

[9] By operation of the transition provisions in s. 87.3 of the Construction Act, the act as it read on June 29, 2018 – i.e., the former Construction Lien Act (the “CLA”) – continues to apply to the subject improvement and Sjostrom’s lien.

Issue 1: Was a contract formed between Kelson and Sjostrom for the sheet metal labour?

[10] There was no written agreement between Sjostrom and Kelson. Sjostrom alleges that an oral agreement was made between Sjostrom’s principal, William (Bill) Preston, and Kelson’s Executive Vice President, Josh Kelson, for Sjostrom to supply all remaining sheet metal installation labour until completion of the project, which formed part of Amar’s scope of work under its sub-subcontract. Kelson denies that it entered into any direct contractual relationship with Sjostrom, arguing that Sjostrom was and remained a subcontractor to Amar. Kelson only paid Sjostrom directly on Amar’s behalf out of funds earned by Amar under its sub-subcontract.

[11] Deciding whether a contract was formed by oral or unwritten agreement involves applying the same basic contractual principles as deciding whether a contract was formed by written agreement. After reserving my decision from this trial, I released my decision in Bellsam Contracting Limited v. Torgerson, 2023 ONSC 468. In that decision, at paras. 35-38, I discussed the principles to be considered when deciding if a contract has been formed between two parties. Those principles are summarized as follows:

(a) An enforceable agreement has five elements: offer, acceptance, consideration, certainty of essential terms, and an intention to create a legal relationship. A contract is formed where there is an offer by one party accepted by the other with the intention of creating a legal relationship, which is supported by consideration;

(b) In deciding whether or not a contractual relationship existed, the court must examine the factual matrix between the parties;

(c) The examination is performed on an objective standard. The court examines how each party’s conduct would appear to a reasonable person in the position of the other party, not the subjective views or understanding of the parties. It does not matter that one party may have had no intention to enter a legally binding contract. Rather, what matters is whether their conduct was such that a reasonable person would conclude that they intended to be bound. That includes considering the nature of the relationship among the parties and the interests at stake; and

(d) It is not enough for there to have been an offer to perform work that was, in general terms, accepted. For there to be a binding contract, there must also be a meeting of the minds or consensus ad idem on all essential terms of the relationship. The essential terms of a construction contract are generally viewed as price, scope of work, and a schedule or completion date.

[12] Cases cited by the parties at trial address substantially the same principles outlined above: Jamshidi v. Dependable Mechanical Systems Inc., 2018 ONSC 7101 at para. 4; Le Soleil Hotel & Suites Ltd. v. Le Soleil Management Inc., 2009 BCSC 1303 at paras. 324-335 and 338-341.

[13] Although Sjostrom’s primary submission is that there was a contract with Kelson, in the alternative, Sjostrom claims against Kelson in quantum meruit. Where there is no agreement or meeting of the minds, a plaintiff may be entitled to relief on the basis of the equitable doctrine of restitutionary quantum meruit, or unjust enrichment. Proving a claim in quantum meruit has three elements: an enrichment, a corresponding deprivation, and the absence of a juristic reason for the enrichment. The plaintiff bears the onus of demonstrating on a balance of probabilities that the claim based on quantum meruit is made out: Androus v. The Bedford Residences Inc., 2011 ONSC 2453 at paras. 49-50.

[14] I need not address Sjostrom’s alternative argument. I am satisfied that Kelson has admitted the direct contractual relationship in its statement of defence and that, in any event, the evidence before me supports that a direct contract was formed between Kelson and Sjostrom to supply all remaining sheet metal labour with payment on an hourly basis.

(a) Has Kelson admitted a contract with Sjostrom in its statement of defence?

[15] Kelson addresses the arrangement with Sjostrom at paras. 4-7 of its statement of defence. Kelson pleads that it “decided to retain [Sjostrom] to complete Amar’s Work directly” and that it “entered into an agreement with [Sjostrom] for [Sjostrom] to complete Amar’s Work”. Kelson particularizes express or implied terms of the agreement. Kelson also pleads that it was “forced to re-hire Amar to perform [Sjostrom’s] scope of work” when Sjostrom abandoned the job site for a period of one week.

[16] During a cross-examination on these paragraphs, Josh Kelson put forward a reading of them that fit Kelson’s position at trial. Kelson advanced a similar argument in closing submissions to Mr. Kelson’s interpretation that using the word “agreement” did not amount to an admission of any contract with Sjostrom. I am not convinced.

[17] Section 67(3) of the CLA provides that the rules of court apply in lien actions except to the extent of any inconsistency with the provisions of the act. Subrule 25.07(3) of the Rules of Civil Procedure, RRO 1990, Reg 194 expressly requires a party who intends to prove a version of facts different from that pleaded by the opposite party to plead the party’s own version of the facts in the defence. The reason for this pleading rule is to avoid unfairness at trial, which may result where a defendant is permitted to rely on an unpleaded defence that, had it been pleaded, might have prompted counsel to employ different tactics at trial. Where a defence is not pleaded and no pleadings amendment is obtained, the court should generally resist the inclination to allow a defendant to raise and rely on an unpleaded defence if trial fairness and avoiding prejudice to the plaintiff are to be achieved: Tutt v. Ishakis, 2020 ONSC 5711 (DivCt).

[18] In Sjostrom’s statement of claim, at para. 7, Sjostrom pleads an agreement between Sjostrom and Kelson to provide on-site duct work installation and site supervision for work at the CCVP project, with such services to be provided, billed, and paid on an hourly basis. That paragraph is not expressly admitted in Kelson’s defence, but the above-discussed paras. 4-7 acknowledge an agreement with Sjostrom “to complete Amar’s Work”. Variant terms from those pleaded by Sjostrom were put forward.

[19] Given the positions, I have carefully reviewed the pleading in Sjostrom’s lien action. In my view, Kelson’s statement of defence is inconsistent with Kelson’s trial position that Sjostrom remained a subcontractor to Amar. Kelson’s statement of defence refers specifically to Kelson having retained Sjostrom directly (para. 4), entered into an agreement with Sjostrom to complete Amar’s work (para. 5), and being forced to re-hire Amar when Sjostrom temporarily abandoned the project (para. 7). None of these statements align with Kelson having no contractual relationship with Sjostrom and thereby no contractual obligation to pay it. Kelson does not state anywhere in its defence that it lacked privity of contract with Sjostrom and only had a contractual relationship with Amar. Despite Kelson’s arguments to the contrary, the language used suggests otherwise.

[20] Kelson’s position is that its payments to Sjostrom were made pursuant to s. 28 of the CLA. That section permits an owner, contractor, or subcontractor to make a payment without obligation to a person having a lien, on written notice to the proper payer of the lien claimant. Such a payment is deemed to be a payment by the owner, contractor, or subcontractor to the proper payer of the lien claimant (without reducing holdback obligations). In the statement of defence, Kelson pleads and relies on ss. 17(3) and 35 of the CLA, but not s. 28.

[21] Pleading and relying on s. 17(3) of the CLA is significant. That subsection provides that, in determining the amount of a lien, “there may be taken into account the amount that is, as between a payer and the person the payer is liable to pay, equal to the balance in the payer’s favour of all outstanding debts, claims or damages, whether or not related to the improvement.” Accordingly, Kelson is only entitled to claim set-off under s. 17(3) if it is a “payer” that is liable to pay Sjostrom. “Payer” is a defined term in the CLA. It means “the owner, contractor or subcontractor who is liable to pay for the services or materials supplied to an improvement under a contract or subcontract.” Put simply, the right to assert set-off under s. 17(3) of the CLA requires privity of contract between the lien claimant and the party claiming set-off. Pleading and relying on s. 17(3) further supports that Kelson was admitting it had privity of contract with Sjostrom.

[22] At the outset of trial, Kelson moved to amend its statement of defence in Amar’s action to add a counterclaim for damages against Amar. Kelson did not bring any motion to amend its defence in Sjostrom’s lien action. It statement of defence there by stands as-is.

[23] Based on Kelson’s statement of defence as it stands, I find that Kelson admitted a direct contract with Sjostrom in its pleading.

(b) Does the evidence support that a contract with Sjostrom was formed?

[24] Even if I am wrong that Kelson’s statement of defence admits a direct contract with Sjostrom, I would still find that the objective evidence supports a contract. As noted above, whether a contract was formed directly between Sjostrom and Kelson is to be assessed on an objective standard. In my view, a reasonable person in the position of each of Sjostrom and Kelson would view both parties as intending to enter into a direct contractual relationship separate and apart from any relationship between Kelson and Amar. The evidence supports that the required elements of offer, acceptance, consideration, certainty of essential terms, and an intention to create a legal relationship are all present.

[25] On July 3, 2018, Sjostrom left the project on the basis of non-payment by Amar. Evidence at trial supports that, at the time, Sjostrom was the only sheet metal labour force on site. Shortly afterwards, on July 5, 2018, Josh Kelson called and spoke with Bill Preston. Jeff Preston (Sjostrom’s site foreman on the job) was with Bill Preston for the call. Mr. Kelson testified that he asked why Sjostrom was no longer on site and was told that it was because Amar was not paying them. Mr. Kelson testified that he told them if Sjostrom’s forces would return to site, then Kelson would pay Sjostrom the balance owing by Amar (although Amar ultimately paid Sjostrom itself) and directly pay Sjostrom moving forward to give them comfort. Mr. Kelson also testified that Bill Preston confirmed that Sjostrom would come back to site provided he was not paid by Amar. Ultimately, Mr. Preston agreed and Sjostrom re-mobilized the next day. Bill Preston’s testimony about the call was consistent with Josh Kelson’s account. Jeff Preston had little recollection of what was discussed.

[26] In my view, Josh Kelson’s proposal was an offer capable of being accepted and was accepted by Sjostrom. The required scope of work to be performed was known and understood by both parties: completing all remaining sheet metal installation work. Price and schedule were not discussed until a few days later on June 9, 2018. However, the delay in reaching an agreement on price and schedule is not, in my view, fatal to a contract being formed. It is not necessary for every conceivable matter to be resolved between parties before an enforceable contract is created. The question is whether the parties have reached agreement on all matters that are vital or fundamental to the arrangement: Le Soleil Hotel & Suites Ltd., supra at para. 330. The evidence of Josh Kelson and Bill Preston is consistent that both understood that Kelson would be paying Sjostrom directly to complete the sheet metal labour work. Kelson wanted Sjostrom to return to work immediately. It did so.

[27] The next day, on July 6, 2018, Josh Kelson emailed Jeff Preston (in the absence of having an email for Bill Preston) and asked for Sjostrom’s cost to finish the remaining work by the end of July. In his email, Mr. Kelson indicated that it could be “an hourly rate with man count to finish by end of July or lump sum amount.” Marked up drawings showing work completed with man count were also requested moving forward. Significantly, at the end of the same email, Mr. Kelson stated, “I will send you PO for the work moving forward as well once I get cost to finish.”

[28] I find that the evidence supports, on a balance of probabilities, that price and schedule were subsequently agreed on July 9, 2018. On that date, Bill Preston emailed Josh Kelson with a proposal to proceed with work on an hourly basis at a rate of $69.50 per hour for regular hours and 1.5 times that rate for weekends, as required. There is no dispute that Kelson agreed to pay Sjostrom at the rate of $69.50 per hour for its labourers. The remaining pricing terms are disputed. Josh Kelson testified that, after receiving Bill Preston’s email, he telephoned him, discussed Sjostrom completing sheet metal installation by the end of July, then sent a responding email to Mr. Preston setting out his understanding of their arrangement. Mr. Kelson’s email stated as follows:

Moving forward, the sheetmetal work is to be complete by end of July. Based on this with 6 guys working on level 10 for 45 hours of regular time per week for 3 remaining weeks for a total of $56,295.00. In addition at 1.5x rate on Saturday with 6 guys working 3 Saturday's until end of July that is $16,888.50. Therefore total to finish level 10 by end of July is $73,183.50.

We can pay this weekly based on the calculations above. Do you want us to do up cheque a or [sic] set you up for electronic deposit in a bank account?

[29] Bill Preston testified that he only ever had one telephone call with Josh Kelson, which was on July 5, 2018. Josh Kelson was challenged on the alleged July 9, 2018 call during cross-examination, but maintained that he did speak to Mr. Preston that day and that Mr. Preston was not remembering correctly. Mr. Kelson’s recollection was unsuccessfully challenged with part of his discovery evidence. His discovery evidence was ultimately shown to be consistent with his trial evidence, namely that he and Bill Preston had a conversation after which Mr. Kelson followed up with an email.

[30] Notwithstanding that Josh Kelson seemed more certain at trial of the timing of the June 9, 2018 call than he did during the examination for discovery, I find his recollection to be reliable. Notably, it explains the specificity of the responding email, albeit that the email does not refer to any conversation.

[31] Bill Preston testified that he never agreed to Sjostrom completing its work for $73,183.50, was never asked if the job could be finished by the end of July, was never asked if Sjostrom was able to supply six labourers for 45 hour weeks or for another 8 hours on Saturdays, and that he had absolutely no input on the calculation outlined in Mr. Kelson’s email. He testified that Sjostrom’s labourers do not work 45 hour weeks, but rather regularly work 37.5 hour weeks. I find Mr. Preston’s evidence on these points to be unreliable.

[32] During the course of his cross-examination, Mr. Preston was demonstrated to lack specific recollection of work he performed and conversations that took place. His evidence was often general and more high level. A call with Josh Kelson on July 9, 2018 was not specifically put to Mr. Preston during his examination. It may be that Mr. Preston would have recalled it had he been asked about it. His testimony that he only spoke with Josh Kelson once was not substantively challenged.

[33] More significantly, the contemporaneous record is inconsistent with Mr. Preston’s evidence. Mr. Kelson’s email clearly sets out Kelson’s expectations for completing the sheet metal installation work. Mr. Kelson testified that neither Bill Preston nor Jeff Preston responded to his email. There is no evidence of any response. Bill Preston confirmed during his own testimony that he never advised anyone that the job could not be competed for the price or amounts set out in Mr. Kelson’s email. He stated that he did not know there was any need to do so. I find that response to lack credibility. Mr. Preston’s failure to refute Mr. Kelson’s calculations and evident expectations for the timing of completion is a significant silence. There are several other emails in evidence where Mr. Preston did take the time to send emails when he disputed something. In context of the overall evidence, on a balance of probabilities, failing to respond to Mr. Kelson’s email at all, particularly when Bill Preston’s evidence is that it contained incorrect assumptions, figures, and deadlines, supports that Mr. Kelson did, in fact, speak with Mr. Preston about the terms before Mr. Kelson sent the email. I find accordingly.

[34] With respect to intention to create a legal relationship, Josh Kelson testified that Kelson only intended to pay Sjostrom as Amar’s subcontractor. During cross-examination, Mr. Kelson explained his email on July 6, 2018, in which he indicated that a purchase order would be issued to Sjostrom. He testified that it was not ultimately issued because Kelson determined it did not make sense since Amar already had the sub-subcontract for that work. The is no contemporaneous email or record to that effect. I was also directed to no email or other evidence supporting that Kelson ever advised Sjostrom that it would not be issuing a purchase order and that Kelson would instead be continuing to treat Sjostrom as Amar’s subcontractor.

[35] More importantly, Mr. Kelson’s subjective intention and understanding is not dispositive of whether a contract was formed. As noted above, case law has consistently held that the court is to examine the matter on an objective standard.

[36] During cross-examination by Kelson, Bill Preston was asked about whether Sjostrom was still working for Amar. Mr. Preston testified that, in his view, Sjostrom was working for Amar but being paid by Kelson, since all he wanted was assurance that Sjostrom would be paid. During cross-examination by Amar, though, Mr. Preston agreed that Sjostrom did enter into a direct contract with Kelson. I have considered the impact of that conflicting testimony, but have ultimately found that the answer given during Kelson’s cross-examination is inconsistent with Mr. Preston’s overall evidence. I have thereby given the single answer limited weight in my assessment of whether both Sjostrom and Kelson intended a contract to be formed.

[37] Objectively, I am satisfied that the evidence does not support Kelson’s position that Kelson and Sjostrom understood that Sjostrom remained Amar’s subcontractor. Kelson’s negotiations with Sjostrom were done without any involvement or approval of Amar. An hourly rate was negotiated between Sjostrom and Kelson independent of Amar and at a rate higher than the rate agreed between Sjostrom and Amar. Bill Preston expressly advised Alain Amar by email on July 6, 2018 that Sjostrom would be taking direction from Kelson, not Amar, which neither Josh Kelson nor anyone on Kelson’s behalf corrected. The agreement contemplated direct payments from Kelson to Sjostrom. Emails support that Kelson wanted Sjostrom to invoice it directly, which is what Sjostrom did. Sjostrom’s invoices were not provided to Amar. There are no emails, letters or other documented communication supporting that Sjostrom was paid or to be paid only as Amar’s subcontractor.

[38] I accordingly find that, on a balance of probabilities, Sjostrom and Kelson entered into a sub-subcontract to supply all remaining sheet metal installation labour, which was to be billed by Sjostrom on an actual hours basis at the agreed rate of $69.50 per hour for each labourer, plus overtime as required. If further find that the estimated hours to complete the work were as outlined in Josh Kelson’s email dated July 9, 2018, and that Bill Preston and Josh Kelson had agreed that the work would be completed by the end of July 2018.

[39] The completion deadline was not met and the estimated hours were greatly exceeded. However, I need not address whether the sub-subcontract terms as I have found them were amended, since I have also found (as outlined below) that Sjostrom has failed to prove its claimed hours and, thereby, the value of contract work performed.

Issue 2: Has Sjostrom proven the claimed amount for the work it performed?

[40] I have found that Sjostrom and Kelson agreed to a term that Sjostrom would be compensated based on its actual hours spent completing sheet metal labour at the agreed rate of $69.50 per hour. That agreement is similar to a cost-plus arrangement, whereby a contractor is compensated for actual costs incurred plus an agreed markup. Given the similarity, principles from case law arising from disputes over cost-plus contracts are, in my view, largely applicable to this case.

[41] Several relevant principles were discussed in Infinity Construction Inc. v. Skyline Executive Acquisitions Inc., 2020 ONSC 77 at para. 114, a case cited by Sjostrom. In assessing Sjostrom’s damages claim, I have considered and applied the following principles as summarized in that case (adapted to the subcontractor / sub-subcontractor situation before me):

(a) even in an open-ended contract, there is still an obligation on the parties to exercise a degree of diligence in carrying out the work so that they do not incur costs significantly higher than the estimate without prior approval;

(b) where the parties have agreed to an open-ended contract, courts will often imply terms preventing payment for wasteful or uneconomic use of labour and materials;

(c) where an estimate is given, the final price should fall somewhere near the estimate, although the degree of variance between the estimate and the final price is subject to the “bounds of reasonableness”, which will be circumstance specific;

(d) the role played by the estimate in the parties’ agreement requires examining various contextual criteria, including the circumstances in which the estimate was given, the knowledge and expertise of the party providing the estimate, whether it was relied upon by the party requesting it, whether the contractor made it clear that it was not assuming any of the risk that the estimate might be exceeded, whether the contractor provided the owner with information regarding rates for labour, equipment rental and materials, and whether the owner encouraged the contractor to proceed with the construction despite actual or constructive knowledge that the estimate would be exceeded;

(e) the relative sophistication and knowledge of the parties is important in determining the degree to which the party should be required to adhere to the estimate;

(f) a contractor is obliged to promptly notify an owner if there are cost overruns to a budget estimate in a cost-plus contract;

(g) where a contractor is seeking to recover on a cost-plus basis the evidentiary burden of proving these costs is a heavy one;

(h) it is not necessary that the accounts be kept in any particular manner or to a high standard, but well enough to show proof of the contractor’s charges;

(i) once a contractor proves that he has kept proper accounts and is able to show supporting documentation, the onus shifts to the opposing party to adduce evidence to show that the amounts claimed or the accounts are incorrect or unreliable;

(j) once doubt is cast upon the accounts the onus shifts back to the contractor to satisfy the court that his accounts are accurate and support his claim. If the court is left in doubt, the contractor fails; and

(k) while supply of materials may be proved upon evidence somewhat less conclusive, so long as the building is in existence and the system of recording material is capable of providing a substantially accurate result, the records for the time of workers must be strictly proved since it is difficult to verify after the fact.

[42] As lien claimant and plaintiff, Sjostrom bears the evidentiary burden of proving the value of services and materials that it supplied. The evidence that Sjostrom has tendered to substantiate its claim is predominantly hearsay evidence. Sjostrom has not met its onus.

[43] Sjostrom claims $161,585.76, representing the unpaid balance of its three invoices issued to Kelson. Those three invoices for its work are as follows:

(a) invoice no. 2974 dated August 11, 2018, billing for 1,187.5 man hours for the five weeks respectively ending July 7 to August 4, 2018 at the rate of $69.50 per hour, for a total of $93,260.31, including HST;

(b) invoice no. 2975 dated November 1, 2018, billing for a further 1,031.5 man hours for the five weeks respectively ending August 11 to September 8, 2018 at the rate of $69.50 per hour, for a total of $81,008.85, including HST; and

(c) invoice no. 2976 dated December 21, 2018, billing for a further 1,026 man hours for the fifteen weeks respectively ending September 15 to December 22, 2018 at the rate of $69.50 per hour, totalling $80,576.91, including HST.

[44] Sjostrom’s first invoice was paid in full by Kelson. That payment is not in dispute as between Sjostrom and Kelson. Kelson does not allege overpayment, despite its position at trial that the amounts billed by Sjostrom exceeded its estimates. The central dispute is over the number of labour hours actually worked by Sjostrom’s labourers and what, if anything, is properly payable to Sjostrom.

[45] Based on Sjostrom’s invoices, its labourers worked an aggregate of 3,245 man hours. Bill Preston testified that the total hours billed were the composite of regular hours and overtime hours (such as weekend work), which was billed at 1.5 times the actual hours. Sjostrom amalgamated the overtime hours with regular hours rather than bill them as separate line items. As a result, the actual hours spent by Sjostrom’s labourers was less than the aggregate billed man hours.

[46] The only documents tendered supporting Sjostrom’s invoicing are weekly time summaries, which were prepared by Bill Preston. The time summaries are charts identifying labourers and the total number of hours worked on a day in a particular week. They were challenged at trial with respect to the truth of their contents. They are unsigned by the labourers and there is no description of the specific work performed by them during the hours claimed. Although the division of total regular and overtime hours could presumably be calculated by using these time summaries, they were not clearly tallied in any evidence at trial.

[47] In my view, Sjostrom has failed to tender sufficient evidence to prove, on a balance of probabilities, that the time summaries accurately reflect the hours actually spent by Sjostrom on the project. I thereby cannot find that Sjostrom has a valid claim for any payment above the amount already paid by Kelson.

[48] As already discussed, Josh Kelson’s initial calculation of the anticipated hours, outlined in his email dated July 9, 2018, was unchallenged by Bill Preston (or Jeff Preston) in any contemporaneous email or other written communication. Sjostrom’s actual worked hours are greatly in excess of the total hours that I have found were agreed as the estimate to complete. A total of 3,245 in actual man hours (adjusted to include overtime) was purportedly incurred to complete the job after July 4, 2018.

[49] Based on the evidence before me, Sjostrom provided only one written estimate itself for labour hours, which was done just shy of a month after Sjostrom returned to site in July 2018. In an email dated August 2, 2018, Jeff Preston stated as follows:

As of July 6th, when Sjostrom starting [sic] working direct to Kelson, until and including July 31st Sjostrom has worked a total of 862 hrs. 203.5 o/t hrs and 658.5 regular hours. I estimate that it will take at least that many more total hrs to fully complete the project.

[50] Kelson characterizes this as an estimate that a further 862 man hours would be required to complete. Josh Kelson testified that Sjostrom having spent 862 hours was still within his understanding that completing the work would require approx. 1,000 labour hours, so he took this email to be confirming that Sjostrom would be a month late to complete with some overage in the anticipated hours. Jeff Preston testified that his email was a forecast, not a hard estimate. Sjostrom argues that it provided no more than a minimum estimation of what would be required to complete, and was not a binding estimate.

[51] As noted above, case law supports that the relative sophistication and knowledge of the parties is an important factor in determining the degree to which a party should be required to adhere to an estimate. I agree with Kelson’s submission that Jeff Preston had been on site for five months at the time of sending the email acting as a site foreman. Evidence supports that he was familiar with the scope of required work, site conditions, and was attending site meetings.

[52] I reject Sjostrom’s submission that Jeff Preston was only a licensed sheet metal installer and lacked the requisite expertise to provide an accurate estimate of time required to complete. Multiple witnesses testified to Jeff Preston’s knowledge of the site, including Bill Preston and Chris Ulyett (Turner’s mechanical/engineering manager for the project). Based on the evidence before me, I find that Jeff Preston was in the best position of anyone at Sjostrom to accurately assess the number of hours required to complete the work given the site conditions. No cogent evidence or argument was advanced for why Sjostrom was unable to more accurately forecast the required hours to complete the sheet metal work.

[53] I have also considered the total number of hours claimed by Sjostrom in context of other evidence supporting that sheet metal labour was substantially completed by early July 2018. Without going through all of the evidence in detail, I note three instances in particular.

[54] First, Alain Amar testified that, as of June 25, 2018, his view was that labour was 80-86% complete. His email of the same date indicates a view that it was 86% complete.

[55] Second, emails put to Alain Amar from Tom Olesinski of Crossey Engineering Ltd. (the payment certifier for the project) indicated Mr. Olesinski’s view that sheet metal work was 80% complete. Eric Rautanen (Kelson’s project manager) agreed during his cross-examination that, as of June 25, 2018, sheet metal material and labour were approx. 80% complete.

[56] Third, Octavio Deviveiros (Amar’s operations supervisor) testified during cross-examination that he reviewed the mechanical drawings that had been marked up by Jeff Preston in early July 2018 to depict areas where installation work was still required and materials had been delivered to site and areas where installation was still required and materials remained to be delivered. Mr. Deviveiros felt that Mr. Preston’s highlighting accurately depicted the amount of work left to complete on site and that, based on his own review of the drawings and recollection of a site walkthrough that he attended with others on July 5, 2018, the highlighted work ought to have taken four to five weeks to complete with four to five labourers, with work completed by late August or early September at the latest.

[57] Mr. Deviveiros also testified to his own observations of the state of work in late September when Amar returned to the site to supply sheet metal labour at Kelson’s request. Mr. Deviveiros testified that when he attended the site in late September to assess the state of work before Amar’s labourers started, he felt that only 15-20% of the work highlighted by Jeff Preston in the tech spaces was left to be done. Moreover, he testified that when Amar left the site in mid-October, he did not expect much more work was left to be done and was surprised to hear that Sjostrom did not complete installation work for another two months (although acknowledged he did not know what work Sjostrom was doing in that period).

[58] During cross-examination by Sjostrom’s lawyer, Mr. Deviveiros did confirm that he had not seen the highlighted drawings at the time. He conceded that his estimation was not contemporaneous, but rather was made when preparing his affidavit evidence for this trial. Sjostrom has advanced arguments for why Octavio Deviveiros’ evidence should be doubted. However, Mr. Deviveiros’ recollection of events was consistent during cross-examination and his observations on the state of work remain a relevant consideration.

[59] Although some of the above evidence was tendered after Bill Preston and Jeff Preston had testified, the evidence of Alain Amar and Octavio Deviveiros on the state of completion and anticipated timing of completion as of July 2018, September 2018, and October 2018 was tendered prior to Sjostrom’s first witness being called. In the face of such evidence, it was incumbent on Sjostrom to put forward a cogent explanation for the stark discrepancy between Amar’s evidence, Sjostrom’s forecast/estimate of “at least” a further 862 man hours as of August 2, 2018, and the substantially higher total hours claimed in this litigation as being spent. Sjostrom has not done so.

[60] Jeff Preston agreed during cross-examination that sheet metal labour was 80% complete as of June 25, 2018. Both Bill Preston and Jeff Preston testified on the actual working conditions and the impact of tight spaces and material and equipment deliveries on the time required to complete installation work. Several witnesses, such as Gary Caldwell (Turner’s project manager), Chris Ulyett (Turner’s mechanical/engineering manager), and Eric Rautanen (Kelson’s project manager) corroborated the complexity of the project and site conditions, as well as timing for when certain materials or equipment were brought to site. That, however, is not enough to explain why so many labour hours were required to complete the job.

[61] Sjostrom’s agreement with Kelson was time-based. Sjostrom’s evidentiary onus is not discharged by proving that site conditions and delays impacted work efficiencies. Sjostrom must prove that the hours claimed were actually incurred by Sjostrom’s labourers, were required, and were spent completing Sjostrom’s contractual scope of work.

[62] Bill Preston’s time summaries are Sjostrom’s main evidence on how the hours claimed were totalled and when they were incurred. Both Bill Preston and Jeff Preston gave evidence on how the time summaries were prepared. Significantly, the time summaries tendered at trial are not timesheets prepared by Sjostrom’s labourers. Bill Preston explained that he prepared the summaries after the end of the week, usually on the following Monday. Any timesheets from labourers were not produced in the litigation. Bill Preston testified that they were not kept, often being notes on things like scrap paper, pieces of drywall, cardboard from a box, or napkins.

[63] Notwithstanding that the time summaries were prepared weekly, they were not provided to Kelson on a weekly basis. Kelson was only provided the time summaries with Sjostrom’s invoices. There was no evidence tendered at trial supporting that Kelson could reasonably have known how many hours Sjostrom was spending on site until receiving the invoices: one in August, one several months later in November, and a final one in December.

[64] During his testimony, Bill Preston was demonstrated to have no personal knowledge of the time recorded in the time summaries for Sjostrom’s labourers. He gave limited testimony on his own. Mr. Preston testified that he prepared the summaries based on information provided to him by Jeff Preston on the telephone, in text messages, or in meetings. He conceded during cross-examination that he had no first-hand knowledge of the hours. He relied on Jeff Preston for them. That is consistent with Jeff Preston’s testimony.

[65] Jeff Preston testified that he was the person who provided Bill Preston with all of the hours worked by labourers on a daily basis, typically by text message or in person. However, he was not examined on the accuracy of the time summaries or how he tracked and verified the hours he provided to Bill Preston. Jeff Preston did not discuss the scrap paper, pieces of drywall, or other notes from labourers about which Bill Preston testified.

[66] Sjostrom argues that the time summaries constitute admissible business records within s. 35 of the Evidence Act, RSO 1990, c E.23. I agree with Sjostrom that they are admissible. As provided in s. 35(4) of the Evidence Act, the circumstances in which a business record is made, including lack of personal knowledge by the maker, may be shown to affect its weight, but such circumstances do not affect its admissibility. The weight to be given to the time summaries is directly in dispute.

[67] In my view, the time summaries have limited evidentiary value in the absence of corroborating evidence that Sjostrom has not tendered. They were prepared by Bill Preston relying entirely on hearsay information. There is no evidence on how or if the hours worked by each labourer, as provided to Bill Preston, were tracked and verified. Notably, direct corroborating evidence was available, but was not tendered by Sjostrom.

[68] Testimony from both Bill Preston and Jeff Preston was consistent that Jeff Preston would provide Bill Preston with the labourers’ hours by telephone, text, or in person. Bill Preston also testified that there could have been emails. None of those texts or emails were produced in the litigation. The reasons for which they were not obtained and produced were not explained.

[69] Sjostrom’s initial witness lists contemplated affidavit evidence in chief from many of the labourers who worked for Sjostrom on the project. Ultimately, though, affidavits were not prepared for them and they were not called as witnesses at trial to confirm the work they performed or their worked hours. Both Bill Preston and Jeff Preston gave only general evidence on the hours worked, without detailing what work was being performed by which labourers in any given week and why the total hours spent by them was required beyond general testimony about material delays and working in confined spaces that was not correlated to any of the time summaries.

[70] Sjostrom argues that its bank statements, which were tendered at trial, provide evidence that Sjostrom paid its labourers for the claimed hours and, thereby, corroborates them. However, there is no evidence on the hourly rates paid by Sjostrom to its labourers and what source deductions (if any) were made. Sjostrom has failed to provide calculations for the payment amounts and correlate those to the hours outlined in the time summaries. The bank statements thereby do not, in my view, corroborate the time summaries, or Bill Preston’s evidence. Additional information or evidence is required that was not tendered.

[71] Evidence on time entries for Bill Preston and Jeff Preston themselves was also scant and raised questions about whether the entries were properly billable. For example, specific testimony was given about the last date of Sjostrom’s work, for which the time summaries indicate Bill Preston and Jeff Preston were working. Bill Preston did not appear to recall what he and Jeff Preston were doing for 5.5 hours each. He suggested that they would have cleaned up the site and removed tools and equipment, but could not recall if they did any installation work. He stated that they were “there doing something.” Jeff Preston indicated that, based on emails put to him, a cart pass through was installed, after which Sjostrom would have performed venting work. There was, however, no evidence on how long that work took. Given Bill Preston’s evidence that clean up and removing tools and equipment may have been done, it is unclear how much, if any, of the total 11 hours of aggregate time was properly compensable as sheet metal work.

[72] Sjostrom tendered evidence on the impact of actual site conditions, but the evidence was general and non-specific. For example, both Bill Preston and Jeff Preston testified about the tight spaces in which Sjostrom’s labourers had to work in the ceilings because trade sequencing resulted in the ceiling space being closed before all the ductwork was completed. However, there was no evidence on the extent of inefficiency, such as comparing the time that would have been required for the same tasks if they could have been performed prior to the ceiling closure. Put simply, no evidence was tendered on the extent of additional time that was required due to the actual site conditions.

[73] Despite Sjostrom having a time-based agreement with Kelson there appears to have been no proper accounting of actual time spent. Labourers were not logged in or logged out of the site, were not required to keep formal timesheets, and their actual time spent working at the site does not appear to have been audited by either Bill Preston or Jeff Preston.

[74] As noted above, time spent by labourers on a project must be strictly proved given the difficulty in verifying it after the fact: Infinity Construction Inc., supra at para. 114. In my view, the time summaries and testimony of Bill Preston and Jeff Preston are insufficient to meet Sjostrom’s evidentiary onus to demonstrate what actual hours were incurred, how the hours were incurred, why they were so significantly higher than Josh Kelson’s unchallenged expectations as set out in his email of July 9, 2018 and Jeff Preston’s subsequent minimum estimate of August 2, 2018, and why Sjostrom provided no notice to Kelson that actual labour hours were greatly exceeding those figures until Sjostrom rendered its invoices.

[75] On a balance of probabilities, I cannot find in Sjostrom’s favour. It has tendered insufficient evidence to support a finding that the hours claimed were, in fact, spent. I thereby find that Sjostrom has failed to prove its claimed supply of services, at least in excess of the amounts already paid by Kelson. This finding is dispositive of Sjostrom’s lien and contract claims.

Issue 3: To what extent, if any, and on what basis is Kelson liable to Sjostrom for its claim?

[76] Given my finding that Sjostrom has failed to prove its claimed unpaid hours, I need not address the nature and extent of Kelson’s liability to Sjostrom.

Issue 4: Does Kelson’s claim for contribution and indemnity for Sjostrom’s claim against Amar comply with the Construction Act?

[77] During the course of the reference before me, I raised a concern with the legal tenability of Kelson’s counterclaim in Amar’s non-lien action seeking contribution and indemnity for Sjostrom’s claims in its lien action. Specifically, I requested submissions at trial on whether the counterclaim was consistent with the provisions in the CLA governing third party claims for contribution and indemnity and, if inconsistent, whether that had any bearing on Kelson’s ability to pursue contribution and indemnity at trial. That request led to a partially opposed motion at trial by Amar to amend its reply and defence to counterclaim to specifically plead non-compliance with the CLA and the Negligence Act, RSO 1990, c N.1. I granted that motion without prejudice to the parties’ legal arguments in closing submissions.

[78] Availability of third party claims in lien actions is much more restricted than in non-lien actions. They are confined to claiming contribution or indemnity from the third party in respect of the claim against the person bringing the third party claim: CLA, s. 56. In addition, a defendant seeking to add a third party must first obtain leave of the court and meet the requirements for leave as set out in that section. By issuing a counterclaim in Amar’s non-lien action for contribution and indemnity, Kelson did not have to address the requirements of s. 56.

[79] Counsel for Amar and Kelson both made capable and compelling arguments on why the counterclaim is or is not valid and sustainable. However, since I have found that Sjostrom has not proven its claim, I need not consider or decide the issue. Kelson’s contribution and indemnity claim is rendered moot by my disposition of Sjostrom’s claim.

Issue 5: Was remaining sheet metal labour removed from Amar’s scope of work?

[80] My finding that a separate sub-subcontract was formed between Sjostrom and Kelson for Sjostrom to perform all sheet metal labour is not itself dispositive of whether or not Amar was still required to complete the same scope of work under its existing sub-subcontract. Kelson and Amar disagree on the contractual impact of the Revision 1 change order issued by Kelson.

[81] Kelson argues that the change order merely credited the amount noted in the change order against the sub-subcontract price, but did not remove the sheet metal labour scope of work. Amar argues that it fully removed sheet metal labour from Amar’s scope of work. In my view, the evidence supports that the effect of the Revision 1 change order was to fully remove sheet metal labour from Amar’s scope of work. Viewed in the context of the actual dealings between the parties, I find that Kelson’s change order went beyond merely crediting the amount noted in the change order against the total sub-subcontract price.

[82] In assessing and interpreting the change order, I have considered and applied the following principles of contractual interpretation from the leading case of Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, at paras. 47 and 50:

(a) Interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. It is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix;

(b) A decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Surrounding circumstances are properly considered because ascertaining contractual intention can be difficult when looking at words on their own. Words alone do not have an immutable or absolute meaning; and

(c) The overriding concern is to determine “the intent of the parties and the scope of their understanding”.

[83] The Revision 1 change order is the only document exchanged between Kelson and Amar that they agree deals with the deduction or deletion from Amar’s sub-subcontract of the labour work performed by Sjostrom. Its interpretation is disputed. The change order itself states very little. The previous purchase order total is noted ($782,000.00), with a “Unit Price” deduction of $61,924.50. Under the heading “Description”, the following is stated:

** Revision 1 ** Jul24/18

WORK PERFORMED BY OTHERS

THIS SUBCONTRACT REVISION IS SUBJECT TO ALL TERMS AND GENERAL CONDITIONS OF THE ORIGINAL SUBCONTRACT.

[84] The change order was drafted by Kelson. In my view, the language is ambiguous. It does not expressly state what either Amar or Kelson argue that I should find it means. I must thereby look to the surrounding circumstances to assess the intent of the parties. In my view, the evidence on what transpired leading up to the change order bears directly on understanding the surrounding circumstances at the time that Kelson issued it. Similarly, although conduct after the fact is not determinative of what was understood at the time, it is consistent with Amar’s position.

[85] There is no question that Kelson had the authority to unilaterally issue a change order that amended the scope or price of Amar’s subcontract. Kelson’s right to do so is found in Article IX of the subcontract between Kelson and Turner, which is incorporated by reference into the Kelson/Amar sub-subcontract by Article 1.02 of that agreement. Article XI provides, in part, that Kelson has the authority “to make changes, additions and/or omissions in the Work as it may deem necessary, upon written order to the Subcontractor.” Josh Kelson agreed that Kelson had authority in Article IX to issue change orders to deduct amounts from Amar’s subcontract, including the Revision 1 change order.

[86] The deduction amount of $61,924.50 represents the sum of $56,295.00 plus 10%. Josh Kelson provided an internal direction to Kelson finance personnel to deduct that amount from Amar and make arrangements for three payments to Sjostrom. Alain Amar testified that he recalled agreeing to a deduction of approx. $60,000 with Josh Kelson, and when the Revision 1 change order was received it was the amount that had been agreed. There appears to have been some dispute about the 10% markup in contemporaneous emails, but Amar ultimately did not (and does not) dispute the deduction from the sub-subcontract price as outlined in the Revision 1 change order.

[87] Testimony from Alain Amar and Octavio Deviveiros was that there was a labour shortage of non-unionized sheet metal workers across much of the Greater Toronto Area in early 2018, when Amar commenced work under its sub-subcontract. That was confirmed by Bill Preston and Jeff Preston during their testimony. Gary Caldwell (Turner’s project manager) acknowledged having been told that during his own testimony.

[88] Evidence further supports that Amar was working for Kelson concurrently on five separate projects, including the CCVP project, having been the low bidder on each of them. Josh Kelson acknowledged during his examination that, although the projects were not bid at the same time, delays on some of the projects resulted in all five proceeding around the same time. Evidence supports that Kelson was providing some direction to Amar on which projects to prioritize.

[89] Amar’s position is that both the industry labour shortage and Amar’s concurrent work on multiple projects for Kelson required Amar to subcontract portions of its labour work on the CCVP project. It did so by engaging Sjostrom on an hourly basis. Sjostrom began performing work at the CCVP project in February 2018.

[90] Evidence supports that the triggering events to the current dispute occurred in June 2018. Gary Caldwell, on behalf of Turner, sent a letter to Kelson’s project manager, Eric Rautanen, alleging delays in ductwork installation, impacts to other subtrades from the delay, and generally expressing concerns with manpower allocation for the ductwork installation. Kelson formally responded by denying that it or any of its subcontractors were responsible for project delays or interference and, further, that no schedule for Kelson’s work had ever been agreed. Turner subsequently issued a formal notice of default dated June 22, 2018 to Kelson under its subcontract for schedule delays caused by lack of manpower and lack of progress of ductwork installation.

[91] Two weeks later, Sjostrom left the project site for non-payment by Amar, resulting in a stoppage of sheet metal installation work. Josh Kelson testified that he contacted Alain Amar immediately to have forces return to site, but that Mr. Amar refused to speak to Bill Preston. Evidence from Alain Amar and Octavio Deviverios was consistent that Amar had sought to arrange to reallocate Amar’s labour from Kelson’s McMaster University projects. Mr. Amar testified that he felt Amar could supplement its forces on the CCVP project without impacting the McMaster University projects as much as the CCVP project was suffering, but that Josh Kelson would not agree to it.

[92] I have already discussed the testimony from Josh Kelson and Bill Preston about their discussions over Sjostrom returning to the site. As noted, Josh Kelson offered to pay Sjostrom directly moving forward. Bill Preston agreed and Sjostrom returned to the site.

[93] Josh Kelson testified that, after that discussion with Bill Preston, he spoke with Alain Amar and told him that Sjostrom would be returning to the site, that Kelson would be paying Sjostrom directly, and that what Kelson paid would be deducted from Amar’s sub-subcontract. That discussion and Mr. Kelson’s version of it was not specifically put to Alain Amar during his cross-examination. Mr. Amar’s testimony on what was agreed was limited to an agreement to have of approx. $60,000 deducted for Sjostrom completing the labour.

[94] Subsequently, as discussed above, Bill Preston requested and Josh Kelson agreed to a labour rate of $69.50 per hour for Sjostrom’s labourers. Significantly, the communications between Mr. Preston and Mr. Kelson on price did not include anyone on behalf of Amar. Alain Amar was not asked about the agreed rate, which is curious given Kelson’s position that Sjostrom remained Amar’s subcontractor and that Amar would ultimately be the party liable to pay the hourly rate agreed by Kelson and Sjostrom.

[95] On July 6, 2018, Alain Amar sent an email to Josh Kelson and Eric Rautanen outlining a list of items to be done by Sjostrom moving forward, such as submitting daily time sheets and Amar being included on all emails. Mr. Kelson testified that Alain Amar was concerned about “having an open bar tab” against Amar, so wanted to make sure he could review all time summaries and emails. Mr. Amar was not asked about these alleged concerns. No evidentiary foundation was established that would fairly permit me to find that Mr. Kelson’s view of Mr. Amar’s concerns is accurate.

[96] In the evening of the same day, Bill Preston sent an email to Mr. Amar, copied to Josh Kelson and Eric Rautanen, stating expressly that “going forward Sjostrom will have to follow instruction as directed by Josh and or his representatives, exclusively. This includes but not limited to, time sheet submital [sic] etc.” Alain Amar testified that, after this email, he understood that Sjostrom was no longer working for Amar.

[97] In my view, even if Josh Kelson’s view of Mr. Amar’s concerns is correct, Bill Preston’s email supports Alain Amar’s understanding that Kelson had assumed direct responsibility for Sjostrom. That is essentially what Bill Preston said. Importantly, neither Josh Kelson nor Eric Rautanen responded to indicate anything different.

[98] On July 9, 2018, the email exchange and, as I have found, call between Josh Kelson and Bill Preston occurred, in which the hourly rate and other terms under which Sjostrom would return to site were agreed. Neither Alain Amar nor anyone on behalf of Amar was included in or copied on these communications. There is no evidence supporting that the hourly rate or calculation of completion costs was discussed with Mr. Amar.

[99] On July 11, 2018, in an email exchange between Josh Kelson and Alain Amar about the unpaid amounts owing to Sjostrom, Mr. Amar stated as follows:

There must not be ANY change in the agreed rates as submitted. There should be no hidden agenda with respect to materials supply. There should be no ambiguity with hours to complete.

As I stated the process should remain as it was and not change as they elected to take this action. Amar should NOT burden any circumstance from this.

Sjostrom and Amar were/ are your sub on this, one should not be penalized in any way, historically, or moving forward.

Please verify and confirm all release of new payments with me prior to making deductions from my contract. Additionally, what has Kelson put in place for recording dates and hours performed on our behalf as we were removed from the process.

There are no outstanding monies owed to Dr. Bill Preston and Dr. Jeff Preston.

[100] In my view, this email is consistent with Alain Amar’s evidence on his understanding that Kelson was directly engaging Sjostrom to complete Amar’s scope of labour work. The Revision 1 change order had not yet been issued. Mr. Amar was requesting approval of payments prior to any deductions to the Kelson/Amar sub-subcontract and direction on how dates and hours for work performed by Sjostrom would be tracked. I was directed to no response in the evidence by Josh Kelson or anyone on Kelson’s behalf.

[101] Kelson issued the Revision 1 change order on July 24, 2018. There is no clear evidence of any discussion between Josh Kelson and Alain Amar, or anyone else at Kelson and Amar, prior to the Revision 1 change order being issued about how the quantum of the change order was calculated or the basis upon which Sjostrom would be continuing work. Josh Kelson testified that only the base amount from his email dated July 9, 2018 was back charged because Sjostrom had not been working on weekends and that the 10% was for administrative costs for Kelson’s accounting staff and Mr. Kelson’s own time since Kelson would be paying Sjostrom on behalf of Amar. Mr. Kelson felt it was fair that Amar pay for their time.

[102] Neither Kelson’s nor Amar’s understanding of the arrangement regarding Sjostrom was recorded in emails or otherwise committed to writing. I was directed to only one contemporaneous communication about the parties’ understanding of the Revision 1 change order: an email from Alain Amar to Eric Rautanen, copied to Josh Kelson, sent on July 26, 2018. It was sent two days after the Revision 1 change order was issued. Mr. Rautanen had emailed Mr. Amar about labour required for installation of control dampers. In response, Mr. Amar stated as follows:

Josh has received and deducted costs from my contract for the entirety for “cost to complete”

I am not authorizing any further costs, regular time or overtime ..

To date and after several request [sic] for monitoring and identifying costs to be deducted there has been NO effort brought forth on this to my attention or discussions

[103] Alain Amar was cross-examined on his statement above that the Revision 1 change order deducted all costs to complete and the specific wording of the Revision 1 change order. Mr. Amar testified that he was expressing in the second sentence of his email that he would not agree to any more changes to Amar’s sub-subcontract for Sjostrom to finish the work. He was not examined on what he meant by his comment in the third sentence about “identifying costs to be deducted”.

[104] Josh Kelson responded to the email. In that response, Mr. Kelson added Jeff Preston to the email chain and provided him with direction to complete work by the following Friday. Mr. Kelson also inquired of Alain Amar about material turnaround times. What Mr. Kelson did not do, though, was dispute Mr. Amar’s characterization that the “cost to complete” had been deducted from Amar’s sub-subcontract.

[105] There is no cogent evidence of Amar being involved in or kept apprised of Sjostrom’s work or the labour being performed after that time until late September. The record at trial supports, on a balance of probabilities, that Sjostrom’s work was being directed by Kelson. That does not align with Kelson’s view that Amar remained responsible for Sjostrom’s work.

[106] In late September / early October 2018, Amar returned to the site to perform sheet metal labour at Kelson’s request. Alain Amar testified that Amar provided labour hours during Sjostrom’s absence from the site and that the hours worked by Amar’s labourers were recorded by Octavio Deviveiros and signed-off by Eric Rautanen. Mr. Rautnanen confirmed that he did sign off on the hours. Amar issued an extras invoice to Kelson for the hours for $28,947.50, plus HST. Kelson paid the invoice in full, although Mr. Kelson testified that it was paid as part of Amar’s total sub-subcontract price.

[107] Kelson points to subsequent changes orders accepted by Amar as supporting that Alain Amar was agreeing to further deductions despite his unequivocal statement he would not accept further deductions. I do not find the argument compelling. The Revision 1 change order deals with sheet metal labour included in Amar’s sub-subcontract price, but being performed by Sjostrom. All other change orders ultimately accepted by Amar (albeit disputed by Alain Amar during his cross-examination as being improperly issued), were for specific work items, not general sheet metal labour.

[108] Kelson points to Amar accepting a back charge for installation of HEPA filters, performed by Sjostrom, which is argued by Amar to have been work within it sub-subcontract scope of work already removed by the Revision 1 change order. Kelson argues that accepting this back charge for labour performed by Sjostrom is inconsistent with Amar’s position. I do not agree. Alain Amar’s evidence is that he disputed this and other change orders issued by Kelson, but felt he had no choice but to accept them if Amar wanted to get paid. I accept that evidence.

[109] In my view, the fact that Amar has not disputed change order deductions in this litigation (other than the lien bond cost) is not an admission of responsibility for them. Alain Amar testified on why they were disputed and the business decision made to accept them at the time. That decision was made prior to preservation of Sjostrom’s lien and the decision by Amar to sue Kelson for non-payment. Amar made a business decision to accept the deductions, which were not substantial, well prior to its action being commenced.

[110] Kelson’s position on Amar remaining responsible for all sheet metal labour and, accordingly, the actual amounts paid to Sjostrom is, in my view, inconsistent with the circumstances surrounding issuance of the Revision 1 change order and the parties’ conduct after it was issued. I have been left with a series of unanswered questions on Kelson’s position, including the following:

(a) Why were change orders required at all? If Amar continued to be responsible for sheet metal labour within its fixed price sub-subcontract, then a reduction in price for an estimated amount of future work to be performed by Amar’s own sub-subcontractor on behalf of Amar pursuant to that sub-subcontract is certainly curious.

(b) Why did Josh Kelson not confirm what hourly rates had been agreed between Amar and Sjostrom prior to discussing an hourly rate with Bill Preston?

(c) Why did Josh Kelson not speak to Alain Amar to confirm Amar’s agreement to the payment arrangements that Kelson negotiated with Sjostrom? Specifically, if Sjostrom remained Amar’s subcontractor, and Kelson intended to pay Sjostrom from amounts otherwise payable to Amar, why would Kelson not seek Amar’s agreement to the direct pricing arrangement made with Sjostrom?

(d) Why was Sjostrom’s first invoice, which exceeded the Revision 1 change order deduction and was paid in full by Kelson, not provided to Amar for review, comment, and approval?

(e) Why is there no contemporaneous record of Kelson’s position that payments to Sjostrom were understood to be from funds payable to Amar and were effectively payments on behalf of Amar to its own subcontractor?

[111] Josh Kelson’s evidence did not provide cogent answers to these questions. They are, in my view, significant gaps in Kelson’s position on what was agreed. Josh Kelson’s own conduct at the time is not consistent with Kelson’s position at trial on the intention behind the Revision 1 change order. Moreover, Mr. Kelson was confirmed at trial to be a lawyer called to the bar in Ontario some 10 years ago, who is listed with the Law Society of Ontario as practicing in-house at Kelson. The gaps are made even more notable by the fact that Mr. Kelson is a lawyer.

[112] The circumstances may have been different had Kelson waited for Sjostrom to invoice for its work and, at that point, issued a change order for the amount of the invoice and paid Sjostrom. However, that is not what happened. Instead, Kelson issued a change order to reduce Amar’s subcontract price for work not yet performed by Sjostrom based on a credit amount that was unilaterally determined by Josh Kelson without any input from Alain Amar. The change order was prepared by Kelson. Amar had no input on it. It was issued without any reservation for further, future deductions. Despite Kelson paying Sjostrom more than the Revision 1 change order amount, and despite additional change orders being issued in the course of Amar’s work, no further change order was issued for the excess payment to Sjostrom.

[113] The fact that Amar ultimately did not dispute the Revision 1 change order does not change that Kelson drafted the ambiguous document. In my view, absent cogent evidence clarifying the ambiguity, which has not been tendered, that ambiguity should be read against Kelson.

[114] Alain Amar was cross-examined on misrepresenting the remaining value of labour work to Kelson in Amar’s progress billings. During his examination in chief, Josh Kelson was taken to Amar’s June 2018 progress billing. He confirmed that it stated the remaining contract value to be completed was $70,000. However, Mr. Kelson did not clearly testify that he was mislead or relied upon Amar’s stated value for remaining work when deciding the amount for the Revision 1 change order deduction or in his discussions with Bill Preston. Absent such evidence, I cannot find that Kelson was in any way misled as to the amount of sheet metal labour work left to complete.

[115] Contractual interpretation is objective, not subjective. Regardless of what Josh Kelson or others at Kelson may have intended when Kelson issued the Revision 1 change order, it is the objective standard that applies with regard to the surrounding circumstances.

[116] In my view, on a balance of probabilities, issuing a change order that deducts an estimate amount for future work to be performed by Sjostrom and paid by Kelson, at rates negotiated by Kelson without input or agreement from Amar, is objectively consistent with removing the scope of work from Amar’s sub-subcontract. Josh Kelson’s understanding of the Revision 1 change order is at odds with Alain Amar’s testimony on his own understanding. Both may be subjectively correct. Their testimony supports, and I find, that there was no clear discussion about Kelson’s intention to hold Amar responsible for completing the remaining sheet metal installation labour and costs all costs associated with it. There is also no contemporaneous communication or other record supporting any such communication.

[117] For these reasons, I find that the change order removed the remaining sheet metal labour from Amar’s scope of work in the sub-subcontract between Kelson and Amar.

Issue 6: Who breached the subcontract between Kelson and Amar?

[118] Amar argues that Kelson breached the subcontract by non-payment. Kelson argues that Amar breached the subcontract first. Specifically, Kelson argues that Amar’s lack of sheet metal manpower constituted a breach of contract that forced it into the position of having to deal with Sjostrom directly. Amar denies that it was ever in breach of the subcontract.

[119] Amar’s sub-subcontract was drafted by Kelson. It incorporates by reference terms and provisions from the subcontract between Kelson and Turner to the extent that those provisions are not inconsistent.

[120] Default under the sub-subcontract is addressed in Article 5. Article 5.01 provides four heads of default and indicates that Kelson “may” provide a written notice of default upon the occurrence of a default. I agree with Kelson’s argument that Kelson was not required to issue a notice of default. However, Kelson’s rights on default flow from a default notice being given. Articles 5.01 provides that if the default is not remedied within two business days following the default notice, Kelson has the right to terminate the sub-subcontract or “cure such default or make good such deficiencies, or may complete the outstanding Sub-subcontract Work, all at the cost and expense of [Amar]”. Article 5.03 is to similar effect if Amar responds to the default notice, complies with Article 5.02, but still fails to correct the default.

[121] I accordingly find that a default notice was a pre-requisite to Amar being formally in default under the sub-subcontract and Kelson being entitled to exercise any rights against Kelson under Article 5 of the sub-subcontract, including directly engaging Sjostrom and back charging Amar for the cost.

[122] No formal notice of default under Amar’s sub-subcontract was issued by Kelson at any point prior to the Revision 1 change order. During cross-examination, Josh Kelson expressly confirmed that an intentional decision was made not to issue a notice of default to Amar and acknowledged that Amar was not formally in default under Article 5 in June 2018. No default notice was issued prior to Kelson ceasing payments to Amar. The only potential default notice sent by Kelson to Amar was in February 2020, when Kelson was purporting to back charge Amar for the costs of the bond obtained to vacate Sjostrom’s lien. Josh Kelson acknowledged during cross-examination that the notice was issued some seven months after Kelson had completed its subcontract work and after Kelson had received a final payment from Turner.

[123] Since no default notice was issued until well after Amar and even Kelson had completed work on the project, I find that Amar was not formally in breach of the subcontract at any material time. Kelson thereby had no contractual right to back charge Amar for Sjostrom’s work beyond the agreed value in the Revision 1 change order.

[124] Evidence supports that Sjostrom left the site due to non-payment by Amar. However, there is also evidence that Amar remained unpaid for work performed and was asking Kelson for updates on payment of its progress invoices around the same time. Alain Amar testified about those requests with reference to an email sent to Kelson’s project manager, Eric Rautanen, on June 28, 2018, asking to be advised on the status of payment of Amar’s still-outstanding April invoice.

[125] Article 2.02(iii) of the Kelson/Amar sub-subcontract provides a mandatory obligation on Kelson to remit payment to Amar upon issuance of the certificate for payment that incorporates final payment of the sub-subcontract work. Josh Kelson acknowledged during cross-examination that Kelson received final payment from Turner in mid-2019. Article 2.02(iii) does permit Kelson to adjust payment to account for any deductions and set-offs, but it also requires that notice of the existence and estimated quantum of such deductions or set-offs must be given at least ten (10) days prior to the date on which final payment is due.

[126] Despite Josh Kelson’s cross-examination testimony that there was notice of deductions “on multiple occasions”, I have been directed to nothing in the evidence supporting any notice of the existence and estimated quantum of any deductions or set-offs prior to Kelson receiving payment from Turner in mid-2019. Notably, although Kelson was in possession of all three of Sjostrom’s invoices (one of which had been paid in full by Kelson), no notice was given of any intention to set-off for the amounts billed by or paid to Sjostrom in excess of the Revision 1 change order. The lien bond back charge, for which notice was given, post-dates Kelson’s receipt of final payment.

[127] Article 2.02(ii) of the Kelson/Amar sub-subcontract also required Kelson to make payment to Amar of the unpaid balance of holdback upon certification of substantial completion. Josh Kelson acknowledged that a certificate of substantial performance was published in April 2019. Holdback was not paid to Amar. Mr. Kelson testified it was not paid because of Sjostrom’s lien, so the funds were held back.

[128] I need not decide Amar’s accounting to find that Kelson breached the sub-subcontract by failing to pay Amar following receipt of final payment from Turner. Kelson acknowledges that there is $170,490.72, including HST, in earned and unpaid funds owing under Amar’s sub-subcontract. That figure includes holdback that was not paid following publication of a certificate of substantial performance. No deductions or set-offs were identified by Kelson to Amar until some time after final payment was made by Turner to Kelson. Kelson was contractually required to make payment of all amounts withheld by Kelson under the sub-subcontract upon receiving payment. It did not do so.

[129] Pursuant to s. 24 of the CLA, a payer may only make payments on a subcontract of up to 90% of the price of services and materials supplied under that subcontract, which ensures statutory holdback is retained until it may be released in accordance with other provisions of the CLA. Where a lien has been registered, a payer is required to retain an amount sufficient to satisfy the lien. However, I have found that Kelson entered into a separate subcontract with Sjostrom. Kelson thereby had separate holdback obligations under the CLA for each subcontract with Amar and Sjostrom. Sjostrom preserving its lien thereby did not trigger any additional notice holdback obligation on Kelson under s. 24 of the CLA with respect to Amar’s separate subcontract. There was accordingly no contractual or legislative basis to withhold payment by reason of Sjostrom’s lien.

[130] I thereby find that Kelson breached the sub-subcontract by non-payment when holdback was due to be paid to Amar under article 2.02(ii) and when final payment to Amar was due under article 2.02(iii). These appear to have been the same date in mid-2019.

[131] I note that, even if I am wrong in my decision on s. 24 of the CLA, the amount of Sjostrom’s lien is less than the admitted earned and unpaid balance under the Kelson/Amar sub-subcontract. Kelson would still be in breach of contract for non-payment of at least that difference.

Issue 7: What is the earned and unpaid amount owing to Amar before set-off?

[132] As noted, Kelson does not dispute that there is $170,490.72, including HST, in earned and unpaid funds under Amar’s subcontract. Although Josh Kelson testified that he believed the figure excluded HST, Kelson’s statement of account indicates that the figure is inclusive of HST. Amar’s position is that the earned and unpaid amount is $209,737.88, including HST. The discrepancy between their positions is $40,247.16. Evidence and argument from both sides on accounting was less organized that it could have been.

[133] Kelson argues that Amar and Sjostrom are claiming for the same scope of work: sheet metal labour. Kelson points to what it characterizes as Amar’s evident underbidding of the labour portion of the sheet metal work and alleged erroneous billing of $289,000 in sheet metal labour in Amar’s progress applications.

[134] Kelson relies on the decision in JMCC Ltd. v Buttcon Limited, 2016 ONSC 3202, in which Master Albert held, at para. 51, that it was appropriately inferred from an admitted underbid that the actual costs for the contractual scope of work exceeded the contract price. In my view, JMCC Ltd. does not assist Kelson. It dealt with quantifying an extra to a modest cleaning subcontract. The underbidding inference was drawn in the context of the plaintiff having failed to meet its burden of proof, namely failing to distinguish between labour hours devoted to the original cleaning required by the subcontract and labour hours devoted to the re-cleaning that constituted the extra. Those are not the facts of this case.

[135] Whether or not Amar underbid the job is, in my view, immaterial to disposition of this trial. Amar’s subcontract was a fixed price contract, not a cost-plus or time and materials contract. There is no claim by Amar for unapproved extras for sheet metal labour, so there is no similar argument to that in JMCC Ltd. that hours spent on extra work were really base contract work. Amar had an obligation to complete its contractual scope of work and was not entitled to be paid any more than the fixed price, regardless of the actual hours spent. If Amar underbid the job, that was at its own risk. Kelson would not have to pay anything more than the agreed subcontract price.

[136] Kelson admits that Amar completed its subcontract scope of work. It thereby follows from my earlier findings that Amar was entitled to payment of the unpaid balance of its adjusted subcontract price, less any proven set-offs.

[137] I have found that the remaining sheet metal labour was removed from Amar’s sub-subcontract scope of work by the Revision 1 change order. It follows that Amar’s invoice for sheet metal labour in late September and early October was a valid extra, since the labour performed had been removed from its scope of work and was given to Sjostrom. Payment of that invoice thereby does not represent a credit owing to Kelson against the accounting tendered by Amar.

[138] Subsequent to the Revision 1 change order, there were several change orders that both increased and reduced Amar’s sub-subcontract price. None of those change orders are disputed by Amar, with the exception of the change order purporting to back charge Amar for Kelson’s lien bond costs. Amar’s position is that it is not properly deducted from earned and unpaid amounts. I was directed to no provision of the sub-subcontract supporting that Kelson was entitled to such a back charge. I find that it was not. Regardless, given my finding that Kelson entered into a direct subcontract with Sjostrom, Amar has no liability for Kelson’s bonding costs associated with the lien of another of Kelson’s sub-subcontractors.

[139] Although Kelson asserted labour overbilling by Amar, there is no cogent evidence establishing it. Alain Amar was not cross-examined on any overbilling in Amar’s invoices. Even if there was overbilling during the course of the project (and the evidence does support that labour may have been overbilled prior to July 2018), Amar’s sub-subcontract was a fixed price contract. Its work was complete. It was therefore entitled to payment of the adjusted balance of unpaid funds owing under the contract. I am satisfied from Alain Amar’s evidence on Amar’s accounting that it appropriately accounts for the unpaid amounts owing to Amar, including deductions for the Revision 1 change order and other credit change orders issued by Kelson. Amar’s accounting was not challenged in any meaningful way on cross-examination. Kelson’s own accounting was the subject of limited evidence at trial.

[140] For these reasons, I accept Amar’s accounting and find that the earned and unpaid balance owing to Amar, before any proven set-offs, is $209,737.88, including HST.

Issue 8: Is Kelson entitled to set-off the cost of sheet metal labour?

[141] The right to indemnity under the common law as a direct right to reimbursement arises in three circumstances: (i) by express contract, if provided in the terms of a contract between the parties; (ii) by implied contract, if the parties intended such indemnity; or (iii) by implication, if the circumstances demand a legal or equitable duty to indemnify, by which the law recognizes an assumed promise by a person to do what, under the circumstances, they ought to do: Addison & Leyen Ltd v. Fraser Milner Casgrain LLP, 2014 ABCA 230 at para. 22, citing Birmingham & District Land Co. v. London & North Western Railway (1886), 34 Ch D 261 (Eng CA).

[142] I have already found that the sub-subcontract terms do not support any rights arising from default without Kelson having first issued a default notice. Albeit in re-examination, Josh Kelson pointed to an indemnity in Article III of the Turner/Kelson subcontract dealing with delays by the subcontractor. I am unconvinced by the arguments in closing submissions that the indemnity should be viewed as being triggered here. Argument on the point was not sufficiently detailed, and I do not accept that the provision should be held to operate independently of the default notice provisions in Article 5 of Amar’s sub-subcontract, which have priority over the terms in the Turner/Kelson subcontract pursuant to Article 1.02 of the sub-subcontract. Delay is expressly contemplated as a basis of default in Article 5.01(i) of that sub-subcontract. The available remedy of completing the work at Amar’s expense flows from Amar’s failure to correct a default following a default notice.

[143] In my view, the totality of evidence does not support any finding that Amar intended to or did agree to an indemnity for actual costs of completing the sheet metal labour when Kelson retained Sjostrom to complete it. Indemnity by implication is not appropriate here.

[144] Also, the sub-subcontract includes an entire agreement clause at Article 6.01. The Court of Appeal has observed that entire agreement clauses are generally intended to lift and distill the parties’ bargain from the “muck of the negotiations”. Limiting the expression of the parties’ intentions to the written form attempts to provide certainty and clarity: Soboczynski v. Beauchamp, 2015 ONCA 282 at para. 43. Entire agreement clauses do not apply to agreements or representations that post-date the contract in which the clause is found: Soboczynski v. Beauchamp, 2015 ONCA 282 at para. 53. However, the Revision 1 change order states expressly that it is subject to the terms and conditions of the original sub-subcontract. In my view, the Revision 1 change order thereby incorporates and restates the terms and conditions, including the default notice requirements in Article 5 and the entire agreement clause in Article 6.01.

V. Conclusion

[145] For the above reasons, Sjostrom’s action is dismissed, its lien discharged, and the lien bond posted into court to as security to vacate the lien shall be delivered up to Kelson for cancellation. Amar shall have judgment against Kelson for $209,737.88, including HST, plus pre-judgment interest.

V. Costs, INTEREST & REPORT

[146] Bills of costs have been exchanged and submitted. I encourage the parties to agree on both costs and for Amar and Kelson to agree on the calculation of pre-judgment interest, including the date from which pre-judgment interest runs and a per diem rate that may be applied to the date of a report. If they cannot agree, then written submissions shall be exchanged and filed. Written submissions shall not exceed five pages, excluding any attachments such as offers to settle and case law. Any party seeking costs shall serve their costs submissions within thirty (30) days of release of this decision. Responding submissions from the parties against whom costs are sought shall be served within a further fourteen (14) days. All costs submissions shall be submitted by email to my Assistant Trial Coordinator (ATC) by email, with proof of service. Submissions on calculation of pre-judgment interest shall be included with costs submissions, adding no more than one page.

[147] Both the CLA and the Rules of Civil Procedure require that the results of this trial be embodied in a report. I encourage the parties to discuss an appropriate form of draft report, which shall be filed with my ATC by the deadline for responding costs submissions. If the parties cannot agree, then my ATC should be so advised and an appropriate form of report will be addressed following my decision on costs and interest.

ASSOCIATE JUSTICE TODD ROBINSON

Released: August 31, 2023

COURT FILE NOS.: CV-19-616159 & CV-20-643699

DATE: 2023 08 31

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Act, RSO 1990, c. C.30, as amended

B E T W E E N:

SJOSTROM SHEET METAL LTD.

Plaintiff

• and -

GEO A. KELSON COMPANY LIMITED

Defendant

A N D B E T W E E N:

A. AMAR AND ASSOCIATES LTD.

Plaintiff

• and -

GEO A. KELSON COMPANY LIMITED

Defendant

REASONS FOR JUDGMENT

Associate Justice Todd Robinson

Released: August 31, 2023