COURT FILE NO.: CV-21-654545
DATE: October 5, 2023
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF the Construction Act, R.S.O. 1990, c.C.30
BETWEEN:
RDC CONSTRUCTION LTD.
Plaintiff
William Ribeiro for the plaintiff, Tel.: 416-533-7133, Fax: 416-533-3114, Email: wribeiro@azevedonelson.com;
-and-
ERICA HERBERT, 1750466 ONTARIO LTD., ERICA HERBERT, AS ESTATE TRUSTEE AND/OR LITIGATION ADMINISTRATOR FOR THE ESTATE OF KENNETH RAMSUBICK ALSO KNOWN AS KENNY RAMSUBICK
Defendants
Alfred Schorr for the defendants; Tel.: 905-940-9252, Fax:: 905-940-5583, Email: Alfred@schorrlaw.ca.
HEARD: May 16, 17 and 18, 2023
Associate Justice C. Wiebe
REASONS FOR JUDGMENT
I. INTRODUCTION
[1] This is the other action in the reference begun by Novelcare Heating & Cooling. I heard and issued reasons for judgment concerning the trial of the Novelcare action on May 9, 2023.
[2] This second action was commenced by RDC Construction Ltd. (“RDC”) purporting to perfect a claim for lien RDC registered on the subject property in the amount of $59,729.97. The land is registered in the name of Kenneth Ramsubick who is deceased. It is undisputed that his widow, Erica Herbert, is the trustee and litigation administrator of the estate of Mr. Ramsubick, and that the said estate holds the land in trust for 1750466 Ontario, a company of which Ms. Herbert is the sole director and shareholder. Ms. Herbert, therefore, is effectively the owner of the land. The defendants deny the entirety of the claim, but assert no counterclaim.
[3] The property is a three story house located at 1417 Dundas Street West, Toronto (“the Property”). It contains eight rental units; three in the basement and five on the first floor. The claim for lien concerns work RDC allegedly did in that house in 2018, 2019 and 2020. The work in 2019 and 2020 concerned repair caused by a flood that occurred in February, 2019. The units were being renovated when the flood occurred.
II. BACKGROUND
[4] I begin with a summary of the facts of this case that are undisputed.
[5] In the summer of 2018 the principal of RDC, Ricardo Costa, met Ms. Herbert at Downtown Lumber, a lumber supplier. She advised that she wanted work done at the Property. The house has four floors and is in part a rooming house. The basement has three rental units; the first floor has five rental units; there are two upper floors for Ms. Herbert’s residential use.
[6] Mr. Costa attended at the site in July, 2018 and on or about July 18, 2018 provided Ms. Herbert with a written estimate specifying a price, $29,018.40, for concrete, framing, wall and floor tiling work in the ensuite washrooms of all eight units. The framing was specified as being on a time and material basis while the remainder of the work was fixed price. This was work that corrected the work of a previous contractor, primarily the slope of the bathroom floors.
[7] RDC alleges that, despite the primarily fixed price estimate, the parties subsequently entered into a verbal time and material contract, with the labour to be charged at the $45/hour rate shown in the estimate. In the alternative, RDC alleges there was no contract. Ms. Herbert denies any such verbal time and material contract, and asserts that there was a fixed price contract as reflected in the estimate.
[8] RDC started working in August, 2018 in the three basement washrooms. It worked in August and September, 2018. On September 13, 2018 RDC emailed Ms. Herbert enclosing an invoice for work on two of the three basement units in the amount of $15,478.74, and two change orders for time and material work in the amounts of $3,833.39 and $1,840.48. The change orders were not signed.
[9] The work ceased on September 14, 2018. There was no work done in the first floor units. Ms. Herbert says in her affidavit that she did not request more work. In early November, 2018 Ms. Herbert paid RDC $15,000 on account of the invoice.
[10] On February 3, 2019 there was a flood in the house caused by water pipes in wall cavities freezing and bursting. The flood damaged two units in the basement and three units on the first floor. Ms. Herbert made a claim on her insurance policy with Wawanesa Mutual Insurance Company. Wawanesa appointed Craft Restoration Services to do the repair work. On March 6, 2019 Ms. Herbert signed a document called a “Work Authorization - Emergency Work” authorizing Craft to do the repair work.
[11] Craft did not do the repair work. In March, 2019 Ms. Herbert asked Mr. Costa to return to the site to provide an estimate for the repair work in all the rental units. He did so.
[12] On April 3, 2019 RDC provided an estimate of a fixed price, $50,098.08, for interior rough carpentry framing, drywall, plumbing, electrical and tiling repair work in most of the damaged areas of the rental units. The document specified that extra labour would be charged at $45/hour.
[13] Despite the estimate, RDC alleges the parties agreed verbally, as they did with the 2018 work, to have RDC do the specified work on a time and material basis again with the labour charged at $45/hour. In the alternative, RDC states that there was no contract. Ms. Herbert stated that there was no contract at that time and that the estimate was given to help her in her negotiations with Wawanesa.
[14] RDC alleges it proceeded to work on the damage repair starting April 18, 2019. Ms. Herbert denies that RDC did any work before the end of 2019.
[15] On or about May 8, 2019 Craft gave Ms. Herbert a detailed estimate for the repair work to be done. On the same date, based on this Craft estimate, Wawanesa gave Ms. Herbert an assessment of the replacement cost in the amount of $114,732.85.
[16] RDC alleges it proceeded to do repair work in April, May, June, July, August up to September 12, 2019. Again, Ms. Herbert denies this.
[17] In November, 2019, Ms. Herbert gave Mr. Costa the Craft estimate and asked for another estimate from RDC that paralleled the Craft estimate. She said she needed the RDC estimate in her negotiations with Wawanesa.
[18] On or about December 5, 2019 Wawanesa paid Ms. Herbert the first tranche of the insurance payout in the amount of $68,699.68.
[19] On December 6, 2019 RDC gave Ms. Herbert the requested estimate. This RDC estimate incorporated the work covered by the April 3, 2019 RDC estimate but also repair work on units 1 and 2 in the basement, the south entrance stairwell and the hallway. The estimate was in the amount of $96,154.68 (HST inclusive). Ms. Herbert indicated in her affidavit that she instructed RDC to proceed with the work as indicated in this estimate, suggesting there was a contract at that time and that work began at that time.
[20] RDC alleges it did further work on January 7, January 8, January 22, May 8, August and September 22, 2020. It was not paid for any of its work in 2019 and 2020. RDC ceased working.
[21] On September 24, 2020 RDC rendered an invoice to Ms. Herbert in the amount of $59,729.97. The invoice purported to cover the cost of the work allegedly done by RDC in 2018, 2019 and 2020 with the claimed labour cost calculated at the rate of $50/hour. The rate shown for time and material work in the estimates was $45/hour. The September 24, 2020 invoice also covered the cost of the materials RDC supplied to the site. The document accounted for the Herbert $15,000 payment. There was no payment.
[22] On November 19, 2020 RDC registered a claim for lien on title in the amount of $59,729.97. On January 17, 2021 RDC purported to perfect its lien by commencing this action and registering a certificate of action. The defendants delivered a statement of defence on April 7, 2021. The defendants pleaded that there were two contracts in accordance with the two RDC estimates of July 18, 2018 and December 6, 2019, that the value of RDC’s work was no more than the $15,000 she already paid, and that as a result of RDC’s lack of performance, Ms. Herbert suffered $44,100 in lost rent which she raised as a set-off. She has withdrawn the set-off claim for rent loss.
[23] At some point Ms. Herbert resolved her insurance claim. Wawanesa agreed to pay her $117,141.28. On February 3, 2021 Wawanesa paid Ms. Herbert the second tranche of the insurance payout in the amount of $48,441.60.
[24] The parties to the RDC action were served with the notice of trial in the Novelcare action, and joined the Novelcare reference at the first trial management conference on February 8, 2021.
[25] On February 21, 2023 RDC issued a revised invoice reducing the amount claimed to $56,554.67. This revision was based on the labour rate of $45/hour.
[26] At the subsequent trial management conferences on June 28, 2021 and November 8, 2021 I made orders for interlocutory steps such as production and discovery.
[27] At the trial management conference on April 19, 2022 and due to the settlement of the counterclaim in the Novelcare action, I made the RDC action a separate stream. At the trial management conference in the RDC stream on January 9, 2023 I scheduled a three day summary trial in the RDC action to take place on May 16, 17 and 18, 2023.
[28] RDC filed affidavits for evidence-in-chief sworn by Mr. Costa, Patricia Borges (the RDC administrative assistant) and Steve Capitao (the site foreman). In reply, RDC filed affidavits sworn by Bruno Marques (the electrical trade), Alcindo Boucinha (the drywaller) and Messrs. Costa and Capitao. All these witnesses were cross-examined by Mr Schorr in the hearing. The defendants filed one affidavit sworn by Ms. Herbert, who was cross-examined by Mr. Ribeiro.
[29] At the outset of the hearing on May 16, 2023, Mr. Schorr brought forward a verbal motion asking me to recuse myself on account of an alleged reasonable apprehension Ms. Herbert had that I was biased against her. Mr. Schorr said that the basis for the motion was my May 9, 2023 decision in the trial of the Novelcare action wherein I found Ms. Herbert to be less credible than the principal of Novelcare, Al Ghandchi.
[30] I dismissed this motion. I quoted from paragraph 181 of my decision in New Generation Woodworking Corp. v. Arviv, 2021 ONSC 1166 concerning the test for a reasonable apprehension of bias:
The Court of Appeal in R v. Richards, 2017 ONCA 424 at paragraphs 43-50 gave more particularity to the test as follows: there is a presumption of judicial integrity; judges have a sworn duty to act impartially; the threshold for the moving party is high, but not insurmountable; the onus of meeting the test rests with the party alleging the reasonable apprehension of bias; the motion is determined by the facts in the case at bar; the apprehension of bias must be a reasonable one, held be reasonable and right-minded persons, applying themselves to the question and obtaining the right information about it. The Court noted that stereotyping reasoning may give rise to a reasonable apprehension of bias.
Applying this test, I found that my assessment of Ms. Herbert’s credibility in the Novelcare trial based on the evidence presented in that trial was not a ground a reasonable and right-minded person, applying herself to the question and obtaining the right information about the question, would find to create a reasonable apprehension of bias. Findings of credibility on the evidence presented at trial is a normal part of a trial judge’s function and should not lead to a reasonable apprehension that the same judge does not have integrity and will be bias against the same party in another case. Mr. Schorr confirmed that Ms. Herbert had no other evidence of bias.
III. ISSUES
[31] Based on the evidence and submissions, I find that the following are the issues to be determined:
a) Did RDC violate the rule in Browne v. Dunn?
b) What was the relationship between the parties?
c) What was the value of the RDC work?
d) Are the doors and drywall deficient?
IV. WITNESSES
[32] I will deal with the credibility of the plaintiff’s witnesses in two groups. The first group was Mr. Costa, Mr. Capitao and Ms. Borges. These are employees and officers of the plaintiff, and, therefore, there was a natural bias in favour to the plaintiff to be considered. Nevertheless, I found these witnesses to be credible. Their affidavits were detailed and well corroborated. Their evidence was not shaken in cross-examination. The other group, Messrs. Marques (the electrician) and Boucinha (the drywaller), were subcontractors of the plaintiff and, therefore, did not have the natural bias in favour of the plaintiff to be considered. Regardless, I also found these witnesses to be credible as their affidavits were detailed and corroborated. They also were not shaken in cross-examination.
[33] Ms. Herbert, on the other hand, was less credible. Her affidavit contained statements that were unreasonable, self-serving and uncorroborated. Most importantly, in response to the many time sheets and subcontractor invoices in RDC’s evidence showing extensive RDC work throughout 2019, Ms. Herbert asserted unequivocally that that work was started no sooner than at the end of 2019. She also stated in her affidavit that she needed the approval of her insurer to authorize RDC to do any repair work, and that she did not get that approval until the end of 2019. There was no corroboration for that statement. Later in her affidavit, Ms. Herbert in fact contradicted herself and grudgingly admitted that the some of the subcontractor invoices and time sheets were in fact reflective of work done at the premises in 2019. I note that her affidavit contained only one exhibit that was from her own productions.
[34] Ms. Herbert’s discovery evidence and cross-examination undermined her affidavit evidence and her evidence in general. She admitted at discovery in fact not needing Wawanesa approval to have RDC do the repair work. She said RDC was already there when Wawanesa gave its assessment to her, and that she gave the assessment to RDC. This was done obviously to facilitate the work. I note that Ms. Herbert said in her affidavit that the Wawanesa assessment was given to her in early May, 2019. Ms. Herbert also said at discovery that she was not sure when RDC started working in 2019, which contradicted her strong assertion in her affidavit that that work was not done until the end of 2019. She admitted at discovery that RDC did the repair work, not Craft. At discovery Ms. Herbert said that she passed the RDC April 3, 2019 estimate to Wawanesa as she said RDC was working with her insurer; but in cross-examination she retracted that statement saying she “misspoke” at discovery. At discovery, she said that Wawanesa did not give her a repair estimate, but in cross-examination she retracted that statement saying again she “misspoke” at discovery. In her affidavit, Ms. Herbert asserted that RDC ordered the doors with wrong dimensions, but she had no response when confronted with a text wherein she stated that she ordered the doors.
[35] In short, Ms. Herbert evidence was full of contradictions and self-serving, uncorroborated statements and arguments. I found her to be less credible than the plaintiffs’ witnesses. Therefore, I generally (with one exception) preferred the evidence of the plaintiff’s witness to Ms. Herbert’s evidence whenever the two conflicted.
V. ANALYSIS
a) Did RDC violate the rule in Browne v. Dunn?
[36] In closing argument, Mr. Schorr argued for the first time that RDC had violated the rule in Browne v. Dunn (1893), 1893 CanLII 65 (FOREP), 6 R. 67 (H.L.) by not cross-examining Ms. Herbert as to the evidence raised by Messrs. Costa and Capitao in their reply affidavits concerning the doors, drywall and the invoice from John and Grace Construction about tile installation. The rule is one of fairness to a witness. It requires that a cross-examiner put to a witness evidence the cross-examiner intends to use that contradicts the witness’s evidence and that undermines the credibility of the witness. The witness is then allowed to address the contradictory evidence; see R v. Dexter, 2013 ONCA 744 at paragraph 17. It is commonly understood as the rule against “ambushing” witnesses.
[37] In their reply affidavits Messrs. Costa and Capitao gave evidence that Ms. Herbert had, contrary to her trial evidence, ordered the doors she alleged were defective, rejected the use of quietrock soundproofing in the drywall, and authorized the ceramic tile installation in the hallways that led to the John and Grace invoice. Mr. Schorr argued that Mr. Ribeiro should have put this evidence to Ms. Herbert in cross-examination, and did not. He argued that I should disregard this evidence as a result. Mr. Ribeiro conceded that he knew of these issues as early as discovery.
[38] I do not accept Mr. Schorr’s argument. This is a summary trial. As a result, the reply affidavits about which Mr. Schorr complains were served on Ms. Herbert well in advance of the trial hearing, namely it appears on May 3, 2023. This is almost two weeks before the trial hearing. Therefore, Ms. Herbert had an opportunity to review and address this evidence. She could have sought leave from me before the trial hearing to serve a sur-reply affidavit addressing this evidence. She could have sought leave from me at the commencement of the trial hearing to address this evidence through viva voce evidence from her before her cross-examination began. There was more than enough time in the trial schedule for such viva voce evidence as three witnesses that were on the trial witness lists were not called. Ms. Herbert did neither of those things. Instead, she allowed the evidence to go in without a responding explanation, and waited until closing argument to raise the issue. I do not as a result find that she was ambushed.
[39] It did concern me that RDC did not address this evidence in its affidavits for evidence-in-chief, since the issue was addressed at discovery. But, again, Ms. Herbert did not seek to exclude the evidence on this basis. I will bear this in mind when I assign the weight to be given to this reply evidence. I will not, however, exclude it.
b) What was the relationship between the parties?
[40] A major issue in this case is whether there were contracts between the parties, and, if so, what they were. RDC asserts there were two contracts, one for the 2018 work and the other for the work in 2019 and 2020. It asserts that they were both time and material oral contracts for the scopes outlined in the RDC estimates and with undefined schedules. Ms. Herbert asserts that there was a fixed price oral contract for the 2018 work, and suggested in her evidence that there was a fixed price oral contract for the 2019 and 2020 work (although Mr. Schorr argued curiously in closing argument there was no such second agreement). Ms. Herbert denied ever agreeing to a time and material contract.
[41] It is well established law that an enforceable construction contract requires that there be a meeting of the minds between the parties on three elements: the scope of the work; the price; and the schedule. There must be a certain agreement on these elements; see The Gatti Group Corp. v. Zuccarini, 2020 ONSC 2830 at paragraph 71. Was there such a firm meeting of the minds in this case?
[42] Concerning the 2018 work, I find that there was no enforceable agreement. The evidence of an agreement on scope was unclear. Ms. Herbert said in her affidavit that she authorized the work on only the three basement units indicated in the RDC July 18, 2018 estimate. She also said in her affidavit that she did not remember discussing the framing. Mr. Costa in his affidavit, on the other hand, suggested that the work described in the RDC July 18, 2018 estimate formed the scope of the work. Indeed, when RDC rendered its invoice for $15,478.74 on September 13, 2018, the covering email described the invoice as a “progress payment” on 50% of the original estimate. This accords with Mr. Costa’s evidence. However, the work simply ceased on September 13, 2018 when two of the three bathrooms and other work were done. There was no notice of contract termination from either party. Ms. Herbert said in her affidavit that she just did not request more work. This all indicates to me that the parties were not in agreement as to the work to be done.
[43] I also find that the parties did not agree as to the price for the 2018 work. The July 18, 2018 RDC estimate contained a total fixed price of $29,018.40 (HST incl.), and specified fixed prices for all the itemized work on each unit and a budget price for overall framing specified to be done on a time and material basis with labour charged at $45/hour. There was nothing in writing confirming an agreement on this price.
[44] Mr. Costa stated in his affidavit that RDC simply started working in the basement in August, 2018. He then stated that, because of all the changes Ms. Herbert wanted, he got her to agree orally that RDC would be paid on a time and material basis with the labour to be charged out at $45/hour. This alleged oral agreement was not corroborated in any correspondence. Given the largely fixed price RDC estimate, I would have expected Mr. Costa to have confirmed this alleged oral agreement in emails and text messages. There were none. Ms. Herbert asserted that she never agreed to a time and material contract price. This is the one statement from Ms. Herbert that I found credible. Ms. Herbert is a cost-conscious owner who would never have agreed to the open-ended cost arrangement of a time and material contract. As a result, I find that there was no oral agreement on a time and material contract price for this work.
[45] On the other hand, there was no evidence of an oral agreement on the fixed price or prices specified in the RDC July 18, 2018 estimate. Ms. Herbert did not in fact state in her affidavit that she agreed to the price or prices contained in this document. As stated earlier, Mr. Costa indicated that there was an oral agreement, but not on that fixed price.
[46] As a result, I am driven to the conclusion that there was no enforceable agreement between the parties when the 2018 work was done. The parties assumed there was a contractual relationship between them, but there was too much uncertainty to create a binding contract.
[47] Concerning the 2019/2020 work, I also find that there was no enforceable agreement. There was again uncertainty as to scope. The flood resulting from the burst pipes on February 3, 2019 caused damage in several units and corridors. Ms. Herbert made a claim on her insurance policy with Wawanesa. Ms. Herbert brought RDC back to estimate the repair work to be done. RDC provided Ms. Herbert with an estimate dated April 3, 2019 in the total amount of $50,090.08 (HST incl.). But both parties agree that this estimate was solely for Ms. Herbert’s insurance claim. Mr. Costa emphasized in his affidavit that the April 3, 2019 estimate did not form a part of any contract, and Ms. Herbert did not dispute that statement.
[48] Ms. Herbert suggested in her affidavit that there was eventually an agreement on scope. Wawanesa hired Craft to estimate the repair work and cost, and on May 8, 2019 Craft provided an estimate of the work and Wawanesa an assessment of the cost totaling $114,732.85 (HST incl.). Ms. Herbert provided the Craft estimate to RDC in November, 2019. Mr. Costa in his affidavit stated this was the case. I accept that evidence as Ms. Herbert was not clear as to when this happened. Ms. Herbert then asked Mr. Costa for an estimate of the work that reflected the work in the Craft estimate. RDC provided that estimate on December 6, 2019 in the total amount of $96,154.68 (HST incl.). Mr. Costa stated in his affidavit that this estimate included the work described in the RDC April 3, 2019 estimate plus additional work, and that it was provided to Ms. Herbert solely to present to Wawanesa.
[49] Ms. Herbert asserted in her affidavit that she instructed RDC to proceed with the work described in the RDC December 6, 2019 estimate. I do not accept this evidence. First, there was no corroboration for it in any documents. Second, in emails dated April 16, 2019 and June 15, 2020, Ms. Herbert effectively conceded that the RDC estimate was for her insurance claim. Third, Mr. Costa made it clear that other trades did repair work, not just RDC. This was not disputed by Ms. Herbert. That means that at best RDC’s scope was less than what was in this December 6, 2019 estimate. Finally, there was considerable evidence in the RDC time sheets that RDC had been working extensively prior to and without the need for the December 6, 2019 estimate.
[50] I find, therefore, based on the evidence, that the parties did not come to a certain agreement as to the scope of RDC’s 2019/2020 work. There was consensus that the work was generally flood damage repair. But this was not the certainty in scope that grounds an enforceable contract.
[51] There was also no certain agreement as to price concerning the 2019/2020 work. Mr. Costa asserted that he got Ms. Herbert again to agree to pay for the RDC work on a time and material basis. Ms. Herbert denies that she did so. For the same reasons stated earlier about the RDC 2018 work, I find Ms. Herbert’s denial credible. As to whether there was a fixed price agreement, I have already dismissed Ms. Herbert’s assertion that she instructed RDC to do the repair work in accordance with the RDC December 6, 2019 estimate. There was no agreement as to price.
[52] As a result, I conclude that there was no enforceable agreement between the parties for either the 2018 or 2019/2020 RDC work.
[53] In such circumstances, the court will nevertheless grant recovery on the basis of quantum meruit. I note that RDC based its claim in the alternative on quantum meruit. In Goulimis Construction Ltd. v. Jason Smith, Eva Klein and Bank of Montreal, 2014 ONSC 1239 at paragraph 41, I held that “the courts generally will grant recovery on the basis of quantum meruit where a party supplies services and materials to another at their request, encouragement or acquiescence . . . , and where it would be unjust for this other party to retain the benefit.”
[54] There is a refinement of this doctrine where the parties have an existing contract or are negotiating one, and not all of the essential elements of a further contract for extras or an original contract are agreed upon, particularly price and scope. This is called “contractual quantum meruit.” In Fairwood Construction Ltd. v. Lin, 1997 CarswellBC 1053 (BCSC) at paragraph 32, the court described the essential elements of this cause of action as the following: the parties agree that certain work will done but fail to agree on all aspects of the contract; the defendant accepts the work; the parties have or should have an expectation that the work is not gratuitous; and the payment sought is reasonable remuneration for the work done.
[55] I have no difficulty finding that RDC has established the foundation for a claim of contractual quantum meruit for its 2018 work. The parties discussed a contract between them. Ms. Herbert asked RDC for an estimate of the work in the ensuite bathrooms, and on July 18, 2018 RDC provided that estimate. There is no doubt that Ms. Herbert accepted the work in the basement bathrooms and knew she would have to pay for it as she in fact paid the bulk of the RDC invoice for the work rendered on September 13, 2018. I will discuss separately the reasonableness of the RDC claim in quantum meruit, but I note at this point that Ms. Herbert’s payment of that September 13, 2018 invoice is a significant factor to be considered in this regard.
[56] I also have no difficulty finding that RDC has established the foundation for a claim of contractual quantum meruit for its work in 2019 and 2020. There was considerable flood damage to the units on February 3, 2019. Ms. Herbert knew that work would have to be done to repair this damage, and that this work would have to be paid for. After all she made an immediate claim on her Wawanesa insurance policy to cover the costs of the repair, and negotiated with Wawanesa to get the maximum recovery for this cost. I also find that Ms. Herbert knew that if Wawanesa did not do the repair work itself through its contractor, Craft, she would have to contract with her own contractor to do it. I find that she did find her own contractor in this regard, namely RDC. She admitted at discovery going back to RDC to do this work as RDC had done work in the units a few months earlier.
[57] I also find that Ms. Herbert knew and accepted that RDC started the repair work as early as April, 2019 and did repair work to September, 2019 and then again in January and September, 2020. I find her denial of the existence of this work simply not credible. In my view, the most telling evidence was an email exchange she had with Mr. Costa on April 15 and 16, 2019. By this time, Ms. Herbert had already received the April 3, 2019 RDC estimate of the repair work to be presented to Wawanesa. On April 15, 2019 she emailed Mr. Costs the following: “I want to book the washrooms. Can we finalize the quote for the washrooms in unit 4, 5, 6, 7, 8. The washrooms were gutted in the clean up phase. The ties for the walls and floors are already on site.” Mr. Costa responded the same day stating that the quote she asked for was in the quote that had been rendered. On April 16, 2019, the next day, Ms. Herbert emailed back stating that the RDC quote was for the insurance company. She then says: “I need you to schedule a date to start.” She then discusses some of the repair to be done. The timesheets presented by Ms. Borges show that the RDC repair work began on April 18, 2019, just two days after this exchange. This shows me that Ms. Herbert not only knew about and accepted the RDC repair work as far back as April 15 and 16, 2019, she instructed RDC to do it.
[58] As a result, I find that RDC has established the foundation for a claim for recovery on a contractual quantum meruit basis. I will now discuss the reasonableness of the claimed remuneration.
c) What was the value of the RDC work?
[59] The last element of the claim of contractual quantum meruit is determining what is the reasonable remuneration for the work. The issue is the value of the RDC work. As I stated in Goulimis, op. cit., paragraph 44, the standard measure of the value of the work is what it would have cost the beneficiary of the work under a competitively bid contract. This issue is often addressed by experts such as quantity surveyors and experienced builders, who perform measurements of the work and apply a calculation based on market cost. However, as the court in Fairwood, op. cit., paragraph 34, stated, where such evidence is not available, the court has an obligation to do the best it can with what it has to determine a reasonable sum, and one such method is the actual cost incurred by the claimant plus a certain amount for overhead and profit.
[60] RDC’s claim is captured in its invoice to Ms. Herbert dated September 24, 2020 ($59,729.97) as later amended on February 21, 2023 to reduce the amount to $56,554.67. The invoice is divided between “total labour” ($25,290 plus HST) and “total materials” ($38,032.72 plus HST). The labour is shown as the total of 562 hours at $45/hour. This concerns RDC’s labour force only. In the earlier version of the invoice the RDC labour was shown as being charged at $50/hour, which Mr. Costa stated in his affidavit was an error. In his affidavit, Mr. Costa also stated that the shown total material cost is the total of all subcontractor and supplier invoices that RDC purchased for this project, namely the charges from Downtown Lumber, Marques Electrical, Target Drywall & Acoustics, John & Grace Construction, Urban Kitchens, and Swiss Lumber. There is no overhead and profit shown in the invoice. After the grand total, the invoice shows a deduction for the $15,000 Ms. Herbert paid in November, 2018.
[61] There was no expert evidence from either side on the issue of the reasonableness of the quantum of the RDC contractual quantum meruit claim. Given the modest amount in issue, I understand these decisions simply from a proportionality perspective. I nevertheless have an obligation to determine this issue. As a result, as indicated in Fairwood, I will use the evidence of RDC’s cost as a guide.
[62] Concerning the RDC labour hours, there was considerable evidence in support of the total RDC labour hours claimed, 562. Mr. Costa and Ms. Borges attached to their affidavits copies of the original timesheets that were generated from information given by RDC labourers on this project. None of these labourers gave evidence. Initially, Mr. Schorr considered challenging the admissibility of these records as business records. He did not do so in the end.
[63] I accept these records as business records in any event. Mr. Costa and Ms. Borges in their affidavits went into detail as to how these timesheets were created. The RDC labourers reported their hours orally to Mr. Costa each day and he informed his wife accordingly, who transposed them into the written timesheets. These timesheets were then used by Ms. Borges, the RDC administrative assistant, to create the invoice.
[64] I note that the actual total of RDC manhours was 564 and that through inadvertence RDC did not charge Ms. Herbert for 2 hours. RDC is not claiming this missed 2 hours. The only time that was not documented by timesheets was the 22.5 hours allegedly spent by “Matt” in August, 2020. However, I do not view this as fatal to the claim as Mr. Costa attached to his reply affidavit text message exchanges he had with Ms. Herbert confirming her awareness that Matt was on site doing work on several days in August, 2020. I find that RDC has established that its forces worked 562 hours on this property in 2018, 2019 and 2020.
[65] I also find that the $45/hour rate that RDC applied to these hours is as a reasonable reflection of the market cost for this labour. I base this finding in part on the fact that Ms. Herbert was aware of this rate throughout and did not complain about it. $45/hour was the rate that appeared for the time and material portion of the July 18, 2018 RDC estimate, namely the framing. It was the basement work in this estimate (including the framing) that Ms. Herbert paid for in November, 2018. The $45/hour rate appeared for the time and material extra work indicated in the RDC April 3, 2019 estimate.
[66] I also note that the Wawanesa assessment dated May 8, 2019 contained a few references to hourly labour rates. It showed an hourly rate for “general labour” of $40.39, and an hourly rate for “carpenter – general framing” of $79.53. As Mr. Costa made clear in his initial affidavit, a significant part of the work of RDC’s forces in 2019 and 2020 was framing. Given the rates shown in the Wawanesa assessment, it would appear that the RDC blended rate of $45/hour for all of its labour is more than reasonable. Ms. Herbert did not contest the reasonableness of this rate.
[67] Concerning the amount claimed for material cost, the affidavits of Mr. Costa and Ms. Borges thoroughly reviewed the work done by subcontractors and the material supplied by suppliers. They attached to their affidavits the invoices to corroborate these costs and the proofs of payment. There were the invoices from Downtown Lumber for the materials supplied to the site. There were the Marquis Electric invoices for the electrical rough-in work. Ms. Herbert denied in her affidavit that electrical work was done by RDC. RDC uploaded a reply affidavit sworn by Bruno Marques confirming that the electrical work was done. As stated earlier, I found his evidence credible, and I accept it.
[68] The other material charges were also substantiated. There was the Target invoice for the supply and installation of drywall and insulation. RDC uploaded the reply affidavit of Target’s general manager, Alcindo Boucinha, which showed that the charged work was done and paid for by RDC. Ms. Herbert did not deny that this work was done. I found the Boucinha evidence credible, and I accept it. There was the John & Grace Construction invoice for the installation of ceramic tile. Mr. Costa stated in his reply affidavit that he got Ms. Herbert’s oral approval for the estimate for this work and that John & Grace did the installation while Ms. Herbert supplied the tiles. Ms. Herbert did not deny that this work was done. I accept Mr. Costa’s evidence on this point. There was also the Swiss Plumbing invoice for the plumbing work. Ms. Herbert also did not deny that this work was done. Each of these invoices identified the 1417 Dundas Street West location. Ms. Borges in her affidavit showed how she tallied these costs and included the total in the RDC September 24, 2020 invoice. There was no issue as to the admissibility of the material invoices. I am satisfied that RDC incurred these costs for the benefit of the project.
[69] Mr. Schorr submitted in closing argument that the value of the RDC work was only $20,000. He wavered in this position, at one point conceding for a moment that it was indeed the $56,554.67 being claimed. He gave no value to the work of RDC’s own forces, arguing that I should give no weight to the RDC timesheets as none of the labourers were called to verify them. I reject this position. As stated earlier, I accept these timesheets as business records. I also give them full weight as to the evidence of the work done, as Mr. Costa and Ms. Borges confirmed in their affidavits how the timesheets were created.
[70] Mr. Schorr argued that the material invoices showed only $20,000 worth of work. He presented no evidence to support this position; no expert evidence; not even any evidence from Ms. Herbert on this point. As a result, I find this argument to be speculation and I reject it.
[71] As a result, I find that RDC has established that its value of work was $56,554.67.
d) Are the doors and drywall deficient?
[72] Ms. Herbert alleges that the doors installed by RDC are defective as they leave too much space between the hinges and the doors, thereby causing the fire rating for the doors to be lost. She said that she had to restore the fire rating for the doors by July 23, 2023 as a part of the renewal of her rooming house license. She also alleged that RDC did not install the soundproofing in the drywall that had existed prior to the flood. Understandably, soundproofing is an important part of the construction as this is a rooming house with several rental units.
[73] Concerning the doors, these were addressed by Mr. Capitao, the RDC site foreman, and Mr. Costa in their reply affidavits. As stated earlier, I admitted the RDC reply affidavits despite the subsequent objection from Ms. Schorr.
[74] Mr. Capitao stated that Ms. Herbert was the one who ordered the eight doors from Downtown Lumber. He attached to his affidavit a text message wherein Ms. Herbert confirmed that she ordered the doors. He then stated that he, following Mr. Costa’s instructions, installed the doors, that the doors did not fit and that he, after getting clearance from Mr. Costa, followed Ms. Herbert’s instructions in cutting the doors down in size to fit the frames. In cross-examination, Ms. Herbert admitted attending at Downtown Lumber when the doors were ordered; but she insisted she was just “confirming” the door order made by RDC and ensuring that the doors were fire rated. For the reasons stated earlier about credibility, I prefer the evidence of Mr. Capitao to that of Ms. Herbert on this point. I find that Ms. Herbert ordered the doors with wrong dimensions, and that she got Mr. Capitao to cut them down to fit the frames.
[75] For the same reasons about credibility, I also do not accept the remainder of Ms. Herbert’s evidence on this issue, namely that the doors are deficient. She did not present corroboration for her evidence that the doors do not have fire rating and have to be replaced. Furthermore, she admitted not replacing the doors for the last 3 years after the RDC work was done. This all makes the claim quite suspicious. The defendants have the onus of proving deficiencies in the plaintiff’s work, and I find they have failed to do so on this item.
[76] Concerning the drywall, as stated earlier, RDC uploaded the reply affidavit sworn by Mr. Boucinha, the Target general manager. Mr. Costa addressed this issue as well in his reply affidavit.
[77] Mr. Boucinha stated that on April 3, 2019 Target presented RDC with an initial quotation for the supply and installation of drywall and acoustic insulation in the corridor and units 1, 2 and 3 in the basement and the corridor and units 6, 7 and 8 of the main floor. He stated that the drywall was type X fire rated and that the insulation was rolux batt insulation, both of which provided acoustic insulation. He stated that these items replaced what had existed before the flood. Mr. Costa stated that he then asked Mr. Boucinha to revise the quotation to include a special soundproof drywall called quietrock in the ceilings of the basement and the main floor. He said he did this because the building was a rooming house and needed further soundproofing. Mr. Boucinha stated that he revised the quotation accordingly to add the requested quietrock drywall, which added a price of $11,612 plus HST. These two quotations were attached to Mr. Boucinha’s affidavit.
[78] Mr. Costa then stated that he presented these quotations to Mr. Herbert who rejected the revised quotation due to the cost of the quietrock. Mr. Boucinha stated that Target then proceeded to do the work on the main floor without the quietrock. Mr. Costa stated that Ms. Herbert then decided to defer the drywall work in the basement. That basement drywall work was never done by RDC forces. Messrs. Boucinha and Costa confirmed that Target only charged RDC for the work Target did on the main floor and was paid. In cross-examination, Mr. Boucinha was firm that there was soundproofing in the walls and ceilings Target worked on.
[79] Ms. Herbert did not address this evidence. I find the evidence of Messrs. Boucinha and Costa credible on this point and I accept it. The type X drywall and rolux batt insulation replaced what had existed before the flood. These provided the soundproofing that previously existed. The quietrock was an additional layer of soundproofing that was costly. Ms. Herbert struck me as a very cost-conscious person who would not have incurred such an additional expense if it was not necessary. As a result, I find that the defendants have failed to meet their onus of showing that the drywall installation was defective due to the alleged absence of soundproofing.
[80] There will be, as a result, no discount on account of these two issues.
VI. CONCLUSION
[81] There was no issue about the validity of the RDC claim for lien other than its quantum. Indeed, the defendants formally admitted in their statement of defence that RDC is entitled to a lien on the title to the premises.
[82] In conclusion, I find that RDC has proven entitlement to be paid damages for breach of contract and to a lien on the premises in the amount of $56,554.67. I find that the defendants are jointly and severally liable to pay these damages and lien.
[83] Concerning the costs of this action, Mr. Ribeiro uploaded a bill of costs for RDC showing substantial indemnity costs of $97,758.30 and partial indemnity costs of $70,352. Mr. Schorr uploaded a costs outline for the defendants showing partial indemnity costs of $22,713.
[84] I strongly encourage the parties to resolve the issue of costs and interest. If they do not, RDC must serve, file and upload written submissions on costs and interest of no more than three pages on or before October 12, 2023. In that event, the defendants must serve, file and upload responding written submissions on costs and interest of no more than three pages on or before October 18, 2023. Any reply written submissions must not be longer than one page and must be served on or before October 20, 2023.
[85] I reiterate that these written submissions must address the prejudgment and post-judgment interest to be calculated and paid on the judgment amount.
Released: October 5, 2023 _____________________________
ASSOCIATE JUSTICE C. WIEBE
COURT FILE NO.: CV-21-654545
ONTARIO
SUPERIOR COURT OF JUSTICE
In the matter of the Construction Act, R.S.O. 1990, c. C.30
BETWEEN:
RDC Construction Ltd.
Plaintiff
- and -
Erica Herbert, 1750466 Ontario Ltd., Erica Herbert, as Estate Trustee and/or Litigation Administrator for the Estate of Kenneth Ramsubick also known as Kenny Ramsubick
Defendants
REASONS FOR JUDGMENT
Associate Justice C. Wiebe
Released: October 5, 2023