Reasons for Judgment

Court File No.: CV-16-00546744-0000
Date: 2025-03-14
Ontario Superior Court of Justice

Between:
Domenic Gesualdi, Plaintiff
– and –
Massimo Conti, Alex Armellin, Daytona Auto Centre Ltd., and 251485 Ontario Limited, Defendants
– and –
George Biggs and Body by Biggs Inc., Third Parties

Appearances:
Emilio Bisceglia and Hana Tariq, for the plaintiff
A. Edward Tonello, for the defendants
David Zuber, for the third parties

Heard: January 21, 22, 23, 24, 27, 28, 29, and February 3, 2025
Judge: Robert Centa

1. Overview

[1] Domenic Gesualdi loved his vintage Ferraris. Mr. Gesualdi owned a 1970 Ferrari Daytona and a 1973 Ferrari Dino. Mr. Gesualdi loved his cars so much that he decided to do a “Concours restoration” of them. In 2011, Mr. Gesualdi retained the defendants to restore the engines of the Daytona and the Dino. The defendants worked to rebuild and restore the two engines between 2011 and 2015.

[2] In 2011, the defendants introduced Mr. Gesualdi to the third parties, George Biggs and his company, Body by Biggs Inc. Mr. Gesualdi retained the third parties for bodywork restoration and assembly as part of the Concours restoration of the Daytona and Dino.

[3] The defendants advised Mr. Gesualdi that their work on the Daytona engine was complete, and that the car was “running great.” However, Mr. Gesualdi was not satisfied with the state of the engine, and in late 2014, Michael Kerley was retained to inspect the engine. Mr. Kerley found a litany of problems with the Daytona engine, many of which would lead to catastrophic engine failure unless they were repaired. When Mr. Kerley later inspected the Dino engine, he observed different but similarly serious problems.

[4] Mr. Gesualdi sued the defendants for breach of contract, negligence, and negligent misrepresentation. The defendants issued a third party claim against Mr. Biggs and Body by Biggs, asserting that they were responsible for any damage to the Ferraris and for the delay in completing the work.

[5] As I will explain below, I find that the defendants breached their contract with Mr. Gesualdi to rebuild the engines of the Daytona and the Dino and to return the cars in good working order. I also find that the defendants were negligent in their efforts to rebuild the engines. I do not find the defendants liable for negligent misrepresentation.

[6] On either theory of liability, I find that Mr. Gesualdi is entitled to damages equal to the amounts he paid to repair the damage the defendants caused to the engines and to achieve the Concours restoration of the engines. Mr. Gesualdi also sought damages for his inability to sell the Daytona and the Dino at the peak of the market. I do not award loss of value damages to Mr. Gesualdi, because he did not prove that but for any delays caused by the defendants, he would have sold the cars at the peak of the market. As noted, I am satisfied that Mr. Gesualdi loved these cars and would not have sold them any earlier than his advancing age required.

[7] I dismiss the third party claim in its entirety. The defendants did not prove that the third parties damaged the Daytona or the Dino in any way or that the third parties are properly liable for any of the damage the defendants caused to Mr. Gesualdi’s Ferraris.

2. The Parties and Their Witnesses

A. The Plaintiff and His Witnesses

[8] The plaintiff, Domenic Gesualdi, owned two Ferrari automobiles that are the subject of this proceeding: a 1970 Daytona and a 1973 Dino. Between 2011 and 2015, Mr. Gesualdi retained the defendants and the third parties to restore his automobiles. Mr. Gesualdi testified at the trial, and he called five other witnesses.

[9] Micheal Kerley is a licenced automotive machinist and a professional engine rebuilder. Mr. Kerley was the principal behind Active Racing Engines and he and his company had significant expertise and experience in rebuilding Ferrari engines. Mr. Kerley disassembled, examined, and repaired the engines of the Daytona and the Dino after the defendants completed their work on the engines. Mr. Kerley gave evidence about what he found when he examined those engines and about his work to repair and rebuild the engines.

[10] Gary Nolan is the owner of Diamond Trim and gave evidence about his work on the interior of the Dino between 2015 and 2018.

[11] Frank Di Rosa is a technician with a company that carries on business as Ferrari of Ontario. He provided evidence about the maintenance work he did on the Daytona and Dino between 2018 and 2022.

[12] Steve Ahlgrim has extensive experience in servicing Ferrari automobiles and sourcing and installing parts for them. I qualified Mr. Ahlgrim to provide opinion evidence on Ferrari engines. Mr. Ahlgrim never saw the cars in person and his opinion was based on his review of photos and videos taken of the engines, invoices for work performed, and the examination for discovery transcripts.

[13] Lance Coren is an automobile appraiser. I qualified Mr. Coren to provide expert evidence regarding the market for sales of Daytona and Dino automobiles and how the market moved over time.

B. The Defendants and Their Witnesses

[14] Mr. Gesualdi sued four defendants who called eight witnesses.

[15] The defendant 251485 Ontario Limited carries on business as Daytona Auto Service. The defendant Daytona Auto Centre Ltd. was created by amalgamation between Daytona Auto Centre Ltd. and 2442865 Ontario Inc. on July 1, 2016. The defendants admit that for the purposes of this action, the two companies are interchangeable and if one company is found liable, they are both equally liable on any theory of liability. Unless it is necessary to distinguish between the two corporations, I will refer to them collectively as Daytona Auto Centre. The defendants admitted that Mr. Gesualdi was a customer of Daytona Auto Centre.

[16] The defendant Alex Armellin is a licenced mechanic, the President of Daytona Auto Service, and one of its three directors. He testified at trial about his involvement with the Daytona and Dino rebuilds, but he did not personally work on either engine.

[17] The defendant Massimo Conti was an employee of Daytona Auto Centre. He disassembled and reassembled the Daytona engine and was involved in the Dino engine restoration. He was not a licenced mechanic or machinist at the time he worked on Mr. Gesualdi’s cars. He testified at trial about the steps he took during the rebuild of the Daytona engine and his role in the restarting of the Dino engine.

[18] John Duca is the President of Daytona Auto Centre. Mr. Duca testified about his dealings with Mr. Gesualdi regarding the work on the Daytona and Dino.

[19] Leonardo Guinci was a licenced mechanic employed by Daytona Auto Centre for about 25 years. He gave evidence about his role in reassembling the Dino.

[20] Valentin Voinea worked for Daytona Auto Centre from 2013-2014. He gave evidence about his role in the final test run of the Dino engine.

[21] Domenic Lancia is a licensed machinist and the President of Astro Automotive Machine. He testified about Astro’s role in machining some parts for the Dino engine.

[22] Jamie Holmes is a retired businessman and motor vehicle mechanic. He testified about his observations of the Daytona engine in 2014. He was not involved in the rebuild of that engine.

[23] Rocco Solmito is the owner of Rock’s Automotive Restoration, which services Ferrari automobiles. He has personally rebuilt three Daytona engines. I qualified him as an expert on the Ferrari Daytona engine to give evidence on the following topics: disassembling and reassembling a Daytona engine; and applying and interpreting compression ratio tests and leak-down tests.

C. The Third Parties and Their Witnesses

[24] The defendants brought a third party claim against George Biggs and his company, Body by Biggs. Mr. Biggs testified about his work on the Daytona and Dino and his observations about the operation of their engines.

[25] Mr. Biggs called Paul Newman as an expert witness. Mr. Newman personally observed the Daytona engine run and physically examined the Daytona engine. He also reviewed documents and evidence related to the case. He offered his opinion on whether the defendants’ work on the Daytona and Dino met the standard of care and whether the engines needed to be rebuilt to remedy any problems with the defendants’ efforts.

3. Evaluating the Evidence

A. Reliability and Credibility

[26] There are several significant factual disputes in this case. Resolving those disputes will require me to assess the reliability and credibility of the fact witnesses at trial.

[27] It is important to recall that reliability and credibility are different. Credibility has to do with the honesty, sincerity, or veracity of a witness. Reliability describes the other factors that can influence the accuracy of testimony, such as the witness’s ability to observe, recall, and recount events in issue. [1]

[28] Witnesses can sincerely believe their evidence is true, but that does not mean that what they are saying is reliable. Memory is fallible and becomes increasingly frail over time. Even an apparently convincing, confident, and credible witness may not be an accurate or reliable reporter. There is significant risk in placing too much emphasis on demeanour or the confidence with which a witness speaks where there are contradictions and inconsistencies inherent in their evidence or where that testimony is inconsistent with contemporaneous records. [2]

[29] One of the leading decisions on assessing credibility is Faryna v. Chorny, where the court explained that:

The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. [3]

[30] Taking into account my assessment of reliability and credibility, I will assess the evidence before me according to many factors, including the following:

a. if the evidence makes sense by being internally consistent, logical or plausible;
b. if there are inconsistencies or weaknesses in the evidence of the witness, such as internal inconsistencies, prior inconsistent statements, or inconsistencies with the evidence of other witnesses;
c. if there is independent evidence to confirm or contradict the witness’s evidence, or a lack of such evidence;
d. the witness’s demeanour, including their sincerity and use of language, although this must be considered with caution; and
e. if the witness, particularly one that is a party in a case, may have a motive to fabricate. [4]

[31] In addition, each of the fact witnesses swore an affidavit. When I am assessing their affidavits, I will consider the following factors:

a. presence or absence of details supporting conclusory assertions;
b. artful drafting which shields equivocation;
c. use of language in an affidavit which is inappropriate to the particular witness;
d. indications that the deponent has not read the affidavit;
e. affidavits which lack the best evidence available;
f. lack of precision and factual errors;
g. omission of significant facts which should be addressed; and
h. disguised hearsay. [5]

[32] Applying these principles, I do not find Mr. Holmes to be a credible or reliable witness. On September 26, 2014, Mr. Holmes sent a lengthy email to Mr. Biggs to “sum up the items of concern on the Ferrari Daytona that I inspected at your shop this morning.” Mr. Holmes set out eight areas of concern. Shortly after he sent this email, Mr. Holmes met with Mr. Gesualdi. In his trial affidavit, Mr. Holmes stated that he discussed the Daytona engine with Mr. Gesualdi and explained to him, “[M]y observations were an accurate representation of what I saw and a more complete diagnosis needed further testing including disassembly would be required.”

[33] On October 3, 2019, at the request of Daytona Auto Centre and its counsel, Mr. Holmes signed a statement providing comments on his September 26, 2014, email to Mr. Biggs. Mr. Holmes admitted that he did not write the document, he only signed it. I find that this letter is an inelegant attempt to minimize and walk back the concerns that Mr. Holmes had expressed some five years earlier. Mr. Holmes denied that the second letter was an attempt to “backtrack” on his earlier statement, but that is exactly what he was doing. He admitted that some of his comments in the October 3, 2019, document were not fair statements and that he should have removed them from the document (which he admitted that he did not write) before he signed it.

[34] On January 26, 2022, Mr. Holmes signed a further statement following a meeting with some of the defendants and their counsel. This was another statement that was written for Mr. Holmes and not by him. In this statement, Mr. Holmes changes his opinion regarding an oil leak. Mr. Holmes admitted during cross-examination that he did not change his ultimate opinion that “the engine required further investigation, including disassembly.”

[35] I am concerned that Mr. Holmes was too willing to modify his evidence and his statements following his meeting with the defendants. Following those meetings, he backtracked on several fairly clear statements in his September 26, 2014, email. I have grave concerns about the reliability and credibility of all of Mr. Holmes’ statements and evidence. For these reasons, I give his evidence no weight.

[36] I will address other credibility and reliability concerns below.

B. Expert Evidence

[37] As noted above, each party called one or more expert witnesses. Mr. Gesualdi called Mr. Ahlgrim and Mr. Coren. The defendants called Mr. Solmito. The third parties called Mr. Newman.

[38] Expert opinion evidence is presumptively inadmissible unless it meets the two-stage test for admissibility set out in White Burgess. [6] The first stage focuses on threshold requirements of admissibility. If the proposed expert evidence does not meet the threshold requirements, it is excluded. If the proposed evidence meets the threshold requirements, the evidence must still pass the second stage, which focuses on the judge’s discretionary gatekeeper role. The judge must be satisfied that the benefits of admitting the evidence outweigh the costs of its admission. [7] Expert evidence is admissible when:

The evidence meets the threshold requirements of admissibility, which are that the evidence must:
a. be logically relevant;
b. be necessary to assist the trier of fact;
c. not be subject to any other exclusionary rule;
d. The expert must be properly qualified, which includes the requirement that the expert be willing and able to fulfil the expert’s duty to the court to provide evidence that is:
i. impartial,
ii. independent, and
iii. unbiased.
e. For opinions based on novel or contested science or science used for a novel purpose, the underlying science must be reliable for that purpose,

and

The trial judge, in a gatekeeper role, determines that the benefits of admitting the evidence outweigh its potential risks, considering such factors as:
a. legal relevance
b. necessity,
c. reliability, and
d. absence of bias. [8]

[39] I qualified all the experts to give evidence in this case. I accepted their expertise and the necessity and relevance of their evidence. I came into this case knowing nothing about the restoration of vintage Ferrari engines. Although the experts’ credentials were not as formal as those held by many experts testifying in court, their experience and deep knowledge was of significant assistance to me. The expert evidence was necessary to assist me to understand how the engines operated and whether the rebuilds were successful. These are matters beyond the general expertise of the court.

[40] The defendants submitted that I should give very little weight to the opinions of Mr. Ahlgrim and Mr. Newman because their opinions were based on the direct observations of Mr. Kerley. I agree that in weighing the expert evidence, I am entitled to examine the factual foundations of the opinion and give less weight to the opinion where it is not based on facts proved at trial. [9] However, as I will explain below, I accept all of Mr. Kerley’s evidence about his observations of the problems with the Daytona and Dino engines, which establishes the factual underpinnings of their conclusions.

[41] The defendants also submit that I should give less weight to Mr. Newman’s opinion because his business is located near Mr. Biggs’ business, they have had a prior business relationship, and Mr. Newman worked on the engine of a Lamborghini Countach that was owned by Mr. Biggs.

[42] I am satisfied that Mr. Newman was an impartial and fair expert. I do not see the prior business dealings, which appear to be limited to having referred customers to each other on a few occasions but not on a regular basis, as impairing Mr. Newman’s objectivity. Similarly, I do not think that Mr. Newman’s work on the engine of the Lamborghini Countach owned by Mr. Biggs disqualifies him. I have no reason to believe that Mr. Newman did not follow his acknowledged duty to the court, and I do not discount the weight to be given to his opinion on that basis.

Gesualdi v. Conti, 2025 ONSC 1662

Case Summary

Reasons for Judgment

1. Overview

2. The Parties and Their Witnesses

A. The Plaintiff and His Witnesses

B. The Defendants and Their Witnesses

C. The Third Parties and Their Witnesses

3. Evaluating the Evidence

A. Reliability and Credibility

B. Expert Evidence

[Sections 4–11 omitted for brevity; see full text above for detailed findings, legal analysis, and conclusions.]

Cited Authorities

Legislation

Case Law

This Proceeding

Judge

Counsel

Parties

Areas of Law

Legislation 1