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PAYNELAW Trial and Appeal Experience For the Wrongfully Dismissed |
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Case Name: Between [2006]
O.J. No. 3149 Ontario Superior Court of
Justice Heard:
July 24-26, 2006. Counsel:
________________________________________________________________________ REASONS FOR JUDGMENTP.M. PERELL J.:— Introduction and Overview ¶ 1 In this action under the simplified procedure, Lilia Kadosh and David Kadosh sue 1275815 Ontario Inc., which I will refer to as the Numbered Company, and its principal Cosimo Chimienti for damages with respect to a contract to provide the rough framing and other carpentry work for the Kadoshs' house at 24 Dallas Road in the City of Toronto. The Kadoshs also sue Simon Low-A-Chee, who is a carpenter who did carpentry at the house. ¶ 2 Mr. Low-A-Chee did not defend the main action, and pleadings have been noted closed against him. ¶ 3 The Numbered Company and Mr. Chimienti bring a counterclaim against the Kadoshs, which counterclaim is also the subject of an outstanding action under the Construction Lien Act, R.S.O. 1990, c. 30 brought by the Numbered Company against the Kadoshs. The parties have agreed that the resolution of the immediate action will be dispositive of the construction lien action. ¶ 4 The Numbered Company and Mr. Chimienti also bring a crossclaim against Mr. Low-A-Chee. Although he did not defend the main action, Mr. Low-A-Chee defended the crossclaim. However, Mr. Low-A-Chee did not appear at the trial. The Numbered Company sought judgment against Mr. Low-A-Chee based on the evidence presented at the trial. ¶ 5 The Kadoshs and Mr. Chimienti have very different versions of the events that took place between June 2002, when framing work started at the house, and the beginning of September 2002, when the Kadoshs hired Mr. Bruce Boyd, a carpenter, to complete the carpentry work. As will be seen, there is very little common ground in what was a very bitter and acrimonious dispute between individuals, who had had a friendly history together, before the events that are the subject of these proceedings. ¶ 6 Unfortunately -- to varying degrees -- I found the evidence provided by every witness who testified at the trial incredible, unreliable, or of little utility, and also unfortunately, Mr. Low-A-Chee, whose role was pivotal, did not give evidence, although efforts were made to summons him as a witness. ¶ 7 I was left in the situation of believing some but not all of the evidence of all of the witnesses, and I have made my findings of fact in accordance with the evidence that I found believable and that I find to be true on the balance of probabilities. ¶ 8 There were no legal or interpretative issues in these proceedings, and indeed no authorities were even mentioned during argument. The outcomes of the claim, counterclaim, crossclaim, and the construction lien action depend entirely on the findings of fact. ¶ 9 I will discuss my findings of fact below, but I will note in this introduction and overview that, I conclude that: (a) there was a construction contract between the Kadoshs and the Numbered Company with a price of $28,440.60 for goods and services, as described later in this judgment; (b) The Kadoshs have proven a claim for deficiencies due to incomplete or deficient work by the Numbered Company (but not against Mr. Chimienti or Mr. Low-A-Chee, with whom they had no privity of contract) in the amount of $7,000; (c) Once a deduction is made for these deficiencies and for payments of $14,250 made by the Kadoshs (with respect to Mr. Low-A-Chee's labour) and of $1,067.33 (for crane rentals), the Kadoshs owe the Numbered Company the sum of $6,123.27 on account of the framing contract; (d) Mr. Low-A-Chee is liable to the Numbered Company in the amount of $7,000 for the incomplete or deficient work that he did for the Numbered Company with respect to the framing contract; and (e) Mr. Low-A-Chee is liable to the Numbered Company in the amount of $7,000 on account of payments from the Kadoshs to the Numbered Company and converted by Mr. Low-A-Chee. The Parties Competing Versions of the Events ¶ 10 As I have already indicated, the parties diverge greatly in their accounts of the events. I note at the outset that there were a substantial number of factual disputes that need not be resolved because the claims and defences associated with them were not pursued. For instance, Mr. and Mrs. Kadosh did not press their claims that they suffered damages from: the late completion of the work; the slandering of the title to the property; the increased cost of financing the construction of the house; the diminished value of the house from irreparable damage including the negligent installation of a floor beam. Mr. Kadosh also did not press his claim that the stress of the circumstances contributed to the decline in his health. The only claim that was actually pursued by the Kadoshs was for reimbursement for the work performed by Mr. Boyd and for the return of the monies paid into court in the construction lien action. ¶ 11 Mr. Kadosh's evidence was that in or about March of 2002, as general contractor for his wife, who owned the land, Mr. Kadosh entered into an oral contract with Mr. Chimienti personally to provide the rough framing and other carpentry work for the Kadoshs' new house to be constructed at 24 Dallas Road in the City of Toronto in accordance with drawings provided by Mr. Kadosh. The contract was for services including the framing of the basement and the first and second floor of the house at a fixed price of $16,000, exclusive of lumber, which was to be provided by Mr. Kadosh. Mr. Chimienti was to provide three persons to do the labour, which was to be completed in about 4 weeks' time. Mr. Chimienti was also to provide for crane rentals and other construction equipment, as necessary. ¶ 12 Mr. Chimienti's evidence was that in or about March of 2002, as general contractor for his wife, who owned the land, Mr. Kadosh entered into an oral contract with the Numbered Company to provide the rough framing and other carpentry work for the Kadoshs' new house to be constructed at 24 Dallas Road in the City of Toronto in accordance with drawings provided by Mr. Kadosh. The contract was for services including the framing of the first and second floor of the house, but not the basement, at the price of $6.00 per square foot plus G.S.T. for approximately 4,500 square feet, exclusive of lumber, which was to be provided by Mr. Kadosh. Mr. Chimienti was to provide the labourers and construction equipment, both as necessary, but not the crane, which was to be arranged by Mr. Kadosh. ¶ 13 Mr. Kadosh's evidence was that the "discount" fixed price of $16,000 for the contract was to reciprocate for favours that Mr. Kadosh had provided to Mr. Chimienti, including introducing him to a bankruptcy lawyer. He also says that the price for the work was low because it was understood that the extensive cutting for frames with a circular design would be completed by Mr. Kadosh, who had access to a high pressure water jet saw. ¶ 14 Mr. Kadosh's evidence was that some months after the oral agreement was reached, Mr. Chimienti explained that he was too busy to be the carpenter for the Kadoshs' house because of other projects but that he had arranged for Mr. Simon Low-A-Chee to be the carpenter for the 24 Dallas Road house with Mr. Chimienti to play the role of supervisor. Although disappointed, Mr. Kadosh says he agreed to this arrangement. Mr. Chimienti's evidence was similar on this point. ¶ 15 Mr. Kadosh's evidence was that Mr. Chimienti came to the property: once, to build a construction fence; and a second time, to build the wood frames for the footings, but save for one other attendance, which was to assist others in placing heavy engineered beams, Mr. Chimienti did not come to the property to supervise Mr. Low-A-Chee, despite Mr. Kadosh's complaints that Mr. Low-A-Chee, for a variety of reasons, needed supervision and despite Mr. Chimienti's assurances that he would provide it. ¶ 16 Mr. Chimienti's evidence was that he came to the property for the attendances noted by Mr. Kadosh but also three or four other times to supervise the work of Mr. Low-A-Chee. ¶ 17 Mr. Kadosh's evidence was that Mr. Low-A-Chee began work in mid-July 2002, but he was repeatedly late and that the work was delayed. Further, Mr. Kadosh testified that Mr. Low-A-Chee frequently worked alone or with only one helper. Mr. Kadosh testified that Mr. Low-A-Chee excused his absenteeism, in part, by the fact that he was not being paid by Mr. Chimienti. ¶ 18 Mr. Chimienti's evidence was that in addition to Mr. Low-A-Chee, Boris Shaytzag, an employee from the Numbered Company, and two individuals from a company known as W.W. Carpentry provided work on the property but that there were delays and wasted or idle time caused by Mr. Kadosh's failure to have enough lumber available and to make arrangements for a crane. ¶ 19 Mr. Kadosh's evidence was that Mr. Low-A-Chee was complaining to him about not being paid and that he discussed this problem with Mr. Chimienti. According to Mr. Kadosh, it was agreed that to address Mr. Low-A-Chee's concerns, Mr. Kadosh would pay him. Thus, Mr. Kadosh or his wife made the following payments, totaling $14,350 directly to Mr. Low-A-Chee: (a) July 19, 2002 (cheque), $1,500; (b) August 3, 2002 (cheque), $2,100; (c) August 12, 2002 (cash), $4,000. (d) August 16, 2002, (cheque) $3,000; (e) August 22, 2002, (cheque) $2,500; (f) August 23, 2002, (cheque) $1,000; and (g) August 28, 2002 (cheque), $250. ¶ 20 Mr. Chimienti states that he did not learn until long after proceedings were commenced that the Kadoshs were making payments to Mr. Low-A-Chee. ¶ 21 Mr. Chimienti's evidence was that there was no agreement for the Kadoshs to pay Mr. Low-A-Chee and that this remained his responsibility, which he honoured by making payments in the sum of $9,528.24 as follows: (a) June 26, 2002, $1,000; (b) July 19, 2002, $2,000; (c) July 23, 2002, $4,528.24; and (d) August 12, 2002, $2,000. ¶ 22 Mr. Kadosh's evidence was that due to the fault of Mr. Chimienti or Mr. Low-A-Chee, he twice incurred the expense of renting a crane for a total cost of $1,067.33 as follows: (a) July 23, 2002, $449.40; and (b) August 12, 2002, $617.93. ¶ 23 Mr. Chimienti's evidence was that the matter of renting cranes was Mr. Kadosh's responsibility and his failure to make arrangement caused construction delays. ¶ 24 Mr. Chimienti's evidence was that he asked Mr. Kadosh for payments during June and July 2002, and when these were not forthcoming, he delivered an invoice to Mr. Kadosh around August 6, 2002. When no payments were made, Mr. Chimienti said that he had nothing further to do with the project. ¶ 25 Mr. Kadosh's evidence was that Mr. Low-A-Chee worked into August 2002 but did not complete the work and before the end of the month, he left the job, never to return. ¶ 26 Mr. Kadosh's evidence was that he hired Bruce Boyd to complete the rough framing work and to repair the deficiencies in the work performed by Mr. Low-A-Chee. ¶ 27 It is common ground that the Numbered Company registered a construction lien on September 12, 2002 and that the Numbered Company commenced a construction lien action on October 24, 2002. In February 2003, Mr. Kadosh paid the sum of $36,112.50 into court in order to have the construction lien removed from the title of the property. Findings of Credibility ¶ 28 Before setting out my findings of fact, it is convenient to discuss the credibility, reliability, and utility of the evidence of the witnesses. ¶ 29 Mrs. Kadosh's testimony was brief and mainly directed at the alleged absenteeism of Mr. Low-A-Chee and Mr. Chimienti, upon which very little turns because the claim for damages from delay was not pursued by the Kadoshs. She was not involved in the contract negotiations, and she was not aware of its details. She had no direct dealings with Mr. Chimienti. I did not find her evidence helpful. ¶ 30 Sasson Matatyhu is a neighbour of the Kadoshs, who on a regular basis would walk by the construction site, and he would regularly visit the workers. His evidence was mainly directed at the alleged absenteeism of Mr. Low-A-Chee and Mr. Chimienti, upon which very little now turns. Mr. Matatyhu was on vacation for a significant period in July, 2002, and this circumstance substantially weakens his evidence. His evidence about W.W. Carpentry was double, if not triple, hearsay. I did not find Mr. Matatyhu's evidence particularly helpful. ¶ 31 Boris Shaytzag is an employee of the Numbered Company. He delivered an affidavit but did not testify. His affidavit provided no useful evidence. ¶ 32 Richard Makhlouta is Mr. Chimienti's brother-in-law and had been a friend of Mr. Kadosh. I found Mr. Makhlouta to be a credible witness, but his evidence was largely unhelpful, given that it focused on the competing explanations for the alleged delay in completing the project, but no delay claim was actually advanced. Mr. Makhlouta was wrong about a stop work order having been placed against the property, of which there was no evidence. He gave evidence, which I believed, because it was consistent with the evidence of Mr. Boyd, that he enlisted Mr. Boyd to quote for the flooring work and not as a substitute for the errant Mr. Low-A-Chee. ¶ 33 Stephen Blaney is a professional engineer who was retained by the Kadoshs to comment and to submit a report on the work done on 24 Dallas Road. Mr. Blaney reviewed the building plans, several inspection reports performed by others and the videotape in which Mr. Boyd did a walk-through with commentary in November 2002. Mr. Blaney did not make his own investigations, and he had no independent evidence. Given the claims that were actually pursued at the trial, the absence of any independent investigations by him, the vague questions to which he offered vague comments, I did not find Mr. Blaney's evidence helpful. ¶ 34 Ned Allam is an architect who was called by the Numbered Company to testify. His evidence was not based on any independent investigations. He relied on information provided by others and from viewing the videotape with Mr. Boyd's commentary. Some of the information provided to Mr. Blaney was incorrect, most particularly, he mistakenly understood that the work was exposed to the elements over the winter of 2002/2003. I did not find Mr. Allam's evidence helpful apart from his evidence about the typical pricing for rough carpentry work. ¶ 35 Bruce Boyd is a carpenter who was hired by Mr. Kadosh after Mr. Low-A-Chee left the project. Mr. Boyd was a credible witness and I will discuss his evidence below. ¶ 36 I found Mr. Kadosh's evidence unreliable. He exaggerated and wished to win every point, however, trivial. He was emotional and argumentative. His evidence about the oral contract with Mr. Chimienti belied common sense. The evidence of others established to my satisfaction that rough framing for custom built houses was typically valued at $10 per square foot, but Mr. Kadosh would have it that Mr. Chimienti out of gratitude had agreed to provide this work at a value of approximately $2.50 per square foot for the basement and two floors of the house. Mr. Kadosh's evidence about entering into a contract with Mr. Chimienti personally was inconsistent with the pleadings and seemed contrived. In his affidavit, he deposed that the foundations were placed in March 2002 and that he was therefore ready for the framing to commence and he blames the delay on starting the work on Mr. Chimienti. A review of the building plans indicates, however, that they were being revised into April 2002, and, I believe, after that based on his evidence that the building plans were changed because of demands by the municipality. Based on what Mr. Low-A-Chee had told him, Mr. Kadosh denied that Mr. Chimienti made payments to Mr. Low-A-Chee for work at 24 Dallas Road. However, this is something that Mr. Kadosh could not know, and I find that payments were made to Mr. Low-A-Chee. In his affidavit, Mr. Kadosh complained about substantial damage to his home, but he retracted this evidence at the trial and relied on the much more modest evidence of deficiencies provided by Mr. Boyd. Mr. Kadosh testified that Mr. Boyd was introduced to him by Mr. Makhlouta, who was trying to find a replacement for Mr. Low-A-Chee. Mr. Kadosh's evidence, however, was contradicted by the evidence of Mr. Makhlouta and more importantly by the evidence of Mr. Boyd, who testified that he was contacted to provide a quotation for the flooring and that he had not anticipated being asked to complete the carpentry for 24 Dallas Road. ¶ 37 I find Mr. Chimienti's evidence to be unreliable. He gave exaggerated, inaccurate, and uncorroborated evidence about making payments to Mr. Low-A-Chee. He said that he regularly paid Mr. Low-A-Chee, but I find this not to be the case. He said that there about nine invoices from Mr. Low-A-Chee; he produced only one. He admitted during cross-examination that the workers from W.W. Carpentry could not have provided the 240 hours of labour at 24 Dallas Road for which he paid them $8,000. Most of this work was likely provided for projects elsewhere. Mr. Chimienti said that he constantly requested payment from Mr. Kadosh, but I find that these requests were not made. Had requests for payment been made, then the Kadoshs undoubtedly would not have made payments to Mr. Low-A-Chee. In his affidavit, Mr. Chimienti states that on or about August 6, 2002, he approached Mr. Kadosh with an invoice for $28,890. At trial, he gave unsure testimony that the invoice was mailed to Mr. Kadosh. I do not believe that Mr. Kadosh received an invoice of this amount on August 6, 2003. Had such an invoice been delivered, there would have been fireworks, to put it mildly, given that Mr. Kadosh had been making payments to Mr. Low-A-Chee for several weeks and given his view that the contract was for a fixed price of $16.000. Mr. Chimienti testified that by mid-August 2002, he had ceased all involvement with the property, but this is inconsistent with the evidence of others, including his brother-in-law Mr. Makhlouta, and it is inconsistent with the fact that Mr. Low-A-Chee continued to do work on the property until the end of the month. Mr. Chimienti, like Mr. Kadosh, was prepared to give self-serving evidence based on mistaken information provided by others or without any foundation. For example, he blamed alleged construction delays on the issuance of a stop work order, which was not proven to have occurred. He blamed alleged construction deficiencies on the work being exposed to the elements during the winter of 2003, but once again there was no foundation for this assertion. Findings of Fact ¶ 38 Based on what I can bring together from the testimony that I found believable, I find as a fact that Mr. Kadosh entered into an oral contract with the Numbered Company and not with Mr. Chimienti in his personal capacity. Although he did not discover the name of the Numbered Company until after this action commenced, Mr. Kadosh's evidence was that he knew Mr. Chimienti had a corporation and that he expected that Mr. Kadosh would contract through that corporation. Further, Mr. Kadosh's statement of claim pleads that he contracted with the Numbered Company. It was only after this action had been pleaded that Mr. Kadosh took the position that his contract was with Mr. Chimienti personally. ¶ 39 I find as a fact that the contract was for the Numbered Company to provide the rough framing and other carpentry work for the Kadoshs' new house to be constructed at 24 Dallas Road in the City of Toronto in accordance with drawings provided by Mr. Kadosh. The contract did not include the framing of the basement and was at a price of $6.00 per square foot, exclusive of lumber, which was to be provided by Mr. Kadosh. Mr. Chimienti was to provide the labourers, arrange for the crane rentals and for other construction equipment as necessary. It was understood that Mr. Chimienti would supervise the work, which in the main was to be provided by Mr. Low-A-Chee. ¶ 40 The square footage of 24 Dallas Road was 4,430 square feet, and therefore the price for the contract was $26,580 plus G.S.T. of $1,860.60 for a total price of $28,440.60. ¶ 41 The work on the construction contract began in June 2002, and while Mr. Low-A-Chee would be absent from time to time, the work progressed more or less satisfactorily, although not as quickly as Mr. Kadosh required. In addition to building the construction fence and the footings, Mr. Chimienti did on at least one or two occasions attend to supervise the work, and he was there to assist in lifting the beam. ¶ 42 I find as a fact that Mr. Chimienti made payments to Mr. Low-A-Chee as noted earlier. This means, however, that Mr. Low-A-Chee had some reason to complain because once his assistant was paid, he was not receiving much for his labour and not commensurate with the time he worked. ¶ 43 I believe that Mr. Low-A-Chee complained to Mr. Kadosh about not being paid and that Mr. Kadosh discussed this with Mr. Makhlouta, who came to the construction site from time to time to deliver supplies and to be able to report to Mr. Chimienti. I believe that Mr. Kadosh understood Mr. Makhlouta to say that Mr. Kadosh could pay Mr. Low-A-Chee. This was probably a miscommunication or misunderstanding between Mr. Kadosh and Mr. Makhlouta acting on behalf of Mr. Chimienti and the Numbered Company, but the result was that the Kadoshs made payments to Mr. Low-A-Chee, as noted above. ¶ 44 Mr. Low-A-Chee was now receiving more than he deserved for the work he was performing at 24 Dallas Road. He received $9,528.24 from Mr. Chimienti and $14,350 from the Kadoshs for a total payment of $23,878.24 of the $28,440.60 contract. Mr. Low-A-Chee was entitled to be paid, but the Numbered Company was also entitled to be paid. I estimate that Mr. Low-A-Chee was overpaid by approximately $7,000, which is money that belongs to the Numbered Company. ¶ 45 I find that Mr. Low-A-Chee was not reporting the payments he was receiving from the Kadoshs and that Mr. Chimienti mistakenly believed that Mr. Kadosh had not made any payments on the construction contract. ¶ 46 However, I do not believe that Mr. Chimienti demanded payment from the Kadoshs, and I do not believe that they received an invoice from him at any time. Mr. Chimienti was very busy on other projects and had no reason to believe that the Numbered Company would not be paid by the Kadoshs. ¶ 47 I find that work progressed throughout August 2002, although not with the speed that Mr. Kadosh desired. Sometime near the end of the month, Mr. Low-A-Chee stopped coming to work. Probably, he realized that he would receive no more payments from the Kadoshs and that he should have accounted to Mr. Chimienti for the overpayments. ¶ 48 I find as a fact that although Mr. Low-A-Chee abandoned the work, the contract had been substantially performed, although there were some deficiencies. I conclude that subject to the deficiencies, the Kadoshs were obliged to pay for the goods and services received. I find that in the circumstances of this case, the payments the Kadoshs made to Mr. Low-A-Chee were part payment of the contract price and that they are also entitled to offset the expense they occurred to arrange for crane rentals, which was the responsibility of the Numbered Company. ¶ 49 I conclude that the Kadoshs are also entitled to offset the cost of completing and repairing the work that was not properly completed by Mr. Low-A-Chee. This work was performed by Mr. Boyd. ¶ 50 In late August or early September 2002, Mr. Boyd arrived to speak to Mr. Kadosh about the flooring work, and Mr. Kadosh took this opportunity to hire Mr. Boyd to complete the carpentry work. Mr. Boyd was not told the details of the contract with the Numbered Company. I find that Mr. Boyd was also asked to do work that was not part of the contract with the Numbered Company. For instance, the framing of the basement was not a part of the contract with the Numbered Company. ¶ 51 Mr. Boyd worked from September 2002 until around January 2003. He was paid $28,035.00 for his work. Of this sum, I estimate that about $10,000 to $12,000 was for work associated with the basement of the house. Based on my viewing of his video and from his evidence at trial, I estimate that about $10,000 to $12,000 was for work arising from changes necessitated by problems in the design discovered during construction and from changes requested by Mr. Kadosh for cosmetic reasons. For examples, there was a change to the location of a beam and changes because Mr. Kadosh ordered windows different in size from the plans. ¶ 52 I estimate that approximately $7,000 of the work performed by Mr. Boyd was to complete or to repair work that should have been properly completed by Mr. Low-A-Chee. Conclusion ¶ 53 After accounting for the setoffs, the Kadoshs are liable under the contract with the Numbered Company in the amount of $6,123.27, and judgment should issue accordingly. In all the circumstances, I disallow any claim for prejudgment interest. ¶ 54 The above sum may be paid from the monies held to the credit of the construction lien action, and the balance should be paid out to the Kadoshs. ¶ 55 As for Mr. Low-A-Chee, after accounting for the overpayment he received and for his liability to his employer, the Numbered Company, for his incomplete and deficient work, Mr. Low-A-Chee owes the Numbered Company the sum of $14,000, and judgment in the crossclaim should issue accordingly with prejudgment interest from February 17, 2005, the date of the crossclaim ¶ 56 As for costs, I would make no order as to costs because, in my assessment, no party was free of fault. That said, if any party believes that he, she, or it should be entitled to costs, then the party may make submissions in writing within 30 days from the release of these Reasons for Judgment and the other parties may, in turn, make submissions in writing within six weeks from the release of these Reasons. P.M. PERELL J. QL UPDATE: 20060809
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