IN THE SUPREME COURT OF NOVA SCOTIA
Citation: J & P Reid Developments v. Branch Tree Nursery & Landscaping Ltd.,
2006 NSSC 226
Date: 20060710
Docket: SBW 234932
Registry: Bridgewater, N.S.
Between:
J. & P Reid Developments Ltd
Plaintiff/Defendant
By Consolidation
v.
Branch Tree Nursery & Landscaping Ltd
Defendant/Plaintiff
By Consolidation
Judge: The Honourable Justice Gregory M. Warner
Heard: At Bridgewater, Nova Scotia, on April 18, 19, 20 & 21, 2006 and in Liverpool, N.S., on April 24, 2006
Final Briefs received May 23, 2006
Counsel: Martin C. Dumke, Esq., for the Plaintiff
Michael K. Power, Esq., for the Defendant
By the Court:
INTRODUCTION
[1] This is a dispute involves interpretation of a building contract. The developer of a 49-unit apartment building sued the excavation and landscaping contractor for damages for the cost of completing the work the contractor abandoned. The contractor claimed justification for abandonment, and sued for work and services performed by him and not paid by the developer.
THE FACTS
[2] In or about 2002 James Reid, an English business executive, acquired land at Pine Grove, near Bridgewater Nova Scotia, on which to build a home. He hired Fred Hirtle to build it; it was completed in early 2004. The Reids emigrated from England to Nova Scotia in April, 2004.
[3] In the same year (2002), Reid, through the plaintiff corporation, purchased a lot at 84 North Street in Bridgewater, on which to develop an apartment complex.
[4] In early 2003 he hired architect Brent Kaulback to design the building. Kaulback had retired as a full time architect in 1991, then taught architecture; at all times relevant to this action, he was a curriculum consultant to the College of Trades and Technology, and “moonlighted” as a part-time architect. Because of his design work on the Reid residence, he was hired to carry out the original design for the apartment building.
[5] His design (for which the drawings are dated August 26 and September 30, 2003) called for a north-facing 49 unit building, extending westerly from North Street. The lot sloped uphill from North Street; the original design showed the building rising in three steps or lifts from west to east. Between September 30 and December 11, 2003, after becoming aware of the extent of bedrock on the lot, and to reduce the amount of bedrock removal, he changed the design so that the step-up of the building was simplified to only one lift; as a result, the floor of the ground floor of the west wing is at about 112' elevation, and the ground floor of the east wing is at about 121' elevation.
[6] Because Kaulback had not maintained his license to practice architecture, he could not certify his design for the purposes of obtaining municipal development approval; he was replaced in December, 2003 with the architectural firm of Sperry & Partners. That firm made minor design changes in the building itself, and, in response to a request from the municipal development authority for a design change to facilitate fire vehicle access, replaced the turning circle at the rear of the lot with a “hammer-head” turnaround .
[7] Robert Forbes, a civil engineer, was retained by Reid in the fall of 2003 to prepare an engineering design for the site to meet the requirements of the municipal development authority for obtaining a building permit. This retainer included determining and setting the elevations and grades (and subgrades) of the lot, the design of the rock walls at the rear of the lot, and the design of the drainage system. His design, contained in a plan stamped December 17, 2003, was submitted to the municipal development authority. This plan was given to the excavation contractors in late November or early December, 2003. His design was revised (the revised plan is dated May 21, 2004) to reflect the change in the retaining walls at the rear of the lot (a consequence of the hammerhead turnaround);
[8] Lester Berrigan, a local land surveyor, was hired by Reid: first, to prepare a boundary plan of the lot; and second, to carry out a topographical survey and prepare a site plan, showing the contours and all of the features of the lot and adjacent lots. Based on information from Kaulback and Forbes, Berrigan subsequently drew plans showing the slopes, and proposed grades of the lot and drainage system, and the location and grades for the building footings. These plans, containing Forbes’ design, were stamped and signed by Forbes on December 17. On November 27, 2003, Berrigan staked out the location for the building footings on the ground.
[9] In late November, 2003, Reid asked Forbes to tender the initial ground work. Forbes approached three experienced local excavation contractors - Maughan Construction Ltd, Bernard Mailman Projects Ltd, and the defendant, Branch Tree Nursery and Landscaping Inc. (“Branchtree”).
[10] No formal tender package was prepared by Forbes; he provided each contractor with a copy of the December version of his design plan showing the contours, slopes, proposed grades, drainage system, building location, and lot features; he also provided a list particularizing the seven items they were to bid on. He advised that the work had to be done to Municipal standards (to secure municipal building approval). Forbes says that he discussed the requirements with each of the three contractors and answered all questions. These discussions included the fact that there was potential for bedrock on the lot. Forbes expected each contractor to investigate the site for potential bedrock. In fact, Maughan Construction had, in the summer of 2003, grubbed the land for Reid and observed bedrock on the surface. Each of the three contractors submitted a proposal.
[11] A review of the three proposals shows that all three appeared to have bid for the same work; that is:
(a) excavation of the foundation for the building (although Maughan's bid specifically excluded backfilling);
(b) materials and labour for the foundation drainage system;
(c) excavation of the site to subgrade and removal of all surplus materials from the site;
(d) materials and labour for the site’s storm drainage system;
(e) materials and labour for the water and sewer services to the building;
(f) materials and labour to build a construction or access service road on the site (for access to the building by the tradesmen during construction);
(g) materials and labour to build the stone retaining wall at the rear (east end) of the apartment lot.
[12] Maughan tendered a fixed price of $155,000.00 plus HST and specified that the removal of bedrock (if applicable) would be an extra to be agreed upon before it was carried out. Mailman tendered a fixed price of $94,954.66 plus HST. The defendant, Branchtree, tendered prices for each of the seven items for a total price of $56,672.00 plus HST. The printed form of its “proposal” included the following:
Any alteration or deviation from the above specifications involving extra costs will be executed only upon written orders, and will become an extra charge over and above the estimate.
[13] Neither the Mailman nor the Branchtree bids mentioned bedrock. Eugene Wentzell, who prepared the Mailman bid, did not recall if he spoke to Forbes about whether bedrock would be an extra, but said that “by practice” it would likely have been stated by him. He acknowledged having a conversation with Forbes respecting bedrock when asked to tender by Forbes and he anticipated bedrock would be encountered. He would have be surprised to find no rock in Bridgewater and in particular on that location.
[14] In early December, Reid flew to Nova Scotia for the opening of the bids. He met at the Fairview Inn with Bob Forbes, Fred Hirtle (the building contractor who was building his home and whom he intended to rely upon to construct the apartment building) together with Jack and Mark Logan.
[15] Fred Hirtle, the contractor who built Reid’s home, and Reid differed in their view of Hirtle's role in the apartment project. Reid says that he hired and relied upon Hirtle to be his general contractor, to co-ordinate the project and subtrades, and to assist in budgeting and planning. Hirtle states that he was not the general contractor but only one of the many contractors hired by Reid to complete the project. He did acknowledge that he and Mark Logan were Reid's “eyes and ears on the ground” before Reid arrived in Nova Scotia in April, 2004. In fact, Hirtle was the person that other contractors invoiced for work carried out on the project; Hirtle then reported to Reid in England, paid the invoices, and was reimbursed by transfers from Reid’s bank to Hirtle's account.
[16] Mark Logan was an estimator employed with Nova Scotia Building Supplies. His employer supplied the materials for the construction of Reid's home. Reid appears to have relied upon his expertise in estimating the cost of materials and supplies for the project. In July, 2004, when the project appeared to be behind schedule and over budget, Mark Logan was hired by Reid as a full time project manager.
[17] James Reid had never been in involved in real estate development prior to this project. His only experience with construction was the purchase and renovation of his own home in England.
[18] Because the Branchtree Proposal was so much lower than the Maughan or Mailman proposals, Reid requested a meeting with Micah Beaumont, the principal of Branchtree. While Fred Hirtle has no memory of what was said during the meeting, his records showed it was held on December 3, 2003. Reid and Forbes say that at the meeting Reid discussed Branchtree’s proposal and gave Beaumont a chance to reconsider it. They were concerned that it was so much lower than the other two proposals. They say Beaumont stated that he was content with the price he had bid, and explained that it was low because of the time of year and that he had workers and equipment not in use. Reid added that Beaumont stated that he had payments to make and was therefore doing the job at cost. Beaumont recalls the meeting at the Fairview Inn, but thought that there was nothing extraordinary about it other than it was a meeting with the lowest bidder to get the job started. He did not recall any discussion about why the bid was so low.
[19] Forbes and Beaumont differ as to whether Forbes indicated that the bid was to be a fixed price tender and whether Forbes had mentioned the possibility of bedrock on the lot. Forbes says yes; Beaumont says no.
[20] Reid awarded the contract to the defendant, based on Branchtree’s December 2, 2003 proposal (called “December Proposal”). Branchtree started work immediately. Reid returned to England.
[21] Until June, 2004, Branchtree invoiced Reid, through Hirtle, and Hirtle paid on behalf of Reid, the following amounts (including HST):
January 1, 2004 $ 54,767.35
January 15, 2004 $ 27,776.85
March 19, 2004 $ 53,745.90
May 20, 2004 $10,000.00
May 20, 2004 $ 9,095.21
May 28, 2004 $ 26,500.34
June 3, 2004 $ 4,404.45
$ 186,267.10
[22] Fred Hirtle says he paid the invoices only after sending copies to Reid. He was aware of the December Proposal but was not concerned about the amount of the invoices because he thought Branchtree was doing work besides what was contained under that contract. He says he had no experience in “ground work, especially rock” and had no experience as to whether it should be an extra, and if so, how much. He did not recall Reid ever saying that the invoices were too high. When Reid arrived in Nova Scotia in April, 2004, Reid had conversations with Beaumont, and he (Hirtle) could not recall any conversations with Reid about the amount of the defendant's invoices, or anything else that was said about them. The court accepts that Hirtle always used (or recommended) the defendant to carry out excavation and landscaping for homes he built, and had a special relationship with the defendant.
[23] Beaumont's description of the invoices reflected his belief that his bid did not include any problems he ran into on the site, including bedrock. He says he invoiced for work and materials in the way he usually does. His bid was only to carry out what he perceived his December Proposal consisted of, not for any difficulties he may run into in carrying out that work. He never saw Reid on the site until the end of April. No one - Forbes, Mark Logan or Fred Hirtle, questioned his work or his invoices.
[24] Reid says that he questioned Hirtle about the invoices when he arrived in Nova Scotia and found, to his surprise, that (a) no written contract had been entered into, and (b) despite being billed more than three times Branchtree's December Proposal, the excavation work was not nearly complete. He denied seeing Branchtree's invoices before April; he says Hirtle only sent him requests to be reimbursed, setting out the amount invoiced without providing a copy or any details. Reid says that Hirtle told him that bedrock was an “extra”. Since Reid had been away when the work was done, and had relied on Hirtle, and because Branchtree had not executed a written contract, he felt he had no choice but to honour Branchtree’s invoices.
[25] At this point, because of the bedrock, and requirements imposed by the Municipality regarding access by fire trucks to the back of the building, three minor changes to the project were made. These changes were:
(a) because of the bedrock, the original plan that showed the building “stepped up” in three lifts was changed to one lift. This simplified the footings, reduced the amount of bedrock that needed to be excavated and eliminated one of the retaining walls adjacent to the north side of the building;
(b) Because the turning circle at the rear of the building could not handle fire trucks, the Municipality required a “hammerhead” design to replace the turning circle. Sperry and Partners designed this change. It resulted in an increase in the height and size of the stone retaining walls at the rear of the lot; and
(c) the water and sewer lines, which had originally been designed to extend from North Street to the nearest end of the building, had to be extended half way down the south side of the building.
[26] Forbes states that the changes in the building (items (a) and (c) above) did not change the sub-grades or grades for the foundation of the building or for the rest of the lot as they related to Branchtree’s December Proposal. He states that the revisions to the grades for the lot, shown on the revised plan dated May 21, 2004, were very minor.
[27] In May/June, 2004, Reid met with Beaumont. He paid Beaumont $40,000.00 of the $48,008.66 in outstanding invoices. Despite what he believed was an over payment of $130,000.00 in respect of Branchtree’s December Proposal, he invited Branchtree to complete the balance of the groundwork, which included the three changes, and landscaping. Reid says he told Beaumont he wanted a fixed price to complete the job and that he did not want to again be faced with paying three times the price quoted. He says he chose Beaumont because the time line to finish the project - scheduled to be open on September 1st, was tight, and because Beaumont now knew the site in detail, a fact that should mean no more surprises (which a new contractor would face).
[28] In response, Branchtree delivered to Reid a written proposal dated June 7, 2004 (called “June Proposal”), to (a) construct the three stonewalls at the rear of the lot, (b) dig, supply and lay the longer water and sewer line to the building, and (c) complete the landscaping of the lot, for a fixed price of $99,500.00 plus HST. The June Proposal contained the same printed stipulation as the December Proposal to the effect that any alteration involving extra costs would be executed only upon written orders.
[29] Reid says that because of his unsatisfactory experience with December Proposal, he prepared a written contract. Similar contracts were prepared by him for the other contractors on the site. Reid says he left the contract prepared by him with Beaumont, and advised him to read it and get legal advice if he wanted. Beaumont returned to Reid's home about a week or more later (on August 2nd, 2004) and both parties executed it.
[30] The relevant parts of this contract (called Contract) read as follows:
Whereas the Owner has requested, and the Contractor has agreed, that the Contractor provide the following:
a. To supply labour, material, and equipment to provide labour and materials to complete, ready for occupation, all groundworks and landscaping including construction of retaining walls and roadway preparation to engineering drawing design and specifications at Bridgewater Terrace site.
in accordance with the specifications attached as Schedule “A” hereto and the approved architectural drawings of Drew Sperry, Architect, referred to therein and in accordance with the supplementary terms attached hereto as Schedule “B”, (hereinafter referred to as the “Work”) at the Owner's premises situate at 84 North Street, Bridgewater, Nova Scotia, at the Owner's request . . .
. . . the parties hereto agree with each other as follows:
1. The Contractor shall
(a) furnish the labour, material, tools, construction machinery and equipment necessary to perform the Work on the Owner's premises described herein, and shall diligently perform the Work described in a proper and workmanlike manner;
(b) do and fulfil everything required to be done and fulfilled by the Contractor as indicated by this agreement; and
(c) perform the Work required to be performed by the Contractor in accordance with the schedule mutually agreed upon by the Owner and the Contractor at the time of signing of this agreement. The Contractor is to commence Work immediately and is to complete the work on the 1st day of September, 2004.
2. The Contractor shall supply all the labour, tools, construction machinery and equipment necessary to perform the Work for a total contract price of $281,000.00, plus HST (the “Contract Price”), payable as follows:
(a) the parties confirm, that the amount of $176,000.00 of the Contract Price has been paid by the Owner prior to entering into this agreement, which amount is confirmed to have been paid on account of the Contract Price;
(b) the Owner shall pay to the Contractor within seven days such amount as is shown on presentation of an invoice by the Contractor from time to time, and upon receipt of evidence satisfactory to the Owner and confirmation by Drew Sperry, Architect, of the Contractor's fulfilment of the Contractor's obligations hereunder, subject to the provisions of the Mechanics Lien Act of the Province of Nova Scotia; PROVIDED HOWEVER that the total amount so invoiced shall not exceed the Contract Price as stipulated herein.
(h) the Owner shall pay to the Contractor the unpaid balance of the Contract Price, being the statutory holdback required to be maintained by the Owner under the Mechanic's Lien Act. R.S., c. 277, s. 1., as amended, forty-six days subsequent to the date of the Owner's receipt of satisfactory evidence of the completion of all the Work performed by the Contractor pursuant to this agreement, provided that the Owner can do so without jeopardy under the provisions of the Mechanic's Lien Act, or otherwise in law.
. . .
21. Time shall be of the essence of this agreement.
22. This agreement, together with Schedules “A” and “B” attached hereto, and the documents referred to therein, constitutes the entire agreement among and between the parties and shall not be modified, amended or assigned without the prior written consent of both parties hereto.
[31] No schedules were attached to the Contract. I am satisfied that both parties understood that the schedules of the Contract consisted of:
(a) Forbes’ plan for the ground work stamped December 17, 2003, and revised May 21, 2004, (Exhibit 3B);
(b) the Sperry site plan of the “hammer-head” design, dated May, 2004, (included in Exhibit 6);
(c) Branchtree’s December Proposal (Exhibit 1, Tab 5) and
(d) Branchtree’s June Proposal (Exhibit 1, Tab 9).
[32] Reid told Beaumont that the Contract was intended to include the work in both Branchtree proposals, and that all of the groundwork and landscaping was to be completed for a fixed price of $281,000.00 plus HST. There were to be no surprises. Any extra work was to be agreed upon in writing before it became part of the Contract. The completion date was September 1st, 2004.
[33] Over the next three months, three written change orders were agreed to between the parties. The first, signed on September 7, 2004, was for $4,000.00 for unspecified work. The second, signed on October 12, 2004, was for the construction of a stone wall along North Street for $7,000.00 plus HST, which stone wall was required by the Town of Bridgewater to be built to protect the fire hydrant. The third change order requested by Branchtree on November 2nd and signed by Reid on November 4th was for $3,600.00 plus HST to supply and install drainage pipes behind the rock wall at the rear of the site.
[34] The plaintiff’s evidence (both Reid and Mark Logan) is that Branchtree did not allocate sufficient resources after signing the Contract to complete its work in accordance with the terms of the contract. Mark Logan, who had been hired in July as the full time project manager, co-ordinated the various contractors and set time frames. When work began lagging, he arranged for weekly site meetings, which meetings Beaumont did not attend. He says that by October, the first phase of the building (24 units) was ninety percent complete. He states that Branchtree did not have sufficient resources to do its work and was much behind schedule. Usually Branchtree had three or four people on site but on many days it had no one on site. He became very concerned in October that the ground work would not be ready for Dexter Construction to pave before their plant closed. His efforts to work with Branchtree were fruitless, so communications with Beaumont were directly with Mr. Reid. Logan continued to co-ordinate work of the other contractors. Logan’s evidence, which the Court accepts, is that by mid October Branchtree had completed the work for the elevations for the installation of the drainage system but had not completed the grades required to allow for paving and had not commenced the rock walls at the rear of the site, or any of the landscaping.
[35] On September 7, 2004, Reid wrote Branchtree:
(a) noting that he had been given a two week extension to accommodate minor changes resulting from the work of other contractors, but that he still had substantial work outstanding;
(b) requesting confirmation of when Branchtree would complete its work and reminding him that the Contract provided that time was of the essence, and
(c) advising that tenants had given notice to their current landlords and were expecting to have a place to live in the building and it is imperative that the project be complete for this reason.
[36] On September 14, 2004, Reid caused his lawyer to write Branchtree regarding its failure to perform its obligations. The letter notes that Branchtree did not have crews attending at the site several times despite promises by Branchtree to the contrary. It asked for an anticipated completion date to avert the need to seek legal redress.
[37] In response, on September 16, 2004, Branchtree provided Reid with a written schedule outlining what work he would have done by October 8, being a work necessary to allow the paving to be completed and what work he would have done by October 24th (related primarily to the storm drainage system). Reid immediately discussed the September 16th Branchtree schedule with Beaumont and Reid says they agreed that the October 24th deadline was changed to October 18th.
[38] On September 20th, Reid noted that Branchtree’s crews were not working on his site, despite being well behind schedule and despite Beaumont’s promise of diligence. Reid says that Branchtree’s crew were working on a nearby site. He wrote Branchtree again, reminding him of the schedule and confirming that the final completion date was October 18th and asked for Branchtree to acknowledge this by return. He noted that Bob Forbes was waiting to hear respecting a site meeting that Beaumont had agreed to on September 18th. Reid and Beaumont met to discuss the letter. Beaumont replied outlining his activity on September 21st.
[39] By letter dated October 12, Reid followed up on the September 20th letter. He noted that the work promised to be completed by Branchtree by October 8th was not done, and that the remaining work scheduled to be done by October 18th was substantially behind schedule. He asked for a revised work schedule. He advised that tenants were moving in on October 29th and all the groundwork had to be completed before then. He reminded Branchtree that the Contract completion date had already been extended twice and that damages would be claimed from November 1st, 2004, if not completed then. He offered to discuss how the work could be completed within the extended time frame.
[40] In response Branchtree invoiced Reid for installing storm drains and catch basins ($25,875.00) and threatened to leave the site if not paid right away. Fearing Branchtree would leave and he would be stuck with tenants without a roof over their head, Reid paid Branchtree on October 15th.
[41] On October 26th Reid received from Glenstone Excavation (one of Branchtree’s subcontractors) a request for payment directly from Reid because Branchtree was not paying. Reid contacted Glenstone; fearing another mechanic’s lien would jeopardize his financing, he guaranteed Glenstone’s account, and later paid it.
[42] At the same time Dexter Construction advised that Branchtree had not liaised with them about when the site would be ready for paving (contrary to Beaumont’s promise to Reid), and that time was running out to do the paving that season. On October 28th, Reid wrote Branchtree advising of his conversation with Dexter and other concerns and stated that he no longer relied on Branchtree’s promises. He required a commitment that all Branchtree’s resources would be applied to complete the project and stated that no further progress payments would be made until the work was complete.
[43] On October 29th Branchtree replied. It did not accept responsibility for the delays and said the work would stop if progress payments ceased. In a second letter on the same day it stated it had spent five days hammering the cliff at the rear of the property for the stone wall, which hammering had been unforeseen by Branchtree.
[44] On November 2nd Branchtree requested a Change Order to supply and install drain pipes behind the stone wall at the rear and for another change. Reid spoke to Beaumont, agreed to the request respecting the drainage pipes and obtained a promise from Branchtree that the groundwork would be complete by Friday, November 5th, and ready for paving.
[45] On November 3rd Dexter Construction told Reid that Beaumont had on November 2nd given them another story; that is, that it would be two or three more weeks before he would be ready for them. As a result of this information, a furious Reid wrote Branchtree terminating the Contract and ordering him off the site. Following that letter Reid and Beaumont spoke and Beaumont promised to have the work done as quickly as possible. Reid relented and cancelled the termination and Beaumont remained on the site working for the rest of the week.
[46] On Monday, November 8th, Beaumont again asked Reid for a progress payment. Reid, who believed he did not owe Beaumont, refused to pay any more money until the work was complete. Beaumont pulled Branchtree’s crew off the site and did not return.
[47] Reid hired Glenstone Excavation to complete the groundwork and in the spring of 2005 Greenway Landscaping to complete the landscaping (to a lesser extent than Branchtree’s June Proposal).
[48] Reid had paid Branchtree $238,587.20, before Branchtree left. It paid to Branchtree’s subcontractors $33,604.97. Net of HST, it paid $236,688.84 out of a total contract amount of $295,600.00.
[49] To complete Branchtree’s work, Reid paid other contractors $98,809.82.
[50] Brian Desloges, a landscape architect employed by Sperry & Partners, has considerable experience performing construction site assessments for the purposes of advancing contract payments, dispute resolution, and legal proceedings. On November 9, 2004, he attended at the site of this project for the purpose of evaluating the extent of completion of the groundwork and landscaping, and to estimate the cost to complete. His report, with photographs showing the state of the site on November 9th, was before the Court. He reviewed the documents that constitute the Contract (including the four documents which this Court finds constitute the particulars or specifications of the Contract). He detailed the extent of incompleteness of Branchtree’s work. He estimated the cost to finish the Contract to be $86,000.00 plus HST. This estimate was within $100.00 of what it actually cost Reid to complete the work.
[51] Mr. Desloges was asked his opinion about whether site features below ground could materially affect a groundwork contract and whether bedrock was a common type of risk. He gave the opinion that, based on the Contract, the discovery of bedrock ordinarily would have been the type of change requiring prior written consent before it could be charged to the owner. He qualified his opinion: if a contractor was not aware of bedrock on the site, in circumstances where the contractor could not have reasonably anticipated finding bedrock, the discovery of bedrock would be a material difference, and could constitute an extra. The contractor’s local knowledge would be a factor.
[52] At trial Micah Beaumont testified that his December Proposal included the specific cost of doing the work itemized in the proposal, and did not cover any difficulties he may run into in carrying out the work. He stated the majority of the work was extras.
[53] With respect to the request by Reid for a written contract in the summer of 2004, he testified he did not understand that it included hammering because hammering was always an extra. With regards to the issue of the responsibility for setting grades on the ground, he says that was never the contractor’s responsibility.
[54] It appeared from his evidence, and that of Eugene Wentzell, that Beaumont believed that the change in the footings for the building itself (after December, 2003 and before May, 2004) resulted in a substantial change in the grades of the site. This evidence was inconsistent with the evidence of Robert Forbes and the documentary exhibits. I accept the latter, that the groundwork plan, provided by Forbes to Beaumont in November, 2003, changed very little when the footings for the building were changed.
[55] With respect to the defendant’s work after the Contract, Beaumont denies that it did not carry out the work diligently and in a businesslike manner. He blames all delays upon other contractors and changes requested by Reid. He expressed concern about the fact that the project appeared to have cost over-runs and whether Reid would be in a position to pay him. He says he was entitled to payment when he submitted progress reports. When Reid advised on November 8th he would not pay any further progress payments until the job was complete, he states that Reid breached the Contract and he was entitled to cease work. He states that at the time he ceased work the project was almost complete.
[56] He claims a total of $56,871.40., consisting in invoices delivered for $51,629.08, plus extras (not billed) of $10,000.00, less credit for some amounts paid to Glenstone Excavating and Mailman Projects for the defendant.
THE LAW
[57] This case involves five legal issues:
(a) Was there a contract and, if so, what constituted the Contract?
(b) Was the cost of removing the bedrock part of the Contract or an extra?
(c) Who breached the Contract - the contractor by abandoning, or the owner by refusing to pay interim claims?
(d) What is a proper accounting between the parties of the monies owed?
(e) What damages are payable?
Was there a contract and, if so, what constituted the contract?
[58] The general rules of interpretation applying to all contracts apply to building contracts. The Supreme Court of Canada in Manulife Bank of Canada v. Conlin [1996] 3 S.C.R. 415 at paragraph 79 says in part:
The cardinal interpretative rule of contract is that the court should give effect to the intention of the parties as expressed in their written document. As Estey, J. Said in Consolidated Bathurst “in all contacts effect must be given to the intention of the parties to be gathered from the words they have used”.
The court went on:
The court will deviate from the plain meaning of the words only if the literal interpretation of the contractual language would lead either to an absurd result or to a result which is plainly repugnant to the intention of the parties.
[59] In Eli Lilly & Co v. Novopharm Ltd [1998] 2 S.C.R. 129, in paragraphs 54 - 56 the Court said in part:
The contractual intent of the parties is to be determined by reference to the words they used in drafting the document possibly read in light of the surrounding circumstances which were prevalent at the time. Evidence of one party's subjective intention has no independent place in this determination.
Indeed it is unnecessary to consider any extrinsic evidence at all when the document is clear and unambiguous on its face. . . .
When there is no ambiguity in the wording of the document, the notion in Consolidated Bathurst that the interpretation which produces “fair result” or a “sensible commercial result” should be adopted is not determinative. Admittedly, it would be absurd to adopt an interpretation which is clearly inconsistent with the commercial interests of the parties. If the goal is to ascertain that a true contractual intent, however to interpret a plainly worded document in accordance with the true contractual intent of the parties is not difficult if it is presumed that the parties intended the legal consequences of the words.
[60] Goldsmith on Canadian Building Contracts, Fourth Edition, by Immanuel Goldsmith and Thomas Heintzman, (Carswell: 1995) summarizes the relevant principles at pages 1-38 and 1-39 as follows:
. . . the function of the court in interpreting a contract is to determine the intention of the parties as expressed in their agreement. It is not the actual intention of the parties, but the intention of the parties as they have expressed it, that is the guiding consideration.
If the parties have expressed their intention in clear terms, there is no need to resort to rules of interpretation, and in fact it is not permissible to do so.
. . . in cases of ambiguity the courts will construe a document against the person who prepared it, and every endeavour will be to give some sensible meaning to a document, however difficult this may sometimes be.
. . .
When the parties have taken the trouble to embody what they consider to be their agreement in a written document, the courts will be very reluctant to come to the conclusion that the document is completely meaningless; but in the last resort, if it is impossible to arrive at a proper construction, the contract may be held to be void for uncertainty.
A written contract must be construed as a whole, and, as a general rule by looking at nothing other than the document itself. If the written agreement itself is clear and unambiguous, it is not permissible to ask what the parties in fact intended by the words they used, nor may the surrounding circumstances or the pre-contract negotiations be taken into consideration. There are, however, certain circumstances where such extrinsic evidence may be considered.
[61] Of particular relevance to this case is the rule respecting extrinsic evidence. Goldsmith on Canadian Building Contracts, at pages 1-40 - 1-42 says:
Evidence of surrounding circumstances is admissible to explain the meaning of words which are ambiguous or to identify persons or things not clearly defined in a document. The facts which existed at the time when the agreement was entered into and the conduct of the parties may sometimes be helpful in resolving such an ambiguity or clearing up such questions of identification. Such evidence, however, must not contradict or vary the written agreement, and may only be used to clarify any ambiguities or uncertainties. If the words of the agreement in themselves are clear and unambiguous, no such evidence is admissible at all. Nor can extrinsic evidence be admitted to fill a blank which the parties have left in the agreement. This sometimes happens where printed forms are used.
. . .
It is important to distinguish between extrinsic evidence sought to be adduced for the purpose of construing a contract, and evidence intended to be used for the purpose of showing that no contract in fact exists, or that the contract does not correctly set out the agreement between the parties. The rule against the admissibility of extrinsic evidence applies only in the former situation.
[62] The extrinsic or parol evidence rule - that external contradictory evidence is not admissible, is derived from the Supreme Court of Canada decisions in Hawrish v. Bank of Montreal [1969] S.C.R. 515, Bauer v. Bank of Montreal [1980] 2 S.C.R. 102 and Carman Construction Ltd. V. Canadian Pacific Railway Co. et al [1982] 2 S.C.R. 958.
[63] In Gallen v. Allstate Grain Ltd., 1984 CarswellBC 104, the British Columbia Court of Appeal seems to have reduced the rule to a presumption that a written contract constitutes the whole of the agreement between the parties.
[64] In Zippy Print Enterprises Ltd. V. Pawliuk, 1994 CarswellBC 4, the British Columbia Court of Appeal dismissed an appeal from a trial judge’s finding that even an “entire agreement” clause will not preclude evidence of a specific oral representation.
[65] In Canadian Newspapers Co v. Kansa General Insurance Co., 1996 CarswellOnt 3227, the Ontario Court of Appeal allowed extrinsic evidence that did not contradict the written contract. The Court, citing Gallen, endorsed admission of extrinsic evidence that illustrates the “factual matrix” of the agreement. In Canada Deposit Insurance Corp. v. Commonwealth Trust Co., 1997 CarswellBC 2175, the British Columbia Court of Appeal stated that evidence about the “factual matrix” (that is, the surrounding circumstances) is admissible even if the agreement is not itself ambiguous. This decision gives a far broader scope to “factual matrix” than the Ontario Court of Appeal did in Arthur Andersen Inc. v. Toronto Dominion Bank, 1994 Carswell Ont 233, which decision seems to limit such evidence to identifying the purpose of the agreement.
[66] The parties in this case executed a written contract. The Contract clearly and unambiguously requires the contractor to furnish the labour, materials, tools, construction machinery and equipment to complete, ready for occupation, all groundwork and landscaping; the Contract described this “Work” as being in accordance with the specifications and drawings attached to the Contract as schedules A and B. No schedules were attached.
[67] Section 22 - the “entire agreement” clause, states:
This agreement, together with schedules A and B attached hereto, and the documents referred to therein, constitute the entire agreement . . .
[68] The ambiguity in this case arises from what constitutes schedules A and B.
[69] On the evidence of the plaintiff and defendant, it is clear both parties intended and understood that the groundwork and landscaping encompassed the work described in the Forbes’ plan (Exhibit 3B), Sperry’s “hammerhead” design, Branchtree’s December Proposal, and Branchtree’s June Proposal.
[70] I find that the Contract incorporated by reference these four documents.
Was the cost of removing the bedrock part of the Contract or an extra?
[71] The most significant issue between the parties is whether the cost of removing the bedrock was an “extra”, or part of the Contract price.
[72] The seminal decision describing the nature of extras is Chittick v. Taylor, 1954 Carswell Alta 43 (Alta.S.C.). At paragraphs 5-10, the Court described the rules as follows:
5 Generally speaking, in my opinion, the following rules should apply:
6 Rule 1. An item specifically provided for in the contract is not an “extra.”
7 Rule 2. When the plaintiff supplied material of a better qualify then the minimum quality necessary for the fulfilment of the contract, without any instructions, express or implied, from the defendant to do so, he is not entitled to charge the extra cost as an “extra.”
8 Rule 3. When the plaintiff did work or supplied materials not called for by the contract (plans or specifications) without instructions, express or implied, from the defendant, or the consent of the defendant, he is not entitled to charge this additional work or materials as an “extra.” (This was admitted by the plaintiff in evidence.)
9 Rule 4. When the plaintiff did work or supplied materials not called for by the contract on the instructions, express or implied, of the defendant, he is entitled to charge for additional work or materials as an “extra.”
10 What amounted to instructions from the defendant is dependent on the circumstances relating to each item. If the defendant, without giving definite instructions, knew the plaintiff was doing extra work or supplying extra materials and stood by and approved of what was being done and encouraged the plaintiff to do it, that, in my opinion, amounts to an implied instruction to the plaintiff, and the defendant is liable.
[73] Goldsmith on Canadian Building Contracts summarizes the law in Chapter 4, Section 3. Frequently, without substantially changing the nature of the work originally planned, additional work, not specifically envisioned by either party, becomes necessary, or the owner requires additional work to be performed. A contractor is obligated to perform only such work as is included in his contract. If the contract provides for such a contingency, the terms of the contract as to how the extra work is ordered and the method of payment applies. In the absence of any provision in a contract there must be a new agreement between the parties.
[74] The writers further note that usually contracts contain a provision to the effect that the contractor will not be entitled to payment for extras without a written order to do such extra work signed by someone authorized by the owner. Whether realistic or not in actual practice, compliance with such a provision is a condition precedent to payment.
At page 4-14, the text reads:
Extras . . . must be distinguished on the one hand from work properly called for by the contract, and on the other, from work which is substantially different from, and wholly outside, the scope of the work contemplated by the contract. The former the contractor is obliged to perform without being entitled to any additional remuneration beyond the contract price; the latter the owner cannot compel the contractor to perform at all without a new agreement being entered into between the parties. Whether a particular item of work is an extra or not must be determined by reference to the terms of the contract, the nature of the work and the surrounding circumstances. If, on the proper construction of the contract documents, which generally include the drawings and specifications, the item of work is one which the contractor is required to perform, it cannot be an extra, notwithstanding the fact that the contractor may have failed to realize at the time of entering into the contract that he would be required to perform such work.
At page 4-15:
. . . A contractor who voluntarily and without instructions does additional work not required by the contract is not entitled to any extra payment therefor, unless the owner, by standing by with knowledge of what is being done, can be held to have impliedly authorized such extra work, or unless the extra work was necessitated by a misrepresentation made by the owner.
[75] Counsel for the plaintiff has referred the Court to Hoar v. 1290052 Ontario Ltd., 2001 Carswell Ont 3108 (Ontario Master), and A-Jac Demolition (London) Ltd v. Urlin Rent-A-Car Inc., 1990 Carswell Ont 669 (Ont. Div. Ct.) as cases where the increased cost to the contractor to carry out its work, due to miscalculation, were held not to be extras payable by the owner.
Analysis
[76] With respect to the first phase of the project, the owner’s requirements for groundwork were provided through the Forbes’ plan and the instructions given either orally or in writing (which writing has not been preserved). The best record of the instructions are the written proposals submitted by Maughan, Mailman and Branchtree. Beaumont says that his December Proposal, accepted by Reid on December 3, 2003, was to do only the seven specified items of work, each of which he priced separately, and did not include the cost of bedrock removal. He states that, when he tendered the job, he had no knowledge that there might be bedrock on the site; he notes that Forbes had some knowledge that bedrock may exist but failed to disclose it to him.
[77] While the denial of knowledge of possible bedrock has not affected my ultimate decision, I have a problem with the defendant’s position on this point. Branchtree was an experienced excavating contractor in the Bridgewater area. The two other bidders, both local, expected that there would be bedrock on the site, as bedrock was prevalent in the area and on North Street. It is bizarre that Branchtree would tender on the project without inquiring, either of the owner, or by his own site inspection, for possible bedrock; based on the evidence of Vernon Maughan, bedrock was obvious on the surface of the site.
[78] Goldsmith on Canadian Building Contracts reads, at page 2-2, that:
It is of considerable importance that, prior to submitting his tender, the contractor be familiar with the conditions of the site. . . Where substantial sub-excavation is required, or where the work consists primarily of excavation and fill work, e.g., road or sewer construction, the conditions of the site, and particularly soil conditions, may be of the utmost importance.
[79] Reid was both new to the area and to property development, but he noted the wide discrepancy in the three proposals received for phase one of the groundwork; therefore, he met with Beaumont before accepting the defendant’s tender to inquire why the bid was so low. Beaumont does not recall conversation as to why his bid was low. I accept the evidence of Reid and Forbes as to their concern about this and meeting with Beaumont for that purpose. Despite Beaumont’s experience with excavation contracting in that area, he did not discuss the issue of possible bedrock, or ask Reid or Forbes about it.
[80] It appears that he always considered bedrock would be an extra and so it was of no concern to him to reference it in his Proposal. Vernon Maughan (whose bid was three times that of Branchtree) was the only bidder to specify that bedrock was an extra. Contrary to Maughan’s specific reference to bedrock being an extra, Branchtree’s December Proposal, on Branchtree’s own printed form, included a statement that:
Any alteration or deviation from above specifications involving extra costs will be executed only upon written orders and will become an extra charge over and above the estimate.
[81] On December 3, 2003, Reid accepted Branchtree’s proposal which contained these words. If Branchtree intended that bedrock removal would be an extra, his own contract stated that he would only carry out this extra work upon written orders. This is contrary to what he says his practice was. It might have been a custom in the excavating business in Lunenburg County, that bedrock was an extra (as is stated by Eugene Wentzell), but if such was so, Branchtree’s proposal form, accepted by Reid, required Branchtree to obtain written orders before it carried out this extra work. No written orders were ever requested by Branchtree or given by Reid or by anyone on behalf of Reid. In my view, by Branchtree’s December Proposal, Branchtree was not permitted to charge, nor Reid obligated to pay, for any extras, except those incurred by written orders.
[82] Nevertheless, Reid subsequently caused his agent to pay, or paid directly, invoices including extras charged by Branchtree for work under the December Proposal. Reid was not in the area until April 2004. His agent, Fred Hirtle, who professed no knowledge of the nature of excavating contracts and assumed that bedrock removal was an extra, paid Branchtree, on behalf of Reid, for this work. Reid reimbursed Hirtle. When Reid arrived in April, 2004, he was upset, but, as he testified, he felt he had no choice but to honour the payments that had been made by Hirtle on his behalf. I conclude that he effectively waived the terms of the December Proposal, and consented to the payments for extras incurred incurred to that point.
[83] With respect to the second phase, Branchtree submitted, on June 7, 2004 , a proposal to finish the groundwork (including the revisions to the groundwork noted in paragraph 25 of this decision) and landscaping, for $99,500.00 plus HST. The proposal was on Branchtree’s form (the same form as the December Proposal), and contained the clause respecting the requirement of written orders before any extras would be carried out. Reid stated that he learned his lesson the first time (failing to get a fixed cost contract and completion date) and his project was well over budget and late; I accept his evidence that, as a result, he advised Branchtree, through Beaumont, that the contract to complete the groundwork and landscaping would be for a fixed price that would include everything including bedrock. Reid, at this point acting more prudently, arranged for a written contract to be prepared on his behalf. The contract was intended to ensure that there would be no more surprises (that is, extras as had occurred in the first phase), and that Branchtree would be required to complete all of the groundwork and landscaping (phase one and two) for a total fixed price, and that the work would be completed in a timely manner.
[84] Branchtree was given the draft contract and time to review it and told to consult a lawyer if it wanted. Branchtree, through Beaumont, attended at Reid’s home a week or more later and signed the Contract.
[85] I find that Branchtree, regardless of the nature of their dealings during the first phase, knew, as the Contract clearly stated, that all of the groundwork and landscaping for the project, both Phase 1 and Phase 2, would have to be completed by September 1st, 2004, for an all inclusive fixed price of $281,000.00 pus HST.
[86] There is no basis for Branchtree understanding or assuming, after August 2, 2004, that bedrock removal would be an extra. Furthermore, if I am wrong, and it was to be an extra, there is no basis for understanding or assuming that, before it could be charged to Reid as an extra, Branchtree would need to obtain prior written authorization from Reid to incur that extra expense. I reject Beaumont’s evidence that he believed, or that he could honestly and reasonably believe, that the dealings with respect to extras between Branchtree and Reid would proceed as they had during Phase 1 under the December Proposal.
[87] In fact, Reid and Branchtree did act differently under the August 2nd, 2004, contract. Three changes were made and all three were confirmed by written change orders before the expenses were approved and incurred. While I am sceptical, it is possible that Branchtree may have been surprised to find bedrock on the site when it made the December Proposal. By June, 2004, it had invoiced Reid almost $200,000.00 on a $56,000.00 contract. The extra was because of bedrock. The Court does not accept Branchtree’s evidence that it did not know what to expect in terms of bedrock, when Branchtree delivered its June Proposal and signed Reid’s Contract on August 2, 2004. Branchtree was fully aware, or ought to have been fully aware, of the existence of bedrock, the probable extent of bedrock, and that it would be a factor in completing the groundwork and landscaping.
[88] Beginning on September 14, 2004, Reid began putting his complaints and position in writing, as well as orally. In response to one of those complaints Beaumont wrote to Reid on October 29, 2004, that “there is nothing in the contract on the original plan for...the unforeseen cliff ”. There is little that should have been unforeseen by Branchtree after June, 2004. I reject the evidence that the cliff (that is, the bedrock) was unforseen in October.
[89] In summary, I find that the Contract which incorporated Branchtree’s December and June proposals, included, as part of the contract price, the removal of any bedrock on the site, all as part of the fixed price contract of $281,000.00 plus HST. If I am wrong, the Contract, and the June 7, 2004 proposal, required Branchtree to obtain the prior written authorization of Reid before becoming entitled to payment for rock removal.
Who breached the contract - the contractor by abandoning, or the owner by refusing to pay interim claims?
[90] It is not disputed that Branchtree left the site on November 8, 2004. It is an issue as to whether its abandonment was justified because Reid, by declaring his refusal to pay any more advances to Branchtree until the job was completed, had repudiated the contract. This also requires the determination of what Branchtree was owed on November 8, 2004.
[91] On November 8, the completion date specified in the Contract (September 1st) had long past. Reid had given Branchtree several extensions - in early September two weeks to September 14th; on September 20th, to October 18th; on October 12th, a final extension to November 1st. All these extension times had passed.
[92] By putting his complaints and position in writing, Reid had given Branchtree clear and fair notice that there would be consequences for any further delay and for non-completion.
[93] The Court finds that Branchtree did not put a serious effort into completing the work after it secured the contract on August 2, 2004. I accept that Exhibit 15, Branchtree’s log records for its employees, shows that, in August, 2004, there were ten weekdays that none of its employees were on site, and an eleventh when only one was on site. I accept Mark Logan’s evidence that there were only three or four on site at any one time. These records corroborate the evidence of Reid and Logan that Branchtree did not put a serious effort into completing its Contract, and Branchtree’s delays were unreasonable and of its own making.
[94] The report and evidence of Brian Desloges showed that as of November 9, 2004, only seventy percent of the work called for in the Contract had been completed. Based on Desloges’ evidence, at that time, Branchtree was entitled to have been paid, net of HST, $206,920.00 less the 10 % mechanic’s lien holdback of $20,692,00 or, $186,228.00.
[95] As of October 12, 2004, Reid had paid to Branchtree $238,587.20 (approximately $207,000.00, net of HST), and had paid to Branchtree’s sub-contractors (Mailman and Glenstone), $26,499.67 (approximately $23,000.00 net of HST).
[96] Reid had overpaid Branchtree at this point by more than $20,000.00 directly, and more than $43,000.00 if one includes the payments to Branchtree’s sub-contractors. Even if Desloges was in error in his estimate of the state of completion, Branchtree had been paid as if the contract was about 87% complete ($295,600 X .87 - 10% = $231,000), and it was not 87% complete. Branchtree was not owed money as of November 8th.
[97] Reid explained that he paid Branchtree to keep Branchtree on the job, even though he knew he did not owe money. He was desperate to get his building open.
[98] In summary, Branchtree was not justified in abandoning the work by reason of Reid’s refusal to advance more money. He had been significantly overpaid, and in addition, was past the deadline for completion of his work.
[99] I conclude that, when Branchtree walked off the site on November 8th, it had repudiated the contract and had no justification to doing so.
[100] The circumstances in respect of this issue are similar to those in Graystone Construction Ltd. v. MacLean, 1994 Carswell NS 288 (NSSC), in which case a contractor was in error in electing to consider the owner’s actions as a repudiation of the contract when, in fact, the contractor repudiated the contract by abandoning the site. Another similar case with a similar result is Hoar v. 1290052 Ontario Ltd.
What Is A Proper Accounting Between The Parties Of The Monies Owed?
[101] With two exceptions, the plaintiff’s summary of payments made to Branchtree’s sub-contractors and suppliers, and to those who completed the work for Reid after Branchtree abandoned and repudiated the contract, are accurate and supported by the evidence. In particular, I find that,
(a) by October 15, 2004, Reid paid Branchtree twelve invoices dated between January 1, 2004 and October 12, 2004 in the amount of $238,587.20 (including HST).
(b) Mailman’s two invoices and Glenstone’s three invoices, totalling $21,999.67, all of which were in relation to work that was the responsibility of Branchtree, whose sub-contractors they were, was work under the Contract and paid before November 8th. At trial, Branchtree represented that proof of compliance with s. 14 of the Builders Lien Act was not in issue.
(c) the six invoices, in the amount of $98,809.82, listed on the plaintiff’s summary as being paid to South Shore Ready-mix, Greenway Landscaping, and Glenstone Excavation, to complete the work that Branchtree had abandoned, were both reasonable and actually incurred to complete Branchtree’s obligations under the Contract. I note that the landscaping work carried out by Greenway Landscaping (totalling $13,736.00) was less work than Branchtree was required to do; in effect, Branchtree has been let off the hook for the full cost of completing the work that it contracted to do.
[102] The two exceptions mentioned above were acknowledged by Reid or his witnesses, as to fact but not as to amount. They were:
(a) Branchtree excavated for underground lighting. That was not part of Branchtree’s contract. I credit Branchtree with $2,000.00 for this item as claimed in the defendant’s memorandum.
(b) Reid claimed that the Emco Corporation bill for piping, paid directly by Reid, was for Branchtree’s account. The evidence was that it was for the pipes that extended from North Street to the building itself (Branchtree’s responsibility),but also included pipes that were the responsibility of another contractor. I accept Beaumont’s evidence that it was liable for approximately 670 feet of the pipe at a cost of approximately $3.00 per foot. The Emco bill totalled $7,205.30. Of this I find Branchtree is liable for $2,311.50.
[103] In summary, from the plaintiff’s calculation of the accounting between the parties, which shows that Branchtree is liable to Reid for $39,898.66, I deduct $4,793.80 with respect to the Emco invoice and $2,000.00 with respect to Branchtree’s excavation for underground lighting, and find that Branchtree owes Reid $33,104.86, representing the difference between the contract price, and the final cost to Reid to complete the work Branchtree contracted to do. In addition, I allow interest at the rate charged by the Royal Bank to Reid on its credit facility as set out in Exhibit 1, Tab 40, from March 31, 2005 to the date of judgment.
What damages are payable?
[104] The plaintiff paid into court to release Branchtree’s lien, under the Builders Lien Act, $51,629.08. It borrowed that money and has been paying the Royal Bank on its credit facility interest in respect of that money. I order the money repaid out of court to Reid, and order that the defendant shall pay interest at the rate paid by the plaintiff to the Bank on its line of credit (Exhibit 1, tab 40), from the date of payment into court, until the date of repayment.
[105] Reid claims, as a additional damages, four lost rentals of one year each, for a total of $44,400.00 in rent. Reid claims to have lose at least four tenants, who were ready to move in on October 31, 2004. Reid’s memoranda cite Goldsmith on Canadian Building Contracts and Keating on Building Contracts (7th Edition, Sweet and Maxwell, London, 2001) as authority for the proposition that where a contractor builds a facility and is aware that it is probable that there will be a loss of rent if he does not complete as he contracts to do, that he is liable for such loss. The plaintiff also cites Lalonde v. Zuccarini Construction (Ottawa) Ltd, 1985 Carswell Ont 957 (OSC), at paragraph 120 for the same proposition. The previously cited case, Hoar v. 1290052 Ontario Ltd, is to the same effect.
[106] There was evidence that some tenants had signed agreements to lease from Reid and that he lost those tenants as a result of the building not being available when the tenants, who had given notice to their prior landlords, had to find other accommodation. There was evidence of an occupancy permit issued for six units on November 25, 2004 and a permit for full occupancy on August 26, 2005.
[107] There was no evidence of when, and if, the building ever achieved full occupancy. There was evidence that some other contractors were late in completing their work.
[108] The onus is on the plaintiff to prove its damages on a reasonable preponderance of credible evidence. When the evidence is within its control, it has an evidentary burden of producing that evidence.
[109] It is not necessary that damages be proved with mathematical precision. On the other hand, the Court must not be left to speculate respecting when, and for how long, Reid was deprived of occupancy of all or part of the building.
[110] I accept that Branchtree breached its agreement by failing to work diligently towards completing its work, and that the abandonment of the project more than two month after the September 1st deadline in the Contract , and the various extensions to November 1st,did lead to the loss of some tenants, but for how long is not clear. Whether they were replaced or not replaced and when is not clear.
[111] The Court is obligated to make an assessment of damages based on the information before it. The Court is satisfied there was a loss of rental income. The Court is not satisfied that the extent of it was for four tenants for one year. The Court must assess damages based on the evidence before it and I award under this head of damages, $20,000.00, as the Court’s best estimate as to what likely was lost rental attributable to the defendant’s delays. Pre-judgment interest on this amount, at the simple rate of five percent per annum from January 1, 2005 to the date of judgment, is awarded.
COSTS
[112] This action was commenced after September 29, 2004 and therefore the “new” Costs and Fees Tariff applies. No argument is made that the basic scale should not be applied in these circumstances.
[113] The return to the plaintiff of the payment made into Court does not figure into the Court’s calculation of the quantum of the claim. This payment was simple security for the defendant’s lien claim.
[114] The damages awarded are approximately $53,000.00, and interest (including with respect to the payment made into court). I determine that the claim falls within the $65,000.00 to $90,000.00 bracket, for which the basic Scale 2 fees are $9,750.00. I fix the trial length at four and one-half days; the plaintiff is entitled to $2,000.00 per day, making an additional $9,000.00. The total taxed fees are $18,750.00. In addition, the plaintiff shall have its disbursements as agreed between the parties, or failing agreement, as taxed.
J.