SCCH 334239
IN THE SMALL CLAIMS COURT OF NOVA SCOTIA
Cite as: Econo Renovations Ltd. v. Reliable Rooter Ltd., 2011 NSSM 16
Between:
Econo Renovations Limited
CLAIMANT
- and –
DEFENDANT
Reliable Rooter Limited
DECISION AND ORDER
Adjudicator:David T.R. Parker
Heard: January 10, 2011 and January 11, 2011
Decision: March 21, 2011
Counsel: The Claimant was represented by James D McNeil
The Defendant was represented by Douglas J Livingston
This case involves a contract between the parties for the refurbishing of 131 bathrooms of various locations in The Halifax Regional Municipality ["HRM"]. The Claimant did a number of renovations and then the contract was canceled. This claim relates to the renovations that were completed up until the date the contract was canceled. The claim does not relate to anything beyond the time the Claimant was on the worksite.
Pleadings:
The Claim:
The Claimant states the following in its pleadings:
The Claimant entered into a contract with the Defendant for the provision of services to refurbish 131 bathrooms at various locations located throughout HRM.
The Claimant stated that the scope of the work included; demolition of the vanities, toilets, drywall and tile on tub walls; installation of water resistant drywall and fire tape; the supply and installation of vinyl flooring, baseboards, ceiling exhaust fans, light bar fixtures, towel racks, 24 inch vanities and tops. The work was to be performed at a labor rate of $75 per hour for mold and electrical and $60 per hour for carpentry.
The Claimant stated that the original quote for the contract work was $3500.00 per unit. The Claimant stated that it began work on the project on February 16, 2010. The Claimant also stated that the original quote was lowered to $3200.00 on February 19th 2010 and a contract reflecting that change was executed on even date. The Claimant stated that subsequent to the submission of the first set of invoices to the Defendant the quote was reassessed and raised back to the original cost of $3500.00 per unit.
The Claimant stated that the work progressed slower than expected, with a variety of extra costs being incurred by the Claimant. The Claimant alleged that the delays and many of the extra costs were the sole fault of the Defendant’s plumber. The Claimant goes on to state that the Defendant’s employees ended up requiring the Claimant to perform work outside the scope the contract and that this work included but was not limited to the reinstallation and repair of shower surrounds.
The Claimant stated that on March 30, 2010 the Defendant terminated the contract. The Claimant stated that as of that date it had completed the work of approximately 20 units at Seaview location, four of which were at a cost of $3500 per unit plus tax and 16 at a cost of $3200 per unit plus tax and completed the work of approximately 6 units at the Charles Court location at a cost of $3500 plus tax per unit and partially completed the work of two units at the same location which were invoiced at a unit price of $2200 plus tax and $2800.00 plus tax respectively.
The Claimant stated that it did extra work outside the scope of the work contracted for which included but was not limited to removal, supply and installation of sub-flooring; supply and installation of shower rods, electrical baseboards, sheathing, installation and vapor barriers; installation of window trim; removal of electrical wall switches; removal of moldy drywall; door re-trimming; replacement of rotten sheathing and door jams; mud coating, taping and priming; repair and installation of shower surrounds; other additional work not previously mentioned. The Claimant stated that the total cost for the extra work approximated $15,445.00 plus tax and has been invoiced to the Defendant.
The Claimant stated that the balance owing including the cost for the extra work totaled $123,962.54 as of April 1, 2010 and invoices were submitted to the Defendant. To date [being August 10, 2010] there remains a balance of $14,993.73 in addition to $6081.36 for restocking and/or nonrefundable material charges and that these amounts remain due and owing to the Claimant by the Defendant.
The Claimant also claims for $542.40 relating to an emergency hookup of the heating system for an individual named Sokolowski and that it invoiced the Defendant for this particular job.
The Claimant therefore claims $14,993.73 for the balance owing on project plus $6081.36 restocking fees and/or costs incurred for nonrefundable materials plus payment on the Sokolowski job and $100.00 general damages and costs.
The Defence:
The Defendant acknowledged that it was the general contractor for the project and the Claimant was a subcontractor and Eagle Project Management was the Project Manager for the property owner being the Province of Nova Scotia.
The Defendant stated that the Claimant refused to take directions from the Defendant and fell behind in the work, used foul language, left deficiencies and caused the work progress to fall behind. As a result of the Project Manager receiving complaints about the Defendant and as a result of the Claimant contacting the province in an attempt to have the Defendant replaced as the general contractor, the Defendant dismissed the Claimant and arrange for another subcontractor to rectify the Claimant's deficiencies. The Defendant stated that it offered to purchase any materials from the Claimant left on site and the Claimant refused this offer.
The Defendant stated that the Claimant submitted invoices which the Defendant in turn provided to the Project Manager for review as required.
The Defendant stated that the Claimant directly contacted the province seeking payment from it rather than seeking payment from the Defendant.
The Defendant stated that the Project Manager reviewed the Claimant's invoices, found some to be valid, some to be excessive, made adjustments for deficiencies and recommended a figure for payment by the province for the adjusted balance of the Defendant's account in the amount of $65,316.88.
A cheque was issued through the province’s solicitors in the amount of $65,316.88 payable jointly to the Claimant and the Defendant and provided to them on June 17, 2010. The Defendant stated that the Claimant presented the cheque to the Defendant for endorsement which the Defendant reluctantly did[but only in exchange for a payment in full by the Claimant to the Defendant for the Sokolowski job] and the Claimant thereby receive payment from the province in full. The Defendant stated that the Claimant chose to submit its claim for payment directly to the province, the province’s Project Manager evaluated the claim and the Claimant received and accepted such payment in full from the province and the Defendant has no liability to the Claimant.
The Defendant stated that in addition and in the alternative the Claimant's claim for $6081.36 for materials and restocking fees resulted solely from the Claimant's refusal to allow the Defendant to purchase same thereby forcing the Defendant to incur costs of purchasing from a third-party. The Defendant stated that the Claimant refused and failed to mitigate its expenses.
The Defendant stated that with respect to the Sokolowski job at no time did the Claimant report this matter to the Defendant or asked the Defendant to do anything nor did it invoice the Defendant.
Counterclaim of the Defendant:
The Defendant and Claimant by way of counterclaim alleges that the Claimant and Defendant by way of counterclaim breached the contract as articulated in the pleadings and as a result the Defendant and Claimant by counterclaim incurred extra cash expenses in the amount of $7195.38 related to deficiencies in units 5817, 5818, 2420, 2536, 2528, and 2522.
The Defendant also claimed additional administrative costs to deal with complaints about the Claimant, to find a new subcontractor and to arrange for new materials for total amount of $3750.00. The Defendant also claims for general damages in the amount of $100.00.
Defence to Counterclaim:
The Claimant/Defendant by way of counterclaim denied each allegation contained in the counterclaim and stated they were in any event excessive and unsupportable.
Facts:
The Province of Nova Scotia is the owner of certain properties located within HRM.
Eagle Project Management was the Project Manager for the property owner being the Province of Nova Scotia.
Certain refurbishing to the properties was to be done under the overall supervision of Eagle Project Management and the Project Manager for that entity was Peter Smith.
The Defendant was the general contractor for the refurbishing project and as it’s owner did work with the Claimant in the past, he invited the Claimant to visit the site which the Claimant did on two occasions after which the Claimant supplied a quote on January 20, 2010 which the Defendant gave to the Project Manager Peter Smith.
The quote was directed to Joe MacLeod of the Defendant company and the quote enumerated the scope of the work which included demo drywall and tile on top walls; demo vanity and toilets; plumber to disconnect and reinstall new; install water resistant drywall and fire tape; supply and install vinyl flooring; supply and install baseboard; supply and install the following fixtures – Ceiling exhaust fan – light bar fixture – towel rack – 24 inch vanity and top. Under the heading scope of work the quote stated – labor rate for
_ mold $75/hr
_ electrical $75/hr
_ carpentry $60/hr
The quote then stated:
Cost per unit $3500 + HST
On February 19, 2010 a contract was agreed to between the parties and the relevant portions for the purpose of this decision stated:
"We hereby submit specifications and estimates for: refurbishment of 131 bathrooms as per the details of our quote price revision as per the meeting between Peter Briand and Joe MacLeod February 19, 2010.
We hereby propose to furnish material and labor in accordance with the above specifications for the sum of $3200 per unit + HST Total Contract $473,696.00
Payments to be made as follows: Progress billing.
This contract relates to all items included in the written quote provided. All material is guaranteed to be as specified. All work to be completed according to building code practices and details of our quote. 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 estimate¼.”
The Claimant subsequently went to the Defendant and it was agreed to change the amount per unit back to $3500.00. There was no new quote for this just a verbal agreement between the parties.
On March 30, 2010 the Claimant received a letter from the Defendant terminating the contract. The letter was from the Defendant’s solicitor and stated in part the following:
"I am instructed to advise you that due to inadequate, untimely performance and unbu that sinesslike practices on the part of your company and its representatives, Reliable Rooter Limited [the Defendant] hereby gives notice that your services will no longer be required and are terminated effective as of 5 PM on Tuesday, March 30, 2010.
Reliable Rooter Limited also advises that you will be paid in accordance with the contract for services and materials properly provided to that time.
Reliable Rooter Limited also advises that you will [be] reimbursed in accordance with the contract for any materials which you have now already purchased for the project provided such materials are on site in good condition on or before Thursday, April 1, 2010, 4 PM."
Difficulties arose in what was owed to the Claimant. After the contract was terminated Peter Smith, the Project Manager, played a role in trying to resolve the difficulties between the parties.
Peter Smith tried to resolve, what was completed by the Claimant, what was left on site and how much was owed to each of the parties.
Peter Smith did five different assessments to determine what was owed to the Claimant. Mr. Smith reviewed the Claimant's invoices, the Defendant's invoices and the extras.
Warren Olsen, coordinator for projects in difficulty housing services with the government became involved, intervened and e-mailed the Project Manager, Peter Smith in which he said the following:
"Also, I am not paying Econo [the Claimant] direct. I am however issuing a joint check to both companies. This is the only way that we can ensure that the problems between Econo and Reliable [the Defendant] as it relates to NEU [the project] are settled."
The cheque in the amount of $65,316.80 was subsequently issued by the government jointly payable to the Claimant and Defendant herein and delivered by the government's lawyers, McInnes Cooper, to the Claimant.
Analysis:
The Defendant acknowledged that all of the invoices submitted by the Claimant related to the main body of the work, excluding extras, were properly submitted.
These would include the following:
Seaview – Gerrish Street
Unit 2388/invoice 100926 – $3955.00
unit 2390/invoice 100928 – $3955.00
unit 2394/invoice 100906 – $3616.00
unit 2396/invoice 100904 – $3616.00
unit 2401/invoice 100900 – $3616.00
unit 2405/invoice 100933 – $3955.00
unit 2406/invoice 100902 – $3616.00
unit 2408/invoice 100930 – $3955.00
unit 2410/invoice 100898 – $3616.00
unit 2412/invoice 100896 – $3616.00
unit 2413/invoice 100694 – $3616.00
unit 2414/invoice 100892 – $3616.00
unit 2415/invoice 100890 – $3616.00
unit 2417/invoice 100888 – $3616.00
unit 2418/invoice 100918 – $3616.00
unit 2420/invoice 100916 – $3616.00
unit 2422/invoice 100914 – $3616.00
unit 2423/invoice 100912 – $3616.00
unit 2425/invoice 100910 – $3616.00
unit 2427/invoice 100908 – $3616.00
Charles Court – Woods Avenue
unit 2427/invoice 100951 – $3955.00
unit 2522/invoice 100953 – $2486.00
unit 2528/invoice 100949 – $3164.00
unit 2534/invoice 100947 – $3955.00
unit 2536/invoice 100945 – $3955.00
unit 2538/invoice 100943 – $3955.00
unit 2542/invoice 100939 – $3955.00
unit 2550/invoice 100937 – $3955.00
The extras were in contention. The extras raise some interesting issues for the court. This project was a major undertaking and the overall Project Manager Peter Smith drew up the original specifications for the tendering of the contract. These specifications were provided to the Defendant and the Defendant provided them to the Claimant. The Claimant was a subcontractor to the Defendant the general contractor who was awarded the contract. Normally any extras are approved by the general contractor however in this case they apparently were discussed with and approved by the Project Manager, Peter Smith. This in itself was a cause for inevitable problems as a contract under which the Claimant was suing for extras was with the Defendant. The second problem on the continuum is the Claimant only provided invoices of extras and did not show with any exactitude why each item was an extra that is how the costs of those extras was derived except in general commenting terms. The third problem is the Defendant is a plumber by trade and not a carpenter. The extra items are related to a carpenter's trade. The fourth problem is that the items in contention by the Defendant are generally those requirements that were to be provided on the main contract between the parties. The fifth problem is that part of the extra items were agreed to by the Defendant and part were not; for example, when an extra was written down "install two layers of drywall" the Defendant agreed that the second layer was an extra and the first layer of drywall was part of the main contract. The cost associated with two layers was $100.00 the question is was each wall of equal value. The sixth problem is the Defendant acknowledged that certain extras were appropriate and then he agreed to an extra $300 per unit in the contract to eliminate the extras that were being charged and then on cross examination agreed that some of the extras were appropriate. Other factors which came into play is the evidence provided to the court was a document prepared by Peter Smith where he determines that $8027.30 are extras invoiced which were a part of the original contract. Mr. Smith provided no explanation.
The Claimant contends that the original quote which was incorporated into the more formal contract [exhibits C – 1 and C-2 respectively] articulate the labor rate costs for mold removal electrical work and carpentry work. The Defendant’s Counsel contends that these are not extra rates but merely part of the contract which totals a cost base of $3500.00 plus HST. I accept the Claimant's position that these labor costs were there to show the charges if there was extra work required. Materials classified as extras would typically not be noted as their costs could not be foreseen but labor costs would be noted. Joe MacLeod said he did not authorize extras. He said "it looks like Peter Smith and Econo determine what an acceptable extra was. The extras don't go through me they go through Peter Smith." Mr. MacLeod said "I left it up to Peter Smith to deal with extras, they know what is not in the scope they knew carpentry."
Peter Smith's testimony was general not specific in regards to extras he authorized, accepted or rejected. He did say he reviewed all invoices of both parties and that he did five different assessments to determine what was owed to Econo. This was captured in exhibits 12 and 13. These exhibits have a notation of $8273.30 worth of extras that were considered part of the original contract and should not be considered part of the original scope of work. There was no analysis of the invoices by Mr. Smith at least in this court case and therefore it is difficult to determine how he arrived at this amount. The Defendant’s owner Joe MacLeod suggested in his testimony that the Claimant was charging what was already in the contract. Exhibit C 18 is an accounting by Peter Smith of extras that should not be included as extras. This was not explained by Mr. Smith in his testimony. That is to say he did not go through the extras on the invoices as related to the contract which is encompassed in the quote. The Claimant's testimony and a notation at the bottom of exhibit C 18 stated that the items deemed by Mr. Smith as not extras in the invoices presented were all part of the original tender. The original specifications (tender) [exhibit C 14] were presented to the Defendant by Mr. Smith. Peter Briand the owner of the Claimant Company met with Joe MacLeod prior to submitting his quote. The quote (exhibit C1) did not contain everything that was contained in the original specifications [exhibit C 14]. This may have been the problem and probably should have been dealt with by the Defendant and possibly the Project Manager. This would have allowed a clear understanding of what was within the scope of everyone's responsibility at the very beginning. Peter Smith however was given the quote by the Defendant and cannot say he was not aware of the work the Claimant was quoting on and whether it covered the scope as envisaged in the original specification. I could take Mr. Smith's document at face value but it would assume that Peter Smith is qualified to make this analysis and further I have no information on how the analysis was made. What the court does have is the analysis of the Defendant who was examined and cross-examined on each invoice as it relates to extras. I also have some testimony from the Claimant owner Peter Briand. Mr. Briand said the scope of the work changed, it required more framing and drywall. Both Briand and MacLeod said they would agree to go back to $3500.00 per unit. Mr. MacLeod said he hoped that would take care of the extras and Mr. Briand said “even though we went back to $3500.00 from $3200.00 "we were still doing more".
While Mr. MacLeod said in his testimony that the Claimant is already charging for those things already in the contract, the best evidence before the court of what is an extra and what is not an extra came out of the direct and cross-examination of Mr. MacLeod in reviewing each the invoices and this the court prefers over the list provided by Mr. Smith [exhibit C 18]
I have reviewed the testimony provided by the Defendant as to what he considered and did not consider an extra and the findings are as follows with respect to matters that should not be considered extras and their costs.
Invoice 100927 drywall repairs $150.00 plus HST
Invoice 100907 removal of molding drywall $100.00 plus HST
Invoice 100905 removal of drywall $100.00 plus HST
tape complete unit(the cloud said "it is already in
the contract. Even if he had an agreement with
Peter Smith there should have been a reduction"
the charge was $281.00 and a $100 reduction
would be in the court’s reasonable
$100.00 plus HST
invoice 100893 and 100901 the Defendant had
"no problem with all the items noted as extras"
to the contract.
Invoice 100932 removal of drywall $100.00 plus HST
tape complete unit $100.00 plus HST
Invoice 100903 removal of molding drywall $75.00 plus HST
Invoice 100931 drywall to firewall repairs $120.00 plus HST
patch and repair drywall $50.00 plus HST
Invoice 100899 remove molding drywall and insulation $75.00 plus HST
replace drywall and tape $92.50 plus HST
Invoice 100897 removal of molding drywall/vapor
barrier/insulation $125.00 plus HST
replace drywall and tape $175.00 plus HST
Invoice 100895 replace drywall and tape $75.00 plus HST
Invoice 100891 additional construction debris
due to extra work $265.00 plus HST
invoice That 100889 remove dried wall on downstairs
ceiling $75.00 plus HST
install new drywall and tape $200.00 plus HST
Invoice That 100919 removal
of molding drywall $75.00 plus HST
removal of drywall and tape $120.00 plus HST
Invoice That 100917 removal of insulation/molding
drywall $75.00 plus HST
Invoice 100915 removal of molding drywall in insulation $75.00 plus HST
Invoice 100913 removal of molding drywall/insulation $100 plus HST
spot prime $40 plus HST
Invoice 100911 removal of two layers
of molding drywall installation(fire rating) $100.00 plus HST
install two layers of drywall, tape $74.00 plus HST
Invoice 100952 extra taping/drywall around surround $100.00 plus HST
Invoice 100954 double layer of 5/8 drywall $40.00 plus HST
Invoice 100950 removal of molding drywall insulation $170.00 plus HST
one layer of drywall as extra only $50.00 plus HST
Invoice 100948 removal of molding drywall $85.00 plus HST
two coats of mud $50.00 plus HST
spot prime $40.00 plus HST
Invoice 100946 only one layer of drywall as extra $75.00 plus HST
two coats of mud $50.00 plus HST
spot prime $40.00 plus HST
Invoice 100944 remove molding drywall ½
around vanity $150.00 plus HST
apply two coats of mud $50.00 plus HST
spot prime $40.00 plus HST
Invoice 100942 removal of two layers of
drywall along vanity wall $85.00 plus HST
supply and install new drywall $125.00 plus HST
apply two coats of mud $50.00 plus HST
spot prime $40.00 plus HST
Invoice 100940 frame out tub for plumber $50.00 plus HST
hung 5/8 drywall for full wall $125.00 plus HST
Hung 1/2 drywall full $75.00 plus HST
2 coats of mud $40.00 plus HST
Invoice 10093858 drywall removal and repair $175.00 plus HST
two coats of mud $40.00 plus HST
primed $50.00 plus HST
$4391.50 Total
Mr. Livingstone, Counsel for the Defendant made a number of well reasoned arguments not allowing for the extras. The first argument was that the contract between the parties clearly stated "any alterations or deviation from the specifications involving extra costs will be executed only upon written orders, and will become an extra charge over and above the estimate." In this particular case there was nothing put down in writing prior to the extra being performed and its costs. Both parties ignored that part of the contract. This may be due to the fact that the contract went from $3500.00 to $3200.00 and then back up to $3500.00 with the Defendants hoping that the extra $300 would cover the extras. When the head invoices were submitted, the Defendant was well aware that there were extras and never said these extras are not approved. Further the Defendant went along with the fact that Peter Smith and the Claimant were dealing with the extras as the project continued. At this late stage the Defendant would be estopped from claiming the extras should not be paid for because the work authorized was not in writing. This is also not an unusual happening in a contract where people are working closely together and time is of the essence.
The second argument was that the acceptance of $65,316.88 settled the matter. Counsel raised the principle of accord and satisfaction by accepting the monies and that one should put this principle within the scope and ambit of the e-mails (exhibits D6 and D8).
Counsel for the Claimant said there never was satisfaction and accord.
The case which dealt very thoroughly with this principle was Bank of Nova Scotia v. MacLellan [1977] N.S.J. No. 7, 25 N.S.R. (2d) 185 wherein the following comments were made
" This argument involves the principle of satisfaction and accord, which is described in Cheshire and Fifoot's Law of Contract (8th Ed.), p. 537:
_ "The agreement, if supported by the necessary consideration, is called accord and satisfaction. This has been judicially defined as follows:
_ 'Accord and satisfaction is the purchase of a release from an obligation, whether arising under contract or tort, by means of any valuable consideration, not being the actual performance of the obligation itself. The accord is the agreement by which the obligation is discharged. The satisfaction is the consideration which makes the agreement operative.'"
20 Whether the consideration must pass at the time of agreement or may be executory is discussed at p. 538:
_ "The essential fact is, then, that an accord without satisfaction is ineffective. This statement, however, is ambiguous. Is the discharge effective as soon as the debtor has promised to give the satisfaction, or only when the promise has been implemented? In other words, is it sufficient if the consideration is executory? The correct answer is given by SCRUTTON, L.J., in these words:
_ "Formerly it was necessary that the consideration should be executed: 'I release you from your obligation in consideration of 50 pounds now paid by you to me.' Later it was conceded that the consideration might be executory: 'I release you from your obligation in consideration of your promise to pay me 50 pounds and give me a letter of withdrawal.' The consideration on each side might be an executory promise, the two mutual promises making an agreement enforceable in law, a contract. Comyns put it in his Digest, and the passage was approved by PARKE, B., in Good v. Cheesman and by the Court of King's Bench in Cartwright v. Cooke: 'An accord, with mutual promises to perform, is good, though the thing be not performed at the time of action; for the party has a remedy to compel the performance,' that is to say, a cross-action on the contract of accord."
_ The modern rule is, then, that if what the creditor has accepted in satisfaction is merely his debtor's promise to give consideration, and not the performance of that promise, the original cause of action is discharged from the date when the agreement is made.
_ This, however, raises a question of construction in each case, for it has to be decided as a fact whether it was the making of the promise itself or the performance of the promise that the creditor consented to take by way of satisfaction.
_ Suppose for instance, that a buyer is unable to pay 50 pounds which is due for goods delivered and that the seller agrees to discharge him from his obligation of immediate payment in consideration of receiving a bill of exchange from a third party, X, for 55 pounds payable four months hence.
_ If the seller were to sue for the 50 pounds before receipt of the bill of exchange, the question would arise whether he had committed a breach of the agreement. This would depend upon whether the agreement constituted a good accord and satisfaction, and this in turn would depend upon the true bargain between the parties. Did they mean that the discharge should be complete when X promised to give the bill or only when he actually gave it?
_ The question of construction that arises in such a case is well illustrated by British Russian Gazette, Ltd. v. Associated Newspapers, Ltd., where the facts relevant to the present matter were as follows:
_ Mr. Talbot agreed to compromise two actions of libel, which had been commenced by him and by the British Russian Gazette, in respect of certain articles in the Daily Mail. His promise was expressed in a letter couched in these terms: "I accept the sum of one thousand guineas on account of costs and expenses in full discharge and settlement of my claims ... and I will forthwith instruct my solicitors to serve notice of discontinuance; or to take other steps ... to end the proceedings now pending." Before payment of the thousand guineas had been made, Talbot disregarded this compromise and proceeded with the action.
_ If this letter meant that Talbot agreed to discharge the Defendants from their obligation in consideration of their promise to make the payment, his continuance of the libel action constituted a breach of a good accord and satisfaction. His argument, of course, was that there was no binding discharge until actual payment, but this did not prevail with the Court of Appeal. It was held that the letter recorded an agreement in which the consideration was a promise for a promise: "In consideration of your promise to pay me a thousand guineas, I promise to discontinue proceedings." The Defendants were, therefore, entitled to enforce the accord by way of counterclaim."
21 When I look at the dealings between Mr. Oliver and the various officials of the bank as a whole, I am satisfied that there was some consideration for the compromise agreement of settlement. In Mr. Drapeau's original letter in which he indicated that the bank was prepared to discuss settlement, he made it clear that such a settlement would envisage their continued contact with the Defendant from time to time in an attempt to locate her ex-husband for the purpose of recovering the balance due under the note. Mr. Oliver's letter of April 25, 1975, provided information on this subject, and it is apparent that the parties were assuming that the Defendant undertook this obligation as well as the payment of twenty-five per cent of the debt in exchange for a release of liability. When the bank official communicated the acceptance of the settlement to Mr. Oliver, it was on the understanding that Linda MacLellan's co-operation would be forthcoming, and, in my opinion, this amounted to the exchange of a promise for a promise, which is sufficient consideration for the agreement to accept twenty-five per cent of the debt in satisfaction of the whole.
The Claimant's never agreed that the payment of $65,316.88 by the government was full payment and that the Defendant's obligation is discharged. The Defendant suggests that you have to take the acceptance of the $65,316.88 cheque as a settlement within the context of the e-mails as provided to the court.
It is however necessary to take it within the context of the evidence as a whole. While the owner (the Province) issued a joint cheque payable to both parties saying "this is the only way we can ensure that the problems between Econo and Reliable, as it relates to NEU are settled." This was an e-mail directed to Peter Smith. The fact that a third-party believes the matter is settled does not mean that the matter is settled. Peter Smith said in his testimony "after termination I played a role to resolve it. We had to resolve; what was completed, what was left on site and how much was owed on each contract. We an did assessment on the project and for some reason Mr. Olson decided to bypass us and Mr. Olson did this on his own." He also stated he never passed on invoices to Olson. "Olson cut me out of the loop I was not aware what was outstanding to Econo. Mr. Olson did this on his own."
There is no evidence before me that the Claimant made a promise to forgo any claimant the Claimant might have against Defendant and the government for payment.
The total billed to the Defendant was $128,539.05. After removing an amount for unit 2427 which was double billed there remained the balance owing on the project of $123,962.54. This amount included an amount for extras. It is my view that the Defendant gave an honest and accurate account of what things were extras and should not have been billed as they were part of the original contract between the Defendant and the Claimant. That amount came to $4241.50 plus HST of 13% or $551.39 for a total of $4792.89. I would deduct that from the balance owing on the project that is $123,962.54- $4241.50 equaling $119,169.65. From that amount the Claimant received a cheque of $30,000.00 and a cheque for $65,316.88 also there was credits for teak tree invoice of $10,650.25 and repair bills for three of the units in the amount of $797.28.
The other matters outstanding were the Monk construction invoice with respect to the three units Monk were called in to finish which the Claimant did not finish. The invoice from Monk Renovations & Painting referred to unit 2536, 2528 and 2522 and gives a global amount of $3720.26. It does not break down the cost amount for each unit but it does break down what it completed for each unit. Reflecting back on invoices of the Claimant for unit 2536 there were two invoices, one invoice for $3500.00 being invoice 100945 and one invoice for extras in the amount of $621.50 and being invoice 100946. These invoices would indicate that the job was completed with respect to unit 2536 and there are some common items on both the Monk invoice and the Claimant's invoice. Unit 2528 indicates the amount of $2800.00 and being invoice number 100949 as well there is a invoice for extras in the amount of $983.10 and being invoice 100950. Unit 2522 indicates the amount of $2200.00 as represented in invoice 100953 and in addition that unit has invoice for extras in the amount of $485.90 and being invoice number 100954. The last two units do not seem to have any commonality with the invoiced items of Monk. An e-mail sent to Peter Smith by the Claimant stated "Peter, we actually billed for 9 units at Charles Court, three of which were partially done (and we only billed for what was done). How can you deduct for work done by Monk when we did not bill for what we didn't do and you did not include what was done in the amount owing to us." Assuming the base cost for each unit is $3500.00 then the total cost for the three units would normally be $10,500.00. In this case $8500.00 was billed for those three units leaving a difference of $2000 to be completed and in this case representing the two units which were not completed. Monk’s invoice came to $3720.26 notwithstanding it was not broken down with respect to each unit the difference between the amount not completed that is $2000.00 and the amount charged by Monk of $3720.26 would indicate that Monk had to do $1720.26 worth of work which was billed for but not completed by the Claimant. HST of $223.63 would attach to this for total amount of $1943.89. The Claimant however arrived at a larger amount that is $2203.90 in his estimate and I shall accept that as a more accurate amount and which I shall deduct from the amount owed to the Claimant.
With respect to the restocking and non returnable materials the Claimant is seeking $6081.36. The Defendant argues that this amount should not be paid as the Claimant did not mitigate it's losses with respect to non-returnable items. The Defendant refers to correspondence sent to the Claimant upon termination the contract wherein it said the Defendant would pay the Claimant for services and materials provided and would reimbursed in accordance with the contract for any materials for which it has already purchased for the project. The Claimant said that it returned the items to the store where they were purchased and did not get reimbursed for them from the store. In the Claimant owner’s testimony he commented, ¼why would he give these items to the Defendant when the Defendant was not paying for work already done.
I accept the argument that the Claimant certainly could have mitigated its loss because the materials involved being, shower rods, toilet roll holders and tower racks, could all be used in the project. However because the project was terminated by the Defendant and there is no reasonable explanation for the termination, the restocking charges would be appropriately awarded due to the termination and that amounts to $861.76 plus HST of $112.02 or $973.78 total. I accept this amount as the restocking charge amount, notwithstanding there were no invoices to support the assertions of the Claimant. The 10% restocking charge though is well within the range charged in the industry.
The last item before me involves the Sokolowski job and that appears to be a job which was taken on by the Claimant on its own and should not be something the Defendant pays as it was not involved.
Therefore based on my analysis from the evidence provided the accounting would be as follows:
$123,962.54 work completed and extras billed
-$4391.50 extras that should not have been billed
-$30,000.00 paid to Claimant
-$65,316.88 paid to the Claimant
-$10,650.25 teak tree invoices paid by Defendant
-$797.78 repair bills on three units
-$2203.90 Monk construction reimbursement
+$973.78 restocking charges
$11,576.01
with respect to the counterclaim the repair bills on three units being claimed the amount of $797.78 are accounted for above. The bill of Monk Renovations & Painting has also been dealt with and allowed in the amount of $2203.90 and the additional materials have already been paid. There is no basis or supporting documentation in any event for the additional parts the counterclaim involving Joseph MacLeod's time, Peter Thoms time or idle time by plumber on site.
IT IS THEREFORE ORDERED THAT the Defendant pay the Claimant the following sums:
$11,576.01
$ 179.36 court costs
$11,755.37
Further It Is Ordered that the counterclaim be dismissed.