Marble & Granite Imports Ltd. (Plutonic Marble & Granite) v Jahanroshan, 2012 ABQB 706

Court of Queen ’ s Bench of Alberta Citation: Marble & Granite Imports Ltd. (Plutonic Marble & Granite) v Jahanroshan, 2012 ABQB 706 Date: 20121119 Docket: 1203 04061 Registry: Edmonton Between: Marble & Granite Imports Ltd. operating as Plutonic Marble & Granite and Nick Trang Appellants - and - Jabbar Jahanroshan Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Robert A. Graesser _______________________________________________________ Appeal from the Oral Decision by The Honourable Judge P.M. Caffaro on February 14, 2012 Docket: P1190301470 Introduction

[ 1 ] This is an appeal by Marble & Granite Imports. Ltd. and Nick Trang from the decision of Caffaro, PCJ. After trial, Judge Caffaro granted Jabbar Jahanroshan judgment in the amount of $14,560 against the defendants (Appellants). Mr. Jahanroshan had claimed $18,560 but his claim was reduced on account of remediation work which Judge Caffaro assessed at $4,000. [ 2 ] The Appellants appeal on the basis that judgment should not have been granted in favour of Mr. Jahanroshan as the invoices to the Appellants were issued by Pars Design Millwork Ltd. ("Pars"), a company owned and controlled by Mr. Jahanroshan.

During argument it was also clear that the Appellants were concerned about the amount of the judgment against them. Background [ 3 ] In the spring of 2010, Mr. Jahanroshan or Pars were hired by the Appellants to supply and install millwork for a new restaurant being constructed by the Appellants, the Buddha Room. There was no written contract between the parties. The paperwork is very scant. [ 4 ] Designs were provided to Mr. Jahanroshan by Tri-Stad Designs, and work was performed at the restaurant.

The Appellants paid Pars $9,500.00 on account of the work. [ 5 ] On July 30, 2010, Pars invoiced Budha (sic) Restaurant $7,560.00 for work related to the bulkhead in the restaurant. The invoice acknowledges a $3,000.00 deposit having been paid. On August 30, 2010, Pars invoiced “ Budha Restaurant ” $11,550.00 for the supply and installation of the bar and finishing a wall panel. [ 6 ] The Appellants counterclaimed for $21,894.47 on account of alleged deficiencies in the work, being the amount paid to Pars of $9,500.00 and $12,394.00 paid to various other contractors or trades.

The $12,394.00 was supported by invoices. [ 7 ] At the trial, Mr. Jahanroshan testified. He stated that he invoiced the work through his company Pars because the Appellants only wanted to write cheques to a company. He considered that he was the one who had the contract for the work, and the use of the company for payment purposes was for the Appellants ’ convenience. No explanation was offered as to why Mr. Jahanroshan sued personally and not the corporate entity that invoiced for the work. [ 8 ] When Mr.

Jahanroshan was offered the opportunity to amend his claim to include Pars as a plaintiff, he indicated to Judge Caffaro that he wasn't sure about whether he wanted to do that. The issue was not revisited before judgment was given in his favour. [ 9 ] Mr. Jahanroshan claimed that the work performed was worth in excess of $50,000.00 and that the Appellants had received a great deal from him. He disputed liability for any of the alleged deficiencies. At the end of his evidence in direct, he stated "This is job I did over $40,000. I did for almost about $25,000. He paid me $9,000". [ 10 ] Mr.

Trang testified for the Appellants. He stated that his company Marble & Granite Imports Ltd. was the general contractor for the restaurant and that he did not own the restaurant. He had previously supplied a countertop to Mr. Jahanroshan, and had a discussion about Mr. Jahanroshan doing some work for his company. When asked who he contracted with, Mr. Trang stated “ I talk to him but he have to give me the company ” . [ 11 ] According to Mr. Trang, the work was for the bar, the wall panel and the bulkhead, for a total of $17,000.00.

[12] He paid $9,500.00 for the work, and paid $12,394.47 to finish the work that was to be performed by Pars and to correctdeficiencies. [13] The Appellants also called Christopher William Odegard as a witness to support their counterclaim. Mr. Odegard, a plumber,performed plumbing work for the restaurant and at some stage took over as general foreman for the job. He testified that Mr.Jahanroshan's job was to put up paneling (a feature wall), build the bar and put up decorative beams. He described the deficiencies anddescribed the quality of Mr.

Jahanroshan's work as "very bad", "quality-wise about 40 to 50 percent quality". [14] Mr. Jahanroshan was not represented by counsel, and had difficulty presenting his case in an organized manner. He did noteffectively cross-examine either of the Appellants' witnesses as to the scope of his work, or the extent of the claimed deficiencies. [15] Judge Caffaro gave an oral judgment the next day. In it, he described the contract as involving "the construction of a bar and afeature wall", and further work mounting beams. [16] He accepted Mr. Jahanroshan's evidence that the beams were to be prepared and ready cut.

He stated that: It is my impression that Mr. Jahanroshan is not a sophisticated person with respect to the legal niceties of whether he is using anincorporated entity or he is using it personally. Be that as it may, the work was done, and there seems to have been no complaints withrespect to the bar or the feature wall but when it came to the design – pardon me, the bulwarks or beams, that is when the system brokedown. [17] He appears to have accepted part of Mr.

Odegard's evidence as to the quality of the work on the beams, but stated: I am not satisfied on the evidence before me that all of the parties employed were engaged in remediation work. I therefore find that Mr.Jahanroshan is entitled to his claim for $18,560 less a figure which this Court is going to arbitrarily fix for remediation. I am doing thisbecause there was obvious remediation, and I set the remediation at $4,000. [18] No costs and no pre-judgment interest were awarded. Standard of Review [19] The standard of review is generally set out in Housen v. Nikoleison, 2002 SCC 33 , [2002] 2 S.C.R. 235.

Questionsof law are determined on the basis of correctness; findings of fact are reviewed for palpable and overriding error. Where the question ismixed fact and law, and the question of law cannot be readily extracted from the factual questions, the finding is subject to the morestringent palpable and overriding error standard, as held in De Shazo v. Nations Energy Co., 2005 ABCA 241. [20] In this case, the main issue raised on appeal is whether the party to the contract was the plaintiff, Mr. Jahanroshan, or hiscompany, Pars Design and Millwork Ltd.

That determination is a mixed question of fact and law, engaging the palpable and overridingerror standard. [21] Questions of pure fact are reviewed on the basis of palpable and overriding error, showing considerable deference to the trierof fact. Analysis

[22] Mr. Shim, on behalf of the Appellants, argues that Mr. Jahanroshan did not have the capacity to sue and that Judge Caffaroerred in not dismissing the case. He submits that the evidence showed that all dealings between the parties were between the corporationPars and the corporation Marble. The issue was recognized when Judge Caffaro offered to allow Mr. Jahanroshan to add Pars as aplaintiff. However, Mr. Jahanroshan declined to do so. [23] It would appear from the evidence that Mr. Jahanroshan did not know who he was contracting with.

He just knew he wasdoing the work for Buddha Restaurant and "didn't care about the what is the name of the company we got paid". [24] On the record before me, I do not envy the trial judge for his task. There was scant evidence as to the formation of thecontract, there was scant evidence as to the scope of the work, and there was scant evidence as to the deficiencies. I have no doubt thatthe trial judge did the best he felt he could with the limited evidence before him. [25] That being said, there was no analysis as to who the parties to the contract really were. I agree with Mr.

Shim's submissionthat "capacity to sue cannot depend on whether the Plaintiff is a sophisticated person". [26] The only documentation generated on behalf of the Plaintiff was the two invoices, in the name of Pars Design Millwork Ltd.It would also seem clear from the evidence that Mr. Trang did not particularly care to whom he wrote a cheque for the work, as long as itwas a company. [27] The work came about as a result of the interaction between Mr. Trang and Mr. Jahanroshan, although Mr. Jahanroshan wascareful to sue Mr. Trang and his company instead of just Mr.

Trang, or the "Budha Restaurant" named in Pars Design's invoices. Itseems clear that at the contract formation stage, the identity of the parties was not particularly important to either of them. It seems to methat at least at the time of the formation of the contract for the work, the evidence supports the trial judge's conclusion that the contractwas between Mr. Jahanroshan and Mr. Trang. Whether the corporations Pars Design and Marble & Granite became assignees of thecontract, or were used for payment purposes is unclear.

I do not think that the trial judge made a palpable and overriding error when heconcluded that Mr. Jahanroshan had the necessary capacity to sue and receive judgment. That ground of appeal is dismissed. [28] As to the result, I am troubled by the absence of detailed reasons or analysis as to why the trial judge did not give credit tothe Appellants for the payments they had made to Pars Design, and the basis for assessing damages on the counterclaim. Clearly, a judgehas to do the best he or she can with the evidence and make whatever findings can be made on the evidence. See Wood v.

Grand ValleyRailway Co., (1915), (SCC), 51 S.C.R. 283, 22 D.L.R. 614 and Chaplin v. Hicks, [1911] 2 K.B. 786. [29] Where the trial judge must exercise some discretion in making inferences or assessing damages, the standard of review onsuch findings is reasonableness. [30] Here, the two invoices describe all the work that appears to have been discussed between the parties – the bar, the wall paneland the bulkhead or columns. The invoices total $18,200.00 plus GST of $910.00 for a total of $19,110.00. There does not appear to beany dispute that $9,500.00 was paid to Pars Design.

It would appear that the monies sued for by Mr. Jahanroshan ignored the GST on thesecond invoice. In any event, the balance owed under the contract would be $8,700.00. [31] Mr. Jahanroshan's Small Claims summons says “The contract was over $25,000.00 but I did for less than $25,000.00.” Herepeated that in his evidence. I cannot reconcile the payments made to Pars, the Pars invoices, a contract amount of $25,000.00 and thebalance claimed of $18,560. The trial judge's analysis does not assist me in trying to determine whether the amount awarded isreasonable.

There is nothing in his frank description of his assessment of damages on the counterclaim as "arbitrary" which assists me onthat issue. [32] On the basis of R. v. Sheppard, 2002 SCC 26, the inadequacy of reasons is a ground to quash a decision and order a newtrial. However, on Small Claims appeals to Queen's Bench, that is not permitted under s. 53(1.1) of the Provincial Court Act, RSA 200, cP31 as a transcript has been provided.

[ 33 ] Essentially, that means that if I conclude that the trial judge's reasons do not support or explain his conclusions, I must do the best that I can on the same evidence that was before the trial judge. [ 34 ] Here, I am satisfied that the trial judge's reasons are inadequate. I do not know how he arrived at the unpaid amount of $18,540 having regard to the uncontradicted evidence that $9,500.00 was paid, and the invoices total only $19,110.00.

One of the invoices acknowledges that there was a $3,000.00 deposit, so even the invoices themselves only support an unpaid balance of $16,100.00. [ 35 ] The evidence does not suggest that there was another $6,500.00 worth of work done and paid for outside the work invoiced for. Mr. Shim asked Mr. Jahanroshan in cross-examination "have you ever given him any invoice for all this work done?" to which Mr. Jahanroshan replied “ Yes, I give him ” . [ 36 ] The only conclusion I can make on the evidence is that the contract between the parties was for $19,100.00. Pars Design was paid $9,500.00.

That left a balance owed of $9,610.00. [ 37 ] I am in no better position than was Judge Caffaro in assessing damages on the counterclaim. He was obviously satisfied that there were deficiencies in the work, and also that the amount claimed was excessive. I defer to his assessment of damages in the amount of $4,000.00 and cannot conclude that it was unreasonable. [ 38 ] That leaves a balance owed to Mr. Jahanroshan of $5,610.00. I agree with the trial judge that this is not an appropriate case for pre-judgment interest or costs, whether in this court or in Provincial Court.

This dispute arose mainly because of the inadequate documentation of the parties' contractual relationship. They are equally at fault for the confusion that resulted, and the court proceedings necessary to resolve the matter. Result [ 39 ] The Appellants' appeal is allowed to the extent that judgment against them is reduced to $5,610.00. There shall be no pre- judgment interest on that amount. No costs are payable by either party. Heard on the 11 th day of October, 2012. Dated at the City of Edmonton, Alberta, this 15 th day of November, 2012. Robert A. Graesser J.C.Q.B.A. Appearances:

William Shim for the Appellants Mr. Jahanroshan on his own behalf