Kidco Construction Ltd v Griffith, 2015 ABQB 814

Court of Queen ’ s Bench of Alberta Citation: Kidco Construction Ltd v Griffith, 2015 ABQB 814 Date: 20151218 Docket: 1501 05597 Registry: Calgary Between: Kidco Construction Ltd. Plaintiff - and - Arthur Ingram Griffith Defendant _______________________________________________________ Memorandum of Decision of the J. B. Hanebury, Master in Chambers _______________________________________________________ [ 1 ] Mr. Griffith owned farm land which he sold for the development of a proposed subdivision. The lands were found to be contaminated and he agreed with the new owner to ensure the contamination was remediated.

The plaintiff, Kidco Construction Company, completed the last steps of the remediation and Mr. Griffith refused to pay its bills, saying that they had no contract. Kidco applied for

summary judgment on the basis of contract, the ostensible authority of a third party to authorize the work, and quantum meruit . Mr. Griffith cross-applied for

summary dismissal of the claim.

Facts [2] Mr. Griffith, a farmer, owned land north of the City of Calgary, and sold it in 2007 for the purpose of a subdivisiondevelopment. It was resold, and in 2009 he renegotiated the terms of his lease back and his vendor take-back mortgage with the newowner, LaCaille North Point Incorporated. [3] As the lands were contaminated from fuel tanks and pumps he had used on the farm, he and LaCaille entered into aMemorandum of Agreement which provided in the

preamble that Mr Griffith “has agreed to complete, or cause to be completed, the fullremediation of Environmental Contamination to the satisfaction of Sabatini, acting as LaCaille’s consultant, such remediation to be at hissole cost and expense”. In paragraph 2.5 of the Agreement Mr. Griffith agreed to be responsible for “all costs associated with theremediation work”. [4] Sabatini Earth Technologies Inc., later known as Levelton Consultants Ltd., oversaw the remediation.

Levelton’sinvolvement ended when the last of the contaminated soil was removed in 2014, after which a contractor was needed to deal with theremaining issues of backfilling and the construction of a containment pond for contaminated water. [5] At that time Kidco was already at the site doing work for LaCaille. Kidco said that a price was negotiated with IBI Group tocomplete the remediation work. Kidco said IBI Group told the company that it was the consultant, representative or contractor on behalfof Mr. Griffith. Kidco acknowledged that it did not know if IBI Group discussed with Mr.

Griffith the arrangements it made with Kidco. [6] In the fall of 2014, IBI Group prepared the contract documents for the remediation work and forwarded them to Kidco whosigned them and submitted them back to IBI Group. IBI Group said it mailed letters to Mr. Griffith in September and again in October2014, allegedly enclosing copies of the proposed contract. It is not certain that those contract documents were actually enclosed, but inany event, Mr. Griffith says he did not receive those letters. [7] Kidco was given access to the lands by LaCaille in late August or early September, 2014.

It undertook the remainingremediation work and essentially completed it by mid-November, 2014. Kidco says that at this point it had had absolutely no contactwith Mr. Griffith. [8] Kidco sent its bills to IBI Group who approved them and sent them to Mr. Griffith. The first bill was sent to Mr. Griffith inmid-November in the amount of $34,038.90 for work done to October 25, 2014. In January 2015, a second bill was sent for $286,138.23,which was for work that was completed by November 15, 2014. [9] By November 2014, Mr.

Griffith had already paid in excess of one million dollars to remediate the property, and he said thathe was becoming frustrated by what he saw as ever-changing requirements to successfully complete the remediation. Mr. Griffith did notpay either of Kidco’s invoices. At this time he also stopped payment on a cheque he had issued to Levelton for their final report. [10] At the end of November, 2014, Mr. Griffith attended a meeting to discuss the remediation and Kidco was in attendance. Kidcoand Mr. Griffith said that was the first contact between them. Mr.

Griffith said virtually nothing at the meeting and did not raise hisconcerns and frustrations. [11] As its bills continued unpaid, Kidco filed a builder’s lien against the lands. It subsequently removed the lien at the request ofthe owner, LaCaille. Kidco said LaCaille did not pay its lien claim or any part of it. [12] In early 2015 Kidco started this action against Mr. Griffith seeking payment of its invoices. It filed this application forsummary judgment. Mr. Griffith responded by filing a cross-application for

summary dismissal, alleging that there was never a contract. [13] Affidavits were filed by Mr. Griffith, and by Mr. Rang as a representative of Kidco. Transcripts were filed of the cross-examination of both of those parties and of the examination of Mr. Livaditis of LaCaille and Mr. Seiker of IBI Group, who wereexamined under rule 6.8. Issues [14] The test utilized by the court when considering an application for

summary judgment or dismissal is that the applicationshould be granted where no genuine issue for trial exists. This occurs when the judge is able to make a fair and just determination on themerits without a trial, because the

summary judgment process allows him or her to make the necessary findings of fact, to apply the lawto those facts and is a proportionate, more expeditious and just means to achieve a just result. Rule 7.3 provides that

summary judgmentmay be granted if a disposition that is fair and just to both parties can be made on the existing record: Maxwell v. Walmart, 2014 ABCA383 , para. 12. [15]

Summary judgment is therefore no longer to be denied solely on the basis that the evidence discloses a triable issue. Thequestion is whether there is in fact any issue of "merit" that genuinely requires a trial, or conversely whether the claim or defence is socompelling that the likelihood it will succeed is very high such that it should be determined summarily: WP v. Alberta, 2014 ABCA 404, para. 26: [16] This does not affect the established legal burdens. The legal or persuasive burden is on the Applicant throughout.

If anApplicant discharges the evidentiary burden imposed upon it on a balance of probabilities, the evidentiary burden then falls to theRespondent to show that there is arguable merit to the case and that there is a compelling reason that it should go to trial. 1214777Alberta Ltd. v. 480955 Alberta Ltd., 2014 ABQB 301 , para. 19

[17] The case law is clear that the Court is to assume that the best evidence from the parties is before it: 1214777 Alberta Ltd.,para. 17; Canada (Attorney General) v. Lameman, 2008 SCC 14 , para. 19. Bald statements without substantiation and self-serving evidence can be disregarded by the court when determining a

summary dismissal application: 1214777 Alberta, para. 17;Guarantee Co. of North America v. Gordon Capital Corp., (SCC), [1999] 3 S.C.R. 423 para. 31; 1250810 AlbertaLtd. v. 1284768 Alberta Ltd., 2010 ABQB 125 , para. 31; Goldman v. Devine, 2007 ONCA 301 . [18] Generally, issues of credibility cannot be decided summarily and require a trial for determination: Beier v. Proper CatConstruction Ltd., 2013 ABQB 351 , para. 68; Charles v. Young, 2014 ABCA 200 , para. 4.

In rare cases, where oneparty’s evidence on the material facts is destroyed as a result of other evidence or on cross-examination so that it is “completely non-credible”, the court may “accept certain facts or may draw inferences of fact”: Janvier v. 834474 Alberta Ltd., 2010 ABQB 800, para. 15. [19] These are the parameters within which Kidco raises three arguments to persuade the Court that

summary judgment should begranted in this case. Firstly, it says that there was a contract between the parties. Secondly, it argues that the IBI Group had the apparentor ostensible authority to authorize the work and commit Mr. Griffith to paying for it. Thirdly, Kidco argues that it should be paid on thebasis of quantum meruit. The evidence of the parties will be considered in light of each of these three arguments. Analysis [20] Before considering these arguments the question of the reliance to be placed on Mr. Griffith’s evidence must be considered.On a

summary judgment or

summary dismissal application, where the evidence is contradictory on relevant facts, the usual practice is torely on the evidence of the respondent and consider the application on that basis: Goodfellow Inc. v. Woody’s Hardwood Flooring Ltd.,,2003 ABQB 162 , para. 21. As earlier noted, an exception permits the Court to ignore this practice and discount therespondent’s evidence only when it is “completely non-credible”. Kidco argues that Mr. Griffith’s evidence meets this test and it shouldnot be accepted as it: conflicts in an unbelievable manner with that of others; is evasive; and, is internally inconsistent.

Conflicting Evidence [21] At the time he was questioned Mr. Griffith stated that he was close to turning 80 and said that at his age he has memoryissues. That question was not explored further so it is unknown if his reference was to normal issues of memory associated with aging orsomething more. [22] Mr. Griffith said that he had a meeting with Mr. Livaditis in the summer of 2014 to discuss how to complete the remediationand he “guessed” that it was decided that it would be efficient to use Kidco as it was already on site but no costs were ever discussed.

Helater said that he didn’t know if he ever agreed in a meeting with Mr. Livaditis and IBI that Kidco should complete the remediationwork. [23] Mr. Griffith was asked if he received copies of a letter in September 2014 from IBI Group to Kidco saying that contractdocuments were enclosed. He responded that “I don’t think I ever seen that letter”. He was asked if that contract was being sent to Kidcoby IBI Group on his behalf. He said that he had no understanding that IBI Group was sending the contract out to Kidco on his behalf.

Hisresponse was the same to a similar letter sent to him from IBI Group dated October 29 2014, which also allegedly enclosed contractdocuments. [24] Mr. Griffith acknowledged getting a letter from IBI Group dated November 13, 2014 asking him to sign the contract. He saidthat he received it by about November 20, and he contacted a lawyer and sent the documents on. [25] As to his understanding of Kidco being onsite doing remediation work, Mr. Griffith said that Kidco was working for LaCailleand if it was doing remediation work he was not informed about it.

When questioned as to whether he watched Kidco do work onsite, hesaid he drove to the site one day to see what they were doing and “they were doing absolutely nothing, so I left.” He stated that he neverauthorized Kidco’s involvement nor instructed IBI Group to authorize Kidco to do the work. [26] Mr. Griffith said that the first time he met anyone from Kidco was at a meeting on November 28, 2014, just after he receivedthe contract documents and a progress invoice. At the meeting there was a discussion of what was to be done to complete theremediation.

He said that he did not participate in the meeting; he merely listened. At that meeting the cost to complete the remediationwas given and Mr. Griffith said that he did not respond, as he had hired counsel by that point. [27] When questioned about the IBI Group Mr. Griffith stated that he did not retain them to assist with the remediation of thecontaminated soil and water, but paid them for some consulting in relation to the remediation activities. Later he said that IBI Group’sclient was LaCaille and he “guessed” they helped him as well with certain things.

He emphatically denied that he asked IBI Group tocoordinate with Kidco to get the remediation work done. [28] IBI Group acknowledged that it did work for LaCaille on the subdivision development and started at the work site around2009. Mr. Sieker of IBI Group said that it was asked by Mr. Griffith to provide some construction survey and coordination work for theremediation “that was ongoing by Kidco”. The coordination work included the preparation of the contract and progress claims. He wasnot specifically asked during questioning, nor did he state that IBI Group had the authority to contract with Kidco on Mr.

Griffith’sbehalf. [29] Mr. Sieker of IBI Group said that there were meetings where both Mr. Griffith and a representative of Kidco were inattendance prior to Kidco starting work on the remediation. This evidence contradicts both Mr. Griffith’s evidence and that of Kidco,who both stated that they had not met prior to the end of November 2014, at which point the remediation work was substantiallycompleted. [30] Mr. Livaditis of LaCaille said that he recalls a verbal authorization of Kidco’s work by Mr. Griffith at a July 2014 meetingthat he and Mr. Griffith had with IBI Group.

He said that the work did not start immediately and there was a subsequent meeting with

Kidco in late August or early September to get the work started and Mr. Griffith was not at that meeting. [31] There were no minutes provided by anyone of meetings held with Mr. Griffith prior to Kidco commencing the work. [32] In short, both Kidco and Mr. Griffith acknowledged that their first contact was after the work was essentially completed.LaCaille’s representative said Mr. Griffith authorized the work and the contract price at a meeting with IBI Group before the workcommenced. IBI Group’s representative said that Kidco and Mr.

Griffith met before Kidco started the remediation work and IBI Grouponly provided some consulting and construction survey work. Neither Mr. Griffith nor IBI Group said that IBI Group had any authorityto enter into a contract with Kidco. [33] There is no evidence that Mr. Griffith actually received the September and October letters from the IBI Group that allegedlyenclosed the contracts. The letters were not signed for nor delivered by courier. [34] These conflicts in the evidence are confusing, but they are not sufficient to find Mr. Griffith’s evidence “completely non-credible”. Mr.

Griffith’s evidence is substantiated on a number of points by the evidence of some of the other representatives. Evidence is Evasive [35] While the transcript of Mr. Griffith’s evidence certainly leaves an impression of evasiveness or “cuteness” this is alsoinsufficient to find his evidence “completely non-credible”. That impression from the transcript could be false. Mr. Griffith could havememory issues and, for example, by prefacing his responses with “I guess”, be striving to be perfectly truthful. He could have beennervous, poorly prepared and uncertain.

These are not determinations that can be made from a careful reading of the transcript. Mr.Griffith’s oral testimony is open to

interpretation and both it and his demeanour require assessment. Internal Inconsistencies [36] Lastly I turn to some alleged glaring inconsistencies in Mr. Griffith’s own evidence. For example, after confirming that he hadnot paid Kidco and stopped payment on the cheque to Levelton, Mr. Griffith was asked: Q: So how is it, sir, that you can take on responsibility for the cost and expense of environmental remediation and then not pay thepeople that are doing it? A: No contract in place. Q: That is it? A: Yes Q: I see. So you observe the work happening and you have knowledge that the work is happening, right?

A: Yes. Q: You are in meetings where the work is discussed? A: Yes. Q: You are fully up to speed on what is happening, aren’t you? A: Yes. Q: Then you don’t pay? A: No contract. [37] It is the above evidence that appears to most contradict his earlier testimony. Is it sufficient to find his evidence “completelynon-credible”? [38] In my view, this cross-examination does not go far enough to meet the test. The prior discussion dealt with the non-payment oftwo parties, not just Kidco.

The questions posed are not sufficiently situated in time or context. [39] “Complete non-credibility” requires contradictory or inconsistent evidence of a blatant or damning nature. I have concludedthat the evidence in this case does not meet that test. Therefore, for the purposes of Kidco’s application, where the evidence diverges Iwill accept the evidence of Mr. Griffith. With that determination I turn to the three arguments advanced by Kidco.

There was a binding contract between the parties [40] Kidco first argues that there was a binding contract between the parties. [41] It is acknowledged that there was no written contract between the parties. It is also acknowledged by them that neither metwith nor spoke to the other before the meeting on November 28, 2014.

Kidco argues that a party’s conduct can constitute acceptance of acontract even when there is no written formal agreement and that such an acceptance occurred in this case: Saint John Tug Boat Co. v.Irving Refinery Ltd., (SCC), [1964] SCR 614, para’s 18, 19. [42] In Saint John Tug Boat Co. the parties had a contract and the tugboat company continued its services even after theagreement came to an end and continued to send monthly invoices. Irving Refinery neither paid the invoices nor objected to them. The

Court held that a binding contract would be implied where the circumstances, viewed objectively, give rise to an inference that thealleged acceptor had consented to the work being done on the terms offered. [43] Similarly in NHM International Inc. v. All Risks (The), 2003 FCT 53, a contract was found where one party executed thecontract and sent it to the other who did not sign it, but whose actions were found to show acceptance of the contractual terms. See aswell: Dr. T. Torfason Inc. v. 338058 B.C.

Ltd., (BC CA), 1994 CarswellBC 62 (B.C.C.A.) [44] Kidco relies on numerous factors to argue that such an inference should be made in this case: Mr. Griffith was responsible forthe costs of soil and groundwater remediation, and had paid over $1.2 million for the remediation work; Mr. Griffith never tried to haltKidco’s work; Mr. Griffith did not question the progress claim he received by Nov. 20, 2014; and, on Nov. 28, 2014 there was a meetingwhere the remediation was discussed and Mr.

Griffiths was told of the costs to complete the remediation and he said nothing. [45] There are several problems with this argument. [46] While Mr. Griffith may have agreed to be responsible for the costs of remediation, that agreement was with the new owner ofthe land. It was not with Kidco. If Mr. Griffith failed to keep his bargain it was the other contracting party, the owner, who had the rightto commence an action. Unlike Saint John Tug Boat Co. where the two parties had a prior contract, Mr. Griffith had never had acontract with Kidco.

A contract with a third party is insufficient to support the necessary inference. [47] Similarly, the fact that Mr. Griffith paid other contractors unrelated to Kidco is insufficient to support the necessary inference. [48] As for Mr. Griffith failing to stop Kidco from working, Mr. Griffith says that he never saw Kidco working on the remediationand he received both the contract and the bill only after the work was essentially completed. [49] Mr. Griffith’s failure to challenge the mid-November bill before or at the November 28 meeting is also insufficient.

By thatpoint the work had been virtually completed and Mr. Griffith had forwarded the documents to his lawyer. [50] The factors relied upon by Kidco are insufficient to objectively determine that an inference should be made that a contractexisted between the parties and find that

summary judgment should be granted. IBI Group had the apparent or ostensible authority to authorize the work and commit Mr. Griffith to paying for it [51] Next Kidco argues that IBI Group was empowered by Mr. Griffith to coordinate with Kidco to complete the remediation.Kidco says that IBI Group acknowledged that Mr. Griffith requested it to coordinate with Kidco by preparing the contract, preparing theprogress claims, and undertaking construction survey work to quantify the earthworks that were being completed. Kidco says it relied onIBI Group’s ostensible authority to act on Mr.

Griffith’s behalf, and agreed to undertake the work. [52] Kidco states that for there to be ostensible authority there must be an explicit or implicit representation of authority, a relianceon that representation and an alteration of the position of the person so relying: Doiron v. Manufacturers Life Insurance Co. (c.o.b.Manulife Financial), 2003 ABCA 336, para’s 14, 15. However, as Mr. Griffith notes, that representation of authority must come fromthe principal, ie Mr. Griffith: Samek v. Black Tusk Energy Inc., 2000 ABQB 684, , para. 10. [53] Both IBI Group and Mr.

Griffith deny that it acted or had the authority to act on behalf of Mr. Griffith. Both Kidco and Mr.Griffith acknowledge that they had no contact prior to the meeting of November 28, by which point the work was virtually complete.There is no undisputed evidence that indicates an explicit representation by the principal, Mr. Griffith, to Kidco that IBI Group had theauthority to act for him. [54] Kidco also argues that Mr.

Griffith created a situation that gave rise to an inference of authority, did nothing to dispel thatinference and, by his conduct, acquiesced to Kidco completing the remediation of the contamination and his responsibility for paymentfor that work. Such an inference must be found to be reasonable and grounded on proved facts: Walton v. Alberta (SecuritiesCommission), 2014 ABCA 273, para’s 26-28. [55] Kidco says the inference fairly arises because Mr.

Griffith: agreed to have Kidco complete the remediation; requested that IBIGroup coordinate with Kidco; authorized $280,000.00 of work before it commenced; made all of the decisions about remediation; knewthat Kidco was engaged in remediation work starting at the end of September, 2014; and received the contract and progress claim inNovember but never raised any issues whatsoever at the November 28, 2014 meeting. [56] First, some of these alleged facts rest on disputed evidence and remain unproven at this point. They cannot ground aninference at this stage of the proceeding.

I note as well that to ground such an inference Kidco would need to prove its knowledge ofthese facts at the relevant time. For example, a meeting at the end of November after the work was done cannot ground an inference thatmust have been in existence at the time the work was started. [57] These factors are insufficient to objectively find that there was an explicit or implicit representation that IBI Group had theauthority to act on behalf of Mr. Griffith.

Summary judgment cannot be granted on this basis. Kidco should be paid on the basis of quantum meruit [58] Quantum meruit has two branches. It can be based on a contract where, for example, the court determines reasonableremuneration for services provided under a contract that failed to specify an amount. Alternately it can be used to provide restitutionwhen a remedy is available through unjust enrichment.

In that instance quantum meruit is one of the remedies to a claim for unjustenrichment: 677960 Alberta Ltd. v Petrokazakhstan Inc., 2013 ABQB 47 , para. 77 and cases cited therein. [59] In this case, as there was no contract proven, the claim of Kidco to quantum meruit is founded in a claim of unjust enrichment.

[ 60 ] To establish unjust enrichment three elements are necessary: the respondent has been benefited or enriched by the claimant’s efforts and contributions; the claimant has suffered a corresponding deprivation; and, there is no juristic reason for the enrichment: Kerr v. Baranow , 2011 SCC 10 , para. 3 . [ 61 ] Mr. Griffith did not own the lands that Kidco improved. However, Kidco argues that the enrichment was monetary, in other words it was the retention by Mr.

Griffith of the funds he was to pay to Kidco. [ 62 ] This is a circuitous argument: the enrichment upon which the unjust enrichment is founded is the money that should have been paid as a result of the actual enrichment, the remediation services provided by Kidco for which Mr. Griffith would have allegedly been otherwise responsible. [ 63 ] As Mr. Griffith notes, for these remediation services to qualify as a benefit, they must have been performed at his request or he must have been “incontrovertibly benefited”: Grover v. Hodgins , 2011 ONCA 72 , para’s 56-59.

That case noted that when the defendant may have declined the services but had no opportunity to do so, there can be no “incontrovertible benefit”. [ 64 ] Accepting for now Mr. Griffith’s evidence that he did not specifically request or authorize the work, he had no opportunity to decline the services before Kidco undertook the work and therefore he was not incontrovertibly benefited.

Summary judgment cannot be granted on this basis. [ 65 ] The application of Kidco is dismissed. I turn next to the cross-application of Mr. Griffith. Cross-application for

Summary Dismissal [ 66 ] Mr. Griffith argues that Kidco has not made out any legal basis for its claim against him and the claim should be dismissed. [ 67 ] This I cannot do as the initial and overall evidentiary burden is on Mr. Griffith and he has not met it. [ 68 ] Firstly, Mr. Griffith’s evidence on crucial points is disputed. The disputed evidence that allowed Mr. Griffith to defeat Kidco’s application, similarly raises a stumbling block to the success of his cross-application. [ 69 ] Secondly, as discussed, the tenor of Mr.

Griffith’s evidence overall is troubling and while there may be perfectly innocuous explanations for his apparent evasiveness, it has led me to the conclusion that a trial judge must assess his evidence, as the claims of Kidco may yet be proven to have legs. Conclusion [ 70 ] It would not be a just resolution of this case to either allow or dismiss the claim at this stage of the proceedings. The costs of this application will be in the cause. Heard on the 3 rd day of November, 2015. Dated at the City of Calgary, Alberta this 18 th day of December, 2015. J.B. Hanebury M.C.C.Q.B.A.

Appearances: Sarah Nykolaishen and Dufferin Harper Blake, Cassels & Graydon LLP for Defendant Craig O. Alcock Burnet, Duckworth & Palmer LLP

for the Plaintiff