Garside v. Stirling, 2013 BCSC 1457

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Garside v. Stirling, 2013 BCSC 1457 Date: 20130826 Docket: 11-2035 Registry: Victoria Between: Roger Garside Construction Ltd. Plaintiff And Andrew Harvey Stirling and Karolyn Christine Jones Defendants Before: The Honourable Mr. Justice Steeves Corrected Judgment: The text of the judgment was corrected at paragraph 235, subparagraph (

e) where changes were made on August 16, 2013. Corrected Judgment: The text of the judgment was corrected at paras. 206, 207 and 235 where the calculations for deficiencies was adjusted and the amount the Plaintiff was entitled to was adjusted to $225,441.35, these changes were made on August 26, 2013. Reasons for Judgment Counsel for Plaintiff: N.W. Lott Counsel for Defendants: A.P.M. Berns Place and Date of Trial/Hearing: Victoria, B.C. May 27, 28; June 24-27, 2013 Place and Date of Judgment: Victoria, B.C.

August 13, 2013 Introduction [ 1 ] The plaintiff did some repair and renovation work on the defendants’ home in 2010. There were five previous fixed-price contracts and one cost-plus contract between the parties, and there is no issue in this claim on those contracts. A subsequent, seventh contract is very much in dispute. The parties now disagree about the scope and cost of the work as well as whether it was a cost-plus or fixed-price contract.

There was no written contract or other written evidence of what was agreed. [ 2 ] The plaintiff originally sought a declaration that he is entitled to a lien pursuant to the Builders Lien Act, R.S.B.C. 1997, c. 45 ( BLA ), in the amount of $228,197.93 against the lands and premises owned by the defendants, among other remedies. At trial the claim was $234,398.03 for materials, labour, a management fee of 12% and taxes.

The defendants counterclaim for breach of contract and negligence, including failure to properly manage the project. [ 3 ] According to the plaintiff, it had a cost-plus agreement with the defendants to do repairs and renovations to the defendants’ home. All of the work was authorized and known to the defendants as was a management fee of 12%. Any deficiencies, as alleged by the defendants, were not significant (such as dust on windows) or they arose because the defendants terminated the contract, thus preventing the plaintiff from completing the project.

The amount owed by the defendants became due and owing on October 12, 2011, but the defendants have paid nothing. [ 4 ] The defendants’ opening and evidence accepted that there was a cost-plus agreement for the work in dispute. In argument, however, they submitted it was a fixed-price contract. With respect to any management fee, it is submitted by the defendants that the plaintiff agreed to forgo that fee until the end of the project and then the defendants could pay what they considered appropriate.

They also say that they needed cost certainty; a budget was agreed to and then exceeded by the plaintiff by a significant margin. They were never told the project was over budget and they were not regularly invoiced. Further, the plaintiff failed to properly manage the project, was negligent in performing the work and did not hold sub-trades responsible for damage they caused. Finally, there were deficiencies

and some work was not completed at all. [ 5 ] The defendants submit that when the agreed contract price is considered with the deficiencies (and with unspecified damages in negligence), they owe no money to the plaintiff. Background General [ 6 ] The plaintiff, Roger Garside Construction Ltd., is owned and controlled by Roger Garside. He has been in the construction industry for about 47 years. For the last 15 to 20 years he has done renovations and additions on custom homes. I will refer to Mr. Garside as representing the plaintiff.

Neither he nor his company has had to come to court before to collect on an account. [ 7 ] Mr. Garside, through his company, manages 15 to 20 projects per year; some of them are small and some are in the order of millions of dollars. In general he manages the flow of work and ordering of materials as well as working with engineers and inspectors. The actual work is done by subcontractors that are appropriate for each job. One of the subcontractors is Mr. Garside’s son. [ 8 ] The plaintiff does work by means of two kinds of contracts.

The first is a fixed-price contract whereby the plaintiff prepares estimates or quotations for work on a particular job and then has an agreement with the owner of a property to do the work for a specific price. The second kind of contract is a cost-plus contract. In that case the costs of the materials and subcontracted labour are paid by the owner and the owner also pays a percentage to the plaintiff for managing the contract. The percentage can range from 10% to 15% depending on the size of the contract.

A significant amount of the plaintiff’s work is done on the basis of cost-plus contracts, sometimes it is 100%. [ 9 ] Mr. Garside uses a day timer book to keep track of various tasks in his work. It includes reminders written by Mr. Garside, measurements he has taken, orders he needs to make, phone numbers of subcontractors, some costs, customers and various other matters. As will be seen, it is not a complete or detailed record of all of the work done by Mr. Garside or all of the information related to that work.

The plaintiff puts considerable weight on one entry in the day timer as demonstrating a quotation of the cost of the work. This information was only available one week before trial, and it was not available during discovery. [ 10 ] Andrew Stirling, one of the defendants, is a helicopter pilot. He has no construction experience to speak of. His work as a helicopter pilot is on a Monday to Friday basis, during the day. On occasion he has to stay overnight when he is travelling for work. Karolyn Jones, the other defendant, works for the Canadian Coast Guard as a Staff Officer.

She had some minor construction experience in the past. The two defendants have lived as husband and wife since about 2005. [ 11 ] In late 2009, the defendants purchased a new home on Birch Road in the District of Saanich. The defendants remained in their previous home on West Saanich Road until August 2010 while repairs and renovations were completed in the Birch Road property. The latter are the subject of this litigation. [ 12 ] According to Mr. Garside’s day timer, he met with Ms. Jones at the Birch Road property on November 21, 2009. At that time the defendants were considering buying the property.

They wanted to discuss the repairs that would be necessary and they wanted to make some changes. It is agreed that Mr. Garside was asked by Ms. Jones for an estimate of the work and his estimate was $200,000 - $250,000. This figure is not recorded in Mr. Garside’s day timer or in any other documents. [ 13 ] Over the next few days and into December 2009 there were more meetings and discussions between Mr. Garside and the defendants. Some of these took place at the Birch Road property, some took place at the defendants’ West Saanich Road property and others took place in local restaurants.

There are detailed lists of various tasks in Mr. Garside’s day timer on December 11 and December 12, 2010. On December 12, 2010, there is a note, “160 K Birch Rd.” In Mr. Garside’s evidence he could not recall the significance of this note. [ 14 ] The parties then agreed on five fixed-price contracts on the Birch Road property. They are as follows, according to the dates of the invoices from the plaintiff (the estimates were the same amounts as the ultimate invoice amounts and the dates of the estimates are in brackets):

a) January 8, 2010 (remove stucco from garage): $7,665.00 (December 16, 2009).

b) January 8, 2010 (remove exterior cladding and sunroom from house): $45,748.50 (December 16, 2009)

c) February 16, 2010 (repair rot damage in garage): $2,730.00 (January 15, 2010).

d) February 16, 2010 (repair rot damage in-house): $28,245.00 (January 15, 2010).

e) June 24, 2010 (Windows and stucco replacement): $157,720.50 (March 10, 2010). [ 15 ] The date of the last of these invoices, June 24, 2010, is of some significance, as discussed below. [ 16 ] The defendants also asked the plaintiff to do some work on the West Saanich Road property to get it ready for selling. Mr. Garside sent a crew over and the work was done quickly. The work was billed to the defendants on a cost-plus basis on March 9, 2010. The invoice of that date was for $4,224.42, including a management fee of 15%. There was no estimate for this contract in evidence.

The final invoice included a work sheet with the materials and subcontracts listed. The defendants testified that they did not know about the management fee until they received the invoice.

[ 17 ] For the most part, the above five fixed-price contracts and one cost-plus contract work were completed without any problems, and the defendants promptly paid the amounts owing to the plaintiff. As an example, for the cost-plus contract for work at West Saanich Road, Ms. Jones testified that she was pleased with the work and “happy” to pay the invoice because the work was done quickly and it helped with the sale of the West Saanich property. [ 18 ] It is the subsequent arrangement between the parties that is in dispute.

The parties have very different versions of the facts of that arrangement, including details of some of the above events and the facts of other events. As well, whether their contractual arrangement was on a cost-plus or fixed-price basis became an issue in argument. I will begin with the plaintiff’s version of what occurred and then I will set out the defendants’ version. Plaintiff’s evidence [ 19 ] As above, Mr. Garside met with Ms. Jones for the first time at the Birch Road property on November 21, 2009. [ 20 ] They walked around the property and through the house. Mr.

Garside testified that overall the house was in a “leaky condo” situation. There was rot in some of the exterior walls and there had been water damage to the interior wood floors. He was asked for and he provided an estimate of $200,000 - $250,000 for the work that was discussed. He then met with both defendants, and they ultimately agreed on the five fixed-price contracts and the one cost-plus contract.

Work proceeded on the Birch Road property with the knowledge of the defendants and the five fixed-price contracts there were completed without any problems. [ 21 ] The work on the Birch Road property continued after June 24, 2010, the day the last fixed-price contract was invoiced and paid. According to Mr. Garside, this work was done on the basis of a cost-plus contract that started in June 2010, perhaps May 2010. In his mind it coincided with the end of the last fixed-price contract for the work on the Birch Road property.

As below, the defendants say the date was July 29, 2010, and it was a fixed-price contract. [ 22 ] Mr. Garside explained in his evidence why the parties proceeded on the basis of a cost-plus contract. He testified that the work on the Birch Road property had come to a stage where there were a number of decisions to be made about floor tiles, fixtures and other things. These required a lot of detail and choices about what, for example, fixtures would be used. Mr. Garside also testified that the defendants were busy, as was he, and everyone felt that the previous contracts had worked well.

He suggested a cost-plus contract for the further work because it gave the defendants freedom to select or not select items as the job evolved and blocks of work could be done separately. There was more than one meeting to discuss this idea, according to Mr. Garside. He estimated 10 to 20 meetings over all. [ 23 ] According to Mr. Garside, he discussed this with Ms. Jones and she said that his proposal made sense, the parties agreed to proceed on this basis and they agreed to a 12% management fee as well.

There is no written contract to this effect, there are no letters, emails or other correspondence, nor is there any reference to a cost-plus agreement in Mr. Garside’s day timer. He explained this by saying that, as a result of their previous dealings, the defendants trusted him and he trusted them. Mr. Garside agreed in his evidence that the defendants were concerned with cost. [ 24 ] There were a number of meetings to make decisions about various issues such as tiles, painting and landscaping. According to Mr. Garside, there was a lot of talk about costs and he always brought a

summary of the costs to date for the defendants to see. There were no invoices from the plaintiff, and there is no evidence that the defendants asked for more information or objected to the cost until as discussed below. The defendants did ask Mr. Garside from time to time if he needed payments, but he declined those offers. Other than the evidence above, there is no other information in Mr. Garside’s day timer about costs.

As well, as will be seen, the parties do not have clear memories of all of their conversations, in particular the dates and the particulars of those meetings. [ 25 ] The defendants retained a designer who prepared reports and options in May 2010. Mr. Garside testified that many changes were made by the defendants after that date including selection of tiles and paint, wood floor, carpet, living room fireplace and a number of others.

He also said that he thought that November 10, 2010, was the date when the work on the Birch Road property was substantially complete although there were still some things left to do that were “not minor.” These included a countertop in the kitchen and problems with the cabinets. [ 26 ] There was an important meeting on July 29, 2010, in which the work was discussed and, according to Mr. Garside, he advised the defendants that the cost would be between $187,010 and $189,788.

In his day timer for July 29, 2010, these figures are noted beside “Quoted to Andrew.” The plaintiff places considerable weight on this note. It also includes a list of the following work items: flooring, concrete, ceilings, light fixtures, septic, excavating, wiring, flooring and tile, labour, “move pole” and drainage. [ 27 ] The plaintiff’s day timer was not available for discovery but it was an outstanding request by counsel for the defendants at the end of discovery.

However, the request was not recorded by the court reporter, and the absence of the day timer was not noticed by counsel for both parties until one week before trial. At that point the document was disclosed and, for the first time, the quote of $187,010 - $189,788 was known to all. This included Mr. Garside as he had not mentioned the quote in discovery. He testified that a lot of things became known when the day timer was disclosed. The information recorded by Mr. Garside in his day timer is very much in dispute. [ 28 ] At the meeting on July 29, 2010, Mr. Garside presented a printout of the costs to that date.

This was a 13 page document itemizing the subtrades, materials, permits and the cost for each item. The total cost was $253,757.51. On the front page of this document are two handwritten notes. The first says “meeting” and the second is “$63,969.33.” The plaintiff’s bookkeeper, Cathy Ogilvie, testified that she made these notes on the document but she could not recall in her evidence why she wrote them. [ 29 ] At the meeting the defendants wrote notes on their copy of the printout on the back page including a list of work items totaling $90,700.

This is discussed below in detail, but the defendants claim there was agreement on a cost of $90,700 to “get them in their house.” In his evidence Mr. Garside said that he never mentioned that figure at the meeting; instead he gave them the above range of $187,010 to $189,788. Further, he testified that he told the defendants that some invoices had not yet been recorded on the printout and some further work that had been discussed was to be completed. It follows from this that the total of $253,757.51 did not represent what

the plaintiff said the defendants owed; the amount owed was, according to Mr. Garside, in the range of $187,010 - $189,788 plus any outstanding invoices (plus a management fee and taxes). [ 30 ] According to the evidence of Mr. Garside, Mr. Stirling said at the July 29, 2010, meeting he was hoping that the defendants would not have to spend that much money; i.e. $187,010 - $189,788. However, Mr. Garside testified that he was instructed to carry on with the work and if there were any ways to save money, the defendants would like to do that. Mr. Garside also testified that Mr.

Stirling said that, when the West Saanich Road house was sold, there would be enough money to complete the project the way the defendants wanted it completed. This latter conversation may have taken place at a later date. [ 31 ] Work on the Birch Road property proceeded and the defendants moved into the Birch Road property on August 20, 2010. [ 32 ] There was another meeting in November 2010 between Mr. Garside and Mr. Stirling (the parties differ on the date, it may have been November 11 or 19, 2010). Mr. Garside presented a cost

summary of numerous pages. This included some of the costs for the previous fixed-price contracts, and Mr. Garside testified that it would now take “considerable work” to calculate the amount owing by the defendants on November 19, 2010, under the cost-plus contract in dispute. He testified that the amount owed was approximately $180,000 at that time, and he told Mr. Stirling this and that there were more bills to come. According to Mr. Garside, Mr. Stirling said that the amount owing was too much and Mr. Garside would have to come and speak to both defendants to explain the costs. In discovery Mr.

Garside said the amount discussed as owing was about $150,000. The actual cost printout from this meeting is not available. [ 33 ] Mr. Garside was asked in cross-examination whether Mr. Stirling said at this November 2010 that the amount claimed was not what was agreed. Mr. Garside answered that he did not know if Mr. Stirling used those exact words and then he said that Mr. Stirling may have said that the defendants did not agree on that amount. Mr. Garside was also asked whether Mr. Stirling was shocked by the amount claimed, and Mr. Garside replied that Mr.

Stirling was unhappy and he said “something like we hoped it would come in less than that”, in Mr. Garside’s words. [ 34 ] A subsequent meeting took place on December 4, 2010. According to Mr. Garside, this was when “things fall apart.” There is an entry in Mr. Garside’s day timer that suggests that the meeting took place at 10 AM, and in his evidence he said he believed that the meeting took place in the morning. There is another cost

summary sheet dated November 29, 2010, and it is likely that Mr. Garside took this to the meeting. This was a 10 page document with a total of $148,115.61. There is another handwritten document prepared by Ms. Ogilvie, the plaintiff’s bookkeeper. This is a one-page document showing a total of $185,154.57 as owing by the defendants. A management fee was not included, and Mr. Garside testified that this was done to resolve the contract with the defendants. [ 35 ] Mr. Garside testified that the defendants were unhappy, rather than shocked, with this amount.

The defendants said at the December 4, 2010, meeting that they would not pay the amounts presented by Mr. Garside. To this, according to Mr. Garside’s evidence, he replied that this was the last thing he wanted to happen and he thought that a solution could be found. He asked the defendants what amount they thought was fair. According to him, they replied that they would pay $110,000 and he said he could not accept that. [ 36 ] The defendants then said, according to Mr.

Garside, that he should take the $110,000 because in one week their offer would be reduced to $90,000 and the following week it would be reduced to $80,000. Mr. Garside refused. He agreed that the defendants wanted finality and he testified that he wanted finality as well. At the December 4, 2010, meeting the defendants raised an issue about the hardwood floors. Mr. Garside offered to take care of the repair cost because he wanted to resolve the situation and he was prepared to, as he testified, take “a bit of a loss.” The meeting ended when Mr. Garside was told there would be no payment, Ms.

Jones left the room and Mr. Garside was asked to leave. [ 37 ] Mr. Garside testified that he decided to leave the issue of costs for a while and look after completing a number of small things on the project. He apparently thought that with the passage of time the issue of cost would resolve. He agreed that the defendants may have called him on February 23, 2011, and offered $110,000 to settle his account. [ 38 ] On April 12, 2011, previous counsel for the plaintiff sent a letter to counsel for the defendants. It was signed by Kristen Collishaw, articled student.

Among other things the letter says: The figure of $91,000 that our client quoted in July, 2010 as the projected cost of completing the interior renovations was based on the work that Mr. Stirling and Ms. Jones requested at that point in time. . . . [ 39 ] At trial the plaintiff objected to the admissibility of this letter on the basis that it contained discussions between counsel about settlement.

I denied the plaintiff’s objection on the basis that, although it was in the context of settlement discussions and it did include information about settlement, it also contained a factual assertion that, on its face, appeared to contradict a fact asserted by the plaintiff in the trial. The plaintiff then called Ms. Collishaw as a witness; she is now a lawyer. Her evidence is discussed below. [ 40 ] On October 12, 2011, the plaintiff sent to the defendants an invoice in the amount of $238,627.55 for materials and subcontractors from June 30, 2010. Mr. Garside testified that a cost

summary would have been sent with this invoice. It was sent some time after the commencement of this action. [ 41 ] At trial the plaintiff submitted 108 invoices for materials and labour, beginning February 26, 2010. Mr. Garside testified that these represented the materials and labour for the plaintiff’s work at the defendants’ Birch Road property. They total $206,627.32. The plaintiff’s claim is for this amount, plus a management fee and plus taxes. The total of all costs claimed by the plaintiff at trial is $234,398.03. Defendant’s evidence [ 42 ] I next turn to the evidence of the defendants. Mr. Stirling provided the more lengthy evidence.

[ 43 ] He and Ms. Jones began looking for property sometime in 2009. After looking at a number of properties they settled on the Birch Road house, the subject of the dispute in this case. However, it obviously needed repairs and they wanted some advice about the repairs, including costs, before they made an offer. They were also interested in making some changes to the house. Ms. Jones telephoned Mr. Garside to ask him if he could provide this advice because she had seen the signs for his company in the area. [ 44 ] Ms. Jones met Mr. Garside at the Birch Road property on November 21, 2009, late in the morning.

Ms. Jones agreed that Mr. Garside’s day timer correctly recorded the date although she said they met at 11:00 AM rather than the previously arranged 10:00 AM. There is an arrow in the day timer that is consistent with this. [ 45 ] They walked around and inside the house (it was empty) for about 1.5 hours. Ms. Jones testified there were a lot of repairs needed on the house and it was an odd design; “very chalet-ish”, as she put it.

There was water damage, all the windows needed to be replaced, the kitchen was old and narrow, all the cabinets needed to go, the upstairs fireplace was not working, the bathrooms were old and the fixtures were chipped, there was a hole in the ceiling of one of the bedrooms from water damage, the windows in the sunroom were fogged up and the concrete floor had sunken, all the patios needed to be replaced and there were other problems. She discussed these with Mr. Garside and she asked him for an estimate of the cost for the repairs they discussed. He said $200,000 - $250,000.

They did not look at the garage but they agreed that it would require work as well. [ 46 ] The defendants testified that the working budget they had for the purchase was $850,000 (Ms. Jones thought it was $750,000 - $850,000) because this was an amount that they could service a mortgage on. Mr. Stirling explained that Ms. Jones liked Mr. Garside, she thought he could do the work that they wanted done and she arranged for a meeting with Mr. Stirling, Mr. Garside and her. In the meantime the defendants had made an offer on the Birch Road property and it had been accepted.

The purchase price was $575,000 (the 2013 assessed value is $1,026,000). [ 47 ] Mr. Stirling could not remember the date of this meeting but he agreed it was in December 2009. His reference point was the possession date for the Birch Road property of December 16, 2009. The purpose of the meeting was for Mr. Stirling to meet Mr. Garside and to begin a discussion about the work. Mr. Stirling testified that his memory is that the work included new windows, flooring, changes to the kitchen, changes to the interior, patios, stucco (house and garage), and the roof.

The defendants had in mind an open interior concept so that they were wondering about removing a wall between the dining room and kitchen and making more access to the family room. As well, the existing furnace was in a small room near the front door and they wondered about opening it up and relocating the furnace. As Mr. Stirling put it in his evidence, it was “basically a whole renovation of the house.” [ 48 ] Further, Mr. Stirling testified that the discussion was “not so much about details, we were looking for the big picture.” Later in his evidence, Mr. Stirling said that Mr.

Garside did not break down the various parts of the project when he was discussing it with the defendants. Mr. Garside either offered or he was asked for a cost estimate for the work and he said it would be in the range of $200,000 - $250,000. Mr. Stirling could not remember any other meetings in December 2009; he agreed with Mr. Garside’s evidence that there were about 10 to 20 meetings in all. At this same meeting, according to Ms.

Jones, the idea of cost-plus contracts was discussed and she said she did not want to proceed on that basis. [ 49 ] The parties then agreed to the five fixed-price contracts described above as well as the one cost-plus contract, also discussed above. There were meetings in December 2009, January and into March 2010 about these contracts. The work under these contracts was completed and paid without any apparent difficulties. In his evidence Mr. Stirling said that, with respect to the cost-plus contract above that was a result of the defendants asking Mr.

Garside to do some work to get the West Saanich Road house ready for sale. Mr. Stirling testified that the defendants did not know it was to be on a cost-plus basis or that there would be a management fee of 15%. Ms. Jones agreed with this but she was “happy” to pay the invoice because the work had been done quickly to help with the sale of the West Saanich Road property, she did not notice the management fee until later and the amount of the invoice was reasonable. [ 50 ] Mr. Stirling described the next discussion about cost with Mr. Garside as occurring on June 24, 2010.

This was around the plaintiffs invoice of the same date with respect to the fixed-price contract $157,720.50. The defendants had paid $110,000 on account and they immediately paid the balance owing. [ 51 ] Mr. Stirling testified that there may have been some additional work done that was not included in the June 24, 2010, invoice. He could not say for certain and he was “not keeping any records about how the job was proceeding.” Mr. Stirling could not “guess” if any work had been going on between June 24 and the next meeting on July 29, 2010. Sometimes he and Ms.

Jones would go by the property and see progress was being made; other times nothing seemed to have changed. [ 52 ] Mr. Stirling described in his evidence what he called “direct contracts” for a number of things that the defendants contracted directly with suppliers or contractors, rather than paying the plaintiff. These included kitchen cabinets, countertops, lighting fixtures and appliances. The total cost for these items was approximately $60,000. [ 53 ] The defendants also testified about design issues and choices the defendants made during the project. These were times during the project when Mr.

Garside would say that it was necessary to make a selection about something and the defendants would go to a supplier and make the selection. An example of this is electrical fixtures, and Mr. Stirling stated that he and Ms. Jones made this selection in one day. According to Mr. Stirling, virtually all of these selections were made before the invoice was submitted for the previous cost-plus contract on June 24, 2010. The defendants hired a design consultant and she produced a number of documents dated in May 2010. According to Mr.

Stirling, the defendants did not use her after that date or make many changes to the project. Similarly, the defendants used a landscape consultant recommended by Mr. Garside and that work was done in January and February 2010. Other design issues and choices involved the outside patios and sunroom, the driveway and the garden beds. There were small things completed afterwards such as extending the length of the sidewalk because it had not been poured to the plans of the landscape consultant. [ 54 ] Early in the discussions between the parties there was the prospect of the defendants buying a boat owned by Mr.

Garside, and he took the defendants on a cruise in it in February 2010. It was priced at around $100,000. They were thinking about Mr. Garside’s estimate of $250,000 for the work on the Birch Road property, and, on that basis, the defendants thought they would have money

available at the end of the work on the Birch Road house to buy the boat. When the defendants received the final fixed-price contract of $157,720.50 on March 10, 2010 (as above), the defendants realized that they could no longer consider buying the boat. Mr. Stirling also testified that at this point (March 2010) the defendants knew that their original budget price had nearly been met. [ 55 ] On July 29, 2010, the defendants and Mr. Garside met at a restaurant. Mr. Garside was not sure what time of day it was but he thought his day timer record of a morning meeting was the time. In contrast, Mr.

Stirling had medical appointments in the morning, and he testified that the meeting could not have happened before noon. [ 56 ] At the July 29, 2010, meeting Mr. Garside presented a printout of the work and materials to that date. This was the 13 page document with a job total of $253,757.51. According to Mr. Stirling, no particular explanation was given for the costs or this amount or the fact that the defendants had already paid approximately $242,000 under the previous contracts. Mr. Garside did not request payment for the total of the worksheets or payment for any amount.

Nor did he say how much was owed by the defendants. [ 57 ] However, according to Mr. Stirling’s evidence, Mr. Garside advised the defendants at the meeting that he had just lost $3,000 on a previous fixed-price contract and he now wanted to change the arrangement he had with the defendants to a cost-plus contract. As above, Mr. Garside testified that the agreement on a cost-plus contract took place in June 2010, perhaps May 2010. [ 58 ] Mr. Stirling described Mr. Garside’s costs as surprising and unexpected.

He testified that most of the time at the meeting of July 29, 2010, was spent on the issue of a cost-plus contract rather than on the 13 page worksheet. The defendants were two weeks away from being able to move in to their Birch Road property and, according to Mr. Stirling, they did not feel they had any choice. Therefore they agreed to a cost-plus contract but they insisted on cost certainty. Mr. Stirling also testified that, with respect to any management fee, Mr. Garside said that it could be 10% or 5% or 0%; the defendants could decide at the end of the job what percentage to pay.

This was done because, according to Mr. Stirling, of the defendants “obvious reluctance” to enter into a cost-plus arrangement, to use Mr. Stirling’s words. They preferred a fixed-price contract. [ 59 ] Mr. Stirling testified that nobody was being very clear at the July 29, 2010, meeting about how to complete the work and he started to make specific suggestions. He described a list that he and Ms. Jones wrote on the last page of the July 29, 2010, cost sheet and on the back of that page. The list on the back of the last page was primarily written by Mr.

Stirling and I reproduce it as follows: Rock Chimney Penn Plum Fixtures EST ACTUAL Handrails $2500 Floors Wood $25,000 Carpet Tile Bath Towels, $700 holders Etc. Blinds 10K Bathroom Door Glass ? Lighting $2200 Mirrors $1000 Countertops $10,000 Kitchen Cabinetry $20,000 Excavating $4000 Drainage $5000 Concrete $6000 Pagoda $3000 Plumb Fixtures $7200

Door Hardware $700 [ineligible] Doors $2500 Vacuum $900 $90,700 Monies $360,000 -$254,000 $106,000 -$90,700 $15,300 [ 60 ] In his evidence Mr. Stirling said that the items on the left-hand side of the list were the items that needed to be completed to finish the job. These were discussed with Mr. Garside. The cost for countertops ($10,000) and kitchen cabinetry ($20,000) were to be paid directly by the defendants to the contractors for those items and the pagoda ($3,000) was never built. Ms. Jones confirmed this in her evidence. [ 61 ] The numbers under the heading “EST” were provided by Mr. Garside.

The total of $90,700 was calculated by Mr. Stirling. He testified that he asked Mr. Garside whether the amount of $90,700 was “the cost it would take to get us into the house.” Mr. Garside agreed to this, according to Mr. Stirling. The calculation at the top right, “MONIES”, was Mr. Stirling’s. He used the amount of $360,000 as the amount available to the defendants, he deducted a rounded up amount of $254,000 (from the worksheets) and then deducted the amount of $90,700. The balance of $15,300 “showed” the defendants that they had enough money to do the job. On this basis, as explained by Mr.

Stirling in his evidence, they instructed Mr. Garside to go ahead. Mr. Garside was not taking notes, nor did he have his day timer with him at this meeting, again according to Mr. Stirling. [ 62 ] As above, Mr. Garside’s day timer for July 29, 2010, says that the amount of $187,010 to $189,788 was “Quoted to Andrew.” Mr. Stirling denied in his evidence that Mr. Garside gave that quote on July 29, 2010. Further, according to Mr. Stirling, the first time he learned of that amount was a week before this trial commenced in May 2013 when he had the opportunity, through his counsel, to see a copy of Mr.

Garside’s day timer. As above, this document had been requested in discovery but, through an error of the court reporter, the request was not recorded in the transcript. [ 63 ] The next meeting of significance according to Mr. Stirling was one held in a restaurant in November 2010. He met with Mr. Garside without Ms. Jones. At this meeting Mr. Garside presented another worksheet showing the defendants owed about $152,000. According to Mr. Stirling he was “visibly shocked” with this number, and he asked Mr.

Garside to take it back, to check his numbers and to prepare another worksheet that was consistent with their previous conversation on July 29, 2010. That new worksheet was to be presented to Mr. Stirling and Ms. Jones at another meeting. Mr. Stirling could not remember the reasons given by Mr. Garside for the cost of $152,000. He did recall that Mr. Garside was “blaming” Ms. Jones for all the changes she made. To this Mr. Stirling asked Mr. Garside not to speak badly of Ms. Jones. [ 64 ] The next meeting was held on December 4, 2010, with both defendants and Mr. Garside. Mr. Stirling testified that Mr.

Garside presented a one-page handwritten document with the current costs on it. It showed that the defendants owed $185,154.57 for material, labour and taxes. [ 65 ] Mr. Stirling testified that there was “no mistaking” that he and Ms. Jones were “dumbfounded” because the amount was supposed to be less than $152,000 and now it was $30,000 more than what was discussed recently. The defendants asked how this could be possible. Mr. Stirling testified that Mr. Garside “talked a lot” but Mr. Stirling could not recall Mr. Garside’s reasoning. Mr. Stirling also testified that Mr. Garside was not making any sense.

In addition, Mr. Stirling said that the one-page document presented by Mr. Garside at the July 29, 2010, meeting did not include any management fee because Mr. Garside said he was forgoing that fee. [ 66 ] The defendants agreed that the meeting ended when Ms. Jones left the room. However, according to Mr. Stirling, there was still room for discussion and negotiation. They deny they told Mr. Garside that they would not pay him anything. Mr. Stirling also denied in his evidence that the defendants said at any meeting, or in any conversation, that Mr.

Garside should accept the $110,000 because the following week the offer would be $90,000 and the week after that it would be $80,000. At the December 4, 2010, meeting Mr. Garside asked what amount could the defendants pay that day, and Ms. Jones testified that thought that she did not want to give him anything. She also testified that Mr. Garside suggested that the defendants “pay what we had and then go into personal debt with him” for the balance. She found this upsetting and left the meeting to go upstairs. [ 67 ] Mr.

Stirling testified that, after the meeting on December 4, 2010, things remained amicable with Mr. Garside. For example, in December 2010 the defendants needed help installing a new fridge that was to be delivered. Mr. Stirling “felt comfortable”, as he put it, calling Mr. Garside and asking him to help, which he did (and he was paid by the supplier). [ 68 ] On February 23, 2011, Mr. Stirling telephoned Mr. Garside to offer $110,000 to settle the defendants’ account. Mr. Garside declined this offer. Mr.

Stirling wrote a note about the conversation on the back of the worksheet described above (that has the cost at $90,700). Mr. Stirling also recorded that Mr. Garside told him in this conversation that he wanted to make sure that the Birch Road house was right for the defendants. Mr. Stirling presented this as a positive statement from Mr. Garside.

[ 69 ] As above, the defendants have been in their Birch Road home since August 2010. Mr. Stirling testified about a number of deficiencies as a result of the work of the plaintiff. These are discussed in more detail below. In

summary they include cupping of the wooden floors, damage to the exterior stucco, problems with the stain on the front door, nail pops and cracks in the drywall, gaps in the molding on the exterior of the windows, screen doors that do not open or do not open properly, problems with the in-floor heating in the bathroom, problems with flashing around skylights and coldness and drafts in the closet in the master bedroom. Photographs of some of these issues were entered in evidence. As well, the defendants hired another contractor to repair some deficiencies and record others that still need repairing.

This contractor also testified. [ 70 ] There is also the issue of what type of contract was in place after June 24, 2010. Mr. Stirling emphasized that the defendants did not agree to a cost-plus contract until July 29, 2010. As above, Mr. Garside testified that the cost-plus arrangement began in June 2010. Mr. Stirling was also concerned that the defendants never received a written estimate of the cost of the work to be done and they were not told how frequently they would be billed. And he denied, as asserted by Mr.

Garside, that the defendants agreed that any of the work or materials prior to July 29, 2010, were to be included in the cost-plus contract that commenced on that date. In her evidence, Ms. Jones was asked in cross-examination about the nature of the contract between the parties after the meeting on July 29, 2010, and she ultimately agreed it was a fixed-price contract. [ 71 ] Finally, according to Mr. Stirling the defendants expected to be in the Birch Road house in March or April 2010. However it was not until August 2010 that this happened. Mr. Stirling testified that Mr.

Garside did not raise the issue of the late occupancy: he also could not specifically recall asking Mr. Garside about it. And, at times Mr. Garside was unavailable to the defendants because he was at his vacation property in the interior or he was working on other projects.

Claim and counterclaim [ 72 ] On May 13, 2011, the plaintiff filed its notice of civil claim. [ 73 ] The relief sought includes a declaration that the plaintiff is entitled to a lien against the Birch Road property in the amount of $228,197.93 (as above, at trial the plaintiff seeks $234,398.03, composed of materials, labour, a management fee of 12% and taxes).

Other relief claimed includes an Order that the defendants pay the amount claimed and, in default, an Order that the property be sold to realize the amount of the claim. [ 74 ] A counterclaim was filed by the defendants on June 10, 2011. [ 75 ] The defendants’ allege in their counterclaim that the plaintiff failed to properly manage the project and this resulted in damage and loss. Further, the work performed by the plaintiff resulted in damage and loss to the defendants, and the plaintiff owed the defendants a duty to complete the work in a professional and workmanlike manner.

The plaintiff failed in this duty and did not meet the industry standards required for the performance of this duty. The relief sought by the defendants includes damages for breach of contract, a claim of set-off and other relief. [ 76 ] In a response to the counterclaim, filed June 10, 2011, the plaintiff stated, among other things: 3. The Plaintiff denies that the parties agreed that the cost of completing the project would not exceed $90,000.

This figure was an estimate that the Plaintiff provided to the defendants as the cost of the project based on the scope of the work requested by the Defendants at that point in time. . . [ 77 ] The legal basis of the plaintiff’s response on the counterclaim was the BLA , the law of contract and the law of quantum meruit .

Expert evidence [ 78 ] The defendants obtained an expert opinion from a document examiner with regards to the statement in the plaintiff’s day timer on July 29, 2010, “Quoted to Andrew $187,010 – $189,788 flooring – flooring and tile . . .” This was described as “exhibit Q1” in the examiner’s report. [ 79 ] The document examiner was J.M. Kovacs and his report is dated June 10, 2013. Mr. Kovacs worked for many years with the RCMP doing examination of documents, he has lectured on the subject and he has been an expert witness in this and other courts. Mr.

Kovacs was not cross-examined. [ 80 ] The purpose of his examination was to “To conduct an examination of the question entry on exhibit Q1 with respect to the probability of the entry being made at the same time as the surrounding entries.” The line quality of the entry in question was analyzed and Mr. Kovacs described “a freely and clearly written entry with a good overall line quality which means that the physical conditions would have been a stable surface for the book to rest on and ample arm support for the writing.” [ 81 ] Mr.

Kovacs conclusion was as follows: I am not able to determine the sequence that the question entry was made on July 29, 2010… or the correctness of the indicated time of the entry. The question handwritten entry shows all the features normally associated with a carefully executed handwriting. Analysis [ 82 ] The issues in this case are largely factual ones relating to the nature of the contract between the parties, the cost of the work

under that contract, the cost of management fees and the cost of any deficiencies. There are also issues relating to the defendants’ allegation of negligence against the plaintiff, the timeliness of the plaintiff’s filing of a lien and issues about pre and post-judgment interest. [ 83 ] I begin by identifying some facts that are not in dispute and others where I have identified the different positions of the parties:

a) The defendants purchased a new home on Birch Road. The possession date was December 16, 2009, and they moved into the home on or about August 20, 2010. They had been living in another home on West Saanich Road before moving to Birch Road. The former home was sold in the summer of 2010.

b) The Birch Road home required extensive repairs and the defendants wished to make changes as well. These were reviewed generally with the plaintiff in November 2009, before the home was purchased, and the plaintiff estimated that the cost would be $200,000-$250,000.

c) The plaintiff contracted with the defendants to repair and renovate the Birch Road home by means of five fixed-price contracts. The defendants agreed to these contracts on the basis of detailed quotations of the work and prices. The total cost of these five contracts was $242,109.00

d) The plaintiff also contracted with the defendants to work on the West Saanich Road home to get it ready for sale. This was by means of a cost-plus contract that included a management fee of 15%. The invoice for this contract included a printout of the costs for materials and labour. The cost of this contract was $4,224.42.

e) There were no problems between the parties with regards to these contracts. Indeed, as Ms. Jones testified with regards to the cost-plus contract, the defendants were pleased with the work and “happy” to pay the plaintiff for the work. The total cost of the above six contracts was $246,333.42.

f) The parties agreed on a second contract with regards to further work on the Birch Road house. The plaintiff believes that this contract started in June 2010, possibly even May 2010 but the defendants say that it started on July 29, 2010 at a meeting that day.

g) The plaintiff is clear this was a cost-plus contract. In their opening and evidence the defendants agreed it was a cost-plus contract. However, during argument they changed their position and submitted that it was a fixed-price contract.

h) There were meetings between the parties on costs on July 29, 2010, in November 2010, and on December 4, 2010.

i) At no point did any of the parties say that the work was over budget until November 11, 2010, or that the work should stop for that reason.

j) Mr. Garside had a day timer that included some information about his dealings with the defendants. On July 29, 2010, it has the note “Quoted to Andrew $187,010 - $189,788”, and Mr. Garside testified that he said that to the defendants on that date. The day timer was not available until after discovery and Mr. Garside did not explain the quote for $187,010 - $189,788 until after the day timer was disclosed, a week before trial. The defendants deny that the quote of $187,010 - $189,788 was given on July 29, 2010.

k) The defendants took notes at the meeting of July 29, 2010. These include a list of work items to be completed with cost figures beside them. The total is $90,700. They say Mr. Garside agreed to complete the work for that amount. Mr. Garside denies he said that at the meeting on July 29, 2010.

l) There is no other written record of the discussions or agreements between the parties after June 24, 2010, the date the last fixed- price contract was completed and paid.

m) On October 11, 2011, the plaintiff sent an invoice to the defendants in the amount of $238,627.55. This included management fees of $23,140.98 (at 12%), taxes and costs for materials and subcontractors.

n) The defendants allege deficiencies in the work of the plaintiff and that all of the contracted work was not completed by the plaintiff. They also allege negligence on the part of the plaintiff. The plaintiff denies there were deficiencies or that it was negligent. [ 84 ] I now turn to the issues in dispute between the parties: the nature of the contract between them; the cost and scope of the work; any management fee; any deficiencies; negligence; the timeliness of the filing of the lien; and the issues of pre and post-judgment interest.

The contract [ 85 ] There are two issues with respect to the contract between the parties I will attempt to address here: when did the contract commence; and was it a fixed-price or cost-plus contract? I will deal with the issue of cost, including whether the contract included a management fee, separately below. [ 86 ] There is disagreement between the parties about when the contract in dispute commenced. Mr. Garside testified that it started about the end of June, when the last fixed-price contract was completed. That contract was invoiced and paid on June 24, 2010.

In contrast the defendants submit that it started on July 29, 2010, when they met with Mr. Garside and, as they contend, agreed on the contract price of $90,700. Again, there is no written document to explain the date the contract started. [ 87 ] The difficulty with the July 29, 2010, date as the commencement of the contract is that there is no question that work on the Birch Road property continued after June 24, 2010. Mr. Garside testified that a cost-plus contract (as he described it) started about June 24, 2010, but it may have also started in May 2010.

The defendants simply deny that there was any discussion about a contract until July 29, 2010. However, on June 24, 2010, the work that the defendants wanted done on the Birch Road property was not complete, and it

carried on for at least one month prior to the July 29, 2010 meeting with the knowledge of the defendants. In his evidence Mr. Stirling agreed that the work on the Birch Road property carried over past the end of the last fixed-price contract in June 2010. [ 88 ] I conclude that there was some understanding or acquiescence around June 24, 2010, that the work would continue and would be paid for. It may have been that the previously successful contracts between the parties led them to simply carry on the work with the expectation that it would be paid for.

That approach has obviously created difficulties for both parties; their lack of communication has contributed greatly to the problems in this case. It may also have been, as Mr. Stirling said in his evidence, that the defendants at least were just looking at the “big picture.” In any event, I find that there was a contractual relationship between the parties on or about June 24, 2010. [ 89 ] What then was the contractual relationship on or about June 24, 2010? [ 90 ] In this litigation the parties initially agreed that the contract in dispute between them was a cost-plus one.

Both parties presented their evidence on that basis. This would have been the second such contract after the cost-plus contract for the work on the West Saanich Road house in March 2010 to get that house ready for sale. That contract was completed and paid without any difficulties. [ 91 ] The dispute over the nature of the contract after June 2010 arose in evidence. The defendants had always asserted that, in their dealings with the plaintiff, they wanted cost certainty and, in fact, the plaintiff agreed that costs were always an issue.

The problem arose because the evidence of the defendants was that the agreement was a cost-plus contract (as of July 29, 2010) but with a fixed-price of $90,700 and with a fixed list of work to be done. When pressed on this in cross-examination it was accepted that the contract they had in mind was really a fixed-price one. Then, in argument, the defendants submitted that the work done was pursuant to a fixed-price contract, contrary to their opening. The plaintiff says the contract was a cost-plus one. [ 92 ] There is no disagreement as to what a cost-plus contract is and what a fixed-price contract is.

The former has been defined as “A contract to sell a product or perform work for the selling price or contractor’s cost-plus a percentage or plus a fixed fee.” A fixed-price contract is a “Contract in which the price is preset regardless of the actual cost” (Daphne Dukelow, Pocket Dictionary of Canadian Law , 3rd ed.(Toronto: Carswell, 2002). These

definitions accord with the way the parties acted with the five fixed-price contracts and one cost-plus contract they previously completed with success. [ 93 ] Therefore, it is necessary to review what occurred between the parties between June 2010 and the end of 2010, in particular what happened on July 29, 2010. [ 94 ] First, on or about June 24, 2010, I find that there was an understanding or acquiescence that the work on the Birch Road property was not complete. Further, it would continue and it would be paid for. There was no preset price or quotation about cost that is in evidence.

I conclude that the circumstances at this time support a conclusion that the work would be done on a cost-plus basis. [ 95 ] Another aspect of the contract between the parties beginning June 24, 2010, is that some work claimed by the plaintiff took place before that date, including work in February, March, April and May 2010. That is, work that might be expected to have been included in the five fixed-price contracts for the Birch Road property is being claimed by the plaintiff as part of the cost-plus contract that was in place from about June 24, 2010.

The defendants oppose this claim and disagree they accepted or agreed to this. However, the work continued and, if there was not an express agreement, there was at least acquiescence that the work would be paid for by the defendants. I conclude that the cost for this work was part of the cost-plus contract between the parties. [ 96 ] There is then the meeting of July 29, 2010. The defendants now submit that the contract they had with the plaintiff was a fixed- price contract: it was for a fixed cost ($90,700) and for a fixed list of work items.

In contrast, the plaintiff says the relationship continued as a cost-plus contract. I pause to note that there is no reason in law why parties cannot change their contract from a cost-plus one to a fixed-price one, or vice versa. The question is whether that happened on July 29, 2010. [ 97 ] It is clear that the defendants believed on July 29, 2010, that they had cost certainty by getting an agreement on the amount of $90,700. On the other hand the plaintiff’s position is that, on July 29, 2010, a quote of $187,010 - $189,788 was given. Mr.

Garside testified this quote was not a preset price but it was an amount that provided some cost certainty to the defendants. [ 98 ] The issue of whether the parties had a fixed-price or cost-plus contract is intricately related to what happened on July 29, 2010, and whether the plaintiff agreed to a fixed-price contract in the amount of $90,700 or whether the defendants agreed to a cost-plus contract with a quoted cost of $187,010 - $189,788. [ 99 ] I now turn to that issue. Cost [ 100 ] As above, it is agreed that on November 20, 2009, at a first meeting between Mr. Garside and Ms.

Jones at the Birch Road property, Mr. Garside was asked for an estimate of the cost of the work discussed and he replied with an estimate of $200,000 - $250,000. [ 101 ] The parties then entered into the five fixed-price contracts and one cost-plus contract, which totalled $246,333.42. The last of these contracts ended on or about June 24, 2010, when the defendants paid a total of $157,720.50 for the last fixed-price contract on the Birch Road property. If the cost of the work on the West Saanich Road property ($4,224.42) under the cost-plus contract is deducted from the total cost (because Mr.

Garside’s estimate in November 2009 related only to the Birch Road property), by June 24, 2010, the defendants had paid to the plaintiff an amount of $242,109.00 for work on the Birch Road property. [ 102 ] I therefore conclude that there can be little doubt that the defendants knew that the original estimate of $200,000 - $250,000 for the work on the Birch Road property was met in June 2010. A simple addition of the contracts to that date would have demonstrated that fact.

[ 103 ] I also conclude that, after June 24, 2010, the defendants accepted that the work would continue and the cost would increase beyond the original estimate of $200,000 - 250,000. Clearly the scope of the work expanded from the original discussion in November 2009, it continued after June 24, 2010, and somehow it had to be paid for.

The heart of the dispute between the parties on cost is how much more than the original estimate of $200,000 - $250,000 is to be paid by the defendants. [ 104 ] This came to a head on July 29, 2010, when, according to the defendants, the amount of $90,700 was agreed at a meeting in a local restaurant. On the other hand, Mr. Garside says he “quoted” the amount of $187,010 - $189,788. Both parties have documents that they say support their respective positions.

The difficulty, of course, is how could the parties come away from the same meeting with very different understandings of what was agreed? [ 105 ] I therefore turn to the issue of what was discussed and agreed between the parties on July 29, 2010, with respect to cost. [ 106 ] The plaintiff relies on the day timer entry for July 29, 2010, that says “Quoted to Andrew $187,010 - $189,788.” He testified that this is what he said at the meeting in the restaurant that day. [ 107 ] The day timer is not a complete list of all of Mr. Garside’s appointments or all of his work.

It is primarily notes that serve as reminders for things such as ordering supplies, telephone calls to make, measurements taken, list of work items at certain jobs and so on. Mr. Garside could not recall the significance of some notes at all and, in other cases, he could not recall details. Other things were not recorded in the day timer. For example, there is no note that the defendants moved into the Birch Road house on or about August 20, 2010. As well, there are no meetings noted in November 2010, and it is accepted that that is when Mr. Garside met with Mr.

Stirling to present the cost figure of about $152,000. This figure was rejected by Mr. Stirling, and he asked for the meeting with Ms. Jones. The parties then met on December 4, 2010, and that is when, according to Mr. Garside, the contract ended.

The only reference to this in the day timer is a note at 10 AM on December 4, 2010, “Carolyn [sic] Andrew.” [ 108 ] Overall, while there are omissions, there are no apparent errors of any significance in the day timer, unless the note on July 29, 2010, “Quoted to Andrew $187,010 - $189,788” was an error, as submitted by the defendants. [ 109 ] The defendants take issue with the time listed for this entry on July 29, 2010. It is located on the page beside 7:30 or 7:45 AM but it does not appear to be noted at a specific time.

The note “Quoted to Andrew $187,010 - $189,788” is followed by a list of work items such as “flooring” and “concrete”. At the end of the list is “Bill at Slegg [Lumber]” and 10:00 AM is circled. Mr. Stirling testified that he attended medical appointments the morning of July 29, 2010, and the meeting could not have taken place before late morning or early afternoon. I accept this is a more specific memory of the meeting than that of Mr. Garside.

Beyond that I am unable to conclude that any other differences between the parties about the time of the meeting on July 29, 2010, are of great significance. [ 110 ] The defendants’ challenge to the note in the day timer on July 29, 2010, includes the use of an expert document examiner, and I have the benefit of his report. His opinion was inconclusive as to whether the statement in question was made at a different time than the “surrounding entries.” It was written on a stable surface and I conclude that could have been a table, including one in the restaurant where the meeting took place.

That, however, is not decisive. It is also apparent that there is no dispute that the note in question was written by Mr. Garside. [ 111 ] In

summary, I can find nothing in the expert report that contradicts the evidence of Mr. Garside and his record in the day timer that he said “Quoted to Andrew $187,010 - $189,788” at the meeting on July 29, 2010. [ 112 ] There are then the circumstances of the day timer being disclosed. As above, as a result of an error by the court reporter at the discovery of Mr. Garside, counsel did not have the day timer until one week before trial. Further, Mr. Garside did not remember the reference to “Quoted to Andrew $187,010 - $189,788” until after he had reviewed the day timer; that is, until after discovery.

This is noteworthy because one would expect that a person would recall, without the prompting of the day timer, an important matter such as a quote about cost while in litigation about that issue. Mr. Garside did not remember the entry in the day timer until it was disclosed and his memory on a number of areas in his evidence was similarly not good. On the other hand the evidence is that he wrote the entry. [ 113 ] Turning to another matter that may be relevant to the day timer entry on July 29, 2010, of a quote of $187,010 - $189,788, there are other numbers about the cost of the work attributed to Mr.

Garside at other times. On April 12, 2011, his previous counsel wrote to counsel for the defendants to say, among other things, “The figure of $91,000 that our client quoted in July, 2010 as the projected cost of completing the interior renovations was based on work that Mr. Stirling and Ms. Jones requested at that point in time.” The context of the letter was settlement discussions between counsel. [ 114 ] The author of this letter was Kristen Collishaw, an articling student in April 2011; she is now a barrister and solicitor.

The plaintiff called her as a witness and she testified that her principal at the time was away on holiday for an extended period so she was handling the plaintiff’s file. She talked to the plaintiff before writing the April 12, 2011 letter, and her notes say “Roger did not recall” the amount of $91,000. Ms. Collishaw said in her evidence that her letter had not been careful or drafted well.

She said the letter should have said, “If in fact the $91,000 quoted . . .” In cross-examination she said that her notes did not indicate that the plaintiff gave any figure and she could not remember him doing so. [ 115 ] A related matter is that the plaintiff’s previous counsel also filed a counterclaim on his behalf, dated June 27, 2011. Paragraph 3 of the counterclaim contained the following: The Plaintiff denies that the parties agreed that the cost of completing the project would not exceed $90,000.00.

This figure was an estimate that the Plaintiff provided to the Defendants as the cost of completing the project based on the scope of the work requested by the Defendants at that point in time. This estimate was at all times subject to change as the scope of the work changed. [ 116 ] I am urged by the defendants to find that the statements in the April 12, 2011, letter and the counterclaim prove that their estimate of $90,700 was the amount of money agreed to by the plaintiff on July 29, 2010, to complete the work on the Birch Road property. However, the evidence of Ms.

Collishaw does not support that proposition and, indeed, it contradicts it. As well, I note that her letter of April 11, 2011, was not copied to Mr. Garside. His uncontradicted evidence is that he knew there were discussions going on

between counsel but he did not know the details. Finally, taken on their own, the two statements describe an “estimate” or quotation by the plaintiff, subject to change. It is true that the estimate or quote was in an amount similar to the amount relied on by the defendants but it was not an agreed contract price. [ 117 ] I am not persuaded that the reference to $91,000 in the April 11, 2011, letter and the reference to a similar amount in the plaintiff’s counterclaim support the conclusion that the plaintiff agreed with the defendants on July 29, 2010, that the cost of completing the work would be that amount. [ 118 ] In

summary, the matter is not without difficulty, but I conclude that the evidence (including expert evidence) supports a conclusion that it is more likely than not that the entry “Quoted to Andrew $187,010 - $189,788” was made by Mr. Garside and it was made on July 29, 2010. His oral that he said this evidence corroborates the entry in the day timer.

That evidence was prompted by the disclosure of the day timer but, again, despite a serious challenge by the defendants to the entry on July 29, 2010, it remains as credible evidence. [ 119 ] There is then the number of $90,700 relied on by the defendants as the cost agreed between the parties on July 29, 2010, to complete the work. [ 120 ] It may be recalled that this number was the total of costs recorded by Mr. Stirling on the back of the printout provided by Mr. Garside. The costs included specific items such as handrails, floors (wood, carpet, and tile), bath towel holders, lighting and so on.

According to the defendants, they came away from the July 29, 2010, meeting with an agreement with Mr. Garside that the itemized work would be completed for $90,700 so that they could move into the Birch Road house. That move was imminent and, in fact, it took place on or about August 20, 2010. In his evidence Mr. Stirling agreed that the defendants asked Mr. Garside what amount of money it would take so that they could move in. However, the intent was to get a number that would complete the work. [ 121 ] As a starting point, I accept that the notes written on the back of the cost printout were made by Mr.

Stirling. It is also probable that the numbers written beside each item came from Mr. Garside. And there is no disputing that the total is $90,700. Further, in cross- examination Mr. Garside agreed that the defendants “may have asked” whether the work could be completed for $90,700 but he never agreed with that number. What is in dispute is what this number represents. [ 122 ] One difficulty with the proposition that $90,700 was the agreed total to complete the work is that the list recorded by Mr. Stirling included two items that the defendants contracted for directly and paid directly to the suppliers.

These were the countertop at a cost of $10,000 and the cabinets at a cost of $20,000. Logically, these costs were not the plaintiff’s. Therefore, the total of $90,700 that includes these costs cannot represent the plaintiff’s cost to complete the work. [ 123 ] As well, the defendants’ figure of $90,700 left out some costs. There was the work done by the plaintiff between June 24, 2010, (and even before that date) and July 29, 2010, under what I have found above was a cost-plus contract. I also accept the evidence of Mr.

Garside that not all of the invoices for completed work had been received by him and that he told the defendants this on July 29, 2010. [ 124 ] Some examples of the work not included in the $90,700 amount are evident on the printout presented by Mr. Garside at the July 29, 2010, meeting. There was a cost for stucco of $9,591.55, entered in the plaintiff’s tracking system on July 22, 2010. There were also charges for recycling (drywall and garbage) totaling $3,710.66, beginning in January 2010 and the last one recorded was July 17, 2010.

The cost for electrical wiring was entered in the tracking system on May 13, 2010, and the cost of an electrical furnace “system” was entered on April 28, 2010. These costs were $11,700 and $5,500, respectively. [ 125 ] The defendants respond to this by saying a number of things were done without their knowledge or authorization. For example, the furnace was removed and replaced in a different location, and Mr. Stirling testified that the first time he knew about this was when he asked about an empty cardboard box that had contained the new furnace.

However, one of the original conversations the defendants had with the plaintiff was about the furnace. It had originally been in a small room beside the front door, and the defendants wanted it moved to open up the front area of the Birch Road house. Further, the evidence is that the defendants were obviously interested in the work on their new home. They attended from time to time and it is highly unlikely that they would not have noticed that the old furnace room had been removed and replaced as had been discussed from the beginning.

I therefore conclude that the defendants knew about the new furnace. [ 126 ] Similarly, the defendants knew about the new wiring in new walls or to accommodate the removal of old walls, including media cables. It is not reasonable to suggest, as Mr. Stirling did in his evidence, that existing wiring from an older house could have been used again.

Certainly, as described in the evidence of the cable wire installer, Michael Jennings, the defendants’ request for satellite television service could not be met using wiring of that vintage. [ 127 ] I pause to note that separating out what work was done before or after June 24, 2010, is difficult because there is little evidence describing the sequence of the work and all of the parties had unreliable memories about the different stages of the work. There are the plaintiff’s printouts of the cost of materials and labour.

These set out the cost of specific subcontractors and specific material suppliers but the order is not necessarily the order that the work was done. I also take this opportunity to note that the printouts do not always represent the actual amount owed by the defendants. That is a separate calculation, and Mr. Garside testified that it would have taken “considerable time” to separate what was owed by the defendants on one of the printouts. [ 128 ] Apart from context, the significance of this is that the defendants may have, reasonably, taken the final amounts on the printouts as the amount they owed the plaintiff.

In fact the final amount could be less than the total on the printout because there were invoices to come; the final amount could also be more than the total on the printout because some costs from the previous fixed-price contracts were included. For example, at the July 29, 2010, meeting Mr.

Garside presented a printout that had total costs in excess of $250,000, but his evidence is that he said at the meeting that $187,010 - $189,788 would complete the project (subject to any invoices not yet recorded). [ 129 ] The defendants expressed some concern in their evidence that they had not been aware of the costs accruing on the project. In this regard, the evidence is that Mr. Garside presented the first printout of his costs on July 29, 2010, about one month after the last fixed-price contract was completed on June 24, 2010. His evidence is that he kept the defendants up to date on costs throughout the

project, but the evidence is that the first printout of costs was provided on July 29, 2010. I do not agree with the defendants that the plaintiff should have presented information about costs earlier than about one month. On the other hand, the defendants concern that the plaintiff did not provide an actual invoice until October 2011 is well taken. In his evidence Mr. Garside said there was no real explanation for this.

In any event, the defendants knew on July 29, 2010, that the printout of that date recorded costs in excess of $250,000. [ 130 ] The evidence includes two other documents related to the plaintiff’s costs. The next one was at the meeting in November 2010 between Mr. Stirling and Mr. Garside; the latter presented a printout and Mr. Garside said (in discovery) an amount of $152,000 was owed by the defendants. Mr. Stirling rejected that out of hand, and the actual printout is not available. There is also a hand written sheet that Mr. Garside presented at the meeting on December 4, 2010.

It recorded an amount of $185,154.57 owed by the defendants to the plaintiff, and it was prepared by the plaintiff’s bookkeeper. [ 131 ] It is unfortunately the case that the defendants did not review the plaintiff’s printouts in any detail or at all. Both defendants testified that, with regards to the printout from July 29, 2010, they did not read it at the meeting on that day or later. Ms. Jones could not recall if Mr. Garside explained at the meeting the costs in the printout; Mr. Stirling testified that Mr. Garside explained some parts of the printout. I find that Mr.

Garside did review the printout of costs at the meeting (although it is unlikely he reviewed the entire 13 page document). At one point Mr. Stirling testified that Mr. Garside did not make any sense when he was explaining the printout, but Mr. Stirling also could not remember what he said. It was certainly open to the defendants to review the printout at the meeting or afterwards.

As above this was not necessarily an accurate statement of what was owed, but it was a detailed statement of what work was done, what materials were used, when the invoices were received by the plaintiff and who did the work or supplied the materials. [ 132 ] The defendants did not review the printout given to them on July 29, 2010, and the reasons for this are not explained. However, there can be no real dispute that information to explain the costs that had been accruing up to July 29, 2010, was available to the defendants on that date.

More significantly, those costs were more than $90,700 to complete the project if they were combined with the list prepared by Mr. Stirling at the meeting on July 29, 2010. Unfortunately, the defendants missed an opportunity to understand the actual costs for the work on their house. [ 133 ] A further concern of the defendants is that they say that their budget was exceeded on July 29, 2010, and the plaintiff knew it was exceeded. To the extent that this is a comment on the plaintiff’s November 2009 estimate of $200,000 - $250,000 this is correct.

However, the defendants knew this in June 2010 after the completion of the last fixed-price contract. They knew more work was required and they either authorized it or acquiesced in it proceeding. [ 134 ] Part of the defendants’ submission on their budget involves their early interest in purchasing a boat owned by the Mr. Garside at a cost of about $100,000. The significance of this is that the defendants’ budget was $750,000 - $850,000 to purchase the Birch Road property and do the renovations. The purchase price for the property was $575,000 and the balance was available for the renovations.

On this basis the original estimate by Mr. Garside in November 2010 of $200,000 - $250,000 made sense for the defendants and left open the option to buy the boat. There is logic to these calculations. [ 135 ] However, the evidence is that Mr. Garside was not told by the defendants that he had a budget to work with until July 29, 2010. However, the evidence is not clear that Mr. Stirling’s notes on that date about the defendants’ budget were explained or disclosed to Mr. Garside. In addition, there was the cost of the work from June 24, 2010, to July 29, 2010, that was ongoing and substantial.

With regards to the boat, there is no evidence that the defendants said to the plaintiff that they could not buy the boat because the cost of the project had surpassed a budget amount. I cannot interpret that decision to mean that the plaintiff had detailed knowledge of the defendants’ budget and violated that budget. For these reasons I find that, until July 29, 2010, there was an open-ended budget, as would be consistent with the cost-plus contract for that period. [ 136 ] In

summary, up to July 29, 2010, the contractual arrangement between the parties was a cost-plus one and the defendants knew or ought to have known this. It appears that the defendants prepared a list of costs on July 29, 2010, that reflected what they wanted done to complete the project. However, the list was not based on the plaintiff’s printout of costs; it included costs that were not the plaintiff’s and it did not include work that had actually been done and not yet been billed. I accept that Mr.

Garside provided the numbers used by the defendants for their list but I am unable to find that he agreed that the project could be completed for the total of that list of $90,700. In short, it is probable that the defendants prepared and acted on an inaccurate and incomplete list of costs. [ 137 ] This is another matter that is not without difficulty, but I find it is probable that Mr. Garside provided a range of $187,010 - $189,788 as a quote to Mr. Stirling on July 29, 2010, to complete the work.

The defendants did not need to agree to that quote but I find it was available for them to consider, as was the detailed but not necessarily complete printout of costs to date. It follows that there was no agreement that the project would be completed for $90,700. [ 138 ] I return to the issue of the nature of the contract between the parties. As discussed above, the parties were certainly not clear about their contractual relations and no specific legal definition is a perfect fit. I have found above that the contract between the parties from June 2010 to July 29, 2010, was a cost-plus one.

To the extent there is a need to define the contract after July 29, 2010, I conclude that it continued as a cost-plus arrangement but with the proviso that the cost would be $187,010 - $189,788. To be clear that amount was a quote rather than an agreed contract price. It represented the plaintiff’s commitment to complete the items listed by Mr. Stirling, but it also included other costs. And the nature of a quote is that it may change. [ 139 ] There are other matters that relate to the discussions between the parties.

First, there is the plaintiff’s allegation that the defendants told him on December 4, 2010, that he should accept their offer of $110,000 or the next week it would be $90,000 and the following week it would be $80,000. There is also the defendants’ statement that the plaintiff proposed a cost-plus contract on July 29, 2010, because he had just lost $3,000 on a fixed-price contract on another project. I find that neither of these incidents has been proved on the required standard of proof. Management fee

[ 140 ] As a final cost matter, there is an issue of whether a 12% management fee was agreed on. The defendants say it was left open- ended, to be determined by them at the end; the plaintiff says it was always agreed that the management fee would be 12%. [ 141 ] As background Mr. Garside testified that his fee for cost-plus contracts ranges from 10 to 15%, depending on the size of the contract. At times 100% of his work is done on this basis. As well, there is the previous cost-plus contract between the parties in March 2010 for work on the West Saanich Road property of the defendants.

The invoice for that contract included a management fee of 15% and it was immediately paid. The defendants say that there was no discussion of a management fee for

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