Kevin Kott (o/a K & K Contractors) - v. -, 2011 SKPC 74

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2011 SKPC 074 Date: November 28, 2011 File: 2010-35 Location: Melfort _____________________________________________________________________________ Between: Kevin Kott (o/a K & K Contractors) - and - A. Dale Leader and Patricia Ann Leader Kevin Kott For the Plaintiff A. Dale Leader For the Defendants _____________________________________________________________________________ JUDGMENT B. MORGAN , J _____________________________________________________________________________ INTRODUCTION: [ 1 ] This case arises out of a verbal contract in which the plaintiff agreed with the defendants to build and install new kitchen

cabinets, as well as a central island, in the defendants’ home.

Unfortunately, the parties did not put the terms of this oral contract into writing, and whereas much of the background is not in dispute, there is considerable conflict on three issues: 1) Was the price provided a “quote”, as the defendants argue, or was it an “estimate”, as the plaintiff argues? 2) Was there an agreement that the defendants would make “progression payments” as the work went on, as the plaintiff argues, or were they entitled to wait until all the work was completed before making payment, as the defendants argue? 3) What amount, if any, is owed to the plaintiff by the defendants? [ 2 ] I do not intend to review all the evidence.

Where there is conflict in the evidence on a point I consider necessary to determine in order to deal with this judgment, I will deal with such evidence in more detail at that point. What follows will be firstly a brief overview of the situation, followed by my analysis of the three points I have raised. OVERVIEW: [ 3 ] Kevin Kott resides in Carrot River, Saskatchewan, with his wife Beverley. Although the business is registered as a sole proprietorship, each of Kevin and Beverley Kott have a substantial interest in the business, and each performs some separate and some overlapping roles.

Kevin Kott is the craftsman; although he does not have a lot of experience building kitchen cabinets, he is an experienced carpenter, and that is the general nature of the business. Most of the book work and accounting falls to Beverley Kott, although she often helps out in the field assisting her husband Kevin. In addition, another carpenter, Kevin Miller, sometimes works with the Kotts on what Mr. Kott refers to as a subcontractor basis. [ 4 ] Mr. and Mrs. Leader live in Bjorkdale, Saskatchewan, a drive of approximately one hour south of Carrot River.

They were either building a new residence, or completely renovating their existing residence (that was never made clear in the evidence), but there is no doubt that, in either case, they were undertaking a substantial amount of work in their kitchen, basically building or rebuilding it from scratch. [ 5 ] During the trial, there was much discussion about a china cabinet that was also built and installed by the plaintiff.

That cabinet does not form part of this lawsuit, it having been paid for, although it has some relevance as it was somewhat of what I may refer to as a “test project” done by the plaintiff for the defendants, to satisfy the defendants that the plaintiff had the expertise to do the work agreed to. [ 6 ] Some time in or around January of 2009, the parties entered into an agreement to have the plaintiff build cabinets and an island area in the kitchen of the defendants.

This contract was made some time after the defendants had looked at, and approved, the china cabinet that the plaintiff had built. [ 7 ] The defendants state that it was an express term of the contract that the work all be done by Christmas of 2009, as they wanted to have the renovations complete for a planned family Christmas gathering. The plaintiff is equally adamant that no such set date was agreed to. What is known is that the work wasn’t done by then, much to the irritation of the defendants.

The plaintiff says that the reason the work wasn’t done by Christmas, irrespective of the fact that there was no end time given for the project, was that the other work the defendants were doing had not yet been completed. Specifically, the plaintiff argues that the floor and walls were not finished, making it impossible to mount cabinets on walls that weren’t done, or to put an island onto floors that weren’t laid.

This other work was not being done by the plaintiff, but his argument was that, as it was not done in a timely fashion, he was inevitably delayed. [ 8 ] The arrangement was that the defendants would pay for the materials as billed, and as the work progressed, invoices were provided to the defendants, which were paid on an ongoing basis. The plaintiff was making requests for payments of part of the labour, which the plaintiff says was met by stalling on the part of the defendants, that is, Mr. Leader would say he could pay that, but he had other things to discuss with him first. Mr.

Leader basically argues that there was no agreement made respecting progression payments. This issue became one of great aggravation, at least to the plaintiff, and finally, in March of 2010, Mr. Kott stated that he would do no further work, as he simply couldn’t afford to continue working on a project for which he was not getting paid. The impression I had,

based on Mr. Leader’s evidence, was that this was fine by him, as at that point, he, if not his wife as well, had concerns that Mr. Kott had bitten off more than he could chew. By this time, the relationship between the parties had completely disintegrated. Being unable to resolve their differences, the plaintiff commenced this action seeking the amount of $6,876.35, being the amount he claims was owing on the project as of March 26, 2010.

In essence, that price includes the portion of the labour that was addressed in the initial price, plus approximately an extra $2,500.00 in additional material which the plaintiff says was necessitated by changes made by the defendants as the work was ongoing.

The defendants, as the reader might expect, take the position that, having received a quote, they are not prepared to pay anything more than that quote. [ 9 ] Having set out the salient background facts, I will deal with the issues as set out earlier. 1) Was the price provided a “quote”, as the defendants argue, or was it an “estimate”, as the plaintiff argues? [ 10 ] Mr. Kott’s evidence on this point was that, after the defendants were satisfied with the china cabinet he had built, they gave him the go-ahead to build the kitchen cabinets. The parties went over everything that Mr. and Mrs.

Leader wanted to have done, and Mr. Leader asked for, in the plaintiff’s own words, a “quote”. Mr. Kott stated that he replied that “it should be around $12,000.00 to $13,000.00 to do this”. Mr. Kott testified that Mr. Leader said that his son had received an estimate of approximately $13,000.00 for the work he and his wife were having done at their residence, and that he replied “I think I can take a thousand off”. Mr. Kott said that Mr.

Leader then gave him the go-ahead. [ 11 ] The basis for the projected cost of the work that was to be done was that the Leaders’ son and daughter-in-law had also done, or were in the process of doing, some renovations, or construction, on their residence, and the plaintiff and defendants had reviewed those plans in arriving at the price for the work that the defendants wanted done on the house in issue in this claim. As Ms.

Kott put it, one reason the price went up as construction progressed was because the defendants’ property was considerably bigger in size than the one the defendants’ son and daughter-in-law owned. Further, as mentioned earlier, there was an issue of changes to the work. [ 12 ] Mr. Kott was adamant that he didn’t actually give a quote to the defendant; he maintained that he provided an estimate based on the plans, and based on doing close to the same type of work as was done on the other house. [ 13 ] Ms. Kott testified that she drew pictures based on what the Leaders wanted (P-3).

This was done so each of the parties could work off it; she’d make notes, make changes, etc., until the parties had it the way they wanted it. Those documents were drawn in October of 2009, and, she says, were based on information provided by the defendants. [ 14 ] Ms. Kott was adamant, when asked in cross-examination what the initial quotation was, that Mr. Kott told the defendants what the plaintiff’s estimate was: $12,000.00 to $13,000.00, inclusive of labour and materials. [ 15 ] Mr.

Kott testified that the defendants wanted a few changes, to the cabinets and the island, which increased the cost of material by $2,500.00. [ 16 ] Mr. Leader’s evidence was that he came up with the figure of $12,000.00, and asked Mr. Kott if that was sufficient, receiving the reply that it was. He went on to say that every time a change was discussed, he asked if the price would remain at $12,000.00, and that Mr. Kott replied that it would. He remained firm that this figure was to include all of the kitchen cabinets, as per the pictures, and all of the material, labour, and installation.

He testified that the agreement was that all work would be completed by December 25. The only item left unaddressed, he stated, was taxes. [ 17 ] I am satisfied that the initial price agreed to was $12,000.00, inclusive of everything but taxes. I note that Mr. Kott testified that Mr. Leader asked for a “quote”, and that was what Mr. Leader clearly thought he was getting. I note as well that the explanation offered by Mr. Leader as to how that figure was arrived at is supported by Mr.

Kott’s testimony that he said that he thought he could “take a thousand off”, that is, to arrive at a firm price of $12,000.00, down from his earlier stated price encompassing a range between $12,000.00 and $13,000.00.

[ 18 ] I also accept Mr. Leader’s evidence as to what effect the changes had on the price, that being that the changes would have no effect. After hearing the evidence on this point, provided by the only two who were parties to the initial agreement, I am satisfied that Mr. Leader’s version is correct. He testified in a sure and direct manner, and he was obviously concerned, as one of the defendants paying the bills, as to what the final bottom line would be. Mr.

Kott, on the other hand, was, understandably, interested in getting into the cabinet-making business in a bigger way, and his focus was on getting this job in order to establish his credentials. He did not seem to be as certain as Mr. Leader as to what transpired at the stage of their business relationship dealing with the price. [ 19 ] Mr. Kevin Miller, a journeyman carpenter who assisted Mr. Kott, testified that there “are always changes when you get to a job site”. Mr. Kott also testified that such was the case. I found Mr.

Miller to be a very helpful witness, as he was somewhat removed from the dispute, and he came across as a very fair and honest individual. He was asked many questions by Mr. Kott respecting what he would have charged for this job, and it was clear from his answers that he thought this job was very much underbid. I find that to be the case. However, the question is not what Mr. Miller would have quoted, or estimated; the question is what the terms of this contract were. [ 20 ] I conclude the figure of $12,000.00 was a firm price, a quote, that was all-inclusive, save for taxes. It was not an estimate.

Further, not being broken down between labour costs and material costs, Mr. Kott bears responsibility for what he refers to as the additional or extra costs, as he chose to quote for the work on the basis that he did, that is, an all-inclusive price. 2) Was there an agreement that the defendants would make “progression payments” as the work went on, or were they entitled to wait until all the work was completed before making payment? [ 21 ] Mr. Kott agrees that Mr. Leader told him that they didn’t like to pay until the “stuff was installed”. As I understood Mr.

Leader’s evidence, he believed that was agreed to. [ 22 ] When he went specifically into the question of progression payments on this arrangement, Mr. Kott said it was usual to have the cabinets done, at which point he would go out and install them, and get paid; however, that does not answer the question as to what happened on this agreement. [ 23 ] Mr. Kott also testified that, starting in January or February of 2010, he was telling Mr.

Leader that he needed some money, and was requesting the payment of any sum to be paid toward his labour costs, as he was having financial difficulties and wanted to get paid for the work he had done to date. He stated that Mr. Leader said that they would work something out, although I note that never did occur. Mr. Kott, feeling he was being stonewalled, started to have suspicions as to the ability of the defendants, or from his view Mr. Leader, to pay anything at all. [ 24 ] In cross-examination, when asked specifically if the defendants had agreed on progression payments, Mr.

Kott said that was agreed to at the time of the deal. He testified that Mr. Leader said, as things were put in, he would pay, and that the agreement was that “progression payments were to be made as we went along”. Ms. Kott said, in examination-in-chief, that, early on, before they actually started working on matters, she told Mr. Leader that they wanted progression payments. She says any time she talked to the defendants about progression payments, something came up, and they were put off. Ultimately, as Ms.

Kott put it: We made the call that we weren’t going to go out until we got a progression payment. [ 25 ] Whereas I can understand the plaintiff’s desire to get progression payments for labour, for the obvious reason that a considerable amount of work in progress was tied up in this project, I am not satisfied that progression payments were an item that was discussed at the time the contract was made. The fact that Mr.

Kott made the request for those payments after the work was started does not alter the original agreement, nor does the fact that the making of progression payments may be the norm in the renovation business. The issue to be determined is what this contract called for, and on that question, I conclude that progression payments were not part of that contract. 3) What amount, if any, is owed to the plaintiff by the defendants?

[ 26 ] As mentioned earlier, the plaintiff’s claim is for $6,876.35, being what the plaintiff claims is the outstanding amount left unpaid. The defendants argue that, as the work was abandoned by the plaintiff, they had to expend monies to get the job completed, but I note that Mr. Miller was prepared to finish up the work, at a cost that would be borne by the plaintiff as part of the original agreement. Further, the defendants argue there were deficiencies in the work that was done. [ 27 ] Dealing with that last point first, I am satisfied that Mr. Kott, along with Mr.

Miller, did good quality work and that the only deficiency of any note is a small nick that Mr. Kott offered to pay for. The photographs of the work done bear this out. I am satisfied that the alleged deficiencies are anchored more in the defendants’ dissatisfaction and unhappiness with how things turned out than they are in reality.

I find that none of these alleged deficiencies were raised until after the work was completed, giving me further grounds to doubt their veracity. [ 28 ] I am equally satisfied that much of the problems that arose in this arrangement came about as a result of miscommunication between the parties as to when the work that the plaintiff was doing could be completed. The plaintiff’s time lines were somewhat dependent on the defendants having certain work completed prior to the plaintiff being able to do his work.

Further, much of the cabinet work that the plaintiff was doing was being done off site, and therefore out of sight of the defendants, leaving them to wonder if anything was being done. [ 29 ] The net result of all this is that both the plaintiff and defendants felt that their expectations were not being met. Thus, when it comes time to sort out the actual monetary compensation owed to the plaintiff, the evidence is less than clear. [ 30 ] Despite these shortcomings, I am satisfied, based on the evidence of Mr.

Miller, that the project was essentially complete when the work stopped, and that what was required was for the doors to be put onto the cabinets, and for the shelves to be inserted. [ 31 ] The evidence is clear that Mr. Kott had retained another cabinetmaker to build the doors, and had budgeted $1,200.00 for that. However, as the relationship between the plaintiff and defendants had disintegrated by the time this was to be done, Mr. Leader got those doors directly from that third party.

Thus, that amount has to be deducted from the plaintiff’s claim, as he would have absorbed that cost as part of his quote for the overall project. [ 32 ] Mr. Miller testified that it would take about a day to put the doors in, and put the handles on those doors. I accept Mr. Kott’s evidence that he told Mr. Leader that he would install everything for $500.00, what Mr. Kott said was a considerable discount from the usual price of $2,500.00. This would include, I find, the installation of the central island. Mr.

Leader testified that he paid another contractor the sum of $5,830.00 to complete the work, although I am not able to compensate the defendants for that. First, the evidence on that point comes from a note the defendant supplied himself (D-3), the contractor himself never testifying and thus never being subjected to cross-examination. Second, it is clear from that exhibit, in any event, that a considerable amount of other work was done and charged for by that contractor. I do note that the stated cost to lacquer and install all the doors and drawers is quoted at $1,050.00 on that document.

I am therefore deducting the sum of $400.00 from the claim to allow for that, as that is in my view a fair figure based on the evidence before me. [ 33 ] The evidence satisfies me that GST was paid on the china cabinet, and was contemplated to be an additional charge on the labour portion of the total cost. [ 34 ] The service cost claimed by the plaintiff is based on personal service by a process server in an amount that seems excessive, as there is no reason service could not have been effected by registered mail, as the demand letter was. I therefore allow service costs by registered mail.

[ 35 ] The plaintiff is therefore granted judgment as follows: Contract price: $12,000.00 Less materials paid: ($7,715.02) Less door adjustment: ($1,200.00) Less installation adjustment: ($400.00) Subtotal: $2,684.98 Plus GST: $134.25 Plus pre-judgment interest from August 27, 2010 to date of judgment: $29.99 Plus costs of service: $8.42 Total: $2,857.64 B. Morgan, J