Meszarics et al v. Hart Modular Homes et al, 2020 BCPC 234

Citation: Meszarics et al v. Hart Modular Homes et al 2020 BCPC 234 Date: 20201009 File No: 1751701 Registry: Prince George IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: NORMAN MESZARICS AND DORCASLYNN WASYLESKI CLAIMANTS AND: HART MODULAR HOMES , REGENCY DEVELOPMENTS AND 0796166 BC LTD DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE C. MALFAIR Appearing on their own behalf: Norman Meszarics and Dorcaslynn Wasyleski Counsel for the Defendant: Douglas McLaughlin Place of Hearing: Prince George , B.C.

Dates of Hearing: November 25,26,27, 2019; July 8,9,10, 2020 Date of Judgment: October 9, 2020 A Corrigendum was released by the Court on December 7, 2020. The corrections have been made to the text and the Corrigendum is appended to this document.

[ 1 ] The claimants purchased a modular home (the “Home”) in 2016 from the defendant, 0796166 BC Ltd., doing business as Hart Modular Homes. The claimants seek damages for losses they allegedly incurred as a result of delays and misinformation provided by the defendant, as well as for deficiencies to the Home. [ 2 ] Initially the claimants sought damages in the amount of $6,380 for living costs they incurred due to delays in the construction of the Home; $10,000 for “discomfort and disrespect,” and $25,000 for manufacturing deficiencies.

As this amount totalled over $25,000, the claimants abandoned $16,380 of their claim to bring it under the applicable small claims limit in force at the time. They also originally sued other third parties in addition to the defendant. [ 3 ] At the Settlement Conference of May 27, 2019, the claimants increased their claim to $35,000 to reflect the new Small Claims Court monetary limit and abandoned their claims against all named defendants other than Hart Modular Homes.

At trial the claimants abandoned $3,000 of their claim for living costs associated to damage their RV allegedly incurred due to being inhabited in cool weather conditions. ISSUES [ 4 ] The issues I must decide are: • Is the defendant liable to the claimants for living costs? • Is the defendant liable to the claimant for “discomfort and disrespect?” • What deficiencies are in the Home, and have the claimants proven the defendant’s contractual liability for those deficiencies? • What is the measure of damages for any deficiencies attributable to the defendant? • Have the claimants’ failed to mitigate their loss?

BACKGROUND [ 5 ] On May 4, 2016, the parties entered into a contract for the purchase and sale of a 27 by 50 foot modular home in the amount of $184,637.40 (the “Home”). The defendant is a dealer or retail seller of modular homes which are manufactured by third parties, in this case, SRI / Winfield Homes in Kelowna. The claimants contracted with the defendant for the purchase of the Home and paid a $10,000 deposit with the intention of financing the balance of the purchase price.

The contracted delivery date for the Home from the manufacturer was June 30, 2016, with a completion date of July 7, 2016. [ 6 ] Another contract was signed May 9, 2016, for a smaller 27 by 48 foot home, however the parties all agree the operative contract in force between them was the May 4, 2016 contract. [ 7 ] The Home was a customized product offering the claimants choices of size, layout, and finishing, as well as options and upgrades they could purchase for the Home.

Despite the contract being entered into on May 4, 2016, the defendant did not place the order for the Home from SRI Homes until early August 2016. There is a dispute as to who was responsible for that delay. The Home was manufactured in Kelowna and arrived in Prince George October 19, 2016. [ 8 ] The Home did not arrive move-in ready from the manufacturer. A significant amount of site preparation work had to be done to support the Home, including ground filling and grading as well as the installation of supporting pilings or “pins”.

Under the contract, the claimants assumed responsibility for all site preparation and pilings. The Home also does not arrive fully not finished. It was the responsibility of the defendant to lay the Home on the pins, construct skirting, lead hook-ups to utilities, and perform all interior finishing work such as installing appliances, doors, trim, fixtures, flooring and painting.

In short, while the home structure was manufactured at SRI Homes, there was a significant amount of carpentry work that needed to be performed by the defendant to make the Home suitable for occupation. [ 9 ] In ordering the Home the claimants primarily dealt with Rick Engstrom, who worked for the defendant as a salesman prior to suffering some health issues. It is not contested that due to an error Mr. Engstrom told the claimants in October 2016 that they could move into the Home on October 31, 2016.

In fact the Home was not finished on that date and the defendant, under the terms of the contract, denied occupation. The claimants learned their bank had advanced the purchase monies for the Home to the defendant’s solicitor on October 31, 2016, and took out the first mortgage payment on November 1, 2016. In response to this, the claimants changed the locks to the Home and unilaterally moved in November 9, 2016. [ 10 ] A walk-through of the Home was done on November 9, 2016, by the claimants and a representative of the defendant in order to identify any deficiencies.

The observations from this walk-through were recorded on a “Warranty Occupancy Checklist” which set out 20 areas for inspection in the Home. All that was reported by the claimants at the time was a broken stove handle, missing toe kick, and the wrong sized fridge. The stove handle was replaced as was the fridge. Only the small toe kick remained unrepaired. [ 11 ] In the winter of 2016-2017 the claimants complained to the defendant of other deficiencies in the Home. The Home was covered by a one year general warranty and 10 year structural warranty by the manufacturer.

The warranty was facilitated by the defendant which was responsible for investigating and repairing any defects covered by the warranty. The defendant sent a contractor in March 2017 who identified and fixed some deficiencies and arranged for a carpet layer to attend the Home. There is a dispute as to what deficiencies were and were not fixed, and when the defects complained of arose.

On May 31, 2017, the claimants commenced this action and refused the defendant and its contactors any further access to the Home to investigate and repair any deficiencies. [ 12 ] The defendant contests the claims for living costs and “disrespect and discomfort” as being unproven or disclosing no cause of action. It was not clear at the trial whether the claimants were abandoning some or all of these claiMs. Sometimes only one of the two

claimants appeared to be abandoning a claim, and sometimes they appeared to change their mind. As they were self-represented, I have treated those claims as not fully abandoned and have therefore dealt with them in these Reasons. [ 13 ] The defendant says the claimants have failed to prove a number of the deficiencies were caused by the defendant or were anything more than de minimis in nature. The defendant also asserts the claimants failed to mitigate their losses, as their Home was covered by a manufacturer’s warranty which the claimants refused to avail themselves of.

CLAIMS Living Costs [ 14 ] The claimants seek $3,380 in damages for “living costs” they say they incurred due to delays by the defendant in manufacturing and delivering the home. It was not clear at trial whether they were abandoning their claim for living costs or not. Mr. Meszarics seemed to suggest that, but the other claimant, Ms. Wasyleski, did not. As such, I must address this aspect of their claim.

At times the claimants complained about storage fees, at other times they complained about wage loss. [ 15 ] The claimants say the completion date for taking possession of the Home was supposed to be July 7, 2016, but they were unable to take possession until they forcibly took it on November 9, 2016.

They say they sold their old residence in the expectation of moving into the Home July 7, 2016, and had to live in a fifth wheel for several months and incur additional costs for storage due to these delays. [ 16 ] According to the purchase contract, the purchase price balance of $176,417.80 was due upon the “final walk through” after the home was set up. Paragraph 12 of the contact provides: Extension of Time.

The Dealer shall not be liable in damages and the Purchaser shall not have the right to terminate this agreement for any delay or default in performance hereunder by the Dealer caused by conditions beyond the reasonable control of the Dealer or its agents, employees, contractors or subcontractors and all dates by which performance obligations of the Dealer are scheduled to be met shall be extended for period of time equal to the time lost due to any such delay.

Without limiting the generality of the foregoing, the Delivery Date and the Completion Date may be extended from time to time by the Dealer on notice to the Purchaser as a result of labor or employment difficulties, manufacturing delays, weather related or other transportation delays, Home Site Preparation delays or other events beyond the reasonable control of the Dealer. [ 17 ] Under the terms of the contract the claimants represented they owned or had a valid lease to the property where the Home was to be situated.

The contract required that if the claimants did not have such ownership or lease, they were to provide the defendant with a “Manufactured Home Removal Agreement” signed by the property owner and the defendant. The claimants admitted in cross- examination that in order to get bank financing for the Home they needed to own the land it was to sit upon. [ 18 ] The land on which the Home was to be situated belonged to Ms. Wasyleski’s father. The claimants intended to purchase the land from him but the purchase was delayed due to a family dispute.

The claimants did not take title to the land until June 22, 2016. [ 19 ] Notwithstanding the delivery and completion dates set out in the contract, it was the defendant’s practice not to place an order for a home until it had confirmation of financing for the purchase. No financing condition was contained in the contract, however, the Home to be constructed was of sizable value and was highly customized.

I find the claimants knew from their discussions with Rick Engstrom that the Home would not be ordered from manufacturer until a commitment letter had been provided by the bank confirming financing was in place to complete the sale. That commitment letter was not provided from Scotiabank to the defendant until July 15, 2016. [ 20 ] Mr. Engstrom testified it generally took three-four months after an order was placed to get a house manufactured in Kelowna to Prince George. The claimants testified they were told it took around months for a house to be delivered and set up.

I find the timelines in the contract consistent with the claimants’ expectation of timing, that is, from the time of order it would take around three months to have the Home delivered and set up for occupancy. [ 21 ] I do not agree with the claimants that the defendant ought to have placed an order for the modular home on or prior to May 4, 2016, when the contract was entered into. The claimants did not own the land until June 22, 2016, and did not have a commitment letter from the bank until July 15, 2016.

It would have been commercially unreasonable for the defendant to order the manufacture of an $184,000 home, built to the claimant’s specifications, in circumstances where the claimants did not have the land to put it on and no financing commitment from their bank to pay for it. [ 22 ] The evidence shows that as of July 15, 2016, the claimants also had not finalized the Home’s specifications. I accept the Home could not be manufactured until the final floor plan, options, and drawings were completed. The claimants were still making changes to the Home plans as late as July 31, 2016.

The final confirmation drawing required by the manufacturer was then completed and the order placed August 4, 2016. A Building Permit was obtained August 9, 2016, based on the final drawings. [ 23 ] In all of the circumstances I find the defendant could not have ordered the Home before July 31, 2016, and the order date of August 4, 2016, was reasonable given final drawings had to be prepared to reflect the claimants’ choices. [ 24 ] Based on their discussions with Rick Engstrom, the claimants expected it would take around two months to manufacture the Home and around three weeks to set-up.

The total anticipated timeline for completion was around three months from the date the order was placed. The order being placed August 4, 2016, the anticipated completion date would have been around November 4, 2016. The home was delivered October 20, 2016, and set-up work commenced. An occupancy permit was issued November 4, 2016, and the claimants took possession November 9, 2016. This is a delay of five days. [ 25 ] The claimants testified they were told by Mr. Engstrom that the manufacture of their Home was somewhat delayed due to a labour disruption at the plant.

If that was the case, the contract expressly exempts liability for delays outside the defendant’s control, such as labour difficulties. No direct evidence was called on this point and I make no findings in that regard.

[ 26 ] The contract expressly exempts the defendants from liability for delays outside the defendant’s control and provides extensions for completion in the event of such delays. Delays relating to securing the land, financing, and finalizing options were solely within the control of the claimants and outside the control of the defendant. I find the claimant has not shown the defendant breached the contract in delaying the order, delivery, and set-up of the Home. [ 27 ] Further, the claimant has not proven on a balance of probabilities that they suffered damage due to any delays in completion.

They were living in a fifth wheel trailer they owned on the property. They did not make any financing payments until November 1, 2016. It is not the case that they were paying for two residences during the period of delay. I find no damages are payable for any additional cost of living. [ 28 ] The claimants say they had to pay $540 for three extra months of storage of household belongings as a result of the Home not being completed by July 7, 2016. However, had the Home been completed July 7, 2016, the claimants would have been storing their belongings in the Home and paying their mortgage fees for that space.

One way or another the claimants had to pay the cost of putting their items somewhere, be it in a storage facility or in their financed Home. They have not proven the storage fees represented a loss attributable to delay. [ 29 ] Mr. Meszarics alleged he lost a couple of months of work “dealing with this,” however, he adduced no evidence connecting any wage loss to the delay itself. Mr. Meszarics did site preparation work for the Home, but that work had to occur whether the Home arrived on July 7, 2016, or some time thereafter. When asked, Mr.

Meszarics was unable to explain how delayed delivery of the home caused him to miss more work than he already had to miss in order to prepare the site and utilities for the Home. The claimants have not proven this aspect of their claim. [ 30 ] The claimants state their belongings suffered damage as a result of the misrepresentation by Rick Engstrom that the Home would be ready to move in October 31, 2016. In reliance on that representation, the claimants moved their belongings out of storage on October 31, 2016, and surrendered their storage unit.

In fact, the Home was not ready and when they attempted to move in they were told they could not. Their valuables and furniture therefore remained in the driveway for two more days while the parties attempted to find alternate storage. By November 2, 2016, the defendant found another unit and arranged for the items to be moved and stored at the defendant’s own cost. [ 31 ] The claimants say their items were damaged from being exposed to the elements for the two-three days while they were in the driveway. The items were separated from the ground by supporting structures and fully tarped.

The pictures adduced by the claimants did not depict any obvious damage. Ms. Wasyleski claimed many items “stunk like mildew,” but these items were in a storage unit for months prior to being briefly situated in the driveway. This damage was not reported to the defendant at the time. In the circumstances, I cannot conclude that any musty contamination was solely attributable to the items being tarped in the driveway for two-three days. The claimants did not adduce any evidence valuing the alleged quantum of damage to the items.

The onus is on the claimants to prove this aspect of their claim, which they have failed to discharge. [ 32 ] The defendant concedes the claimants paid $100 to move their items from the storage unit to the Home on October 31, 2016, and were ultimately unable to move in the items because the Home was not ready.

I award the claimants $100 in damages for unnecessary moving costs. [ 33 ] In connection with the same error regarding the possession date, the claimants’ notary was directed to pay out the purchase price to the defendant’s solicitor in trust on October 28, 2019, unbeknownst to the claimants, who were still living in the fifth wheel. The claimants learned of this when the bank took its first mortgage payment on November 1, 2016. The claimants were upset at paying a mortgage on a property they could not occupy, so they changed the locks on November 9, 2016, and moved in.

That same day they did the walk-through with the defendant. [ 34 ] Under the contract the purchase price for the Home was not due until the home was set-up with a final walk-through. Although the money was not released to the defendant until November 8, 2016, the terms of the contract provided that payment was not due until the walk-through. The claimants commenced paying interest on the financing associated with the advancement of the purchase price November 1, 2016. The claimants are entitled to damages equal to nine days’ interest on the principal borrowed to complete the sale of the Home.

The mortgage payment for 16 days was $563.84, or $35.24 per day which included principal and interest. The total borrowing sum also included around $30,000 to finance other debts unrelated to the purchase price. I value the interest loss to be nine days at $25.00 per day, for a total of $225. [ 35 ] All other claims for damages for living costs are dismissed. Discomfort and Disrespect [ 36 ] The claimants initially framed this aspect of their claim for $10,000 as including discomfort suffered by Ms. Wasyleski’s elderly father and her dog.

These aspects of the claim were abandoned and the claimants proceeded with this claim on other grounds. [ 37 ] Ms. Wasyleski complains that she once went into the defendant’s premises to serve them court documents. The defendant’s employees perceived her to be yelling and vulgarly discouraging other customers in the office from doing business with the defendant. Ms. Wasyleski says she was not yelling and confirmed she videotaped her attendance at the premises. [ 38 ] Being falsely accused of yelling or swearing is not actionable in law, other than to the extent it could be framed as

an act of defamation. The Provincial Court has no jurisdiction to adjudicate defamation suits, and I decline to award any damages for this alleged act. [ 39 ] “Disrespect” alone is also not actionable in civil law. Nothing in the contract between the parties, or in tort law, required the defendant to address Ms. Wasyleski with “respect,” as she defined it. Other than the allegation the defendant’s employees mischaracterized Ms. Wasyleski as yelling in the office, which may have been the honest subjective perception of the employees at the time, no evidence of “disrespect” was adduced by the claimants.

[ 40 ] The claimants seek damages for discomfort they suffered while living in the fifth wheel awaiting completion of the Home. I have found that almost all of the delay was attributable to the claimants. Further, the claimants have a duty to mitigate their loss. The claimants were not paying a mortgage between July 7 and October 31, 2016, before the Home was complete, and could have used those accommodation related funds to rent more comfortable environs if the RV was not suitable.

No evidence was adduced by the claimants that the fifth wheel was the only accommodation available to them other than the Home itself, such that the delay in completing the Home forced them to live in an RV. For the month of September 2016, Mr. Meszarics was not even living in the fifth wheel as he was working in the lower mainland. [ 41 ] I find the claimants have failed to prove they suffered damages in the nature of “discomfort and disrespect” as alleged. This aspect of their claim is dismissed.

Deficiencies [ 42 ] The claimants’ lists of deficiencies evolved over the course of the proceedings. [ 43 ] A significant number of deficiencies alleged by the claimants required expert evidence. Only some defects were obvious and readily apparent. The claimants did not adduce any witnesses with expertise in construction to support their claim.

The only witness with any construction experience was the defendant’s contractor, Darby Brash, who refuted many of the claimants’ assertions despite being called by the claimants as their witness. [ 44 ] Much of the claimants’ case suffered from a lack of evidentiary foundation. The claimants seemed to be of the view that I could take judicial notice of defects or causes of defects, or could solely rely on the strength of their personal opinions in weighing the evidence. The claimants held out they were very knowledgeable about construction, yet they adduced no evidence about their expertise in such matters. Mr.

Meszarics testified he is a union pipe layer. Ms Wasyleski says she worked as a heavy equipment operator. Neither purported to have expertise in home construction, finishing, or engineering. [ 45 ] At the pre-trial conference the claimants were warned that if they would not allow the defendant’s contractor to access the Home to assess the alleged defects, they may need to call their own expert to prove their claim. The claimants neither allowed access nor called their own expert.

Exhaust Fan [ 46 ] The claimants complain the exhaust fan was not installed properly, with the result that bathroom odours were vented into the living room. They claim they “had” an electrician to come and re-wire it properly. [ 47 ] The claimants’ evidence on this point was confusing because the defendant paid an electrician $204.75 to attend the home on December 6, 2016, to repair a factory splice for fan system. It was unclear if the claimants were saying they made the defendant send that electrician, or that they hired and paid their own.

The claimants adduced no proof of payment to some other electrician to work on the fan, nor did they attest to how much they paid. This aspect of their claim is not proven. Water Meter [ 48 ] The claimants allege that due to some negligent act or omission by the defendant, the Home failed to qualify for a free water meter such that the claimants had to pay $643.65 to install one. Little evidence about this issue was adduced by the claimants and there is no evidence as to any communications they had with the defendant about it. This allegation was not put to any of the witnesses.

No plumber or other witness was called to explain the process or who was responsible for doing what in order for the Home to qualify for a free meter. The claimants have failed to prove this aspect of their claim. De Minimis claims [ 49 ] Some of the deficiencies alleged by the claimants were de minimis. Ms. Wasyleski complained workers placed construction related materials in the bathtub and left disposable coffee cups on the countertops. [ 50 ] The claimants allege the defendant employed “used screws” in the hinges of the exterior doors, which the defendant’s contractor, Darby Brash, denied.

I note that some of the screws are painted white and there are some silver Robertson screws, but I cannot ascertain from the photographs that these screws were “used.” Mr. Brash testified the manufacturer and company that built the door jams provided the screws and those were the ones that were employed. There are two types of screw in the hinge because the Robertson screws in the door are security screws. [ 51 ] The claimants allege the defendant used mismatched bathroom fixtures in the Home. This alleged mismatch was not readily apparent from the photos.

The fixtures are generally in a brushed nickel finish, but some items, like the doorknobs, shower rod and light fixture, appear to be of a slightly different shade of brushed nickel than the faucets, trim, and accessory hardware. The bathtub plug is chrome. No evidence was led that it is standard in the industry for every metallic surface in a bathroom to match absolutely, or that this was ever communicated to the defendant as a desired option. No evidence was led of how these shade variations diminished the value of the Home.

This aspect of their claim is dismissed. [ 52 ] The metal ring covering the water line to the toilet was not siliconed to the floor. That would be very small repair. The claimants also say the bathroom sink faucet handle “came off,” but provided no further information about the faucet being broken or replaced. It was unclear if a set screw was loose or missing, or if the faucet was fully broken.

There is no evidence the claimants sought, bought, or installed a new faucet. [ 53 ] At numerous times in their testimony the claimants speculated that items used to finish the Home were actually “used” or “seconds.” Because the stove handle was accidentally broken during installation and subsequently repaired, they characterized the stove as “re-conditioned.” Ms. Wasyleski complained the toilets in the Home were “used” because workmen used the toilets to relieve

themselves while setting up the Home. [ 54 ] In addition to claiming the defendant employed used goods to finish the Home, the claimants levied numerous accusations of dishonesty against the defendant, none of which were supported by the evidence. The claimants complained at length that when they took possession a small fridge, not the larger one they ordered, was in the Home. The larger fridge was paid for and delivered by the defendant shortly after the possession date.

The claimants admit they cannot claim any loss relating to the fridge, but sought to emphasize it showed the defendant was “trying to pull a fast one.” At one point Ms. Wasyleski alleged the Engineer’s Certificate for the Home was a forgery. The claimants alleged some type of conspiracy by Mr. Engstrom to advise them of the wrong possession date so they would pay his grandson $100 to move their items from the storage unit to the Home. They accused Mr. Engstrom of surreptitiously selling the old mobile home on their property and keeping all the proceeds. Ms.

Wasyleski alleged that the Home was not insured because of some kind of collusion between the manufacturer and the insurer. [ 55 ] In any event, no proof of damage was provided in connection with these allegations and I dismiss this aspect of their claim. Screen Door [ 56 ] The claimants say the defendant failed to close the screen door one day, and as a result it was left open and “slamming” in the night, causing damage. The claimants’ evidence about the value of this damage was unclear. Ms.

Wasyleski testified that she had to replace the cylinder which opens and closes the door, but provided no evidence of purchase or cost. She also said Mr. Brash came and replaced that same cylinder. The claimants have not proven this aspect of their claim. Exterior Doors [ 57 ] The claimants allege that sunlight is visible around the outline of the front door, from which I must find the door was hung improperly. The claimants complain the back door is hard to close and lock.

Photos of the front door show a crack in the door frame, glue is visible coming out of the door in the bottom corner, and the bottom of the front door was cut to fit and not sealed off. The claimants are upset because they paid extra for an upgraded door option and the door has a number of apparent defects, as documented in the photographs. [ 58 ] Darby Brash testified the crack in the door frame was superficial and did not affect the structural integrity of the door. In his view it would cost around $30 to fill and repair, and that is what a door company would do if faced with that defect.

He also did not agree the door was hung incorrectly and did not accept the claimant’s assertion that the alleged sunlight around the door was indicative of improper installation. He also denied cutting the door on site, stating the door manufacturer would have done that. [ 59 ] Ms. Wasyleski testified that black dust discoloration on the door hinges is evidence of “rubbing,” however, no evidence was adduced to confirm the discoloration is from rubbing as opposed to lubricant from the hinges themselves.

I cannot take judicial notice that rubbing is the cause of the discoloration, or even that this would be considered a “defect.” [ 60 ] The claimants seek the cost of two new doors and frames, with a supply and install cost of $1,315.01 and $891.51 respectively. This defect would have been apparent at the time of the walk-throughs on November 9, 2016, and March 17, 2017, but was never communicated to the defendant before the claim was filed. There is no expert evidence that the doors and jams must be entirely replaced, rather than repaired.

The defendant says a maximum award of $400 would be reasonable to account for any loss of value to relating to the doors. Silicone caulking [ 61 ] The claimants complain that silicone was used to caulk the baseboards, which is unsuitable for that purpose. As a result, the silicone attracts dust and gives the appearance of being dirty all the time. [ 62 ] Only silicone around the fireplace trim was shown to Mr. Brash in examination. Mr. Brash testified that silicone caulking is an appropriate material for sealing spaces involving tile because it has better adherence. Mr.

Brash testified it would cost $65 to clean and repaint the “dirty” area of silicone. Carpet [ 63 ] The claimants seek $2,901.75 to replace all the carpet in the home which they allege was laid improperly. The defendant does not contest that the carpet was laid poorly and in fact had made arrangements to have the carpet repaired. That repair did not occur because the claimant commenced this claim and thereafter refused the defendant and its contractors, including the carpet layer, access to the Home. Mr. Meszarics told the carpet layer he did not want any work done until the court case was finished.

Fireplace [ 64 ] Mid-trial the claimants raised a further alleged defect relating to the fireplace. They adduced a memo from “Mr. Plumbing and Heating” dated July 1, 2020, stating that the fireplace was not working and the only way to determine what was wrong with it was to remove drywall and investigate. The cost estimate is for $666.75. [ 65 ] It was never raised with the defendant, before trial, that the fireplace did not work. When this issue was put to Mr. Brash in examination it was his opinion the problem was poor homeowner maintenance, not poor manufacture.

At the time this defect was raised the Home had been occupied for over three years. I have no evidence as to whether the fireplace does not work due to homeowner misuse, a defective fireplace unit or defective set-up by the defendant. The defect was discovered long after the expiry of the warranty. No expert opinion on the cause of the failure was adduced. I find claimants have not proven this aspect of their claim. Defects “Under the Home”

[ 66 ] The claimants adduced a video Ms. Wasyleski took under the Home. It was made long after these proceedings had commenced, although Ms. Wasyleski could not remember exactly when it was taken. In the video she repeatedly refers to the “Honourable Justice.” [ 67 ] In the video Ms. Wasyleski goes under the Home and starts narrating as to the alleged construction errors and defects she purports to find there. Included was a claim the defendants had cut a supporting joist under the bathtub and it might fall through the floor.

She pointed to a number of cables in a corner and alleged the defendants had not properly secured them to prevent rodents from getting into the house from the access hole. She complained a water line was running along the ground, and posited “that was why it took so long to get hot water to run” because the hose was not tied up against the bottom of the structure.

The video did reveal a belly bag of insulation under the tub to be pulled down and exposed. [ 68 ] There was no evidence the claimants had been experiencing any problems relating to the tub or rodents prompting an inquiry into the construction under the Home. Ms. Wasyleski admitted she “didn’t know why” she decided to go under the Home and videotape. The video had the impression of Ms. Wasyleski going around videotaping things and jumping to conclusions about their condition as she witnessed them. [ 69 ] Mr.

Brash testified there was no issue with the support of the tub and the video did not reveal any “cut joists” or other defects. With respect to the exposed belly bag, I accept Mr. Brash’s testimony he inspected under the Home when the work was completed and did not observe any such defect. He says he would not have left the belly bag like that as the pipes could freeze. It appeared to him that someone had deliberately pulled down the belly bag and insulation and tampered with it, such as if someone wanted to access that pipe area to relieve a clog. Mr.

Brash cannot say who may have gone under the house after he had left it. At this point the home had been occupied by the claimants for over 1.5 years. In any event, it was his opinion it would cost around $65 to repair the belly bag. [ 70 ] Mr.

Brash explained the so called “electrical wires” captured on the video were in fact internet and TV cables installed after the defendant had finished the Home, and it would have been those companies responsible for any access holes left behind after installation. [ 71 ] The claimants adduced an estimate from “Farmer the Handyman,” for $728 to “put in support joists and floor under the main bathroom and repair belly.” The quote says “joists and floor have been previously removed to fit plumbing drain from shower.” This was one of several quotes from “Farmer the Handyman” adduced by the claimants.

No c.v. setting out his expertise was adduced nor was any report provided to explain the notes on his estimates. He did not testify. The claimants repeatedly emphasized in the trial that the defendant was negligent in allowing carpenters who were not “red sealed” to finish the Home, yet there is no indication the claimants’ carpenter, Farmer the Handyman, is red sealed. I can put little weight on the quotes and bare notes contained in the estimates. Painting [ 72 ] The claimants seek $5,809.31 to repaint the Home. This was another late blooming claim that arose mid-trial.

There is evidence that during the March 2017 walk-through Mr. Brash observed some bare walls that required painting. Mr. Meszarics testified they purchased $400 of paint and paid a neighbour $350 to assist Ms. Wasyleski with mudding and painting the house and removing silicone. It was unclear when this allegedly occurred, given Mr. Brash had observed some unpainted walls in March 2017 and remediated them in April 2017. Ms. Wasyleski testified she repaints the Home every year anyway because she gets bored of the colour and smokes. [ 73 ] I am not satisfied this claim was proven.

No photos of unpainted walls were adduced. Mr. Brash painted walls in April 2017. This aspect of their claim is dismissed. Siding and Exterior Trim [ 74 ] The claimants identified areas in the siding they say were defective. There were a couple of areas in which this was apparent, depicted as a piece of siding sticking out from the wall, and an area where the siding had popped out at a seam. Mr. Brash confirmed on cross-examination these two areas needed repair. He testified it was a very quick and minor repair. [ 75 ] The claimants also allege siding around the windows was installed improperly.

Alleged deficiencies relating to the siding installation around the windows was not readily apparent on the photos provided by the claimants. The claimants adduced no one with any expertise in siding or construction to confirm the siding was installed incorrectly. Mr. Brash, the defendant’s contractor, explained the claimants were mistaken and the siding was installed correctly. The gaps complained of by the claimants were lap joints designed to allow the vinyl siding to move and slide as it contracted and expanded with temperature changes.

He says the area where the siding came off could be fixed in “minutes.” [ 76 ] Mr. Meszarics admitted in cross-examination he has made no efforts to fix the dislodged piece of siding. The claimants say the alleged siding gaps around the window are causing water damage, but admit they never observed any water damage and have never investigated if that was actually occurring, despite water damage being potentially deleterious to the Home. I am not satisfied the siding was installed incorrectly. [ 77 ] The claimants’ photos show small variations of paint colour around some of the exterior window trim.

I accept the claimant’s description that it appears the wrong paint colour was used to touch up some finishing nail holes. This would be a minor repair with matching paint. [ 78 ] Initially the claimants sought $10,000 to remove and install all new siding, on the basis that any new repairs would “show” due to sun damage which might have affected the colour tint of the existing siding. At trial the claimants adduced an invoice from Farmer the Handyman estimating a cost of $974 to conduct siding repairs, which includes the cost of a box of siding, grey paint, and a box of nails.

The estimate states the cost includes “removing all staples and replace with proper nails.” No evidence was adduced as to why that action was necessary. The defendant submits the exterior siding defects should be valued at $150. Incorrect door sill [ 79 ] The defendant installed a metal sill on an indoor doorway in the Home, which the claimants say was improper and causes

oxidation which stains their socks. The sill is in a laundry/mud room area. Again, no evidence was adduced as to the propriety of an aluminium doorsill in that type of room, which can be exposed to mud and moisture. This issue was not put to Mr. Brash, and I cannot find whether or not the sill was inappropriate for the area. No evidence was adduced of cost of replacement. This claim was not proven. Door Handles [ 80 ] Mr. Meszarics testified that he had to replace around four door handles because they were locking doors not installed properly so he had to break into the rooms to gain access.

No estimate of cost was adduced in relation to this claim and it was not put to Mr. Brash. This defect was never raised with the defendant prior to this action being brought, despite the fact it would have been apparent during the walk-throughs on November 9, 2016, and March 17, 2017. In fact, it is hard to envision how the November 9, 2016, walk-through could have taken place if the parties were all locked out of the rooMs. This claim was not proven. Missing Tiled Shower [ 81 ] The claimants say when they saw a brochure of the home the bathroom photos depicted a tiled shower, which is what they expected.

The shower in the Home was an insert, not tile. The brochure relied upon was not adduced, only a single page of a very poor quality photocopy of a photo of a bathroom. I cannot ascertain from the image what type of material is surrounding the shower. It has the appearance of linoleum. [ 82 ] Mr. Engstrom testified he had never seen the picture relied on by the claimants in the defendant’s brochures and had never sold a tiled shower. He explained the showers always come with an insert and feared a ceramic tiled shower would likely break up during transportation. [ 83 ] When Mr.

Brash came to investigate defects in March, 2017, the claimants did not complain about the shower. Mr. Brash confirmed that had the wrong shower been installed, that would have been an item covered under the manufacturer’s warranty. [ 84 ] The Winfield Home Systems order form documenting the claimants’ design options does not identify tile walls as either standard or an extra option. This aspect of the claim is not proven. “Stolen” paint and carpet [ 85 ] The claimants allege the defendant “stole” paint and carpets the claimants purchased as part of the Home package.

The claimants base their claim on the belief that when they briefly entered and photographed the home on October 31, 2016, they saw rolls of carpet and containers of paint that were no longer there when they moved in November 9. [ 86 ] I accept Ms. Meroniuk’s explanation that it is common practice for the modular home manufacturer to ship up extra finishing supplies inside the homes for use in other homes supplied by the manufacturer to the same area. It saves costs on shipping. Only some of the carpet and paint was intended for the claimant’s Home, the rest was for use in other projects.

The Home was carpeted and painted and the additional supply removed. There was no evidence the Home was missing carpet from any of the rooms as contracted for, or that the claimants paid for extra paint and carpet beyond that required to finish the Home. I am not satisfied any paint or carpet was misappropriated and that aspect of the claim is dismissed. [ 87 ] The claimants say that if the carpet and paint was not theirs and was just being shipped in the Home to save transport costs, then they should be compensated for the costs of shipping these extra finishing materials in their Home.

There was no evidence the claimants bore any additional shipping costs arising from the manufacturer putting extra finishing materials in the Home for shipment. In any event, at the time of shipment the Home belonged to the defendant as title had not passed to the claimants, so there was no trespass to their property. This aspect of their claim is dismissed. Ceiling Patch [ 88 ] The claimants seek damages for an improperly painted ceiling patch in the bedroom. The photos do show slight variation in colour as between the main part of the ceiling and the patch area, which appears to be several feet long.

Although this patch would have been apparent from the date of possession and on March 17, 2017 when Mr. Brash walked through the house to investigate deficiencies, it is not clear this was raised with the defendant before these proceedings were commenced. No repair cost estimate was provided concerning this defect. Cracking and Separation [ 89 ] The claimants took photos of the Home on April 11, 2018 which depict cracks in some of the walls and separation between some areas of trim and cabinetry. These cracks were documented almost a year after the claim was filed. Mr.

Brash did not observe this cracking during his walk through in March, 2017, just some separation between the fireplace mantle and the wall. [ 90 ] In purchasing the Home the claimants had the option of paying the defendant to provide site preparation and pilings or make those arrangements themselves. The claimants assumed that responsibility. The claimants retained Cantilever Construction and paid them $13,650 to prepare the site and install the pins upon which the Home was to sit.

The claimants also undertook some of the site preparation themselves. [ 91 ] The claimants initially intended to purchase a 48 foot long modular home but later changed their minds and extended the length of the Home to 50 feet. When Cantilever requested the defendant send the blocking plan for the Home, Rick Engstrom sent the wrong drawing which showed the Home to be 48 feet.

As such, the pin layout was two feet shorter than what would have ordinarily been installed for a 50 foot home, for a total cantilever overhang of 3 feet instead of two feet at each end. [ 92 ] Cantilever Construction accounted for the additional overhang by adding bracing to support the pins. The defendant paid for this additional bracing work in light of their error in the amount of $2,944.84. The defendant also gratuitously paid Cantilever Construction

an additional $2,130.45 to perform extra grading and excavation work for the benefit of the claimants as

an act of good will,notwithstanding that work was unrelated to the blocking plan error. [93] The claimants say the cracking and separation observed in the Home was due to the Home being set on a pin grid which was tooshort, resulting in a cantilever that was too long and structurally unsound. They say the defendant is liable because the defendantprovided the wrong blocking plan to Cantilever. [94] The claimants did not adduce any expert evidence to explain the cause of the cracking and separation related deficiencies in theHome. It could be the pins were inadequately spaced.

It could be ordinary shrinkage and settling. It could be the foundation materialswere unsuitable or ground grading was done incorrectly. It could be a manufacturer’s structural defect. It could be the product of frostheave from an underground creek. There are many different things which could have contributed to the cracking and separation observedby the claimants. Some causes, like those relating to the quality of the site preparation or pilings, would not be attributable to thedefendant.

Defects related to “normal deterioration, cracking or shrinkage of plaster, paint, and drywall,” as well as defects related to“settlement,” are excluded from the manufacturer’s warranty and correspondingly may also not fall under any implied warranty underthe Sales of Goods Act. Different causes of defects give rise to different findings of liability. In order to assess damages against thedefendant, the claimants must first prove the cause of the defects. [95] Mr.

Brash, who installed the Home on the pins, testified that a 3 foot overhang is within standard allowances and does notrequire any further engineer’s approval. Notwithstanding, he sought that approval before installing the Home to avoid any liability forhis company. Correspondence adduced by the defendant shows the engineering manager from the Home’s manufacturer, SRI, confirmeda 3 foot cantilever was acceptable and would not vitiate the claimants’ warranty. [96] Mr. Brash testified he has been setting up modular homes for 14 years and has seen some cracking and separation when a homeis settling on its foundation.

He said there is a natural spring creek running underground under the corner of the Home where most of thecracking is alleged to have occurred. Over the winter of 2016-2017 the ground heaved so badly on that end of the Home that the skirtingbuckled. Mr. Meszarics observed he thought that that end of the Home was “sinking.” Defects arising from flaws in the ground and soilpreparation work would not be attributable to the defendant, as that site preparation work was the sole responsibility of the claimants. [97] The cracking and separation captured in the photographs is not dramatic.

The claimants’ estimates do not contemplate any largescale remediation of these defects. At best they may be captured under the “mudding and painting” quote from “Farmer the Handyman.”I cannot infer solely from the appearance of the defects that there is major structural insufficiency for the Home relating to the pins. [98] A

Schedule C-B “Assurance of Professional Field Review and Compliance” Certificate was issued by a professional engineer,Keery Consulting Ltd., confirming the Home complied with the B.C. Building Code. The “Summary of Design and Field ReviewRequirements” form identifies all the items reviewed by the engineer, which included “structural aspects of deep foundations.” No onefrom Keery Consulting or Cantilever Construction was called as a witness, nor was anyone else with any engineering experience. [99] I cannot conclude on the evidence before me that the cause of the cracks was due to the pin layout being too short.

The onus ison the claimants to show the cause of the deficiencies was due to the actions of the defendant. The onus is not on the defendant todisprove it. I have no engineering evidence to support a finding that the cracks in the Home were due to the cantilever being too long.

Icannot take judicial notice of that fact, especially in the face of some evidence to the contrary. [100] While I accept there is damage to the Home in the nature of the cracks and separations, I have insufficient evidence from theclaimants to find what caused the damage, who is responsible for it, and what cost and effort would be involved to repair it. The onusbeing on the claimants to prove that aspect of their claim, I must dismiss it.

DAMAGES AND DUTY TO MITIGATE Measure of Damages [101] A party who suffers from a breach of contact is entitled to be put back into the position they would be in if the contract had beenperformed according to its tenor. However, that consideration is always to be balanced against another principle in this area of the law,namely, that a person who suffers damage by reason of a breach of contract is bound to act reasonably to mitigate damages arising fromthe breach (514953 B.C. Ltd. dba Goldkey Construction and Chiu v.

Leung, 2007 BCCA 114 at par. 11). [102] Sometimes damages payable for defective work is to be measured by the cost of remedying the defects. This may be the casewhere the cost of performing the work or making good the defects is less than the diminution in the value of property caused by the poorwork. In such cases, it is the claimant’s duty to take any reasonable steps to mitigate their damage by doing what is required (McGarry etal. v. Richards, Akroyd & Gall Ltd., (BC SC) at par. 116). Sometimes the cost of re-construction is appropriate.

Thereal question is “what damage has the plaintiff really suffered from the breach?” (Goldkey Construction, at par. 13). [103] Although I am satisfied there were some deficiencies in the Home attributable to the finishing of the home, but that does not meanthe claimants are entitled to require the defendant to replace everything brand new as they demand. [104] The claimants have not led any evidence of diminution of value, that is, how much less their Home is worth now than it wouldhave been had the defects not been present.

The claimants seek complete replacements of things, like an entire painting of the house,entire re-siding of the house, total replacement of doors and jams, total re-carpeting. Courts have held that the cost of re-instatement isnot the proper measure of damages where the owner does not intend to, or cannot rectify or complete the defective work, or where theywould be acting unreasonably or oppressively in doing so (McGarry et al. v.

Richards, Akroyd & Gall Ltd., (BC SC)).The reasonableness of doing the work must be judged not only by the effect of the default upon the amenities of the property, but by therelation between the cost of repairing the default and the diminution in the value of the premises caused by it (par. 124). [105] I find the cost of full replacements as claimed by the claimants is unreasonable and far exceeds any diminution of value of theHome. While there are some small defects in the paint, siding, doors, and carpet, these deficiencies do not represent a total failure to

achieve the precise contractual objective between the parties. The claimants substantially received the Home they bargained for. Therewere some imperfections, all of which were capable of being repaired. The cost of reinstatement would be all out of proportion to thebenefit obtained, namely, that everything would be brand new with no history of imperfection. [106] The contract provides that the defendant warrants any goods sold or work done by it, as the dealer, under any Dealer Warrantyforming part of the agreement or as a seller under the Sale of Goods Act. As there was no Dealer Warranty, under the terms of thecontract the Sale of Goods Act prevails.

Section 18 of the Sale of Goods Act provides: Implied conditions as to quality or fitness 18 Subject to this and any other Act, there is no implied warranty or condition as to the quality or fitness for any particular purpose ofgoods supplied under a contract of sale or lease, except as follows: (

a) if the buyer or lessee, expressly or by implication, makes known to the seller or lessor the particular purpose for which the goodsare required, so as to show that the buyer or lessee relies on the seller's or lessor's skill or judgment, and the goods are of a descriptionthat it is in the course of the seller's or lessor's business to supply, whether the seller or lessor is the manufacturer or not, there is animplied condition that the goods are reasonably fit for that purpose; except that in the case of a contract for the sale or lease of a specifiedarticle under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose; (

b) if goods are bought by description from a seller or lessor who deals in goods of that description, whether the seller or lessor is themanufacturer or not, there is an implied condition that the goods are of merchantable quality; but if the buyer or lessee has examined thegoods there is no implied condition as regards defects that the examination ought to have revealed; (

c) there is an implied condition that the goods will be durable for a reasonable period of time having regard to the use to which theywould normally be put and to all the surrounding circumstances of the sale or lease; (

d) an implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade; (

e) an express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent with it. [107] The implied warranty of fitness does not require the goods be “perfect,” as explained by the Ontario Court of Appeal in the oftcited passage from Venus Electric Ltd. v. Brevel Products Ltd., (ON CA) at p. 1178: A warranty of fitness has to do with the intrinsic qualities and characteristics of the property sold . . .

An implied warranty that goods arereasonably fit for the purpose must be reasonably construed in the light of common knowledge with respect to the nature of the articlesold. While such warranty requires that goods be reasonably suited or fitted to the purpose for which sold, nothing further is required,and it is not necessary, for example, that the

article purchased be perfect or the best of its kind, nor is there any implied warranty that thearticle is as suitable for the purpose as other articles of the same kind. The warranty does not constitute an agreement that the goods canbe used with absolute safety or that they are perfectly adapted to the intended use . . . . (Dubin, J.A.'s emphasis) [108] The modular home itself did not breach any implied warranty of fitness under the Sale of Goods Act. While not “perfect,” thedefects were mostly aesthetic and did not affect the habitability of the Home as a residence.

With respect to the defendant’s liability as aseller of the Home, the claimants are not entitled to reject it or demand the defendant re-construct significant portions of it. [109] Pursuant to s. 56 of the Sale of Goods Act, the claimant’s measure of damages for breach of warranty by the defendant, as theseller of the Home, is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.Because this is an alleged breach of warranty of quality, the claimants’ damages are limited to the difference between the value of theHome at the time of delivery and the value the Home would have had if it did not have those deficiencies.

The claimants’ right todemand repairs, as opposed to recovering damages for diminution of value, lies against the manufacturer under the manufacturer’swarranty. [110] The claimants have led no evidence on how the value of the Home has been diminished by the deficiencies. Duty to Mitigate [111] The Home is subject to a manufacturer’s warranty through SRI Homes. The warranty insures against non-structural defects for aperiod of one year from the possession date. It insures against structural defects for ten years.

Structural defects include defects to wallsand floors, unless the cause of the defect arises from the foundation. Under the warranty, the Manufacturer agrees to repair or replace anydefects within the applicable coverage period if brought to Manufacturer’s attention in writing. The warranty is terminated if there is abreach of contract by the homeowner. [112] The covering letter for the warranty agreement explains that all warranty is delivered and coordinated through the retailer, in thiscase being the defendant.

If the homeowner has a claim within the first year of possession, they are to contact the retailer, which isidentified as the “quickest way to resolution.” After one year, for structural defects the homeowner is to contact Pacific Home Warranty,and the contact information was provided.

The letter also states that “if your SRI retailer is unable to assist you, please contact theWarranty Department at the plant where your home was built,” and provides contact information for three plants, including WinfieldHomes. [113] Under the warranty, the claimants were obliged to promptly notify the manufacturer in writing of any defect and take allreasonable steps to prevent any further loss or damage once a defect has been found. Implicit in the warranty is the claimants’ obligationto allow the manufacturer the opportunity to investigate and repair a defect occurring within the applicable coverage period.

In order todo that the claimants must give the manufacturer or its agent access to the Home. [114] At common law, where there are deficiencies in construction work, in the absence of a fundamental breach, the contractor is

entitled to a reasonable opportunity to rectify the work. In C. S. Bachly Builders Ltd. v. Lajilo, (ONSC), the claimantsought to fully set off the amount she owed to the builder for alleged defects in restoration work to her residence. The deficiencies werenot so defective as to go to the root of the contract and the work have no value. The builder offered to fix the deficiencies but thehomeowner refused him access and hired another builder. The trial judge found the homeowner had a duty to mitigate and provide thebuilder a reasonable opportunity to correct his work.

Having refused the builder that opportunity, the homeowner was not entitled todamages based on her cost of correction. The trial judge awarded damages based on the builder’s cost of rectification. [115] Rhonda Meroniuk, office manager for the defendant, testified the claimants were covered by the manufacturer’s warranty aftercompletion. She also confirmed that she sent the requisite information to PAL insurance to enrol the Home in the free insurance programafter completion. Mr.

Meszarics admitted he knew about the warranty. [116] The claimants had an avenue to repair defects under the manufacturer’s warranty administered by the defendant. The claimantsbrought this action long before the warranty ever expired without giving the defendant an opportunity to investigate and repair thedefects now complained of. The claimants say they brought this action because they sought repairs and received “no response” from thedefendant.

In these circumstances where there was a duty to mitigate, facts relating to whether or not the defects were reported to thedefendant, and how the defendant responded, are material. [117] In their pleadings the claimants alleged Mr. Meszarics told the defendant about “all the problems” with the Home inNovember 2016 “with no response.” However, the evidence contradicts that claim. When the defendants moved in on November 9,2016, the only deficiencies noted during the walk-through were a missing toe kick, broken stove handle, and the incorrect fridge. Thestove handle and fridge were remedied shortly thereafter.

There is evidence that in mid-November 2016 the defendant sent a contractorto do some baseboard work at the Home. An exhaust fan was repaired in December 2016. This suggests the defendant did “respond” tosome complaint by the claimants in some fashion. [118] The defendant’s records document that Ms. Wasyleski called the defendant’s office “for the first time” on February 27, 2017. Thedefendant responded by sending out Darby Brash to investigate under the terms of the warranty on March 17, 2017. He conductedrepairs in April 2017 and the carpet layer was retained to repair the carpet in June 2017. [119] Mr.

Meszarics testified he sent a “list” of deficiencies to Rick Engstrom on December 16, 2016.The list was not adduced inevidence, nor was its contents. When asked in cross-examination what issues were identified in this alleged list, Mr. Meszarics said “lookin your book and you won’t have to ask me.” [120] Mr. Engstrom was not confronted by the claimants about having received a list of deficiencies in December 2016. Mr.

Engstromagreed the claimants had brought problems in the Home to his attention once they moved in, and he “turned it over to Ken” at thedefendant’s office, as that ended his involvement as the salesman. The timing, details, or nature of those discussions were not exploredby the claimants. The defendant’s witness, Ms. Meroniuk, was not confronted about any list. Mr. Brash was not confronted about havingany conversations with the claimants other than when he attended the Home in March 2017. [121] Ms.

Wasyleski also spoke of talking to the defendant about all the deficiencies, but when asked for details of those conversations,she did not provide any. When pressed, she became emotional and accused the defendant of trying to “trick her” and accusing her ofbeing a thief, and generally avoided the question. When asked by the court when she spoke to the defendant about deficiencies in theHome, Ms. Wasyleski said it was right before Mr. Brash came out in March 2017. [122] I repeatedly invited Ms.

Wasyleski to tell the court about what conversations she had with the defendant about the deficiencies inthe Home and any requests for repair. Ms. Wasyleski said these conversations were with Mr. Brash and “Jana” and that “they should bethe ones here giving evidence.” I again explained she could tell me about her side of the conversation and invited her to explain how theyresponded to her requests for repairs. Ms.

Wasyleski continued to deflect the issue, complaining the defendant “keeps lying about her”and avoided the question. [123] In short, the court gave the claimants every opportunity to provide evidence about their allegedly ignored requests to repairdeficiencies, and neither claimant was able to provide any details of that claim. Mr. Meszarics admitted the claimants never attempted tocontact the manufacturer directly as instructed in the warranty cover letter, which invites the homeowner to call the manufacturer if theyare not receiving satisfaction from the dealer. [124] It was put to Ms.

Wasyleski in cross examination that she had a warranty on the home which may have covered the deficienciesnow complained of, and she responded that she needed to read the Notice of Claim. She ultimately admitted that the only efforts shemade to notify the defendant of the deficiencies were at the November 9, 2016 walk-through and in March 2017 when Mr. Brash cameto the Home to investigate. [125] Ms. Meroniuk testified that upon receiving complaints from the claimants in early 2017, they sent Mr. Brash out to investigate inMarch 2017 and sent him back to do repairs in April 2017.

The defendant also contacted the carpet layer, Neil Busse, to come repair thecarpet. Ms. Meroniuk explained they like to try and deal with warranty claims all at once, and because they only have the one contractor,Mr. Brash, they have to prioritize complaints. Homeowners who can live comfortably in the home with minor deficiencies are lowerpriority than those with urgent probleMs. [126] Mr. Brash identified the carpet was not laid well and had paint stains on it, some walls were still unpainted, and some of the covemouldings needed caulking and paint touch-ups.

There was separation between the fireplace mantle and wall. He noted at the time thatthe ground was heaved very badly on one end of the home which had damaged the skirting. Mr. Brash testified he photographedeverything he observed and did not leave anything out in his review. He says if he had seen cracks in walls he would have documentedthat. In April 2017 he returned and fixed drywall, painting, and crown mouldings, and gratuitously fixed the skirting (which wasexcluded from the warranty).

Much of the remedial work was subsequently done within a month of the walk-through. [127] The claimants never suggested to Darby Brash, Rick Engstrom, or Rhonda Meroniuk that they had communicated defects to thedefendant which the defendant ignored, failed, or refused to repair. I put little weight on the claimants’ evidence that they brought this

claim due to inaction by the defendant. [128] The claimants did not communicate any further with the defendant about defects in the Home after Mr. Brash’s attendance inApril 2017. Rather, they commenced this lawsuit on May 31, 2017. The Home was still under the manufacturer’s one-year warranty,which did not expire until November 8, 2017. The claimants thereafter refused to allow the defendant or any of its contractors to accessthe home or effect any repairs.

The Claimants are still under the 10 year structural warranty. [129] There is no evidence that prior to starting this claim the claimants made any claim for defects under the warranty which wereignored or refused by the defendant or the manufacturer. At no point did the defendant ever say it would not repair or remediate anydefect the claimants identified with the Home.

The claimants simply started this lawsuit then refused the defendant and itssubcontractors, including the carpet layer, access to the Home to investigate and repair. [130] I find the defendant acted reasonably and in good faith in investigating and repairing deficiencies in the Home as they wereidentified by the claimants.

I find all of the evidence to be inconsistent with the claimants’ assertion that there was “no response“ to theirrequests for repair from the defendant. [131] The defendant has consistently, including up to the time of trial and even in the course of the trial, expressed its willingness toassess and potentially repair defects in the Home if the claimants would just give them access to it. The claimants have consistentlyrefused access for spurious reasons. [132] In cross examination Ms. Wasyleski admitted Mr.

Brash addressed a number of the deficiencies complained of, but suggested thatdid not satisfy their claims because the work was not done by “red seal” carpenters. No evidence was led that superficial finishing work,such as filling gaps in trim, painting, or drywall, requires the expertise of a red seal carpenter. There is no evidence the claimants’preferred contractor, Farmer the Handyman, is a red seal carpenter. I put no weight on this explanation for failing to seek remediation ofdefects under the warranty. [133] Mr.

Wasyleski said she would not allow the defendant’s contractors in after March 2017 because she thought they would “stealher belongings.” She based this belief on her claim that the defendant “stole” her carpet and paint. I note this alleged theft would havebeen apparent to the claimants on the date they moved in, yet that did not deter them from allowing the defendant’s contractors to accessthe Home multiple times between November 9, 2016, and April 2017 to effect various repairs.

I put no weight on this explanation. [134] To the extent the claimants discovered defects in the Home they had a duty to mitigate that loss. The claimants had amanufacturer’s warranty which covered the repair or replacement of defects within a one year period or 10 year period. Had theclaimants made a claim under the warranty, many of the defects they complained of may have been remediated at no cost to them. [135] The claimants emphatically expressed their distress at the alleged egregious state of the Home.

Many of the defects theycomplained of were minor in nature and readily repairable by anyone with some carpentry skill. Both claimants held themselves out to beknowledgeable about construction, inviting the court to rely on their opinions about defects and industry standards, as well ascommenting on the workmanship of the defendant’s contractors. Despite apparently being quite knowledgeable and handy, theyclaimants did not attempt many of these repairs themselves, nor did they ask the defendant or anyone else to fix them. They haveapparently lived with these defects for years unnecessarily.

When asked in cross-examination why she would endure that state of affairsfor so long instead of remedy it, Ms. Wasyleski answered that it was “not her job” because it was a “brand new house.” SET-OFF [136] If the claimants are awarded any damages the Defendants claim set off in the amount of $2,130.45 for amounts it paid toCantilever for grading and excavation work which was the responsibility of the claimants. The defendant says it paid for this work as anact of good faith to move the project along for no consideration. The cost of grading was $1,154 and excavation work to move a waterline was $875. Mr.

Brash testified this work had to be done because the grading work done at the behest of the claimants was notsufficient and because the water line could not remain in its current location. [137] The claimants say there should be no set-off because they never authorized the defendant to instruct Cantilever to do this gradingand excavation work. I accept that the claimants were not aware the defendant had given those instructions to Cantilever and paid thosecosts.

The claimants say it would be unfair to set off amounts incurred by the defendant on their behalf for work which was done by athird party without their knowledge, consent, or authorization. [138] The defendant provided no authorities for the proposition that a set-off may be available in these circumstances. The contractexpressly excluded site preparation and pilings work, stating that was the responsibility of the homeowner. Accordingly, site preparationwork did not fall under the contract. [139] The law of set-off was summarized in Wilson v. Fotsch, 2010 BCCA 226: 68 True legal set-off is unproblematic.

It has two principal requirements - both obligations must be debts and both debts must be mutualcross obligations: see Holt v. Telford, (SCC), [1987] 2 S.C.R. 193 at 205 where the court cites from Royal Trust v.Holden (1915), (BC CA), 22 D.L.R. 660 (B.C.C.A.) at 662-63: ...

"mutual debts" mean practically debts due from either party to the other for liquidated sums, or money demands which can beascertained with certainty at the time of pleading. 69 Where both are established, the amount due will be deducted from the award for unjust enrichment. 70 Where one or both of these requirements cannot be established, legal set-off is not available. Equitable set-off may be: Holt at 205-206. By its nature, equitable set-off is more difficult in application. In Irving Oil Ltd. v. Blanchard, 2002 PESCTD 52, DesRochesC.J.T.D. helpfully explained its essence at para. 9:

[9] Equitable set-off arises where there are certain equitable circumstances which give a right to a person who sets them up against anopposing party to an action. It is a doctrine based on fairness.

Equitable set-off is available provided there is a relationship between thecross-obligations such that it would be unfair or inequitable to permit one to proceed without taking the opposing claim into account. 71 The authorities "are clear that a defendant's claim will not be viewed as an equitable set-off ... unless it is closely or intimatelyconnected with, or directly impeaches, the plaintiff's claim": Cam-Net Communications v.

Vancouver Telephone Co., 1999 BCCA 751 atpara. 44. 72 The leading modern statement on the application of equitable set-off is a judgment of Macfarlane J.A. for this Court in CobaIndustries Ltd. v. Millie's Holdings (Canada) Ltd. (1985), (BC CA), 65 B.C.L.R. 31 (C.A.). It was adopted by WilsonJ. in Holt, and most recently cited by this Court in Jamieson v. Loureiro, 2010 BCCA 52 at para. 35. 73 Coba Industries sets out the requirements for a claim of equitable set-off (at 38): 1.

The party relying on a set-off must show some equitable ground for being protected against his adversary's demands: [Rawson v.Samuel (1841), Cr. & Ph. 161, 41 E.R. 451 (L.C.)]. 2. The equitable ground must go to the very root of the plaintiff's claim before a set-off will be allowed: [Br. Anzani (Felixstowe) Ltd.v. Int. Marine Mgmt. (U.K.) Ltd., [1980] Q.B. 137, [1979] 3 W.L.R. 451, [1979] 2 All E.R. 1063]. 3.

A cross-claim must be so clearly connected with the demand of the plaintiff that it would be manifestly unjust to allow the plaintiffto enforce payment without taking into consideration the cross-claim: [Fed. Commerce & Navigation Co. v. Molena Alpha Inc., [1978]Q.B. 927, [1978] 3 W.L.R. 309, [1978] 3 All E.R. 1066]. 4. The plaintiff's claim and the cross-claim need not arise out of the same contract: [Bankes v. Jarvis, [1903] 1 K.B. 549 (Div. Ct.); Br.Anzani]. 5. Unliquidated claims are on the same footing as liquidated claims: [Nfld. Govt. v. Nfld. Ry. Co. (1888), 13 App.

Cas. 199 (P.C.)]. [Citations added.] [140] In this case there was no mutual debt between the parties arising under the contract and the doctrine of legal set-off does notapply. The defendant’s claim of set-off can only arise in equity. The scope of the defence was explained in Cam Net Communications etal. v. Vancouver Telephone Company Limited, 1999 BCCA 751 at par. 25: 25 Equitable set-off, as claimed by the appellant in this case, will only be permitted where the claims are so closely related that it wouldbe unfair or unjust to treat the claims separately.

As Houlden and Morawetz state at F [section] 109: Equitable set-off arises where there is such a relationship between the claims of the parties that it would be unconscionable or inequitablenot to permit set-off.... For equitable set-off, there must be a close connection and interrelatedness of the transactions sought to be set off,and if this is lacking, equitable set-off will not be allowed. [141] There was little evidence from the defendant as to why the additional grading and water line relocation work was necessary.Cantilever did not attest to this. Mr. Brash made thin reference to it in his evidence.

The claimants did not admit it was required. Theclaimants were prepared to do and had done much of the site preparation and excavation work themselves. They were not advised thatCantilever had been directed to perform this service, they were not warned of the cost, and they were not given the opportunity to do thework themselves or negotiate their own price. That work was not undertaken at the request of the claimants.

The defendant has notalleged an unjust enrichment or quantum meruit for which the claimants were required to account. [142] The defendant’s payment to Cantilever was gratuitous and did not give rise to any claim against the claimants for reimbursement.In 1026238 B.C. Ltd. v.

Pastula, 2016 BCSC 1812, the court found that gratuitous offers to accommodate the plaintiff which were nottied in any way to the contractual obligations in the original agreement did not give rise to an equitable set-off. [143] Given the defendant’s payment to Cantilever was gratuitous and made without the knowledge and consent of the claimants, I amnot satisfied it rises to the level of a “claim” which the defendants would be entitled to set-off against the claimants’ claim.

I find thedoctrine of equitable set-off does not apply in these circumstances to reduce any amounts owing by the defendant to the claimants. CONCLUSION [144] The claimants admit they did not take steps to remedy any defects, other than some painting, since they moved in over three yearsago. In Goldkey Construction the court found it a “matter of materiality” that little had been done by the homeowner over the course ofyears to remedy a number of the alleged deficiencies.

The court found in those circumstances it was open to the trial judge to infer thehomeowner had no intention of remedying the alleged deficiencies, and as such, the proper measure of damages was diminution in value.The homeowner having failed to lead evidence of diminution of value, the trial judge chose to award no damages under that head. [145] The same inference as to the claimants’ intention to use any award of damages to conduct repairs could also be reasonably drawnin this case. The claimants had an avenue to repair defects through the Home warranty which they rebuffed.

They claim to be greatlydistressed by the defects, yet in over three years they have taken no steps to remedy many of the deficiencies, even very minor ones.They seek unreasonable total replacement costs for small defects. They told the carpet layer not to come repair the carpet, rather, theywould hire him themselves after the court case was completed. [146] In Goldkey Construction, the trial judge awarded significantly reduced damages to the homeowner in similar circumstanceswhere evidence of loss was wanting.

The construction contract was for $70,000 and the homeowner sought to set off $60,000 in claimsfor deficiencies. The trial judge awarded the homeowner $7,000. A

summary of those evidentiary problems was provided by the Court

of Appeal at para. 21: 21 In the present case, while it might have been possible to accurately estimate what was required to alter or add certain items in dispute, the evidence at trial was not particularly clear. For instance, Mr. Leung said he had installed a garborator type appliance but could not quantify what it cost. There was apparently a built-in desk said to be missing from one room but the accuracy of the estimate of the expense of this item in the evidence of the expert retained by Mr. Leung was doubtful.

There was said to be some deficiency in the driveway but whether that was attributable to the actions of municipal workers or the contractor was not clear from the evidence. Mr. Leung claimed the windows leaked but the expert retained by the contractor testified that, when he examined the premises soon after a substantial rainstorm, he could detect leakage only in one smallish window in a nook area. I doubt if the evidence permitted any clear finding on several of these factual issues and, in any event, there was a dearth of accurate evidence about what sum might be required to remedy the alleged problems.

The judge found certain deficiencies existed and awarded a sum as a set-off to Mr. Leung, largely b

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