Select Drywall et al v. Sandhu et al. Date:, 2012 BCPC 320

Citation: Select Drywall et al v. Sandhu et al. Date: 20120629 2012 BCPC 0320 File No: 19604 Registry: Abbotsford IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SELECT DRYWALL CONSTRUCTION LTD. CLAIMANT AND: LOVEPINDER KAUR SANDHU NARDEV SINGH SANDHU DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE G. BROWN Counsel for the Claimant: Balraj Gill, a company representative Appearing for the Defendants: Nardev Singh Sandhu Place of Hearing: Abbotsford , B.C. Dates of Hearing: June 13, 22, 2012 Date of Judgment: June 29, 2012

[ 1 ] THE COURT : These are my Reasons for Judgment under file number 19604, Select Drywall Construction Ltd. versus Nardev Singh Sandhu and Lovepinder Kaur Sandhu. [ 2 ] This case illustrates the problems which can occur in the construction industry when contracts are not reduced to writing. [ 3 ] The claimant, Select Drywall Construction Ltd., is a company with three directors; Balraj Singh Gill, Sukhvir Singh Bal and Sukhinder Singh Rai.

The claimant alleges that it had a verbal contract with Nardev Singh Sandhu and Lovepinder Kaur Sandhu to install drywall (including mudding and ceiling texture), to the Sandhu's home on 32536 Egglestone Avenue, Mission, B.C. in the summer of 2009. The claimant says the price was $24,000 plus tax, for a total of $25,200. The defendant Sandhus only paid $9,000, plus $7,060.41 directly to the material supplier, Slegg Construction, leaving a balance owing of $9,139.59. [ 4 ] The defendants, Mr. and Mrs.

Sandhu, say that the claimant had a verbal contract not with themselves, but with the general contractor for their home, Ram and Sons Builders Ltd. Ram and Sons, and I will use that name in short, is a company wherein Mrs. Sandhu, Mr. Sandhu and his father, Ram Sandhu, are directors.

The defendants also assert that the price was for $18,000, all in, and not $24,000 plus taxes. [ 5 ] The defendants, by way of counterclaim, allege the drywall work was defective and they incurred extra costs and delays to remedy the defective work. [ 6 ] This trial concerning an oral contract had the further complication of requiring Punjabi interpreters for both parties, although Nardev Sandhu had a fair command of the English language. The trial was held June 13th and June 22, 2012.

PARTIES TO THE ORAL CONTRACT : [ 7 ] Before a contract can be enforced, the identity of the contracting parties must be determined. To acquire rights and be subject to liabilities under a contract, one must be a party to it. (See, for example, paragraphs 31 and 32 of the case of Dulay v. Gill

(2011) BCJ 1245 ). [ 8 ] Here, it is clear that the party providing the drywall services is the claimant, Select Drywall Construction Ltd. What is less clear is the identity of the party responsible to pay for the drywall services. Is it the homeowners, Mr. and Mrs. Sandhu, or is it the general contractor, Ram and Sons Builders Ltd.? [ 9 ] The claimant asserts that its directors, in particular, Balraj Singh Gill, only had dealings with Nardev Sandhu in his personal capacity. Mr. Gill gave evidence that he dealt with Nardev Sandhu as one of the owners of the home and Mr.

Gill was not even aware of the existence of Ram and Sons Builders Ltd. The undated invoice of the claimant is of no assistance. It does not name a payor. [ 10 ] The defendants, in particular Nardev Sandhu, gave evidence that the construction of their home on Egglestone Avenue was carried out by the general contractor, Ram and Sons Builders Ltd. Nardev Sandhu points out that the first payment of $9,000 to the claimant was by a cheque in that amount dated August 11th, 2009 from Ram and Sons Builders Ltd.

He also relies on the building permit taken out by the District of Mission which names Ram and Sons as the contractor, and the business licence posted on the property also names Ram and Sons. Further, the claimant's name was on a subcontractor's list with the District of Mission. [ 11 ] I find that, having reviewed all the evidence, there was an oral contract for drywall services between the corporate claimant and Nardev Singh Sandhu and Lovepinder Kaur Sandhu in their personal capacity. Mr. Gill, as the chief negotiator for the claimant, says he was dealing with the Sandhus personally as the homeowners. Mr.

Gill says he was never aware that Nardev Singh Sandhu was acting in his capacity as a director for Ram and Sons Builders Ltd. Most significantly, Nardev Sandhu, in his evidence, did not indicate that he told Mr. Gill anything about Ram and Sons Builders Ltd. or that he was negotiating as a director for that company.

Even the painter who testified for the defendants gave evidence that he was unclear whether he was dealing with the Sandhus or their company. [ 12 ] While it is true that the $9,000 cheque dated August 11th, 2009 came from Ram and Sons Ltd., the form of payment is not determinative of who is the proper defendant in this case.

First, the payment is made well after the oral contract was formed; secondly, the claimant simply accepted this cheque as partial payment, without likely much consideration as to the source of payment. [ 13 ] I also take into account the fact that the defendants never corrected the claimant as to who they felt was the proper payor in this contract in the subsequent weeks during which the claimant was making repeated requests for payment. [ 14 ] Mr.

Gill, as representative for the claimant, has proven he was dealing with the defendants personally on a balance of probability, and the defendants have failed to demonstrate that they held themselves out as directors for a company in any negotiations with the claimant. The defendants were the homeowners of the house requiring drywall, and the defendant, Nardev Sandhu, was the primary negotiator. There is no oral evidence wherein Mr. Sandhu makes it clear to the claimant that he was a corporate representative.

The building permit, the business licence and the home warranty documents in the name of Ram and Sons Ltd. mean little since they were not brought to the attention of the claimant. The same can be said for the subcontractor list. There is no suggestion the claimant was aware of any of these documents. The phone number is also not determinative. [ 15 ] I emphasize this is not a case of piercing the corporate veil.

I simply find that the defendants failed to establish that they held themselves out to the claimant as directors of Ram and Sons Builders Ltd., and I accept the claimant's evidence that they were dealing with the defendants personally. THE PRICE UNDER THE ORAL CONTRACT : [ 16 ] The claimant asserts that the price is $24,000 plus GST, for a total price of $25,200. The defendants say the price is $18,000, all in. It is agreed they already paid $9,000 to the claimant, plus $7,061.41 directly to a supplier.

[ 17 ] The claimant relies on an undated invoice which shows a total price of $24,000 plus taxes. There are a number of issues concerning this invoice: (

a) The invoice does not name a payor, but I presume the payor to be the defendants, as outlined in the first issue above. (

b) The invoice is undated. I accept the evidence of Major Sidhu (as conceded by the claimant) that the invoice was not presented on August 11th, 2009 when the $9,000 was paid to the claimant. Mr. Gill, for the claimant, indicates the claimant finished the drywall work on August 22, 2009, and although Mr. Gill's evidence is far from clear, it appears the invoice was not presented to the defendants until on or about September 7th, 2009. For his part, Nardev Sandhu says he never got the invoice until after litigation was commenced. It is clear from the documentation, however, that a collection agency for the claimant sent the defendants' solicitor a price breakdown on November 27th, 2009. (

c) The carbon copy of the invoice was marked Exhibit 6 in these proceedings. It simply has the price information. Two further copies of the invoice are marked Exhibit 5 and they show additional wording, including a notation in a box about the subject house being 6,000 square feet. This square footage notation is written differently on each of the copies marked Exhibit 5. Mr.

Gill says the box was written onto the invoice by his notary handling a builder's lien, and the notary perhaps wrote it two different times on two different copies. [ 18 ] I am not suggesting any dishonesty on the part of the claimant concerning the invoice, but given the above problems, I cannot rely on the invoice as being reliable evidence of the price for this oral contract. [ 19 ] The claimant, primarily through Mr.

Gill, states that when the defendants provided the $9,000 on August 11th, 2009, the price was to be "one-half now, one-half later." It is the claimant's position that it was understood that the defendants were paying the drywall supplier (Slegg) directly, and that a further approximate $9,000 was owing to the claimant at the end of the job. Despite many phone calls and alleged broken promises, the defendants never paid this second half.

According to the claimant, the defendants did not initially dispute the price while demands were made, the defendants only refused to pay in late October 2009. [ 20 ] The defendants, of course, say that the claimant's invoice is fraudulent. They also assert they never heard of the $24,000 price. Nardev Sandhu and his witness, Rashpal Mann, gave evidence that the price was first negotiated through Mr. Mann, who had used the claimant's drywall services for his own home. Mr.

Mann said the claimant had given an estimate of $18,500, but he conceded the ultimate price was to be adjusted between the parties without his involvement. Mr. Sandhu asserts the final price of $18,000 was agreed upon by Mr. Gill, for the claimant. The claimant, of course, denies the agreement at $18,000. Mr. Gill says they had to measure the defendants' house first before agreeing on the price. [ 21 ] The defendants also say they observed defects in the claimant's work and raised this with the claimant near the end of September 2009.

They were willing to pay the claimant once the defects were rectified, but it would have been a small balance. [ 22 ] None of the written documentation assists me in my determination about the price, and the oral testimony from each side is not reconcilable. I did ask both Mr. Sandhu and Mr. Gill about market price for a drywall job of this kind. The defendant, Mr. Sandhu, said this job involved 19,076 square feet of drywall, based on the supplier (Slegg) invoices. Although the claimant says the price is $1.10 per square foot, the prevailing price in the Mission area is apparently 85 cents per square foot.

At 85 cents per square foot, the job costs out at $16,214.60. At $1.10 per square foot, the job costs out at $20,983.60. Mr. Sandhu says he would go broke if he ever agreed to a $24,000 price. [ 23 ] Mr. Gill, for the claimant, says the square footage for the defendants' home was as much as 22,000 square feet, because there were two suites in the basement. He says he bought extra drywall from Dryco. He says the rate is $1.10 per square foot, which equates to $24,200 for the job, by my calculations. [ 24 ] The case of Warren H. Dunn Construction Ltd. v. Thompson

(2010) NBJ 59, at paragraphs 26 and 27 , quotes from well- known contract texts. Paragraph 26: In The Law of Contracts in Canada, G.H.L. Fridman, 5th Edition, 1994 at page15, it is stated that the essence of a contract is described as: It is not what an individual party believed or understood was the meaning of what the other party said or did that is the criterion of agreement; it is whether a reasonable man in the situation of that party would have believed and understood that the other party was consenting to the identical terms.

Paragraph 27: Further, in the Law of Contracts, supra, and quoting from Ron Ghitter Property Consultants Ltd. v. Beaver Lumber Co. (2003) 17 Alberta LR (4th) 243, at page 15 of the text: The parties will be found to have reached a meeting of the minds, in other words, be ad idem , where it is clear to the objective reasonable bystander, in light of all the material facts, that the parties intended to contract and the essential terms of that contract can be determined with a reasonable degree of certainty. [ 25 ] In this case, the onus is on the claimant to prove its alleged price in an oral contract.

No written documentation assists me in this determination and the oral evidence of one party so contradicts the other party that I am uncertain of the truth as to the actual price agreed upon. The claimant has ardently pursued its assertion that the price is $24,000 plus taxes by filing a builder's lien previously, and by taking other collection measures; however, the invoice it relies upon is fraught with problems. [ 26 ] The claimant has not been able to prove a price of $24,000 plus taxes on a balance of probabilities. I cannot say with any clear

probability that a reasonable man, in the situation of the claimant, would have understood that the defendants were consenting to the price of $24,000. I must accept the defendants' position that the total price is $18,000. DEFECTS : [ 27 ] The defendants say that the claimant's drywall work was defective. In particular, Ram Sandhu indicated that the drywall boards were loose because a number of drywall screws were drilled in too far, thus damaging the drywall paper and making the drywall insecure. Mr.

Sandhu, Sr. surmised that one of the claimant's tradesmen used a drill that was not adjusted properly. [ 28 ] Ram Sandhu is the father of the defendant, Nardev Sandhu, so I attach some bias to his evidence; however, Hardev Singh, of H and H Drywall also testified and confirmed the same sort of problems with the drywall work. He visited the subject home in October of 2009 and found that many of the drywall screws were drilled in too far, especially on the interior walls. He also said a few electrical outlets were mistakenly covered. Mr.

Singh charged the defendants $1,501.50 to extract the problematic screws and repair drywall. [ 29 ] Brar Painting also charged the defendant $600 to repaint the primer on these repairs; however, Mr. Brar gave evidence that he was not critical of the original drywall work when he first saw it. [ 30 ] The claimant says, through several of its witnesses, that the defendants were very happy at first with the drywall work, and the defendants mentioned no problems when payment was first requested.

The claimant subcontracted the drywall boarding work to Khera Drywall and that subcontractor gave evidence that the drywall was screwed in properly. [ 31 ] Mr. Gill, for the claimant, said he was never given an opportunity to rectify any alleged defects. The defendant, Nardev Sandhu, however, says he gave Mr. Gill two weeks to fix the problem. [ 32 ] I find that there were minor problems with the drywall work, but those problems could have been rectified to a degree by the claimant if the claimant was given an adequate opportunity to do so. I prefer Mr. Gill's evidence over Mr.

Sandhu's evidence concerning the lack of notice about the defects. I accept that Mr. Gill was making demands for payment and Mr. Sandhu was stalling. Mr. Sandhu may have been unhappy with the workmanship, but he was not voicing that clearly to the claimant. COUNTERCLAIM : [ 33 ] The defendants incurred the cost of $1,501.50 for drywall repairs and $600 in repainting concerning the defective drywall work.

In my view, the claimant could have rectified these defects at a reduced cost to the defendants, had it been given adequate opportunity to do so. [ 34 ] The defendants also allege that completion of the house was delayed two months by reason of these defects. Again, part of the blame lies on their shoulders for not properly advising the claimant of the problem. Damages, as a result of delay, are not foreseeable for a claimant who was not aware of the defects.

More importantly, I find that the defects were relatively minor and I do not accept that a two-month delay can be laid at the feet of the claimant. [ 35 ] The defendants are seeking damages for loss of rental income. Due to the factors outlined above, I consider such a loss too remote in this case. I am also concerned that the rental income may be derived from illegal suites. [ 36 ] The defendants are linking much of their counterclaim to costs for losses incurred as a result of having to remove a builder's lien filed by the claimant. The case of Van Overschot v. Jernberg

(1997) BCJ 1338 rules that the Provincial Court does not have jurisdiction to deal with such costs. CONCLUSION: [ 37 ] Based on a price of $18,000, the claimant would ordinarily be entitled to that sum, less the $9,000 received and $7.060.41 paid to the supplier, leaving a balance owing to the claimant of $1,939.59. The defendants breached the oral contract by not providing that balance. However, there will be a set-off for the defendants' counterclaim, and I estimate that counterclaim amount to be close enough to $1,939.59 such that the claimant's claim is reduced to zero.

The counterclaim proven is primarily $1501.50 in drywall repairs, the $600 in repainting, and some negligible sum for delay of completion, less an adjustment of at least $161.91 for not giving the claimant adequate opportunity to rectify the defects. [ 38 ] As a result, these are my orders. Number 1, the Notice of Claim is dismissed; number 2, the counterclaim is dismissed; number 3, each party shall bear their own costs, filing fees and interpreter costs in this matter. Both parties came to court because they did not set out their contract in writing.

Best business practices call for clear, written agreements which will prevent litigation of the sort we have seen here. Those are my orders.