RNL Construction Ltd. Plaintiff And: R.J.G. Construction Limited Defendant, 2020 NLSC 158

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : RNL Construction Ltd. v. R.J.G. Construction Limited , 2020 NLSC 158 Date : December 17, 2020 Docket : 201501G4358 Between: RNL Construction Ltd. Plaintiff And: R.J.G. Construction Limited Defendant Before: Justice Vikas Khaladkar Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: November 23-25, 2020

Summary: The Plaintiff alleges the existence of a verbal contract by virtue of which it was to be paid for the hourly use of its construction equipment for the development of a subdivision. In the alternative, the Plaintiff made a claim on a quantum meruit basis. The Defendant acknowledged that the Plaintiff’s equipment was used for the development of the subdivision, but said that the agreement was to share the profits and, since there were no profits, there is nothing to be shared. An award was made on a quantum meruit basis. Appearances: John F.E. Drover &

Mitchell D. King Appearing on behalf of the Plaintiff R. Barry Learmonth, Q.C. Appearing on behalf of the Defendant Authorities Cited: TEXTS CONSIDERED: G.H.L. Fridman, The Law of Contract in Canada , 6th ed. (Toronto: Carswell) REASONS FOR JUDGMENT Khaladkar, J. : INTRODUCTION [ 1 ] Mr. Aiden Fennell testified on behalf of the Plaintiff, RNL Construction Ltd. (hereinafter “RNL”). Mr. Fennell is 64 years of age and has 40 years’ experience in the heavy equipment industry. He is qualified to operate excavators, bulldozers, front-end loaders and backhoes. He is not a qualified crane operator. Mr.

Fennell is the sole shareholder and director of RNL. [ 2 ] At its peak, RNL had 12 employees who used eight pieces of heavy equipment including excavators, loaders, dump trucks, a 10-ton compactor, a grader and all of the hand tools necessary for doing the company’s construction work. [ 3 ] Mr. Fennell met Robert Giovannini, the principal of the Defendant, R.J.G. Construction Limited (hereinafter “R.J.G.”), through a mutual friend. After the introduction, RNL did a small job, in 2012, for R.J.G. consisting of repairs to a sanitary outfall in the Town of Torbay, Newfoundland and Labrador. Mr.

Fennell acted as supervisor for the project. RNL was paid a lump sum for its work. [ 4 ] Later in 2012, RNL did more work for R.J.G. in the Town of Long Harbour, Newfoundland and Labrador. The work consisted of contouring a slag pile that had been abandoned after a phosphorous plant had ceased operations. RNL supplied two excavators, operators and fuel for the work. An hourly rate of $200 was paid for each excavator. Mr.

Fennell was the supervisor on the project and was in charge of decision-making. [ 5 ] RNL then did some work for Matrix Construction Ltd. (hereinafter “Matrix”) on what was known as Phase VII of the Paradise Ridge project. The job consisted of taking out trees, clearing land, stripping, building roads, installing water, sewer, storm sewer lines, curb and gutter and asphalt paving. There were 32 building lots in the subdivision. RNL provided all of the equipment and manpower while Matrix provided the material. Mr. Fennell acted as supervisor. RNL was paid an hourly rate for each piece of equipment used.

This fee would include the services of the operator and fuel. The agreement with Matrix was that at the end of the job the two companies would split the profits 50/50. Matrix kept the books – to which RNL had full access. Expenses were reviewed by the representatives of the two companies monthly. They jointly prepared progress reports. [ 6 ] When Phase VIII of the Paradise Ridge project came up for bidding Matrix was too busy with other work to become involved. RNL was doing work on the Long Harbour project at the time and Mr. Fennell approached Mr.

Giovannini to see if R.J.G. would be interested in doing Phase VIII in June, 2013. [ 7 ] At the time, Mr. Fennell was thinking of getting out of the construction business. He had some health problems and was in the midst of splitting up with his common-law wife of 31 years. He wanted to sell his equipment and get out of construction. [ 8 ] Mr. Fennell testified that he and Mr. Giovannini went to look at his equipment – which was located at John MacDonald’s farm. Mr. Fennell says that Mr. Giovannini said that he would be interested in buying the equipment at the end of the year, but not immediately. Mr.

Giovannini denied that this conversation took place. He said that his company had hundreds of pieces of equipment and he did not need any more. [ 9 ] Mr. Fennell testified that Mr. Giovannini said that if they got the contract to build Phase VIII of the Paradise Ridge project, R.J.G. would buy RNL’s equipment at the end of the year. [ 10 ] Mr. Fennell testified that he offered to rent his equipment to R.J.G., but that R.J.G. would have to supply the operator and fuel – on the condition that R.J.G. buy the equipment at the end of the year.

He mentioned the deal that he had with Matrix – a 50/50 sharing of profits at the end of the job. He said that Mr. Giovannini said, “We’ll see”. Only the two men were present during this discussion. [ 11 ] Mr. Fennell prepared a bid estimate that he reviewed with Mr. Giovannini and his estimator, Michael Anthony. The parties felt that they would each be able to make a couple of hundred thousand dollars in profit. [ 12 ] Michael Anthony is an engineering technician. He has been employed by R.J.G. for the past 16 years. He has a gold seal designation as a project manager.

He is a project manager for R.J.G., and on site supervisors report to him. His job is to administer projects and ensure that construction is carried out according to contract drawings and specifications.

[ 13 ] The bid went in under the name of R.J.G., it was accepted and R.J.G. signed the contract. [ 14 ] Mr. Fennell supervised the work for Phase VIII of the Paradise Ridge project. RNL was paid $50/hour for Mr. Fennell’s time. This included the use of Mr. Fennell’s pickup truck and fuel. RNL paid the source deductions for Mr. Fennell and for all insurance and maintenance costs of the vehicle. [ 15 ] RNL provided an excavator, two dump trucks and tools that were located in a 20-foot shipping container – including wrenches, laser levels, pumps and hand tools.

R.J.G. provided three excavators, two rock hammers and three dump trucks. The shipping container was owned by RNL. [ 16 ] Mr. Fennell encountered some issues with some of the employees provided by R.J.G. to the project. He says that he followed up with Mr. Giovannini but nothing was done to replace them. [ 17 ] Mr. Fennell said that he would meet with Mr. Anthony to prepare the progress report for certification by the owner’s engineer. Mr.

Fennell testified that R.J.G. did the bookkeeping for the Phase VIII Paradise Ridge project, and he never saw the books. [ 18 ] The Phase VIII Paradise Ridge project began in early July, 2013. RNL did its last work on the project on December 10, 2013. Mr. Fennell testified that the work was 95% complete at the time. However, Mr. Giovannini and Mr. Anthony took exception to that estimate.

Both of them thought that there was a lot more work left to do and would have put the estimate of completion significantly lower. [ 19 ] In September, 2013 persons unknown broke into RNL’s 20-foot shipping container and stole all of the tools located therein. A claim was made under R.J.G.’s insurance policy and Mr. Fennell said that he received around $21,000. [ 20 ] Mr. Fennell testified that he would speak with Mr. Giovannini from time to time about buying his equipment, but that Mr.

Giovannini led him to believe that he was having a tough time financially and was unable to proceed with the purchase of his equipment. [ 21 ] At no time in 2013 did RNL send R.J.G. an invoice for the rental of its pieces of equipment on site. However, RNL sent regular invoices to R.J.G. for the time that Mr. Fennell spent supervising the project at a rate of $50/hour. Each of these invoices was paid. [ 22 ] Mr.

Fennell testified that RNL and R.J.G. had agreed to do an hourly rental for his equipment – not a profit sharing arrangement. [ 23 ] RNL sent R.J.G. an invoice for the use of RNL’s equipment on May 30, 2014. At that time it claimed $83,507 including HST. Mr. Fennell testified that he did not send an invoice earlier because R.J.G. did not have the money to pay RNL and, as well, because if he sent the invoices out RNL would become liable to pay the HST and he did not want to pay tax on accounts RNL had not collected. [ 24 ] Mr. Giovannini responded to RNL’s invoice by denying liability.

He indicated that the parties had an arrangement to split the profit 50/50 and since there was no profit as a result of the job taking much longer than Mr. Fennell had indicated, there was nothing to share. Mr. Giovannini testified that he felt betrayed when he received the invoice and was shocked by its contents. [ 25 ] On October 14, 2014 RNL sent R.J.G. a “revised” invoice in the amount of $119,344.95. Mr. Fennell indicated that because R.J.G. did not buy RNL’s equipment or pay the first invoice, he felt that there was no need to give them a break on the value of the work. [ 26 ] I must say that Mr.

Fennell’s evidence contained much equivocation. When asked questions he was hesitant and unsure of himself. When asked to pin down dates he would respond that something probably happened in this month or that. When asked for amounts – for example how much he eventually sold his equipment for – his answer was that he “got around $200,000” and that “there was around $120,000 owing – just guessing”. He acknowledged that his memory was not perfect. [ 27 ] In cross-examination, Mr. Fennell admitted that the completion date for the project was September 30, 2013. He admitted that they were behind schedule.

He attributed that to problems with the employees and the lack of appropriate rock busters on site. He acknowledged that he was responsible, as supervisor, to get the job done within budget. [ 28 ] When asked about the frequency of the invoices he remitted for his work as supervisor, Mr. Fennell was unsure whether he sent in monthly invoices for his time or weekly invoices. [ 29 ] With respect to the agreement with R.J.G., Mr. Fennell indicated that there was only the one discussion that took place on the job site at Paradise Ridge. It was only for a matter of minutes.

He denied that there was a profit sharing arrangement discussed. He stated that the agreement was that R.J.G. would pay RNL rent and, at the end of the year, would buy the equipment from RNL. Mr. Fennell did acknowledge that he mentioned the deal he had with Matrix and that Mr. Giovannini said that he would look at it. According to Mr. Fennell profit sharing was never discussed again after that time, and profit sharing was not the deal. He also stated that he and Mr. Giovannini did not talk about the rates to be charged for the construction equipment. [ 30 ] Mr.

Fennell testified that he was in R.J.G.’s office asking for money. He said that Mr. Giovannini, in the presence of Mr. Anthony, said he would try to get the 10% holdback from the owner of the Phase VIII Paradise Ridge project. Mr. Fennell indicated that Mr. Anthony was aware that R.J.G. owed RNL money. Mr. Anthony testified that he was not at a meeting where this discussion took place. He said that the only arrangement he was aware of was a profit sharing arrangement – and that was stated to him by Mr. Giovannini. Mr. Giovannini also denied that such a conversation occurred with Mr. Fennell. [ 31 ] Mr.

Fennell was in dire straits financially. One of his pieces of equipment was costing him $7,500/month in payments. He went to Mr. Giovannini and received sums of money, from time to time, for various items that he sold to R.J.G. including a goose-neck trailer, two pickup trucks, a 1949 vintage truck for a total of around $62,000. The 1949 vintage truck was donated by R.J.G. to Mothers Against Drunk Drivers for a fundraiser. R.J.G. did not get a donation receipt for the 1949 truck. At the time R.J.G. was doing about $20-$30 million/annum in business. Mr.

Giovannini testified that R.J.G. was not in any financial difficulty in 2013.

[ 32 ] Mr. Anthony testified that in May, 2014 he received an invoice for payment from RNL. He brought it to Mr. Giovannini’s attention because he had no knowledge of payments to be made to RNL. [ 33 ] Mr. Anthony indicated that R.J.G. had an extensive fleet of equipment, and provided the lion’s share of the equipment to the Phase VIII project at Paradise Ridge. [ 34 ] Mr. Anthony had little involvement in the day-to-day administration of the project. He said that Mr. Fennell was the superintendent on site. R.J.G. paid for all of the wages and fuel used on the site – except for the fuel used in Mr.

Fennell’s truck. Maintenance on all of the equipment on site was performed by R.J.G.. [ 35 ] At the beginning of December, 2013 there was a significant amount of work left to do on the project according to Mr. Anthony. According to the engineers on site there was $313,882 worth of work left remaining.

The engineers would not certify the release of any further monies. [ 36 ] The following deficiencies were noted by the engineers: • A fair amount of material was stockpiled; • Portions of the site needed to be filled; • Terracing was not done on the individual lots; • Road elevations had to be filled; • Overburden on site needed to be removed; • Water and sewer needed to be connected and tested; • Asphalt needed to be completed. [ 37 ] Mr. Fennell had indicated to Mr. Anthony that the work was 95% complete. However, Mr. Anthony indicated that he could not defend that position vis a vis the engineer’s assessment.

He indicated that they would have to wait until the spring, when the snow cover had melted, to determine what remained to be done. [ 38 ] Mr. Anthony indicated that, in spring, it was determined that there was quite a bit of work to be done. They anticipated it would take six-seven weeks to complete – as opposed to the one week stated by Mr. Fennell. [ 39 ] It cost $111,704, including HST, for Fowler’s Construction to complete the deficiencies on the project. This sum did not include the paving for the roads in the subdivision, which was to be done by others. [ 40 ] Mr.

Giovannini is originally from the Town of St. Lawrence, Newfoundland and Labrador. He has his journeyman’s papers in heavy equipment and welding. He has been in the business since 1973. In 1985 he moved to St. John’s – where he was doing water and sewer installations and site preparation. In 1988 his business went under. [ 41 ] On May 10, 1991 Mr. Giovannini started R.J.G. Construction Limited. Initially the company operated in St. Lawrence but, eventually, it moved to St. John’s. Mr. Giovannini worked in Russia for a number of years as a mechanic, but has operated in St. John’s since 1995.

At present his company is involved in building wharves and docks. The company has 80 employees. Before the COVID-19 pandemic the company had 160 employees. [ 42 ] Mr. Giovannini was introduced to Mr. Fennell by a mutual friend, Michael O’Leary, in 2009 or 2010. They did a couple of projects together. In the Town of Torbay they worked on a sewer outfall project. In Long Harbour they worked on the contouring of a slag pile. Mr. Fennell provided labour to run a D-8 cat and some trucks. He was paid an hourly wage. [ 43 ] Mr. Fennell approached Mr. Giovannini with respect to the project on Paradise Ridge.

He had worked there earlier with Matrix. Mr. Fennell couldn’t get the job on his own – he had limited equipment and personnel. They looked at the drawings, visited the site and R.J.G. submitted a bid. It was successful. [ 44 ] Mr. Giovannini said that they agreed that Mr. Fennell would run the project and R.J.G. would pay him to run it. Mr. Giovannini acknowledged that Mr. Fennell wanted to get rid of his gear. Mr. Giovannini said that they agreed that RNL would put its equipment on the job. At the end, when they made a profit, they would split the profit.

He said there was no discussion of a 50/50 division – just a split of the profits. [ 45 ] Mr. Giovannini denied that there was any arrangement to buy RNL’s equipment. He said that R.J.G. had 25-30 excavators. They had 12-15 tandem trucks. It would be a waste of money for R.J.G. to buy something else. The company had surplus equipment at the time. [ 46 ] Mr. Giovannini said that R.J.G. contributed 12 pieces of equipment to the project. RNL contributed three. In his view a 70/30 or 75/25 split of profit would have been appropriate had they made any. [ 47 ] Mr.

Giovannini testified that without taking the depreciation of the equipment that was used into account, there would have been a profit of $70,000 on the job. [ 48 ] Mr. Giovannini was adamant that there was no discussion about renting RNL’s equipment. When Mr. Fennell came to him, he

said that there would be $400,000 profit on the job to be split. Mr. Giovannini said that the proportion (of contribution) would be the profit split. It is not at all clear whether the men discussed a proportionate share of profits. [ 49 ] Mr. Giovannini said that on a number of occasions Mr. Fennell came to him looking for money - for his son, for Canada Revenue Agency, whatever. He says he bought machines from Mr. Fennell and gave him money. He didn’t need any of those things. He was trying to help him out because he was going through a rough spell.

Among the items he purchased were a 1995 GMC Truck for $15,000-$16,000, a 2006 Diesel Chevrolet pickup for $12,000-$15,000, a 2008 5th-wheel trailer for $6,000-$7000 and a yellow 1949 GMC truck that Mr. Fennell had refurbished for $22,500. [ 50 ] Mr. Giovannini was not in any financial difficulty in 2013. [ 51 ] Mr. Giovannini testified that the first time he heard about complaints about low productivity was when he was reading transcripts from the examinations for discovery. plaintiff argues [ 52 ] There was a contract to do the work on Paradise Ridge. RNL was to do all the work up to paving.

There is no question about the scope of the work that was to be done. There is no issue about the amount to be paid to RNL for Mr. Fennell’s supervision of the work. [ 53 ] R.J.G.’s position with respect to what payment RNL was entitled to for providing equipment to the job site changed from its statement of defence to trial. The amount to be paid was a moving target – 50/50 profit split to be calculated when the project was complete to 50/50 if the project was done by September 30, 2013 to 70/30 or 75/25 – based upon the equipment that was provided by each of the parties to the construction effort. [ 54 ] Mr.

Fennell mentioned the idea of profit sharing to Mr. Giovannini based on what he had done with Matrix, but received no real answer from Mr. Giovannini. [ 55 ] Counsel for RNL submitted that Mr. Fennell and Mr. Giovannini both left with their own ideas regarding compensation and there was no meeting of the minds. He argued that RNL should receive compensation on a quantum meruit basis – which would mean compensating RNL at a reasonable rate for the use of its equipment.

He submitted that the rate requested by RNL in its second invoice, less some deduction for the rental of the shipping container and the tools located therein because the amount charged by RNL was, perhaps, somewhat excessive. defendant argues [ 56 ] Counsel for the Defendant submitted that the positions of the two parties are diametrically opposed. It is difficult to reconcile the positions, and that leads to issues of credibility and reliability. [ 57 ] The defence submitted that Mr. Giovannini was trying to help a friend who wanted to make some money. Mr. Fennell was undergoing financial difficulty.

Counsel submitted that Mr. Giovannini let his guard down by mixing friendship with business. [ 58 ] The critical issue, according to the defence, is that RNL’s position is that it was a contractual term that it be paid for equipment rental, whereas R.J.G.’s position is that there was no such agreement. Mr. Giovannini was adamant that he did not need the use of RNL’s heavy equipment. R.J.G. had surplus equipment that could have been put on the project.

For that reason there was no possibility, or discussion, about R.J.G. buying RNL’s equipment. [ 59 ] R.J.G. says that RNL was allowed to use its equipment on the project for the purpose of profit sharing. This position is reinforced by the fact that RNL never submitted an invoice during the currency of the project for the use of the equipment – although regular invoices were submitted for Mr. Fennell’s supervisory duties at a rate of $50/hour. [ 60 ] The Defendant says that the Plaintiff could have presented a draft invoice if, as Mr. Fennell testified, he was concerned about triggering HST liability.

The Defendant says that the HST rationale for not submitting invoices is very weak. [ 61 ] The Defendant argued that Mr. Fennell’s assertions that R.J.G. was short of money also does not make any sense given that Mr. Giovannini purchased $62,500 worth of vehicles and automotive equipment from Mr. Fennell. It is not, therefore, credible for the Plaintiff to assert that R.J.G., or Mr. Giovannini, had no money. If R.J.G. or Mr.

Giovannini were having financial difficulties, why would they buy something like a 1949 vehicle for which they had no use? [ 62 ] The Defendant says that the fact that the Plaintiff did not submit an invoice until he had been off the project for six months confirms the fact there was no contractual obligation to pay rental for equipment that was used on the project.

It is, according to the Defendant, the only reasonable inference to be drawn. [ 63 ] Counsel for the Defendant took the position that if there is a claim in quantum meruit , it would be a claim for restitution and not a claim for contractual quantum meruit . This would flow if the Court finds that there was no enforceable agreement between the parties. [ 64 ] Counsel for the Defendant took the position that the Plaintiff’s claim should be dismissed.

Costs should be awarded at Column III of the Scale of Costs. analysis [ 65 ] It is trite law to state that in order for a contract to exist there are four fundamental elements that must exist: there must be an offer, an acceptance, consideration and an intention to create a legal relationship.

[ 66 ] It was clear from the evidence that the two principals, Mr. Fennell and Mr. Giovannini, had very different ideas about the nature of the relationship that they were entering into. Mr. Fennell says that RNL was to provide equipment for the project for which R.J.G. would pay on an hourly basis. At the end of the contract R.J.G. would buy the equipment.

There was no discussion of the amount to be charged for the hourly fee, the type or quantity of equipment to be supplied or the amount that would be paid for that equipment at the conclusion of the project – all terms that would be necessary in order to conclude an appropriate contract. [ 67 ] Mr. Giovannini says that in exchange for RNL providing its equipment to the project the parties would split the profits 50/50. This proportion changed, though, because the project was not completed by the end of September, 2013 as projected by Mr. Fennell. On the stand Mr.

Giovannini thought that a split of 75/25 or 70/30 (the larger amount going to R.J.G.) would be fair. He said this in relation to the gross profit figure of approximately $70,000 before taking equipment depreciation into account. [ 68 ] It is clear from these very different ideas about what was being agreed to that the essential elements of a contract did not exist. The parties never reached a consensus ad idem concerning who was doing what and for how much.

There is no legally enforceable contract between them insofar as the provision of equipment was concerned. [ 69 ] Despite that finding, RNL did supply equipment to the project and the project got the value of the use of the supplied equipment. [ 70 ] The law respecting the entitlement to remuneration for services performed by persons for others in the absence of a contract has been succintly set out by G.H.L. Fridman, in The Law of Contract in Canada , 6th ed. (Toronto: Carswell) , at page 10: 6.

Contract and restitution That contract stems from agreement, involving some voluntary act by each of the parties is the vital feature distinguishing contract from restitution.

The underlying principle of restitution is not that of promise or agreement: it is the idea of unjust enrichment at another’s expense. 46 After the emergence of a general contractual remedy, which helped to create the broader concept of contract, there also developed ancillary or additional instances of recovery where there was no truly contractual relationship between the parties, founded upon an implied contract. 47 Though these instances of liability were, superficially at any rate, likened and assimilated to contract, they were not in actuality contractual situations, even where the facts revealed that there was, or had been some contractual relationship between the parties.

These various situations, formerly thought of as being instances of liability founded upon an “implied promise,” or an “implied contract,” 48 are now no longer viewed in the same way. The law of restitution is distinct from the law of contract even though restitution stemmed historically from contract. By virtue of modern developments, the better view is that all these instances where recovery is permitted should be considered as cases of restitution. There is no promise, and a fortiori no contract.

Instead there is an obligation to pay or repay that is imposed by the law, irrespective of agreement, and even by way of contradiction of agreement. As said by Martin J.A. in Alexander (Percy) Enterprises Ltd. v. Genesis Land Development Corp. , 49 “if the parties have acted on the assumption that there is a contract their rights will generally be resolved through the law of restitution.” A complication or confusion arises from the fact that there is contractual quantum meruit , as well as restitutionary quantum meruit .

In some circumstances, for example, where there is a contract between the parties but they have not agreed upon a price for goods or services to be delivered or rendered by one party to the other, the court must award money to the unpaid party on the basis of a reasonable amount for the goods or services. 50 This is a liability that arises from a truly contractual relationship, and the situation between the parties is founded upon the concept of contract as it has been expounded earlier.

Where no contract exists between the parties, or such contract as there is cannot be recognized or enforced, the courts have allowed a deserving party to recover something on a quantum meruit basis, which is not the same as what might have been recovered if there had been a valid, enforceable contract upon which the successful party could have sued. 51 The distinction between these cases, as between contract and quasi-contract, lies in the idea that there has to be an agreement, between the parties, and such agreement must be in the form of an enforceable contract, to which the law will give effect. 52 [ 71 ] This is a case of restitutionary quantum meruit .

I must, therefore, assess the value of the equipment provided to the project by RNL on the basis of their worth. In making that analysis, I must be mindful of the fact that both parties anticipated that all of the work being supervised by Mr. Fennell, on behalf of RNL, would be completed by September 30, 2013. In fact there was a considerable delay and, as of December 10, 2013 the work remained incomplete. The cost to complete the project in the spring of 2014, excluding the cost of installing pavement, was in the order of $111,000.

This impacted significantly on the profits that the parties had anticipated would be realized. [ 72 ] The Court received evidence that the gross profit, before taking into account the value of the depreciation of the equipment used for the project, was $70,000. The ratio of equipment supplied by each of the parties, according to Mr.

Giovannini, and whose estimate I accept, was 3:1 – that is R.J.G. supplied 75% of the equipment and RNL supplied 25% of the equipment. [ 73 ] It would not be fair to award restitution to RNL on the basis of an hourly rate for the use of its equipment because RNL has to shoulder a large measure of the responsibility for the fact that the project was substantially delayed. Mr. Fennell was the supervisor on the project. It was his responsibility to ensure that the work progressed according to specifications and on time. If he ran into difficulty

with the equipment provided to him, or the quality of some of the manpower, it was his duty to cure the defects or, at least, ensure that it was understood by R.J.G. and Mr. Giovannini that he took no responsibility for any delays if the defects could not be cured. This he did not do. It would not be fair to award RNL an hourly fee for its equipment in circumstances where many of those hours would have been unnecessary had the work been done on time. [ 74 ] A fair measure of the restitution would be based upon a percentage of the gross profit before applying the cost of depreciation.

And, in my opinion, that should be based upon what Mr. Giovannini originally decided that he was going to pay RNL, namely 50/50 – and not a shifting figure that occurred to him when pressed in cross-examination. [ 75 ] Under the circumstances, the Plaintiff will have judgment for $35,000. Costs shall be calculated at Column III of the Scale of Costs. Costs shall be calculated on the basis of one counsel – although the Plaintiff was represented by two counsel at trial. VIKAS KHALADKAR Justice