Joseph Humby, o/a Joe Humby Construction Plaintiff/ Defendant by counterclaim And: William & Amanda Nash Defendants/ plaintiffs by counterclaim, 2022 NLSC 35

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Humby v. Nash , 2022 NLSC 35 Date : March 4, 2022 Docket : 202006G0120 Between: Joseph Humby, o/a Joe Humby Construction Plaintiff/ Defendant by counterclaim And: William & Amanda Nash Defendants/ plaintiffs by counterclaim Before: Justice Peter A. O'Flaherty Reasons for Judgment Given Orally Place of Hearing: Clarenville, Newfoundland and Labrador Dates of Hearing: February 28 – March 2, 2022 Date of Oral Judgment: March 3, 2022

Summary: On a mechanics lien action the Plaintiff claimed for the balance of the contract price of $37,300.00, and extras. The Defendants claimed there was no amount due and owing and counterclaimed for the damages they had incurred in completing and repairing the work.

Held: The Court determined the claim and counterclaim and concluded that the sum due and owing by the Defendants to the Plaintiff was $3,900.00 plus pre-judgment interest. Upon payment of any balance owing to the Plaintiff, the claim for lien shall be discharged by the Plaintiff at the Registry of Deeds. The Defendants were awarded costs of the action on Column 3. Appearances: Philip C. Whalen Appearing on behalf of the Plaintiff Thomas F. Hutchings Appearing on behalf of the Defendants Authorities Cited: CASES CONSIDERED: Connelly v. Greater Homes Inc. , 2011 NSSC 291 ; Sattva Capital Corp. v.

Creston Moly Corp. , 2014 SCC 53 STATUTES CONSIDERED: Mechanics Lien Act, R.S.N.L. 1990, c. M-3 RULES CONSIDERED : Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT O'Flaherty, J. : INTRODUCTION [ 1 ] This is a mechanics lien action. In August 2020, Joseph Humby, the Plaintiff, contracted to renovate the basement and repair the existing roof of the Defendants’ residence in North West Brook, Newfoundland and Labrador (“NL”), and to perform some extra work requested by the Defendants. He performed work on the Defendants’ property starting in the third week of September, 2020.

He claims to be entitled to recover the amount of $22,115.00 due and owing by the Defendants upon the completion by the Plaintiff of the contract on or about October 17, 2020. [ 2 ] The Defendants claim that there is no amount due and owing to the Plaintiff, and that some of the work was not completed and other work performed was not completed in a good and workmanlike manner and had to be completed, repaired or redone at the Defendants’ expense.

The Defendants engaged JCL Construction Inc. (“JCL”) to carry out the further work in October, 2020, and paid $10,235.00 to JCL for the work it performed. [ 3 ] The Plaintiff accepts there were some deficiencies with respect to certain work he performed, in particular with the support beam he placed in the Defendants’ residence.

In the Plaintiff’s view the Defendants were legally obliged to provide him with the opportunity to remedy any deficiencies rather than proceed to engage a contractor to repair and complete the work under the contract. [ 4 ] The last day worked on the project was October 17, 2020, and the Plaintiff requested payment on October 21, 2020. When the Defendants refused to pay any further amount to the Plaintiff a Claim for Lien was registered on October 29, 2020, and the Plaintiff subsequently commenced an action within the period required under the Mechanics Lien Act, R.S.N. 1990, c. M-3, (the “ Act ”).

This triggered the filing of a Defence and Counterclaim by the Defendants. [ 5 ] The legislation provides for a less formal and expedited trial process. Interlocutory applications are permitted only on leave and there is no requirement to proceed through the pre-trial process for civil claims generally under the Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D .

A trial date was requested and I heard the trial between February 28, 2022, and March 2, 2022. [ 6 ] In terms of the conduct of the mechanics lien action, s. 36(4) and (5) of the Act directs, inter alia , that the judge hearing the trial shall try the action, including any set-off and counterclaim, and all questions in order to completely dispose of the action: 36.

(4) The court shall

(

a) try the action, including set-off and counterclaim, and all questions that arise or that are necessary to be tried in order to completely dispose of the action and to adjust the rights and liabilities of the persons appearing before it or upon whom notice of trial has been served; (

b) take all accounts, make all inquiries, give all directions and do all other things necessary to finally dispose of the action and of all matters, questions and accounts arising before or at the trial, and to adjust the rights and liabilities of and give all necessary relief to all parties to the action and all persons who have been served with the notice of trial; and (

c) embody the results of the trial in a judgment, which judgment may direct payment immediately by the person primarily liable to pay the amount of the claims and costs as ascertained by the judgment, and execution may be issued immediately.

(5) The form of the judgment may be varied by the court in order to meet the circumstances of the case so as to give to a party to the proceedings a right or remedy in the judgment to which he or she may be entitled. [ 7 ] This is my judgment following the trial of the action and the counterclaim. THE EVIDENCE [ 8 ] The Plaintiff called two witnesses, Mr. Edward Kehoe and Mr. Joseph Humby, the Plaintiff. The Defendants called Mr. Jerry Stanley, the owner of JCL, and the Second Defendant, Ms. Amanda Nash. [ 9 ] There were a series of exhibits entered in evidence through the witnesses.

I note that much of the evidence is undisputed however I will make any necessary findings of fact on disputed issues and provide my reasons later in this judgment. I will first outline what is not disputed. [ 10 ] The Plaintiff lives in Summerville, NL, a rural community in Bonavista Bay about 60 km from Clarenville, NL. He operates a small construction business which specializes in foundations. Mr. and Ms. Nash are a married couple who live at 16 Harbour Drive in North West Brook, NL, a rural community in Trinity Bay which is about 20 km from Clarenville, NL. In July, 2020, Mr. and Ms.

Nash acquired the title to the family home Ms. Nash had grown up in from Ms. Nash’s mother, Ivy Chaulk, after Ms. Nash’s father, Frederick Chaulk, had passed away in June, 2020. [ 11 ] In 2020, there was a provincial government rebate program underway to stimulate the contracting industry. Mr. and Ms. Nash decided that they would update and develop the residence generally and in particular renovate the basement of the home for use as two bedrooms and a bathroom.

The Plaintiff was one of two businesses that the Defendants contacted to renovate their basement and perform other work which they required. [ 12 ] The parties agree that at the Defendants’ request the Plaintiff attended their residence, and the Plaintiff prepared and provided to the Defendants a written quote dated August 6, 2020.

The written quote stated that Joe Humby Construction agreed to construct a basement renovation job for the Defendants which would include “pouring of concrete walls and footings”, “new inside walls”, “new shingles on roof”, “stone and weeping tile”, “new stairs”, “electrical upgrades” and “plumbing upgrades”. Mr. Humby testified that the quote, which he said was a hurried document prepared for the rebate program, contemplated “new” concrete walls and footings. The quote to perform the work was $40,780.00, including taxes.

The parties further agree that the Defendants engaged the Plaintiff to perform the work because the Plaintiff was available to perform the work. [ 13 ] Before the work commenced, the quote was revised when the Plaintiff and the Defendants agreed that the electrical and plumbing upgrades would be removed and the price for the Plaintiff’s work was reduced to $37,300.00, including taxes. [ 14 ] The Plaintiff takes the position that the scope of work was also changed such that he was no longer required to provide the “pouring of (new) concrete walls and footings” and that he would instead utilize the existing concrete foundations which he said were in good condition, except for one

section of the foundations where a eight foot

section of wall would be installed where a

section of cliff provided part of the foundations leading to water entering the property. The Plaintiff testified that it was agreed that the knee wall to be installed to raise the height of the basement ceiling would be placed on the existing concrete foundations. Finally, the Plaintiff said that the weeping tile would be installed inside the foundation walls, not outside, because of the existence of the cliff. [ 15 ] Unfortunately, the changes to the original agreement were not recorded in writing.

The Defendants admit that they agreed the Plaintiff would utilize the existing foundations, except for the cliff section, but they allege that the Plaintiff agreed to install a uniform depth foundation wall along the back of the property. Critically, the Defendants allege they only agreed to the changes to what the Plaintiff describes as the “scope of work” on the assurances of the Plaintiff that they would still receive the dry, secure and livable basement space they had contracted for in the first place. [ 16 ] The parties agree that the work commenced in earnest in the third week of September, 2020.

The work involved the Plaintiff jacking up the house, installing a knee wall, installing a new uniform concrete floor, building interior walls and installing a beam. The roofing work was completed by a subcontractor and no issue was raised regarding its performance. The Plaintiff also installed a new set of stairs. [ 17 ] The parties agree that during the progress of the work the Plaintiff excavated the Defendants’ property so that an existing water line for the neighboring property which was traversing the basement could be reconnected outside.

The basement renovation work included roughing in a bathroom and during the work the Plaintiff recommended that a septic tank be installed due to the elevation of the

sewer pipe from the main floor bathroom. The parties agree that at the Defendants’ request the Plaintiff installed a septic tank and dug a French drain for the septic system run-off. [ 18 ] The Plaintiff states the last day worked was Friday, October 16, 2020, and there is some evidence that the last day worked was October 17, 2020. Nothing turns on whether the last day worked was the 16th or the 17th. [ 19 ] In a text message sent early on the 16th of October Ms. Nash requested that Mr. Humby address some work items including the water that was leaking from a

section of the existing concrete wall foundation as she intended to have the walls insulated that weekend. Later that same day she asked whether the Plaintiff was finished his work. Mr. Humby replied that “as far as I know we are,” and explained why he had left the stairs uncompleted. [ 20 ] The Defendants were not satisfied with what they saw, including the improper installation of the knee wall, the new stairs and window openings, the improper installation of a ceiling beam that was clearly sagging, and the incomplete repairs to a

section of the existing concrete wall foundation. The Defendants were also concerned with other issues they observed including the lines in their main floor where the beam and new interior wall was installed, and the failure of the Plaintiff to properly secure the property or clean up when he left. As a result, they requested that Jerry Stanley come to their residence. [ 21 ] Jerry Stanley is the owner of JCL Construction Inc., a contracting company in Clarenville, NL. He is a journeyman carpenter who has a red seal designation.

He testified that the Defendants contacted him in a pretty good panic about issues they had with the renovations to their property and he attended the site. When he attended there were a number of issues identified by the Defendants including how they could complete the interior work when there was an area of the basement with water coming in, the floor supports were cut off and the newly installed beam was sagging. [ 22 ] On October 19, 2020, Mr.

Stanley provided a quote to do the following work: “repair and fixing of all exterior walls front and back”, “installment of 140 (sic) foot long steel beam”, “installment of two windows and one door”, “framing of one set of stairs this also includes materials”, and “installment of five jack posts”. His quote was for $10,235.00, and this was the amount he charged the Defendants, however I am satisfied that he also performed additional work to repair other issues he found as his work progressed. [ 23 ] Mr. Stanley entered a series of photos showing the work his company had to carry out.

The knee wall installed by the Plaintiff was off plumb, by one and a half inches, some of the knee wall had no base plates, and there was parging used and no vapor barrier, which meant the entire knee wall was taken down and replaced. The main beam installed by Mr. Humby had to be taken down and replaced as it was sagging and improperly constructed and installed. The windows could not be installed because of the knee wall issues. The new

section of wall constructed by the Plaintiff had covered over a rotten support beam at the back of the house that had to be removed and the entire house had to be jacked up 1 ½ inches to make it level. [ 24 ] The Plaintiff did not challenge the veracity of the evidence of Mr. Stanley. When Ms.

Nash raised the issue of the sagging beam with him he offered to have a pre-engineered beam made and installed, but she declined his offer as she said she and her husband had lost confidence in the Plaintiff. [ 25 ] After the work was completed by JCL Construction Inc. the Defendants continued to have water issues in the basement in particular in the area of the foundation that Ms. Nash indicated a uniform wall was to have been installed by the Plaintiff. She entered in evidence a video shot around November 25, 2020, showing water steadily entering the basement from the bottom of the wall

section which Mr. Humby had apparently “parged” or patched, and down a seam which she said Mr. Humby had agreed would be filled when the uniform wall was installed, but was patched instead. [ 26 ] In March, 2021, the Defendants’ neighbor informed them that the septic run off from their tank was running onto their lawn. At that stage Ms. Nash contacted Service NL and was informed that the septic field installed was failing and she was required to have a septic system properly designed and the installation supervised by a person qualified to certify the system. This led to the septic tank installed by Mr.

Humby being relocated on their lawn along with a designed septic field in the time period June to July, 2021. The Defendants engaged Larry Lambert to design the field and supervise the installation for $650.00 and Graystone Excavating and Landscaping to repair the septic system and install it properly, for $1,763.50. THE ISSUES [ 27 ] The issues may be stated as follows: i. Was the contract breached by the Plaintiff? ii. If so, what damages are the Defendants entitled to? iii. What are the rights and liabilities of each of the parties? and, iv. Costs.

ANALYSIS [ 28 ] This is a mechanics lien action, and the underlying cause of the Plaintiff’s action lies in breach of contract. There is no real dispute on the applicable law. [ 29 ] A person who contracts to provide work and services, like the Plaintiff did in this case, is an independent contractor who

undertakes to provide a given result to the other contracting party who agrees to pay for the result. The method of the work is under the Plaintiff’s control provided the result is given. The law does not require that the agreement be in writing and an agreement may be formed partly in writing, and partly by words. Where there is no express term governing the work and materials, the law implies a term that the work must be performed in a good and workmanlike manner and the materials supplied must be reasonably fit for the purpose ( Connelly v. Greater Homes Inc. , 2011 NSSC 291 , at para. 40 ).

The standard of the work to be provided is often described as that of a reasonably competent member of the trade or profession. These basic principles apply whether the work done and materials provided by the building contractor are for the pouring of concrete for a basement or for the provision of new shingles for a roof. I will apply those principles in this case. [ 30 ] In this case the parties admit that there was a contract, and that the contract was for the Plaintiff to perform construction and renovation work on the Defendants’ property.

The parties also admit, and evidence clearly shows, that work was performed on the Defendants’ property and that at least partial payment was made for the work. [ 31 ] In terms of the condition of a portion of the back wall of the basement, which the evidence showed is leaking, a question which arises in this case is what result did the parties intend that the Plaintiff’s work and materials would provide in terms of the basement renovations? The Defendants allege that they were contracting to obtain a dry, secure and livable basement.

The Plaintiff does not expressly deny this intention, and in fact admitted in his evidence that the job was intended to provide a dry basement. His position is that when he had completed his work he had delivered a secure and waterproof basement and that the subsequent leaks were as a result of the condition of the existing foundations not his own work.

He also testified that if he had been allowed back on site he would have fixed all the problems without any further charge for the Defendants. [ 32 ] The question of whether one of the results contracted for was for the Plaintiff to provide a dry, secure and livable basement is a question of the

interpretation of the agreement made by the parties which is a question of mixed fact and law (See: Sattva Capital Corp. v. Creston Moly Corp. , 2014 SCC 53 ). The

interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine “the intent of the parties and the scope of their understanding.” [ 33 ] Sattva provides that the construction and

interpretation of a business contract involves reading the words of the agreement the parties made as a whole, consistent with the surrounding circumstances as known to the parties at the time of the formation of the contract.

At paragraph 47 of Sattva the Supreme Court of Canada explained the reason why the decision-maker must read the words of the agreement in light of the surrounding circumstances: [47] …Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning: No contracts are made in a vacuum: there is always a setting in which they have to be placed. . . .

In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating. [ 34 ] In this case, the Plaintiff prepared and provided to the Defendants a written quote dated August 6, 2020, which provided that Joe Humby Construction would construct a basement renovation job for the Defendants which included “pouring of concrete walls and footings”, “new inside walls”, “new shingles on roof”, “stone and weeping tile”, “new stairs”, “electrical upgrades” and “plumbing upgrades”. [ 35 ] The words in the quote dated August 6, 2020, describing the basement renovation work are unambiguous, and I have no hesitation in concluding that the commercial purpose of “pouring of concrete walls and footings” is to provide as a result a dry, secure and livable basement.

In this case however the Plaintiff and the Defendants agree that what the Plaintiff calls the “scope of work” was changed and no further written document or contract was prepared to show what work the parties agreed would actually be performed. The evidence shows that the parties agreed that instead of the Plaintiff providing all new concrete walls and footings in the basement that he would instead utilize most of the existing concrete foundations.

Did the agreement still provide for a dry, secure and livable space in the basement? [ 36 ] Applying Sattva to the facts, a good place to start to answer the question of the commercial purpose of this aspect of the contract is the parties, and the surrounding circumstances or factual matrix at the time the contract was entered into. [ 37 ] As I referenced above, Mr. and Ms. Nash are a young married couple who live at 16 Harbour Drive in North West Brook, NL a rural community in Trinity Bay. In July, 2020, Mr. and Ms. Nash acquired title to the family home Ms. Nash had grown up in from Ms.

Nash’s mother, Ivy Chaulk. The home is a standard 24 x 40 bungalow on a concrete foundation. It is an older home and was built by Ms. Nash’s maternal grandfather and Ms. Nash’s father in about 1960. Mr. and Ms. Nash, who have two small children, aged 3 and 5, have lived there since 2016. [ 38 ] The existing basement of the house was quite low, about 6 feet in some places, and both the foundation walls and the floor of the basement had been poured in sections, using different materials over time. One

section of the foundation, about 8 feet on the back of the house, was actually a

section of natural cliff. As a result, the basement was prone to water leaks and was not a livable space and it was used primarily for storage and for a wood furnace according to the evidence. In 2020, there was a provincial government rebate program underway to stimulate the contracting industry. It was in this context that Mr. and Ms. Nash decided that the time was right to develop the residence generally and to renovate the basement of the home for use as bedrooms and a bathroom.

It was in this context that the Plaintiff visited the home prior to providing his quote, discussed the existing water issues in the basement, and inspected the property including the basement. [ 39 ] Mr. Humby operates a business performing foundation work and holds himself out as being knowledgeable regarding this trade. It was his proposal to utilize the existing foundations, which he told the court were in good condition and were not leaking, in providing the basement renovation he had contracted to perform.

There was no qualification placed on his ability to deliver the same result at the time the contract was formed as when it was amended, and it does not lie in his mouth to say, now, that he could not ensure

that water would not continue to enter the basement if the existing foundations were maintained.

The time to do that was when he proposed the change, which would have allowed the Defendants the option to proceed or not proceed with the contract on that basis. [ 40 ] In my view the genesis of the transaction, the background, and the context, as known to both parties establishes that the commercial purpose of this aspect of the contract was clearly for the Plaintiff to provide a dry, secure and livable basement space. [ 41 ] I find based on the evidence that the roofing work, the new uniform concrete floor with stone and weeping tile, and the interior framing wall were completed and the work and materials met the required standard.

I also find, based on the evidence, that the repairs and installations to the existing foundations for use in the basement renovation, the knee wall, the cut outs for the windows, the set of stairs and the beam installed in the house did not meet the required standard and the implied term of performance of good and workmanlike quality, and provision of materials reasonably fit for the purpose, was not met with respect to those aspects of the work. [ 42 ] The Plaintiff therefore breached the implied condition of the contract that as the builder he would perform those aspects of the work I have noted in a good and workmanlike manner including the supply of good and proper materials.

This is a close case, but I am not satisfied on the evidence that this is a case in which the builder’s workmanship entitled the Defendants to terminate the contract, refuse to pay for the work he performed, and sue for damages because the Defendants did not get what they bargained for. In some respects they did get what they bargained for and in some respects they did not, but overall I conclude they were not deprived of their bargain. [ 43 ] In terms of the basement it is very much improved from when the project started and I note the evidence of Ms.

Nash that even when the leaking shown on the video occurred the Defendants were able to clean up the water quickly. The installation of a pump, at least until the

section of wall is repaired, will in my view allow the basement to be used. With that said, there is no question in my mind based on the evidence that the Defendants were acting reasonably when they refused to let Mr. Humby return to the site.

I conclude that this is a case in which the proper remedy is to allow the Plaintiff to be paid the outstanding balance, less a set-off for any claim for damages by the Defendants for remediation of the poor workmanship. [ 44 ] Before I turn to the calculation of damages, I must address the claim for extras for the installation of a septic tank and field and the excavation of the water line trench, for which the Plaintiff claimed $3000.00. [ 45 ] The evidence was that North West Brook is an unincorporated municipality and part of a local service district.

The local service district provides water to the homes in the community, but there is no sewer service. Homes in the community generally use septic tanks and fields (“septic systems”) however in some homes, including 16 Harbour Drive, the sewage and grey water is run through a pipe into the waters of the bay. In 2020, it was a requirement of provincial law that the installation of new septic systems be limited to those which are approved. [ 46 ] I will not order the payment of any amount for the work performed by the Plaintiff to excavate and install an unapproved septic system on the Defendants’ property.

To do so would be against public policy. I will also not award damages against the Plaintiff for the cost the Defendants incurred in installing a proper septic system as in my view there was an obligation on the Defendants to investigate their requirements as homeowners and follow the regulations. I will allow the amount of $500.00 for the excavation work, and the total amount of the contract and extras is therefore $37,800.00.

Given the payment by the Defendants of $18,665.00 this leaves a balance owing to the Plaintiff, before deduction for damages, of $19,135.00. [ 47 ] Having concluded that the Plaintiff breached the implied condition in a number of respects, the second issue is the damages which flow from those breaches. [ 48 ] I am awarding the amount of $10,235.00 as damages to repair the knee wall, the cut outs for the windows, the set of stairs and the beam installed in the house.

I recognize that there are other portions of the quote like the installation of two windows, but the repairs extended well beyond the quote and JCL to its credit did not charge for all the work it performed. In terms of the breach of the implied condition regarding the repairs and installations to the existing foundations, I do not have a quote to perform this specific work however the Plaintiff provided an estimate of the cost of a full foundation, at $2,800.00-$3,500.00 plus concrete, and the cost of the membrane, at $300.00 plus installation.

I am satisfied that the basement space can be used at present, but that the wall which was not properly addressed by the Plaintiff in his work must be repaired or replaced. An amount should be awarded for damages sufficient to address the ongoing leaking shown on the video entered from November 25, 2020, and fix the problem, and I allow $5000.00 for damages. [ 49 ] As to general damages, I understand that the Defendants may have been inconvenienced however Ms. Nash acknowledged there was no cost to the Defendants to be out of the home longer than expected. I also note, and I accept, that Mr.

Humby would have fixed the deficient work at no cost. In those circumstances I decline to award any general damages against the Plaintiff. [ 50 ] The third issue on this mechanics lien trial is adjusting the rights and liabilities of each of the parties. Having concluded that the net balance, before damages, owing to the Plaintiff is $19,135.00, I will deduct from that amount the amounts awarded by me for remediation and repair of the deficient work. Those amounts total $15,235.00. The net result is that the Defendants owe the Plaintiff $3,900.00.

The Plaintiff is entitled to pre-judgment interest on the sum of $3,900.00 from October 20, 2020, to the date of the trial. [ 51 ] In terms of costs, the Defendants have been successful on the majority of the issues and they are entitled to their costs, to be taxed, on Column III. [ 52 ] Upon calculation of the Defendants’ costs I order that they shall be set off against the amount of $3,900.00, plus interest, due the Plaintiff.

If the calculation results in a negative number, the Defendants shall be at liberty to enter judgment against the Plaintiff for that amount. [ 53 ] Upon payment of any balance owing to the Plaintiff, or the Defendants entering judgment for an amount as a result of the calculation of costs, the Plaintiff’s claim for lien registered at the Registry of Deeds shall be discharged by the Plaintiff. [ 54 ] I would like to thank counsel for their submissions and able presentation of the parties’ cases.

[ 55 ] Order accordingly. _____________________________ Peter A. O'Flaherty Justice