Craig Harvey v. Gerri Harvey, 2017 SKPC 75

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2017 SKPC 075 Date: August 30, 2017 File: SC#226 of 2016 Location: Rosetown _____________________________________________________________________________ Between: Craig Harvey and Gerri Harvey - and - Flatlander Construction Ltd. Self Represented For the Plaintiff Scott Zoerb For the Defendant ______________________________________________________________________________ JUDGMENT M.M. BANIAK , J ______________________________________________________________________________ [ 1 ] The plaintiffs wished to build a new home.

The contacted the defendant and commenced discussions the first week of July, 2014. On July 29, 2014 they entered into a contract (Exhibit P-2). In the words of Craig Harvey, “we hired Mr. Zoerb in the summer of 2014 to build us a custom turnkey, move-in ready home. In September 2015 we moved into the home.” [1] The house was built on the northeast quarter of

Section 3, Township 30, Range 15, West of the Third Meridian (NE3-30-15 W3rd).

[ 2 ] Not long after construction commenced, the relationship between the builder and the clients started to deteriorate. The conflict and acrimony that eventually evolved as the project continued went beyond anything contemplated initially. [ 3 ] It is my belief, based on my observation of the parties in court, and by their testimony, the problems escalated in proportion to the deterioration in communication and trust between the parties. The lack of civility resulted in both parties taking unreasonable positions. [ 4 ] According to Mr.

Harvey, there were mistakes and deficiencies on the house from the foundation to the roof. He spared no effort to point these out to Mr. Scott Zoerb, who was the project manager and owner of the defendant company. [ 5 ] Mr. Zoerb testified that he is an experienced home builder who built many homes over the years without any serious problems. Defects and mistakes are normal, but these are repaired or fixed usually before the home owner takes possession of the home. He acknowledged that there were defects or deficiencies in the workmanship vis à vis the plaintiff’s home.

He was willing and able to effect the necessary changes or repairs but was not allowed to do so. [ 6 ] In any event, the plaintiffs moved in and took possession of their home in September of 2015 before the final walk through and inspection was done. [ 7 ] At this point the communication between the parties became so toxic that no meaningful or fruitful negotiations could take place. When an impasse of such a nature occurs, the parties may avail themselves of the services of the New Home Warranty Program of Saskatchewan. [ 8 ] On November 13, 2015, the plaintiffs contacted the New Home Warranty Program (NHWP).

On November 23, 2015, Mr. Ralph Schaan, the manager (warranty services) of the NHWP wrote to the plaintiffs confirming their desire to enter into conciliation to resolve their problem with the defendant. On December 10, 2015, the plaintiffs executed the Request for Conciliation Form. On December 18, 2015 Mr. Schaan sent a letter to the plaintiffs outlining the appointment of the conciliator and the procedure to be followed going forward. This letter, which is Appendix C to the Conciliation Report dated February 16, 2016, (Exhibit P-3) is reproduced in its entirety: December 18, 2015 Craig & Gerry Harvey P.O.

Box 73 Rosetown, SK S0L 2V0 Dear Mr. & Mrs. Harvey: Re: NE 3-30-15 W3rd, Rosetown - Enrollment #890-1-1108-0007-15 This letter is to confirm receipt by the New Home Warrant Program of a completed Request for Conciliation. The New Home Warranty Program has appointed Dave Fetsch, P.Eng., as Conciliator. I am attaching a copy of Mr. Fetsch’s resume for your information. In accordance with the terms of the Warranty, either the Builder or the Homeowner disagree with the appointment, a second Conciliator shall be appointed. The appointment of the second Conciliator shall be final.

The Conciliator will make arrangements to meet with the Homeowner and the Builder and will receive written and/or verbal submissions from both. Following interview, inspections and investigations by the Conciliator, he/she will submit a written report required to be done by the Builder, a completion date will be indicated. The decision of the Conciliator SHALL BE FINAL AND BINDING on both parties. There is no appeal procedure.

In the event the Conciliation calls for work to be performed by the Builder and the Builder fails to perform the work within the time constraints specified in the report, the Program will assume the responsibility of the Builder. If either THE BUILDER OR THE OWNER HAVE OBJECTIONS TO THIS APPOINTMENT OF MR. FETSCH as Conciliator, the Program must be informed prior to January 7, 2016 .

Yours Truly, “Ralph Schaan ” Ralph Schaan, Manager, Warranty Services Attachment C: Flatlander Construction Ltd. [ 9 ] The Conciliation Report was completed on February 16, 2016, a little over a month after the plaintiff’s home was inspected. The eight paragraph preface to the report is a

summary of what the NHWP covers and what it does not. Again, I reproduce it here in its entirety: PREFACE 1. The Warranty provided by the New Home Warranty Program of Saskatchewan, Inc. provides five (5) years of limited protection. Year One (1) covers defects in workmanship and material, year two (2) covers water penetration through the building envelope, and year two (2) through five (5) covers major structural defects. 2.

The workmanship and material phase of the Warranty covers the repair or the replacement of defective material and/or appliances that were supplied by the Builder that become manifest during the first year of possession. Design errors and cosmetic errors that were apparent at the time of the acceptance by the homeowner. 3. Defects of workmanship and material nature must be brought to the attention of the Builder and/or the Program by means of written notification within the first year of possession. 4.

Major Structural Defects means defects in workmanship or materials which have or are likely to have an adverse effect on the performance of the load-bearing portion of the home. It is strictly a condition that excluded as Major Structural Defects are defects in driveways, basement floors, garage floors, patios, sidewalks, retaining walls and all concrete construction which is not load-bearing. 5.

Load-bearing portion shall, so as not to restrict the generality of the foregoing, mean footings, piles, basement walls, grade beams, teleposts or columns, beams of timber or steel, load-bearing walls, floor joists, and roof trusses provided the foregoing support an integral part of the home or attached garage. 6. Notice of Major Structural Defects must be given to the Program and/or the Builder in writing within five (5) years from the date of possession. 7. It should be noted that contractual disputes and financial disputes are not considered to be within the Warranty coverage.

8. The above is a brief

summary of The New Home Warranty. Please refer to your New Home Warranty Certificate for complete information. [ 10 ] The Report is essentially the itemized list of the plaintiff’s complaints, followed by the conciliator’s observation and his decision.

If a particular complaint is deemed legitimate, the builder is required to remedy it or if not, then no further action by the builder is required. [ 11 ] The conciliator concluded his report with the following responsibilities assigned: BUILDER ’S RESPONSIBILITY: The builder shall ensure that all work is done in as short a time as possible, but no later than April 15, 2016 , with the least inconvenience to the homeowner. The builder shall ensure that all tradesmen, including subtrades, completely clean all areas that have been affected.

The builder shall ensure that any of the owners’ belongings are protected against damage. OWNERS ’ RESPONSIBILITY: The owner shall be required to provide access to the home during normal working hours for the builder and any of his subtrades. Access to the home shall be by mutual agreement of the owner and the builder, with the builder giving the owner at least 24 hours notice prior to requiring access. [ 12 ] This would normally have ended the matter. In this case it did not.

As the Conciliation Report states, and as the NHWP mandates, the builder (in this case the defendant) is to be provided an opportunity to perform the enumerated repairs. However, the plaintiffs refused to allow the builder or his trades on their property. As one email sent by Mr. Harvey to Mr. Zoerb illustrates; the situation had become untenable: Scott, I would like to remind you that this is my and Gerri’s home, and ours alone. And you had best remember that.

Don’t suppose for even a millisecond that you or anyone else has any say or authority about who is to do what here for warranty work or otherwise, as anyone who enters our home will do so at our invitation. As our guest, is that clear? [2] [ 13 ] To move forward, and in an attempt to resolve the impasse between the parties, the NHWP took over the repairs.

As was stated by Dwayne Williams (the Warranty manager) and Ralph Schaan (retired Warranty manager) and Denise Mildner (Chief Executive Officer), in a letter dated January 23, 2017, “the Program incurred expenses in the total amount of $36,171.98, of which $33,684.53 was paid in cash settlement directly to the Harveys.” [ 14 ] The Plaintiff executed “Settlement and Release” forms as “full and final settlement” and released the NHWP from any future claims.

The first release was signed on April 11, 2016 and the second on October 4, 2016. [ 15 ] On April 28, 2016, the plaintiffs filed a claim against the defendant alleging breach of contract.

More specifically, the plaintiffs state that the defendant was negligent in that it failed to construct the house in a timely and workmanlike manner, and ask for a judgment in the amount of $30,000.00. [ 16 ] The defendant denied negligence and stated that any delays, or inability to finish certain work, was wholly due to the plaintiffs firing the various trades employed by the defendant or denying them access to the property altogether. On November 1, 2016, the defendant filed a counterclaim for $64,774.27. Analysis

[ 17 ] The Saskatchewan New Home Warrant Program paid for any and all structural problems with the house that they determined were legitimate and which were agreed to by the plaintiffs. If there were any outstanding contractual or financial issues those could be negotiated or litigated by the parties themselves - the NHWP would not be involved. [ 18 ] The plaintiffs agreed to take the cash settlements rather than allowing the defendant to make the structural repairs which were identified by the conciliator as being necessary. If the plaintiffs believed that the required repairs would exceed the amount offered by the NHWP they had two options:

a) hold out for more money, or

b) allow the defendant to make the repairs. They chose neither, and, instead, decided to accept the amount offered. [ 19 ] The plaintiffs then proceeded to sue the defendant on the basis of contractual breaches. [ 20 ] Any complaints the plaintiffs have with the quality of the defendant’s workmanship is based entirely on the plaintiff’s own belief. [ 21 ] Mr. Harvey, who adduced the bulk of the plaintiff’s evidence, was not qualified as an expert, and did not hold himself out as an expert builder.

No testimony by journeyman carpenters, inspectors, engineers or other home builders was adduced. [ 22 ] The defendant for his part testified that he is an experienced home builder who has, over a number of years, built numerous homes and never had any serious problems with his past customers. He is a member in good standing with the NHWP and the said program was never involved in any of his previous projects. He testified that the plaintiff’s home was “built according to Code”. He further testified that any project will have some defects or deficiencies.

These are flagged down during the building process or during the final “walk through” prior to possession being taken and fixed.

On this project the plaintiff would not allow his tradespeople to do any repairs or to even be on his property. [3] [ 23 ] Therefore, having regard to the fact that the plaintiffs’ claim is not supported by any independent source who could point out the alleged negligence of the defendant, and taking into account the plaintiffs’ interference and refusal to allow the defendant’s tradespeople to fix or repair the problems complained of, I find that the plaintiffs have failed to establish that the defendant breached the contract, and as such has failed to prove their case on a balance of probabilities. [ 24 ] As far as the defendant’s counterclaim is concerned, it too has its problems. [ 25 ] The defendant’s main contention is that it had to pay its trades in full while at the same time it will incur a cost with NHWP. [ 26 ] With respect to the payment to its trades, the plaintiffs are entitled to have a lien-free home if they paid for it.

There was no evidence that there were any holdbacks held such as would exist when parties employ solicitors who are required to comply with the Builders Lien Act [4] . If the plaintiffs did not insist that the trades be paid, then they risked that their property would have liens registered against it. [ 27 ] As far as payment to the NHWP is concerned, the defendant, as builder, is obliged to be a member. It understands that if there is an impasse between itself and a homeowner the program becomes involved. The defendant entered into the conciliation process with the full understanding of how the program operates.

Moreover, the money paid by the NHWP to the plaintiffs was to repair or fix deficiencies deemed to be legitimate. If that work was not done by the defendant’s tradespeople then, presumably, it would not have to pay them for that work. If, on the other hand, he was contractually obligated to pay his tradespeople for work that they did not actually do that evidence was not presented at the trial. There was no evidence led to show how much the defendant paid the tradespeople and if that amount would have been different if they were the ones who actually repaired or fixed the defects.

[ 28 ] Finally, there is no evidence from the defendant to establish when and how much it actually paid to the NHWP. [ 29 ] Accordingly, the defendant’s counterclaim also fails. ___________________________ M.M. Baniak, J [1] Transcript, page T6 [2] Transcript, page T81 [3] Transcript, page T81 [4] SS 2015, c.21 -Part IV