Medusa Contracting Inc v Efficient Quality Homes Inc, 2023 ABCJ 123

In the Alberta Court of Justice Citation: Medusa Contracting Inc v Efficient Quality Homes Inc, 2023 ABCJ 123 Date: 20230602 Docket: 2290301732 Registry: Edmonton Between: Medusa Contracting Inc Plaintiff - and - Efficient Quality Homes Inc Defendant Reasons for Judgment of The Honourable Justice J.L.

Skitsko Introduction [ 1 ] This was a case involving a claim by a framer for new home construction framing services and a counterclaim by the owner of the project for costs incurred to finish the framing of the unfinished work on the project. [ 2 ] The Plaintiff Medusa Contracting Inc. was the framing company who accepted the responsibility for the framing project on lands in Beaumont owned by the Defendant company Efficient Quality Homes Inc.

The Plaintiff’s sole shareholder and operating mind was Ali El-Khalil (“Khalil”). [ 3 ] The Defendant’s sole shareholder and operating mind was Manjeet Singh (“Singh”). [ 4 ] The framing of the new home in question construction began on or about October 18, 2021 after the Defendant had accepted the Plaintiff’s offer to perform the work in what was known as an “estimate”.

There is disagreement as to precisely which estimate was accepted by the Defendant which will be dealt with later in the decision. [ 5 ] As the framing was being completed, the court learned that Khalil was injured in a slip and fall on the worksite. There was approximately 30% of work remaining on the project. He was disabled to the extent that he was not capable of completing the framing contract. He claimed he was owed $12600 for work performed to the date of the injury December 7, 2021.

The Plaintiff admitted that he still had approximately $7500 of work remaining to be completed. [ 6 ] The Defendant claimed that the balance of the framing work cost him additional monies to complete and counterclaimed in its pleadings for $9411 for costs that he incurred over and above the amount that the Plaintiff had agreed to complete the project. The actual amount submitted by the Defendant during the trial was approximately $19000. The Defendant referenced several tradesmen’s remedial work expenses during the trial. The Evidence

Ali El-Khalil [ 7 ] Khalil advised that leading up to the commencement of the work, he had opportunities to review the plans and designs of the project provided to him by the Defendant. He knew the project was a custom “spec” two story 2550 square foot home. He believed the project would take 22 days to complete. His estimate of September 25, 2021 quoted a price of $25518 plus GST totaling $26,793.90 (“the first estimate”). [ 8 ] However, even before the framing work began, he lost the two coworkers who would assist him in the project.

Given the labour shortages created by the COVID 19 crisis, he was unable to replace them. He satisfied me that he immediately advised Singh of this event and that the parties were aware that the project would take longer to complete as Khalil would carry on the project working alone. I am also satisfied that the Defendant agreed to this extension of the time it would take to complete the same under these circumstances. Therefore, when framing work began, it was clear that the estimate of 22 days to complete had changed.

It was certainly going to take more than the 22 days initially estimated. [ 9 ] Khalil advised that at some point before the project commenced, he had prepared another document, also entitled “estimate”, for the same project and this estimate revealed a price of $20500 plus GST (“the second estimate”). This estimate was dated October 3, 2021.

When asked about this second estimate, he advised that he had prepared this second estimate, not as a new offer to replace the first but rather as an estimate to show that he would be prepared to charge the Defendant 20% less for his framing services if he was to be given additional projects on future projects by the Defendant. He emphasized that this second estimate was a form of enticement that would secure more work from the Defendant in the future.

During cross examination, Singh suggested to the Plaintiff that it was this second estimate that formed the basis of the contract price agreed to between the parties which the Plaintiff vehemently denied. [ 10 ] The first of several issues in this trial will be, what was the contract under which the parties operated? [ 11 ] I am satisfied that the Plaintiff attended to his work diligently and completed the first phase of the project. The first phase consisted of the installation of the floor joists on the main level and application of the sheeting over the joists.

With the completion of the first level, the Plaintiff billed the Defendant $6542.52 including GST and was paid promptly. [ 12 ] The work continued and on December 7, 2021 the Plaintiff substantially completed the framing of the walls and flooring, including the sheeting of the second level. He billed the Defendant $12,600 including GST the next day for the work. He was clear that he had given the Defendant a $2000 reduction with this account. This left a total remaining of $7651.38 of funds to completion.

I find this amount, subject to remediation fees, to be reasonable. [ 13 ] However, on this day the Plaintiff experienced a fall. He slipped on ice and snow on the site causing injury to his left knee along with a slight concussion.

From the description of the injury and the medical reports that the Plaintiff submitted along with his own subjective description of the issues, I am satisfied that the Plaintiff experienced a debilitating painful injury to his knee which prevented him from completing the project within a reasonable time period estimated by the parties back in late October, 2021. [ 14 ] The medical reports that he presented to me made it clear that the scope of his injury would be reviewed on or after January 31.

There was no doubt that the existence of this injury meant that for a substantial time period he would be prevented in completing the framing of the home. In coming to this assessment, I am taking into account the very physical nature of framing, the time of the year, coupled with the severe physical limitations of Khalil. I have no hesitation in concluding that the Plaintiff would have been incapable of performing any of the physical tasks associated with the framing work until well into late February, 2022.

Singh requested that the Plaintiff find a replacement framer as soon as possible to complete the work Khalil advised he was not physically able to attend to this request. I therefore believe it was reasonable for Singh to consider alternatives to complete the project. Yamen Awad [ 15 ] The second witness for the Plaintiff was Mr. Awad. He is an experienced home builder with solid general knowledge of the various trades needed to construct a new home. He was not presented as an expert.

Nevertheless, I found him to be a reliable witness with knowledge of the pricing of new homes and pricing experience in the house building trades. [ 16 ] He advised that he did not know the Plaintiff and did not work with him at any time. I found him to be knowledgeable and helpful. [ 17 ] His evidence was presented by the Plaintiff to help the court determine the costs of the remaining work after Khalil’s injury. In coming to his conclusions of the amount of the remaining work in this case, he viewed square footage of projects as very telling.

He was of the view that depending on the complexity of the project, framing would cost in the range of $9-12 per square foot. Most significantly, in his experience, matters of pricing were subject to several market variances: 1. the logistics of the site and its availability to the workers from their residence; 2. the current state of the labour pool and availability of experienced workers; 3. the market demand for new homes; 4. the type of home being constructed. [ 18 ] While he did not inspect the house at any stage of its construction, he did review the blueprints.

He could see that this was a “spec ‘custom’ home”, not an average spec home. In this regard, he reviewed the truss plans and was of the view that with a small crew of 2-3 people, the completion of the remaining roof work would take 3 days. He believed that the fee for this crew would total

approximately $4228. [ 19 ] He also was asked by the Plaintiff to give an estimate of the costs of the entire framing expenses for the home. Based on a 2555 square foot home, he was of the view that the labour only cost would total $25,486.13. I find his skill of estimating this project to be realistic. [ 20 ] He also estimated that the total amount remaining to be completed of this framing project at the time of the Plaintiff’s injuries was approximately 30% of the entire project, depending upon whether the garage on site was attached or detached from the home (the garage roof was attached).

Finally, on cross examination, he believed the garage roof charges would be in the range of $3-3.50/square foot. However, given that an attached garage roof is different than the home roof, a garage roof would be less than this rate, perhaps $2- 2.50 per square foot. His final square foot calculations showed a roof of almost 2000 square feet and a garage of approximately 750 square feet for a total of 2750 square feet. Using these estimates, the remaining estimated cost of the roofing based on his numbers could be reasonably within the $6000-7500 range.

I noted that this cost was reasonably close to the Plaintiff’s own estimate of around $7000- $7500 of work remaining. [ 21 ] Mr. Awad was not able to comment on any of the deficiencies that remained to be completed. He did suggest that deficiencies in the framing industry were not unusual. The Evidence of the Defendant Manjeet Singh [ 22 ] Mr. Singh advised that the house in question was 2555 square feet and he viewed the framers’ costs at around $8/square foot. He was of the view that this was the basis of the Plaintiff’s estimate of $20,500.

He admitted that there had been a discussion with the Plaintiff of “further work” of up to 10 other jobs but that really had no influence on the Plaintiff’s second quote as that quote was prepared by the Plaintiff. The project would take 17-22 days. Singh agreed during his evidence that no outside deck was to be constructed and did not form part of the scope of the project. [ 23 ] I am satisfied that the existence and nature of the Plaintiff’s injury was explained to the Defendant within the first two weeks from the date of the injury.

A telephone call was held between the parties and the transcript dated December 20, 2021 of the call was put into evidence. I further find that the Defendant did not agree to extend the project for any period that would have allowed the Plaintiff to complete the work after his rehabilitation. I find that this option was simply not available to the Defendant as it was essential that the home be framed as soon as possible. [ 24 ] I find that the position taken by the Defendant to press on with the remaining framing work was a reasonable one.

After it was made clear to Singh that he needed to find a replacement framer, he retained Mandeep Jammu (“Jammu”) to complete the work, beginning in mid January, 2022. [ 25 ] While Singh acknowledged that the Plaintiff’s work was for the most part workmanlike on phases one and two, he did indicate there were certain deficiencies. In addition, he added that phase three including certain walls and all roofing areas remained to be completed.

He told the court that Mandeep Jammu completed the phase three work. [ 26 ] Singh advised that based on the 2555 square feet of home at $8/square foot the framing price for the entire project would total $20500. This was the amount of the second estimate which he argued was the cost of the entire project.

He was of the view that the second estimate therefore reflected the correct price as estimated by the Plaintiff. [ 27 ] Singh advised of several window and framing errors, errors of blue skin application, door openings needing to be recut to accommodate 8 foot tall doors, construction of and correct placement of stairs needing correction. These items were attended to by others. According to Singh, the door openings cost $1338.75 to repair and an invoice to 2317532 Alberta Ltd (“231”) was paid.

He presented a paid invoice of $1100 for the construction of the garage step landing from Matharo Construction and lastly an invoice for the stair adjustment and basement post adjustments of $2200 from NuCastle Renovation. These three invoices totaled $4638.75. It is my view that these estimates were very vague in detail and I regard them skeptically. I come to this conclusion as none of the remediation trades people were called as witnesses and no attempt by the Defendant to gain an admission of the cost of the repairs was effected prior to the trial by the Defendant.

In this regard, I draw the parties’ attention to Rule 6.37(1)-(8) of the Alberta Rules of Court , particularly Rule 6.37(3) which reads:

(3) Each of the matters for which an admission is requested is presumed to be admitted unless, within 20 days of the date of service of the notice to admit, the party to whom the notice is addressed serves on the party requesting the admission a statement that (

a) denies the fact or the opinion, or both, for which an admission is requested and sets out in detail the reasons why the fact cannot be admitted or the opinion cannot be admitted, as the case requires or (

b) sets out an objection on the ground that some or all of the matters for which admissions are requested are, in whole or in part, (

i) privileged or (ii) irrelevant, improper or unnecessary. [ 28 ] For brevity, I have not copied the entire Rule but would simply say this. This Rule sets out a procedure that can be accessed by litigants during trial preparation to comply with the rules of evidence in a timely and efficient way without having to call the witness to the trial itself, thereby saving valuable trial time. It is fair as it allows the party on which the notice has been served to object to any

deemed admissions. Needless to say, this process was not followed. [29] Singh simply brought the estimates to the trial and asked the court to conclude these were the necessary repairs costing “X”dollars. [30] The presentation of these invoices proved problematic for another reason. He offered no internal corporate records of proof ofpayment (cancelled cheques, receipts, email confirmations of payment) for these invoices, only telling the court that “… he did not bringthese documents with him” to court. [31] While I accept there were deficiencies, no details of their remediation (scope of the work required, hours of time to completethe same, name(

s) of trades people completing the work) were included in the invoices from the various trades. For example, the stairlanding took 8.5 hours of time to complete. Without more, I find this to be excessive. Similarly, the work to correct the garage dooropenings without more details of the work did not convince me as to the extent of the remediation required. The NuCastle Renovationinvoice for stair adjustment, drywall backings and basement post readjustment of $2200 in my view was excessive.

To be very clear,Singh should have anticipated this issue of cost of remediation at trial and at the very least should have insisted on a detailed accountfrom these three parties or engaged Rule 6.37. He did neither. [32] That is not to say that the deficiencies did not come without a cost. In this situation however, I invoke the common law, usingthe provisions of Penvidic v International Nickel (SCC), [1976] 1 SCR 267 (“Penvidic”). [33] I do find that some corrective work was required and set the total amount of $1500 for all the work covered by these threeinvoices.

I make this determination in light of the long-standing legal principles of Penvidic where the Supreme Court of Canada requiresjudges to “do the best they can” in assessing damages even where suitable evidence is not called. [34] In Penvidic, the Supreme Court of Canada quoting with approval Wood v Grand Valley Railway Company (1915), (SCC), 51 SCR 283 (SCC), at pp 279-280 held: When Wood v.

Grand Valley Railway Company, supra, reached the Supreme Court of Canada, judgment was given by Davies, J. wherethe learned justice said at p. 289: It was clearly impossible under the facts of that case to estimate with anything approaching to mathematical accuracy the damagessustained by the plaintiffs, but it seems to me to be clearly laid down there by the learned judges that such an impossibility cannot“relieve the wrongdoer of the necessity of paying damages for his breach of contract” and that on the other hand the tribunal to estimatethem whether jury or judge must under such circumstances do “the best it can” and its conclusion will not be set aside even if the amountof the verdict is a matter of guess work.

Mandeep Jammu [35] Mr. Jammu had done framing of one project for Singh in the past. I accept that his evidence was not affected or tainted by hisprior dealings with Singh, however. I found him helpful and clear. [36] I found Mr. Jammu’s evidence was presented in a very objective manner. His evidence was “matter of fact”. [37] He is a framer with three years’ experience and, in his words on cross examination, “… is still learning the business.” As withMr. Awad, he was not called as an expert.

He was called as a person with knowledge of framing work and I found most of his evidencehelpful. [38] When asked by Singh to complete the job, he agreed. When he arrived on site in mid-January, 2022, he was presented with alarge home with an entire roof to be completed along with the roof of the attached garage. [39] His first duty was to inspect the entire work to assess its level of workmanlike quality.

He advised that this took a full day tocomplete including an assessment of the “point loading” work that must be conducted by framers to ensure that the walls as constructedcan support the weight of the structure. He was of the view that much of the completed work was workmanlike but did find deficiencies. [40] During his review, he noted that 30-40% of the project remained to be completed and could see that minor deficiencies of theexisting work needed attention. He was of the view that the square footage of the roof including the garage roof was more than thesquare footage as estimated by the Plaintiff.

He estimated the roof framing area to be 3125 square feet. He believed the attached garageadded another 725 square feet to the project. This amount was challenged when Singh put into evidence the truss plans layout indicatinga total roof area of 3125 square feet. I am of the view that this 3125 square feet is the most accurate square footage of the project. Evenwitness Awad was of the view that the home roof was 2550 square feet and with a garage roof of another 750 square feet, this totaled3300 square feet. [41] Trusses were delivered on site and had to be organized for the crane lift part of the project.

This took a full day. Once thetrusses were sorted, construction of the roof followed. It took 3 days to complete construction of the home and garage roof. [42] His fees for completing the framing of the home were $11484.37 plus an additional $1903.12 for the garage portion of theroof totaling $13387.49, including GST. I find these fees to be reasonable. Some of these fees included the repair of some of thePlaintiff’s deficiencies. [43] He indicated that the remediation of the Plaintiff’s completed work would take about 2-4 days.

He gave details and particularsof the time the work had taken. [44] One of the existing garage walls had to be cut down by one foot to allow windows on the house to literally fit the openings in

the body of the home. [ 45 ] He noted that the windows had been improperly fitted with the blue skin product and would have to be re-shimmed after the blue skin was refitted. [ 46 ] Some other work remained to be completed including the installation of the stairs and adjustments to squeaking floors. [ 47 ] He finished the work on or about January 17, 2022. A framing inspection report (“report”) followed the completion of this framing by the City of Beaumont on the 7 th of February, 2022.While the inspector David Ross was not called, his report was put into evidence. It revealed that 8 deficiencies existed.

These were noted as: Project Location : Lot: 33 Block: 01 Plan: 062 7131 Civic Address : 3810 Triomphe Blvd, Beaumont Bldg. Classification : Division B, Group C,

Part 9 (Residential) Building Area : 1358 ft 2 Upper, 1197 ft 2 Main, 0 ft 2 Basement Number of Storey : 2 Building Inspection : ■ Framing Code Deficiency(

s) Observed ■ Yes Observations: • Framing of the home was complete at the time of inspection. • Roofing is in place with no building wrap or siding started. • Truss drawings were on site with all required bracing in place • Corner nailing pattern is acceptable. • Insulation stops are in place. • As built tall walls closely match submitted drawings. • Main floor joist layouts match submitted drawings. • Telepost size and placement match submitted drawings. • Pony walls have been used. • Squash blocking in place where visible. Deficiencies: 1.

Blocking between joist in garage ceiling required as per submitted drawings. 2. Temporary heat permit is required for heaters in the basement. 3. Windows are required to be installed in accordance with the 440 standard including sill protections and treated blocks. 4. Repair roof sheathing where vents cut out but not used. 5. Double window tall wall required mid-span blocking below top window as per submitted drawings. 6. Tall wall requires horizontal blocking below floor sheathing as per submitted drawings. 7. Header over front entry was to be 2 ply 2x10.

Submit acceptance letter or updated drawings for as built header. 8. Add 2x4 to built up post supporting beam at base of the stairs on main floor (FL 1101) [ 48 ] Items 1, 3, 4, 5 ,6, 7, 8 in the report were deemed to be deficiencies and interestingly, Items 1 and 4 were deficiencies to be

corrected by Jammu. According to Jammu, Items 3 and 5-8 in the report were deficiencies of the Plaintiff’s work and would take approximately 5 hours of time to correct. [ 49 ] I am satisfied that phases one and two did require some remediation work. As pointed out by Singh and Jammu, certain repairs needed to be made. These were described as: 1. Minor framing blocking issues existed. 2. The building envelope product known as “blue skin” was not placed behind the windows on the first and second floor, and errors existed with door openings.

The blue skin had not been applied along the inside areas of the windows which meant that the windows had to be removed and the blue skin had to be reapplied followed by the re-shimming of the windows. 3. A garage wall that had been previously built by the Plaintiff had to be cut down by at least a foot to allow the windows on the second floor to fit. 4.Other minor repairs such as gluing existing floor sheeting and adjusting the stairs needed readjustment. 5. The garage landing had not been completed. Is this a case of frustration of contract? [ 50 ] This requires an analysis of frustration of contract.

Given that no comprehensive written agreement existed assisting the parties in what to do in this case, the court needs to review the terms and conditions of the contract and read those terms in light of the existing circumstances and the events which have occurred. [ 51 ] However, that is not the “be all end all” as has been noted by authors of Canadian Contract Law , Swan and Adamski (Third Edition 2012, Lexis Nexis): Just because the parties could have avoided the problems … [in a well drafted agreement] “… has not usually been regarded as a sufficient reason for sending them away and letting the loss that has or is threatened lie where it has fallen or will fall.”… There is a huge social value in the courts recognizing or shouldering the burden of rescuing clients from the consequences of their or their solicitors’ inability to think of everything. (at p. 802) The Issues 1.

What was the contract between the parties? 2. Was the Plaintiff’s contract with the Defendant frustrated, that is, was the Plaintiff excused from the remaining obligations under the contract because of his injuries? 3. If the contract was frustrated, what is the Plaintiff entitled to under that part of the contract that was completed? 4. If the contract was not frustrated, what damages is the Defendant entitled to complete the framing and correct the deficiencies?

What Was the Contract Between the Parties? [ 52 ] I am required to determine this preliminary question as the parties argued two different prices were in play. The Plaintiff alleged that the framing price was for a price of $25,518 plus GST as per his written estimate dated September 25, 2021 (the first estimate). [ 53 ] The Defendant’s position was that the price was $20,500 plus GST as per the Plaintiff’s estimate of October 3, 2021 (the second estimate).

It did not expressly exclude any other items as was noted in the first estimate but it was admitted by the Defendant that the outdoor deck was not included in this price. [ 54 ] There was no question as to what the scope of the work entailed. The Plaintiff was to complete the framing of a single family dwelling. The work included the labour, nails, floor screws, power allowance, and installation of exterior windows and doors. [ 55 ] The payment

schedule would be negotiated in percentage amounts based upon the progress completion. The estimated time for completion was 17-22 working days “…unless weather or other environmental hazards arise.” [ 56 ] It was also agreed that the scope of work would not include deck framing or basement walls framing.

The major disagreement was therefore the cost of the framing and what was the value of the work to be completed. [ 57 ] It was very clear that the circumstances in which the first estimate was provided was a “stand alone” project, that is, there was no discussion of further work for the Plaintiff, only this framing job. Prior to the second estimate, there were admittedly discussions about future framing work to be completed. However, that future work could not be guaranteed or warranted by the Defendant.

In my view, unless there was a collateral agreement in place, express or implied, there would have been no reason for the Plaintiff to provide this second estimate and the Defendant could not rely on this second estimate. The Defendant presented no evidence of any further details of future work in writing or with verbal discussions of future work. These discussions did not amount to anything other than an invitation to treat. The case of Powder Mountain Resorts Ltd. v British Columbia , [1999] BCJ No 1954 is referred to.

[ 58 ] At para 112, the Court held: It is unlikely, ..., that the parties intended to initiate contractual relations by the submission of a proposal by PMR…..The invitation for proposals appears to have been an invitation to negotiate or, in other words, an invitation to treat . It appears unlikely that the intention of the parties was that a submission of a proposal would initiate contractual relations between the parties. It appears more likely that the intention was to initiate negotiations which, if mutually satisfactory, would lead to contractual relations.

In Spicer v Gambell , 2005 AJ 1074 , Park J. said this, at para 63 (c): What is sometimes conceived of as an offer, by the alleged offeror or others, may be nothing more than a statement indicating a general commercial intent, a desire to make a contract with the party to whom the statement is addressed if a suitable arrangement can be reached. Such an "offer" is considered to be nothing more than an invitation to treat , which is designed to elicit an offer from the party to whom it is addressed. ... (emphasis mine). [ 59 ] In my view this was precisely the situation in this case.

Without more than a suggestion that the Plaintiff would be provided with 8 more jobs, this was a beginning point for the parties to negotiate. The evidence reveals that nothing further developed between the parties in that regard. [ 60 ] Therefore, I find that the contract between the parties was based on the first estimate and that is the offer that represented the true intentions of the parties. The contract that was accepted as the correct offer by the Defendant was the sum of $25,518 plus GST for a total of $26,793.90.

Was the Plaintiff’s contract with the Defendant frustrated, that is, was the Plaintiff excused from the remaining obligations under the contract because of his injuries? [ 61 ] Frustration arises where there is a supervening event that is the fault of neither party and for which there is no provision in the contract. As a result contractual performance "becomes a thing radically different from that which was undertaken by the contract": Naylor Group Inc v Ellis-Don Construction Ltd , [2001] 2 SCR 943, 2001 SCC 58 .

The frustration of a contract results in both parties being discharged from their obligations. [ 62 ] At para 53 in Naylor : Frustration occurs when a situation has arisen for which the parties made no provision in the contract and performance of the contract becomes “a thing radically different from that which was undertaken by the contract”: Peter Kiewit Sons’ Co. v. Eakins Construction [1960] S.C.R. at p.368, ... quoting Davis Contractors Ltd. v.

Fareham Urban District Council [1956] A.C. (H.L.) at p 729. [ 63 ] The doctrine of frustration was summarized in Fishman v Wilderness Ridge at Stewart Creek Inc , 2010 ABCA 345 at paras 4- 7 : 4. The doctrine of frustration arises in many and varied situations, and it has been described in different ways. It essentially involves an unforeseen change to the circumstances underlying the contract, through no fault of the parties, that renders the contract incapable of performance. The change of circumstances must be fundamental in nature, such that it goes to the root of the contract.

It is not enough that performance has become more difficult; performance must be impossible. The destruction of the subject of the contract can amount to frustration, but not if the risk of destruction has been allocated in the contract to one of the parties, and not necessarily if the subject of the contract can be replaced. 5 The main issue is whether this contract was frustrated. The fire clearly operated to prevent the respondents from delivering the condominium unit when anticipated.

In all the circumstances, however, the unit can be rebuilt, and the respondents will be able to deliver it, albeit later than originally anticipated. The force majeure clause anticipated late delivery in circumstances of this sort. A contract is only frustrated when it becomes incapable of performance, not just because performance might be more onerous, more costly, or different from what was anticipated.

Here the late delivery of the condominium will be inconvenient to, and onerous for, the appellants, but the force majeure clause effectively allocated that risk to them. 6 While the record is not entirely clear, it appears that the condominium might be rebuilt approximately one year after the originally scheduled completion date. Whether the possible performance of a contract is so delayed as to amount to frustration is a matter of degree and context: Krell v. Henry , [1903] 2 K.B. 740 at p. 751 . For example, in Taylor v.

Caldwell (1863), 3 B. & S. 826, 122 E.R. 309 it was impossible to rebuild the Music Hall in time, and unreasonable to think that the concerts should just be delayed indefinitely until it was rebuilt. Reciprocity is also important in measuring frustration; if one party to the contract can reasonably and fairly assert frustration, the other should be able to as well.

In this case, if the respondents decided to rebuild the condominium, but asserted frustration and the right to sell the condominium to a third party (at a higher price), the appellants would have a legitimate reason to object. 7 In the present case the original purchase agreement was signed in January of 2007, with an anticipated possession date to be set by the respondents no later than February of 2010, a period of time of three years. In that context, a delay of one year as a result of the fire is not such an extraordinary circumstance as to undermine the entire foundation of the contract.

Combined with the force majeure clause and the fact that the condominium can be rebuilt exactly as promised, in this case the destruction of the condominium by fire did not amount to frustration. [ 64 ] In Fishman , the Court concluded that the fire that destroyed a condominium under construction with the result that completion was delayed by a year, did not constitute frustration.

[65] A helpful distillation of the elements of the doctrine of frustration was set out by the Court in 0707448 BC Ltd v CascadesRecovery Inc, 2011 BCSC 1065 at paras 58-60: [58] Frustration of a contract occurs when: 1. A supervening event occurs: (

a) after the formation of the contract; (

b) for which the contract makes no provision; and (

c) which is not the fault of either party, which is not self-induced, and which was not foreseeable. 2. The supervening event so significantly changes the nature of the contractual rights/obligations which the parties could reasonablyhave contemplated at the time of execution, that: (

a) the contract is now totally different from what the parties intended; or, (

b) a fundamental contractual term has become incapable of being performed; or, (

c) new circumstances in which performance is called for would render it a thing radically different from that which was undertaken bythe contract; or, (

d) the thing undertaken would, if performed, be a different thing from that contracted for; or, (

e) it has totally affected the nature, meaning, purpose, effect and consequence of the contract so far as concerns either or both parties. 3. The differences between the contract before the supervening event, and after: (

a) must be permanent, not temporary or transient; (

b) are not mere inconvenience, but fruitlessness; (

c) are not merely expense or onerousness. [59] The result of the foregoing is that it would be unjust to hold the parties to the literal sense of the contract's stipulations in the newcircumstances; hence, frustration. [60] The data for assessing whether the foregoing has occurred are: 1. the terms and construction of the contract (read in light of the existing circumstances); and 2. the events which occurred. [66] In Kesmat Investments Inc v Industrial Machinery Company Limited and Canadian Indemnity Company (1985), 70 NSR (2d)341, at para 21, citing Lieberman v Roseland Theatre Limited, [1946] 1 DLR 342, at 350, the Courtlisted injury as a potential frustrating event: [21] It is clear from the authorities that hardship, inconvenience or material loss or the fact that the work has become more onerousthan originally anticipated are not sufficient to amount to frustration in law so as to terminate a contract and relieve the parties thereto oftheir obligations to each other… Courts have, however, interpreted impossibility of performance to encompass not only absoluteimpossibility but also impossibility in the sense of impracticability of performance due to extreme and unreasonable difficulty, expense,injury or loss. [67] The Plaintiff argued that his knee injury prevented him from completing the contract.

I accept that his injury may have likelyprevented him from framing until late February, a 3-month recovery period. In the meantime, as he was not able to secure the services ofanother framer and ultimately by mid January, the Defendant had hired a new framer. Did these circumstances allow the Plaintiff out ofthis contract? Was he permitted to be relieved from his duties? If the contract was frustrated, what is the Plaintiff entitled tounder that part of the contract that was completed? [68] Frustration brings a contract to an end and releases both parties from any further performance of the contract.

There arecertain legal consequences which flow from frustration, because of the enactment of frustrated contracts legislation in Alberta. Theconsequences of frustration are governed by the Frustrated Contracts Act, RSA 2000, c F-27 (the FCA). The FCA applies to a contractthat “has become impossible of performance or been otherwise frustrated and the parties to which for that reason have been discharged”(s 2(1)). [69] The payment provisions of the FCA are as follows: Sums payable before discharge 3 The sums paid or payable to a party, in pursuance of a contract before the parties were discharged,

(

a) in the case of sums paid, are recoverable from that party as money received by that party for the use of the party by whom the sums were paid, and (

b) in the case of sums payable, cease to be payable. Expenses 4(1) If, before the parties were discharged, the party to whom the sums were paid or payable incurred expenses in connection with the performance of the contract, the court, if it considers it just to do so having regard to all the circumstances, may allow the party to retain or to recover, as the case may be, the whole or a part of the sums paid or payable not exceeding the amount of the expenses.

(2) Without restricting the generality of subsection (1), the court, in estimating the amount of the expenses, may include a sum that appears to be reasonable in respect of overhead expenses and in respect of work or services performed personally by the party incurring the expenses.

Benefit 5(1) If, before the parties were discharged, any of them has, by reason of anything done by another party in connection with the performance of the contract, obtained a valuable benefit other than a payment of money, the court, if it considers it just to do so having regard to all the circumstances, may allow the other party to recover from the party benefited the whole or a part of the value of the benefit.

(2) When a party has assumed an obligation under the contract in consideration of the conferring of a benefit by another party to the contract on another person, whether a party to the contract or not, the court, if it considers it just to do so having regard to all the circumstances, may for the purposes of subsection (1) treat a benefit so conferred as a benefit obtained by the party who has assumed the obligation. [ 70 ] As a general rule, the FCA provides that once the contract has been frustrated, the sums already paid are returnable to the payor and the sums payable cease to be payable.

However, if before the contract was frustrated one of the parties has obtained a valuable benefit, the court may allow the other party to recover restitution from the party benefitted, in whole or in part . In other words, while

section 3 of the FCA provides that the Defendant can recover the payment he already made to the Plaintiff and is not liable to pay the amount owing,

section 5 allows the court to remedy that injustice by compensating the Plaintiff for some or all of the work done if it is just to do so. [ 71 ] I also wish to bring to the parties’ attention that

section 8 of the FCA provides for an option of severance: 8. If it appears to the court that a part of the contract can be severed properly from the remainder of the contract, being a part (

a) wholly performed before the parties were discharged, or (

b) wholly performed except for the payment in respect of that part of the contract of sums that are or can be ascertained under the contract, the court shall treat that part of the contract as if it were a separate contract that had not been frustrated and shall treat this Act as applicable only to the remainder of the contract. [ 72 ] In Homewood Development Inc v 2010999 Ontario Inc ., 2013 ONSC 4441 at paras 73-74 , the Court noted that most construction contracts are interpreted as divisible contracts rather than entire contracts, since progress payments are triggered by the substantial completion of each project milestone along the way.

Further Analysis [ 73 ] I find that the framing contract between the Plaintiff and Defendant has not been frustrated. The Plaintiff’s injury, which was not unforeseeable like supervening illegality or

an Act of God, did not fundamentally change the nature of the contract or otherwise render it impossible to perform. There were options available to the Plaintiff such as recruiting the help of another roofer, which the Defendant encouraged the Plaintiff to do. If the contract was not frustrated, what options are available to the owner? [ 74 ] A

summary of who is entitled to recover payment in the event of different types of breaches of a construction contract is provided in D&M Steel Ltd v 51 Construction Ltd ., 2018 ONSC 2171 at paras 49-56 (see case for footnote references): 1. Damages and Quantum Meruit Claims for a Construction Contract . . .

51 Contractor breach: mere bad or defective work or insignificant non-completion will not, in general, entitle an owner to terminate acontract, but the owner will have an obligation to pay for the work and make a claim for damages for the defective work. An owner willnot be able to terminate the contract because of some minor or inconsequential failure to complete, although the owner may have a claimagainst the contractor for damages for non-completion or for defective workmanship, which will generally be the cost of completing thenon-completed items or remedying any defects.

If the contractor breaches the contract, an owner who alleges that the work performed orthe materials supplied are defective must provide proper evidence on the basis of which his or her damages can be assessed. 52 If there are defects in a contractor's workmanship, but not enough to amount to a fundamental breach entitling the owner to terminatethe contract, the contractor should be permitted to remedy the defects and failure by the owner to permit such corrections will disentitleor reduce the amount of damages the owner can claim to remedy the defects as a result of its failure to mitigate. ... 55 Contractor breach: unless the breach is a repudiation, fundamental breach, or abandonment of a contract, if a contractor breacheswhat is called a "severable," "divisible" or "non-entire" construction contract or if the contractor breaches an "entire contract" that it hassubstantially performed, then subject to the owner's claim for damages for defective, delayed, or incomplete performance, the breachingcontractor is entitled to be paid for its performed work or to a quantum meruit for the substantially completed work. [Emphasis added] [75] In my view, this case is clear that the Plaintiff breached a severable or “non entire” construction contract between himself andthe Defendant.

Therefore, this allows him to be paid for this performed work, set off by the Defendant’s claim of provable damages forincomplete performance. [76] In Yang v Daytona Homes (Lethbridge) Ltd., 2023 ABPC 54, LeGrandeur J set out the law on damages for a contractor’sbreach of contract due to non-completion at paras 16-17: [16] When the breach being compensated for is either non-completion or faulty completion on the part of the contractor, therecoverable damage is generally the difference between the value of the premises if the work had been done properly and the value ofthe property as it stands either incomplete or defective in part: Strata Corp NW 1714 v Winkler (1987), (BC CA), 27CLR 225 (BCCA).

In most cases, however, dealing with defective work the nature of damages is the cost of correcting the work overand above the contract price; Allan v Pierce (1895), 3 TERR LR 319. (NWTSC). In this case the matter is somewhat unusual because wehave a breach based upon noncompletion, which when remedied by the contractor was done so defectively. [17] The proper remedy is the reasonable costs (actual costs: Nu-West Homes Ltd v Thunderbird Petroleums Ltd (1975), (AB CA), 59 DLR (3d) 292 (ABCA) of remedying the defect. ...

The Specific Review of Damages in this case. [77] At the date of the breach by the Plaintiff, the Plaintiff was owed $12,600 including GST less deficiencies on that job andfurther proven deficiencies of the remaining work to be completed. From the contract, the initial invoice of $6542.52 was paid. Therefore, the $12600 subtracted from the total job cost ($26,793.90) left a contracted balance to complete of $7651.38 (“the completionamount”).

The Defendant would have in any event of the Plaintiff’s non-performance been responsible for this completion amount. [78] The Defendant’s remediation work consisted of framing the balance of the home and several minor deficiencies. Thesetotaled: 1. The framing work of Mr. Mandeep Jammu including all remediation work of cutting down a 25-foot garage wall, roof completionincluding garage, blue skin window adjustments and repairs to double tall wall $13387.49 2.

Miscellaneous repairs to stairs, doors and garage step landing (as granted by the Court) $1500.00 TOTAL $14887.49 Calculation of Judgments to Each of Plaintiff and Defendant byCounterclaim Amount of total contract $26793.90 Minus - amount billed by Plaintiff and paid by Defendant ($6542.52) Balance under contract if completed $20251.38 Amount due and owing to Plaintiff as per last invoice ($12,600.00) Amount of work remaining completion ($20,251.38 - $12,600) $7651.38

Amount outstanding to Defendant/Plaintiff by Counterclaim ($14887.49-$7651.38) $7236.11 Amount outstanding to Plaintiff ($12600-$7236.11) $5363.89 [ 79 ] I therefore find in favour of the Plaintiff an amount of $5363.89, being the balance owing to the Plaintiff after taking into account the success of the Defendant’s Counterclaim. [ 80 ] Due to the mixed success of each party, I will allow the Plaintiff the difference of filing costs given the amount of his filing fees ($200) and the Defendant/Plaintiff by counterclaim fees of $125 for a credit of $ 75 payable to the Plaintiff.

There will be no other costs to either party. [ 81 ] The Plaintiff is entitled to Judgment Interest from April 1, 2022 to today’s date. Dated at the City of Edmonton, Alberta this 2 nd day of June, 2023. J.L. Skitsko A Justice of the Alberta Court of Justice Appearances: The Plaintiff - self-represented. The Defendant - self-represented.