Sander Holdings Ltd., Gil Sander, v. Doreen Sander, 2012 SKPC 19

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION 2012 SKPC 019 Date: January 19, 2012 File: 465/2009 Location: Judicial Centre of Saskatoon _____________________________________________________________________________ Between: Sander Holdings Ltd., Gil Sander, and Doreen Sander Plaintiffs and McDiarmid Lumber Ltd., Defendants T.P. Hawryluk For the Plaintiff C.B. Barry For the Defendant ______________________________________________________________________________ JUDGMENT S. P.

WHELAN, J ______________________________________________________________________________ Introduction [ 1 ] This action concerned a dispute over the substitution of windows and doors supplied by the Defendant, McDiarmid Lumber Ltd. (McDiarmid), to the Plaintiffs, (Sanders) in a contract for the construction of a ready-to-move-home (RTM). The trial spanned four days, spread out over six months. Evidence was presented regarding the cause of the breakdown of a supply relationship between McDiarmid and the manufacturer, All Weather Windows (All Weather), the brand selected by the Sanders.

Expert evidence was presented regarding both the All Weather product and the substituted product, Weather Shield Peachtree (Weather Shield). Counsel filed lengthy arguments. [ 2 ] The Plaintiffs purchased the RTM to replace their house on their farm property near Sovereign. The corporate Plaintiff is their “farming company” and the house was bought by Sander Holdings Ltd. While Mr. and Mrs. Sanders have a home in Saskatoon, they required a home on the farm during those months of the year when Mr. Sander is engaged in farming.

They tore down their old farm house in anticipation of the delivery of their new RTM in July of 2008. [ 3 ] The “Sale Agreement” was signed by the parties on December 14, 2007 and contemplated All Weather windows and doors. In October of 2007, All Weather terminated their supply relationship with McDiarmid. Nonetheless, in November 2007, Mr. and Mrs.

Sander were directed by McDiarmid to the Saskatoon showroom of All Weather to pick out their windows and doors. Construction began sometime after March 21, 2008. McDiarmid substituted windows and doors with Weather Shield products.

The Plaintiffs were not notified of the substitution until about two weeks prior to the target delivery date of July 2, 2008. [ 4 ] The Sanders claim breach of contract and damages on the basis that the windows and doors installed in the RTM were different in appearance and quality from those chosen by them. [ 5 ] McDiarmid relies upon paragraph 11 of the Sale Agreement, which they maintain permits them to unilaterally substitute materials necessary to complete the RTM. [ 6 ] McDiarmid also relies upon the “Walk-through Inspection Agreement” signed by the Mr.

Sanders after a June 30, 2008 walk- through on the Defendant’s premises in Saskatoon, which states that the purchaser accepts the RTM “as is ”. The Sanders maintain that the windows and doors were not part of the Walk-through Inspection Agreement. Issues

a) What were the terms of the contract?

b) Should the Defendant be permitted to rely upon the Substitution Clause of the Sale Agreement, which provides for unilateral changes to construction materials?

c) Were the substituted windows and doors of “similar quality”?

d) Did the Plaintiffs acquiesce to the substitution with the Weather Shield windows and what was the impact of the Walk-through Inspection Agreement?

e) Was there a breach of contract for which a remedy is appropriate?

f) What if any damages are appropriate? Evidence Agreed Statement of Facts [ 7 ] The parties filed an Agreed Statement of Facts (Exhibit P-1), from which pertinent facts were gleaned: i. The Sanders dealt with Roseanne Miller, a McDiarmid employee; however in April 2008, Randy Harder, the Saskatoon manager, became the contact. ii. On or about October 11, 2007 (Exhibit P-1) the Sanders paid a deposit of $5,000.00. At that time they were advised by Roseanne Miller of a number of the McDiarmid’s suppliers and were referred, with respect to windows and doors, to: All Weather. iii.

Between October 18, 2007 and January 3, 2008, McDiarmid provided the Sanders with multiple draft RTM plans for their review. (Exhibit P-3.) iv. From October 11 to December 14, 2007, McDiarmid provided the Sanders with a number of quotes. (Exhibit P-4) v. On December 14, 2007, the parties entered into the Sale Agreement (Exhibit P-4) with a purchase price of $178,656.97. vi. Subsequent to the Sale Agreement, the parties entered into a number of Change Orders. vii. On June 30, 2008, the Sanders attended the McDiarmid construction site to inspect their RTM.

At that time they signed the Walk- through Inspection Agreement. viii. On July 2, 2008, the RTM was delivered to the Sanders’ farm at Sovereign. Subsequently service issues arose. ix. On July 8, 2008, a serviceman attended and a number of items were completed. Some service issues remained unresolved. x. On March 3, 2009, McDiarmid and Mr. Sander signed a Deficiency Agreement (Exhibit D-1) respecting service issues and monies owing. xi. The Sanders arranged for the installation of a third kind of windows and doors in the mudroom to their RTM, which was

subsequently added. All Weather Windows October 10, 2007 - termination of supply [ 8 ] A letter, dated October 10, 2007, from All Weather to McDiarmid (Exhibit P-1), states in part: As we review your program for this year and look ahead to 2008, we acknowledge your change of stocking product, direction on your RTM and First Nations business. In light of the change of direction of your company, we are giving you 30 days notice on ending our business partnership. Effective November 12, 2007, we will not accept any new orders, and will commence removal of our consignment displays. . . .

McDiarmid’s Promotional Package [ 9 ] The Sanders received a three page promotion package from McDiarmid (Exhibit P-2) the first page of which states in part: If you are looking for a builder, who offers personalized customer service; and ensures that you will receive the home you imagine, desire, and will love for years to come; a builder that pays attention to the details and quality of the craftsmanship of every home we build; you have found it here at McDiarmid Homes. . . Our construction materials are described on the “Specification Sheet” included in this package.

Upon sending our office a detailed list of the features and items you wish to have in your home, we will be able to send you an accurate price. . . LIVE THE DREAM! [ 10 ] The attached specifications sheet does not, for the vast majority of the items listed, specify a supplier; however with respect to windows it provides: Windows ° All weather dual Low-E or clear triple pane . . .

The content of the specifications sheet included with the promotional package appears to be the same as that which is attached to the Sale Agreement. [11] The specifications sheet further provides a Note regarding changes to the specifications listed: Note In an attempt to provide the highest quality possible, McDiarmid Lumber reserves the right to change the above specifications. Please review the specifications with your sales consultant before your purchase.

Sale Agreement [12] The Sale Agreement (dated December 14, 2007, Exhibit P-4) provisions address, among other things: building in accordance with the plans and specifications in a proper and workmanlike manner, changes to those specifications, completion and occupancy dates, and substitution of materials, pertinent portions of which have been set out below: 1. The Contractor agrees to provide all materials and labour to build the said dwelling house in accordance with the plans and specifications set forth in the Pricing

Schedule attached hereto and forming part of this agreement, in a proper and workmanlike manner and with all due diligence and dispatch in order to have the said dwelling house completed by the completion date and occupancy date provided herein. The Contractor does not guarantee the completion date of the said dwelling house or occupancy date to the purchasers and the Contractor shall not be responsible for delays in construction caused by unfavourable weather, strikes, fires, shortage of material, acts of God, acts of the Owner, acts of the Owners servants, employees, contractors, sub-trades or

any other causes whatsoever beyond the control of the Contractor. . . . 2. The Owner agrees to pay the Contractor for all labour, materials, permits, all other charges in connection with the completion of the dwelling house in accordance with the plans and specifications as herein set out for the sum of $178,656.97 (as per attached Pricing

Schedule “1”). . . 3. The Owner agrees to pay the purchase price to the Contractor in the manner as follows: . . .

c) The balance of the purchase price herein, including any extras, which may be outstanding, shall be paid by the Owner to the Contractor’s solicitor 5 working days prior to the dwelling house being removed from the Contractor’s construction site. The same to be held in trust by the Contractor’s solicitor until such time as the Contractor confirms with its solicitor that the house has been delivered to the Owners site. . . . . .

e) The Owner shall be responsible to pay to the Contractor, in addition to the purchase price herein, the price of all extras which may have been requested by the Owner, and completed or supplied by the Contractor in addition to the plans and specifications herein set out. The price of any extras will be agreed upon between the parties in writing, prior to the installation or completion of the same. . . . 4.

The Contractor hereby agrees to use its best efforts to complete the said dwelling house on its site on or before the, 02, day of July, 2008. (the completion date) and the dwelling house will be ready for occupancy by the Owner on or before the 15 day of July, 2008, (the occupancy date) provided however that if the completion is delayed as contemplated in paragraph 1 hereof the duration of such delay shall be added to the completion date and occupancy date herein provided and the completion date and occupancy date shall be extended for the duration of the delay. . . . 8.

The parties hereto agree that upon execution of this agreement, no further changes to plans, specifications, construction methods, materials or products will be accepted. Any changes or modifications will become a separate amendment to this agreement and shall be agreed to by both parties, and the cost of any amendment shall be paid to the Contractor prior to the said changes being made. . . . 10. In the case of discrepancies between the plans and specifications the specifications shall govern. 11.

Any materials necessary to complete the building which may not be available due to circumstances beyond the control of the Contractor may be substituted by materials of similar quality in the sole discretion of the Contractor. 12. The parties agree that all previous agreements entered into in connection with the said dwelling house and premises insofar as such other agreements may be inconsistent with the terms hereof, are hereby revoked. . . . 15.

Time shall in every respect be the essence of this agreement. . . . [13] The pricing schedules attached to the Agreement (Exhibit P-4) provide for upgrades to the windows and the additional cost for same, under the heading: Elevation Standards and Options. There are two pricing schedules, dated: December 5 and December 14, 2007. The second pricing

schedule provides additional detail regarding the windows. The information below is taken from the December 14 th pricing schedule. The details first in the December 5, 2007 pricing schedules are underlined. Base Price:

- Extra charge for upgrade of windows TBA - 2 side lights with internal blinds $ 1,550.00 - Upgrade to Low-E windows c/w Argon Gas: Qty: 20 $ 1,500.00 - Extra Window in Master Bedroom $ 300.00 - Upgrade to ½ front door with blinds $ 650.00 - Add awning window for mudroom $ 500.00 - Add 2 6 panel garage doors $ 800.00 - Window Grills (Between Glass) Qty: 18 $ 1,530.00 Plans [14] There were at least five sets of plans. Four sets of plans were preliminary, dated: October 18, November 1, December 5, and December 20, 2007.

Included in Exhibit P-3 was a fifth set, marked with a date of December 20, 2007, revised January 2, 2008 and approved for construction January 3, 2008. The December 5, 2007 set contains handwriting on the Elevation page that was not identified, which states: ALL WINDOWS ARE TRI PANE WITH HS5A TRI 1 SUNSTOP On that same page it describes in relation to the front door: DOOR WOODBRIDGE 106-921

(2236) SIDE LITES X2 Platinum 129-921

(836) In relation to the mudroom it states: DOOR + SIDELITE INTERNAL BLINDS DOOR 2236 SIDE LITE 836 As well it provides regarding the door to the garage: 226 4 LITE General handwritten notes specify: ORDER ALL DOORS FOR HOUSE + WALK IN DOORS FOR GARAGE GIVE QUOTE FIRST [15] The January 3, 2008 approved set of plans provides in typed format DOOR and WINDOW SCHEDULES. There is not the same degree of specification as for the previous set of plans but it describes one of the exterior doors, presumably the front door which is consistent with the handwritten description on the December 5, 2007 plans, as follows: 3’- 0” x 6’- 8” DOOR w/ 2SIDE LITES R.O. – 66 ½” x 82 ½” WOODBRIDGE DOOR 106-921

(2236) SIDE LITES 129-921

(836) The description of this door is the same as the description found in Exhibit, D-5, which McDiarmid proffered as pertaining to an order they attempted to place with All Weather. Under WINDOW

SCHEDULE the January 3, 2008 approved plans provide: ALL WINDOWS HS5A TRI 1 – SUNSTOP ARGON This description of the windows is consistent with the description of the All Weather window description provided in Exhibit D-11, proffered by the Defendant and discussed by Mr. Drake, to represent the windows selected by the Plaintiffs (Transcript page 671 to 673). [16] As late as January 3, 2008, the contract incorporated plans for All Weather windows and doors. Walk-through Inspection Agreement, Exhibit P-5

[17] The first of this two page document, dated June 30, 2008, was signed by Gilbert Sander and the Saskatoon McDiarmid manager, Randy Harder. The second handwritten page, prepared by Randy Harder and unsigned, was described as a list of deficiencies. The first page provides in part: It is in the best interest of the Home Purchaser and McDiarmid Homes to go through the purchased unit together and to mutually agree on its condition before the unit is delivered to its destination.

If in the event there is not a mutual agreement between the Home Purchaser and McDiarmid Homes to accept unit No. 17356 in its present condition before delivery, then a third party will go through and inspect the unit, to clarify any dispute between the Home Purchaser and McDiarmid Homes. If the said unit meets all the requirements of the “National Building Code” and CSA, then the Home Purchaser must agree to its condition before delivery of the unit will be confirmed. All service work will be taken care of by McDiarmid Homes at the most convenient time it can be done.

This letter is to herby certify that the Home Purchaser has done a walkthrough with the General Manager and/or the Production Manger of McDiarmid Homes and herby accepts the said unit No. 17356 and serial No. 100757 as is. The home has been marked with CSA label certification No. 63430. The attached list does not address the windows and doors. It is not in the form of a “checklist”, which Mr. Klassen indicated was typically used by McDiarmid. Change Orders [18] The Plaintiffs filed numerous Change Orders with dates ranging from January 25, 2008 to March 2, 2009 (Exhibit P-6).

None of the Change Orders address the substitution of All Weather windows and doors with Weather Shield product. Mr. Sander was advised that upgrades required a Change Order; in practice however, McDiarmid’s handling of Change Orders varied. (Transcript page 68) As noted above, the Plaintiffs All Weather window selection did involve additional charges. Mr.

Henderson testified that a Change Order was not necessary with respect to the substitution of the windows and doors (Transcript page 540 to 541) but he had no knowledge as to whether the Sanders received credits or were entitled to credits as a result of the substitution. (Transcript page 596 to 600). Witnesses Errol Blatz [19] Mr. Blatz is the current Saskatoon Branch Manager of All Weather. It has a showroom in Saskatoon. All Weather did a significant amount of business with McDiarmid, supplying it with windows and doors for many years.

In Saskatoon, McDiarmid often sent purchasers to their showroom to pick out their product. McDiarmid had some All Weather samples in their showroom but a more extensive display was available at the Saskatoon branch of All Weather. The exterior windows to the McDiarmid showroom in 2007 and at the time of the trial were All Weather. He understood that prior to the letter of October 10, 2007, (Exhibit P-1) All Weather was one of two major suppliers to McDiarmid; the other major supplier was Jeld-Wen. Gilbert Sander [20] The Sanders approached two RTM builders: McDiarmid and Warman Homes.

One of the reasons they sought an RTM was because of the speed with which it could be built. They tore down their existing farmhouse in anticipation of having a replacement the following summer. It was important that both McDiarmid and Warman Homes supplied All Weather windows and doors; the differentiating factor was price. [21] Mr. Sander discussed McDiarmid’s promotional package (Exhibit P-2). When asked about the windows, referenced in the

specifications sheet, he remarked that he and his wife were sent over to All Weather; they wanted the best and spent a lot of extra money to get the best. He understood the reference to All weather windows in the specifications sheet to refer to All Weather Windows , saying that it was pretty much a household name in Saskatoon and one in which he had confidence. [22] The Sanders chose the windows and doors in December 2007 before going on vacation (Transcript - pages 62).

We told Roseanne we were going away on a six week vacation, and when we gave her the time frame of when we were going to be gone, she suggested that we have all the windows, rugs, linoleum, all that stuff ordered and priced in before we left so that they thought they were going to start the house before we came back. Roseanne Miller had given them a list of contractors that McDiarmid dealt with and it included All Weather. They spent a half day at the All Weather showroom with their RTM plans, selecting their windows and doors.

They picked out “pretty much the high end of what they sold” (Transcript page 60) for all of their windows and doors. No one from McDiarmid or indeed All Weather told them at any time that they could not obtain All Weather products through McDiarmid. [23] Before they left they gave Roseanne Miller their email address so that they could be reached if needed. On their return from vacation in March, they repeatedly tried to contact Roseanne Miller without success. After about two weeks they were told that she no longer worked with McDiarmid. [24] Mr.

Harder, the new Saskatoon branch manager, advised that he would look after them. In March, after their return from their holiday, construction of their RTM had not yet begun. Mr. Sander described the dealings with Mr. Harder regarding upgrades to lighting, illustrating that McDiarmid’s customer selection practices continued; Randy Harder sent them to Richardson’s Lighting (a supplier listed in the Agreed Statement of Facts) to pick out what they wanted. They requested a lot of upgrades to the basic RTM package and selected their lighting, flooring, cabinets, windows and doors. [25] Mr.

Sander discussed the walk-through inspection and the events surrounding his signing the June 30, 2008 letter (Walk-through Inspection Agreement, Exhibit P-5), and delivery of the RTM on July 2, 2008 (Transcript page 71 - 75). On June 30, 2008, in Mr. Harder’s office, Mr. and Mrs. Sander overheard part of a phone call between Mr. Harder and another to the effect that the RTM was not ready. Mr. Harder then gave them the option of delaying delivery until after the RTM was complete and the movers were available or taking delivery on July 2 nd and having the RTM completed at their site in Sovereign.

At this time, the Sanders were occupying a camper trailer at their farm because the original farm home had been demolished and they opted for the planned delivery on July 2 nd, as specified in the Sale Agreement. This was apparently their first notice that the RTM was not ready. [26] When they did the “walk-through” on June 30, 2008 with Mr. Harder, Mr. and Mrs. Sander told him they were not satisfied with the windows (Transcript page 76): We said we weren’t satisfied because they had switched windows and doors on us. And Randy said, well, we have to do this walk-through.

You have to sign the papers if you want the house. If you don’t sign the paper, the house stays right where it’s at, and we can do the window issue and all the other things that aren’t done at the farm at a later date. [27] A couple of weeks earlier, Mrs. Sanders was told that the windows had been changed but this was their first opportunity to see them. During the “walk-through” they noticed that there were nail holes all the way up on each side of the windows and they complained to Mr. Harder that they would not accept that kind of workmanship.

They received no information about the windows that had been substituted and knew nothing about the quality of the windows until contractors working at their site in Sovereign commented upon them. After delivery they expressed concern about the windows to McDiarmid on a regular basis. The Saskatoon office referred them to the Winnipeg office where Mr. Sander spoke to two or three people; the message was the same: “nothing will be done”.

No one explained the circumstances behind the substitution or why Weather Shield windows were selected. [28] The exterior doors and some windows were not installed at the time of the “walk-through” as they pertained to the mudroom which the Sanders’ were undertaking to have built through another contractor on site. Mr. Sander picked up the Weather Shield doors from McDiarmid but they were never installed because they were “not even close to what we wanted” (Transcript page 106). He knew this when he picked them up but took possession of them as he had paid for them. They remain in storage.

They installed CWD windows and doors in the addition at an added cost of about $7,000.00. That installation did not involve nails through the jamb extensions.

[29] He described the photos in Exhibit P-7. Photos 1 and 2 on page A depict a window in the office and show that the window frame is pressboard and not vinyl sealed. They expected real wood as the All Weather window samples that he examined were solid wood and completely sealed in vinyl. Windows depicted on page C, photos 1 to 4, depict the nail holes in the window jambs. [30] There were a number of service and warranty calls out to the RTM at Sovereign. Mr.

Sanders consistently expressed his concerns about the windows to two or three of the service technicians and another that attended regarding a warranty item. [31] Mr. Sander produced a quote, dated October 11, 2008, from Sauer Construction for the replacement of the remaining windows in the house (not doors) with CWD windows for the total sum of $8,781.13, which sum was exclusive of removal and installation. (Exhibit P-9) [32] Mr.

Sander was questioned about accepting delivery before the RTM was ready (Transcript page 136): Q So you were in agreement, though, that even though the house wasn’t ready that it was best to have it shipped. A Well, yeah. I said, “whatever is going to work for everybody,” and Randy sort of – I just got from the gist of the phone call that it was a moving problem. It was – if we could have had another week or so that a lot of that work could have been done in Saskatoon rather than people driving 150 miles back and forth to do the work on it then.

Q So it was your understanding that it had to do with trucks and getting trucks coordinated. A Coordinated, right. Yeah. [33] He was also questioned as to why the list attached to the June 30, 2008 letter (Exhibit P-5), prepared by Mr. Harder after the walk-through inspection did not list windows (Transcript page 140): Q Okay. And is there anything in here that refers to the windows being Weather Shield and you not being satisfied with that? A No. Q No, there’s nothing there. A That was a totally separate issue that Randy was – wanted to deal with – Q Now, when you signed – A – separately.

THE COURT: Just a minute. Q When you signed – THE COURT: Let him finish. That was a totally separate? WITNESS: Well, that was – we agreed right before the walk-through that the windows would be a separate issue, that would be looked after after the house got to the farm. [34] Mr. Sander was asked about a Deficiency Agreement, signed by him, dated March 3, 2009 (Exhibit D-1). It was put to Mr. Sander that it dealt with any deficiencies in the home. He replied that it dealt with separate matters. (Transcript pages 148 to 149): Q Okay. And that dealt with any deficiencies in the home? A Let’s see that again.

It looks like it – no, that had nothing to do with deficiencies at all. This is the trusses that we ordered through McDiarmid for the garage and the mud room. [35] Counsel for McDiarmid persisted that it dealt with deficiencies and Mr. Sander remarked, “But I can tell you one thing, it isn’t windows.” This questioning continued (Transcript page 150 to 151): Q Yeah, okay. So it’s not the windows. So this deals with – there’s a sentence up here. You’ll be given a credit in the amount of $3750 as closure for deficiencies.” THE COURT: “Any other concerns shall be directed to the head office” –

WITNESS: And that’s what I THE COURT: - “in Winnipeg, Manitoba.” WITNESS: That’s what we did. MR. BARRY (continuing): Q So – A Because Saskatoon was – the windows and doors were out of their, shall we say jurisdiction. We were – Doreen and I were told if we wanted to do anything with the doors and windows, to deal with head office, period. Doreen Sander [36] Mrs. Sander’s testimony was largely consistent with that of Mr. Sander; thus some aspects of her testimony are not referred to unless they added something or the consistency was important. [37] Mrs.

Sander talked about the need to replace the old farm house and the limitations associated with living in the camper trailer while they waited for their RTM. She discussed their search for a RTM builder. They began with Warman Homes but ultimately went with McDiarmid due to the difference in cost. They asked Roseanne Miller for the names of the contractors that supplied materials for the RTM and she gave them a list. In December 2007, they went to All Weather with their McDiarmid plans in hand. They wanted PVC- lined windows.

She was quite interested in the home’s appearance and had consulted an interior decorator. She wanted a grill between the window panes to be in pewter to match other aspects of the home. Pewter was a prevalent theme in the house, inside and out, which included the handles on the exterior doors and cabinets and the light fixtures. [38] Mrs.

Sander, like her husband, testified that they were not told about the termination of the supply of All Weather products to McDiarmid and were not told to pick out their windows before the deadline of November 12, 2007, referenced in the October 10, 2007 letter from All Weather (Exhibit P-1). Ms. Miller told them to pick out their windows and doors, as for other items involving aesthetics, before they left for their vacation and that is what they did in December 2007. [39] The Sanders were away from January 26, 2007 to March 21, 2008.

They left an email address with Roseanne Miller but received no communication except in response to an email from Mrs. Sander. Construction of the RTM had not commenced during their vacation. She confirmed the information provided by Mr. Sander that upon their return it was roughly three weeks before they were told that Ms. Miller was no longer with McDiarmid and that Mr. Harder, the manager, would handle their RTM purchase. It was not until June 2008 that they were told that the windows and doors had been substituted and only after they had already been installed. [40] At some point in June Mrs.

Sander was shown the doors for their RTM. She immediately noticed that the exterior door to the garage was not the one they ordered; the window was a different shape. The door they chose had a little row of square windows on top and pewter in the glass, which was consistent with the “square look” and the pewter that they had chosen for the rest of their home. The window of the door that she was shown was in the shape of a half circle. The door chosen by McDiarmid for the mud room seemed to be very poor quality. Mrs.

Sander was shown the plans “approved for construction”, dated January 3, 2008, (Exhibit P-3) which illustrated “the square look”; the garage door depicts a row of square windows at the top. [41] Mrs. Sander was told that the doors that she chose were no longer available. The next day she contacted All Weather and was told that they were available. She phoned Mr. Harder back and it was then that she learned that the windows and doors were not All Weather.

He said that they were going with a different supplier as it offered a better deal for McDiarmid. [42] She was not satisfied with the replacement windows and doors and did not install them in the mudroom. At an additional cost of $7,000.000, they installed CWD product with which they were familiar and happy. Their contractor who installed the windows and doors in the mudroom, Mr. Sauer, was able to get a price which was more competitive than a retail purchase from All Weather.

They subsequently received advice from contractors who worked on their RTM, that the windows and doors supplied by McDiarmid were not “anywhere near the quality” of the All Weather product. [43] Mrs. Sander described the “walk-through” on June 30, 2008 as very disappointing, stating: “for many years we were looking forward to our new house on the farm and this was turning out to be quite a disappointment” (Transcript page 188). She described many of the deficiencies with respect to the windows, including: the nail holes in the jambs, stains along the ledge, and missing and poorly

operating hardware on the windows. She compared the operation of these windows to that of the CWD windows installed in their Saskatoon home (Transcript page 189 to 190): “ – sometimes it would slip and it wouldn’t turn, and then sometimes it grabbed and then it would turn the window open and they made squeaky noises and it was hard to open and close the windows. They didn’t open and close smooth.

And I mean we had CWD in Saskatoon so we knew the difference. . .” [44] She described some of her concerns with reference to the photos in Exhibit P-7, taken by her in July 2008, including: shutters that were ordered but not supplied for which they have since been reimbursed.

They re-patched and repainted the house after the “fix-ups” by McDiarmid because the patches showed right through and “they looked pretty bad.” (Transcript page 201) Referring to the photos, her remarks about the windows have been set out in point form: - Page A, photos 1 & 2 – the window is pressed board and it is not PVC trimmed, in contrast to the All Weather Windows. - Page C, photos 1 to 4 - the nail holes in the window jambs. - Page D, photo 4 – the staining. - The interior blind on the back door was very poor. - There were missing cranks on some windows and crank operational issues with others. [45] Mrs.

Sander said that they were disappointed when they saw the windows but aside from the colour of the grill, which did not appear to be pewter, they did not appreciate at first that the windows were “not what they ordered”. It was not until later that she appreciated that the “grills” on the Weather Shield windows were not grills. Referring to Exhibit P-7, page B, photo 1, she described the Weather Shield “grill” as black. [46] Mrs. Sander recalled receiving the Defendant’s promotional package (Exhibit P-2) at the time that they paid the $5,000.00 deposit in October 2007.

They were told that a deposit was necessary to secure a July delivery. She understood that their window supplier included All Weather, based on the specifications sheet included in Exhibit P-2. It was at about that time that they were given the names of a number of the McDiarmid’s suppliers and were referred to All Weather. [47] Mrs. Sander explained that the routine for selecting and pricing out the windows at All Weather was the same as for the other materials that they chose; they visited the supplier who put together a quote which was then sent to McDiarmid.

They received no indication from All Weather that there was a problem with supplying product to McDiarmid. [48] When cross examined about signing the letter of June 30, 2008 (Exhibit P-5) she remarked: “That’s the one that we had to sign.” (Transcript page 219) [49] Mr. and Mrs. Sander expressed their concerns with the windows and doors to McDiarmid, numerous times, including:

a) About the substitution of the windows, at the time of the walk-through, to the manager, Randy Harder, who said it would be dealt with after delivery. (Transcript page 76)

b) About the nail holes during the walk-through, to Randy Harder. (Transcript page 99 to 100)

c) About the nail holes, the quality of the installation and the change from All Weather windows, to McDiarmid's Saskatoon Office, who directed the Sanders on to McDiarmid's Winnipeg Head Office. (Transcript page 99 to 101)

d) To several of McDiarmid's service personnel who attended to do related work on the RTM, including John Wiebe, Richard (last name unknown) and Cliff Keerstake. (Transcript page 102 to 103)

e) To senior Executives of McDiarmid in the Winnipeg office (Transcript page 100).

Corey Hunchak [50] Mr. Hunchak was qualified to testify as an expert witness in the area of residential windows and doors. A

summary of his qualifications was provided in his report and in testimony (Exhibit P–10 and Transcript pages 232 to 257). [51] He is the president/owner/operator of Clear Light Glass Window Warehouse. He oversees the commercial and residential operations. He took a course on Architectural Technology over the course of three years while working at Clear Light Glass. He worked one summer during the three years, manufacturing vinyl windows. In his early years with the company he was the commercial designer for all shop drawings.

This included designing the windows for fabrication and installation. [52] At the time of his report, Mr. Hunchak was the president of the Saskatoon Construction Association. He was also on the Board of the Saskatchewan Construction Association. For four or five years he has been on the Board of the Glass Dealers Association of Saskatchewan. [53] Mr. Hunchak has experience with every aspect of the window industry: manufacturing, design, sales, estimating, project management and quality control. He is consulted regularly by owners, architects and general contractors to inspect installations.

His company is assisting two of the largest general contractors in the province on the design proposal for the new police station in Saskatoon. It is currently working on the academic health sciences projects at the University of Saskatchewan and the Inervac project. His is the largest glazing contractor in the province. It sells All Weather windows, amounting to about 3 percent of sales. They primarily deal in CWD (Ply Gem) and All Weather windows and he is familiar with their residential products.

He worked for two years in the field with journeymen glazers to learn the hands-on aspect of installation. [54] On November 20, 2010, Mr. Hunchak inspected the Weather Shield windows in the Sanders’ RTM at Sovereign. Later that month he inspected the Peach Tree doors (also, Weather Shield, part of the same corporate group) at the Sanders’ Saskatoon home. At the time he did not have the benefit of the Defendant’s Report (Exhibit D– 2), nor, it would seem, the various documents with specifics concerning the product that was to have been installed.

He was limited in his ability to assess the Weather Shield window in the home, without removing the window and sectioning it. The same applied to the Peach Tree doors. He was not familiar with Weather Shield window. [55] The Plaintiffs’ Counsel and Mr. Hunchak questioned whether the windows installed in the Sander home were the windows for which the Defendant provided computer simulated specifications and which formed the basis of much of the Defendant expert’s opinion. (Transcript page 283 to 285) [56] Mr. Hunchak found the overall quality of the Weather Shield windows and workmanship disappointing.

He was concerned with the insulating or U value (also described as R value). He said that the thickness of the unit affects the U value and the thicker the unit, the bigger the air space and the more argon gas between the panes of glass. He advised that the presence of a Low-E coating improves upon the U value and multiple coatings reflect the sun even better. (Transcript page 270) [57] He was careful to say that he is not an expert on “Low-E coatings” and that the testing that he did on site was inconclusive in that regard.

He used a machine, an EPTMG3000, which detects the presence of Low-E coatings and measures the thickness of each pane of glass and the air space between each pane, providing a total unit thickness. [58] Mr. Hunchak was cross examined about the capabilities and use of the EPTMG3000, with reference to the operator’s manual, the Glass Check Pro TC 3000 (Exhibit D–3). He conducted his tests based on the assumption that there was one Low-E coating on the windows in the Sander home. He was not looking for two Low-E coatings.

The manual at page 7 provides directions for detecting the Low-E coating on a triple pane window: . . . “If there are multiple Low-E coatings, the GC3000 will only identify the nearest coating.” This would indicate that to detect two Low-E coatings, measurements need to be taken from the outside and inside of the window. [59] He reviewed Mr. Drake’s report (Exhibit D-2), received from the Defendant shortly before he testified, regarding the Zo-E-Shield

7 Weather Shield window which is said to have been installed in the Sander home. He explained with reference to page 6 of 16, ID no 13, that the lower the U factor, the better the insulated value of the unit. Based on his measurements, that the windows were 7/8 of an inch in total thickness, his observations and the data provided, he testified that his would indicate that the window “basically gets what a triple-glazed half inch air space would get as far as a U value is concerned (Transcript page 279).” [60] He questioned whether the windows had two Low-E coatings as Mr. Drake’s report would indicate.

Upon testing he did not detect two Low-E coatings on the windows. He explained that the industry numbers the surfaces from the outside in, so that the outside surface of the first pane of glass is surface number one. The inside surface of that first outside pane is number two and so on, to six surfaces on a triple-glazed unit. (Transcript page 266) He initially measured all of the windows from the inside out and generally he found a Low-E coating on the fifth surface, or the inside surface of the pane next to the interior of the house (industry numbering from outside in). In cross examination Mr.

Hunchak elaborated on his earlier statement that his testing of the Low-E coatings was inconclusive. He would prefer to go back and test the Low-E coatings from both sides (inside and outside the home) to be sure of the number of Low-E coatings. He remarked that the inert gas represented in the report concerning the Weather Shield window is not recognized in Canada. In any event he suggested that where there are two Low-E coatings, a significantly better insulation factor may be achieved by increasing the distance between the panes of glass, allowing for more argon or inert gas. [61] Mr.

Hunchak’s measurements on one window in the living room, which were taken from both the inside and outside, indicated one Low-E coating, only. Measuring from the inside out, he did not detect any Low-E. As a result, he then measured that same window from the outside and detected one Low-E coating on the second surface (inside surface of the pane next to the exterior of the house). [62] Mr. Hunchak was critical of the installation methods.

He expressed this in his report and in testimony, stating (report paragraph 8(b): It is my opinion that this product installation method is not to acceptable industry standards. . . Unfortunately in this instance the owner has an inferior product compounded with substandard installation. [63] He was critical of the presence of nail holes through the interior jamb extensions. In his words, this installation method is “unheard of”. (The Court noted the testimony of Mr. Sander that the CWD windows installed in his mudroom did not have nail holes through the jamb extensions.) The report of Mr.

Drake, Exhibit D-2, would indicate that there is a nailing flange or factory applied jamb extension, so Mr. Hunchak concluded that this was esthetically displeasing and an improper installation or poorly designed product. He was limited in his ability to draw conclusions because he could not

section the window. This installation, however suggested to him, an absence of an exterior vapour barrier and he questioned whether it was properly sealed. “If the vapour barrier is not tied in properly, you will get moisture into the wall cavity, potential black mold issues . . . moisture in your wall cavity is as bad as it gets.” (Transcript page 296) When questioned further, he stated that provided the vapour barrier is attached to the flange properly, putting nail holes through the sash does not affect the seal. He added however that there was potential for frosting issues on the bottom of the unit.

He noted that the nails were not sealed off. [64] Mr. Hunchak observed cracks or gaps in the windows between the jamb extension extrusion and the sash extrusion. These gaps were 1/16 of an inch and larger in places. This suggested that they were not attached properly or that they were damaged in transport. He worried that should moisture or condensation get in between the sash and the jamb extension and if there’s exposed particle board, there could be swelling and moisture issues. [65] Mr. Hunchak stated in his report that the interior jamb extension was quite cool to the touch.

He compared this to a CWD or Ply Gem window elsewhere in the Sander home and found that the Weather Shield jamb extension was significantly cooler to the touch. He also found that the R value in the middle of the Weather Shield window was significantly less than for the CWD window, determined by simply touching the centre of the two different windows. The Weather Shield window was significantly colder at the same elevation and about 25 or 30 feet away from each other. [66] The vinyl extrusions of the Weather Shield window did not appear to be as rigid as comparable windows.

He held up a corner sample of an All Weather window to illustrate. When he pushed on the window sash of the window at the Sander home, he found that it had a bit of flex in it. He expressed concern about the strength of the sash and questioned whether the corners would stand up well over time. [67] Mr. Hunchak was also critical of the hardware on the Weather Shield window. He found it to be a lighter gauge compared to the products that his company sells. He wrote in his report (Exhibit P-10) at paragraph 6:

The hardware installed . . . are far inferior to the Truth hardware that All Weather Windows use . . . The cam locks are flimsy and felt like they would break when locking and unlocking the cams. He tested the crank operators on seven opening windows. On the majority of them he had to rotate the crank almost 180 degrees before it engaged the arm to start opening the window. According to him, that is not the case with Truth hardware that is used on All Weather and Ply Gem windows.

When the crank is delayed in engaging, he predicted that the cogged teeth in the crank will eventually break off from the spinning and it will worsen over time. He noted that one of the windows was extremely noisy and difficult to open. This could be as a result of poorly mounted hardware, poor hardware, or poor installation.

Noting that the insulating factor is critical in our climate, he remarked: if the hardware can’t pull the sash tight and seal the window there can be air leakage and frosting. [68] He could find no evidence on the Weather Shield website or in the Defendant’s report to indicate that Weather Shield windows have been CSA approved. All Weather Windows are not only CSA approved; they are CSA certified as well as Energy Star certified. [69] Mr. Hunchak was shown some of the photos from Exhibit P-7.

With respect to the photos on page A, he opined that the window appears to have a particle board rather than a vinyl extrusion. He added that particle board generally does not receive moisture well and there is a potential for swelling. He remarked that the Defendant’s report (Exhibit D–2) indicated that jamb extension is physically attached to the PVC or vinyl sash in the factory. When asked about particle board being covered in vinyl, he replied that provided it was sealed it would not be a problem with respect to moisture.

However, referring to photos 1 and 2 on page A, he remarked (Transcript page 300): The ends are exposed in those two pictures. So if the moisture gets to those corners, there could be swelling in those corners. The All Weather product or CWD or Ply Gem product have a – on their vinyl windows they have a vinyl extension. [70] The Weather Shield windows in the Sander home do not have bar grills. It is caming tape. He said, “we’re not even talking in the same ball parks.” (Transcript page 304) It was the first thing that he noticed when he walked up to the window.

He also noted a gap at the perimeter; the tape only goes about a ¼ or 3/8 of an inch from the spacer bar. You can see the gaps, standing 2 feet from the window. The All Weather and CWD or Ply Gem windows have real bar grills. Caming tape is not customary, nor recommended, among manufacturers. He stated emphatically: “. . . Aesthetically the caming tape looks, in my personal opinion, looks very inexpensive, very cheap, doesn’t look anything near the aesthetic quality of an actual grill.” (Transcript page 414) [71] Mr.

Hunchak examined the doors sold (not installed) to the Sanders and found that the hinge does not appear to be a ball bearing hinge; it’s a lighter hinge. The framing material that the hinges are screwed into seemed lighter or thinner. The molding that holds the glass in place on the decorative door protruded into the opening and minimized the overall thickness of the decorative glass. Aesthetically he found it to be inferior to the All Weather door with respect to the molding and hinges. He provided a brief additional report regarding his inspection of the doors (Exhibit P-11). [72] Mr.

Hunchak provided a quote, dated November 1, 2010, to remove the existing Weather Shield windows and replace them with All Weather windows for $22,986.60. (Exhibit P–12) [73] With reference to page 3 of his report (Exhibit P–10), he was asked in cross-examination if he continued to believe that the vinyl extrusions were not as rigid as comparable products including the All Weather window. He acknowledged that according to the Defendant’s report (Exhibit D–2), in particular the die extrusions reproduced, they appear to be comparable and specifically that the measurements indicate that the thickness is comparable.

He agreed that the Defendant’s report indicates that there is a nailing flange but continued to question whether the product he examined had a nailing flange and if it did he questioned whether it was properly tied in. He continued to question the installation of the jamb extension. (Transcript page 358) [74] Mr. Hunchak was questioned about a statement in his report at paragraph 5 (Exhibit P-10) that the Weather Shield product is “not really manufactured to accept triple-glazed units.” He responded that it only allows for a 7/8 inch seal.

He added that there is little benefit to having a triple-glazed unit if the thickness is no greater because the insulating factor is principally derived from the air space between the panes. The difference between a one inch sealed unit and a ¾ inch sealed unit is a reduced U value of 32 percent. Mr. Hunchak pointed to the Defendant’s report (Exhibit D-2) at page 6 of 16, stating that at ID 13 it indicates that the thickness is 1 inch. On page 11 of 16 at ID 42 it indicates that decreasing the thickness of the sealed unit by slightly less than ¼ inch the U value is reduced by 31.3 percent. [75] Mr.

Hunchak regarded the Weather Shield window as inferior, saying that he would not sell it out of his commercial establishment. (Exhibit P-10 paragraph 11 and Transcript page 306 to 307)

Michael Ryz [76] Mr. Ryz is the director of regional operations at McDiarmid. He was director of retail operations on October 10, 2007, when McDiarmid received the notice from All Weather discontinuing the supply of their product. Present at that meeting when the letter was delivered were: Brett Henderson, the manager of McDiarmid’s window and door store, Jim Ryz, purchasing manager and Mr. Ryz. In October 2007, they were talking to Weather Shield with a view to obtaining competitive quotes on some of their housing plans but McDiarmid was desirous of continuing to purchase windows from All Weather.

Shortly afterwards another window supplier, Jeld-Wen also terminated its supply relationship with McDiarmid. Mr. Ryz, said that this placed McDiarmid in a precarious predicament. He was questioned why this was so and he elaborated (Transcript page 450): Because it (All Weather Windows) is a brand name that is – has been marked (sic) by us and other people in the Canadian market for years and product that is asked for by name, and we needed to be able to provide that - product. [77] Asked how the letter was disseminated to its branches, Mr. Ryz said (Transcript page 439): . . .

Our first reaction was that we had to get into a position where we could put a – spin a positive on this negative and we need time to – a secondary – or I shouldn’t say secondary, a new primary window supplier. When pressed to advise about communications with their retail operations in the field, he could not recall what was done. He believed that it was well known, relying on the fact that All Weather was planning on removing their displays from McDiarmid showrooms and that a

schedule was prepared for that purpose. He did agree that as a distributor of a product it was necessary to let their managers know that a key supplier was unavailable. Jim Ryz, his uncle, as the purchasing manager was involved in the RTM side of their business and directing those purchases. [78] According to Mr. Ryz, since October 2007, McDiarmid has taken on Weather Shield as their main supplier. In the fall of 2007, McDiarmid was producing over 100 RTMs per year sold out of 18 to 20 branches across Canada. Inquiries about RTMs came in daily (Transcript page 439 to 441). Mark Henderson [79] Mr.

Henderson is the director of business development for McDiarmid. He is responsible for managing RTM operations. [80] He explained the need for the Substitution Clause (paragraph 11 of the Sale Agreement. Exhibit P-4). (Transcript page 486): . . .We often have trouble through the course of building homes of supplying the same product as sometimes detailed in the specs for a multitude of reasons varying from supplier change to suppliers who might go out of business, transportation problems, and we use – I should say we use that, but we make use of that paragraph a substantial amount of time.

He estimated that they work with about 200 suppliers in their RTM operations. [81] He described the purpose of paragraph 4 of the Sale Agreement concerning completion and occupancy dates. He said that All Weather’s termination of window supply contributed to delay but he did not explain how. The Sander windows and doors were apparently ordered February 19, 2008 (Exhibits D-6 and D-7). 2008 was a very busy year for building and movers. He stated: if you didn’t move on the day that had been agreed to, there was a substantial delay.

He testified that they started to put the pieces in place to bring the Weather Shield product line to market in the summer of 2007. [82] He explained the purpose of Exhibit P-2 that includes the specifications. He clarified that the reference to “All weather dual Low- E or clear triple pane” refers to All Weather product. It was their preferred window supplier because it had a local showroom and it was the lowest price.

[83] Mr. Henderson testified that all products that go into their homes must be CSA approved and that all homes are CSA inspected and certified. [84] He produced a pricing quote (Exhibit D-5) which was said to have been prepared by All Weather for the Sanders. There is some handwriting at the bottom of the note that Mr. Henderson believed had been added by the person doing the purchasing. He testified, based on this document that the order was first placed with All Weather and when it would not fill the order, it was placed with Weather Shield.

Exhibit D-5 was admitted “minus the handwriting” and the handwriting was disregarded. During cross examination he agreed that it was simply a quote, not an order. He could not ascertain the date it was submitted or that it was requested by an employee of McDiarmid. It did not bear a McDiarmid purchase order number. In light of the foregoing and his lack of direct information it was difficult to give weight to his assertion that McDiarmid attempted to place the order with All Weather and placed it with Weather Shield when that failed. Surprisingly, after the Court refused to admit the handwriting, Mr.

Henderson continued to testify about matters about which he had no personal knowledge and to assert that the order was placed by McDiarmid with a McDiarmid purchase order number. The June 13, 2008 date was a printing date only. [85] He produced Exhibits D-6 and D-7, the pricing quotes from Weather Shield for the windows and doors ordered for the Sander home. He produced Exhibit D-8, Receiver Confirmation reports for the windows and doors, both entered February 20, 2008, and indicating receipt of the windows and doors on May 14, 2008, from the McDiarmid Winnipeg distribution centre.

Exhibit D-8 provides very scant identifying information but does contain a purchase order number: 394433. It appears to bear SKU numbers but these were not discussed. [86] Mr. Henderson produced Exhibit D-9, titled Shipping Paperwork. It is generated by Weather Shield and accompanied the shipment. This document, pertaining to the windows only, was used to verify that the correct sizes have been received and he pointed to the handwritten remarks that would indicate that the sizes were correct.

There is no attempt to ascertain whether the shipment is correct with respect to other particulars, including if the windows have one or more Low-E coatings. Mr. Henderson testified that these documents pertain to the Sander residence. He pointed to the handwritten number: 356 on the face of Exhibit D-9 but did not identify its source [87] Exhibit D-10 is the Order Acknowledgement, which Mr. Henderson identified by virtue of the handwritten number on the left hand column: 394433. He described it as a safety check on sizes and specifications.

The last page of Exhibit D-10 discloses the “face of invoice cost”, which discloses one of two discounts and net cost to McDiarmid. The actual cost to McDiarmid is roughly 50 percent of the face of invoice cost. Exhibit D-10 was admitted without objection from the Plaintiffs Counsel. [88] Upon cross examination Mr. Henderson agreed that he was unable to verify that the windows installed met the specifications in the preceding Exhibits because the only thing that was inspected was the size of the windows. [89] The Court paid close attention to Exhibits D-6 to D-10 inclusive for two reasons:

i) the position of the Plaintiffs; that they do not know that the windows represented in these documents are the windows that were installed in the Sander home, and ii) measurement and product specification discrepancies between the Plaintiffs’ expert, Mr. Hunchak and the Defendant’s expert, Mr. Drake. [90] In this regard, Mr. Drake described the Visions 3000 Zo.E. Shield 7 windows under discussion. Zo.E 7 is a marketing name for a certain recipe of glass and it is a glazing designation. Visions 3000 is also a marketing name. Dual and triple pane windows are both available in the Visions 3000.

The Zo.E 7 glass can go into a wood product, clad wood product and a vinyl product. Weather Shield produces triple pane windows with one, two or no Low-E coatings. He stated that anything designated as a Zo.E 7 will have two Low-E coatings. [91] Exhibits D-6, 9 and 10 provide the detailed description of the product. Examining them closely, the following unaddressed anomalies were noted: Exhibit D-6 – Weather Shield Quote # 389, dated February 19, 2008 - After each item under “Additional Item Comments”, the name of the product is provided. For all but three of the items, the description is: 1″ TRIPLE INSL.

ZO.E.SHIELD 7 “EASY CARE”. Those three items are described as: DUAL INSL ZO.E.SHIELD 6 “EASY CARE”. Exhibit D-9 Shipping Paperwork, bearing Order Date: February 26, 2008 - The testimony of Mr. Henderson was that, the staff at McDiarmid, only check that the correct sizes have

been shipped. (Transcript page 523) - All of the product descriptions specify: ZO-E-SHIELD ‘EASY CARE’. None of the descriptions specify that they are: ZO-E-SHIELD 7. - All but three of the items are described as: 1″ TRIPLE INSL ZO-E-SHIELD ‘EASY CARE’. - Those three items are described as: ¾ ″ INSL ZO-E-SHIELD 6 ‘EASY CARE’ - The description for these same three items lists “W/ARGON GAS IN 1 AIRSPACE”. The remaining items provide: “W/ARGON/KRYPTON GAS IN 2 AIRSPACES”. - In Exhibit D-2, pages 5 to 14 of 16 that there are many items specified as 1 inch and ¾ inch.

In the presentation of the evidence, the parties were careful to specify that the windows that were ordered were Zo-e-Shield 7 and that there was significance attached to the number 7. Given the reliance upon documentary evidence and the limits upon first- hand knowledge, precision in this regard was important. Indeed the specifications for these windows are apparently significantly different as between Zo-e-Shield 6 and 7. Exhibit D-10 Order Acknowledgment, dated February 26, 2008 - All but three of the items are described as: 1″ TRIPLE INSL ZO-E-SHIELD ‘EASY CARE’.

None of the items are described as: ZO-E-SHIELD 7. - Those three items are described as: ¾ ″ INSL ZO-E-SHIELD 6 ‘EASY CARE’. - The description for these three items lists “W/ARGON GAS IN 1 AIRSPACE”. The remaining items provide: “W/ARGON/KRYPTON GAS IN 2 AIRSPACES”. [92] Mr. Henderson was asked to discuss the CSA label certification number included at the foot of the June 30, 2008 letter, produced following the walk-through inspection (Exhibit P-5). He advised that every home receives a CSA certification number, provided by CSA, indicating that the house complies with CSA standards.

In cross-examination he described generally the spot check means of inspection by CSA. He could not and did not suggest that the Sander home was physically inspected. [93] Mr. Henderson introduced Exhibit D-4 which was created by the Defendant regarding the Zo-E-Shield 7 and purported to compare it to two unidentified competitors. The document does not specify the specific product or the competitors to which the Zo-E- Shield 7 was compared. It was subsequently pointed out by the Defendant’s expert witness, Mr. Drake that the information about the U value of the Zo-E-Shield 7 was in error. As Mr.

Henderson did not have personal information about the underlying evidence to support this document, I gave no weight to Exhibit D-4, except in that it was proffered by the Defendant and relevant to the terms of the Sale Agreement. [94] Mr. Henderson discussed the significance of change orders, (Transcript page 540): Change orders are a credit/debit function. A credit, you know, for something that might have been taken out of the house. A debit for something that might have been added to the house. Q So if I came to McDiarmid and I wanted to purchase a high-end floor.

A That costs more than the allowance, it will, then we would charge you and there would be a debit change order. There was no change order with respect to the substitution of the windows and doors, despite the evidence referred above with respect to additional costs associated with the Sanders’ selections. [95] Mr. Henderson was cross examined regarding the October 10, 2007 letter (Exhibit P-1), which he received within two days of its date. At the time he shared responsibility for the RTM business.

His testimony about steps being taken to inform McDiarmid branches and staff of about the letter was carefully reviewed. He began by saying that Tony Maddick would have disseminated the letter to the purchasing department and purchasing would have notified the branches.

He could not advise whether or not he instructed him to disseminate the information; however he attested to it having been disseminated or received (Transcript page 549 to 564): Q So in your capacity and having received this letter on or about October 1 0 t h , 2007, what steps did you take to disseminate the letter itself out to your branch managers and the managers that reported to you? A Actually, the fellow that was referred to in prior documents Tony Maddick disseminated the

letter. . . . Q And I don’t recall the name Tony Maddick or any evidence on that, Mr. Maddick (sic). Can you refresh me on who he is or the capacities in which he functions? A He was the senior operations manager in transition at that point. He would have communicated it as would the purchasing department. Q When you say he would have communicated it, did you direct him to disseminate that to all the different branches at that point? A I don’t recall if I did or not. Q Would he have been one of the individuals that would have reported to you or to your management team? A Yes.

Q But you just said you didn’t yourself, correct? A (Pause) You know, I don’t recall whether I did or one of my other colleagues did. It probably came out of - I guess if we’re going to - I would say that he would have sent it out because he would have got a copy and purchasing would have notified the branches. . . . Q When you say he would have sent it out, what I’m asking you is do you know for certain that he sent it out or are you simply assuming and guessing at this stage. A I do not know that he sent it out.

Q Do you know that anyone else disseminated that letter amongst the branches at that point or would you simply be guessing to say that it was disseminated? A I can’t attest to the fact that they received it. [96] The Plaintiffs’ Counsel persisted in this line of questioning and Mr. Henderson went on to say that he instructed the head of the purchasing department, in particular Jim Ryz, to send it out.

He was then asked if he knew if the Saskatoon site received this correspondence, at which point he said he had discussed it with Serena Gorin, purchasing agent, and Randy Harder in the two weeks following the letter’s date. He said that Randy Harder confirmed with him that he advised the sales staff of the change in suppliers. In light of the initial vague responses, his recall of specific conversations with Ms. Gorin and Mr. Harder seemed suspect. [97] Asked why Ms. Roseanne Miller would send the Sanders over to All Weather to select windows and doors in December 2007, he had no idea. Asked if Ms.

Miller was acting contrary to McDiarmid’s direction in doing so; he did not answer directly and parried with the comment that he didn’t understand why All Weather would accept a customer from them. He suggested that perhaps the Saskatoon branch of McDiarmid had a side agreement and was carrying on business with All Weather without the rest of McDiarmid being aware of it. When it was suggested that Ms. Miller may not have been informed of the termination of the All Weather supply of windows, he responded that “she knew”, stating: “We didn’t tell her not to go to All Weather.

All Weather told us we couldn’t go.” (Transcript page 558 to 559) He then made what appeared to be a contradictory statement that management’s direction to sales staff was: “Any windows that needed to be ordered after November 12th would be bought from Weather Shield or Jeld-Wen.” (Transcript page 559) [98] When asked what customers were to have done if they had selected windows from McDiarmid that were no longer available; he said that they must have been available or All Weather would not have provided a quote.

When Counsel persisted, asking whether staff were instructed to alert customers who had ordered from All Weather that the product would no longer be available, his responses included: no he had not so directed staff, that he did not regard it to be a material change to the contract, and that they had no obligation to inform the customer. When Counsel persisted that it was good business practice to advise a customer of such a change, he stated (Transcript page 562): It would be logistically impossible for us to do that.

There are so many changes that take place in the course of building hundreds of homes every year that you can’t – you can’t communicate every time we change a piece of drywall from one manufacturer to another. . . a piece of roofing, . . a piece of drywall, . . . and OSB and studs and immaterial – and items that are buried within the walls. . . . I’m talking about roofing shingles, . . . and exterior siding. The spaces above indicate junctures where counsel tried to ask questions and the witness continued with his extended answer.

The Court interrupted this discussion and reminded both of the need for a clear question and answer discourse.

[99] Mr. Henderson said that windows are not an integral part of an RTM; they were no more important than roofing, siding, kitchen cupboards, flooring, and bathroom fixtures, which he described as cosmetically important. When Counsel persisted that it would be important to advise the customer of changes to windows and doors, Mr. Henderson replied (Transcript page 565): . . . I’m saying there’s too many changes. You must realize that if you’re building hundreds of houses, and you’re making changes all the time, and as long as the product is equal, there’s no reason to inform them.

I mean, can you if we had to phone every time we changed a roof or a piece of siding or a piece of soffit or an interior door or a kitchen. [100] He was shown photos 1 and 2 on page A of Exhibit P-7 and asked if he was satisfied with the installation; answering: “No.” (Transcript page 613). Asked why the Sanders were required to sign Exhibit P-5 when it was in a state that he found incomplete; he said (Transcript page 617): Well, because we don’t move a house without the form being signed.

And subsequent to these kinds of issues, we don’t move houses that are not finished because it’s very bad to move a house that is not finished. Phillip Drake [101] Mr. Drake was qualified to give expert testimony with respect to windows and doors, their construction, design, quality and efficiency, as well as installation, which included giving evidence on the established practice for installing the Zo-E-Shield 7 window. He was not qualified to testify with respect to the National Building Code of Canada. [102] Mr. Drake is employed by Weather Shield. Peach Tree products fall within the Shield family of brands.

He is the director of field operations. He travels to job sites as requested. He works with architects, builders, some homeowners and developers to help them through difficulties and to teach them the proper way to do things. His experience in Canada was very limited. [103] Mr. Drake has a BA in Science in agricultural engineering. He has been a licensed professional engineer since the early 1970’s. [104] He described his experience in the industry which included working for Pella, a window and door manufacturer in the United States.

He built a lab for testing windows and doors which included testing for the U value or heat flow through a window or door. [105] He described the Weather Shield Zo.E Shield 7 window. “Zo.E 7” is a glazing designation. This window has three layers of glass, two of which have Low-E coatings and the two spaces between the glass are filled with argon gas. It comes with a warm edge spacer which is designed to be a poor conductor of heat. It is Energy Star approved. [106] He described the process by which windows are produced from the order acknowledgement document.

Each window produced gets a tag with a bar code on it and that is how everything is matched up in the factory. They are “wanded” by the bar code onto and off the truck so that their computer system knows that they’ve been shipped. He checked the production documents and he verified that the correct windows were produced. Beyond that he was unable to say what was shipped and delivered but he suggested that as they are specifically produced for that house there is little doubt but that the correct windows were installed. He did not produce the production documents that he examined.

He was not asked to examine and compare Exhibits D-6 to 10 inclusive with the production documents. [107] Mr. Drake is not familiar with the National Building Code of Canada. He was asked if Weather Shield windows are CSA approved. A discussion arose about the joint standards between Canada and the United States. A company certified to the joint standard may sell in Canada and the USA. According to Mr.

Drake, the Visions 3000 Zo-E-Shield 7 windows put in the Sander home meet this standard. [108] He provided data from the National Fenestration Rating Council (NFRC), produced by a licensed operator program, the American Architectural Products Corp., pertaining to Weather Shield windows, which he believed to apply to the windows installed in the Sander home. His report, Exhibit D-2, at page 6 of 16 provides testing results, referring to ID no 13 pertaining to the Zo-E-Shield 7 window.

He testified that all of the measurements are “total unit” rather than “centre of glass” and that the solar heat gain coefficient for the unit is .17 and the U factor is .22. Solar heat gain is a lower number than the centre of glass number because it is based upon the whole window including the sash and the frame. Comparable, admissible data was not available for the All Weather windows ordered by the Sanders. Exhibit D-4 could be given no weight in this regard. (It was relevant to the description of the All Weather windows included in the Sale Agreement, as it was then against the interest of the Defendant).

[109] He visited the All Weather website with a view to obtaining data on the U value of the windows chosen by the Sanders and produced Exhibit D-11. It was discussed during Mr. Henderson’s testimony when it was accepted as an exhibit on the basis that it was not for the truth of the contents but as context to Mr. Drake’s testimony, representing the kind of information that he relied upon with respect to All Weather windows. (Transcript page 542 to 544 and page 678 to 680). [110] He discussed the difference between the centre of glass and the total U value.

The latter is based on the heat loss from all parts of the window unit including the centre and edge of the glass, the sash and frame and they are averaged in according to their area. He discussed the features which affect the U value of the Weather Shield Zo.E Shield 7 window, which include: the Low E-coatings, the number of sheets of glass, the space between the glass, the argon gas and the warm edge spacer. [111] Mr. Drake sought to compare the total unit U value of the Weather Shield and All Weather windows.

His ability to do so was compromised because he did not have admissible data for the All Weather windows selected by the Sanders. However, he found the windows to be very similar, with Weather Shield having the edge regarding the efficiency of the glazing system (Transcript page 673): From everything that I can see, the windows are very, very similar, Weather Shield having the edge in that it’s got a more efficient glazing system. The glass system is better.

The rest of the windows are very, very similar. [112] He testified that the centre of glass U value for the Weather Shield Zo-E-Shield 7, indicated in his report Exhibit D-2 and Exhibit D4 (advertising document not a full exhibit), is in error and that the U value is .17 not .19. He based this on a Cardinal Glass document produced for the Zo-E-Shield 7 window, Exhibit D-12 (not available to the Plaintiffs’ expert witness, Mr. Hunchak.). Cardinal Glass manufactures the flat glass, coated and uncoated, for Weather Shield.

Further attempts were made to compare the numbers in Exhibit D- 12 with those in Exhibit D-11, purported to represent the All Weather product, but this too appeared to produce an error in Exhibit D-11 and the exercise was of no real assistance as Exhibit D-11 was not admitted for the truth or accuracy of its contents. [113] Mr. Drake established through the Cardinal Glass specifications (Exhibit D-12) produced days before his testimony, that the centre of glass U value of the Weather Shield Zo-E-Shield 7 to be .17. He testified that the solar heat gain coefficient was also important. [114] Mr.

Drake was critical of Mr. Hunchak’s opinion that the total depth of the panes of glass in the Sander home windows measured 7/8 inch. Asked if Weather Shield produces a 7/8 inch glazing tri-pane window, he replied: “Not for this product.” (Transcript page 705) Mr. Drake discussed machines used to measure glass depth and emissivity of the coating on the glass if any and the manual for the machine used by Mr. Hunchak (Exhibit D-3). His testimony accorded with that of Mr. Hunchak regarding the use of the machine to read the coatings. He suggested that Mr.

Hunchak got a depth measurement of 7/8 inch due to the presence of two coatings, stating that the laser in the machine will bounce off the second coating, resulting in a reading of 7/8 inch, rather than 1 inch. [115] Mr. Drake was asked to comment upon the visual difference between the caming used in the substituted windows and the grill bars ordered by the Sanders: (Transcript page 730): A. If you’re a few feet away no. If you put your eye right up to the glass, you’re going to see a difference. . . . THE COURT: What do you mean by a “few feet”? WITNESS: Five or six feet away for me.

I mean, it depends on your eyesight. . . . WITNESS: If you’re driving by the house in a car, you’re not going to see the difference. THE COURT: Okay. But if you’re looking through the window with the sun shining in on a lovely afternoon, you might notice? WITNESS: If you get your face right up to the window, you would be able to see a difference. Yeah. . . Mr. Drake has did not examine the windows in the Sander home (Transcript page 801). Having compared his evidence with that of Mr. Hunchak, his testimony in this regard was not convincing.

[116] Mr. Drake discussed the complaints about the crank operators on the Weather Shield windows in the Sander home, stating (Transcript page 736): . . . the crank operators are always kind of loose. It doesn’t make any difference whether Truth makes them or Roto makes them or whatever. They’re always kind of loose.

If they’re a full 180, that one has probably been hammered by wind or something and somebody has left the window open in a pretty severe wind and it sat there and jostled back and forth or somebody didn’t unlock the window and turned really hard on that crank and then realized, whoops, I got to unlock it first, or if they unlock the window and turned it the wrong direction. All of those things can happen. If you get too strong with that, you can stress the metal parts in the operator and you’ll increase that amount of slide. But you know, turning a crank 180 is really no reason to replace it.

Like I say, when they’re brand new, they’re not tight so. [117] He testified that Roto hardware meets the same standards as the Truth hardware, used by All Weather. His report contains test standards for the Roto products used with the Zo.E. Shield 7. There was no discussion about a particular line of crank operators nor their relative strengths or weaknesses. Mrs. Sander testified that there were missing cranks on some windows and that there were issues with operation of others. Mr.

Hunchak testified that he tested the crank operators on seven opening windows and that the majority of them required a rotation of almost 180 degrees before engaging. I was surprised that Mr. Drake’s speculated about any number of causes, all of which he would attribute to someone other than the manufacturer or installer. His statement that a 180 degree turn, before engagement was not a reason for replacement; was not persuasive. [118] With respect to Exhibit P-7, page A, photo 3, he indicated that it showed a vinyl wrapped jamb extension.

He was unable to identify the crank or operator (Transcript page 746): There’s the edge of the jamb extension shown there. It looks quite big because the camera is quite close to it. You can just barely pick up an operator and it looks similar but, you know, I can’t say for sure. [119] He was asked to remark upon the particle board, wrapped in vinyl, used with the Zo-E-Shield 7, given that All Weather windows are wood wrapped and advised that the particle board is treated so that it doesn’t respond well to water.

He could not say how it compares to wood. [120] With reference to the photos in Exhibit P-7, page C, he was asked about the nail holes in the jamb extension. He guessed that it was done to tie the jamb extension to the rough opening when insulating with foam around the window (Transcript page 749 to 750): When you squirt foam around a window or a door, I have more trouble with doors because doors are taller, and when you squirt insulating foam behind the jamb, that foam expands and there’s a lot of square inches of area that that expansion is working on. So you end up with a lot of load and it will cause it to bo

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