2014 QCCQ 459, 2014 QCCQ 459

Tonaka Construction Ltd. c. Zmeureanu 2014 QCCQ 459 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL No: 500-32-127433-110 DATE: January 7, 2014 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON J.C.Q. ____________________________________________________________________ TONAKA CONSTRUCTION LTD 4755 Place Daunais Chomedey Montréal, Qc, H7W 1Z8 Plaintiff v.

RADU AND MARIE-DANA ZMEUREANU […] Montréal, Qc, […] Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, Tonaka Construction Ltd. (“Tonaka”), a general contractor, claims for the unpaid balance of progress billings on a fixed-price contract entered into on October 1, 2010, reducing its claim to $ 7,000 the maximum permitted in the Small Claims Division. [ 2 ] The Claim consists of a bill for $ 36,261.37 (P-1), dated December 6, 2010 on which payment received totals $ 29,882.05, leaving a balance of $ 6,379.32 and an additional bill (P-2) for $ 1,219.05 dated December 23, 2010.

Both bills detail works carried out up to December 1, 2010, the date on which the Defendants unilaterally resiliated the Plaintiff’s contract. [ 3 ] The Defendants contest this claim, asserting having paid all amounts owed, arguing for the reduction of specific amounts listed on the progress bills and making claims of their own for defective or incomplete work; they assert that a final payment of $ 612.06 was made on January 17; 2011 and accepted as complete and final compensation (D-11, D-12). [ 4 ] Tonaka refutes this allegation, having crossed out the inscription appearing on the cheque (D-12) “final and complete payment and compensation as per our letter dated January 14, 2011”, replacing it with “accepted as partial payment only”. [ 5 ] Mr and Mrs Zmeureanu also make the substantive defence which consists in reiterating the position taken in a letter dated January 14, applying, item by item, certain elements of refusal and deductions, showing a reduction of their accounts in the amount of $ 7,393.37, thereby negating the claim.

In their cross demand, they allege that the payment of $ 612.06 ends the matter, but subsidiarily, if it does not, they claim $ 6,999 as compensation for stress and loss of enjoyment of life due to delay in the work and the Plaintiff’s threats to abandon on the work. Issues [ 6 ] To resolve this case, the Court must answer the following questions: 1. Are Tonaka’s progress bills just or should they be reduced because of reductions of amounts claimed or claims validly made against it by the Defendant? 2. Was the final payment accepted in such a way that all matters must be considered settled between the parties? 3.

Do the Defendants have a valid claim against the Plaintiff for delay to the work and moral damages? FACTS AND ANALYSIS

Structural elements [ 7 ] The invoice of December 6, 2010 (P-1) includes the following items: Cost of additional beams supporting structure and attachments for roof structure as per engineer’s drawings, and included invoicing $ 1,158.25 Labor to unload, prepare, raise and install the laminated beams 3-1/2”x14”x 23’-0” 23’0 $ 720.00 [ 8 ] As the work progressed, the dimensions of structural elements used in the roof came under criticism. The Defendants insisted upon replacing certain structures with stronger materials.

Tonaka accepted recommendations of a civil engineer hired by the Defendants, though he did not necessarily agree with these recommendations as he felt he had constructed the roof framing according to the applicable textbook. [ 9 ] The Defendants testified that they agreed with Tonaka to pay the cost of the extra materials involved, but not the labour costs associated with the corrective work. [ 10 ] Mr Bohuslav Vojtech, the president of Tonaka, testified that he agreed to absorb the labour costs associated with any demolition, but that the extra costs of labour and materials for the corrective work should be to the Defendant’s account. [ 11 ] In the Court’s analysis, the onus of proof is on the Plaintiff, because it is claiming an extra cost for something that, according to the civil engineer, whose report he accepts, is a necessary element according to building codes. [ 12 ] Given the contradiction of testimony, the fact that the Defendants confirmed their understanding of the agreement in writing on November 21, 2010, lends support to their position. [ 13 ] The Court accepts the amount of $ 1,158.25 for the materials and refuses the cost of $ 720 for installation.

Handling of the Pella Inc. windows [ 14 ] The parties stipulated in the contract (D-1) that the Pella windows would be supplied by the Defendants and installed by the Plaintiff. The Plaintiff charged $ 630 "To unload windows purchased by owner plus 6 visits to Pella Inc.@ 2Hours" [ 15 ] Tonaka charges for the manpower to unload the windows from Pella’s delivery truck and store them in the appropriate area on the jobsite. It also claims time for dealing with Pella Inc. to coordinate the work. The contract was resiliated before the windows could be installed.

Tonaka should receive some payment for its pains, because it performed the preparatory part of the work, including coordination and receiving delivery. The amount charged seems exorbitant, however. The total cost of the installation was to be $ 1,645, including supply of flashing, insulating and supporting material. The bulk of the work was to come with the actual installation. The Court arbitrates $ 100 for handling and $ 100 for coordination.

Crushed stone [ 16 ] Tonaka claims an additional $ 395 for crushed stone needed to firm up the soil in the yard to receive the equipment to backfill the excavation because of site conditions. [ 17 ] The accumulation of standing water on the property would depend upon rain and the slope of the land. Tonaka did not establish that this was an unforeseeable site condition, neither that the amount of rain was extraordinary, nor that the slopes were not apparent. [ 18 ] This is a fixed-price contract: a miscalculation of the costs of dealing with ordinary site conditions is a contractor’s risk.

This amount will therefore not be allowed. Preparing of bricks [ 19 ] This bill (P-1) came as an afterthought, on December 23, 2010. Tonaka argues that it charged for the demolition of veneer brick walls as part of an item described as follows: Demolition and disposal of the debris $ 5,400.00 [ 20 ] To reuse the brick, Tonaka had to take off the residue of mortar and store the bricks until the project advanced to that stage.

Of course the contract was resiliated before the reinstallation of brick veneer. [ 21 ] The contract (D-1) describes the brickwork as follows: To supply and install brick veneer on entire North side exterior wall finished with concrete window sill up to bottom level of the window $ 3,195.00 [ 22 ] The cleaning and sorting of bricks that have been removed and that are to be reused, rather than disposed of, is not mentioned expressly in either item.

Is it part of the demolition, or part of the installation? [ 23 ] An indication of the meaning intended can be gleaned from another part of the contract documents (D-2), containing a tentative schedule. [ 24 ] Note these items:

1) Demolition, preparation of the construction site, disposing of the debris, cleaning of the bricks and staking of the excavation area. Starting 04/10/2010 ending 09/10/2010. […] 9) Electrical installation, Bricks and stills installation, exterior walls finishing, “Tyvek” Furring and cedar and aluminium siding. Starting 23/10/2010 ending 10/12/2010 [ 25 ] The argument that can be made in favour of Tonaka is that it would not have been necessary to mention “cleaning of the bricks” if this was naturally part of the other items, such as "demolition, preparation of the construction site and disposing of debris.

As well, the labour associated with preparing the bricks would be different than that of demolition and disposal, requiring less skill. [ 26 ] The Court accepts the view that this cleaning is part of the installation, not of the demolition. The amount claimed however seems exorbitant: The total cost of the brickwork is only $ 3,195. It seems unlikely that one third of this price would be charged for the preparation of the bricks before hauling them to the walls, mounting them and laying them in the mortar. Twenty percent seems more reasonable. The Court arbitrates $ 200.

Protection against weather [ 27 ] Tonaka argues that the cost of tarpaulins and sealing, as well as labour to protect the premises against rain, $ 236, is not included in the contract, and is therefore an extra cost. The Zmeureanus argue that the protection of the existing structure, in which they were residing during the construction, was a necessary part of the work and that it was done inadequately. [ 28 ] While it is not ventilated in the fixed-price contract, the Court agrees that protecting the existing structure from water infiltration is, implicitly, part of the contractor’s scope of work.

The extra charge is not allowed. Roof insulation and ventilation [ 29 ] The architectural plan (D-19) provides for mineral wool insulation in the ceiling of the addition, and an airspace above it connecting to the airspace in the existing roof. The connection was to be provided by removing "part of the existing roof sheathing" for air ventilation. [ 30 ] Even though the contract (D-1) includes the

preamble: “To build extension to residence at 4560 King Edward Montreal Qc. 19’- 0”x12’ – 2 ¾” as per your drawings and specifications”, Tonaka gave its quote on the basis of a different concept: a cathedral roof with "sprayed-on insulation forming cathedral ceiling and 5/8’’ T&G roof deck”. [ 31 ] Mr Vojtech explained that such a roof does not require ventilation and adds that it would have been impossible to construct the connection to the airspace of the existing building at the point indicated in the architect’s drawing. [ 32 ] The contract was accepted on the basis of this alteration of the architect’s concept.

As the project progressed the Defendants asked for technical proof that the contract could be performed in this manner without infringing building code requirements. Tonaka provided some technical literature which the Defendants found to be inadequate, because it related to a manufactured roof. [ 33 ] The Defendants made the claim that the contract price should be adjusted because Tonaka refused to do the work as defined by the architectural plans.

The fallacy in that argument is that the contract clearly provided for a different architectural concept, with the price stipulated as a function of that concept. [ 34 ] The Defendants also argue that they should be compensated for the cost of having the openings made in the existing structure, which they apparently did after terminating Tonaka’s contract. Mr Zmereanu made the admission, however, that his architect had given him the option of either concept, and he, rather than the architect, insisted upon the original design.

Having not heard any technical evidence on the issue, the Court finds that the Defendants have not demonstrated the technical necessity of proceeding according the original architectural concept. Tanaka’s insistence on following the contractual stipulation does not constitute a contractual fault.

Consulting Engineer’s fees [ 35 ] The Defendants seek to charge part of their engineer’s fees to Tonaka: that part relating to the follow-up visits to check the corrective work carried out after Tonaka had agreed to do so. [ 36 ] The Defendants argue that Tonaka should pay these costs, because the inspection revealed deficiencies in the corrective work. [ 37 ] The visit of November 30, 2012 gave rise to a list of deficiencies which the Defendants called upon Tonaka to correct. [ 38 ] The bill submitted to establish the quantum of this claim, $ 1,250 plus tax, refers to five visits, not just the visit mentioned in the list of deficiencies.

The earlier bill mentions the report, for $ 950 plus tax, and makes no mention of site visits. Therefore, it would seem that the bill for five visits includes four visits unrelated to the list of deficiencies. Only one-fifth, or $ 250 would relate to the visits that detected faulty corrective work. [ 39 ] Does a contractor bear the responsibility of paying for the supervision of his work by a professional when that supervision gives rise to a list of deficiencies to be corrected before the contractor can require payment in full?

Normally he does not, it being considered part of the normal process of a construction project for deficiencies to be listed by the owner. It is up to the owner whether to hire an engineer or architect, or to proceed without them, relying upon his own understanding of the plans and specifications. The contract in this case does not stipulate a contractual responsibility to pay for such professional fees when they are proved to have been useful in pointing out a deficiency requiring correction. No proof of a custom to that effect was submitted.

[ 40 ] This claim is therefore disallowed. [ 41 ] The Court establishes the final account of Tonaka as the total of the amounts discussed above: $ 1,558.25. The cheque in full and final payment [ 42 ] The practice of marking a check with the inscription “full and final payment” and other similar expressions has been the object of much debate in the jurisprudence and doctrine. [ 43 ] Essentially, it is a question of fact whether a party intends to renounce any further claim by accepting a cheque in full and final payment.

Whatever the expression used, the Court must look to the specific facts of each case to determine whether a presumption can be established that a party claiming a higher amount has accepted a lesser amount as a settlement. In a typical case, the debtor will advise the creditor, usually by letter, that the cheque is provided on the basis that it will be accepted as a settlement of the claim, and the person receiving the check will communicate a rejection of this proposal if he does not intend to accept it.

Otherwise his conscious cashing of the cheque with no prior communication will be deemed to be an acceptance of the offer. [ 44 ] In the present case, the facts did not establish such a presumption because Tonaka crossed out the inscription before depositing the cheque. The amount cashed accrued to the balance and did not constitute a complete resolution of all matters between the parties.

Delay and moral damages [ 45 ] It therefore becomes necessary to consider the Defendants’ claim for delay and moral damages. [ 46 ] The Court understood, from the testimony of the Defendants, that they suffered hardship because of the fact that the contract was only completed the following spring, after they resiliated Tonaka’s contract on December, 1. [ 47 ] The Court finds however that the Defendants were too hasty in resiliating the contract: the demand given to Tonaka to correct deficiencies and to state its intention as to the completion of the work did not give reasonable time for Tonaka to react. [ 48 ] Tonaka pointed out that one of the requirements, to install Hilti bolts, was difficult to accomplish instantaneously because of the non-availability of Hilti Bolts in small quantities in the market.

Tonaka would have required a few days to require these bolts and the time given was insufficient. [ 49 ] As well, generally, the precipitous nature of the demand shows unwillingness on the Defendant’s part to give the Plaintiff the opportunity to correct any defaults and continue with the work. [ 50 ] As the Court mentioned above, the technical issue whether the roof had to be ventilated according to the architect’s original concept has not been adequately proved by the Defendants.

Therefore, the Plaintiff’s apparent refusal to follow that concept, which was inconsistent with contract stipulations, has not been demonstrated to constitute contractual fault. [ 51 ] As to the delay in general, the

schedule provided was tentative and subject to weather conditions. The Defendants have not demonstrated that Tonaka was at fault in the degree of completion of the work accomplished by December 1. It is also not certain which work could have been completed in December if Tonaka had been allowed to continue. The Defendants, therefore, have not established a claim for delay in the completion of the work. [ 52 ] The claim for moral damages has not been established.

While the Court sympathises with the Defendants’ frustration in having endured a conflictual relationship with the contractor, the only fault demonstrated in the performance of the work related to the change imposed by the engineer, which Tonaka accepted and carried out substantially, subject only to some minor deficiencies which it should have been allowed to carry out within a reasonable time.

FOR THESE REASONS THE COURT: GRANTS the principal action in part; CONDEMNS the Defendants to pay the Plaintiff the sum of $ 1,558.25 together with interest at the legal rate of 5% per annum and the additional indemnity provided at

article 1619 of the Civil Code of Quebec , calculated from January 3, 2011; DISMISSES the counter claim; CONDEMNS the Defendants to pay the Plaintiff the judicial costs of $ 207.

__________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: September 17, 2013