Editor ’ s note: Corrigendum released on October 3, 2014. Original judgment has been corrected with text of corrigendum appended. IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Date: October 3, 2014 Citation: 2014 SKPC 173 File: File # 139/12 Location: Regina, Saskatchewan Between: Baltic Properties and Developments Incorporated - and - Maria Rajbar and Alec Kasinski Yens Pedersen For the Plaintiff (Defendant by counter-claim) Brian J.

Smith For the Defendants (Plaintiff by counter-claim) CORRECTED JUDGMENT: The text of the original judgment has been changed as per the corrigendum released November 6, 2014. (A copy of the corrigendum is appended to the judgment.) Introduction [ 1 ] Baltic Properties and Developments Incorporated (“Baltic”) is a company registered in Saskatchewan and carries on the business of new home construction including renovations and concrete flatwork. It specializes in the installation of ICF foundations.

ICF is a specialized form of foundation construction using insulated concrete forms rather than what might be described as a cribbing style of

construction. [ 2 ] Maria Rajbar (“Rajbar”) and Alex Kasinski (“Kasinski”) are married and reside in Saskatchewan.

In or about August of 2011, they sought to retain Baltic to assist them in building a basement and a garage on a residential lot they had purchased in the village of Belle Plaine, Saskatchewan. [ 3 ] Baltic brings action against Rajbar and Kasinski, jointly and severally, for the recovery of monies which it says are due and owing to it and which constitute the balance owing to it under a building contract. [ 4 ] Baltic maintains that its obligations under the building contract were limited to two things and two things only.

Specifically, it was to build a garage and an ICF foundation on a parcel of land owned by the defendants. [ 5 ] Baltic says that the contract was unilaterally cancelled by the defendants in December of 2011, after the ICF foundation was completed, but before the garage could be constructed. As such, its obligation to complete the garage was negated. Baltic says, however, that the contract entered into between the parties quoted a specific cost for the ICF foundation which, equated to the sum of $49,155.12.

Because it received a down payment of $25,000.00 towards the cost of the foundation, Baltic says it is entitled to recover the balance due and owing which amounts to $24,155.12. [ 6 ] Baltic also seeks payment of the further sum of $931.43, which constitutes payment for surveying services which Baltic paid for on behalf of the defendants but for which the defendants were obligated to pay. [ 7 ] These combined amounts exceed the $20,000.00 jurisdictional limit of this Court and Baltic has expressly limited its claim to that monetary limit.

Baltic is also seeking interest on that amount pursuant to The Pre-judgment Interest Act , RSS 1986, c. P-22.2 and the costs of this legal proceeding. [ 8 ] Rajbar and Kasinski have defended the action alleging numerous deficiencies in the provision of the goods and services provided by Baltic under the building contract.

The most serious deficiency, they allege, is that Baltic failed to ensure that the ICF foundation, once placed on the property, would be sufficiently above the grade of the land to meet the building restrictions that the defendants were obligated to follow in the subdivision where their home was to be placed. [ 9 ] Rajbar and Kasinski have also counterclaimed against Baltic.

They allege that the building contract was partly oral and partly written and that Baltic was obligated to provide them with, among other things, a rebar reinforced concrete slab which would constitute the basement floor of the home; steel beams; roughed in plumbing and electrical; certain service hookups and other ancillary things. [ 10 ] The defendants also allege that Baltic agreed, but ultimately failed, to act as a general contractor for the purposes of providing a ready to move in property once their home arrived on their parcel of land. [ 11 ] The defendants also allege that Baltic, as a supplier of consumer goods, as envisaged by

section 5 of The Consumer Protection Act , c C-30.1 SS 1996, committed an unfair practice by misleading them as to what would be provided under the building contract and they seek damages pursuant to that section. [ 12 ] In the result the defendants allege that they incurred significant losses and additional costs and claim the sum of $25,000.00 for house lifting services to correct the elevation of the foundation provided by Baltic. [ 13 ] They claim the further sum of $10,225.16 for miscellaneous costs to correct deficiencies and complete other aspects of the building contract which they allege should have been done by Baltic.

They have, however, restricted their counterclaim to $20,000.00 operating on the assumption that they are limited in their counterclaim to the $20,000.00 jurisdiction of this Court.

Issues

a) What was the true nature and scope of the agreement entered into between the parties?

b) Did Baltic, as a supplier of goods and services, commit an unfair practice by misleading the defendants as to what was contemplated under the agreement?

c) If the foundation that was provided by Baltic was structurally sound, is Baltic entitled to recovery of the monies due and owing to it under the agreement, or was Baltic in breach of an express or implied term of the agreement that the ICF foundation was to be placed above a certain grade on the parcel of land?

d) If Baltic was in breach of the express or implied term of the agreement referred to above, are the defendants entitled to set off the expense of correcting this breach and what are those expenses?

e) Are the defendants entitled to any further relief, as sought in paragraph 32 of their counterclaim? Evidence [ 14 ] Eldon Hall is a principal of Baltic and the primary person that dealt with Rajbar and Kasinski in relation to this building contract. He says that he was first contacted by the defendants in early August of 2011. Apparently the defendants had obtained information about his company through a website. He says he met with the defendants personally in early August of 2011 and they made it known to him that they were going to purchase an RTM (Ready To Move) home.

These RTM’s come equipped with all fixtures and are then placed on a foundation. Other service providers then make the necessary connections for utilities such as electrical, water and sewer. Mr. Hall says that after a short meeting he was satisfied that the defendants wanted him to prepare a quote for an ICF foundation upon which to place the RTM. He says that a foundation is understood in the building community as constituting the walls of that portion of a home that rests below grade and the footings upon which those walls sit and the incidental materials used for that purpose. [ 15 ] Mr.

Hall says that he prepared a quote for this project on or about August 5 of 2011 and he says that this was provided to the defendants shortly thereafter. The quote was addressed to the defendants and it reads in part: This quote is based on a 1456 sq. ft. foundation. The price is per plan and associated spec sheet. Custom Home Pricing... 1456 sq foot RTM foundation Regina, Saskatchewan. Please note: SEE SPECS/ ALLOWANCE FORM Includes excavation footing, Logix ICF foundation blocks, rebar, fill aggregates, concrete, top sill, window buck material, anchor bolts, Supreme ICF fill wrap, and back fill.

Foundation footing and Walls.......................................... $46,814.40 GST................................................................................... $ 2,340.72 Total ..................................................................................$49,155.12 [16] It should be noted that the quote referred to above did not have a “plan and associated spec sheet” attached to it. It should also be noted that although this quote was submitted into evidence as exhibit P-1 as a photocopy, it differs from D-18 which is the defendant’s photocopy of the same document.

The defendant’s photocopy includes the clause “ Finished Home Price incl Pkg ...$49,155.12". The

Court takes judicial notice of the fact that the plaintiff’s version of this same document had whiteout on the phrase referred to above. No reason was given by the Plaintiff for this. [17] For reasons which will become frustratingly apparent later on in this decision, the quote made no reference whatsoever to the provision of a four inch thick rebar reinforced concrete slab which constitutes the floor of most basements. Rather, as Mr. Hall points out, a foundation is only the poured footing and associated external walls (and associated materials) which support a house. [18] On or about August 15, Mr.

Hall received an e-mail from the defendants requesting a quote for both a “basement” and a garage. The e-mail confirmed that the defendants would arrange for geothermal installation and duct work through another company. The e-mail (Exhibit D-1) had five pages of materials attached to it and included:

a) a letter asking Baltic to quote on building an ICF basement and double garage .....When we dig the basement, the soil will be used to build up the site grade which is currently a bit low below the street level. Windows must absolutely be 6-8 inches above grade in relation to the street.

NO WINDOW WELLS! - Will need a steel beam to minimize tele-posts. - We will provide you with a basement drawing within the next two weeks-as soon as McDiarmid supplies it. -Build basement on piles as per attached info. - Weeping tiles as per attached info. -Include the panel, basement wiring, and all electrical and service hookups. -Rough plumbing for laundry and basement bath, and main floor bath hookups, kitchen hookup, sump pit, outside faucets, electric water heater. - Include the double un-insulated garage measuring 22 ft wide and 24 ft deep. -Two 9 foot insulated, embossed panel automatic overhead doors in front. -One insulated steel panel door in the back. -One dual panel opening/sliding window in the north side of the garage. -Please include the electrical. - Please include the cost of the concrete in the garage. -Provide the additional cost of a concrete double driveway 25 feet long.

b) The next attachment was described as SUBDIVISION BUILDING REQUIREMENTS. It was, the defendants say, a list of those building requirements or restrictions that had been provided to them by the seller of the residential lot, and something which had to be followed as a condition of placing a home on the lot they had purchased. It made reference to basement easements, roofing, siding, house, garage, driveways , landscaping and the need for inspections and building permits

c) The last attachment was a diagram of the RTM they had purchased with attached blueprint diagram of the foot print of the main floor. [19] On August 25, Mr. Hall received another e-mail from the defendants which attached the spec sheets for the basement that was required for the type of home that the defendants had purchased. [20] Mr. Hall and the defendants met at Mr. Hall’s office on or about September 20 of 2011. Following discussions (which Mr.

Hall mentioned in a very fleeting manner in his evidence in-chief) he prepared a new quote (Exhibit P-2 in these proceedings) which was in the same basic format as the one mentioned earlier. It was dated September 20, 2011 and is described in part as follows: Description ... Deposit for ICF Block Foundation Box 40 Belle Plaine Sk.

Deposit of Home Cost Total Foundation Cost ............................................. $49,155.12 Detached Garage (34 x 22)........................................$31,575.60 Total contract to date ................................................$80,730.72 Deposit on Foundation ..............................................$25,000.00 Total Amount Remaining ..........................................$55,730.72 This new quote was signed by both of the parties and included a handwritten note evidencing that a certified cheque for $25,000.00 had been provided.

The quote made no mention of building a basement floor slab, or rough plumbing, or bathroom or kitchen hookups, sump pit, outside faucets, electric water heater, or a concrete double driveway 25 feet deep. It made no mention of who was to be responsible to obtain permits and inspections, nor did it prescribe any amount to be paid whatsoever on its unit price quote for all of these additional goods and services. [21] In his evidence in-chief, Mr. Hall told the Court that there were no other documents other than the one described above which formed any part of the contract with the defendants.

In addition, he stated that other than the work described above, he did not agree to do any other work for the defendants. [22] Mr. Hall stated that he understood that the defendants would act as their own general contractors for all other aspects of the home; to retain a surveyor to give instructions as to where to place the foundation and how deep to dig the hole in which to place the foundation and where the garage was to be located; to get the foundation plans stamped by an architect; to size and order basement windows; to have Sask Energy and Sask Power attend to mark access locations and the like.

Specifically, he says that he accepted no obligation whatsoever to pour the concrete slab which would constitute the basement floor or do anything in relation to placement of electrical panels or tele-posts or support beams, or any other ancillary requirement to provide a move in ready basement. [23] There was nothing in the signed quote (which Mr. Hall says constituted the entirety of the building contract) which identified the time lines for completion of this work. [24] Mr.

Hall indicated that at some point in November, he contacted Midwest Surveys Inc. for and on behalf of the defendants to attend at the lot and lay out markings to designate where to dig the hole for the laying of the foundation and to stake out the required elevations. He did this, he says, because Midwest would more likely respond to his request in a more timely manner than if the request was made by the defendants.

He says that he made it clear to both Midwest and to the defendants that the defendants were to attend on Midwest to make sure that the specs prepared by the surveyor would meet with the defendants’ needs. [25] Mr. Hall stated that he had subcontracted with a company called Serbu to actually attend on the building site to dig the hole into which the foundation would be placed. He says that the hole was completed in or around November 10 and the foundation was built thereafter but not before his business partner had contacted the defendants to ascertain the size and dimensions of the basement windows. [26] Mr.

Hall says that Midwest Surveyors sent him their invoice for surveying services directly and he paid it on the understanding that the defendants, who were presumably responsible for this additional cost, would pay Baltic back. [27] After the foundation was placed, he acknowledges that the defendants contacted him expressing concern that the foundation was below grade.

Conversations ensued and, before he could complete the remainder of the contract, the defendants terminated the remainder of the contract and failed to pay the balance of the quoted price for the laying of the foundation. [28] In cross-examination Mr. Hall conceded that the parties discussed several aspects of the defendants’ requirements at the September 20 th meeting and he maintained, among other things, that while a floor slab was discussed, he was not asked to provide a quote for doing this additional work.

[29] He also indicated that they had discussions generally about other aspects of the project anticipated by the defendants and that he had told them that he could assist them in arranging for those other services that the defendants might require (hookups, trenching and the like). He maintained however, that this was not a part of the contract with the defendants, but rather something he would do from time to time and in the normal course of providing customer service for anyone who might be utilizing the services of Baltic. He pointed out however, that this would be gratuitous if he chose to do so.

He is adamant that he did not, at any time, undertake to act as a general contractor nor was anything said about what the associated costs might be if he agreed to act as a general contractor. [30] He confirmed that he was well aware that the defendants absolutely wanted to ensure that the completed foundation was to be 6 to 8 inches above grade, but he disputed that he ever advised them that he would purchase windows on their behalf or that the defendants told him that they were to be “as big as possible”. [31] Mr.

Hall acknowledged that many of the things set forth in the defendants’ e-mail (referred to earlier in paragraph 19) were discussed and that he made comments in relation to certain aspects of the building restrictions and offered up names of certain plumbing and trenching service providers. Mr.

Hall was quick to point out that while he was aware that the defendants may have been looking to him to provide a larger basket of goods and services than were agreed to in the quote given and partially paid for on September 20 th , there was simply no specific agreement between the parties in that respect, there was no discussion as to what might be charged for all of these additional goods and services, and there was no reference to them in the quote nor was there any financial consideration flowing between the parties in respect of these additional goods and services. [32] Maria Rajbar gave a very different version of what transpired at the September meeting.

She says that after having concluded that they were going to buy an RTM home, she contacted Baltic in the first week of August 2011 and had a short discussion with Mr. Hall and his business partner at the parcel of land that they had purchased. There were some short discussions about perhaps using Baltic to build them a house but stated that ultimately they chose to have Baltic build them a basement only. [33] She says that she had received Baltic’s first quote but could not specify precisely when she had received it.

In any event she sent the materials referred to in paragraph 19 above to Baltic because all of the items listed were what they sought and she and her husband wanted a quote to cover all of these things. [34] Rajbar says that she wanted to meet personally with Mr. Hall and attempted on several occasions to set up that meeting but that Mr.Hall cancelled on several occasions. When Rajbar and Kasinski finally met with Mr.

Hall on September 20 th she says that one of the central points of their discussion was their desire to have Baltic act as a general contractor to set up and direct all of the building trades that might be required. Rajbar insists that Mr. Hall made it known to them that he was a member of LinkedIn, and had many connections in the trades community. She maintains that Mr. Hall said that he would arrange for securing the electrical and plumbing and septic trades to attend and would arrange for timely installation. In support of her assertions, she introduced a one page sheet of notes prepared by Mr.

Hall (Exhibit D-4) which referred among other things, to the name of the company that would do backfilling, reference to a company called T&C for plumbing, heating and electrical, a picture representing the weeping tile, reference to the two stage septic tank, some commentary as to stairs, and the notation “ before Christmas ” . [35] She says that when she left the meeting, which ran for the better part of an hour she felt satisfied that Mr.

Hall had agreed to act as the general contractor; was well aware that he had been instructed to purchase basement windows that were “as large as possible”; that Baltic would provide a basement floor slab as indicated in the materials she had forwarded on to him; and that Mr.

Hall was absolutely aware that the foundation had to be placed at least 6 to 8 inches above the level of the street. [36] Rajbar also said that she felt that they had an understanding that the garage would be built as soon as possible and completed by the end of October at the latest. [37] Before leaving the meeting Rajbar and Kasinski were presented with the quote which I have identified in paragraph 21 of this decision.

The only significant difference between that quote and the earlier quote that had been received is an additional cost line item identified for provision of a garage, and a line on the quote which reads: “ total contract to date...... $80,730.72" . They reviewed the quote, signed it and left a certified cheque in the sum of $25,000.00. [38] On October 28 th Rajbar sent an e-mail to Mr. Hall attaching the final drawings of the RTM home they had purchased.

In that e- mail she mentioned that she had discussed placement of the garage with Hall’s partner, and inquired about when the basement would be started, because they were feeling a time squeeze and the RTM was to be delivered on site on November 15. They asked him to firm up a

garage and basement build date. Rajbar indicated that she received a reply text indicating that the build date would be October 29 or November 1, but Rajbar stated that Baltic did not show up on either of those dates. [39] Rajbar did state however, that the digging for the hole started the following week after the survey had been completed. In this regard it should be noted that Baltic arranged for the surveyor to attend, and presumably sent to the surveyor those plans which were necessary to do the survey.

Baltic (through Hall) also contacted the defendants indicating that they should show up to meet with the surveyor to provide them with information as to the final placement of the home. Kasinski attended at the site with the surveyor and saw that the surveyor had the plans which were presumably provided by Baltic. Kasinski says that he made it very clear to the surveyor that the land was lying low and the foundation windows had to sit at least 6 to 8 inches above grade. [40] On November 10 th , Mr.

Hall’s business partner was on site and Rajbar said that she received a call from him indicating that the foundation was ready to receive the basement windows, and wanted to know what size they were going to be. Rajbar said she was upset and frustrated because the sizing and the ordering of the windows was to be Mr. Hall’s (Baltic’

s) responsibility. Rajbar quickly did an assessment and provided Mr. Hall’s business partner with measurements. [41] On November 12 th Rajbar sent another e-mail to Mr. Hall (Exhibit D-6) indicating her surprise that the business partner building the foundation was unaware of Baltic’s obligation to size and purchase the basement windows. She mentioned that the RTM’s arrival would be delayed until November 25 th , and that they had secured a craning company for that date.

She indicated that she felt that the trades still had time to come in and do all of the preliminary work, but wanted assurances from him that the geothermal company had been booked. In addition she wanted to know that if he did not have a person available to trench and install the water and sewage he should let her know. She also wanted confirmation that he had an electrician to obtain permits and someone would contact SaskPower as to where to put the meter. She wanted his assurance that he had a plumber who could do the rough basement plumbing.

She wanted him to acknowledge that each of the trades referred to had been secured and to contact her if he needed anything more from her. [42] Mr. Hall responded by indicating that he would get back to her in two days. He did not do so. [43] Rajbar says that she met with Mr.

Hall on November 16 th to deal with some of her concerns, and having been made aware of a further delay for the delivery of her RTM (to December 8) sent two further e-mails (Exhibit D-7 and Exhibit D-8) reiterating the need for tele-posts, and the employment of T&C to do duct work, installation of water heater, and HRV, installation of electrical panel, trenching for water and sewage and other assorted things. [44] While Rajbar could not say for certain that Mr. Hall received these e-mails, she believes he did because they referred to the date of December 8 for the arrival of the RTM and Mr.

Hall’s business partner Dominique Rodriguez was in attendance at that date. It is clear that Mr. Hall did not respond to either of these e-mails. [45] Rajbar says that when the RTM arrived, it was bitterly cold.

Once the house was set, and the lot backfilled, she said it was patently apparent that the windows were set far too low on the foundation and that when the defendants measured the grade, found it to be 16 inches below grade instead of 6 to 8 inches above grade. [46] In assessing the grade Kasinski says that he and Rajbar measured the grade by using a string line and string level attached to stakes at 20 foot intervals. He said that the string was pulled as taut as possible and ran from the top of the street to the foundation.

He noted that it was at least 16 inches too low and perhaps as much as 22 inches too low. It is clear that Kasinski is not a home builder, nor is he an expert surveyor. He says however that he is, by profession, an engineering technologist and red seal mechanic and perfectly capable from his training to work with and interpret the results of a string line and level. [47] The defendants further noted that none of the ancillary work, such as trenching, the supply of electrical and plumbing and duct work and the like had been started, let alone completed. [48] Rajbar says that shortly thereafter she contacted Mr.

Hall and expressed her frustration with the fact that the foundation was below grade. In her words, she maintains that Mr. Hall “pretended to be surprised”. After a brief discussion she was advised by Mr. Hall

that he wasn’t prepared to do anything to correct this apparent problem. [49] Later that evening she says that she was contacted by Mr. Hall’s business partner Rodriguez who was quite rude to her and that he explained that Baltic could correct the problem by effectively moving the windows higher by cutting through what is described as a sill plate, and that the cost was going to be $2,000.00 per window for a total cost of $14,000.00. Rajbar declined his suggested resolution and she says that Rodriguez then phoned back in an effort to talk to Kasinski and Kasinski similarly rejected the suggestion.

They were concerned that they had to incur any cost whatsoever, felt the cost was excessive and did not feel that the intended repair would correct the deficiency.... that the net effect would result in a portion of their windows sitting in their basement rafters. [50] In light of all of their concerns, they fired Baltic from the contract and undertook, over the next several months, steps to complete those aspects of the contract which they felt were the responsibility of Baltic. [51] In cross-examination Rajbar confirmed that there were a great many things listed on Exhibit D-1 (her requested list of things for Baltic to quote on) that were not to be done by Baltic.

For instance, it mentioned providing stairs, it did not specify the thickness of the basement slab that they presumably wanted. It didn’t specify the size of the basement windows to be ordered. In addition, she conceded that at no time did Baltic enter into a written agreement to provide anything other than a foundation and a garage. Finally, she conceded that there was no discussion whatsoever about the cost that might be charged to them for Baltic to undertake any of this additional work. [52] The defendants called Andrew Birnell to the stand.

He is a retired upholsterer by trade, but has also, throughout his career worked as a backhoe operator, worked with over head cranes and drag lines, and has dug a great many basements and waterlines around the Regina area. He was not called as an expert. He stated that he lives in and around the area and that when Serbu first began to dig the hole for the foundation, he went over to watch the progress of the digging. He also watched as the foundation went in.

He stated that in a conversation he had with one of the workers at the work site it looked like the foundation was too low... because he could clearly see that a portion of the window frame was below the dirt line. He says he was told in fairly clear terms that “it is none of your business”. Mr. Birnell stated that he was aware of the low lying land, and the building restriction in the subdivision demanding that the foundation windows be at least 6 to 8 inches above grade. The Court recognizes that Mr. Birnell is not an expert.

In my view, he did not provide expert opinion... rather, he provided the Court with his simple observation that, to the naked eye, it was plain and obvious that the foundation was sitting low on the property. [53] It is clear Rajbar was the point person for the defendants in their dealings with Baltic. Mr. Kasinski however did attend the meetings they had with Mr. Hall, and he, for the most part, confirms Rajbar’s understanding of the discussions held between these parties. He says that they talked about Baltic acting as a general contractor, and that Mr. Hall was amenable to the idea.

He says they discussed the contractors that Mr. Hall preferred to deal with, and he says that it was his understanding that Baltic would help to coordinate those sub-trades other than the geothermal people. He says that he thought that costs would be charged by Baltic for acting as a general contractor, but again, noted that there were no discussions whatsoever in relation to what all of the associated costs for all of these ancillary goods and services might have been. He maintained that Mr.

Hall indicated that he would take care of sizing and ordering the windows. [54] After firing Baltic, Kasinski says that he contacted several people in an effort to try to correct the foundation problem. He says he contacted a contractor in Moose Jaw and the town engineer. He says he discussed the problem with people at SIAST.

He says that their respective advice was to either mud jack the entire foundation to a new height, or else lift the house, remove it from the foundation, re- apply more ICF foundation to raise the level of the foundation and then remove the windows, block out a portion of them and then put in new windows. The defendants went with the latter approach but at a significant cost. I am satisfied that the mud jacking was not a realistic alternative. [55] Baltic called Mr. Hall’s business partner Dominique Rodriguez to the stand.

He explained that it was counter-intuitive to build the garage before the home was placed because the house effectively sets the grade for the land. This, he says, was the reason for the delay in building the garage. He also stated that he received a call from Mr. Hall, on or about December 15 th advising him that Baltic had been fired and the reason why.

He says that shortly thereafter, he called Rajbar and Kasinski to discuss some type of resolution to the problem, which he said involved adding several sill plates around the top of the windows and the addition of a couple of two by ten planks which would further raise the elevation of the windows. He says that this would effectively correct the elevation of the windows to the inches required under the building restrictions identified for the property.

He specifically denied that he quoted them a cost of two thousand dollars per window and instead indicated that the total cost would be three thousand to thirty-five hundred dollars. He says that this offer was rejected.

[56] In order to correct the deficiencies, the defendants located and retained a company to lift the RTM off the foundation and provide corrective construction. After receiving a deduction from the original cost the defendants paid the sum of $25,000.00. [57] The defendants also paid for jack hammering and rental of a generator to dig a trench under the footing of the foundation walls to accommodate access to sewer and water lines. They paid $120.68.

Baltic maintains however, that this was needless as a trench and hole had been built into the footing and would have advised the defendants of its location in the foundation had the defendants but asked. [58] The defendants paid the further sum of $472.50 to allow for temporary electrical services to assist the construction company that performed the lift and reconstruction of the foundation. [59] The defendants paid the further sum of $641.07 for support columns instead of installing tele-posts due to the adjusted height of the basement for remedial work. [60] The defendants paid the further sum of $678.61 for the purchase of rebar twist ties and poly to assist in the building of the concrete basement slab. [61] The defendants paid the further sum of $2,100.00 for the cost of pouring the basement slab. [62] The defendants paid the further sum of $3,737.30 for the cost of the concrete for the basement floor slab. [63] Finally, the defendants maintain that they were obligated to perform addition work in the nature of sweat equity to adjust window bucks, clean up mud surrounding the foundation, and peel back and re-apply the membrane that is applied to the exterior of the foundation, and they seek the sum of $2,475.00 constituting 49.5 hours of work at a stated $50.00 hourly rate to their family members.

Analysis

a) What was the true nature and scope of the agreement entered into between the parties? [64] Baltic invites this Court to conclude that the entirety of the agreement entered into between the parties are as set forth in the quote for the provision of a foundation and a garage signed by the parties on September 20, 2011 and which I have referred to at paragraph 21 of this decision.

They say that they provided a foundation and that the defendants acknowledge that it was a good and workmanlike foundation and that they are therefore entitled to the balance due and owing under the agreement, which is the balance of the purchase price quoted. [65] The defendants had in fact acknowledged in their evidence that the foundation was built in a good and workmanlike fashion in the sense that it was structurally sound.

However, they maintain that it was an express or at the very least, an implied condition of the agreement that it would be built at a height necessary to allow for the windows of the basement to be 6 to 8 inches above street level, and in fact, it was built so that the windows sat 16 inches below street level. [66] They also allege, that much more was contemplated under the agreement than simply digging a hole, setting the footings for foundations walls, building the walls and backfilling the property to the desired grade.

They allege that Baltic promised a basement floor slab, general contractor oversight throughout all remaining aspects of the basement, putting in roughed in plumbing, electrical panels and the like.

They allege that if a building contractor is aware, and repeatedly told that it is essential that the basement windows have to be 6 to 8 inches above grade, then it is an implied condition if not an express condition of the contract that the product meet that essential requirement, particularly when that building contractor is undertaking to retain a surveyor on their behalf and undertaking to transmit all available diagrams and measurements to that surveyor. I will deal with each in turn.

[67] In

summary, Baltic says that the contract as agreed to between the parties anticipated the provision of a foundation and, at best, a mere understanding, but not a contractual term, that Baltic would assist, from a customer service perspective, in acting as a liaison in arranging for additional subcontractors.

On the latter point, Baltic says that had it contracted to act as a general contractor then it would certainly not provide these significant additional services for free, and, would, in the normal course, look for a fee equivalent to as much as 20% of the various subcontractors services in providing this further service.

They maintain that because there was no discussion whatsoever in relation to payment (consideration) for these additional services, and because consideration is a vital component to any simple contract, no contract can be found to exist in relation to this aspect of the defendant argument. [68] Baltic’s argument in relation to the defendants’ assertion that they had also contracted for the provision of a rebar reinforced concrete basement floor slab runs along parallel lines.

Baltic knew that the defendants wanted one, but Baltic says that it never agreed to build them one, and again, no consideration passed between the parties, nor did the parties ever discuss payment in relation thereto.

In fact, as Baltic points out, their quote, which takes on the similarities of a unit price contract (each unit of work has a fixed price and the total contract price is arrived at by adding the units up) is absolutely silent in relation to the provision of a basement slab. [69] In short, Baltic takes the position that during the September meeting, the parties discussed a number of things and that he represented that he knew a number of sub-trades which could assist the parties and that he was aware that the defendants wanted a basement slab, but all that he was prepared to contract to do was to provide a foundation, and that, it says, is precisely and only what the quote contemplated. (Arguably, it was prepared to do further work and presumably therefore that is why the September 20 quote has the additional clause ... total contract to date .) [70] With the greatest respect to the defendants, who I found to be credible and honest (if not somewhat optimistic in their expectations) I find merit in Baltic’s argument.

In saying this I am of the view that Hall, by his manner and words and conduct may have led the defendants to believe that a different relationship was anticipated, but at the end of the day, his actions did not change the essential arrangement that the defendants agreed to when reduced to writing. [71] While I may be sympathetic to the defendants’ plight, I simply cannot conclude that it was in th contemplation of both parties that the contract was as expansive as suggested by the defendants.

First, the defendants should, in my view, have operated on the assumption that Baltic was not going to provide professional services for free. If they felt that Baltic was to do more under the contract, they should have clarified that understanding and reduced it to writing or at the very least, obtained a much more clear and more firm understanding of what they thought the contract would anticipate, and in my view, on the evidence presented at Court, there was no such meeting of the minds.

I find support in this conclusion by virtue of the fact that Baltic did not do anything post the September 20, 2011 meeting to suggest that he would provide general contractor services. He was allegedly sent two reminders about these presumed obligations, and he failed to respond to either of them. While it speaks poorly of both Mr.

Hall and his company Baltic to fail to provide even the courtesy of a response, Baltic’s lack of a response or silence cannot, in my view, be seen as a representation or a type of conduct of any kind to do those things that the defendants felt it was Baltic’s obligation to undertake. [72] Second, I cannot accept the defendants’ argument...that the agreement contemplated the provision of a rebar reinforced concrete basement slab..... as compelling. They have invited the Court to conclude that a request for a basement, by the simple layman’s definition of a basement, would obviously include a concrete floor.

The problem with their argument is that this action dealt with a building contract and presumably, contractors attach different meanings to what a layman may understand the word to mean. The defendants did not offer up an expert to define what that term means in the trades generally, and Baltic consistently referred to a basement as a foundation footing and its walls, and a floor, as the concrete slab distinct from that. [73] Blacks Law Dictionary , 4th ed (St.

Paul: West Publishing Co, 1968) at p. 192 is of no great assistance, because its definition of a basement ... “ a floor partly beneath the surface of the ground but distinguished from a cellar by being well lighted and fitted for living purposes.

In England the ground floor of a city house ” ... clearly makes no reference whatsoever to the foundation and footings of that foundation, and the defendants would most certainly have been aggrieved to find out that they were contracting only for a floor. [74] The Shorter Oxford English Dictionary Volume I (Clarendon Press Oxford University Press, 1973) describes a basement variously as “ a foundation or the lowest or fundamental portion of a structure especially when sunk below the ground level ” . This

interpretation does not, in my view assist the defendant either. [75] Third, and what I believe is most telling is that the first quote offered by Baltic on or about August 5 of 2011 described in detail what a foundation is and what was to be provided. Following the September 20 th meeting, the second quote again referred to a

foundation and quoted precisely the same cost as set forth in the original quote. There is no reference whatsoever to the term “basement”. The defendants present as reasonable people. They must have known that there would be a significant additional cost for the installation of a basement floor slab, and this of course is borne out by the fact that they were ultimately charged in excess of $6,500.00 for the labour and materials to install their concrete floor slab. In my view, whatever comments that may have been made by Mr.

Hall as an inducement to enter into the agreement, it would be unreasonable to assume that the revised quote, which refers to a foundation, a term which had been clearly articulated in the first quote, and which is identified as being offered at precisely the same price, was somehow intended to include a floor slab and a 25 foot driveway and electrical panels and basement wiring and a sump pit, and an electrical water heater and all of the other things that were on the defendants’ original request for quote... all of which would obviously result in an increased cost. [76] Finally, I cannot see how it can be that the defendants can be at liberty to pick and choose what part of the ‘basement’ was intended to be included in the actual cost they were going to pay.

The defendants made it clear at trial that they knew that when a sub- trade attended to do work, that they would be forwarded a bill for the work to be done... although they did not know what that cost might be, nor was there a set price for that service. Therefore, if an electrical panel was to be installed, or sewer line, or roughed in plumbing, or stairs, then, based on the defendants’ understanding of the agreement, Baltic would arrange for it and send on the invoice to them for payment. Why would this not work the same way with respect to the floor slab?

If a basement is intended to contemplate a floor slab, does it not also contemplate these other fixtures and services that are incidental to their understanding of a basement?

Why is the floor slab a distinct part of the whole of the anticipated contract that must be included in the definition of a basement but not the remainder? [77] For these reasons, and while I fully understand that the defendants thought they were obtaining far more under the contract than what they received, I conclude that the contract entered into between the parties, and the only terms of that contract upon which the parties were ad idem , and for which consideration flowed dealt with the provision of, and proper installation of, an ICF foundation as described to the parties in the first quote. (I have ignored the reference to the garage through out this analysis simply because the defendants terminated the contract before it could be built and therefore does not form part of these deliberations.) At best, what the parties were left with was an understanding that at some point Baltic had promised to assist with other things for them, and which can be best described, at least from Baltic’s perspective as an agreement to agree. [78] I conclude that the true nature and scope of the agreement entered into between the parties was for the supply and proper installation of a foundation footing and the supporting walls and the materials necessarily incidental thereto.

b) Did Baltic, as a supplier of goods and services, commit an unfair practice by misleading or deceiving the defendants as to what was contemplated under the agreement? [79] After listening to the defendants, I have no doubt that Mr.

Hall’s discussions with them on the 25 th day of September may have led them to a very robust understanding of the magnitude of the job that Baltic was going to undertake, but with due respect I do not have sufficient evidence before me to conclude that Baltic deceived them, and as such would have committed an unfair practice as that term is defined under The Consumer Protection Act. [80] The defendants have failed to direct me to what particular act of deception they allege Baltic was engaged in, and there are no less than 19 examples of unfair practices set forth under

section 6 of The Consumer Protection Act . Which of these apply? The only allegation set forth in their counterclaim is that the defendants had clearly stipulated for a basement, and that asserting that a foundation does not include a floor amounts to unreasonably misleading or deceiving a customer. [81] The problem that the defendants face is that the term ‘foundation’, was, in fact, clearly identified in the original quote, which the defendants had before the September 20 th meeting, and the second quote, which the defendants signed also referred to a foundation. It made no reference whatsoever to a ‘basement’.

The defendants’ attempt, to have this Court conclude what is meant by a ‘basement’, and inviting the Court to interpret this term based on what reasonable people think this term means is also troubling. It is troubling because there is no clear dictionary

interpretation to be attached to it; the parties each attach their own

interpretations to it; and there was no evidence led by the defendants to show what that term is intended to encompass in the trades. It is more troubling because the defendants would, in suggesting that it include the floor slab, not also invite me to conclude that it includes sewer hookups, and stairs, and electrical panels and wiring and water heaters. [82] As I review the evidence and the submissions of counsel, I am simply not persuaded that there is sufficient evidence before the Court upon which to find that Baltic has committed an unfair practice as alleged.

c) If the foundation provided by Baltic was structurally sound, is Baltic entitled to recovery of the monies due and owing to it under the agreement, or was Baltic in breach of an express or implied term of the agreement that the ICF foundation was to be placed above a certain grade on the parcel of land? [83] I conclude that Baltic provided an ICF foundation which was structurally sound.

The defendants concede that this is so, but maintain that in providing it, Baltic did not comply with an essential term of the contract. [84] I am satisfied that when the foundation was laid, it was in fact below the level sought by the defendants, and not laid so that the windows were 6 to 8 inches above street level. In so concluding, I have considered the evidence of Andrew Birnell, who, as I mentioned, was not called as an expert, but rather as a person experienced in digging foundation holes. I accept it as some evidence but not as conclusive evidence.

His evidence was that with his training he could readily see that the hole was too deep and that the foundation was below grade. He based this on his experience, his familiarity with the property’s location, and a visual inspection. While I do not accept his evidence as that of an expert, I accept it as information from an experienced layman and find it to be admissible.

In my view it meets the criteria summarized in David Paciocco & Lee Struesser, The Law of Evidence , 2d Ed., (Toronto: Irwin Law Inc., 1999) at p. 127 in that he was in a better position than the trier of fact to form the conclusion; that the conclusion is one that persons of ordinary experience are able to make; that although not an expert, he had the experiential capacity to make such a conclusion; and that his opinion was merely a compendious mode of stating facts that are too subtle or complicated to be narrated as effectively without resort to conclusions. [85] In addition, I am satisfied that the steps taken by the defendants to ascertain the fact that the windows were below grade were reasonable.

As indicated, they visually inspected the property and were satisfied that the windows were low. They then used a string and level to determine the extent of the problem. Counsel for Baltic tried mightily to suggest that this methodology was capable of being inaccurate and suggested that the appropriate and better method would be to use a laser level. While this might be so, Baltic led no expert evidence to suggest that this method is preferable.

In addition, I listened carefully to Kasinski in giving his evidence on methodology as I accept his evidence as credible and his experience as a technical engineer and red seal mechanic reinforces my view that he has the capacity to use a string and level to make these kinds of calculations. [86] There are four other reasons for my conclusion. [87] First, if the defendants did not believe that their measurements were reliable, I do not see why they, or any other reasonable person, would incur the very significant cost of making things right. [88] Second, I note that Baltic, while at first instance not willing to correct the suggested problem, soon came back to the defendants offering up a particular style of fix for the problem.

If the problem did not exist, one would think that Baltic’s response would have been clear and concise. They would, in my opinion, do as any other reasonable builder would do.... and stand behind the integrity of the work they had done, or would have provided the defendants with convincing evidence that their work was, in fact, properly done. [89] Third, I take note of the fact that this action was commenced more than two years ago. It had gone to case management and had been set for trial on three previous occasions.

There has been a great deal of time for Baltic to have undertaken tests or gather evidence to suggest that their work was reasonable. They did not lead any convincing evidence to rebut the evidence tendered by the defendants. The only evidence they led was from Mr.Hall, who submitted photographs he took of the property and an invitation to the Court to review those photographs as evidence that the grade was correct.

If, as his counsel suggested, a laser level was a more accurate means of measuring, why did he not provide this information directly or through another witness? [90] Finally, Baltic has been aware of the defendants’ concern since shortly after the work was done. They have had the defendants’ defence and counter claim for a significant period of time. They knew that this problem was at the heart of the defendants’ refusal to pay. One of the central issues of this trial was whether or not the hole was dug too deep.

Yet, Baltic failed to call the one person which could have shed some light on the subject, and that would have been the person employed by Baltic’s subcontractor Serbu who dug the hole. Baltic’s failure to call this person invites this Court to draw an unfavourable or adverse inference, and I am prepared to do so. In my respectful view, Mr. Justice Ball’s comments on adverse inferences at paragraph 17 in Stonechild v Westfair Foods Ltd. , 2001 SKQB 466 , 212 Sask R 312 is apposite:

An unfavourable inference can be drawn when, in the absence of an explanation, a party fails to adduce the evidence of a witness who would have knowledge of the facts and who would be assumed to be willing to assist that party. In the same vein, an adverse inference may be drawn against a party who does not call a material witness over whom he or she has exclusive control and does not explain why.

Such failure is said to amount to an implied admission that the evidence of the absent witness would be contrary to the party’s case, or at least would not support it.... [91] I am also satisfied that it was a condition of the agreement entered into between the parties that the foundation had to be 6 to 8 inches above the level of the windows. This was reiterated to Baltic on numerous occasions both before and after the defendants signed the contract, and in my view Baltic cannot now be heard to say that this was not an essential term of the agreement because it was not written into the agreement.

The simple fact is that I find, on the evidence, that Baltic clearly knew the importance of this essential aspect of the contract. [92] In addition, Baltic was obliged to provide its goods and services in a good and workmanlike manner. This is a long established implied term of any contract to perform work or provide services, and certainly, work which does not meet the requirements of the specifications contained in the contract is not of reasonable quality and constitutes a breach of that contract. Baltic had two jobs to do.

Build a foundation, and build it to the rather nominal specifications that the defendants had asked for. [93] Baltic however would invite this Court to infer that the depth of the hole was dug to the specifications laid out by the surveyor; that the surveyor did its job wrong; that the surveyor was employed by the defendants; and therefore, it is either the defendants or the surveyor which should be accountable for the mistake.

The problem of course is that neither Baltic, nor the defendants, called the surveyor to give evidence, and there is simply no evidence before the Court to show that the surveyor did anything wrong. First, I note that it was Baltic and not the defendants, who contacted the surveyor and sent the surveyor those blueprints and diagrams necessary to dig the hole. I also have a concern with the suggestion that Baltic could pass off its obligations to provide a foundation in accordance with the specifications given to them to the surveyor.

What if the surveyor had done its job wrong and laid out a plan suggesting that Baltic dig the hole four inches deep? Could it be said that Baltic had complied with the terms of its agreement with the defendants if the foundation sat eight feet above the ground? What if the surveyor had laid out sight lines that demanded that the hole be dug fifteen feet deep, such that the foundation would be swallowed, in its entirety, ten feet below the ground level? Could it be said that Baltic had complied with the terms of the contract or that it had provided its services in a good and workmanlike manner? I think not.

I believe that Baltic should have, but failed to, ensure that the placement of the foundation met the specific obligations that it had accepted under the agreement. [94] For all of the foregoing reasons, I find that Baltic provided a structurally sound foundation and prima facies entitled to the balance of the amount due and owing to it, but having breached an essential term of the agreement, I also find that the defendants are entitled to monetary damages reasonably necessary to correct this deficiency.

d) If Baltic was in breach of the express or implied terms of the agreement, are the defendants entitled to set off the expense of correcting the breach and in so doing were their costs of mitigation reasonable? [95] As earlier stated, the defendants contacted a variety of people and concluded that the only reasonable way of correcting the deficiency was to lift the RTM and rebuild the foundation and elevate the windows. In so doing, they expended the sum of $25,000.00.

Baltic alleges that the fix they suggested to the defendants on December 15 of 2011 was a reasonable and cost effective resolution to the defendants’ problems as the cost would have been as little as $3,000.00 to $3,500.00. The defendants, however say that the price quoted to them was in fact nearer to $14,000.00. I prefer the evidence of the defendants, over that of Rodriguez on this point. I have found the defendants to be honest and credible individuals. Each of them came across as forthright, and were, as circumstances warranted, prepared to concede certain things during their testimony.

In addition, they ultimately incurred $25,000.00 to correct the deficiency. I have a difficult time concluding that these reasonable individuals would not have jumped at the opportunity to correct the problem if the cost quoted was as nominal as suggested by Rodriguez. [96] In mitigating their losses, the defendants are entitled to be put into the position they would have been had the breach not occurred. The defendants’ efforts to mitigate must be reasonable, but what is reasonable, as many courts have concluded, is dependent of the circumstances of each case.

In the instant circumstances, the defendants attempted to identify a variety of potential means of correcting the deficiency. They were struggling under time constraints based on various delays encountered on the original project, as Christmas approached and in the depths of a bitterly cold Saskatchewan winter. They needed a house to live in, and they did not have it. Obviously they were looking for a timely resolution to their problem, and a fix that they could rely on. The fix they chose was not a radical deviation from what they had originally expected under the contract.

[97] Lord McMillan’s comments in Banco de Portugal v Waterflow & Sons Ltd. , [1932] AC 452 (HL) at p. 506 remains good law: The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures, and he will not be disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken. [98] I am also satisfied that the defendants had no obligation to rehire Baltic to correct the deficiency even if the cost quoted had not been the $14,000.00 they alluded to.

Baltic had challenged the assertion that they had done anything wrong in the first place and then apparently changed direction and sought to charge the defendants extra for a fix, rather than offering to correct it for free. They had delayed on the project for a considerable period of time and gave no meaningful feedback to the defendants as to why this was so. They had not even started on the defendants’ garage. Mr.

Hall had cancelled several meetings with them at the commencement of their relationship and rarely if ever responded to the defendants’ e-mails even though he knew or ought to have known of the defendants increasing concerns on the project.

I am satisfied that the defendants had, by the time the foundation was improperly laid, completely lost confidence in Baltic. [99 ] For the foregoing reasons, while the plaintiffs provided a structurally sound foundation and are prima facie entitled to the balance due and owing under the agreement, the deficiency that arose resulted in the following costs to the defendants: $25,000.00 to raise the RTM and rebuild the foundation; and $472.50 to allow for temporary electrical services to assist the construction company that performed the lift and reconstruction. [100] I am not prepared to direct payment of the sum of $641.07 for support columns instead of tele-posts because I have no compelling evidence that these were required, and in any event I must assume that some kind of support would be required for the RTM regardless of whether or not the foundation was raised.

I am not prepared to award any damages for the provision of a floor slab. Finally, I have considered, but reject the claim for sweat equity in the sum of $2,475.00. In my view the evidence is less than satisfactory that all of this work was necessarily incidental to raising the elevation of the foundation.

e) Are the defendants entitled to any further relief, as sought in paragraph 32 of their counterclaim? [101] The defendants by counterclaim sought a declaration that the plaintiff unreasonably misled and deceived the defendants. This Court has no authority to provide declaratory relief and in any event I have concluded that their claim under this head of damages is unsuccessful. [102] The defendants also seek an order that the lien registered against the defendants’ property by Baltic be removed. This Court has no authority or jurisdiction to provide this form of relief.

Presumably, the net effect of this judgment will operate to force Baltic to remove the lien. Conclusion [103] In the result, Baltic has succeeded in proving that they provided a structurally sound foundation and prima facie would be entitled to payment for the balance of the invoice and payment of the surveyor’s services, albeit restricted to the $20,000.00 jurisdictional limit of this Court. The defendants have succeeded in alleging a breach of contract and in proving that their costs to mitigate equal and in fact exceed the plaintiff’s claim. They have, however, limited their counterclaim to $20,000.00.

I have set off each of the claim and counterclaim and in the result no money is due or owing to any of the parties. [104] In light of the divided success, I am inclined to make no order as to costs, but will hold that order in abeyance for a period of thirty days. If, after a review of the Court of Queen’s Bench decision in Rajbar v Baltic Properties Development Inc., 2014 SKQB 128 , either party seeks their costs, either party may apply to the Court within thirty days to argue the matter of costs. If no application is made within that time, there shall be no order as to costs for either party.

[105] I would like to extend to each counsel this Court’s heartfelt thanks for their valuable assistance in this difficult matter. Each conducted themselves with courtesy and respect and in this Court’s view thoroughly and professionally represented the interests of their respective clients. Paul Demong, J Citation: 2014 SKPC 173 Baltic Properties and Developments Incorporated v.

Maria Rajbar and Alec Kasinski Corrigendum Released: October 3, 2014 [1] The judgment in this matter was released on October 3, 2014 (2014 SKPC 173). [2] The second sentence in paragraph 100 reads: “ I am prepared to award any damages for the provision of a floor slab. ” That sentence should read: “ I am not prepared to award any damages for the provision of a floor slab. ” Issued at Regina, Saskatchewan, this 6 th day of November, A.D. 2014. P. Demong, J.