2012 QCCQ 2125, 2012 QCCQ 2125

9178-0734 Québec inc. c. Alvaro 2012 QCCQ 2125 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-22-160975-093 DATE: March 13, 2012 ______________________________________________________________________ BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ 9178-0734 QUÉBEC INC. Plaintiff v.

GIUSEPPE (PEPE) ALVARO Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, 9178-0734 Québec Inc. ("Construction Daleo") sues Giuseppe (Pepe) Alvaro, alleging a contract price of $12,709.72 for renovation works carried out at the Defendant's building, admitting a deposit of $2,500, claiming a balance of $10,209.72. [ 2 ] In his written Defence and Cross-Demand, Mr Alvaro alleges that the contract price was $7,000 taxes included that he made partial payments totalling $4,500 leaving a balance of $2,500 which he refuses to pay because the Plaintiff failed to correct defective work and to complete the contract.

He also claims an amount of $2,500 alleging a loss equal to this amount because of the Plaintiff misappropriation of items of moveable property belonging to him that were stored in the part of the building that was renovated but which were intended for installation in another part of the building. [ 3 ] At the trial, the Defendant altered his position somewhat asserting that the initial contract price of $7,000 was increased to $7,500 and admitting that the Plaintiff is entitled to some compensation in relation to the claim he is making for extra work but only for an amount totalling $650.

In view of other adjustments he admits owing $50. ISSUES [ 4 ] To resolve this conflict, the Court must decide: 1. What is the contract price owed to the Plaintiff? 2. What payments toward the contract price has the Defendant established? 3. Is the Defendant entitled to a reduction from this price because of the quality or extent of completion of the work? 4. Does the Defendant have a claim for prejudice resulting from an unlawful retention of property owed by him? 5. And if so, for what amount?

FACTUAL MATERIAL [ 5 ] In February 2009, the Defendant required renovations to part of his apartment building situated at 9120 Iberville in Montreal, namely apartment #2, which he intended to occupy himself after the renovations. [ 6 ] Mr.

Maurizio D'Ascanio, the president of Construction Daleo, a general contractor, was acquainted with Mr Alvaro's brother and father for whom he had done some construction work to their mutual satisfaction. [ 7 ] Mr D'Ascanio had also given advice when Mr Alvaro was contemplating the purchase of the Iberville property at an earlier time. [ 8 ] Mr Alvaro examined the apartment to be renovated and quoted a price of $7,000 on the basis that Mr Alvaro would provide

all materials except for plumbing materials such as pipes and drains, which Construction Daleo would provide as part of the price. [ 9 ] Mr D'Ascanio says that the price was inclusive of taxes and Mr Alvaro says the price was to be paid cash without any bill. [ 10 ] Both parties agree that the agreed contract price of $7,000 was not to include the kitchen cabinetry, which Mr Alvaro would obtain elsewhere. [ 11 ] Mr D'Ascanio testified that he usually asks for half of a contract price, prior to commencing the work.

Because he did not have a significant investment to make in materials, which were to be provided by the Defendant, he only asked for an initial payment of $3,000. [ 12 ] He testifies that, in fact, he only received $2,500 but agreed to continue the work. [ 13 ] Mr Alvaro, on the other hand, testifies that there were three cash payments of $500 remitted in a restaurant before the work began as well as an additional $3,000 one week into the work, for total of $4,500. [ 14 ] The jobsite was to be given to the Plaintiff with the demolition having already been carried out by Mr Alvaro's men.

Mr Alvaro testifies that his men demolished for three days and put the debris out on the balcony and in the front yard. [ 15 ] Mr D'Ascanio, on the other hand testifies that, when he took possession of the jobsite, his men had to spend three days cleaning out the debris before they could commence their work. [ 16 ] The Defendant formally objected to any testimonial evidence of a change to the initial contract price.

The Plaintiff asserted that, both on the basis of a commencement of proof and also because the contract was in the course of Mr Alvaro's enterprise, that testimony was admissible. [ 17 ] The Court heard the testimony of Mr D'Ascanio and also the contradictory testimony of Mr Alvaro concerning this issue under reserve of this objection. [ 18 ] Mr D'Ascanio testifies that he obtained a used kitchen; it was in good condition having been used for only five years. [ 19 ] He offered it to Mr Alvaro for apartment #2, and the parties agreed on a price of $800 plus the cost of installing a faucet and sink. [ 20 ] Mr Alvaro testified that he did, in fact, agree to the purchase of the kitchen cabinets but that the price, including installation, would be a supplement of $500 over the initial contract price of $7,000.

Therefore, he states that the total contract price of $7,500 without taxes and with no receipts. [ 21 ] During the course of the work, Mr Alvaro had intended to sell the building but, apparently, these plans fell through and he found a tenant who was to move in to the apartment upon completion. [ 22 ] While he initially asked for the room to be painted white, the tenant requested colours and Mr Alvaro intervened while the painter was in a process of completing the work and took some of the white paint back to the supplier to add the necessary pigments. [ 23 ] Mr Alvaro believes that he took approximately half of the finish coats back to be coloured while the painter, Mr Frederic Raimondo states that the work was virtually complete, it was almost ready to be delivered with the finish coat of white paint when he was asked to repaint according to the colours chosen by the tenant. [ 24 ] Mr D'Ascanio states that when he received the phone call from the painter, who was in the presence of Mr Alvaro, he agreed that the colours could be changed but that either the tenant or Mr Alvaro would have to pay the extra price. [ 25 ] He testifies that he was told that Mr Alvaro would accept this extra. [ 26 ] In the course of the work, it was necessary to open and close the central valve providing water from the city's aqueduct.

The valve was leaking and the Plaintiff installed a new one.

He got access to the garage where the valve is located from Mr Luigi Biamchi, the tenant of apartment #3 who had a key for the garage. [ 27 ] In his testimony, Mr Alvaro admits that he requested replacement of the valve. [ 28 ] It is not in issue that Mr Alvaro had delivered to the building, in addition to the fixtures required for the bathroom of apartment #2, a sink, a vanity, a toilet and a bathtub for apartment #3 in view of a future renovation. [ 29 ] Mr D'Ascanio was interested in obtaining the contract to do this work. [ 30 ] He claims, however, that the presence of these items encumbered his work in apartment #2 and that he moved them, with Mr Alvaro's permission, to his own premises. [ 31 ] Mr Alvaro contests this and states that Mr D'Ascanio removed these materials in order to try to exercise a right of retention when the parties were not able to agree on the final payment. [ 32 ] This issue is resolved through the independent testimony of Mr Biamchi who states that these fixtures were stored in the premises he rented in the garage space and that he noticed, at one point, that they were missing.

Mr Alvaro told him they had been stolen while he later learned from Mr D'Ascanio that he had taken them to his premises. [ 33 ] The bills (P-1) submitted, May 14 th , at the end of work, consist in four separate invoices # 427, #429, #430, #431 and a final

statement #432 combining the amount of the four invoices, adding taxes and showing a partial payment of $2,500. [ 34 ] The bills were prepared by Mr D'Ascanio for "negotiation purposes" , as he states.

They add up to $11,260 which, when taxes are added totals $12,709.72 while the initial contract price was, according to him, only $7,000. [ 35 ] The first two pages, showing items totalling $4,550 and $2,950, for a total of $5,500, show a great deal of description, which is not really necessary since the contract was for a fixed price. [ 36 ] When asked about the fact that these two bills total $7,500, Mr D'Ascanio stated that the initial contract price was $7,000 plus taxes and he reduced the tax portion to $500 for a total price of $7,500. [ 37 ] This, of course, is contradicted by the fact that GST and QST are added to the total of the four bills which would mean that there is tax on tax.

This is not very likely especially because it appears that, at least from the Defendant's point of view, there was to be no tax payable! [ 38 ] The extras begin on the third bill #0430. There is an additional $800 for the kitchen, $350 for its installation and numerous other items including plugs and switches, a faucet, a kitchen sink and some doorframes.

A claim is made for extra paint, cement, glue, and accessories for $250. [ 39 ] On bill #0431, the extras continue with $400 for three days of cleaning, $875 for 35 hours of additional painting, $250 for the change of the entry valve and miscellaneous items, $30 for four hinges. [ 40 ] With respect to the materials that the Plaintiff took to his premises, the Defendant alleges that they had a value of approximately $2,500 although the exact description of the materials is different than those which Mr D'Ascanio admits having taken. [ 41 ] Be that as it may, there is no allegation of a written demand to return this material. [ 42 ] The Defendant showed that, when he sold the building, a credit was given to the purchaser for the fact that apartment #3 was not renovated.

He alleges that he suffered a loss because of the fact that the Plaintiff had retained the materials as this prevented him from completing the renovation to apartment #3. [ 43 ] The evidence concerning the value of the tub, the toilet, vanity and sink is contradictory but the amounts are close: Mr D'Ascanio alleges a value of approximately $700 (he eventually sold these materials for $600).

The bills (D-3), as supplemented by Mr Alvaro's testimony, establish their value at approximately $1,000. [ 44 ] The Defendant claims various deficiencies in the work although he never provided a written demand to correct them. The allegations set out in the defence and cross-demand read as follows: 6. Monsieur D'Ascanio rencontre le défendeur le 7 juin 2009 à l'appartement pour lui réclamer 7 942,00$ en sus du dépôt de 4 500,00 $ déjà payé; 7.

Le défendeur lui fait donc part de sa surprise pour l'excédent demandé et de son mécontentement eu égard à la mauvaise exécution de certains travaux, en sus de la peinture qui n'était pas finie et des nombreuses taches sur les planchers qui n'avaient pas été nettoyées; 8. Le défendeur lui fait donc part que celui-ci devait corriger les malfaçons et finir les travaux commencés, et qu'il lui paierait alors les 2 500,00$ convenus; [ 45 ] The testimony is a little more detailed.

Based on the pictures (D-5), a certain number of minor deficiencies are visible such as a piece of missing baseboard; some elements are not completely clean and the like. [ 46 ] There does not seem to be any deficiency significant enough for a retention of $2,500 which represents one-third of the contract price as alleged by the Defendant. ANALYSIS [ 47 ] Cases involving oral proof of contracts and payments are often troubling to both the parties and to courts.

Adherence to rules of evidence that exclude testimony can sometimes give rise to unjust results and, even when testimony is admitted, the clash of conflicting recollections does not always provide a spark of truth as authors of conflicting testimony may be equally credible (or equally lacking in credibility as the case may be). [ 48 ] In the present case, both parties lacked credibility, the Plaintiff because he was engaged, according to his own admission, in a process of negotiation; putting down figures in order to get the dialogue started without necessarily having a firm basis to do so. [ 49 ] The Defendant, on the other hand, candidly admitted that he was engaged in a process of non-documentation, providing cash payments and insisting on receiving no invoices. [ 50 ] The quality of the Plaintiff's testimony was not particularly convincing but the Court was also not impressed by the fact that the Defendant made no admission in his proceedings about the increase in price because of the kitchen, an element that is hard to dispute, nor for the installation of the new city valve, something that could not be denied given the involvement of Mr Biamchi to facilitate entry to the garage area. [ 51 ] While most of Mr Alvaro's testimony was given under reserve of the objection, the Court nevertheless did not find in the part of the testimony that dealt with the alleged payments anything that would constitute probative value sufficient to convince the Court on

the balance of probabilities. [ 52 ] Mr Alvaro has the burden of proving the partial payments he alleges because he is asserting the partial extinction of the obligation to pay the contract price. [ 53 ] The Court considers, therefore, that proof is satisfactorily made as to payment only up to the amount of the judicial admission made by the Plaintiff of $2,500. [ 54 ] As for the contract price, the Defendant made three clear admissions that he agreed to an increase from the initial $7,000.

While this testimony was received by the Court under reserve of an objection, and as a contradiction to the Plaintiff's testimony objected to, it would be somewhat artificial not to consider the clear judicial admissions made in this testimony on a pure question of form. [ 55 ] The Defendant was a compellable witness at trial and, had the Court ruled immediately against receiving the testimony of the Plaintiff, the Plaintiff would nevertheless have been entitled to cross-examine the Defendant in order to obtain these judicial admissions. [ 56 ] It was perhaps in tacit recognition of this reality that the Defendant revised his position at the end of the hearing. [ 57 ] These admissions, although they do not constitute complete admissions of what the Plaintiff would like to prove, do open the door to testimony as a commencement of proof. [ 58 ] Having said that, the Court does not find Mr D'Ascanio's testimony sufficiently probative to establish any extras beyond those that the Defendant actually admitted. [ 59 ] These amounts are: $500 for a used kitchen, $250 for the installation of the valve and some additional amount, the value of which the Court must arbitrate, for having asked the painter to redo the painting at a certain stage of completion.

The Court arbitrates $500. [ 60 ] As for the other items that the Plaintiff claims in the form of materials and labour, given that this was a contract for fixed price, he would have been well-advised to follow the prescriptions of

article 2109 C.C.Q. [1] and seek a change to the contract price, duly documented.

Otherwise, his conduct in performing the extra services or work without any agreement can be presumed to be a renunciation to any claim for an extra payment. [ 61 ] Even putting the case in its best light, and allowing oral evidence of a change to the contract, apart from the three elements mentioned above, Mr D'Ascanio was not able to present any clear and convincing evidence that the Defendant accepted the changes he is claiming. [ 62 ] As to the claim for deficiencies or unfinished work, in the absence of a list agreed to by the parties or at least presented by the Defendant with a time fixed for completion as a putting in default, the claim cannot succeed.

The claim, for $2,500, lacks credibility being an amount disproportionate to the minor deficiencies asserted. [ 63 ] The Court finds that the Plaintiff is not in default in this regard. [ 64 ] Based on the forgoing, the final contract price is established at $8,250. [ 65 ] Construction Daleo runs an enterprise that must collect GST and QST.

No agreement between the parties could alter the fact that these amounts must be remitted at the rates applicable in 2009, namely 5% and 7.5% respectively, bringing total to $9,312.18. [ 66 ] The remaining balance, considering payment of $2,500 is $6,812.18. [ 67 ] Finally, the materials having a value of approximately $1,000 that were withdrawn from the site were not subject to a right of retention because they were not connected to the work being done.

They were materials purchased in contemplation of a future contract and, according to Mr Biamchi, they were stored in his garage premises. [ 68 ] The Plaintiff, therefore, had no reason to remove them to his own premises and, having deprived the Plaintiff of possession thereof and eventually having sold them for $600, the Plaintiff should be accountable for their approximate value: $1,000. [ 69 ] Therefore, the Defendant will be entitled to damages in the amount of $1,000, subject to judicial compensation. [ 70 ] Since neither party was fully successful, there will be no award of costs.

WHEREFORE, THE COURT: CONDEMNS the Defendant to pay, to the Plaintiff the sum of $6,812.18, 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 June 8, 2009; CONDEMNS the Plaintiff, Cross-Defendant to pay the Defendant, Cross-Plaintiff the sum of $1,000 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 October 21, 2009; PRONOUNCES judicial compensation of the two condemnations up to the amount of the lesser;

Each party paying its costs. __________________________________ DAVID L. CAMERON, J.C.Q. Mtre Joanie Talbot SYLVESTRE & ASSOCIÉS Attorneys for the Plaintiff Mtre Ronald Saad Attorney for the Defendant Date of hearing: February 8, 2012