Mona Hill - v - Dallas Kronberg v. Common Sense Renovations Inc., 2016 SKPC 152

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2016 SKPC 152 Date: November 18, 2016 File: SC 380/15 Location: Regina _____________________________________________________________________________ Between: Mona Hill - v - Dallas Kronberg and Common Sense Renovations Inc. Self Represented For the Plaintiff (Defendant by Counterclaim) Self Represented For the Defendants (Plaintiff by Counterclaim) JUDGMENT P. DEMONG, J Introduction

[ 1 ] Mona Hill (‘Ms. Hill’) alleges that she entered into an oral agreement with Dallas Kronberg, operating under the trade name and style of Common Sense Renovations, who undertook to provide goods and services to repair and renovate Ms. Hill’s residence following an insurance claim. Ice damming had caused significant damage to the interior of her home and she sought to repair that damage and also make some improvements to her bathroom.

In the alternative, she alleges that the agreement was entered into between herself and Dallas Kronberg, in his capacity as agent for a corporate entity known as Common Sense Renovations Inc. (‘the corporate entity’). [ 2 ] Ms. Hill alleges that the work was not done in a good and workmanlike manner and that many of the goods supplied were not fit for their intended purpose.

She further alleges that the agreement anticipated that the work would be done without interruption, and due to excessive delay, and due to the poor quality of the goods and services provided, she suffered extensive emotional stress and frustration. [ 3 ] Ms. Hill seeks the sum of $14,069.60, an amount which she feels is necessary to correct the deficient work. She seeks punitive damages and also claims for additional damages arising from the stress associated with dealing with Mr. Kronberg and/or Common Sense Renovations Inc., in an amount to be determined at trial.

She also seeks prejudgment interest and costs. [ 4 ] Dallas Kronberg has defended the action. He asserts that he was not a party to the agreement and that the agreement is between Ms. Hill and the corporate entity. He alleges, therefore, that he is added as an improper party and asks this court to dismiss the action against him personally. [ 5 ] Common Sense Renovations Inc. has also defended the action and maintains that the services and goods, with the exception of some additional minor touch ups that may be required, were of good and workmanlike quality and reasonably fit for their intended purpose.

This corporate entity has counterclaimed alleging that while it was paid for some of the work it performed, there remains due and owing to it, the sum of $3,276.77. It also seeks interest and costs incidental to the counterclaim. [ 6 ] When the trial commenced, Dallas Kronberg, as agent for the corporate entity, stipulated for the record that the counterclaim brought by the corporate entity was being withdrawn. He indicated that the corporation has been struck from the corporate registry and is no longer carrying on business. It is clear to the Court that

Section 275 of The Business Corporations Act RSS 1978 c. B-10, precludes, by statute, an unregistered corporation from commencing or maintaining any action or other proceeding in a court. The Court accepted the withdrawal of the counterclaim and it has been dismissed on a without costs basis. Issues [ 7 ] In light of the withdrawal of the counterclaim, the Court is asked to determine only those issues that arise under the main action. They are:

a) Was there an agreement, or series of agreements to provide goods and services for the repair and renovation of Ms. Hill’s home?

b) Did Ms. Hill contract with Dallas Kronberg, or with the corporate entity known as Common Sense Renovations Inc.?

c) Were the goods provided under the contract reasonably fit for their intended purpose, and were the services provided in a good and workmanlike manner?

d) Is Ms. Hill entitled to recover damages and if so in what amount? Evidence

[ 8 ] Ms. Hill states that in April of 2013 she was confronted with an ice damming episode on her roof which resulted in water damage to the interior of her home. She presented her insurance company with a claim which was accepted and in consequence her insurance company estimated the amount of damage and the cost of repair. The specifications for repair were presented into evidence as P-1. [ 9 ] Three areas of her home were affected - her office, her bathroom and her front entrance.

The work to be performed called for the removal and reinstallation of ceiling lights and fans; the placement of new drywall with the associated work of taping, mudding, and preparing of that dry wall; repainting of the affected walls, removal and replacement of vanities, faucets, and taps, and the removal and reinstallation of certain mouldings in the affected areas. Ms. Hill eventually agreed with these specifications for repair and in turn, was offered $8,881.60 in settlement of her claim which she accepted. This amount reflected a net cost of repair of $9,381.60 less Ms.

Hill’s $500.00 insurance deductible. [ 10 ] Ms. Hill says that it was very difficult to locate a contractor who would, at that time, accept such a small job. After searching for a contractor she was eventually advised by a plumber that she had previously used, that she may wish to engage the services of Dallas Kronberg. In or about July of 2014, she says that she met with Mr. Kronberg at her home but could not recall if she called him or if her plumber acquaintance simply had Mr. Kronberg attend at her home. In any event, at that meeting, she went through the work that was to be completed and also asked Mr.

Kronberg if he would be prepared to make some additional improvements to her bathroom - this in addition to the insurance repairs. For the most part, this dealt some framing around a mirror and the tiling of her bathtub/shower. [ 11 ] Ms. Hill says Mr. Kronberg agreed to do both jobs. The insurance work would be done for the cost of $9,381.60 and the improvements to the bathroom would be done for an additional $2,109.41. Ms. Hill stated that Mr.

Kronberg indicated that he would do the work and that it would start on September 27 th of 2014 and that the work would proceed uninterrupted by other contracts that he may have had. Ms. Hill is adamant that at no time did Mr. Kronberg ever indicate that he worked for, or represented, a corporate entity. Ms. Hill says that because of her work

schedule she did not speak directly to Mr. Kronberg regularly but that he provided an e-mail address that she frequently used - commonsenserenovations@gmail.com. [ 12 ] Mr. Kronberg and a helper worked on the project but not to the satisfaction of Ms. Hill. She says that she experienced delays and complained of poor workmanship but that those complaints went unanswered over the course of the next three months. [ 13 ] In or about early October of 2014 Ms.

Hill’s insurance company was attempting to conclude their end of the settlement, and as is an insurance company’s normal practice, it issued a cheque jointly to the names ‘Mona Hill’ and ‘Common Sense Renovations’. Ms. Hill says that she attempted to deposit the cheque with her bank which refused it as it was directed jointly to Ms. Hill and Common Sense Renovations and so she simply signed it over and handed it to Mr. Kronberg who accepted it as partial payment on the contract. [ 14 ] The relationship between Ms. Hill and Mr. Kronberg fell through by the middle of December of 2014 with Ms.

Hill expressing disappointment that the work was not complete and poorly done. She had received an invoice from ‘Common Sense Renovations’ on or about December 5 of 2014 seeking payment of $10,966.00 less the sum of $8,881.60 already received. This suggested to her that Mr. Kronberg felt that the work was done. She refused to pay. Ultimately, after the parties ended up at loggerheads over the quality of the work and the need to correct numerous deficiencies, Ms.

Hill sent a letter to ‘Dallas Kronberg, Common Sense Renovations’ advising of her intention to retain another contractor to fix the variety of problems that she complained of and to look to him for compensation. He did not reply and this action was brought. [ 15 ] At trial Ms. Hill introduced a large number of photographs (in excess of fifty) that she took in an effort to show the court the poor quality of the goods and services that were provided. While she concedes that they do not show the entirety of the work that was done, she says that they fairly represent the general quality of the work that was done.

She alleges that the photographs represent services performed that are less than good and workmanlike. Much of the time spent at trial was taken up in reviewing those photographs.

She suggests that they provide numerous examples of poor painting in all locations that were painted: holes in new drywall that was not repaired; poorly sanded walls that should have been sanded to a smooth finish prior to the application of paint; paint splatters on hardwood mouldings and on her hardwood floor; places where the paint is chipped or paint is missing; poor joining of mouldings in the sense that they are cut at the wrong angle and do not conjoin; dark stain being used where there is no attempt whatsoever to match the stain being applied to other, existing, staining; offset framing; application of non-waterproof paint around windows where water proof paint should have been used; the application of chipped tiles in her bathroom; discoloured caulking in a large number of locations most likely attributable to the failure to apply sufficient waterproofing compound; exposed grout where caulk should be; fixtures not properly applied to walls and ceilings; the use of over-size screws which do not allow the shower doors to be opened and closed

properly, amongst other problems. [ 16 ] The Court was invited to review the photographs and make its own determination. In my opinion they fairly reflect the real concerns that Ms Hill has with the work that was done. Most of the problems that she complains of are, in my view, actually reflected in the photographs, but my opinion is not necessarily determinative of the issue of good and workmanlike performance. [ 17 ] Ms.

Hill called another witness, Daniel Gerard, and sought to have him qualified as an expert in order to speak to whether the goods and services provided were good and workmanlike and fit for intended purpose. It is clear that Mr. Gerard was living in the home during the time that the work was being performed. He was also involved in a romantic relationship with Ms. Hill during this time, but not at the time of trial. He does, however, have construction experience in residential dwellings.

He has dry walled on about forty occasions, done mudding on about twenty-nine occasions, done painting on about fifty occasions, and grouted, tiled and caulked about six bathrooms. While he is not, in my view, at arms-length in his relationship with the plaintiff, and while his expertise is not without parallel, I did, with noted reservations to the parties, indicate that I would hear his opinion on the work that was done and consider thereafter whether his evidence should, pursuant to

section 28 of The Small Claims Act, 1997 , be admitted into evidence if I found it to be credible and trustworthy. [ 18 ] I did in fact find his evidence to be both credible and trustworthy. He did not overstate any of the problems that he saw, nor did he attempt to foist upon the Court an outlandish or exaggerated position. He spoke to what he saw in the photographs and provided the court with his suggestions as to what was wrong with the work and why it was likely wrong. Most of this was, in my view, common sense. Tile caulking should not immediately discolour. It should not fall off and expose grout.

Chipped tiles should not be used. Moulding that is stained dark brown, almost black, does not come close to the honey oak colour of other moulding. Shower heads should be attached to a wall. Screws that are two inches long should not be used on shower door, if they interfere with the movement of the doors. When a wall or ceiling is painted, the surface should be sanded smooth first. If the paint to be applied is lighter than the previous coat, a primer should be used or two coats of paint should be applied. One should not be able to see dark splotches underneath a newly painted ceiling or on a wall.

Drop cloths should be placed on hardwood floors to avoid paint splatter, and any paint splatter that does occur should be cleaned up. When moulding is applied, the two pieces should be cut such that they are attached one to another without spaces or gaps in between them. The moulding should attach seamlessly and not be offset. [ 19 ] In short, Mr. Girard’s opinion mirrored Ms. Hill’s, and provided me with some solace that what I concluded as poor quality workmanship is, in fact, just that. [ 20 ] Ms. Hill’s final witness was also presented as an expert although primarily in the painting field.

I accepted his evidence that the paint job performed was shoddy, that the dry wall had not, in certain places been properly sanded and that inadequate paint had been applied. I also accepted his evidence that the tile work in the bathroom was less than good and workmanlike and many of the goods provided were not fit for their intended purpose. His expertise in this regard, which I accept, was predicated on his experience in overseeing the work of subcontractors who have done this work on some three hundred condominium units that he has supervised. [ 21 ] Ms.

Hill has also filed two estimates for the consideration of the Court. The first estimate, to repair the work that had been done and to finish not only that work but the improvements in the bathroom is in the amount of $14,059.60 but it includes the provision of a new bathtub, something which Ms. Hill says is not necessary. She says that she can simply resurface her old one. This would reduce the estimate to $12,021.09. The second quote is in the amount of $10,212.17. [ 22 ] This matter was set for a two day trial. Ms. Hill concluded her case at 3:30 p.m. on the first day and after hearing submissions from Mr.

Kronberg, I agreed to allow him to present his defence on the following day in order to allow him time to prepare. Trial commenced at 9:30 a.m. the following morning. He entered his defence in ten minutes. He called no witnesses other than himself. He made no comment whatsoever on the quality of the goods or services that had been provided. He led no evidence to contradict the opinions of the two witnesses that were called by Ms. Hall. He tendered no oral evidence whatsoever to contradict Ms.

Hall’s assertions that he had agreed to do the work himself when he first attended to review the work that would be undertaken. He provided no evidence to the court that he ever advised Ms. Hall that the contracting party would be a corporate entity. [ 23 ] Rather, Mr. Kronberg asked for permission to tender two documents into evidence. The first document was a bank statement indicating that the sum of $8,881.60 had been deposited into the account of Common Sense Renovations Inc. on October 20, 2014.

The second document was a Saskatchewan Corporate Registry profile report dated September 8 2015 showing that Common Sense Renovations Inc. was an active company as at that date.

Findings of Fact and the Law [24] An agreement to provide goods and services for repair and renovation work does not need to be in writing. I am satisfied that theoral agreement entered into Ms. Hill and Mr. Kronberg is binding on the parties and that the agreement stipulated that the work to bedone and the goods to be supplied would be such that the contractor would do the repair work envisaged by the insurance companyspecifications and the improvements to the bathroom as discussed by the parties.

I am satisfied that the agreed upon price was thecombined amounts of $9,381.60 for the insurance repair work, and $2,109.41 for the bathroom improvements for a total of $11,491.01. [25] Mr. Kronberg appears, to employ an often used phrase, to have placed all of his eggs in one basket. He invites the court toconclude that he is not personally responsible for the damages that this Court might award, because, on the evidence before the Court, itis clear that the contractor in this enterprise was the corporate entity known as ‘Common Sense Renovations Inc.’ [26] I disagree.

The only evidence that I have as to who the contracting parties were when the agreement was entered into comes fromMs. Hill, and she was of the view that she was contracting with Dallas Kronberg, carrying on business under the trade name and style of‘Common Sense Renovations’. There is no evidence whatsoever to suggest that she knew or even ought to have known that she wascontracting with a distinct legal personality - a corporation. Admittedly, at some point following the breakdown of the contract it becameapparent that Mr.

Kronberg was the president and sole shareholder of that corporate entity, but that knowledge, acquired after thecontract fell apart, is not, in my opinion, sufficient to find that she entered into a contract with that corporate entity. [27] It seems to me that Mr. Kronberg is unfamiliar with the distinction between carrying on business under a trade name, andcontracting as a distinct corporate entity. Section 267(1) of The Business Corporations Act RSS 1978 c.

B-10 states: A corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or serviceissued or made by on behalf of the corporation. It is clear to me that the correct corporate name of the corporate entity is ‘Common Sense Renovations Inc.’. The use of the word ‘Inc.’is important. It explains, to the world at large, and certainly to any person contracting with an entity that the entity is a corporation.

In theabsence of the use of that part of the name, a person is not presumed, in the absence of evidence to the contrary, to know that they aredealing with a distinct corporate entity and in my view they are entitled to assume that they are dealing with the individual who presentsbefore them and who negotiates the contract. [28] This issue arose in a decision of the Court of Appeal for Ontario in Truster v Trilux Fine Homes Ltd., (ONCA).

Para 21 of that decision, in my view, neatly explains the law in relation to this issue: [The trial judge] also recognized a principle arising from the case law that persons wishing to benefit from the protection of the corporateveil should not hold themselves out to the public without qualification.

They should identify the name of the company with which theyare associated in a reasonable manner or risk being found personally liable if the circumstances warrant it: see cases such as WatfieldInternational Enterprises Inc. v 655293 Ontario Ltd. (On SC) and Pennelly Ltd, v 449483 Ontario Ltd. (1986), 20C.L.R. 145 (Ont. H.C.J.).

This principle properly flows from the fact that incorporation provides corporate officers and shareholders thelegal protection thought to be necessary for modern business relations; however, if one expects to benefit from this protection, thenothers must, at minimum, be informed in a reasonable manner that they are dealing with a corporation and not an individual.

In the lastanalysis, persons who set up after the fact that they contracted solely on behalf of another bear the onus of establishing that the partywith whom they were dealing was aware off the capacity in which they acted: Clow Darling Ltd. v 1013983 Ontario Inc., [1997] O.J.No. 3655 (Gen. Div.) ... . [29] While it is clear that a breach of section 267(1) of the Act does not create automatic personal liability if it is not complied with, itis incumbent on, and the burden of proof lies, with Mr. Kronberg, who seeks the protection of that corporate veil. He must lead evidencethat Ms.

Hill was informed that she was dealing with a corporation and not an individual. I say this because, as noted in Shur TransportLtd. v Sweet, 2009 SKQB 33 , any uncertainty as to who the contracting party was can be resolved if, by subsequentperformance and exchange of documents, as exhibited by invoices or otherwise, it can be shown that Ms. Hill was subsequently madeaware that she was dealing with a corporation and chose to continue to deal with that entity.

[ 30 ] I am not satisfied that the evidence produced by Mr. Kronberg in respect to this aspect of the action is sufficient to discharge his burden. First, he led no evidence to contradict Ms. Hill’s understanding of the oral agreement entered into at the time they first met - her assertion that she was dealing with Mr. Kronberg personally and had never been advised that he represented a corporate entity. Second, the existence of the cheque paid jointly to Ms. Hill and ‘Common Sense Renovations’ does not assist. That cheque is made out to a trade name and not a corporate entity.

Third, his invoice does not identify that it is being sent by a corporate entity. It is sent by ’Common Sense Renovations’ not by ‘Common Sense Renovations Inc.’ Fourth, his e-mail address does not identify the corporate entity. Fifth, the mere fact that the cheque that he received from the insurance company was deposited to the corporate entity’s account is of no assistance whatsoever. There is no evidence to suggest that Ms. Hill was aware that the cheque would be deposited to that account. Finally, the fact that Ms.

Hill became aware of the fact that the corporate entity existed, but only after the contract was repudiated cannot, in any way operate retrospectively to give her fore knowledge of its existence. [ 31 ] For all of these reasons, I am satisfied that the contract was entered into between Ms. Hill and Dallas Kronberg who represented himself to be acting under a trade name and not as agent for a corporation. [ 32 ] I am also satisfied that most of the goods and services that were provided did not meet the standards of reasonably fit for purpose, or of good and workmanlike quality.

In the instant circumstances, there was no specific agreement as to the manner in which the work was to be done. A contract to perform any work, in the absence of any stipulation as to the manner in which it is to be carried out, implies a condition that the work shall be done in a good and workmanlike manner and the workmen employed on the work must be possessed of the ordinary amount of skill by those exercising that particular trade. [See: Mack v Stuike (1963), 43 DLR (2d) Sask QB]. [ 33 ] I have no hesitation in finding, based on the evidence of Ms.

Hill, the photographs entered into evidence, and the opinions of Ms. Hill’s witnesses, particularly in the absence of any evidence tendered by the defendant as to the quality of the work done, that most, if not all, of goods and services provided were deficient. [ 34 ] Mr. Kronberg’s failure to meet the implied condition of good and workmanlike services, and his subsequent failure to address and correct the deficiencies and complete the remainder of the work entitled Ms. Hill to treat the contract as if it had been breached by Mr. Kronberg and thereafter, sue Mr.

Kronberg for damages in amount sufficient to put her in the situation she would have been in had it been properly performed. [ 35 ] In assessing the quantum of damages that she seeks, Ms. Hill has provided two estimates. The first estimate values the work to be performed at $14,059.60. The second, in the sum of $10,212.17. I am satisfied that the work, as itemized in the lesser quote bears a fair analysis of the work that needs to be done to put Ms. Hill back to the position that she would have been in had the work been done properly.

I would also note that the defendant has led no evidence whatsoever to suggest that a lesser amount of work need be performed, nor any evidence to suggest that the rate to be charged for these services are unfair. Indeed, the quoted cost is less than that originally agreed upon between Ms. Hill and Mr. Kronberg. I award damages to Ms. Hill in the sum of $10,212.17. Prejudgment interest is awarded, from January 1, 2015 in the further sum of $106.84 . [ 36 ] Ms.

Hill has also claimed for punitive damages and, while improperly styled as special damages in her claim, something which is more properly described as a claim for emotional distress. I decline to make any award under either of these heads. While the evidence shows that the work undertaken was shoddily done, and not done within what Ms. Hill feels to be within a reasonable time, and while Ms. Hill was understandably frustrated and stressed both during and following her dealings with Mr. Kronberg, the stress she complains of did not cause her to come under the care of a physician, or a psychiatrist.

It did not cause her to attend counselling or take medication, or lose work. Her frustration and stress is, in my view, a rather typical but unfortunate consequence of dealing with a contractor who has failed to make good on his contracted work. In addition, an award of punitive damages is an extraordinary remedy. In order to found a claim for punitive damages I would have to find that Mr.

Kronberg’s conduct was, as articulated by our Court of Appeal in Lynch v Hashemian and Pura 2006 SKCA 126 , at para 18 , so malicious, oppressive and high handed that it offends this court’s sense of decency; that his conduct could be found to be so outrageous that punitive damages are rationally required to act as deterrence in the future. On the evidence before me I am satisfied that the work was poorly performed, and that there were delays in its completion and that Mr. Kronberg was often delinquent in attending upon Ms. Hill’s requests for updates and performance of the contract.

I cannot say that this meets or surpasses the rather extraordinary type of oppressive conduct that is necessary to draw forth the imposition of punitive damages. [ 37 ] At the close of trial I invited the parties to exchange and submit their respective claims for costs to be filed with the court and exchanged between the parties within twenty days. Ms. Hill has filed her brief with supporting invoices but the Court has not heard from Mr. Kronberg. I have reviewed Ms. Hill’s request for costs and note that she is seeking payment for the cost of photographs which she

used as evidence at trial and which were beneficial to advancing her case. She has sought the cost of service of her claim on each defendant and her costs of issuing the claim. She also seeks payment for the attendance of each of her witnesses, each of which gave opinion evidence which the court found to be relevant and both of which assisted the Court in coming to its conclusions. None of these costs are unreasonable.

I note, however, that she has also included a request for payment of an invoice from a plumbing company which did some work on her bathtub faucet and additional invoices for the cost of purchasing bathroom tiles. These are not costs, but rather a portion of her claim for damages which was not advanced at trial. They are not a disbursement which she incurred in advancing her claim and are not appropriate item to be considered or added into an award of costs.

Of the $1,392.61 that she seeks in costs I deduct the plumbing expense in the sum of $59.85 and tiles, in the sum of $294.78 and award her the sum of $1,037.98. [ 38 ] In total I award Mona Hill the sum of $11,356.99, comprising $10,212.17 in damages, prejudgment interest in the sum of $106.84 and $1,037.98 in costs. I direct that this amount be paid immediately. P. Demong, J