Name Shuxiu Wang Claimant Name Taylor Flooring Limited Defendant Editorial Notice: Addresses v. phone numbers have been removed from this electronic version of the judgment., 2016 NSSM 40

IN THE SMALL CLAIMS COURT OF NOVA SCOTIA Cite as: Wang v. Taylor Flooring Ltd., 2016 NSSM 40 Claim No: SCCH 449800 BETWEEN: Name Shuxiu Wang Claimant Name Taylor Flooring Limited Defendant Editorial Notice: Addresses and phone numbers have been removed from this electronic version of the judgment. Revised Decision : The second clam number has been removed. This decision replaces the previously released decision.

Date of Hearing : May 19, 2016 Date of Decision : July 21, 2016 Shuxiu Wang appeared on her own behalf; Larry Woodland, Donald Behie and Maureen Donovan appeared for the Defendant, Taylor Flooring Limited; DECISION On June 19, 2014, the Claimant, Shuxiu Wang, purchased hardwood flooring from the Defendant, Taylor Flooring Limited. The type that she purchased was not available so she agreed to a substitution believing it to be the same or similar grade. About a year after she purchased the flooring and had it installed, she discovered it was a lesser type of flooring than was contracted.

She now seeks a full refund plus the cost to remove it. The Defendant, who supplied the flooring and installed it, concedes that it is the wrong type, and essentially admits liability. They submit that the damages should be the difference in price between the lesser grade and the one which the Claimant and her husband thought they had purchased. Before reviewing the evidence, it is important to note that notwithstanding the Defendant’s admission, the evidence is overwhelming in establishing Taylor Flooring’s liability to the Claimant, Ms. Wang.

Several grounds have been proven, including negligent misrepresentation and there is even strong evidence of fraudulent misrepresentation. However, I need not find liability on either of these grounds. As noted, I have found Taylor Flooring liable for breach of contract and specifically, breach of the condition that the hardwood flooring does not correspond with the description stipulated in the contract. Issues On what specific legal ground is Taylor Flooring liable? What is the proper level of compensation payable to the Claimant? The Evidence Both parties were self-represented in this matter. Ms.

Wang was joined by her husband, Chuntang Liu, and their son, Stephen Liu. The Defendant, Taylor Flooring Limited (“Taylor Flooring”), was represented by three employees, Larry Woodland, Donald Behie and Maureen Donovan. Mr. Behie and Ms. Donovan gave evidence. Mr. Woodland, who is a vice-president with that company, conducted the advocacy and did not testify. I shall begin by reviewing the facts which are not in dispute and fully corroborated.

Sometime prior to June 19, 2014, Shuxiu Wang attended to the Taylor Flooring location in Clayton Park regarding the purchase and installation of hardwood floors for her new home at 56 Trailwood Place, Halifax. The property closing had not yet taken place and they had given notice to vacate their apartment by the end of June. Ms. Wang and Mr. Liu planned to have the flooring installed prior to moving in. She spoke with Donald Behie by phone and in person. She and her husband attended to the store on at least one occasion and reviewed several samples.

The couple decided on 3 ¼” Natural Red Oak hardwood flooring manufactured by River’s Bend. The grade they chose was “Select Better”. This type was not available. She and her husband were advised that “Select” grade Natural Red Oak was on sale for $5.29 per square foot (down from $5.88 per square foot), but there were no samples in the store. They were advised by Donald Bahie that the difference between “Select Better” and “Select” was the amount of color variations within the various boards. They paid their deposit on June 19, 2014 and the balance on June 24.

The hardwood floor was installed on June 24, 2014, and there is varied evidence as to whether the Claimant and her husband were satisfied with the floors at that time. When the boards arrived, Ms. Wang and her husband noted significant dark coloration on several boards and asked that those particular boards either be left out of the installation or installed in the closet. In July 2015, Ms. Wang contacted Taylor Flooring as she became concerned over the number of pith and wormholes she was discovering.

Maureen Donovan attended their home to view the wormholes and during this process discovered and commented to Ms. Wang and Mr. Liu that it was a different grade of flooring than was identified in Taylor Flooring’s records. She confirmed this was “Cottage Grade”. Ms. Wang and Mr. Liu contacted the manufacturer, Quick Style Industries (a Montreal based company, rather than the Nova Scotia company, Rivers Bend) and provided the representative on the phone with the lot number from the box (which was provided in evidence). The representative advised Mr.

Liu that the flooring was indeed “Cottage Grade”, rather than “Select” or “Mixed”. As a result, she and her husband demanded the floors be replaced. Taylor Flooring refused. The evidence in this respect is unrefuted. It is clear the parties contracted for either “Select” or “Mixed” grade hardwood flooring and they received the lower valued flooring, “Cottage Grade”. The parties tendered into evidence the grading chart provided by the manufacturer of the hardwood floor, Quick Style Industries.

Unfortunately, they did not provide a breakdown of the grading chart for River’s Bend, which would have provided a more exact difference. While this example is not directly relevant, it is one example of grading which influences the cost of the flooring. Hardwood flooring is graded based on the presence or absence of certain features within the wood. This affects its aesthetics and appearance. There is nothing in evidence to suggest grading has anything to do with quality. I find grading is not relevant to the flooring’s durability or fitness.

The charts show six different grades of hardwood flooring, from “Rustic” to “Select & Better”. The range is dependent upon the appearance of the board and if the box contains a certain type of board or a mix. The appearance of the wood is affected by the presence or absence of colour variation, defects, knots, colour streaks or worm holes. Board length is also a factor presumably because longer boards result in fewer seams where one board joins the other. The boards that are more consistent and uniform are chosen for the higher grades.

In support of this conclusion, I cite the following from the Taylor Flooring Installation Agreement , tendered into evidence. Paragraph 9 states:

“Hardwood flooring is manufactured from many different trees and many different sections of the tree; this will have an effect on colour and appearance. The samples in the showroom are only a small portion of what you should expect from new hardwood floor. (T)here will be grade and colour changes from board to board.

Your hardwood floor has gone through an intense grading process to discard any substandard material, based on the grade of wood you have chosen. ” The grades which are relevant to this matter are described in the chart as follows: Select or Select and Better is described as having no color variation or major defects, a minimum board length of 14 inches, occasional knots of less than or equal to 1/16” of an inch in diameter and no color streaks, pith or wormholes. Mixed grade is a combination of 60% “Select” grade and 40% “Natural” grade flooring.

It is described as “moderately permissive” on color variation, a minimum board length of 12”, larger knots that are filled; brown and black mineral streaks and no pith or wormholes. “Natural” grade flooring is graded lower than mixed and higher than cottage grade. Cottage grade is a mix of “rustic” to “select” grade boards, “moderately permissive” with defects; all color variations; a minimum board length of 10” with knots of 3/4” which are filled with putty; wood splits; brown and black mineral colors streaks and pith and wormholes described as “accepted”. The chart is intended to be promotional literature.

Thus, I interpret reference to “permissive” and “accepted” to mean they are a significant feature of the particular grade of flooring. Similarly, their absence is noted as well. While none of the witnesses testified to this, I am prepared to find preference in grading is very subjective. Some buyers prefer their flooring to have a solid, uniform appearance, while others prefer a more varied or rustic look. This may depend (or not) on where the flooring is installed, such as in a house or a cottage. I also noted a lack of consistency with the descriptions and standards of each available grade.

The term “natural” is used interchangeably to describe the colour or shade of the red oak flooring as well as a grade. Both parties freely described the wood colour as natural red oak. More importantly, none of them made any reference to a purchase or sale of natural grade flooring. Shuxiu Wang testified that in her discussions with Donald Bahie, she was advised that the “Select” grade was more popular for one's home than lower grades. She was advised by him to order this grade when the “Select and Better” grade was not available.

She says she relied on his advice and representations at all times throughout the process. Chuntang Liu testified that he believed there were too many dark brown boards and putty filled dark knots in the wood from the moment it was installed. He was assured by Behie once the flooring was installed that the wood looked as it should. He tendered into evidence an e-mail from Mr. Bahie to that effect. He testified that he knew nothing about hardwood flooring prior to this order. Mr. Liu continued to have concerns over his flooring. In June 2015, he contacted Mr.

Bahie to re-examine the wood as he was concerned about wormholes and what they were. Maureen Donovan attended to his home on June 12, 2015 and, during this visit, identified the flooring as “Cottage Grade”, rather than “Mixed” or “Select”. He referred to the chart in evidence. He also tendered photographs of the boards which were installed, some of the holes and confirmation that certain boards are 10” in length. He was offered $350 or the option to replace a few boards which he declined. He had asked them to remove the lesser grade flooring and replace it with the type which he ordered.

He was advised that was not possible. He contacted Quick Style Industries in Montreal and provided the serial number off the package containing the hardwood flooring, and they confirmed for him that it was “Cottage Grade” flooring. Both Ms. Wang and Mr. Liu testified that they paid for the flooring shortly after it was finished. However, had they known the wrong type of flooring was being used, they would have stopped the installation. Donald Bahie is a retail sales associate with Taylor Flooring. He has worked for the company for 27 years.

During his time there, he has worked on various projects of differing size, complexity and value. Mr. Bahie met the Claimant and her husband when they attended to Taylor Flooring's location to view different samples of flooring. They selected a 3¼” Red Oak Select grade manufactured by River’s Bend. Mr. Bahie attended to the Claimant's home to measure the area to provide a quote. After they were finished their measurements, Taylor Flooring provided a quote to Ms. Wang and Mr. Liu which they accepted. They did not provide a deposit at that time. When they were ready to pay, the stock was no longer available. Mr.

Behie searched the inventory of Taylor Flooring and found flooring similar in cost and color as the Rivers Bend brand, located in their Bridgewater store. He testified that he believed the wood which he selected was the same or similar grade. Consequently, he ordered the material. He used the price as the means by which to determine its grade. He describes color variations as being very common in orders of hardwood flooring. It is common to order a little extra to allow for waste. He testified that he genuinely believed that he was ordering a comparable quality hardwood flooring.

The hardwood flooring was installed and payment was made promptly and on time. He recalls receiving a complaint from the Claimant and her husband in 2015. There was reference to holes being found in the boards and he thought this a service issue. He referred the complaint to Maureen Donovan. Under cross examination, he acknowledged that he could have ordered more River’s Bend flooring, but there was not sufficient time based on the expectations of the clients, that is to have the materials installed by the end of June. Maureen Donovan is the after sales service manager at Taylor Flooring.

She has been in the flooring industry for 24 years. During that time, she owned her own store and was a manufacturer's representative for both Shaw and Mohawk. She was referred to Mr. Liu by Mr. Behie. She visited Mr. Liu and Ms. Wang’s home to review concerns regarding wormholes and possible splits in the boards. The meeting results were tendered into evidence. Mr. Liu was concerned of the possibility of insects being in the boards. However, she assured him there were no insects as they would have been killed and removed during manufacture. There were no significant pith holes.

There were some unfilled nail holes and a few cases of 1/8” round that had not been installed. She obtained a copy of the grading chart from the manufacturer. A review of the invoice identified the flooring as “select grade”, which she interpreted to be “mixed”. It was clear to Ms. Donovan that this was not the correct grade. She found the flooring was installed correctly, but it was “cottage grade” rather than “select” or “mixed”. She offered the Claimant $750 store credit or comparable replacement boards.

She testified that the cost to install this grade was anywhere from $0.50 to $1.00 per square foot less than the cost of a mixed or select grade. It is her position, and indeed the submission of the Defendant, that this is adequate. She believes that to bring the flooring to a “Mixed” or “Select Grade” requires only changing a few boards. The Law The Consumer Protection Act governs this transaction. The relevant provisions are as follows: Implied conditions or warranties 26

(1) In this

Section and

Section 27, “consumer sale” means a contract of sale of goods or services including an agreement of sale as well as a sale and a conditional sale of goods made in the ordinary course of business to a purchaser for his consumption or use but does not include a sale (

a) to a purchaser for resale; (

b) to a purchaser whose purchase is in the course of carry- ing on business;

(

c) to an association of individuals, a partnership or a cor- poration; or (

d) by a trustee in bankruptcy, a receiver, a liquidator or a person acting under the order of a court.

(2) In this

Section and

Section 27, “purchaser” means a person who buys or agrees to buy goods or services.

(3) Notwithstanding any agreement to the contrary, the following conditions or warranties on the part of the seller are implied in every consumer sale: (

d) where there is a contract for the sale of goods by description, there is a condition that the goods shall correspond with the description; and if the sale be by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description;” The provisions of s. 16 of the Sale of Goods Act are worded similarly to s. 26(3)(

d) of the Consumer Protection Act, except that the latter is not prefaced with the clause “Notwithstanding any agreement to the contrary...”.In any event, there is nothing in the agreement to the contrary. This is clearly a consumer sale which involves the supply of goods and services. The issue to determine is if this is a sale of goods by description. Findings A sale of goods by description is not defined in either statute. However, it has received judicial

interpretation by the courts across Canada, including Nova Scotia. A helpful

summary of the law is found in Coast HotelsLimited v. Royal Doulton Canada Limited, 2000 BCSC 857 where Martinson, J., stated the following in paragraphs 32-34: “[32] The Act does not define the word description. In the leading case of Christopher Hill Ltd. v. Ashington Piggeries Ltd., [1972] A.C. 441, the House of Lords concluded that the description goes to the identity of thegoods.

For example, Lord Diplock said: (at 503)The description by which unascertained goods are sold is, in my view, confined to those words in the contact which were intended by the parties to identify the kind of goods which were to be supplied. It is open to theparties to use a description as broad or narrow as they choose. [33] The court must construe the contracts to determine what the description was. The Alberta Court of Appeal, in Bakker v. Bowness Auto Parts Ltd. (1976), (AB CA), 68 D.L.R. (3d) 173 (Alta.C.A.)followed the Ashington Piggeries approach to the meaning of the word description.

The court in Bakker emphasized the common intention of the parties and confirmed that what the parties intended the descriptionto be is determined objectively: (at 179)In each of the appeals the dispute is as to what the seller promised to the buyer by the words which he used in the contract itself and by his conduct in the course of the negotiations which led up to the contract. What hepromised is determined by ascertaining what his words and conduct would have led the buyer reasonably to believe that he was promising.

That is what is meant in the English law of contract by the common intention ofthe parties. [34] A description does involve the use of language. However, the production of a sample during the course of the negotiations can be relevant to the common intention of the parties and contribute to the verbaldescription. The provision of a sample provides a context in which the proper meaning of the contractual description is to be ascertained: Bakker at 180.” In this case, the invoices describe the hardwood flooring as either “Natural Red Oak 3¼” Rivers Bend” or “Natural Red Oak Select”.

Based on the representations at the time of the initial quote, I find it was supposed tohave been a “Select” grade that was to be installed. Subsequently, the order was changed to “Red Oak 3¼” Select”. Each grade of flooring provides a different appearance, similar to any other feature including colour orgloss. The terms “Select Grade” have a specific meaning and appearance which goes to the heart of the contract. I find this was a sale of goods by description. The goods provided were of a different grade.

Taylor’s Agreement described the process as “an intense grading process to discard any substandard material, based on the grade of wood you have chosen.” The contract andpromotional material make it clear that the grade is a significant factor in appearance and price. The goods contracted to be supplied were Red Oak 3¼” flooring, Select Grade manufactured by Rivers Bend, a Nova Scotiacompany. The flooring supplied was Cottage Grade, manufactured by a company in Quebec. I find the goods do not correspond with the description, and the condition has been breached.

Before leaving the issue of liability, if I am wrong in this finding, then I would have had no difficulty in finding Taylor Flooring liable for misrepresentation. Donald Behie advised the Claimant that the current flooringwas of a similar type as the Select grade manufactured by Rivers Bend. It was not. This was a misrepresentation which Ms. Wang and Mr. Liu relied upon. Indeed, they relied on other representations as well, including hisstatements to the effect that the floor’s appearance was as it should be. The colour variations and knots are quite evident in the photographs. Mr.

Behie has been working with Taylor Flooring for 27 years. I do not believehim when he testified that he believed what he said when he assured Mr. Liu that it was supposed to look that way. His colleague, Ms. Donovan, recognized the problem almost immediately. To her credit, she raised it withher client and her superiors and was authorized to make an offer to settle. Mr. Behie also testified that he believed he found a comparably priced flooring of similar grade and quality in Taylor Flooring’s inventory.

According to Behie, Taylor Flooring follows the grading provided by themanufacturer without making its own independent assessment of grade. The difference in cost of solid hardwood flooring (as opposed to laminate) is based in large part on the grading of the material. This is so whetherpayable to a manufacturer, such as Quick Style, or the price for which it is sold to a consumer. It defies common sense that the Defendant, Taylor Flooring, would not have taken steps to independently assess the materialthey buy and sell and record it in their inventory.

I need not find whether it was a failure of their inventory system or the actions of Mr. Behie, which ultimately led to the misrepresentation. Notwithstanding these observations, it is not necessary for me to determine if the actions of Taylor Flooring were the result of negligent misrepresentation or if the evidence is sufficient to meet the more difficult legal testof fraudulent misrepresentation. I have found them liable for breach of the implied condition that the goods conform to the description.

Damages In assessing damages for breach of contract, the object is to put the wronged party in the same position financially that they would have been in had the contract not been breached – no more and no less. The Claimant is seeking a refund of the purchase price, $5766.56 plus the cost to remove the existing floor, $1120.00 + HST or $1288, for a total claim of $7054.56. The Defendant submits that there is little difference in the cost of purchasing and installing cottage grade hardwood flooring and mixed or select grade.

In their submission, the Claimant should only receive the differencein cost ($280.00 or $560.00). Nevertheless, they submit a total of $750.00 is proper.I reject the Defendant’s submission. As stated by the learned authors of Goldsmith on Canadian Building Contracts (Carswell, 1989) at page 4-25, and cited with approval by the New Brunswick Court of Queen’s Benchin Capital Construction and Foundations Inc. v.

Cote (1992) (NB KB), 124 N.B.R. (2d) 204:“... the proper measure is the value of the work to the owner and not the cost to the contractor.” It is settled law that when goods sold by description do not correspond with the description, the buyer has the right to reject the goods and repudiate the contract. Once again, I quote Madam Justice Martinson in Coast Hotels:

“[36] Any minor deviation from the contractual description of the goods may constitute a breach of the implied condition that the goods must correspond with the description: Arcos Limited v. E.A. Ronaasen andSon, [1933] A.C., 470, (H.L.): (at 474)…If the

article they have purchased is not in fact the

article that has been delivered, they are entitled to reject it even though it is the commercial equivalent of that which they have bought.” Furthermore, I refer to s. 32(3) of the Sale of Goods Act: “Where the seller delivers to the buyer the goods the seller contracted to sell, mixed with goods of a different description not included in the contract, the buyer may accept the goods that are in accordance with the contractand reject the rest, or the buyer may reject the whole.” I believe Mr. Liu when he testified that had he known this was the wrong grade of flooring he would have stopped the whole process.

However, the goods were not only delivered to the Claimant but installed in herbedroom and hallway. Thus, rejection of the goods without a complete disruption of their household is impossible. The law provides that where rescission is not appropriate, an award of damages may be made instead. Theamount of damages is objective, namely the amount which may be reasonably contemplated by the parties as the result of the breach. I have dealt with that issue below. The second question arises in the Statement of Defense, namely: does the payment for the goods and their use for over a year amount to acceptance?

The Claimant paid her bill promptly and in full. I find that she and Mr.Liu had little experience, if any, in purchasing hardwood floor. She relied on the representations of Mr. Bahie that this was “Select” or “Mixed” grade hardwood flooring, and that its appearance was as promised. Thecouple did not become aware of the actual difference until one year later. Ms. Wang and Mr. Liu responded as soon as they knew that had received a lesser valued grade. When they realized the difference, they contactedTaylor Flooring and attempted to negotiate a solution, a process which took place over the course of 8 or 10 months.

When it was clear that would not be successful, they complained to the Better Business Bureau and theycommenced this claim. They hardly sat on their rights. Their actions were reasonable and cannot be interpreted as acquiescence. Mitigation The Defendant also raises the issue of mitigation, specifically where the hardwood flooring has yet to be replaced. The principles governing mitigation have received consideration by both the Supreme Court of Canadaand the Nova Scotia Court of Appeal.

Our Court of Appeal summarized the principles in Keybase Financial Group Inc. v Andrews et al., 2015 NSCA 9, where Justice Fichaud stated the following: “[11] Justice Wright (para 175) applied the Supreme Court of Canada’s test for mitigation from Southcott Estates Inc. v.

Toronto Catholic District School Board, 2012 SCC 51 , [2012] 2 S.C.R. 675, paras 23-25, i.e.: (1) “a plaintiff will not be able to recover for those losses which he could have avoided by taking reasonable steps”, (2) the “burden of proof is on the defendant, who needs to prove both that the plaintiff failed tomake reasonable efforts to mitigate and that mitigation was possible”, and (3) mitigation is “based on fairness and common sense, which seeks to do justice between the parties in the particular circumstances of the case”.” Once Ms. Wang and Mr.

Liu discovered the difference, they sought to work out the problem with the Defendant. Following that, they filed a complaint and commenced this action. Perhaps they could have ordered acomparable replacement flooring, had it installed and sought full recovery of that amount in their Claim. That would have certainly addressed any concerns over mitigation and been an appropriate award. In my view, it isnot necessary to go to that length. Their actions described above are reasonable in the circumstances. The Defendant submits the Claimant will simply leave the flooring intact and not replace it.

That has not been proven inevidence. In my view, the Defendant has not discharged the onus to establish a failure to mitigate. Thus, I am left to calculate an appropriate sum of damages. Calculation The calculation of damages for breach of contract is to provide for damages that would have been reasonably foreseen. Losses which are foreseen are defined by G.H.L.

Fridman, Sale of Goods in Canada (6th ed.) as: “...loss which is foreseen as likely or probable as a consequence of certain circumstances especially known by the seller is recoverable even though it is not directly and naturally a result of the breach.” The grade of hardwood flooring is a material term of a contract, due to its effect on the appearance of the floor. Thus, it is reasonably foreseeable that the job would be rejected and the flooring required to be replaced. Special Damages In a case such as this, I would typically order rescission of the contract.

However, since the floor is already installed, it would have to be removed. Ms. Wang is entitled to the cost of removal. She has tendered intoevidence a quote from Floors Plus Ltd. which provides a removal cost of $1120 + HST. I award $1288.00. The Claimant has a right to reject the goods for failure to corresponding with the description. I find it is of no value. Accordingly, I allow the total paid, $5766.56. However, I deduct $282.90 ($246.00 + HST) representing labour and materials shown in the invoice for removal of carpet and laminate. This would have been necessary in any event.

In a case where rejection of the goods is enforced and rescission ordered, the Defendant would be entitled to a return of the original goods at its expense. No evidence was provided of any value of the hardwood flooringonce it had been installed and removed. I find this amount to be negligible if it has any value at all. Rather than ordering the material returned, I provide Taylor Flooring with a credit of $100. In

summary, I have awarded damages sufficient to compensate Ms. Wang and her family for the removal of the flooring and refund them for the amount paid, with credit being given to the Defendant for the cost and workto prepare the floor for installation of hardwood floor from its previous state. In other words: Total Contract $5766.56Less: Remove carpet/laminate ($282.90)Less: Value of Flooring ($100.00)Cost of Hardwood Removal $1288.00Total Special Damages $6671.66 General Damages

I award general damages of $100. Prejudgment Interest Prejudgment interest compensates a Claimant or plaintiff, the loss of use of the money during since the period of a breach of contract (or a loss due to a tort). It need not be specifically pleaded. I find this an appropriate case to award prejudgment interest. The Defendant shall pay prejudgment interest on the contract price less any credits or $5383.66. The regulations permit 4% per annum. I allow this amount for a two year period, namely $430.69.

Costs In litigation, costs follow the event at the discretion of the court and need not be specifically pleaded. I award the Claimant her costs as follows: Filing Fee: $199.35 Cost of Service: $ 50.00 Total Costs $249.35

Summary In

summary, I find the Defendant, Taylor Flooring Limited, liable to the Claimant, Shuxiu Wang, in breach of contract for supplying goods which do not correspond with their description. They will be ordered to pay the following: Special Damages: $6671.66 General Damages: $ 100.00 Prejudgment Interest: $ 430.69 Costs: $ 249.35 Total $7451.70 An order shall issue accordingly. Dated at Halifax, NS, on July 21, 2016; ______________________________ Gregg W. Knudsen, Adjudicator Original: Court File Copy: Claimant(

s) Copy: Defendant(s)