New City Contracting Ltd. v. Super Windows Ltd., 2022 BCPC 248

Citation: New City Contracting Ltd. v. Super Windows Ltd. 2022 BCPC 248 Date: 20220620 File No: C-2168747 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Civil Division BETWEEN: NEW CITY CONTRACTING LTD. CLAIMANT AND: SUPER WINDOWS LTD. DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE A. BROWNSTONE Counsel for the Claimant: S. John Counsel for the Defendant: D.R.E. MacLean Place of Hearing: Vancouver , B.C. Dates of Hearing: March 29, 30, 31, 2022 Date of Judgment: June 20, 2022

[ 1 ] THE COURT: The claimant, New City Contracting Limited, was the general contractor on a remediation project at China Creek Housing Cooperative, which included an apartment building as Phase 1 and a townhouse complex as Phase 2. The defendant, who I will refer to at times as Super Windows and at times as Silverline given that both were used by the parties, was hired by New City as a subcontractor to perform a significant amount of work.

The scope of work included things such as demolition of vinyl siding, installation of flashings, installation of Tyvek/sidings, removal and reinstallation of doors and windows. It did not include supply of material. The total price fluctuated from time to time when change orders were issued, but it was over $200,000. [ 2 ] The work began in approximately March of 2020, and in September 2020, the defendant stopped working on the project. This action arises from that event.

The claimant alleges that the defendant walked off the job saying it would not complete the work and thereby repudiated or breached the contract by refusing to perform the balance of its work. It is suing the defendant for its costs of completing the contract, correcting deficiencies, and delay, and has reduced its claim to $35,000 to bring it within the scope of this court's monetary jurisdiction. [ 3 ] The defendant says that it was the claimant that terminated the contract without justification and, thus, it does not owe the claimant anything.

It says that any deficiencies in the defendant's work were remediable and any delays in its performance were caused by the claimant's actions in failing to provide materials in a timely way, failing to provide adequate site supervision, and failing to provide a clear schedule. It also argues that the force majeure clause applies due to the COVID pandemic and its impact on the defendant's ability to do his work. [ 4 ] The parties agree that the defendant did not work on the project after September 16, 2020. They also agree that the defendant has unpaid invoices of $42,256.04.

The defendant has counterclaimed for those unpaid invoices and an additional amount of $4,317 of un- invoiced work, and it also has reduced its counterclaim to $35,000 to bring it within the monetary jurisdiction of this court.

As noted above, the claimant acknowledges the unpaid invoices, though not the un-invoiced work, but submits that that amount is to be set off from what the defendant owes it for its claim. [ 5 ] The issues that are raised in these proceedings are as follows: 1. who terminated the contract; 2. was the termination justified; and 3. what, if any, damages flow from that? [ 6 ] First of all, who terminated the contract? [ 7 ] Throughout the term of the contract, there had been discussion and email requests from the claimant indicating it was concerned about the rate of progress of the defendant's work.

That appeared to culminate on the evening of September 8, 2020, when Mr. Mike Zhu of New City emailed Mr. Sun of the defendant. The email said, and I will read it in full: Hi, Adam, Based on our phone conversation this morning we leant [sic] that many of your employees have quit from your company and we won't be able to have more than one installer onsite until next week, the earliest. We understand that it will be difficult for you to hire more guys within such a short period but we cannot wait any longer to have those outstanding items completed at China Creek.

As I mentioned early last week, the upper courtyard, breezeway and 304 balcony are all ready to be completed. Other than that, we have the roofers start working this week as well, which means there is no roadblock for us/you to complete the siding work. We have just created the completion day of all sidings, soffit and trim work - complete by September 25th. As you were aware, this project wasn't in a good shape and we are behind the

schedule a lot. It is understandable that you have lost most of your crews onsite and we would like to give you 5 days to give us a solution on how to get this job on track. We need at least four-five workers daily to accelerate the process to meet the goal. Besides we (Hilmi) won't have extra time to train your workers onsite to get them up to speed and we would like you to pull out installers from your other sites instead of sending us with new guys. Or we will have to get another team involved to take over the leftover scope of work from your contract.

If you have any questions, we prefer to have an onsite meeting with you. We won't charge you anything for delaying the project this time, but please remember there will always be a delay penalty in construction projects. There were a few additional comments and then it ended with: Please let me know your thoughts. [ 8 ] It does not appear that there was a written response to that email from the defendant. [ 9 ] On September 14, Mr.

Zhu again wrote to the defendant saying, as per their phone conversation earlier that morning, New City would send two workers from another company to assist the defendant to meet the target. It advised that New City would pay those workers directly and subtract that from the defendant's contract amount. Mr. Zhu stated that the defendant was to ensure that there would not be any less than two Silverline workers on site every day. It concluded by saying: … let me know if you have any questions and send your confirmation email at your earliest convenience.

[ 10 ] It does not appear there was an email response. [ 11 ] Mr. Sun said that on September 15, he advised Mr. Maslovich that the workers New City sent were not much of a help. He said that Mr. Maslovich asked if he would give up the remaining contract and Mr. Sun said they were open to that. I do not believe Mr. Maslovich was asked about that conversation in cross. The next day, on September 16, two of the defendant's employees worked on the China Creek project for four hours each. One employee clocked out at 11:30 a.m. It is assumed the other did as well, and Super Windows never returned to the job.

At 11:54 on September 16, Mr. Zhu emailed the defendant saying: As you were aware, Silverline has reached out to us to terminated [sic] the contract with NCC. These invoices won't be released until we come up with a plan showing how much it will cost us to complete the rest of the work in Silverline's contract. Also, caulking removal/re-application at Apt, incident (your onsite crews cut the optical fibre cable), 8 sliding door (installation) and etc., will be taken from your original PO. [ 12 ] There are competing versions as to what led the defendant employees to cease working on September 16. According to Mr.

Maslovich of New City, he and Mr. Sun had a conversation that morning in which Mr. Maslovich asked Mr. Sun to come to the site to manage the workers and ensure the project was getting done, but Mr. Sun said he would not as he was too busy. He then had his workers walk off the job. [ 13 ] According to Mr. Sun, Mr. Maslovich told him he no longer needed Silverline to complete the contract as he needed someone committed to the project and he asked them to pack up and leave the site. Mr.

Sun said he assumed there would be a change order to descope the balance of the work. [ 14 ] There did not appear to be any further written correspondence between the parties until over a month later. On October 19, the defendant responded on the September 16 email thread saying he was following up on final costs and release of payments on hold. The email indicated the parties had spoken a week before and that New City expected to have quotes by then.

New City responded that day expressing that it had been challenging to get the right solution to take over "after you have left the project with your team." The email concluded saying they would be in touch once they reconciled the project at the end. [ 15 ] On December 2, the defendant wrote to the claimant seeking payment. Mr. Zhu responded that: Since Silverline worked [sic] away we have had extreme hard time to find new trades . . . It appears that he meant "walked away." I have left the typos in these quotes to indicate that it is evident that English is not Mr. Zhu's first language.

Some words in his emails do not appear to accurately reflect what he intended. That December 2 email also stated that the defendant's workmanship did not meet the industry standard and it had cost the claimant a lot to get it up to standard to get the engineer's approval. [ 16 ] The defendant responded saying that, back in September, he could not meet the fast timeline with his resources and COVID so he "gave up the contract" to minimize delay. He then said if he had kept his two workers on the project they would be done by then and he offered to send two siders to work on the project. Mr.

Maslovich responded on December 3 saying: You leaving the project has created some challenges to keeping our original schedule. We do not require your services on this project any longer as the remaining work has been subcontracted. Furthermore, your departure from the project has come with extra cost to complete the project and extra management time. Until the project is finished, we will not know the total impact. [ 17 ] On December 24, Mr. Sun emailed New City again. He said it seemed that the project was delayed by a month for roof replacement and that is why it was still ongoing.

He again requested payment of at least a portion of what was owing, saying he thought the claimant would have an estimate by then. In response, Mr. Maslovich said: Adam, you abandoned the site and left the project in limbo. There is no balance as I have explained to you in my last correspondence. Happy to review the numbers with you in the New Year. [ 18 ] All of the correspondence from New City to Silverline referred to Silverline having walked off the job and abandoned it.

Silverline corresponded with the claimant seeking payment of its outstanding invoices and each time, starting with the correspondence on September 16, the day Silverline's work on the project ended, the claimant variously stated that the defendant terminated, abandoned, or left the project in limbo, or walked away from the job. In the email correspondence, Silverline never disputed that. It never asked for a change order to descope the work. On December 2, Mr.

Sun said they gave up the contract to minimize delay. [ 19 ] Given the corroboration of those emails, I prefer the evidence of the claimant and find that the defendant terminated the contract by walking off of the project, leaving it unfinished, and evidencing that it did not intend to complete the work. [ 20 ] The defendant argues that the claimant had formed an intention to terminate them even before the September date.

The defendant pointed to a project performance report dated August the 13th, 2020, which stated that the project was in bad shape, and they should look at getting other contractors to finish the job as they were behind schedule. Mr. Maslovich testified that they were considering options to get the job done, but their first choice was to continue working with the defendant. That is why they sent the email of September 8 offering to help them get other workers. [ 21 ] I accept that, while New City was considering all of its options, the evidence does not indicate that the claimant terminated the

contract. I find the defendant terminated the contract by walking off the job and not returning. Its conduct showed no intention to returnto complete its work other than its suggestion that it could send two people to the project some two-and-a-half months after abandoningthe project. [22] The second question is, did the claimant's actions justify the defendant walking off the job? [23] As stated in Boone v. R., (SCC), [1934] S.C.R. 457, quoting from Roberts v.

Bury Improvement Commissioners(1870), L.R. 5 C.P. 310: . . . it is a principle very well established at common law that no person can take advantage of the non-fulfilment of a condition theperformance of which has been hindered by [it]self. [24] The defendant says it was unable to complete the contract due to the conduct of the claimant that hindered its performance. Itsubmits that the deadline of September 25 as stated in the September 8 email was unachievable and unreasonable. Further, that it wasimpossible for it to complete its work until the roofing work on Phase 2, the townhouse complex, was complete.

It submits that delays onthe project were caused by the claimant's actions in failing to provide materials in a timely way, failing to provide adequate sitesupervision, and failing to provide a clear schedule. It further states that COVID impacted its ability to do the work and, thus, the forcemajeure clause in the contract applies. [25] The claimant denies that the September 25 deadline was unreasonable, stating it did not apply to all of the outstanding work, andstates that its conduct did not cause the delay or cause the defendant to walk off the job.

It also submits that any issues with schedules,material, and site supervision and COVID did not account for the delay or justify the defendant's abandonment of the contract. Rather, itsays the defendant always under-resourced the job. [26] First, turning to materials, the claimant acknowledged that there was occasionally some delay in obtaining materials due tosupply chain issues. According to New City, there was a short delay due to the HardieTrim arriving late and about a two-week delay dueto the wrong doors being ordered.

The claimant maintains that, during those periods, there was other work that the defendant could havebeen doing while waiting for the HardieTrim. For instance, it stated that the HardiePanel could be installed before the trim arrived. It didacknowledge that delay in receiving the trim did cause some delay to the project and submits it has taken that into account in assessingits claim. [27] Mr. Sun testified for the defendant, stating that when the trim had not arrived, he had to find other work to keep the workersbusy.

He said having to wait for the trim to arrive disrupted its workflow and led to it reallocating manpower, as some days there wasonly enough work to keep a few people busy. That was Mr. Sun's standard answer to many of the concerns raised. The defendant did notrefer to its timesheets or provide details about reallocation of workers.

Looking at the timesheets, which I discuss further below, it isdifficult to see any evidence as to when the alleged reallocations occurred such that it could be said to correspond with delay in materialarriving. [28] There was also an acknowledged delay caused by the claimant ordering the wrong doors. Mr. Declercq testified for the claimantsaying that that caused a two-week delay. That was also noted in the project performance report dated May 19, 2020.

In July 2020, therewas a change order to remove swing doors from the defendant's contract because they were unable to provide the manpower to carry outthe work as scheduled. It is not clear whether those were the same doors that had been delayed earlier or whether the earlier doors weresliding doors. [29] In any event, the defendant again said that that led to a delay in its work and a reallocation of manpower, but it did not point toany period in its timesheets that indicate it reallocated manpower because of that delay.

The defendant's frustration with material supplyissues and attempts to resolve some of it was evident when in May 2020 the defendant tried to order flashing material on its own, but theclaimant asked it not to. [30] Thus, I do accept that there was delay in providing some materials and that that caused some delay in the defendant doing itswork.

It appears that those delays occurred fairly early on in the project, and by the end of July when the doors were removed from thedefendant's scope, and the HardieTrim -- or the doors issue was resolved, and the HardieTrim issue appears to have been resolved in thespring of 2020. Thus, although the delay of procuring materials caused some delay to the defendant prior to July 2020, I cannot find thatit was the cause of the defendant's delay in meeting the ultimate date imposed by the claimant.

I will discuss that scheduling issue lateron. [31] Another issue raised by the defendant was failure to provide adequate site supervision. A project performance report dated July14, 2020, indicated that New City had assigned Mr. Zhu to the project to help the two individuals who had been in charge and to get theproject organized. On July 17, one of those individuals was terminated from his employment. According to the claimant's witnesses, thatemployee had been struggling with personal problems. It is clear from some other emails that he was not meeting expectations of hisemployer.

An undated WeChat message from Mr. Zhu to Mr. Sun stated that he knew the job had not been managed well. He also saidthey were removing the installation of doors from the defendant's scope so that it could be done in a timely fashion. [32] The defendant submits that the poor site supervision caused delay in procurement of material. In addition to the material issuesdiscussed above, the defendant points to the late ordering of doorframes by the employee who was ultimately terminated.

He said that,overall, the lack of communication about timing impacted his ability to resource the job. [33] Again, I acknowledge that there were delays with procurement of material prior to July and Mr. Sun was frustrated with the sitesupervision. However, that all appeared to be rectified in mid-July. Although Mr.

Sun repeatedly said the claimant's conduct caused itswork to be delayed and caused it to reallocate its workers, I reiterate that the time records do not support that testimony. [34] The defendant further submits that, had there been proper site supervision, defects in the defendant's work would have beennoticed and therefore repaired by the defendant sooner. I do not accept the argument that the claimant is somehow at fault for notpointing out deficiencies. It is true that the site supervisors were supposed to manage the subtrades' work to ensure it was acceptable, but

the defendant had an obligation to perform its work in a good and workmanlike manner. [ 35 ] Starting as early as April 2020 there were emails from New City to the defendant pointing out some deficiencies. Some examples of those communications are as follows. On April 13, the claimant emailed the defendant saying: This is totally unacceptable caulking application. Get somebody there who can do this properly.

We have already discussed this as being an issue earlier on. [ 36 ] On April 21, the claimant indicated it was not satisfied with the quality of workmanship of sealant and suggested that an experienced person do that. On May 26, the claimant advised the defendant that the third party warranty company identified several deficiencies in the defendant's work. It expressed concern that the poor workmanship was "making us look like a bunch of amateurs with the consultant." Notes of a meeting on May 28 refer to problems with the defendant's work indicating that that had been communicated to the defendant before.

A June 2 performance report says New City met with Silverline and reiterated what needed to be done to correct panel finishing. Ultimately, on June 19, 2020, a change order removed caulking from the defendant's work. [ 37 ] The defendant suggested at trial that some of the concerns with caulking were caused by a design change requiring it to use polyurethane caulking instead of latex caulking. Despite the number of emails complaining about the caulking work, the defendant did not indicate in its responses that it was concerned there had been a change to the specifications and that that was causing problems.

The tender drawings submitted indicate both types of finish were to be used. At trial, the defendant's suggestion that there had been a change in design which impacted its work was not put to the claimant's witnesses which limited the reliance I can place on the defendant's evidence on that point. I do not find that there was a design change that impacted the defendant's work. [ 38 ] In conclusion, it is clear that New City felt the need to replace the site supervisor.

However, I am not satisfied that it has been established that issues with the site supervisor impacted the defendant's ability to do its work in a timely manner by September 2020, nor did it cause the deficiencies in the defendant's work. [ 39 ] I turn next to the issue of failing to provide a schedule. The defendant submits it did not receive a clear

schedule for the project and it did not receive updated schedules. It said that the September 8 email gave it an unreasonably short period of time in which to complete its work. The claimant's position is that it had been frustrated with the defendant's lack of progress throughout the project, that this was an ongoing discussion, and that the September 25 deadline applied only to Phase 1 of the project and was achievable if the job were properly resourced with manpower from the defendant. [ 40 ] A project

schedule was provided to the defendant on March 10 and April 21, 2020. The

schedule indicated that the defendant's work was to be finished in August of 2020. The April email attaching the

schedule said: As discussed with you before on several occasions, we are expecting you to have a minimum of six to eight workers on site daily installing your contract work and more may be needed to meet the project schedule. Please see a copy of the project

schedule and call me with any questions you may have. If you cannot achieve these timelines, we will have to bring people in who can make it happen and changes to your contract will be mandatory. Your exterior work is safe and your crew can maintain social distancing while they work using reasonable safety procedures. Shane told me today that you only planned to have two people on site for the rest of this week and only four next week. Is that really what you told him and, if so, please explain why you would say that?

We appreciate your work to date and we want to work with you as a team towards a successful project. [ 41 ] The defendant responded the following day saying it would discuss the

schedule with the claimant, but not the number of installers as it had to allocate its workers among all its projects. It advised that it would add additional workers now that the required material was available and would finish Phase 1 of the project in 10 weeks with an additional week for deficiencies. Ten weeks from that date was July 1. In that email, the defendant referred to the delay regarding material and also said: I will add more installers, and work overtime according to our progress. [ 42 ] The records do not indicate that more workers were added following that email.

This was not the first or the last time that the claimant had told the defendant it was dissatisfied with the lack of manpower the defendant was providing to the project as it was impacting their schedule. The first email about that was on March 10, 2020, in which the claimant advised it was expecting six to 10 crew on site daily.

A follow-up email on March 19 asked for reasonable revised completion dates, but also indicated it was unacceptable having only two to three people on site. [ 43 ] On several occasions commencing March 12, 2020, items were removed from the defendant's scope of work as the defendant was having difficulty completing the work in a timely and/or workmanlike fashion. Each time a change order was issued, and the parties agreed on a reduction of contract price that corresponded with the work removed. [ 44 ] The defendant noted that the date of substantial completion on those change orders was blank.

However, as noted on the change order, there was no change to the completion date which made sense given that the scope of work was reduced and not increased. The only exception to that was on April 7, 2020, when a change order increased the scope of work to add installation of 37 swing doors. It did not contain a change of completion date, either. [ 45 ] Timesheets indicated that, despite repeated requests from the claimant, the number of workers on site was lower than the claimant felt was needed to do the work in a timely fashion.

There was one week in June, plus two other days, that the records show there were entries indicating six people on site. On 11 days throughout the project, there were entries indicating five people. Otherwise, the entries recorded one to four workers on site. That is the maximum number of workers that were ever on site. Although the records show some days with five or six people, that may not be accurate.

As acknowledged by the defendant, the records do not necessarily capture the number of workers on site each day as one worker might have two entries if a worker left the site and then returned to it later that day. [ 46 ] The defendant asserted that the failure of the claimant to issue a

schedule contributed to its delay and that the defendant could not have known it was falling behind giving the lack of a clear schedule. However, the evidence is that concerns about delay and timing

were frequently communicated to the defendant. The defendant was not meeting its targets throughout the project leading to reductions in the scope of its work. On May 4, 2020, the townhouse demolition was removed from the scope of work. On June 19, caulking was removed from the scope of work. On July 28, removal of doors was removed from the scope. The claimant also hired someone else to install the Hardie fascia. [ 47 ] The removal of work from the defendant's scope was to assist it in meeting the project schedule.

Emails from the claimant to the defendant often asserted the need to complete the project in a more timely manner. The final correspondence was the email of September 8 reproduced above. [ 48 ] The defendant, as I said, submits that the timeline was wholly unreasonable and amounted to an unjustified termination by the claimant as the work could not possibly be done in that time. It points out that the project was not finally completed by others for several months after that September 25 date which indicates that the work could not have been done in 16 days.

The claimant submits that the delay in completing after the defendant left the job was caused in large part because of the disruption of having to hire new contractors, stating that new contractors are often difficult to retain midway through a job. [ 49 ] As well, the parties disagreed about the

interpretation of the September 8 email and the deadline date. The defendant testified it understood the September 25 date was for completion of the entirety of its work. The claimant testified that that date was for Phase 1 only and noted that the email referred to work to be done on the upper courtyard, breezeway, and 304 balcony.

I do note the email also stated completion day of all siding, soffit, and trim work and referred to the roofing, but it is not clear whether that referred to the apartment building only or if it included the townhouses. [ 50 ] There was no evidence as to whether there were conversations between the parties to clarify the expectation. There was just the further email from the claimant to the defendant confirming that additional workers would be supplied by the claimant.

Even if there was a lack of clarity as to what work was expected to be completed by September 25, the email setting out that deadline indicates that the claimant wanted to work with the defendant to find ways to get the project moving. [ 51 ] There was a phone call referenced that occurred on September 14. Emails showed that the claimant offered to provide and pay for additional workers. There is no evidence of the defendant suggesting any solutions or a refined timeline or seeking to clarify what work was to be met by the timeline.

So, again, throughout the correspondence beginning in March and continuing throughout, the claimant urged the defendant to properly resource the job to keep it on schedule. The defendant did not change the number of workers other than on the few days referred to above. [ 52 ] I find that the claimant did not cause the defendant to terminate by unreasonably imposing a

schedule on September 8. Rather, throughout the project, the defendant was not meeting timeline expectations and, despite repeated requests to add workers to the job, it rarely did. The claimant acknowledged some delay earlier in the project was due to material procurement issues. The final imposition of a deadline of September 25 was consistent with the claimant urging the defendant throughout the project to resource the job and get it done.

There is no evidence of any counter proposal from the defendant. [ 53 ] Thus, I do not find that the claimant caused delay or hindered the defendant's work by failing to provide schedules. Rather, the claimant has established that the delay was primarily caused by the lack of manpower supplied by the defendant, an ongoing issue throughout the project that the claimant tried to resolve by working with the defendant and descoping some of the work. Even when the defendant said it would add more workers in April, it did not.

Even after the September 8 email, the defendant continued to send only one to two workers to the project. [ 54 ] The defendant said it had already reallocated its workers due to delays in the roofing work. Yet the records indicate there were only two people working the week prior to the email and one to two workers the week after the email. It is not clear when those people were supposedly reallocated or why they could not be called back to this project.

I do not find that the claimant acted unreasonably in imposing a deadline or that the claimant's conduct justified the defendant abandoning the contract work. [ 55 ] In terms of COVID, on March 18, 2020, the Province declared a public health state of emergency due to the COVID pandemic.

That day, the defendant advised the claimant that it had told its employees to stay home if they felt sick, and thus there was a lack of manpower which impacted the ability to meet deadlines. [ 56 ] New City responded asking the defendant to provide reasonable revised dates and, again, indicated that having two to three crew members on site was unacceptable. New City offered to add manpower if the defendant was unable to meet demands.

The email acknowledged the pandemic, but said it was not enough to simply say that the defendant could not meet projections as there was plenty of work to do on the outside of the building and there was no government-ordered lockdown on construction work. The email acknowledged that if there was such a lockdown delays would apply. New City implemented safety protocols that provided no more than two people could enter a suite at any time and that those entering suites must wear full protective equipment. [ 57 ] The defendant testified that due to that protocol workers were slowed down.

However, there was no evidence as to how often workers were required to go into suites or how much the safety protocols slowed them down. The defendant further submitted that COVID impacted its ability to retain or hire workers. There was no evidence to indicate if or how often workers called in sick due to COVID, and nothing to show that people were quitting or not applying for jobs due to COVID. There was no evidence that, prior to COVID, the employer had more employees at its disposal. The defendant's timesheets indicate it had other employees who were working on different projects.

Allocation of employees is a business decision that the defendant made. [ 58 ] Clause 9 of the contract states [as read in]: Should the subcontractor be delayed in the prosecution or completion of the work by the act, neglect, or default of New City or the project owner or general contractor or by acts of God or in the event of a lockout by New City, then the time fixed in the

schedule for the completion of the work shall be extended by the number of days that the subcontractor has been delayed, but no allowance or extension shall be made unless a claim for an extension is presented in writing to New City within three days of the commencement of such delay and under no circumstances shall the time of completion be extended to a date which will prevent New City from completing the entire

project within the time allocated. [59] No such notice was given by the subcontractor, there was no quantification of delay that allegedly was caused by COVID, andthus I find that the defendant has not established the application of the force majeure clause. [60] I turn to the final question of damages. I have found that the defendant breached the contract by walking off the job andindicating it would not complete the work, and I have further found that the defendant was not justified in doing so.

The defendantsubmits that the claimant did not properly comply with Clause 7 or 21 of the contract which deal, respectively, with notice of terminationby New City and written notice of termination by either party if a material breach is not cured, but I have found that the defendantwalked off the job without justification and those contractual clauses are not applicable on these facts. [61] At common law, the measure of damages for breach of contract is that the claimant is entitled to be put into the position it wouldhave been in had the contract been completed.

The claimant testified it was left in a bind when the defendant walked off the job and thatfinding replacement subcontractors who could take over another company's work and complete the job in a reasonable period of timewas difficult and required that a premium be paid. [62] The claimant's evidence was that it cost them over $93,990 including GST for replacement contractors to install Tyvek paper,strapping, soffit, vinyl siding, Hardie Board, and flashing.

Though the amount paid to the replacement contractors may seem excessivegiven that only $33,362 was left on the defendant's contract, the witnesses for the claimant testified that a premium had to be paid. Theamount was not seriously challenged in cross-examination, and I am satisfied it has been proved. [63] The claimant also testified it cost them $14,326 to correct deficiencies in the caulking work done by the defendant. Receipts weresubmitted for that work. Though the defendant argues that the deficiencies were not proved, I am satisfied that they were.

There werecomplaints throughout the course of the project about the caulking deficiencies that correspond with the invoices from Victor Caulkingto repair them. [64] Mr. Maslovich testified it took them 30 days to get new subcontractors on site and attributes that delay to the defendant's walkingoff the job when their contract was unfinished. The claimant calculated its delay costs at $12,500 if a two-week delay is attributed to thedefendant and $25,000 if a four-week delay is attributed to Super Windows.

That includes personnel costs and additional rental time forscaffolding, a temporary fence, and a portable toilet. I will address the delay claim below. From those amounts, the claimant subtractsthe $33,362.97 it would have paid the defendant to complete the work and the $42,258.04 of unpaid invoices.

The claimant thuscalculates the balance owing at $45,195.15 if it uses costs for a two-week delay or $57,694.37 if attributing four weeks of delay cost tothe defendant. [65] The defendant submits that, first, un-invoiced work of $4,317 should be credited to it; secondly, that the claimant waived delaycosts; thirdly, the claimant is estopped from claiming costs to complete because it did not issue a change order; and fourthly, that NewCity has not proved its delay costs with an expert report. [66] Turning to the question of whether the un-invoiced claim of $4,317 should be credited, Mr.

Sun testified that that amount isowing, but un-invoiced for the work that the company did from September 1 to 16, 2020. He said he arrived at that amount based on thesquare footage for flashing. There were no measurements or further details provided. Throughout the correspondence between the partiesafter the defendant stopped working, the defendant did not mention that amount or ever submit an invoice. [67] Though generally the doctrine of quantum meruit can apply to ensure that one party is not enriched by the other party's unpaidwork, the work performed and the value of that work need to be proved. Though Mr.

Sun said the figure was based on lineal feet andsquare footage of the material, he did not know what the number of feet was or the rate that was charged and, thus, I do not find that thathad been proved by the defendant. [68] Turning to the question of waiver, the defendant submits that the claimant explicitly waived any costs for delay in its September8 email or, alternatively, the claimant is estopped by convention from claiming damages as, in the past, it always descoped the work withthe defendant's agreement and a certain amount attributed to it. [69] The parties agree that the caselaw establishes that in order for there to be a waiver, the waiving party must have full knowledgeof their rights and the unequivocal and conscious intention to abandon the rights.

In Saskatchewan River Bungalows Limited v. MaritimeLife Assurance Company, (SCC), [1994] 2 S.C.R. 490, the court discussed both waiver and promissory estoppel sayingthat the principle that underlies those concepts is that a party should not be allowed to go back on a choice when it would be unfair to theother party to do so. [70] The defendant submits, first, that the claimant waived its right to claim delay costs in the email from Mr.

Zhu on September 8,2020, that said: We won't charge you anything for delaying the project this time, but please remember there will always be a delay penalty inconstruction projects. [71] Mr. Maslovich testified that, based on discussions he had had with Mr. Zhu, he understood that to mean the claimant would notcharge for delaying the project at this time assuming the defendant completed the work in a timely fashion. He pointed out that Mr. Zhuhas English as a second language and, as I noted above, the email correspondence shows other typos and grammatical errors in his email,and it also shows that he and Mr.

Sun frequently communicated on WeChat in a Chinese language. [72] Counsel for the claimant points out that the language cannot be said to be clear and unequivocal as the first part of the sentencesays, "We won't charge for delaying this time," but then the email goes on to say, "There will always be a delay penalty." That emailwas a longer email that was requesting that the defendant provide a solution for accelerating the work.

The claimant submits that it wasan attempt to incentivize the defendant to do the work and cannot be read as an unequivocal intention to waive its right to claim damagesfor delay in the event that the defendant did not come up with a satisfactory proposal.

[ 73 ] I agree that it is not a clear and unequivocal intention as evidenced in that email. It cannot be said that Mr. Zhu had full knowledge of what he was said to be waiving or the authority to do so, nor was the email clear on its face given the contradictory statements about delay. [ 74 ] I also note that there is no evidence that the defendant relied on the statement as written to its detriment such that it would be unfair to the defendant to find no waiver. There was no evidence that the defendant relied on that statement when it chose to abandon the project. Mr.

Sun said he thought there would be no charge and his company continued on with its work on the project. He did not testify that he did or did not do anything as a result of believing there would be no delay costs. He maintains that he did not walk off the job so he cannot be said to have decided to walk off believing that there would be no delay charges. [ 75 ] In the correspondence following September 16 when Super Windows contacted the claimant for payment, the claimant repeatedly stated it could not pay until it calculated all its associated costs.

The defendant never protested saying it thought there would be no delay costs. Rather, it appeared to accept that, asking at most if some of the payment could be made and, thus, I do not find that there was unequivocal delay charges. [ 76 ] Alternatively, the defendant submits that the claimant is estopped from claiming costs to complete because it did not issue a change order. The defendant says the parties had a shared assumption that, if work was being descoped, there would be a change order removing it and indicating the dollar amount of the reduction to the contract price. In Ryan v.

Moore , 2005 SCC 38 , before finding there was no estoppel by convention in that case, the court discussed when that principle arises. At paragraph 59, it said the three factors are: where the parties' dealings are based on a shared assumption of fact or law; a party has acted in reliance on the shared assumption resulting in a change of its legal position; and it is unjust or unfair to allow one of the parties to resile or depart from the common assumption.

In paragraph 61 of that case, the Supreme Court of Canada stated that: The crucial requirement for estoppel by convention . . . is that at the material time both parties must be of “a like mind” . . . [ 77 ] I cannot find on the evidence that there was a shared assumption that a change order would be issued in these circumstances. It is true that, prior to September 2020, each time work was removed from the defendant's scope a change order was issued, but this was not such a case. In this case, I have found that the defendant walked off the job, not that the claimant agreed to descope the defendant's work.

The defendant did not ask for a change order to be issued at any point and there was nothing in the evidence to indicate that the defendant changed its position based on that assumption. All of the correspondence from the claimant to the defendant indicated there would be an adjustment based on the cost to complete and delay. [ 78 ] The defendant never indicated it had assumed something different and it cannot be said there was a shared assumption.

The September 8 email from the claimant said if no solution was forthcoming, "We will have to get another team involved to take over the leftover scope of work in your contract." That was stated as a possible consequence, but it cannot be said that it formed the basis for a shared assumption. The parties continued to work together after that and, again, there was no evidence that the defendant altered its position thinking that there would be a change order. [ 79 ] Thus, there was no estoppel by convention. [ 80 ] The defendant submits that New City has not proved its delay costs with an expert report.

In Arrowmark Contracting v. JDP , 2013 BCSC 1649 , the defendant counterclaimed against a subcontractor. The court quoted Arch Windoor Limited v. Aragon (Quayside) Properties Ltd. , 2012 BCSC 179 , which said that to succeed on a claim for breach for contract for delay, the party alleging the breach must show on a balance of probabilities that the other party breached the contract by late performance which caused project delays that could not be mitigated, and the other party suffered damages as a result.

The court also stated that: . . . the calculation of operating costs of a construction project is a complex matter that would normally require expert evidence . . . [ 81 ] It then found in that case that with or without such evidence there were problems in the counterclaim and dismissed it. [ 82 ] In A.H.H. Construction Services Limited v.

Washington Properties (QEP) Inc. , 2021 BCSC 1912 , the court referred to those authorities and stated at paragraph 82: I do not read those authorities as creating a legal requirement for a plaintiff to call expert evidence to support a delay claim, in the sense that such a claim is barred if no expert evidence is called.

They do however emphasize the obvious assistance a court can derive from expert evidence to explain and quantify a claim for delay in the context of a construction dispute. [ 83 ] While an expert report can be of great assistance to the court, it cannot be said that the claim fails just because one is not provided. In this case, the claim, as I understand it, is more for the delay caused by the defendant's leaving the job prior to completing their contract. Mr.

Maslovich testified there was a delay of about 30 days or 20 work days in getting new contractors to work on the project after the defendant abandoned the job. The claimant submitted that its delay costs consisted of having a project manager, a site superintendent, a site foreman, and project coordinator on the payroll, and also paying the extra costs for scaffolding, portable toilet, and temporary fencing. [ 84 ] In this case, I am satisfied that, by walking off the job, the defendant caused a delay of at least 10 working days in getting new workers onto the job. In my view, given Mr.

Maslovich's testimony as to the actual delay which is directly tied to the defendant's abandonment, no expert report is necessary for that. However, I am not satisfied that the personnel costs claimed have been adequately proved with actual timesheets indicating what those employees were doing. Some of them may have been involved in arranging new subcontracts, but no details were provided as to what all four employees claimed for were doing or how much they worked on this project.

So I will allow the claim for the additional rentals for the half a month which I have calculated to be at $1,723.10. [ 85 ] In conclusion, I find that the claimant has proved damages of $14,326.20 for deficiency correction, $93,990.75 for replacement contractor costs, and $1,723.10 for delay costs totalling $110,040.05. From that amount, there is to be a setoff for the amount that the claimant owes the defendant for unpaid invoices of $42,258.04 and the amount the claimant would have paid the defendant to complete

the contract, namely, $33,362.97, which totals $75,621.01. Applying the setoff, the balance due and owing from the defendant to the claimant is $34,419.04. [ 86 ] Any submissions with respect to costs? [ 87 ] CNSL S. JOHN: Yes, Your Honour. The claimant would submit that they're entitled to the costs pursuant to the Rules, which I believe are mostly filing fees. And I will bring to your attention, I have a couple copies of a settlement offer that was made by -- by the claimant to the defendant on February 23, 2022, to settle for $30,000. May I hand that up? [ 88 ] THE COURT: Sure, thank you.

Thank you. [ 89 ] CNSL S. JOHN: So that -- you'll see that that was made on February 23, 2022, and that that was $30,000. So, pursuant to Rule 10.1, offer to settle, the claimant would submit that a penalty be assessed based on Subrule -- sub (6). I don't know the amount of that. [ 90 ] THE COURT: Okay, and so it strictly was not done 30 days after the settlement conference in accordance with -- [ 91 ] CNSL S. JOHN: Oh. [ 92 ] THE COURT: -- 10.1. So I just point that out. [ 93 ] CNSL S. JOHN: Okay. [ 94 ] THE COURT: Thank you. [ 95 ] CNSL S. JOHN: So, then, that would be [indiscernible background noise].

Thank you. [ 96 ] THE COURT: All right, thank you. [ 97 ] CNSL D. MACLEAN: So I suppose in response to that, that would be my response. It wasn't strictly in the form nor is it strictly within the -- I think the [indiscernible]. Thank you. [ 98 ] THE COURT: So I will award the filing fees of $156 and service fees of $20. The settlement offer did sort of beat the award by $4,000 so a 10-percent amount would only be $400, but again, because it was not in strict compliance, I am not going to award it. So it is filing fees and service fees that are awarded. [ 99 ] CNSL S. JOHN: Could you please repeat those numbers?

I just missed them. Thank you. [ 100 ] THE COURT: $156 for the filing fee and $20 for the service fee. [ 101 ] CNSL S. JOHN: Thank you, Your Honour. [ 102 ] THE COURT: Okay. So the clerk will give you a copy of the trial record. Thank you both. [ 103 ] CNSL S. JOHN: Thank you. [ 104 ] CNSL D. MACLEAN: Thank you. [ 105 ] THE CLERK: Just give me one second, Your Honour. Your Honour, there was a counterclaim.

Is that counterclaim dismissed? [ 106 ] THE COURT: This is in full and final -- [ 107 ] THE CLERK: Thank you. [ 108 ] THE COURT: -- or this deals with both the claim and the counterclaim -- [ 109 ] THE CLERK: Both the claim and counterclaim. [ 110 ] THE COURT: It is a setoff -- after applying the setoff, so. [ 111 ] THE CLERK: Okay, thank you. (REASONS CONCLUDED)