Wales McLelland Construction v. First Queensborough Date:, 2013 BCPC 17

Citation: Wales McLelland Construction v. First Queensborough Date: 20130201 2013 BCPC 0017 File No: C014664 Registry: New Westminster IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: WALES McLELLAND CONTRUCTION COMPANY

(1988) LTD. CLAIMANT AND: FIRST QUEENSBOROURGH SHOPPING CENTRES LIMITED DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE POTHECARY Appearing for the Claimant: Darren Sauer Counsel for the Defendant: Aidan Cameron Place of Hearing: New Westminster , B.C. Date of Hearing: January 4, 2013 Date of Judgment: February 1, 2013

[ 1 ] The Claimant, Wales McLelland Construction Company

(1988) Ltd., “Design-Builder”, entered into a contract with the Defendant, First Queensborough Shopping Centres Limited, “Owner”, on January 10, 2006, for the construction of Building “K” at the new Queensborough Shopping Centre in New Westminster. This contract was the first of fifteen contracts that were in effect from 2006 to 2010 between the Claimant and a series of companies incorporated under the umbrella of Smart Centres, a business headquartered in Ontario. Smart Centres was in the business of developing commercial centres across Canada, including at least three during this period in the Lower Mainland.

The contract between the developer (Owner) and the general contractor/project manager (Design-Builder) for each building was the subject of a separate contract and a separate corporate developer, however it was agreed between the parties that Smart Centres was the ultimate developer. [ 2 ] Each of the fifteen contracts involving Wales McLelland is now the subject of a separate civil law suit filed in Provincial Court.

It is anticipated that the outcome of this action will have a significant impact on the resolution of the others as the issues and contracts are essentially identical, notwithstanding the different corporate defendants. This judgment however will refer only to this specific contract as the others were not joined at the trial. [ 3 ] At issue in this case Is whether or not the Defendant is liable under breach of contract to pay interest resulting from late payments of invoice during the construction phase, as provided for in the contract in

Article 5.3, or was that potential claim waived and released by the Claimants by virtue of

Article 12.2.2 of the contract given that no notice in writing had been provided to the Defendant before final payment. The Defendant further argues that by reason of the lack of notice to the Defendant of such a claim before the final payment, the Claimant is now estopped from making such a demand. In its Reply, the Defendant referred to delays by the Claimant in meeting the construction schedule. However, it abandoned that argument during the trial.

The Evidence: [ 4 ] The evidence was presented primarily by an Agreed Statement of Facts and a common Book of Documents prepared by the parties with some viva voce evidence led by each party primarily for the purpose of describing the discussions that took place or did not take place regarding the subject matter of this case. [ 5 ] The contract was in the form of the “Standard Construction Document CCA-14-2000, a Design-Build Stipulated Price Contract”.

It provided for the appointment of a “Payment Certifier” (also referred to in the contract as the “consultant” and the “design- builder’s consultant”) whose task it was to certify the completed work on each invoice presented by the Claimant so that it could be forwarded to the Defendant for payment. It is common ground that all invoices submitted during the course of construction of the building were paid in full.

However it is also agreed that none of the payments was made within the period specified in the contract, i.e. “no later than 20 days after the receipt of a certificate for payment issued by the Payment Certifier”. [This date was amended from 15 days by the Supplementary Conditions to the contract.] Different provisions applied to the repayment of the lien holdback and final payment, but it is agreed that they also were not paid within the period specified in the contract. [ 6 ] The contract specified in

Article 5.3 that: .1 Should either party fail to make payments as they become due under the terms of the Contract or in an award by arbitration or court, interest at Prime + One percent (1%) per annum above the prime rate on such unpaid amounts shall also become due and payable until payment. Such interest shall be compounded on a monthly basis. The prime rate shall be the lowest rate of interest quoted by the Royal Bank of Canada for prime business loans. The words “Prime + One” were added to a pre-printed form at the time of preparation of this contract.

It is agreed between the parties that the intention was that the interest rate be simply “prime plus one per cent”, not “double prime plus one per cent” and that any calculations should be made on that basis. [ 7 ] Building “K” was substantially completed in September, 2007, and the final certificate for payment (No. 9) was dated February 19, 2007. [ 8 ] On June 21, 2010, after final payment had been received with respect to the last of the fifteen contracts, a further invoice relating to Building “K” was delivered by the Claimant to the Defendant for the interest owing for the late payment of all of the earlier invoices.

A similar invoice was delivered for each of the contracts at that time and after all other amounts owing on all of the fifteen contracts had been paid. [ 9 ] The amount of interest owing on this contract was initially claimed as totalling $5,572.88. It was agreed during the trial that that number is not accurate for a variety of reasons, and it was left for the court to calculate, if necessary, based on the court’s ruling.

In addition, at the commencement of the trial, the Claimant applied to amend the Claim to include the interest for the delays in paying the invoices for the repayment of the holdback and the final payment. I ruled during the trial that, given all of the adjustments that were being made, I would allow the amendment to include the interest for the final payment, and reserved decision on the interest attributed to payment for the holdback.

The Defendant argued that such a claim was statute barred because the date for payment was either in November, 2006 or December, 2006, depending on how the date was calculated, but in either event was more than 6 years before the date of application to amend at the trial (on January 4, 2013). Given that this invoice was not paid until January 16, 2007, I am satisfied that notice was given to the Defendant of this part of the claim within the 6-year period following payment. In this case, by paying the invoice when it did, the Defendant was acknowledging the debt within the limitation period.

As such, this claim will be amended to also include this amount. [ 10 ] The project manager with responsibility for this contract on behalf of the Claimant, Etienne Theron, testified at the trial. He testified that in about 2005, the Claimant began discussions with the Defendant in the hope of obtaining contracts. They had not worked together before but knew the Defendant, and in particular the umbrella company, to have substantial amounts of work in this area. Clearly, it was hoped that this would be a lucrative relationship for the Claimant.

[ 11 ] Mr Theron described his responsibilities for managing the contract and the construction of this project. He described the process for obtaining payment for the work done. The Claimant would prepare the appropriate invoices on a monthly basis, then submit them to the Payment Certifier for review and approval. The Payment Certifier would then forward them to the Defendant for payment.

The documents were transmitted by courier to the head office in Toronto, and the cheques were couriered back to the Claimant. [ 12 ] It became apparent nearly immediately that the payments were not being received in accordance with the time period set out in the contract of twenty days after the invoices were approved. Mr Theron had numerous conversations with Mr DeJong, the project manager employed by the Defendant to manage its interests, with regard to the late payments. He also sent a number of emails to Mr DeJong and others inquiring about when payment would finally be received.

He believed Mr DeJong was communicating his concerns to Toronto, as he was copied on some of the emails. Nonetheless, despite promises to speed the payments, nothing changed. Numerous emails and letters were sent to Smart Centres both directly and through their property manager here by Mr Therron specifying the delays in receiving payments, some of more than sixty days, and indicating the problems the delays were causing the Claimant with its own subcontractors. The possibility of liens being filed by some of them was also mentioned in some of the emails and conversations.

Mr Theron testified that he raised the matter of the potential for a Notice of Default because of the late payments with Mr DeJong in conversation, but never put it into writing because the Claimant “wanted to keep Smart Centres as a client as they did a lot of work.” The Claimant also did not send any invoices for interest on the late payments until the invoices sent June 21, 2010. [ 13 ] In cross-examination, Mr. Theron testified that the Claimant had to borrow money to pay their suppliers in a timely fashion, and that the delay in receiving payment from the Defendant resulted in a direct cost to the Claimant.

He also testified that, notwithstanding the delays, the Claimant continued to enter into contracts with the Defendant on the basis of assurances given in negotiations that the payments would be more timely. [ 14 ] He described the Certificate of Final Payment as confirmation that all work under the contract had been performed and that there were no further “extras” to be billed.

He noted that the Payment Certifier did not certify the payment structure or manage the timing of payments. [ 15 ] The parties agreed that the following Certificates for Payment were issued, were received by the Defendant and were paid as follows: a. Certificate for Payment No. 1 ($31,875.30), dated March 15, 2006, received by the Defendant the same day, with payment received by the Claimant April 25, 2006. b. Certificate for Payment No. 2 ($29,461.31), dated April 6, 2006, received by the Defendant the same day, with payment received May 17, 2006. c.

Certificate for Payment No. 3 ($48,724.91), dated May 5, 2006, was received by the Defendant on May 9, 2006, with payment received on June 21, 2006. d. Certificate for Payment No. 4 ($146,332.67), dated June 9, 2006, was received by the Defendant on June 12, 2006, with payment received July 14, 2006. e. Certificate for Payment No. 5 ($184,443.64), dated July 10, 2006, was received by the Defendant on the same day, with payment received August 18, 2006. f. Certificate for Payment No. 6 ($292,687.20), dated August 4, 2006, was received by the Defendant on the same day, with payment received September 20, 2006. g.

Certificate for Payment No. 7 ($155,407.83), dated September 6, 2006, was received by the Defendant on September 7, 2006, with payment received October 10, 2008. h. Certificate for Payment No. 8 ($5,914.80), dated October 10, 2006 was received by the Defendant on October 10, 2006. It was revised by Certificate for Payment No. 8R, dated October 16, 2006, and received by the Defendant the same day. Payment was received by the Claimant on November 16, 2006. [ 16 ] The Certificate of Substantial Performance was posted on site on September 12, 2006.

According to the Builders Lien Act, subcontractors had 45 days to place any liens for unpaid work on the property, at the end of which period the owner had 10 days to verify the existence of liens if any, and in the event there were none, to then release the holdback. This would seem to indicate that the funds that were held back should have been paid by November 6, 2006. [ 17 ] The contract also speaks directly to the payment of held-back funds.

General Condition 5.5 provided that upon substantial completion, the Design-Builder shall submit an invoice for payment and a sworn statement that all accounts have been paid in full, subject to any holdbacks, to the Payment Certifier. The Payment Certifier will then issue a certificate for payment to the Owner. Paragraph 5.5.4 then states: The holdback amount authorized by the certificate for payment of the holdback amount is due and payable on the day following the expiration of the holdback period stipulated in the [applicable] lien legislation….

It should be noted that nothing here extends the time for payment to beyond that set out in the legislation. [ 18 ] The Claimant prepared the Holdback Invoice dated October 20, 2006 and the Statutory Declaration of Progress Payment Distribution by Contractor dated October 24, 2006. The invoice stated on its face, the date of substantial completion and “Holdback Due & Payable: November 6, 2006”. The date-stamp on the documents seems to indicate they were not received by the Payment Certifier

until December 4, 2006. However, no explanation was provided to the Court and I am not in a position to interpret the stamp. The Certificate for Payment No. 9-HB ($99,307.33) is dated December 5, 2006. Payment was received by the Claimant on January 16, 2007. [ 19 ] The Claimant testified that he requested confirmation from the Defendant that the funds that were the subject of the holdbacks had been placed in a joint account on or before November 6, 2006, in accordance with the legislation. However, that confirmation was never received. [ 20 ] The timing of the final payment was also governed by the contract.

General Condition 5.7 provided that: .1 When the Design-Builder considers that Total Performance of the Work has been achieved, the Design-Builder shall submit an application for final payment and a certificate for payment issued by the Design-Builder’s Consultant to the Design-Builder in the amount applied for by the Design-Builder. .2 Unless the Payment Certifier is identified to be the Consultant, the Payment Certifier will review the Work to verify the validity of the application after the receipt of the Design-Builder’s application for final payment and the Consultant’s certificate for payment.

The Payment Certifier will review the Work within 10 days of receipt of the Design-Builder’s application and will issue to the Owner, no later than 7 days after reviewing the Work, a certificate for payment in the amount applied for or in such other amount as the Payment Certifier determines to be properly due.... .3 Subject to…any lien legislation applicable to the Place of the Work, the Owner shall make payment to the Design-Builder on account as provided in

Article A-5 of the Agreement – Payment - no later than 20 days after the receipt of a final certificate for payment issued by the Payment Certifier. [as amended by the Supplementary Conditions including changing the date from “15 days”] In this contract, the Payment Certifier was also the Consultant. [ 21 ] “Work” is defined as: The Work means the Design Services and Construction required by the Contract, including without limitation, unless specifically excepted, the furnishing of all material, labour, equipment, supplies, plans, drawings, tools, scaffolding, transportation, superintendents, insurance, taxes and other services, facilities, and expenses necessary for the full performance and completion of the requirements of the Contract Documents.” [as amended by Supplementary Conditions] [ 22 ] “Total Performance of the Work” is defined as: Total performance of the Work means when the entire Work, except those items arising from the provisions of GC 12.3-Warranty, has been performed to the requirements of the Contract Documents and when the price of completion or correction of any known defects or last supply is not more than the lesser of (

a) one percent of the Contract Price; or (b) $1,000 and is so certified by the Design-Builder’s Consultant. [added by the Supplementary Conditions] [ 23 ] The invoice for the final payment was issued February 8, 2007 and Certificate for Payment No. 9 ($46,509.43) dated February 19, 2007, was received by the Defendant apparently on the same day.

Payment was received in two parts; $36,449.32 on April 3, 2007 and $10,060.11 on April 10, 2007. [ 24 ] Mr Therron testified that the Claimant delayed invoicing for the interest because of the challenges that they had had in negotiating payment for “extras” with the Defendant and because of very late payments being made on some of the other contracts that they had with the Defendant. Some of the correspondence submitted at this trial corroborates delays of 120 days or more in some cases.

So, in order to not jeopardize payments on all of the other projects, the Claimant chose not to invoice the interest immediately.

He also testified that his expectation if the issue of interest were raised earlier, was that besides jeopardizing other payments owing, that the Claimant would also be jeopardizing the possibility of obtaining future contracts with the Defendant. [ 25 ] The Defendant has refused to pay the invoice for the accrued interest in this case and in all the related cases. [ 26 ] In doing so, the Defendant primarily relies upon the Waiver provisions contained within General Condition 12.2 Waiver of Claims, in particular 12.2.2 which states as follows: Waiver of Claims by Design-Builder As of the date of the final certificate for payment, the Design-Builder expressly waives and releases the Owner from all claims against the Owner including without limitation those that might arise from the negligence or breach of contract by the Owner except: .1 those made in writing prior to the design-Builder’s application for final payment and still unsettled; … Inasmuch as the final certificate for payment was dated February, 19, 2007, the Defendant claims that neither claims for interest accruing up to that date which had not already been included on any invoices, nor any interest claims arising after that date can survive this waiver of claims within the contract. [ 27 ] The Defendant secondarily relies on the principal of estoppel with regard to the Claim on the basis that by not including the outstanding interest claims on earlier invoices during the active life of the contract, the Claimant is now estopped from making the claim. [ 28 ] The Defendant called as its only witness, Martin Williams, now a Senior Project Manager for the company, and at the time, a

project manager with the Defendant. He had been involved in some of the contracts, including locating contractors to put on the tenderlist. He recalled meeting with the Claimant sometime before 2006, with a view to performing his due diligence to ensure they would besuitable for their sort of work. He was satisfied that they obviously were, and they were put on the tender list.

He did not have theprimary responsibility for managing the contracts thereafter, although had knowledge of them and was involved from time to time. [29] He became aware of the invoices for interest shortly after they were submitted by the Claimant, and he referred them to thehead office and their lawyers. [30] In direct examination, he testified that he had never received such invoices in the past. He was asked if there was anything theDefendant would have done differently had the Claimant given notice of an interest claim before the completion of Building “K”.

Hereplied, “I think we would think seriously about our future dealings because we want to keep an agreeable relationship with ourcontractors.” He added that he would not have invited the Claimant to bid on further contracts. He acknowledged that, in fact, he has notissued any further invitations to tender to the Claimant since the interest invoice was received, although the Defendant has had suitablesubsequent contracts out for tender. [31] Mr Williams described the process in effect at the time of this contract for making payments pursuant to certificates ofpayment.

It was expected that the certificates would be delivered to the Defendant’s accounts department at the head office in Toronto by the 8th of the month. The department then had until the 20th of the month to prepare the cheques. The cheques were then taken to thefunding institution to be funded which ordinarily took 3 – 4 weeks. So it was impossible for the payments to ever be made on time.

Assuch, he agreed that invoices were never paid in accordance with the time line in the contract. [32] He was aware of the many complaints of late payment made by this company and to a much lesser degree by others with whomthey dealt. He testified that the contracts were prepared by the Defendant’s head office, and that since the time of this contract, somenewer contracts have been amended to provide a payment period of 45 days instead of 20 days. He also advised that he had taken theconcerns of the Claimant to his Vice-President but had never passed on any caution that they might be liable to pay interest.

The law: [33] At the conclusion of the trial, both parties acknowledged that they were unable to find any cases that governed this matterwhich were directly on point. However they did provide some that might inferentially be of assistance. For the purpose of completeness,those cases were: • Capital Trust Corporation Limited and Lalonde v. Gordon and Frechette, (ON SC), [1945] O.R. 277-290 • Hansen v. British Columbia, 2000 BCCA 338 • Creston Moly Corp. v. Sattva Capital Corp., 2011 BCSC 597 • B & A Bobcat & Excavating Ltd. v. Sangha, 1999 BCCA 49 • Calder v. Jones, 2010 BCPC 77 • Giffels Associates Ltd. v.

Eastern Construction Co., (SCC), [1978] 2 SC.R. 1346 • Gilbert Blasting & Dredging Co. v. Canada, (1901) (CA EXC), 7 Ex. C.R. 221 (Exch. Ct of Canada), aff’d(1902) (SCC), 33 S.C.R. 21 • Gilbert Brothers Engineering Co. v. Canada, (CA EXC), 40 D.L.R. 723 (Exch Ct of Canada), aff’d (1918) (SCC), 57 S.C.R. 611 • Litwin Construction

(1973) Ltd. v. Pan (1988) 29 B.C.L.R. (4th) 88 (C.A.) • Revell v. Litwin Construction

(1973) Ltd. (1991) (BC CA), 86 D.L.R. (4th) 169 (C.A.) • Tercon Contractors Ltd. v. British Columbia 2010 SCC 4 [34] In addition to the cases provided, others were reviewed by the Court, some of which will be referred to below. Analysis [35] In order to properly analyse this case, it is helpful to review the general principles of

interpretation of contracts. A usefulstarting point may be the

summary found in Dunko Industries Ltd. v. Husky Oil Ltd., 2009 BCSC 66, referring to Group EightInvestments Ltd. v. Taddei, 2005 BCCA 489, at paras. 19-22, as follows:

(1) A court must determine objectively the intention of the parties from the words of the contract and not interpret the words of thecontract based on the intentions of the parties;

(2) The words or language of the contract must be read in the context of the circumstances at the time the contract was made;

(3) Only when the words, objectively, bear two or more reasonable

interpretations, may the court consider the conduct of the partiesafter the contract was made;

(4) The plain and ordinary meaning must be given to words in a contract unless to do so would result in an absurdity;

(5) A negotiated commercial document should be construed in accordance with sound commercial principles and good business sense;

(6) To the extent that it is possible to do so, the contract should be construed as a whole and effect should be given to all of its provisions; and

(7) The provisions should be read, not as standing alone, but in light of the contract as a whole. [ 36 ] The enforceability of exclusion clauses, which would include clauses such as the Waiver of Claims clauses herein in General Condition 12.2, has been the subject of recent comment and analysis in the Supreme Court of Canada. In Tercon Contractors Ltd. v. British Columbia, supra , the Court essentially rejected the principal of fundamental breach, and accepted the framework for analysis of Binnie J. as follows: 121 The present state of the law, in

summary, requires a series of enquiries to be addressed when a plaintiff seeks to escape the effect of an exclusion clause or other contractual terms to which it had previously agreed. 122 The first issue, of course, is whether as a matter of

interpretation the exclusion clause even applies to the circumstances established in evidence. This will depend on the Court's assessment of the intention of the parties as expressed in the contract. If the exclusion clause does not apply, there is obviously no need to proceed further with this analysis. If the exclusion clause applies, the second issue is whether the exclusion clause was unconscionable at the time the contract was made, "as might arise from situations of unequal bargaining power between the parties" ( Hunter , at p. 462).

This second issue has to do with contract formation, not breach. 123 If the exclusion clause is held to be valid and applicable, the Court may undertake a third enquiry, namely whether the Court should nevertheless refuse to enforce the valid exclusion clause because of the existence of an overriding public policy, proof of which lies on the party seeking to avoid enforcement of the clause, that outweighs the very strong public interest in the enforcement of contracts. [ 37 ] From these two decisions, it is obvious that in interpreting a contract it must be read as a whole, and read in the context of the relationship between the parties at the time of making the contract.

Clearly this contract contemplated timely payment of all accounts, and in the event that such payments were not made within the contemplated time, interest would accrue. The Defendant in this case was responsible for the preparation of the contract, and included in the Supplemental Conditions for its benefit, a delay of a further 5 days in the time for payment of the accounts before they were obliged to pay interest.

There was no evidence to suggest that the Defendant ever informed the Claimant that their delay in payment was, at least in part, systemic and that they would never be able to meet the prescribed period for payment. There was also no evidence to suggest that the Claimant at any time acquiesced in the delays.

In fact, the evidence is clear that the Claimant pursued the matter of timely payment throughout its relationship with the Defendant and related companies. [ 38 ] In following the framework for analysis of exclusion clauses, which would include the Waiver of Claims clause herein, the Court must first decide whether or not the clause even applies in the circumstances of the case. Although the waiver clause addresses “all claims...including without limitation...” those for breach of contract, the waiver’s effective date is the date of the final certificate for payment.

No allowance is made for anything that might happen after that date, such as, as happened here, the late payment of the amount owing in the final certificate. [ 39 ] The Payment Certifier, in preparing the certificates for payment, was required to certify that the amount contained in the application for payment was, “for the value, proportionate to the amount of the Contract, of Work performed and Products delivered to the Place of the Work at that date.” (General Condition 5.2.4) Nothing in the definition of Work suggests that his responsibilities would also include managing the payment of any outstanding interest that may by owing by the Owner.

The Payment Certifier’s task was to measure the progress of the work, not to manage the accounts between the parties. [ 40 ] In addition, it confounds logic that the contract must be interpreted as argued by the Defendant, so as to enforce the waiver of a claim that could not yet have even arisen. In this case, Certificate of Payment No. 9, the final certificate of payment, was received by the Defendant on February 19, 2007 with a payment due date twenty days later of March 11, 2007. Payments were not received until some 23 and 30 days after that due date.

By the terms of the waiver provision, if it were to apply, it would be impossible in any circumstance for the Claimant to make a claim for interest by reason of this delay as any right to do so would have been waived on the date of the Certificate of Payment, February 19, 2007. [ 41 ] Given the lack of clarity in the contract regarding invoicing for payment of interest and the impossibility of a claim following the Final Certificate of Payment if the waiver were found to apply, I am satisfied that this is one of those circumstances described by Binnie J where the exclusion clause does not apply.

Accordingly I find that the Waiver of Claims clause does not in fact apply to interest claims from late payments whether before or after the date of the Final Certificate of Payment. [ 42 ] I further find that given the actions taken by the Claimant throughout its relationship with the Defendant and related companies in pressing for timely payment, and in repeatedly and frequently questioning the delays in payments, the Claimant is not estopped from pursuing the interest claim at the time it did. [ 43 ] I am reinforced in this view by General Condition 1.4 which states: .1 Except as expressly provided in the Contract Documents, the duties and obligations imposed by the Contract Documents and the rights and remedies available thereunder shall be in addition to and not a limitation of any duties, obligations, rights, and remedies otherwise imposed or available by law.

.2 Except as expressly provided in the Contract Documents, no action or failure to act by the Owner, Design-Builder, the Design- Builder’s Consultant or the Owner’s Consultant shall constitute a waiver of any right or duty afforded any of them under the Contract, nor shall any such action or failure to act constitute an approval of or acquiescence in any breach thereunder, except as may be specifically agreed to in writing. [ 44 ] Finally, I want to observe that while the construction industry is one filled with challenges, it is also one filled with opportunity.

How one wishes to proceed depends upon one’s integrity. It is unfortunate when one party which can clearly dominate a contractual relationship because of its size and power chooses to do so to the detriment of other smaller and less powerful businesses that rely upon that party to do business. The persistent and consistent failure of the Defendant herein to respect the Claimant by failing to ever pay its accounts on time, and also by never even admitting its lack of intention to do so, as proven in this case, is reprehensible.

The financial success of the Defendant and the umbrella company, Smart Centres, was obtained at least in part by using, at no charge, the credit facility of the Claimant. That was unfair. [ 45 ] I am also deeply troubled by what was described as the culture in the industry, again arising from the imbalance in power between the parties, wherein if one party chose to stand on its rights as provided for in the contract, such as to be paid interest for late payments, the other party would effectively blacklist that party from future contracts and work.

In this case, the witness testifying on behalf of the Defendant admitted in evidence that the suspicion of such treatment was indeed well founded and that had the Claimant sought interest payments earlier, the work would have ended. That, too, is unfair. [ 46 ] With these concerns in mind, I have considered the imposition of punitive damages against the Defendant, and had they been pleaded, might well have done so, in particular after reviewing the factors contained in Whiten v. Pilot Insurance Co., 2002 SCC 18 , paragraph 94 .

Conclusion: [ 47 ] In conclusion, I find that the Claimant is entitled to payment for the interest that accrued as a result of a late payment of each of the Certificates of Payment for this contract in accordance with the amounts in Exhibit 4(b), except for Certificate of Payment No. 9-HB. [ 48 ] With respect to the Certificate of Payment No. 9-HB, the contract is clear that the appropriate legislation is to be complied with. That required payment no later than November 6, 2006. The monies were not placed in a joint account as requested by the Claimant, and that amount remained outstanding.

By not paying them either to the Claimant or into a joint account as requested by the Claimant, the Defendant had the benefit of the funds for a period longer than provided for by law, to which he was not entitled. As such, the interest on this Certificate of Payment is to be calculated from November 6, 2006 until the date of payment of January 16, 2007, or for a period of 71 days, which totals $1,352.21. [ 49 ] In calculating the total interest due, the Claimant used the Bank of Canada Prime Business rate, and instead of compounding the interest monthly, calculated the interest as simple interest.

Although the rate of interest prescribed in

Article 5.3 was “the lowest rate of interest quoted by the Royal Bank of Canada for prime business loans”, there is no evidence that the Bank of Canada rate would be any higher than that and, if anything, would likely be lower. So both these modifications of calculations work to the benefit of the Defendant and I will not change them. [ 50 ] Accordingly, I find for the Claimant in the amount of $4,712.47, plus costs of $270.00, totalling $4,982.47.

In addition, I am ordering the payment of court ordered interest on the $4,712.47, payable from July 11, 2010 (20 days after the date of the subject invoice, which was received June 21, 2010). [ 51 ] Payment is to be made in full on or before Friday, February 15, 2013. ________________________________ The Honourable Judge D. Pothecary Provincial Court of British Columbia