IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]         Ms. Kinghorn claims damages for breach of a construction contract. The Defendant, Osprey Contracting Ltd. (“the Corporate Defendant”) counterclaims for amounts which it alleges to be due under the contract. The Defendant, Mike Alexander, is the principal of the Corporate Defendant.

[2]         In the summer of 2020, Ms. Kinghorn approached Mr. Alexander, seeking an estimate for the replacement of her carport with a more sophisticated structure with a rooftop deck. On July 18, 2020, Mr. Alexander provided Ms. Kinghorn with an estimate of $45,536.76, not including applicable taxes. Ms. Kinghorn authorized him to proceed with the work. The estimate identified the contractor as “Osprey Contracting”, which was a trade name under which Mr. Alexander carried on business. 

[3]         On July 23, 2020, Mr. Alexander caused the Corporate Defendant to be incorporated. Sometime in November 2020, Mr. Alexander sent a second estimate to Ms. Kinghorn. The only difference between the first and second estimates is that the contractor identified in the second estimate is the Corporate Defendant. 

[4]         Ms. Kinghorn asserts that she contracted with Mr. Alexander. He asserts that she contracted with the Corporate Defendant. On this issue, Ms. Kinghorn is obviously correct. Mr. Alexander had no right to substitute the Corporate Defendant as the contracting party, without the consent of Ms. Kinghorn, after the contract was made.

[5]         I am mindful that the construction contract in this case was partly oral and partly written. Mr. Alexander provided a written estimate and Ms. Kinghorn orally instructed him to proceed. That raises a question as to the terms of the contract. Plainly, the parties did not intend a fixed-price contract, under which Mr. Alexander promised to perform the work at the price stated in the estimate. There is no reference in the documents or in the oral evidence to a cost-plus contract. The differences between the two were discussed in Ashlar Developments Inc. v. Barakat Industries Ltd., [2018] AJ No. 90; 2018 ABQB 67.  At paragraph 14, Master Schlosser said:

[6]         At paragraph 16, Master Schlosser quoted the following passage from Patel v. W.G. Housing Ltd. [2012] AJ No. 1403; 2012 ABQB 734:

[7]         The contract between Ms. Kinghorn and Mr. Alexander was for a routine piece of renovation work, not complicated and readily estimable. I think that a variance of 10% from the estimated price would be reasonable. As a result, I conclude that Mr. Alexander contracted to perform the work for a price less than $51,000.

[8]         A building permit was required by the Cowichan Valley Regional District (“CVRD”). Mr. Alexander prepared the building permit application, which he and Ms. Kinghorn signed. 

[9]         Mr. Alexander says that he submitted the building permit application to CVRD in November, 2020. Mr. Gary Anderson is the building inspector for CVRD. He was called to give evidence, and said that no building permit application was ever submitted to CVRD. I accept Mr. Anderson’s evidence on the point.

[10]      Mr. Alexander commenced work on the project in mid-August. Ms. Kinghorn was dissatisfied with some of the work and complained to Mr. Alexander. Some of the deficiencies were rectified. Mr. Alexander completed the project on November 23, 2020.

[11]      Ms. Kinghorn remained dissatisfied with the quality of the work. In particular, the roof leaked, with the result that there was water on the garage floor every time it rained. In December, 2020, she telephoned to the office of the CVRD building inspector. During that call, she learned for the first time that no application for a building permit had been filed with CVRD and that no building permit had been issued.

[12]      Mr. Anderson inspected the work on January 8 and February 1, 2021. He concluded that the building, as constructed, conformed neither to the plans provided to him by Ms. Kinghorn nor to the British Columbia Building Code. He recommended that Ms. Kinghorn retain a structural engineer to assess the building, and that she follow the engineer’s advice in taking remedial measures. When he gave evidence at trial, he said that:

[13]      Ms. Kinghorn retained Mr. Jonathan Reiter, a structural engineer, to inspect the work. In his report, he identified nine major structural deficiencies. They created a risk that the structure would collapse under heavy loads (having particular regard to activities on the roof-top deck) or in the event of an earthquake. He set out the particulars of the work necessary to remedy the deficiencies. Ms. Kinghorn retained another contractor to undertake the remedial work recommended by Mr. Reiter. Most of that work has been completed, at a cost of $29,956. The estimate of the cost of the remaining remedial work is $14,500.

[14]      Mr. Alexander tendered in response the evidence of Mr. Robert Blanchard, a structural engineer, who inspected the work at Mr. Alexander’s request in August 2022, after most of the remedial work had been performed. He acknowledges that there were deficiencies in the work performed by Mr. Alexander, but opines that the deficiencies were relatively minor, that they could have been remedied by Mr. Alexander at relatively small expense, and that Mr. Alexander ought to have been offered the opportunity to remedy them.

[15]      I do not accept Mr. Blanchard’s evidence. He did not have the opportunity to inspect the work as performed by Mr. Alexander. He saw it only after very substantial remediation had already been done. I do not see how he could opine as to the quality of work which he has never seen. His evidence flatly contradicts that of Mr. Anderson, who is an independent witness, with appropriate qualifications, who inspected the work as performed by Mr. Alexander.

[16]      It is an implied term of a construction contract that the work shall be constructed in conformity with the applicable building code: G. Ford Homes Ltd v. Draft Masonry (York) Co. Ltd., (1983) 1983 CanLII 1719 (ON CA), 43 OR (2d) 401; 1 DLR (4^th) 262; Mason v. Michaud, [2020] BCJ No. 2312; 2020 BCPC 283. In this case, Mr. Alexander breached that term of the contract.

[17]      Mr. Alexander complains that Ms. Kinghorn ought to have afforded him the opportunity to remedy the defective work before retaining another contractor for that purpose. The governing principle was stated in 2016637 Ontario Inc. v. Catan Canada Inc., [2013] OJ No. 3259; 2013 ONSC 4727; 26 CLR (4^th) 84 at paragraph 47:

[18]      The question, therefore, is whether Mr. Alexander’s breach of contract may be properly characterized as “fundamental”.  The principles to be applied in answering that question were set out in Spirent Communications of Ottawa Ltd. v. Quake Technologies (Canada) Inc., 2008 ONCA 92; 88 OR (3d) 721, and summarized as follows in 1157391 Ontario Ltd v. Ortiz, [2021] OJ No 4836; 2008 ONSC 5923 at paragraph 14:

[19]      In considering those five factors, I am mindful that the obligation of a builder to comply with the applicable building code is of great importance, not just to the building owner but also to the general public. The most important function of a building code is to provide a safe structure for those who use it. Mr. Alexander’s failure to conform to the building code put public safety at risk. Addressing the five factors in turn:

[20]      I conclude that Mr. Alexander’s breach of contract was fundamental, and that Ms. Kinghorn was entitled to treat the contract as repudiated.

[21]      Ms. Kinghorn made the following payments on account of the contract price:

[22]      In the result, if Ms. Kinghorn completes the remedial work as recommended by Mr. Reiter (as she intends to do), her total cost for the project will be $92,270, more than $45,000 in excess of the estimate. On any view of the measure of recoverable damages, her loss exceeds the monetary limit on the jurisdiction of this court (which is $35,000).

[23]      Accordingly, Ms. Kinghorn will have judgment against Mr. Alexander for $35,000, plus court order interest at the Registrar’s rate from January 8, 2021 to the date of these reasons. 

[24]      Under Rule 20(2)(c) of the Small Claims Rules, Ms. Kinghorn is also entitled to filing fees of $156, service fees of $20, and Mr. Reiter’s fee of $1,398.58 for preparation of his expert report and attendance to give evidence at trial.

[25]      The claim against Osprey Contracting Ltd. and its counterclaim against Ms. Kinghorn are both dismissed.