



COURT OF APPEAL FOR ONTARIO

CITATION: Allto Construction Services Ltd. v. Toronto and Region Conservation Authority, 2017 ONCA 488

DATE: 20170612

DOCKET: C61686

Weiler, van Rensburg and Huscroft JJ.A.

BETWEEN

Allto Construction Services Ltd.

Plaintiff/Appellant

and

Toronto and Region Conservation Authority,
Aplus
    General Contractor Inc.
, Peter Martins, Accent Building Sciences, and Naji
    Hassan

Defendants/
Respondent

Doug LaFramboise, for the appellant

Lena Wang, for the respondent

Heard: June 5, 2017

On appeal from the order of
    Justice P. Sutherland of the Superior Court of Justice, dated January 11, 2016.

REASONS FOR DECISION

[1]

The appellant Allto Construction Services Ltd.
    (Allto) sued the respondent Aplus General Contractor Inc. (Aplus) for
    $163,202.98, the amount alleged to be owing under a subcontract to install a
    sewage system during the construction of a pool for the Heart Lake Conservation
    Area for the Toronto and Region Conservation Authority (the Owner).
The
    appellant appeals the trial judgment dismissing its claim.

[2]

At the conclusion of oral argument, we allowed
    the appeal for reasons to follow. These are those reasons.

Discussion

[3]

In our view the trial judge erred in principle
    when he concluded that the appellant did not prove it was owed the amount it
    claimed.

[4]

In its amended statement of defence Aplus denied
    owing the amount claimed, pleaded that during its work Allto damaged an on-site
    irrigation system for which Aplus incurred repair expenses of $33,611.85, and
    asserted that Allto had overbilled Aplus $5,135.85 for additional risers which
    were included within its original scope of work. Aplus asserted a set-off and
    counterclaim in the amount of $38,747. Allto also pleaded that it was a term of
    the parties contract that payment would be made only if and when Aplus
    received payment for the work from the Owner. While the original statement of
    defence asserted that Allto had not yet been paid by the Owner, this was
    removed from the amended pleading.

[5]

In her opening to the trial judge, Apluss
    counsel described the theory of the defence case as quite simple  that Allto
    had overbilled Aplus (for an extra for risers) and that Allto damaged the
    irrigation system as part of its work, did not fix the damage and that Aplus
    incurred expenses to repair the damage.

[6]

Two witnesses testified at trial. The
    appellants witness, Larry Acchione, identified the purchase order issued by
    Aplus. He testified that the work had been performed. He confirmed, under
    cross-examination, that Allto was owed the amount claimed in the statement of
    claim ($163,202.98). The respondents witness, Sanjeev Desai, did not
    contradict any of this evidence and confirmed the work had been performed
    without deficiencies.  By the end of the trial it was obvious that Allto was
    not claiming for the amount that Aplus asserted was an extra. The only material
    point of dispute in the evidence was with respect to whether Aplus had damaged a
    sprinkler head in the irrigation system, and the cost of its repair.

[7]

In his reasons for judgment dismissing the
    action, the trial judge stated that the evidence showed, on a balance of
    probabilities, that the parties entered into a contract for a price of
    $288,150, that Allto performed the work with no deficiencies, and that there
    was an amount outstanding for the work it performed. He referred to submissions
    that there was no evidence at trial of invoices for the work performed or an
    accounting of the amount billed by Allto and paid by Aplus. The trial judge
    dismissed Alltos claim after finding that Allto failed to meet its burden to
    satisfy the court it was owed the amount claimed in the statement of claim.

[8]

The trial judge also dismissed Apluss
    counterclaim. He found that Allto had damaged the irrigation system, but
    rejected Apluss evidence on the repair cost of $33,611.85, as well as the
    argument that the repair cost had been admitted by Aplus.

[9]

In our view, the trial judges reasons
    demonstrate reversible error. The central issue in this case was whether Allto
    caused damage to an irrigation system sprinkler head, if so, the reasonable
    cost of repair, and whether Aplus was entitled to a set-off for this amount
    from the balance of the contract price. While Aplus denied the amount owing, it
    admitted the contract (which it confirmed through a purchase order), and
    Alltos performance of the work. Other than the claimed set-offs, there was no
    other credit claimed by Aplus. Mr. Acchione provided oral evidence that the
    amount claimed had not been paid. In the circumstances of this case, this was
    sufficient to establish Alltos outstanding claim. There was no requirement for
    any further proof through invoices or a statement of account.

[10]

The respondent asked that, if this court were to
    allow the appeal, any judgment should be reduced by the cost of its repairs to
    the irrigation system, notwithstanding that its counterclaim was refused by the
    trial judge and there is no cross-appeal. The respondent says that the trial
    judge erred in rejecting its evidence on this issue, and in failing to give
    effect to deemed admissions from an unanswered request to admit. We do not give
    effect to this argument.

[11]

First, the respondents claim for set-off was not
    made out on the trial record. The trial judge charitably described Apluss
    evidence of the cost to repair the damaged sprinkler head as unreliable. On
    its face, Apluss documentation was suspect and the amount for the repair of a
    sprinkler head unreasonable. Second, the trial judge was entitled to interpret
    the deemed admissions as he did  as admitting an entitlement to a back-charge
    but not a right to the amount the respondent claimed.

[12]

In these circumstances, there is no basis for a
    set-off to the amount claimed by the appellant.

Disposition

[13]

The appeal is therefore allowed. The appellant
    shall have judgment for the sum of $174,518.38. This amount includes
    pre-judgment interest under the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43
.
in the sum of $11,315.40, calculated at the rate of 1.3% per annum
    from the date of issuance of the statement of claim, February 7, 2012.

[14]

The trial judges costs award is set aside and
    the appellant shall have its costs of the action in the sum of $16,000. Costs
    of the appeal to the appellant in the sum of $7,800, inclusive of HST and
    disbursements.

K.M. Weiler J.A.

K. van Rensburg J.A.

Grant Huscroft J.A.


