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King Road Paving and Landscaping Inc. v. Plati 2017 Ont SCJ

Owner, general, and subcontractors contested just about everything. Findings:

• Owner was given credit for some payment in cash even though there were no receipts because general admitted paying his payroll in cash and it made no sense that the general would have continued to work without having received additional money in excess of the cheques.
• When a contract is silent about payment of HST, HST is payable in addition to the contractual amount.
• There was an alleged increase in price between the 2^nd and 3^rd contracts, but there was no new consideration for the increase.
• The 2^nd invoice purported to impose interest at 3% per month. The contract was silent as to interest and there was no agreement as to interest. Further, 3% per month contravened section 4 (no annual rate) of the Interest Act of Canada. The general was entitled to prejudgment interest only.
• The owner was on site and knew extras were being completed and was therefore liable for them if they were indeed extras – even though no amount had been agreed for them.
• If the general failed to provide proper invoices for labour and materials to back up the claim for extras, the general received nothing.
• Since there were no invoices or expert testimony to back up the owner’s claim for deficiencies, nothing was awarded for them.
• The lien claimants were awarded the amount that the owner actually owed to the general in addition to the 10% holdback merely because the lien claimants gave the owner notice of the lien. There was no indication that the owner paid the general in the face of the lien. The judge was wrong.
• The judge awarded judgment against the owners in favour of the general in the amount of $79,000 and against the 2 lien claimants in the amount of $97,000 without indicating that the payment to the lien claimants was to be set off against the payment to the general. The judge was wrong.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.