Décision

INTRODUCTION

[1]           Plaintiffs seek the cancellation of Defendant's notice of legal hypothec registered on December 15, 2014, under number 21 253 330 as well as, damages in the amount of $43,883.83 for delays, faulty execution of work and abusive proceedings.

[2]           Defendant has filed a Defence and Cross-Demand seeking payment of the amount of $160,947.14 outstanding for labour and materials provided to Plaintiffs in the renovation of their home.

FACTS

[3]           Plaintiffs hired Defendant in June 2014 in order to assist them in the renovation of their home.

[4]           Plaintiffs remitted to Defendant a copy of their architect’s plans and requested that the work described in the plans be completed[1].

[5]           It was understood that Plaintiffs had hired a plumber and other sub-trades and also purchased some of the material for the renovation, such as the cabinets and ceramic tile for the two bathrooms. As such, Defendant was asked to provide a quote on finishing the two bathrooms, plastering the walls, adding mouldings, laying down the floors in basement and kitchen, some demolition, cleaning and painting the entire home.

[6]           After an initial quote by Defendant in the amount of $85,000[2] for the work, the parties agreed on a fixed contract price of $75,000[3].

[7]           Defendant was paid $40,000 USD at the outset as Plaintiff Bochi was leaving the country and would not return for several weeks[4].

[8]           During the course of the renovations, Plaintiff Baho, Plaintiff Bochi's wife, visited the home daily and provided Defendant's workers with instructions.

[9]           As is often the case, Plaintiffs made changes in their renovation plans and Defendant's workers were asked by Plaintiff Baho to complete some additional work ("extras").

[10]        Defendant's workers would obtain authorization from Defendant's president, Mr. Nasseh, on each occasion. A list of the extras is detailed in Exhibit D-3.

[11]        The parties never discussed or agreed upon a price for most of the extras, it being understood that Mr. Nasseh and Plaintiff Bochi would agree upon the cost.

[12]        The few extras where a price was agreed upon in advance were: the glass doors, the sub-flooring for the basement, sanding of the hardwood floors on the main floor and mouldings in the living room ceiling.

[13]        On October 23, 2014, Defendant requested payment by email from Plaintiff Bochi in the amount of $51,400 for the extras[5].

[14]        Until that request, Defendant had received payments in the amount of $68,359 from Plaintiffs’ various business entities[6].

[15]        Plaintiff Bochi, who was not privy to his wife's requests for extras, was understandably surprised and upset about the cost of these extras.

[16]        Plaintiff Bochi met with Defendant's representative, Mr. Nasseh, and offered to pay the amount of $28,500 in two instalments, the first to be paid on December 2, 2014, and the second once the work was completed.

[17]        On December 2, 2014, Mr. Nasseh met with Plaintiff Bochi and as Plaintiff refused to pay the balance of the invoice, the offer was refused[7].

[18]        Plaintiffs then fired Defendant and expulsed the workers from their home.

[19]        Plaintiffs claim that there was some vandalism in the home caused by Defendant's workers.

[20]        Defendant denies Plaintiffs' claim of vandalism.

[21]        There was no evidence that Defendant’s workers damaged the home.

[22]        On December 15, 2014, Defendant registered a notice legal hypothec in the amount of $229,306.14[8].

[23]        Defendant's invoice for materials, labour and other fees totals $199,440 plus taxes[9]. 

[24]        Defendant recognized, at trial, that the value inscribed in the notice of the legal hypothec was erroneous in that its attorneys did not take into account the fact that Plaintiffs had paid Defendant $68,359.00.

[25]        Defendant's invoice also includes the following amounts:

25.1.     $20,740 representing an administration fee of 15% that was admittedly never discussed or agreed to by Plaintiffs;

25.2.     $4,400 for the removal of debris, cleaning and delivery of material; and

25.3.     $20,000 for damages due to the delays caused by the Plaintiffs' sub-contractors on the site.

[26]        Defendant withdrew the claim for $20,000 in damages at trial, acknowledging this was a penalty for non-payment.

[27]        Plaintiffs recognized that the amount of $7,670.43 was outstanding and argued that the balance claimed by Defendant forms part of the fixed contract in the amount of $75,000 and cannot be charged.

[28]        Defendant argued that the additional work claimed are "extras" which are not included in the fixed contract.

THE LAW

[29]        A person who supplies material and services in construction is entitled to a legal hypothec[10].

[30]        A party may seek the cancellation of the notice of legal hypothec where the registration is "effected without right or irregularly, or on the basis of a title that is null or that is irregular as to form or where the registered right has been annulled, rescinded, resiliated or extinguished by prescription or otherwise"[11].

[31]        A contractor is entitled to increase the price of a fixed contract where he establishes an agreement with the client to perform additional work or where the work was not foreseeable at the time of contract[12].

[32]        As in the case at bar, where there is no agreement as to the value of the services performed, the contractor must establish the value of these services[13].

ANALYSIS

Additional Work

[33]        Plaintiffs' expert, Alan White, filed a report dated January 31, 2015[14]. Based on his meeting with Plaintiffs, he concluded that the extras claimed formed part of the fixed contract price of $75,000.

[34]        The Court does not adopt Mr. White's conclusion on the extras. Mr. White relies upon the description of the work provided to him by Plaintiffs which was contradicted by the evidence adduced at trial.

[35]        The evidence clearly established that the additional work described in the Defendant's final invoice was not included in the fixed contract.

[36]        In particular, both Plaintiff Boha and Defendant's employee, Mr. Salamé, testified that Plaintiff Boha requested the extras during the renovation.

[37]        The extras were not foreseeable at the time of contract and do not appear in the architect’s plans remitted to Defendant.

[38]        In addition, the extras do not appear in Defendant's internal estimate for the fixed contract, in the amount of $85,000, prepared after Mr. Nasseh's meeting with Plaintiff Bochi[15].

[39]        However, there was no estimate given by Defendant to the Plaintiffs for the cost of most of the extras and none was requested by Plaintiffs.

[40]        Plaintiff Bochi was out of town for most of the work and Mr. Nasseh took it upon himself to do the additional work and negotiate the price with Plaintiff Bochi later when he returned to Montreal.

[41]        Therefore, Defendant has the burden of establishing the value of the additional work being claimed in the amount of $77,800 as well as other fees and damages added to the final invoice[16].

Value of the Additional Work

[42]        Defendant's claim for extras in the amount of $77,800 plus taxes has been proven. 

[43]        Defendant filed the invoices for the materials purchased at Plaintiffs' request[17]. Defendant corrected the claim for the cost of the paint in the amount of $2,049.79 plus taxes[18].

[44]        Mr. White agreed that the amount charged by Defendant for the extras were reasonable and, in some cases, inexpensive. However, he confirmed that there are several deficiencies in the work that will need to be corrected by Defendant.

[45]        The cost for correcting these deficiencies, according to by Mr. White, is $26,301. This expertise is not contested and, therefore, Plaintiffs’ claim in the amount of $26,301 is granted.

[46]        Plaintiffs additional claim in the amount of $4,262.83[19] for plumbing work required further to a leak in the bathroom pipes is refused. It was clearly established at trial that Defendant was not responsible for the plumbing work in question but rather Plaintiffs had hired a sub-contractor to do this work.

[47]        Defendant’s total claim for the additional work is therefore reduced to $51,499, plus applicable taxes[20].

Balance outstanding on the Fixed Contract

[48]        Plaintiffs recognized that the amount of $7,670.43 was outstanding on the fixed contract.

[49]        Plaintiffs argued that they did not agree to pay Defendant the applicable taxes.

[50]        The applicable taxes are required to be paid by Defendant under the law and, as such, Defendant is entitled to claim the taxes from Plaintiffs on the balance of the fixed contract price as well as, on the invoice for the additional work.

Damages and other fees claimed by Defendant

[51]        Defendant admitted, in cross-examination, that the claim for $20,000 in damages was added to the final invoice as a penalty for non-payment. He thereafter withdrew this claim at trial.

[52]        Defendant's final invoice also includes other amounts that appear to be added solely as a result of the dispute with Plaintiffs.

[53]        There is an amount of $20,740, representing a 15% administration fee for the additional work that was admittedly never discussed or agreed upon by the parties.

[54]        While Mr. White agreed that the average administration charges is 20%, he stated that the practice is for the contractor to advise the client that such a fee would be charged.

[55]        In the circumstances, as this claim was never discussed or agreed upon by the parties, Defendant's claim for administration charges in the amount of $20,740 is refused.

[56]        As well, Defendant has included the amount of $4,400 for the removal of debris, cleaning and delivery of material purchased by Plaintiffs.

[57]        This claim is also refused as it forms part of the fixed contract agreed upon by the parties and is work that was foreseeable by Defendant in June 2014.

[58]        Therefore, the Defendant's Cross-Demand in the amount of $160,947.14 is reduced to $59,169.43[21], plus applicable taxes.

Cancellation of the Legal Hypothec

[59]        The Defendant's notice of legal hypothec was registered within the 30 days of the end of work but for an amount of $229,306.14.

[60]        Plaintiff Bocchi testified that the registration of the notice of legal hypothec caused him to default in his loan obligations to his bank and left him without the ability to complete the renovations in his home.

[61]        As a result, Plaintiffs seek the cancellation of the Defendant's notice of legal hypothec and damages, in the amount of $13, 320, for inconvenience and abusive proceedings.

[62]        The value inscribed on the notice of legal hypothec is excessive and abusive. It represents almost four times the amount of the actual claim and includes an amount that was admittedly added to the final invoice as a penalty. These facts give rise to the cancellation of Defendant's notice of legal hypothec[22].

[63]        However, the damages claimed for inconvenience and abusive proceedings have not been proven and will not be granted.

FOR THESE REASONS, THE COURT:

[64]        GRANTS, in part, Plaintiffs' originating demand;

[65]        ORDERS the cancellation of the notice of legal hypothec registered on December 15, 2014 under number 21 253 330 in the land registry for Montreal against the following immovable property;

Un emplacement ayant front sur le chemin Rockland, en la ville de Mont-Royal, province de Québec, connu et désigné comme étant le lot numéro […] du cadastre du Québec, circonscription foncière de Montréal.

Avec bâtisse dessus érigée portant le numéro […], en la ville de Mont-Royal, province de Québec, […].

[66]        ORDERS the Registrar of the Montreal land registry to cancel the said notice of legal hypothec registered on December 15, 2014 under number 21 253 330 in the land registry for Montréal upon presentation by Defendant of the requisition for inscription required under the law and the payment of the prescribed fees;

[67]        CONDEMNS Defendant to pay the prescribed fees for the cancellation of the said notice of legal hypothec registered on December 15, 2014 under number  21 253 330;

[68]        GRANTS Plaintiffs' claim for damages in the amount of $26,301 for faulty execution of work;

[69]        DISMISSES Plaintiffs' claim for damages in the amount of $4,262.83 for plumbing work as well as, the claim for inconvenience and abusive proceedings in the total amount of $13, 320;

[70]        DISMISSES the balance of Plaintiffs' originating demand;

[71]        GRANTS, in part, Defendant's Defence and Cross-Demand;

[72]        CONDEMNS Plaintiffs, solidarily, to pay Defendant the amount of $59, 169.43 plus all applicable taxes, with interest at the legal rate and the additional indemnity provided by law, to be calculated from December 24, 2014;

[73]        DISMISSES the balance of the Defendant's Defence and Cross-Demand;

[74]        DISPENSES Plaintiffs from the requirement of serving Defendant with a copy of the present judgment;

[75]        THE WHOLE without judicial costs.