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CITATION: 116892 Ontario Inc. v. Ergete, 2016 ONSC 1378 DIVISIONAL COURT FILE NO.: 574/14 DATE: 20160226 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT BETWEEN: ) ) 116892 ONTARIO INC (cob as Sinott Building Material) Plaintiff/Respondent - and - SENAITE ERGETE Defendant/Appellant ) ) ) ) ) ) ) ) ) ) David D'Intino, for the Plaintiff/Respondent Gerald Matlofsky, for the Appellant ) ) ) HEARD: December 15, 2015 in Toronto MOLLOY J.: REASONS FOR DECISION Introduction [1] This is an appeal by the defendant, Senaite Ergete, from the decision of Small Claims Court Deputy Judge Ashby dated November 17, 2014 granting judgment to the plaintiff in the amount of $25,000 (plus interests and costs) and dismissing the defendant's claim. [2] The plaintiff, 116892 Ontario Inc., is a corporation that carries on a renovation and construction business in Toronto under the name Sinott Building Material ("Sinott"). The defendant, Senaite Ergete, hired Sinott to do renovations on a property she owns on Keele Street in Toronto. The property consisted of a bakery on the main floor and three apartment units above it. The renovation project involved tearing down an existing structure, building a new two-storey addition and renovating the second floor to make one apartment, where previously there had been three. There was a written contract signed on March 6, 2011, stipulating a contract price of $95,000 plus HST, for a total of $107,350. [3] There were to be three stages: Phase 1 was preliminary steps for a review of the project and attendance at the Committee of Adjustments if required; Phase 2 was the submission of all plans and drawings leading up to obtaining a building permit; and Phase 3 was the actual project itself. There was also a second contract for some additional work that needed to be done, in the total amount of $15,000, which was paid in full. Also, Sinott alleged a further $7,430.00 for extras agreed upon during the course of the contract. [4] There were delays in getting the project started due to zoning problems and other issues. Ultimately, the building permit was issued and there were then some delays in the construction. [5] Ms. Ergete terminated her agreement with Sinott by letter dated September 21, 2012. [6] Sinott brought an action in Small Claims Court claiming a total amount owing of $48,615.90 (after deducting $1,000 plus HST, which Sinott alleged was the value of the work not done as of the date of termination). Sinott abandoned the amount of its claim in excess of $25,000 to bring the claim within the jurisdiction of the Small Claims Court. [7] Ms. Ergete filed a defendant's claim against Sinott claiming she had paid $76,000 on the main contract (rather than $66,000 as alleged by Sinott). She also claimed $30,000 for the amount she paid to another contractor to complete the job; $4,500 for permits and expenses; and $12,000 in lost rental income. She therefore alleged that she owed nothing to Sinott, and that the balance owing from Sinott to her was $15,150.00. The Prior Trial Date [8] The claims came on for trial on November 12, 2013.1 At that time, Ms. Ergete sought an adjournment, having dismissed the paralegal who had previously represented her and retained a new representative (Mr. Worku) just two weeks before the trial date. She had not advised the plaintiff that she would be seeking an adjournment. The plaintiff had all of its witnesses there and was ready to proceed. Ms. Ergete did not have her witnesses there. On that occasion, the plaintiff also produced a bundle of documents which had not previously been provided to the plaintiff. Those documents were given to plaintiff's counsel and also filed with the court. The presiding judge adjourned the trial, but on terms that Ms. Ergete pay costs of $847.50 and that the next trial date would be peremptory to her. 1 It would appear that this was the second trial date, and that the first trial date was also adjourned at the request of Ms. Egrete. However, I was unable to locate information in the material filed as to the when that happened or the reason for the adjournment. The Trial Before Deputy Judge Ashby [9] The matter came on for trial again on November 17, 2014 before Deputy Judge Ashby. Ms. Ergete was represented by Mr. Worku and Sinott was represented by Mr. Ziskind, both of whom are paralegals. The main witness for the plaintiff was the owner of Sinott, Joseph Masas. His testimony in chief runs from pp. 5- 44 of the Transcript. The cross-examination was 1 pages, in the course of which Mr. Masas was not contradicted in respect of any of his prior testimony. The plaintiff next called Garry Nixon who was employed by Sinott and worked on the project. The transcript of his examination-in-chief is 14 pages long and his cross-examination is 2 pages. [10] In the afternoon, the plaintiff called David Batterton, who did some of the roofing work on the project. His evidence in chief was approximately 4 pages long and the cross-examination was 1 pages. That completed the evidence for the plaintiff. [11] The only defence witness was Ms. Ergete. Her examination-in-chief commences at p. 70 of the transcript. At page 72 of the transcript, her representative showed her a document which prompted an objection from the plaintiff's representative that this had not been produced before and they had never seen it. After some discussion, it was clarified that the document in question was not in the possession of plaintiff's counsel, nor was it in the court file with other documents filed by Ms. Ergete. Ms. Ergete testified, "I don't know how I missed this, this document. I don't know how I miss it but only I put the receipt."2 The trial judge ruled that the document could not be introduced into evidence because of the failure of the defence to produce it to the other side at least 30 days before trial. The agent for Ms. Ergete requested an adjournment of the trial for purposes of giving such notice, which the trial judge refused. [12] The trial then proceeded with the examination-in-chief of Ms. Ergete, which runs from pages 79-100, followed by cross-examination from pages 100-110, with brief re-examination thereafter. The defence called no other witnesses. [13] In her testimony, Ms. Ergete stated that the roofing work done by Sinott was defective and she produced an invoice indicating that she paid $14,500 to another roofing contractor to fix the roof. She also testified that she was promised by Garry Nixon, on behalf of Sinott, that the work would be done in six weeks, but acknowledged there was nothing in writing to that effect. After terminating her contract with Sinott, Ms. Ergete hired another contractor to finish the job and paid that contractor $18,093. She also produced a notice she received from the Electrical Safety Authority indicating that the electrical work had not been done by a licensed electrician. She testified that she had to hire an electrician to inspect the work and fix it, at a cost of $2,200.00. In addition, Ms. Ergete claimed to have lost rental income as a result of the delay in the construction, but produced little documentation in support of that claim. On cross-examination, Ms. Ergete refused to acknowledge that the delay in getting the building permit was because there were taxes owing. She agreed that when she paid the outstanding amount of approximately $1,800.00, the permit was issued, but maintained that this was a fee for the permit. The Reasons of the Trial Judge [14] The evidence concluded at 2:53 p.m. After a recess, there were oral submissions for 17 minutes. There was then a 10 minute recess, following which the Deputy Judge gave oral reasons for his decision allowing the plaintiff's claim, and dismissing the defendant's claim. [15] The Deputy Judge found that a substantial part of the delay in getting the building permit was that there had been prior breaches of the Ontario Building Code, and this was what led to the additional contract to do work on the apartment units. He concluded that the units as they had previously existed "quite possibly contravened the bylaw." [16] The Deputy Judge referred to the evidence of the plaintiff about the other extras requested by Ms. Ergete at an additional cost of $7,430.00. Although he noted that there was nothing in writing to confirm this, he upheld that claim because the plaintiff's evidence was not challenged. [17] The Deputy Judge referred to the evidence of the plaintiff that Ms. Ergete had paid only $66,000 towards the contract total and the evidence of Ms. Ergete that she had paid $76,000.00. Again he noted that there was no conclusive documentation from either side, but found the evidence of the plaintiff more likely as it had not been challenged in any great detail. [18] He therefore concluded that the plaintiff's claim exceeded the $25,000.00 Small Claims Court jurisdiction, and therefore capped the plaintiff's damages at $25,000.00 [19] In dealing with the defendant's claim, the Deputy Judge held that there was insufficient evidence with respect to the nature and reason for the roof repairs for him to determine what, if any, portion would be attributable to any deficiency in the plaintiff's work. [20] Likewise, with respect to the $18,000.00 claim for work done to complete what was not done by the plaintiff, the Deputy Judge was unable to determine from the plaintiff's evidence what work was actually done and whether it was to repair or complete the work supposed to be done by the plaintiff, or for something else. [21] On the issue of the lost rental income, the Deputy Judge again rejected the claim based on a lack of evidence. There was no evidence to support the plaintiff's contention that she could have earned additional rental income but for the alleged breach of contract by the plaintiff. Deputy Judge confessed to not being able to understand the basis for the claim and to being "at a loss to understand how the rental claim is arrived at or calculated." [22] With respect to the claim based on the $2260.00 Ms. Ergete claimed she paid for electrical work to correct defective work done by the plaintiff, the Deputy Judge held that he could tell from the two defect notices from the Electrical Safety Authority (dated February 13, 2013 and March 15, 2013), that there was some problem with the electrical system. However, he held that he could not tell from the notices whether these defects were caused by the plaintiff, or whether the amount paid was to correct those faults. Without hearing from the contractor that did the work, he was not prepared to find that this was attributable to defective work by the plaintiff. [23] Therefore, the Deputy Judge disallowed all of the defendant's claims, and granted judgment to the plaintiff for $25,000.00, plus costs of $4,000.00. The New Evidence Motion [24] On an earlier motion, I ruled (in an Endorsement dated June 25, 2015) that the documents the plaintiff had attempted to file at trial, and which were refused by the trial judge, could be placed before the judge hearing the appeal. I stated, inter alia, "It is difficult for the Divisional Court to evaluate the merits of the appeal in respect of the trial judge's decisions about these documents without seeing the documents themselves." [25] It is always helpful in these cases if the trial judge would mark excluded evidence as a lettered exhibit, such that it does not form part of the trial itself, but is nevertheless available for appellate review to determine: (a) if it was properly excluded at trial; and (b) if so, if the exclusion resulted in an unfair process to the party seeking its admission or would have otherwise affected the result. The Deputy Judge in this case failed to do that, which is why I directed that the documents could still be filed in the appeal record and be available for review by the Court hearing the appeal. [26] I also noted in my Endorsement on June 25, 2015 that three pages of that material appeared to be directed to Garry Nixon, who was working for the plaintiff, and that the production of those documents should therefore not have been a surprise to the plaintiff. Analysis [27] The Deputy Judge gave thorough reasons for rejecting the claims made by the defendant. It was open to the trial judge to prefer the evidence of the plaintiff over that of the defendant with respect to how much the plaintiff had paid on the contract price. He committed no reviewable error in doing so. I find no error at all in respect of the judgment in favour of the plaintiff in the amount of $25,000.00. On the evidence at trial, I would have reached the same conclusion. [28] The Deputy Judge also provided a sound basis for rejecting the plaintiff's claim with respect to the work done on the roof. This was a conclusion open to him on the evidence. There is no palpable or overriding error. [29] The Deputy Judge reached a similar conclusion with respect to the claim of $18,000.00 paid by Ms. Ergete to a general contractor after she terminated her contract with Sinott. The Deputy Judge was not prepared to accept Ms. Ergete's testimony that all of this work was required to correct deficiencies in the work done by Sinott. This was a conclusion that was open to him. He was not required to simply accept the plaintiff's word for it in the absence of any documentation or expert evidence as to the nature of the work done and whether it was necessary, particularly when it directly conflicted with the plaintiff's evidence as to the small amount of work remaining to be done. Again, I find no reviewable error. [30] I share the Deputy Judge's concerns about the basis for the lost rental income claim. The onus was on the defendant to prove that claim and she failed to do so. On the evidence before him, the Deputy Judge could do no more than speculate that there might have been some loss of rental income. There was no foundation in the evidence upon which he could have done any more than that. I find no error in the rejection of that claim. [31] The entirety of the evidence with respect to the electrical work was Ms. Ergete stating that she got notices from the Electrical Safety Authority about defects and that she hired another electrical company to fix the problems identified at a cost of $2,260.00. The notices from the Electrical Safety Authority were marked as exhibits as was the invoice for $2,260.00. The trial judge held that in reviewing the list of faults listed on the notices from the Electrical Safety Authority, it was not apparent to him whether these problems related to work done by the plaintiff. The trial judge also expressed concerns about the validity of the $2,260.00 invoice. However, even if it is accepted that $2,260.00 was paid to an electrical contractor, and even if it is accepted that this was to address the defects identified by the Electrical Safety Authority, there is no evidence to link the defects to the work done by the plaintiff. The trial judge's rejection of this claim was based on that lack of evidence. This is a finding of fact that is entitled to deference. I find no palpable or overriding error in the reasoning of the trial judge. I note as well that these documents, and in particular the notices from the Electrical Safety Authority, were not put to the plaintiff's witnesses in cross-examination, nor were the alleged electrical defects put to those witnesses. [32] Finally, the trial judge did not accept the defendant's evidence as to the cause of the delay in getting the building permit, or in getting the work done once the building permit was issued. The trial judge provided logical and compelling reasons for his conclusion that the plaintiff was not responsible for the delay. The trial judge noted that he could understand Ms. Ergete's frustration with the pace of construction once the permit was issued, but found that Ms. Ergete had not established any damages flowing from that delay, as I have noted above. The Deputy Judge's dismissal of her claim based on delay was a reasonable one and supported by the evidence at trial. He was entitled to prefer the evidence of the plaintiff as to the reasons for the delay in getting the building permit, and he provided reasons for doing so. Again, this is a finding of fact with no palpable or overriding error that would permit appellate intervention. The Refusal of the Adjournment Request and the Right to a Fair Trial [33] Counsel for Ms. Ergete submits that the Deputy Judge erred in refusing to grant an adjournment so that Ms. Ergete could serve and then reply upon documents that had been filed, but which the court could not find. He further submits that the documents were vitally important, could have changed the outcome of the trial, and that the defendant was therefore prejudiced in a manner that resulted in a substantial wrong or miscarriage of justice. [34] The document in question relates to a letter dated August 11, 2011 from the City of Toronto Zoning Examiner to Garry Nixon (who worked on the project for Sinott), indicating that development charges of $1,787.78 were due and payable prior to the issuance of the building permit, along with attachments showing the calculations for those charges. [35] Given that the letter was addressed to Garry Nixon rather than to Ms. Ergete, it would have been at least arguable that this document should have already been in the possession of the plaintiff prior to trial and that the plaintiff was not prejudiced by its production at trial. The trial judge did not consider that issue, likely because nobody raised it before him. The plaintiff maintained that they did not have it. [36] It does not appear to be the case, as contended by Ms. Ergete, that she filed this document and that it was lost by the court. That is not supported by the record. She filed a bundle of documents at the prior court appearance and gave a copy of those documents to the plaintiff's representative at that time. The document in question was not in the documents received by the plaintiff and also not in the court file. Ms. Ergete's own evidence at trial was that she must have missed disclosing this document somehow. That is a situation significantly different from her having served and filed it and having the court lose it. While it may well have been an oversight by Ms. Ergete that she did not produce this document earlier, the fact remains that it was her responsibility to do so. [37] In these circumstances, the trial judge had a discretion to exercise. He took into account the importance of moving these matters along in a timely way and the delay that had already been incurred at the behest of Ms. Ergete. There was significant inconvenience to the plaintiff who had been ready to proceed on this trial date and on the prior trial date and whose witnesses had taken time off work on both occasions to be present for trial. Further, the issue did not even arise until after the plaintiff had closed its case and Ms. Ergete had taken the stand. Those are relevant factors to be taken into account. In my view, the Deputy Judge exercised his discretion judicially based on relevant factors. [38] Further, I find no miscarriage of justice and I have no reason to conclude that the result would have been any different if Ms. Ergete had been permitted to introduce the document at trial. She would not have been able to state when, or even if, this document had been received by Garry Nixon, nor would she have been able to address how this caused any delay in the issuance of the building permit. Garry Nixon had testified for the plaintiff and no questions were asked in cross-examination about the timing of the development charges notice. Indeed he was not asked any questions at all about the development charges, and his testimony-in-chief as to the various reasons for the delay in getting the building permit was essentially unchallenged in cross-examination. [39] In these circumstances, it would not be reasonable declare a mistrial, and order a whole new trial. At most, the trial could have been adjourned to permit the plaintiff to review the document in question, and would then proceed at a later date picking up with the defendant's case. Given the limited nature of the document, I do not believe an adjournment for this purpose would have affected the result at trial. [40] I find no error of fact or law by the trial judge in the exercise of his discretion to refuse the adjournment. Conclusion and Order [41] The appeal is dismissed. [42] The plaintiff (respondent in appeal) has been wholly successful and is entitled to costs. If the parties are unable to agree on those costs, written submissions may be forwarded to the Court. The submissions of the plaintiff/respondent shall be delivered within 15 days of the release of these Reasons, and the responding submissions of the defendant/appellant within 10 days after receipt of those submissions. A brief reply may be filed within 5 days after receipt of the responding submissions if counsel sees fit. All submissions must include time dockets.