A general contractor was hired to perform renovations.
During the work, a defect in the work is discovered, a door that was designed as left opening was improperly installed as right opening.
The contractor and homeowner agree that the issue is cosmetic and minor the homeowner approves continuation of the work without correction of the defect.
Later, it is realized that the defect is more than cosmetic and is causing functional problems.
The homeowner calls the contractor and requests correction of the defect.
The contractor argues that the homeowner previously accepted the defect and thus the flaw is no longer the responsibility of the contractor.
The homeowner hires another contractor to fix the defect.
The homeowner sues the original contractor for the cost of hiring the subsequent contractor to correct the defect.

General contractors and tradespersons are paid to build, assemble, install, fix or repair things and from time to time mistakes are made that are costly to correct if correctable at all, resulting in the need to recover loses, often through litigation.

These types of cases are known as defective workmanship, subpar workmanship, below standard workmanships and are classified under contract and tort law. Issues in contract law allege a breach of an expressed or an implied term within the workmanship agreement, regardless of whether the agreement is verbal or in writing. When the agreement is in writing, it will typically set out that the work will be performed to a standard specific in the industry, however, if the contract is silent on the standards, there are standards within every industry that are practiced  by every person thoroughly familiar with the industry. When the industry standard is breached and results in losses, grounds for a negligence lawsuit under tort law are created.

Breach of contract and negligence claims require a specialized legal approach as correctly framing the details of the breach and negligence scenario often results in the matter being settled out of court or pre-trial.

Breach of industry standard versus defects

Industry standard speaks for itself as no bonafide  tradesperson or contractor can argue against it, defects are different, they are highly subjective. What constitutes a defect varies on degree of discrimination applied, to the point where even the slightest cosmetic flaw will result in outrageous claims. However, a contractor or a tradesperson may sometimes wrongfully perceive that their job ends when the requirements as set out by such legislation as the Building Code or the Electrical Code. At law, the standard of care is argued and it is the judge who has the final say on whether the work was defective, breach occurred or an obligation not met, as per Scott v. Sarsfield Foods Ltd., 2000 CanLII 3533

Work which does not meet the requirements of the specifications contained in the contract, or which, in the absence of such specifications, is not a reasonable workmanlike quality, is not proper compliance with the contract and constitutes a breach.  Furthermore, compliance by the contractor with the specifications will not be sufficient performance if the specifications were prepared by him and are deficient, even if they were approved by the owner.  Whether work, or material supplied, is defective or not is, in each case, a question of fact, depending on the construction of the particular specifications where there are any, and on expert evidence as to what is reasonable where there are none.

Where a contract, either expressly or by implication, contains a particular standard for the work to be done, an owner is not entitled to insist on work of a higher quality.   . . .

On the other hand, compliance by the contractor with a statutory or regulatory standard of conduct may not be sufficient, if it is not the standard called for by the contract, or reasonable in the circumstances.

An owner who has accepted the work does not thereby necessarily lose his right to claim damages for defective work, unless the defects have been expressly approved, or unless approval of them can be otherwise inferred from the owner’s conduct.  Sometimes a contract contains a provision guaranteeing certain parts of the work for a particular period, and any defects occurring during such period of guaranteed maintenance must be remedied by the contractor.

Generally speaking, a contractor is liable only for defects resulting from his own work or from work or materials of his suppliers and subcontractors. …

Apart from being contractually liable to the owner, a contractor who has been guilty of negligent construction resulting in a dangerous or unsafe structure may be liable in tort to the owner and to third parties. …The standard of care for which the contractor is responsible may be determined by his contracts with the owner or subcontractor or, in the absence of specific provisions applying to the circumstances, by expert evidence about the standard of conduct in his industry.

Owner’s Duty (allow to remedy)

The reality is that relations between property owners and contractors working on their property can and do breakdown, sometimes with incredible haste. The manner in which relations between owners and contractors break down can have an extraordinary impact on the future legal action. At times, property owners immediately expel poorly performing contractors however, this can amount to a repudiation of the contract, thereby voiding certain legal rights available for the owner. Essentially, the owner must allow the contractor a reasonable opportunity to correct their poor workmanship or defects; this is understood as a warranty in contract law. The reasonable opportunity regarding warranties within contract (whether expressed or implied) was well summarized in PSR & Construction v Dagenais, 2014 CanLII 29444

[87] The principles in such a case were canvassed by R. Smith J in Rocksolid v Bertolissi, 2013 ONSC 7343 (CanLII). Rocksolid was installing masonry stonework at Bertolissi’s home. Bertolissi was responsible for assuring the materials were available. He failed to do so and ultimately was found to have repudiated the contract. There had been some deficiencies in Rocksolid’s work.

[88] It was accepted in Rocksolid that at common law a builder had the right to return to a work site to repair deficiencies. R. Smith J accepted as well the following proposition [at para 80]:

“Although the Longwell decision is little more than a head note, it does appear to stand for the proposition that a builder who is ready and willing to complete the work required to make good the contract between it and the home owner, has the right of entry to the house to do so. In that case, it was held that a refusal to permit such entry amounted to repudiation of the contract by the homeowner.”

[89] Additional principles were gleaned from C.S. Bachly Builders Ltd v Donna Lajlo, 2008 CanLII 57444 (ON SC), a decision of Hill J:

–it was unreasonable not to permit a contractor to rectify deficiencies

–an implied term of the contract was its completion in workmanlike manner

–short of a fundamental breach, a contractor is entitled to rectify deficiencies

–it is a matter of mitigation of damages to allow a contractor to correct its work

–any homeowner’s claim cannot include work undone after a contractor justifiably left the site

“short of a fundamental breach, a contractor is entitled to rectify deficiencies” is of particular interest to the court and to homeowners. When is the homeowner within their right to lose faith in their contractor? How is the homeowner to draw the hard line and not lose their entitlement at law? The best way to preserve the right is with written notices that correctly identify and frame the breach, however, it is the judge that makes the final call on whether drawing the line was the justifiable call.

Action to remedy- Eliminating Current Risk and Preventing Future Loss

Poor workmanship situation can cause loss in both the present and in the future, for example, a poorly installed beam can cause the structure underneath to buckle while the buckled structure, can overtime cause the whole wall to collapse. The problem at law arises with regards to whether or not a property owner has the right to sue for the cost of repairs or corrections to poor workmanship prior to actual loss or harm resulting from them. While it is still argued that property owners should not be entitled to sue for economic loss prior to the time actual damage occurs, the precedent case of Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 SCR 85 suggests that liability for repair of defects can arise prior to the defect causing any actual harm, as long as a ‘real and substantial danger’ threshold is established and met. Recently,Vargo v. Hughes, 2013 ABCA 96 affirmed the reasoning of Winnipeg Condominium Corporation No. 36 v. Bird Construction Co and the threshold extended to ‘likelihood’ of danger to occur rather than imminent.

When the right to remedy defence is raised, it is commonly argued that the plaintiff spent too much money to repair the defects and therefore the defendant is not liable for the excessive amount. This is a good argument but it is one that is not based in reality far too often, that is, when faced with imminent or the likelihood of danger, the plaintiff cannot be expected to act perfectly, adopting the most cost effective measures for the benefit of the defendant. This type of reasoning can be seen in Viper Concrete 2000 Inc. v. Agon Developments Ltd., 2009 ABQB 91

[72] The plaintiff has a duty to mitigate its damages. Red Deer College at p. 330:

… the defendant cannot be called upon to pay for avoidable losses which would result in an increase in the quantum of damages payable to the plaintiff.

[73] The burden of proof is on the defendant to show that the plaintiff failed to mitigate. See: Fridman, at p. 779; Harvin D. Pitch and Ronald M. Snyder, Damages for Breach of Contract, 2nd ed., looseleaf (Toronto: Thomson Carswell, 1989) at p. 8-20.9.

[74] The question to ask is whether the actions of the plaintiff, in mitigating its damages, were reasonable. Pitch and Snyder summarized the analysis for determining whether the plaintiff properly mitigated its damages at p. 8-15 to 8-16:

In determining whether the plaintiff’s efforts at mitigation were reasonable, the court will consider the plaintiff’s actions on the basis of facts which existed when the contract was breached, i.e., when the plaintiff was faced with the obligation to act immediately. In so doing, the court places its sympathy squarely with the plaintiff… The court does not impose upon the innocent plaintiff an exacting standard but instead adopts a practical perspective in line with business realities.

[75] The test is not whether a less costly course was available; rather, the test is whether the plaintiff’s conduct was reasonable as described in Nu-West Homes at para. 58:

In my view, one should be careful not to weigh in too fine a set of balances the conduct of the aggrieved party. The wrongdoer is entitled to expect the aggrieved party to act reasonably. He is not entitled to have him act perfectly. In my view the proper test to be applied is that set out by Lord MacMillan in Banco de Portugal v. Waterlow & Sons, Ltd., [1930] A.C. 452 at 506, where he states:

Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measure which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the incidence of the party whose breach of contract has the difficulty. It is often easy after an emergency has passed to criticize the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures, and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken.

Contractor argues- ‘I did not do that’

It is a common practice for a general contractor to hire a sub-subcontractor, a subcontractor hire another subcontractor and even further subcontracting from there on. In reality, the property owner only deals with the general contractor, while work on the property is performed by any number of tradespersons and sub-contractors. This brings a lot of property owners to accept and ultimately move past the fact that it is ultimately not the responsibility of the general contractor. Luckily at law, the general contractor is liable due to the principle that one ‘cannot contract out the duty of care’ also known as the ‘non-delegable duty’, making the contractor responsible for ensuring subcontractors perform work to the expected standard. Vandenbrink Farm Equipment Inc. v. Double-D Transport Inc., 1999 CanLII 14947

Durability and beyond the work performed

A general contractor has their bottom line, as such, they are of mistaken in their belief that under a contract they are simply required to do what was specified within the contract. Such perception can lead to legal action for failure of durability of the work performed. For example, a general contractor may be required to install the foundation to a house, which they do, however, after some time, it is discovered that the excavation was not done properly, causing the foundation to crack. Even though time has passed and the owner approved of the work, the work performed by the general contractor did not prove to be durable, thereby not meeting the reasonable expectation for the job. Dirm Inc. v. Bennington, 2010 ONSC 3298 reasons as follows,

[98] I further conclude that, while not an expressed term of the contract between these parties, it was an implied term of the contract that the concrete finish would be durable.  Reasonable durability of the concrete has a certain degree of obviousness and as such it is a reasonably implied term of the contract: M.J.B. Enterprises Ltd. v. Defence Construction (1951) Limited, 1999 CanLII 677 (SCC), [1999] 1 S.C.R. 619 at paras. 27-19. The delamination appeared within less than one month after the pouring of the concrete.

[99] Further, although Dirm may have complied with the specifications provided to it, in general terms, having undertaken to produce a particular result, it will still be liable even if it followed the specifications and the required result was not obtained: Steel Co. of Canada v. Willand Management Ltd. [1996] S.C.R. 746; Temar Construction Ltd. v. West Hill Redevelopment Co., 1986 Caswell Ont. 778.

Must achieve reasonably expected result

As reasoned in Dirm, a contractor must achieve the reasonably expected result, further reasoned in Alliance v. Manorcore, 2013 CanLII 60850

[99] The Supreme Court of Canada in Steel Co. of Canada v. Willand Management Ltd. 1966 CanLII 13 (SCC), [1966] S.C.R. 746 approves the proposition in Hudson’s Building and Engineering Contracts, 8th ed. 1959 which states “Sometimes again, a contractor will expressly undertake to carry out work which will perform a certain duty or function in conformity with plans and specifications, and it turns out that the work constructed in accordance with the plans and specifications will not perform that duty or function.  It would appear that generally the express obligation to construct work capable of carrying out the duty in question overrides the obligation to comply with the plans and specifications, and the contractor will be liable for the failure of the work notwithstanding that it is carried out in accordance with the plans and specifications.  Nor will he be entitled to extra payment for amending the work so that it will perform the stipulated duty.”

[100] This case as followed in Dirm Inc. V Bennington Construction Ltd. [2010] O.J. No. 2591 at paragraphs 98 and 99.  Both cases indicate that if a contract was to produce a particular result then the contractor can be liable even if it follows the specifications required.

General Damages (distress, suffering, irritation, frustration, anxiety)

It is not unreasonable to understand that poor workmanship results in personal aggravation, distress and irritation of the property owner. However, legal practitioners have claimed that only the actual monetary loss associated with poor workmanship can be claimed at law. Essentially, if it costs the property owner $1,000.00 to remedy the poor workmanship, $1,000.00 is all that they are entitled to recover. However, courts have gone beyond that reasoning and left valuable framework for pursuing wrongdoers on the expectation of some ‘peace of mind’ Fidler v. Sun Life Assurance Co. of Canada, [2006] 2 SCR 3 exemplifies this approach to seeking general damages for breach of contract causing mental distress.

In the years since Fidler, the courts have moved to include what was ‘reasonably contemplated’ when the contract was created in terms of loss of enjoyment due to defective workmanship. In other words, if you hire a reputable company paying them handsomely and are still grossly startled by the fact they have performed far below your expectations, you may seek to recover damages for the breach of what was expected from their brand representation and reputation. Van Duren v. Chandler Marine Inc., 2010 NSSC 139 at 106 to 111

[111] The Van Durens suffered a great deal of anxiety and distress as a direct result of Chandler’s breach of their contract and as a result of their negligence.  While the vessel is not a “write off” they experienced nothing but failure and disappointment from the day they sailed away from Nova Scotia.  The problems in total may not make the boat unsalvageable but it has kept them out of the water since 2006.  I award general damages of $15,000.