With Great Expectations Comes Greater Responsibility

In a recent Small Claims case of Lund v. Appleford Building Company Ltd., a general Contractor (the “Defendant”) learned the importance of due diligence and paying heed to its clients’ concerns and high expectations.

In or around early 2014, a couple residing in Victoria (the “Homeowners”) decided to renovate their nearly 90-year-old home (the “Home”). To oversee and manage this renovation, the Homeowners hired the Defendant, who in turn hired a painting subcontractor (the “Subcontractor”) to paint the exterior and interior of the Home. The Defendant had no prior experience with the Subcontractor.

Unfortunately, the Defendant failed to diligently check the references of the Subcontractor, or clarify who would be performing the work. As it turned out, the Subcontractor had limited involvement in supervising or overseeing his crew while they painted the Home. Several issues subsequently arose during the course of the painting, including the wrong colour of paint being ordered twice, overspray on the basement floor necessitating a change to the floor covering, as well as overspray on other portions of the Home (the “Alleged Deficiencies”). Naturally, the Homeowners expressed concern about the quality of workmanship and completion of the work.

After a dispute arose between the parties regarding the Alleged Deficiencies and the payment of holdback funds, the Subcontractor allegedly walked off the job and the Defendant was forced to contract other painters to rectify the Subcontractor’s work. Despite these efforts, the Homeowners remained unsatisfied with the quality of the work and brought a claim against the Defendant for a job “poorly managed and left incomplete”.

The Decision

In allowing parts of the Homeowners’ claim, the judge found that the Defendant was contractually responsible for hiring sufficiently skilled and qualified painters. Furthermore, the Homeowner had put the Defendant on notice of its high expectations and concerns about the quality of painting, and the court reasoned that the Defendant should have taken appropriate steps to meet those high expectations and properly address their concerns. The failure to do so, in addition to making unauthorized payments to the Subcontractor, amounted to a breach of contract by the Defendant.

In limiting the damages granted to the Homeowner, however, the judge refused to award the full estimated cost to repair the Alleged Deficiencies. In preparing cost of repair estimates, the Homeowners obtained quotes from premier painting companies in the local area. Using the analogy of a car purchase, the judge found that it would be unfair to award someone a Cadillac when they had contracted and paid for a Kia. The Homeowners had originally agreed to the low pricing of the Subcontractor, and the court held they should not be overcompensated with much higher priced painting services. As such, the damages awarded to the Homeowner were significantly lower than the amount claimed.

Lessons Learned

1. Pay attention to your client’s concerns, and consider whether there is a mismatch between their high expectations and the quality of work being provided.

2. When working with new or unfamiliar subcontractors, follow through with their references and clarify in writing how the work ought to be carried out.

3. In assessing the costs to repair, a homeowner is not necessarily entitled to damages equivalent to the highest quality of repair. Rather, a court will likely assess damages on a “cost of reinstatement basis” without overcompensating the homeowner.

This article was written by Andrew D. Delmonico and John A. Wiebe, lawyers who practice in construction law with the law firm of Kuhn LLP. This article is only intended as a guide and cannot cover every situation. It is important to get legal advice for specific situations. If you have any questions or comments about this case or other construction law matters, please contact us at 604-864-8877 (Abbotsford) or 604-684-8668 (Vancouver).