A commonly disputed issue in the construction industry is delays in project completion. Who should pay the extra costs involved in finishing the work? What happens if the delay causes loss, such as lost income? Often it comes down to the terms of the relevant contract between the construction company and the land owner.

This article considers these issues with reference to the recent decision of the Supreme Court of British Columbia in Bob Landscaping Corp. v Fang. In this case, a landscaping company sued property owners after they refused to pay for “additional work” that took place after the leveling job they had previously agreed to turned out to be more challenging than expected.

The parties agreed to landscaping work at a Surrey property

In late 2018, the defendant land owners hired the plaintiff, Bob Landscaping Corp., operated by Bozidar Vujicic, to level the land at their Surrey property. The house on the property had burned down and the property owners wanted to compact and level the land to bring the property into line with those of the neighbours so that it could be leased to allow for heavy machinery storage. The defendants mentioned wanting six inches of height to be added to the property.

The defendants and Mr. Vujicic exchanged text messages and agreed that the work would be completed for $10,000 inclusive of tax.

Delays ensued and the parties disagreed on the nature of the work required

After the defendants were concerned by a lack of progress, the parties exchanged more texts. Mr. Vujicic said that due to the nature of the land, six inches of crushed gravel and limestone would be insufficient. Instead, he thought one foot of crushed rock and limestone would be needed. He stated that the contract price was for leveling the land on a base of six inches and that the budget would need to be doubled. He proposed a new price of $16,000, plus one year’s worth of free parking. One of the defendants wrote back that “we have to stick to what we both agreed.”

The plaintiff continued to work on leveling the property and issued invoices that went unpaid. A stalemate ensued with the plaintiff refusing to complete any more work until he was paid the outstanding amounts. However, the defendants refused to provide payment until the work was completed.

After attempts to negotiate a new arrangement, the plaintiff sued the defendants for breach of contract

In January 2019, the defendants proposed a second contract with different terms, which included staged payments per truckload of limestone deposited at the property along with fees for the machines. The plaintiff proposed some amendments, including a higher payment per truckload. The defendants did not receive these proposed changes.

Through the winter the snow delayed the project, which was paused until March. At this point, the defendants paid the plaintiff an amount equivalent to four truckloads of limestone in accordance with their proposed new terms. The plaintiff, however, only deposited two truckloads of limestone, as he was under the impression that his proposed amendments applied.

This misunderstanding led to a series of angry texts being exchanged between the parties. The defendants threatened to have the plaintiff’s equipment towed and the plaintiff accused the defendants of failing to pay for services rendered. The plaintiff issued a final invoice of approximately $88,000, which was much higher than the previous invoices. When the defendants refused to pay, the plaintiff commenced proceedings.

Plaintiff argued that there were supplemental contracts

The plaintiff argued that the parties had an original verbal agreement to raise the level of the land by six inches and compact the ground. Mr. Vujicic said that his company had only been paid about $4,720, so he asked the Court for the remaining $5,280.

The plaintiff also sought an additional $83,000 for the extra work completed under supplemental contracts. In the alternative, it sought damages in quantum meruit for the value of the work performed. Quantum Meruit is a remedy for restitution that can be used to compensate someone that has enriched someone else to their deprivation in some circumstances.

Court decided the defendants only owed the unpaid balance of the $10,000 contract

Justice Brongers found that the parties did form a contract in 2018 that had two essential elements – leveling the property with the neighbouring land, and ensuring it was solid enough to support machinery, for which the agreed price was $10,000. His Honour decided that the parties had not agreed to a specific height in inches, nor that the text message discussions led to a change to the terms of the contract.

The Court determined that after Mr. Vujicic realized the project was more onerous than he first thought, he attempted to renegotiate the contract. However, the parties never agreed on new terms. His Honour said:

“The lack of such a “meeting of the minds” is particularly evident when one compares [the defendants’] proposed terms for a second contract that were communicated on January 30, 2019, with those proposed by Mr. Vujicic in response.”

The defendants threatened to terminate the contract but never did, therefore the plaintiff completed the work. The Court ordered the defendants to pay the plaintiff the outstanding balance of $5,280.

The plaintiff’s claim for quantum meruit was dismissed

To claim restitutionary quantum meruit, Justice Brongers explained that the plaintiff needed to show that the defendant was enriched, that he suffered deprivation and that these occurred in the absence of a “juristic reason” like the existence of a contract or donative intent.

His Honour dismissed the plaintiff’s claim because the alleged enrichment was due to the existence of the contract. In the alternative, the plaintiff was ineligible for the remedy because he lacked the necessary “clean hands” after trying to pressure the defendants to change a contract he regretted having entered by taking unjustified steps like preparing invoices with fictitious charges.

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