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Construction Law - CONTRACTS - Building contracts - Terms - Penalties or liquidated damages - Breach - By owner - Delay - Failure to pay contract moneys

Thursday, December 22, 2016 @ 7:00 PM  


Appeal by the plaintiffs, Zhang and Ren, from a trial judgment in favour of the defendants, Cute-Go Novelty and Liu. In April 2010, Liu agreed to build a laneway house on the plaintiffs’ property in Vancouver. The written agreement provided that the work would be completed within 120 working days from the date of excavation, which was not to be later than April 2011, and following final inspection by the city. The agreement provided for a delay penalty of $83 per day. The plaintiffs claimed that the work was not completed and inspected by the city until October 2012. The plaintiffs accordingly claimed damages pursuant to the delay penalty. The plaintiffs further claimed that the personal defendant Liu had improperly used a corporate name, Grand East Development, and misrepresented his licensing status with the Homeowner Protection Office. The trial judge found that the penalty clause was not triggered, as the completion date was dependent upon the city inspection. Any delay was attributable to the city inspection process and the fact that the plaintiffs delayed payment. The judge allowed the defendants’ counterclaim for monies owed under the contract plus incidental work. The plaintiffs appealed the aspects of the judgment related to the counterclaim.

HELD: Appeal dismissed. The reasons for judgment were sufficient to permit appropriate appellate review. The evidentiary record disclosed no basis for finding a reasonable apprehension of bias. The trial judge’s credibility findings were available on the evidence. The preference for the evidence of the defendants did not disclose bias. The determination that the defendant did not receive the final payment owed under the parties’ agreement was supported by the evidentiary record. The doctrine of ex turpi causa arising from the fact that the defendant was an unlicensed builder did not bar recovery under the circumstances. The plaintiffs did not rely on a representation of licensed builder status, and the work was acknowledged as having been of good quality. No compensable loss flowed from the defendant’s unlicensed status.