Alberta Court of King's Bench – Dissatisfied Customer’s Obligations to a Contractor
In a recent decision, Cubbon Building Centre Ltd v Gabrysh, 2020 ABQB 219, the Alberta Court of King's Bench answers the question: can a home renovation contractor’s workmanship be so deficient that the customer is relieved of any obligation to pay?
In this decision, the Honourable Justice Mah clarifies the risk to owners who fail to allow a contractor the ability to remedy defects on a project and subsequently terminate or repudiate an agreement.
The action arises as a result of the defendant’s failure to pay in full for the supplies provided and work performed by the plaintiff. The defendant alleged that the work performed was so substandard that he was required to dismantle it and have it all redone by another contractor, and also alleged breaches of the Fair Trading Act (now the Consumer Protection Act) so as to nullify any contract with the plaintiff.
In its review of the law the Court provides that a fundamental breach entitling the innocent party to repudiate the contract must be a breach that goes to the root of the contract and therefore deprives the contracting party of substantially the entire benefit of the very thing for which it contracted.
Ultimately, the plaintiff was successful in their action, with the Court finding that there was no fundamental breach of contract on the plaintiff’s part and therefore the defendant was not entitled to repudiate the contract, or purport to terminate it as he did. Relying on 1314058 Alberta Ltd v Albers, 2019 ABQB 9, which outlines the law relating to fundamental breach in the context of residential renovation, the Court held:
Further to the above, when considering the alleged breach of the Fair Trade Act by the plaintiff, the Court found there was no evidence of overcharging or misrepresentation and dispensed with the defendant’s allegations accordingly.
The key take-aways from this decision are:
The action arises as a result of the defendant’s failure to pay in full for the supplies provided and work performed by the plaintiff. The defendant alleged that the work performed was so substandard that he was required to dismantle it and have it all redone by another contractor, and also alleged breaches of the Fair Trading Act (now the Consumer Protection Act) so as to nullify any contract with the plaintiff.
In its review of the law the Court provides that a fundamental breach entitling the innocent party to repudiate the contract must be a breach that goes to the root of the contract and therefore deprives the contracting party of substantially the entire benefit of the very thing for which it contracted.
Ultimately, the plaintiff was successful in their action, with the Court finding that there was no fundamental breach of contract on the plaintiff’s part and therefore the defendant was not entitled to repudiate the contract, or purport to terminate it as he did. Relying on 1314058 Alberta Ltd v Albers, 2019 ABQB 9, which outlines the law relating to fundamental breach in the context of residential renovation, the Court held:
There is no doubt that Cubbon’s product did not meet Mr. Gabrysh’s expectations. However, he did not afford them the opportunity to make good. Moreover, he undid their work. Tearing something down does not mean that it was not done in the first place. Mr. Gabrysh’s actions do not relieve him from liability for Cubbon’s services and materials.
Further to the above, when considering the alleged breach of the Fair Trade Act by the plaintiff, the Court found there was no evidence of overcharging or misrepresentation and dispensed with the defendant’s allegations accordingly.
The key take-aways from this decision are:
- a contractor’s workmanship not meeting the owner’s standards, does not necessarily relieve the owner from liability for materials and services provided;
- contractors should be given the opportunity to address concerns prior to hiring a replacement contractor;
- tearing down a product that does not meet the owner’s standards does not mean that it was not done in first place; and
- dissatisfaction in a contractor’s work does not necessarily amount to a fundamental breach.