Johnston Investments v. Spears

Johnston Investments v. Spears

The defendants breached the contract by unilaterally withholding the final contract payment at substantial completion; the written contract including General Conditions governed remedies for deficiencies (warranty available after payment), so the claimant was entitled to the outstanding balance; only proven direct damages (washer and exterior door) were awarded to defendants as setoff totaling $400; claimant awarded balance plus 4% interest and costs.

Citation
2022 NSSM 29
Parties
Claimant: Johnston Investments cob as All-Craft; Defendants: Dan & Christine Spears
Court
Nova Scotia Small Claims Court
Jurisdiction
Canada
Judgment Date
3 August 2022
Procedural Posture
Small Claims Court / Decision
Outcome
Claimant's claim allowed in part; counterclaim substantially dismissed except for limited damages; claimant awarded outstanding contract balance subject to setoff, interest and costs.
Legal Topics
Breach of Contract, Warranty, Allowances and Estimates, Substantial Completion, Payment Schedule, Damages, Setoff, Contract Interpretation
Source Language
English
Contract Law Construction Law Builders Lien Law Breach of Contract Warranty Allowances and Estimates Substantial Completion Payment Schedule +3 more

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Parties

Johnston Investments cob as All-Craft

Claimant

Dan & Christine Spears

Defendants

Procedural Posture

Small Claims Court / Decision

Legal Issues

  1. 1 Whether the defendants were contractually entitled to withhold the final 5% payment at substantial completion
  2. 2 Whether the General Conditions formed part of the contract
  3. 3 Whether deficiencies alleged by defendants amounted to contractor breach allowing setoff or withholding of payment

Ratio Decidendi

The defendants breached the contract by unilaterally withholding the final contract payment at substantial completion; the written contract including General Conditions governed remedies for deficiencies (warranty available after payment), so the claimant was entitled to the outstanding balance; only proven direct damages (washer and exterior door) were awarded to defendants as setoff totaling $400; claimant awarded balance plus 4% interest and costs.

Court Disposition

Claimant's claim allowed in part; counterclaim substantially dismissed except for limited damages; claimant awarded outstanding contract balance subject to setoff, interest and costs.

Orders

  • Claimant entitled to payment of the balance due at substantial completion of $8,190.67 less setoff of $400 (awarded to defendants) resulting in net award of $7,790.67 to claimant
  • Award interest on the amount due at 4% from the date payment was due until paid