3027539 Nova Scotia Ltd. v. Mogon

3027539 Nova Scotia Ltd. v. Mogon Court Supreme Court Date 2002-05-31 Citation 2002 NSSC 96 Docket SH 160449 Judge/Registrar/Adjudicator Kelly, F. B. William (Honourable Justice) (SC) Document Type Decision Decision Content Date: 20020531 Docket: SH 160449 IN THE SUPREME COURT OF NOVA SCOTIA [Cite as: 3027539 N.S. Ltd. v. Mogon, 2002 NSSC 96] BETWEEN: 3027539 NOVA SCOTIA LIMITED PLAINTIFF - and - AJAY AND MEENU MOGON DEFENDANTS D E C I S I O N HEARD: Before the Honourable Justice F.B. William Kelly at Halifax, Nova Scotia on October 1-5 (inclusive) and December 17 and 18, 2001 LAST WRITTEN SUBMISSION: January 30, 2002 DECISION: May 31, 2002 COUNSEL: Colin D. Bryson Joseph M.J. Cooper, Q.C. KELLY, J.: [1] The parties entered into a contract for the construction of a residential home in the Halifax area. During the construction, the parties had differences of opinion regarding the right of selection of certain items, the pricing of these items, extras and generally delays in construction. When the premises was more than half completed, the defendant homeowners, Ajay Mogon and Meenu Mogon, terminated the contract. The contractor plaintiff (3027539 Nova Scotia Limited) commenced an action and filed a lien pursuant to the Mechanics Lien Act for $132,972.50. It claims an order, as provided by that Act, that it has a valid lien for the amount owing with the usual provisions regarding default of payment. [2] A supplier of building supplies has also filed a lien but, during the hearing of this matter, the parties have agreed that this is a valid lien and have agreed on the amount of that lien and the interest due. THE CONTRACT [3] After considerable pre-contract discussion involving other counsel for both parties, the contractor and the homeowners entered into a building contract on April 13th, 1999, for the construction of the house. The parties agreed that this form contract was subsequently modified by a letter dated April 7th, 1999, from the defendants’ lawyer, Mr Srini Pillay. The form contract is based on a standard form “Construction Building Contract” provided by the plaintiff. The basic financial terms of the two contract documents (hereinafter called the “contract”) may be summarized as follow: a. A base price of $132,625, inclusive of HST; b. The assignment by the Defendants to the Plaintiff of the Defendants’ HST Rebate for the purchase of the lot by the Defendants and the house construction; c. The Plaintiff’s costs of plans, permits, surveys, etc.; d. An extra of $150 (inclusive of HST) for living room doors; e. Costs of light fixtures in excess of $500; f. $3,500 towards the cost of a hot water furnace and tank; and g. The cost of the propane tank and insert. [4] The other portions of the contract relevant to this dispute are the provisions relating to the arbitration of certain disputes and the termination clauses and rights given to the parties when the contract is terminated. They are: 11. ARBITRATION The parties hereto agree that should any dispute arise relating to the quality of workmanship, defective materials, the cost of extras, or the cost of deficiencies that such disputes shall be resolved by arbitration. Both the Contractor and the Owner shall each appoint one arbitrator, who together shall appoint a third independent arbitrator. These three arbitrators acting together shall resolve all disputes relating to the foregoing and any decision or decisions made by the arbitrators shall be binding on both parties. 15. TERMINATION (a) That should the Contractor: (i) be adjudged a bankrupt either by way of assignment or by way of a receiving order; or (ii) at any time: (a) refuse or neglect to supply a sufficient supply of properly skilled workmen and materials of the proper quality; (b) fail in any way to perform work required by this Agreement; (c) fail to prosecute the work required by this Agreement in a diligent manner; (d) fail to complete this Agreement pursuant to paragraph 2; (e) commit a breach of any of the terms of the Agreement; or (iii) fail to replace or repair any work required by this Agreement which is defective; then, upon the Contractor having received from the Owner seven (7) days written notice, the Owner shall be at liberty to terminate this agreement and shall be at liberty to provide any such labour or material and to deduct the cost thereof from any moneys due or hereinafter to become due to the Contractor and to enter upon the Lot and take possession for the purpose of completion of the work required by this Agreement, of all the materials thereon, and to employ any person or persons to finish the work required by this Agreement and to provide the materials therefore; and in case of such termination of this Agreement and discontinuance of the employment of the Contractor, the Contractor shall not be entitled to receive any further payments until the work required by this Agreement shall be wholly finished, at which time, if the unpaid balance of the total contracted price of the work required by this Agreement shall exceed the expenses incurred by the Owner to complete the work required by this Agreement, such excess shall be paid by the Owner to the Contractor, but if such expenses shall exceed the unpaid balance of the total contracted price of the work required by this Agreement, the Owner shall have a claim against the Contractor, its assigns, successors and representatives for the said excess expense. Such termination by the Owner of this Agreement shall not constitute a waiver of any claim which the Owner may have against the Contractor hereunder. (b) That should the Owner: (i) be adjudged a bankrupt either by way of assignment or by way of a receiving order; (ii) not make payments to the Contractor as provided in Paragraph 1 hereof; or (iii) commit a breach of any of the terms of this Agreement; then the Contractor may be at liberty to terminate this Agreement upon the Owner having received from the Contractor seven (7) days written notice and the Contractor shall upon said termination be released from all its covenants hereunder. Upon such termination the Contractor shall be entitled to be paid for all work performed including reasonable profit. Such termination, however, shall not constitute a waiver of any claims which the Contractor may have against the Owner hereunder. The original draft contract was prepared by the contractor’s counsel and was forwarded to counsel for the owners with plans and diagrams and a set of specifications. A number of changes and additions were suggested by Mr Pillay and were advanced in his letter of April 7th , 1999, along with some documentation. On the basis of these changes, it is generally agreed that the contract was composed of the original draft agreement, the plans and specifications and the Pillay letter of April 7th, 1999. Some plans were apparently not delivered to the homeowners until after the signing of the agreement. The owners noted that on these plans the garage roof and basement structure were somewhat different than the first plans shown to the homeowners by the contractor at their initial meeting. [5] Construction commenced in late May or early June, after the building permit was obtained on May 14, 1999. While the contract completion date was originally set for August 15, 1999, it was extended because of the delay in obtaining the building permit and other delay factors. By early July, a number of difficulties arose in relation to the building heating system and the supply of bricks and siding. The parties also disputed whether a smaller garage was originally contemplated and whether the owners’ choice of siding and bricks were extras, while the contractor submitted that such choices must be within a restricted list he provided. The contractor claimed $3,000 in relation to garage changes, $500 and $900 respectively for the owners selection of bricks and siding. At trial, the contractor maintained its claims for extras for the siding and for the bricks, but appears not to continue the garage claim. An attempt was made to resolve the issues by arbitration, but this attempt broke down, and no arbitration was ever concluded. The issue with respect to many of the disputes was whether building materials and fixtures chosen by the homeowners were more costly than those the contractor was obliged to supply under the contract. [6] An early dispute and construction delay was caused by provisions relating to the heating system. The contract provided that the homeowners could choose the supplier of the hot water furnace and tank. In this case, the supplier, Irving, would only supply the furnace if it also supplied the hot water baseboard heating system, which, under the contract, was the contractor’s responsibility. A problem arose because Irving’s price to install the hot water baseboard heating system was more than the contractor’s estimated cost for doing it itself, and the contractor insisted upon an extra if Irving was going to install the hot water baseboard heating system. It requested the homeowners pay $4,500 and HST towards Irving’s quote of $6,988 plus HST for the hot water heating system and furnace. This issue was never finally resolved, although as part of negotiations prior to the termination of the contract, Mr Mith Ilesh Thandra Jha, the principal owner and operator of the plaintiff company, and Mr Pillay attempted to resolve this issue from time to time. Mr Jha no longer used a solicitor during the frequent attempts at resolution because of the cost factor. To some extent Mr Jha’s misunderstanding of the arbitration process was a factor during the various attempts at resolution of disputes and misunderstandings in relation to the contract. When the homeowners attempted to institute the arbitration clause of paragraph 11 of the contract, a full panel acceptable to both sides was never appointed. At one stage the homeowners appointed their member of the panel, a member of the Indian-Canadian community. Mr Jha and the Mogons were all members of that community. Mr Jha responded by appointing his supervisor on the project, Mr. Kohl. A lawyer arbitrator was selected from a list who expressed concern regarding an employee of one of the parties being on the panel. Mr Jha responded that he felt the Mogons’ appointee may also have a bias as a friend of the Mogons. Although the two appointees got together to discuss what issues were in conflict, and Mr Jha considered this discussion somehow binding, it is abundantly clear that the somewhat cumbersome arbitration procedure was never fully effected, mainly due to Mr Jha’s lack of understanding of the process and concern about its cost to his company. [7] Another of the issues raised during construction were changes to the garage roof. The contract plans showed a ‘gable roof’ but, during construction, it was realized that a gable roof over the garage would eliminate a side window on the house. Accordingly, a ‘hip roof’ was built over the garage for which the plaintiff is claiming an extra of $900. One of the major concerns of the Mogons was the considerable delay in building completion, caused in part by these disputes. Their belief was that Mr Jha was failing to provide an adequate work force to complete the project on schedule. [8] After attempts at informal resolution of the many matters in dispute, negotiations broke down in September 1999. Mr Pillay had written a letter dated September 1st, 1999, providing a complete list of the exact flooring, fixtures and other items that they required to be installed to complete the house. This was a complete document involving price and serial numbers of the items. The letter acknowledged that some of these items were extras that they would pay for. This letter advised the contractor that “If not accepted at this time, this proposal is to be considered revoked and my clients will look to another contractor to complete their home.” [9] Discussions ensued between the parties over the next week attempting to resolve the matters, culminating in a response by the contractor in a letter dated September 7th, 1999. The contractor attempted to reach agreement on some items but emphasized that many of the items specified by the defendants were “builders choice” items, meaning that the contractor, not the owners, had the right to select such items, provided that the specifications in the contract were met. The contractor argued that the owners were limited to choosing flooring, etc., from a limited list provided by the contractor and, if the owners wanted other colours or quality, they could pay extra. Most frustrating to the owners was the repeat of earlier claims which they felt had been resolved, including $30,000 for an alleged basement change and $3,000 for a garage change. [10] Mr Pillay consulted with them and on the same day, September 7th, 1999, forwarded a notice of termination of the contract to the contractor. After giving this notice and pursuant to paragraph 15 of the agreement, the owners obtained three estimates from others to complete the contract. One of these estimates, that of St. Onge Developments, was accepted and that contractor completed the building. the owners seek to set those “completion costs” off against what is otherwise owed under the contract. The contractor states that several of the items in what the defendants maintain are completion costs are, in fact, extras to the contract. Before the termination of the contract the owners had paid the sum of $34,000 towards the contract price, which amount consisted of a deposit of $2,500, a “roof tight” payment of $35,000, less $3,500 for a mechanics lien hold back. The owners claim the amount of $132,625 was their cost to complete the project. The parties have entered into a consent order of this court dated the 19th of December, 2001, which agrees on some of the disputed extras, the method of calculating the HST rebate, and provides for the method to be used in the calculation of the contract price due to the contractor, depending on the determination of the issues by this court. The order also designated a Referee pursuant to Civil Procedure Rule 35 and authorizes the Referee to make valuations of disputed extras based on the court’s determination of the contractor’s entitlement to these extras. The costs of the Referee is to be shared equally by the parties. Certain directions from the court are required by the Referee to fulfill his functions. A final order will then be issued after his report to the court. the following are the issues now to be resolved. ISSUES 1. Did the owners’ have the right under the contract in these circumstances to terminate it? 2. What, if any, is the plaintiff’s entitlement to certain “disputed extras”, including the hip roof, the bricks, the siding and the heating system? ARGUMENT Was the defendants’ termination of the contract valid? [11] The principal issue to be decided is whether the owners, the Mogons, were justified in terminating their contractual relationship with the contractor, as represented by Mr Jha. The position of the contractor is that the contract was terminated because the owners misunderstood their rights under the contract, believing they had the right to choose the supply of certain items, such as flooring, siding and bricks, and because of their heating or furnace selection. [12] The owners claim that by the time of the termination in early September, 1999, the contractor was in breach of the contract for a number of reasons which will be reviewed below. The plaintiff asserts that it was not in breach of the contract and that the defendants’ termination of the contract was wrongful. The basic position of the contractor, unless otherwise specified, a contractor always has the right to determine how a contract is performed and what materials are to be used in the performance of the contract. While many building contracts specifically give the owner some choice or control over the supply of certain items, as this contract did, the contractor here claims the owners did not have the right to insist on their choice of flooring, mirrors, bathroom fixtures etc., because the contract did not give them that right, and that, accordingly, their termination of the contract because the owners did accept this principle was wrongful. The owners claim the contractor was in fundamental breach of the contract in that he failed to advance the project in a reasonable and diligent manner, having completed allegedly about 60% of the work at the time of the termination, a considerable time after the completion date of August 15th, 1999. Subsumed in this general claim they argue Mr Jha failed to provide sufficient workmen at times and held up work on the project while disputes were being resolved, all of which caused extensive delays. Additionally, the owners related their termination to Mr Jha’s alleged unreasonable claims for “extras”, particularly those relating to the garage and the basement and his bad faith in pursuing the arbitration and resolution process. The submission of the owners is that their right to terminate is based on breaches of paragraph 15(2)(a)(b)and(c) of the contract. [13] In reviewing the law in relation to the repudiation of a contract , Palmeter, CCJ commented in Monet v. All Seasons Siding & Carpentry Ltd. (1990), 102 N.S.R. (2d) 389 (Co. Ct.), at p. 39, that an owner can terminate a building contract where there has been a substantial breach of the contract by the builder which amounts to repudiation of the contract by the builder (see: Goldsmith on Canadian Building Contracts (4th Edition)). Goldsmith at p.6-4 states: “An owner is entitled to terminate a contract if it is clear that either before the commencement of the work, or during the course of it, the contractor is not in substance able or willing to perform the work. Frequently building contracts contain an express clause entitling the owner to take the work out of the contractor’s hands, and forfeit the contract in certain circumstances. Sometimes the certificate of the architect or engineer, certifying the contractor’s inability or unwillingness to complete, is required as a condition precedent to such right. An order exercising such a right of forfeiture must comply strictly with the terms of the contract, or he may himself breach the contract by preventing the contractor from completing. Mere bad or defective work will not, in general, entitle an owner to terminate a contract, but the contractor’s work may be so bad or so defective as to amount, in substance, to a failure or refusal to carry out the contract work, and thus amount to repudiation. In Hudson’s Building and Engineering Contracts, 11th ed. (1995), the author makes the following useful comments at s. 4.205, pp. 612, 613: (1) Repudiation and Termination for Breach 4.205 It is evident, particularly in relatively long-term contracts, that the remedy of a right to damages while remaining obliged to continue, or to attempt to continue, with the contract to the end will for practical purposes often be a quiet inappropriate remedy for an innocent party, whether an owner faced by wholescale incompetence and defective work, or by extreme delay or abandonment on the part of the part of the contractor, or a contractor faced with chronic delays by the owner in making interim payment, or a continued lack of information or possession which persists beyond a certain point. The right of the innocent party to rescind or terminate a contract because of breach by the other, apart from obtaining damages for it, will basically arise in the following situations: . . . (b) Where there is a breach of a term which, while not by itself sufficiently serious, may be so protracted or repeated, despite protest or notice by the innocent party, that it either evinces a subjective intention not to be bound by the contract, as in the case of deliberate and continued breaches (however minor), or simply an objective involuntary inability to perform the contract properly. Notice calling on the party to perform, while not always strictly necessary if the facts speak for themselves, is highly desirable from the evidentiary point of view to establish both the seriousness of the continued breach and the unwillingness or inability of the guilty party to perform, as well as to dispel any defence based on alleged waiver of the breach. No innocent party is bound to accept deliberate incomplete performance by the other, if proper performance is feasible, it is submitted, and the doctrine of substantial performance will not avail a guilty contractor, for example, however slight his failures of performance, unless they are involuntary and due to matters outside the contractor’s control or represent a genuine endeavour to mitigate a breach. [14] The burden of proof is on the owners to satisfy the court that there was a repudiation of the contract. The court must find that there was a substantial breach of the building contract “which amounts to a repudiation” by the contractor “which can fairly be regarded as evidencing an intention...no longer to be bound by the terms of the contract.” Here the contractor did not explicitly renounce the contract so what is to be determined is whether there was a breach which “by itself evinces the necessary intention no longer to be bound”. In making this assessment the test is an objective one and even a direct or indirect intention by the party allegedly in breach that they wished to continue the contract is not necessarily conclusive in rebutting a repudiation of a contract. A party may repudiate a contract even when the party honestly believes it wants to continue with the contract to completion. The test is an objective one. See Gettle Bros. Construction Co. v. Alwinsal Potash of Canada Ltd. (1969), 5 D.L.R. (3d) 719 (Sask. C.A.), where at p. 725 the court states as follows: The respondent took it on itself to impose terms that were harsh and unrealistic before it would make the payments it was obligated to make under the contract. By indicating that it would not, under these circumstances, make the payments when due, the respondent repudiated the agreement within the well-known principles established by the Courts in numerous cases, among them the decisions of this Court in Canadian Doughnut Co. Ltd. v. Canada Egg Products Ltd.,[1954] 2 D.L.R. 77, 11 W.W.R. (N.S.) 193 (affirmed [1955] 3 D.L.R. 1, [1955] S.C.R. 398), and Budzak et al v. Bene (1963), 42 D.L.R. (2d) 679, the appellant was accordingly justified abandoning the work. [15] Referring to clause 15 of the contract, repeated in full above, the alleged repudiation of the owners is based on the following portions of that section: “That should the contractor ...(ii) at any time (a) refuse or neglect to supply a sufficient supply of properly skilled workmen and materials of the proper quality; (b) fail in any way to perform work required in this Agreement; (c) fail to prosecute the work required by this agreement in a diligent manner; (d) fail to complete this Agreement pursuant to paragraph 2; [or] (e) commit a breach of any of the terms of the Agreement...” “then, upon the Contractor having received from the Owner seven (7) days written notice, the Owner shall be at liberty to terminate this agreement...”. [16] The thrust of the owners’ claim is that they specified and were dependant on a fixed completion date and, although accepting Mr Jha’s request to extend that date to August 15th, 2001, they were so frustrated by the further delays in the progress of the contractor that by the beginning of September, with the construction less than two-thirds completed with frequent evidence of failure of their builder to prosecute the work at the site, they had to take action. The action was thorough and explicit. Together with their solicitor, they went to considerable effort to review all matters in dispute and put on paper their position and all the facts they felt were necessary for Mr Jha to make a commitment to cease delays and to commit to an early completion of the contract. The proposal made it clear that, unless they had a satisfactory reply, they would terminate the contractual arrangement and have another contractor complete the contract as provided for in the building contract. [17] I have reviewed the evidence in relation to the claim that the contractor, Mr Jha, caused delays in failing to provide sufficient workers. This consisted mainly that Mr Mogon visited the site frequently and rarely saw more than a very limited number of workmen, sometimes only the foreman, Mr Herbert Kohl, and sometimes no one at all. I accept there might be some reasonable explanation for this situation, including the hours of some visits, but, I accept Mr Mogon’s evidence in this regard. Not only was it not seriously contested by conflicting evidence, but Mr Jha did not present any conflicting evidence to rebut it. He could have done so by pay records or even through his then job supervisor, Mr Kohl. Mr Jha also acknowledged there was a work delay of one month due to disputes. Mr Kohl’s evidence was that he was on the job on a regular basis and that Mr Mogon visited almost daily and sometimes twice a day. However, he did not comment on the attendance of other members of the work force. At times of no work being done, Mr Pillay urged Mr Jha to continue the work and the matter of extras could be resolved later and the completion date would not be affected. Mr Jha did not always proceed in this manner and considerable delays resulted. On all the evidence I am satisfied that the defendants’ concerns of unnecessary delays in construction were justified or at least required a rational response from the plaintiff. I found the overall evidence of Mr Pillay to be careful, thorough and very reliable and accepted his evidence where it was inconsistent with that of Mr Jha and other witnesses. I am also satisfied that the defendants, when acting through their counsel, acted in good faith in attempting to bring the construction items in issue to final resolution in order to expedite a reasonable completion date. I note from the evidence that they substantially acknowledged that they had limited choices in such matters as the bricks, siding and fixtures and agreed either to pay for the extras or to resolve such costs in the future. Their attempt in final resolution I find to be reasonable, fair and in good faith. Mr Jha made some attempts also in this regard, but unfortunately at times his position seemed to be that he would only proceed if ongoing issues were resolved in his favour. Here, time was specified to be of the essence and the possible completion date was, at the time of the defendants’ repudiation, several weeks away. Under all of the circumstances, I find the defendants’ loss of confidence in the plaintiff’s good faith not unreasonable. Prior to and after the notice of Mr Pillay, he and the Mogons made considerable and reasonable attempts to resolve the outstanding issues and, although Mr Jha made some reasonable attempts to resolve some of the matters, he could not resist raising matters that challenged his good faith (see Gateway Realty Ltd. v. Arton Holdings Ltd. (1991), 106 N.S.R. (2d) 180 N.S.S.C.)). These matters included some already essentially resolved (that the owners had to pay extra for items costs beyond the costs where selection was limited), some new matters (concrete front steps, oak staircase) and the claim that he had built a two storey house when he was only required to build a split-entry one (at an additional cost of $30,000). In applying the guidelines of the authorities cited above, I conclude that the defendants validly repudiated the contract. Disputed Items [18] The consent order of the parties of December 19th, 2001, provided that the “Court is to determine the Plaintiff’s entitlement to the disputed items, with the valuation of the extras for the hip roof, bricks and siding to be determined by the Referee.” I will deal with the bricks and the siding together and the hip roof claim separately. The other disputed item is the furnace or heating claim where I understand I am to determine if an extra is appropriate and, if so, the amount due to the plaintiff. Heating System [19] The agreement between the parties in relation to the heating system is somewhat complex. The draft contract provided (in Schedule B, p. 2) that the “hot water, furnace and tank system, will be leased in the owners name...”. Mr Jha interpreted that this mean his company would supply the furnace system and lease it to the Mogons. This item was modified by the April 7th, 1999, Pillay letter amendment which reads as follows: “12. Hot water baseboard heating system for the entire dwelling to be provided by the contractor at his cost. Hot water furnace and tank to be purchased or leased by the Owner from a company of their choice (Estimated cost to the Owner of $3,500.00).” On the original of this amendment three inked interlineations appear. In the left margin are the initials of Mr Jha above the comment “fixed cost to the owner”. The word “estimated” is cross out and lastly, the letters “ok” are found in the right margin. There was considerable evidence by witnesses regarding these interlineations. Mr Jha stated the “ok” was not marked by him. [20] When the Mogons chose Irving as the lessor of their furnace, that company indicated they could only enter into such a contract if they did the installation which included the baseboard work the contract assigned to the contractor. A check with the other suppliers confirmed that this was the practice of those companies as well. When Mr Jha was advised of their choice by Mr Pillay, he protested that he had the right under the contract to lease the furnace to the Mogons. Mr Pillay attempted to persuade him otherwise by reference to the clear words of the contract and believing he may have failed to do so, he sent Mr Jha the letter of July 2nd referred to above. Mr Pillay’s evidence was that many hours and days were involved in the furnace dispute, causing considerable delays in the house construction. The concern for this delay caused the Mogons to offer an additional $1000 to Mr Jha in relation to the furnace if there were no more delays and this was accepted. Unfortunately, there were such delays causing Mr Pillay to forward the following letter of August 31st, 1999: Dear Mr Jha: RE: Building Contract with Ajay and Meenu Mogan Further to our conversation yesterday, I wish to confirm that my client has already provided their compromise proposal in this matter. They have chosen Irving for the furnace and had agreed that if there were no more delays or problems, they would pay $1,000.00 more for this item. This did not occur. Things have been delayed and it is long past the closing date for construction. You had asked my client to provide an arbitrator for arbitration and asked that this person not be a member of the Indian community, but someone independent. My clients have chosen Stewart McInnes three weeks ago and you have still chosen no one. Yesterday, you advised me that you consider the arbitration part of the contract now completed with the meeting of Mr. Lekhi and your representative. My clients position with regard to this contract is simple. Please complete the house as called for in the contract as soon as possible. When this is done, your company will be paid for its work. Please provide any further communication in writing so that my clients can have a clear indication of your position in this matter. Yours very truly, MCGINTY MACLEAVE [21] Mr Pillay noted that his last sentence was a continuing attempt to have amendments to the contract in writing. As well, I would note that the position of Mr Jha was that the earlier meeting of the two appointed representatives of the parties was a completion of the arbitration process as referred to in this letter was also a position he maintained at trial. His representative, Mr. Kohl, and all other witnesses agreed this was not the case. I found that no arbitration was concluded by the parties. This and other evidence leads me to find that the offer by the Mogons to pay an additional $1,000 to Mr Jha in relation to the furnace was conditional on him proceeding expeditiously with construction, a condition which was not fulfilled. No agreement to amend the contract in relation to the heating provision has been proven to my satisfaction and I therefore find that the $1,000 claimed as an extra has not been proven. Bricks and Siding [22] The two contract documents provide that there would be “vinyl siding,...purchasers’ choice of color from builder’s samples” and “Bricks in front of house one floor”, with the latter modified by the letter of April 7th referred to above by adding “plus centre of second floor as shown on plan”. On the face of these words and their context, it is at least arguable that the limited choice might refer only to the siding as the reference to bricks is on a separate line with no similar limitation and with the first word capitalized. However, this was not an argument advanced and the Mogons seemed content to proceed on the basis that the brick selection would be limited to samples provided by Mr Jha. The Mogons stated they discussed the type of bricks to be used with Mr Jha before a contract was signed. When they were getting initial information on his proposal from him, he explained that they could select a brick type from those he had used in other houses, including his own house in Park Lane. They further stated he indicated to them that they would have choices of the kind of brick used in a development called Portland Estates. As I understand the sometimes-confused evidence regarding the bricks as eventually installed, they may have been a type similar to those described above. [23] In any event, at one stage the parties stopped communicating with each other directly. The Mogons claimed Mr Jha hung up on Ms Mogan during a discussion on construction progress. He acknowledges bad feelings had developed but denies the impolite action. On June 1st Ms Mogon followed up this discussion by letter asking him to forward to them his brick and shingle samples, indicating they would respond. Mr Jha visited the Mogon home several days later at which time the Mogons believed the bricks and shingles were selected. Apparently, the roof shingles were selected and were installed and no extras were claimed. About two weeks later the first advance was received, Mr Jha sent a note to Mr Pillay dated July 20th advising the bricks would be builder’s choice, otherwise he was demanding an extra of $900 for the bricks if they were chosen by the owners. I would note that in the same communication Mr Jha reasonably requested arbitrators to be appointed by the parties immediately. Unfortunately, although the defendants had appointed one, Mr Jha did not comply with his own suggestion and appoint a suitable person, apparently because of the cost. In the same note Mr Jha indicated that siding would be from the builder’s sample of three colours, white, dark brown and green, but if another colour was selected the additional cost would be $500. The Mogons selected a colour and it was installed. Mr Mogon’s evidence was that Mr Jha brought siding samples which included a gray one which they selected and at the time there was no suggestion that this might constitute an extra. They stated they also selected bricks that were the same as he had on his house and there was no discussion that this selection would constitute an extra or, indeed, that they were restricted to only three colours of the approximately 15 siding samples he provided. [24] I would request the Referee to inspect the siding samples provided by Mr Jha to the Mogons and determine if a different colour was selected. If so, then to determine the reasonable additional costs likely to be incurred by the plaintiff and to report that amount to the court. With reference to the claim of extras for the bricks, I would request the Referee to compare the bricks on the Mogon residence installed by the plaintiff and compare them with the quality of the bricks provided to the Mogons as samples. He is requested to then determine the reasonable additional cost likely incurred by the plaintiff, if any, and report that amount to the court. If such samples of bricks and siding are not reliably available, to then inspect the quality of bricks and siding on Mr Jha’s residence as referred to by him in his pre-contract discussion with the Mogons. He would then compare these with the installed bricks and then to report to the court his best judgment on the assessment of extras, if any. Hip Roof [25] Mr Jha claims $900 for his company’s alleged additional cost of having to change the garage roof from a hip roof to the gable roof shown on the contract plans. Mr Jha’s evidence was that during construction he realized the garage should have a hip roof instead of a gable roof or the window over the garage would have to be eliminated. He stated he advised Mr Mogon who told him he wanted the window retained. When asked if an extra was discussed then, he replied that he told Mr Mogon there would be an impact on the cost but did not presently know. Mr Mogon stated Mr Jha asked for changes to the top of the house from gable to hip in April of 1999, but not to the garage. Mr Mogon disagreed with the evidence of Mr Jha in considerable aspects of the latter’s evidence regarding alleged discussions on extras for the basement and garage. After considering all of the evidence and noting that the contract requirement requiring that extras be agreed upon in writing, I am not persuaded that the owners requested the roof change nor that an extra should be allowed for any change. CONCLUSION [26] These appear to be the matters to be decided by the court to effect the order of December 19th, 2001. However, I retain jurisdiction to clarify or supplement if necessary. I anticipate that when the Referee files his report with copies to counsel that they can then agree on and file an order with me. I would ask them to attempt to agree on costs which should substantially follow the result. In the event of any matter being in dispute, I would ask counsel to provide me with the substance and their position on the matter or matters in issue by briefs, and I will set down a day to conclude this already protracted litigation. J.