514953 B.C. Ltd. et al. v. Leung,

• Jurisdiction: British Columbia
• Judge: Prowse, Hall and Levine, JJ.A.
• Court: Court of Appeal (British Columbia)
• Citation: 2007 BCCA 114,(2007), 236 B.C.A.C. 191 (CA)
• Date: 16 January 2007

514953 B.C. v. Leung (2007), 236 B.C.A.C. 191 (CA);

    390 W.A.C. 191

MLB headnote and full text

Temp. Cite: [2007] B.C.A.C. TBEd. FE.058

514953 B.C. Ltd. dba Gold Key Construction and Vincent Chiu (respondent/plaintiff) v. Yin Sing Leung (appellant/defendant)

(CA032585; 2007 BCCA 114)

Indexed As: 514953 B.C. Ltd. et al. v. Leung

British Columbia Court of Appeal

Prowse, Hall and Levine, JJ.A.

February 23, 2007.

Summary:

Leung contracted with Gold Key Construction to build a house for him. Leung refused to pay Gold Key's final invoice until deficiencies in the construction were remedied. Leung's expert estimated the cost of repairing the deficiencies at around $60,000. Gold Key sued Leung for the amount of the outstanding invoice, less $6,617 for the deficiencies which it acknowledged. Leung submitted that $60,000 should be set off against Gold Key's invoice due to the alleged deficiencies and that a further $3,000 should be set off as a penalty for the failure to complete the house in a timely way.

The British Columbia Supreme Court, in a decision reported at [2004] B.C.T.C. Uned. 737, awarded Gold Key judgment for $58,876.15, being the $67,493.15 balance owing on the contract, less a set-off of $8,617, which consisted of $2,000 as a penalty for failure to complete the work in the time specified and $6,617 to rectify the acknowledged deficiencies. The court considered that Leung had not led any evidence of diminution of the value of the house, and that the cost of remedying the unacknowledged deficiencies would clearly exceed any diminution of value, and it concluded that Leung had not proved any loss arising from the unacknowledged claims. Leung appealed, arguing that the court erred in finding that the measure of damages was the diminution of value of the home.

The British Columbia Court of Appeal dismissed the appeal. It was appropriate for the trial judge to adopt the diminution in value test. As no such diminution was proved, no award of damages could be made under that head.

Building Contracts - Topic 3442

Liability of builder - Defective workmanship or design - Damages - Leung contracted with Gold Key Construction to build a house for him - Leung refused to pay Gold Key's final invoice until deficiencies in the construction were remedied - Leung's expert estimated the cost of rectifying the deficiencies at around $60,000 - Gold Key sued Leung for the amount of its outstanding invoice, less $6,617 for the deficiencies which it acknowledged - Leung submitted that $60,000 should be set off against Gold Key's invoice due to the alleged deficiencies - The trial judge awarded Gold Key judgment for the balance owing on the contract, less a set-off of $8,617, which consisted of $2,000 as a penalty for delay in completing the work and $6,617 to rectify the acknowledged deficiencies - The trial judge considered that Leung had not led any evidence of diminution of value, and that the cost of remedying the unacknowledged deficiencies would clearly exceed any diminution of value, and he concluded that Leung had not proved any loss arising from the unacknowledged claims - The trial judge also considered that Leung had occupied the house for five years and had not remedied any of the alleged deficiencies and there was no evidence that he intended to do so - The British Columbia Court of Appeal held that it was appropriate for the trial judge to adopt the diminution in value test - As no such diminution was proved, no award could be made under that head.

Building Contracts - Topic 3568

Liability of builder - Damages - Measure of - Reinstatement costs of defective work - [See Building Contracts - Topic 3442].

Building Contracts - Topic 3581

Liability of builder - Damages - Measure of - Loss or diminution in value of owner's property - [See Building Contracts - Topic 3442].

Damages - Topic 201

Entitlement - Requirement of loss - [See Building Contracts - Topic 3442].

Damages - Topic 6512

Contracts - Building contracts - Breach by engineer or builder - Restoration costs - [See Building Contracts - Topic 3442].

Damages - Topic 6516

Contracts - Building contracts - Breach by engineer or builder - Measure of damages - [See Building Contracts - Topic 3442].

Cases Noticed:

Strachan v. Barton (1993), 10 C.L.R.(2d) 142 (B.C.S.C.), refd to. [para. 12].

Radford v. de Froberville, [1978] 1 All E.R. 33; [1977] 1 W.L.R. 1262, consd. [para. 13].

Ruxley Electronics and Construction Ltd. v. Forsyth, [1996] A.C. 344; 185 N.R. 241 (H.L.), consd. [para. 13].

Strata Corporation NW 1714 et al. v. Winkler (1987), 20 B.C.L.R.(2d) 16; 45 D.L.R.(4th) 741 (C.A.), refd to. [para. 20].

McGarry v. Richards, Ackroyd & Gall Ltd., [1954] 2 D.L.R. 367 (B.C.S.C.), refd to. [para. 20].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 23].

Counsel:

J.J. Kim, for the appellant;

R.M. Kyle and L. Nguyen, for the respondent.

This appeal was heard on January 16, 2007, at Vancouver, British Columbia, before Prowse, Hall and Levine, JJ.A., of the British Columbia Court of Appeal. The following judgment of the Court of Appeal was delivered by Hall, J.A., on February 23, 2007.