Infinity Steel Inc. v. B & C Steel Erectors Inc. et al., (2011) 304 B.C.A.C. 227 (CA)

• Judge: Huddart, Saunders and Hinkson, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: February 07, 2011
• Jurisdiction: British Columbia
• Citations: (2011), 304 B.C.A.C. 227 (CA);2011 BCCA 215

Infinity Steel v. B&C Steel (2011), 304 B.C.A.C. 227 (CA);

    513 W.A.C. 227

MLB headnote and full text

Temp. Cite: [2011] B.C.A.C. TBEd. MY.017

Infinity Steel Inc. (appellant/plaintiff) v. B & C Steel Erectors Inc. (respondent/defendant)

(CA037427; 2011 BCCA 215)

Indexed As: Infinity Steel Inc. v. B & C Steel Erectors Inc. et al.

British Columbia Court of Appeal

Huddart, Saunders and Hinkson, JJ.A.

April 28, 2011.

Summary:

Infinity Steel Inc. sued B & C Steel Erectors Inc. for damages for breach of contract, including back charges for delay and increased costs to reassign and complete a building project. B & C counterclaimed for damages for breach of contract and breach of trust or in the alternative as compensation for unjust enrichment on a quantum meruit basis for all work conducted. It asked the trial judge to quantify the award based on the fair value of the work that had been completed.

The British Columbia Supreme Court, in a decision reported at [2009] B.C.T.C. Uned. 1053, dismissed the claim and counterclaim for damages for breach of contract, and awarded $86,338 on B & C's counterclaim for compensation for unjust enrichment. The contract was not enforceable as it lacked the essential term of price. B & C was entitled to reasonable payment for the services rendered "on a quantum meruit basis". The court did not specify whether it made the award as a contractual remedy or as an unjust enrichment remedy. Infinity appealed.

The British Columbia Court of Appeal held that the trial judge's only error was to deduct the costs of delay attributable to B & C from the total cost of labour rather than from the amount of reasonable compensation. Thus, the court varied the award to correct what it saw as a calculation error, making the final sum $79,338.

Building Contracts - Topic 4168

Quantum meruit claims - Measure of compensation - Determination of - Benefit to owner - The British Columbia Court of Appeal stated that "[i]t is now firmly established that a claim alleging unjust retention of a benefit conferred in an ineffective transaction is a discrete category of the doctrine of unjust enrichment, which may attract a personal monetary remedy ... and that remedy must match, as best it can, the extent of the enrichment unjustly retained by the defendant ... However, ... equitable remedies are flexible. They must respond to various situations in various ways, so as to 'deal with different circumstances according to principles rooted in fairness and good conscience' ... [A] trial judge's first task after rejecting a contractual remedy and finding unjust enrichment is to determine what measure is appropriate to remedy the unjust enrichment in all the circumstances of the case ... [I]n the light of Kerr [v. Baranow (2011) (S.C.C.)], the appropriate measure for restitutionary quantum meruit is to be selected to meet the circumstances of the particular case. Important factors will include but not be limited to, the course of dealings between the parties, any estimates obtained, the costs incurred, the scope of work, the actual work done, the market value of the services provided" - See paragraphs 19 to 22.

Building Contracts - Topic 4170

Quantum meruit claims - Measure of compensation - Considerations - Fair and just amounts - Infinity Steel Inc. sued B & C Steel Erectors Inc. for damages for breach of contract, including back charges for delay and increased costs to reassign and complete a building project - B & C counterclaimed for damages for breach of contract and breach of trust or in the alternative as compensation for unjust enrichment on a quantum meruit basis for all work conducted - It asked the trial judge to quantify the award based on the fair value of the work that had been completed - The trial judge dismissed the claim and counterclaim for damages for breach of contract and awarded B & C $86,338 on its counterclaim for compensation for unjust enrichment - Infinity appealed - The underlying issue was whether the trial judge erred in failing to take deficiencies into account - Infinity suggested that either the trial judge failed to distinguish contractual quantum meruit from restitutionary quantum meruit or he incorrectly applied the law of restitutionary quantum meruit - The British Columbia Court of Appeal held that the awards under both measures would be comparable, because the same factors were material to the quantification - The court was not persuaded the trial judge failed to consider the evidence of deficiencies when he quantified the reasonable compensation for work done - The trial judge's only error was to deduct the costs of delay from the total cost of labour rather than from the amount of reasonable compensation - Thus, the court varied the award to correct what it saw as a calculation error, making the final sum $79,338 - See paragraphs 24 to 29.

Restitution - Topic 121

Unjust enrichment - Remedies - General - [See Building Contracts - Topic 4168 ].

Cases Noticed:

Rafal v. Legaspi, [2007] B.C.T.C. Uned. A60; 2007 BCSC 1944, refd to. [para. 11].

CH2M Hill Energy Canada Ltd. v. Consumers' Co-operative Refineries Ltd. (2010), 362 Sask.R. 104; 500 W.A.C. 104; 2010 SKCA 75, refd to. [para. 12].

Greenhill Properties (1977) Ltd. v. Sandcastle Recreation Centre Ltd. et al., [1998] B.C.T.C. Uned. 634; 39 C.L.R.(2d) 205 (S.C.), refd to. [para. 14].

Golder Associates Ltd. v. Mill Creek Developments Ltd. et al., [2004] B.C.T.C. 665; 2004 BCSC 665, refd to. [para. 14].

Fairwood Construction Ltd. v. Lin, [1997] B.C.T.C. Uned. 666; 33 C.L.R.(2d) 111 (S.C.), refd to. [para. 14].

Jamieson Construction Co. v. Lacombe and North Western Railway, [1926] 1 W.W.R. 628 (Alta. C.A.), refd to. [para. 14].

Kerr v. Baranow (2011), 411 N.R. 200; 300 B.C.A.C. 1; 509 W.A.C. 1; 2011 SCC 10, refd to. [para. 19].

Pacific National Investments Ltd. v. Victoria (City) et al., [2004] 3 S.C.R. 575; 327 N.R. 100; 206 B.C.A.C. 99; 338 W.A.C. 99; 2004 SCC 75, refd to. [para. 20].

Ketza Construction Corp. v. Mickey (2000), 139 B.C.A.C. 161; 227 W.A.C. 161; 2000 YTCA 1, refd to. [para. 21].

Bond Development Corp. v. Esquimalt (Township) (2006), 226 B.C.A.C. 227; 373 W.A.C. 227; 2006 BCCA 248, refd to. [para. 21].

Deglman v. Brunet Estate, [1954] S.C.R. 725, refd to. [para. 21].

Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc. et al. (2007), 223 O.A.C. 330; 2007 ONCA 324, refd to. [para. 21].

Palethorpe v. Bogner, [1995] B.C.J. No. 2311 (C.A.), refd to. [para. 21].

Aerovac Systems Ltd. v. Darwin Construction (Western) Ltd. et al., [2010] B.C.T.C. Uned. 654; 2010 BCSC 654, refd to. [para. 21].

Malik Estate v. State Petroleum Corp. et al. (2009), 278 B.C.A.C. 160; 471 W.A.C. 160; 2009 BCCA 505, refd to. [para. 23].

Authors and Works Noticed:

Wise, Howard M., The Manual of Construction Law (1994) (2009 Looseleaf Update, Release 10), pp. 3-62, 3-66, 3-67 [para. 18].

Counsel:

N. Milliken, for the appellant;

M.J. Lawless and L. Eames, for the respondent.

This appeal was heard at Victoria, British Columbia, on February 7, 2011, before Huddart, Saunders and Hinkson, JJ.A., of the British Columbia Court of Appeal. In reasons written by Huddart, J.A., the Court of Appeal delivered the following judgment at Vancouver, British Columbia, on April 28, 2011.