Court of Queens Bench of Alberta  
Citation: Swanby v Tru-Square Homes Ltd, 2022 ABQB 215  
Date: 20220318  
Docket: 1301 10836  
Registry: Calgary  
Between:  
Craig Swanby and Georgina Swanby  
Plaintiffs  
(Defendants by Counterclaim)  
- and -  
Tru-Square Homes Ltd. and James Frederick Metcalfe  
Defendants  
(Plaintiffs by Counterclaim)  
_______________________________________________________  
Reasons for Decision  
of the  
Honourable Mr. Justice M. David Gates  
_______________________________________________________  
Table of Contents  
I. Introduction and Overview...................................................................................................... 3  
II.  
Facts.................................................................................................................................. 6  
Issues .............................................................................................................................. 12  
Evidence ......................................................................................................................... 13  
III.  
IV.  
A. James Metcalfe ............................................................................................................. 13  
B. The Plaintiff’s Experts.................................................................................................. 14  
1.  
2.  
3.  
David Matthews.................................................................................................... 14  
Dana Bjornson ...................................................................................................... 14  
Cameron Kraychy................................................................................................. 15  
Page: 2  
C. The Defendants’ Expert................................................................................................ 15  
V.  
Analysis .......................................................................................................................... 17  
A. Concurrent Liability in Contract and Tort .................................................................... 17  
B. Liability in Contract...................................................................................................... 18  
1.  
2.  
3.  
The Lock-Up Contract .......................................................................................... 19  
Was the Lock-Up Contract Amended or Varied?................................................. 22  
Breach of Contract ................................................................................................ 29  
C. Liability in Tort............................................................................................................. 30  
D. The Deficiencies ........................................................................................................... 31  
1.  
2.  
3.  
4.  
5.  
6.  
7.  
8.  
9.  
The Foundation..................................................................................................... 32  
The Leaking Windows.......................................................................................... 33  
Bonus Room.......................................................................................................... 40  
The Garage............................................................................................................ 44  
Door Threshold Cut-Outs ..................................................................................... 45  
Interior Electrical .................................................................................................. 46  
Foundation, Framing and Nail Floor Wall Connection ........................................ 47  
Kitchen Floor ........................................................................................................ 49  
Walk-Out Header.................................................................................................. 51  
10. Missing Point Load............................................................................................... 52  
11. Sound Proof Insulation ......................................................................................... 53  
12. Roof....................................................................................................................... 54  
13. Main Attic Insulation ............................................................................................ 58  
14. Deck ...................................................................................................................... 61  
15. Stucco.................................................................................................................... 66  
16. Stone Work ........................................................................................................... 69  
17. Building Envelope, Eaves & Soffits..................................................................... 71  
18. Exterior Decorative Beams................................................................................... 72  
19. Mechanical Room & Plumbing ............................................................................ 73  
20. Other Deficiencies Identified by Bjornson ........................................................... 74  
E. Other Possible Breaches................................................................................................. 74  
1.  
2.  
Metcalfe’s Lack of Involvement in the Project..................................................... 74  
Failure to Keep the Plaintiffs Informed ................................................................ 74  
Page: 3  
F. Application of Liability in Contract ............................................................................... 75  
G. Application of Liability in Tort .................................................................................... 75  
1.  
2.  
3.  
4.  
Inherently Dangerous Work.................................................................................. 76  
Fraud ..................................................................................................................... 78  
Piercing the Corporate Veil .................................................................................. 81  
Inducing Breach of Contract................................................................................. 91  
H. Alberta New Home Warranty Program (“ANHWP”) .................................................. 93  
Damages ......................................................................................................................... 95  
A. Quantification of Damages ........................................................................................... 95  
VI.  
1.  
2.  
3.  
4.  
Contract Price to Lock Up .................................................................................... 98  
Extras and Upgrades ............................................................................................. 99  
Amount Paid to Tru-Square................................................................................ 105  
Amounts Paid to TGC for Remediation Work ................................................... 105  
B. Consequential Damages.............................................................................................. 111  
C. Non-Pecuinary General Damages............................................................................... 113  
D. Punitive Damages ....................................................................................................... 115  
E. Aggravated Damages.................................................................................................... 122  
F. Contributory Negligence .............................................................................................. 123  
G. Mitigation of Damages ............................................................................................... 125  
H. Improvement............................................................................................................... 129  
VII.  
Counterclaim ................................................................................................................ 130  
VIII.  
IX.  
X.  
Conclusion.................................................................................................................... 130  
Costs ............................................................................................................................. 130  
Pre-Judgment Interest................................................................................................... 131  
I. Introduction and Overview  
[1]  
The Plaintiffs, Georgina Swanby (“Ms. Swanby”) and her husband, Craig Swanby (“Mr.  
Swanby”), seek damages from the Defendants, Tru-Square Homes Ltd (“Tru-Square”), and  
James Frederick Metcalfe (“Metcalfe”) relating to the construction of their home west of  
Carstairs, Alberta.  
 
Page: 4  
[2]  
The Plaintiffs filed a Statement of Claim on September 13, 2013 and an Amended  
Statement of Claim on March 12, 2014. In their Amended Statement of Claim, the Plaintiffs  
allege breach of contract and negligence on the part of the Defendants, citing multiple  
construction deficiencies, as well as material breaches of the construction contract and a failure  
to follow the building plans. Further, the Plaintiffs allege that the Defendants failed to meet the  
requirements of the Alberta Building Code (the “Code”) and employed methods and materials  
that were sub-standard so as to render the property uninhabitable.  
[3]  
The Plaintiffs maintain that the Defendantsconstruction deficiencies, and their failure to  
correct these deficiencies, amount to negligence. As such, the Plaintiffs say that the Defendants  
failed to meet the standards of a reasonably competent general contractor and home builder. In  
the alternative, the Plaintiffs contend that the Defendants’ actions constitute a breach of contract.  
[4]  
As more fully discussed below, the Plaintiffs maintain that Tru-Square and Metcalfe are  
legally indistinguishable and invite the Court to pierce the corporate veil.  
[5] Further, the Plaintiffs allege fraud on the part of the Defendants. Specifically, the  
Plaintiffs point to the Defendants’ concealment of construction deficiencies, misrepresentations  
as regards the state of the construction project and diversion of funds from the Plaintiffs’ project  
to another construction project underway at the same time (the West Highlands residence”), as  
amounting to fraud.  
[6]  
With respect to the West Highlands residence, the Plaintiffs seek pre-judgment injunctive  
relief, an order tracing the funds paid by the Plaintiffs to the Defendants, restitution of any funds  
that can be traced, an accounting and a declaration that the Plaintiffs hold an interest in the West  
Highlands residence.  
[7]  
In addition to damages for negligence and, alternatively, breach of contract, the Plaintiffs  
also seek aggravated damages for financial losses and increased costs incurred as a result of the  
actions of the Defendants. The Plaintiffs cite emotional upset, distress and a diminishment in  
their quality of life. Further, the Plaintiffs seek Punitive Damages as a result of the deliberate and  
fraudulent actions of the Defendants.  
[8]  
Finally, the Plaintiffs seek pre-judgment interest pursuant to the Judgment Interest Act,  
RSA 2000, c J-1, and costs on a solicitor-client basis.  
[9] The Defendants filed a Statement of Defence on April 17, 2014 and a Counterclaim on  
April 24, 2014. In their Statement of Defence, they deny any defects in their work and deny that  
they at any time attempted to deceive the Plaintiffs or to hide defects or deficiencies in the  
construction of the residence. The Defendants seek dismissal of the Plaintiffs’ action in its  
entirety, as well as costs. In their Counterclaim, the Defendants allege that they paid a total of  
$879,404.72 to suppliers of goods and services relative to the project. Further, the Defendants  
allege that they are owed not less than $450,000 pursuant to the construction contract for work  
completed. The Defendants state that this $450,000 includes lost profit for work that they were  
not able to complete after they were denied access to the property. They seek costs in relation to  
the Counterclaim.  
[10] The Defendants say that Metcalfe never had a contractual relationship with the Plaintiffs.  
Further, they maintain that the Plaintiffs have failed to establish any legal basis upon which the  
Court can find Metcalfe liable for any alleged negligence on the part of Tru-Square. The  
Defendants maintain that the Plaintiffs cannot prove the four required elements of fraud. They  
Page: 5  
also deny that any funds received from the Plaintiffs were directed to the construction of the  
West Highlands residence.  
[11] The Defendants contend that the work for which they are responsible is covered by the  
Alberta New Home Warranty Program (“ANHWP”) Single Family Residence Warranty  
Certificate that forms part of the contract between the parties. They say that all of their work is  
free of defects or structural defects as defined in the Warranty Certificate. The Defendants also  
maintain that the Plaintiffs are in default of the “Homeowner Obligations” set out in clause 4 of  
the Warranty Certificate. In this regard, the Defendants allege that the Plaintiffs are in breach of  
the Construction Agreement in commencing this action when some of the matters that form part  
of the Plaintiffs’ claim should have been referred to arbitration in accordance with the  
Arbitration Agreement.  
[12] The Defendants further contend that the Plaintiffs failed to mitigate any damages for  
which the Defendants may be liable and contributed to the damage to the residence.  
[13] The Plaintiffs filed a Defence to Counterclaim on June 20, 2014, in which, amongst other  
things, they denied owing $450,000 to the Defendants. The Plaintiffs maintain that the amount  
claimed in the Counterclaim relates to work that was never performed and is based on an invoice  
or invoices issued for the sole purpose of justifying the Counterclaim and set-off claimed by the  
Defendants. The Plaintiffs say that the work performed by the Defendants was deficient and not  
carried out in accordance with the requirements of the contract. Further, the Plaintiffs allege that  
the amount claimed in the Counterclaim represents over - or double-charging insofar as it  
includes invoices issued for progress payments, as well as for payments made directly to  
suppliers and sub-contractors. The Plaintiffs seek dismissal of the Counterclaim and costs on a  
solicitor-client basis.  
[14] Initially, this matter was heard from April 8-18, 2019, the time scheduled for the trial.  
However, significant additional time was required to complete the matter. The trial was  
continued on April 23-25, 2019, May 8-17, 2019, October 15-18, 2019, and November 27-28,  
2019. Instead of the 9 days originally scheduled, 26 days were required.  
[15] The Plaintiffs called seven witnesses, including themselves. Three expert witnesses were  
called to provide opinion evidence in relation to structural engineering, building envelope  
engineering, and the standard of care associated with the construction and remediation of custom  
residential homes.  
[16] The Defendants called nine witnesses, including one expert, Metcalfe and various trades  
who worked on the construction project. They also called a municipal building inspector, a  
representative of a supplier of framing materials, and the Plaintiffsdesigner, Shawn Carm.  
[17] At the conclusion of the evidence and oral argument on November 28, 2019, I reserved  
my decision. On September 30, 2021, counsel for the Plaintiffs supplied a 122-page written  
argument, combining their response argument to the Defendants’ oral submissions delivered on  
November 28, 2019 with the written argument that was to follow their own oral submissions  
delivered on November 27 and 28, 2019. Counsel for the Defendants filed a brief written  
response argument on October 8, 2021.  
[18] The Court wrote to counsel on February 7, 2022, seeking clarification on two matters.  
First, the parties were invited to respond to a question relating to Invoice 118. Second, the parties  
were invited to make further written submissions on the legal relationship, if any, between the  
Page: 6  
parties following the completion of the lock-up contract. The parties submitted further written  
submissions on February 18, 2022 and February 24, 2022, respectively.  
[19] These are my Reasons for Decision.  
II. Facts  
[20] The Plaintiffs have resided in the family home that is the subject of this litigation since  
August 2015. The home is located just west of Carstairs, Alberta. Previously, the Plaintiffs lived  
on Ms. Swanby’s family farm also located in the Carstairs region. The Plaintiffs operate a grain  
farm east of Carstairs.  
[21] Ms. Swanby completed Grade 12 and then qualified and worked as a hairstylist. During  
her career, she has owned, operated, and sold two businesses, a Telus Mobility store and a  
courier company.  
[22] Mr. Swanby is a power engineer, holding a certificate from SAIT obtained in 1991. For  
the past nine years, he has worked out of the country as an oilfields manager. At present, he  
works for Glencore on a 28-day on/28-day off rotation in Chad, Africa. As such, he spends a  
great deal of time outside of Canada. Mr. Swanby has no experience as a structural engineer and  
neither he nor Ms. Swanby has any background or experience in house construction.  
[23] Mr. Swanby gave evidence that he planned to pay for the construction of the residence,  
including the Plaintiffs’ initial mortgage, sometime in 2019, at which point he would terminate  
his overseas work commitments. As a result of the need to finance the remediation work and the  
other associated costs relating to the delayed completion of the project, he testified that he did  
not expect to be able to consider retirement for at least another ten years, approximately 2029.  
[24] The Plaintiffs acquired the land on which the home is built in 2009 or 2010. They were  
looking to move to a new location and searched for land that had either a mountain or coulee  
view. The planned home was to serve as a retirement home that could accommodate a  
wheelchair on an all-purpose ground floor, as well as a home for their then teenaged daughters.  
Their plans included a walk-out basement and multiple windows overlooking the view of the  
coulee. They had known for some time that they would build a home and had collected  
photographs from magazines over the years depicting house ideas that they wished to  
incorporate.  
[25] The Plaintiffs met Shawn Carm (“Carm”) at the Carstairs arena while attending a hockey  
game. They learned that Carm was a designer who had built some large, custom-built homes in  
the past. Carm told them that he “gets to do the pretty stuff,” but did not know how to do the  
other tasks associated with new home construction. The Plaintiffs liked Carm’s ideas.  
[26] Carm provided them with some home design ideas and introduced them in late 2010 to  
Gordon Snell (“Snell”), an architectural draftsman employed by Innographic Design and  
Drafting (“Innographic”). The Plaintiffs provided Snell with a rough sketch they had prepared  
(which no longer exists), together with magazine photographs gathered over the years. They  
discussed with Snell their interest in having stone on the bottom portion of the home’s exterior,  
as well as granite or concrete counter tops in the kitchen and stone around the stove. Snell told  
them that they would require a robust floor in the kitchen area to support these heavy building  
materials. Carm attended the last couple of meetings with Snell and assisted the Plaintiffs with  
 
Page: 7  
their design ideas, including the design of a large exterior deck to be incorporated into the plan,  
as well as interior beams and an interior staircase.  
[27] Snell produced a design for the Plaintiffshome based on the materials and input they  
provided. The drawings that he ultimately prepared for the Plaintiffs addressed this enhanced  
load requirement. Carm provided additional design ideas once the Plaintiffs received the  
drawings. Ms. Swanby recalled that the drawings were completed in mid to late 2010, though it  
could have been later. She identified Exhibit 1-A-1 as the drawings prepared by Snell, the final  
version of which was dated May 8, 2011. A few minor modifications were made to the drawings  
prior to the start of construction, but such modifications related only to the placement of doors.  
Snell told the Plaintiffs that he thought they should employ an Insulated Concrete Form (ICF)  
foundation for their planned home.  
[28] The Plaintiffs had no written agreement with either Carm or Snell for the work that they  
performed.  
[29] Carm proposed that the Plaintiffs engage a builder in Calgary with whom he had worked  
in the past. The Plaintiffs met this builder on two occasions. During their second meeting, the  
Calgary builder provided an oral estimate of approximately $1.4 million to build the home based  
on his review of the Snell drawings.  
[30] Mr. Swanby hoped to find a builder in their local area. In late 2010, the Plaintiffs  
approached Metcalfe to find out if he was interested in building the home. Metcalfe previously  
had built custom homes for Ms. Swanby’s brother, Mr. Swanby’s cousin and friends they knew  
in the area. Metcalfe was also the next-door neighbour of Ms. Swanby’s brother. The Plaintiffs  
were familiar with the Defendantswork as a home builder, having seen Tru-Square signs on  
homes in the Carstairs area. According to the Plaintiffs, Metcalfe had a great reputation in the  
Carstairs region.  
[31] When first contacted by telephone, Metcalfe indicated that he was looking to wind-up his  
construction business and was not really interested in taking on the project. He told them that he  
was about to go to Phoenix for the winter and had plans for a cross-Canada road trip with his  
wife the following year. In the spring of 2011, the Plaintiffs contacted Metcalfe again and asked  
if he would be interested in being their general contractor for the residence. While he was  
hesitant to take on the job due to his upcoming travel plans, he agreed to discuss it with his wife.  
He responded a short time later, indicating that he was possibly interested, but only in terms of  
construction to the lock-up stage given his upcoming holiday plans. Ms. Swanby understood that  
the lock-up stage included pouring the foundation, framing, and installation of doors and  
windows. Following a further meeting with the Plaintiffs, Metcalfe agreed to build the home to  
the lock-up stage.  
[32] Metcalfe was advised from the outset that the home was to be both a family home and the  
Swanbysplanned retirement home. He was shown the Snell drawing that included the interior  
beams, a very large exterior deck, and the requirement for a robust floor construction to support  
the stone and granite features in the kitchen. Metcalfe advised the Plaintiffs that this was the  
largest project he had ever built and that he probably would require a subcontractor to complete  
what he described as the complicated framing for the planned house.  
[33] Metcalfe provided the Plaintiffs with three separate quotes for the job. The initial quote  
was for $500,000 to complete construction to the lock-up stage. The second quote, dated July 6,  
Page: 8  
2011, for a total cost of $578,875.40, including GST, added interior drywall and exterior stucco  
to the contract price: Exhibit 1-C-2.  
[34] The Plaintiffs’ bank required a price quote for the entire cost of building the home,  
including all interior finishing. During an in-person meeting in early August 2011, Metcalfe  
provided a quote for the entire construction project. The written quote (Exhibit 1-C-3) is dated  
August 4, 2011 and totals $1,064,348.00. It sets out specified allowances to cover exterior and  
interior finishes. Metcalfe subsequently provided the Plaintiffs with a document dated August 21,  
2011 (Exhibit 1-C-20) that set out in great detail the projected costs to construct the entire  
residence. After listing a number of items totalling $352,251.00, he added the “part from Tru-  
Square Homes”, $659,510.00, for a total of $1,011,761.00.  
[35] Metcalfe expressed no reservations about his ability to follow the plan and construct the  
home. He told the Plaintiffs that he would fly back from Phoenix periodically to keep a handle  
on the job.  
[36] The parties signed three separate contracts at a sod farm near the location of the  
Plaintiffs’ recreational trailer on August 22, 2011. The meeting lasted approximately 40 minutes,  
during which time there was a discussion regarding Tru-Square’s obligation to meet Code  
requirements and to ensure that all trades on site would have insurance and WCB coverage.  
While the parties signed more than one contract at the time, there is no dispute that the  
agreement reached that day required the Defendants to build to the lock-up stage only, with  
framing to start in late September 2011 and completion to lock-up stage by early 2012.  
[37] The first contract, Exhibit #1-C-5, involved construction of the residence to the lock-up  
stage, including stucco and drywall, in the revised amount of $692,485.50.  
[38] A second contract was signed the same date for a total contract price of $1,011.760.00,  
plus GST of $50,588.00, for a total contract price of $1,062,348.00, Exhibit 1-C-6. That contract  
was for the construction of the residence to completion.  
[39] A third pre-printed form of contract, Exhibit 1-C-4, the ANHWP contract, was brought to  
the meeting by the Plaintiffs. This contract also covered the construction of the entire residence  
at a cost of $1,062,348.00.  
[40] The Plaintiffs obtained a building permit from the county. At the request of the county,  
they also obtained a geotechnical inspection (Exhibit 1-A-3) dated July 2011, prepared by Curtis  
Engineering Associates Ltd of Calgary. The report recommended the use of Type 50, Sulphate  
Resistant Portland Cement for the foundation due to the soil composition. A copy of the report  
was provided to Metcalfe.  
[41] The Plaintiffs retained Quality Dirt Works (“Quality”) to do excavation work and pour a  
concrete pad for a planned future workshop on the property. While James Quartz, the principal  
of Quality, was on site, Ms. Swanby suggested to Metcalfe that Quality undertake the excavation  
work for the property. Metcalfe, who was familiar with Quality’s work, agreed as Quality’s  
equipment was already on site. The Plaintiffs paid Quality’s invoice of $16,803.15 (Exhibit 4) as  
excavation was not part of the contract with Tru-Square.  
[42] As noted above, Snell recommended that the Plaintiffs use an ICF foundation for the  
residence. However, Metcalfe advised that he did not like ICF foundations and would never  
install one. He told the Plaintiffs that if they wanted him to build their home, they would have to  
accept a standard foundation. They agreed, though they told Metcalfe that he was required to  
Page: 9  
otherwise follow Snell’s plan. At one point, the Plaintiffs asked Metcalfe if any new drawings  
would be required in light of the change in foundation. Metcalfe indicated that no further  
drawings would be required and that any necessary adjustments could be made along the way.  
[43] Metcalfe also testified that Ms. Swanby was also opposed to ICF foundations. However,  
this was never put to her in cross examination. Moreover, there is nothing in her evidence to  
suggest that she had any experience with building foundations so as to afford her a basis upon  
which to form an opinion.  
[44] After the foundation was completed, Metcalfe told Ms. Swanby that it was a pretty good  
job and just a little off, but nothing that would affect anything. Later, Metcalfe told her that the  
framing was just a bit off because it was a difficult foundation due to all the jut-outs in the house  
design. He told her that there was nothing to be concerned about as it could be addressed during  
the framing. Ms. Swanby was not concerned by these comments and had full trust in Metcalfe.  
[45] During the framing process, Ms. Swanby spoke to John McEwen, the framer, on a regular  
basis. On one occasion, he told her that the foundation was “off” and that there were some issues  
with the framing. He also told her that Metcalfe was not being particularly helpful, that the  
trusses were not fitting on the foundation and that there was not enough material on site. He  
reported that he had to salvage some of the used cribbing material. According to Ms. Swanby,  
McEwen related that Metcalfe had provided the direction to use whatever material was available  
on site. When she subsequently asked Metcalfe about the issues that McEwen had raised,  
Metcalfe told her that the foundation was not quite square but that this was a common occurrence  
in construction and there were no issues at all in terms of the overall project.  
[46] Metcalfe was on site only occasionally during the framing process and generally not as  
frequently as the Plaintiffs had anticipated. During the summer of 2012, he went on his planned  
cross-Canada road trip. He was also frequently away on camping trips and trips to Saskatchewan.  
According to Ms. Swanby, a number of trips “popped up” and Metcalfe would advise of his  
planned absences. Prior to entering into the contract with the Defendants, the Plaintiffs were  
aware only of the planned cross-Canada road trip.  
[47] The Plaintiffs hired the Defendants to manage the various subtrades. Due to Metcalfe’s  
frequent absences, the project did not proceed as rapidly as expected. When issues arose during  
the construction, the Plaintiffs were left to try to reach Metcalfe to attempt to resolve them.  
[48] According to Ms. Swanby, the construction was progressing slowly and not in  
accordance with the schedule that had previously been provided. At one point, Metcalfe told her  
that some of the delay was on account of poor weather. He also reported that there were some  
issues with the trusses.  
[49] Ms. Swanby described in detail some of the specific problems that arose during the  
construction. Tiles were being installed in one of the bathrooms by Metcalfe’s brother, John.  
Ms. Swanby recalled that she and Carm stopped by the project while the tiling was taking place  
and raised concerns with the way some of the tiles were placed. John Metcalfe responded that he  
was doing the best he could. When the concerns were relayed to Metcalfe several days later, he  
told her that if they were going to be that picky they could find their own tiler. Shortly thereafter  
John Metcalfe’s tools and equipment disappeared from the job site and he never returned to  
finish the job. The Plaintiffs were then forced to go out and hire their own tiler to correct the  
Page: 10  
mistakes and finish the job. According to Ms. Swanby, Metcalfe’s general attitude towards the  
project changed after John Metcalfe walked off the job.  
[50] Metcalfe provided the name of his flooring supplier, Deerfoot Carpet, Ms. Swanby found  
the flooring she liked, but was told that it would be difficult to get due to labour problems in the  
USA. Metcalfe told her that she was going to have to outsource the product herself.  
[51] Metcalfe also advised Ms. Swanby that his supplier would not build the staircase set out  
in the design plans and that she would have to outsource the stairs. As a result, the Plaintiffs had  
to seek out, hire and pay their own tradesperson to rough in the staircase.  
[52] Metcalfe suggested his own painter for the interior painting. Ms. Swanby knew that this  
painter had done a poor job on her brother’s residence. When she suggested another painter,  
Metcalfe threw his hands up in the air and told her to find her own painter.  
[53] At one point, Metcalfe referred the Plaintiffs to his cabinet supplier in Red Deer who  
submitted a quote for the job. Carm suggested that they obtain other quotes from other suppliers.  
He wanted to bid on this part of the project himself as he had his own cabinetry company.  
[54] On May 23, 2013, several weeks prior to the scheduled possession date, Ms. Swanby was  
notified by the flooring subcontractor that water was leaking into the residence through the  
windows. The initial leak was detected in the main floor Great Room, as well as in the Bonus  
Room located over the garage. Ultimately, it was determined that all of the main floor windows  
and many of the second-floor windows leaked.  
[55] Metcalfe was advised of the leaking windows by Ms. Swanby that same day, but he did  
not attend the site to investigate the matter for several days. I accept Ms. Swanby’s evidence that  
when Metcalfe finally attended, he denied any responsibility for the problem. Rather, he blamed  
Carm for the leaking windows, citing his inset or recessed window installment specifications as  
the cause of the problem. Metcalfe refused to assist the Plaintiffs in investigating the cause and  
extent of the window leaks.  
[56] On May 29, 2013, Troy Snyder (“Snyder”), Director of Operations and President of  
Western Form Works, attended the residence at Carm’s request to inspect the leaking windows.  
Snyder had approximately 25 years of experience in residential and commercial construction and  
was, amongst other things, a project manager as well as a ticketed carpenter, log home builder,  
and excavator. Metcalfe was present during this inspection. Snyder subsequently issued a report  
(Exhibit 1-D-5) in which he noted, amongst other things, that the windows had not been installed  
in accordance with the specifications that Carm had previously provided to Metcalfe.  
[57] Snyder noted that it started to rain during the course of his visit and he observed water  
leaking through the soffits. He recommended that the roof be assessed to determine how water  
was getting into the soffit.  
[58] While Snyder had no recollection of the homeowners being present during his inspection,  
I accept Ms. Swanby’s evidence that she was present. I also accept her evidence that Snyder told  
Metcalfe to fix the windows, to which Metcalfe responded, “Not my responsibility”.  
[59] Metcalfe took no action to repair the windows or to offer up any possible solutions to  
remedy the problem in either the short-term or the long-term. Shortly thereafter, the Defendants  
left the construction site and never returned.  
Page: 11  
[60] As more fully described below, the Swanbys began to investigate the installation of the  
leaking windows commencing in July 2013. This led to the investigation of other construction  
deficiencies identified by the engineers and others hired by the Swanbys to assist them in  
uncovering the construction deficiencies and in recommending and executing the required  
demolition and remediation work.  
[61] Around July 17, 2013, Ms. Swanby personally served Metcalfe with a letter listing the  
deficiencies. By the terms of the letter, July 26, 2013, was set as the deadline for Metcalfe to  
address the leaking windows. The Swanbys’ then counsel sent a follow-up letter dated July 30,  
2013 (Exhibit 1-G-11) referring to earlier correspondence from the Defendants, apparently  
seeking access to the property to conduct an inspection. (The Defendantsearlier correspondence  
was not produced at trial.).  
[62] Metcalfe sent an email to Ms. Swanby on July 22, 2013 (Exhibit 1-G-15) outlining the  
mediation/arbitration processes associated with the ANHWP. He expressed his willingness to go  
to non-binding mediation if the Swanbys were prepared to agree. Failing agreement, Metcalfe  
advised that that “final option” would be for him to trigger the arbitration process. Metcalfe  
made no reference in this communication to any intention to address any of the deficiencies  
identified in Ms. Swanby’s July 17, 2013, correspondence.  
[63] Ms. Swanby responded to Metcalfe’s email on July 23, 2013 (Exhibit 1-G-10), advising  
that someone would be hired to repair the damage caused by the leaking windows if Metcalfe  
was not prepared to act. She expressed a willingness to attend mediation after the necessary  
repairs had been completed.  
[64] Ms. Swanby subsequently contacted the ANHWP and learned that the fact that the  
contract amounts owing to Tru-Square had not been paid in full, and that the Plaintiffs did not  
have possession of the home, meant that there was no building warranty in place. Ultimately, no  
mediation or arbitration ever took place.  
[65] Metcalfe’s failure to respond to the substantive concerns raised in their letters led the  
Swanbys to conclude that Tru-Square and Metcalfe had repudiated the contract.  
[66] In July 2013, the Swanbys hired Tamata’s General Contracting & Consulting (TGC),  
an experienced construction and remediation contractor, to begin the investigative and  
demolition work required to determine the nature and scope of the construction deficiencies.  
During his initial examination of the premises, TGC’s principal, Mike Juniper (“Juniper”), found  
water-damaged drywall in every room of the home. Juniper provided a written quote dated  
August 8, 2013, based on his understanding of the scope of work as of that date: Exhibit 1-F-3.  
At the time, he estimated that the total cost would be $19,140. On August 19, 2013, he provided  
a revised quote based on an enhanced scope of work in the amount of $41,701.80. He  
subsequently produced a detailed budget quote dated January 2014 (Exhibit 1-F-9) in which he  
estimated the total cost of all repairs to be $802,597.11. Juniper ultimately produced a detailed  
written report regarding his involvement in this matter: Exhibit 1-F-35. Juniper explained that the  
scope of work greatly expanded as a result of the testing and investigative work undertaken by  
the Plaintiffs and the two engineers hired to oversee the remediation process.  
[67] The Plaintiffs also retained Dana Bjornson (“Bjornson”), a building envelope engineer,  
and David Matthews (“Matthews”), a structural engineer, to assist them in investigating  
Page: 12  
suspected construction deficiencies. Both subsequently were called as expert witnesses during  
the trial.  
[68] As more fully set out below, Matthews concluded that there were numerous building  
Code deficiencies and failures to meet industry best practices in Tru-Square’s construction.  
[69] The Plaintiffs asked Bjornson to examine the condition of the building envelope,  
including if there were any deficiencies or Code deviations. Bjornson found that the building  
envelope was not properly constructed and required remediation. She concluded that there were  
numerous building Code deficiencies and failures to meet industry best practice in Tru-Square’s  
construction of the building envelope.  
[70] Remediation work did not begin until July or August 2014. This work was undertaken by  
Juniper and TGC, working closely with Bjornson and Matthews to correct the various  
deficiencies identified, and to ensure that the remediations were Code-compliant and met the  
custom homebuilding industry’s accepted standards of practice. Juniper’s involvement in the  
remediation process continued until approximately August 2015. The Plaintiffs finally took  
possession of the fully remediated residence in late August or early September 2015, more than  
two years after the initial occupancy date.  
III. Issues  
[71] Numerous issues, both factual and legal, arise in this matter:  
(a) Can the Defendants be concurrently liable in both contract and tort?  
(b) What were the terms of the parties’ contract?  
(c) Was the parties’ contract amended and, if so, what were the amended terms?  
(d) Did Tru-Square and/or Metcalfe have a duty of care to the Plaintiffs?  
(e) What were the deficiencies in the house as constructed?  
(f) Did the Defendants, or either of them, breach the contract with the Plaintiffs?  
(g) Are the Defendants, or either of them, liable to the Plaintiffs in tort?  
i. Was the Defendants’ work inherently dangerous?  
ii. Was Metcalfe’s conduct fraudulent?  
iii. Is it appropriate to pierce the corporate veil in this case?  
iv. Did Metcalfe induce Tru-Square to breach its contract?  
(h) Is the ANHWP’s dispute resolution process applicable?  
(i) What is the appropriate measure of the Plaintiffs’ damages?  
i. Are the Plaintiffs entitled to consequential damages?  
ii. Are the Plaintiffs entitled to non-pecuniary damages?  
iii. Are the Plaintiffs entitled to punitive damages?  
iv. Are the Plaintiffs entitled to aggravated damages?  
v. Was there contributory negligence by the Plaintiffs?  
vi. Did the Plaintiffs appropriately mitigate their damages?  
vii. Have the Plaintiffs benefitted from improvement?  
(j) Are the Defendants entitled to payment under their Counterclaim?  
 
Page: 13  
IV. Evidence  
[72] As will become clear later in these Reasons, my findings on the credibility and reliability  
of the witnesses, both lay and expert, has an impact on my subsequent determinations.  
A. James Metcalfe  
[73] According to the Plaintiffs, the Defendants’ case rests on Metcalfe’s testimony. They  
maintain that Metcalfe was not a credible or reliable witness and that the Court should approach  
his testimony with great caution. Due to his frequent and extended absences from the job site, the  
Plaintiffs say that Metcalfe cannot speak with any authority to the quality of the work of his  
subtrades. His evidence in this regard is entirely self-serving. The Plaintiffs further contend that  
Metcalfe’s failure to produce any contemporaneous notes, documents or photographs tracking  
the progress of the project negatively impacts the reliability of his evidence. In the result, the  
Plaintiffs argue that little or no weight should be given to his evidence.  
[74] In terms of his credibility, the Plaintiffs cite several instances where Metcalfe gave  
inconsistent, even contradictory, evidence during the trial. I would summarize some of these  
instances as follows:  
a) In the Statement of Defence, the Defendants conceded that Metcalfe was the general  
contractor for the project to the lock-up stage. He made the same admission during  
questioning. However, at trial, Metcalfe suggested that Carm was the general  
contractor. Later, in cross-examination, he was insistent that the Swanbys were their  
own general contractors. Further, Metcalfe swore an affidavit on April 18, 2016,  
deposing that he was not the general contractor. Finally, in his response to the Notice  
to Admit Facts, Metcalfe stated he was a “builder” and not a “general contractor”.  
b) In the Agreed Statement of Facts, Exhibit 2A, para 66-67, it was admitted that Tru-  
Square’s insurance coverage during the construction of the Swanby residence was  
held by Metcalfe as a sole proprietor and, further, that the insurance policy was  
cancelled on or about May 13, 2013. Metcalfe testified in chief that the insurance had  
no relevance at all to the construction of the Swanby residence. However, during  
cross-examination, he conceded that he had taken out property and liability insurance  
as a sole proprietor on behalf of Tru-Square Homes, but that the insurance was  
cancelled in May 2013 (Exhibit 35).  
c) In direct examination, Metcalfe testified that he had been up on the roof and inspected  
the work of the roofing subtrade. He stated that the work appeared to be  
unexceptional and in order. In cross-examination, he confirmed that he had been up  
on the roof, but conceded that he never inspected the work.  
d) In his evidence, Metcalfe suggested that the complexity of the interior finishing on  
the residence served as a disincentive to his continued involvement in the project  
beyond the lock-up stage. However, in cross-examination he conceded that the  
complexities associated with the house related to the foundation and the framing, both  
of which were clearly within the scope of his work.  
e) In the Agreed Statement of Facts, Metcalfe admitted that several aspects of his work  
were deficient, but his testimony was to the contrary.  
   
Page: 14  
[75] The Defendants, on the other hand, urge me to accept the evidence of Metcalfe and to  
prefer his evidence over that of the Plaintiffs where there is a conflict.  
[76] I have several concerns with Metcalfe’s evidence generally. First, I agree with the  
Plaintiffs’ contention that Metcalfe’s frequent and extended absences from the job site, and  
indeed Alberta, adversely impact the reliability of his evidence respecting the key events. He was  
not present for almost 50% of the time from the outset of construction to the completion of the  
lock-up stage. His lack of contemporaneous notes, documents, or photographs contributes to my  
concern about the reliability of his evidence relative to events that took place many years ago.  
[77] I also have concerns with Metcalfe’s credibility. I accept the Plaintiffs’ assertion that  
Metcalfe gave conflicting, even contradictory, evidence. As a witness, I found him to be highly  
combative and quick to deflect responsibility for most, if not all, of the extensive deficiencies  
discovered by the Plaintiffs’ experts after Metcalfe abandoned the project. Generally, he was  
unwilling to acknowledge any responsibility for the very serious issues that arose during the  
project. As more fully set out later in these reasons, I reject the evidence of Metcalfe on several  
key matters in dispute. The combined impact of these adverse findings relative to Metcalfe leads  
me to approach the entirety of his evidence with considerable skepticism.  
B. The Plaintiff’s Experts  
[78] The Plaintiffs called three expert witnesses at trial: Bjornson, Matthews, and Cameron  
Kraychy. All of them gave their evidence in a clear, straight-forward manner and were not  
seriously challenged in cross-examination.  
1. David Matthews  
[79] Matthews was qualified by the Court as an expert in structural engineering and qualified  
to give opinion evidence with respect to building code compliance, applicable industry standards  
and best practices relating to the design, construction, and constructional components in custom  
residential home construction in Alberta. His curriculum vitae was marked as Exhibit 11.  
Matthews provided two reports to the Court, an initial report dated April 7, 2017 (Exhibit 12)  
and an Expert Rebuttal Report dated October 30, 2017 (Exhibit 13).  
[80] Matthews is the principal of Madden Matthews Engineering Ltd, with experience in  
structural engineering over a span of 30 years. His expertise is directly applicable to the various  
issues that arose in this litigation. His expert report is the result of extensive examination,  
investigation and on-site testing. He gave detailed and comprehensive evidence that I found to be  
highly credible. I accept his evidence.  
2. Dana Bjornson  
[81] Bjornson is a professional engineer registered with the Association of Professional  
Engineers and Geoscientists of Alberta (APEGA) as well as the Leadership in Energy and  
Environmental Design (LEED) Rating Systems. She is an engineering graduate from the  
University of British Columbia (1994) and holds a Master of Architecture degree from the  
University of Oregon (1999). Her curriculum vitae was marked as Exhibit 15.  
[82] Bjornson has worked in the field of building envelope engineering for over 30 years. She  
has extensive experience in relation to residential and commercial construction projects. She  
serves as a member of the Alberta Building Envelope Council (ABEC) and is the principal of  
     
Page: 15  
her own firm, Optimize Envelope Engineering Ltd. As of the date of her court appearance in this  
matter, she had reviewed over 300 building envelopes in the preceding two years. She has  
previously given expert evidence in the Provincial Court of Alberta.  
[83] The Plaintiffs asked Bjornson to examine the condition of the building envelope,  
including if there were any deficiencies or Code deviations. Bjornson submitted an expert report  
to the Plaintiffs on April 7, 2017, having inspected the site on July 10, September 8, October 18,  
2013, and October 24, 2014: Exhibit 16. Bjornson reviewed the condition of the windows,  
exterior doors, stucco, stone, decks, soffits, interior vapour barrier, interior insulation, drainage  
systems, and roofing. The deck was also flood-tested on July 10, 2013. She provided an Expert  
Rebuttal Report dated September 12, 2017. Her CV was marked as Exhibit 15.  
[84] Bjornson was qualified by the Court as an expert in building envelope engineering and  
permitted to give opinion evidence in the areas of building code compliance, applicable industry  
standards, and best practices relating to the design and construction of building envelopes in  
Alberta custom residential construction. She gave very detailed and comprehensive evidence that  
I found to be highly credible. I accept her evidence without reservation.  
3. Cameron Kraychy  
[85] Cameron Paul Kraychy (“Kraychy”) was qualified by the Court as an expert in the field  
of general contracting in the context of custom home building. He was qualified to give opinion  
evidence on the role of the general contractor and the applicable standard of care in the custom  
home building industry in Alberta, and as regards the remediation of custom homes and  
renovations.  
[86] Kraychy provided an Expert Report dated March 28, 2017 (Exhibit 27) and an Expert  
Rebuttal Report dated September 19, 2017 (Exhibit 28).  
[87] I found Kraychy’s evidence to be of considerable assistance in relation to a number of  
issues. First, he provided the perspective of a seasoned custom home builder on the need to  
engage engineering support relative to structural design, including design changes, as well as  
structural issues arising during construction. Second, he provided important evidence on the role  
of the general contractor on a construction project in terms of overall project oversight and the  
effective management of subtrades. Third, he gave evidence as to the appropriate  
communications strategy to be employed by a general contractor relative to the customer or  
homeowner so as to ensure that they are fully apprised of the progress of the project and, in  
particular, problems or issues arising during the project and the proposed strategy to address such  
matters. Based on his qualifications and experience, I accept Kraychy’s evidence regarding the  
industry standards and best practices applicable to a general contractor working in the custom  
home building field.  
C. The Defendants’ Expert  
[88] The Defendants called Doug Mark Hamman (“Hamman”) and sought to have him  
qualified in the following areas:  
a) The field application of the requirements of the Code;  
b) Field design and construction of structural support systems;  
c) Field design and construction of building envelope systems for construction projects;  
   
Page: 16  
d) Construction project management, including budgeting, scheduling, trades oversight,  
and the inspection of completed work to confirm Code compliance has been met.  
[89] The Plaintiffs urged the Court to find that Hamman was not qualified to give expert  
evidence and to decline to admit his report into evidence. After hearing extensive argument from  
counsel, I qualified Hamman as an expert homebuilder and project manager in the four areas  
proposed by the Defendants. However, I declined to allow him to give expert evidence as an  
engineer in any of those areas. I also note that Hamman was not qualified to give expert evidence  
as either a custom home builder or a remediation expert given his lack of experience in both  
domains. Accordingly, Hamman provided no evidence regarding the standard of care applicable  
to custom residential homebuilding. Subject to these and other limitations more fully set out  
below, Hamman’s Expert Report dated July 17, 2017 was received in evidence (Exhibit 48).  
[90] The Plaintiffs urge the Court to approach Hamman’s evidence with great caution,  
particularly given his alleged cursory examination of the actual construction project and the fact  
that he offered conclusions based on limited visual examination and without the benefit of  
destructive testing or comprehensive investigation. The Plaintiffs argue that Hamman’s evidence  
should be restricted to the determination of Code compliance and structural components in  
residential home construction.  
[91] Hamman’s report was based on three visits of approximately 1.5 hours duration each.  
Given the size of the residence and the nature and number of alleged deficiencies, I am satisfied  
that Hamman’s opportunity to fully inspect the residence was necessarily limited by the time  
constraints. Further, his comments and conclusions were based on his observation of pre-exposed  
areas of the residence. He conducted no independent testing. This stands in sharp contrast to the  
comprehensive investigation undertaken by the Plaintiffs’ experts and Juniper. I would also note  
that Hamman’s report is silent on several deficiencies noted by Bjornson, Matthews and Juniper.  
[92] Of note, Hamman acknowledged the deficiency of the Defendants’ work in quite a  
number of instances. He expressed agreement with many of the conclusions reached by the  
Plaintiffs’ experts.  
[93] I accept the Plaintiffs’ contention that Hamman’s assessment of the individual  
deficiencies was incomplete. A number of the assumptions that form the foundation of some of  
his conclusions are not substantiated by the evidence. This and the other constraints previously  
identified lead me to place very limited weight on Hamman’s evidence. I do not, however, go so  
far as to accept the Plaintiffs’ assertion that the weight to be attributed to Hamman’s evidence is  
credibility-based. In my view, the difficulties with Hamman’s evidence are related to the  
reliability of that evidence, not to his credibility.  
[94] I do not view Hamman’s report as a technical response to the engineering evidence of  
either Matthews or Bjornson or a response to the custom home building expertise of Kraychy. In  
this regard, I accept the Plaintiffs’ caution as regards the treatment of Hamman’s expert  
evidence. As the Plaintiffs properly point out, Hamman’s more limited accepted areas of  
expertise place significant restrictions on his ability to challenge or otherwise undermine the  
opinions and findings of the Plaintiffs’ engineering expert witnesses. In my view, this is the  
natural consequence of the Defendants’ decision not to call engineering experts of their own to  
challenge the Plaintiffs’ experts.  
Page: 17  
[95] Indeed, the Plaintiffs go so far as to suggest that there is essentially no defence to the  
deficiencies aspects of the case. While I accept the general thrust of this argument, it is still  
necessary to consider carefully the evidence of the engineering experts and Kraychy, and all of  
the other evidence in this case, to determine whether the Plaintiffs have satisfied the burden  
resting on them to establish the individual alleged deficiencies. I would simply add that  
Hamman’s reports and trial testimony have been carefully considered in this process.  
[96] The Defendants appear to rely on Hamman’s report as offering to the Court an alternative  
remediation work plan reflected in the budgeting exercises that he undertook. He compared his  
proposed scope of work with a quote that TGC prepared before remediation efforts were  
commenced. The Plaintiffs challenge the weight to be given to Hamman’s comparative  
remediation budgets. They say that Hamman’s budgets are unreliable given that his credibility  
was impugned and his primary conclusions have been found to either be incorrect or  
untrustworthy. As noted above, I do not find that Hamman lacked credibility.  
[97] The law does not require the cheapest or most economical solution to effect remediation,  
but only that reasonable efforts be made in this regard. Cost is only one factor to be taken into  
consideration. The Plaintiffs say that, only three weeks from their anticipated possession date,  
their trust in their contractor had been destroyed. While the Defendants argue that the costs  
incurred were too high, the Plaintiffs respond that there is no evidence that should cause the  
Court to doubt, let alone reject, the investigation results of Bjornson or Matthews, their  
remediation recommendations and, ultimately, Juniper’s charges. This issue is more fully  
explored later in these Reasons in the section dealing with the calculation of damages.  
V. Analysis  
[98] This matter raises numerous legal and factual issues.  
A. Concurrent Liability in Contract and Tort  
[99] The Plaintiffs maintain that a building contractor can be liable concurrently in contract  
and tort unless the terms of the contract clearly and expressly limit or exclude liability in tort.  
They maintain that the contract in this instance is entirely silent on the issue of limiting or  
excluding tort liability. I agree.  
[100] The Plaintiffs rely on Vermillion & District Housing Foundation v Binder Construction  
Limited, 2017 ABQB 365 at paras 123-25, where the Court explained:  
The conduct of a contractor may constitute not only a breach of contract but also  
negligence: Heintzman and Goldsmith, at 7-2. Generally speaking, there is a duty  
of care owed by a contractor to an owner: University of Regina v Pettick (1991),  
90 Sask R 241, 6 CCLT (2d) 1 (CA). What is undertaken by the contract will  
indicate the nature of the relationship that gives rise to the common law duty of  
care, but the nature and scope of the duty of care that is asserted as the foundation  
of the tortious liability does not depend on specific obligations or duties created  
by the express terms of the contract the distinction is between what is to be done  
and how it is to be done: Central & Eastern Trust Co v Rafuse, [1986] 2 SCR 147  
at 204, [1986] SCJ No 52.  
   
Page: 18  
In Fraser-Reid v Droumtsekas, [1980] 1 SCR 720 at 726, [1979] SCJ No 125,  
Dickson J. for the majority stated the relevant question as being: “Did the builder  
act as a competent and careful builder would have acted in what he did or did not  
do?”, citing Batty v Metropolitan Property Realizations Ltd, [1978] 2 All ER 445  
(CA) and Dutton v Bognor Regis United Building Co Ltd, [1972] 1 All ER 462  
(CA).  
An owner may sue a building contractor alternatively or concurrently in contract  
and tort, and a contractor who is negligent in the performance of a contract to  
build is liable in tort to any person suffering resultant injury to person or property,  
unless such liability is limited by the contract: Dominion Chain Co v Eastern  
Construction Co (1976), 12 OR (2d) 201, [1976] OJ No 2104 (CA), aff’d without  
reference to this point [1978] 2 SCR 1346, Dabous v Zuliani (1976), 12 OR (2d)  
230, 1 CPC 48 (CA), Central Trust Co; BG Checo International Ltd. v British  
Columbia Hydro & Power Authority, [1993] 1 SCR 12, [1993] SCJ No 1.  
[101] Briefly stated, the plaintiff in Vermillion advanced claims for breach of contract and  
negligence by a general contractor in the construction of an addition to an existing building. The  
contractor ultimately was found to have breached the contract and to have been negligent for  
failing to exercise reasonable care and skill in ensuring that the construction was undertaken in  
accordance with the accepted standards of a reasonable contractor.  
[102] The Court in Vermillion confirmed at para 179 that in breach of contract, “the wronged  
plaintiff is entitled to be put in as good a position as he would have been in if there had been  
proper performance by the defendant” [citations omitted]. In tort, “[T]he purpose of an award of  
damages...is to put the innocent party back into the position as if the tort had not occurred”  
[citations omitted]: at para 181. With respect to potential concurrent liability in both contract and  
tort, the Court stated at para 183 that “it would seem anomalous to award a different level of  
damages for what is essentially the same wrong on the sole basis of the form of action chosen,  
though particular circumstances or policy may dictate such a course”.  
[103] There is no dispute that Vermillion also stands for the proposition that the contractual  
measure is the preferred approach in cases of concurrent liability in both tort and contract: see  
para 22. Ultimately, I am satisfied that it makes no practical difference whether a case is assessed  
as a tort claim or a contract claim. In both instances, the measure of damages is the same, ie., to  
put the plaintiff back in the position they ought to have enjoyed but for the breach of contract or  
the breach of a duty of care.  
[104] While the overall approach to both liability and damages may be the same under both  
contract and tort, contractual liability is limited to the specific contracting parties, in this case  
Tru-Square, other than in circumstances involving the lifting of the corporate veil. By contrast,  
the Plaintiffs contend that both Tru-Square and Metcalfe can be held liable in tort. The Plaintiffs  
argue that Metcalfe can be found personally liable for negligence, as well as fraud.  
B. Liability in Contract  
[105] To establish liability under contract, the Plaintiffs must prove the existence of an  
enforceable agreement, the breach of an obligation(s) under that agreement and a resulting loss  
that was foreseeable and not too remote.  
 
Page: 19  
1. The Lock-Up Contract  
[106] The parties’ Agreed Statement of Facts includes the following statements relating to the  
three contracts they signed on August 22, 2011:  
a) On August 22, 2011, Tru Square (by Metcalfe) and the Plaintiffs executed an  
Alberta New Home Warranty Program (ANHWP) form of agreement valued  
at $1,062,348.  
b) On August 22, 2011, Tru Square (by Metcalfe) and the Plaintiffs executed two  
additional forms of agreement for construction services valued at $1,062,348  
and $692,485.50, respectively.  
c) Metcalfe typed up and prepared both forms of agreement other than the  
ANWHP agreement.  
[107] All of these contracts were fixed-price contracts and included a four-stage draw payment  
to the Defendants. The first contract (Exhibit 1-C-5) involved construction of the residence to the  
lock-up stage (the Lock-Up Contract”), including stucco and drywall, in the amount of  
$692,485.50. It excluded all interior finishes, any stone, any fireplaces and any exterior services.  
The homeowner was responsible once the drywall was finished. Work performed by others was  
specifically the responsibility of the homeowner.  
[108] The Lock-Up Contract refers to the design prepared by Innographic, but states that “the  
building spec or design of plan drawings may not always be followed as suggested by  
draftsman”. Further, the contract stipulates:  
This contract shall replace the contract that covers the entire home but shall have  
all the warranty on all work done by Tru-Square Homes Ltd. as covered by the  
ANHW program.  
[109] The second, unnumbered paragraph of the Lock-Up Contract stipulates the inclusions and  
exclusions. Included in the contract price of $692,485.50 are the following:  
...foundation (excluding excavation, backfill), framing, windows/doors installed,  
overhead doors installed (allowance of $7000 for 3 doors), shingles, acrylic  
stucco (all built-outs are extra includes $5000 allowance for built-outs in price),  
eavestrough, plumbing, heating, electrical (including pot lights but not rest of  
fixtures), insulation, drywall, concrete finished in basement and garage.  
[110] Excluded from the Lock-Up Contract are the following: “any exterior services (water  
line, septic, power, gas, road, etc.), any fireplaces, any stone, any interior finishes (except  
plumbing, heating and some electrical)”. In another portion of the Lock-Up Contract, the  
owner’s responsibility for all interior finishing after drywall, including false beams, is repeated.  
Later, it stipulates:  
Once the building is completed to the point where the drywall is finished, then the  
home owner takes over the overseeing and responsibility of finishing the home  
except those that are the responsibility of Tru-Square Homes. All interior  
finishing is the responsibility of the homeowner.  
[111] Under the heading “Comments or Specs”, the Lock-Up Contract included a term relating  
to the construction of the foundation:  
 
Page: 20  
Basement has 8” concrete wall, not ICF. Finished ceiling height to be  
approximately 9’1”. Concrete to be 25 MPA (type 50) with two rows of 2 (10  
mm) rebar in the 9 foot wall and 1 row of 2 rebar in 4’ wall. Footing to have 2  
bars in as well. Concrete walls to step down to walkout as grade allows.  
[112] The Lock-Up Contract stipulates that Tru-Square is responsible for ensuring that the  
residence meets building codes and that it will “strive for high quality”. Trades are to have WCB  
coverage or private insurance, while the homeowner is required to have building and liability  
insurance. A four-step payment schedule is set out in the final portion of the contract as follows:  
1. After completion of the foundation- $110,000.00;  
2. Framing complete, including doors/window installed, roof complete, rough in  
plumbing, heating, electrical, insulation and vapour barrier installed, concrete  
basement poured - $350,575.00;  
3. Insulation and drywall complete, heating equipment installed - $130,000,00;  
4. Stucco completed, concrete exterior pads, finals on electrical, heating, plumbing,  
eavestrough and garage doors installed - $101,910.50.  
[113] The second signed contract contemplated construction of the residence to completion for  
a total price of $1,062,348.00. This second contract repeats many of the terms set out in the  
Lock-Up Contract, including that payments are due “after completion of 4 stages as per ANHWP  
contract”.  
[114] While this contract provided details as to the construction of the basement, no reference  
is made to the type of concrete to be used, unlike the Lock-Up Contract. The second contract  
does, however, specify that the basement walls are not ICF. Unlike the Lock-Up Contract, the  
cost of excavation and backfill were not excluded from the second contract.  
[115] The second contract includes allowances for exterior and interior finishes, namely:  
$ 5,000.00  
Stucco build outs (installed)  
$30,000.00  
Stone (installed)  
$ 8,000.00  
Two fireplaces (installed)  
$30,091.00  
Finish material (not including cabinets)  
$15,000.00  
False beams and ceiling timber/beams (installed)  
$ 6,000.00  
Window/door upgrades  
$ 2,000.00  
Interior stair upgrades  
$27,000.00  
Deck covering material with railing (installed)  
$10,000.00  
Appliance allowance  
$33,660.00  
Floor coverings (supply and install main floor)  
$14,735.00  
Floor coverings (supply and install lower level  
$54,710.00  
Cabinets (supply and install)  
Page: 21  
$ 2,736.00  
$ 5,471.00  
$ 3,000.00  
Wall tiles (supply and install)  
Electrical fixtures (does not include pot lights which is part of electrical)  
Steam shower (supply and install)  
[116] Finally, the second contract specifies that trades are required to have WCB coverage or  
private insurance that meets the standards. The homeowner is stated to be responsible to have  
building and liability insurance and is also responsible for the supply of power. Unlike the Lock-  
Up Contract, this contract states that Tru-Square belongs to the ANHWP.  
[117] Metcalfe brought both of these contracts (1-C-5 and 1-C-6) to the meeting. Both are on  
Tru-Square letterhead. The Plaintiffs had never seen the documents before, but reviewed them  
briefly and then signed them.  
[118] The third form of contract, the pre-printed ANHWP contract, was brought to the meeting  
by the Plaintiffs. This contract also covered the construction of the entire residence at a cost of  
$1,062,348.00. Unlike either 1-C-5 or 1-C-6, it specified a completion date of June 30, 2012.  
[119] While this third contract is stated to be between Craig and Georgina Swanby and Tru-  
Square Homes Ltd, it was signed only by Craig Swanby, though both Plaintiffs initialled each  
page of the multi-page document. Of note, some of the blanks are filled in with the following  
information:  
a) Under paragraph (f), the construction section, the following was added: “Custom Plan  
from Innographic Design and Drafting (Gordon Snell) with changes as outlined in  
Part 2 of contract”;  
b) Under paragraph (g), the price of the home was stated to be $1,011,76.00 plus GST of  
$50,588.00, for a total contract price of $1,062,348.00.  
c) Under paragraph (h), the terms of payment were stated as follows:  
(i) 0 deposit;  
(ii) 0 upon the removal or satisfaction of Conditions in paragraph 21;  
(iii) $169,975.68 on completion and inspection of foundation (16%);  
(iv) $350,574.84 upon completion and inspection of ready to drywall (33%);  
(v) $276,210.48 upon completion and inspection of drywall complete, heating  
installed (26%);  
(vi) $265,587.00 being the balance of the total price and interest, if any, on the  
completion and possession of the home, whichever occurs first.  
d) The purchaser was stated to be responsible for utility connections, building permit,  
utility costs, and building/liability insurance (paragraph M);  
e) Completion date was stated to be June 30, 2012, though the builder did not guarantee  
this date in the event of delays for which the builder may not be responsible  
(paragraph N);  
f) Under the heading “warranty” (paragraph S), the contract provided:  
The Builder agrees to provide the Builder Warranty set forth in  
detail in the Warranty Certificate appearing on page 6 of this  
Agreement as the minimum requirement on the part of the Builder.  
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The Builder may provide warranty coverage in addition to the  
minimum required in the said warranty and in such event, the  
additional warranty coverage shall be contained in an addendum in  
writing signed by the Builder and attached to this Agreement.  
Additional coverage is provided solely by the Builder and the  
Program does not warrant the Home beyond the terms, conditions,  
limits and exclusions contained in the Warranty Certificate.  
[120] A Single Family Residence Warranty Certificate was attached to the contract.  
[121] It seems clear that the detailed quote provided by Metcalfe and dated August 21, 2011,  
was in furtherance of the Plaintiffsrequest for information, presumably for their bank, as to the  
total cost to complete the project. Metcalfe’s breakdown confirms that at that point in time, the  
agreement was for him to build to the lock-up or drywall stage only. The document also includes  
a handwritten timeframe for the projected completion of various stages of construction. Of note,  
the timeframe indicated that drywall would be completed by the end of February 2012, with  
work on the interior to commence on March 1, 2012. The document also confirmed that the  
initial quote was for $551,310 and referred to a “new” quote of $659,510, the new quote to  
include exterior stucco, a concrete garage pad, entrance pad and deck pad, soffit, facia,  
eavestrough, ANHWP fees, and other items.  
[122] I am satisfied that at the time of the August 22, 2011 meeting that led to the signing of the  
three contracts, the parties had come to an agreement that the Defendants would construct the  
home to the lock-up stage only. As such, their agreement was that the Lock-Up Contract (1-C-5)  
was to apply. At that time, the Plaintiffs contemplated completing the residence on their own.  
2. Was the Lock-Up Contract Amended or Varied?  
[123] The parties take very different positions on the question of whether there was an  
agreement reached that committed the Defendants either to finish the construction of the  
residence or to complete some aspects beyond the lock-up stage.  
[124] In Hyslip v Macleod Savings & Credit Union Ltd, [1988] 90 AR 141 (QB), the Court  
held that a contract may be varied by agreement. At para 30, the Court stated:  
It may be stated as a general principle that the parties to a concluded agreement  
may by agreement vary the terms of their concluded agreement, and that such  
variation may be by express agreement or may be implied by conduct. An  
agreement varying an existing agreement must in itself amount to a valid contract.  
To effect a variation the parties must be ad idem in the same sense as for the  
formation of a contract, and there must be consideration passing. Where an  
agreement is varied it then operates according to the variation, and the original  
term or terms cannot be set up by one of the parties against the other. A variation  
cannot occur by a unilateral notification by one party to the other, without any  
agreement, but if the variation is made unilaterally by one party and accepted by  
the other party and there is valid consideration passing a variation of the original  
contract can occur.  
[125] According to Metcalfe, the agreement to build to the lock-up stage was the only  
agreement that was ever reached. However, he also says that the total contract consisted of 1-C-  
5, the Lock-Up Contract, as well as portions of 1-C-4, the ANHWP contract relating to warranty  
 
Page: 23  
coverage for the work performed by the Defendants. This ignores the fact that 1-C-4 expressly  
refers to an agreement to construct the entire residence. The Defendants’ reliance on a portion of  
1-C-4 as forming part of their agreement is, in my view, not supported by the evidence. There is  
no evidence before me that the parties ever reached a consensus that a portion of 1-C-4, the full  
construction contract, was to be included as part of their agreement. However, it is not necessary  
for me to resolve this.  
[126] The Defendants say that a plain reading of the terms of the Lock-Up Contract reveals that  
it “replaced” the full contract. As such, they maintain that the Plaintiffs did not have the option  
of making anything other than the Lock-Up Contract the document governing the parties’ legal  
relationship.  
[127] In my view, the plain meaning of the first paragraph of the Lock-Up Contract is that it  
was intended by the parties to replace the full contract. While I accept the Defendants’  
contention that it was not open to the Plaintiffs unilaterally to re-activate the earlier agreement, it  
was certainly open to the parties to reinstate the earlier contract upon a further agreement to this  
effect. Likewise, it was open to the parties to vary the Lock-Up Contract to incorporate some or  
all of the terms of the full house contract.  
a) The Fall 2011 Amendment  
[128] Both Mr. and Ms. Swanby say that, about three-quarters of the way through the framing  
process, they concluded that completion of the residence post lock-up stage was beyond their  
capability. They decided to ask Metcalfe to complete the project. According to Ms. Swanby, she  
had a discussion with Metcalfe while standing close to the doorway of the unfinished kitchen in  
which he agreed to build the residence to completion. She did not recall the exact words that he  
used, but he verbally agreed to complete the construction of the residence. Ms. Swanby  
mentioned to Metcalfe that they already had a signed contract for the completion of the  
residence, but he did not respond. The Plaintiffs maintain that the Defendants thereby committed  
to completing the residence in accordance with the full price contract signed on August 22, 2011  
(Exhibit 1-C-6).  
[129] Metcalfe acknowledges that he did have a conversation with Ms. Swanby at some point  
regarding him taking on the completion of the residence, but disputed he agreed to finish the  
home or to be bound by the full contract, either 1-C-4 or 1-C-6.  
[130] I accept Ms. Swanby’s evidence that she had a discussion with Metcalfe in which he  
agreed to build the residence to completion. I am satisfied that the parties came to an agreement  
in the fall of 2011 to vary the terms of their existing contract. By the terms of this oral  
agreement, the Defendants agreed to complete the construction of the residence. As such, the  
parties agreed to be bound by the terms of the fixed-price, full contract signed on August 22,  
2011, for $1,062,348.00, Exhibit 1-C-6, as constituting an amendment or variation of the Lock-  
Up Contract. Under the terms of the revised contract, Metcalfe remained the general contractor.  
[131] In their written submissions, the Defendants contend that the Plaintiffs abandoned their  
argument that they ever exercised the option to proceed on the full contract. The Defendants say  
that this abandonment took place during counsels’ oral submissions at the conclusion of the  
evidence. I have carefully reviewed the evidence of both Mr. and Ms. Swanby and am satisfied  
that they both testified as to their belief that they reached an agreement with Metcalfe to vary the  
Page: 24  
terms of the Lock-Up Contract so as to incorporate the terms of the full house contract. I accept  
the assertion of counsel for the Plaintiffs that this argument was never abandoned.  
[132] That said, it seems clear that this first variation agreement reached in the fall of 2011 had  
limited practical implications for the progress of the project. At the time, the Defendants were  
still very much engaged in those aspects of the construction of the residence that formed part of  
the Lock-Up Contract. The Plaintiffs maintain that all of the deficiencies claimed in this action  
flow from the Defendantswork to the lock-up stage. As such, the Plaintiffs say that whether or  
not the parties subsequently entered into a new contract for the construction of the entire  
residence is not material to the resolution of this litigation.  
[133] Save for the possible involvement of the stone mason in the leaking windows, I agree  
with the Plaintiffs’ contention in this regard. On the evidence before me, it is clear that the terms  
of the agreement reached between the parties relative to the completion of the project beyond the  
lock-up stage are largely irrelevant to the issue of liability. There is no dispute between the  
parties that virtually all of the deficiencies relied upon by the Plaintiffs in this litigation were  
items covered by the Lock-Up Contract. While the installation of the exterior stone was not part  
of the Lock-Up Contract, its removal was necessitated by the deficient stucco work that clearly  
was covered. This is discussed in greater detail later in these Reasons.  
b) The May 2012 Amendment  
[134] The second amendment alleged by the Plaintiffs is potentially more significant.  
[135] The Plaintiffs assert that the full price contract was varied in May 2012. Ms. Swanby’s  
evidence was that this new agreement was prompted by the Plaintiffs’ escalating concerns about  
the sub-contractors hired by the Defendants to complete the interior work on the residence. As  
noted above, when Ms. Swanby raised concerns with respect to the quality of John Metcalfe’s  
work, he walked off the job, leaving the Plaintiffs to hire their own tile sub-contractor to re-do it.  
Issues also arose with the Defendantspainting sub-contractor and cabinet supplier. Further,  
Metcalfe was unable or unwilling to meet the Plaintiffs’ requests relative to flooring and a  
planned staircase. Finally, Ms. Swanby was growing increasingly frustrated by the delays  
occasioned by Metcalfe’s frequent absences from the job site and his continuing refusal to assist  
in keeping track of the various allowances established for the interior work.  
[136] The full price contract included a list Metcalfe had prepared of allowances to complete  
the interior finishings. Ms. Swanby understood that the full price contract was a fixed price  
contract and that the itemized amounts were Metcalfe’s guidelines as to what could be spent to  
complete the interior. When Metcalfe subsequently refused to provide regular budget updates  
relating to these allowances, Ms. Swanby turned to Carm to assist her in preparing budgets to  
ensure that they knew exactly where they were at relative to each line item. Exhibit 1-I-37 was  
the first budget that she developed with Carm when the required information was not  
forthcoming from Metcalfe. Exhibit 1-I-20 was a later version of this same budget. These  
spreadsheets were created in late 2012 or in early 2013 when bills started to arrive from the  
various interior trades.  
[137] Ms. Swanby testified that she, Metcalfe and Carm met in May 2012 and arrived at a  
verbal agreement under which the Plaintiffs agreed to pay the Defendants either 5% or 10% of  
the cost of work completed by subcontractors, depending on whether the subcontractor was  
identified and hired by the Plaintiffs or by Metcalfe. It was also agreed that Metcalfe would  
Page: 25  
receive and process all of the sub-contractors’ invoices and then seek reimbursement from the  
Plaintiffs. While the terms of this alleged variation were not reduced to writing, Ms. Swanby  
believed that Metcalfe and Tru-Square continued as the general contractor for the project. She  
and Mr. Swanby both testified that they believed it was only fair to provide some compensation  
to the Defendants for their continuing work on, and oversight of, the full price contract even if  
the Plaintiffs hired some of the sub-contractors.  
[138] According to Metcalfe, he was approached by Ms. Swanby and Carm in May 2012, just  
prior to the completion of the drywall, and told that the Swanbys were unable to sell their other  
property and were therefore in a difficult financial situation. Metcalfe asserts Carm asked him if  
he would be willing to pay certain invoices with a 5% or 10% mark-up just to assist the Swanbys  
for a period of time. Metcalfe agreed. Carm set up a schedule on one of the budgets that added  
the 5% or 10% mark-up. Metcalfe says he had no input as to whether he was given 5% or 10%  
for the various trades. He insists that he simply agreed to receive and process the invoices of the  
sub-trades beyond the lock-up stage. The Defendants strongly dispute that Metcalfe retained any  
oversight function for the project beyond the completion of the lock-up stage.  
[139] Carm’s evidence on this point was very limited. He confirmed that a meeting took place  
with Metcalfe and Ms. Swanby in May 2012, during which they reviewed on an item-by-item  
basis the various finishing items and determined whether Metcalfe would receive a mark-up of  
5% or 10%. Carm referred to a budget he prepared dated May 21, 2012, Exhibit 1-I-21, which  
includes various 5% and 10% mark-ups identified as “Jim’s percentage” or “Jim’s mark-up”.  
Carm’s May 15, 2012, budget did not include these mark-ups. A subsequent budget prepared by  
Carm dated January 1, 2013, revealed that Metcalfe’s mark-up was reduced to 5% in certain  
instances where, according to Carm, Metcalfe was unable to provide the trade for the required  
interior work.  
[140] Carm was never questioned about Metcalfe’s version of what took place at this meeting,  
nor was he asked to confirm his alleged initiation of this discussion or his alleged proposal to  
assist the Swanbys through difficult financial circumstances. Metcalfe’s version of events also  
was never put to either Mr. or Ms. Swanby during cross-examination.  
[141] No arguments were advanced at trial regarding the possible application of the so-called  
rule in Browne v Dunn, 6 R 67, 68 (H L 1893), even after the Court invited further written  
submissions on the nature of the legal relationship between the parties, if any, beyond the terms  
of the Lock-Up Contract.  
[142] I accept the evidence of the Plaintiffs. Given the Defendants’ failure to put this key issue  
to the Plaintiffs in cross-examination or to their own witness, Carm, in direct examination, and  
for other reasons discussed below, I place little weight on Metcalfe’s version of events.  
[143] There is no evidence to support Metcalfe’s contention that the cost-plus arrangement  
came about because of financial difficulties experienced by the Plaintiffs when they were unable  
to sell their other home. To the contrary, the evidence indicates that the Plaintiffs had obtained  
full financing from the bank to cover the construction of the entire residence: Exhibit 1-H-22.  
Further, Carm testified that he was unaware of any financial difficulties on the part of the  
Swanbys. While Mr. Swanby gave evidence about financial strain that arose during the  
remediation process that required them to cash in some of their retirement investments, I am  
satisfied that this arose much later than the timeframe relied upon by Metcalfe.  
Page: 26  
[144] The Defendants forcefully assert that they retained no supervisory or oversight  
responsibilities beyond the scope of work set out in the Lock-Up Contract. They advance two  
arguments to support their position that they were not the general contractor and, as such, not  
responsible for the work of the trades involved in the finishing work post lock-up. First, the  
Defendants, relying on Carm’s evidence, maintain that Metcalfe’s only role relative to the trades  
for which he received a 5% mark-up was to simply pay their invoices. According to the  
Defendants, “[I]t is not commercially reasonable that Mr. Metcalfe would not have a role in the  
hiring or supervision of these trades but would be responsible for deficiencies in their work”:  
Defendants’ Response to Additional Reply Submissions of the Plaintiffs, para 12.  
[145] The Defendants called Carm as a witness at trial, which obviously imposed limitations on  
their ability to challenge his evidence. Absent an application under the Canada Evidence Act,  
RSC 1985, c C-5, or the Alberta Evidence Act, RSA 2000, c A-18, or under the common law, to  
have Carm declared an adverse or hostile witness, the Defendants were precluded from cross-  
examining him. No such application was made. The Defendants must accept Carm’s evidence as  
given.  
[146] Carm’s evidence was to the effect that Metcalfe’s responsibilities relative to those trades  
identified by the Plaintiffs, and for which Metcalfe was entitled to a 5% mark-up, were limited to  
the payment of the invoices submitted by that particular trade. However, when questioned as to  
who would be responsible for issues pertaining to the quality of work undertaken by any of the  
so-called 5% trades, Carm offered two responses. First, he suggested that he would be  
answerable to the Plaintiffs if trades associated with his company, C & S Fine Furniture Ltd,  
performed sub-standard or deficient work. Second, he suggested that if another of the 5% trades  
performed substandard work, that trade would be called back to correct the problem. Carm also  
made it very clear that his role on the project did not include any personal responsibility for any  
deficiencies arising from the work of any of the 5% trades. When then asked who would be  
responsible to call back the affected trade to correct the matter, he suggested that anyone from  
the team could make the call.  
[147] I attach very little weight to Carm’s understanding of the chain of responsibility for  
performance issues and deficiencies related to the finishing trades. There is no evidence that  
Carm is legally trained. He was not qualified as an expert witness to give legal opinions. While  
no objection was taken to his responses to hypothetical questions clearly touching on legal  
matters, I do not attribute to this aspect of his evidence the significance advanced by the  
Defendants. In my view, Carm was merely sharing his views as to his personal sense of  
responsibility for trades that he brought to the project either personally or through the Plaintiffs.  
As a practical matter, he believed that trades should be called back to correct sub-standard or  
deficient work. At the same time, he clearly saw very significant limits on his personal  
responsibility insofar as he was quick to point out that he would not bear any personal financial  
responsibility in such circumstances. Moreover, Carm was adamant that he was not the general  
contractor and that this role was played by Metcalfe from the outset of the project until the  
Defendants abandoned it in June 2013. In the result, I am unable to accept Carm’s views as being  
in any way determinative of the underlying issue relating to legal responsibility.  
[148] In my view, Metcalfe’s evidence that the cost-plus variation of May 2012 was a financial  
arrangement only is not credible. It is inconsistent with his continued regular presence on the  
job-site, a presence that would not have been required for someone exercising an invoice  
payment function only. It is also inconsistent with Carm’s time sheets and the various email  
Page: 27  
exchanges between Carm and Metcalfe and others that confirm Metcalfe’s continuing active  
involvement in the project. In rejecting this aspect of Metcalfe’s evidence, I reiterate that  
Metcalfe’s alleged financing arrangement was never put to either Mr. or Ms. Swanby in cross-  
examination. Likewise, it was never put to Carm notwithstanding the key role Metcalfe claimed  
he played in the discussion leading to this new financial arrangement. My rejection of Metcalfe’s  
evidence on this key issue significantly impacts my overall assessment of his credibility as a  
witness in these proceedings.  
[149] The Defendants advance a series of arguments regarding Carm’s role throughout the  
construction project, but most particularly relative to the finishing trades involved in the post  
lock-up phase of the process. Carm identified a number of these trades, including his own  
company, C & S Fine Furniture Ltd, which was involved in furnishing and installing much of the  
interior cabinetry. Several of the other trades, including the stone mason, Lawrence Masonry,  
were identified and hired by the Defendants.  
[150] Carm’s role in this construction project is the subject of significant disagreement between  
the parties. The Defendants suggest that he played a significantly more active role than simply  
the Swanbys’ designer. The Plaintiffs, on the other hand, view the Defendants’ focus on Carm as  
nothing more than an attempt to deflect responsibility for the supervision and oversight of the  
project away from Metcalfe. In my view, the Plaintiffs’ argument finds support in Metcalfe’s  
contradictory evidence regarding his role described earlier in these Reasons.  
[151] Carm was hired by the Plaintiffs as their designer and paid $85 per hour for his work  
throughout his involvement in the project. He was required to keep track of his time. He did not  
have a written contract with the Plaintiffs and there was never a contractual relationship between  
him and the Defendants.  
[152] I am satisfied that Carm’s involvement in the project created some confusion for  
Metcalfe, who testified that he had never worked with a designer before. Metcalfe’s initial email  
communication with Carm on August 27, 2011, days after the parties signed the contracts for the  
construction of the residence, confirms Metcalfe’s uncertainty about the arrangement: Exhibit 1-  
G-23. The final paragraph of the email reads as follows:  
I’m sure the clients appreciate your input into their new home and hopefully we  
can work together as smoothly as possible so that the owners can get the best  
product possible for a reasonable price. I gather this is something neither one has  
done before (work together) so we will need to communicate what is happening  
as the project continues. I will try to remember to keep you informed on the  
progress and schedule but I imagine you will be by regularly to see for yourself  
which will be good as you may pick up something that I may have missed that  
works toward the finished house.  
[153] Carm testified that the Swanbys initially invited him to take on the role of general  
contractor, but he declined on the basis that he lacked the required technical knowledge and  
experience. According to Carm, he was the designer on the project and, as such, his work  
involved design, budgeting and the coordination and scheduling of some of the finishing trades.  
[154] Nonetheless, Carm had significant experience in the design process, as well as in the  
finishing processes that follow the lock-up stage. The Plaintiffs placed great reliance on his input  
Page: 28  
and advice throughout. He acted somewhat as a “go-between” for the Plaintiffs in their dealings  
with Metcalfe throughout the construction project.  
[155] I am satisfied that part of Metcalfe’s confusion regarding Carm’s role flowed from the  
fact that Carm frequently acted as the Plaintiffs’ voice in dealings with Metcalfe and others. This  
confusion was compounded by Metcalfe’s significant time away from the job site when  
circumstances required Carm to step into the breach during these absences to try to keep the  
project rolling. On occasion, when Metcalfe’s travel schedule rendered him difficult or  
impossible to contact, Carm filled some of the oversight vacuum created by Metcalfe’s absences  
from the site, including relaying messages to and from Metcalfe.  
[156] The Defendants cite several examples of circumstances in which Carm is alleged to have  
played a key role in the oversight and supervision of the project, particularly after the lock-up  
stage was reached. For example, the Defendants suggest that Carm’s email to Metcalfe on  
September 19, 2012, makes it clear that he was assuming responsibility for the project with the  
result that Metcalfe and Tru-Square cannot be found to have been responsible for the work of the  
finishing trades.  
[157] Carm’s email (Exhibit 1-I-46) contained a list of fourteen items that he suggested  
required Metcalfe’s attention. The heading at the top of the email is “Items I need you to finish  
before I take over the project”. At the conclusion of that email, Carm asked Metcalfe to sent out  
an email to all of the trades to notify them that “I will be the contact person for the project”. On  
September 22, 2012, Metcalfe sent an email to Carm listing the names and contact information  
for ten of the trades working on the project. The email read as follows:  
Hi Shawn,  
Sorry for the delay but have been extremely busy of late.  
True Blue Plumbing and Heating Jason 540-8230  
Eagle Electric Jim 556-9853  
Amax Exteriors Allan 559-4539 (eavestrough, soffit/fascia)  
Glen Coulter drywaller 507-9840  
Diamond Fireplace 273-0000  
John Lawrence 874-3413 stone  
John 561-1270 tile  
Kory 507-3783 concrete  
Lumberding Exteriors 888-8504 (shingles)  
M+K Stucco (Merlin) 944-1077  
I believe you have any others that I have missed. If not, you can phone my cell (it  
is no extra cost as long as I am in the country) or email but I won’t have access all  
of the time. Any questions phone. The other unfinished items will be delt [sic]  
with on my return.  
[158] Carm sent a further email that same day acknowledging receipt of Metcalfe’s earlier  
message and stating: “[T]hank u when are u leaving and when approximately will u be back?  
Have a great trip.”  
[159] According to Carm, this email exchange took place in the context of Metcalfe’s planned  
absence from the province for a period of three weeks, during which there would be periods of  
time when he could not be reached via cellphone or email.  
Page: 29  
[160] What I take from this email exchange is that Carm was taking over the temporary  
supervision of the project during Metcalfe’s absence. On the evidence before me, it is clear that  
Metcalfe was regularly away from the job site for personal reasons, including pre-planned  
vacations. On occasion, when Metcalfe’s travel schedule rendered him difficult or impossible to  
contact, Carm was required to fill some of the gap created by his absence, including contacting  
the trades directly. In my view, given the oversight vacuum created by Metcalfe’s frequent  
absences from the site, it is not particularly surprising that Carm provided guidance and advice to  
the Plaintiffs at various stages of the construction process. This email exchange was situation-  
specific and involved Carm covering for Metcalfe during an extended absence from the project.  
[161] To the extent that the Defendants are suggesting that this email exchange reflects some  
sort of general transfer of the oversight responsibility for the project from Metcalfe to Carm, I  
am unable to accept this contention. Carm insisted that it never occurred to him that Metcalfe  
was not the general contractor. Further, Carm’s evidence was that he did not instruct any of the  
trades on how to perform their functions. He maintained that he was not paid by the Plaintiffs to  
supervise the trades. I accept his evidence on all of these points. Metcalfe’s role and legal  
responsibilities as general contractor remained unchanged.  
[162] As regards the finishing work that took place following lock-up, Carm’s increased  
oversight role was, in my view, consistent with his role a designer for the project. However, I  
reject any suggestion by the Defendants that Carm was ever the general contractor on the project.  
On the evidence before me, I am satisfied that this was Metcalfe’s role throughout.  
[163] Metcalfe’s contradictory evidence on this point is, as previously stated, troubling. I am  
satisfied that Metcalfe’s failure to properly supervise the project as a result of his personal travel  
commitments, together with his focus on his upcoming retirement, are the principal reasons that  
he failed to note and address the short-cuts and construction deficiencies of the various sub-  
trades that plagued the project to the lock-up stage. While I accept the proposition that it is  
important to consider carefully Carm’s role in some of the key decisions taken during the course  
of construction, I approach Metcalfe’s evidence in this regard with some considerable  
skepticism, particularly his attempts to deflect responsibility to others, notably Carm.  
[164] I am satisfied that Metcalfe and Tru-Square remained the general contractor for the  
project after agreeing to complete the residence on a cost-plus basis.  
3. Breach of Contract  
[165] The Plaintiffs led a substantial quantity of evidence highlighting the various deficiencies  
that were discovered by experts retained following the Defendants’ refusal to address the leaking  
windows and, ultimately, the Defendants’ abandonment of the project. This evidence is set out in  
the various expert reports prepared by Bjornson, Matthews, and Kraychy, as well as the evidence  
of the Plaintiffs’ remediation contractor, Juniper. In response, the Defendants led evidence  
challenging some of the observations and conclusions of the Plaintiffs’ experts and called their  
own expert.  
[166] The Plaintiffs rely on these specific construction deficiencies in support of their  
contention that the Defendants are in breach of contract relative to their construction of the  
Plaintiffs’ residence. I will address those deficiencies in detail later in these Reasons.  
 
Page: 30  
C. Liability in Tort  
[167] The Plaintiffs contend that the Defendants owed a duty of care based on their contractual  
obligation to construct the residence, that they breached that duty of care through the negligent  
performance of their contractual obligations, and that the Plaintiffs suffered damage as a result.  
[168] The Plaintiffs also say that Metcalfe should be held personally liable for the negligent  
construction performance of Tru-Square. Specifically, the Plaintiffs assert that the law provides  
that principal individuals may be held personally liable where the work performed is inherently  
dangerous or where a principal of the defendant contractor induces a breach of contract.  
[169] Metcalfe was aware from his pre-contract discussions with the Plaintiffs that they were  
seeking his assistance in the construction of their dream retirement home. Before entering into  
the agreement, Metcalfe had occasion to review the Swanbys’ architectural plans and, as such,  
was aware of their design specifications. Further, Metcalfe presented himself as a custom home  
builder who had at least some experience in building high quality homes.  
[170] In their written brief, the Plaintiffs suggest that Tru-Square and Metcalfe were under a  
duty of care “to fulfill the contract in the manner expected of a reasonable [sic] competent and  
careful custom home builder, having mind to established industry custom and practice.” In this  
regard, the Plaintiffs cite Vermillion at para 124, wherein the Court, citing Dickson J (as he then  
was) for the majority in Fraser-Reid v Droumtsekas, [1980] 1 SCR 720 at 726, states that the  
relevant question is, “[D]id the builder act as a competent and careful builder would have acted  
in what he did or did not do?”.  
[171] I accept the Plaintiffs’ contention that the scope of the Defendants’ duty of care is  
informed by both the terms of the contract and other general principles. In this instance, the  
terms of the contract specified that the Defendants were to meet Code requirements and to  
“strive for high quality”.  
[172] On the expert evidence before me, I am satisfied that the Code represents only the  
minimum standards required by law. In this regard, the Plaintiffs cite Holtslag v Alberta, 2006  
ABCA 51 at para 35, where Sulyma J (ad hoc) for the Court stated:  
The provisions of the Code are technical requirements relating to minimal health  
and safety standards and the use of safe and adequate building materials (see para.  
10 and excerpt from the Preface to the National Building Code of Canada 1990 in  
Part D above). As the respondent submitted, the Code cannot be said to be a  
textbook on building design. ...The statute establishes a regulatory scheme for  
building products and is intended only as a set of minimum standards for the  
benefit of the public at large.  
[173] The Plaintiffs maintain that the standards applicable to custom home building are higher  
than those prescribed in the Code. Bjornson, Matthews and Kraychy all testified that the Code is  
a set of minimum construction standards. The Defence expert, Hamman, confirmed that a  
reputable construction manager seeks a higher standard then merely meeting the minimum  
requirements in the Code: Evidence of Hamman (Cross), October 15, 2019, at 11:41 a.m.  
[174] In her expert report, Bjornson stated that many of the provisions of the Code either are  
outdated or have been withdrawn by the Standards Association, and that, for this reason, the  
building industry relies on other standards. Her evidence was that the Code’s minimum building  
 
Page: 31  
standards typically lag behind practices and standards generally applicable to the construction of  
custom-build luxury homes: Evidence of Bjornson (Direct) April 22, 2019 (am). As more fully  
discussed later in these Reasons, she expressed the view that in relation to roofing, the Alberta  
Roofing Contractors Association (“ARCA”) Roofing Application Standards Manual is the  
accepted standard for roofing installation purposes, not the Code’s “extremely outdated”  
provisions.  
[175] Kraychy stated that Metcalfe placed undue reliance on the minimum requirements of the  
Code. Given that Metcalfe was hired to build a custom, luxury home, Kraychy maintained that  
the Code’s minimum standards did not reflect the required accepted standard. He provided  
particulars as to some of the attributes and duties of a reasonably competent and careful custom  
home builder, including:  
a) Providing advice and assistance to clients relative to project budgeting;  
b) On-going communication with clients to ensure they are aware of changes,  
problems and delays in construction;  
c) Working with clients to resolve issue or problems arising during the course of  
construction so as to ensure that clients are properly informed of the status of  
the project. In this regard, the custom home builder is required to offer  
solutions to problems or issues that may arise without compromising overall  
building performance;  
d) Oversight of design and shop drawings to ascertain changes, either required or  
made, and consulting engineering professionals as required to ensure  
satisfactory building performance. Changes to the designed structural  
foundation or framing elements require the custom home builder to seek the  
advice and direction of engineering professionals;  
e) Oversight of sub-contractors to ensure work quality.  
Evidence of Kraychy (Direct) April 25, 2019 (10:45 am 12:20 pm).  
[176] As regards to his responsibility for the material and labours supplied by his sub-  
contractors, Metcalfe acknowledged that “My contractors are my responsibility”: Exhibit 29 at  
84:9-12. Hamman described the general contractor’s responsibility for his sub-contractors in the  
following terms: “if I’ve hired trades, they are me”: Evidence of Hamman (Cross), October 18,  
2019, 2:15 p.m.  
[177] As noted above, the Plaintiffs rely on construction deficiencies in support of their  
contention that the Defendants are in breach of contract relative to their construction of the  
Plaintiffs’ residence. The Plaintiffs rely on these same deficiencies as supporting their claim that  
the Defendants breached their duty of care and are, as such, also liable in tort.  
D. The Deficiencies  
[178] Before turning to consider whether or not there was a breach of this contract and, if so,  
whether the Plaintiffs sustained damages as a result of the breach, I would note that the decision  
in Vermillion confirms that there are implied terms in every building contract. At para 122, the  
Court held:  
 
Page: 32  
Unless the contract or the circumstances indicate otherwise, the contract will  
contain an implied term that the work will be done in good and workmanlike  
manner, the workmen employed on the work will possess the ordinary skill of  
those exercising the particular trade, and the materials will be of good quality and  
reasonably fit for the purpose for which they are used: Heintzman and Goldsmith  
at 4-50. In G Ford Homes Ltd v Draft Masonary (York) Co (1983), 43 OR (2d)  
401, 1 DLR (4th) 262 (CA), Cory J., as he then was, observed that a contractor  
undertaking to do work implicitly undertakes that it will be undertaken with care  
and skill and in a workmanlike manner and will be reasonably fit for the purpose  
for which is it required, unless the circumstances of the contract exclude such  
liability.  
[179] As previously stated, the Plaintiffs led a substantial quantity of evidence highlighting the  
various construction deficiencies. I turn now to reviewing that evidence in detail.  
1. The Foundation  
[180] The Plaintiffs contend that the Defendants failed to meet the appropriate standard of care  
as a general contractor in the custom home trade when they failed to engage an engineer  
regarding the change to architectural design drawings relative to the foundation. Specifically, the  
Defendants elected to pour a traditional foundation, rather than the ICF foundation specified in  
the drawings.  
[181] There is no dispute that an ICF foundation consists of the standard 8-inch wide poured  
concrete wall supplemented by rebar reinforced polystyrene forms that remain in place. In a  
traditional foundation, the temporary forms are removed after the concrete has cured.  
[182] I accept Kraychy’s evidence that this change should have been reviewed and approved by  
an engineer to ensure that it did not impact on other structural elements of the construction.  
According to Kraychy, Metcalfe should have obtained the proper engineered drawing for the  
new foundation. Similarly, he needed to make sure that the consulting engineer contacted  
ZyTech to discuss the implications, if any, of using a different type of foundation on the overall  
planned framing structure for the residence. I am satisfied that Metcalfe failed to take any of  
these steps.  
[183] While I note that Metcalfe was insistent that the change in the type of foundation  
employed in this instance had no impact in terms of the dimensions of the perimeter walls, I am  
satisfied that it represented a sufficiently significant deviation from the original plan as to  
warrant expert review. In a November 19, 2012 email to the Plaintiffs, Metcalfe apologized for  
the quality of the framing, noting: “I really appreciate how patient and understanding you have  
been during the building process and am sorry that the framing wasn’t done as well as it should  
have been which has caused us some problems especially in the bathrooms”: Exhibit 1-G-23, p  
83. It is not clear whether or not these framing issues were related to the wall overhang relative  
to the foundation.  
[184] In his written report, Matthews noted the lack of vertical alignment of wood framed walls  
supported on foundation walls at the east elevation of the residence. Specifically, he noted (at p  
5) that “the bottom plate of the stud wall supported at grade level was projecting significantly  
beyond the face of the foundation wall, and vertical support for the wall was compromised”. By  
way of remediation, he noted that the thickness of the concrete foundation wall was increased to  
 
Page: 33  
provide support for the full thickness of the supporting wall (at p 5). He also noted (at p 6) that  
the “substitution for ICF with conventional formwork has potentially significant structural  
impacts”.  
[185] The Defence expert, Hamman, expressed the view that the wall overhang was Code-  
compliant and, as such, acceptable. He recognized, however, that the overhang would have to be  
addressed in subsequent framing steps. Matthews, on the other hand, felt that the as-built  
condition was not satisfactory. He conceded that the situation was Code-compliant, but asserted  
that it did not satisfy industry standards. Both Matthews and Kraychy believed that the change  
from the ICF to traditional foundation was a likely cause of the wall misalignment.  
[186] In my view, the remediation recommended by Matthews was a reasonable response to the  
concern relative to the vertical support available to the wall.  
[187] In final argument, counsel for the Defendants suggested that Juniper’s evidence was to  
the effect that this recommended repair was never actually made. Assuming that to be the case,  
then Juniper obviously did not bill the Swanbys for this work.  
[188] Bjornson also raised issues with respect to waterproofing and damp-proofing relative to  
the foundation. In her report, and confirmed in her rebuttal report, Bjornson observed that  
waterproofing and damp-proofing did not meet s 9.13.2.4.(2) of the Code, which required that  
holes in dampproofed concrete walls be sealed off with cement mortar or damp-proofing  
material. No treatment to the concrete ties at the foundation damp-proofing was observed on the  
SE elevation, contrary to s 9.13.2.4.(2). Bjornson also suggested that best practice is to include a  
drainage mat installed to the foundation perimeter, as per s 9.14.5.1 of the Code.  
[189] The Defendants challenge certain aspects of Bjornson’s evidence in this regard, notably  
her conflicting evidence as to whether or not the absence of a drainage mat amounts to a Code  
violation. The Defendants also question the extent of the absence of damp-proofing observed by  
Bjornson, though I note that the Hamman made no observations in this regard. In accepting the  
evidence of Bjornson on this latter point, I note that there is no evidence that the Plaintiffs took  
any steps to address this issue during the remediation process. Accordingly, it is not strictly  
necessary for me to make any specific findings in this regard.  
2. The Leaking Windows  
[190] Ms. Swanby first became aware of the leaking windows on May 23, 2013. She observed  
water pooling by the great room window on the main floor. Water was also present half-way  
across the 800 square foot Bonus Room above the garage, as well as in the doorway above the  
downstairs bedroom and leaking into the basement. As described earlier in these Reasons,  
Metcalfe was immediately alerted to the situation by Ms. Swanby, but took several days to attend  
the job site. He denied responsibility for the problem and failed to take any steps to assist the  
Plaintiffs in the assessment or remediation of the problem.  
[191] When Snyder attended the residence to inspect the leaking windows, he was provided  
with a copy of recessed window installation detail that Carm had given to Metcalfe as an  
example of this type of installation, Exhibit 1-A-4. He conducted a detailed examination of some  
of the leaking windows. After removing the stone sill, Snyder determined that a lot of the details  
set out in the drawing, Exhibit 1-A-4, had not been followed. Specifically, he referred to the fact  
that there was no weeping rope and no foam rod and sealant. He also determined that some of the  
laps (waterproofing) had not been installed properly. Further, Snyder noted that the metal  
 
Page: 34  
flashing at the bottom of the window was bent upward “a little bit” by the stone sill. He noticed  
that the bottom flashings on other windows were also slightly bent.  
[192] While on site, Metcalfe suggested to Snyder that the impact of the stone sill pushing up  
the metal flashing was the cause of water entering the residence. Snyder disagreed with this  
suggestion, observing that if the window had been properly sealed, the fact that the flashing was  
somewhat bent would not result in water leaking into the residence.  
[193] Snyder subsequently issued a report, Exhibit 1-D-5, in which he concluded:  
Upon inspection of the windows (Master bedroom & Bonus room) we noted that  
the window was not completed as per drawing specifications due to water pooling  
behind the stone Lintel. We did not observe weeping ropes or tubes used to drain  
access water from the windows in question. It is also noted the drip flashing was  
bent on a reverse grade towards the window with no foam rod and sealant  
observed throughout. These issues created the water to pool behind the lentil [sic]  
and break the window wrap therefore allowing water to penetrate the wall.  
[194] In terms of corrective actions, Snyder’s report recommended the following:  
Stone to be removed as needed and lintel lowered to accommodate drip flashings  
installation as per drawing details. (Positive slope, Foam Rod and Sealant).  
After stone (as needed) is removed verify building wrap installation is as per  
drawing details and correct if necessary, before reinstalling stone.  
Weeping ropes/tubes to be installed under lentil [sic] as per drawing details.  
[195] Snyder provided a quote to repair the windows (Exhibit 1-I-22) in the amount of  
$11,530.00, inclusive of GST.  
[196] Water damage was observed by Bjornson at all main floor windows on the rear elevation  
of the residence and below the windows of the Bonus Room above the garage. Bjornson found  
that this water damage was consistent with the Swanbysreports of water leakage. In her report,  
Bjornson noted that there were water stains visible on the floor above the garage, under the  
windows at the back of the house, and in the master bathroom area. In conjunction with her  
investigation, Bjornson conducted flood testing by applying a light spray of water via hose onto  
the exterior of various windows. Flood testing on the second story window above the garage  
showed water entering the window sill at two locations within minutes.  
[197] The Plaintiffs maintain, relying on Bjornson’s expert opinion, that the windows were  
improperly installed by the Defendants, and that this improper installation gave rise to the  
ensuing leaks. The Plaintiffs contend that the window leaks were not the result of deficient or  
problematic design issues, as alleged by the Defendants, but rather the improper installation  
undertaken personally by Metcalfe and the framer. The Plaintiffs point to the fact that Metcalfe  
was personally responsible for the application of the peel-and-stick membrane associated with  
the required creation of a continuous moisture barrier, during the window installation.  
[198] The Defendants advance several different arguments in their denial of any responsibility  
for the leaking windows. First, they suggest that the stone mason, John Lawrence, damaged the  
installed window assembly when installing the sill stones. According to the Defendants,  
Metcalfe’s role was complete by that point in time as the installation of the stone occurred well  
after the lock-up stage had been reached. Second, the Defendants seek to attribute to Carm a  
Page: 35  
good deal of the responsibility for the leaking windows on the basis that he initiated this change  
from the original design and provided the design detail to complete the recessed installation.  
Third, the Defendants say that Metcalfe warned Ms. Swanby and Carm that the recessed  
windows were a bad idea and that he would not provide a warranty that they would not leak.  
According to the Defendants, McEwen also warned Carm about the recessed installation.  
Finally, the Defendants challenge the Plaintiffs’ decision to replace all the windows, rather than  
effecting the repairs proposed by Snyder.  
[199] There is conflicting evidence relating to the installation of recessed, as opposed to flush-  
mount, windows and doors. It is common ground that the original design called for flush-  
mounted windows. I accept Ms. Swanby’s evidence that, following the signing of the contract,  
Carm proposed, and the Swanbys agreed to, a change in the design to recessed installation of the  
windows. Carm provided Metcalfe with a drawing used on a previous project to help explain the  
concept, specifically the framing and installation requirements, as Metcalfe was confused by the  
specifications. Carrm also provided Metcalfe with some photographs illustrating this earlier  
installation, though these photographs are not in evidence. Metcalfe advised Ms. Swanby that he  
had never previously undertaken such an installation and was not sure that it would work. The  
framer, McEwen, was also unfamiliar with this type of window installation and was “leery”  
about this specification.  
[200] Metcalfe’s evidence was that he believed from the outset that the recessed design was a  
mistake. McEwen testified that he told both Metcalfe and Carm that he did not think that the  
recessed windows were a good idea given his belief that they would leak. According to McEwen,  
Carm assured him that he had figured out the recessed installation. Ultimately, McEwen agreed  
to install the recessed windows, but told Metcalfe and Carm that he would not guarantee that the  
windows would not leak. McEwen had no recollection of ever speaking to the Plaintiffs about  
the recessed windows and doors.  
[201] According to Carm, neither Metcalfe nor McEwen ever expressed any concerns to him  
regarding the recessed installation specification. He maintained that Metcalfe or McEwan could  
have easily indicated their reluctance or unwillingness to install the windows in this fashion but  
did not do so. In this regard, I note that Metcalfe refused to undertake the project if the Plaintiffs  
insisted on the use of an ICF foundation as specified in the design drawings. Whatever hesitation  
or reluctance Metcalfe may have had about the recessed installation of the windows, there is no  
dispute that he went ahead and installed the windows in that fashion and subsequently billed the  
Plaintiffs for recessed windows.  
[202] I approach McEwen’s evidence with some caution. His evidence contained repeated  
references to “I would have” or “I would not have” without certainty as to what he actually did in  
this instance. For example, he seemed uncertain as to whether there was a building permit for the  
project. At one point, he indicated that he was not sure, but later gave evidence regarding the  
permit being a one-page document. Overall, he seemed to have a limited recollection of what  
actually took place in this instance.  
[203] I accept Carm’s evidence that Metcalfe was confused by the specification, and that this  
was the reason that he provided a drawing used on an earlier project, together with some  
photographs. Significantly, the drawing Carm provided included disclaimers that the drawing  
was for design purposes only and that the responsibility for proper installation of the windows  
lay with the contractor. Carm also gave evidence that he met with Metcalfe on several occasions  
Page: 36  
to discuss the recessed window installation and, specifically, the special framing requirements to  
accommodate the stone returns around the recessed windows and doors.  
[204] After the windows had been installed, Metcalfe presented Ms. Swanby with the invoice  
covering the window installation and advised her verbally that he would not cover the warranty  
on the windows. In his testimony, Metcalfe conceded that he did not disclaim any warranty on  
the installation of the windows until he issued Invoice 118 on September 1, 2012, well after the  
windows had been installed: Exhibit 1-C-11. The invoice contains the following language:  
Peel and stick, chaulking (sic), extra lumber and personal labor for framing to  
recess doors and windows (does not include extra labor from framer) As this does  
not meet building code warranty is void in regards to any moisture entering  
building (emphasis added).  
[205] Metcalfe’s disclaimer makes no reference to any specific provision of the Code. In cross-  
examination, Metcalfe conceded that he made no investigation to determine whether or not the  
recessed installation was Code compliant or not.  
[206] In my view, Metcalfe’s disclaimer of responsibility for the installation of the recessed  
windows came too late to relieve him and Tru-Square of responsibility for any deficiency arising  
from the installation of the windows. Under the circumstances, Metcalfe should have either  
refused to install the recessed windows, as he refused to utilize the ICF foundation, or sought  
written instructions from the Plaintiffs to proceed with the recessed installation at the Plaintiffs’  
sole risk.  
[207] The Defendants seek to buttress their denial of responsibility for the leaking windows on  
a number of other grounds. First, they point to the fact that the Plaintiffs ultimately elected not to  
reinstall the windows in a recessed configuration given Juniper’s advice that he would not  
warranty windows installed in this fashion. Bjornson also expressed concerns relating to some of  
the details associated with the original plan set out in Exhibit 1-A-4 and recommended to the  
Plaintiffs that they flush-mount the reinstalled windows.  
[208] While Bjornson had reservations about some of the details of the design, she expressed  
the view that it was “not unexecutable.” She also indicated that the recessed windows should  
have had a design detail specifically prepared for this house, saying “It is a difficult design, but it  
can be achieved.”  
[209] I am not persuaded that the after-the-fact views of either Juniper or Bjornson in this  
regard are of any assistance to the Defendants. The fact that the Plaintiffs followed the strong  
recommendation not to reinstall the windows and doors in a recessed fashion during the  
remediation process does not change the fact that Metcalfe installed the windows without ever  
providing a similar strong recommendation.  
[210] The Defendants also rely on the terms of their agreement with the Plaintiffs to construct  
only to the lock-up stage. In particular, the Defendants cite the provision of the contract, Exhibit  
1-C-5, that specifically excluded the exterior stonework. As such, the Defendants say that they  
are not responsible for the work of Lawrence, the stone mason. According to the Defendants,  
Lawrence bent the window flashings while installing the stone sills underneath the windows,  
thereby causing the windows to leak.  
[211] Lawrence was called as a defence witness and gave evidence with respect to the leaking  
windows. He testified that he had no experience installing stone sills where the windows were  
Page: 37  
recessed. He could not recall if he was provided with a copy of Exhibit 1-A-4, the recessed  
window detail that Carm provided to Metcalfe.  
[212] There is no evidence before me as to any specific discussions between Lawrence and  
Metcalfe regarding the special requirements of the recessed window installations. According to  
Carm, Metcalfe was on site frequently during the time that Lawrence was engaged in the  
installation of the stone veneer to the exterior of the residence. As such, Carm assumed that they  
must have had discussions, though Carm claimed that he was not a party to any such discussions.  
[213] Lawrence had some difficulty installing some of the stone stills so that they would fit  
under the windows. Some of the stones had to be made thinner to fit. He also indicated that some  
of the flashings “got pushed up a bit”, but that it was “OK” and he did not feel that it was a big  
issue. In response to the question whether he had any concerns about the windows leaking,  
Lawrence responded (May 14, 2019 (Direct), 11:24 a.m.):  
Q
Did you have any concerns about the window openings  
leaking?  
A
Well, I had never seen a design like that, and to me it’s  
creating a trap, looking at the design.  
Q
A
Q
A
Q
A
What do you mean when you say creating a trap?  
Well it’s creating a spot for water to pool.  
And where would it pool?  
At the sills.  
At the sill where the sill meets the house?  
Yeah.  
[214] Lawrence confirmed his familiarity with weeping ropes and tubes but explained that  
weep holes and ropes are not installed in a closed system like the one he was dealing with at the  
Swanby residence.  
[215] The Code is silent on the installation of windows but requires at section 9.27.1.1 that no  
precipitation penetrate the interior of the building:  
Minimizing and Prevent Ingress and Damage  
1) Except where exterior walls are protected from precipitation or where it can be  
shown that precipitation ingress will not adversely affect occupant health or  
safety, exterior walls shall be designed and constructed to  
a) Minimize the ingress of precipitation into the assembly; and  
b) Prevent the ingress of precipitation into interior space.  
[216] According to Bjornson, the discontinuous moisture membrane and holes around the  
windows allowed water to enter under the window framing and enter the building around the  
Page: 38  
rough opening. Bjornson concluded that the breaks in the moisture barrier below the windows  
caused the leaks and led to the long-term damage to the interior components and the potential for  
fungal growth. I accept her evidence that the deficiencies were related to installation issues and  
not design issues. She maintained that if the windows had been properly installed, “they were not  
likely to leak”: Evidence of Bjornson, Re-Direct, April 24, 2019, 4:29 p.m.  
[217] Notwithstanding that the working drawings for the installation of the windows called for  
the use of sealant, a minimal sill flashing was installed at the base of the windows with an  
inadequate slope and no sealant. Moisture was directed along the window flashing, contrary to s  
9.7.4.2 of the Code, which requires the application of caulking to prevent the entry of water into  
the structure.  
[218] At the base of the windows, a minimal sill flashing was installed with an inadequate slope  
and no sealant, despite sealant use being indicated on the window installation drawings. Moisture  
was directed along the window flashing, contrary to the Code requirements in section 9.7.4.2:  
Caulking Compound  
1) Caulking shall be provided between window frames or trim and the exterior  
siding or masonry in compliance with Subsection 9.27.4.  
9.27.4.1 Required Caulking  
1) Caulking shall be provided where required to prevent the entry of water into  
the structure.  
2) Caulking shall be provided between masonry, siding or stucco and the  
adjacent door and window frames or trim, including sills, unless such  
locations are completely protected from the entry of rain.  
[219] Batt insulation was installed between the window frame and rough opening. While this  
installation did not violate the Code, Bjornson expressed the view that it is inconsistent with best  
practices. As such, she pointed to the 2014 Code at section 9.7.6.1.13: “Windows, doors, and  
skylights shall be sealed to air and vapour barriers.” According to Bjornson, this change to the  
Code represents formal acknowledgement of a best practice. She recommended that spray foam  
be applied consistently to the full depth instead of having a discontinuous barrier.  
[220] Hamman confirmed that the window installation was not Code-compliant. Specifically,  
he found that the rough openings were not properly framed, leading to water being directed into  
the building.  
[221] According to Juniper, all but four or five of the windows had to be replaced. All the main  
floor windows showed signs of leakage. I accept Bjornson’s evidence that the window  
installation did not satisfy Code or industry standards or best practices. Based on the evidence  
before me, it seems clear that several factors contributed to the leaking windows, including:  
a) The windowsrough openings were improperly framed such that the sill stone  
directed water towards the building, rather than away from the structure;  
b) The required peel and stick membrane was not installed properly so as to interrupt the  
continuity of the seal and to direct moisture towards the interior;  
Page: 39  
c) There was no back dam at the interior side of the framing at the rear of the window  
cavity. Sloping the window framing or installing a shim would have met this  
requirement;  
d) The flashings were bent and flat, as opposed to having a 6% minimum slope. There  
were no flashings between the stucco and the stone on the horizontal cladding  
transitions. Similarly, there were no end dams on any of the flashings;  
e) As installed, the windows did not accord with the specifications in the building  
drawings. Specifically, there was no weeping rope and no rain screen fabric installed  
behind the stone veneer. Likewise, there was a mix of foam and batt installation  
around the windows when the drawings called for foam only.  
[222] I am satisfied that the windows were improperly framed and installed by the Defendants  
and their framer, and that this improper installation led to the various leaks. Bjornson and  
Hamman agreed that the rough openings for the windows had been improperly framed.  
Moreover, Metcalfe was fully aware of the special framing requirements associated with the  
recessed installation, including the space required to accommodate the stone returns. Bjornson  
also identified a series of additional installation deficiencies that compounded the framing  
problems.  
[223] I do not accept the Defendants’ contention that the leaking windows were entirely the  
result of Lawrence’s installation of the stone sills that pushed up and bent the previously  
installed metal flashings. Snyder rejected Metcalfe’s assertion that this was the cause of water  
entering the residence. Having carefully considered the detailed evidence adduced at trial on this  
issue, I find that the slightly bent flashings were not a factor contributing to the leaking windows.  
While bent flashings were clearly not a “best practice”, the underlying cause of the window leaks  
was entirely the result of improper installation, including improper framing of the rough  
openings for the windows.  
[224] Regardless of Metcalfe’s role post lock-up, I am satisfied that he had a responsibility to  
take reasonable steps to ensure the integrity of the window installations that clearly formed part  
of the Lock-Up Contract. This responsibility included collaborating with Lawrence on the  
installation of the doors and windows. Metcalfe’s lack of experience with the installation of  
recessed windows and doors should have heightened his diligence in ensuring that Lawrence was  
fully aware, and fully understood, the special requirements for this somewhat unique feature. I  
am satisfied that Metcalfe failed to take these steps.  
[225] Lawrence was one of the Defendants’ trades, hired by the Defendants to complete the  
stonework on the exterior of the residence. I am satisfied that the Defendants were responsible  
for at least this aspect of Lawrence’s work on the project, either as the general contractor or as a  
project coordinator with some oversight responsibilities for the project. I am satisfied that these  
oversight responsibilities at the very least included the obligation to work collaboratively with  
Lawrence on a very complex window installation that had been largely completed under the  
terms of the lock-up contract.  
[226] The Swanbys accepted Bjornson’s advice not to re-install recessed windows. In addition,  
Juniper told Ms. Swanby that he would not warranty the labour on the installation of the new  
windows if the recessed design was retained. He gave evidence that he believed that the design  
of the recessed windows was “poor” and that there were lots of avenues available for the  
Page: 40  
windows to fail. The flush-mount reinstallation involved some additional framing costs, but such  
costs were considerably less than the anticipated costs associated with a recessed re-installation  
and, overall, a less costly repair option.  
[227] Bjornson recommended replacement of the windows. Her inspection of the removed  
windows revealed residual foam and sealant, damaged frames, and broken flanges. She also  
noted that the operation of some of the windows appeared to be difficult. Further, her  
understanding was that the manufacturer’s product warranty was likely voided once the windows  
were removed. She acknowledged that it might be possible to re-use the windows in certain  
circumstances, but that the contractor would have to be confident in accepting responsibility for  
the used product.  
[228] Juniper explained that when a window is removed, it is no longer a “new” window. A re-  
installed window would no longer be covered by the manufacturer’s warranty, though the labour  
would be covered by warranty. Juniper testified that 4 or 5 windows in the home were found to  
have no issue and were never removed or replaced.  
[229] Hamman confirmed that a contractor would warranty the re-installation of windows only  
if it was certain that they were in proper condition. He said his experience suggested that the  
windows could be reinstalled without affecting the manufacturer’s warranty if care is taken not  
to damage them during the removal process. In his written report, Hamman recommended that  
the windows be re-used following the Code method of lapped blueskin. During his testimony, he  
acknowledged that the Code does not refer to such a method, but stated nonetheless that it was  
best practice. He acknowledged that his expert report was in error in this regard.  
[230] Hamman acknowledged that he did not have an opportunity to inspect the windows after  
they had been removed. In cross-examination, he conceded that, to the extent that Bjornson’s  
conclusions regarding the condition of the windows was correct, they would need to be replaced.  
He did not factor window replacement in his suggested remediation budget.  
[231] I am satisfied that the Plaintiffsdecision to replace the windows was reasonable under  
the circumstances. In my view, the level of confidence required for a contractor to re-install and  
provide a warranty for the used windows was missing in this instance. I am also satisfied that the  
manufacturer’s product warranty would have been voided due to damage on removal.  
[232] The Plaintiffs spent approximately $31,000 to replace all of the windows, save for the  
four or five windows that were determined not to require replacement and the decision to  
eliminate one of the windows that had been removed. I am satisfied that this was a reasonable  
expenditure under the circumstances.  
3. Bonus Room  
[233] The Plaintiffs maintain that there were several construction deficiencies relating to the  
Bonus Room, a large room located above the garage.  
a) Roof  
[234] During the course of their investigative work, the Plaintiffs determined that the roof  
trusses in the Bonus Room were cut and not properly connected to the ridge beam. A number of  
trusses were also found to be oriented on their weak axes. Further, the 34-foot long steel I-beam  
was found to lack proper connection to the outside walls.  
 
Page: 41  
[235] In his report (at p 10), Matthews expressed the following concerns with respect to the  
Bonus Room roof:  
a) Lack of connection of steel ridge beam to supports;  
b) Structural inadequacy of support header above windows at east and west walls;  
c) Absence of hangers at trusses at numerous locations;  
d) Non-approved field-modification of trusses by cutting;  
e) Missing nails in hangers;  
f) Lack of fit of trusses evidenced by trussed not fully seated at hangers;  
g) Split wood components due to nailing;  
h) Absence of nails at dimensional lumber components at truss support detail at walls.  
[236] In his evidence, Metcalfe acknowledged that he was personally involved in some of the  
framing in the Bonus Room. He maintained that that there were no cuts or other modifications to  
the trusses supplied by Zytech. He also stated that the I-beam was well secured and that he was  
satisfied that it had been wedged into position in such a fashion that it was not likely to move.  
Further, to the best of his knowledge, Metcalfe believed that the hangers supplied by Zytech had  
been installed. Finally, he challenged one of the photographs presented to him as even being a  
truss, “guessing” that it had been cut during the process of de-construction.  
[237] I accept Matthewsevidence that the roof system in the bonus room was significantly  
compromised as a result of the structural irregularities he noted in his report and related in his  
evidence. Specifically, he testified that good practice requires proper connection of the trusses to  
the ridge beam. Similarly, good practice dictates that truss members should not lie on their weak  
axis and should not be modified on site. In this regard, he observed that the roof is a critical  
structure, the failure of which poses significant safety risks to the occupants of the residence.  
Hamman conceded that the roof in the Bonus Room lacked some connection details and required  
additional blocking.  
[238] According to Matthews’ report (at p 10), “extensive remedial structural work was carried  
out to address the numerous deficiencies observed.” Matthews prepared detailed drawings  
illustrating remediation details, Exhibit 1-A-7, including SK-C, a drawing detailing the required  
Bonus Room truss support, and SK-D, the required Bonus Room truss support cradle.  
b) Floor  
[239] According to Juniper, the Bonus Room floor was missing at least some of the blocking  
between the floor joists stipulated in the Zytech drawings. In addition, Juniper testified that a  
portion of the tongue and groove sub-floor had been cut out in the area near the windows. He  
also observed that there was a floor joist missing.  
[240] Metcalfe and McEwen both testified that blocking was installed but referenced a Zytech  
drawing that indicated blocking was not required. In support of their contention in this regard,  
they produced Exhibit 38, a drawing that appears to be an enlargement of a portion of the  
complete Zytech drawing, Exhibit 1-A-9. Metcalfe’s evidence was that he did not notice that a  
floor joist was missing.  
[241] I accept Juniper’s evidence that the complete Zytech drawing for the Bonus Room  
included a requirement for blocking. The fact that Metcalfe and McEwen included some  
blocking strongly suggests that this was always a structural requirement. No satisfactory  
Page: 42  
explanation was ever provided as to how Exhibit #38 came into existence or that it was actually  
relied upon by the Defendants.  
[242] The recommended remediation involved installation of a new sub-floor, the requisite  
blocking identified in the Zytech drawing (Exhibit 1-I-35, p 18, top photograph) and installation  
of the missing floor joist.  
[243] Under the circumstances, I am satisfied that the remediation work effected by the  
Plaintiffs in this regard was both reasonable and appropriate.  
c) Insulation and Ventilation  
[244] In the vaulted areas of the attic, Bjornson reported that the thickness and installation  
method of insulation blocked the soffits, thus preventing effective cross-ventilation between truss  
cavities. She stated that this amounted to a violation of the Code.  
[245] During his investigation, Juniper removed some of the drywall in the Bonus Room  
ceiling and determined that the insulation batts were touching the plywood roof sheeting such  
that there was no room for air to circulate between the roof and the insulation.  
[246] The roof and attic ventilation requirements are outlined at section 9.19.1.2.(3) and section  
9.25.2.4(6) of the Code:  
9.19.1.2 Vent Requirements  
3) Required vents may be roof type, eave type, gable-end type or any combination  
thereof, and shall be distributed  
a) Uniformly on opposite sides of the building;  
b) With not less than 25% of the required opening located at the top of the  
space, and  
c) With no less than 25% of the required openings located at the bottom of  
the space...  
9.25.2.4 Installation of Loose-Fill Insulation  
6) Where soffit venting is used, measure shall be taken  
a) To prevent loose-fill insulation from blocking the soffit vents and to  
maintain an open path for circulation of air from the vents into the attic or  
roof space, and  
b) To minimize airflow into the insulation near the soffit vents to maintain  
thermal performance of the material.  
[247] According to Bjornson, the ventilation in the Bonus Room was not compliant with the  
Code, in that the insulation prevented proper air flow as it was installed too close to the roof  
sheathing. In addition, there were no continuous ridge vents. Further, the vents were not properly  
connected. Specifically, the Code required two-inch to three-inch spaces between the cavities,  
whereas the as-built state involved only one to one-half inch space between cavities.  
[248] Hamman did not inspect the attic space of the Bonus Room. The Defendants made no  
observations about the ventilation space at the trusses, though they pointed to the fact that there  
was a four-inch space on top of the insulation allowing for ventilation. Nevertheless, Bjornson  
Page: 43  
expressed the view that four-inch spaces in the individual cavities were insufficient for the  
purposes of cross-ventilation.  
[249] At Bjornson’s direction, Juniper installed Styrofoam baffles next to the roof sheeting and  
then insulation batts in order to create sufficient room for air to circulate between the insulation  
and the roof. In order to increase the R factor to R-40, Bjornson also directed Juniper to apply  
spray insulation over the insulating batts. He estimated that spray insulation is approximately  
twice the cost of insulation batts, but noted that there was insufficient room in the cavity to  
accommodate R-40 batt insulation and, further, that no plastic vapour barrier was required when  
using spray insulation.  
[250] I accept the evidence of Bjornson and Juniper as regards these deficiencies and the  
necessary remediation. While the Defendants challenge the need for a building envelope  
engineer to make this type of recommendation, I am satisfied that this fell within the proper  
scope of Bjornson’s very thorough review of the as-built construction of the residence at the time  
of her involvement.  
d) Stairs  
[251] There is a conflict in the evidence as to the as-built condition of the Bonus Room stairs,  
particularly the connection between the stairs and the floor.  
[252] According to Juniper and Matthews, the stairs were not connected to the floor system  
either with bolts or hangers, as required by the Zytech drawings: Exhibit 1-A-2, SWA922.  
Limited finishing materials, including drywall, were holding the stairs in place, together with a  
few nails. Matthews’ evidence was that the stair to floor connection was very deficient and  
presented a risk of detachment or collapse. He noted the lack of fasteners in suggesting that the  
construction represented poor workmanship.  
[253] Metcalfe’s evidence was that McEwen installed the stairs, attaching them at the top, but  
that Metcalfe was personally involved in nailing and screwing every joist to wall studs. McEwen  
pointed to Exhibit #38, which appears to be an enlargement of the Zytech drawings. As in the  
case of the Bonus Room floor blocking, the portion of the drawing containing detailed  
specification notes is missing from the enlarged version.  
[254] McEwen’s evidence was that he “would have screwed” the stairs into the floor system  
and then to the walls and that he was the person who put the screws in: Evidence of McEwen  
(Direct), May 13, 2019, 2:16 p.m. In my view, there are some serious issues with the reliability  
of McEwen’s evidence generally. As previously noted, it was replete with language such as “I  
would have...” or “I wouldn’t have...” without certainty as to what he actually did. I am satisfied  
that, though well-meaning, he had limited recollection of what actually took place. In the result, I  
find that his evidence is not reliable and I attach little weight to it.  
[255] Hamman made no observations as to any defects relative to the stairs. His evidence was  
simply that they appeared to be pinned at both ends and that he conducted no further  
investigation.  
[256] Given the contradictions in the evidence of Metcalfe and McEwen in terms of who  
actually installed the screws alleged to have been employed to connect the stairs to the floor, I  
prefer the evidence of Juniper and Matthews on this point. I am satisfied that the stairs were only  
minimally connected to the rest of the structure and presented a significant risk of collapse.  
Page: 44  
[257] The Plaintiffsremediation, connecting the Bonus Room stairs in accordance with the  
Zytech drawings through the use of bolts, hangers and backers, was both appropriate and  
reasonable under the circumstances: Exhibit 1-F-35, pp 13, 17 (remediated stairs).  
4. The Garage  
[258] The as-built state of the garage raised a number of concerns. First, the division walls  
between the house and the garage were not insulated to prevent the migration of C0-2 gas from  
the garage into the residence. Second, the garage doors had to be re-installed with new springs.  
Third, open heat runs were found buried in the insulation in the ceiling space with no connection  
to registers: Exhibit 1-G-35, p 15, bottom photograph; p 16, bottom photograph. Juniper said he  
had never seen such a configuration before. Fourth, electrical wires that were intended to be  
connected to various exterior electrical outlets were rolled-up and located behind drywall:  
Exhibit 1-G-35, p 20, lower photograph.  
[259] The garage floor was also determined to be off the foundation’s footing and floating  
above it: Exhibit 1-F-35, p 126, bottom photograph; p 127, top photograph. In other words, the  
concrete slab that represented the garage floor was not connected to the footing.  
[260] The Defendants made no submissions, either orally or in writing, relative to this  
particular construction deficiency.  
[261] Metcalfe offered no explanation relative to the insulation of the division walls between  
the garage and the residence or the need to re-install the garage door. With respect to the open  
heat runs, he maintained that this was common practice, relying in part on hearsay statements of  
the heating contractor, who did not give evidence during the trial. Metcalfe’s evidence with  
respect to the electrical wires located behind drywall was to the effect that the wires would have  
been connected during the final walk-through. The electrician, Dueck, testified that he did not  
complete his work on the residence due to unpaid invoices, but that he would normally do a  
walk-through at the end of a job to test circuits and label wires.  
[262] Metcalfe gave evidence that there was gravel located underneath the garage pad, together  
with a Styrofoam floor heating system. He also stated that there were piles located every 8 feet.  
However, he offered no evidence to confirm his assertions regarding the piles or Styrofoam.  
Further, his evidence on this point was never put to Juniper in cross-examination. Hamman’s  
report makes no reference to this alleged deficiency.  
[263] Metcalfe also maintained that the garage doors were not part of the contract as they were  
one of a number of items that were listed as an allowance. However, I note that the final draw  
invoice 137, Exhibit 1-C-17, lists this allowance as a credit.  
[264] Juniper testified that the remediation work in the garage included installing spray foam  
on the walls separating the garage from the main residence, as well as the ceiling, to protect the  
Bonus Room and the living areas from CO-2 gas. I am satisfied that the Plaintiffs’ remediation in  
this regard was appropriate to address the underlying issue.  
[265] I reject Metcalfe’s explanation that the rolled wires concealed behind the drywall would  
have been detected and connected during the final walk-through. Even assuming that to have  
been the case, there would have been costs associated with the necessary disruption and repair to  
the drywall, as well as the cost of connecting the wires to individual outdoor electrical boxes at  
the time of the final walk-through. As such, I am satisfied that the remediation costs were more  
 
Page: 45  
or less the same as would have been incurred under the scenario outlined by Metcalfe. In my  
view, the Plaintiffs acted reasonably in pursuing this course of action.  
[266] I am also satisfied that the Plaintiffs acted reasonably in adding rebar to the garage pad  
and in pouring concrete underneath the slab to connect the pad to its footing, thereby avoiding  
the risk of breaking the concrete pad. To address this issue, Juniper testified that additional  
concrete had to be poured to fill the void and establish a connection between the footing and the  
garage pad.  
5. Door Threshold Cut-Outs  
[267] There is conflicting evidence on the cutting of the sub-floor in the area of the exterior  
door thresholds for the purpose of making space for the installation of stone sills underneath.  
[268] According to Matthews, the floor sheathing at door thresholds on the east elevation of the  
residence, that is at the rear of the residence leading to the deck, had been cut out by a saw. He  
expressed the view that these cut-outs were neither Code-compliant nor acceptable practice. He  
testified that he had never seen this done before. I accept the evidence of both Bjornson and  
Juniper that water entered the basement through these threshold cut-outs and that water damage  
was visible upon removing the drywall in various rooms in the basement. Similarly, daylight was  
visible through the cut-outs. According to Bjornson, the moisture barrier failed at the threshold  
cut-outs: Evidence of Bjornson (Direct) April 17, 2019.  
[269] Juniper gave evidence regarding the as-built condition, depicted in Exhibit 1-G-35, p 24,  
top and bottom photographs. According to him, water was able to enter the basement as a result  
of the discontinuous nature of the sub-flooring. He described the resulting damage to the drywall  
in the rooms in the basement.  
[270] Metcalfe acknowledged that he provided directions to the framer to cut the thresholds and  
that this was not normal practice. He testified that he took directions from Carm on this matter.  
McEwen’s evidence was to the effect that both Metcalfe and Carm provided directions to him to  
cut the thresholds. In this regard, the Defendants rely on two emails Carm sent to Metcalfe.  
[271] On December 22, 2011, Carm sent Metcalfe a short email that read as follows:  
Jim see attached pictures. On the bottom of the doors there is a space for the stone  
to fit in the larger the better but if I only end up with ¾” I will cut the stone to fit.  
Attached to the email are three photographs. Two of the photographs depict windows, not doors,  
while the third photograph shows two sets of double doors. I do not interpret this email as in any  
way providing “instructions” to Metcalfe to cut the thresholds to accommodate the stone  
installation.  
[272] The second email is dated March 13, 2013, two months prior to the Plaintiffs’ discovery  
of the leaking windows. The relevant portion of the email reads as follows:  
...In our final walk through I pointed out that there was missing stone under three  
doors. I was under the impression that he was going to install it before he packed-  
up. He may not have installed it due to the fact the wood needs to be chiseled out  
under the door in order for him to install it like the other doors.  
[273] Carm says he provided no directions to Metcalfe or McEwen on how to ensure that there  
was a minimum ¾” space below the door openings for stone installation. He maintained that he  
 
Page: 46  
provided photographs to Metcalfe to illustrate similar installations. He testified that his only  
involvement in effecting changes to doors or door openings involved a request made to a mason  
to chisel down some wood at a door on the front side of the house. Carm never saw the changes  
made to the exterior door thresholds and was surprised to see photographs depicting the as-built  
details.  
[274] I accept Carm’s evidence on this point, namely that his only involvement in effecting  
changes to door openings involved one of the doors on the front of the house. Even if there was  
some confusion as to which doors that Carm was referring to in his March 13, 2013 email, the  
interpretation advanced by the Defendants is not reasonable given the language employed.  
[275] It is significant, in my view, that Metcalfe was aware that Carm was not an engineer.  
While Carm’s role in the project is the subject of some disagreement between the parties, as  
discussed elsewhere in these Reasons, I am satisfied that his primary role was as designer and  
co-ordinator and that he never had any responsibilities relative to the construction of the building  
structure or the integrity of the building envelope.  
[276] In my view, Metcalfe was responsible for the structural integrity of the building. Even if  
Carm had provided such instructions, a finding that I am not prepared to make in these  
circumstances, Metcalfe, the general contractor, cannot avoid responsibility on the basis that he  
took instructions from a designer on a matter pertaining to a structural and building envelope  
element. I also note that Metcalfe made no efforts to obtain an engineering opinion regarding the  
threshold cut-outs. Finally, Metcalfe had previously refused to install the ICF foundation  
specified in the Innographic drawings and, indeed, advised that Plaintiffs that he would not build  
the home if they insisted on an ICF foundation. Under the circumstances, I reject his contention  
that he directed McEwen to breach the integrity of the building envelope because he had been  
directed by Carm to do so.  
[277] Matthews directed remediation work, namely to cut back more of the floor sheathing in  
order to tie the floor back in and extend it to the foundation. Juniper gave evidence regarding this  
remediation process. All of the doors along the back deck were removed. At Matthews’  
direction, TGC installed Blueskin silicon, flashing and spray foam in conjunction with the repair  
work. Fortunately, all of the doors could be re-used.  
[278] Hamman agreed that it was “absolutely necessary” to replace the cut-out sheathing:  
Evidence of Hamman (Cross) - April 24, 2019, at 4:09 p.m.  
6. Interior Electrical  
[279] During the investigative process, live electrical wires were located in the master bedroom  
taped up behind the drywall. Live wires were also located underneath the jet tub. Further, a plug  
in the mechanical room had been covered with drywall. The investigative process was  
complicated by the fact that the electrical box was not marked. During the remediation, TGC had  
to trace all the electrical lines throughout the residence in order to label the electrical panel.  
[280] As previously indicated, the electrician, Dueck, did not complete his work at the  
residence because of nonpayment of his invoices. He testified that he had no recollection of any  
wiring behind the drywall in the master bedroom, but did not deny any of the deficiencies  
identified by the Plaintiffs in this regard. Rather, he stated that he does not energize wires until  
he has completed his work and, further, that he would have found such wires through testing at  
the time of completion. Dueck also testified that there were no electrical drawings for the project  
 
Page: 47  
and that he would have labelled the main breaker box at completion. Notwithstanding Dueck’s  
evidence that the wires were not energized, the Plaintiffs properly point out that the remediation  
work required electrical power. The electrical system was, accordingly, activated during the  
remediation process, including the live wires in the master bedroom.  
[281] Metcalfe acknowledged the plug in the mechanical room that had been covered by  
drywall. However, he denied that there were hot wires around the jet tub and stated that leaving  
hot wires behind a master bedroom wall is common practice. I do not accept Metcalfe’s evidence  
on this particular issue.  
[282] The question of remediation on this particular matter was straight-forward. By all  
accounts the work was not finished. As such, completing the project necessarily involved the  
completion of the electrical work by TGC in conjunction with its overall remediation work.  
7. Foundation, Framing and Nail Floor Wall Connection  
[283] The Plaintiffs’ concerns under this heading fall into three related categories. The first  
involves the wall off-set from the foundation. The second relates to the use of non-pressure  
treated lumber near grade-level, while the third relates to alleged non-compliance with the  
Code’s nail requirement for wall to floor connections.  
[284] First, the Plaintiffs say that the deck wall overhung the foundation by approximately one  
and one half to two inches. While this was Code-compliant, the Plaintiffs, relying on Matthews’  
opinion, say that it was not satisfactory from a custom home construction standard. Further, the  
Plaintiffs maintain that Metcalfe’s decision not to follow the Zytech drawings calling for an ICF  
foundation in favour of a traditional foundation, changed the width of the foundation walls.  
Despite Metcalfe’s assurances to the Swanbys that the foundation “looked good”, and his  
direction to McEwen to adjust the framing of the walls to account for the fact that the foundation  
was not square, Metcalfe failed to correct the wall off-set from the foundation: Evidence of  
Metcalfe (Cross) May 10, 2019, 10:20 a.m. Furthermore, Metcalfe knew in the fall of 2011 that  
two wall sections were not square.  
[285] Hamman stated that the wall overhang was Code-compliant and therefore acceptable, but  
acknowledged that action would need to be taken to offset the overhanging foundation in  
subsequent framing steps. He also conceded that he had not accounted for occupancy and live  
loading in reaching this conclusion. Matthews, on the other hand, was of the opinion that the risk  
of the wall off-set from the foundation was that the wall could lose the ability to support vertical  
loads, thereby compromising overall stability.  
[286] Kraychy opined that it is common practice to hire a surveyor to set the elevations  
properly in conjunction with pouring a foundation. Further, he indicated that it is customary to  
get engineered drawings for a foundation. He testified that he has never constructed a foundation  
based on architectural design alone.  
[287] Metcalfe failed to engage a surveyor or obtain engineered drawings for the foundation.  
He also failed to consult Zytech or an engineer on the impact of his planned change to the  
foundation. Both Kraychy and Matthews expressed the view that the change from the ICF  
foundation to the non-ICF foundation was a likely cause of the wall misalignment.