Page: 6
chosen by the parties, not to change or overrule the meaning of those words. The
surrounding circumstances are facts known or facts that reasonably ought to be known to
both parties at or before the date of contracting. Therefore, the concern of unreliability
does not arise (see paras. 57-61 of the Sattva decision).
[21] In considering the contract in this case, I have concluded that the provisions of Articles
2.1 and 2.2 must be read in conjunction with the provisions of Schedule A which identify
that certain items are subject to a cash allowance which has been included for the item.
The cash allowance is set out under Schedule C. So, for example, under Schedule A it
talks about the design and installation of a septic system and notes that, “a cash allowance
has been included for this item”. The cash allowance identified under Schedule C for a
septic system is set at $20,000. I interpret this provision to mean that if the cost of a
septic system exceeded this amount, the cost overage would be the responsibility of the
defendants.
[22] The defendants argue that the contract for construction of their home is a “fixed price”
contract and that there is no provision for increases in the price they are required to pay
unless there is an “upgrade” requested by them. The defendants rely on Article 2.1 of the
contract which as noted previously states, “subject to the inclusion of any upgrades
pursuant to paragraph 2.4 of this Agreement the owners shall pay the builder the sum of
$572,798.64”. The applicable provision with respect to “upgrades” is found in Article 2.2
(as opposed to 2.4 of the Agreement). Article 2.2 provides for a definition of upgrades as
follows: “Any and all design changes, inclusions or extras (collectively, “the upgrades”)
which are requested by the owner, subsequent to the owner executing this Agreement,
must be acknowledged in writing by both the owner and the builder and the appropriate
amendment(s) shall be made to the contract price.” [Emphasis Added.] It is apparent
from the wording of the contract that “extras” are to be added to the contract price.
Schedule C sets out a series of cash allowances. The cash allowances are referenced in
Schedule A which deals with the house specifications. For example item 6 of Schedule A
refers to a “rough in driveway”. A cash allowance has been included for this item. It is
apparent that the cash allowance represents the anticipated cost for this item but that it is
subject to increase or decrease based on the actual cost. I base this conclusion on the fact
that most items under Schedule A are not covered by a cash allowance and that the term
in its ordinary meaning suggests that an amount has been “allowed for” in the context of
any cash allowance item and that the exact cost is to be determined at a later time.
[23] The defendants argue that they did not “request” any “upgrades” and that these extra
costs were in fact passed on to them by the builder. However, for each of the cash
allowance items, they were signed off by Mr. Nikifork. He clearly approved of any cost
overages on the cash allowance items. By doing so I have concluded that he was
requesting the extra in question. The defendants were clearly aware of the implications of
signing off on an additional quotation for a cash allowance item. This is reflected in Mr.
Nikifork’s email dated August 9, 2017 when he responded to the quotation from
Robinson Haulage for the new septic system which was a cash allowance item and which
came in above the cash allowance price. He states in his email: