Q.B. A.D.1993 No. 205 J.C. Y. IN THE QUEEN'S BENCH JUDICIAL CENTRE OF YORKTON BETWEEN: DENESCHUK HOMES LTD. and JOSEPH BATIUK and BEV BATIUK DEFENDANTS David K. Rusnak for the plaintiff Ian D. McKay for the defendants JUDGMENT McINTYRE J. November 29, 1996 The defendants entered into contract with the plaintiff, whereby the plaintiff was to build and supply to the defendants, ready to move home ("RTM"), placed on basement to be constructed by the plaintiff. The plaintiffalleges the contract price stipulated in the RTM agreement ofJune 26, 1992, and signed by both parties, was in error andseeks rectification of the contract. The plaintiff has been building RTMs in the City of Yorkton since 1979. An RTM as supplied by the plaintiff does not come with basement. It is the practice of the plaintiff to price an RTM and basement separately if prospective purchaser seeks to have the plaintiff provide basement as well as the RTM. Of the 40 RTMs built by the plaintiff in 1992, no more than half dozen involved supplying basement. The defendants dealings with the plaintiff were almost exclusively handled by Peter Skwerniuk who had been commissioned salesman for the plaintiff for about 15 years. In those 15 years, Mr. Skwerniuk had sold an average of 20 homes per year, most of which were RTMs. On May 9, 1992, the defendants met with Mr. Skwerniuk to inquire about having the plaintiff build an RTM for them. The defendants had set of blue prints and were wanting to have home built to their specifications. The defendants acknowledge being advised by Mr. Skwerniuk that an RTM does not come with basement and that an RTM and basement are priced separately. There were discussions about full basement versus half basement. The plaintiff's claim depends upon what the defendants knew or ought to have known at the time the contract was drawn up on June 26, 1992. It is necessary to review the salient facts as each side says they unfolded. The plaintiff says that on May 9, 1992, Mr. Skwerniuk gave the defendants an idea of the cost, indicating an RTM of the size proposed would be approximately $80,000.00 to $85,000.00 and basement approximately $14,000.00 to $15,000.00. The defendants acknowledge being provided with this information. The plans presented by the defendants on May 9, 1992, contained options or extras that were not part of standard RTM. Mr. Skwerniuk testified that after the initial meeting on May 9, he priced out an RTM with the specifications required by the defendants and telephoned Mrs. Batiuk on May 15, 1992, and quoted her an approximate price of $101,000.00 for the RTM and $19,000.00 for full basement. Mrs. Batiuk does not remember the May 15, call and does not recall Mr. Skwerniuk giving her the prices indicated. Mr. Batiuk was not part of the conversation and did not recall being told by his wife after the May 15 call that Mr. Skwerniuk had quoted the figures of $101,000.00 and $19,000.00. It was Mr. Skwerniuk's habit to keep notes of developments, by date, of his dealings with prospective customer. His entry for May 15, the date upon which he says he provided the approximate quote of $101,000.00 for an RTM and $19,000.00 for full basement reads: "said very serious of building". No reference is made to having provided an approximate quote. Indeed there was notation made by Mr. Skwerniuk under date of May 18, 1992, which reads: "Wanted approximate quote". Mr. Skwerniuk and the defendants met in person June 6, 1992. Mr. Skwerniuk testified that he had prepared pricing sheet for the purposes of that meeting which set out base price for an RTM of the size indicated and then listed all of the extras with price shown for each extra. The cost of the RTM came to $106,725.00. His notes for the meeting also indicated the cost of full basement would be $18,574.00. Mr. Skwerniuk testified in chief that in the June meeting he provided these prices to the defendants and, in particular, provided separate pricing for the RTM and the basement. Mr. Batiuk denies being provided these prices during the June meeting. Mrs. Batiuk did not recall Mr. Skwerniuk providing prices at the June meeting. While at the examination for discovery Mr. Skwerniuk (who was examined as the proper officer of the plaintiff and whose answers would bind the plaintiff) gave evidence that he did not communicate the prices which are listed on his June pricing sheet to the defendants at the June meeting, he was adamant at trial that he had, in fact, done so. Mr. Skwerniuk further testified that as result of their June meeting he did not think the defendants were interested in the plaintiff quoting price on basement. He says in that context he faxed to the defendants on June 18, 1992, firm price on 2,394 square foot RTM with various options as listed. The RTM was listed at $85,196.00. The options were listed and priced individually, coming to total of $106,928.00 plus GST. The document made no reference to basement. note that one of Mr. Skwerniuk's notations in his records under date of June 6, reads: "They both were in, want price on basement and RTM". The evidence of both defendants was that on June they asked for price for an RTM with basement and when they received the fax of June 18, 1992, they took the price quoted to include the basement. Mr. Skwerniuk went to the defendant's farm on June 26, 1992, to prepare written contract and obtain the defendants' signatures. His version of events is that he started out writing up the contract on the basis of his June 18 fax and his understanding the plaintiff was not supplying the basement. He was prepared to price the RTM at $106,000.00 plus GST if there was substantial down payment and he wrote this figure into the contract in paragraph where provision is made for the total price to be inserted. Paragraph of the contract provides for the terms of payment and in the final analysis read as follows: 4. The said price of $106,000.00 plus G.S.T., shall be paid the by [sic] Owner to the Contractor at the time and in the manner following, that is to say: a) On the execution of this agreement the sum of $5,000.00; "received as of this Date payment". b) Prior to commencement of construction the sum of $5,000.00; "received as of this Date payment". c) When the basement walls are poured and the foundation is ready for backfill the sum of $19,000.00. d) When the building is framed, the roof shingled, and the plumbing and electrical wiring are roughed in the sum of $50,000.00. e) When the building is ready to move the sum of $24,000.00; "when Basement floor is poured sum of $13,000.00." f) When the building is substantially complete and ready for occupancy OR when the Owner takes possession thereof, whichever is earlier the sum of "changes in options CR.'s will be adjusted final payment". Only subparagraphs a), b) and c) were completed during the meeting of June 26. The figures and notations in d) and e) were inserted later by Mr. Skwerniuk and initialled by Mrs. Batiuk. Mr. Skwerniuk testified that during the course of the June 26 meeting it became apparent that the defendants wanted the plaintiff to supply basement. He says he then quoted price of $19,000.00 for the basement. He then proceeded to complete separate document entitled "P.W.F. Basement Agreement". The basement agreement had line near the bottom where the price for the supplying of the basement is to be inserted. Mr. Skwerniuk wrote in "included in the agreement". Mr. Skwerniuk then wrote in the $19,000.00 figure in paragraph 4(c) of the RTM agreement and says he forgot at that point to amend the total price from $106,000.00 to $125,000.00. The defendants testified that having asked for price on June 6, 1992, on an RTM and basement and having received the fax of June 18, that when the contract was being drawn up on June 26 at $106,000.00, they simply asked for confirmation that the price was for the basement, the house everything included and received confirmation that this was so. The contract as drawn up June 26 and signed by the defendants at that time was subject to the plaintiff's approval. Joseph Deneschuk, president and general manager ofthe plaintiff, testified it was his practice to reviewagreements item by item. In this situation Mr. Deneschuk had before him the RTM agreement, an attached list of standard specifications, an options and specification sheet, the P.W.F. Basement Agreement, the June 17 pricing sheet as prepared by Mr. Skwerniuk and faxed to the defendants June 18, and floor plan. Mr. Deneschuk testified that the P.W.F. BasementAgreement is the company's standard agreement when supplying awood basement. He confirmed an RTM is priced separately from basement if the plaintiff is asked to price basement. Mr. Deneschuk testified that he reviewed the documentation carefully to ensure that the individual extras listed in the pricing sheet of June 17 (33 in number) were, in fact, transferred to the specification sheet and he, in fact, found three items which had not been transferred. Mr. Deneschuk testified there was no indication in the material he reviewed that basement was included. He said when he signed the RTM agreement he understood local contractor was building the basement. I cannot accept histestimony. He had the P.W.F. Basement Agreement in front ofhim and he signed the P.W.F. Basement Agreement whichindicated that the price of the basement was "included in theagreement". Indeed, in his testimony Mr. Deneschuk indicated that he worried over whether an item for framing of the stairwell to the basement had been priced into the quote, but missed the fact that the price of the basement was "included in the agreement". have difficulty in accepting that in his meticulous review to ensure that all extras, some of which were priced at few hundred dollars, were accounted for, he overlooked $19,000.00 item. However, this is not determinative of what the defendants knew or ought to have known on June 26, 1992. The plaintiff argues the Court should rectify the June 26 contract as there was mutual or common mistake in the written expression of the terms of an agreement reached by the parties. The plaintiff argues that the defendants knew or ought to have known that there was mistake in the preparation of the June 26 contract as they were aware that the price for the RTM was $106,000.00 and the cost of basement would be further $19,000.00. The plaintiff relies upon the following to fix the defendants' with this knowledge: 1. The defendants were aware that an RTM does not come with basement, which is priced separately. 2. May 9, 1992, the defendants were given ballpark figures of $80,000.00 to $85,000.00 for an RTM and $14,000.00 to $15,000.00 for basement. 3. May 15, the defendants were provided with an approximate quote of $101,000.00 for an RTM and $19,000.00 for basement. 4. June 6, the defendants were provided with price of $106,725.00 for the RTM and $18,574.00 for basement, but left Mr. Skwerniuk of the view they did not require price on basement from the plaintiff. 5. In that context the plaintiff faxed specific price on June 18 of $106,928.00 plus GST which did not include basement. 6. In the June 26 meeting when it became apparent that the defendants wanted the plaintiff to supply basement, they were quoted price of $19,000.00. The plaintiff argues there was mutual or common mistake in the written expression of an agreement and that rectification may be made upon satisfying the Court that there was an actual concluded agreement and that such agreement is inaccurately represented in the written instrument. The Saskatchewan Court of Appeal in Bercovici v. Palmer (1967), 1966 CanLII 333 (SK CA), 58 W.W.R. 111, adopted the following principles as applicable to claim for rectification. At p. 112 the court quotes from the judgment of the Supreme Court of Canada in Hart v. Boutilier (1916), 1916 CanLII 631 (SCC), 56 D.L.R. 620: "The power of rectification must be used with great caution; and only after the court has been satisfied by evidence which leaves no "fair and reasonable doubt" (Fowler v. Fowler [1859] DeG. J. 250, at 264, 45 E.R. 97), that the deed impeached does not embody the final intention of the parties." At p. 113 the court quoted from the English Court of Appeal in Rose (London) Ltd. v. Pim, Jr. Co., [1953] Q.B. 450: "Rectification is concerned with contracts and documents, not with intentions. In order to get rectification, it is necessary to show that the parties were in complete agreement on the terms of their contract, but by an error wrote them down wrongly." At pp. 113 and 114 the court quotes from the Supreme Court of Canada in Ship "M. F. Whalen" v. Pointe Anne Quarries Ltd. (1921-22), 1921 CanLII 57 (SCC), 63 S.C.R. 109: "Where one of the parties denies the alleged variation the parol evidence of the other party is not sufficient to entitle the court to act. Such parol evidence must be adequately supported by documentary evidence and by considerations arising from the conduct of the parties satisfying the court beyond reasonable doubt that the party resisting rectification did in truth enter into the agreement alleged. It is not sufficient that there should be mere preponderance of probability; the case must be proved to demonstration in the only sense in which in court of law an issue of fact can be established to demonstration, that is to say, the evidence must be so satisfactory as to leave no room for such ." The judgment of this Court in Building Design Ltd. v. Wascana Rehabilitation Centre (1992), 1992 CanLII 7962 (SK QB), 104 Sask. R. 49 contains thorough and useful review of various decisions in this jurisdiction on the issue of rectification. At p. 62 there appears the following quotation from United Grain Growers Ltd. v. Agri-Builders Regina Ltd. (1982), 18 Sask. R. 316, affd (1984), 1984 CanLII 2660 (SK CA), 33 Sask. R. 241 (C.A.): "In order to claim rectification it must be shown that there was mistake in putting down the party's intentions. There must be prior agreement which clearly shows the mistake. The evidence of mistake must be clear, unambiguous and established by convincing evidence. The mistake must be mutual in the absence of very exceptional circumstances which would amount to fraud or misrepresentation amounting to fraud." party seeking rectification must establish that the parties were of one mind. That is to say, that there was common intention or agreement as to the terms of the contract and that the written record does not properly record that common intention. While the burden of proof is still the civil burden, the nature of the evidence must be clear and convincing. In this regard I cannot accept the plaintiff'sversion of events. Mr. Skwerniuk's evidence that he providedan approximate price on May 15, contradicts his own notationsof May 15 and 18. If he provided an approximate quote May 15, the notation of May 18 makes no sense. His notation is, iffact, consistent with the evidence of the defendants. While Mr. Skwerniuk testified that he provided aprice to the defendants on June 6 for an RTM and a basementseparately, this contradicts the answers given by him at theexamination for discovery. It is also not consistent with hisown notation of June 6, which indicated that the defendantswanted a price for a basement and RTM. Why would the defendants leave the meeting wanting price if they had just been given price. It was also Mr. Skwerniuk's evidence that as result of the June meeting, he was of the view the defendants did not want price on basement. This is again contradicted by his own note of June 6. His note is, in fact, consistent with the defendants' testimony that they left the June meeting wanting price on an RTM and basement. In accepting the defendants' version of what transpired June 6, they asked for quote on an RTM and basement. They received fax on June 18 with price quoted of $106,928.00 plus GST. Given that cannot accept that they were provided with previous quotes on May 15 and June 6, this is the first firm quote they had received and one cannot conclude on the basis of the fact the document is silent on the matter of the basement that they knew or ought to have known that basement was not included in the price quoted. While the defendants acknowledge being told at the outset that an RTM does not come with basement and being given ballpark figures which totalled $95,000.00 to $100,000.00, the fact is that after number of discussions about the specifications they wanted in their home, they asked on June 6, for price for an RTM and basement. They received fax June 18 and price. There is no clear and convincing evidence that as of June 18 that the defendants knew or ought to have know that the price quoted did not include basement. It is in this context that then view the June 26 meeting. It may well be that in Mr. Skwerniuk's mind that in the course of that meeting he realized that $19,000.00 had to be added to the contract price in order to supply basement as well as an RTM. However, am not satisfied that this was communicated to the defendants such that can conclude the defendants, knowing that the total contract price was, in fact, supposed to be $125,000.00, signed the contract at $106,000.00 seeking to take advantage of the plaintiff's mistake. In the context of the defendants having asked for price June for an RTM and basement and receiving price of $106,928.00 on June 18, the contract being written up at $106,000.00 and receiving confirmation this included everything, including house and basement, there is no clear and compelling evidence that on June 26 there was common agreement or intention and mistake in recording that intention. The plaintiff's claim for rectification of thecontract is dismissed. The plaintiff also had claim for $1,716.28 for extras to the contract. The defendants in their statement of defence acknowledged that the sum of $1,716.28 was owing to the plaintiff. The plaintiff will have judgment against the defendants for the sum of $1,716.28. The plaintiff claims interest at the rate of 15% or, in the alternative pre-judgment interest. When the contract was prepared June 26 and signed by the defendants, no interest rate was stipulated. That portion of paragraph of the contract where it provided for an interest rate to be inserted was left blank. When further details on the terms of payment of the purchase price were inserted into paragraph 4(d) and (e) at later date and initialed by Mrs. Batiuk, an interest rate had still not been inserted into the contract. It was Mr. Batiuk's evidence that there was no interest called for as it was his understanding that the RTM would not be leaving the plaintiff's premises until it was paid for in full. Theevidence was not clear as to when an interest rate of 15% wasinserted into the document and I am not satisfied that therewas an agreement reached by the parties to pay interest. The plaintiff's claim for interest is dismissed. The plaintiff is entitled to interest pursuant to The Pre-Judgment Interest Act, S.S. 1984-85-86, c. P-22.2 on $1,716.28. With respect to costs, while the plaintiff has obtained judgment for the extras, this was never in dispute and was admitted by the defendants in their statement of defence. The real issue was the claim for rectification. On that basis, the defendants shall be entitled to costs of the
The plaintiff was to build and supply to the defendants a ready to move home (RTM). The plaintiff alleged the contract price was in error and sought rectification of the contract. The commissioned salesman who was examined as the proper officer of the plaintiff gave evidence at the examination for discovery that he did not communicate the prices listed on his pricing sheet to the defendants but was adamant at trial that he had. HELD: The claim for rectification was dismissed. 1)The testimony of the president and general manager was not accepted. He signed the company's standard agreement which indicated that the price of the basement was included in the agreement. The salesman's evidence that he provided an approximate price contradicted his own notations and the notation was consistent with the evidence of the defendants.  2)A party seeking rectification must establish that the parties were of one mind as to the terms of the contract and the written record does not properly record that common intention. 3)The evidence was not clear as to when an interest rate of 15% was inserted into the document and the court was not satisfied that there was an agreement to pay interest. The plaintiff was entitled to interest pursuant to the Pre-judgment Interest Act on the claim for extras to the contract. 4)The claim for the extras was never in dispute. The defendants were entitled to costs of the action.