Sheila Thomas v Haile Maskal

• Jurisdiction: Bermuda
• Judge: Mussenden J
• Judgment Date: 20 October 2023
• Court: Supreme Court (Bermuda)
• Year: 2023
• Docket Number: CIVIL JURISDICTION 2015: No. 114

Between:

Sheila Thomas

Plaintiff

and

Haile Maskal

(Trading as West Side Construction Management)

Defendant

[2023] SC (Bda) 83 Civ.

CIVIL JURISDICTION 2015: No. 114

In The Supreme Court of Bermuda

Appearances:

Craig Rothwell, Cox Hallett Wilkinson Limited, for Plaintiff

Angelita Dill, AAA Law Company Ltd., for Defendant

Judgment of Mussenden J

Introduction

1 The Plaintiff (“ Ms. Thomas”) is the owner of 13 Orchard Grove, Pembroke Parish (the “Property”).

2 The Defendant (“ Mr. Maskal”) is a building contractor, trading as West Side Construction Management (“ WSCM”).

3 The dispute revolves around the construction and renovation of the Property which had as a final aim to turn a one-storey dwelling into a two-storey dwelling. The lower level (“Lower Level”) would be renovated into two apartments and the upper level (“Upper Level”) would be newly constructed and a part of one of the Lower Level Apartments. This case centers mainly around the Lower Level renovation but some aspects of the Upper Level new construction are involved.

Background

4 Ms. Thomas caused a Specially Endorsed Writ of Summons dated 17 March 2015 (the “Writ”) and Statement of Claim (the “ SOC”) to be issued against Mr. Maskal in respect of a dispute about the construction work performed by him at her Property.

5 The Writ set out the claim that the parties entered into a contract in writing dated 22 April 2014 (the “Contract”) wherein Mr. Maskal agreed, subject to terms in the Contract, to carry out certain construction and renovation work to the Property (the “Project”), in accordance with all existing building codes and specifications.

6 It was an express term of the Contract that Mr. Maskal would complete the Project, inclusive of all labour, materials, equipment and trucking, for $207,700.00, based on an Architectural Drawing ST 15/10. The Project was forecast by Mr. Maskal to be completed within 4 months weather permitting.

7 The SOC set out that Mr. Maskal started the work on 5 May 2014 and work continued at an intermittent and slow pace which drew complaints from Ms. Thomas. Mr. Maskal demanded the payments and by 29 July 2014 Ms. Thomas had paid Mr. Maskal $155,542.50 of the total set out in the section entitled “Proposed Payment Schedule” of the Contract (the “Payment Schedule”). There were a number of events that took place during the course of the Project including further work, further payments, change orders, withholding of a portion of the final payment and complaints. Change orders were for work not included in the original Scope of Works and were charged as an extra cost over the Contract Price (“Extras”). On 5 November 2014 Mr. Maskal abandoned the Project in an incomplete state.

8 Lawyers and experts became involved. Canterbury Law Firm, for Ms. Thomas, wrote to Mr. Maskal to request that he return to the Project and complete it. However, he did not return. Ms. Thomas consulted Atlantic Building Consultants (“ ABC”) which estimated the costs of completing the Project to be $300,000 to $325,000. ABC estimated the total value of the work completed by Mr. Maskal to be 21% of the Contract price. Thus, Ms. Thomas claimed to be entitled to 79% of the $180,7000 paid to Mr. Maskal, that is, $142,753.00. There were smaller claims for expenses including for ABC, some sub-contractors or service providers who were left unpaid and for rent that Ms. Thomas was paying to live somewhere else as she could not move into her home at the expected completion date at the end of September 2014.

9 Thus, Ms. Thomas claimed that Mr. Maskal has breached or repudiated the Contract and consequently she has suffered loss and damage. She claims: (i) a refund of $142,753.00; (ii) the difference between the said sum of $142,753.00 and $325,000.00 estimated cost of completing the Project; (iii) the various smaller expenses; and (iv) interest, damages, and costs.

10 The Defence set out that any change orders would lead to price structure changes. Also, it set out that work progressed diligently and on schedule although there were delays caused by change orders and by Ms. Thomas' failure to pay on schedule. The Defence pointed to Ms. Thomas' representative, a Mr. John Holdipp (now deceased), who had pre-approved work subject to additional billing. The Defence claimed that Ms. Thomas breached the Contract by not making payments on schedule therefore he left the Project. As a result, Ms. Thomas repudiated the Contract which Mr. Maskal accepted. Further, the Defence set out that all subcontractors were paid except for some extra work.

The Evidence

11 . For the Plaintiff's case, Ms. Thomas gave evidence and the evidence of Mr. Holdipp (deceased) was presented by way of a notice of hearsay. Ms. Thomas' temporary landlord Andre Thomas' witness statement evidence was accepted of her short-term accommodation at a rent of $1,100 per month for the period May 2014 to November 2014 and $1,300 per month for the period December 2014 to September 2015. Mr. Alex Adelsberg of Bermuda Project Managements Limited (“BPML”) gave evidence and was cross-examined on his reports dated December 20201 and his second report dated April 2023 (together the “BPML Report”).

12 For the Defendant, Mr. Maskal gave evidence along with: Christopher Mouchette, a former banking officer for Ms. Thomas at HSBC; Corey Brown, a city planner and architect; Craig Laws, of Brilliant Solutions, an electrical sub-contractor who worked on the Project; and Dennis Smith, foreman on the Project, who is Mr. Maskal's brother. There was also an expert report dated 16 September 2022 prepared by Mr. Patrick Topley, a professional licensed Quantity Surveyor of Trent Construction Consulting (the “TCC Report”).

Expert Evidence

13 Ms. Thomas' expert Mr. Adelsberg's conclusions were that:

• a. Mr. Maskal underbid the Project. He considered that the proper range was $275,000 to $300,000 with the actual value of the Project being $298,000.

• b. 41% of the Lower Level was complete amounting to work worth $123,000 which was rounded up to $130,000. This included all work by Mr. Maskal including the Slab but excluding the Additional Billing. This resulted in an assessment of an overpayment of $88,000 to Mr. Maskal.

14 Mr. Maskal's expert Mr. Topley's conclusions were that:

• a. Mr. Maskal underbid the Project. He considered that the true value of the Project was between $300,000 to $350,000.

• b. 47% to 54% of the Lower Level had been completed together with works carried out on the Upper Level (Slab, plumbing, electrical and other works) worth $174,000. This resulted in an overpayment of $43,000 to Mr. Maskal.

Evidence not in dispute

15 There was evidence that generally was not in dispute as set out below.

16 During the period between 2012 and 2103, Ms. Thomas obtained various bids based on plans drafted by Hegni Architectural Design Services dated 28 June 2010 for the Property (the “Hegni Plans”) stamped approved by the Department of Planning dated 20 July 2010. There were some approved revised Hegni Plans in respect of several areas of the Project.

17 Ms. Thomas applied for a loan to renovate the Lower Level only. She received an HSBC “Offer to Finance” letter dated 20 February 2014 in respect of a home equity loan in the sum of $230,000 to assist with renovations to the Property. Mr. Mouchette, an HSBC official at the time of the grant of loan, stated that HSBC was clear from the beginning that it could not finance construction work on the Upper Level of the Property because Ms. Thomas could not support a loan to that extent due to her income, debt-to-equity ratio and age. Thus, he advised her to change the plans to reflect only renovations to the Lower Level.

18 Ms. Thomas met Mr. Maskal through her domestic partner Mr. Holdipp who had recommended him for the Project.

19 There is a dispute about what kind of price was the figure of $200,700 and what aspects of the Project it was to cover. I will turn to those disputed facts later, however at this point, Ms. Thomas' position is that it was a fixed price to complete the Project, namely the renovation of the Lower Level. Mr. Maskal's position is that he provided a kind of pricing which he referred to as a price structure (the “Price Structure”). He was asked to provide and did provide three Price Structures as follows: (i) a total Price Structure for both the Upper Level and Lower Level in the amount of $485,000 (the “Total PS”); (ii) a Price Structure for the Lower Level only in the amount of $200,700 (the “Lower Level PS”); and (iii) a Price Structure for the Upper Level only in the amount of $284,300 (the “Upper Level PS”).

20 Ms. Thomas' position was that the price provided by Mr. Maskal in the Contract was a price to complete the Project, that is the renovation of the Lower Level subject to extra charges for any changes to the Hegni Plans. Thus, she selected him from a list of contractors who had bid for the job. Mr. Maskal states that Ms. Thomas selected and signed off on the Lower Level PS.

21 On 21 April 2014 Mr. Maskal presented Ms. Thomas with the Project Description setting out the Lower Level PS of the Project at $200,700 as well as a Scope of Works to be performed. On 22 April 2014 the parties signed the Contract for $200,700 with the Payment Schedule, which Mr. Maskal said had a little flexibility, as set out below along with the actual payments made:

Payment	Amount Due	Date Due	Amount Paid	Date Paid
Initial Payment	$20,070.00	2 May 2014	$20,700.00	2 May 2014
2 nd Payment	$44,527.50	26 May 2014	$44,527.50	27 May 2014
3 rd Payment	$45,157.50	23 Jun 2014	$45,157.50	26 Jun 2014
4 th Payment	$45,157.50	28 Jul 2014	$45,157.50	29 Jul 2014
August 2014 — Period of work stoppage
5 th Payment	$45,157.50	Aug 2014 23 Sep 2014	$25,157.50 (withheld $20,000)	2 Oct 2014
	...