Executive Summary: Key Legal and Evidentiary Issues

• The appeal centered on whether a construction management contract obligated Brillion Homes Ltd. alone, or both appellant companies, to pay damages for breach.
   
• Christa Vina Investment Ltd., the property owner, had been found liable at trial despite never signing the contract.
   
• Conflicting testimony from the principals of each company created disputes over the agreed contract price, duration, and reasons for continued work into 2020.
   
• Justice Dickson's reasons examined whether the trial judge improperly implied a payment term that conflicted with the contract's express fixed-fee provision.
   
• New arguments raised for the first time on appeal, including Christa Vina's liability, required the court to decide whether they should be entertained.
   
• Determining how much of the $220,000 fixed fee had been earned before termination proved central to fashioning the final remedy.
   

Facts of the case

Tony Nguyen owned and operated both appellant companies, Brillion Homes Ltd. and Christa Vina Investment Ltd., while Tony Hayre owned and operated the respondent, Tony Hayre Management Services Ltd. Christa Vina owned property in East Vancouver that Mr. Nguyen hoped to develop into a mixed commercial/residential building. After Mr. Nguyen's own management of the project caused delays and deficiencies, the architect withdrew, the City of Vancouver issued a stop-work order, and both the City and a new architect required Mr. Nguyen to retain a qualified project manager before construction could resume. On December 12, 2018, Mr. Nguyen met with Mr. Hayre, a project manager with over 40 years of construction industry experience, and the two signed a construction management contract that day. Mr. Hayre and Mr. Bhambra, his site superintendent, began work, but the project did not reach completion within the anticipated 12-month period. Mr. Hayre continued working into January and February 2020, submitting invoices that Mr. Nguyen did not pay, before instructing Mr. Bhambra to stop work toward the end of February 2020. The City eventually issued an occupancy permit in November 2020. Mr. Hayre then sued for the unpaid balance, and Mr. Nguyen's companies counterclaimed.

Policy and legislative provisions at issue

The contract identified Brillion Homes as the "General Contractor" and Tony Hayre Management as the "Construction Manager," with Mr. Hayre as Construction Manager and Mr. Bhambra as Superintendent. Under "Scope of Work," it provided that the Construction Manager would "provide construction management services to the General Contractor for the completion of the construction of the [Project]." The "Project Schedule" clause stated that the parties agreed the project would be completed within twelve months, with an occupancy permit expected on or before December 31, 2019. The "Construction Management Fee" clause set the total contract amount at $220,000 plus GST, comprising a monthly fee of $15,000 plus GST invoiced over a 12-month term (totalling $180,000 plus GST) and a remaining $40,000 plus GST payable within 55 days of the occupancy permit's issuance. A "Termination" clause allowed either party to end the agreement on 30 days' written notice for reasonable cause. The contract did not specify an express end date or address what would happen if the project was not finished within 12 months. The court also considered the doctrine of unjust enrichment and, briefly, provisions of the Builders Lien Act, S.B.C. 1997, c. 45, though the panel found it unnecessary to resolve the unjust enrichment issue given its contractual analysis.

Reasoning and analysis

Writing for the panel, Justice Dickson first addressed whether Mr. Nguyen could raise new arguments on appeal, including Christa Vina's liability and the juristic-reason defence to unjust enrichment. He concluded these were not truly new issues, since both parties' pleadings had distinguished between Brillion Homes' alleged debt and Christa Vina's separate role as landowner, and in any event the interests of justice supported hearing them. On the merits, the court rejected Mr. Nguyen's arguments that the trial judge failed to consider surrounding circumstances or misapprehended the evidence regarding the stop-work order, finding those conclusions were reasonably available on the record. However, the panel agreed that the trial judge erred in law by implying a term requiring ongoing monthly payments of $18,333 plus GST until the contract ended, because this conflicted with the contract's express fixed total fee of $220,000 plus GST for completion of the project. The court reiterated the presumption against implying unexpressed terms that conflict with a contract's express provisions, citing Athwal v. Black Top Cabs Ltd. It also agreed with Mr. Nguyen that Christa Vina could not be held liable for breach of contract, since it was undisputed that Christa Vina was never a contracting party and the absence of privity is a complete defence to a breach of contract claim. The court disagreed, however, that the contract expressly ended on a fixed date or that the trial judge erred in finding the contract ambiguous, noting the agreement did not address what would occur if the project ran past 12 months.

Ruling and overall outcome

The Court of Appeal allowed the appeal in part. It set aside the trial order against Christa Vina Investment Ltd. in its entirety, since Christa Vina was never a party to the contract and could not be held liable for its breach. As against Brillion Homes Ltd., the court varied the order, finding that Mr. Hayre had delivered approximately 14 of the 15 months' work encompassed by the $220,000 fixed fee, entitling Tony Hayre Management Services Ltd. to a total of $205,333.33 plus GST for construction management services. The court ordered Brillion Homes to pay Tony Hayre Management the difference between that amount and the $189,000 already paid, together with pre-judgment interest calculated in accordance with the contract's provision for the $40,000 payment becoming due 55 days after the November 13, 2020 issuance of the occupancy permit. Tony Hayre Management Services Ltd. was thus the successful party against Brillion Homes Ltd., though the claim against Christa Vina Investment Ltd. was dismissed.