Online Constructors Ltd. v. Speers Construction Inc., 2011 ABQB 43

Court of Queen ’ s Bench of Alberta Citation: Online Constructors Ltd. v. Speers Construction Inc., 2011 ABQB 43 Date: 20110126 Docket: 0701 06112, 0701 02688 Registry: Calgary Between: Action No.: 0701 06112 Online Constructors Ltd. Plaintiff - and - Speers Construction Inc. Defendant And Between: Speers Construction Inc. Plaintiff by Counterclaim (Defendant) - and - Online Constructors Ltd. Defendant by Counterclaim (Plaintiff) And Between: Action No.: 0701 02688

In the Matter of the Builder ’ s Lien Act , R.S.A. 2000, c. B-7 and Amendments Thereto; Speers Construction Inc. Applicant - and - Online Constructors Ltd. and Viper Concrete 2000 Limited Partnership Respondents _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice R.E. Nation _______________________________________________________ [ 1 ] Golfers play their sport at Priddis Greens golf course, likely commenting on the state of the greens.

Few of them think of the source of the water for the course, or the details of any dam construction to feed the irrigation line. In 2005, an earth dam failed, necessitating a new dam, with a concrete spillway. Speers Construction Inc. was the general contractor to Priddis Greens Golf and Country Club to perform work to repair the breached dam. Online Constructors Ltd. bid for and was awarded the cement subcontract, to construct the spillway. [ 2 ] When a project is proposed, the story starts with the planning and design. It then proceeds to tender, after which the physical work of constructing the project begins.

At the start, no one knows the story of how the project will unfold. It may go well, it may go badly, every project has its hiccups and glitches. The nature of construction is to work through the challenges, to complete the project. In this case, several forces came to bear: delays at the start, problems sourcing materials, a hot labour market in Southern Alberta, a young, keen engineer working as the monitor at the site, and communication issues between the contractor and concrete subcontractor. Work was pushed into the winter months.

The project was ultimately completed in 2007, this lawsuit is about the issues that arose. 1. Issues [ 3 ] Much of this lawsuit is driven by the factual findings. There was little disagreement about the applicable law. The major differences were about the application of the law to the facts as found, and the assessment of damages. Because it is so factually driven, much of this decision is about the details of the job, and the claims made by the parties.

[ 4 ] The plaintiff claims it was delayed on the job, and that it is entitled to payment for extras to the job, and to be paid for all the concrete poured. The defendant claims for expenses to complete the work after the plaintiff left the jobsite, and to fix deficiencies. It also looks to pass on deductions made by Priddis under the prime contract, as the concrete work did not meet all the specifications. [ 5 ] In general, the main issues reviewed are: 1. Incorporation of the prime contract terms into the subcontract. (para. 7 - 20). 2.

The duty of disclosure of the contractor when soliciting bids from a subcontractor. (para. 21 - 36). 3. Which party bears the cost of the contractor completing work for the subcontractor after it left the site. (para. 37 - 102). 4. Delays on the job. (para. 103 - 173). 5. Whether the engineers representing the owners interfered with the work of the subcontractor. (para. 174 - 193). . 6. Can the contractor claim from Online the deductions made by Priddis for deficiencies in the concrete work? (Para. 244 - 259). 7. The quantification of damages. (para. 260 - 335). 2.

Background Facts [ 6 ] The following are undisputed background facts to this lawsuit: 1. Online is a British Columbia corporation which has been in business since 1993. It is based in Abbotsford, and although it was usually the general contractor on projects, it had some experience working as a subcontractor. It had previous experience with concrete projects. 2. Speers is a British Columbia corporation with a head office in Revelstoke. It is a heavy construction contractor with a focus on earth moving projects.

On June 29, 2006, it signed a contract (the prime contract) with Priddis Greens Golf and Country Club (Priddis) to repair a breached dam. Part of this work involved constructing a concrete spillway. The project was in the country, roughly 20 kilometers southwest of Calgary, Alberta. 3. AMEC Earth & Environmental Limited (Amec) was a consultant to Priddis. It prepared the plans, specifications, the prime contract documents and provided engineering services, including monitoring the project. Mr. Cody Wanner and Mr. Craig Lapins were the engineers hired by Amec to monitor the work on site. 4.

Under the prime contract, Speers was responsible for all the excavation for the project including the duty to excavate to the lines, grades and elevations for the structural excavation for the concrete spillway, and for supplying and installing all the filter material required by the contract documents. 5. On June 7, 2006, based on limited information which it received from Speers, Online submitted a tender for the construction of

the concrete spillway part of the project. On June 8, 2006, Speers agreed to Online amending the unit price of the structural concrete to $711.13 a m3, which increased the total estimated price of the Online work from $402,608 to $602,944.50. This was as a result of the actual written quote received by Online from Harris Rebar for the cost of the reinforced steel (rebar) required. 6. A written subcontract document dated July 18, 2006 (the subcontract) was entered into between Speers and Online for the concrete spillway and other related work.

The contract had a term that Online was to commence the concrete work on July 27, 2006 and to complete the work by September 30, 2006. 7. Online and Speers later agreed to additional subcontract work whereby Online would install an irrigation and drainage line. The lump sum price agree to for the irrigation line was $74,570 and $8,350 was the price agreed for the drainage line. An increase of $10,000 in the price of the irrigation line was later agreed to by the parties. 8.

The prime contract called for Speers to commence work by June 15, 2006 and to complete the work by December 1, 2006, or such later date as the owner may for any reason determine. The start date of June 15, 2006 was delayed and the eventual date of substantial completion was March 24, 2007. Speers was not assessed any damages by the owner for late completion of the project. 9. There was only one written change order which was prepared by Online and signed by Speers which related to the irrigation and drainage line agreements.

Both parties agree that there was an oral agreement that, when available, Speers would rent operated equipment to Online when required by Online for the purposes of installing the irrigation line. 10. Online arrived on site on August 9 and left the jobsite on December 6, 2006, just after the last concrete pour which completed the concrete spillway. At that time, of the work to be done by Online, the irrigation line, the Cematrix/grout work and the work to remedy the concrete deficiencies were outstanding. Online never returned to the jobsite and Speers completed those three items. 3.

Is Speers Responsible to Pay Online for the Actual Amount of Concrete poured? [ 7 ] The prime contract between Priddis and Speers clearly obligated the owners to pay only for the volume of concrete as measured and required by the contract documents (neat line volume) rather than the concrete actually poured. Online takes the position that the terms of the sub-contract do not incorporate that measurement from the prime contract, and payment under the terms of the subcontract should be made based on the amount of the concrete actually delivered and poured into the spillway.

Alternatively, if the subcontract is for neat line volumes, Online argues that Speers is liable to it for the difference in the two measurements as a result of the tortious conduct of Speers, as the documents it gave to Online in advance of the preparation of its bid for the subcontract failed to disclose the fact that the prime contract called for a neat line measurement. 3.1. Factual Background [ 8 ] Mr.

Khalad Mohammad, the president of Online, testified that the only documents he received from Speers before Online submitted its bid for the subcontract, were those in exhibit 2 (tab 13), which included various drawings and specifications, but did not include the prime contract documents. He testified that he did not know that the prime contract was on a neat line basis. His discussions before tender were all with a Speers’ employee, Mr. MacDougall, who called to tell him about the project a few days before Speers had to submit its tender.

The context was that Online had done one previous cement project on which Speers had done the earth work. Mr. MacDougall told Mr. Mohammad on the telephone that he would make sure that Online would get the information it needed, and anything out of the ordinary, Speers would let him know. [ 9 ] Mr. MacDougall sent a fax to Online on June 5, 2006 which included photos of the project area. Other faxed materials sent the same day, included the bid sheet, and copies of the plans. On June 6, Mr. MacDougall sent a letter with a tender questionnaire, including the

section from the special provisions concerning the specifications for cast in place concrete, with the note that this was "probably standard info, but you should at least see it before you tender a price".... "If you require any more info, please call us directly, either myself or Mike Miller."

[ 10 ] Online submitted a tender on June 7, which was revised on June 8 before tenders closed. The tender indicated a unit price for each type of concrete, and put a total price at the bottom. Mr. Mohammad testified that he tendered without asking for, or reviewing the prime contract information, so he did not know the specific measurement terms in the prime contract. He testified he had never worked with a neat line measurement contract before, it was always lump sum or unit price, although he understood the meaning of a neat line measurement contract.

He testified that if he had known that the payment was on a neat line basis, that would have concerned him, as he was not doing the excavation, so could not control the quantity of concrete required, and that fact would have affected Online’s bid. [ 11 ] Mr. MacDougall did not testify at the trial. No one from Speers could testify about any discussions other than written correspondence between Mr. MacDougall and Mr. Mohammad over this two day period, during which Online received material and submitted the tender.

Online was the only concrete subcontractor from whom Speers solicited a bid. [ 12 ] There is a dispute in the evidence as to when Online actually received a complete copy of the prime contract documents, from which it would be apparent, if one read the details, that the terms were neat line measurements for the structural and foundation concrete. On July 6, Mr. Miller, the individual at Speers who was mainly responsible for the bid and contract dealings with Online, made a notation in his notebook that he was to send a complete set of the contract documents to Online. Mr.

Miller could not swear that they went out, there was no cover note, or delivery slip to prove the fact. Mr. Mohammad indicated he did not receive the contract documents on that date. [ 13 ] It is clear that there was a complete set of the contract documents at the site meeting on July 11, which Mr. Mohammad attended. Copies were not given out, and Mr. Mohammad testified he was concentrating on the site review that day. He cannot say exactly when he got the documents. [ 14 ] By letter of August 1, 2006, Mr.

Mohammad sent to Speers a proposed subcontract agreement, and asked that it be signed by Speers and returned along with: "some drawings and another set of specifications"; [ 15 ] The subcontract agreement signed between Speers and Online used the Alberta Standard Construction Subcontract form, and in

article one stated the work to be as follows: The subcontractor shall supply all the labour, supervision, material, tools, and equipment necessary to construct, install and complete the following portion of the project....: As per items referenced in the Main Contract noted as item numbers 1.1 (mob/demob), 3.1.1 (Structural Concrete), 3.1.2 (Foundation Concrete), 3.1.3 (Dental Concrete) and a separate item named as Cematrix/grout fill. Price for work is as per faxed bid dated June7, 2006 and amended as per fax letter dated June 8, 2006 (included in Appendix A).

All work is as per main contract as issued by Amec Earth and Environmental Job No. CG25218 all in a proper and workmanlike manner and in accordance with the requirement and on the terms and conditions of both the Prime Contract (including, without limitation, such documents as drawing, specifications, instructions to bidders, general and /or special conditions....... [ 16 ] Appendix A to the agreement attached the submitted bid, the addendum to the bid and the subcontract amount and breakdown.

It also stated: "included but not attached: Contract documents prepared by Amec Earth and Environmental, and related drawings and specifications." 3.2. Relevant Law [ 17 ] The subcontractor is only bound by the terms of the prime contract to the extent its terms are referenced or incorporated into the subcontract. In construction cases, the contract between the contractor and a subcontractor often incorporates by reference some parts, or even much of, the prime contract as is applicable to the particular work in question.

When done, this does make the terms and conditions of the prime contract, to the extent they are incorporated, a part of the sub contract. If there are inconsistences, those inconsistences and the extent to which the terms of the prime contract have been incorporated by reference, is a question of the

interpretation of the subcontract. See: Goldsmith & Heintzman, Goldsmith on Canadian Building Contracts, 4th ed. (Carswell:Toronto,1988) at p. 7-5. "Goldsmith"). [18] The cases of Q.Q.R. Mechanical Contracting Ltd. v. Panther Controls Ltd., [2005] A.J. No. 80 and Haynes v. Noran WestBuilders Ltd., [1995] B.C.J. No. 2337 both deal with fact situations where one side was arguing that the terms of one contract wereincorporated by reference to them in another contract. The Q.Q.R. case dealt with whether the warranty provisions of the prime contractspecification were included in the subcontract.

The Haynes case dealt with whether the use of the word "guidelines" in a contract had theeffect of incorporating a definition in a standard new home warranty. Both look at the specific wording in one contract, in the context ofthe whole of the work and the circumstances, to decide the

interpretation of the contract. 3.3. Application of the law to the Facts [19] The prime contract had clear wording that the concrete was to be measured on a neat line basis. The subcontract, signed by theparties, had clear terms referencing the terms and conditions of the prime contract and specifically including the drawings,specifications, instructions to bidders, general and /or special conditions and referencing the contract documents as appendix A. [20] Here, the subcontract was drafted by the subcontractor, who wanted a written contract.

The method of measurement ofconcrete in the prime contract was clear, it was an essential detail, and was clearly incorporated by reference into the subcontract. Itwould have been hard to do so in a clearer way. The plain meaning of the subcontract is that neat line measurements are to be used as themethod for the compensation of the subcontractor. 4. Claims in Tort [21] This is not the end of the inquiry as to the basis of any liability by Speers for the difference between the neat line and actuallypoured measurements, as the plaintiff advanced a claim in tort for damages.

The plaintiff raises the failure of Speers to provide thedetails of the prime contract about the neat line measurements in the pre-tender information it provided to Online. Online states thesedetails were clearly in the knowledge of Speers, and clearly of importance. Speer was asking Online to prepare a bid on short notice, asthe deadline for Speers to submit its bid was June 8. 4.1. Relevant Law [22] A formal tender process will normally create an implied duty to act fairly and in good faith once a contract is formed betweenthe owner and the contractor, upon the contractor submitting its bid.

This implied duty also apples to the bidding stage, in terms of theinformation provided by the owner to bidders. [23] The duty in the contractual context has been explored by the Supreme Court of Canada in the case of Banque de Montreal etal. v. Commission Hydrolectrique du Quebec et al., (SCC), [1992] 2 S.C.R. 554. In that case, the court outlined a duty toinform arising from the obligation of good faith between contracting parties.

The elements of the obligation were: knowledge of theinformation by the party which owes the obligation to inform; the fact that the information in question is of decisive importance; and thefact that it is impossible for the party to whom the duty to inform is owed to inform itself so that the party to whom the obligation isowed is legitimately relying on the party who is obliged to disclose. [24] The case of Opron Construction Co. v. Alberta, (AB KB), [1994] A.J. No. 224 is the leading case inAlberta on this issue.

Opron held that a special relationship does exist between an owner and prospective bidders, so as to create anobligation on the owner to disclose all relevant information that could foreseeably affect the bidder's assessment of the project. Where arepresentor omits to reference qualifying information, or when the representor suppresses a fact which in the circumstances of the case itwas his duty to disclose, that may in essence be a falsehood, or a misrepresentation, even if what was presented by itself was literallytrue.

See: Opron, para. 493. [25] Opron held that a tort action does lie in negligent misrepresentation, if the information supplied by the owner and relied on bythe bidder on the project was incorrect, and led to cost overruns. The cause of action would be for actionable misrepresentation or

actionable non-disclosure. [ 26 ] In the Opron case, at para. 693, Feehan, J. in determining the standard of care, looked at the principle that the tender documents must be prepared having in the mind the average tenderer. The bidder is entitled and expected to rely on the tender documents as conveying the best information the owner can give.

Where the owner has special knowledge gained through the years and then invites bids in a relatively short period of time, where it knows that reliance will necessarily be placed on the tender documents and independent verification of information is impractical, the owner must disclose all reasonably material facts which may have a bearing on the tenderer's bid.

Also, if after the tender documents are prepared and delivered, the owner learns they are inaccurate, it owes a legal duty to the tenderers to inform the bidders of the true facts. [ 27 ] Thus, actionable misrepresentation is a statement made by a person to another in the context of a special relationship.

The representation must be untrue, inaccurate or misleading, the representor must have acted negligently in making the misrepresentation, the representee must have relied in a reasonable manner on the negligent misrepresentation and the reliance must have been detrimental to the representee, in the sense that damages resulted. [ 28 ] The cases are clear that the amount of time the plaintiff had to prepare its tender must be taken into account in determining whether the defendant owed a duty of care to bidders to impart accurate information in the tender documents. [ 29 ] Also, where a misrepresentation is found, one has to look at the terms of the contract to see if any tortious liability that may flow is limited by the actual terms of the subsequent contract. 4.2.

Application of the Law to the Facts [ 30 ] There is no question here that Speers was providing documents to Online to elicit a bid that it needed, as Speers did not do concrete work and Speers needed a subcontractor in order that it could submit a bid to Priddis by the deadline, June 8. It provided specific information to Online, with a tight timetable. A special relationship exists in those circumstances. Mr. MacDougall made a representation to Online that the concrete items were "probably standard", and provided some, but not all the specifications.

He omitted to provide the part of the contract that set out how concrete was to be measured. This omission, considered in the whole of the circumstances: the relationship; the time frame; and the knowledge of Speers, was an omission or misrepresentation. [ 31 ] The question in this case, is whether it was reasonable for Online to rely on that information, as it was open to Online to request the whole of the specifications and the prime contract documents, and check the details. Online had far more knowledge of concrete contracts and specifications than Speers.

It also should know that the terms of the prime contract may be important. [ 32 ] Mr. Mohammad testified that he felt comfortable making the bid on the documents that Mr. MacDougall provided, as he felt that if there were any discrepancies that later arose, Speers and Online would deal with that. [ 33 ] Mr. Hullah was qualified as an expert in the field of construction industry practices and called to testify by the plaintiff at this trial. He testified that Online should have had the contract specifications and drawings before providing the bid. Mr.

Hullah assumed that Online in fact had them, as it was his opinion that Online really could not do a quote without them. His evidence was that it was risky to bid on a project without reviewing the whole specifications and contract documents. It would be usual to insist on their production. [ 34 ] Here it was Speers that had the package of information from the owner. It contacted Online and asked it to submit a bid on the cement work. Speers, for reasons that were not apparent, gave some of the information, but not all, and particularly, did not disclose that the prime contract was for neat line quantities.

It was certainly within the power of Online to request from Speers all the details of the contract, and concrete specifications. A prudent contractor would have done so, and not bid without them. [ 35 ] In these circumstances, although Speers made a misrepresentation and omitted to provide relevant information, Online does not fall into the category of a representee who would not be able to obtain the prime contract information. Generally, these are the type

of documents a subcontractor would insist on seeing before submitting a bid and documents it would know may have terms affecting its work. These are also standard documents it might ordinarily ask to see, and would have a right to see before tendering. Online had the expertise in cement, not Speers. Online could easily have requested and insisted on seeing all the specifications and contract documents. A subcontractor who does not to do so, and bids anyway, makes a risky decision.

There was no requirement on Online to bid. [ 36 ] As a result the tort of deceit or negligent misrepresentation is not proven and the payment for concrete is on neat line terms, as set out in the prime contract and incorporated into the subcontract. 5. Legal Effect of the Disintegration of Relations Between the Parties. [ 37 ] In December 2006, when the last concrete pour on the structure of the spillway was complete, Online left the worksite, planning to come back in more clement weather to finish three parts of its work: the irrigation line, the Cematrix grout work and the concrete deficiencies.

After Online’s departure, Speers completed these three items, and now claims compensation from Online for the expense of that work. [ 38 ] The facts around how this came to be are very much in dispute. What happened, and its legal effect is essential to the determination of the contractual issues between the parties. 5.1. Relevant Law [ 39 ] Mere bad or defective work will not in general entitle an owner to terminate a contract, nor will a temporary slowdown in the progress of the work itself.

However, a contractor's work may be so bad or so defective that it amounts, in substance, to a failure or refusal to carry out the contact work and thus amounts to repudiation. [ 40 ] If the owner clearly repudiates the contract, the contractor can accept that and terminate the contract. He may then sue for any damages which he has suffered as result of the repudiation. A delay in payment per se in making progress payments will not normally amount to repudiation, unless it evidences an intention not to conform to the agreement in the future. See: Goldsmith, p. 6-7. 5.2.

Contractual Context [ 41 ] The relevant terms of the subcontract that speak to termination are sections SC 18 and parts of

section SC 19 set out below. SC 18. If the subcontractor shall neglect to prosecute the work properly or fail to perform any provisions contained in the contract documents, the contractor may give the subcontractor written notice specifying such default and if such default shall continue for the period of time specified in

Article 1C, hereof, the contractor, without prejudice to any other right or remedy it may have, may make good such deficiencies and deduct the cost thereof from the payment otherwise due to the subcontractor or may terminate this subcontract, and may, for the purpose of completing the work, take possession of all material, tools and equipment, upon the premises, and may either complete this subcontract itself, or employ any other person, firm or corporation to do so, charging all costs incurred to the subcontractor. SC 19.3.

The Subcontractor may notify the Contractor in writing that the Contractor is in default of its contractual obligations if the contractor should fail to pay the Subcontractor in accordance with the time for payment stated in

Article 2 of the Subcontract. Such written notice shall advise the Contractor that if such default is not corrected within 5 working days from the receipt of the written notice the Subcontractor may, without prejudice to any other right or remedy it may have, stop work and/or terminate the subcontract. SC 19.4. If the subcontractor terminates the subcontract under the conditions set out above, the subcontractor shall without prejudice to any right or remedy it may have, be entitled to be paid for all work performed and for any loss sustained with respect to products and construction machinery and equipment, with reasonable profit, damages and legal expenses.

[ 42 ]

Article 1C, referred to in

section SC 18, was filled out to be 63 days in the subcontract, but both parties acknowledge that was an error, as that time was the total days Online estimated the work would take, not the period of time to remedy a default. 5.3. Relevant Facts [ 43 ] A discussion of what happened in late November and early December, and the legal consequences resulting is determinative of several of the major claims made by the defendant in this lawsuit.

To understand the factual background as to how the two parties arrived at their standoff in December, 2006, it is necessary to talk about two items, and how they were treated historically between the parties: the irrigation line work and the Cematrix grouting. 5.3.1. Irrigation Line [ 44 ] Online agreed in the written addendum to install the irrigation line. This involved supplying blue brute pipe and digging the line, preparing the bedding material, laying the pipe and completing the backfilling. It did not involve providing the fill or doing the layout.

Online’s work also involved installing a valve, with a device to control the valve that went from the top of the dam, to the valve at the bottom. The latter part of the work involved installing a specialty ladder and mechanism to work the valve, in a confined concrete space. [ 45 ] The distance of the pipe to be laid was 335 lineal meters. The irrigation line was the purpose for the dam construction, as it supplied irrigation to the golf course.

The new line had to be installed, and then the old line plugged, a process that required a specific fill process using grouting, done by a company, Cematrix. [ 46 ] There was an informal, verbal agreement made when Online arrived on site, that it could rent equipment and an operator from Speers to do the excavation work for the pipe, if the machinery was available. [ 47 ] No time deadline was ever set or discussed between Online and Speers for the completion of the irrigation line. The completion date for the whole project in the prime contract was December 1. [ 48 ] Mr.

Mohammad testified that there was a problem when his crew first tried to work on the irrigation line. Speers was gone at the end of September for a week and there were a number of alternatives on how to interpret the elevations for the manhole. As no surveyor (a worker under Speer's control) was there, Online could not continue the work on that day. This meant it could not pour the manhole base at the same time as the pouring of the four cut off walls on Sept 5. Mr. Lyle was Speers’ supervisor on site. His evidence, which was read in as part of the case of the plaintiff, was that Mr.

Mohammad did not have confidence in the survey to proceed with the work, and the next week, Speers did in fact recheck the survey elevations and they were correct. [ 49 ] It was known to all parties that the exact location of the old irrigation line had to be located, there were no as-built plans in existence. This was the responsibility of Speers, as was the layout plan. As early as August 16th, Speers reported at the weekly site meeting that it would try to locate the downstream end of the tie in that week. On August 25 it reported it could not find it.

There was a suggestion by some witnesses that it was possible to lay most of the line without knowing the end point. The evidence of Mr. Lapins, and the evidence I accept, was that the old line had to be located to establish the grades for the new line. That had to happen before the layout was completed, which involved a surveyor laying out the grades based on ground lines, taking into account elevation and depths. [ 50 ] On September 6, Online wanted to start excavation for the irrigation line, but the Speers machines which they hoped to use were not available.

The line upstream of the dam was laid by Online, using Speers machinery, in a time frame between September 7 and September 20. There is a dispute as to exactly how much pipe was laid at that time. Mr. Mohammad testified that Online laid pipe to between the 120 and 140 lineal meter mark. The defendant takes the position that pipe was just laid to the toe of the dam, or 85 to 90 lineal meters out of the full length of 335 lineal meters. No one surveyed or measured the length laid.

At some point, Online did complete the installation of a valve required for one of the irrigation line manholes, that work required Online’s employees to be certified for working in confined spaces.

[ 51 ] There is little reference to the irrigation line until October, when it again was discussed at the weekly site meetings. Although it was always known to the engineers that Online would do the work, the October minutes reference Speers as doing the work. In the October 4 minutes, Speers is referenced as stating it will install the irrigation line from the downstream to the pump house after it had placed fill to the top of the cofferdam. By the October 11 weekly site meeting, the comment was that there were no immediate plans to do the irrigation line. Mr.

Mohammad testified that at this point Online could not do the installation as the backfill material was not there, and there were no grade elevations nor a final layout plan. By the October 25 weekly site meeting, Speers reported that they may start work on the irrigation line in the next ten days. [ 52 ] The November 1 site meeting minutes reference November 13 to 20, as the time Speers intended to do the access ladder, manhole lid and valve. At the November 15 weekly site meeting, Speers was asking Amec for details of the tie in (this is the first time this request was recorded in the minutes).

The tie in details were provided on November 24. At the November 22 meeting, Speers said it would take three to five days to install the rest of the line. At the November 29 meeting, Speers said that Online had the certification to install the valve and ladder, and they would be doing it. In stark contrast, at the December 6 weekly site meeting, Speers indicated that Online did not have the certification, and that Speers had another subcontractor who would do the work. [ 53 ] Mr.

Mohammad testified that he intended to do the work to place the rest of the irrigation line on November 22 and again on November 28, but each time it was the same story, that despite the promise of equipment, there was no equipment either of those two days that Speers could spare to work on the irrigation line. On November 30, Mr. Mohammad wrote a letter to Mr. Miller referencing those dates that Online was unable to work on the irrigation line, and stating that Online could not install the irrigation line at that time.

Online requested an extension to late winter or early spring in order to complete the irrigation line. [ 54 ] Speers denied that there was ever a specific, verbal arrangement to provide machinery on November 22 and 28, despite the fact that Mr. Lyle’s evidence indicated that it was possible that these arrangements were made and then cancelled by Speers at very short notice. Mr. Miller confirmed that by November 22, Speers did not have extra equipment on site.

The project was under pressure and everyone at Speers was working full out in late November and December to try to obtain substantial completion of the project. [ 55 ] Unless Online rented equipment independently (and there was no evidence it ever attempted to do this) Online would have to coordinate this work with Speers as Speers was providing the necessary back fill and Online chose to be dependent on Speers for machinery. [ 56 ] By late November, Online had not ordered the manhole cover, it had one it thought would work but it was not accepted by the engineers.

Online never ordered the valve stem system components. [ 57 ] Mr. Speerbrecker testified that there were standing instructions to Mr. Lyle to provide fill materials and to generally do anything Online needed to complete the irrigation line. Mr. Miller echoed this sentiment, suggesting that the surveyor was around, to get the survey done was nothing, maybe half a days work.

However, from all the evidence at the trial, this type of cooperation or any priority for Online was frankly not available as the work pushed into November, the weather deteriorated and everyone got nearer to the crunch as the December 1 completion date was missed. [ 58 ] Thus, Online entered into the start of December, never having been given a deadline for completing the irrigation line. Completion of the line had been affected by delays caused both by Speers and Online’s own refusal to rent machinery. Online requested an extension of the work until at least after the Christmas break. 5.3.2.

Cematrix contract [ 59 ] The grout work involved filling in the old irrigation line. It was a specialized product which required Cematrix’s technology, operator and equipment. [ 60 ] Online quoted this work as part of its original bid. As it was the engineer’s position that this work could not be done until the new irrigation line was in place, and installed (as this work would disable the old line), it was always recognized the Cematrix work would be done near the end of the project.

[ 61 ] The weekly site minutes first reference this part of the work on November 22, when Online was not in attendance. Amec raised the scheduling of this work, and Speers indicated it did not know when it would be done. Amec was requesting that Speers contact Cematrix as Amec wanted a site meeting when Amec and Cematrix were there to discuss the process to occur in grouting the line. At the next weekly site meeting, November 29, Mr.

Mohammad indicated that above 0 temperatures were needed to do the work (the Cematrix quote of June 9 obtained by Online did indicate that the temperature must be +5 degrees C. during grout placement).

Amec at that point indicated that this was critical work and it had to be done in the next two weeks, and again stated that it wanted to be there at a meeting with Cematrix to see how the work was going to be done. [ 62 ] Online requested and obtained an updated quote from Cematrix, dated December 1, which provided a quote for the work, and set out its availability for work in December (temperature did not appear to now be an issue). At this time, Mr.

Speerbrecker also contacted Cematrix who provided Speers with copies of its earlier quotes to Online. [ 63 ] Speers requested that Cematrix came out for a meeting on site on December 6. Mr. Speerbrecker, Mr. Miller, Mr. Mohammad, and Mr. Lyle as well as either Mr. Wanner or Mr. Lapins attended. Mr.

Mohammad at this time had made it known he would be going overseas on a holiday, but he indicated he would send a supervisor to oversee Cematrix's work. [ 64 ] It was clear from the evidence, that as of December 5, there had never been a specific date agreed to between Speers and Online for the completion of the Cematrix work. 5.4. Events Around the Breakdown of Relations Between the Parties [ 65 ] Around this time period, each party wrote a letter to the other. Mr. Mohammad wrote a letter dated November 30, 2006 which he testified that he gave to Mr. Lyle at the site. Mr.

Miller testified this letter was received by mail in the Speers office on December 5. This was the letter advising that Online could not install the irrigation line at this time and requesting an extension to complete the line in late winter or early spring. [ 66 ] Mr. Mohammad testified that Mr. Lyle indicated the request seemed reasonable and he would recommend it to Mr. Miller, who they both knew was the person at Speers who would have to make this type of decision. The last concrete pour was completed early December. The fact that Online planned to take a break from the site appears to have been known to Mr.

Lyle and others on the site. [ 67 ] Speers wrote a letter dated December 5, 2006 to Online signed by Mr. Lyle. Mr. Miller and Mr. Speerbrecker testified that they had authorized Mr. Lyle by phone to write this letter (which would generally have been beyond his authority) while they were on route to the site on December 5. They requested it be given to Mr. Mohammad.

The letter was written, and stated that as Online had indicated it would not be able to complete the grouting under the agreement, Speers found Online in breach of contract and Speers would complete the balance of that work and deduct the costs from the total owing under the subcontract.

Further, it indicated that the request for an extension of the completion of the irrigation line into late winter or early Spring was not acceptable and advised that if Online did not wish to proceed with the irrigation line, Speers would install it and back change for the difference between Online’s quote and the actual construction costs. [ 68 ] Mr. Lyle’s evidence was that he could not remember if he gave the letter to Mr. Mohammad in person. Neither Mr. Speerbrecker nor Mr. Miller could testify that they knew Mr. Mohammad had received or read the letter at the time of their meetings with him November 5 and 6.

Mr. Mohammad denied receiving this letter on site, and stated it was received by him at his Abbotsford office in the mail later in December. [ 69 ] There was a meeting on the site on December 5 between Mr. Miller, Mr. Mohammad, and Mr. Speerbrecker. There was also a meeting between representatives of Amec, Online and Speers with Cematrix on the morning of December 6. At one of these meetings, a cheque was provided to Online, the third progress payment. Mr. Speerbrecker testified that he delivered the cheque by hand, as he had been contacted by a concrete supplier who said it was owed money by Online.

At the meeting on December 5, the request for an extension of time by Online to complete the irrigation line was discussed. It was not expressly refused, as both Mr. Miller and Mr. Speerbrecker agreed to ask the engineers for the extension, although both said they were skeptical that any extension would be granted, and expressed that to Mr. Mohammad.

[ 70 ] Mr. Mohammad made it known at that meeting that it was his intention to leave the site, as it was cold. It was equally clear that he intended to return to collect tarps and equipment, to clean up the spillway area of ice blocks and debris, and work on the concrete deficiencies. He testified that it was his impression after the meeting of December 5, that it was left that Speers would ask for an extension from Amec.

He returned to British Columbia and expected a call to confirm when the Cematrix work could be scheduled and to be told Amec’s response to the request for an extension of time for completing the irrigation line. Mr. Mohammad testified that he felt Speers had not given a formal yes, but there was no other option for them but to extend, since Speers had not accommodated him to lay the irrigation line. [ 71 ] There was a weekly site meeting in the afternoon of December 6, which Mr. Mohammad did not attend. At that meeting, Amec indicated it would not grant the extension.

Speers at that meeting indicated that the Cematrix work could be done in the cold weather and Speers would do this part of the work. At that meeting, Speers changed its advice from the week before, and advised Amec that Online would not be installing the valve and ladder in the manhole for the irrigation line as Online did not have the required safety rating and certification. At trial, no one from Speers could explain the source of that information or advice, other than Mr. Lyle's comment that Online had not produced proof of the certification. No proof of certification was produced at trial. [ 72 ] Neither Mr.

Miller nor Mr. Speerbrecker could say how the denial of an extension of the time to complete the irrigation line was communicated to Online, it seems no one from Speers called Mr. Mohammad. It was acknowledged it may have been first communicated by a letter from Speers dated December 12, in which Speers advised they had arranged to have Cematrix work done. [ 73 ] Mr. Mohammad wrote a letter of December 12 to Mr. Miller, indicating that after the December 6 meeting, Online was to be informed of the confirmed

schedule for having Cematrix do the grout work. As of December 12, Online had not been notified of the date, but the letter indicated that on December 12, Mr. Mohammad was told by Mr. Lyle that Speers had arranged to have the work completed and Speers was working directly with Cematrix. [ 74 ] On December 13, Mr. Miller wrote to Online, stating that December 18 was the date for the Cematrix work, and in essence, if Online's representative wanted to coordinate the work, he should be on site to do so. Mr. Mohammad sent a letter dated December 18, giving notice pursuant to

section 19.3 of the subcontract that Online felt Speers was in breach of its contractual obligations. Mr. Mohammad stated he would be away until January 19 th , but could be contacted by e-mail. 5.5. Analysis of the Responsibility for Costs of the Cematrix Work and the Irrigation Line [ 75 ] It was an agreed fact in this trial that the letter of December 5, 2006 was the first written notice provided by Speers to Online to complete the Cematrix work and the installation of the remaining

section of the irrigation line. [ 76 ] Mr. Speerbrecker was unable to say how Speers felt Online was in breach of contract at the time of the December 5 letter. Although the letter referenced an inability to do the grouting, there was no evidence this was the case on December 5. He stated that Speers was concerned that Online was going to pull out and leave the Cematrix grouting and the irrigation line not done.

He confirmed that there was no specific date that had been agreed for those two pieces of work to be done, but he assumed that the substantial completion date for the project, December 1, would be known to everyone. The only logical conclusion is that Mr. Lyle had received Online’s November 30 letter, advised Mr. Miller and Mr. Speerbrecker, who became concerned about the statement that Online could not do the irrigation line at that time. Whether or not Speers’ letter of December 5 was given to Mr.

Mohammad in person, it is clear Speers did not at the meetings of December 5 and 6 insist that the work be done, but rather said it would ask for the extension from Amec although it doubted Amec would agree. [ 77 ] The intention of Speers is probably best discovered in what was happening the week before the December 5 and 6 meetings. The project was behind, and Speers clearly wanted to get substantial completion of the project. It was already past the completion date of December 1. Clearly, the project had been the subject of many delays. [ 78 ] The engineer’s notes of November 30 indicate that Mr.

Lyle was informing Mr. Wanner that another contractor, not Online would be doing the manhole work, as Online claimed to have confined space training but could not provide any paperwork or tickets.

The December 2 engineer's notes disclose that Mr. Mohammad informed the engineer of Online’s intentions to install the valve in the manhole but not until later in the winter or spring. Mr. Wanner noted that he told Mr. Mohammad that he would talk to Speers about the completion to the manhole as he did not feel partial completion was acceptable. Mr. Ray Speerbrecker, past president of Speers, told Mr. Wanner that Speers would complete the manhole “this year” with or without Online, regardless of Online's intentions. [ 79 ] Mr. Wanner's notes indicate that on December 4, Mr.

Ray Speerbrecker gave him assurances that Mr. Mohammad was leaving the next day, and Speers would do the grout and irrigation line. Mr. Michael Speerbrecker in cross examination said that did not surprise him. [ 80 ] Clearly, Speers was starting to focus on substantial completion. It was already considering what to do if Online did demobilize. It knew that Mr. Mohammad had a substantial holiday planned. No one from Speers called a meeting to confront Mr. Mohammad and state that the irrigation line and Cematrix work were needed for substantial completion, and that they had to be done in December.

Speers never made it clear to Online that Speers was going to proceed with the work, although clearly it was starting to make those arrangements before the letter of December 5. Speers never gave a formal notice of the date for completion. [ 81 ] Notably, in the meeting with Amec on December 6, immediately after asking for an extension which was rejected, Speers was already indicating who would do Online's work. Neither Mr. Speerbrecker nor Mr. Miller made any attempt to call Mr.

Mohammad to tell him the extension was not granted by Amec, although he was not present at the meeting. [ 82 ] Although substantial completion of the project was to be December 1, the numerous problems and delays that had arisen made it clear to all that December 1 could not be met. Extensions of the timelines on the project had been a common occurrence. On December 22, Speers requested an extension of time for substantial completion from Priddis, from December 1, 2006 to December 29, 2006.

Interestingly, the request was based on: (1) the initial two week delay; (2) loss of production meaning they had to work in the winter season; and (3) "exceptionally" poor weather conditions. Substantial completion was not actually achieved until March 24, 2007. [ 83 ] Mr. Speers confirmed the completion of the irrigation line was started December 12 by High Mountain Hoe Service Ltd, a subcontractor hired by Speers and the irrigation line was substantially competed by December 20. This is interesting, as December 13 was likely the first date that Online was notified that its request for an extension was denied.

High Mountain was already on the job site at that time. [ 84 ] When I consider this analysis, I find that when Speers took over the Cematrix work and the irrigation line, it was doing this because it wanted substantial completion, and it knew Online would not return before January, at the earliest. There had been no formal deadline agreed between Speers and Online for either completion of the irrigation line or the Cematrix work. [ 85 ] It cannot be said that Online abandoned the project, it clearly intended to return.

There is no question that the weather had been cold, the sheer misery of doing the concrete work through November is well illustrated in exhibit 2 (tab 1-photos 91 to 149). Although it was argued that the completion date of the project was December 1, that date had come and gone, neither Online nor Speers had completed their work. At this point, Speers decided to do the irrigation line and grouting for its own reasons, without sufficient notice to Online under the terms of the subcontract.

As a result, it did the Cematrix work and completed the irrigation line by its own choice, not because Online had refused to do so, or had abandoned the project. Speers failed to give proper or adequate notice under

section 18 of the subcontract. [ 86 ] The result is that Speers is not entitled to charge back costs against Online for the Cematrix work or completing the irrigation line. Online was not required to incur the cost of doing the work, so cannot claim those amounts under the contract, only lost profits. The evidence is clear that if Online had completed either job, it would have spent more than the bid amount. There was no evidence to suggest any loss to Online from a failure to complete the irrigation line, or the Cematrix work.

Online is entitled to be compensated for the portion of the work it had already completed on the irrigation line. 5.6. Liability for the Concrete Deficiency Work [ 87 ] The communication between the parties after December 18, as well as an examination of the invoicing, is necessary to determine if Online was contractually allowed to walk away from the concrete deficiencies, without fixing them, and without being responsible for those costs. Speers completed and paid for the work on the deficiencies, and claims those amounts under

section 18 of

the subcontract. 5.6.1. Subsequent Communication [ 88 ] On December 18, Mr. Mohammad wrote to Speers and stated that there were monetary matters outstanding. The letter purported to be notice under

section 19.3 of the subcontract that Speers was in default of its contractual obligations, and the notice was without prejudice to any other right or remedy Online may have, to stop work or terminate the subcontract. It indicated Online was willing to go to arbitration. [ 89 ] On January 10, 2007 Mr. Miller wrote to Online with the progress numbers to the end of November. Mr.

Mohammad e-mailed on January 11 with details of the concrete actually placed in the slabs and walls and a calculation of the neat line placement for the walls. [ 90 ] On January 24, 2007 the lawyer for Online wrote to the lawyer for Speers, referencing the notice of default on December 18, and indicating it resulted from outstanding payments. The letter stated that the default had not been cured and accordingly Online was not obliged to complete its work. A lien was placed on January 31, 2007 and litigation ensued to establish a lien fund. Online sent an invoice dated January 26 for $347,145.41.

This was the first invoice received by Speers from Online since early September of 2006. This was followed by an invoice for additional costs on May 3, 2007 for the amount of $140,000.

After December 18, 2006 and before June 25, 2007, Online never requested the ability, or illustrated a willingness, to return to the project to fix the concrete deficiencies. [ 91 ] As the notice of default of December 18 related to nonpayment by Speers under the subcontract, and Online took the position that as the default had not been remedied, it was not obliged to complete the contract, this court has to look at the subcontract terms, the invoicing and the payments to determine if Online was legally justified to take that position, and thus was not responsible to return to the site to fix the concrete deficiencies. 5.6.2.

History of Invoicing [ 92 ] The terms of the subcontract set out that the subcontractor is to submit an invoice covering progress claims to the contractor no later than one day before the month end in which the materials are supplied or the work performed. Payments are to be made monthly on the progress estimates as approved by the contractor covering 100% (less a hold back) of the value of the work completed by the subcontractor to the end of the previous month. Any failure to make a payment carries an interest rate of 9% per annum. [ 93 ] Mr.

Mohammad prepared his first invoice under the terms of the subcontract agreement in early September. He gave it to Mr. Lyle on site, and mailed it to Mr. Miller. Mr. Miller responded that there was no purpose in Online sending a progress claim, Online would get paid on the basis of the amounts of concrete as Speers was paid from the owner. Online was told to keep track of various other claims that arose and the parties would work those out at the end of the project.

Online did so, and sent letters outlining its claims for extras. [ 94 ] The evidence was that the four cheques that Online received came with no back up, so it was very hard to understand the numbers on which each cheque was based. Online was not part of the discussion between Speers and Amec about progress claims, so had no input into or information about the payments. Online never received a copy of the payment progress certificates given by Amec to Speers. [ 95 ] Mr. Mohammad prepared the first progress claim for this project. Ms. Baumeister, the accountant at Online, did not see that.

The first cheque that was received in the office by mail was for the amount of $93,455.87 dated September 29 for work up to the end of August. As there was no breakdown for the amount, Ms. Baumeister called an assistant at Speers who provided her with the backup for the amount of the cheque. Online then created an invoice for that amount. The first payment was not far off from the first progress claim submitted by Online, there were some handwritten changes to the amount of concrete (based on neat line calculations), and none of the material supplied but not yet incorporated was paid.

[ 96 ] At the August 30 site meeting, Online requested payment for the rebar delivered (for which it invoiced in early September). Priddis mentioned that although the terms of the prime contract only obligated it to pay once materials were incorporated in the project, a progress draw would allow for payment for rebar delivered to site, and could be issued Sept 15, but a quote for the rebar and bill of lading would need to be submitted for payment. Later minutes suggest this payment was held up until Online had more workers to do concrete forming on site.

Specifically in the minutes of October 4, 11 and 18, Amec was threatening that it would withhold payments if it did not get the concrete submittals (required for formal approval of the mix, rather than on a pour by pour basis), a revised

schedule of work from Online and also Speers, and wall form design information from Online. [ 97 ] The second cheque paid by Speers to Online was for $98,242.45 and was dated October 13. The backup provided by Speers was the letter sent by Online, giving details of the cost of materials. Close to the whole amount for materials was paid. The third cheque, dated October 30, was for $87,201.22. Back up information was requested, and an invoice made up by Online to fit the cheque. The final cheque dated November 28 was for $170,298.36 and was handed to Mr.

Mohammad at the jobsite on December 5 or 6, there was no evidence of any particular backup or invoicing resulting. [ 98 ] Speers got the quantity of concrete under a neat line calculation from the engineer and created the invoicing to the owner. Mr. Lapins confirmed that the progress payment was prepared on a quantity agreed to by Speers. Online was not consulted, and Mr.

Miller was unapologetic that cheques would be sent with no backup information. [ 99 ] There is no doubt this type of approach to accounting was frustrating for Online, as clearly Speers was not on top of the dissemination of information, and their method of reporting to the subcontractor was sloppy. Although Mr. Miller and Mr.

Speerbrecker testified that Speers is not generally a contractor, and usually dealt with these matters by work orders and invoicing, Speers had signed the subcontract but was careless as to its terms. [ 100 ] However, it is equally clear that Online never generated a progress claim or invoice under the subcontract after the first invoice. It is therefore difficult to know at any one time what Online said the amounts payable should be. Online merely issued an internal invoice for the amount already paid, to match the amount of Speers’ payment.

Online was not billing according to the terms of the subcontract. 5.6.3. Conclusion on Responsibility for the Concrete Deficiencies [ 101 ] Looking at the total payment of $448,262.48, with no ongoing invoicing being provided by Online, and the issues in dispute in December and January, I do not find that Speers was in default under the subcontract. Thus, Online was not at liberty to unilaterally withdraw on the basis of non-payment and take the position it was not obligated to complete the rest of the contract. There were substantial concrete deficiencies.

To the extent that there may have been some payments late under the subcontract, interest was the remedy. The amounts were not substantial enough to justify Online walking away from the contract, or issuing the letter of January 24, purporting to end its contractual responsibilities. [ 102 ] Online took the position that it was not obligated to remedy deficiencies. It never offered to show up on site again and work on them, although it left the project knowing there were substantial deficiencies to address.

The concrete deficiency work was subcontracted by Speers to others in the time frame of March to May 2007 with some work in November 2007. On June 25, 2007, Online set out in letter that it did not abandon the project, but stopped work due to very cold weather conditions. However, it is clear that Online never gave any notice in 2007 that it intended to return or wanted to deal with deficiencies. Also, Online never asked to have an inspection or its own expert to attend and do any evaluation. The owner was insisting the deficiencies be addressed.

In the circumstances, Speers had no choice but to have the deficiency repair done by others, and has the right to charge the costs back against Online. 6. Claims Brought by the Plaintiff Against the Defendant [ 103 ] Before reviewing the specifics of the claims brought by the plaintiff against the defendant, some comments need to be made about scheduling, as some aspects of scheduling are front and center to the claim advanced by the plaintiff for delays, and inefficiencies arising out of the conduct of the defendant. Then each specific claim of the plaintiff will be addressed. 6.1. Scheduling Issues

[ 104 ] Many of Online's claims arise out of the

schedule initially provided by Speers. Online states this gave it the belief that when it arrived on the site, all excavation and filter material would be placed, and it would have a full and unimpeded ability to work on the spillway area. Also, Online takes the position that the

schedule originally published was one on which Online was entitled to rely, and when it did not transpire, Online was entitled to all added labour and other costs that resulted from any additional time it was on site. [ 105 ] Mr. Mohammad testified that when he was bidding on the concrete work, Mr. MacDougall conveyed to him that there were critical procedure time lines on which the construction must proceed to proficiently do the job. Mr. Mohammad testified that the time frame set out in the initial

schedule provided by Speers was that the concrete work on the spillway was to be done by the end of September. [ 106 ] The subcontract signed by the parties had the following clause: The Subcontractor will begin work on or about the 27 day of July, 2006 and will carry on and complete the work on or before the 30 day of September, 2006 (hereinafter called the Subcontract Time) generally in accordance with the

Schedule attached hereto or as otherwise provided for by the Prime Contract and the Subcontractor shall carry out its work in a manner which shall not delay the work of the Contractor or of other subcontractors on the Project. [ 107 ] No

schedule was attached to the subcontract. No

schedule was provided or generated prior to tender. Various schedules prepared by Speers were introduced into evidence. Both parties agreed that the general contractor, Speers was responsible for managing and co-ordinating the construction schedule, maintaining it and ensuring that Online was aware of changes to the schedule. [ 108 ] An initial bar graph

schedule was provided by Mr. MacDougall on July 27. It indicated, in terms of critical path, that Speers would have the excavation done, and then would lay the filter layer after which Online would start its work. [ 109 ] Mr. Hullah testified that when a contract is awarded, the general contractor should generate a

schedule and circulate it to all the subtrades, to see if the outlined time and

schedule is possible. He testified that in seven to ten days, a subcontractor should respond, and in doing so that subcontractor would usually create a

schedule for its work, and in this case, a pour schedule, in terms of when the concrete was to be done. [ 110 ] There is no doubt that this project was delayed, and Online could not mobilize when originally planned. The July 27 e-mail from Mr. MacDougall to Mr. Mohammad starts to deal with the realities of the project, and revised schedules. By the time of that e-mail, the

schedule had been revised already, and it asked for details of needs and concerns to adjust the

schedule if Online took over the irrigation line, or to adjust the

schedule to accommodate Online's crews. Later that day another e-mail indicated that Mr. MacDougall was still re-working scenarios for the construction schedule. He indicated that Online did not need the whole form crew on site before August 8, but Speers wanted a person from Online on site during grade preparation. There is no question that through no fault of its own, Online started the project two weeks after it expected. [ 111 ] There was no penalty clause in this contract, and in fact, there was never any suggestion that Online was in breach of contract for not finishing by September 30.

The evidence was that the timetable was constantly under revision, changes were made by Speers, and provided to Amec. There was no evidence that the revised schedules were given to Online. Discussion of these schedules at the weekly site meetings was often after Mr. Mohammad had left, as he was only in attendance when concrete issues were discussed at the start of the meeting. The revised schedules were available in the field office, but not displayed in any particular place. Mr. Lyle could not say that he gave Mr. Mohammad the revised schedules. [ 112 ] Mr.

Mohammad remained adamant throughout his cross examination that he understood Online’s work had to be completed by September 30. He denied ever receiving any revised

schedule for the project, saying that although he was in the Speers’ trailer on and off, he never saw any updated schedules posted. Mr. Speerbrecker testified that the September 30 completion date had no particular magic to Speers, it had to complete the work by December 1. Although there were things that Speers had to do to complete the project that could not be done until after the spillway was completed, late October or early November would have been the date when Speers would start to be concerned if the spillway was not done. When Speers signed the subcontract, it was already past the start date, and Mr.

Speerbrecker testified he paid no heed to the dates, and saw September 30 simply as a target.

[ 113 ] Clearly, the project started late, and ran beyond the originally scheduled completion date. The evidence was clear that all parties carried on working on the project. The parties agreed to some additional costs along the way, but generally, there was an indication by Speers that Online should keep track of the extra costs it felt it incurred due to delay or the conduct of Speers, and those would be visited at the end of the project. Mr. Mohammad wrote several letters documenting these costs. Speers rarely replied, but limited oral discussions tried to resolve some issues.

When they were not resolved, the understanding was they would be revisited when the work was complete. A formal notification of

schedule changes did not contain any magic. The reality was that the project did drag out, it ran into late fall and winter conditions. [ 114 ] It has to be remembered in a construction situation such as this, the plaintiff is only entitled to recover losses which can be tied to a breach of contract, or arising from a tortious act about which the plaintiff complains.

In looking at cost overruns, the law is clear that over runs that have no relationship to breaches found by the court, are not compensateable: for instance, bid errors, errors in supervision, errors in the utilization of labour and equipment, errors in scheduling, errors in predicting weather contingencies to name a few. See: Opron , para. 814. [ 115 ] What the

schedule and the contract clearly establish was that the work was to start July 27, and that start date was delayed until August 8, solely as a result of issues between Speers and the engineers which had nothing to do with Online. As a result, if Online can prove direct damages as a result of the two week delay in starting, that would be an allowable head of damages. [ 116 ] There was no evidence that suggested Online had lined up workers for the first two weeks, and so had to pay workers or costs due to contracts it had arranged (e.g. rental of equipment).

In fact, all the evidence was that it could accommodate the delay, and showed up on August 8 with a skeleton staff and started to set up for the job. At that time, Mr. Mohammad met with various subtrades and started to make appropriate arrangements for the project. In fact, Mr. Schwartz, who was hired by Online with three other workers to do the concrete formwork, testified about the project. His evidence was that he had no particular concerns that the job did not start on August 1, that in his experience, there are always delays on jobs.

Thus, inconvenience, and the fact the project was pushed two weeks towards winter conditions are proven, but there was no evidence that Online incurred any other monetary costs from the initial delay of two weeks in starting. [ 117 ] In this case, Online did not approach damages by outlining its bid in detail, how it calculated costs, how it intended to roll out the workforce and then provide a detailed breakdown of what it expended, and what were the overruns.

Rather, the question of damages resulting from delays on the project extending beyond September 30, or the originally estimated 65 days, was approached by raising specific allegations. These each need to be addressed in order to determine if the allegations are proven and liability for costs or damages is imposed by the law. 6.2. Inefficiencies and Delays Caused by Lack of Excavation/Preparation [ 118 ] The plaintiff alleged that Online could do the work in the manner and order it wished. Because the

schedule indicated that before Online arrived on site, all excavation would be completed, and the fill installed, Online argued it was entitled to plan to have the whole area available to work. Mr. Mohammad indicated that his intention was to pour all the slabs, and then commence erecting the walls.

He alleged that the Speers’ delay in concluding the excavation and obtaining the fill material, meant Online had to change its manner of work and this lead to increased costs and inefficiencies, for which Online is entitled to be compensated. [ 119 ] One has to start with the question: was it a fair expectation of Online to believe that when it arrived on site, the excavation would be done, and the fine filter in place, so it could immediately start on the foundation concrete work? If so, then the court has to determine what costs resulted from the inefficiencies and delays. [ 120 ] Mr.

Hullah, the construction expert called by the plaintiff, suggested that Speers and Online would have had to coordinate their work, as the filter material could not be exposed for too long. It would be compromised by the weather and people walking around on it, so it made sense to put the filter material down in close proximity to pouring the foundation concrete.

Thus, to arrive and have everything in place and waiting may have been somewhat unrealistic, but Online certainly was entitled to plan that once it was there, and ready to go, the final steps for the preparation of each slab would be done without delay. [ 121 ] The evidence was clear that Speers’ work involved excavating the spillway, in five distinct slabs. Once the initial excavation

was done, fine excavation with attention to grade was necessary. Slab one at that point would be ready for foundation concrete to be poured by Online. Slabs two, three, four and five required a fine filter layer. Slab five would then be ready for foundation concrete to be poured. Slabs two, three and four required an additional layer of course filter on top of the fine filter, and then compaction, before they were ready for foundation concrete. [ 122 ] Once each slab was ready, Online would be in a position to start to put wooden form work around the slab area and pour foundation concrete.

Foundation concrete had to be poured fairly soon after the completion of Speers’ work on the slab. This in fact happened, generally foundation concrete was poured the day Speers’ work concluded on the slab, or the next day, at the latest. Once foundation concrete was poured, structural concrete could be poured to form the slabs. The walls of the spillway associated with each slab could be erected once the slab was poured. [ 123 ] The whole spillway was not excavated, and prepared so that foundation concrete could be poured when Online arrived on August 9. In fact very little excavation had been done at that time.

The final excavation of slab one was done on August 17. At this point, it was ready to receive foundation concrete. Although slabs two, three, four and five where all excavated by August 28, the first fine filter was delivered to the site on September 11, so no more foundation concrete could be poured until then. Fine filter was placed the next day, September 12 on slab five. The foundation concrete was poured on slab five the same date. Slabs two, three and four needed coarse filter to be applied. Coarse filter was first delivered to the site on September 19.

It was applied on slab two on September 19 and foundation concrete poured Sept 20. [ 124 ] Thus, Online could not start concrete work on slab one until August 17, on slab five until September 12, and slab two until September 19 or 20. None of these pours could have been done earlier, as Speers did not have the excavation done on slab one, and the evidence is clear it did not have the fine filter material to do slab five until September 12, and the coarse filter material until September. 19.

Foundation concrete was poured on slab three on September 25, and slab four on October 12, these latter two dates were not dictated by the absence of coarse or fine filter material. [ 125 ] Clearly then, in addition to the delay from July 27, Online was also delayed from August 9 until August 17.

The extent of the delay depends on the amount of time it takes to mobilize on the site (arriving, setting up, mobilization) before starting to pour foundation concrete. [ 126 ] Online advanced a number of delay claims beyond August 17, alleging that the project took twice as long in time, that its workers had to work inefficiently, not as planned, and the method of making one slab available at a time completely changed the way it would approach the work. It could not just staff up immediately, and do the work as it wished. Mr.

Mohammad testified that Online workers helped Speers spread the filter material, not their work, but they helped at times in the spirit of cooperation and to get the work moving. Much of the evidence of Mr.

Mohammad was that it was the stop and start nature of the work that made the method of work inefficient, that not having the whole five slabs to work on at one time lead to inefficiencies in work and added more concrete pours. [ 127 ] There is no question that the progress of the concrete work was in whole dictated by Speers until August 17 and in part until the last slab was ready for foundation concrete, on October 12. Mr.

Mohammad at trial pointed to the fact that he planned to rent wall forms, and pour the concrete walls in a continuous manner, and this type of stop and go did not allow him to do this, a fact he raised at the weekly site meeting on September 6. He was forced to work around a

schedule imposed on him by Speers. [ 128 ] When Online’s crew of three arrived, there was no work to do, other than setting up their camp, they had to do items that did not involve concrete work until slab one was excavated and ready on August 17. The evidence shows the two labourers and Mr. Mohammad obtained lumber and material, and the irrigation pipe was delivered. Some assistance was given to the surveyor shooting the grades and Harris rebar made deliveries of approximately 65 to 80 tons of rebar.

On August 17, concrete forming and foundation concrete was available but work could only commence on slab one until September 12. [ 129 ] The evidence, and the detailed discussions about sourcing and finding the filter material amply demonstrated that the real problem was that until the filter was found and finally available in sufficient supply for the slabs on September 19, it was impossible to plan how or when those areas would be available. Day by day there appeared to be the promise this material would arrive, but clearly from the weekly site meetings, week by week the uncertainty grew.

Looking backward, when the project is completed, it is easy to overlook that a snapshot every day has to consider for the first six weeks, the time when the four slabs that needed fill would be available for concrete work was far from clear.

[ 130 ] The defendant’s response to this at trial, was similar to their response when this frustration erupted on the site or at the weekly site meetings, and that was that once slab one was poured, it was possible to do the walls and wing walls connected to that slab. This involved rebar placement and formwork for the concrete pours. The evidence was clear that approximately 20% of the total concrete work in terms of volume to be poured was available once slab one was excavated and the foundation concrete was done.

After slab one was poured, that was the only slab available for work (other than cut off walls, another separate subject) until slab five was ready with fine materials placed, on September 12. With slab five ready for foundation concrete, another 30% by volume of concrete work became available, also requiring considerable rebar and formwork. [ 131 ] In his letter of September 15, Mr. Mohammad did address the suggestion that Online finish the walls on slab one. He indicated it was not cost effective for Online to rent forms and redirect their forces from building the slabs on the spillway. Mr.

Mohammad testified that the introduction of forming the cut off walls, made the concrete delivery different, as more deliveries of smaller amounts were needed. Concrete deliveries were hard to

schedule at short notice. In that letter, he requested a formal directive be forwarded and costs agreed prior to the change in work format. There was no suggestion by him at that time of what the actual additional costs could be, or how they should be calculated. [ 132 ] Mr. Mohammad was correct in his position, for Speers to dictate that he do slab one work first would be a change in the subcontract, as the subcontractor is left free to decide how to allocate his work force and how he will do the work. No written directive was given.

Nonetheless, to the extent that Online was forced to incur extra costs to concentrate its efforts in slab one, it would have been entitled to those costs. [ 133 ] However, Online did not choose to bring in its planned workforce and concentrate on slab one work, rather it delayed in bringing on more workers, and delayed any decisions it would be making about renting formwork, or using subcontractors.

Thus, outside of the delay in the project for starting two weeks late, and the delay on the site from August 9 to 17, the remainder of this claim is generalized delay relating to the inefficiency of workers, or inability to plan as it was not known when the other slabs would be available.

Although the plaintiff complained about the way the slabs were made available, it never actually answered the question of why, once it realized the uncertainty of the slab preparation, it could not have started formwork, and rebar for the structural concrete associated with slab one, and then moved to slab five. [ 134 ] The defendant also raises in defence that the plaintiff could not have mobilized and poured concrete earlier than the slabs were ready, due to its failure to comply with the contract and supply a mix design, or details of the form work design as required by the contract.

That defence will be discussed in paragraphs 212 to 224 below. 6.3. Harris Rebar Issue [ 135 ] The Harris Rebar subcontract was an important issue in this trial. This is one allegation where Online pointed to a specific change of plans due to the disorganization at the site when it arrived. Online alleged that it had a subcontrac

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