Whitehorn Lodge Inc. v. Nuco Inc., 2012 ABQB 701

Court of Queen ’ s Bench of Alberta Citation: Whitehorn Lodge Inc. v. Nuco Inc., 2012 ABQB 701 Date: 20121122 Docket: 0401 02633 Registry: Calgary Between: Whitehorn Lodge Inc. Plaintiff - and - Nuco Inc. and The Bolt Supply House Ltd. Defendants _______________________________________________________ Reasons for Judgment of the Honourable Madame Justice C.L. Kenny _______________________________________________________ I. Introduction [ 1 ] The Plaintiff, Whitehorn Lodge Inc. (“Whitehorn”) built a seniors’ assisted living complex in Calgary in 2001/2002.

As part of its fire stop system, Whitehorn used an intumescent caulking material, GG-266, manufactured by the Defendant, Nuco Inc. (“Nuco”) around the holes where plumbing and electrical wire penetrated the walls. This was to prevent fire and smoke from moving from one room to another through the holes created to run plumbing lines and electrical wire though the building. For the reasons described below, the wiring that came into contact with the GG-266 caulking material was required to be removed and replaced.

Whitehorn claims damages from Nuco for the cost of removing and replacing the electrical cable, and for the cost of delay to the project resulting from having to do the additional work. The trial of this action proceeded only against Nuco, as Whitehorn and The Bolt Supply House Ltd. (“Bolt”) have entered into a Pierringer settlement agreement. II. Background

[ 2 ] The seniors’ residence required fire rated walls. The fire rating ( i.e., one hour, two hours, etc.) is shown on the architectural drawings. Along with the drawings, written specifications were prepared and were submitted to the City of Calgary to obtain the necessary approvals. These written specifications, however, were not given to Whitehorn or to the construction supervisor. [ 3 ] Construction started in September of 2001 with completion planned for August 23, 2002. Actual occupancy occurred on October 20, 2002. [ 4 ] Mr. Kelly Wood was hired as the construction supervisor for the project.

He is a carpenter by trade and has many years’ experience in the construction business, including acting as a supervisor on many multi-unit building projects requiring fire rated walls. [ 5 ] Before starting the caulking, Mr. Wood met with Mr. Baburam Singh, the City of Calgary building inspector, to discuss the type of fire stop caulking to use. Mr. Wood understood from this meeting that he was to use intumescent caulking, which expands when subjected to heat, to fill the holes used for piping, such as plumbing, that may collapse during a fire.

Non-intumescent fire stop caulking could be used for smaller penetrations that do not collapse, such as electrical wires. [ 6 ] Mr. Wood contacted Bolt to find intumescent caulking. Bolt’s salesman, Mr. Bill Taekema, wondered why he wanted to use intumescent caulking for all of the fire wall penetrations as it was more expensive than non-intumescent caulking. Mr.

Wood said that by using only one kind of caulking, he could be sure no mistakes were made in application, for example, there would be no risk of someone putting non-intumescent caulking on pipe penetrations where intumescent caulking was required. [ 7 ] The only intumescent caulking Bolt carried was the GG-266 manufactured by Nuco. Mr. Taekema provided Mr. Wood with a document titled “ Nuco Fire Stop-Technical Information-Self Seal GG-266 Intumescent Caulk” (the “Technical Information”). He also provided a May 22, 2001 announcement about GG-266 put out by Nuco. (the “Announcement”) [ 8 ] Mr.

Wood was primarily interested in four matters with respect to the caulking. Those matters and the information provided by Nuco in the Technical Information and the Announcement with respect to those matters are as follows:

a) that it was non slump caulking. The information indicated that GG-266 was ideally suited for “caulk and walk” applications.

b) that it could be used in cold temperatures. The information indicated that GG-266 had an application temperature range of -29 o C to 50 o C.

c) that it was tested. The information stated that GG-266 was “tested at positive pressure to simulate the pressure differentials that can occur in a fire situation”. It also stated that GG-266 met ASTM E-814, UL1479, UBC 7-5 and CAN 4/ULC-S115M codes.

d) what type of penetrations it could be used on. The information indicated that, among other penetrations, GG-266 was suitable for electrical cable penetrations and compatible with power and communication cables. [ 9 ] Upon reading the Technical Information, Mr. Wood was satisfied that the GG-266 caulking could properly be used on all penetrations, including those for electrical cables. He discussed the product he was going to use with Mr. Singh, who confirms a discussion with Mr. Wood about the caulking to be used. Mr.

Singh confirms he saw information about the fire stop caulking to be used, but cannot recall if the documents described above are what he saw. [ 10 ] The GG-266 caulking was then used on two mock up suites. The package that it came in had the applicable code markings on it, along with the symbols for the test agencies. The caulking on those two suites was approved by Mr. Singh and arrangements were

made to finish caulking the fire walls in the south wing using the GG-266 caulking. When finished, the caulking was inspected by Mr. Singh and approved. Preparations then were made to move on to another part of the building while the south wing was prepared for the installation of insulation and drywall. [ 11 ] At this time, the electrical contractor, Mr. Wally Lee, in removing some of the electrical cable for repair, noted a reddish brown discolouration on the cable where it had been in contact with the GG-266. Mr.

Lee cut open several of the cables and observed that the discolouration extended to the inside of the jacket and to the copper grounding wire. He also observed some liquid within the jacketing at the point where it was caulked. In some instances, the outer jacket had deteriorated to the point where there were holes in it. [ 12 ] Mr. Lee contacted the City of Calgary. Mr. Lou Greco, a City of Calgary electrical inspector, attended at the site, inspected the cables and observed the discolouration and other problems. [ 13 ] Whitehorn contacted Nuco to advise of the problems.

Mr Keith Brebner from Nuco faxed over a specification sheet on the sealant which seemed to indicate that GG-266 was suitable for electrical cables in wood frame construction. [ 14 ] A representative of Nuco, Mr. Bruce Richards, came to view the wires and saw the discolouration as well. He indicated that the caulking had been sloppily applied and that there was no tested system that would allow this product to be used to seal electrical cables in wood frame construction. [ 15 ] On February 28, 2002, Mr. Greco issued a direction that all of the wiring in contact with the GG-266 caulking was to be removed.

On March 1, 2002, after a subsequent meeting, Mr. Greco indicated that an engineer’s report stating that the caulking was not damaging the wiring was the only alternative to removal of all of the wiring. [ 16 ] Whitehorn asked Nuco for such a report but received no response. Whitehorn then wrote to say that if it did not have such a report by March 7, 2002, it had no option but to comply with the City’s directive and would be pulling all of the wiring. It also indicated in that letter that it would be looking to Nuco to recover its costs associated with such a removal.

No engineer’s report was received by that date and the wiring was removed. [ 17 ] On March 27, 2002, after all of the wire had been pulled and the building was in the process of being rewired, Nuco provided a report from Southwire. That report indicated that electrical wire had been tested with the GG-266 caulking. It showed significant discolouration on the outer jacket, but it was confined to the surface and did not affect the tensile properties of the jacket. [ 18 ] At the trial of this matter, Nuco provided an expert report by Mr.

Steve Paniri which indicated that the discolouration was likely a result of a reaction with humidity and air during the curing process and that it did not affect the integrity of the wires. [ 19 ] From the evidence of those who inspected the actual wires at the time, I find that both the outer and inner jacket of the wiring was discoloured and that the copper wire itself inside the jacket showed some signs of discolouration. In my view, whether this was later found to affect the tensile properties of the wiring or not is irrelevant.

Whitehorn was in the process of constructing a multi-unit complex which had possession timelines associated with it. The City of Calgary inspectors had ordered the wiring removed unless they received an engineers’s report indicating that the discolouration had no impact on the viability of the wiring. No engineering report was obtained within the necessary time and the wiring was removed to comply with the City’s direction. [ 20 ] Whitehorn claims damages for the cost to rewire that portion of the building where the wires were removed as well as for damages related to the delay in completion of the building. III.

Law and Analysis [ 21 ] Whitehorn bases its claim against Nuco on negligent misrepresentation. In addition, Whitehorn claims that Nuco breached the Sale of Goods Act , RSA 2000, c. S-2 and the Fair Trade Act , RSA 2000, c. F-2 .

A. Sale of Goods Act [ 22 ] Whitehorn says that Nuco has breached the implied warranties set forth in ss. 16(2) and (4) of the Sale of Goods Act . Those provisions read as follows:

(2) When the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller’s skill or judgment and the goods are of a description that it is in the course of the seller’s business to supply, whether the seller is the manufacturer or not, there is an implied condition that the goods are reasonably fit for that purpose. ...

(4) When goods are bought by description from a seller who deals in goods of that description, whether the seller is the manufacturer or not, there is an implied condition that the goods are of a merchantable quality. [ 23 ] Whitehorn alleges that Nuco breached this implied condition that the goods are reasonably fit for the purpose. In support of its argument, it refers to these comments from G.H.L. Fridman, Q.C., Sale of Goods in Canada, 5 th ed. (Toronto: Thomson Canada Ltd., 2004) at p. 170: Three factors are therefore relevant: (

i) the course of the seller’s business; (ii) knowledge on the part of the seller of the purpose of the goods; (iii) reliance on the seller’s skill or judgment.

Only if a contract of sale satisfies these requirements will it be possible to imply into it the condition of fitness of the goods that is contained in this subsection. [ 24 ] Nuco refers to a similar list of factors set out in Daishowa-Marubeni International Ltd v Toshiba International Corp , 2010 ABQB 627 , 501 AR 178. [ 25 ] Whitehorn argues, firstly, that the sale of fire stop caulking is Nuco’s business and that the sale of the GG-266 was in the course thereof.

Nuco does not appear to take issue with this argument. [ 26 ] Secondly, Whitehorn asserts that where a product has only one purpose or where its purpose is obvious from the character of the goods, there is no need for express notification to the seller of the purpose to which the buyer intends to put it. Whitehorn relies on Fridman in this regard as well, quoting as follows from pp. 174-175: Sometimes the purpose of a purchase will be so obvious that only one purpose could reasonably be in mutual contemplation. An only purpose or ordinary purpose may therefore be a particular purpose. ...

Sometimes a particular purpose will be made known expressly: sometimes it will be made known by implication. [ 27 ] Whitehorn’s position is that the GG-266 caulking had only one use, namely to fill penetrations in fire rated walls, and, therefore, the second factor is satisfied.

[ 28 ] Nuco, however, argues that “GG-266 is a fire stop caulking that was intended to be used to fill penetrations in fire rated walls where it forms part of an approved fire stop system.” Nuco takes issue with Whitehorn’s argument that GG-266 could be used to fill any and all penetrations in fire rated walls and asserts that Whitehorn should have consulted the UL and ULC directories to determine whether its proposed installation was part of an approved fire stop system. [ 29 ] Finally, with respect to the third factor, Whitehorn argues that it relied on Nuco’s skill in developing, manufacturing and selling GG-266.

For its part, Nuco points out that at no time did Whitehorn or any of its agents contact Nuco to discuss its proposed use of GG-266. [ 30 ] In addition, Nuco asserts that Whitehorn has failed to establish that the GG-266 was not fit for its intended purpose or of merchantable quality.

While Nuco acknowledges the discolouration of the cables, its position is that Whitehorn has not provided any evidence that the integrity of the wires was negatively affected. [ 31 ] In sum, Whitehorn argues that it relied on an implied warranty from Nuco that the GG-266 caulking was fit for use in fire rated walls and that this warranty was breached. Nuco argues that Whitehorn misused the product and has failed to prove that it was not fit for its intended purpose or not of merchantable quality. [ 32 ] Clearly the GG-266 caulking was part of Nuco’s business, so that part of the test is met.

With respect to the second part of the test, I reject Nuco’s position that Whitehorn ought to have consulted one of the various directories before using the GG-266. As will be discussed below, Whitehorn relied upon the Technical Information provided by Nuco which indicated that it could use the GG-266 as it did. Nuco asserted that there was no tested system for GG-266 in sealing electrical cables in wood frame construction, yet its description set out in the Technical Information says the opposite.

Absent some indication that the use of the product was more limited, I find that the second and third parts of the test are satisfied. [ 33 ] As to the questions of fitness for the intended purpose and merchantable quality, I find that the opinion evidence provided by Nuco’s expert who conducted testing many years later is of no relevance to the situation as it existed at the time and to the decision made by Whitehorn. The reality is that Whitehorn was required by the City either to provide a satisfactory engineer’s report or to remove and replace the wiring.

Further, given the time constraints in respect of the project, it had to do one or the other of these within a short time frame. Whitehorn purchased the GG-266 intending to install it and proceed with its project. It was not able to do this due to the performance of the product and, therefore, I find that there was a breach. B. Fair Trade Act [ 34 ] Whitehorn also made very brief arguments about the Fair Trade Act . It cited s. 6(4) thereof, which provides:

(4) Without limiting subsections (2) and (3), the following are unfair practices if they are directed at one or more potential consumers: ... (

b) a supplier’s misleading statement of opinion if the consumer is likely to rely on that opinion to the consumer’s disadvantage; (

c) a supplier’s representation that goods or services have ... performance, ... uses, benefits or other attributes that they do not have; [ 35 ] Nuco responds, first, by denying that it made any misleading statements or representations. Further, Nuco points out that the Fair Trading Act defines “consumer” as including only an “individual” rather than a corporation. Therefore, it takes the position that the Fair Trading Act does not apply to the sale of GG-266 to Whitehorn. [ 36 ] In light of my findings in respect of the Sale of Goods Act and negligent misrepresentation, I need not deal with this issue.

C.

Negligent Misrepresentation [37] In Queen v Cognos, (SCC), [1993] 1 SCR 87, the Supreme Court of Canada enumerated five elements thatmust be established to give rise to a claim for negligent misrepresentation: (1) there must be a duty of care based on a “special relationship” between the representor and the representee; (2) the representation in question must be untrue, inaccurate or misleading; (3) the representor must have acted negligently in making the representation; (4) the representee must have relied, in a reasonable manner, on the representation; and (5) the reliance must have detrimental to the representee in the sense that damages resulted. 1.

Duty of Care Based on Special Relationship [38] As a preliminary matter, Nuco takes the position that there is no relationship between Nuco and Whitehorn as any informationfrom Nuco was provided to Mr. Wood, who operated through his own corporate entity, A Touch of Wood Construction Ltd. I disagree.It is obvious that Mr. Wood was acting as agent for Whitehorn in carrying out his contracting duties and in investigating and purchasingthe caulking material to be used in the project. [39] The question, then, is whether there is a special relationship.

In Hercules Management Ltd v Ernst & Young, (SCC), [1997] 2 SCR 165, the Supreme Court of Canada held at para. 24 that such a relationship will arise where a two-part test is met:“(

a) the defendant ought reasonably to foresee that the plaintiff will rely on his or her representation; and (

b) reliance by the plaintiffwould, in the particular circumstances of the case, be reasonable.” [40] With respect to the first part of the test, it is Whitehorn’s position that since the Technical Information and the GG-266Announcement were intended for the end user of the product, it is clear that Nuco would foresee that those are the persons who wouldrely on the representations. Here, Whitehorn, through Mr. Wood, was the end user. [41] The second part of the test is whether the reliance by Whitehorn was reasonable.

Whitehorn asserts that the reasonableness ofthe reliance may be assessed by reference to a number of factors set out in Albionex (Overseas) Ltd v ConAgra Ltd., 2011 MBCA 95, 270Man R (2d) 293 at para. 99. These include the skill of the advisor, the skill of the advisee, the nature of the occasion, the request and thenature of the advice. [42] Whitehorn argues, firstly, that Nuco has all of the skill and information with respect to its product. Nuco would know whathad been tested and what had not.

Nuco would know whether its product was compatible with the penetrations stated or whether therewere any adverse effects when using the GG-266 on certain penetrations. [43] As to the second factor, Whitehorn acknowledges that Mr. Wood was a longtime general contractor and was familiar withconstructing fire rated walls. Whitehorn asserts, however, that Mr. Wood would not know about the testing Nuco had done on itsproduct.

He would know only that the Technical Information indicated that GG-266 was compatible with electrical cable penetrations.He would assume that Nuco had tested the product with electrical cable to know that. Nuco argues that Mr. Wood was very familiar withthe directories and that he knew where he needed to go to see if the product was part of a tested fire stop system.

Nuco asserts that Mr.Wood was a skilled advisee. [44] With respect to the occasion, it appears to be common ground that the representations were made in a business, rather than asocial, context. [45] Whitehorn asserts that it is not relevant that it did not request further information about GG-266 from Nuco. Its position is that

the Technical Information and other material provided was intended for the end user and therefore there was no need to make furtherinquires. In support of this proposition, Whitehorn cites these comments from the Manitoba Court of Appeal in Albionex at paras. 109and 110: ...when a representor desires potential representees to rely on information it provides, that fact will help support a finding of a primafacie duty of care. ...

I agree with Klar’s conclusion that where the reasonable person knows or ought to know that advice will be relied upon, the fact that theadvice was not specifically requested is of no importance... [46] Nuco says the information came from an employee of Bolt, which was not an approved distributor for Nuco. Nuco did notsupply information to Bolt on its products. Nuco says there was a full binder of information on all of their products including UL andULC listings as well as installation instructions. None of the rest of the information in the binder was delivered to Mr. Wood. Nucoargues that, had Mr.

Wood made the request for further information, he would have found out there was no tested fire stop system usingGG-266 for electrical cables in wood frame construction. [47] Finally, the nature of the advice is as set out in the Technical Information and the Announcement. Whitehorn argues that itwas prepared for use by the end users of the product such as electricians and plumbers and that it was reasonable for it to rely on thatinformation. Nuco, on the other hand, says that Whitehorn’s reliance was not reasonable because Mr.

Wood should not have acceptedwhat was in the Technical Information, but rather should have gone behind the information therein to determine whether the GG-266was compatible with electrical cable penetrations. [48] I am satisfied that there was a duty of care based on a special relationship between Whitehorn and Nuco. Clearly the TechnicalInformation was prepared for persons such as Mr. Wood. Therefore, Nuco could reasonably have foreseen that Mr. Wood would rely onthat information. Further, I find that Whitehorn’s reliance was reasonable. Nuco had the expertise with respect to its product. Mr.

Woodwas looking for specific information and the Technical Information provided that information. 2. Were Nuco’s Representations Untrue, Inaccurate or Misleading? [49] The Technical Information indicated that the GG-266 caulking is suitable for electrical cable penetrations and is compatiblewith power/communication cables. Whitehorn says that this is untrue, inaccurate or misleading. In this case, the GG-266 reacted with theelectrical cables, causing at least a discolouration to the cables and leading the City of Calgary inspector to conclude that there was apotentially hazardous situation.

At the time, Nuco was unable to provide any information to indicate that such a situation was nothazardous or that the discolouration did not and would not affect the viability of the wires themselves. Nuco eventually did provideevidence, the reliability of which is questioned by Whitehorn, that the integrity of the wires was not impacted. However, this was severalyears later in preparation for this trial.

There was nothing available at the time Whitehorn had to deal with the issue. [50] Whitehorn takes the position that anyone reading the Technical Information and other material would assume the GG-266 wascompatible with electrical cables. There was no limiting instruction to say that it was compatible only with certain cables and that oneshould consult other sources to find out which ones. Whitehorn’s position is that such a failure to inform is the same as an inaccuratemisrepresentation.

In support of that position, it cites Albionex, Allison v Noranda Inc., 2001 NBCA 67, 239 NBR (2d) 211 and Spinks vR, (FCA), [1996] 2 FC 563 (Fed CA). [51] Nuco responds that the Technical Information “directs” the reader to consult other resources. I find it does not do so withrespect to compatibility with power and communication cables and it does not do so when indicating that it is suitable for electrical cablepenetrations. It does talk about “ Mechanical and Electrical Application Charts” in a

section dealing with features and typical uses and itdoes refer to UL and ULC directories when talking about installation of the product and how to fill the space with the caulk. [52] I am satisfied that the representation that the GG-266 caulking is suitable for electrical cable penetrations is inaccurate andmisleading. We do not know whether the GG-266 caulking would react as it did with all electrical cable or just with the cable used in thisproject. The expert report prepared for Nuco referred to testing the expert had done using different electrical cable than that used by

Whitehorn and that cable tested also discoloured where the caulking was used. The Technical Information does not give the reader the impression that the suitability of GG-266 for electrical cable penetrations is limited to certain types. 3. Were the Representations Negligently Made? [ 53 ] Nuco argues that its product is sold to commercial, not retail, purchasers and that the Technical Information and the GG-266 Announcement are included in a large binder and field manual that they provide to all of their distributors.

A prospective purchaser, it is argued, must review all of the material in the binder and field manual relating to the product rather than simply rely on the Technical Information and the Announcement. [ 54 ] The difficulty with that, as confirmed by Nuco’s own evidence, is that the Technical Information and the Announcement were prepared for the end user of the product - the individual who is going to be installing the caulking such as electricians, plumbers and contractors. The product clearly is also sold at the retail level as that is how Mr. Wood purchased it.

It is not sold or distributed only through approved distributors. [ 55 ] It is clear that an end user reading the Technical Information and the Announcement would read that GG-266 is suitable for electrical cable penetrations. If there were conditions or limitations on that, then they should have been pointed out. They were not. Therefore, I find the representations to have been negligently made. 4. Did Whitehorn Rely, in a Reasonable Manner, on the Representations? [ 56 ] Mr.

Wood relied on the representations in the Technical Information and the Announcement, in particular with respect to the assertion that GG-266 had been tested and classified in accordance with the applicable codes and that it was suitable for electrical cable penetrations. [ 57 ] Nuco’s position is that Mr. Wood was required to go beyond the Technical Information and the Announcement and could not rely on them without further investigation. In particular, they point out that the Alberta Building Code (“ABC”) requires penetrations through fire rated walls to be “sealed by a fire stop system”.

The onus then, says Nuco, is on Whitehorn to make sure that they go to the appropriate guide to find out if this particular caulking has been tested with the planned building materials (wood frame walls) and penetrations (electrical cables). [ 58 ] The various directories in which one would search for this information were made exhibits in this trial. They are very large books with hundreds of pages in each setting out various tested systems. The Technical Information and the Announcement both indicate that the GG-266 is UL classified and ULC listed.

Both parties agree that if one were to search those directories, one would not find a tested fire stop system for wood frame construction using GG-266 with electrical penetrations. [ 59 ] Nuco also makes mention of information and directives set out in a City of Calgary manual which discusses fire stop systems and ratings. In my view, however, that is not relevant to this matter as the evidence indicated that the manual was not published until 2003 and, in any event, was not seen by Mr.

Wood. [ 60 ] From the evidence at trial, it appears that these numerous directories are generally not in the hands of electricians and plumbers, those persons for whom the Technical Information and Announcement were prepared. As well, the Technical Information and the Announcement do not direct the reader to consult the directories. They merely reference the directories. They say that GG-266 has been tested pursuant to various codes and then reference those codes.

They give instructions on how to install the GG-266 and then reference a directory in which the evidence indicates one would not find any reference to GG-266 used in wood frame construction with electrical cables. [ 61 ] I find that Mr. Wood did rely on the representations and that it was reasonable that he do so in light of the Technical Information and Announcement. I find the facts in this case to be similar to those in the Albionex decision.

[62] Subject to the following discussion with respect to damages, I find that the elements of negligent misrepresentation have beensatisfied by Whitehorn. D.

Damages [63] As I have found that Nuco breached both the implied warranty under the Sale of Goods Act and made negligentmisrepresentations, I now turn to the question of damages. [64] As a preliminary matter, Nuco points out that on the Technical Information sheet containing the alleged misrepresentationsmade by Nuco, there is a clause under “ Warranty Information” which reads as follows: NUCO Inc., warrants only that its product will meet its specifications. NUCO shall in no event be liable for incidental or consequentialdamage.

NUCO’s liability, expressed or implied is limited to the stated selling price of any goods found to be defective. [65] As a result, Nuco says that any damages suffered by Whitehorn are limited to the cost of the GG-266 which is $1,770.00. [66] Whitehorn responds that:

a) if the requirements of the Sale of Goods Act implied warranty are met, this statutory warranty can be ousted by contract only ifthere is clear and unambiguous language to that effect, which is not the case here (Hunter Engineering Co. v Syncrude Canada Ltd., (SCC), [1989] 1 SCR 426 at para. 140);

b) Whitehorn claims direct and foreseeable damages related to the requirement to remove all of the wiring and reinstall all newwiring, not incidental or consequential damages;

c) Whitehorn does not claim that the GG-266 is defective, but rather that the Technical Information misrepresented the use of theGG-266; and

d) an exclusionary clause set out in written literature or information, as opposed to a contract would not affect Nuco’s liability(Canada Building Materials v W.R. Metals of Canada Ltd., (ON SC), [1968] 1 OR 469 (HCJ)). [67] I am satisfied that the limitation set out in the Technical Information is not sufficient to oust the statutory requirements underthe Sale of Goods Act or to oust the liability for damages resulting from the negligent misrepresentations found above. [68] Whitehorn claims damages under a number of heads. I will deal with each in turn. 1.

Cost of removing and reinstalling the electrical and communication cables in the south wing of the building [69] Whitehorn claims a total of $64,385.54 for its costs in this regard. Nuco acknowledges the cost of $35,000.00 plus GST as setout in the invoices from Performer Electric to reinstall the wiring. The additional costs claimed by Whitehorn relate to use of causallabour on site to help remove the wires, clean up, and fire stop caulk the replaced wires as well as for the removal and reinstallation ofcommunication cables and the storage of the removed wires as evidence in the dispute between the parties.

Whitehorn also claims thecost of the new caulking used.

[ 70 ] Nuco points out that the casual labour was on site in any event working on the project and would have been paid regardless of this issue. At best, it asserts that as the wires were removed and reinstalled in March 2002, only invoices for that month should be reimbursed. It appears from the invoices from Performer Electric that the majority of the work was concluded in March 2002 with a little left to do in April. Whitehorn has claimed reimbursement for the casual labour for all of March and April.

I am satisfied that not all of the labour for those two months should be included and will set the sum of $7,000.00 to be reimbursed with respect to the casual labour. [ 71 ] The storage of the wires for review by Nuco should they wish (until they were stolen) is a cost directly related to this issue and will be compensated as well. That cost is $7,623.75. [ 72 ] Whitehorn claims for the reinstallation of the communication cable. Nuco says that there is no reference to the requirement to remove the communication cables, only the electrical cables.

In fact, both the electrical cables and the communication cables are covered in nonmetallic sheathed cable (NMSC) and this is the cable that was directed to be removed from the premises. The pictures show that this communication cable was caulked using GG-266. Since all NMSC cable was ordered by the City to be removed, this is a proper expense for which Whitehorn should be reimbursed. [ 73 ] The total due and owing to Whitehorn under this head of damages is therefore $61,618.58. 2.

Delay in completion of the project [ 74 ] Whitehorn asserts that the problems with the GG-266 caulking gave rise to delays in completion of the project, resulting in damages which it claims against Nuco. This is broken down into three claims:

a) additional financing costs - $88,275.62

b) additional site supervision costs - $17,212.50

c) additional management fees - $150,000. [ 75 ] Whitehorn claims that the project was delayed two months as a direct result of the need to pull out and replace the wiring in the south wing of the building. This delayed the drywalling in that area on which everything else relies. Whitehorn argues that, had the drywalling been completed earlier, the finishing could have been completed earlier and possession completed on schedule. As a result of this two-month delay, Whitehorn claims it incurred the additional costs referred to above.

They claim that 1½ months of the two-month delay relates directly to the wiring issue. [ 76 ] Nuco says that the delay cannot be traced to the issue of the wiring in the south wing and that any attempt to tie the delay to that issue is wholly speculative. [ 77 ] There is no doubt from the evidence that scheduled completion of the project was delayed by two months. The issue is whether that relates directly to the issue of replacing the electrical and communication cables in the south wing. [ 78 ] This was a large commercial project consisting of three phases.

The south wing was where the project started and as each phase was completed, those working on the project moved on to the next wing. The site meeting minutes starting March 5, 2002 and carrying on into September 2002 indicated delays on a number of matters, not just the electrical problem. In addition, the minutes in March and April 2002 reflected a need to have the electrical repair work done quickly in order to make up time on the schedule. The March 19, 2002 minutes indicate “electrical crew to catch up with delayed work”, “the drywall

schedule has been completed. We will need lots of cooperation to recover some of our lost time”. The April 2, 2002 minutes indicate “electrical should be caught back up in 2 weeks on the south side” , “request for a commitment from Performer Electric to leave as many men as possible to get back on schedule”. The minutes of the meetings after that date do not refer again to the delay caused by the electrical rewiring and the need to catch up.

[ 79 ] Mr. Wood indicated that as of October 2001, the scheduled walk through for the units in the south wing was set for the last two weeks of August 2002. That

schedule remained in place from October 2001 up to and including July and August 2002, well after the electrical issue arose in March 2002. No adjustment was made to the walk through schedule. Mr. Wood was unable to say that the delay in possession of the units to October 2002 was related to the electrical problems, although he did indicate that it was a factor. [ 80 ] On the evidence before me, I am not satisfied that the delay in the project and in the possession date of the units can be traced directly to the electrical issue.

I have already awarded damages to Whitehorn for the additional manpower to address the caulking issue. The minutes of the site meetings refer to other matters that caused delay. I therefore cannot find that the additional financing costs, supervision costs and additional management fees are related to the electrical issue with Nuco. There will be no award of damages for those costs. IV. Decision [ 81 ] The Plaintiff shall have judgment in the sum of $61,618.58 plus interest and costs. Heard on the 23 rd day of April, 2012. Dated at the City of Calgary, Alberta this 22 nd day of November, 2012. C.L.

Kenny J.C.Q.B.A. Appearances: Robert J. Simpson, Q.C. For the Plaintiff Michael D. Aasen/Brad Kudar for the Defendant Nuco