Impact Painting Ltd v Man-Shield (Alta) Construction Inc, 2017 ABQB 743

Court of Queen’s Bench of Alberta Citation: Impact Painting Ltd v Man-Shield (Alta) Construction Inc, 2017 ABQB 743 Date: 20171204 Docket: 1203 17245 Registry: Edmonton Between: Impact Painting Ltd. Plaintiff / Defendant by Counterclaim - and - Man-Shield (Alta) Construction Inc. Defendant / Plaintiff by Counterclaim _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice B.R.

Burrows _______________________________________________________ [ 1 ] Impact Painting Ltd. and Man-Shield (Alta) Construction Inc. are in a dispute regarding change orders, extras and back charges in relation to Impact’s involvement as the painting subcontractor in a 2011-12 construction project for which Man-Shield was the general contractor. The project was the construction of the Laurel Retirement Community in Edmonton.

The owner was Laurel Facility Inc. [ 2 ] There were three contracts between Man-Shield and Impact: a subcontract for painting dated March 29, 2011 for $248,850.00; a subcontract for wallpaper installation dated June 23, 2011 for $98,700.00; and a subcontract for painting of the “DAL Wing” of the project dated March 24, 2012 for $65,310.00. [ 3 ] The DAL Wing of the project represented a change in the concept for one floor of the four floor seniors’ residence.

In early 2012, when construction according to the original plan was significantly advanced, the owner obtained government approval and funding to have one floor converted to a residence for dementia patients. This necessitated substantial renovation of that floor before the original work was fully completed.

The evidence indicated that Man-Shield’s attempt to accommodate the owner with respect to this late change in the project created significant strain for all involved in the project, including both Man-Shield and Impact. [ 4 ] Impact had been Man-Shield’s painting subcontractor on previous projects and they had a good working relationship which was carried over to the Laurel project. Both Impact and Man-Shield expected that they would work together on Man-Shield projects following Laurel.

Indeed, there was another senior residence project for the same owner, the Lewis Estates project, which began before Laurel was complete. Impact anticipated being the painting subcontractor on that project though there was never any formal commitment to that effect.

[5] During the course of Impact’s work at Laurel, the relationship between Man-Shield and Impact soured and, in the end, brokedown completely. The first indication of the souring in the evidence appears in early July 2012.

As I understand the evidence, thedifficulties arose because of the late addition of the DAL Wing renovation to the project and the difficulty meeting the deadlines Man-Shield and its subcontractors, including Impact, had agreed to. [6] On July 3, 2012 Jimmy Arlia, Man-Shield’s superintendent for the Laurel project e-mailed upper management: Guys, our flooring contractor and painter are weak and do not seem to understand the urgency of the DAL so I suggest they do not getpaid anything for a long time.

Neither party has met any dates we have needed and continue to fail, I don’t think either contractor [is]capable on our future projects. . . [7] In the email discussion that followed other members of Man-Shield management dissented from Mr. Arlia’s view andother’s agreed. The email chain does not record any decision taken.

Kevin Juby, a Man-Shield partner who functioned, as I understandthe evidence, as a high-level overseer of the project, visiting the site once or twice a month, advised that Impact’s problem was that it hadtoo few painters on the job. “Impact has 2 men on site for painting [for which] typically 8 to 10 are required.” He advised that he hadarranged for a Winnipeg painting contractor, Hay Decorating, to send three men to assist Impact. [8] On July 4, Man-Shield gave Impact this notice: This email is an official notice that ManShield will be supplying painters to complete Impact’s scope of work at the Laurel RetirementResidence.

Also, Impact Painting has agreed to this and all costs plus 10% overhead will be deducted from any monies owing to ImpactPainting. [9] Man-Shield’s costs in relation to the painters it brought in are one of the back charges in dispute in this action and will beconsidered below. The present point is that Man-Shield’s early July 2012 concerns and its response to them evidence that the formerlygood relationship between the parties had by early July begun to seriously deteriorate. [10] On August 25, 2012, Impact made its final progress claim on each of the contracts indicating that its scope of work was 100%complete.

Mounsef Mounsef, Impact’s principal, testified that Man-Shield instructed Impact to state in the August progress claim that itswork was 100% completion so that it could claim full payment from the owner. He testified that Impact performed the last work it didon the project, other than remedying deficiencies, on September 24, 2012. [11] On October 25, 2012, Impact issued nine invoices claiming “extras”. They, and a tenth invoice which was issued on August25, 2012 are the subject of Impact’s claim against Man-Shield in this action. Man-Shield’s position is that none of the 11 invoices ispayable.

Impact had previously issued six invoices for extras which Man-Shield does not dispute. The total of all of Impact’s invoicesfor extras, accepted and disputed, is $133,964.39. Of that, Man-Shield does not dispute invoices totalling $6,879.49. [12] On November 7, 2012, Impact registered a builder’s lien against the title to the land on which the project was constructed. Itclaimed $237,676.12. [13] On November 12, 2012, Man-Shield issued seven back charges to Impact. It had previously issued five back charges. Impactdisputes all 12 back charges.

The total of the 12 back charges is $208,579.73. [14] On November 23, 2012, Man-Shield obtained an Order directing the discharge of the builder’s lien upon payment into courtof the amount claimed in the lien.

The same day, Man-Shield deposited a bond in that amount in court and the builder’s lien wasdischarged from the owner’s title. [15] Impact commenced this action on April 3, 2013, claiming judgment in the amount of its lien claim, $237,676 plus interest andother remedies. [16] Man-Shield counterclaimed alleging that Impact had not fulfilled its obligations under the contracts by not engaging sufficientwork forces, that Man-Shield had mitigated the loss and delay that would have resulted by retaining alternate employees andsubcontractors and thereby incurred an expense of $105,000 in excess of any amount owing to Impact.

It claimed damages in thatamount. [17] Impact included the owner, Laurel Facility Inc., as a defendant in this action but did not claim any relief against it. Iunderstand that the owner has not participate in the litigation at any point. It did not participate in the trial. [18] In an agreed statement of facts filed at the commencement of the trial, the parties agreed that Man-Shield has paid Impact$349,588.23 in respect of the contracts. By my understanding of Impact’s calculations, Impact alleges that Man-Shield owes it a further$235,281.16.

By my understanding of Man-Shield’s calculations, at least as they stood at the start of the trial, Man-Shield alleged that itpaid $101,013.47 more than it ought to have and initially sought to recover that amount. During the trial, Man-Shield withdrew three ofits back charges totalling $79,307.98. By my calculation this reduced Man-Shield’s counterclaim to $21,075.49. Law regarding claims for “extras” [19] In Ridge Rock Construction Ltd. v. Beckmyer Builder Ltd, 2006 ABQB 850, Hughes, J. discussed claims by subcontractorswhere no written change orders have been issued.

She adopted the following passage from Kei-Ron Holdings Ltd. v. Coquihalla MotorInn Ltd. (BC SC), [1996] BCJ No. 1237 (S.C.) at paragraph 41: In determining liability for the cost of extra work, the first question to be answered is whether the work performed was, in fact, extrawork; that is, it did not fall within the scope of the work originally contemplated by the contract. If so, did the owner give instructions,either express or implied, that the work be done or was the work otherwise authorized by the owner? Next, was the owner informed ornecessarily aware that the extra work would increase the cost?

Finally, did the owner waive the provision requiring changes to be made

in writing or acquiesce in ignoring those provisions? If the plaintiff can establish these elements, the defendant is liable to pay a reasonable amount for the extra work. These elements must be proved with respect to each extra claimed. [ 20 ] Both Counsel accepted this as an accurate statement of the law. I will apply it to Impact’s extras claims with one adjustment. Kei-Ron Holdings Ltd . was an action by a contractor against the owner. Here the dispute is between the general contractor and a subcontractor. The owner has no interest in this dispute. The terms used in Kei-Ron require adjustment.

The onus is on Impact to establish with respect to each disputed extra that: 1. The work was not within Impact’s scope of work, 2. Man-Shield either expressly or impliedly instructed Impact to do the work, 3. Man-Shield was informed or would necessarily have known that the extra work would increase its cost, 4. Man-Shield waived or acquiesced in not following the formal change order provisions. Painting Subcontract - Scope of the Work [ 21 ] The subcontract between Man-Shield and Impact defined the scope of the work in its Appendix A: Appendix A The attached is a brief

summary of your scope of work. A more detailed description of your scope of work will follow with your contract. Base Bid $237,000.00 Supply and install based on quote dated March 23, 2011. [ 22 ] There is no evidence of a “more detailed description of your scope of work” ever having followed. [ 23 ] The “quote dated March 23, 2011” was Impact’s Contract Proposal of that date.

It described the work as follows: Project includes: All interior Finishes, as per specifications, architectural drawings & Addendums to date Including: ♦ 2 coat application system in interior of suites only – walls, doors & frames. ♦ Common area chair rail support, crown moldings & feature trim work. ♦ Exterior fence, trellis, and gazebo only – no painting on building exterior. ♦ All ceilings to be primed & textured (by others) ♦ All baseboard to be pre finished material only. ♦ No Staining – all stain grade to be pre finished (by others). ♦ No Wallpaper supply or Install. ♦ Does not include any Special coatings (Epoxy). [ 24 ] In my view, the description of the work in the Impact’s Contract Proposal was incorporated by reference into the contract and constitutes the parties’ agreement as to the scope of work. [ 25 ] Most of the specific items listed under the heading “Including” are more in the nature of exclusions than inclusions.

Whether or not particular work done by Impact is within its scope of work depends on whether the work in question is an “interior finish” described in the specifications and architectural drawings as qualified by the “Including” list in the Contract Proposal.

Where an item of work included in the specifications and drawings is excluded by the “Including” list in the Contract Proposal, it is not part of the Impact’s scope of work. [ 26 ] I note that in my view, the first item in the “Including” list (2 coat application system in interior of suites only – walls, doors & frames) is not properly interpreted as limiting the scope to painting in the suites only. I do not understand there to be any dispute, for example, that Impact’s scope of work included the walls of common areas (though, as will be discussed below, there is a dispute about common area ceilings).

Back Charges [ 27 ] I was not referred to any authority as to the tests to be applied to determine the legitimacy of a back charge claimed by a general contractor from a subcontractor. [ 28 ] In my view, the onus is on the party claiming a back charge to prove that: 1. The back charge is for an expense actually, necessarily and reasonably incurred by the party claiming the back charge.

2. By the terms of the subcontract, or by some other agreement between the parties, the charge is one, or is in relation to some task, for which the subcontractor undertook responsibility. 3. The general contractor incurred the expense because the subcontractor defaulted on the responsibility to which the charge relates. 4.

Prior to incurring the charge, the general contractor gave notice to the subcontractor of its default and a reasonable opportunity to cure it. [ 29 ] There is no provision in the subcontract in relation to back charges though at least two provisions (Condition #14 and Condition #18.1) mention circumstances in which the Man-Shield would have the right to back charge Impact. [ 30 ] Impact’s Contract Proposal contained the following provision: We do not accept any back charges unless approved by Impact Painting Ltd. in writing, and has been given 48 hours notice in advance, of any alleged work necessitating a back charge. [ 31 ] In my view, that provision did not become part of the contract.

It was not part of the Contract Proposal’s description of the scope of work which, as noted, became part of the subcontract because it was incorporated by the reference to it in Appendix A to the subcontract. By virtue of the entire contract provision in the subcontract, any part of Impact’s Contract Proposal that was not incorporated by reference into the subcontract is not part of the subcontract.

Assessment of Disputed Extras and Back Charges [ 32 ] In the remainder of these Reasons I will deal with each of the extras claimed by Impact which is disputed by Man-Shield and each of the back charges by Man-Shield which is disputed by Impact. [ 33 ] In an appendix to these Reasons I provide a table which sets out the position of each party with regard to their respective entitlements and obligations in relation to the project and the determinations I have made with respect to each item. It represents my calculation of the amount of the judgment I award.

I have taken the amounts in the table from, or have based those amounts on, the figures in the schedules to the Agreed Statement of Facts the parties provided at the commencement of the trial. I am not certain that those figures properly account for GST in all cases (particularly in relation to change orders which are not in dispute). I leave it to the parties to advise if they require my assistance in resolving any GST or other arithmetical issue that arises between them in relation to the calculations set out in the table.

Extra Claim - Impact Invoice #680-12 - Repaint Drywall Fixes [ 34 ] Impact issued Invoice #680-12 for $19,918.50 on August 25, 2012. The invoice describes the work as follows: priming, and painting of all drywall patches repaired due to poor workmanship after final coat of paint was applied in all suites and common areas [ 35 ] The invoice indicated that the amount claimed was based on 334 man hours @ 55.00/hr ($18370.00), $600 for paint, and $948.50 for GST. [ 36 ] Mr. Mounsef testified that another trade’s poor workmanship on drywall installation gave rise to the need for this further painting.

The drywall had been installed over electrical plugs and switches which were, as a result, buried in the wall. He testified that Man-Shield had instructed Impact to paint the drywall ignoring the deficiencies in the drywall workmanship. After Impact had painted the drywall, repairs were effected and Man-Shield asked Impact to repaint. Mr. Mounsef could not say exactly on what date the work had been performed.

The invoice was issued before the relationship between Impact and Man-Shield deteriorated. [ 37 ] On September 28, 2012, Man-Shield’s General Manager, Peter Schwind, emailed Shaun Smeding, the project superintendent, about Impact’s invoices. The message he sent is not in evidence but from the replies that are in evidence it appears that he was inquiring about several invoices received from Impact including invoice #680-12. He sent copies of his message to Adam Robertson, the assistant project manager, and to Jimmy Arlia, the project superintendent. [ 38 ] Mr.

Robertson’s reply with regard to invoice #680-12 said: Inv 680-12 - $18,970.00 [before GST] - This is an invoice that Mounsef has sent to us hoping to get paid as he believes we are backcharging ATEK for the work. This is his cost to repaint and repair after we had Bobby McConnell do the drywall repairs for ATEK. I believe Kevin/Jimmy told him to put a cost together for this. [ 39 ] Mr. Arlia replied with regard to all the Impact invoices about which Mr. Schwind had inquired: They are all legit . . . [ 40 ] In a second email sent in reply Mr.

Arlia said: We need to put those backcharges together so Shaun let Adam know which ones are for which including Bobby’s repair work, thanks. [ 41 ] Mr. Smeding replied: Here’s what I know in regard to all of Moose’s [Mr. Mounsef] invoices. . . .

I’ve also attached the hours from Bobby’s guys, and who to charge each

section out to. . . Inv#680-12 should all be charged to Atek. The majority of that repair work was locating buried electrical boxes, or just fixing at boxes where it was cut to ( sic ) big. [ 42 ] Mr. Schwind confirmed in his testimony that Man-Shield backcharged Impact’s invoice #680-12 to the drywall subcontractor. There was a lawsuit between Man-Shield and the drywall subcontractor in which Man-Shield claimed this backcharge, amongst other things. The lawsuit was settled. The settlement did not address the backcharge specifically. Mr.

Schwind confirmed that Man-Shield paid the contractor who fixed the drywall for his work though it did not pay Impact’s invoice. [ 43 ] I find that Impact performed the work described in its invoice 680-12. The scope of the work it contracted to do did not include repainting drywall after the consequences of poor workmanship by the drywall contractor were remedied. The correspondence among Man-Shield staff in reaction to invoice 680-12 shows, and I find, that Man-Shield requested this work, was aware that it would increase the cost and waived any deviation from change order procedure contemplated in the contract.

That Man-Shield sued the drywall subcontractor to recover this payment justifies the conclusion that it recognized that Impact was entitled to this payment and that it was responsible for it. [ 44 ] I find that Impact is entitled to recover the amount of Invoice #680-12, $19,918.50 from Man-Shield. Extra Claim - Impact Invoice #714-12 - Paint Basement Floors and Heaters [ 45 ] Impact issued Invoice #714-12 on October 25, 2012.

It was for $4701.90 made up of: $3200 for “paint floors in basement – Not in contract” $678 for materials, and $600.00 for “paint heaters in stairwells to basement as per Shaun – ManSheild” $223.90 for GST Painting Basement Floors [ 46 ] Mr. Mounsef testified that the work was orally requested, that Man-Shield needed it to be done quickly, and that there was an understanding between Impact and Man-Shield that Man-Shield would pay for it. Mr. Schwind testified that the work was not requested.

Kevin Juby testified that he believed Impact painted the basement floors, but so far as he was aware, Impact did not have approval to do it. There is no evidence as to when this work was done, though I assume that it was long before the date of the invoice, October 25, 2012. [ 47 ] It does not appear to be in issue that the painting of the basement floors was not in Impact’s scope of work. I can find no specific reference to painting of basement floors in the specifications which are Appendix B to the contract.

I can find no general description of the areas and surfaces to be painted that would include basement floors. No witness identified any provision in the specification that includes painting basement floors. Neither did either Counsel. I find that the painting of basement floors was not within Impact’s scope of work. [ 48 ] The issue appears to be as to whether Impact’s forces painted the basement floors on its own initiative, perhaps by mistake as to the scope of its work, or on the instruction of Man-Shield. The evidence amounts to Mr. Mounsef asserting that Man-Shield instructed the work and Mr.

Schwind asserting that Man-Shield did not. [ 49 ] Mr. Mounsef did not identify the Man-Shield person who gave the instruction. His evidence included no particulars of the instruction whatsoever. The onus is on Impact to show on a balance of probabilities that Man-Shield either expressly or impliedly instructed that this work be done, knew that painting the basement floor would increase its cost, and was party to the ignoring of the formal change order requirements. It has not satisfied that onus. [ 50 ] Impact has not established that it is entitled to be paid for painting the basement floors.

Painting heaters [ 51 ] Mr. Smeding acknowledged that he requested that the heaters be painted. He understood that this was within Impact’s scope of work and that they were not painted amounted to a deficiency. [ 52 ] The specifications in item 3.11.1 say: Paint exposed conduits, piping, hangers ductwork and other mechanical and electrical equipment unless specified otherwise. . . . [ 53 ] The heaters in question come within “other mechanical equipment”.

The “Including” list in the Contract Proposal does not exclude painting mechanical equipment from Impact’s scope. [ 54 ] Impact has not established that the painting of heaters in Invoice #714-12 is not within its scope of work. It is not entitled to be paid any portion of that invoice. Extra Claim - Impact Invoice #715-12 - Window/door fixes [ 55 ] Impact issued Invoice #715-12 on October 25, 2012 claiming $22,932.00 for the following work:

Additional Caulking of all windows and door casings on main floor due to shiming which was required as jambs were undersized and additional MDF filler pieces were required. Additional Caulking and painting of all interior door casing on All remaining floors due to improper sizing of jambs additional MDF filler pieces required. [ 56 ] The main floor work was billed at $3640.00. The work on the remaining floors was billed at $18,200.00. GST was $1092.00. [ 57 ] There can be no doubt that the work described in the invoice was not part of Impact’s scope of work.

The main point in dispute, however, is whether all of the work described in the invoice was done. [ 58 ] Mr. Mounsef testified that the door and window jambs supplied for the project were not the correct size. As I understand his evidence, the supplied jambs were too small for their intended door and window openings. Man-Shield recognized the problem after Impact had primed and painted the jambs. When the jambs were installed in their openings, Man-Shield used fibreboard to eliminate the gap between the jamb and the opening.

Impact applied caulking to seal the joint between the fibreboard and the jamb and repainted. Mr. Mounsef testified that this was required for all door and window jambs on all floors of the building. [ 59 ] Man-Shield witnesses acknowledged that the problem had existed and that it was remedied in the manner Mr. Mounsef described. Mr. Smeding testified that this remedy was necessary for every door and window on the main floor.

His memory, however, was that the error was “caught” for the upper floors and that proper sized door and window jambs were supplied. [ 60 ] The point in dispute is whether the door and window door fixes were required for just the main floor or for all floors. In my view, the point ought to have been readily resolvable by evidence beyond Mr. Mounsef’s bare statement that the work was done on all floors and Mr. Smeding’s evidence that he “thought” it was done only on the main floor. No Impact employee time records showing that employees were engaged in this work for the number of hours Mr.

Mounsef used to calculate the amount of the invoice were offered in evidence. If there was a problem with the size of door and window jambs supplied for the entire building, or any part of it, one would expect Man-Shield would have some documentary evidence of it which would have been produced to Impact in the discovery stages of this litigation and would have been put in evidence. [ 61 ] The onus is on Impact to prove, among other things, that the work claimed for was done. The evidence presented, largely Mr. Smeding’s acknowledgement of the problem and Impact’s

part in remedying it on the main floor, satisfies Impact’s onus in respect of the claim made for this work on the main floor. It’s onus for the remainder of the work claimed for is not satisfied. [ 62 ] Impact has proved entitlement to $3640 plus $182 GST on this extra. Extra Claim – Impact Invoice #716-12 – Repaint Suite Doors [ 63 ] Impact issued invoice #716-12 on October 25, 2012 claiming $6300.00 for: Repainting of Metal suite doors due to bondo repairs and replacement of doors after finish coat.

Damage was noted to ManShield site staff and we were told to paint it as ManShield (Brent) will deal with it at a later date. Impact was forced to paint all doors. Includes all prep necessary to cover all finished floors and walls. [ 64 ] The invoice indicates that 40 doors were repainted at a cost of $150.00 each. [ 65 ] Mr. Mounsef testified that the doors were received on site in a damaged state. Man-Shield instructed that they be painted and installed despite the damage. Later Man-Shield fixed the damage and the damaged doors were repainted.

It was necessary to uninstall them and spray paint them in a “mini-spray booth”. [ 66 ] Brent Cameron, Man-Shield’s foreman on the project, to whom the invoice referred, testified that he recalled a problem with a few metal suite doors – perhaps five doors. He or some other member of Man-Sheild staff fixed them. They had been painted before they were fixed. He denied directing that they be repainted. He testified that he did not have authority to give such directions. [ 67 ] Mr. Smeding acknowledged in his testimony that damaged suite doors had had to be repainted. He did not know how many.

He did not recall that a mini spray booth had been required for the repainting. [ 68 ] In my view, the tests Impact must satisfy to succeed on this extra are satisfied with respect to five doors. The repainting was not in the scope of Impact’s work under the contract. Mr. Smeding’s evidence establishes that Impact was instructed to repaint the repaired doors. Man-Shield would have known that the repainting would increase its costs and it acquiesced in not following the formal change order procedures. [ 69 ] Impact has not however satisfied its onus of proving that 40 doors were repainted.

Again the absence of any documentary evidence created at the time of the repainting by Impact employees or management, and the absence at trial of any documentary evidence obtained by Impact from Man-Shield in the discovery process referring to its having received 40 damaged doors from its supplier, along with the absence to any reference to or explanation for the absence of such documentation, is significant. I am not satisfied that 40 doors were repainted. [ 70 ] Impact is entitled to an extra for the repainting of five doors at $150.00 each. With GST the entitlement is $787.50.

Extra Claim – Impact Invoice #717-12 – Paint offsite doors [ 71 ] Impact issued invoice #717-12 on October 25, 2012 claiming $4200.00 for: Painting of additional interior doors that were sent to other location as Impact was to be painter on second site. Approximately 400 doors.

[ 72 ] Mr. Mounsef testified that Man-Shield provided pallets of interior doors for painting. Impact painted 400 more doors than were needed for the Laurel project. He understood the extra doors were moved to the Lewis Estates project where they would be used. At the time, he anticipated that Impact would be the painting subcontractor for that project and that it would be paid for the extra painting under that subcontract. He testified that Man-Shield advised him of this arrangement. He testified that Impact painted what was supplied.

They did not know or keep track of whether the doors they were painting were the number required for the Laurel project. He testified that he spoke to Mr. Smeding and Mr. Cameron about this. He was told he did not need to get a change order because he was going to be the painter on the later project. In the end, he was not the painter on the later project. The original route to Impact being compensated for this extra work was blocked. Accordingly he issued the invoice. [ 73 ] Five Man-Shield employees testified in relation to this extra. One, Mr. Schwind, did not have any knowledge of the matter. Two, Mr.

Arlia and Mr. Smeding, did not remember anything about the matter. One, Mr. Juby denied that there were any doors painted at Laurel and shipped to another project. [ 74 ] The remaining Man-Shield witness, Mr. Cameron, confirmed that there were doors originally delivered to the Laurel project which were moved off site. He testified that there was a “moving storage pod worth” of doors shipped off site and stored elsewhere. According to him, most of the doors were unpainted. Somewhere between 20 and 60 of them were painted. He estimated that there were hundreds of unpainted doors that were shipped off site.

He did not recall talking to Mr. Mounsef about them going to the Lewis Estate project. He did not know if they actually went to the Lewis Estate project. He testified that the doors were rotting and thought they were a terrible waste. [ 75 ] Painting doors not required for the Laurel project was clearly beyond the scope of Impact’s work. On the basis of Mr. Cameron’s admission, I find that Impact did paint doors which were extra to the Laurel project requirements. Further, I find that they did so in response to Man-Shield’s instructions to paint the doors provided to them.

When it was clear that the doors were surplus to the Laurel project requirement, Man-Shield would have known that Impact had performed work out of its scope and that Man-Shield’s costs would therefore increase. I also find that the change order process was either waived or that Man-Shield acquiesced in it not being followed. [ 76 ] As to how many surplus doors Impact painted, Mr. Mounsef testified that he counted them. Mr. Cameron testified that there were hundreds of doors shipped off site that were not painted. He estimated that somewhere between 20 and 60 were painted. I prefer Mr.

Mounsef’s definite evidence based on his own counting of the doors in question to Mr. Cameron’s inexact estimate. I find on the basis of Mr. Mounsef’s evidence that there were 400 such doors and allow this extra. Extra Claim – Impact Invoice #718-12 – Paint exterior vents [ 77 ] Impact issued invoice #718-12 on October 25, 2012 claiming $3754.80 for: Painting of bath fan vent for exterior of Building Supply of spray cans of all three colours for touch ups after install [ 78 ] The invoice indicates that 168 such vents were painted. Impact charged $20 per vent. For the supplied paint it charged $216.00. [ 79 ] Mr.

Mounsef testified that Man-Shield requested that Impact paint the exterior vents to match the exterior cladding on the building. Although at the time of the request, Mr. Mounsef recognized that exterior painting was not in Impact’s scope of work, Impact did the painting requested without asking for payment because “we were courting them a bit”.

In effect, Impact performed the work without asking for payment as a gesture of goodwill to maintain a good relationship with Man-Shield from whom Impact anticipated getting further work in the future. [ 80 ] When the relationship between Impact and Man-Shield deteriorated Mr. Mounsef issued the invoice. It was apparent that there would be no future work from Man-Shield. [ 81 ] Though this work was not within Impact’s scope of work, and though Man-Shield at least impliedly requested that it be done, it was done on the implicit understanding at the time it was done, that it would not be charged for.

Man-Shield was not informed and did not know at the time the work was done that it’s costs would be increased by Impact’s performance of this work. The third element required for a valid extra as noted above is missing. I disallow this extra.

Extra Claim – Impact Invoice #719-12 – Paint Common Area Ceilings [ 82 ] Impact issued invoice #719-12 on October 25, 2012 claiming $15,225.00 for: Painting of all common area Ceilings in Building As per contract Proposal – all ceilings to be primed and textured by others Dining room, family dining Room, games Room, Common area bathrooms Elevator lobbies all floors Laundry rooms, all areas with bulkheads. Main floor common area bulkheads, Etc. [ 83 ] Impact painted the common area ceilings. Impact’s position is that the painting of ceilings, any ceilings, was not part of its scope of work. Mr.

Mounsef testified that Man-Shield personal instructed that they be painted and that Impact advised them that painting ceilings was not in Impact’s scope. There was no discussion about a change order being issued. Mr. Mounsef testified that he assumed Man-Shield knew it was an extra.

[ 84 ] Impact relies on one of the items in the “Including” list previously discussed as the basis for its position that the painting of ceilings was not part of its scope. The items says, “All ceilings to be primed & textured (by others).” Impact submits that this provision excludes all ceiling painting from the contract. [ 85 ] There is no dispute that it was not in Impact’s scope to paint the ceilings in the suites. All suite ceilings were to be textured. The contractor that did the texturing would do priming of the suite ceilings.

Impact had no involvement with suite ceilings. [ 86 ] However, ceilings in common areas were not textured. They were flat surfaces that required painting. [ 87 ] In my view, Impact’s

interpretation of the “Including” list item in question stretches its meaning too far. In my view, the effect of the item was to exclude the texturing and priming of all ceilings that required texturing and priming. The point was that any texturing and priming of ceilings for which texturing and priming was specified was to be done by others, not by Impact. The item did not apply to common area ceilings as texturing was not specified for them. [ 88 ] The painting of common area ceilings was not otherwise excluded by any item in the “Including” list.

It was within the scope of work which Impact agreed to do. [ 89 ] This extra claim is denied. Extra Claim – Impact Invoice #732-12 – Paint Exterior Doors [ 90 ] Impact issued invoice #732-12 on October 25, 2012 claiming $630.00 for: Painting of 4 exterior metal doors that were replaced due to faulty wiring 2 @ shipping and receiving and 2 at rear doors at Family dining. The amount of the invoice was calculated at $150 per door plus GST. [ 91 ] Mr. Mounsef testified that metal exterior doors that had been painted had to be replaced because of some issue relating to the fire alarm.

The replacement doors had to be painted. This work was required very late in the project. Indeed, Mr. Mounsef testified that this extra work was done on September 24, 2012, a date significant to the timeliness of the registration of Impact’s builder’s lien. [ 92 ] Neither of the two Man-Shield witnesses who were asked about this matter disputed Mr. Mounsef’s evidence. Mr. Schwind noted that there was no change order with regard to this work. He agreed that it was possible that there was a defect in the original doors, that they were replaced, and that Impact painted them. Mr.

Arlia testified that he remembered some issue about this and agreed that this type of thing was not “untypical” in his experience. [ 93 ] I find that Impact has proved the necessary elements of a valid “extra” in this instance. This extra is allowed.

Extra Claim – Impact Invoice #731-12 – Paint around medicine cabinets [ 94 ] Impact issued invoice #731-12 on October 25, 2012 claiming $2173.50 for: Prime and paint around medicine cabinets in DAL wing of building as new cabinets did not work in existing opening of old style cabinets drywall repaired by others and Painted by Impact – 3 coats [ 95 ] Impact charged $45.00 each for painting around 46 cabinets plus GST. [ 96 ] As I understood Mr.

Mounsef’s evidence in relation to this extra, as a result of the DAL Wing being intended for dementia patients, Alberta Health Services required that the medicine cabinets which had being installed in the pre-renovation work be replaced with lockable medicine cabinets. The replacement cabinets were smaller than the original cabinets. As a result of the replacement, repainting was required. This charge is for that repainting. [ 97 ] Two Man-Shield employees who testified, Mr. Alia and Mr.

Ladoucer, remembered that there had been an issue about the medicine cabinets but could not remember whether or not it had significance to Impact. [ 98 ] As this work related to the DAL renovation, it is the scope of the third subcontract which must be considered. The contract described Impact’s scope by reference to its quote of February 22, 2012, which the contract incorporated by reference.

The quote described the work as “All interior Finishes, as per specifications, architectural drawings and Addendums to date.” There was no “Including” list as there was in the case of the original painting quote and subcontract. [ 99 ] As I understand the evidence, painting relating to the medicine cabinets installed before the renovation needed to be redone because the original medicine cabinets were replaced by new ones in the renovation. That areas previously painted had to be repainted does not, in these unique circumstances, establish that the work was out of scope.

Repainting would only have that significance if both the original painting and the repainting were done as part of the DAL renovation. As I understand the evidence, that is not the case. The original painting was under the original contract and the repainting was under the DAL contract. It has not therefore been shown that the painting for which the invoice was issued was out of Impact’s scope of work. [ 100 ] This extra is disallowed. Extra Claim – Impact Invoice #720-12 – Reverse Contract Deduction [ 101 ] Impact issued invoice #720-12 on October 25, 2012 claiming $47, 250.00 for: Progress Claim #9

Outstanding amount from Painting contract Amount Deducted from original contract with no supporting documentation As such amount is now due and payable [ 102 ] On June 22, 2011, about 3 months after the painting subcontract was signed, Man-Shield issued a change order, Change Order #1, which deducted $47,000 from the contract. The change order provided no particulars or explanation except, “deduction from painting costs”. The change order noted that it was “Internal” which Mr. Schwind testified meant that the change did not affect the owner.

I understand that to mean that it only reduced what Man-Shield was obliged to pay Impact not what the owner was obliged to pay Man-Shield. [ 103 ] The next day, June 23, 2011, Man-Shield and Impact entered the Wallpaper contract. Impact agreed to install the wallpaper specified for the project for $94,000 plus GST. Impact was not to supply the wallpaper, only to install it. [ 104 ] On November 25, 2011, Impact submitted its first progress payment claim under the painting contract. It set out the base contract amount, $237,000 and then showed the change orders which had been approved to date.

These included Change Order #1 which Impact stated to be a deduction of $45,000. It described that change order as “Wallpaper”. [ 105 ] Each month thereafter Impact submitted a further progress payment.

Each of them repeated the reference to Change Order #1, a $45,000 deduction from the contract price in relation to “Wallpaper.” The eighth progress payment claim dated August 25, 2012, in which Impact stated that its work was 100% complete, referenced the $45,000 contract deduction of Change Order #1 just as all the previous progress claims had. [ 106 ] The amount of the Change Order #1 deduction recognized by Impact in the progress payments was $45,000. The amount of the deduction actually stated in Man-Shield’s change order document was $47,000.

This discrepancy was remedied on May 25, 2012, when Man-Shield issued a change order adding $2000 to the contract. The amount of the deduction was thereby recognized to be $45,000 not $47,000. The May 25 revision described the change as follows: Correction to Wall Paper Deduction [ 107 ] On October 25, 2012, Impact issued a ninth progress claim, Invoice #720-12, claiming back the $45,000 which had been deducted by Change Order #1. It also claimed GST of $2250.00. [ 108 ] Impact’s quote for the painting subcontract, as noted, expressly excluded wallpaper.

One item on the “Including” list was “No Wallpaper supply or install”. I have noted that the scope description in the quote was incorporated by reference to the painting contract and contributes to the definition of the scope of Impact’s work. Under the original contract, Impact had no obligation to supply or install wallpaper. [ 109 ] Mr. Mounsef testified that at the time of Change Order #1, Impact agreed to permit Man-Shield to take $45,000 out of Impact’s painting contract. This, he testified, was done because there wasn’t enough money in the project.

It was agreed that Impact would recover the $45,000 in the contract that it was anticipated it would be awarded on the Lewis Estates project. When the relationship between Impact and Man-Shield deteriorated and it became clear that Impact would not be awarded a contract on the Lewis Estates project, Mr. Mounsef issued Invoice #720-12 to recover the $45,000 which had been deducted. [ 110 ] Mr. Schwind, in his testimony, rejected Mr.

Mounsef’s suggestion that $45,000 was taken out of the Laurel painting contract because there was not enough profit for Man-Shield in the project and that Impact would recover the $45,000 on its anticipated Lewis Estates painting contract. [ 111 ] Mr. Mounsef’s explanation for Change Order #1 is difficult to credit. All of the documentation relating to the $45,000 deduction, except Change Order #1 itself, refers to the deduction as being with respect to wallpaper. The deduction occurred at the time the Wallpaper subcontract was entered.

The evidence does not explain however, why Impact accepted a $45,000 deduction relating to wallpaper from a painting contract that did not include the supply or installation of wallpaper. [ 112 ] In any event, in my view, the documentation preceding the deterioration of relations between the parties clearly establishes that Impact did agree to the deduction. There is no hint in the documentation that Impact’s agreement was in any way conditional. Impact’s unilateral attempt to reverse the deduction must fail. I disallow this extra.

Back Charges relating to Hays Decorating supply painters [ 113 ] As previously noted, in July 2012, Man-Shield concluded that Impact required assistance to complete the work it had undertaken on the project. It gave Impact notice that it would be suppling painters to complete Impact’s scope or work. The notice recorded that Impact had agreed to its doing so and had agreed that all costs plus 10% overhead would be deducted from any monies owing to Impact. [ 114 ] Mr.

Mounsef responded to the e-mail by which Man-Shield gave that notice requesting an adjustment to the wording to reflect that the painters supplied by Man-Shield would work “under the guidance of Impact Painting.” His suggested adjusted wording did not challenge either Man-Shield’s conclusion that additional painters were required, or its notice that it would back charge the cost to Impact. [ 115 ] Whether or not Impact would guide the work of the supply painters was not discussed further. Man-Shield brought in painters from Hays Decorating, a Winnipeg firm.

It issued four back charges in respect of the costs it incurred: 1. July 10, 2012 - Back charge #85 for $746.55 - for hotel costs of the Hays Decorating painters, 10% administration fee and GST.

2. July 20, 2012 - Back charge (DAL) #1 for $3401.71 – for hotel costs of the Hays Decorating painters, 10% administration fee and GST. 3. August 22, 2012 – Back charge #87 for $7875.92 – for hotel costs of the Hays Decorating painters, 10% administration fee and GST. 4.

November 15, 2012 – Back charge #92 for $65,638.21 – for recovery of payment of 9 invoices received from Hay Decorating dated between August 31 and September 4, 2012 for labour costs. [ 116 ] The back charge claims were all accompanied by backup invoices showing the particulars of the costs that Man-Shield had incurred in respect of the supply of painters pursuant to its notice. [ 117 ] Impact’s objections to these back charges are: 1. that contrary to Impact’s “adjustment” to the wording of Man-Shield’s notice, the supply painters were not guided by Impact.

Rather Man-Shield directed their work, 2. that the charges included payment for the travel time and costs of the supply painters from points out of Alberta, meal allowances, in addition to hourly wages and overtime. 3. that Man-Shield’s conclusion that there was a need for supply painters arose out of its wish to meet the unreasonable deadlines to which it had committed in order to please its important client, the owner, 4. that Man-Shield’s conclusion that Impact was not capable of completing its scope was wrong – as is evidenced by the fact that some members of Man-Shield management believed that Impact was doing high quality work. [ 118 ] In my view, none of these objections affects the propriety of the back charge.

Impact did not dispute either the need for supply painters or Man-Shield’s notice that the resulting costs would be a back charged in July. Indeed, it did not dispute Man-Shield’s statement in the July 4 notice that Impact had agreed to Man-Shield supplying additional painters and to accept the back charge. That the parties did not reach agreement as to supervision of the additional painters does not affect the agreement they did reach that the painters would be supplied and charged for.

Impact’s present challenge to the Man-Shield’s conclusion that there was a need for additional painters is made long after it agreed to Man-Shield’s action and long after Man-Shield incurred the expense. It comes far too late. [ 119 ] I find that the amounts claimed in these back charges are reasonable. [ 120 ] Man-Shield has satisfied its onus in relation to these back charges. I allow them.

Back Charge - #88 – Cleaning Overspray [ 121 ] Man-Shield issued back charge #88 for $2494.01 on August 23, 2012 for: Additional Cleaning (Scraping Paint) as required due to overspray and improper protection for painting. [ 122 ] Mr. Mounsef testified that Impact accepted this back charge after discussions with Man-Shield which resulted in the adjustment of its original charge of $4988.03 to the amount claimed in the back charge. Accordingly, I allow this back charge. Back Charge - #113 – Second Final Cleaning [ 123 ] Man-Shield issued back charge #113 for $878.00 on October 16, 2012 for: Second Final Cleaning.

As per Complete Building Maintenance Invoice 842556 as well as attached backup and photos. Total hours = 19 @ $40/hour The back charge was for $760.00 plus a 10% administration fee and GST. [ 124 ] The attached invoice from Complete Maintenance & General Services Ltd. for $4,578.00 states that it was for: Second final cleaning in Suites on floors 2, 3, and 4. 109 hrs @ $40/hour [ 125 ] A second attachment to the back charge indicates how the Complete Maintenance charge was distributed among Man-Shield and six subcontractors.

Impact was allotted a total of 19 hours as indicated on the back charge. [ 126 ] The contract provided in paragraph 14: Housekeeping During construction, the Subcontractor shall at all times and on a daily basis remove and keep removed from the site all debris resulting from its operations and upon completion of the Work shall remove all temporary structures belonging to the Subcontractor and shall leave the premises in a neat and tidy condition.

Failure to provide cleanup may result in the work being performed by Man-Shield Construction and will be charged back to this contract accordingly at costs plus an administration fee of 10%. [ 127 ] Mr. Mounsef testified that there had been discussions with Man-Shield prior to the issuing of this back charge as to how Complete Maintenance’s total charge should be allocated among Man-Shield and the six subcontractors. He acknowledged that there was a compromise as to the allocation. Impact did not however accept responsibility for payment of the amount allotted to it in the

compromise. He testified, “We didn’t make the mess that the cleaning up related to”. [ 128 ] Mr. Schwind testified that there had been a first cleaning of the suites. Thereafter, Impact did additional work in the suites and did not clean up after themselves, a second cleaning by a firm retained for the purpose was required. [ 129 ] The Man-Shield employee who determined how Complete Maintenance’s total charge should be allocated among Man-Shield and the six subcontractors was able to “pinpoint” 10 hours of cleaning time as been attributable to Impact. The document does not establish how the pinpointing was done.

The officer who prepared it was not called as a witness. I was advised he was in Europe and was therefore not available to testify. [ 130 ] After allocating all the cleaning hours on the invoice among Man-Shield and the six subcontractors there were 27 hours left unallocated. The Man-Shield employee who prepared the allocation document divided the 27 hours equally among three of the six subtrades.

The document does not reveal, and the evidence did not address, why that was done. [ 131 ] The second final cleaning to which the back charge relates was performed prior to October 9, the date of the Complete Maintenance invoice. On October 16, Mr. Smeding emailed Mr. Mounsef sending him a deficiency list. He said: . . . Also make sure your guys aren’t leaving any mess, as we’ve already paid twice to clean the suites. Any mess of yours that MSC finds will be cleaned up and you’ll be backcharged. [ 132 ] Mr.

Smeding testified that he did not recall that this reference to mess was inspired by a problem with Impact having left a mess prior to the second final cleaning he mentioned in the email. He testified that it was routine to put this type of warning in an email of this type. There is no evidence of any similar notice having been provided to Impact prior to the second final cleaning. [ 133 ] Man-Shield actually, necessarily and reasonably incurred the expense claimed.

Impact agreed in the subcontract to be responsible for cleanup after completion of its work and that cost arising from its failure to do so could be back charged. [ 134 ] The evidence as to whether the second cleaning expense was incurred because of Impact’s failure to clean up after its work is conflicting. It consists of Mr. Mounsef testifying that Impact did clean up after its work and Mr. Schwind testifying that Impact did not. The Man-Shield officer who allocated the Complete Maintenance invoice among the subcontractors did not testify. Man-Shield’s Superintendent, Mr.

Smeding, testified he did not recall that Impact had left a mess. [ 135 ] Man-Shield has not satisfied its onus of proving that the expense was incurred because Impact defaulted on its obligation to clean up after completing its work. [ 136 ] I disallow this back charge.

Back Charge - #117 – Final Deficiencies [ 137 ] Man-Shield issued back charge #117 for $28,875.00 on November 15, 2012 for: Remaining painting deficiencies and work to complete as per attached backup [ 138 ] The attached backup consists of a six page list of Impact Painting deficiencies relating mainly to suites and a four page list of deficiencies relating to common areas. The lists indicate they were updated “on Nov. -8-12”. There is nothing in the documents to indicate that the deficiencies were ever addressed or the cost incurred in addressing them.

There is no indication of how the amount of the back charge was determined. [ 139 ] On October 15, 2012, Man-Shield’s Shaun Smeding texted Mr. Mounsef asking when Impact would see to the deficiencies on a deficiency list he indicated he had sent by e-mail. He said, “Hey just wondering if you are going to do the list I sent you. Most of it is cleaning paint off stuff and the rest was on the last list, just wasn’t done.” Mr. Mounsef responded that he had not received a deficiency list by e-mail. Mr. Smeding said he would resend the list the next day. [ 140 ] Early on October 16, 2012, Mr. Mounsef texted Mr.

Smeding asking him to send the deficiency list. Mr. Smeding sent the list by email. His email asked that Impact complete the deficiencies as soon as possible. By text, he asked Mr. Mounsef if he had received the list. Mr. Mounsef confirmed by reply text that he had. Mr. Smeding observed regarding the list, “They look bigger than they are. Most of it is cleaning paint and can be done in a day.” [ 141 ] It appears that the deficiency list that Mr. Smeding sent was one dated October 10, 2012. It listed, by my count, 334 deficiencies in 127 listed rooms or areas.

The November 8 deficiency list provided in back up to back charge #117 lists 144 deficiencies in 83 listed rooms or areas. All of the deficiencies on the November 8 list are also on the October 10 list. [ 142 ] On October 24, Mr. Mounsef emailed Mr. Smeding saying, “All work pertaining to my scope of work has been completed and areas left clean of any debris.” Mr. Smeding responded, “Awesome thanks Moose.

I’ll need to walk through at some point, not sure when I’ll get over there.” [ 143 ] That was the last communication between Man-Shield and Impact on the subject of deficiencies until Man-Shield issued back charge #117. There is no evidence that Man-Shield responded to Mr. Mounsef’s October 24 statement, in reply to Mr. Smeding’s October 16 request that the deficiencies be addressed, that Impact’s scope of work was complete. Mr. Schwind accepted in cross- examination that Man-Shield did not give Impact notice that deficiencies remained outstanding after Mr. Mounsef stated they had been remedied. [ 144 ] Mr.

Schwind testified that if the deficiencies listed in the attachment to the back charge were remedied it was by Man-Shield’s own forces. He testified that the amount of the back charge was an estimate, not a record of actual expenditure. The Man-Shield

employee who prepared the estimate was not available to testify, and no documentation relating to the preparation of the estimate was put in evidence. Mr. Schwind acknowledged that there was no record of what Man-Shield resources were used. [ 145 ] Man-Shield has not discharged its onus in relation to this back charge. The evidence does not establish that Man-Shield actually incurred the expense claimed. I need not consider the other necessary elements required to be proved to recover a back charge. [ 146 ] I disallow this back charge.

Back Charge - #118 – Bonding Costs [ 147 ] Man-Shield issued back charge #118 for $4,529.91 on November 15, 2012 for: Bonding Costs for Lien Removal [ 148 ] The evidence includes an invoice to Man-Shield from Marsh Canada Limited for $3,922 for each of the five years between November 14, 2012, the date the bond was initially issued and November 7, 2017. The total bond cost paid by Man-Shield according to the invoices is $19,610. The back charge is in relation to the premium for the first year only.

Man-Shield has claimed the total cost as damages in its counterclaim. [ 149 ] Man-Shield’s claim to reimbursement of this expense rests on whether or not the lien was valid and whether in the end it is determined that Man-Shield was indebted to Impact. In my view, it is not appropriate to deal with these issues in the context of a back charge claim. I deal with the bond costs issues later in these Reasons. I disallow the claim for reimbursement of bond premium as a back charge.

Back Charge - #120 – Cleanup and Bin Removal [ 150 ] Man-Shield issued back charge #120 for $14,832.44 on November 15, 2012 for: Cleaning and Bin Removal Costs from November 2011 to July 2012 10% of overall Man-Shield incurred cleanup costs throughout timeframe above ** For the Laurel and Laurel DAL Projects. [ 151 ] The backup provided for this back charge was Man-Shield’s internal cost accounting record for Daily Housekeeping.

It shows the hours recorded and the cost of those hours on each day between November 4, 2011, and February 29, 2012, on the Laurel Project and between March 16, 2012, and June 29, 2012, on the Laurel DAL Project. The record also shows the amounts paid to firms which supplied garbage bins to the site for the supply and removal of those bins. The total cost recorded in the record is $128,419.42, 10% of which is the base amount claimed in the back charge. The back charge also claims $1284.19 as the 10% administration fee and GST. [ 152 ] Mr. Schwind testified that this back charge was agreed to in the subcontract.

Neither he, nor counsel for Man-Shield identified the contract provision which so provided. No such provision was revealed in my own review of the contract. Certainly Condition 14 – Housekeeping, previously quoted, does not contemplate Impact being charged for daily housekeeping work by Man-Shield’s employees. It contemplates only that Impact might be responsible for a cleaning charge if it failed to leave the premises in a neat and tidy condition.

There is no evidence that it did so either daily or at all. [ 153 ] There was no evidence as to how Man-Shield determined that a back charge of 10% of its internal costs was appropriately allocated to Impact. [ 154 ] Though Man-Shield incurred the cost throughout the project, no back charge for any portion of it was issued until well after the project was finished. [ 155 ] As to the portion of the back charge relating to bin removal costs, there is no evidence that Impact was ever notified, prior to the issuing of the back charge, that it would be charged for bin removal. Mr.

Mounsef acknowledged that Impact made use of the garbage bins which Man-Shield arranged for the project. He said the amount of garbage generated by Impact’s work was minimal – paint cans were not garbaged, they were recycled. [ 156 ] Man-Shield has not shown that the back charge for housekeeping and bin removal is either one which Impact agreed to pay, or is in relation to a cost which was within Impact’s contractual responsibility, or that Impact was given notice that Man-Shield would expect it to pay a portion of this cost.

The allocation of 10% of the total cost to Impact has not been shown to be appropriate. [ 157 ] I disallow this back charge. Claimed back charges waived at trial [ 158 ] Near the conclusion of the evidence on this five day trial, Man-Shield’s counsel advised that Man-Shield would not pursue its claim in respect of three back charges which were in issue at the commencement of the trial. These were: 1. Back charge #119 dated November 16, 2012 for $35,317.82 in relation to various matters collectively labeled “Logistic Costs” by Man-Shield. 2.

Back charge #121 dated November 16, 2012 for $39,488.70 in relation to site supervision and deficiency tracking costs 3. Back charge #122 dated November 16, 2012 for $4541.46 for “O&M Manuals not completed or received.

The total amount of these withdrawn back charges is $79,307.98. Conclusion as to Extras and Back Charges [ 159 ] As indicated on the table in the appendix to these reasons, I calculate that taking into account the amounts payable by Man- Shield to Impact under these contracts which are not in dispute, adding the extras and deducting the back charges I have allowed, and deducting the amount the parties agree Man-Shield has previously paid, $57,397.86 remains payable to Impact. [ 160 ] Impact shall have judgment against Man-Shield for $57,397.86 plus interest.

The interest shall be calculated at the rate or rates prescribed pursuant to the Judgment Interest Act from the date of the last invoice issued by Impact to Man-Shield, October 25, 2012. Lien Bond Costs [ 161 ] I indicated that I would deal with Man-Shield’s claim for the annual premiums for the bond which stands as security in place of the builder’s lien after determining the “bottom line”. [ 162 ] Man-Shield submitted that the lien was registered out of time.

There were indications in the evidence that Impact’s work was complete subject to correction of deficiencies in late August 2012, which would make a lien registered on November 7, 2012, out of time. However, there was unchallenged evidence from Mr. Mounsef that Impact performed worked required by Man-Shield to be done on this project, which was not deficiency correction, on September 24, 2012. This work was previously discussed in relation to Impact’s extra claim made in its invoice #732-12 – Paint Exterior Doors. I allowed this extra. [ 163 ] I find this work was done on September 24, 2012.

The builder’s lien registered on November 7, 2012, was therefore timely. Builders’ Lien Act RSA 2000, c. B-7, s. 41(2)(a). [ 164 ] The lien was therefore valid. [ 165 ] The lien claimed, and the bond was for, $237,676.12. In the result, the debt owed by Man-Shield to Impact, as I have determined it, was $57,397.86 or 24% of the amount claimed in the lien. Man-Shield’s cost for bond premiums, as noted, was proved to be $19,610.

In my view, Man-Shield should recover 76% of that amount from Impact given that the bond was larger by that factor than it was required to be. [ 166 ] I award Man-Shield judgment on its counterclaim in the amount of $14,903.60 plus interest at the rate prescribed pursuant to the Judgment Interest Act. I direct that the fact that the damages awarded were suffered over the course of 5 years, with the amount increasing by one fifth of the total each year, be taken into account in calculating the interest.

Costs [ 167 ] If the parties are not able to agree as to costs they may arrange to appear to make submissions on that matter. Heard October 2 to 6, 2017. Dated at the City of Edmonton, Alberta this 4 th day of December, 2017. B.R. Burrows J.C.Q.B.A. Appearances: N. Fenna and B. Lepki for the Plaintiff D. R. Schmidt and N. C. Williams for the Defendant