Pittman's Enterprises LTD. Plaintiff And: Mike Kelly & Sons Limited Defendant, 2021 NLSC 126

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Pittman's Enterprises Ltd. v. Mike Kelly & Sons Limited , 2021 NLSC 126 Date : October 6, 2021 Docket : 201704G0162 Between: Pittman's Enterprises LTD. Plaintiff And: Mike Kelly & Sons Limited Defendant Before: Justice Peter N. Browne Place of Hearing: Corner Brook, Newfoundland and Labrador Dates of Hearing: June 7 – 10, 2021 and June 29, 2021

Summary: The Plaintiff sued the Defendant for payment of two invoices issued in 2017 totaling $115,460 for blast rock material removed from the Plaintiff’s quarry following the expiration of the Defendant’s subordinate permit in 2016. The Defendant claimed that the materials removed in 2017 originated from its surplus materials blasted in 2016 for which they paid royalties to the Crown as required under the Quarry Materials Act, 1998 . The Plaintiff’s claim was dismissed with costs on a Column 3 basis.

The evidence did not establish, on a balance of probabilities, an agreement existed between the parties to transfer entitlement of the Defendant’s surplus materials to the Plaintiff following the expiration of the 2016 subordinate permit. The materials removed by the Defendant in 2017 were from its portion of its 2016 surplus. The materials had become intermixed when the Plaintiff rehabilitated the quarry floor during the 2016 permit year.

Appearances: Keith S. Morgan Appearing on behalf of the Plaintiff David P. Goodland, Q.C. Appearing on behalf of the Defendant Authorities Cited: CASES CONSIDERED: McCabe v. Berge (1999), (NL CA), 182 Nfld. & P.E.I.R. 135, 135 A.P.R. 135 (Nfld.C.A.); Imperial Oil Ltd. v. C & G Holdings Ltd. (1986), 58 Nfld. & P.E.I.R. 326, 39 A.C.W.S. (2d) 48 (Nfld. S.C. (T.D.)); May &Butcher Ltd. v. R. (1929), [1934] 2 K.B. 17 (U.K. H.L.); Carter v. Long & Bisby (1896), 1896 CanLII 18 (SCC), 26 S.C.R. 430; andModern Paving Ltd. v. Donovan Homes Ltd., 2011 NLCA 39 STATUTES CONSIDERED: Quarry Materials Act 1998, S.N.L. 1998 c.

Q-1.1 REASONS FOR JUDGMENT Browne, J.: INTRODUCTION [1] In 2016, Pittman’s Enterprises Ltd. (“PEL”) and Mike Kelly & Sons Ltd.(“MKS”) entered into an arrangement regarding theuse of an undeveloped quarry located near Parson’s Pond Head on the Northern Peninsula. [2] PEL obtained the quarry permit but provided MKS with permission to apply for a subordinate permit on the basis that theyassumed responsibility for readying the area as a quarry. This included clearing trees, rock and soil (overburden), and establishing thequarry through drilling and blasting.

Large rock, or armour stone would be created from the blasting. The armour stone was unnecessaryto MKS’ needs so it was agreed PEL would be entitled to this material. [3] The parties did not discuss what would happen to any unused material blasted by MKS at the expiration of its subordinatepermit. [4] The arrangement continued over the summer and fall of 2016 until the expiry of the permit on December 31, 2016.

InFebruary 2017, MKS required access to the quarry to obtain its unused blast rock for two projects: Baker’s Brook Bridge and RockyHarbour Waste Management. [5] An issue arose as to provenance of this blast rock.

In a Statement of Claim filed on July 4, 2017, PEL claimed payment for twounpaid invoices related to the removal of blast rock in 2017 following the expiration of MKS’ subordinate permit. [6] The Defence filed by MKS on August 21, 2017 claimed that the 2016 arrangement did not provide PEL with ownership of anyblast rock that remained on the quarry site following the expiration of their subordinate permit.

MKS alleged the quarry materials usedfor its two 2017 projects originated from its unused blast rock from 2016. position of the parties PEL [7] It is acknowledged that as part of the 2016 arrangement, MKS hired a professional drilling and blasting company to produce100,000 plus tonnes of quarry material. PEL claims it understood MKS would be using this material for one project, the establishment ofculverts for Parks Canada in Gros Morne National Park.

During the excavation for the project the quarry flooded and MKS had to usepumping equipment in order to continue to remove recoverable material from the pit. [8] By the end of July 2016 MKS had removed all the recoverable blast rock and left the quarry which flooded again. In August,PEL rehabilitated the quarry floor by blasting and filling it with blast rock and large armour stone.

[ 9 ] In the late summer and fall of 2016,, both PEL and MKS were using the quarry for materials. PEL was involved with a breakwater project in Cow Head that required the armour stone from the original MKS blast.

PEL continued its blasting operations into the fall and acknowledge that at this time there were stockpiles of rock crushed by MKS that remained on the quarry site. [ 10 ] By the end of the 2016 permit year PEL claims the only accessible material remaining in the quarry was its own blast rock apart from the MKS stockpile of crushed stone. [ 11 ] In February 2017, PEL was contacted by MKS to request access to the quarry to obtain blast rock for its 2017 projects. The material required was in addition to their 2016 stockpile of crushed material.

PEL informed MKS they could have access to the additional material subject to agreeing to pay specific rates. The rates would be determined by whether the material was blasted by PEL or blasted by MKS. [ 12 ] PEL claims MKS agreed to this arrangement and removed material from the quarry. It is agreed that neither MKS nor PEL conducted any blasting in the quarry in 2017 before MKS removed the blast rock for its projects.

MKS [ 13 ] According to MKS, the arrangement between the parties in 2016 did not contemplate what would happen to the ownership of any blast rock created by MKS before the expiration of their subordinate permit. [ 14 ] In May 2016, MKS blasted approximately 105,000 tonnes of rock from the quarry. Of that amount, it provided PEL with 10,500 tonnes of armour stone as part of the original arrangement. Of the remaining 94,500 tonnes of material, approximately 58,727 tonnes were crushed into “class A” and “class B” aggregates and stockpiled near the quarry site.

An additional 500 tonnes of rip-rap (rubble) was also stockpiled leaving 35,273 tonnes of usable quarry material known as blast rock remaining in the quarry. Between July 7 and October 13, 2016, MKS removed a further 6,152 tonnes of blast rock. [ 15 ] At the end of 2016, MKS claims it had stockpiles of class A and class B aggregates and 29,121 tonnes of blast rock. Between March and May 2017, MKS had two projects which required blast rock from the underwater portion of the quarry: (

i) Rocky Harbour Waste Management site (15,000 tonnes) and (ii) a bridge replacement at Baker’s Brook (10,100 tonnes). [ 16 ] MKS acknowledged discussions occurred with PEL in February 2017 about prices for additional material to be removed but stipulated that the rates would only apply to new materials blasted by PEL or MKS during the 2017 permit year. It rejected PEL’s assertion that in 2016 it removed all of its useable supply of blast rock. MKS claims it completed its two projects in 2017 using the blast rock from its 2016 surplus. Issues [ 17 ] The issues to be determined are: a.

Did the 2016 oral agreement between PEL and MKS contemplate who would be entitled to any surplus blast rock following the expiration of the 2016 quarry and subordinate permits? b. Did MKS remove all of its blast rock in 2016 or did intermixture occur when PEL rehabilitated the quarry floor in August 2016? c. Did MKS agree to pay PEL for the blast rock it removed from the quarry floor in 2017? evidence [ 18 ] At trial, PEL called three witnesses: Devin Pittman, the company Vice-President; Bernard Pittman, the company President; and Christopher Pittman, a supervisor and blaster with the company.

MKS called six witnesses: Don Matthews, a retired engineer who was the Project Manager in 2016; Jim Kasemets, General Manager of Nfld.

Hard-Rok; Dennis Hutchings, Crusher Superintendent; Wade Muggeridge, Loader and Scale Operator; Peder Pederson, Construction Superintendent; and Dave Kelly, co-owner of MKS. [ 19 ] In addition to the oral evidence, the evidence included numerous documents, emails/texts, photographs, and videos entered as exhibits, as well as portions of transcripts from the discovery of Devin Pittman. [ 20 ] At the close of trial I requested the parties provide both written and oral submissions which I found extremely helpful. Where possible, I relied on both the oral and documentary evidence to support a factual finding.

PEL Devin Pittman [ 21 ] The Plaintiff, PEL, is a general contracting company which has been in existence for approximately 40 years. Devin Pittman is one of three Directors and is the Project Manager. [ 22 ] Mr. Pittman was the main witness for the Plaintiff. He testified that in May 2016 his company was approached by MKS’ Project Manager, Don Matthews. Mr.

Matthews indicated they were having difficulty securing materials for a federal project from the adjoining quarry owner. [ 23 ] The parties came to an arrangement whereby PEL, as the permit holder for the quarry, agreed to issue a subordinate permit to MKS in exchange for taking on the responsibility of creating the quarry. [ 24 ] Following the blasting, MKS set up a crushing operation to create class A stones (7.62 cm-12.70 cm in diameter) and class B stones (10.16 cm to 20.32 cm in diameter) for a Parks Canada project in Gros Morne.

[ 25 ] Given the size of the initial blast, it created a deep hole in the floor of the quarry that constantly filled with water that had to be pumped out regularly. [ 26 ] After MKS had finished its crushing operation in July, Mr. Pittman claims the quarry was completely empty of rock and the floor was covered in water.

He provided the Court with a photo from August 9, 2016 (Exhibit DP #12) which showed the extent of the water coverage. [ 27 ] In August, PEL rehabilitated the quarry floor by drilling and blasting rock to get above the water table and built a floor to make the quarry driveable. [ 28 ] During the fall of 2016, PEL was involved in a large construction project. Mr. Pittman testified he saw MKS trucks removing blast rock. He contacted MKS co-owner, Dave Kelly, and told him he would not permit MKS to remove any more material. As far as Mr.

Pittman was concerned, by the end of 2016, all the blast rock that remained in the quarry had been created by PEL. [ 29 ] In February 2017, Mr. Pittman testified that he was driving to St. John’s with his father when he received a call on his cell phone from Don Matthews. Mr. Matthews said they needed access to the quarry to take materials for two upcoming projects. According to Mr. Pittman, he “made it clear” that MKS had “removed everything and more” and that he would only supply materials at cost. [ 30 ] The call was followed by an email exchange on February 28, 2017 between Mr. Pittman and Mr.

Matthews (Exhibit DP #15) which went as follows: Devin Pittman From: Don Matthews Sent: February 28, 2017 12:43 PM To: Devin Pittman Cc: Dave Kelly; Peder Peterson Subject: RE: PP Quarry Agree that’s fine either way Will stay in contact to determine what quantities will be required -----Original Message----- From: Devin Pittman Sent: Tuesday, February 28, 2017 11:43 AM To: donm ... Subject: PP Quarry Don, I spoke with Peter (sic) yesterday and he advised you’ll be using some material from Parsons Pond Head. Just wanted to clarify what we discussed last week.

PEL can drill and blast the material at a rate of $4/tonne including royalties. Alternatively, MKS can drill and blast the material plus a cost of $1.40/per tonne including royalties. I trust this is satisfactory. Regards, Devin Pittman

Pittman’s Enterprises Ltd. [ 31 ] After this exchange, the MKS Construction Superintendent, Peder Peterson, showed up at the PEL office saying they were in a time crunch and needed the material. Mr. Pittman testified he trusted Mr. Pederson so he allowed the MKS crew to remove the materials from the quarry floor. [ 32 ] On cross-examination, Mr. Pittman admitted that when he discussed the pricing for 2017 (Exhibit DP #15) he had not contemplated MKS coming in to the quarry and removing blast rock from the quarry floor. He was also asked about any records of the blasts that were conducted by PEL in 2016.

He advised the Court that they were in the possession of their Blaster-in-Charge, Colton Bennett, and that Mr. Bennett’s former girlfriend had destroyed them. Mr. Pittman was unable to assist the Court with regard to the number, the dates, or the removal of blast rock yielded from their blasts. Bernard Pittman [ 33 ] Bernard Pittman is the company President. Mr. Bernard Pittman confirmed there was a call to his son’s cell while they were driving to St. John’s in early 2017. He recalled that Don Matthews wanted to get certain material from the quarry and some discussion about the price of $4.00 per tonne.

Christopher Pittman [ 34 ] Christopher Pittman was the supervisor at the quarry and assisted Colton Bennett with PEL’s blasting. He confirmed Devin Pittman’s evidence that during the rehabilitation process, they blasted materials into water to fill the pond so as to make the quarry accessible. [ 35 ] In cross-examination, Mr. Christopher Pittman confirmed that he was not the person in charge of PEL blasting activities. When asked about the location of the company’s Dangerous Good/Bills of Lading for the transportation of explosives, he had no explanation as to whether they existed. [ 36 ] On redirect, Mr.

Christopher Pittman estimated there may have been as much as 20 feet of water in the quarry. They did not drain the water to investigate if there was any blast rock fill remaining before they began blasting and filling in the floor. MKS Don Matthews [ 37 ] Don Matthews is a retired engineer with the Department of Transportation who began working as a Project Manager with MKS in 2015. [ 38 ] Mr. Matthews testified that in 2016 MKS had been awarded a contract from Parks Canada to install culverts from Rocky Harbour to Cow Head.

There were several quarries in the local area they could use but settled on PEL’s quarry at Parson’s Pond Head. [ 39 ] He confirmed the arrangement with PEL was that they would be given a subordinate permit in exchange for starting the quarry. [ 40 ] In addition to the Parks Canada project, MKS also needed materials for a waste management project in Rocky Harbour. He estimated MKS would need approximately 100,000 tonnes of rock. When questioned by PEL’s legal counsel as to why the MKS subordinate permit application contained a lower number than the projected blast yield, Mr.

Matthews explained that the industry practice was to insert a low number on the application as royalties are payable up front at the time of filing the application. Instead, contractors paid their royalties based on the material that was used by the end of the permit year. [ 41 ] He recalled having a discussion with Devin Pittman in February 2017 in which Mr. Pittman suggested that MKS had removed all its material and there was no rock left. Mr. Matthews testified that he disagreed with Mr. Pittman’s suggestion and told him there was rock remaining but it was covered by water. [ 42 ] On cross-examination, Mr.

Matthews was shown Exhibit DP #30. This was a photo of the quarry floor filled with water. It was sent to him in an email from Devin Pittman on February 22, 2017. He admitted it was representative of the state of the pit when they left in July 2016 but the water was never drained to determine how much water or rock was actually present. Jim Kasemets [ 43 ] Mr. Kasemets is the General Manager of NL Hard-Rok. He confirmed his company was hired by MKS to drill and blast at the Parson’s Pond Head site. He explained how the blast was conducted and that as part of the blasting plan they used a subdrill.

A subdrill creates a blast below the floor grade and creates additional material. [ 44 ] Mr. Kasemets was shown Exhibit JK #1 and he confirmed that NL Hard-Rok invoiced MKS on May 26, 2016 $213,989.83 for blasting 105,573 tonnes of rock. Dennis Hutchings [ 45 ] Mr. Hutchings is a Crusher Superintendent with MKS. He managed a crew of five that operates a rock crusher. Once the rock is crushed, it is placed in the bucket of a front-end loader and moved to a stockpile. The bucket on the loader has a scale and the buckets are counted by the crusher operator. [ 46 ] Prior to the crew leaving in July 2016, Mr.

Hutchings felt there was five to six meters of blast rock left on the quarry floor. He based this estimation on the fact that the MKS pumps were still draining water from the quarry floor. Mr. Hutchings told the Court his crew were required on another project so they had to leave. He recalled the backhoe was still digging blast rock out of the water after the

pumps had stopped draining the water. [ 47 ] On cross-examination, Mr. Hutchings was questioned about Exhibit DH #1, the bucket counts from the loader. Plaintiff’s counsel had Mr. Hutchings acknowledge that between June 28 and July 5 the counts were high but between July 6 and July 18 the numbers went down. Plaintiff’s counsel suggested that was because the rock materials were harder to obtain. Mr. Hutchings was not able to offer an explanation. Wade Muggeridge [ 48 ] Mr. Muggeridge operated the front-end loader and scales for MKS at the quarry.

One of his responsibilities included keeping daily totals of the loads sent to the Parks Canada project. Besides keeping totals for Parks Canada, he recorded totals for other MKS projects, including contracts for Nalcor, Budgells Equipment and the Department of Transportation and Works. [ 49 ] During Mr. Muggeridge’s evidence he was shown photos from Exhibit DP #12. He observed that the photos taken on July 14 indicate there was MKS blast rock located at the back of the quarry and on the quarry floor. The photos of August 9, 2016 show MKS stockpiles of class A, class B, and blast rock. [ 50 ] Mr.

Muggeridge remained at the quarry until October 13, 2016 and was able to observe PEL’s efforts to rehabilitate the quarry floor. He testified that from what he saw, PEL levelled out the quarry with material from the MKS blast. He felt there was more MKS rock left than what PEL brought in from their own blasts. [ 51 ] On cross-examination, Mr. Muggeridge testified that he helped create a stockpile of blast rock for MKS and pointed it out on the August 9 photo of Exhibit DP #12.

On occasion, PEL trucks would take some of the MKS blast rock from the stockpile and used the stockpile to help fill in the water on the quarry floor. He disagreed with Plaintiff’s counsel’s suggestion that the depth of the water in the pond was 15 to 20 feet deep. [ 52 ] When he left on October 13, 2016, Mr. Muggeridge felt there was still MKS blast rock left in the quarry located towards the back and that material from PEL’s blasting would have ended up on top of the MKS material. Peder Pederson [ 53 ] Mr. Pederson was a Construction Superintendent with MKS in 2016 and 2017.

His only dealings with PEL occurred in 2017 while he was working on the Rocky Harbour Waste Management project. [ 54 ] Around February 20, 2017, he was told by Don Matthews to go to the Parson’s Pond Head quarry to get leftover blast rock. [ 55 ] Mr. Pederson testified he went to PEL and first spoke with Bernard Pittman who told him to deal with his son, Devin. Mr. Pederson did and recalled there was no discussion about price or the cost of materials.

He would never have discussed or agreed to any terms as he would not have had the authority to do so. [ 56 ] He recalled that Devin Pittman did not tell him they could not get their rock so he moved in equipment on February 26. An excavator and a six-wheel articulated truck took the quarry materials from the floor to the top of the quarry to allow the water to drain. The materials came from the floor at the back. [ 57 ] Mr. Pederson was shown Exhibit DP #15.

His understanding from speaking with Don Matthews was that if MKS did not have enough materials then they would have to go to PEL and ask for a price. [ 58 ] On cross-examination, Mr. Pederson confirmed that when he went with the equipment on February 26 he was not aware of any discussions between PEL and Don Matthews about prices. Mr. Pederson was shown an email exchange he had with Devin Pittman on May 10, 2017. According to Mr. Pederson, he sent it along to Don Matthews who said he would look into it. He did not hear anything until months later. David Kelly [ 59 ] Mr.

Kelly is a 50 percent owner of MKS and has worked for the company for 41 years. He described their business as heavy civil construction. [ 60 ] In 2016, MKS had a contract with Parks Canada and a waste management project in Rocky Harbour that had gotten delayed. He estimated he needed 100,000 tonnes of rock material for both. [ 61 ] He agreed with PEL they would ready and establish the quarry. The cost to ready was approximately $25,000 and the blasting and drilling $213,989.88. [ 62 ] When asked the reason for removing his crusher crew from the quarry in July 2016, Mr.

Kelly explained they were required at a site in Plum Point to make aggregate for asphalt. [ 63 ] He denied they did not go back because there was no material left at the quarry rather they had already crushed as much rock as they needed. [ 64 ] Over the course of 2016 there were occasions where each company availed of the other’s work product. Mr. Kelly cited examples where PEL took some of their blast rock and asked for 10 loads of class A. Similarly, around the third week of October, PEL loaded rip-rap for MKS. [ 65 ] Mr.

Kelly testified that at the end of 2016, MKS had somewhere between 25,000 to 30,000 tonnes of blast rock remaining on the floor of the quarry. This did not include their stockpile of class A and B. After he received the two invoices (Exhibits DP #19 and DP

#20) he spoke with Bernard Pittman who said the rock belonged to PEL. Mr. Kelly disagreed and said it belonged to MKS. Theconversation lasted 10 minutes. the law Contract formation [66] To make out a claim in contract, a plaintiff must prove the existence of a contract, breach of contract, and damages flowingfrom the breach. The test is on a balance of probabilities. [67] The elements of a valid contract are: offer, acceptance, consideration, intent to create legal relations, and certainty of terms (seeMcCabe v. Berge (1999), (NL CA), 182 Nfld. & P.E.I.R. 135, 135 A.P.R. 135 (Nfld. C.A.) at paragraph 21).

Inorder for a contract to be enforceable, it must contain the terms essential to its operation (see Imperial Oil Ltd. v. C & G Holdings Ltd.(1986), 58 Nfld. & P.E.I.R. 326, 39 A.C.W.S. (2d) 48 (Nfld. S.C. (T.D.)). At paragraph 144, Goodridge, J. stated the underlyingprinciple is that all of the terms of the agreement between the parties must be settled. There may, of course, be things left to bedetermined. [68] In making this statement, Goodridge, J. relied on the English House of Lords decision in May & Butcher Ltd. v. R. (1929),[1934] 2 K.B. 17 (U.K.

H.L.), in particular the statement of Viscount Dunedin: To be a good contract there must be a concluded bargain, and a concluded contract is one which settles everything that is necessary to besettled and leave nothing to be settled by agreement between the parties. Of course it may leave something which still has to bedetermined, but then that determination must be a determination which does not depend upon the agreement between the parties. Intermixture [69] Intermixture occurs when tangible items are inseparably combined.

English and Canadian law in the area has been influencedby Roman law which distinguished between separable (commixito) and non-separable mixing (confusio). [70] If items belonging to two or more people become mixed and it is possible to segregate them, then ownership can often bedetermined. When separation is not sensible, something must be done to ascertain the proprietary entitlements of rival claimants. [71] When there is innocent intermixture the parties share the combined mass as co-owners, their portion being based on theirrelative contribution (if determinable) otherwise equally.

This common law rule known as innocent intermixture was set out by theSupreme Court of Canada in Carter v.

Long & Bisby (1896), 1896 CanLII 18 (SCC), 26 S.C.R. 430 as follows: Where the owner of chattels, having the legal property in them, has had his property mixed with similar chattels belonging to otherpersons so that out of the mass thus commingled the chattels originally belonging to each person are indistinguishable, as in the casewhich has so frequently happened of a quantity of saw-logs being thus mixed, the rule at common law is that where this has been donewithout fraud or wrong an original owner is entitled to take from the mass an equivalent in quantity and quality for the property which hehas lost by the mixing, and he is treated as having a legal title to such property.

The Quarry Materials Act, 1998 [72] Quarry permits and subordinate quarry permits are governed under the Quarry Materials Act 1998, S.N.L. 1998 c. Q-1.1 (the“Act’). Under sections 5(2)(

a) and 6(2)(a), the quarry materials to which the permits apply are vested in the Crown and under section5(2)(

b) and 6(2)(

b) the permits are for a period of not more than one year: 5.

(2) The minister may issue a quarry permit to a person who applies under subsection (1) provided that (

a) the quarry materials to which the permit applies are vested in the Crown; (

b) the permit is for a period of not more than one year; 6. (2)The minister may issue a subordinate quarry permit to a person who applies under subsection (1) provided that (

a) the quarry materials to which the subordinate permit applies are vested in the Crown; (

b) the subordinate permit is for a specified period of not more than one year. analysis Issue 1: Did the 2016 oral agreement between PEL and MKS contemplate who would be entitled to any leftover blast rock following theexpiration of the 2016 quarry and subordinate permits?

[ 73 ] The evidence is clear the parties entered into an arrangement in May 2016 to develop a quarry. This agreement required MKS to undertake the necessary efforts to establish the quarry. I find that PEL knew of the extensive nature of MKS’ blasting efforts and how much rock material it would generate. [ 74 ] The agreement addressed the terms under which MKS would be issued a subordinate permit to remove material from the quarry.

These terms were: a. clear the overburden; b. create the quarry by conducting the necessary drilling and blasting; and c. pay the required provincial royalties and allow PEL to keep the excess armour stone from the original blast. [ 75 ] At trial, Devin Pittman acknowledged the agreement only addressed the surplus armour stone, not other materials produced from the original blast.

However, in his opinion, MKS had removed all of its recoverable blast rock and any remaining blast rock left on the quarry floor was the result of PEL’s blasting so they retained ownership of this material. [ 76 ] PEL did not provide the Court with any evidence to challenge the testimony of Mr. Jim Kasemets that MKS paid $213,000 for 105,573 tonnes of blast material. Mr.

Kasemets explained how his company planned the blast, the size of the area to be blasted and the calculations used to yield the amount of rock produced. [ 77 ] I accept the evidence of Dennis Hutchings, MKS’ Crusher Superintendent, that prior to the crushing crew’s departure on July 26, 2016, they had crushed the following amounts of product from the blast rock: PRODUCT TONNES class A 17,235 class B 40,232 One-inch clean stone 1,260 TOTAL 58,727 [ 78 ] An additional 500 tonnes of rip-rap (rubble) was stockpiled.

According to Wade Muggeridge, between July 7 and October 13, 2016, MKS removed a further 6,152 tonnes of blast rock for three small jobs. [ 79 ] I find, given the evidence of Mr. Kasemets, that approximately 10 percent of the blast would have generated 10,500 of armour stone then MKS would have had approximately 29,121 tonnes of blast rock remaining in the quarry. [ 80 ] I also accept the evidence of David Kelly and Don Matthews that the reason for the demobilizing of the crushing crew around July 26, 2016 was because they were needed for an asphalt project.

The crew did not return because the Parks Canada project required less material than estimated and there was a sufficient stockpile of crushed material remaining at the quarry. [ 81 ] Based on the evidence led by both parties, I am unable to find that the oral agreement reached between them in May 2016 contemplated the possibility of MKS leaving blast rock behind at the expiration of its 2016 subordinate permit. [ 82 ] Relying on the words of Goodridge, J. in Imperial Oil Ltd. , a good contract is one which settles everything that is necessary to be settled.

I find, therefore, the 2016 agreement did not settle on any terms of what was to happen to any MKS surplus blast rock that remained in the quarry after the expiration of the 2016 permit. Issue 2: Did MKS remove all of its blast rock in 2016 or did intermixture occur when PEL rehabilitated the quarry floor in August 2016? [ 83 ] Devin Pittman testified that in early August 2016 following the departure of the MKS crushing operation, the quarry was empty of blast rock.

He suggested to the Court that he assumed this from speaking with one of the crushing crew. [ 84 ] At this point, the quarry contained water and various witnesses speculated as to its depth. The evidence disclosed that PEL’s rehabilitation did not involve draining or pumping the water but drilling, blasting, and excavating blast rock to get above the water table and build a floor across the pit.

Devin Pittman, who testified regarding the efforts, was not able to offer the Court any objective figures regarding the material blasted except to indicate he felt it was substantial enough to make the quarry floor drivable. [ 85 ] PEL’s rehabilitation of the quarry was observed by Wade Muggeridge. Mr. Muggeridge testified that PEL created a pad at water level using blast rock that had been stockpiled by MKS. Once PEL pushed the blast rock out into the water, the equipment worked their way around the perimeter of the quarry using blast rock from the original MKS blast.

He pointed out the location of the MKS blast rock using the August 9, 2016 photo from Exhibit DP #12. [ 86 ] According to Mr. Muggeridge, PEL leveled out the quarry floor with material from the MKS blast. By the time he left the quarry on October 16, 2016, there was a lot more MKS blast rock in the quarry than what PEL had brought in from its own blasting. He also observed that shortly before he left, PEL had blasted a drain in the base of the pit to remove any excess water. [ 87 ] I accept the evidence of Mr.

Muggeridge that when PEL conducted its rehabilitation of the quarry floor, besides using their own blast rock they used the surplus blast rock belonging to MKS from its original blast. [ 88 ] Based on this evidence and the absence of any evidence tendered by PEL as to the amount of blast rock it realized from its blasting, I find intermixture occurred. [ 89 ] Relying on Carter v. Long & Bisby , I find that MKS had legal title to take from the quarry floor an amount of blast rock

equivalent to approximately 29,000 tonnes. This was the amount remaining in the quarry at the expiration of its permit in 2016. [ 90 ] Under the Act , permit holders do not acquire a proprietary interest in quarry materials. This interest remains vested in the Crown under section 5(2)(

a) and 6(2)(a). They do, nonetheless, have the right to excavate and remove the material from an area for which the Crown is paid a royalty. [ 91 ] I accept the evidence of Don Matthews and David Kelly that industry practice was to pay royalties only after materials were delivered. This practice developed as a result of the requirement that royalties were payable in advance of the issuance of the permit. Mr.

Matthews also testified that it was common practice to allow subordinate permit holders to return the following year to take any material blasted in the previous year. [ 92 ] Exhibits DK #1 and DK #2 show the amount of royalties paid by MKS based on the quantity of material removed from the quarry in 2016 and 2017. These amounts align with David Kelly’s evidence that MKS used just under 90,000 tonnes of material for all its projects and they left behind approximately 5,000 tonnes. [ 93 ] The blast rock removed by MKS in 2017 was part of its original blast material.

It removed 15,000 tonnes for the Rocky Harbour project and 10,100 tonnes for the project at Baker’s Bridge. Intermixture of the blast rock occurred when PEL rehabilitated the floor. MKS paid royalties on the amount of blast rock it removed in 2017. Issue 3: Did MKS agree to pay PEL for the blast rock it removed from the quarry floor in 2017? [95] Devin Pittman testified he was contacted by Don Matthews in early 2017, on his cellphone, about accessing the quarry for material. He made it very clear to Mr.

Matthews that MKS had removed everything from the quarry floor. [ 94 ] Following his discussion, Devin Pittman sent an email to Don Matthews on February 28, 2017 (Exhibit DP #15) referencing the telephone discussion and setting out rates for drilling and blasting rock material. [ 95 ] I accept the evidence of Don Matthews that during the telephone conversation with Devin Pittman he disagreed that MKS did not have any surplus blast rock remaining at the quarry.

His understanding from reading Exhibit DP #15 was that if MKS required more rock material in addition to their surplus then the pricing rates provided by Devin Pittman were acceptable. [ 96 ] I also accept the evidence of Peder Pederson that when he spoke to Devin Pittman about sending a MKS crew to the quarry to remove the remaining blast rock he was never informed by PEL that it took the position MKS did not have any remaining material in the quarry. Mr.

Pederson, like Don Matthews, understood from reading Exhibits DP #15 and DP #16 that the rates being suggested by PEL would be for any additional rock blasted in 2017 and did not relate to MKS’ surplus from 2016. [ 97 ] Mr. Pederson’s evidence is supported by Exhibit DP #18, an email he sent to Devin Pittman on May 10, 2017 in response to Mr. Pittman’s request for tonnage information. Mr. Pederson supplied the tonnage information for the crush rock from their stockpile and the blast rock removed by his crew.

He viewed the email as simply a matter of PEL keeping track of materials remaining at the quarry. [ 98 ] I am of the view that a plain reading of Exhibits DP #15 and DP #16 suggests Devin Pittman was proposing rates for future blasting of rock material for the 2017 permit year not for blasting which had occurred in 2016.

Further, when Peder Pederson and his crew arrived to remove the blast rock, it was not made clear by Devin Pittman that he would be invoicing MKS for blast rock removed from the quarry floor that had been created in 2016. [ 99 ] Accordingly, I rely on the reasons provided by our Court of Appeal in its decision in Modern Paving Ltd. v.

Donovan Homes Ltd. , 2011 NLCA 39 at paragraphs 32 – 33 where it held that in order for a contract to be enforceable, there must be certainty surrounding the essential terms. [ 100 ] In the present case, there was no certainty surrounding the essential term of when rates would be payable by MKS to PEL for blasting of materials. While PEL may have intended the rates to apply to materials it blasted in 2016, this was not communicated clearly in the email Exhibit DP #15 especially after Don Matthews rejected Devin Pittman’s suggestion that MKS did not have any surplus blast rock from 2016. A more reasonable

interpretation of the exchange is that the rates were to apply to the 2017 permit year depending on whether PEL or MKS did the drilling and blasting. [ 101 ] I find there was no agreement between the parties to pay the invoices issued by PEL to MKS on May 10, 2017 and May 15, 2017. conclusion and Disposition [ 102 ] The agreement reached between the parties in 2016 did not contemplate MKS having a surplus of blast rock at the expiration of their 2016 subordinate permit. [ 103 ] In August 2016 when PEL rehabilitated the quarry floor, they used MKS surplus blast rock with their own blast rock causing intermixture. [ 104 ] The evidence supports the finding that at the time of the removal of the blast rock in 2017, MKS had a surplus of 29,121 tonnes remaining in the quarry.

It removed and paid royalties on 25,100 tonnes of blast rock. [ 105 ] MKS did not agree to pay PEL for the removal of its own blast rock created in 2016. The agreement was for additional materials blasted in 2017. [ 106 ] PEL has failed to establish, on a balance of probabilities, the existence of an enforceable agreement with MKS to pay the invoices claimed.

[ 107 ] The action is dismissed with costs to the Defendant on a Column 3 basis. _____________________________ Peter N. Browne Justice