Labrador-Island Link Limited partnership, as represented by its general partner , Labrador-Island Link General Partner Corporation Plaintiff And: General Cable Company Ltd. Defendant, 2019 NLSC 6

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Labrador-Island Link Limited Partnership v. General Cable Company , 2019 NLSC 6 Date : January 18, 2019 Docket : 201801G1924 Between: Labrador-Island Link Limited partnership, as represented by its general partner , Labrador-Island Link General Partner Corporation Plaintiff And: General Cable Company Ltd. Defendant Before: Justice Gillian D. Butler Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: November 5, 2018

Summary: Application to strike a Statement of Claim for alleged non-compliance with a dispute resolution clause of a commercial contract, denied. The contract as a whole, its context and the subsequent conduct of the parties suggested that the parties did not intend strict compliance with things such as the form of the Notice and manner of service but instead intended that there be a good faith and commercially reasonable attempt at dispute resolution.

The Plaintiff’s actions since the dispute arose had been in compliance with the spirit and intent of the clause (in good faith and commercially reasonable) and the Plaintiff’s errors in matters such as the form and service of the Notice were trivial. As a result it was not established that the Plaintiff was in breach of

Article 34 and the Defendant had not established any basis to strike the Statement of Claim. In contrast, the Defendant’s

interpretation of the clause was not commercially reasonable and its actions after the Statement of Claim was issued were suggestive of an attempt to frustrate the spirit and intent of the clause.

In the alternative, if strict compliance with things such as the form of the Notice was intended, on the facts established, it would havebeen fair and just to deny the Application to strike the Statement of Claim and instead to stay the action to allow the Plaintiff to meet theterms of

Article 34. Appearances: Glen L.C. Noel, Q.C. and Thomas M. Munn Appearing on behalf of the Plaintiff Terry G. Rowe, Q.C. and Timothy Lowman Appearing on behalf of the Defendant Authorities Cited: CASES CONSIDERED: Consolidated Bathurst Export Ltd. c. Mutual Boiler & Machinery Insurance Co., (SCC),[1980] 1 S.C.R. 888; U.A., Local 552 v. Greater Essex County District School Board, 2011 ONSC 5554; British Columbia (AttorneyGeneral) v. Canada (Attorney General), (SCC), [1994] 2 S.C.R. 41; Re Manitoba Language Rights, (SCC), [1985] 1 S.C.R. 721; Montreal Street R. Co. v.

Normandin, (UK JCPC), [1917] A.C. 170, 33 D.L.R. 195 (PC);Revera Retirement v. U.S.W., Local 8300 (2012), 111 C.L.A.S. 48, 220 L.A.C. (4th) 165 (Ont. Arb.); Wang v. Commissioner of InlandRevenue, [1994] 1 W.L.R. 1286 (P.C.); Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53 , [2014] 2 S.C.R. 633;Citadel General Assurance Co. v. Johns-Manville Canada Inc., (SCC), [1983] 1 S.C.R. 513; Fieldturf Inc. v. RecoveryTechnologies of Pennsylvania Inc., 2006 NSSC 197; Toronto Truck Centre Ltd. v. Volvo Trucks Canada Inc./Camions Volvo CanadaInc. (ON SC), 1998, 163 D.L.R. (4th) 740, 81 A.C.W.S. (3d) 256 (Ont.

C.J. (G.D.)); Seidel v. Telus CommunicationsInc., 2011 SCC 15; Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63; Behn v. Moulton Contracting Ltd., 2013 SCC 26; KAEFERIndustrial Services Ltd. v. Vale Newfoundland & Labrador Ltd., 2017 NLTD(G) 65; Midnight Marine Ltd. v. Lloyd’s Underwriters, 2010NLCA 64 STATUTES CONSIDERED: Energy Corporation Act, S.N.L. 2007, c. E-11.01; Limitations Act, S.N.L. 1995, c. L-16.1; JudicatureAct, R.S.N.L. 1990, c. J-4 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch.

D TEXTS CONSIDERED: John Swan, Canadian Contract Law, 1st ed. (LexisNexis: Butterworths Canada, 2006); John D. McCamus,The Law of Contracts, 2nd ed. (Toronto: Irwin Law Inc., 2012); Donald M. Brown, Q.C., David M. Beatty & Adam Beatty, CanadianLabour Arbitration (Canada Law Book 2008); Ruth Sullivan & Elmer A. Driedger, Construction of Statutes, 4th ed. (ButterworthsCanada Ltd., 2002) REASONS FOR JUDGMENT Butler, J.: INTRODUCTION [1] This is an application by the Defendant to strike out the Plaintiff’s statement of claim pursuant to rule 14.24(1)(d).

In itsapplication the Defendant alleges that the Plaintiff has failed to comply with the dispute resolution clause in the parties’ commercialcontract and that, as a consequence, the Plaintiff is prohibited from bringing an action in this Court. As a result, the Defendant submitsthat the Plaintiff’s action constitutes an abuse of the Court’s process. [2] For the reasons that follow, I find that the Plaintiff was compliant with the spirit and intent of the clause and the Plaintiff’serrors on matters such as the form and service of the Notice were trivial.

The Defendant had therefore not established grounds to strikethe Statement of Claim. Had non-compliance been established, the appropriate remedy would be a stay of proceedings and not an orderstriking the statement of claim. Facts

[ 3 ] The Plaintiff is the owner and operator of the Muskrat Falls Project as defined by the Energy Corporation Act , S.N.L. 2007, c. E-11.01 . Phase I of the Muskrat Falls Project included design, construction and installation of a transmission system consisting of 1080 kilometers of overhead transmission line from Labrador to the island of Newfoundland via sub-sea cables and associated converter stations. [ 4 ] By Statement of Claim filed March 13, 2018, the Plaintiff asserts the following: (

a) that it engaged SNC Lavalin Inc. to deliver engineering, procurement and construction management services for Phase I of the Muskrat Falls Project and that SNC Lavalin Inc. did, on its behalf, enter into discussions with the Defendant’s corporate predecessor, Alcan Cable, seeking to determine the most appropriate transmission line conductor design for the transmission system; (

b) that it did, through SNC Lavalin Inc., rely on the Defendant’s representations that it had previous experience in the design and manufacture of large diameter aluminum conductor steel-reinforced cables; (

c) that it relied upon the expertise of the Defendant and the representations made by it during the negotiation phase to the effect that using a 110 Catalyst strand conductor (the “Conductor”) was the best suited option for the transmission system; (

d) that in or about 2013, the Plaintiff issued a Request for Proposals for the material, procurement and fabrication of transmission line conductors based on the initial 110 strand conductor specifications provided by the Defendant. (It is not disputed that the Plaintiff accepted the Defendant’s proposal and the parties entered into a performance contract (the “Agreement”) for the design and supply of the Conductor as of January 2, 2014); (

e) that prototype testing revealed that the prototype conductor experienced a problem known as “prouding”, which the Plaintiff viewed as being in breach of the specifications. The Plaintiff understood, however, that the phenomenon had been remedied and the Defendant delivered the 110 strand conductor to the project site with installation beginning in November 2015; and (

f) that on or about March 14, 2016, with use of a field scope, prevalent prouding was observed in significant intermittent portions of the installed Conductor. [ 5 ] The August 7, 2018 Affidavit of Stephen Follett, at paragraph 5, attests that the Plaintiff immediately informed the Defendant of the “prouding” issue but that the Plaintiff’s priority at that time was to “take a collaborative approach” with the Defendant “in the interest of keeping the Project on

schedule and … on budget”. The Plaintiff issued a stop work order by which point, approximately 170 kilometers of conductor had been installed. [ 6 ] The Follett Affidavit, at paragraph 6 and Exhibits C, D, G and M references a series of discussions held between the parties at various levels between May 11 and July 26, 2016 to determine the root cause of the prouding and decide upon a long-term solution “without prejudicing the rights of either party under the Agreement”. [ 7 ] Mr.

Follett asserts that the discussions began between senior technical advisors of both parties and involved several conference calls and in-person conductor cable tests. He suggests that as discussions advanced, senior project members became involved by telephone conferences and email and, eventually, attended an in-person meeting in Kentucky.

The Defendant does not deny that the parties acted collaboratively and exchanged relevant information in their possession at this time. [ 8 ] The Defendant also admits that discussions advanced up the corporate ladder to Jay Lahman, Vice President and General Manager of the Defendant and Jason Kean, Deputy General Project Manager of the Plaintiff and that by email of June 21, 2016 the Plaintiff confirmed its objective for an upcoming meeting to “ensure we have your fullest support to expedite a solution to this problem, as without such, our Project will be exposed to significant delay and financial harm”. [ 9 ] The Follett Affidavit, at paragraph 6, asserts that through these exchanges and discussions, the Defendant was aware of a dispute in relation to liability for what the Plaintiff considered to be faulty Conductor. [ 10 ] As a

summary of the result of these exchanges and discussions, Mr. Follett referenced a July 25, 2016 email from the Plaintiff’s representative, Jason Kean, to the Defendant’s representative, Jay Lahman, stating: You have advised us that you are not yet in a position to seek legal advice to determine the degree, if any, that your firm is liable under the original supply. Notwithstanding this, we are willing, in good faith to attempt to proceed with the Project without further delay, to pay you for the modification costs.

However, we will not (and cannot be expected to) relinquish any of our potential rights or remedies associated with the original supply, especially since the technical investigation indicates that the originally supplied conductor is not in conformance with the requirements of Agreement PT0328. Consequently, the issue of liability will be set aside for the time being in order to proceed with the Project. In context of the above, we are willing to accept your proposal for the modification (i.e. removal and reapply of outer layer) of the existing 150 reels located at your St.

Maurice Plant subject to the following: In the interest of expediency, we will issue to you a Change Order against the existing Agreement to cover the scope and terms for this work and reflect the obligations of both Parties as negotiated as part of the Agreement. As such all warranty terms and other terms and conditions will be maintained. The Change Order will be non-cancellable by either Party for convenience. The Change Order will stipulate that the price of AI will be subject to adjustment to reflect price at time of shipment.

The Change Order will expressly state that this purchase of new conductor will be without prejudice to our legal rights and remedies available under PT0328 resulting from any breach or default by your firm associated with the previously supplied conductor, including any such rights or remedies we may have to recover the price of this new supply. The Change Order will be issued electronically from our office tomorrow AM. GCC are able to maintain or exceed the production plan as stated.

We interpret your proposal to indicate that you are requesting full costs up-front in only the total remake option, while for the removal and reapply 33 wire scenario you intend to invoice per the terms of the Agreement. Please confirm our understanding in this regard and your concurrence with the above. [ 11 ] Thus, the result was that the Plaintiff bore all costs associated with removing and replacing the product and modifying the remainder of the uninstalled product to make it fit for the purpose. It “shelved” the liability issue and got on with the Project.

It was almost two years later that the Plaintiff resorted to legal action on March 13, 2018. [ 12 ] The Statement of Claim asserts that notwithstanding its reasonable requests and in breach of the Agreement, the Defendant failed to remedy the defective supply or pay the costs associated with rectifying the unacceptable supply of Conductor. The Plaintiff claims rectification costs currently calculated at $57,552,556.00 and other damages to be assessed. THE DEFENDANT’S APPLICATION [ 13 ] The Defendant has not yet filed a Defence.

On March 29, 2018, the Defendant filed an application to strike the Statement of Claim pursuant to rule 14.24(1) (

d) of the Rules of the Supreme Court, 1986 , , S.N.L. 1986, c. 42, Sch. D , on the basis that the Plaintiff’s non-compliance with the dispute resolution clause set out in

Article 34 of the parties’ contract prohibited it from taking legal action, thus making the Plaintiff’s action in this Court an abuse of process. [ 14 ] While the relevant portions of the Agreement are set out in

Schedule A below, I reproduce

Article 34 here for ease of reference: 34.1 If any dispute, controversy, claim, question or difference of opinion arises between the Parties under this Agreement including an

interpretation, enforceability, performance, breach, termination or validity of this Agreement ( “Dispute” ), the Party raising the Dispute shall give Notice to the other Party in writing within thirty (30) days of the Dispute arising, and such Notice shall provide all relevant particulars of the Dispute. 34.2 Upon issuance of Notice of the Dispute, the Parties shall, acting in good faith and a commercially reasonable manner, attempt to resolve the Dispute in the following manner:

a) Within fifteen (15) days of the date of the Notice, the senior project managers for each of the Company and Supplier shall meet;

b) If not resolved by project managers, the project sponsors or representative Vice Presidents for each of the Company and Supplier will meet within thirty (30) days following the meeting of the project managers; and 34.3 If the Dispute is not resolved by the Parties within ninety (90) days from the date of delivery of the Notice of Dispute then a Party may take whatever action is deemed appropriate pursuant to this Agreement. For greater certainty, the Parties must comply with this

Article 34 before commencing any further action, legal or otherwise, with respect to a Dispute under this Agreement. 34.4 Notwithstanding the existence of a Dispute and the referral of the Dispute to the resolution procedures in this

Article 34 , Company and Supplier shall, to the extent reasonably possible, continue to perform their obligations under this Agreement without interruption or delay. The continuation of such performance shall not amount to a waiver of, or in any way prejudice, the position that is taken by the Parties in this Dispute. There shall be no extension to the date for Delivery of Goods by reason that a Dispute has been referred to the dispute resolution process in this

Article 34 . [ 15 ] The Defendant’s Application was supported by a March 28, 2018 Affidavit of Jay Lahman, the Defendant’s Vice President and General Manager, Industrial, Construction Specialty (ICS) Business Unit North America. [ 16 ] At paragraph 8, Mr. Lahman asserts that prior to the Statement of Claim having been issued on March 13, 2018: (

a) No written notice of the Dispute, nor with all relevant particular, was delivered by or on behalf of the Plaintiff to General Cable’s Regional Sales Manager, Eastern Canada (as required under

Article 32 of the Purchase Agreement) or otherwise; (

b) No meeting between the senior project managers for the parties occurred to attempt to resolve the Dispute; (

c) No meeting between the project sponsors for the parties occurred to attempt to resolve the Dispute; and (

d) No meeting between representative Vice Presidents for the Parties occurred to attempt to resolve the Dispute. [ 17 ] Once the Plaintiff was aware of the Defendant’s position as set out in its application it immediately provided the Defendant with a formal Notice of Dispute on April 19, 2018 and requested that the parties meet again.

[ 18 ] The Defendant disputes that this qualified as a Notice and suggests that the earliest date that a Notice was received (and then, without “all relevant particulars”) was May 8, 2018. [ 19 ] The Follett Affidavit, at paragraphs 13 to 22, suggests that: (

a) in the months that followed the May 8, 2018 Notice, the Plaintiff provided the Defendant with over 250 relevant technical documents, 88 videos and video recordings of the “prouding”; (

b) the Defendant took the position that these did not constitute “all relevant particulars” required of the Notice contemplated by

Article 34.1 and refused to commence the first meeting of Senior Project Managers as contemplated by

Article 34; (

c) the Defendant demanded that the Plaintiff provide a Notice to third parties who were not parties to the Agreement; (

d) finally, on May 30, 2018, the parties met in St. John’s; (

e) following the meeting the Defendant made a request for documents in 33 categories that the Defendant felt was contemplated by “all relevant particulars”; and (

f) while the Plaintiff believed this request went beyond the requirements of

Article 34.1, it nevertheless undertook to provide them as quickly as possible so that they could advance good faith negotiations between the parties. [ 20 ] The Defendant suggests that while it was frustrated by the incomplete disclosure, it agreed on a without prejudice basis to attend the first of the meetings contemplated by

Article 34 on May 30, 2018. [ 21 ] The Plaintiff asserts that by August 3, 2018 it had satisfied 29 of 33 of the requested categories of documents and that this constituted over 8500 emails and attachments. It asserts that the next step was to be a meeting between the respective Vice Presidents. [ 22 ] At the hearing, counsel acknowledged that this “second level meeting” was to be held on November 27, 2018. [ 23 ] The Defendant does not suggest that it was unaware of performance issues with the Conductor, nor does it claim that it was prejudiced in any manner by attending the series of meetings held up the chain of command between May and July 2016. Instead, the Defendant’s position is: (

a) that the Notice mandated under

Article 34.1 must be in the format outlined in

Article 32 and was not given and the Defendant is entitled to rely upon strict compliance with Articles 32 and 34; and (

b) that failure to give the Notice renders the legal action commenced on March 13, 2018 an abuse of this Court’s process, as

Article 34.3 states that “The Parties must comply with this

Article 34 before commencing any further action, legal or otherwise, with respect to a dispute under this Agreement”. [ 24 ] These facts beg the obvious question of why (if breach of

Article 34 is established) the appropriate remedy would not be a stay of proceedings of the action. In response to this enquiry, Defendant’s counsel asserts that should strict compliance with

Article 34 be waived and the action be stayed and not struck, the Defendant would lose its ability to defend a new action filed after compliance with

Article 34 on the basis of a statutory limitation period of two years. In this regard, the Defendant would intend to rely upon

section 5 of the Limitations Act , S.N.L. 1995, c. L-16.1 , suggesting that the right to commence an action arose in May 2016 and that any legal action would have had to be commenced by May 2018. the PLAINTIFF’S application [ 25 ] By separate Application dated September 28, 2018 the Plaintiff seeks an Order compelling the Defendant to file a Statement of Defence to the Statement of Claim pursuant to Rule 10.02(1) of the Rules. ISSUES [ 26 ] These applications require me to consider of the following issues: (

a) Did the Plaintiff comply with the requirements of

Article 34? (

b) If not, what is the appropriate remedy? (

c) If the statement of claim is not struck, should the Defendant be ordered to file a Defence? analysis General Principles of Contractual

Interpretation [ 27 ] The main issue in this case relates to the

interpretation of

Article 34 of the parties’ agreement. It is necessary, therefore, to outline the principles of contractual

interpretation applicable in this case. [ 28 ] As the starting point in this analysis, I note that the fundamental purpose of the law of contract is said to be protection of the parties’ reasonable expectations (John Swan, Canadian Contract Law , 1st ed. (LexisNexis: Butterworths, 2006)). As Swan notes (at page 23): … any court that is asked to enforce a promise must consider: (

i) will the promisor be caught by surprise if the promise is enforced? (ii)

will the promisee be similarly caught if the promise is not enforced? and (iii) will either party be unjustly enriched if the promise iseither enforced or refused enforcement? … the common law has dealt with the pervasive risk of surprise by adopting the standard of reasonableness: the belief of the party whoruns the risk of being surprised has to be reasonable.

The promisor’s expectation that the promise will not be enforced has also to bereasonable, as has the promisee’s expectation that it will be enforced. [29] Further to this, reasonable reliance on contractual terms should be protected and “is so important that courts will use whatevertool is at hand to achieve it” (Swan, at page 25). [30] Geoff R. Hall, in his text, Canadian Contractual

Interpretation Law, 3d ed. (Toronto: LexisNexis, 2016), notes that contractualinterpretation “requires consideration of two things, namely the words selected by the parties to set out their agreement, and the contextin which those words have been used” (page 9). Hall further notes that: The reconciliation of words and context is a practical, not a technical one… The courts recognize that language and its usage are flexible,and that an infinite variety of commercial and business arrangements requires a holistic approach. As recently expressed by the SupremeCourt of Canada in Sattva Capital Corp. v. Creston Moly Corp. [2014 SCC 53 , [2014] 2 S.C.R. 633], “the

interpretation ofcontracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction.” [31] John D. McCamus, in his book The Law of Contracts, 2nd ed. (Toronto: Irwin Law Inc., 2012), also provides valuableguidance. For instance, at page 745 McCamus notes that: The law of

interpretation of agreements addresses the difficult task of determining, on the basis of the parties’ actual agreement, whatthose intentions should be considered to be. The process of

interpretation is an exercise of giving meaning to the terms adopted by theparties in formulating their agreement. It is often said that the process of

interpretation is an exercise in attempting to ascertain the “trueintentions” of the parties. [32] At page 763, McCamus confirms that “In choosing among possible constructions of an agreement, courts will avoid aninterpretation that produces a commercial result that is considered unreasonable”. In Consolidated Bathurst Export Ltd. c. Mutual Boiler& Machinery Insurance Co., (SCC), [1980] 1 S.C.R. 888 the principle was expressed in the following manner: … Where words may bear two constructions, the more reasonable one, that which produces a fair result, must certainly be taken as theinterpretation which would promote the intention of the parties. Similarly, an

interpretation which defeats the intentions of the partiesand their objective in entering into the commercial transaction in the first place should be discarded in favour of an

interpretation of thepolicy which promotes a sensible commercial result. … [33] Where can the Court turn for assistance in the

interpretation of contractual language? Relying again on McCamus, I acceptthat: (

a) negotiations, draft and antecedent agreements are inadmissible for the purpose of construing a contract; (

b) the words used in an agreement are normally to be construed in accord with their natural or ordinary, or hasbeen said, in their plain ordinary and popular sense; (

c) the subsequent conduct of the parties may be of some assistance in determining the proper construction; and (

d) evidence may be admitted to indicate that the parties utilized particular terms in a specialized sense or in accordwith customary usage in a particular trade. [34] I would also consider the following canons of construction discussed in McCamus’ text as relevant: (a) “Construction of the Agreement as a Whole” - “Agreements are to be construed in such fashion as to effectuatethe intentions of the parties as can best be determined from the entirety of the agreement.

Individual terms are thus to be construed inthe light of their relationship to other parts of the agreement and the overall objectives of the agreement.” (page 761) (b) “Giving Effect to All Parts of the Agreement” - Terms are to be interpreted in the context of the entireagreement between the parties so that, if at all possible, it does not render redundant or nullify another clause of the Agreement. “Thus,courts will lean against an

interpretation of an agreement that will render one of the terms meaningless.” (pages 762 to 763). (c) “Avoiding Commercially Unreasonable or Absurd Outcomes” - Citing Consolidated-Bathurst, McCamusconfirms that “courts will avoid an

interpretation that produces a commercial result that is considered unreasonable”. And, “…the moreunreasonable or absurd a particular

interpretation appears, the greater will be the judicial effort expended in attempting to find a morereasonable

interpretation”. (pages 762 to 765). (d) “The Preference for a Construction That Preserves the Validity or Legality of the Agreement” - Here,McCamus states that “[W]hen confronted with a choice between an

interpretation that will render an agreement or a term invalid or onethat will render it valid, courts prefer the construction that supports validity”. (page 772). [35] Keeping the foregoing in mind, I turn now to the

interpretation of the agreement in this case.

The Words Used in

Article 34 [36] On the whole,

Article 34 provides a means by which the parties to an Agreement addressing material procurement and supportof enormous infrastructure in the development of a hydroelectric project, could address disputes that would inevitably arise, in good faithand in a commercially reasonable manner. [37] Looking first at the words employed by the parties in that provision, we see that

Article 34.1 states that the Party raising thedispute “shall give Notice to the other Party in writing within thirty (30) days of the Dispute arising” and that the Notice “shall provideall relevant particulars of the Dispute”. The form of notice is specified in

Article 32.1 (reproduced in

Schedule A).

Article 34.2 statesthat, after the issuance of the required notice, the parties “shall, acting in good faith and a commercially reasonable manner, attempt toresolve the Dispute” by having a meeting between the senior project managers for each party within 15 days and, if required, having ameeting between the vice president for each party within 30 days after the meeting of the senior project managers.

Article 34.3 providesthat if the dispute is not resolved within 90 days of the delivery of the required notice then the aggrieved party may take whatever actionthey deem appropriate.

Article 34.3 goes on to state, however, that “the Parties must comply with this

Article 34 before commencing anyfurther action, legal or otherwise…”. Finally,

Article 34.4 provides that the parties, “shall” perform their obligations under theAgreement without interruption or delay. I highlight the words “shall” and “must” in the foregoing excerpts as I believe that theinterpretation of these words is central to the result in this case. [38] The meaning of the words “shall” and “must” has been discussed extensively in case law and texts, most evidently in labourarbitration or statutory

interpretation contexts. Although those contexts may be distinguishable, the discussion and analysis of the usageof these terms can provide guidance to the contractual

interpretation issue that must be addressed in this case. [39] For example, in U.A., Local 552 v. Greater Essex County District School Board, 2011 ONSC 5554, the court had to considerwhether the grievance at issue there should have been barred from arbitration due to the wording of the collective agreement in forcebetween the parties. The court, in reviewing the Articles of the agreement and their wording, specifically the word “shall”, referred to thefollowing principle of

interpretation set out in Brown and Beatty’s book ‘Canadian Labour Arbitration’ Canada Law Book, 2008: The more prevalent view ... is that notwithstanding the imperative character of the word “shall”, whether it is mandatory or directoryultimately will turn on the construction of each agreement. For example, where the agreement does not contain an express provisionproviding for a penalty or does not address the consequence of non-compliance, the provisions will more likely be construed as directoryonly. [40] In the statutory

interpretation context, Ruth Sullivan & Elmer A. Driedger, Construction of Statutes, 4th ed. (ButterworthsCanada Ltd., 2002), in discussing the

interpretation of the word “shall”, has noted at page 60 that: If breaching an obligation or requirement imposed by “shall” entails a nullity, the provision is said to be mandatory; if the breach can befixed or disregarded, the provision is said to be directory. The term “directory” is unfortunate in so far as it implies that “shall” issometimes not imperative, that it sometimes has the force of a mere suggestion. … [41] In British Columbia (Attorney General) v. Canada (Attorney General), (SCC), [1994] 2 S.C.R. 41, the courtsought to determine whether the word “shall” in a

section of the Railway Act was mandatory or directory.

Justice Iacobucci, writing forthe majority stated: When considering whether a statutory provision is mandatory or directory, the court should consider whether it would be seriouslyinconvenient to regard the provision’s performance as imperative … the word “shall” in s. 268(2) of the Railway Act suggests animperative reading... however, there are significant adverse consequences to finding that s. 268(2) is mandatory … [42] Justice Iacobucci referenced case law that addressed the effect of the word “shall”, noting its treatment as presumptivelyimperative in its ordinary grammatical meaning (see Re Manitoba Language Rights, (SCC), [1985] 1 S.C.R. 721 andMontreal Street R.

Co. v. Normandin, (UK JCPC), [1917] A.C. 170, 33 D.L.R. 195 (PC)).

He discussed the effect ofconcluding this term was imperative and in doing so, he reiterated and endorsed a question asked by previous courts: “would it beseriously inconvenient to regard the performance of some statutory direction as an imperative?” This, he noted, was an important factorin determining whether the word “shall” should be interpreted as mandatory or directory. [43] From these authorities I accept that the term “must” is mandatory language whereas the term “shall”, although imperative, may,depending upon the context in which the word is used, be considered mandatory or directory. [44] While I note that the use of the mandatory/directory analysis for the purpose of contractual

interpretation has been criticized(see comments of Arbitrator Bendel in Revera Retirement v. U.S.W., Local 8300 (2012), 111 C.L.A.S. 48, 220 L.A.C. (4th) 165 (Ont.Arb.)), as has its use in the statutory

interpretation context (see Re Manitoba Language Rights), I find it helpful, nonetheless, in that ithighlights that the word “shall”, despite its imperative nature, is susceptible to more than one

interpretation. [45] From the guidance provided by McCamus, cited above, we know that what is important in the contractual

interpretationcontext, of course, is determining what the parties intended through the use of a particular word. What then was intended through theuse of the word “shall” in this case? [46] In considering this issue, I find the analysis of the Privy Council in Wang v. Commissioner of Inland Revenue, [1994] 1 W.L.R.1286 at 1296, to be of assistance. While the Privy Council was there considering the effect of the use of the word “shall” in legislation,the focus of its analysis was on the underlying intention of the legislative drafters. Criticizing the mandatory/directory dichotomy, thePrivy Council stated that the

interpretation of the meaning of the word “shall” should involve the resolution of two questions, namely: The first is whether the legislature intended the person making the determination to comply with the time provision…Secondly, if so, didthe legislature intend that a failure to comply with such a time provision would deprive the decision maker of jurisdiction and render anydecision…null and void?

[47] Applying the practical and common sense approach to the interpretive exercise endorsed by the Supreme Court in CrestonMoly Corp. v. Sattva Capital Corp., 2014 SCC 53 , [2014] 2 S.C.R. 633 and rephrasing the questions above for the purposes ofthis case, I believe I must address firstly, whether the parties intended strict adherence to the form of Notice, the manner of service, thetiming of meetings and the attendees at the meetings, and secondly, did they intend that failure to strictly adhere could potentiallydeprive a party from access to the Court for remedies available at law? Other Relevant Provisions [48] To the extent that the Agreement (without Exhibits) assists, I find that

Article 32 has a relationship to

Article 34. It confirmsthat the Notice referenced in

Article 34 shall take a particular format (in writing, marked to the attention of a particular representative,signed and delivered by post, hand or Aconex) (see

Schedule A). [49]

Article 1.13 also provides guidance. It confirms that “the exercise of …rights or recourse shall not constitute a waiver orrenunciation of any other rights or recourse. Except as expressly provided in the Agreement, the obligations imposed by the Agreementand the rights and remedies available thereunder are in addition to and not a limitation of any obligations, rights and remedies otherwiseimposed or available by law”.

The Actions of the Parties in this Case [50] I turn next to consider the actions of the parties. • Minutes of the May 11, 2016 meeting held between representatives of the Parties to address this issue confirmed that concern hadbeen raised over the loose strands on the Conductor, that it was under investigation, that photos were tabled for discussion, and that a sitevisit was to be arranged for May 22, 2016. • The next meeting was May 24, 2016 and here the preliminary assessment of the site visit testing was discussed.

Samples had beensent for independent testing. • The next meeting was May 25, 2016; the parties discussed technical issues including whether the slightly protruded strand after asheave test qualified as a “proud” strand. Further investigations and simulation tests were proposed. • On May 25, 2016 the Plaintiff wrote the Defendant’s contractor representative, (Clinton Hunter) reaffirming the “criticality ofGeneral Cable’s fullest and continued commitment in the determination and correction of the root cause of this” (strand protrusion)“condition”. This letter was sent by email to General Cable Co.

Ltd., 156 Parkshore Dr., Brampton, ON, L6T 5M1. It was signed byKumar Kandaswamy, company representative. It requested a telephone meeting with the Defendant’s “executive sponsor (i.e. VicePresident Jay Lahman)” which was held on June 8, 2016. • A conference call between senior project members (including the Plaintiff’s Project Manager and the Defendant’s GeneralManager, Quality Assurance Manager and Vice President) was held May 27, 2016.

The same or similar parties were on anotherconference call on May 31, 2016. • A face-to-face meeting was held on June 8, 2016 in Highland Heights, Kentucky, U.S.A. between (but not limited to) thePlaintiff’s Deputy General Project Manager and Project Manager to the Defendant’s Vice President and General Manager (ApplicationsEngineer), Plant General Manager, Quality Assurance Manager and Vice President. • Email correspondence continued until July 26, 2016 by which date the Plaintiff’s correspondence confirmed that “the issue ofliability will be set aside in order to proceed with the Project”. [51] Within the period May to July 2016 there was no reference to the Defendant raising any concern that there had been no Noticeto its Regional Sales Manager.

Problem versus Dispute [52] Here, I address the Defendant’s submission that the meetings held in 2016 were not “negotiations to resolve a dispute” butinstead, discussions related to a problem. [53] The Affidavit of Jay Lahman describes the problem in the following terms, at paragraph 9: In the Spring of 2016, General Cable had been made aware of an anomaly relating to the transmission line conductors supplied byGeneral Cable as well as related installation issues involving third parties.

Ultimately, following a period of discussion by the Parties, inwhich I was involved, Change Order agreements for supply of remanufactured transmission line conductors were entered into by theParties in October, 2016. The discussions of the Parties in 2016 were for the purpose of reaching a business solution which would allowthe Plaintiff to secure a line of conductors that would enable it to timely complete the installation.

The Change Order agreements wereexpressly without prejudice to any subsequently raised dispute concerning the Parties’ respective rights, remedies and defencesassociated with previously supplied conductors. [54] Counsel for the Defendant suggests that a business problem can be elevated to a dispute and that when and if that occurs,Article 34 applies, but until such time

Article 34 has no relevance to what occurred in the spring and summer of 2016. [55] The distinction between business problem and dispute is not made out in

Article 34. Its opening words imply a broadapplication of the dispute resolution process not merely to disputes but to controversies, claims, questions or differences of opinionarising between the parties and specifies that it includes issue of “interpretation. Enforceability, performance, breach, termination orvalidity” of the Agreement.

[ 56 ] The problem that the parties were addressing in 2016 was with the performance of the Conductor and whether its supply was in conformity with the terms of the Agreement. I find therefore that it falls within

Article 34. [ 57 ] Further, I find that the Defendant is drawing a distinction without a difference and I agree with Plaintiff’s counsel that it is a reflection of the Defendant’s lack of a genuine interest in resolving the claim.

What was the Purpose of the Notice? [ 58 ] I accept that, in the context of this commercial contract, the purpose of the Notice was to avoid surprise and permit the parties to resolve the problems that would inevitably arise on the Project in a timely and reasonable manner. [ 59 ] The Plaintiff’s position enabled the parties to have expedited, open and comprehensive discussions leading to a business solution.

The Project was not stalled; the Defendant continued to be paid; the Plaintiff shouldered all costs and litigation was not pursued until twenty-one months later and then only in an abundance of caution over a limitation period. [ 60 ] The Plaintiff’s actions served to promote the underlying purpose and objective of the Notice required by

Article 34. In stark contrast, the Defendant’s position (after the Statement of Claim was issued), would frustrate the underlying purpose and objective of

Article 34 because it would inordinately delay the meetings that the

Article required be held expeditiously in an effort to resolve the problem. How should

Article 34 be construed? [ 61 ] To the extent that Articles 32.1, 34.1, 34.2(

a) and 34.2(

b) used the term “shall” for the form of Notice and the steps to be followed in the dispute resolution process, I conclude for the following reasons that the parties’ true intentions were not for strict adherence to the form of Notice, its manner of service, the timing of the meetings and who attended but instead to compliance with the overall spirit and intent of the clause. That intent was to give notice of the problem and to take a multiple step approach to resolving it before resorting to litigation: (

a) Surprise – Relying on Swan, at page 23, and considering the actions of the parties, I conclude that the Plaintiff would be “caught by surprise” if Articles 32.1, 34.1 and 34.2 were interpreted as the Defendant suggests; in comparison, the Defendant would not be caught by surprise with the Plaintiff’s

interpretation. Notwithstanding that a formal Notice in the format required by

Article 32.1 was not given before the series of meetings was held, the Defendant had notice of the problem, was aware of the dispute and had at least one representative in attendance at five meetings held between May and July 2016. (

b) Actions of the Parties – What occurred between May and July 2016 was consistent with what

Article 34 intended insofar as those “on the ground” responded to the problem, meetings were held in which technical issues were discussed and relevant information was exchanged. Testing occurred on Site; test results were sent to independent experts and the results discussed. Within this entire period there is no reference to the Defendant raising concern that its Regional Sales Manager had not received a “Notice”. When the parties could not agree upon who was liable for the problem, the dispute was ‘shelved’ and the Plaintiff took it on its shoulders to cover the full cost of remediation and get the job done.

It was a practical and purposeful approach to the problem identified and that was what

Article 34 contemplated. (

c) Commercially Unfair/Unreasonable – Citing McCamus, page 763, the Defendant’s position on the

interpretation of

Article 34 would result in a construction of

Article 34 that is commercially unreasonable and unfair. It could, if the Defendant’s position on the limitations’ period is correct, result in the complete loss of the Plaintiff’s ability to have liability for the Conductor problem determined by a court as contemplated by

Article 1.13. The Defendant has not established prejudice by failure to give a Notice in the format outlined in

Article 32.1 and the Defendant’s position (that the formal Notice must predate the meetings contemplated) does not meet “the fundamental purpose of the law of contract” being the “protection of the parties’ reasonable expectations (Swan). The

interpretation I have given to Articles 32 and 34 avoids a “commercial result that is considered unreasonable” (McCamus, page 763). (

d) Canons of Construction – Applying the relevant canons of construction earlier cited, I conclude that the Plaintiff’s

interpretation is consistent with construction of the agreement as a whole, gives intended effect to all relevant parts thereof, avoids an absurd outcome and is an outcome that supports validity of the agreement and should therefore be preferred. The Defendant’s

interpretation suggests potential for an expired limitation period notwithstanding that the Plaintiff acted in good faith, “shelved” the liability issue and continued to perform its obligations without interruption or delay as contemplated by

Article 34.4. This

interpretation could leave the Plaintiff with no recourse, contrary to

Article 1.13 and would be an absurd result. Confronted with the choice between an

interpretation that would produce an absurd result and one that supports intended effect of the clause, I prefer the Plaintiff’s

interpretation (McCamus, page 772).

As to reasonableness, this principle requires the Defendant to rationally defend its position with regard to the other party’s interest. TheDefendant’s position (that it is entitled to have the Statement of Claim struck) would leave the parties in a situation where meetings andnegotiations could occur but with the Defendant wielding the enormous bargaining power that comes with the knowledge that ifnegotiations failed, there was a risk that the Plaintiff would have no ability to resort to this Court in pursuit of its claim for $57.5 millionin damages. The Defendant has not established that the parties intended such a result under

Article 34 and I find it is neither rational nora commercially reasonable result to the alternative dispute resolution provisions of this contract. (

e) Trivial or Technical Non-Compliance - On its face, the Plaintiff’s May 25, 2016 letter met the requirements ofArticle 32.1(

a) and (c). It was in writing and signed by a representative of the Plaintiff. As to

Article 32.1(

b) and (e), it was delivered by email to Mr. Lahman, who was not the Defendant’s Regional Sales Manager and it wasnot delivered by post, hand or Aconex but by email. (Since it was given by the Plaintiff,

Article 32.1(

d) was not applicable.) As to

Article 34.1, the May 25, 2016 letter was written within 30 days of the problem arising. The Plaintiff’s May 25, 2016 letter did notpredate the meetings held on May 11, 24 and 25 as contemplated by

Article 34.2(a). Since the issue was not resolved by the projectmanagers by May 25, 2016, the Plaintiff’s request for a meeting with the Defendant’s Vice President within 24 to 48 hours wasconsistent with

Article 34.2(

b) which anticipated such a meeting within 30 days. Finally, as to

Article 34.4, the records establish that the Plaintiff and Defendant continued to perform their obligations under theAgreement to the extent reasonably possible, notwithstanding the problem. At page 466, Swan addresses the question of whether it matters if a contractual notice is not given in strict compliance with the terms ofthe Agreement. Citing Citadel General Assurance Co. v.

Johns-Manville Canada Inc., (SCC), [1983] 1 S.C.R. 513,Swan notes that where a labour and material payment bond had been required by registered mail but was received by ordinary mail, theSupreme Court of Canada characterized the nature of compliance as “trivial non-compliance” and determined that it did not discharge acompensated surety. I accept from Swan that: “the important point will be whether in the circumstances” the person who was entitled to receive notice actually did receive it andwhether any prejudice might have arisen from the way in which the notice was given.

The person who does not give notice in the wayspecified in an agreement runs the risk that the notice that was given will, when the question is examined by a court, turn out to beineffective.

On the other hand, the person who actually receives notice – regardless of how it was given and making allowance wherenecessary for the problems of communicating through an agent – may be estopped from claiming that the notice was ineffective. (pages466 to 467) I would similarly characterize the alleged defects in the Plaintiff’s Notice and procedure as trivial and I have already noted that theDefendant was unable to point to any prejudice to it in the procedure followed. (

f) Good Faith and Reasonableness - Swan provides assistance on the concepts of good faith and reasonablenessin contractual relations and states: As a standard of conduct, the concept of reasonableness has a slightly different focus. If good faith focuses principally on honesty andfairness, reasonableness focuses on rationality or the absence of subjective whim. Reasonableness connotes the ability to give reasons,to defend rationally an action or a decision.

Reasonableness may require the party subject to that standard to have regard to the otherparty’s interests. … The particular situation where standards of good faith and reasonableness are important is the long-term contractualrelation. (pages 698 to 699) I conclude that the Plaintiff has established that despite the technical non-compliance it took all steps contemplated by

Article 34 toattempt to resolve the dispute in good faith and in a commercially reasonable manner. In contrast, I agree with Plaintiff’s counsel that the Defendant’s actions since the Statement of Claim was issued are suggestive of effortsto frustrate the purpose and intention of

Article 34: (

a) It has insisted upon a one-sided document disclosure process that is neither supported by nor proportional to the intent of Article34.1.

(

b) It has attempted (despite numerous meetings at various levels) to force the Plaintiff to repeat the process started in 2016 because of trivial non-compliance with the form of Notice and despite being aware of the problem. (

c) The Defendant’s clear motivation for the position taken is to force the Plaintiff to enter into discussions under pressure (concern that the Plaintiff has no legal recourse to the Court, should negotiations fail). (

d) The Defendant’s actions, overall, are the antithesis of reasonableness and suggestive of bad faith delays. Good faith focuses principally on honesty and fairness. There is no suggestion that the Plaintiff’s actions were otherwise. The Defendant’s position (that trivial non-compliance with Articles 32.1 and 34.1 renders the action void) runs contrary to principles of honesty and fairness. Strict compliance with

Article 34.1’s words (“shall give Notice to the other party in writing…”) would not advance the good faith and commercially reasonable approach which is mandated by

Article 34.2. [ 62 ] I have found the Plaintiff’s actions to be compliant with the parties’ intentions on Articles 34.1, 34.2 and 34.4, but this does not end the analysis because

Article 34.3 uses the term “must”. [ 63 ] While “must” is mandatory, the phrase in which it is used is important. It states, “For greater certainty, the Parties must comply with this

Article 34 before commencing any further action, legal or otherwise, with respect to a dispute under this Agreement”. [ 64 ] Since I have found the Plaintiff’s actions to satisfy Articles 34.1, 34.2, and 34.4, I conclude that the Plaintiff has established that it did “comply with …Article 34 before commencing” the action. [ 65 ] On this point, I note that the case of Fieldturf Inc. v. Recovery Technologies of Pennsylvania Inc. , 2006 NSSC 197 , cited by the Defendant is distinguishable.

In that case, the parties to the action had similarly included a dispute resolution clause in their contract and the plaintiff there had commenced an action without first complying with that section. With respect to this, Justice Hall noted: [18] … the plaintiff commenced this action by by-passing the alternative dispute resolution provisions in the supply agreement and which the defendants have subsequently invoked by giving the required notice under paragraphs 12 and 13 of the supply agreement. The purpose of such provisions is to avoid the substantial costs and delays involved in litigation.

Generally the courts encourage parties to engage in such a process rather than immediately resorting to the litigation route when a conflict arises. … [20] As I see it, the alternative dispute resolution provisions contained in the supply agreement are mandatory pre-requisites that must be complied with before a party to the agreement may commence legal proceedings. In other words, the plaintiff was under a contractual obligation to exhaust the remedies through the alternative dispute resolution process before commencing the action that is now before the court.

In these circumstances, since it failed to do so, it would be wrong for this court to exercise any jurisdiction over the matter that it might have. [ 66 ] As I have found that the Plaintiff in the case before me has substantially complied with the parties’ intentions for the dispute resolution provision, the situation before me is different than that existing in Fieldturf , where there was no compliance with the dispute resolution clause. [ 67 ] Similarly, 3289444 Nova Scotia Ltd. v. RW Armstrong & Associates Inc. , 2016 NSSC 330 , also cited by the Defendant, can be distinguished on the same basis.

In that case the plaintiff acknowledged its failure to engage in the dispute resolution process contemplated by the contract. The same cannot be said here. [ 68 ] As a result, the Defendant has not established that it is entitled to either a stay of proceedings or an order to strike pleadings. Striking the Statement of Claim [ 69 ] Should I be held incorrect on the

interpretation of

Article 34 and my conclusion that the Plaintiff’s actions were compliant with the spirit and intent of the dispute resolution clause, I shall address the merits of the Defendant’s Application under Rule 14.24. [ 70 ] Striking a Statement of Claim is extraordinary relief, and both counsel for the Plaintiff and the Defendant acknowledge that there is no Canadian authority to support striking the Statement of Claim in this instance; instead all authorities cited (in which non- compliance with terms of a commercial contract were established) have resulted in the granting of a stay of proceedings.

See for example Fieldturf . [ 71 ] Alternatively, where non-compliance with a dispute resolution clause (requiring reference to arbitration) has been established,

the court has ordered arbitration (see for example Toronto Truck Centre Ltd. v. Volvo Trucks Canada Inc./Camions Volvo Canada Inc. (ON SC), 1998, 163 D.L.R. (4th) 740, 81 A.C.W.S. (3d) 256 (Ont. C.J. (G.D.)) and Seidel v. Telus CommunicationsInc., 2011 SCC 15. [72] The Defendant characterizes the Plaintiff’s actions as an abuse of process and relies on Rule 14.24(1)(

d) for the Court’s abilityto strike pleadings if an abuse of process is established and on the Supreme Court of Canada’s decision in Toronto (City) v. C.U.P.E.,Local 79, 2003 SCC 63 to support the Court’s inherent and residual discretion to prevent an abuse of the Court’s process.

From thisauthority I accept that abuse of process may be established if proceedings are unfair to the point that they are contrary to the interest ofjustice, or oppressive or vexatious and violate the fundamental principles of justice that underlie the community’s sense of fair play anddecency (paragraph 35). [73] I also accept from Behn v.

Moulton Contracting Ltd., 2013 SCC 26, that because fairness is key, the doctrine of abuse ofprocess is unencumbered by specific requirements. [74] The Defendant suggests that this Court should not approve or countenance an action taken in blatant default of the terms of acontract and instead should hold the Plaintiff to its contractual obligations and allow the parties to enter negotiations and prevent anaction from being commenced prematurely. [75] Defendant’s counsel acknowledges that he has been unable to locate Canadian authority in support of an Order to strike theStatement of Claim; however, he suggests that there were no limitations issues presented in any of the authorities that granted a stay ofproceedings. [76] I conclude that the fundamental principles of justice require that I take a “big picture” approach to the issue.

Were I to strikethe Statement of Claim in this instance (based on what would, at worst, be characterized as trivial or technical non-compliance withArticle 34), I would render futile the Plaintiff’s good faith actions in attempting to resolve the problem, by “shelving” the dispute andcovering the full costs of remediation. It would leave the parties to enter negotiations with the Defendant wielding the enormousbargaining power that comes with the knowledge that, failing further dispute resolution discussions, the Plaintiff has no ability to pursueits claim for $57.5 million in damages.

Such a result would violate the community’s sense of fair play and decency. [77] I consider the lack of Canadian jurisprudence supporting the striking of a Statement of Claim in such an instance to beconsistent with both the exercise of common sense and general recognition of an order to strike as being an inappropriate response tosuch a default fault. Stay of Proceedings [78]

Section 97 of the Judicature Act, R.S.N.L. 1990, c. J-4 give this Court jurisdiction to direct a stay of proceedings but no test iscontained in the section. [79] The Plaintiff relies upon KAEFER Industrial Services Ltd. v.

Vale Newfoundland & Labrador Ltd., 2017 NLTD(G) 65 (and theNewfoundland and Labrador authorities cited therein) for the test to be met for the exercise of the Court’s discretion to grant adiscretionary stay of proceedings (see paragraphs 28-30). [80] Each of these cases involved the exercise of discretion in circumstances where the parties had agreed to refer their dispute toarbitration. [81] In the context of enforcement of a forum selection clause, our Court of Appeal in Midnight Marine Ltd. v.

Lloyd’sUnderwriters, 2010 NLCA 64 confirmed that once the Court was satisfied that the contract required the clause to be followed, a staymust be granted unless the opposing party established strong reasons to support that it would not be reasonable or just. The Defendanthas failed to meet this test. [82] As a result, should I be held incorrect on my conclusion of the parties’ intentions for compliance with the dispute resolutionclause. I conclude that the appropriate remedy would be a stay of proceedings and not an order to strike the Statement of Claim.

Application to compel filing of a Statement of Defence [83] During the course of the argument on these Applications, Defendant’s counsel conceded that its Statement of Defence would befiled on or before January 4, 2019 but I note that this was not done. In these circumstances, I would order it to be filed by February 28,2019. order 1. The Defendant’s Application to Strike the Statement of claim is denied. 2. The Defendant’s Defence shall be filed by February 28, 2019. 3. The Plaintiff shall have its party and party costs to be taxed on Column 3.

_____________________________ Gillian D. Butler Justice

SCHEDULE A LABRADOR-ISLAND LINK LIMITED PARTNERSHIP And GENERAL CABLE COMPANY LTD. PURCHASE AGREEMENT EQUIPMENT AND MATERIALS Supply of Transmission Line Conductors – 350 Kv HVdc Agreement No. PT0328-001 DATED AS OF January 2, 2014 … 1.2(o) “Change Order” means an order or directive for a Change issued in the form set out in Exhibit 3 – Coordination Procedures, and signed by Company. … 1.2(z) “Dispute” has the meaning ascribed thereto in

Article 34.1. … 1.2(dd) (ii) “Notice” means a written communication that is required to be delivered in accordance with

Article 32. …

1.3 The doctrine of contra proferentem shall not apply in the

interpretation of this Agreement, meaning that if there is any ambiguous language in this Agreement it shall not be interpreted more strongly against the Party who prepared or drafted the ambiguous language. … 1.5 Wherever, in the Agreement, a number of days are prescribed for any purpose, unless otherwise specified, the days shall be calendar days and shall be reckoned exclusively of the first and inclusively of the last.

If an action pertaining to the administration of this Agreement, Notices or Disputes is required to be completed on a specified day which is not a Business Day, then the action shall be competed instead on the next Business Day. … 1.11 This Agreement shall be construed and the relations between the Parties determined in accordance with the laws of Newfoundland and Labrador and Canada, including any limitation periods, and reference to such laws shall not, by application of conflict of laws rules or otherwise, require the application of the laws in force in any jurisdiction other than Newfoundland and Labrador.

The Parties hereby irrevocably attorn to the exclusive jurisdiction of the Courts of the Province of Newfoundland and Labrador and Canada for the resolution of any dispute arising hereunder. … 1.13 The rights and recourse of Company and Supplier contained in the Agreement are cumulative and not in the alternative unless otherwise provided. The exercise of any such rights or recourse shall not constitute a waiver or renunciation of any other rights or recourse.

Except as expressly provided in the Agreement, the obligations imposed by the Agreement and the rights and remedies available thereunder are in addition to and not a limitation of any obligations, rights and remedies otherwise imposed or available by law. … 10.13 Payment of any invoice by Company shall not prejudice the right of Company to protest or question the correctness of the invoice for a period of up to two (2) years after expiration or any termination of this Agreement.

Failure by Engineer or Company to protest or question charges in an invoice shall not be deemed to be Approval by Company or Acceptance by Engineer of the charges or as an acceptance of defective workmanship, materials or equipment, nor preclude Engineer or Company from subsequently questioning an amount or from conducting an audit. … 10.15 Delay by Company in making a payment when it becomes due and payable shall not be deemed to be a breach of the Agreement by Company. … 32.1 Unless otherwise specified in the Agreement, any Notice given or made pursuant to the Agreement shall:

a) be in writing;

b) be marked to the attention of Regional Sales Manager, Eastern Canada, in the case of Supplier, or to the Company Representative, in the case of the Company;

c) where given by Company, be signed or authorized by either Company Representative, an officer, a director or company secretary of Company, or a duly authorized representative of a Company;

d) where given by Supplier, be signed or authorized by either an officer, a director or company secretary of Supplier, or a duly authorized representative of Supplier; and

e) be delivered by prepaid post, by hand or by Aconex to the Party to whom the Notice is addressed at its address specified in

Article 32.3 or such other address as that Party may have notified to the other Party.

ARTICLE 34 DISPUTE RESOLUTION 34.1 If any dispute, controversy, claim, question or difference of opinion arises between the Parties under this Agreement including an

interpretation, enforceability, performance, breach, termination or validity of this Agreement ( “Dispute” ), the Party raising the Dispute shall give Notice to the other Party in writing within thirty (30) days of the Dispute arising, and such Notice shall provide all relevant particulars of the Dispute.

34.2 Upon issuance of Notice of the Dispute, the Parties shall, acting in good faith and a commercially reasonable manner, attempt to resolve the Dispute in the following manner: (

a) Within fifteen (15) days of the date of the Notice, the senior project managers for each of the Company and Supplier shall meet; (

b) If not resolved by project managers, the project sponsors or representative Vice Presidents for each of the Company and Supplier will meet within thirty (30) days following the meeting of the project managers; and 34.3 If the Dispute is not resolved by the Parties within ninety (90) days from the date of delivery of the Notice of Dispute then a Party may take whatever action is deemed appropriate pursuant to this Agreement. For greater certainty, the Parties must comply with this

Article 34 before commencing any further action, legal or otherwise, with respect to a Dispute under this Agreement. 34.4 Notwithstanding the existence of a Dispute and the referral of the Dispute to the resolution procedures in this

Article 34 , Company and Supplier shall, to the extent reasonably possible, continue to perform their obligations under this Agreement without interruption or delay. The continuation of such performance shall not amount to a waiver of, or in any way prejudice, the position that is taken by the Parties in this Dispute. There shall be no extension to the date for Delivery of Goods by reason that a Dispute has been referred to the dispute resolution process in this

Article 34 .